Document:

exv4w1

 

EXHIBIT 4.1

FIFTH AMENDMENT TO

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP OF

CAPITAL AUTOMOTIVE L.P.

     This Fifth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Capital Automotive L.P. (“Fifth Amendment”) is entered
into this 4th day of November, 2004, effective as of the
15th day of April,
2004, by Capital Automotive REIT, a Maryland real estate investment trust (the
“General Partner”), in its capacity as general partner of Capital Automotive
L.P. (the “Partnership”).

     WHEREAS, the Second Amended and Restated Agreement of Limited Partnership
of the Partnership was executed on February 2, 1999, a First Amendment thereto
was executed on July 19, 2001, a Second Amendment thereto was executed on
December 11, 2003, a Third Amendment thereto was executed on April 27, 2004 and
a Fourth Amendment thereto was executed on May 4, 2004 (as amended, the
“Agreement”);

     WHEREAS, on April 15, 2004, the General Partner issued and sold
$125,000,000 aggregate principal amount of 6.75% Monthly Income Notes due 2019
(collectively, the “Monthly Income Notes” and each a “Monthly Income Note”) at
a gross offering price of $25.00 per Monthly Income Note;

     WHEREAS, pursuant to Sections 4.02 and 4.03 of the Agreement, the General
Partner is obligated to contribute or loan the proceeds that it received from
the issuance and sale of the Monthly Income Notes to the Partnership;

     WHEREAS, the General Partner has determined, based in part upon the advice
of tax counsel to the General Partner, that it is advisable and consistent
with its ability to remain qualified as a REIT to contribute the proceeds of
the issuance and sale of the Monthly Income Notes to the Partnership in the
form of preferred equity rather than by making a loan to the Partnership;

     WHEREAS, pursuant to Section 4.02(a) of the Agreement, the General Partner
has contributed the proceeds of the issuance and sale of the Monthly Income
Notes to the Partnership in exchange for preferred equity ownership interests
in the Partnership that correspond to the material terms of the Monthly Income
Notes (“Monthly Income Preferred Partnership Units”); and

     WHEREAS, the General Partner desires to amend the Agreement in order to
reflect the aforementioned issuance of the Monthly Income Preferred Partnership
Units.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the undersigned
party, intending legally to be bound, hereby agrees as follows:

 

 

     1. The Agreement is hereby amended by the addition of a new exhibit,
entitled EXHIBIT F, in the form attached hereto, which sets forth the
designations, allocations and preferences of the Monthly Income Preferred
Partnership Units and the amount and timing of distributions due to the Monthly
Income Preferred Partnership Units and the other special rights, powers and
duties of the holders of the Monthly Income Preferred Partnership Units.
EXHIBIT F shall be attached to and made a part of the Agreement.

     2. Pursuant to Section 4.02(a) of the Agreement, effective as of April 15,
2004, the issuance date of the Monthly Income Notes by the General Partner, the
Partnership hereby issues 5,000,000 Monthly Income Preferred Partnership Units
to the General Partner having the terms, conditions and rights provided in
EXHIBIT F. The Monthly Income Preferred Partnership Units have been created
and are being issued in conjunction with the General Partner’s issuance of the
Monthly Income Notes, and, as such, the Monthly Income Preferred Partnership
Units are intended to have terms and conditions and other rights that, while
constituting equity interests in the Partnership, correspond to those of the
Monthly Income Notes. The terms of this Amendment, including without
limitation the attached EXHIBIT F, shall be interpreted in a fashion consistent
with this intent. In return for the issuance to the General Partner of the
Monthly Income Preferred Partnership Units, the General Partner has contributed
to the Partnership the funds raised through its issuance and sale of the
Monthly Income Notes. (In accordance with Section 4.02(b) of the Agreement,
the General Partner’s capital contribution shall be deemed to equal the amount
of the gross proceeds of the issuance and sale of the Monthly Income Notes
(i.e., the net proceeds actually contributed, plus any underwriter’s discount
or other expenses incurred, with any such discount or expense deemed to have
been incurred by the General Partner on behalf of the Partnership)).

     3. In order to reflect the issuance of the Monthly Income Preferred
Partnership Units, SCHEDULE A to the Agreement is hereby amended by adding to
the end of such SCHEDULE A the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Monthly Income	 	 	 	 
	 	 	Preferred	 	Capital	 	Issuance
	Name
	 	Partnership Units
	 	Contribution
	 	Date

	Capital Automotive
	 	 	5,000,000	 	 	$	125,000,000	 	 	 	4/15/2004	 
	REIT
	 	 	 	 	 	 	 	 	 	 	 	 

     4. The foregoing recitals are incorporated in and are part of this Fifth
Amendment.

     5. Except as specifically defined herein, each capitalized term used in
this Amendment and not otherwise defined herein shall have the meaning
attributed to such term in the Agreement. This Fifth Amendment has been
authorized by the General Partner pursuant to Article 11 of the Agreement and
does not require execution by the Limited Partners. No other changes to the
Agreement are authorized pursuant to this Fifth Amendment.

