Exhibit 4.2(d)
AMENDMENT NO. 3 TO THE THIRD AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
EQUITY INNS PARTNERSHIP, L.P.
This Amendment No. 3 (this "Amendment") to the Third Amended and
Restated Agreement of Limited Partnership of Equity Inns Partnership, L.P. dated
June 25, 1997 (the "Partnership Agreement") is entered into as of February 15,
2006, by and among Equity Inns, Inc., a Tennessee corporation (the
"Corporation"), Equity Inns Trust, a Maryland real estate investment trust (the
"General Partner"), and the limited partners (the "Limited Partners") of Equity
Inns Partnership, L.P. (the "Partnership"). All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them in the
Partnership Agreement.
WHEREAS, the Corporation, which is the sole shareholder of the General
Partner, on even date herewith, has issued 2,400,000 shares of its 8.00% Series
C Cumulative Preferred Stock, $.01 par value per share, having a liquidation
preference equivalent to $25.00 per share (the "Series C Preferred Stock"), and
has sold such Series C Preferred Stock in two public offerings;
WHEREAS, the Corporation desires to contribute the net proceeds of the
sale of the Series C Preferred Stock through the General Partner to the
Partnership in exchange for the issuance to the General Partner of preferred
partnership interests in the Partnership as set forth herein; and
WHEREAS, the General Partner is authorized to cause the Partnership to
issue interests in the Partnership to the General Partner in exchange for such
contribution of such net proceeds made by the Corporation through the General
Partner.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
the Partnership Agreement as follows:
Section 1. Contribution.
The Corporation hereby contributes through the General Partner to the
Partnership the entire net proceeds received by the Corporation from the
issuance of the Series C Preferred Stock. As provided in Section 4.02(g) of the
Partnership Agreement, the Corporation shall be deemed to have made a Capital
Contribution to the Partnership in an amount equal to the gross proceeds raised
in connection with the issuance of such shares of Series C Preferred Stock,
which is $60,000,000, and the Partnership shall be deemed simultaneously to have
paid, pursuant to Section 6.05(b) of the Partnership Agreement, for the costs
and expenses relating to the offer, registration and sale of the Series C
Preferred Stock.
Section 2. Issuance of Series C Preferred Units.
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In consideration of the contribution to the Partnership made by the
Corporation through the General Partner pursuant to Section 1 hereof, the
Partnership hereby issues to the General Partner 2,400,000 Series C Preferred
Units (as defined below).
Section 3. Definitions.
Article I of the Partnership Agreement is hereby amended by inserting
in the appropriate alphabetical locations the following definitions of Change of
Control, Series C Preferred Return, Series C Preferred Stock, Series C Preferred
Units and Voting Stock, as follows:
"Change of Control" shall be deemed to have occurred at such time as
(i) the date a "person" or "group" (within the meaning of Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
becomes the ultimate "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person or group shall be deemed to have
beneficial ownership of all shares of Voting Stock that such person or group has
the right to acquire regardless of when such right is first exercisable),
directly or indirectly, of Voting Stock representing more than 50% of the total
voting power of the total Voting Stock of the Corporation; (ii) the date the
Corporation sells, transfers or otherwise disposes of all or substantially all
of its assets; or (iii) the date of the consummation of a merger or share
exchange of the Corporation with another entity where the Corporation's
shareholders immediately prior to the merger or share exchange would not
beneficially own immediately after the merger or share exchange, shares
representing 50% or more of all votes (without consideration of the rights of
any class of stock to elect directors by a separate group vote) to which all
shareholders of the corporation issuing cash or securities in the merger or
share exchange would be entitled in the election of directors, or where members
of the Corporation's Board of Directors immediately prior to the merger or share
exchange would not immediately after the merger or share exchange constitute a
majority of the Board of Directors of the corporation issuing cash or securities
in the merger or share exchange.
"Series C Preferred Return" means an annualized amount equal to $2.00
per Series C Preferred Unit; provided, however, if following a Change of Control
the Series C Preferred Stock is not listed on the New York Stock Exchange, Inc.
