EXHIBIT 10.6
THIRD AMENDMENT TO THE
FIRST AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF
WESTFIELD AMERICA LIMITED PARTNERSHIP
This THIRD AMENDMENT TO THE FIRST AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF WESTFIELD AMERICA LIMITED PARTNERSHIP, dated as of
December 24, 1998 (this "Amendment"), is being executed by Westfield America,
Inc., a Missouri corporation (the "Managing General Partner"), as the managing
general partner of Westfield America Limited Partnership, a Delaware limited
partnership (the "Partnership"), and on behalf of the Limited Partners pursuant
to the authority conferred on the Managing General Partner by Sections 2.4 and
12.3 of the First Amended and Restated Agreement of Limited Partnership of
Westfield America Limited Partnership, dated as of August 3, 1998, as amended by
that certain First Amendment to the First Amended and Restated Agreement of
Limited Partnership of Westfield America Limited Partnership, dated as of August
12, 1998, and as further amended by that certain Second Amendment to the First
Amended and Restated Agreement of Limited Partnership of Westfield America
Limited Partnership, dated as of December 8, 1998 (as so amended, the
"Agreement"). Capitalized terms used herein, but not otherwise defined herein,
shall have the respective meanings ascribed thereto in the Agreement.
WHEREAS, pursuant to Sections 7.1 and 12.3 of the Agreement, the Managing
General Partner is authorized to determine the designations, preferences and
relative, participating, optional or other special rights, powers and duties of
additional Partnership Units and to amend the Agreement, and the Managing
General Partner is hereby creating the Partnership Preferred Units with the
designations, preferences and other rights, terms and provisions as set forth on
Exhibit L and Exhibit M attached hereto.
--------- ---------
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Agreement is hereby amended by the addition of two new exhibits,
entitled "Exhibit L" and "Exhibit M" in the form attached hereto, which shall be
--------- ---------
attached to and made a part of the Agreement.
2. Except as specifically amended hereby, the terms, covenants,
provisions and conditions of the Agreement shall remain unmodified and continue
in full force and effect and, except as amended hereby, all of the terms,
covenants, provisions and conditions of the Agreement are hereby ratified and
confirmed in all respects.
3. This Amendment shall be construed and enforced in accordance with, and
governed by, the laws of the State of Delaware, without regard to principles of
conflicts of law.
IN WITNESS WHEREOF, this Amendment has been executed as of the date first
written above.
WESTFIELD AMERICA, INC.,
Managing General Partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Secretary
ALL LIMITED PARTNERS
By: Westfield America, Inc., as attorney-in-fact
pursuant to the power of attorney granted under
Section 2.4 of the Agreement.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Secretary
2
EXHIBIT L
PARTNERSHIP UNIT DESIGNATION OF SERIES C-1
PARTNERSHIP PREFERRED UNITS OF
WESTFIELD AMERICA LIMITED PARTNERSHIP
1. Creation, Number and Designation.
A class of Partnership Preferred Units is hereby created and designated as
"Series C-1 Partnership Preferred Units." The number of Partnership Preferred
Units constituting the Series C-1 Partnership Preferred Units shall be 138,889.
The number of Series C-1 Partnership Preferred Units may be decreased (but not
below the aggregate number thereof then outstanding and/or which have been
reserved for issuance). Each Series C-1 Partnership Preferred Unit shall be
identical in all respects to each other Series C-1 Partnership Preferred Unit.
2. Definitions.
For purposes of this Partnership Unit Designation, the following terms
shall have the respective meanings indicated in this Section 2, and capitalized
terms used but not otherwise defined herein shall have the respective meanings
ascribed thereto in the Agreement:
"Affiliate" of, or Person "Affiliated" with, a specified Person, shall mean
a Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with the Person
specified. For purposes of the Corporation, Affiliate shall include, without
limitation, Westfield Holdings Limited ("WHL"), Westfield America Trust, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ (such individuals being the "▇▇▇▇
Family").
"Agreement" shall mean the First Amended and Restated Agreement of Limited
Partnership of Westfield America Limited Partnership, dated as of August 3,
1998, as amended, modified, supplemented or restated, from time to time.
"Base Distribution" shall mean an annual distribution per Series C-1
Partnership Preferred Unit equal to 8.5% of the Liquidation Preference per
Series C-1 Partnership Preferred Unit.
"Board of Directors" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the capital stock of the Corporation.
"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, New York, are authorized or required by law, regulation or executive order
to close.
L-1
"Call Date" shall mean the date specified in the notice to holders required
under Section 5 (d) as the Call Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Equity Shares" shall mean the Common Shares and the Excess Common
Shares which are issued with respect to the Common Stock.
"Common Shares"shall mean the shares of Common Stock.
"Common Stock" means the common stock, par value $0.01 per share, of the
Corporation.
"Consolidated EBITDA" for any quarter shall mean the consolidated net
income of the Corporation (before extraordinary income or gains and less equity
in income of unconsolidated real estate partnerships), calculated in a manner
consistent with the Corporation's financial statements filed with the Securities
and Exchange Commission, increased by the sum of the following (without
duplication):
(a) the Corporation's pro rata share of EBITDA from unconsolidated
real estate partnerships calculated in a manner consistent with this definition
of Consolidated EBITDA,
(b) all income taxes paid or accrued according to GAAP for such
quarter (other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses except to the extent that such gains were not
included in Consolidated EBITDA),
(c) all interest expense paid or accrued in accordance with GAAP for
such quarter (including financing fees and amortization of deferred financing
fees or amortization of original issue discount, but excluding capitalized
interest),
(d) depreciation and depletion reflected in such net income,
(e) amortization reflected in such net income including, without
limitation, amortization of capitalized debt issuance costs (only to the extent
that such amounts have not been previously included in the amount of
Consolidated EBITDA pursuant to paragraph (c) above), goodwill, other
intangibles and management fees, and
(f) any other noncash charges, to the extent deducted from
consolidated net income (including, but not limited to, income allocated to
minority interests).
"Consolidated Fixed Charges" for any quarter shall mean the sum of:
L-2
(a) the Corporation's pro rata share of fixed charges from
unconsolidated real estate partnerships calculated in a manner consistent with
this definition of Consolidated Fixed Charges,
(b) all interest expense paid or accrued in accordance with GAAP for
such quarter (including, without duplication, financing fees and amortization of
deferred financing fees or amortization of original issue discount),
(c) distribution requirements with respect to preferred stock and any
other preferred securities for such quarter (not including any portion of
preferred stock distributions the calculation of which is based on the
distribution paid in such quarter to the holders of shares of the Corporation's
Common Stock), whether or not declared or paid,
(d) regularly scheduled amortization of principal of debt during such
quarter (other than any balloon payments at maturity) and
(e) all ground rent payments.
"Constituent Person" shall have the meaning set forth in Section 6(e)
hereof.
"Conversion Date" shall have the meaning set forth in Section 6(a) hereof.
"Conversion Price" shall mean the conversion price per Partnership Common
Unit for which the Series C-1 Partnership Preferred Unit is convertible, as such
Conversion Price may be adjusted pursuant to Section 6. The initial conversion
price shall be $18.00.
"Corporation" shall mean Westfield America, Inc., a Missouri corporation.
"Current Market Price" of publicly traded Common Stock or any other class
of stock or other security of the Corporation or any other issuer for any day
shall mean the last reported sales price, regular way, on such day, or, if no
sale takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the New York
Stock Exchange ("NYSE") or, if such security is not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which such
security is listed or admitted for trading or, if not listed or admitted for
trading on any national securities exchange, on the Nasdaq National Market
("NASDAQ") or, if such security is not quoted on NASDAQ, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by the National Association of Securities Dealers, Inc. (the "NASD")
or, if bid and asked prices for such security on such day shall not have been
reported through the NASD, the average of the bid and asked prices on such day
as furnished by any NYSE member firm regularly making a market in such security
selected for such purpose by the Board of Directors.
"Distribution Payment Date" shall mean (i), for any Distribution Period
with respect to which the Partnership pays a distribution on the Partnership
Common Unit, the date on which such
L-3
distribution is paid or (ii), for any Distribution Period with respect to which
the Partnership does not pay a distribution on the Partnership Common Unit, a
date to be set by the Managing General Partner, which date shall not be later
than the thirtieth calendar day after the end of the applicable Distribution
Period.
"Distribution Periods" shall mean quarterly distribution periods commencing
on January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding Distribution
Period with respect to any Series C-1 Partnership Preferred Units (other than
the initial Distribution Period, which shall commence on the Grant Date for such
Series C-1 Partnership Preferred Units and end on and include the last day of
the calendar quarter immediately following such Grant Date, and other than the
Distribution Period during which any Series C-1 Partnership Preferred Units
shall be redeemed pursuant to Section 5 or converted pursuant to Section 6,
which shall end on and include the Call Date or Conversion Date with respect to
the Series C-1 Partnership Preferred Units being redeemed or converted, as
applicable).
"Excess Common Shares" shall mean shares of excess stock of the
Corporation, par value $0.01 per share, which are issued with respect to Common
Stock.
"Expiration Time" shall have the meaning set forth in Section 6(d)(iv)
hereof.
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a share of the Corporation's Common Stock on the five (5) consecutive
Trading Days selected by the Corporation commencing not more than 20 Trading
Days before, and ending not later than, the earlier of the day in question and
the day before the "ex date" with respect to the issuance or distribution
requiring such computation. The term "ex date," when used with respect to any
issuance or distribution, means the first day on which the Common Stock trade
regular way, without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that day's
Current Market Price.
"Fixed Charge Coverage Violation" shall have the meaning set forth in
Section 3(a) hereof.
"Fully Junior Units" shall have the meaning set forth in Section 9(d)
hereof.
"Funds from Operations" shall mean net income (loss) (computed in
accordance with generally accepted accounting principles) excluding gains (or
losses) from debt restructuring, and distributions in excess of earnings
allocated to other operating partnership interests or minority interests (as
reflected in the financial statements of the Corporation) plus
depreciation/amortization of assets unique to the real estate industry, all
computed in a manner consistent with the revised definition of Funds From
Operations adopted by the National Association of Real Estate Investment Trusts
(NAREIT), in its White Paper dated March 1995, as such definitions may be
modified from time to time.
"Grant Date" shall mean the date on which the Series C-1 Partnership
Preferred Units are issued.
L-4
"Junior Units" shall have the meaning set forth in Section 9(c) hereof.
"Non-Electing Share" shall have the meaning set forth in Section 6(e)
hereof.
"Partnership" shall mean Westfield America Limited Partnership, a Delaware
limited partnership.
"Parity Units" shall have the meaning set forth in Section 9(b) hereof.
"Person" shall mean any individual, firm, partnership, corporation, limited
liability company, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Purchased Shares" shall have the meaning set forth in Section 6(d)(iv)
hereof.
"REIT Termination Event" shall mean the earliest to occur of:
(a) the filing of a federal income tax return by the Corporation for
any taxable year on which the Corporation does not compute its income as a real
estate investment trust;
(b) the approval by the shareholders of the Corporation of a proposal
for the Corporation to cease to qualify as a real estate investment trust;
(c) a determination by the Board of Directors of the Corporation,
based on the advice of counsel, that the Corporation has ceased to qualify as a
real estate investment trust; or
(d) a "determination" within the meaning of Section 1313(a) of the
Code that the Corporation has ceased to qualify as a real estate investment
trust.
"Securities" and "Security" shall have the meanings set forth in Section
6(d)(iii) hereof.
"Series C-1 Partnership Preferred Unit" means a Partnership Unit created
under this Partnership Unit Designation, with the designations, preferences and
relative, participating, optional or other special rights, powers and duties set
forth in this Exhibit L.
---------
"Senior Units" shall have the meaning set forth in Section 9(a) hereof.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Partnership in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of distributions by the Managing General Partner, the allocation of
funds to be so paid on any series or class of partnership units of the
Partnership; provided, however, that if any funds for any class or series of
-------- -------
Junior Units or Fully Junior Units or any class or series of Parity Units are
placed in a separate account of the Partnership or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with respect
L-5
to the Series C-1 Partnership Preferred Units shall mean placing such funds in a
separate account or delivering such funds to a disbursing, paying or other
similar agent.
"Trading Day" shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for trading
on the NYSE, on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities exchange, on NASDAQ, or if such securities are not
quoted on NASDAQ, in the securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in Section 6(e)
hereof."Transfer Agent" shall mean the Managing General Partner, or such other
agent or agents of the Partnership as may be designated by the Managing General
Partner as the transfer agent, registrar and distribution disbursing agent for
the Series C-1 Partnership Preferred Units.
3. Distributions.
(a) Holders of Series C-1 Partnership Preferred Units shall not be
entitled to any distributions on the Series C-1 Partnership Preferred Units,
whether payable in cash, property or stock, except as provided in this
Exhibit L.
---------
(b) Subject to the preferential rights of the holders of any
Partnership Preferred Units that rank senior in the payment of distributions to
the Series C-1 Partnership Preferred Units and subject to paragraph (c) of this
Section 3, the holders of Series C-1 Partnership Preferred Units shall be
entitled to receive, when, as and if declared by the Managing General Partner,
but only out of funds legally available for the payment of distributions,
cumulative preferential distributions payable in cash to holders of record on
the respective date, not exceeding 50 days preceding such distribution payment
date, fixed for the purpose by the Managing General Partner in advance of
payment of each particular distribution in an amount equal to the greater of (A)
the Base Distribution per unit per annum and (B) an amount per unit equal to the
Liquidation Preference of a Series C-1 Partnership Preferred Unit (exclusive of
accrued but unpaid distributions) divided by the Conversion Price (the "Series
C-1 Common Equivalent Factor") times the dollar amount of cash distributions
declared with respect to each Partnership Common Unit that does not result in an
adjustment to the Conversion Price pursuant to subparagraph (d)(iii) of Section
6 (such product, the "Series C-1 Common Equivalent Amount") for the same annual
period; provided, however, that if as a result of the quarterly distributions
-------- -------
paid in accordance with the following sentence, the holders of Series C-1
Partnership Preferred Units shall have received for any calendar year more
distributions than such units shall be entitled under subparagraphs (A) and (B)
above (as adjusted pursuant to the third and eighth sentences of this Section
3), the distributions payable in respect of Series C-1 Partnership Preferred
Units in subsequent calendar years shall be reduced to the extent of such
overpayment.
