AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
As of this 12th day of February, 1997, the First Amended and Restated
Agreement of Limited Partnership of Highwoods/Forsyth Limited Partnership dated
June 14, 1995, as amended (the "Agreement"), is hereby amended pursuant to
Sections 4.2.A and 14.1.B thereof as follows:
Section 1. Definitions.
Article 1 is hereby amended to add the following new definitions:
"Common Partnership Unit" means a Partnership Unit that is not a
Preferred Partnership Unit.
"Liquidation Preference Amount" means, with respect to any Preferred
Partnership Unit, the amount payable with respect to such Preferred
Partnership Unit (as established by the instrument designating such Preferred
Partnership Units) upon the voluntary or involuntary dissolution, liquidation
or winding up of the Partnership, or upon the earlier redemption of such
Preferred Partnership Units, as the case may be.
"Preferred Partnership Unit" means any Partnership Unit issued from
time to time pursuant to Section 4.2 hereof that is designated by the General
Partner at the time of its issuance as a Preferred Partnership Unit. Each
Preferred Partnership Unit shall have such designations, preferences and
relative, participating, optional or other special rights, powers and
duties, including rights, powers and duties senior to Limited Partner Interests
and Common Partnership Units, all as shall be determined by the General Partner
subject to the requirements of Section 4.2 hereof.
"Series A Preferred Partnership Unit" means a Partnership Unit
issued by the Partnership to the General Partner in consideration of the
contribution by the General Partner to the Partnership of the entire net
proceeds received by the General Partner from the issuance of the Series A
Preferred Shares. The Series A Preferred Partnership Units shall constitute
Preferred Partnership Units. The Series A Preferred Partnership Units shall
have the voting powers, designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions as are set forth in Exhibit H, attached hereto. It is the
intention of the General Partner, in establishing the Series A Preferred
Partnership Units, that each Series A Preferred Partnership Unit shall be
substantially the economic equivalent of a Series A Preferred Share.
"Series A Preferred Shares" means the 8 5/8% Series A Cumulative
Redeemable Preferred Shares, par value $0.01 per share, having a liquidation
preference equivalent to $1,000.00 per share, issued by the General Partner.
In addition, the definitions of "Partnership Unit," "Partnership Interest" and
"REIT Shares Amount" appearing in Article 1 of the Agreement are
hereby deleted in their entirety and the following definitions are inserted in
their place:
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1,
4.2 and 4.3. The number of Partnership Units outstanding and the Percentage
Interests in the Partnership represented by such Units are set forth in
Exhibit A attached hereto, as such Exhibit may be amended from time to time. The
ownership of Partnership Units shall be evidenced by such form of certificate
for units as the General Partner adopts from time to time unless the General
Partner determines that the Partnership Units shall be uncertificated
securities. Fractional Units may be held and counted by the General Partner
as necessary to meet the requirements of Section 4.1. Without limitation
on the authority of the General Partner as set forth in Section 4.2
hereof, the General Partner may designate any Partnership Units, when
issued, as Common Partnership Units or as Preferred Partnership
Units, may establish any other class of Partnership Units, and may
designate one or more series of any class of Partnership Units.
"Percentage Interest" means, as to a Partner, with respect to any
class of Partnership Units held by such Partner, its interest in such
class of Partnership Units as determined by dividing the number of Partnership
Units in such class owned by such Partner by the total number of Partnership
Units in such class then outstanding.
"REIT Shares Amount" shall mean a number of REIT Shares equal to
the product of the number of Common Partnership Units offered for
redemption by a Redeeming Partner, multiplied by the Conversion Factor;
provided that in the event the General Partner issues to all holders of REIT
Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT
Shares, or any other securities or property (collectively, the "rights") then
the REIT Shares Amount shall also include such rights that a holder of that
number of REIT Shares would be entitled to receive.
Section 2. Requirement and Characterization of Distributions.
