EXHIBIT 10.1
---------------------------------
SIXTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY, L.P.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINED TERMS AND RULES OF CONSTRUCTION 1
Section 1.1 Definitions 1
Section 1.2 Rules of Construction 20
ARTICLE 2. ORGANIZATIONAL MATTERS 20
Section 2.1 Organization 20
Section 2.2 Name 20
Section 2.3 Resident Agent; Principal Office 20
Section 2.4 Power of Attorney 21
Section 2.5 Term 22
Section 2.6 Number of Partners 22
ARTICLE 3. PURPOSE 22
Section 3.1 Purpose and Business 22
Section 3.2 Powers 23
Section 3.3 Partnership Only for Purposes Specified 23
Section 3.4 Representations and Warranties by the Parties 23
Section 3.5 Certain ERISA Matters 25
ARTICLE 4. CAPITAL CONTRIBUTIONS 25
Section 4.1 Capital Contributions of the Partners 25
Section 4.2 Loans by Third Parties 26
Section 4.3 Additional Funding and Capital Contributions 26
Section 4.4 Stock Incentive Plan 28
Section 4.5 No Preemptive Rights 28
Section 4.6 Other Contribution Provisions 29
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ARTICLE 5. DISTRIBUTIONS 29
Section 5.1 Requirement and Characterization of Distributions 29
Section 5.2 Distributions in Kind 30
Section 5.3 Distributions Upon Liquidation 30
Section 5.4 Distributions to Reflect Issuance of Additional Partnership Interests 30
Section 5.5 Character of PLP Distributions 30
ARTICLE 6. ALLOCATIONS 31
Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss 31
Section 6.2 General Allocations 31
Section 6.3 Additional Allocation Provisions 33
Section 6.4 Tax Allocations 35
ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS 37
Section 7.1 Management 37
Section 7.2 Certificate of Limited Partnership 40
Section 7.3 Restrictions on General Partner's Authority 40
Section 7.4 Reimbursement of the General Partner 43
Section 7.5 Outside Activities of the General Partner 43
Section 7.6 Contracts with Affiliates 44
Section 7.7 Indemnification 45
Section 7.8 Liability of the General Partner 47
Section 7.9 Other Matters Concerning the General Partner 48
Section 7.10 Title to Partnership Assets 48
Section 7.11 Reliance by Third Parties 49
ARTICLE 8. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 49
Section 8.1 Limitation of Liability 49
Section 8.2 Management of Business 49
Section 8.3 Outside Activities of Limited Partners 50
Section 8.4 Return of Capital 50
II
Section 8.5 Rights of Limited Partners Relating to the Partnership 50
Section 8.6 Common Limited Partner Redemption Rights 51
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS 53
Section 9.1 Records and Accounting 53
Section 9.2 Fiscal Year 54
Section 9.3 Reports 54
Section 9.4 Nondisclosure of Certain Information 54
ARTICLE 10. TAX MATTERS 54
Section 10.1 Preparation of Tax Returns 54
Section 10.2 Tax Elections 54
Section 10.3 Tax Matters Partner 55
Section 10.4 Organizational Expenses 56
Section 10.5 Withholding 56
ARTICLE 11. TRANSFERS AND WITHDRAWALS 57
Section 11.1 Transfer 57
Section 11.2 Transfer of General Partner's Partnership Interest 57
Section 11.3 Limited Partners' Rights to Transfer 59
Section 11.4 Substituted Limited Partners 61
Section 11.5 Assignees 62
Section 11.6 General Provisions 62
ARTICLE 12. ADMISSION OF PARTNERS 64
Section 12.1 Admission of Successor General Partner 64
Section 12.2 Admission of Additional Limited Partners 65
Section 12.3 Amendment of Agreement and Certificate of Limited Partnership 65
ARTICLE 13. DISSOLUTION AND LIQUIDATION 65
Section 13.1 Dissolution 65
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Section 13.2 Winding Up 66
Section 13.3 Compliance with Timing Requirements of Regulations 67
Section 13.4 Deemed Distribution and Recontribution 68
Section 13.5 Rights of Limited Partners 68
Section 13.6 Notice of Dissolution 68
Section 13.7 Cancellation of Certificate of Limited Partnership 69
Section 13.8 Reasonable Time for Winding-Up 69
Section 13.9 Waiver of Partition 69
ARTICLE 14. AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS 69
Section 14.1 Amendments 69
Section 14.2 Action by the Partners 69
ARTICLE 15. GENERAL PROVISIONS 70
Section 15.1 Addresses and Notice 70
Section 15.2 Titles and Captions 70
Section 15.3 Pronouns and Plurals 71
Section 15.4 Further Action 71
Section 15.5 Binding Effect 71