(the "NYSE") or the American Stock Exchange ("Amex") or quoted on the Nasdaq
Stock Market, Inc. ("Nasdaq"), Series C Preferred Return shall mean, from (but
excluding) the first date on which both the Change of Control has occurred and
the Series C Preferred Stock is not so listed or quoted, $2.25 per Series C
Preferred Unit for as long as the Series C Preferred Stock is not so listed or
quoted.
"Series C Preferred Stock" means the 8.00% Series C Cumulative
Preferred Stock, $.01 par value, of the Corporation.
"Series C Preferred Units" means the Preferred Units issued to the
General Partner in exchange for the net proceeds of the issuance by the
Corporation of its Series C Preferred Stock, which Series C Preferred Units
shall have the designations, preferences, privileges, limitations and relative
rights set forth in Section 4.02(c)(iii) hereof.
"Voting Stock" means stock of any class or kind having the power to
vote generally for the election of directors.
Section 4. Creation of Series C Preferred Units.
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Article IV of the Partnership Agreement is hereby amended by adding
Section 4.02(c)(iii) as follows:
"(iii) 8.00% Series C Cumulative Preferred Units.
(1) Designation and Number. A series of Preferred Units, designated the
"8.00% Series C Cumulative Preferred Units" (the "Series C Preferred
Units"), is hereby established. The number of Series C Preferred Units
shall be as set forth on Exhibit B hereto.
(2) Rank. The Series C Preferred Units will, with respect to
distribution rights and rights upon liquidation, dissolution or winding
up of the Partnership, rank (i) senior to all classes or series of
Common Units of the Partnership, and to all Partnership Units ranking
junior to the Series C Preferred Units with respect to distribution
rights or rights upon liquidation, dissolution or winding up of the
Partnership; (ii) on a parity with all Partnership Units issued by the
Partnership the terms of which specifically provide that such
Partnership Units rank on a parity with the Series C Preferred Units
with respect to distribution rights or rights upon liquidation,
dissolution or winding up of the Partnership; and (iii) junior to all
existing and future indebtedness of the Partnership. The term
"Partnership Units" does not include convertible debt securities, which
will rank senior to the Series C Preferred Units prior to conversion.
(3) Distributions.
(a) Holders of the Series C Preferred Units are entitled to
receive, when and as distributed by the General Partner out of
available cash flow, preferential cumulative cash distributions in an
amount equal to the excess, if any, of (i) the cumulative Series C
Preferred Return for the current and all prior years over (ii) the sum
of all prior Series C Preferred Return distributions pursuant to this
Section 4.02(c)(iii)(3). Distributions on the Series C Preferred Units
shall be cumulative from the date of original issue and shall be
payable quarterly in arrears on or before the last day of January,
April, July and October of each year, or, if not a Business Day (as
defined below), the next succeeding business day (each, a "Series C
Distribution Payment Date"). The first distribution will be paid on or
before April 30, 2006. The first distribution will be prorated for less
than a full quarter. Any distribution payable on the Series C Preferred
Units for any partial distribution period will be computed on the basis
of a 360-day year consisting of twelve 30 day months. Distributions
will be payable to holders of record as they appear in the ownership
records of the Partnership at the close of business on the applicable
record date, which shall be the last Business Day of each of March,
June, September and December immediately preceding such Series C
Distribution Payment Date, or on such other date designated by the
General Partner of the Partnership for the payment of distributions
that is not more than 30 nor less than 10 days prior to such Series C
Distribution Payment Date (each, a "Series C Distribution Record
Date"). "Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law,
regulation or executive order to close.
(b) The amount of any distributions accrued on any Series C
Preferred Units at any Series C Distribution Payment Date shall be the
amount of any unpaid distributions accumulated thereon, to and
including such Series C Distribution Payment Date, whether or not
earned or declared, and the amount of distributions accrued on any
Series C Preferred Units at any date other than a Series C Distribution
Payment Date shall be equal to the sum of the amount of any unpaid
distributions accumulated thereon, to and including the last preceding
Series C Distribution Payment Date, whether or not earned or declared,
plus an amount calculated on the basis of the Series C Preferred Return
for the period after such last preceding Series C Distribution Payment
Date to and including the date as of which the calculation is made
based on a 360-day year of twelve 30-day months.