Section 5.1 of the Agreement is hereby deleted in its
entirety and the following new Section 5.1 is inserted in its place:
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"Section 5.1 Requirement and Characterization of Distributions
The General Partner shall distribute at least quarterly an
amount equal to 100% of Available Cash generated by the Partnership
during such quarter or shorter period to the Partners who are Partners
on the Partnership Record Date with respect to such quarter or shorter
period in the following order of priority:
(i) First, to the holders of the Preferred Partnership
Units in such amount as is required for the
Partnership to pay all distributions with respect to
such Preferred Partnership Units due or payable in
accordance with the instruments designating such
Preferred Partnership Units through the last day of
such quarter; such distributions shall be made to
such Partners in such order of priority and with such
preferences as have been established with respect to
such Preferred Partnership Units as of the last day
of such calendar quarter; and then
(ii) to the Partners in proportion to their respective
Percentage Interests in Common Partnership Units on
such Partnership Record Date;
provided that in no event may a Partner receive a distribution of
Available Cash with respect to a Partnership Unit if such Partner is
entitled to receive a distribution out of such Available Cash with
respect to a REIT Share for which such Partnership Unit has been
redeemed or exchanged. The General Partner shall take such reasonable
efforts, as determined by it in its sole and absolute discretion and
consistent with its qualification as a REIT, to distribute Available
Cash to the Limited Partners so as to preclude any such distribution or
portion thereof from being treated as part of a sale of property to the
Partnership by a Limited Partner under Section 707 of the Code or the
Regulations thereunder; provided that the General Partner and the
Partnership shall not have liability to any Limited Partner under any
circumstances as a result of any distribution to such Limited Partner
being so treated.
Notwithstanding anything to the contrary contained herein, in
no event shall any Partner receive a distribution of Available Cash
with respect to any Common Partnership Unit with respect to any quarter
until such time as the Partnership has distributed to the holders of
the Preferred Partnership Units an amount sufficient to pay all
distributions payable with respect to such Preferred Partnership Units
through the last day of such quarter, in accordance with the
instruments designating such Preferred Partnership Units."
Section 3. Tax Provisions.
Section 6.1 of the Agreement is hereby deleted in its
entirety and the following new Section 6.1 is inserted in its place:
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"Section 6.1 Allocations For Capital Account Purposes
For purposes of maintaining the Capital Accounts and in
determining the rights of the Partners among themselves, the
Partnership's items of income, gain, loss and deduction (computed in
accordance with Exhibit B hereof) shall be allocated among the Partners
in each taxable year (or portion thereof) as provided herein below.
A. Net Income. After giving effect to the special allocations
set forth in Section 1 of Exhibit C attached hereto, Net Income shall
be allocated (i) first, to the General Partner to the extent that Net
Losses previously allocated to the General Partner pursuant to the last
sentence of Section 6.1.B exceed Net Income previously allocated to the
General Partner pursuant to this clause (i) of Section 6.1.A, and (ii)
thereafter, Net Income shall be allocated to the Partners who hold
Common Partnership Units in proportion to their respective Percentage
Interests as holders of Common Partnership Units.
B. Net Losses. After giving effect to the special allocations
set forth in Section 1 of Exhibit C attached hereto, Net Losses shall be
allocated to the Partners who hold Common Partnership Units in
accordance with their respective Percentage Interests as holders of
Common Partnership Units; provided, however, that Net Losses shall not
be allocated to any Limited Partner pursuant to this Section 6.1.B to
the extent that such allocation would cause such Limited Partner to
have an Adjusted Capital Account Deficit at the end of such taxable
year (or increase any existing Adjusted Capital Account Deficit). All Net
Losses in excess of the limitations set forth in this Section 6.1.B
shall be allocated to the General Partner."