Subject to the proviso of the preceding sentence of this Section 3(b),
the distribution paid in respect of each quarterly period in each calendar year
shall be determined as follows (in each case, excluding any additional payment
made pursuant to the following sentence): (1) for the first
L-6
quarter, the greater of 25% of the Base Distribution per unit and the Series C-1
Common Equivalent Amount for the same quarter; (2) for the second quarter, an
amount such that the aggregate amount to be received per Series C-1 Partnership
Preferred Unit in respect of the first two quarters of such calendar year shall
be the greater of 50% of the Base Distribution per unit and the Series C-1
Common Equivalent Amount for the same two quarters; (3) for the third quarter,
in amount such that the aggregate amount to be received per Series C-1
Partnership Preferred Unit in respect of the first three quarters of such
calendar year shall be the greater of 75% of the Base Distribution per unit and
the Series C-1 Common Equivalent Amount for the same three quarters; and (4) for
the fourth quarter, an amount such that the aggregate amount to be received per
Series C-1 Partnership Preferred Unit in respect of such calendar year shall be
the amount provided in the preceding sentence of this Section 3(b).
Notwithstanding the foregoing, for any quarter in which a Fixed Charge Coverage
Violation (as defined below) has occurred, the distribution payable per Series
C-1 Partnership Preferred Unit shall be 1.20 times the amount provided in the
preceding sentence. A "Fixed Charge Coverage Violation" shall occur for any
quarter that the ratio of the Corporation's Consolidated EBITDA to its
Consolidated Fixed Charges is below 1.40 to 1.
The distributions shall begin to accrue as set forth above and shall
be fully cumulative from the first day of the applicable Distribution Period,
whether or not in any Distribution Period or Periods there shall be funds of the
Partnership legally available for the payment of such distributions, and shall
be payable quarterly, when, as and if declared by the Managing General Partner,
in arrears on the Distribution Payment Dates. Accumulated but unpaid
distributions for any past quarterly Distribution Periods may be declared and
paid at any time, without reference to any regularly scheduled quarterly
Distribution Payment Date, to holders of record on such date, not exceeding 50
days preceding such Distribution Payment Date, fixed for the purpose by the
Managing General Partner in advance of payment of each particular distribution.
Any distribution payment made on Series C-1 Partnership Preferred Units shall
first be credited against the earliest accrued but unpaid distribution due with
respect to Series C-1 Partnership Preferred Units which remains payable.
Beginning with the quarter in which a REIT Termination Event Occurs, all
distributions payable per Series C-1 Partnership Preferred Unit pursuant to this
Section 3 shall be multiplied by 2.5.
(c) The initial Distribution Period for the Series C-1 Partnership
Preferred Units will include a partial distribution for the period from the
Grant Date until the last day of the calendar quarter immediately following such
Grant Date. The amount of distributions payable for such initial period, or any
other period shorter than a full quarterly Distribution Period, on the Series C-
1 Partnership Preferred Units shall be computed by dividing the number of days
in such period by 90 and multiplying the result by the Series C-1 Equity
distribution determined in accordance with Section 3(b). Holders of Series C-1
Partnership Preferred Units shall not be entitled to any distributions, whether
payable in cash, property or partnership units, in excess of cumulative
distributions, as herein provided, on the Series C-1 Partnership Preferred
Units. 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-1 Partnership
Preferred Units which may be in arrears.
L-7
(d) So long as any of the Series C-1 Partnership Preferred Units are
outstanding, except as described in the immediately following sentence, no
distributions shall be declared, paid or set apart for payment by the
Partnership, and no other distribution of cash or other property shall be made,
directly or indirectly, by the Partnership with respect to any class or series
of Parity Units for any period unless distributions equal to the full amount of
accumulated and unpaid distributions have been, or contemporaneously are, paid
with respect to the Series C-1 Partnership Preferred Units for all Distribution
Periods terminating on or prior to the Distribution Payment Date with respect to
such class or series of Parity Units. When the distributions provided for in
Section 3(b) hereof are not paid in full, all distributions paid with respect to
the Series C-1 Partnership Preferred Units and all distributions paid with
respect to any other class or series of Parity Units shall be paid ratably in
proportion to the respective amounts of distributions accumulated and unpaid on
the Series C-1 Partnership Preferred Units and accumulated and unpaid on such
Parity Units.
(e) So long as any Series C-1 Partnership Preferred Units are
outstanding, no distributions (other than distributions paid solely in Fully
Junior Units or options, warrants or rights to subscribe for or purchase Fully
Junior Units) shall be paid by the Partnership, and no other distribution of
cash or other property shall be made, directly or indirectly, by the Partnership
with respect to any Junior Units, nor shall any Junior Units be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any such Junior
Units), directly or indirectly, by the Partnership (except by conversion into or
exchange for Fully Junior Units), nor shall any other cash or other property
otherwise be paid or distributed to or for the benefit of any holder of Junior
Units in respect thereof, directly or indirectly, by the Partnership unless in
each case the full cumulative distributions (including all accumulated and
unpaid distributions) on all outstanding Series C-1 Partnership Preferred Units
and any other Parity Units of the Partnership shall have been or
contemporaneously are declared and paid or declared and set apart for payment
for all past Distribution Periods with respect to the Series C-1 Partnership
Preferred Units and all Distribution Periods terminating on or prior to the date
of payment of the Series C-1 Partnership Preferred Units and all Distribution
Periods terminating on or prior to the date of payment on all Parity Units of
the Partnership with respect to such Parity Units. Subject to the foregoing,
and not otherwise, such distributions may be declared by the Managing General
Partner and paid on any Partnership Common Units from time to time out of funds
legally available therefor, and the Series C-1 Partnership Preferred Units shall
not be entitled to participate in any such distributions, whether payable in
cash, partnership units or otherwise.
(f) No distributions on the Series C-1 Partnership Preferred Units
shall be declared by the Managing General Partner or paid or set apart for
payment by the Partnership at such time as the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, prohibits such declaration, payment or setting apart for payment
or provides 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.
(g) In determining whether a distribution by cash payment, redemption
or
L-8
other acquisition of Units or otherwise is permitted under Delaware law, no
effect shall be given to amounts that would be needed, if the Partnership were
to be dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of holders whose preferential rights on dissolution are
superior to those receiving the distribution.
(h) Notwithstanding the foregoing, it is acknowledged that the
Managing General Partner may, pursuant to the Agreement, elect to make
distributions on the Partnership Common Units on a more or less frequent basis
than quarterly and provide for an appropriate record date; in the event that the
Managing General Partner elects to effect such a non-quarterly distribution, the
Managing General Partner may, in its sole and absolute discretion, cause a
Distribution Period (and related Distribution Payment Date) to be established to
reflect the period established for such Partnership Common Unit distributions
and to make such revisions to the distributions provided in Section 3(b) hereof
as may be required to reflect that more or less than four Distribution Payment
Dates will occur during the relevant calendar year.
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Partnership, whether voluntary or involuntary, subject to the prior preferences
and other rights of any Senior Units, before any payment or distribution of the
assets of the Partnership (whether capital or surplus) shall be made to or set
apart for the holders of Junior Units, the holders of the Series C-1 Partnership
Preferred Units shall be entitled to receive One Hundred Eighty Dollars
($180.00) (the "Liquidation Preference") per Series C-1 Partnership Preferred
Unit plus an amount equal to all distributions (whether or not earned or
declared) accrued and unpaid thereon to the date of liquidation, dissolution or
winding up of the affairs of the Partnership (any such date, a "Series C-1
Liquidation Date"), but such holders shall not be entitled to any further
payment; provided that the distribution payable with respect to the Distribution
--------
Period containing the Series C-1 Liquidation Date shall be equal to the
distribution determined pursuant to Section 3 above for the preceding
Distribution Period times a fraction equal to the actual number of days elapsed
from the end date of the calendar quarter most recently completed to the
relevant Series C-1 Liquidation Date over 90 days. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of the Series C-1 Partnership
Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other units of any class or series of
Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the holders of Series C-1 Partnership Preferred Units and any such other
Parity Units ratably in accordance with the respective amounts that would be
payable on such Series C-1 Partnership Preferred Units and any such other Parity
Units if all amounts payable thereon were paid in full. For the purposes of
this Section 4, (i) a consolidation or merger of the Partnership with one or
more corporations, partnerships or other entities or (ii) a sale, lease or
conveyance of all or substantially all of the Partnership's property or business
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Partnership.
(b) Subject to the rights of the holders of Parity Units or Senior
Units, upon any
L-9
liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of the Series C-1 Partnership Preferred
Units, as provided in this Section 4, the holders of Series C-1 Partnership
Preferred Units shall have no other claim to the remaining assets of the
Partnership, and any other series or class or classes of Junior Units shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Series C-1 Partnership Preferred Units shall not be entitled
to share therein.
5. Redemption at the Option of the Partnership.
(a) The Series C-1 Partnership Preferred Units shall not be redeemable
by the Partnership prior to August 12, 2008. On and after August 12, 2008, the
Partnership, at its option, may redeem the Series C-1 Partnership Preferred
Units, in whole at any time or from time to time in part, in minimum increments
of $10.0 million of aggregate Liquidation Preference of such units, out of funds
legally available therefor at a redemption price payable in cash equal to 100%
of the Liquidation Preference per Series C-1 Partnership Preferred Units (plus
all accumulated, accrued and unpaid distributions as provided in paragraph (b)
below).
(b) Upon any redemption of Series C-1 Partnership Preferred Units
pursuant to this Section 5, the Partnership shall pay all accrued and unpaid
distributions, if any, thereon to the Call Date, without interest. If the Call
Date falls after a distribution payment record date and prior to the
corresponding Distribution Payment Date, then each holder of Series C-1
Partnership Preferred Units at the close of business on such distribution
payment record date shall be entitled to the distribution payable on such units
on the corresponding Distribution Payment Date notwithstanding any redemption of
such units before such Distribution Payment Date. Except as provided above, the
Partnership shall make no payment or allowance for unpaid distributions, whether
or not in arrears, on Series C-1 Partnership Preferred Units called for
redemption.
(c) If full cumulative distributions on the Series C-1 Partnership
Preferred Units and any other class or series of Parity Units of the Partnership
have not been declared and paid or declared and set apart for payment, the
Series C-1 Partnership Preferred Units may not be redeemed under this Section 5
in part and may not be redeemed unless the Series C Partnership Preferred Units
and Series C-2 Partnership Preferred Units of the Partnership (the "Series C-2
Partnership Preferred Units"), if any, shall have been authorized and issued are
also redeemed in whole, and the Partnership may not purchase or acquire Series C
Partnership Preferred Units, Series C-1 Partnership Preferred Units or Series C-
2 Partnership Preferred Units, if any, otherwise than pursuant to a purchase or
exchange offer made on the same terms to all holders of Series C Partnership
Preferred Units, Series C-1 Partnership Preferred Units and Series C-2
Partnership Preferred Units, if any.
(d) Notice of the redemption of any Series C-1 Partnership Preferred
Units under this Section 5 shall be mailed by first-class mail or recognized
overnight courier to each holder of record of Series C-1 Partnership Preferred
Units to be redeemed at the address of each such holder as shown on the
Partnership's records, not less than 30 nor more than 90 days prior to the Call
Date.
L-10
Neither the failure to mail any notice required by this paragraph (d), nor any
defect therein or in the mailing thereof, to any particular holder, shall affect
the sufficiency of the notice or the validity of the proceedings for redemption
with respect to the other holders. Each such mailed notice shall state, as
appropriate: (1) the Call Date; (2) the number of Series C-1 Partnership
Preferred Units to be redeemed and, if fewer than all the units held by such
holder are to be redeemed, the number of such units to be redeemed from such
holder; (3) the redemption price; (4) the place or places at which certificates
for such units are to be surrendered; (5) the then-current Conversion Price; and
(6) that distributions on the units to be redeemed shall cease to accrue on such
Call Date except as otherwise provided herein. Notice having been mailed as
aforesaid, from and after the Call Date (unless the Partnership shall fail to
make available an amount of cash necessary to effect such redemption), (i)
except as otherwise provided herein, distributions on the Series C-1 Partnership
Preferred Units so called for redemption shall cease to accrue, (ii) such units
shall no longer be deemed to be outstanding, and (iii) all rights of the holders
thereof as holders of Series C-1 Partnership Preferred Units shall cease (except
the rights to receive the cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so required and
to receive any distributions payable thereon). The Partnership's obligation to
provide cash in accordance with the preceding sentence shall be deemed fulfilled
if, on or before the Call Date, the Partnership shall deposit with a bank or
trust company that has an office in the Borough of Manhattan, City of New York,
and that has capital and surplus of at least $150,000,000, necessary for such
redemption, in trust, with irrevocable instructions that such cash be applied to
the redemption of the Series C-1 Partnership Preferred Units so called for
redemption. No interest shall accrue for the benefit of the holders of Series C-
1 Partnership Preferred Units to be redeemed on any cash so set aside by the
Partnership. Subject to applicable escheat laws, any such cash unclaimed at the
end of two years from the Call Date shall revert to the general funds of the
Partnership, after which reversion the holders of such units so called for
redemption shall look only to the general funds of the Partnership for the
payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such units so redeemed (properly endorsed or
assigned for transfer, if the Partnership shall so require and if the notice
shall so state), such units shall be exchanged for any cash (without interest
thereon) for which such units have been redeemed. If fewer than all the
outstanding Series C-1 Partnership Preferred Units are to be redeemed, units to
be redeemed shall be selected by the Partnership from outstanding Series C-1
Partnership Preferred Units not previously called for redemption pro rata (as
nearly as may be), by lot or by any other method determined by the Partnership
in its sole discretion to be equitable. If fewer than all the Series C-1
Partnership Preferred Units evidenced by any certificate are redeemed, then new
certificates evidencing the unredeemed Series C-1 Partnership Preferred Units
shall be issued without cost to the holder thereof.
6. Conversion. Holders of Series C-1 Partnership Preferred Units shall
have the right to convert all or a portion of such units into Partnership Common
Units, as follows:
(a) Subject to and upon compliance with the provisions of this Section
6, a holder
L-11
of Series C-1 Partnership Preferred Units shall have the right, at his or her
option, at any time (such time being the "Conversion Date"), to convert all or
any portion of such units into the number of Partnership Common Units obtained
by dividing the aggregate Liquidation Preference of such units (inclusive of
accrued but unpaid distributions) by the Conversion Price (as in effect at the
time and on the date provided for in the last paragraph of paragraph (b) of this
Section 6) by surrendering such units to be converted, such surrender to be made
in the manner provided in paragraph (b) of this Section 6; provided, however,
-------- -------
that the right to convert Series C-1 Partnership Units called for redemption
pursuant to Section 5 shall terminate at the close of business on the fifth
Business Day prior to the Call Date fixed for such redemption, unless the
Partnership shall default in making payment of the cash payable upon such
redemption under Section 5.