(c) The holder of the Series C Preferred Units will not be
entitled to any distributions in excess of full cumulative
distributions as described above and shall not be entitled to
participate in the earnings or assets of the Partnership, and no
interest, or sum of money in lieu of interest, shall be payable in
respect of any distribution payment or payments on the Series C
Preferred Units which may be in arrears.
(d) No distributions on Series C Preferred Units shall be
declared by the General Partner or paid or set apart for payment by the
Partnership if the terms and provisions of any agreement of the
Partnership, including any agreement relating to its indebtedness,
prohibit such declaration, payment or setting apart for payment or
provide that such declaration, payment or setting apart for payment
would constitute a breach thereof or a default thereunder, or if such
declaration or payment shall be restricted or prohibited by law.
Notwithstanding the foregoing, distributions on the Series C Preferred
Units will accrue whether or not the Partnership has earnings, whether
or not there is available cash flow for the payment of such
distributions and whether or not such distributions are declared.
Accrued but unpaid distributions on the Series C Preferred Units will
not bear interest and holders of the Series C Preferred Units will not
be entitled to any distributions in excess of full cumulative
distributions described above.
(e) Except as set forth in the next sentence, no distributions
will be declared or paid or set apart for payment on any Partnership
Units or any other series of Preferred Units ranking, as to
distributions, on a parity with or junior to the Series C Preferred
Units (other than a distribution of the Partnership's Common Units or
any other class of Partnership Units ranking junior to the Series C
Preferred Units as to distributions and upon liquidation) for any
period unless full cumulative distributions have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such payment on the
Series C Preferred Units for all past distribution periods and the then
current distribution period. When distributions are not paid in full
(or a sum sufficient for such full payment is not so set apart) upon
the Series C Preferred Units and any other series of Preferred Units
ranking on a parity as to distributions with the Series C Preferred
Units, all distributions declared upon the Series C Preferred Units and
any other series of Preferred Units ranking on a parity as to
distributions with the Series C Preferred Units shall be declared pro
rata so that the amount of distributions declared per Series C
Preferred Unit and such other series of Preferred Units shall in all
cases bear to each other the same ratio that accrued distributions per
Series C Preferred Unit and such other series of Preferred Units (which
shall not include any accrual in respect of unpaid distributions for
prior distribution periods if such Preferred Units do not have a
cumulative distribution) bear to each other.
(f) Except as provided in the immediately preceding paragraph,
unless full cumulative distributions on the Series C Preferred Units
have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof is set apart for payment for all
past distribution periods and the then current distribution period, no
distributions (other than a distribution of Common Units or other
Partnership Units ranking junior to the Series C Preferred Units as to
distributions and upon liquidation) shall be declared or paid or set
aside for payment nor shall any other distribution be declared or made
upon the Common Units, or any other Partnership Units ranking junior to
or on a parity with the Series C Preferred Units as to distributions or
upon liquidation, nor shall any Common Units, or any other Partnership
Units in the Partnership ranking junior to or on a parity with the
Series C Preferred Units as to distributions or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any
monies be paid to or made available for a sinking fund for the
redemption of any such units) by the Partnership. Holders of Series C
Preferred Units shall not be entitled to any distribution, whether
payable in cash, property or securities in excess of full cumulative
distributions on the Series C Preferred Units as provided above.
(4) Liquidation Preference. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Partnership, the holders of Series C Preferred Units are entitled to be
paid out of the assets of the Partnership legally available for
distribution to its partners a liquidation preference of $25.00 per
Series C Preferred Unit (the "Series C Liquidation Preference"), plus
an amount equal to any accrued and unpaid distributions with respect to
the Series C Preferred Units to the date of payment, but without
interest, before any distribution of assets is made to holders of
Common Units or any other class or series of Partnership Units in the
Partnership that ranks junior to the Series C Preferred Units as to
liquidation rights. The Partnership will promptly provide to the
holders of Series C Preferred Units written notice of any event
triggering the right to receive such Series C Liquidation Preference.