 - 2 -

 

     IN WITNESS WHEREOF, the General Partner has executed this Fifth Amendment
as of the day and year first above written.

	 	 	 	 	 
	 	GENERAL PARTNER

CAPITAL AUTOMOTIVE REIT,

a Maryland real estate investment trust

 	 
	 	By:  	/s/ Thomas D. Eckert
 	 
	 	 	Thomas D. Eckert 	 
	 	 	President and
Chief Executive Officer 	 

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EXHIBIT F

DESIGNATION OF THE

MONTHLY INCOME PREFERRED PARTNERSHIP UNITS

OF CAPITAL AUTOMOTIVE L.P.

     1. Number of Units and Designation.

     A class of ownership interests in the Partnership entitled “Monthly Income
Preferred Partnership Units” is hereby designated and the number of Monthly
Income Preferred Partnership Units constituting such class shall be 5,750,000.

     2. Definitions.

     For purposes of the Monthly Income Preferred Partnership Units, the
following terms shall have the meanings indicated in this Section 2, and
capitalized terms used and not otherwise defined herein shall have the meanings
assigned thereto in the Agreement:

     “Adjusted Capital Account” means the Capital Account of a Partner,
increased by such Partner’s share of any Partnership Minimum Gain or Partner
Nonrecourse Debt Minimum Gain.

     “Aggregate Liquidation Preference” means the sum of the Monthly Income
Liquidation Preference, the Series B Liquidation Preference and the Liquidation
Preference on the Series A Preferred Partnership Units.

     “Interest Payment Date” means any date on which interest is payable on all
outstanding Monthly Income Notes.

     “Monthly Income Liquidation Preference” has the meaning set forth in
Section 4 of this EXHIBIT F.

     “Monthly Income Notes” means the $125,000,000 aggregate principal amount
of 6.75% Monthly Income Notes due 2019 issued by the General Partner.

     “Monthly Income Preferred Partnership Units” means the preferred equity
ownership interests in the Partnership issued and having the designations,
preferences and rights set forth in this EXHIBIT F to the General Partner by
the Partnership in connection with the issuance by the General Partner of the
Monthly Income Notes.

     “Monthly Income Unit Liquidation Preference” has the meaning set forth in
Section 4 of this EXHIBIT F.

     3. Distributions.

     Notwithstanding anything to the contrary contained in Section 5.02 of the
Agreement, on each Interest Payment Date, the General Partner shall cause the
Partnership to make a cash distribution to the General Partner with respect to
the Monthly Income Preferred Partnership Units in an amount equal to the amount
that is required to be paid by the General Partner on that

 

 

date to the holders of Monthly Income Notes. The Monthly Income Preferred
Partnership Units shall not be entitled to any distributions, whether payable
in cash, property or stock, except as provided herein.

     4. Liquidation Preference.

     In the event of any liquidation, dissolution or winding up of the
Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital, surplus or otherwise) shall
be made under Section 5.06(a) to any classes of ownership interest in the
Partnership that are junior in priority to the Monthly Income Preferred
Partnership Units as to payments or distributions upon liquidation, dissolution
or winding up of the Partnership (for purposes of this Section 4, individually
or collectively, “liquidation rights”), the General Partner shall be entitled
to a preference payment, for each Monthly Income Preferred Partnership Unit,
equal to the sum of (i) $25.00 , plus (ii) an amount equal to any accrued and
unpaid interest on one Monthly Income Note to the date of payment (for purposes
of this Section 4, the “Monthly Income Unit Liquidation
Preference”). Until
the Monthly Income Unit Liquidation Preference with respect to all of the
Monthly Income Preferred Partnership Units outstanding at the time of such
liquidation, dissolution or winding up of the Partnership (the “Monthly Income
Liquidation Preference”) has been paid in full, no payment shall be made under
Section 5.06(a) with respect to any classes of ownership interest in the
Partnership that are junior in priority to the Monthly Income Preferred
Partnership Units as to liquidation rights. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, shall be insufficient to pay in full both the Monthly Income
Liquidation Preference and the corresponding amounts payable on any other
ownership interests in the Partnership that are on a parity as to liquidation
rights with the Monthly Income Preferred Partnership Units, then such assets,
or the proceeds thereof, shall be distributed among the General Partner, as the
holder of the Monthly Income Preferred Partnership Units, and the holders of
any such ownership interests in the Partnership that are on a parity with the
Monthly Income Preferred Partnership Units as to liquidation rights , ratably
in proportion to the full, respective, preferential distributions to which they
would otherwise be entitled as a result of their respective liquidation rights.
After payment in full of the Monthly Income Liquidation Preference, the
General Partner, as the holder of the Monthly Income Preferred Partnership
Units, shall have no right or claim by reason of such Monthly Income Preferred
Partnership Units to any of the remaining assets of the Partnership.