(b) In order to exercise the conversion right, the holder of each unit
of Series C-1 Partnership Preferred Units to be converted shall surrender the
certificate representing such unit, duly endorsed or assigned to the Partnership
or in blank, at the office of the Transfer Agent, accompanied by written notice
to the Partnership that the holder thereof irrevocably elects to convert such
Series C-1 Partnership Preferred Units. Unless the partnership units issuable
on conversion are to be issued in the same name as the name in which such Series
C-1 Partnership Preferred Units are registered, each partnership unit
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Partnership, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Partnership
demonstrating that such taxes have been paid).
Holders of Series C-1 Partnership Preferred Units at the close of
business on a distribution payment record date shall be entitled to receive the
distribution payable on such units on the corresponding Distribution Payment
Date notwithstanding the conversion thereof following such distribution payment
record date and prior to such Distribution Payment Date. However, Series C-1
Partnership Preferred Units surrendered for conversion during the period between
the close of business on any distribution payment record date and the opening of
business on the corresponding Distribution Payment Date (except units converted
after the issuance of notice of redemption with respect to a Call Date during
such period, such Series C-1 Partnership Preferred Units being entitled to such
distribution on the Distribution Payment Date) must be accompanied by payment of
an amount equal to the distribution payable on such units on such Distribution
Payment Date. A holder of Series C-1 Partnership Preferred Units on a
distribution payment record date who (or whose transferee) tenders any such
units for conversion into Partnership Common Units on the corresponding
Distribution Payment Date will receive the distribution payable by the
Partnership on such Series C-1 Partnership Preferred Units on such date, and the
converting holder need not include payment of the amount of such distribution
upon surrender of Series C-1 Partnership Preferred Units for conversion. Except
as provided above, the Partnership shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on converted units or for
distributions on the Partnership Common Units issued upon such conversion.
As promptly as practicable after the surrender of certificates for
Series C-1 Partnership Preferred Units as aforesaid, the Partnership shall issue
and shall deliver at such office
L-12
to such holder, or on his or her written order, a certificate or certificates
for the number of full Partnership Common Units issuable upon the conversion of
such units in accordance with provisions of this Section 6, and any fractional
interest in respect of a Partnership Common Unit arising upon such conversion
shall be settled as provided in paragraph (c) of this Section 6.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for Series
C-1 Partnership Preferred Units shall have been surrendered and such notice
shall have been received by the Partnership as aforesaid (and if applicable,
payment of an amount equal to the distribution payable on such units shall have
been received by the Corporation as described above), and the Person or Persons
in whose name or names any certificate or certificates for Partnership Common
Units shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the units represented thereby at such time on
such date and such conversion shall be at the Conversion Price in effect at such
time on such date unless the transfer books of the Partnership shall be closed
on that date, in which event such Person or Persons shall be deemed to have
become such holder or holders of record at the close of business on the next
succeeding day on which such transfer books are open, but such conversion shall
be at the Conversion Price in effect on the date on which such units shall have
been surrendered and such notice received by the Partnership.
(c) No fractional units or scrip representing fractions of Partnership
Common Units shall be issued upon conversion of the Series C-1 Partnership
Preferred Units. Instead of any fractional interest in a Partnership Common
Unit that would otherwise be deliverable upon the conversion of a Series C-1
Partnership Preferred Unit, the Partnership shall pay to the holder of such unit
an amount in cash based upon the Current Market Price of the Corporation's
Common Stock on the Trading Day immediately preceding the date of conversion.
If more than one Series C-1 Partnership Unit shall be surrendered for conversion
at one time by the same holder, the number of full Partnership Common Units
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of Series C-1 Partnership Preferred Units so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Grant Date (A) pay a
dividend or make a distribution on its Common Equity Shares in Common
Equity Shares, (B) subdivide its outstanding Common Equity Shares into a
greater number of units, (C) combine its outstanding Common Equity Shares
into a smaller number of units or (D) issue any shares of stock by
reclassification of its Common Equity Shares, the Conversion Price in
effect at the opening of business on the day following the date fixed for
the determination of holders entitled to receive such dividend or
distribution or at the opening of business on the Business Day next
following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be adjusted
so that the holder of any Series C-1 Equity Shares thereafter surrendered
for conversion shall be entitled to receive the number of Common Equity
Shares that such holder would have owned or have been entitled to receive
after the happening of any of the events described above as if such Series
C-1 Equity
L-13
Shares had been converted immediately prior to the record date in the case
of a dividend or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made pursuant
to this subparagraph (i) shall become effective immediately after the
opening of business on the Business Day next following the record date
(except as provided in paragraph (h) below) in the case of a dividend or
distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case
of a subdivision, combination or reclassification.
(ii) If the Corporation shall issue after the Grant Date rights,
options or warrants to all holders of Common Equity Shares entitling them
(for a period expiring within 45 days after the record date mentioned
below) to subscribe for or purchase Common Equity Shares at a price per
share less than 95% (100% if a standby underwriter is used and charges the
Corporation a commission) of the Fair Market Value per share of the
Corporation's Common Stock on the record date for the determination of
holders entitled to receive such rights, options or warrants, then the
Conversion Price in effect at the opening of business on the Business Day
next following such record date shall be adjusted to equal the price
determined by multiplying (A) the Conversion Price in effect immediately
prior to the opening of business on the Business Day next following the
date fixed for such determination by (B) a fraction, the numerator of which
shall be the sum of (x) the number of Common Equity Shares outstanding on
the close of business on the date fixed for such determination and (y) the
number of shares that the aggregate proceeds to the Corporation from the
exercise of such rights, options or warrants for Common Equity Shares would
purchase at 95% of such Fair Market Value (or 100% in the case of a standby
underwriting), and the denominator of which shall be the sum of (x) the
number of Common Equity Shares outstanding on the close of business on the
date fixed for such determination and (y) the number of additional Common
Equity Shares offered for subscription or purchase pursuant to such rights,
options or warrants. Such adjustment shall become effective immediately
after the opening of business on the day next following such record date
(except as provided in paragraph (h) below). In determining whether any
rights, options or warrants entitle the holders of Common Equity Shares to
subscribe for or purchase Common Equity Shares at less than 95% of such
Fair Market Value (or 100% in the case of a standby underwriting), there
shall be taken into account any consideration received by the Corporation
upon issuance and upon exercise of such rights, options or warrants, the
value of such consideration, if other than cash, to be determined by the
Board of Directors whose determination shall be conclusive. To the extent
that Common Equity Shares are not delivered pursuant to such rights,
options or warrants, upon the expiration or termination of such rights,
options or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights, options or warrants been made on the
basis of delivery of only the number of Common Equity Shares actually
delivered. In the event that such rights, options or warrants are not so
issued, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such date fixed for the
determination of shareholders entitled to receive such rights, options or
warrants had not been fixed.
L-14
(iii) If the Corporation shall distribute to all holders of its
Common Equity Shares any securities of the Corporation (other than Common
Equity Shares) or evidence of its indebtedness or assets (excluding
cumulative cash distributions paid with respect to the Common Equity Shares
after December 31, 1997 which are not in excess of the following: the sum
of (A) the Corporation's cumulative undistributed Funds from Operations at
December 31, 1997, plus (B) the cumulative amount of Funds from Operations,
as determined by the Board of Directors, after December 31, 1997, minus (C)
the cumulative amount of distributions accrued or paid in respect of the
Corporation's Series C-1 Equity Shares or any other class or series of
preferred stock of the Corporation after the Grant Date) or rights, options
or warrants to subscribe for or purchase any of its securities (excluding
those rights, options and warrants issued to all holders of Common Equity
Shares entitling them for a period expiring within 45 days after the record
date referred to in subparagraph (ii) above to subscribe for or purchase
Common Equity Shares, which rights and warrants are referred to in and
treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) collectively called the "Securities"
and individually a "Security"), then in each such case the Conversion Price
shall be adjusted so that it shall equal the price determined by
multiplying (x) the Conversion Price in effect immediately prior to the
close of business on the date fixed for the determination of shareholders
entitled to receive such distribution by (y) a fraction, the numerator of
which shall be the Fair Market Value per share of the Corporation's Common
Stock on the record date mentioned below less the then Fair Market Value
(as determined by the Board of Directors, whose determination shall be
conclusive) of the portion of the Securities or assets or evidences of
indebtedness so distributed or of such rights, options or warrants
applicable to one Common Equity Share, and the denominator of which shall
be the Fair Market Value per share of the Corporation's Common Stock on the
record date mentioned below. Such adjustment shall become effective on the
date of distribution retroactive to the opening of business on the Business
Day next following (except as provided in paragraph (h) below) the record
date for the determination of shareholders entitled to receive such
distribution. For the purposes of this subparagraph (iii), the
distribution of a Security, which is distributed not only to the holders of
the Common Equity Share on the date fixed for the determination of
shareholders entitled to such distribution of such Security, but also is
distributed with each Partnership Common Unit delivered to a Person
converting a share of Series C-1 Partnership Preferred Units after such
determination date, shall not require an adjustment of the Conversion Price
pursuant to this subparagraph (iii); provided that on the date, if any, on
--------
which a Person converting a unit of Series C-1 Partnership Preferred Units
would no longer be entitled to receive such Security with a Partnership
Common Unit (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have
occurred and the Conversion Price shall be adjusted as provided in this
subparagraph (iii) (and such day shall be deemed to be "the date fixed for
the determination of the shareholders entitled to receive such
distribution" and "the record date" within the meaning of the two preceding
sentences). If any distribution of the type described in this paragraph
(iii) is declared but not so paid or made, the Conversion Price shall again
be adjusted to the
L-15
Conversion Price which would then be in effect if such distribution had not
been declared.
Rights or warrants distributed by the Corporation to all holders of
Common Equity Shares entitling the holders thereof to subscribe for or
purchase shares of the Corporation's capital stock (either initially or
under certain circumstances), which rights or warrants, until the
occurrence of a specified event or events ("Trigger Event"): (i) are
deemed to be transferred with such shares of Common Equity Shares; (ii) are
not exercisable; and (iii) are also issued in respect of future issuances
of Common Equity Shares, shall be deemed not to have been distributed for
purposes of this subparagraph (iii) (and no adjustment to the Conversion
Price under this subparagraph (iii) will be required) until the occurrence
of the earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different securities, evidences of
indebtedness or other assets or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new
right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof to the extent not
exercised). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto,
that resulted in an adjustment to the Conversion Price under this
subparagraph (iii), (1) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution (but not a
distribution paid exclusively in cash), equal to the per share redemption
or repurchase price received by a holder of Common Equity Shares with
respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Equity Shares as of the
date of such redemption or repurchase, and (2) in the case of such rights
or warrants all of which shall have expired or been terminated without
exercise, the Conversion Price shall be readjusted as if such rights and
warrants had never been issued.
(iv) In case a tender or exchange offer (which term shall not
include open market repurchases by the Corporation) made by the Corporation
or any subsidiary or controlled Affiliate of the Corporation for all or any
portion of the Common Equity Shares shall expire and such tender or
exchange offer shall require the payment by the Corporation or such
subsidiary or controlled Affiliate of consideration per Common Equity Share
having a fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer, that exceeds the Current Market Price per share of the Corporation's
Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the effectiveness of the
L-16
Conversion Price reduction contemplated by this subparagraph, by a fraction
of which the numerator shall be the number of Common Equity Shares
outstanding (including any tendered or exchanged shares) at the Expiration
Time, multiplied by the Current Market Price per share of the Corporation's
Common Stock on the Trading Day next succeeding the Expiration Time, and
the denominator shall be the sum of (A) the fair market value (determined
as aforesaid) of the aggregate consideration payable to shareholders based
upon the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any maximum, being referred to as the "Purchased Shares") and (B) the
product of the number of Common Equity Shares outstanding (less any
Purchased Shares) at the Expiration Time and the Current Market Price per
share of the Corporation's Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately prior
to the opening of business on the day following the Expiration Time. In the
event the Corporation or any subsidiary or controlled Affiliate is
obligated to purchase shares pursuant to any such tender offer, but the
Corporation or such subsidiary or controlled Affiliate is permanently
prevented by applicable law from effecting any such purchases, or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such tender offer had
not been made.
(v) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease of
at least 1% in such price; provided, however, that any adjustments that by
-------- -------
reason of this subparagraph (v) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment until
made; and provided, further, that any adjustment shall be required and made
-------- -------
in accordance with the provisions of this Section 6 (other than this
subparagraph (v)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of
Partnership Common Units. Notwithstanding any other provisions of this
Section 6, the Partnership shall not be required to make any adjustment of
the Conversion Price for the issuance of any Common Equity Shares pursuant
to any plan providing for the reinvestment of dividends or interest payable
on securities of the Corporation and the investment of additional optional
amounts in Common Equity Shares under such plan. All calculations under
this Section 6 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-hundredth of a partnership unit (with .005 of
a share being rounded upward), as the case may be. Anything in this
paragraph (d) to the contrary notwithstanding, the Partnership shall be
entitled, to the extent permitted by law, to make such reductions in the
Conversion Price, in addition to those required by this paragraph (d), as
it in its discretion shall determine to be advisable in order that any
partnership unit distributions, subdivision of partnership units,
reclassification or combination of partnership units, distribution of
rights or warrants to purchase partnership units, or distribution of other
assets (other than cash distributions) hereafter made by the Partnership to
its Partners shall not be taxable. To the extent permitted by applicable
law, the Partnership from time to time may reduce the Conversion Price by
any amount for any
L-17
period of time if the period is at least 20 days, the reduction is
irrevocable during the period and the Managing General Partner shall have
made a determination that such reduction would be in the best interests of
the Partnership, which determination shall be conclusive. Whenever the
Conversion Price is reduced pursuant to the preceding sentence, the
Partnership shall mail to the holder of each Series C-1 Partnership
Preferred Unit at his or her last address shown on the Partnership's
records a notice of reduction prior to the date the reduced Conversion
Price takes effect, and such notice shall state the reduced Conversion
Price and the period during which it will be in effect.