After payment of the full amount of the Series C Liquidation
Preference, the holders of Series C Preferred Units will have no right
or claim to any of the remaining assets of the Partnership. If, upon
any voluntary or involuntary dissolution, liquidation, or winding up of
the Partnership, the amounts payable with respect to the Series C
Liquidation Preference, plus an amount equal to any accrued and unpaid
distributions to the date of payment, of the Series C Preferred Units
and any other units of the Partnership ranking as to any such
distribution on a parity with the Series C Preferred Units are not paid
in full, the holders of the Series C Preferred Units and of such other
units will share ratably in any such distribution of assets of the
Partnership in proportion to the full respective preference amounts to
which they are entitled. The consolidation or merger of the Partnership
with or into any other partnership, corporation, trust or entity or of
any other partnership or corporation with or into the Partnership, or
the sale, lease or conveyance of all or substantially all of the
property or business of the Partnership, shall not be deemed to
constitute a liquidation, dissolution or winding up of the Partnership.
(5) Redemption.
(a) Except as set forth in Section 4.02(c)(iii)(6) below, the
Series C Preferred Units are not redeemable by the Partnership prior to
February 15, 2011. On and after February 15, 2011, the Partnership, at
its option upon not less than 30 nor more than 60 days' written notice,
may redeem the Series C Preferred Units, in whole or in part, at any
time or from time to time, for cash at a redemption price of $25.00 per
Series C Preferred Unit, plus all accrued and unpaid distributions
thereon to the date fixed for redemption, without interest. A holder
shall surrender its Series C Preferred Units at the place designated in
such notice and shall be entitled to the redemption price and any
accrued and unpaid distributions payable upon such redemption following
such surrender. If notice of redemption of any Series C Preferred Units
has been given and if the funds necessary for such redemption have been
set aside by the Partnership in trust for the benefit of the holders of
any Series C Preferred Units so called for redemption, then from and
after the redemption date distributions will cease to accrue on such
Series C Preferred Units, such Series C Preferred Units shall no longer
be deemed outstanding and all rights of the holders of such Series C
Preferred Units will terminate, except the right to receive the
redemption price. If less than all of the outstanding Series C
Preferred Units are to be redeemed, the Series C Preferred Units to be
redeemed shall be selected pro rata (as nearly as may be practicable
without creating fractional Series C Preferred Units) or by any other
equitable method determined by the General Partner.
(b) Notice of redemption will be mailed or delivered to
holders of Series C Preferred Units not less than 30 nor more than 60
days prior to the redemption date. In addition to any information
required by law, each notice shall state: (i) the Specified Redemption
Date; (ii) the Redemption Amount; (iii) the number of Series C
Preferred Units to be redeemed; (iv) the place or places where the
Series C Preferred Units are to be surrendered for payment of the
redemption price; and (v) that distributions on the Series C Preferred
Units to be redeemed will cease to accrue on the Specified Redemption
Date. If less than all of the Series C Preferred Units held by any
holder are to be redeemed, the notice mailed to such holder shall also
specify the number of Series C Preferred Units held by such holder to
be redeemed.
(c) Immediately prior to any redemption of Series C Preferred
Units, the Partnership shall pay, in cash, any accumulated and unpaid
distributions through the redemption date, unless a redemption date
falls after a Series C Distribution Record Date and prior to the
corresponding Series C Distribution Payment Date, in which case each
holder of Series C Preferred Units at the close of business on such
Series C Distribution Record Date shall be entitled to the distribution
payable on such Series C Preferred Units on the corresponding Series C
Distribution Payment Date notwithstanding the redemption of such shares
before such Series C Distribution Payment Date.
(d) If the Partnership exercises its optional redemption right
with respect to the Series C Preferred Units pursuant to this Section
4.02(c)(iii)(5), then the Corporation must redeem a corresponding
number of shares of Series C Preferred Stock. Similarly, if the
Corporation exercises its optional redemption right with respect to
shares of Series C Preferred Stock, then the Partnership must redeem a
corresponding number of Series C Preferred Units.
(6) Special Optional Redemption by the Partnership.
(a) If at any time following a Change of Control the Series C Preferred
Stock is not listed on the NYSE or the Amex or quoted on Nasdaq, the
Partnership will have the option upon written notice to the holders of
record of the Series C Preferred Units in accordance with Section
4.02(c)(iii)(5)(b) to redeem the Series C Preferred Units, in whole but
not in part, within 90 days after the first date on which both the
Change of Control has occurred and the Series C Preferred Stock is not
so listed or quoted, for a cash redemption price equal to 100% of the
Series C Liquidation Preference plus all accrued and unpaid
distributions to the Specified Redemption Date.