     After the Aggregate Liquidation Preference has been paid to the General
Partner, liquidating distributions shall be made to the Partners as provided in
Section 5.06(a). Prior to making payments to the Partners under Section
5.06(a), the Capital Account of the General Partner shall be reduced to reflect
the payment of the Aggregate Liquidation Preference.

     5. Redemption or Purchase.

     Monthly Income Preferred Partnership Units shall be redeemable by the
Partnership, and the Partnership shall be required to repurchase Monthly Income
Preferred Partnership Units, as follows:

F-2

 

          (a) At any time that the General Partner exercises its right to redeem, or
is required to repurchase, all or any of the Monthly Income Notes, the General
Partner shall cause the Partnership to concurrently redeem or repurchase, as
the case may be, a number of Monthly Income Preferred Partnership Units equal
to the aggregate principal amount of Monthly Income Notes redeemed or
repurchased, divided by $25.00, at a redemption price or repurchase price, as
the case may be, payable in cash, and equal to the Monthly Income Unit
Liquidation Preference, multiplied by the number of Monthly Income Preferred
Partnership Units being redeemed or repurchased. No interest shall accrue for
the benefit of the Monthly Income Preferred Partnership Units to be redeemed or
repurchased on any cash set aside by the Partnership for purposes of funding
such redemption or repurchase.

          (b) If the Partnership shall redeem or repurchase Monthly Income Preferred
Partnership Units pursuant to paragraph (a) of this Section 5, from and after
the redemption or repurchase date (unless the Partnership shall fail to make
available the amount of cash necessary to effect such redemption or
repurchase), (i) except for payment of the redemption or repurchase price, the
Partnership shall not make any further distributions on the Monthly Income
Preferred Partnership Units so called for redemption, (ii) said Monthly Income
Preferred Partnership Units shall no longer be deemed to be outstanding, and
(iii) all rights of the General Partner as the holder of said Monthly Income
Preferred Partnership Units shall cease except the right to receive the cash
payable upon such redemption or repurchase, in each case without interest
thereon.

          (c) If fewer than all the outstanding Monthly Income Preferred Partnership
Units are to be redeemed or repurchased, the Monthly Income Preferred
Partnership Units to be redeemed or repurchased shall be determined pro rata,
by lot or in such other manner determined by the General Partner in its
discretion from outstanding Monthly Income Preferred Partnership Units not
previously called for redemption or submitted for repurchase.

          (d) Upon any such redemption or repurchase, the General Partner shall
amend SCHEDULE A to the Agreement as appropriate to reflect such redemption or
repurchase.

     6. Status of Reacquired Units.

     All Monthly Income Preferred Partnership Units which shall have been
issued and reacquired in any manner by the Partnership shall be deemed
cancelled.

F-3

 

     7. Ranking. The Monthly Income Preferred Partnership Units shall
rank senior to all classes and series of ownership interests in the
Partnership as to the payment of distributions, whether made in
connection with the liquidation, dissolution or winding up of the
Partnership or at any other time, unless the terms of a class or series
of ownership interest in the Partnership specifically provide that such
securities rank on a parity with the Monthly Income Preferred
Partnership Units as to the payment of distributions made in connection
with the liquidation, dissolution or winding up of the Partnership, or
as to the payment of distributions made at any other time, in which
event the Monthly Income Preferred Partnership Units shall be deemed to
rank on a parity with such securities as to the payment of distributions
made in connection with the liquidation, dissolution or winding up of
the Partnership or as to the payment of distributions made at any other
time, as the case may be. All Monthly Income Preferred Partnership
Units shall rank equally with one another and shall be identical in all
respects.

     8. Tax Allocations.

     Notwithstanding Section 5.01(a) of the Agreement (but subject to Sections
5.01(b), (c) and (d) of the Agreement), Profit and Loss of the Partnership
shall be allocated as follows:

     (a) Profit shall be allocated as follows:

          (1) first, to the General Partner in the amount necessary to cause its
Adjusted Capital Account balance to be equal to the Aggregate Liquidation
Preference;

          (2) second, to the Partners in the amounts necessary, and in the ratio of
such amounts, to cause the Adjusted Capital Account balance of the General
Partner in excess of the Aggregate Liquidation Preference and the Adjusted
Capital Account balance of each other Partner to be in the same ratio as their
respective Percentage Interests; and

          (3) thereafter, to the Partners in proportion to their respective
Percentage Interests.

     (b) Loss shall be allocated as follows:

          (1) first, to the Partners, if any, having positive Adjusted Capital
Account balances, in the amounts necessary, and in the ratio of such amounts,
so as to cause the positive Adjusted Capital Account balance of the General
Partner to equal the Aggregate Liquidation Preference and the positive Adjusted
Capital Account balance of each other Partner to equal zero (or, if there is
insufficient Loss to accomplish this result, Loss shall be allocated in a
manner so as to cause the positive Adjusted Capital Account balance of the
General Partner in excess of the Aggregate Liquidation Preference and the
positive Adjusted Capital Account of each other Partner to be in the same ratio
as their respective Percentage Interests;

          (2) second, to the General Partner until its positive Adjusted Capital
Account balance equals zero; and

          (3) thereafter, to the Partners in proportion to their respective
Percentage Interests.