Section 15.6 Creditors 71
Section 15.7 Waiver 71
Section 15.8 Counterparts 71
Section 15.9 Applicable Law 71
Section 15.10 Invalidity of Provisions 71
Section 15.11 Limitation to Preserve REIT Status 71
Section 15.12 Entire Agreement 72
Section 15.13 No Rights as Stockholders 72
ARTICLE 16. SERIES A PREFERRED ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇.▇ Designation and Number 73
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Section 16.2 Ranking 73
Section 16.3 Distributions 73
Section 16.4 Liquidation Proceeds 75
Section 16.5 Redemption 75
Section 16.6 Voting Rights 77
Section 16.7 Transfer Restrictions 77
Section 16.8 No Conversion Rights 77
Section 16.9 No Sinking Fund 77
ARTICLE 17. SERIES B PREFERRED ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇.▇ Designation and Number 77
Section 17.2 Ranking 77
Section 17.3 Distributions 77
Section 17.4 Liquidation Proceeds 79
Section 17.5 Redemption 80
Section 17.6 Voting Rights 81
Section 17.7 Transfer Restrictions 82
Section 17.8 Exchange Rights 83
Section 17.9 No Conversion Rights 87
Section 17.10 No Sinking Fund 87
ARTICLE 18. SERIES J PREFERRED ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇.▇ Designation and Number 87
Section 18.2 Ranking 87
Section 18.3 Distributions 88
Section 18.4 Liquidation Proceeds 89
Section 18.5 Redemption 90
Section 18.6 Voting Rights 91
Section 18.7 Transfer Restrictions 92
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Section 18.8 Exchange Rights 93
Section 18.9 No Conversion Rights 97
Section 18.10 No Sinking Fund 97
ARTICLE 19. SERIES K PREFERRED ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇.▇ Designation and Number 97
Section 19.2 Ranking 97
Section 19.3 Distributions 97
Section 19.4 Liquidation Proceeds 99
Section 19.5 Redemption 100
Section 19.6 Voting Rights 101
Section 19.7 Transfer Restrictions 102
Section 19.8 Exchange Rights 103
Section 19.9 No Conversion Rights 107
Section 19.10 No Sinking Fund 107
vi
SIXTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY, L.P.
THIS SIXTH AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP, dated as of April 17, 2002, is entered into by and among AMB
Property Corporation, a Maryland corporation (the "Company"), as the General
Partner, and the Persons whose names are set forth on Exhibit A attached hereto,
as the Limited Partners (the "Existing Limited Partners"), together with any
other Persons who become Partners in the Partnership as provided herein.
WHEREAS, pursuant to Sections 7.3D(ii) and (iii), the
Partnership Agreement may be amended by the General Partner to reflect the
issuance of additional Partnership Interests pursuant to Sections 4.3.C, 4.3.F
and 4.4 and to set forth the designations, rights, powers, duties and
preferences of the holders of any additional Partnership Interests issued
pursuant to Article 4; and
WHEREAS, the General Partner and the Partnership believe it is
desirable and in the best interest of the Partnership to amend and restate the
Partnership Agreement as set forth herein.
NOW, THEREFORE, pursuant to Sections 2.4 and 7.3D(ii) and
(iii) of the Partnership Agreement, the General Partner, on its own behalf and
as attorney-in-fact for the Limited Partners, hereby amends and restates the
Partnership Agreement as follows:
ARTICLE 1.
DEFINED TERMS AND RULES OF CONSTRUCTION
Section 1.1 Definitions
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Act" means the
Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time, and any successor to such statute.
"Additional Funds" shall have the meaning set forth in Section
4.3.A.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 12.2 and who is shown as
such on the books and records of the Partnership.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of the relevant fiscal year, after giving effect to the following
adjustments:
(i) decrease such deficit by any amounts which such
Partner is obligated to restore pursuant to this
Agreement or is deemed to be obligated to restore
pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)
or the penultimate sentence of each of Regulations
Sections 1.704-2(i)(5) and 1.704-2(g); and
(ii) increase such deficit by the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5)
and (6).