(e) If the Corporation shall be a party to any transaction (including,
without limitation, a merger, consolidation, statutory share exchange, self
tender offer for 40% or more of its Common Equity Shares, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Equity Shares and excluding any transaction as to which subparagraph (d)(i) of
this Section 6 applies) (each of the foregoing being referred to herein as a
"Transaction"), in each case as a result of which all or substantially all of
the Partnership Common Units are converted into the right to receive different
securities or other property (including cash or any combination thereof), each
Series C-1 Partnership Preferred Unit which is not redeemed or converted into
the right to receive different securities or other property prior to such
Transaction shall thereafter be convertible, in lieu of Partnership Common Units
into the kind and amount of different securities and other property (including
cash or any combination thereof) receivable upon the consummation of such
Transaction by a holder of that number of Partnership Common Units into which
one Series C-1 Partnership Preferred Unit was convertible immediately prior to
such Transaction, assuming such holder of Partnership Common Units (i) is not a
Person with which the Corporation consolidated or into which the Corporation
merged or which merged into the Corporation or to which such sale or transfer
was made, as the case may be ("Constituent Person"), or an Affiliate of a
Constituent Person and (ii) failed to exercise his rights of election, if any,
as to the kind or amount of shares, securities and other property (including
cash) receivable upon such Transaction (provided that if the kind or amount of
shares, securities and other property (including cash) receivable upon such
Transaction is not the same for each Common Equity Share held immediately prior
to such Transaction by other than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("Non-Electing Share"), then for the purpose of this paragraph (e) the kind and
amount of shares, securities and other property (including cash) receivable upon
such Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by holders of a plurality of the Non-Electing
Shares). The Corporation shall not be a party to any Transaction unless the
terms of such Transaction are consistent with the provisions of this paragraph
(e), and it shall not consent or agree to the occurrence of any Transaction
until the Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of the
Series C-1 Partnership Preferred Units that will contain provisions enabling the
holders of the Series C-1 Partnership Preferred Units that remain outstanding
after such Transaction to convert into the consideration received by holders of
Partnership Common Units at the Conversion Price in effect immediately prior to
such Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
L-18
(f) If:
(i) the Corporation shall declare a distribution (or any other
distribution) on its Common Equity Shares (other than cash distributions or
distributions paid with respect to the Common Equity Shares after December
31, 1997 not in excess of the sum of the Corporation's cumulative
undistributed Funds from Operations at December 31, 1997, plus the
cumulative amount of Funds from Operations, as determined by the Board of
Directors, after December 31, 1997, minus the cumulative amount of
distributions accrued or paid in respect of the Corporation's Series C-1
Equity Shares or any other class or series of preferred stock of the
Corporation after the Grant Date); or
(ii) the Corporation shall authorize the granting to all
holders of Common Equity Shares of rights, options or warrants to subscribe
for or purchase any shares of any class or any other rights, options or
warrants; or
(iii) there shall be any reclassification of the Common Equity
Shares (other than an event to which subparagraph (d)(i) of this Section 6
applies) or any consolidation or merger to which the Corporation is a party
(other than a merger in which the Corporation is the surviving entity) and
for which approval of any shareholders of the Corporation is required, or a
statutory share exchange, or a self tender offer by the Corporation for all
or substantially all of its outstanding shares of Common Stock or the sale
or transfer of all or substantially all of the assets of the Corporation as
an entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
then the Partnership shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of Series C-1 Partnership Preferred Units at
their addresses as shown on the records of the Partnership, as promptly as
possible, but at least 10 days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such distribution, distribution or granting of rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Equity Shares of record to be entitled to such distribution,
distribution or rights, options or warrants are to be determined or (B) the date
on which such reclassification, consolidation, merger, statutory share exchange,
sale, transfer, liquidation, dissolution or winding up is expected to become
effective, and the date as of which it is expected that holders of Partnership
Common Units of record shall be entitled to exchange their Partnership Common
Units for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation, dissolution or winding up. Failure to give or receive
such notice or any defect therein shall not affect the legality or validity of
the proceedings described in this Section 6.
L-19
(g) Whenever the Conversion Price is adjusted as herein provided, the
Partnership shall promptly file with the Transfer Agent a certificate setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment which certificate shall be
conclusive evidence of the correctness of such adjustment absent manifest error.
Promptly after delivery of such certificate, the Partnership shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the effective date of such adjustment and shall mail such
notice of such adjustment of the Conversion Price to the holder of each Series
C-1 Partnership Preferred Unit at such holder's last address as shown on the
records of the Partnership.
(h) In any case in which paragraph (d) of this Section 6 provides that
an adjustment shall become effective on the day next following the record date
for an event, the Partnership may defer until the occurrence of such event (A)
issuing to the holder of any Series C-1 Partnership Preferred Unit converted
after such record date and before the occurrence of such event the additional
Partnership Common Units issuable upon such conversion by reason of the
adjustment required by such event over and above the Partnership Common Units
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount of cash in lieu of any fraction pursuant to
paragraph (c) of this Section 6.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a reorganization, acquisition or
other similar transaction except as specifically set forth in this Section 6.
If any action or transaction would require adjustment of the Conversion Price
pursuant to both paragraph (d) and paragraph (e) of this Section 6, only one
adjustment shall be made, and such adjustment shall be the amount of adjustment
that has the highest absolute value.
(j) If the Corporation shall take any action affecting the Common
Equity Shares, other than action described in this Section 6, that in the
opinion of the Managing General Partner would materially and adversely affect
the conversion rights of the holders of the Series C-1 Partnership Preferred
Units, the Conversion Price for the Series C-1 Partnership Preferred Units may
be adjusted, to the extent permitted by law, in such manner, if any, and at such
time, as the Managing General Partner may determine to be equitable in the
circumstances.
(k) The Partnership covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Partnership Common Units, for the purpose of effecting
conversion of the Series C-1 Partnership Preferred Units, the full number of
Partnership Common Units deliverable upon the conversion of all outstanding
Series C-1 Partnership Preferred Units not theretofore converted. For purposes
of this paragraph (k), the number of Partnership Common Units that shall be
deliverable upon the conversion of all outstanding Series C-1 Partnership
Preferred Units shall be computed as if at the time of computation all such
outstanding units were held by a single holder.
L-20
Any Partnership Common Units issued upon conversion of the Series C-1
Partnership Preferred Units shall be validly issued, fully paid and
nonassessable.
The Partnership shall use its best efforts to comply with all federal
and state securities laws and regulations thereunder in connection with the
issuance of any securities that the Partnership shall be obligated to deliver
upon conversion of the Series C-1 Partnership Preferred Units. The certificates
evidencing such securities shall bear such legends restricting transfer thereof
in the absence of registration under applicable securities laws or an exemption
therefrom as the Partnership may in good ▇▇▇▇▇ ▇▇▇▇ appropriate.
(l) The Partnership will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
Partnership Common Units or other securities or property on conversion of the
Series C-1 Partnership Preferred Units pursuant hereto; provided, however, that
-------- -------
the Partnership shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of Partnership Common
Units or other securities or property in a name other than that of the holder of
the Series C-1 Partnership Preferred Units to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue or
delivery has paid to the Partnership the amount of any such tax or established,
to the reasonable satisfaction of the Partnership, that such tax has been paid.
7. Redemption at the Option of the Holder.
(a) At any time after August 12, 2008, the holders of Series C-1
Partnership Preferred Units shall have the right at any time that the
Corporation's Common Stock has a Current Market Price at or below the Conversion
Price per unit, to require the Partnership, to the extent the Partnership shall
have funds legally available therefor, to redeem any or all of the Series C-1
Partnership Preferred Units held by such holder at a repurchase price payable,
at the option of the Partnership, in either (i) cash or (ii) such number of
Partnership Common Units that shall be convertible into shares of the
Corporation's Common Stock as shall have a Current Market Price in the aggregate
on the day prior to the day such holder gives notice pursuant to Section 7(b) of
its intention to redeem, equal to in either case, 100% of the liquidation
preference thereof plus accrued and unpaid distributions whether or not
declared, if any, to the date of repurchase or the date payment is made
available (in the aggregate, the "Redemption Payment").
(b) For purposes of this Section 7, redemption at the option of the
holder shall be deemed to occur upon receipt by the Partnership of written
notice that the holder of Series C-1 Partnership Preferred Units wishes to
tender units to be redeemed. The holders of such units to be redeemed shall
then have 30 days from the date of such notice to deliver such units to the
Transfer Agent. Upon the surrender of the certificate or certificates of Series
C-1 Partnership Preferred Units to be redeemed, duly endorsed or assigned to the
Partnership or in blank, at the office of the Transfer Agent, the Partnership
shall promptly, either (i) by wire transfer of immediately available funds to
such holder, as directed by such holder, send an amount equal to the Redemption
Payment in respect
L-21
of all Series C-1 Partnership Preferred Units or portions thereof so tendered or
(ii) issue and deliver to such holder, or on his or her written order, a
certificate or certificates for the number of full Partnership Common Units
issuable in respect of all Series C-1 Partnership Preferred Units or portions
thereof so tendered.
8. Status of Reacquired Series C-1 Partnership Preferred Units.
All Series C-1 Partnership Preferred Units which shall have been
granted and reacquired in any manner by the Partnership shall be deemed
cancelled.
9. Ranking.
The Series C-1 Partnership Preferred Units shall with respect to
distribution rights and rights on liquidation, dissolution and winding up of the
affairs of the Partnership, rank pari passu to the Series A Partnership
----------
Preferred Units, the Series B Partnership Preferred Units, the Series C
Partnership Preferred Units, the Series C-2 Partnership Preferred Units, if any,
the Series D Partnership Preferred Units and the Series D-1 Partnership
Preferred Units.
Each Series C-1 Partnership Preferred Unit shall be identical in all
respects to each other Series C-1 Partnership Preferred Unit.
Any class or series of Partnership Units or Investor Unit Rights shall
be deemed to rank:
(a) prior or senior to the Series C-1 Partnership Preferred Units, as
to the payment of distributions and as to distributions of assets upon the
liquidation, dissolution and winding up of the Partnership, if the holders of
such class or series of Partnership Units or Investor Unit Rights, as the case
may be, shall be entitled to the receipt of distributions or of amounts
distributable upon the liquidation, dissolution and winding up of the
Partnership in preference or priority to the holders of Series C-1 Partnership
Preferred Units ("Senior Units");
(b) on a parity with the Series C-1 Partnership Preferred Units, as to
the payment of distributions and as to distribution of assets upon the
liquidation, dissolution and winding up of the Partnership, whether or not the
distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof shall be different from those of
the Series C-1 Partnership Preferred Units, if the holders of such class or
series of Partnership Units or Investor Unit Rights, as the case may be, and the
Series C-1 Partnership Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon the liquidation, dissolution and
winding up of the Partnership in proportion to their respective amounts of
accumulated and unpaid distributions per unit or other denomination or
liquidation preferences, without preference or priority one over the other
("Parity Units");
L-22
(c) junior to the Series C-1 Partnership Preferred Units, as to the
payment of distributions or as to the distribution of assets upon the
liquidation, dissolution and winding up of the Partnership, if the holders of
Series C-1 Partnership Preferred Units shall be entitled to receipt of
distributions or of amounts distributable upon the liquidation, dissolution and
winding up of the Partnership, in preference or priority to the holders of such
class or series of Partnership Units or Investor Unit Rights ("Junior Units");
and
(d) junior to the Series C-1 Partnership Preferred Units, as to the
payment of distributions and as to the distribution of assets upon the
liquidation, dissolution and winding up of the Partnership, if such class or
series of Partnership Units is Partnership Common Units or Class A Investor Unit
Rights, as the case may be, or if the holders of Series C-1 Partnership
Preferred Units shall be entitled to receipt of distributions and of amounts
distributable upon the liquidation, dissolution and winding up of the
Partnership, in preference or priority to the holders of such class or series of
Partnership Units or Investor Unit Rights ("Fully Junior Units").
10. Allocations.
(a) For each partnership year, each Holder of a Share of Series C-1
Preferred Units shall be allocated Net Income of the Partnership in an amount
equal to the amount of distributions made with respect to such Holder's Series
C-1 Preferred Units pursuant to Section 3 hereof during such Partnership Year.
In no event shall items of Net Loss of the Partnership be allocated to any
Holder of Series C-1 Preferred Units unless such allocation is required by
Section 704(b) of the Code or Section 10(b) of this Exhibit L.
---------
(b) If any Series C-1 Partnership Preferred Units are redeemed
pursuant to the terms of this Exhibit L, for the Partnership Year that includes
---------
such redemption (and, if necessary, for subsequent Partnership Years) (a) gross
income and gain (in such relative proportions as the Managing General Partner in
its discretion shall determine) shall be allocated to the Managing General
Partner and such Special Limited Partner(s) to the extent that the redemption
amounts paid or payable with respect to the Series C-1 Partnership Preferred
Units so redeemed (or treated as redeemed) exceeds the aggregate Capital Account
Balances (net of liabilities assumed or taken subject to by the Partnership) per
Series C-1 Partnership Preferred Unit allocable to the Series C-1 Partnership
Preferred Units so redeemed (or treated as redeemed) and (b) deductions and
losses (in such relative proportions as the Managing General Partner in its
discretion shall determine) shall be allocated to the Managing General Partner
and such Special Limited Partner(s) to the extent that the aggregate Capital
Account Balances (net of liabilities assumed or taken subject to by the
Partnership) per Series C-1 Partnership Preferred Unit allocable to the Series
C-1 Partnership Preferred Units so redeemed (or treated as redeemed) exceeds the
redemption amount paid or payable with respect to the Series C-1 Partnership
Preferred Units so redeemed (or treated as redeemed).
L-23
11. Voting and Consent Rights.
(a) Holders of Series C-1 Partnership Preferred Units shall have only
those voting and consent rights specified in Section 7.3.B of the Agreement and
Section 11(b) hereof.
(b) So long as any Series C-1 Partnership Preferred Units are
outstanding, in addition to any other vote or consent of holders of Series C-1
Partnership Preferred Units required by law or by the Agreement, the affirmative
vote or consent of holders of at least 50% of the outstanding Series C-1
Partnership Preferred Units, voting or consenting as a separate class, given in
Person or by proxy, either in writing without a meeting or by vote at any
meeting called for the purpose, shall be necessary for effecting or validating
any amendment or alteration of any of the provisions of this Partnership Unit
Designation or the Agreement that materially and adversely affects the material
powers, rights or preferences of the holders of the Series C-1 Partnership
Preferred Units; provided, however, that the amendment of the Agreement so as to
-------- -------
authorize, create, issue or grant any class or series of Partnership Units,
including, without limitation, any such Partnership Units that may have rights
senior or superior to the Series C-1 Partnership Preferred Units, shall be
deemed not to materially and adversely affect the material powers, rights or
preferences of the holders of Series C-1 Partnership Preferred Units.
(c) Except as otherwise required by applicable law or as set forth
herein or in the Agreement, the holders of the Series C-1 Partnership Preferred
Units shall not have any relative, participating, optional or other special
voting rights or powers with respect to any matter, and the consent or approval
of the holders thereof shall not be required for the taking of any action by the
Partnership.
12. Information Rights.
Holders of Series C-1 Partnership Preferred Units shall have only the
information rights specified in Section 8.5.A and Section 9.3 of the Agreement.
13. Restrictions on Transfer.
The Series C-1 Partnership Preferred Units are subject to the
restrictions on transfer set forth in Article 11 of the Agreement.
14. Ambiguity.
In the case of an ambiguity in the application of any of the
provisions of this Partnership Unit Designation, the Managing General Partner
shall have the power to determine the application of the provisions of this
Partnership Unit Designation with respect to any situation based on its
reasonable belief, understanding or knowledge of the circumstances.