F-4

 

     To the extent of any conflict between the provisions of this Section 8 and
the provisions of Section 8 of each of EXHIBITS D and E, the provisions of this
Section 8 shall control.

     9. Restrictions on Ownership.

     The Monthly Income Preferred Partnership Units shall be owned and held
solely by the General Partner.

     10. Conversion.

     The Monthly Income Preferred Partnership Units shall not be convertible
into or exchangeable for any other property or securities of the Partnership or
any other entity.

     11. General.

          (a) The General Partner shall have no voting rights with respect to the
Monthly Income Preferred Partnership Units other than the right to vote on an
amendment to the Agreement if it would alter the distribution, redemption,
liquidation or priority rights of the Monthly Income Preferred Partnership
Units, or any other rights or preferences of the Monthly Income Preferred
Partnership Units, as set forth in this EXHIBIT F.

          (b) The Monthly Income Preferred Partnership Units shall not be entitled
to the benefits of any retirement or sinking fund.

          (c) The Monthly Income Preferred Partnership Units shall not have any
preferences or relative, participating, optional or other special rights, or
voting powers, restrictions, limitations as to distributions, qualifications or
terms or conditions of redemption other than as expressly set forth in this
EXHIBIT F.

          (d) No holder of Monthly Income Preferred Partnership Units shall have any
preemptive or preferential right to subscribe for, or to purchase, any
additional ownership interests in the Partnership of any class or series, or
any other security of the Partnership which the Partnership may issue or sell.

          (e) The ownership of Monthly Income Preferred Partnership Units may (but
need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend
SCHEDULE A to the Agreement from time to time to the extent necessary to
reflect accurately the issuance of, and subsequent redemption, or any other
event having an effect on the ownership of, Monthly Income Preferred
Partnership Units.

          (f) The rights of the General Partner, in its capacity as holder of the
Monthly Income Preferred Partnership Units, are in addition to and not in
limitation of any other rights or authority of the General Partner in any other
capacity under the Agreement or applicable law. In addition, nothing contained
herein shall be deemed to limit or otherwise restrict the authority of the
General Partner under the Agreement, other than in its capacity as holder of
the Monthly Income Preferred Partnership Units.

F-5

 

     (g) If any preferences or other rights, restrictions, distributions,
qualifications, allocations or terms or conditions of redemption of the Monthly
Income Preferred Partnership Units set forth in this EXHIBIT F are invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other preferences or other rights, restrictions, distributions,
qualifications, allocations or terms or conditions of redemption of Monthly
Income Preferred Partnership Units set forth in this EXHIBIT F which can be
given effect without the invalid, unlawful or unenforceable provision thereof
shall, nevertheless, remain in full force and effect and no preferences or
other rights, restrictions, distributions, qualifications, allocations or terms
or conditions of redemption of the Monthly Income Preferred Partnership Units
herein set forth shall be deemed dependent on any other provision thereof
unless so expressed therein.

     (h) The headings of the various subdivisions of this EXHIBIT F are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.

F-6exv4w2

 

EXHIBIT 4.2

SIXTH AMENDMENT TO

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP OF

CAPITAL AUTOMOTIVE L.P.

     This Sixth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Capital Automotive L.P. (“Sixth Amendment”) is entered
into this 4th day of November, 2004, effective as of the
12th day of May, 2004,
by Capital Automotive REIT, a Maryland real estate investment trust (the
“General Partner”), in its capacity as general partner of Capital Automotive
L.P. (the “Partnership”).

     WHEREAS, the Second Amended and Restated Agreement of Limited Partnership
of the Partnership was executed on February 2, 1999, a First Amendment thereto
was executed on July 19, 2001, a Second Amendment thereto was executed on
December 11, 2003, a Third Amendment thereto was executed on April 27, 2004, a
Fourth Amendment thereto was executed on May 4, 2004 and a Fifth Amendment
thereto was executed on November 4, 2004, effective as of April 15, 2004 (as
amended, the “Agreement”);

     WHEREAS, on May 12, 2004, the General Partner issued and sold $110,000,000
aggregate principal amount of 6% Convertible Notes Due May 15, 2024
(collectively, the “Convertible Notes” and each a “Convertible Note”) at a
gross offering price of $1,000 per Convertible Note;

     WHEREAS, pursuant to Sections 4.02 and 4.03 of the Agreement, the General
Partner is obligated to contribute or loan the proceeds that it received from
the issuance and sale of the Convertible Notes to the Partnership;

     WHEREAS, the General Partner has determined, based in part upon the advice
of tax counsel to the General Partner, that it is advisable and consistent
with its ability to remain qualified as a REIT to contribute the proceeds of
the issuance and sale of the Convertible Notes to the Partnership in the form
of preferred equity rather than by making a loan to the Partnership;