The foregoing definition of Adjusted Capital Account Deficit
is intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Adjustment Date" shall have the meaning set forth in Section
4.3.E.
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under common control with
such Person.
"Agreed Value" means (i) in the case of any Contributed
Property set forth in Exhibit A and as of the time of its contribution to the
Partnership, the Agreed Value of such property as set forth in Exhibit A; (ii)
in the case of any Contributed Property not set forth in Exhibit A and as of the
time of its contribution to the Partnership, the fair market value of such
property or other consideration as determined by the General Partner, reduced by
any liabilities either assumed by the Partnership upon such contribution or to
which such property is subject when contributed; and (iii) in the case of any
property distributed to a Partner by the Partnership, the fair market value of
such property as determined by the General Partner at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of the
distribution as determined under Section 752 of the Code and the Regulations
thereunder.
"Agreement" means this Sixth Amended and Restated Agreement of
Limited Partnership, as it may be amended, modified, supplemented or restated
from time to time.
"Appraisal" means with respect to any assets, the opinion of
an independent third party experienced in the valuation of similar assets,
selected by the General Partner in good faith; such opinion may be in the form
of an opinion by such independent third party that the value for such asset as
set by the General Partner is fair, from a financial point of view, to the
Partnership.
"Assignee" means a Person to whom one or more Partnership
Units have been transferred in a manner permitted under this Agreement, but who
has not become a Substituted Limited Partner, and who has the rights set forth
in Section 11.5.
"Available Cash" means, with respect to any period for which
such calculation is being made, (i) the sum of:
(a) the Partnership's Net Income or Net Loss (as the
case may be) for such period,
(b) Depreciation and all other noncash charges deducted
in determining Net Income or Net Loss for such period,
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(c) the amount of any reduction in reserves of the
Partnership referred to in clause (ii)(f) below (including,
without limitation, reductions resulting because the General
Partner determines such amounts are no longer necessary),
(d) the excess of the net proceeds from the sale,
exchange, disposition, or refinancing of Partnership
property for such period over the gain (or loss, as the case
may be) recognized from any such sale, exchange,
disposition, or refinancing during such period (excluding
Terminating Capital Transactions), and
(e) all other cash received by the Partnership for such
period that was not included in determining Net Income or
Net Loss for such period;
(ii) less the sum of:
(a) all principal debt payments made during such period
by the Partnership,
(b) capital expenditures made by the Partnership during
such period,
(c) investments in any entity (including loans made
thereto) to the extent that such investments are not
otherwise described in clauses (ii)(a) or (b),
(d) all other expenditures and payments not deducted in
determining Net Income or Net Loss for such period,
(e) any amount included in determining Net Income or
Net Loss for such period that was not received by the
Partnership during such period,
(f) the amount of any increase in reserves established
during such period which the General Partner determines are
necessary or appropriate in its sole and absolute
discretion, and
(g) the amount of any working capital accounts and
other cash or similar balances which the General Partner
determines to be necessary or appropriate in its sole and
absolute discretion.
Notwithstanding the foregoing, Available Cash shall not
include any cash received or reductions in reserves, or take into account any
disbursements made or reserves established, after commencement of the
dissolution and liquidation of the Partnership.
"Board of Directors" means the Board of Directors of the
General Partner.
"Business Day" means each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in Los Angeles,
California or New York, New York are authorized or required by law, regulation
or executive order to close.
"Capital Account" means, with respect to any Partner, the
Capital Account maintained for such Partner in accordance with the following
provisions:
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(i) To each Partner's Capital Account there shall be added
such Partner's Capital Contributions, such Partner's share of Net Income and any
items in the nature of income or gain which are specially allocated pursuant to
Section 6.3, and the amount of any Partnership liabilities assumed by such
Partner or which are secured by any property distributed to such Partner.
(ii) From each Partner's Capital Account there shall be
subtracted the amount of cash and the Gross Asset Value of any property
distributed to such Partner pursuant to any provision of this Agreement, such
Partner's distributive share of Net Losses and any items in the nature of
expenses or losses which are specially allocated pursuant to Section 6.3 hereof,
and the amount of any liabilities of such Partner assumed by the Partnership or
which are secured by any property contributed by such Partner to the
Partnership.
(iii) In the event any interest in the Partnership is
transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the
transferred interest.