In addition, Exhibit C to the Agreement is hereby amended to add the
following new Section 1.G.:
"G. Priority Allocation With Respect To Preferred Partnership
Units. All or a portion of the remaining items of Partnership gross
income or gain for the Partnership Year, if any, shall be specially
allocated to the General Partner in an amount equal to the excess,
if any, of the cumulative distributions received by the General
Partner pursuant to Section 5.1(i) hereof for the current Partnership
Year and all prior Partnership Years (other than any distributions that
are treated as being in satisfaction of the Liquidation Preference
Amount for any Preferred Partnership Units) over the cumulative
allocations of Partnership gross income and gain to the General Partner
under this Section 1.G for all prior Partnership Years."
Section 4. Redemption Right.
The Agreement is hereby amended by adding the following new
Sections 8.6.D and 8.6.E to the Agreement, immediately following
Section 8.6.C:
"D. Notwithstanding anything contained in Sections 8.6.A,
8.6.B and 8.6.C, no Partner shall be entitled to exercise the Redemption
Right pursuant to Section 8.6.A with respect to any Preferred
Partnership Unit unless (i) such Preferred Partnership Unit has been
issued to and is held
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by a Partner other than the General Partner, and (ii) the General
Partner has expressly granted to such Partner the right to redeem such
Preferred Partnership Units pursuant to Section 8.6.A.
E. Preferred Partnership Units shall be redeemed, if at all,
only in accordance with such redemption rights or options as are set
forth with respect to such Preferred Partnership Units (or class or
series thereof) in the instruments designating such Preferred
Partnership Units (or class or series thereof)."
Section 5. General Amendments to the Agreement.
Notwithstanding anything contained herein, all references to
Partnership Units in Sections 7.3.B, 7.5.B and 11.2.C of the
Agreement shall be deemed to refer solely to Common Partnership Units, and not
to Preferred Partnership Units. In addition, references in Sections 14.1 and
14.2 of the Agreement to Percentage Interests of the Limited
Partners shall be deemed to refer solely to Percentage Interests of Limited
Partners with respect to Common Partnership Units. Further, the reference to
Partnership Interests appearing in Section 14.2.A shall be deemed to refer only
to Partnership Interests held with respect to Common Partnership Units.
Section 6. Exhibits to the Agreement.
The General Partner shall maintain the information set forth in Exhibit
A to the Agreement, as such information shall change from time to time, in such
form as the General Partner deems appropriate for the conduct of the
Partnership affairs, and Exhibit A shall be deemed amended from time to time to
reflect the information so maintained by the General Partner, whether or not a
formal amendment to the Agreement has been executed amending such Exhibit A.
Such information shall reflect (and Exhibit A shall be deemed amended from time
to time to reflect) the issuance of any additional Partnership Units to the
General Partner or any other Person, the transfer of Partnership Units and the
redemption of any Partnership Units, all as contemplated in the Agreement.
In addition, the Agreement is hereby amended by attaching thereto as
Exhibit H the Exhibit H attached hereto.
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IN WITNESS WHEREOF, the undersigned has executed this Amendment as of
the date first written above.
HIGHWOODS PROPERTIES, INC.,
as General Partner of
Highwoods/Forsyth Limited Partnership
By: /s/Ronald P. Gibson
---------------------------------
Ronald P. Gibson, President
[CORPORATE SEAL]
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EXHIBIT H
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
DESIGNATION OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF THE
SERIES A PREFERRED PARTNERSHIP UNITS
The following are the terms of the Series A Preferred Partnership Units
established pursuant to this Amendment:
(a) Number. The maximum number of authorized Series A Preferred
Partnership Units shall be 143,750.
(b) Relative Seniority. In respect of rights to receive quarterly
distributions and to participate in distributions of payments in the event of
any liquidation, dissolution or winding up of the Partnership, the Series A
Preferred Partnership Units shall rank senior to the Common Partnership Units
and any other class or series of Partnership Units of the Partnership ranking,
as to quarterly distributions and upon liquidation, junior to the Series A
Preferred Partnership Units (collectively, "Junior Partnership Units").
(c) Quarterly Distributions.