     WHEREAS, pursuant to Section 4.02(a) of the Agreement, the General Partner
has contributed the proceeds of the issuance and sale of the Convertible Notes
to the Partnership in exchange for preferred equity ownership interests in the
Partnership that correspond to the material terms of the Convertible Notes
(“Convertible Preferred Partnership Units”); and

     WHEREAS, the General Partner desires to amend the Agreement in order to
reflect the aforementioned issuance of the Convertible Preferred Partnership
Units.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the undersigned
party, intending legally to be bound, hereby agrees as follows:

 

 

     1. The Agreement is hereby amended by the addition of a new exhibit,
entitled EXHIBIT G, in the form attached hereto, which sets forth the
designations, allocations and preferences of the Convertible Preferred
Partnership Units and the amount and timing of distributions due to the
Convertible Preferred Partnership Units and the other special rights, powers
and duties (including conversion rights) of the holders of the Convertible
Preferred Partnership Units. EXHIBIT G shall be attached to and made a part of
the Agreement.

     2. Pursuant to Section 4.02(a) of the Agreement, effective as of May 12,
2004, the issuance date of the Convertible Notes by the General Partner, the
Partnership hereby issues 110,000 Convertible Preferred Partnership Units to
the General Partner having the terms, conditions and rights provided in EXHIBIT
G. The Convertible Preferred Partnership Units have been created and are being
issued in conjunction with the General Partner’s issuance of the Convertible
Notes, and, as such, the Convertible Preferred Partnership Units are intended
to have terms and conditions and other rights that, while constituting equity
interests in the Partnership, correspond to those of the Convertible Notes.
The terms of this Amendment, including without limitation the attached EXHIBIT
G, shall be interpreted in a fashion consistent with this intent. In return
for the issuance to the General Partner of the Convertible Preferred
Partnership Units, the General Partner has contributed to the Partnership the
funds raised through its issuance and sale of the Convertible Notes. In
accordance with Section 4.02(b) of the Agreement, the General Partner’s capital
contribution shall be deemed to equal the amount of the gross proceeds of the
issuance and sale of the Convertible Notes (i.e., the net proceeds actually
contributed, plus any underwriter’s discount or other expenses incurred, with
any such discount or expense deemed to have been incurred by the General
Partner on behalf of the Partnership).

     3. In order to reflect the issuance of the Convertible Preferred
Partnership Units, SCHEDULE A to the Agreement is hereby amended by adding to
the end of such SCHEDULE A the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Convertible	 	 	 	 
	 	 	Preferred	 	Capital	 	Issuance
	Name
	 	Partnership Units
	 	Contribution
	 	Date

	Capital Automotive
REIT
	 	 	110,000	 	 	$	110,000,000	 	 	 	5/12/2004	 

     4. The foregoing recitals are incorporated in and are part of this Sixth
Amendment.

     5. Except as specifically defined herein, each capitalized term used in
this Amendment and not otherwise defined herein shall have the meaning
attributed to such term in the Agreement. This Sixth Amendment has been
authorized by the General Partner pursuant to Article 11 of the Agreement and
does not require execution by the Limited Partners. No other changes to the
Agreement are authorized pursuant to this Sixth Amendment.

- 2 -

 

     IN WITNESS WHEREOF, the General Partner has executed this Sixth Amendment
as of the day and year first above written.

	 	 	 	 	 	 	 
	 
	 	GENERAL PARTNER
	 
	 	 
	 
	 	CAPITAL AUTOMOTIVE REIT,

a Maryland real estate investment trust
	 
	 	 
	 
	 	By:	 	/s/	 	Thomas D. Eckert
	 
	 	 	 	
 
	

	 	 	 	Thomas D. Eckert
	

	 	 	 	President and
	

	 	 	 	Chief Executive Officer

- 3 -

 

EXHIBIT G

DESIGNATION OF THE

CONVERTIBLE PREFERRED PARTNERSHIP UNITS

OF CAPITAL AUTOMOTIVE L.P.

     1. Number of Units and Designation.

     A class of ownership interests in the Partnership entitled “Convertible
Preferred Partnership Units” is hereby designated and the number of Convertible
Preferred Partnership Units constituting such class shall be 100,000.

     2. Definitions.

     For purposes of the Convertible Preferred Partnership Units, the following
terms shall have the meanings indicated in this Section 2, and capitalized
terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement:

     “Adjusted Capital Account” means the Capital Account of a Partner,
increased by such Partner’s share of any Partnership Minimum Gain or Partner
Nonrecourse Debt Minimum Gain.

     “Aggregate Liquidation Preference” means the sum of the Convertible Unit
Liquidation Preference, the Monthly Income Liquidation Preference, the Series B
Liquidation Preference and the Liquidation Preference on the Series A Preferred
Partnership Units.

     “Convertible Liquidation Preference” has the meaning set forth in Section
4 of this EXHIBIT G.