L-24
15. Partnership Records.
The Managing General Partner shall amend Exhibit A to the Agreement
---------
from time to time to the extent necessary to reflect accurately the grant and
any subsequent redemption of, or other event having an effect on the ownership
of, Series C-1 Partnership Preferred Units.
16. Governing Law.
This Exhibit L shall be construed and enforced in accordance with, and
---------
governed by, the laws of the State of Delaware, without regard to principles of
conflicts of law.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
L-25
EXHIBIT M
PARTNERSHIP UNIT DESIGNATION OF SERIES D-1
PARTNERSHIP PREFERRED UNITS OF
WESTFIELD AMERICA LIMITED PARTNERSHIP
1. Creation, Number and Designation.
A class of Partnership Preferred Units is hereby created and designated as
"Series D-1 Partnership Preferred Units." The number of Partnership Preferred
Units constituting the Series D-1 Partnership Preferred Units shall be 138,889.
The number of Series D-1 Partnership Preferred Units may be decreased (but not
below the aggregate number thereof then outstanding and/or which have been
reserved for issuance). Each Series D-1 Partnership Preferred Unit shall be
identical in all respects to each other Series D-1 Partnership Preferred Unit.
2. Definitions.
For purposes of this Partnership Unit Designation, the following terms
shall have the respective meanings indicated in this Section 2, and capitalized
terms used but not otherwise defined herein shall have the respective meanings
ascribed thereto in the Agreement:
"Affiliate" of, or Person "Affiliated" with, a specified Person, shall mean
a Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with the Person
specified. For purposes of the Corporation, Affiliate shall include, without
limitation, Westfield Holdings Limited ("WHL"), Westfield America Trust, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ (such individuals being the "▇▇▇▇
Family").
"Agreement" shall mean the First Amended and Restated Agreement of Limited
Partnership of Westfield America Limited Partnership, dated as of August 3,
1998, as amended, modified, supplemented or restated, from time to time.
"Base Distribution" shall mean an annual distribution per Series D-1
Partnership Preferred Unit equal to 8.5% of the Liquidation Preference per
Series D-1 Partnership Preferred Unit.
"Board of Directors" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the capital stock of the Corporation.
"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, New York, are authorized or required by law, regulation or executive order
to close.
M-1
"Call Date" shall mean the date specified in the notice to holders required
under Section 5 (d) as the Call Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock, par value $0.01 per share, of the
Corporation.
"Common Equity Shares" shall mean the Common Shares and the Excess Common
Shares which are issued with respect to the Common Stock.
"Common Shares"shall mean the shares of Common Stock.
"Consolidated EBITDA" for any quarter shall mean the consolidated net
income of the Corporation (before extraordinary income or gains and less equity
in income of unconsolidated real estate partnerships), calculated in a manner
consistent with the Corporation's financial statements filed with the Securities
and Exchange Commission, increased by the sum of the following (without
duplication):
(a) the Corporation's pro rata share of EBITDA from unconsolidated
real estate partnerships calculated in a manner consistent with this definition
of Consolidated EBITDA,
(b) all income taxes paid or accrued according to GAAP for such
quarter (other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses except to the extent that such gains were not
included in Consolidated EBITDA),
(c) all interest expense paid or accrued in accordance with GAAP for
such quarter (including financing fees and amortization of deferred financing
fees or amortization of original issue discount, but excluding capitalized
interest),
(d) depreciation and depletion reflected in such net income,
(e) amortization reflected in such net income including, without
limitation, amortization of capitalized debt issuance costs (only to the extent
that such amounts have not been previously included in the amount of
Consolidated EBITDA pursuant to paragraph (c) above), goodwill, other
intangibles and management fees, and
(f) any other noncash charges, to the extent deducted from
consolidated net income (including, but not limited to, income allocated to
minority interests).
"Consolidated Fixed Charges" for any quarter shall mean the sum of:
M-2
(a) the Corporation's pro rata share of fixed charges from
unconsolidated real estate partnerships calculated in a manner consistent with
this definition of Consolidated Fixed Charges,
(b) all interest expense paid or accrued in accordance with GAAP for
such quarter (including, without duplication, financing fees and amortization of
deferred financing fees or amortization of original issue discount),
(c) distribution requirements with respect to preferred stock and any
other preferred securities for such quarter (not including any portion of
preferred stock distributions the calculation of which is based on the
distribution paid in such quarter to the holders of shares of the Corporation's
Common Stock), whether or not declared or paid,
(d) regularly scheduled amortization of principal of debt during such
quarter (other than any balloon payments at maturity) and
(e) all ground rent payments.
"Constituent Person" shall have the meaning set forth in Section 6(e)
hereof.
"Conversion Date" shall have the meaning set forth in Section 6(a) hereof.
"Conversion Price" shall mean the conversion price per Partnership Common
Unit for which the Series D-1 Partnership Preferred Unit is convertible, as such
Conversion Price may be adjusted pursuant to Section 6. The initial conversion
price shall be $18.00.
"Corporation" shall mean Westfield America, Inc., a Missouri corporation.
"Current Market Price" of publicly traded Common Stock or any other class
of stock or other security of the Corporation or any other issuer for any day
shall mean the last reported sales price, regular way, on such day, or, if no
sale takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the New York
Stock Exchange ("NYSE") or, if such security is not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which such
security is listed or admitted for trading or, if not listed or admitted for
trading on any national securities exchange, on the Nasdaq National Market
("NASDAQ") or, if such security is not quoted on NASDAQ, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by the National Association of Securities Dealers, Inc. (the "NASD")
or, if bid and asked prices for such security on such day shall not have been
reported through the NASD, the average of the bid and asked prices on such day
as furnished by any NYSE member firm regularly making a market in such security
selected for such purpose by the Board of Directors.
"Distribution Payment Date" shall mean (i), for any Distribution Period
with respect to which the Partnership pays a distribution on the Partnership
Common Unit, the date on which such
M-3
distribution is paid or (ii), for any Distribution Period with respect to which
the Partnership does not pay a distribution on the Partnership Common Unit, a
date to be set by the Managing General Partner, which date shall not be later
than the thirtieth calendar day after the end of the applicable Distribution
Period.
"Distribution Periods" shall mean quarterly distribution periods commencing
on January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding Distribution
Period with respect to any Series D-1 Partnership Preferred Units (other than
the initial Distribution Period, which shall commence on the Grant Date for such
Series D-1 Partnership Preferred Units and end on and include the last day of
the calendar quarter immediately following such Grant Date, and other than the
Distribution Period during which any Series D-1 Partnership Preferred Units
shall be redeemed pursuant to Section 5 or converted pursuant to Section 6,
which shall end on and include the Call Date or Conversion Date with respect to
the Series D-1 Partnership Preferred Units being redeemed or converted, as
applicable).
"Excess Common Shares" shall mean shares of excess stock of the
Corporation, par value $0.01 per share, which are issued with respect to Common
Stock.
"Expiration Time" shall have the meaning set forth in Section 6(d)(iv)
hereof.
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a share of the Corporation's Common Stock on the five (5) consecutive
Trading Days selected by the Corporation commencing not more than 20 Trading
Days before, and ending not later than, the earlier of the day in question and
the day before the "ex date" with respect to the issuance or distribution
requiring such computation. The term "ex date," when used with respect to any
issuance or distribution, means the first day on which the Common Stock trade
regular way, without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that day's
Current Market Price.
"Fixed Charge Coverage Violation" shall have the meaning set forth in
Section 3(a) hereof.
"Fully Junior Units" shall have the meaning set forth in Section 9(d)
hereof.
"Funds from Operations" shall mean net income (loss) (computed in
accordance with generally accepted accounting principles) excluding gains (or
losses) from debt restructuring, and distributions in excess of earnings
allocated to other operating partnership interests or minority interests (as
reflected in the financial statements of the Corporation) plus
depreciation/amortization of assets unique to the real estate industry, all
computed in a manner consistent with the revised definition of Funds From
Operations adopted by the National Association of Real Estate Investment Trusts
(NAREIT), in its White Paper dated March 1995, as such definitions may be
modified from time to time.
"Grant Date" shall mean the date on which the Series D-1 Partnership
Preferred Units are issued.
M-4
"Junior Units" shall have the meaning set forth in Section 9(c) hereof.
"Non-Electing Share" shall have the meaning set forth in Section 6(e)
hereof.
"Partnership" shall mean Westfield America Limited Partnership, a Delaware
limited partnership.
"Parity Units" shall have the meaning set forth in Section 9(b) hereof.
"Person" shall mean any individual, firm, partnership, corporation, limited
liability company, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Purchased Shares" shall have the meaning set forth in Section 6(d)(iv)
hereof.
"REIT Termination Event" shall mean the earliest to occur of:
(a) the filing of a federal income tax return by the Corporation for
any taxable year on which the Corporation does not compute its income as a real
estate investment trust;
(b) the approval by the shareholders of the Corporation of a proposal
for the Corporation to cease to qualify as a real estate investment trust;
(c) a determination by the Board of Directors of the Corporation,
based on the advice of counsel, that the Corporation has ceased to qualify as a
real estate investment trust; or
(d) a "determination" within the meaning of Section 1313(a) of the
Code that the Corporation has ceased to qualify as a real estate investment
trust.
"Securities" and "Security" shall have the meanings set forth in Section
6(d)(iii) hereof.
"Series D-1 Partnership Preferred Unit" means a Partnership Unit created
under this Partnership Unit Designation, with the designations, preferences and
relative, participating, optional or other special rights, powers and duties set
forth in this Exhibit M.
---------
"Senior Units" shall have the meaning set forth in Section 9(a) hereof.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Partnership in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of distributions by the Managing General Partner, the allocation of
funds to be so paid on any series or class of partnership units of the
Partnership; provided, however, that if any funds for any class or series of
-------- -------
Junior Units or Fully Junior Units or any class or series of Parity Units are
placed in a separate account of the Partnership or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with respect to the
Series D-1 Partnership Preferred Units shall mean placing such funds in a
separate account
M-5
or delivering such funds to a disbursing, paying or other similar agent.
"Trading Day" shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for trading
on the NYSE, on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities exchange, on NASDAQ, or if such securities are not
quoted on NASDAQ, in the securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in Section 6(e) hereof.
"Transfer Agent" shall mean the Managing General Partner, or such other
agent or agents of the Partnership as may be designated by the Managing General
Partner as the transfer agent, registrar and distribution disbursing agent for
the Series D-1 Partnership Preferred Units and notified to the holders of the
Series D-1 Partnership Preferred Units.
3. Distributions.
(a) Holders of Series D-1 Partnership Preferred Units shall not be
entitled to any distributions on the Series D-1 Partnership Preferred Units,
whether payable in cash, property or stock, except as provided in this
Exhibit K.
(b) Subject to the preferential rights of the holders of any
Partnership Preferred Units that rank senior in the payment of distributions to
the Series D-1 Partnership Preferred Units and subject to paragraph (c) of this
Section 3, the holders of Series D-1 Partnership Preferred Units shall be
entitled to receive, when, as and if declared by the Managing General Partner,
but only out of funds legally available for the payment of distributions,
cumulative preferential distributions payable in cash to holders of record on
the respective date, not exceeding 50 days preceding such distribution payment
date, fixed for the purpose by the Managing General Partner in advance of
payment of each particular distribution in an amount equal to the greater of (A)
the Base Distribution per unit per annum and (B) an amount per unit equal to the
Liquidation Preference of a Series D-1 Partnership Preferred Unit (exclusive of
accrued but unpaid distributions) divided by the Conversion Price (the "Series
D-1 Common Equivalent Factor") times the dollar amount of cash distributions
declared with respect to each Partnership Common Unit that does not result in an
adjustment to the Conversion Price pursuant to subparagraph (d)(iii) of Section
6 (such product, the "Series D-1 Common Equivalent Amount") for the same annual
period; provided, however, that if as a result of the quarterly distributions
-------- -------
paid in accordance with the following sentence, the holders of Series D-1
Partnership Preferred Units shall have received for any calendar year more
distributions than such units shall be entitled under subparagraphs (A) and (B)
above (as adjusted pursuant to the third and eighth sentences of this Section
3), the distributions payable in respect of Series D-1 Partnership Preferred
Units in subsequent calendar years shall be reduced to the extent of such
overpayment.
Subject to the proviso of the preceding sentence of this Section 3(b),
the distribution paid in respect of each quarterly period in each calendar year
shall be determined as follows (in each case, excluding any additional payment
made pursuant to the following sentence): (1) for the first
M-6
quarter, the greater of 25% of the Base Distribution per unit and the Series D-1
Common Equivalent Amount for the same quarter; (2) for the second quarter, an
amount such that the aggregate amount to be received per Series D-1 Partnership
Preferred Unit in respect of the first two quarters of such calendar year shall
be the greater of 50% of the Base Distribution per unit and the Series D-1
Common Equivalent Amount for the same two quarters; (3) for the third quarter,
in amount such that the aggregate amount to be received per Series D-1
Partnership Preferred Unit in respect of the first three quarters of such
calendar year shall be the greater of 75% of the Base Distribution per unit and
the Series D-1 Common Equivalent Amount for the same three quarters; and (4) for
the fourth quarter, an amount such that the aggregate amount to be received per
Series D-1 Partnership Preferred Unit in respect of such calendar year shall be
the amount provided in the preceding sentence of this Section 3(b).
Notwithstanding the foregoing, for any quarter in which a Fixed Charge Coverage
Violation (as defined below) has occurred, the distribution payable per
Series D-1 Partnership Preferred Unit shall be 1.20 times the amount provided in
the preceding sentence. A "Fixed Charge Coverage Violation" shall occur for any
quarter that the ratio of the Corporation's Consolidated EBITDA to its
Consolidated Fixed Charges is below 1.40 to 1.
The distributions shall begin to accrue as set forth above and shall
be fully cumulative from the first day of the applicable Distribution Period,
whether or not in any Distribution Period or Periods there shall be funds of the
Partnership legally available for the payment of such distributions, and shall
be payable quarterly, when, as and if declared by the Managing General Partner,
in arrears on the Distribution Payment Dates. Accumulated but unpaid
distributions for any past quarterly Distribution Periods may be declared and
paid at any time, without reference to any regularly scheduled quarterly
Distribution Payment Date, to holders of record on such date, not exceeding 50
days preceding such Distribution Payment Date, fixed for the purpose by the
Managing General Partner in advance of payment of each particular distribution.
Any distribution payment made on Series D-1 Partnership Preferred Units shall
first be credited against the earliest accrued but unpaid distribution due with
respect to Series D-1 Partnership Preferred Units which remains payable.