(1) The General Partner, in its capacity as the holder of the then
outstanding Series A Preferred Partnership Units, shall be entitled to receive,
when and as declared by the General Partner out of any funds legally available
therefor, cumulative quarterly distributions at the rate of $86.25 per Series A
Preferred Partnership Unit per year, payable quarterly in arrears in cash on the
last day of February, May, August, and November of each year or, if not a
Business Day (as hereinafter defined), the next succeeding Business Day,
commencing May 31, 1997 (each such day being hereafter called a "Quarterly
Distribution Date" and each period beginning on the day next following a
Quarterly Distribution Date and ending on the next following Quarterly
Distribution Date being hereinafter called a "Distribution Period"). Quarterly
distributions on each Series A Preferred Partnership Unit shall accrue and be
cumulative from and including the date of original issue thereof, whether or not
(i) quarterly distributions on such Series A Preferred Partnership Units are
earned or declared or (ii) on any Quarterly Distribution Date there shall be
funds legally available for the payment of quarterly distributions. Quarterly
distributions paid on the Series A Preferred Partnership Units in an amount less
than the total amount of such quarterly distributions at the time accrued and
payable on such Partnership Units shall be allocated pro rata on a per unit
basis among all such Series A Preferred Partnership Units at the time
outstanding.
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"Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.
(2) The amount of any quarterly distributions accrued on any Series A
Preferred Partnership Units at any Quarterly Distribution Date shall be the
amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or declared,
and the amount of quarterly distributions accrued on any Series A Preferred
Partnership Units at any date other than a Quarterly Distribution Date shall be
equal to the sum of the amount of any unpaid quarterly distributions accumulated
thereon, to and including the last preceding Quarterly Distribution Date,
whether or not earned or declared, plus an amount calculated on the basis of the
annual distribution rate for the period after such last preceding Quarterly
Distribution Date to and including the date as of which the calculation is made
based on a 360-day year of twelve 30-day months. When distributions are not paid
in full upon the Series A Preferred Partnership Units (or a sum sufficient for
such full payment is not set apart therefor), all distributions declared upon
Series A Preferred Partnership Units and any other series of Preferred
Partnership Units ranking on a parity as to distributions with the Series A
Preferred Partnership Units shall be declared pro rata so that the amount of
distributions declared per unit on the Series A Preferred Partnership Units and
such other series of Preferred Partnership Units shall in all cases bear to each
other the same ratio that accrued distributions per unit on the Series A
Preferred Partnership Units and such other series of Preferred Partnership Units
bear to each other.
(3) Except as provided in the immediately preceding paragraph, unless
full cumulative distributions on the Series A Preferred Partnership Units have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment of the Series A Preferred
Partnership Units for all past distribution periods and the then current
distribution period, (A) no distributions shall be declared or paid or set apart
for payment on the Preferred Partnership Units ranking, as to distributions, on
a parity with or junior to the Series A Preferred Partnership Units for any
period, and (B) no distributions (other than in Junior Partnership Units) shall
be declared or paid or set aside for payment or other distribution or shall be
declared or made upon the Junior Partnership Units or any other Preferred
Partnership Units ranking on a parity with the Series A Preferred Partnership
Units as to distributions or upon liquidation ("Parity Units"), nor shall any
Junior Partnership Units or any Parity 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 Junior Partnership Units or Parity Units)
by the Partnership (except by conversion into or exchange for Junior Partnership
Units).
(4) Except as provided herein, the Series A Preferred Partnership Units
shall not be entitled to participate in the earnings or assets of the
Partnership, and no interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution or distributions on the Series A
Preferred Partnership Units which may be in arrears.
(5) Any distribution made on the Series A Preferred Partnership Units
shall be first credited against the earliest accrued but unpaid quarterly
distribution due with respect to such Partnership Units which remains payable.
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(6) No quarterly distributions on the Series A Preferred Partnership
Units shall be authorized by the General Partner or be paid or set apart for
payment by the Partnership at such time as the terms and provisions of any
agreement of the General Partner or the Partnership, including any agreement
relating to its indebtedness, prohibits such authorization, payment or setting
apart for payment or provides that such authorization, payment or setting apart
for payment would constitute a breach thereof or a default thereunder, or if
such authorization or payment shall be restricted or prohibited by law.