     “Convertible Notes” means the $110,000,000 aggregate principal amount of
6% Convertible Notes due May 15, 2024 issued by the General Partner.

     “Convertible Notes Indenture” means the Second Supplemental Trust
Indenture dated as of May 12, 2004 between the General Partner and Wells Fargo
Bank, National Association.

     “Convertible Preferred Partnership Units” means the preferred equity
ownership interests in the Partnership having the designations, preferences and
rights set forth in this EXHIBIT G and issued to the General Partner by the
Partnership in connection with the issuance by the General Partner of the
Convertible Notes.

     “Convertible Notes” means the $110,000,000 aggregate principal amount of
6% Convertible Notes due May 15, 2024 issued by the General Partner.

     “Convertible Unit Liquidation Preference” has the meaning set forth in
Section 4 of this EXHIBIT G.

     “Interest Payment Date” means any date on which interest is payable on all
outstanding Convertible Notes.

 

 

     3. Distributions.

     Notwithstanding anything to the contrary contained in Section 5.02 of the
Agreement, on each Interest Payment Date, the General Partner shall cause the
Partnership to make a cash distribution to the General Partner with respect to
the Convertible Preferred Partnership Units in an amount equal to the amount
that is required to be paid by the General Partner on that date to the holders
of Convertible Notes. The Convertible Preferred Partnership Units shall not be
entitled to any distributions, whether payable in cash, property or stock,
except as provided herein.

     4. Liquidation Preference.

     In the event of any liquidation, dissolution or winding up of the
Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital, surplus or otherwise) shall
be made under Section 5.06(a) to any classes of ownership interest in the
Partnership that are junior in priority as to payments or distributions upon
liquidation, dissolution or winding up of the Partnership (for purposes of this
Section 4, individually or collectively, “liquidation rights”) to the
Convertible Preferred Partnership Units, the General Partner shall be entitled
to a preference payment, for each Monthly Income Preferred Partnership Unit,
equal to the sum of (i) $1,000, plus (ii) an amount equal to any accrued and
unpaid interest on one Convertible Note to the date of payment (the
“Convertible Unit Liquidation Preference”). Until the Convertible Unit
Liquidation Preference with respect to all Convertible Preferred Partnership
Units outstanding at the time of the liquidation, dissolution or winding up of
the Partnership (the “Convertible Liquidation Preference”) has been paid in
full, no payment shall be made under Section 5.06(a) with respect to any
classes of ownership interest in the Partnership that are junior in priority to
the Convertible Preferred Partnership Units as to liquidation rights. If, upon
any liquidation, dissolution or winding up of the Partnership, the assets of
the Partnership, or the proceeds thereof, shall be insufficient to pay in full
both the Convertible Liquidation Preference and the corresponding amounts
payable on any other ownership interests in the Partnership that are on a
parity with the Convertible Preferred Partnership Units as to liquidation
rights, then such assets of the Partnership, or the proceeds thereof, shall be
distributed among the General Partner, as the holder of the Convertible
Preferred Partnership Units, and the holders of any such ownership interests in
the Partnership that are on a parity with the Convertible Preferred Partnership
Units as to liquidation rights, ratably in proportion to the full, respective,
preferential distributions to which they would otherwise be entitled as a
result of their respective liquidation rights. After payment in full of the
Convertible Liquidation Preference, the General Partner, as the holder of
Convertible Preferred Partnership Units, shall have no right or claim by reason
of such Convertible Preferred Partnership Units to any of the remaining assets
of the Partnership.

     After the Aggregate Liquidation Preference has been paid to the General
Partner, liquidating distributions shall be made to the Partners as provided in
Section 5.06(a). Prior to making payments to the Partners under Section
5.06(a), the Capital Account of the General Partner shall be reduced to reflect
the payment of the Aggregate Liquidation Preference.

G-2

 

     5. Redemption and Purchase.

     Convertible Preferred Partnership Units shall be redeemable by the
Partnership, and the Partnership shall purchase Convertible Preferred
Partnership Units, as follows:

          (a) At any time that the General Partner exercises its right to redeem, or
is required to purchase, all or any of the Convertible Notes, the General
Partner shall cause the Partnership to concurrently redeem (in the case of a
redemption of Convertible Notes) or purchase (in the case of a purchase of
Convertible Notes) a number of Convertible Preferred Partnership Units equal to
the aggregate principal amount of Convertible Notes redeemed or purchased, as
the case may be, divided by $1,000, (i) in the case of a redemption, at a
redemption price payable in cash and equal to the Convertible Unit Liquidation
Preference, multiplied by the number of Monthly Income Preferred Partnership
Units being redeemed pursuant to this Section 5(a), or (ii) in the case of a
purchase for cash, at a purchase price payable in cash and equal to the
Convertible Unit Liquidation Preference, multiplied by the number of Monthly
Income Preferred Partnership Units being purchased pursuant to this Section
5(a). No interest shall accrue for the benefit of the Convertible Preferred
Partnership Units to be redeemed or purchased on any cash set aside by the
Partnership.

