Exhibit 10.2
Form of
Third Amendment to the
Amended and Restated Agreement
of Limited Partnership
of
LaSalle Hotel Operating Partnership,
L.P.
This Amendment is made as of
, 2005 by and among LaSalle Hotel
Properties, a Maryland real estate investment trust, as the general
partner (the “Trust” or the “General
Partner”) of LaSalle Hotel Operating Partnership, L.P., a
Delaware limited partnership (the “Partnership”), and
as attorney-in-fact for the Persons named on Exhibit A to the
Amended and Restated Agreement of Limited Partnership of LaSalle
Hotel Operating Partnership, L.P., dated as of April 29, 1998, as
amended by the First Amendment to the Amended and Restated
Agreement of Limited Partnership, dated as of March 6, 2002 and by
that Second Amendment to the Amended and Restated Agreement of
Limited Partnership, dated as of September 30, 2003 (collectively,
as amended, the “Partnership Agreement”), and SCG
Copley Square LLC, a Delaware limited liability company
(“SCG”) for the purpose of amending the Partnership
Agreement. Capitalized terms used herein and not defined shall have
the meanings given to them in the Partnership Agreement.
WHEREAS, Section 4.2A. of the
Partnership Agreement authorizes the General Partner to cause the
Partnership to issue additional Partnership Units in one or more
classes or series, with such designations, preferences and
relative, participating, optional or other special rights, powers
and duties as shall be determined, subject to applicable Delaware
law, by the General Partner; and
WHEREAS, pursuant to the authority
granted to the General Partner pursuant to Sections 4.2A. and
14.1B. of the Partnership Agreement, the General Partner desires to
amend the Partnership Agreement (i) to establish a new class of
Partnership Units, the Series C Preferred Units (as hereinafter
defined), and to set forth the designations, rights, powers,
preferences and duties of such Series C Preferred Units, (ii) to
issue the Series C Preferred Units to SCG and admit SCG as an
Additional Limited Partner, and (iii) to make certain other changes
to the Partnership Agreement.
NOW, THEREFORE, in consideration of
the premises and for other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the
General Partner hereby amends the Partnership Agreement as
follows:
1. Article 1 of the Partnership
Agreement is hereby amended by adding the following
definitions:
“Series C Preferred Cash
Amount” means $25 multiplied by the Series C Preferred Shares
Amount, plus accrued and unpaid distributions.
1
“Series C Preferred Conversion
Factor” means 1.0; provided that, if the General Partner (i)
declares or pays a dividend on its outstanding Series C Preferred
Shares in Series C Preferred Shares or makes a distribution to all
holders of its outstanding Series C Preferred Shares in Series C
Preferred Shares, (ii) subdivides its outstanding Series C
Preferred Shares or (iii) combines its outstanding Series C
Preferred Shares into a smaller number of Series C Preferred
Shares, the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a fraction, the numerator of which shall be
the number of Series C Preferred Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or
combination (assuming for such purposes that such dividend,
distribution, subdivision or combination has occurred as of such
time) and the denominator of which shall be the actual number of
Series C Preferred Shares (determined without the above assumption)
issued and outstanding on the record date for such dividend,
distribution, subdivision or combination; and provided further that
if an entity shall cease to be the General Partner (the
“Predecessor General Partner”) and another entity shall
become the General Partner (the “Successor General
Partner”), the Series C Preferred Conversion Factor shall be
adjusted by multiplying the Series C Preferred Conversion Factor by
a fraction, the numerator of which is $25.00, and the denominator
of which is the liquidation preference of one Series C Preferred
Share of the Successor General Partner, determined as of that same
date. Any adjustment to the Series C Preferred Conversion Factor
shall become effective immediately after the effective date of the
event retroactive to the record date, if any, for the event giving
rise thereto, it being intended that (x) adjustments to the Series
C Preferred Conversion Factor are to be made to avoid unintended
dilution or anti-dilution as a result of transactions in which
Series C Preferred Shares are issued, redeemed or exchanged without
a corresponding issuance, redemption or exchange of Partnership
Units and (y) if a Specified Redemption Date shall fall between the
record date and the effective date of any event of the type
described above, that the Series C Preferred Conversion Factor
applicable to such redemption shall be adjusted to take into
account such event.