(iv) In determining the amount of any liability for purposes
of subsections (i) and (ii) hereof, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and Regulations.
(v) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and
applied in a manner consistent with such Regulations. In the event the General
Partner shall determine that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by the Partnership, the
General Partner, or the Limited Partners) are computed in order to comply with
such Regulations, the General Partner may make such modification; provided that,
it is not likely to have a material effect on the amounts distributable to any
Person pursuant to Article 13 of this Agreement upon the dissolution of the
Partnership. The General Partner also shall (a) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(q) and (b) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b) or Section 1.704-2.
"Capital Contribution" means, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any property (other than
money) contributed to the Partnership by such Partner.
"Cash Amount" means, with respect to any Partnership Units
subject to a Redemption, an amount of cash equal to the Deemed Partnership
Interest Value attributable to such Partnership Units.
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"Certificate" means the Certificate of Limited Partnership
relating to the Partnership filed in the office of the Secretary of State of
Delaware, as amended from time to time in accordance with the terms hereof and
the Act.
"Charter" means the Company's Articles of Incorporation as of
November 24, 1997, as amended by the Articles Supplementary filed with the
Maryland Department of Assessments and Taxation on July 23, 1998, as further
amended by the Articles Supplementary filed with the Maryland Department of
Assessments and Taxation on November 12, 1998, as further amended by the
Articles Supplementary filed by the Corporation on November 25, 1998, as further
amended by the Certificate of Correction filed by the Corporation on March 18,
1999, as further amended by the Articles Supplementary filed with the Maryland
Department of Assessments and Taxation on May 5, 1999, as further amended by the
Articles Supplementary filed with the Maryland Department of Assessments and
Taxation on August 31, 1999, as further amended by the Articles Supplementary
filed with the Maryland Department of Assessments and Taxation on March 23,
2000, as further amended by the Articles Supplementary with the Maryland
Department of Assessments and Taxation on August 30, 2000, as further amended by
the Articles Supplementary filed with the Maryland Department of Assessments and
Taxation on September 1, 2000, as further amended by the Articles Supplementary
filed with the Maryland Department of Assessments and Taxation on March 21,
2001, as further amended by the Articles Supplementary filed with the Maryland
Department of Assessments and Taxation on September 24, 2001, as further amended
by the Articles Supplementary filed with the Maryland Department of Assessments
and Taxation on December 6, 2002, as further amended by the Articles
Supplementary filed with the Maryland Department of Assessments and Taxation on
April 17, 2002 and as further amended or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time or any successor statute thereto, as interpreted by the
applicable regulations thereunder. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Common Unit" means each Partnership Unit that is not entitled
to any preference with respect to any other Partnership Unit as to distribution
or voluntary or involuntary liquidation, dissolution or winding up of the
Partnership.
"Consent" means the consent to, approval of, or vote on a
proposed action by a Partner given in accordance with Article 14 hereof.
"Consent of the Limited Partners" means the Consent of a
Majority in Interest of the Limited Partners, other than the Preferred Limited
Partners, which Consent shall be obtained prior to the taking of any action for
which it is required by this Agreement and may be given or withheld by a
Majority in Interest of the Limited Partners, unless otherwise expressly
provided herein, in their sole and absolute discretion.
"Consent of the Partners" means the Consent of Partners, other
than the Preferred Limited Partners, holding Percentage Interests that in the
aggregate are equal to or greater than a majority of the aggregate Percentage
Interests of all Partners, other than the Preferred Limited Partners, which
Consent shall be obtained prior to the taking of any action for which it is
5
required by this Agreement and may be given or withheld by such Partners, in
their sole and absolute discretion.
"Constructively Own" means ownership under the constructive
ownership rules described in Exhibit C.
"Contributed Property" means each property or other asset, in
such form as may be permitted by the Act, but excluding cash, contributed or
deemed contributed to the Partnership (or, to the extent provided in applicable
regulations, deemed contributed by the Partnership on termination and
reconstitution thereof pursuant to Section 708 of the Code).
"Debt" means, as to any Person, as of any date of
determination: (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services; (ii) all amounts owed by such
Person to banks or other Persons in respect of reimbursement obligations under
letters of credit, surety bonds and other similar instruments guaranteeing
payment or other performance of obligations by such Person; (iii) all
indebtedness for borrowed money or for the deferred purchase price of property
or services secured by any lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property, even though such
Person has not assumed or become liable for the payment thereof; and (iv) lease
obligations of such Person which, in accordance with generally accepted
accounting principles, should be capitalized.