Beginning with the quarter in which a REIT Termination Event Occurs, all
distributions payable per Series D-1 Partnership Preferred Unit pursuant to this
Section 3 shall be multiplied by 2.5.
(c) The initial Distribution Period for the Series D-1 Partnership
Preferred Units will include a partial distribution for the period from the
Grant Date until the last day of the calendar quarter immediately following such
Grant Date. The amount of distributions payable for such initial period, or any
other period shorter than a full quarterly Distribution Period, on the Series D-
1 Partnership Preferred Units shall be computed by dividing the number of days
in such period by 90 and multiplying the result by the Series D-1 Equity
distribution determined in accordance with Section 3(b). Holders of Series D-1
Partnership Preferred Units shall not be entitled to any distributions, whether
payable in cash, property or partnership units, in excess of cumulative
distributions, as herein provided, on the Series D-1 Partnership Preferred
Units. No interest, or sum of money in lieu of interest, shall be payable in
respect of any distribution payment or payments on the Series D-1 Partnership
Preferred Units which may be in arrears.
M-7
(d) So long as any of the Series D-1 Partnership Preferred Units are
outstanding, except as described in the immediately following sentence, no
distributions shall be declared, paid or set apart for payment by the
Partnership, and no other distribution of cash or other property shall be made,
directly or indirectly, by the Partnership with respect to any class or series
of Parity Units for any period unless distributions equal to the full amount of
accumulated and unpaid distributions have been, or contemporaneously are, paid
with respect to the Series D-1 Partnership Preferred Units for all Distribution
Periods terminating on or prior to the Distribution Payment Date with respect to
such class or series of Parity Units. When the distributions provided for in
Section 3(b) hereof are not paid in full, all distributions paid with respect to
the Series D-1 Partnership Preferred Units and all distributions paid with
respect to any other class or series of Parity Units shall be paid ratably in
proportion to the respective amounts of distributions accumulated and unpaid on
the Series D-1 Partnership Preferred Units and accumulated and unpaid on such
Parity Units.
(e) So long as any Series D-1 Partnership Preferred Units are
outstanding, no distributions (other than distributions paid solely in Fully
Junior Units or options, warrants or rights to subscribe for or purchase Fully
Junior Units) shall be paid by the Partnership, and no other distribution of
cash or other property shall be made, directly or indirectly, by the Partnership
with respect to any Junior Units, nor shall any Junior Units be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any such Junior
Units), directly or indirectly, by the Partnership (except by conversion into or
exchange for Fully Junior Units), nor shall any other cash or other property
otherwise be paid or distributed to or for the benefit of any holder of Junior
Units in respect thereof, directly or indirectly, by the Partnership unless in
each case the full cumulative distributions (including all accumulated and
unpaid distributions) on all outstanding Series D-1 Partnership Preferred Units
and any other Parity Units of the Partnership shall have been or
contemporaneously are declared and paid or declared and set apart for payment
for all past Distribution Periods with respect to the Series D-1 Partnership
Preferred Units and all Distribution Periods terminating on or prior to the date
of payment of the Series D-1 Partnership Preferred Units and all Distribution
Periods terminating on or prior to the date of payment on all Parity Units of
the Partnership with respect to such Parity Units. Subject to the foregoing,
and not otherwise, such distributions may be declared by the Managing General
Partner and paid on any Partnership Common Units from time to time out of funds
legally available therefor, and the Series D-1 Partnership Preferred Units shall
not be entitled to participate in any such distributions, whether payable in
cash, partnership units or otherwise.
(f) No distributions on the Series D-1 Partnership Preferred Units
shall be declared by the Managing General Partner or paid or set apart for
payment by the Partnership at such time as the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, prohibits such declaration, payment or setting apart for payment
or provides 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.
(g) In determining whether a distribution by cash payment, redemption
or other
M-8
acquisition of Units or otherwise is permitted under Delaware law, no
effect shall be given to amounts that would be needed, if the Partnership were
to be dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of holders whose preferential rights on dissolution are
superior to those receiving the distribution.
(h) Notwithstanding the foregoing, it is acknowledged that the
Managing General Partner may, pursuant to the Agreement, elect to make
distributions on the Partnership Common Units on a more or less frequent basis
than quarterly and provide for an appropriate record date; in the event that the
Managing General Partner elects to effect such a non-quarterly distribution, the
Managing General Partner may, in its sole and absolute discretion, cause a
Distribution Period (and related Distribution Payment Date) to be established to
reflect the period established for such Partnership Common Unit distributions
and to make such revisions to the distributions provided in Section 3(b) hereof
as may be required to reflect that more or less than four Distribution Payment
Dates will occur during the relevant calendar year.
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Partnership, whether voluntary or involuntary, subject to the prior preferences
and other rights of any Senior Units, before any payment or distribution of the
assets of the Partnership (whether capital or surplus) shall be made to or set
apart for the holders of Junior Units, the holders of the Series D-1 Partnership
Preferred Units shall be entitled to receive One Hundred Eighty Dollars
($180.00) (the "Liquidation Preference") per Series D-1 Partnership Preferred
Unit plus an amount equal to all distributions (whether or not earned or
declared) accrued and unpaid thereon to the date of liquidation, dissolution or
winding up of the affairs of the Partnership (any such date, a "Series D-1
Liquidation Date"), but such holders shall not be entitled to any further
payment; provided that the distribution payable with respect to the Distribution
--------
Period containing the Series D-1 Liquidation Date shall be equal to the
distribution determined pursuant to Section 3 above for the preceding
Distribution Period times a fraction equal to the actual number of days elapsed
from the end date of the calendar quarter most recently completed to the
relevant Series D-1 Liquidation Date over 90 days. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of the Series D-1 Partnership
Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other units of any class or series of
Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the holders of Series D-1 Partnership Preferred Units and any such other
Parity Units ratably in accordance with the respective amounts that would be
payable on such Series D-1 Partnership Preferred Units and any such other Parity
Units if all amounts payable thereon were paid in full. For the purposes of
this Section 4, (i) a consolidation or merger of the Partnership with one or
more corporations, partnerships or other entities or (ii) a sale, lease or
conveyance of all or substantially all of the Partnership's property or business
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Partnership.
(b) Subject to the rights of the holders of Parity Units or Senior
Units, upon any
M-9
liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of the Series D-1 Partnership Preferred
Units, as provided in this Section 4, the holders of Series D-1 Partnership
Preferred Units shall have no other claim to the remaining assets of the
Partnership, and any other series or class or classes of Junior Units shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Series D-1 Partnership Preferred Units shall not be entitled
to share therein.
5. Redemption at the Option of the Partnership.
(a) The Series D-1 Partnership Preferred Units shall not be redeemable
by the Partnership prior to August 12, 2008. On and after August 12, 2008, the
Partnership, at its option, may redeem the Series D-1 Partnership Preferred
Units, in whole at any time or from time to time in part, in minimum increments
of $10.0 million of aggregate Liquidation Preference of such units, out of funds
legally available therefor at a redemption price payable in cash equal to 100%
of the Liquidation Preference per Series D-1 Partnership Preferred Unit (plus
all accumulated, accrued and unpaid distributions as provided in paragraph (c)
below).
(b) In the event that WHL and its subsidiaries and the trustee of
Westfield America trust on behalf of Westfield America Trust do not vote to
approve the conversion of the Corporation's Series D-1 Equity Shares into Common
Equity Shares at the Corporation's 1999 Annual Shareholder Meeting or at any
other meeting of the Corporation's shareholders at which such proposal is
raised, the Partnership shall have the right to redeem the Series D-1
Partnership Preferred Units, in whole or in part, out of funds legally available
therefor at a redemption price payable in cash equal to 100% of the Liquidation
Preference per Series D-1 Partnership Preferred Unit (plus all accumulated,
accrued and unpaid distributions as provided in paragraph (c) below).
(c) Upon any redemption of Series D-1 Partnership Preferred Units
pursuant to this Section 5, the Partnership shall pay all accrued and unpaid
distributions, if any, thereon to the Call Date, without interest. If the Call
Date falls after a distribution payment record date and prior to the
corresponding Distribution Payment Date, then each holder of Series D-1
Partnership Preferred Units at the close of business on such distribution
payment record date shall be entitled to the distribution payable on such units
on the corresponding Distribution Payment Date notwithstanding any redemption of
such units before such Distribution Payment Date. Except as provided above, the
Partnership shall make no payment or allowance for unpaid distributions, whether
or not in arrears, on Series D-1 Partnership Preferred Units called for
redemption.
(d) If full cumulative distributions on the Series D-1 Partnership
Preferred Units and any other class or series of Parity Units of the Partnership
have not been declared and paid or declared and set apart for payment, the
Series D-1 Partnership Preferred Units may not be redeemed under this Section 5
in part and may not be redeemed unless the Series D Partnership Preferred Units
are also redeemed in whole, and the Partnership may not purchase or acquire
Series D Partnership Preferred Units or Series D-1 Partnership Preferred Units,
otherwise than pursuant to a purchase or
M-10
exchange offer made on the same terms to all holders of Series D Partnership
Preferred Units and Series D-1 Partnership Preferred Units.
(e) Notice of the redemption of any Series D-1 Partnership Preferred
Units under this Section 5 shall be mailed by first-class mail or recognized
overnight courier to each holder of record of Series D-1 Partnership Preferred
Units to be redeemed at the address of each such holder as shown on the
Partnership's records, not less than 30 nor more than 90 days prior to the Call
Date. Neither the failure to mail any notice required by this paragraph (e), nor
any defect therein or in the mailing thereof, to any particular holder, shall
affect the sufficiency of the notice or the validity of the proceedings for
redemption with respect to the other holders. Each such mailed notice shall
state, as appropriate: (1) the Call Date; (2) the number of Series D-1
Partnership Preferred Units to be redeemed and, if fewer than all the units held
by such holder are to be redeemed, the number of such units to be redeemed from
such holder; (3) the redemption price; (4) the place or places at which
certificates for such units are to be surrendered; (5) the then-current
Conversion Price; and (6) that distributions on the units to be redeemed shall
cease to accrue on such Call Date except as otherwise provided herein. Notice
having been mailed as aforesaid, from and after the Call Date (unless the
Partnership shall fail to make available an amount of cash necessary to effect
such redemption), (i) except as otherwise provided herein, distributions on the
Series D-1 Partnership Preferred Units so called for redemption shall cease to
accrue, (ii) such units shall no longer be deemed to be outstanding, and (iii)
all rights of the holders thereof as holders of Series D-1 Partnership Preferred
Units shall cease (except the rights to receive the cash payable upon such
redemption, without interest thereon, upon surrender and endorsement of their
certificates if so required and to receive any distributions payable thereon).
The Partnership's obligation to provide cash in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the Call Date, the
Partnership shall deposit with a bank or trust company that has an office in the
Borough of Manhattan, City of New York, and that has capital and surplus of at
least $150,000,000, necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the Series D-1
Partnership Preferred Units so called for redemption. Notwithstanding the
foregoing, the Partnership shall, in the first instance, send the money to any
holder of Series D-1 Partnership Preferred Units that has notified the
Partnership in writing of the location of delivery of funds. No interest shall
accrue for the benefit of the holders of Series D-1 Partnership Preferred Units
to be redeemed on any cash so set aside by the Partnership. Subject to
applicable escheat laws, any such cash unclaimed at the end of two years from
the Call Date shall revert to the general funds of the Partnership, after which
reversion the holders of such units so called for redemption shall look only to
the general funds of the Partnership for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such units so redeemed (properly endorsed or
assigned for transfer, if the Partnership shall so require and if the notice
shall so state), such units shall be exchanged for any cash (without interest
thereon) for which such units have been redeemed. If fewer than all the
outstanding Series D-1 Partnership Preferred Units are to be redeemed, units to
be redeemed shall be selected by the Partnership from outstanding Series D-1
Partnership Preferred Units not previously called for redemption pro rata (as
nearly as may be), by lot or by any other method
M-11
determined by the Partnership in its sole discretion to be equitable. If fewer
than all the Series D-1 Partnership Preferred Units evidenced by any certificate
are redeemed, then new certificates evidencing the unredeemed Series D-1
Partnership Preferred Units shall be issued without cost to the holder thereof.
6. Conversion.
The Series D-1 Partnership Preferred Units shall not be convertible
into Partnership Common Units prior to (i) a vote of the shareholders of the
Corporation approving the conversion of the Corporation's Series D-1 Equity
Shares into Common Equity Shares or (ii) the transfer of the Series D-1 Equity
Shares to an individual to whom the Corporation is permitted to issue Common
Equity Shares without shareholder approval, in accordance with the rules of the
NYSE. Subject to the foregoing, holders of Series D-1 Partnership Preferred
Units shall have the right to convert all or a portion of such units into
Partnership Common Units, as follows:
(a) Subject to and upon compliance with the provisions of this Section
6, a holder of Series D-1 Partnership Preferred Units shall have the right, at
his or her option, at any time (such time being the "Conversion Date"), to
convert all or any portion of such units into the number of Partnership Common
Units obtained by dividing the aggregate Liquidation Preference of such units
(inclusive of accrued but unpaid distributions) by the Conversion Price (as in
effect at the time and on the date provided for in the last paragraph of
paragraph (b) of this Section 6) by surrendering such units to be converted,
such surrender to be made in the manner provided in paragraph (b) of this
Section 6; provided, however, that the right to convert Series D-1 Partnership
-------- -------
Units called for redemption pursuant to Section 5 shall terminate at the close
of business on the fifth Business Day prior to the Call Date fixed for such
redemption, unless the Partnership shall default in making payment of the cash
payable upon such redemption under Section 5.
(b) In order to exercise the conversion right, the holder of each unit
of Series D-1 Partnership Preferred Units to be converted shall surrender the
certificate representing such unit, duly endorsed or assigned to the Partnership
or in blank, at the office of the Transfer Agent, accompanied by written notice
to the Partnership that the holder thereof irrevocably elects to convert such
Series D-1 Partnership Preferred Units. Unless the partnership units issuable
on conversion are to be issued in the same name as the name in which such Series
D-1 Partnership Preferred Units are registered, each partnership unit
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Partnership, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Partnership
demonstrating that such taxes have been paid).