          (b) Notwithstanding paragraph (a) of this Section 5, if, pursuant to
Section 3.3(c) and (e) of the Convertible Notes Indenture in connection with a
purchase of Convertible Notes, the General Partner elects to pay the purchase
price to the holders of the Convertible Notes through the issuance of REIT
Shares, then the purchase price for the Convertible Preferred Partnership Units
being purchased pursuant to this Section 5(b) shall be paid to the General
Partner through the issuance to the General Partner of Partnership Units in an
amount equal to the aggregate number of REIT Shares issued to the holders of
the Convertible Notes, multiplied by the Conversion Factor.

          (c) If the Partnership shall redeem or purchase Convertible Preferred
Partnership Units pursuant to paragraph (a) or (b) of this Section 5, from and
after the redemption or purchase date (unless the Partnership shall fail to
make available the amount of cash necessary to effect such redemption or the
amount of cash or number of Partnership Units necessary to effect such
purchase), then (i) except for payment of the redemption or purchase price, the
Partnership shall not make any further distributions on the Convertible
Preferred Partnership Units so called for redemption or purchase, (ii) said
Convertible Preferred Partnership Units shall no longer be deemed to be
outstanding, and (iii) all rights of the General Partner as the holder of said
Convertible Preferred Partnership Units shall cease except the right to receive
the cash payable upon such redemption or the cash or Partnership Units payable
upon such purchase, in each case without interest thereon.

          (d) If fewer than all the outstanding Convertible Preferred Partnership
Units are to be redeemed or purchased, the Convertible Preferred Partnership
Units to be redeemed or purchased shall be determined pro rata, by lot or in
such other manner from outstanding Convertible Preferred Partnership Units not
previously called for redemption or purchase by any method determined by the
General Partner in its discretion.

G-3

 

          (e) Upon any such redemption or purchase, the General Partner shall amend
SCHEDULE A to the Agreement as appropriate to reflect such redemption.

     6. Conversion

          (a) Subject to Section 6(b) below, at any time that a holder or holders of
Convertible Notes exercise the right to convert all or any of the Convertible
Notes of such holder or holders into REIT Shares, the General Partner shall
cause the Partnership to convert a number of Convertible Preferred Partnership
Units equal to the aggregate principal amount of Convertible Notes converted,
divided by $1,000, into Partnership Units. The number of Partnership Units
deliverable upon conversion of the Convertible Preferred Partnership Units
being converted pursuant to this Section 6(a) shall equal the aggregate number
of REIT Shares issuable to the holder or holders of such Convertible Notes
being converted pursuant to the Convertible Notes Indenture, multiplied by the
Conversion Factor.

          (b) Notwithstanding the foregoing, at any time that a holder or holders of
Convertible Notes exercise the right to convert all or any of the Convertible
Notes of such holder or holders into REIT Shares, and the General Partner has
the right and elects to deliver cash or REIT Shares to such holder or holders
in accordance with Section 4.1(b)(i) of the Convertible Notes Indenture as a
Principal Value Conversion (as defined in Section 4.1(b)(i) of the Convertible
Notes Indenture), the General Partner shall cause the Partnership to
concurrently redeem for cash, or convert into Partnership Units, a number of
Convertible Preferred Partnership Units equal to the aggregate principal amount
of Convertible Notes redeemed or converted, divided by $1,000, as provided
below:

          (i) if the General Partner delivers cash to the holder or holders of such
Convertible Notes in accordance with Section 4.1(b)(i) of the Convertible Notes
Indenture, the amount of cash deliverable to the General Partner in connection
with the redemption of Convertible Preferred Partnership Units shall equal the
aggregate cash payable to the holder or holders of the Convertible Notes,
multiplied by the Conversion Factor; and

          (ii) if the General Partner delivers REIT Shares to the holder or holders
of such Convertible Notes in accordance with Section 4.1(b)(i) of the
Convertible Notes Indenture, the General Partner shall cause the Partnership to
concurrently deliver to the General Partner, on account of the Convertible
Preferred Partnership Units being converted pursuant to this Section 6(b)(ii),
Partnership Units in an amount equal to the aggregate number of REIT Shares
issuable to the holder or holders of the Convertible Notes, multiplied by the
Conversion Factor.

     7. Status of Reacquired Units.

     All Convertible Preferred Partnership Units which shall have been issued
and reacquired in any manner by the Partnership shall be deemed cancelled.

     8. Ranking.

     The Convertible Preferred Partnership Units, prior to conversion (if any)
into Partnership Units), shall rank(i) on a parity with the Monthly Income
Preferred Partnership Units as to the

G-4

 

payment of distributions, whether made in connection with the liquidation,
dissolution or winding up of the Partnership or at any other time, and (ii)
senior to all other classes or series of ownership interest in the Partnership,
unless the terms of a class or series of ownership interest in the Partnership
specifically provide that such securities rank on a parity with the Convertible
Preferred Partnership Units as to the payment of distributions made in
connection with the liquidation, dissolution or winding up of the Partnership
or as to the payment of distributions made at any other time, in which event
the Convertible Preferred Partnership Units shall be deemed to rank on a parity
with such securities as to the payment of distributions made in connection with
the liquidation, dissolution or winding up of the Partnership or as to the
payment of distributions made at any other time, as the case may be. All
Convertible Preferred Partnership Units shall rank equally with one another and
shall be identical in all respects.