“Series C Preferred
Shares” means the 7.25% Series C Cumulative Redeemable
Preferred Shares of Beneficial Interest, $.01 par value per share
(Liquidation Preference $25 per share) of the Trust, with the
preferences, liquidation and other rights, voting powers,
restrictions, limitations as to distributions, qualifications and
terms and conditions of redemption of shares as described in the
Articles Supplementary.
“Series C Preferred Shares
Amount” means a number of Series C Preferred Shares equal to
the product of the number of Series C Preferred Units offered for
redemption by a Redeeming Partner times the Series C Preferred
Conversion Factor, provided that, if the General Partner issues to
all holders of Series C Preferred Shares rights, options, warrants
or convertible or exchangeable securities entitling such holders to
subscribe for or purchase Series C Preferred Shares or any other
securities or property (collectively, the “rights”),
then the Series C Preferred Shares Amount shall also include such
rights that a holder of that number of Series C Preferred Shares
would be entitled to receive.
“Series C Preferred
Units” means the series of Partnership Units
representing
2
units of Limited Partnership Interest designated
as the 7.25% Series C Cumulative Redeemable Preferred Units
(Liquidation Preference $25 per unit), with the preferences,
liquidation and other rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and
conditions of redemption of units as described herein.
2. In accordance with Section 4.2A
of the Partnership Agreement, set forth below are the terms and
conditions of the Series C Preferred Units.
A. Designation and Number. A
series of Partnership Units, designated as the 7.25% Series C
Cumulative Redeemable Preferred Units, is hereby established. The
maximum number of Series C Preferred Units shall be [
].
B. Rank. The Series C
Preferred Units will, with respect to distribution rights and
rights upon liquidation, dissolution or winding up of the
Partnership, rank (a) senior to the Class A Units, Class B Units
and to all Partnership Interests the terms of which specifically
provide that such Partnership Interests shall rank junior to such
Series C Preferred Units; (b) on a parity with all Partnership
Interests issued by the Partnership, including the 10.25% Series A
Cumulative Redeemable Preferred Units and 8.375% Series B
Cumulative Redeemable Preferred Units, other than those Partnership
Interests referred to in clauses (a) and (c); and (c) junior to all
Partnership Interests issued by the Partnership the terms of which
specifically provide that such Partnership Interests shall rank
senior to the Series C Preferred Units.
C. Distributions .
(i) Pursuant to Section 5.1 of the
Partnership Agreement, holders of Series C Preferred Units shall be
entitled to receive, when, as and if declared by the Partnership
acting through the General Partner, out of Available Cash,
cumulative preferential cash distributions at the rate of seven and
one-quarter percent (7.25%) per annum of the twenty-five dollars
($25.00) per share liquidation preference of the Series C Preferred
Units (equivalent to a fixed annual amount of $1.8125 per unit).
Distributions on the Series C Preferred Units shall accumulate on a
daily basis and be cumulative from (but excluding) the original
date of issuance and be payable quarterly in equal amounts in
arrears on the fifteenth day of January, April, July, and October
of each year, beginning on October 15, 2005 (each such day being
hereinafter called a “Series C Preferred Unit Distribution
Payment Date;” provided that if any Series C Preferred Unit
Distribution Payment Date is not a Business Day, then the
distribution which would otherwise have been payable on such Series
C Preferred Unit Distribution Payment Date shall be paid on the
next succeeding Business Day with the same force and effect as if
paid on such Series C Preferred Unit Distribution Payment Date, and
no interest or additional distributions or other sums shall accrue
on the amount so payable from such Series C Preferred Unit
Distribution Payment Date to such next succeeding Business Day. Any
distribution (including the initial distribution) payable on the
Series C Preferred Units for any partial distribution period shall
be prorated and computed on the basis of a 360-day year consisting
of twelve 30-day months. Distributions shall be payable to holders
of record as they appear in the records of the Partnership at the
close of business on the applicable record date, which shall be the
first day of the calendar month in which the applicable Series C
Preferred Unit Distribution Payment Date falls or such other date
designated by the General Partner for the payment of distributions
that is not more than 90 nor less than 10 days prior to such Series
C Preferred Unit Distribution Payment Date (each, a “Series C
Preferred Unit Distribution Record Date”).
3
(ii) No distribution on the Series C
Preferred Units shall be authorized by the 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
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.