(b) Upon any redemption of the Series C Preferred Units pursuant to this
Section 4.02(c)(iii)(6), the Partnership will pay, in cash, any accrued
and unpaid distributions to the Specified Redemption Date, whether or
not authorized, unless the Specified Redemption Date falls after a
distribution payment record date and prior to the corresponding Series
C Distribution Payment Date, in which case each holder of the Series C
Preferred Units at the close of business on such distribution payment
record date will be entitled to the distribution payable on such units
on the corresponding Series C Distribution Payment Date notwithstanding
the redemption of such units before the Series C Distribution Payment
Date. Except as provided in the previous sentence, the Partnership will
make no payment or allowance for unpaid distributions, whether or not
in arrears, on the Series C Preferred Units.
(c) At its election, the Partnership, prior to the Specified Redemption
Date, may irrevocably deposit the redemption price described in Section
4.02(c)(iii)(6)(a) above for the Series C Preferred Units so called for
redemption in trust for the holders thereof with a bank or trust
company.
(7) Conversion.
The Series C Preferred Units are not redeemable for, convertible into
or exchangeable for any other property or securities of the Partnership
or the General Partner."
Section 5. Allocation of Profit and Loss.
Article V of the Partnership Agreement is hereby amended by adding the
following new Section 5.01(f) immediately following Section 5.01(e), and the
sections previously designated as Section 5.01(f) and Section 5.01(g) are hereby
redesignated as Section 5.01(g) and Section 5.01(h), respectively:
"(f) Priority Allocations With Respect To Series C Preferred
Units. After giving effect to the allocations set forth in Sections
5.01(b), (c), (d) and (e) hereof, but before giving effect to the
allocations set forth in Section 5.01(a), Net Operating Income shall be
allocated to the General Partner until the aggregate amount of Net
Operating Income allocated to the General Partner under this Section
5.01(f) for the current and all prior years equals the aggregate amount
of the Series B Preferred Return and the Series C Preferred Return paid
to the General Partner pursuant to Sections 4.02(c)(ii)(3),
4.02(c)(ii)(4), 4.02(c)(iii)(3) and 4.02(c)(iii)(4) hereof for the
current and all prior years. For purposes of this Section 5.01(f), "Net
Operating Income" means the excess, if any, of the Partnership's gross
income over its expenses (but not taking into account depreciation,
amortization, or any other noncash expenses of the Partnership),
calculated in accordance with the principles of Section 5.01(h)
hereof."
[Signature page follows.]
IN WITNESS WHEREOF, the foregoing Amendment No. 3 to the Third Amended
and Restated Agreement of Limited Partnership of Equity Inns Partnership, L.P.
has been signed and delivered as of this 15th day of February, 2006, by the
undersigned sole general partner of the Partnership, as general partner and on
behalf of the Limited Partners, and by the Corporation as non-Partner party to
the Partnership Agreement.
EQUITY INNS TRUST, a
Maryland real estate
investment trust, as sole
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. Silver
--------------------
Name: ▇▇▇▇▇▇ ▇. Silver
Title: President and Chief Executive Officer
EQUITY INNS TRUST, a Maryland real estate
investment trust, as General Partner, on behalf
of the Limited Partners pursuant to Section 8.02
and Article XI of the Partnership Agreement
By: /s/ ▇▇▇▇▇▇ ▇. Silver
--------------------
Name: ▇▇▇▇▇▇ ▇. Silver
Title: President and Chief Executive Officer
EQUITY INNS, INC., a Tennessee corporation,
as a non-Partner party to the Partnership Agreement
By: /s/ ▇▇▇▇▇▇ ▇. Silver
--------------------
Name: ▇▇▇▇▇▇ ▇. Silver
Title: President and Chief Executive Officer
Exhibit B
SERIES C PREFERRED UNITS
(Effective as of February 15, 2006)
Cash Amount of Capital Percentage of Series C
Partner and Address Contribution Preferred Units Preferred Units
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Equity Inns Trust $60,000,000 2,400,000 100.0%
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