     9. Special Allocations.

     Notwithstanding Section 5.01(a) of the Agreement (but subject to Sections
5.01(b), (c) and (d) of the Agreement), Profit and Loss of the Partnership
shall be allocated as follows:

     (a) Profit shall be allocated as follows:

          (1) first, to the General Partner in the amount necessary to cause its
Adjusted Capital Account balance to be equal to the Aggregate Liquidation
Preference;

          (2) second, to the Partners in the amounts necessary, and in the ratio of
such amounts, to cause the Adjusted Capital Account balance of the General
Partner in excess of the Aggregate Liquidation Preference and the Adjusted
Capital Account balance of each other Partner to be in the same ratio as their
respective Percentage Interests; and

          (3) thereafter, to the Partners in proportion to their respective
Percentage Interests.

     (b) Loss shall be allocated as follows:

          (1) first, to the Partners, if any, having positive Adjusted Capital
Account balances, in the amounts necessary, and in the ratio of such amounts,
so as to cause the positive Adjusted Capital Account balance of the General
Partner to equal the Aggregate Liquidation Preference and the positive Adjusted
Capital Account balance of each other Partner to equal zero (or, if there is
insufficient Loss to accomplish this result, Loss shall be allocated in a
manner so as to cause the positive Adjusted Capital Account balance of the
General Partner in excess of the Aggregate Liquidation Preference and the
positive Adjusted Capital Account of each other Partner to be in the same ratio
as their respective Percentage Interests;

          (2) second, to the General Partner until its positive Adjusted Capital
Account balance equals zero; and

          (3) thereafter, to the Partners in proportion to their respective
Percentage Interests.

G-5

 

     To
the extent of any conflict between the provisions of this Section 9,
on the one hand, and the provisions of Sections 8 of EXHIBITS D, E and F, on
the other hand, the provisions of this Section 9 shall control.

     10. Restrictions on Ownership.

     The Convertible Preferred Partnership Units shall be owned and held solely
by the General Partner.

     11. General.

          (a) The General Partner shall have no voting rights with respect to the
Convertible Preferred Partnership Units other than the right to vote on an
amendment to the Agreement if it would alter the distribution, redemption,
liquidation, priority or conversion rights of the Convertible Preferred
Partnership Units, or any other rights or preferences of the Convertible
Preferred Partnership Units, as set forth in this EXHIBIT G.

          (b) The Convertible Preferred Partnership Units shall not be entitled to
the benefits of any retirement or sinking fund.

          (c) The Convertible Preferred Partnership Units shall not have any
preferences or relative, participating, optional or other special rights, or
voting powers, restrictions, limitations as to distributions, qualifications or
terms or conditions of redemption other than as expressly set forth in this
EXHIBIT G.

          (d) No holder of Convertible Preferred Partnership Units shall have any
preemptive or preferential right to subscribe for, or to purchase, any
additional ownership interests in the Partnership of any class or series, or
any other security of the Partnership which the Partnership may issue or sell.

          (e) The ownership of Convertible Preferred Partnership Units may (but need
not, in the sole and absolute discretion of the General Partner) be evidenced
by one or more certificates. The General Partner shall amend SCHEDULE A to the
Agreement from time to time to the extent necessary to reflect accurately the
issuance of, and subsequent redemption, or any other event having an effect on
the ownership of, Convertible Preferred Partnership Units.

          (f) The rights of the General Partner, in its capacity as holder of the
Convertible Preferred Partnership Units, are in addition to and not in
limitation of any other rights or authority of the General Partner in any other
capacity under the Agreement or applicable law. In addition, nothing contained
herein shall be deemed to limit or otherwise restrict the authority of the
General Partner under the Agreement, other than in its capacity as holder of
the Convertible Preferred Partnership Units.

          (g) If any preferences or other rights, restrictions, distributions,
qualifications, allocations or terms or conditions of redemption of the
Convertible Preferred Partnership Units set forth in this EXHIBIT G are
invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other preferences or other rights, restrictions,
distributions, qualifications, allocations or terms or conditions of redemption
of Convertible Preferred

G-6

 

Partnership Units set forth in this EXHIBIT G which can be given effect
without the invalid, unlawful or unenforceable provision thereof shall,
nevertheless, remain in full force and effect and no preferences or other
rights, restrictions, distributions, qualifications, allocations or terms or
conditions of redemption of the Convertible Preferred Partnership Units herein
set forth shall be deemed dependent on any other provision thereof unless so
expressed therein.

          (h) The headings of the various subdivisions of this EXHIBIT G are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.

G-7

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