(iii) Notwithstanding anything to
the contrary contained herein, distributions with respect to the
Series C Preferred Units shall accumulate whether or not the
restrictions referred to in Subsection 2.C.(ii) exist, whether or
not the Partnership has earnings, whether or not there is
sufficient Available Cash for the payment thereof and whether or
not such distributions are authorized. Accumulated but unpaid
distributions on the Series C Preferred Units will accumulate as of
the Series C Preferred Unit Distribution Payment Date on which they
first become payable or on the date of redemption as the case may
be. Accumulated and unpaid distributions will not bear
interest.
(iv) If any Series C Preferred Units
are outstanding, no distributions of cash or other property will be
authorized or paid or set apart for payment on any Partnership
Interests of the Partnership of any other class or series ranking,
as to distributions, on a parity with or junior to the Series C
Preferred Units unless full cumulative distributions have been or
contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof set apart for such payment on
the Series C Preferred Units for all past distribution periods and
the then current distribution period. When distributions are not
paid in full (or a sum sufficient for such full payment is not so
set apart) upon the Series C Preferred Units and all other
Partnership Interests ranking on a parity, as to distributions,
with the Series C Preferred Units, all distributions authorized,
paid or set apart for payment upon the Series C Preferred Units and
all other units ranking on a parity, as to distributions, with the
Series C Preferred Units shall be authorized and paid pro rata or
authorized and set apart for payment pro rata so that the amount of
distributions authorized per Series C Preferred Unit and each such
other Partnership Interest shall in all cases bear to each other
the same ratio that accumulated distributions per Series C
Preferred Unit and other Partnership Interest (which shall not
include any accumulation in respect of unpaid distributions for
prior distribution periods if such Partnership Interests do not
have a cumulative distribution) bear to each other. No interest, or
sum of money in lieu of interest, shall be payable in respect of
any distribution payment or payments on Series C Preferred Units
which may be in arrears.
(v) Except as provided in subsection
2.C.(iv), unless full cumulative distributions on the Series C
Preferred Units have been or contemporaneously are authorized and
paid or authorized and a sum sufficient for the payment thereof is
set apart for payment for all past distribution periods and the
then current distribution period, no distributions (other than in
Partnership Interests ranking junior to the Series C Preferred
Units as to distributions and upon liquidation) shall be authorized
or paid or set aside for payment nor shall any other distribution
be authorized or made upon the Class A Units, Class B Units, or any
other Partnership Interests ranking junior to or on a parity with
the Series C Preferred Units as to
4
distributions or upon liquidation, nor shall any
Class A Units, Class B Units, or any other Partnership Interests
ranking junior to or on a parity with the Series C Preferred Units
as to distributions or upon liquidation be redeemed, purchased or
otherwise acquired directly or indirectly for any consideration (or
any monies be paid to or made available for a sinking fund for the
redemption of any such Partnership Interests) by the Partnership
(except by conversion into or exchange for other Partnership
Interests ranking junior to the Series C Preferred Units as to
distributions and upon liquidation, dissolution or winding up of
the affairs of the Partnership or by redemption, purchase or
acquisition of Partnership Interests under incentive, benefit or
unit purchase plans of the Partnership for Employees of the General
Partner, the Partnership, Subsidiaries of the Partnership or any
Affiliate of any of them, or by redemption of Partnership Units
corresponding to any Series C Preferred Shares or shares ranking on
parity or junior to the Series C Preferred Shares as to
distributions and upon liquidation to be purchased by the General
Partner pursuant to Article VII of the Declaration of Trust to
preserve the General Partner’s status as a real estate
investment trust, provided that such redemption shall be upon the
same terms as the corresponding purchase pursuant to Article VII of
the Declaration of Trust).
(vi) Holders of Series C Preferred
Units shall not be entitled to any distribution, whether payable in
cash, property or Partnership Interests, in excess of full
cumulative distributions on the Series C Preferred Units as
described above. Any distribution payment made on the Series C
Preferred Units shall first be credited against the earliest
accumulated but unpaid distribution due with respect to such units
which remains payable.
D. Allocation of Net Income and
Net Losses . Notwithstanding anything contained in the
Partnership Agreement to the contrary, so long as any Series C
Preferred Units are outstanding, for each fiscal year, prior to any
allocations of Net Income under the Partnership Agreement, the
holders of Series C Preferred Units shall be allocated an amount of
Net Income equal to the excess of: (i) the sum of (A) the aggregate
amount of cash (or the fair market value of property) actually
distributed to the holders of Series C Preferred Units during such
fiscal year and all prior fiscal years other than distributions
constituting a return of any prior capital contributions to a
holder under paragraphs E and F hereof, plus (B) the amount of
accru