Notwithstanding the foregoing, quarterly distributions on the Series A Preferred
Partnership Units will accrue whether or not the Partnership has earnings,
whether or not there are funds legally available for the payment of such
quarterly distributions and whether or not such quarterly distributions are
authorized.
(d) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, the General Partner, in its capacity as the
holder of the Series A Preferred Partnership Units then outstanding, shall be
entitled to receive and to be paid out of the assets of the Partnership
available for distribution to its partners, before any payment or distribution
shall be made on any Junior Partnership Units, the amount of $1,000.00 per
Series A Preferred Partnership Unit, plus accrued and unpaid quarterly
distributions thereon.
(2) After the payment to the holders of the Series A Preferred
Partnership Units of the full preferential amounts provided for herein, the
General Partner, in its capacity as the holder of the Series A Preferred
Partnership Units as such, shall have no right or claim to any of the remaining
assets of the Partnership.
(3) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Partnership, the amounts payable with respect to the
preference value of the Series A Preferred Partnership Units and any other
Preferred Partnership Units of the Partnership ranking as to any such
distribution on a parity with the Series A Preferred Partnership Units are not
paid in full, the holders of the Series A Preferred Partnership Units and of
such other Preferred Partnership Units will share ratably in any such
distribution of assets of the Partnership in proportion to the full respective
preference amounts to which they are entitled.
(4) Neither the sale, lease or conveyance of all or substantially all
of the property or business of the Partnership, nor the merger or consolidation
of the Partnership into or with any other entity or the merger or consolidation
of any other entity into or with the Partnership, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary, for the
purposes hereof.
(e) Redemption.
(1) The Series A Preferred Partnership Units are not redeemable prior
to February 12, 2027. On and after February 12, 2027, the General Partner may,
at its option, cause the Partnership to redeem at any time all or, from time to
time, part of the Series A Preferred Partnership Units at a price per unit (the
" Redemption Price"), payable in cash, of $1,000.00, together with all accrued
and unpaid distributions to and including the date fixed for redemption (the
"Redemption Date"). The
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Series A Preferred Partnership Units have no stated maturity and will not be
subject to any sinking fund or mandatory redemption provisions.
(2) Procedures of Redemption.
(i) At any time that the General Partner exercises its right
to redeem all or any of the Series A Preferred Shares, the General
Partner shall exercise its right to cause the Partnership to redeem an
equal number of Series A Preferred Partnership Units in the manner set
forth herein.
(ii) No Series A Preferred Partnership Units may be redeemed
except from proceeds from the sale of capital stock of the General
Partner, including but not limited to common stock, preferred stock,
depositary shares, interests, participations or other ownership
interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity securities) or
options to purchase any of the foregoing. The proceeds of such sale of
capital stock of the General Partner shall be contributed by the
General Partner to the Partnership pursuant to the requirements of
Section 4.2 of the Partnership Agreement.
(f) Voting Rights. Except as required by law, the General Partner, in
its capacity as the holder of the Series A Preferred Partnership Units, shall
not be entitled to vote at any meeting of the Partners or for any other purpose
or otherwise to participate in any action taken by the Partnership or the
Partners, or to receive notice of any meeting of Partners.
(g) Conversion. The Series A Preferred Partnership Units are not
convertible into or exchangeable for any other property or securities of the
Partnership.
(h) Restrictions on Ownership. The Series A Preferred Partnership Units
shall be owned and held solely by the General Partner.
(i) General. The rights of the General Partner, in its capacity as
holder of the Series A 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 Partnership Agreement. In addition, nothing contained
herein shall be deemed to limit or otherwise restrict any rights or authority of
the General Partner under the Partnership Agreement, other than in its capacity
as the holder of the Series A Preferred Partnership Units.
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