Holders of Series D-1 Partnership Preferred Units at the close of
business on a distribution payment record date shall be entitled to receive the
distribution payable on such units on the corresponding Distribution Payment
Date notwithstanding the conversion thereof following such distribution payment
record date and prior to such Distribution Payment Date. However, Series D-1
Partnership Preferred Units surrendered for conversion during the period between
the close of
M-12
business on any distribution payment record date and the opening of business on
the corresponding Distribution Payment Date (except units converted after the
issuance of notice of redemption with respect to a Call Date during such period,
such Series D-1 Partnership Preferred Units being entitled to such distribution
on the Distribution Payment Date) must be accompanied by payment of an amount
equal to the distribution payable on such units on such Distribution Payment
Date. A holder of Series D-1 Partnership Preferred Units on a distribution
payment record date who (or whose transferee) tenders any such units for
conversion into Partnership Common Units on the corresponding Distribution
Payment Date will receive the distribution payable by the Partnership on such
Series D-1 Partnership Preferred Units on such date, and the converting holder
need not include payment of the amount of such distribution upon surrender of
Series D-1 Partnership Preferred Units for conversion. Except as provided above,
the Partnership shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted units or for distributions on the
Partnership Common Units issued upon such conversion.
As promptly as practicable after the surrender of certificates for
Series D-1 Partnership Preferred Units as aforesaid, the Partnership shall issue
and shall deliver at such office to such holder, or on his or her written order,
a certificate or certificates for the number of full Partnership Common Units
issuable upon the conversion of such units in accordance with provisions of this
Section 6, and any fractional interest in respect of a Partnership Common Unit
arising upon such conversion shall be settled as provided in paragraph (c) of
this Section 6.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for Series
D-1 Partnership Preferred Units shall have been surrendered and such notice
shall have been received by the Partnership as aforesaid (and if applicable,
payment of an amount equal to the distribution payable on such units shall have
been received by the Corporation as described above), and the Person or Persons
in whose name or names any certificate or certificates for Partnership Common
Units shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the units represented thereby at such time on
such date and such conversion shall be at the Conversion Price in effect at such
time on such date unless the transfer books of the Partnership shall be closed
on that date, in which event such Person or Persons shall be deemed to have
become such holder or holders of record at the close of business on the next
succeeding day on which such transfer books are open, but such conversion shall
be at the Conversion Price in effect on the date on which such units shall have
been surrendered and such notice received by the Partnership.
(c) No fractional units or scrip representing fractions of Partnership
Common Units shall be issued upon conversion of the Series D-1 Partnership
Preferred Units. Instead of any fractional interest in a Partnership Common
Unit that would otherwise be deliverable upon the conversion of a Series D-1
Partnership Preferred Unit, the Partnership shall pay to the holder of such unit
an amount in cash based upon the Current Market Price of the Corporation's
Common Stock on the Trading Day immediately preceding the date of conversion.
If more than one Series D-1 Partnership Unit shall be surrendered for conversion
at one time by the same holder, the number of full Partnership Common Units
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of Series D-1 Partnership Preferred Units so surrendered.
M-13
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Grant Date (A) pay a
dividend or make a distribution on its Common Equity Shares in Common
Equity Shares, (B) subdivide its outstanding Common Equity Shares into a
greater number of units, (C) combine its outstanding Common Equity Shares
into a smaller number of units or (D) issue any shares of stock by
reclassification of its Common Equity Shares, the Conversion Price in
effect at the opening of business on the day following the date fixed for
the determination of holders entitled to receive such dividend or
distribution or at the opening of business on the Business Day next
following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be adjusted
so that the holder of any Series D-1 Equity Shares thereafter surrendered
for conversion shall be entitled to receive the number of Common Equity
Shares that such holder would have owned or have been entitled to receive
after the happening of any of the events described above as if such Series
D-1 Equity Shares had been converted immediately prior to the record date
in the case of a dividend or distribution or the effective date in the case
of a subdivision, combination or reclassification. An adjustment made
pursuant to this subparagraph (i) shall become effective immediately after
the opening of business on the Business Day next following the record date
(except as provided in paragraph (h) below) in the case of a dividend or
distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case
of a subdivision, combination or reclassification.
(ii) If the Corporation shall issue after the Grant Date rights,
options or warrants to all holders of Common Equity Shares entitling them
(for a period expiring within 45 days after the record date mentioned
below) to subscribe for or purchase Common Equity Shares at a price per
share less than 95% (100% if a standby underwriter is used and charges the
Corporation a commission) of the Fair Market Value per share of the
Corporation's Common Stock on the record date for the determination of
holders entitled to receive such rights, options or warrants, then the
Conversion Price in effect at the opening of business on the Business Day
next following such record date shall be adjusted to equal the price
determined by multiplying (A) the Conversion Price in effect immediately
prior to the opening of business on the Business Day next following the
date fixed for such determination by (B) a fraction, the numerator of which
shall be the sum of (x) the number of Common Equity Shares outstanding on
the close of business on the date fixed for such determination and (y) the
number of shares that the aggregate proceeds to the Corporation from the
exercise of such rights, options or warrants for Common Equity Shares would
purchase at 95% of such Fair Market Value (or 100% in the case of a standby
underwriting), and the denominator of which shall be the sum of (x) the
number of Common Equity Shares outstanding on the close of business on the
date fixed for such determination and (y) the number of additional Common
Equity Shares offered for subscription or purchase pursuant to such rights,
options or warrants. Such adjustment shall become effective immediately
after the opening of business on the day next following such record date
(except as provided
M-14
in paragraph (h) below). In determining whether any rights, options or
warrants entitle the holders of Common Equity Shares to subscribe for or
purchase Common Equity Shares at less than 95% of such Fair Market Value
(or 100% in the case of a standby underwriting), there shall be taken into
account any consideration received by the Corporation upon issuance and
upon exercise of such rights, options or warrants, the value of such
consideration, if other than cash, to be determined by the Board of
Directors whose determination shall be conclusive. To the extent that
Common Equity Shares are not delivered pursuant to such rights, options or
warrants, upon the expiration or termination of such rights, options or
warrants, the Conversion Price shall be readjusted to the Conversion Price
which would then be in effect had the adjustments made upon the issuance of
such rights, options or warrants been made on the basis of delivery of only
the number of Common Equity Shares actually delivered. In the event that
such rights, options or warrants are not so issued, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in
effect if such date fixed for the determination of shareholders entitled to
receive such rights, options or warrants had not been fixed.
(iii) If the Corporation shall distribute to all holders of its
Common Equity Shares any securities of the Corporation (other than Common
Equity Shares) or evidence of its indebtedness or assets (excluding
cumulative cash distributions paid with respect to the Common Equity Shares
after December 31, 1997 which are not in excess of the following: the sum
of (A) the Corporation's cumulative undistributed Funds from Operations at
December 31, 1997, plus (B) the cumulative amount of Funds from Operations,
as determined by the Board of Directors, after December 31, 1997, minus (C)
the cumulative amount of distributions accrued or paid in respect of the
Corporation's Series D-1 Equity Shares (or any other class or series of
preferred stock of the Corporation after the Grant Date) or rights, options
or warrants to subscribe for or purchase any of its securities (excluding
those rights, options and warrants issued to all holders of Common Equity
Shares entitling them for a period expiring within 45 days after the record
date referred to in subparagraph (ii) above to subscribe for or purchase
Common Equity Shares, which rights and warrants are referred to in and
treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) collectively called the "Securities"
and individually a "Security"), then in each such case the Conversion Price
shall be adjusted so that it shall equal the price determined by
multiplying (x) the Conversion Price in effect immediately prior to the
close of business on the date fixed for the determination of shareholders
entitled to receive such distribution by (y) a fraction, the numerator of
which shall be the Fair Market Value per share of the Corporation's Common
Stock on the record date mentioned below less the then Fair Market Value
(as determined by the Board of Directors, whose determination shall be
conclusive) of the portion of the Securities or assets or evidences of
indebtedness so distributed or of such rights, options or warrants
applicable to one Common Equity Share, and the denominator of which shall
be the Fair Market Value per share of the Corporation's Common Stock on the
record date mentioned below. Such adjustment shall become effective on the
date of distribution retroactive to the opening of business on the Business
Day next following (except as provided in paragraph (h) below) the record
date for
M-15
the determination of shareholders entitled to receive such distribution.
For the purposes of this subparagraph (iii), the distribution of a
Security, which is distributed not only to the holders of the Common Equity
Share on the date fixed for the determination of shareholders entitled to
such distribution of such Security, but also is distributed with each
Partnership Common Unit delivered to a Person converting a share of Series
D-1 Partnership Preferred Units after such determination date, shall not
require an adjustment of the Conversion Price pursuant to this subparagraph
(iii); provided that on the date, if any, on which a Person converting a
--------
unit of Series D-1 Partnership Preferred Units would no longer be entitled
to receive such Security with a Partnership Common Unit (other than as a
result of the termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred and the Conversion Price shall
be adjusted as provided in this subparagraph (iii) (and such day shall be
deemed to be "the date fixed for the determination of the shareholders
entitled to receive such distribution" and "the record date" within the
meaning of the two preceding sentences). If any distribution of the type
described in this paragraph (iii) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which
would then be in effect if such distribution had not been declared.
Rights or warrants distributed by the Corporation to all holders of
Common Equity Shares entitling the holders thereof to subscribe for or
purchase shares of the Corporation's capital stock (either initially or
under certain circumstances), which rights or warrants, until the
occurrence of a specified event or events ("Trigger Event"): (i) are
deemed to be transferred with such shares of Common Equity Shares; (ii) are
not exercisable; and (iii) are also issued in respect of future issuances
of Common Equity Shares, shall be deemed not to have been distributed for
purposes of this subparagraph (iii) (and no adjustment to the Conversion
Price under this subparagraph (iii) will be required) until the occurrence
of the earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different securities, evidences of
indebtedness or other assets or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new
right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof to the extent not
exercised). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto,
that resulted in an adjustment to the Conversion Price under this
subparagraph (iii), (1) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution (but not a
distribution paid exclusively in cash), equal to the per share redemption
or repurchase price received by a holder of Common Equity Shares with
respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Equity Shares as of the
date of such redemption or repurchase, and (2) in the case of such
M-16
rights or warrants all of which shall have expired or been terminated
without exercise, the Conversion Price shall be readjusted as if such
rights and warrants had never been issued.
(iv) In case a tender or exchange offer (which term shall not
include open market repurchases by the Corporation) made by the Corporation
or any subsidiary or controlled Affiliate of the Corporation for all or any
portion of the Common Equity Shares shall expire and such tender or
exchange offer shall require the payment by the Corporation or such
subsidiary or controlled Affiliate of consideration per Common Equity Share
having a fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer, that exceeds the Current Market Price per share of the Corporation's
Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the effectiveness of the Conversion Price reduction contemplated by this
subparagraph, by a fraction of which the numerator shall be the number of
Common Equity Shares outstanding (including any tendered or exchanged
shares) at the Expiration Time, multiplied by the Current Market Price per
share of the Corporation's Common Stock on the Trading Day next succeeding
the Expiration Time, and the denominator shall be the sum of (A) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based upon the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any maximum, being referred to as the
"Purchased Shares") and (B) the product of the number of Common Equity
Shares outstanding (less any Purchased Shares) at the Expiration Time and
the Current Market Price per share of the Corporation's Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following
the Expiration Time. In the event the Corporation or any subsidiary or
controlled Affiliate is obligated to purchase shares pursuant to any such
tender offer, but the Corporation or such subsidiary or controlled
Affiliate is permanently prevented by applicable law from effecting any
such purchases, or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in
effect if such tender offer had not been made.
(v) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease of
at least 1% in such price; provided, however, that any adjustments that by
-------- -------
reason of this subparagraph (v) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment until
made; and provided, further, that any adjustment shall be required and made
-------- -------
in accordance with the provisions of this Section 6 (other than this
subparagraph (v)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of
Partnership Common Units. Notwithstanding any other
M-17
provisions of this Section 6, the Partnership shall not be required to make
any adjustment of the Conversion Price for the issuance of any Common
Equity Shares pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Corporation and the
investment of additional optional amounts in Common Equity Shares under
such plan. All calculations under this Section 6 shall be made to the
nearest cent (with $.005 being rounded upward) or to the nearest one-
hundredth of a partnership unit (with .005 of a share being rounded
upward), as the case may be. Anything in this paragraph (d) to the contrary
notwithstanding, the Partnership shall be entitled, to the extent permitted
by law, to make such reductions in the Conversion Price, in addition to
those required by this paragraph (d), as it in its discretion shall
determine to be advisable in order that any partnership unit distributions,
subdivision of partnership units, reclassification or combination of
partnership units, distribution of rights or warrants to purchase
partnership units, or distribution of other assets (other than cash
distributions) hereafter made by the Partnership to its Partners shall not
be taxable. To the extent permitted by applicable law, the Partnership from
time to time may reduce the Conversion Price by any amount for any period
of time if the period is at least 20 days, the reduction is irrevocable
during the period and the Managing General Partner shall have made a
determination that such reduction would be in the best interests of the
Partnership, which determination shall be conclusive. Whenever the
Conversion Price is reduced pursuant to the preceding sentence, the
Partnership shall mail to the holder of each Series D-1 Partnership
Preferred Unit at his or her last address shown on the Partnership's
records a notice of reduction prior to the date the reduced Conversion
Price takes effect, and such notice shall state the reduced Conversion
Price and the period during which it will be in effect.
(e) If the Corporation shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, self tender offer for 40% or more of its Common Equity Shares, sale of
all or substantially all of the Corporation's assets or recapitalization of the
Common Equity Shares and excluding any transaction as to which subparagraph
(d)(i) of this Section 6 applies) (each of the foregoing being referred to
herein as a "Transaction"), in each case as a result of which all or
substantially all of the Partnership Common Units are converted into the right
to receive different securities or other property (including cash or any
combination thereof), each Series D-1 Partnership Preferred Unit which is not
redeemed or converted into the right to receive different securities or other
property prior to such Transaction shall thereafter be convertible, in lieu of
Partnership Common Units into the kind and amount of different securities and
other property (including cash or any combination thereof) receivable upon the
consummation of such Transaction by a holder of that number of Partnership
Common Units into which one Series D-1 Partnership Preferred Unit was
convertible immediately prior to such Transaction, assuming such holder of
Partnership Common Units (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of shares,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of shares, securities and other property
(including
M-18
cash) receivable upon such Transaction is not the same for each Common Equity
Share held immediately prior to such Transaction by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("Non-Electing Share"), then for the purpose of
this paragraph (e) the kind and amount of shares, securities and other property
(including cash) receivable upon such Transaction by each Non-Electing Share
shall be deemed to be the kind and amount so receivable per share by holders of
a plurality of the Non-Electing Shares). The Corporation shall not be a party to
any Transaction unless the terms of such Transaction are consistent with the
provisions of this paragraph (e), and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Series D-1 Partnership Preferred Units that will
contain provisions enabling the holders of the Series D-1 Partnership Preferred
Units that remain outstanding after such Transaction to convert into the
consideration received by holders of Partnership Common Units at the Conversion
Price in effect immediately prior to such Transaction. The provisions of this
paragraph (e) shall similarly apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a distribution (or any other
distribution) on its Common Equity Shares (other than cash distributions or
distributions paid with respect to the Common Equity Shares after December
31, 1997 not in excess of the sum of the Corporation's cumulative
undistributed Funds from Operations at December 31, 1997, plus the
cumulative amount of Funds from Operations, as determined by the Board of
Directors, after December 31, 1997, minus the cumulative amount of
distributions accrued or paid in respect of the Corporation's Series D-1
Equity Shares or any other class or series of preferred stock of the
Corporation after the Grant Date); or
(ii) the Corporation shall authorize the granting to all holders
of Common Equity Shares of rights, options or warrants to subscribe for or
purchase any shares of any class or any other rights, options or warrants;
or
(iii) there shall be any reclassification of the Common Equity
Shares (other than an event to which subparagraph (d)(i) of this Section 6
applies) or any consolidation or merger to which the Corporation is a party
(other than a merger in which the Corporation is the surviving entity) and
for which approval of any shareholders of the Corporation is required, or a
statutory share exchange, or a self tender offer by the Corporation for all
or substantially all of its outstanding shares of Common Stock or the sale
or transfer of all or substantially all of the assets of the Corporation as
an entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
then the Partnership shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of Series D-1 Partnership Preferred Units at
their addresses as shown on the records of
M-19
the Partnership, as promptly as possible, but at least 10 days prior to the
applicable date hereinafter specified, a notice stating (A) the date on which a
record is to be taken for the purpose of such distribution, distribution or
granting of rights, options or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Equity Shares of record to be entitled to
such distribution, distribution or rights, options or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Partnership Common Units of record shall be entitled to
exchange their Partnership Common Units for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution or winding up. Failure
to give or receive such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 6.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Partnership shall promptly file with the Transfer Agent a certificate setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment which certificate shall be
conclusive evidence of the correctness of such adjustment absent manifest error.
Promptly after delivery of such certificate, the Partnership shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the effective date of such adjustment and shall mail such
notice of such adjustment of the Conversion Price to the holder of each Series
D-1 Partnership Preferred Unit at such holder's last address as shown on the
records of the Partnership.
(h) In any case in which paragraph (d) of this Section 6 provides that
an adjustment shall become effective on the day next following the record date
for an event, the Partnership may defer until the occurrence of such event (A)
issuing to the holder of any Series D-1 Partnership Preferred Unit converted
after such record date and before the occurrence of such event the additional
Partnership Common Units issuable upon such conversion by reason of the
adjustment required by such event over and above the Partnership Common Units
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount of cash in lieu of any fraction pursuant to
paragraph (c) of this Section 6.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a reorganization, acquisition or
other similar transaction except as specifically set forth in this Section 6.
If any action or transaction would require adjustment of the Conversion Price
pursuant to both paragraph (d) and paragraph (e) of this Section 6, only one
adjustment shall be made, and such adjustment shall be the amount of adjustment
that has the highest absolute value.
(j) If the Corporation shall take any action affecting the Common
Equity Shares, other than action described in this Section 6, that in the
opinion of the Managing General Partner would materially and adversely affect
the conversion rights of the holders of the Series D-1 Partnership Preferred
Units, the Conversion Price for the Series D-1 Partnership Preferred Units may
M-20
be adjusted, to the extent permitted by law, in such manner, if any, and at such
time, as the Managing General Partner may determine to be equitable in the
circumstances.
(k) The Partnership covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Partnership Common Units, for the purpose of effecting
conversion of the Series D-1 Partnership Preferred Units, the full number of
Partnership Common Units deliverable upon the conversion of all outstanding
Series D-1 Partnership Preferred Units not theretofore converted. For purposes
of this paragraph (k), the number of Partnership Common Units that shall be
deliverable upon the conversion of all outstanding Series D-1 Partnership
Preferred Units shall be computed as if at the time of computation all such
outstanding units were held by a single holder.
Any Partnership Common Units issued upon conversion of the Series D-1
Partnership Preferred Units shall be validly issued, fully paid and
nonassessable.
The Partnership shall use its best efforts to comply with all federal
and state securities laws and regulations thereunder in connection with the
issuance of any securities that the Partnership shall be obligated to deliver
upon conversion of the Series D-1 Partnership Preferred Units. The certificates
evidencing such securities shall bear such legends restricting transfer thereof
in the absence of registration under applicable securities laws or an exemption
therefrom as the Partnership may in good ▇▇▇▇▇ ▇▇▇▇ appropriate.
(l) The Partnership will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
Partnership Common Units or other securities or property on conversion of the
Series D-1 Partnership Preferred Units pursuant hereto; provided, however, that
-------- -------
the Partnership shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of Partnership Common
Units or other securities or property in a name other than that of the holder of
the Series D-1 Partnership Preferred Units to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue or
delivery has paid to the Partnership the amount of any such tax or established,
to the reasonable satisfaction of the Partnership, that such tax has been paid.
7. Redemption at the Option of the Holder.
(a) At any time after August 12, 2008, the holders of Series D-1
Partnership Preferred Units shall have the right at any time that the
Corporation's Common Stock has a Current Market Price at or below the Conversion
Price per unit, to require the Partnership, to the extent the Partnership shall
have funds legally available therefor, to redeem any or all of the Series D-1
Partnership Preferred Units held by such holder at a repurchase price payable,
at the option of the Partnership, in either (i) cash or (ii) such number of
Partnership Common Units that shall be convertible into shares of the
Corporation's Common Stock as shall have a Current Market Price in the aggregate
on the day prior to the day such holder gives notice pursuant to Section 7(b) of
its intention to redeem, equal to in either case, 100% of the Liquidation
Preference thereof plus accrued and unpaid distributions whether or not
declared, if any, to the date of repurchase or the date payment is made
available (in the aggregate, the "Redemption Payment").
M-21
(b) Notwithstanding paragraph (a) of this Section 7, in the event that
WHL and its subsidiaries and the trustee of Westfield America Trust on behalf of
Westfield America Trust vote to approve the conversion of the Corporation's
Series D-1 Equity Shares into Common Equity Shares at a meeting of shareholders
at which such proposal is raised, but the shareholders of the Corporation as a
whole reject the foregoing proposal, then from and after the later of such
rejection date and the second anniversary of the Grant Date, the Series D-1
Partnership Preferred Units shall be redeemable at the option of the holder, to
the extent that the Partnership shall have funds legally available therefor, at
a redemption price payable in cash equal to the product of (a) the Series D-1
Common Equivalent Factor times (b) the Current Market Price on the date of the
notice provided pursuant to paragraph (c) below, plus all accumulated, accrued
and unpaid dividends whether or not declared, if any, to the date of repurchase
or the date payment is made available.
(c) For purposes of this Section 7, redemption at the option of the
holder shall be deemed to occur upon receipt by the Partnership of written
notice that the holder of Series D-1 Partnership Preferred Units wishes to
tender units to be redeemed. The holders of such units to be redeemed shall
then have 30 days from the date of such notice to deliver such units to the
Transfer Agent. Upon the surrender of the certificate or certificates of Series
D-1 Partnership Preferred Units to be redeemed, duly endorsed or assigned to the
Partnership or in blank, at the office of the Transfer Agent, the Partnership
shall promptly, either (i) by wire transfer of immediately available funds to
such holder, as directed by such holder, send an amount equal to the Redemption
Payment in respect of all Series D-1 Partnership Preferred Units or portions
thereof so tendered or (ii) issue and deliver to such holder, or on his or her
written order, a certificate or certificates for the number of full Partnership
Common Units issuable in respect of all Series D-1 Partnership Preferred Units
or portions thereof so tendered.
8. Status of Reacquired Series D-1 Partnership Preferred Units.
All Series D-1 Partnership Preferred Units which shall have been
granted and reac quired in any manner by the Partnership shall be deemed
cancelled.
9. Ranking.
The Series D-1 Partnership Preferred Units shall with respect to
distribution rights and rights on liquidation, dissolution and winding up of the
affairs of the Partnership, rank pari passu to the Series A Partnership
----------
Preferred Units, the Series B Partnership Preferred Units, the Series C
Partnership Preferred Units, the Series C-1 Partnership Preferred Units, the
Series D Partnership Preferred Units and the Series C-2 Partnership Preferred
Units of the Partnership, if any, shall have been authorized and issued.
Each Series D-1 Partnership Preferred Unit shall be identical in all
respects to each other Series D-1 Partnership Preferred Unit.
M-22
Any class or series of Partnership Units or Investor Unit Rights shall
be deemed to rank:
(a) prior or senior to the Series D-1 Partnership Preferred Units, as
to the payment of distributions and as to distributions of assets upon the
liquidation, dissolution and winding up of the Partnership, if the holders of
such class or series of Partnership Units or Investor Unit Rights, as the case
may be, shall be entitled to the receipt of distributions or of amounts
distributable upon the liquidation, dissolution and winding up of the
Partnership in preference or priority to the holders of Series D-1 Partnership
Preferred Units ("Senior Units");
(b) on a parity with the Series D-1 Partnership Preferred Units, as to
the payment of distributions and as to distribution of assets upon the
liquidation, dissolution and winding up of the Partnership, whether or not the
distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof shall be different from those of
the Series D-1 Partnership Preferred Units, if the holders of such class or
series of Partnership Units or Investor Unit Rights, as the case may be, and the
Series D-1 Partnership Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon the liquidation, dissolution and
winding up of the Partnership in proportion to their respective amounts of
accumulated and unpaid distributions per unit or other denomination or
liquidation preferences, without preference or priority one over the other
("Parity Units");
(c) junior to the Series D-1 Partnership Preferred Units, as to the
payment of distributions or as to the distribution of assets upon the
liquidation, dissolution and winding up of the Partnership, if the holders of
Series D-1 Partnership Preferred Units shall be entitled to receipt of
distributions or of amounts distributable upon the liquidation, dissolution and
winding up of the Partnership, in preference or priority to the holders of such
class or series of Partnership Units or Investor Unit Rights ("Junior Units");
and
(d) junior to the Series D-1 Partnership Preferred Units, as to the
payment of distributions and as to the distribution of assets upon the
liquidation, dissolution and winding up of the Partnership, if such class or
series of Partnership Units is Partnership Common Units or Class A Investor Unit
Rights, as the case may be, or if the holders of Series D-1 Partnership
Preferred Units shall be entitled to receipt of distributions and of amounts
distributable upon the liquidation, dissolution and winding up of the
Partnership, in preference or priority to the holders of such class or series of
Partnership Units or Investor Unit Rights ("Fully Junior Units").
10. Allocations.
(a) For each partnership year, each Holder of a Share of Series D-1
Preferred Units shall be allocated Net Income of the Partnership in an amount
equal to the amount of distributions made with respect to such Holder's Series
D-1 Preferred Units pursuant to Section 3 hereof during such Partnership Year.
In no event shall items of Net Loss of the Partnership be allocated to any
Holder of Series D-1 Preferred Units unless such allocation is required by
Section 704(b) of the Code or Section 10(b) of this Exhibit M.
---------
M-23
(b) If any Series D-1 Partnership Preferred Units are redeemed
pursuant to the terms of this Exhibit M, for the Partnership Year that includes
---------
such redemption (and, if necessary, for subsequent Partnership Years) (a) gross
income and gain (in such relative proportions as the Managing General Partner in
its discretion shall determine) shall be allocated to the Managing General
Partner and such Special Limited Partner(s) to the extent that the redemption
amounts paid or payable with respect to the Series D-1 Partnership Preferred
Units so redeemed (or treated as redeemed) exceeds the aggregate Capital Account
Balances (net of liabilities assumed or taken subject to by the Partnership) per
Series D-1 Partnership Preferred Unit allocable to the Series D-1 Partnership
Preferred Units so redeemed (or treated as redeemed) and (b) deductions and
losses (in such relative proportions as the Managing General Partner in its
discretion shall determine) shall be allocated to the Managing General Partner
and such Special Limited Partner(s) to the extent that the aggregate Capital
Account Balances (net of liabilities assumed or taken subject to by the
Partnership) per Series D-1 Partnership Preferred Unit allocable to the Series
D-1 Partnership Preferred Units so redeemed (or treated as redeemed) exceeds the
redemption amount paid or payable with respect to the Series D-1 Partnership
Preferred Units so redeemed (or treated as redeemed).
11. Voting and Consent Rights.
(a) Holders of Series D-1 Partnership Preferred Units shall have only
those voting and consent rights specified in Section 7.3.B of the Agreement and
Section 11(b) hereof.
(b) So long as any Series D-1 Partnership Preferred Units are
outstanding, in addition to any other vote or consent of holders of Series D-1
Partnership Preferred Units required by law or by the Agreement, the affirmative
vote or consent of holders of at least 50% of the outstanding Series D-1
Partnership Preferred Units, voting or consenting as a separate class, given in
Person or by proxy, either in writing without a meeting or by vote at any
meeting called for the purpose, shall be necessary for effecting or validating
any amendment or alteration of any of the provisions of this Partnership Unit
Designation or the Agreement that materially and adversely affects the material
powers, rights or preferences of the holders of the Series D-1 Partnership
Preferred Units; provided, however, that the amendment of the Agreement so as to
-------- -------
authorize, create, issue or grant any class or series of Partnership Units,
including, without limitation, any such Partnership Units that may have rights
senior or superior to the Series D-1 Partnership Preferred Units, shall be
deemed not to materially and adversely affect the material powers, rights or
preferences of the holders of Series D-1 Partnership Preferred Units.
(c) Except as otherwise required by applicable law or as set forth
herein or in the Agreement, the holders of the Series D-1 Partnership Preferred
Units shall not have any relative, participating, optional or other special
voting rights or powers with respect to any matter, and the consent or approval
of the holders thereof shall not be required for the taking of any action by the
Partnership.
M-24
12. Information Rights.
Holders of Series D-1 Partnership Preferred Units shall have only the
information rights specified in Section 8.5.A and Section 9.3 of the Agreement.
13. Restrictions on Transfer.
The Series D-1 Partnership Preferred Units are subject to the
restrictions on transfer set forth in Article 11 of the Agreement.
14. Ambiguity.
In the case of an ambiguity in the application of any of the
provisions of this Partnership Unit Designation, the Managing General Partner
shall have the power to determine the application of the provisions of this
Partnership Unit Designation with respect to any situation based on its
reasonable belief, understanding or knowledge of the circumstances.
15. Partnership Records.
The Managing General Partner shall amend Exhibit A to the Agreement
---------
from time to time to the extent necessary to reflect accurately the grant and
any subsequent redemption of, or other event having an effect on the ownership
of, Series D-1 Partnership Preferred Units.
16. Governing Law.
This Exhibit M shall be construed and enforced in accordance with, and
---------
governed by, the laws of the State of Delaware, without regard to principles of
conflicts of law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
M-25