"Deemed Partnership Interest Value" means, as of any date with
respect to any class of Partnership Interests, the Deemed Value of the
Partnership Interests of such class multiplied by the applicable Partner's
Percentage Interest of such class.
"Deemed Value of the Partnership Interests" means, as of any
date with respect to any class or series of Partnership Interests, (i) the total
number of Partnership Units of the General Partner in such class or series of
Partnership Interests (as provided for in Sections 4.1 and 4.3.C) issued and
outstanding as of the close of business on such date multiplied by the Fair
Market Value determined as of such date of a share of capital stock of the
General Partner which corresponds to such class or series of Partnership
Interests, as adjusted pursuant to Section 7.5 (in the event the General Partner
acquires material assets, other than on behalf of the Partnership) and for stock
dividends and distributions, stock splits and subdivisions, reverse stock splits
and combinations, distribution of warrants or options and distributions of
evidences of indebtedness or assets not received by the General Partner pursuant
to a pro rata distribution by the Partnership; (ii) divided by the Percentage
Interest of the General Partner in such class or series of Partnership Interests
on such date; provided, that if no outstanding shares of capital stock of the
General Partner correspond to a class of series of Partnership Interests, the
Deemed Value of the Partnership Interests with respect to such class or series
shall be equal to an amount reasonably determined by the General Partner.
"Depreciation" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for Federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the Federal income tax depreciation, amortization or other cost
recovery deduction for such
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year or other period bears to such beginning adjusted tax basis; provided,
however, that if the Federal income tax depreciation, amortization or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable method
selected by the General Partner.
"Effective Date" means the date of closing of the initial
public offering of REIT Shares upon which date contributions set forth on
Exhibit A shall become effective.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agreements" means one or more of the agreements
between the Company, the Partnership and one or more of the Performance
Investors, dated as of the closing of the date of the initial public offering of
the common stock of the General Partner, pursuant to which the Performance
Investors have deposited their Performance Shares in escrow for possible
transfer to the General Partner or the Partnership (as applicable).
"Excess Performance Capital" means, with respect to a
Performance Partner, an amount equal to the number of Partnership Units held by
such Performance Partner, multiplied by the excess of (i) the Capital Account
per Partnership Unit for such Performance Partner; over (ii) the Capital Account
per Partnership Unit for a Limited Partner which is not a PLP or a Performance
Partner. For purposes of (ii) above, it shall be assumed that the Limited
Partner has no special arrangements with the Partnership, other than as set
forth in this Agreement, which would cause its Capital Account per Partnership
Unit to be different from the Capital Account per Partnership Unit of other
Limited Partners who are not Performance Partners or PLPs. If the Partner
described in (ii) above does not exist, the amount used for purposes of (ii)
shall be the projected Capital Account balance per Partnership Unit for such
Partner, determined in the reasonable discretion of the General Partner. For
purposes of this definition, to the extent the Capital Account of a Partner
which owns both Common Units and Preference Units is being considered, such
Capital Account shall be equal to such Partner's Capital Account determined
without regard to the adjustments arising from or as a result of the acquisition
or ownership of Preference Units by such Partner.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
"Fair Market Value" means, with respect to any share of
capital stock of the General Partner, the average of the daily market price for
the ten (10) consecutive trading days immediately preceding the date with
respect to which "Fair Market Value" must be determined hereunder or, if such
date is not a Business Day, the immediately preceding Business Day. The market
price for each such trading day shall be (i) if such shares are listed or
admitted to trading on any securities exchange or the Nasdaq National Market,
the closing price, regular way, on such day, or if no such sale takes place on
such day, the average of the closing bid and asked prices on such day, (ii) if
such shares are not listed or admitted to trading on any securities exchange or
the Nasdaq National Market, the last reported sale price on such day or, if no
sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the General
Partner or (iii) if such shares are not listed or admitted to trading on any
securities exchange or the Nasdaq National Market and no
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such last reported sale price or closing bid and asked prices are available, the
average of the reported high bid and low asked prices on such day, as reported
by a reliable quotation source designated by the General Partner, or if there
shall be no bid and asked prices on such day, the average of the high bid and
low asked prices, as so reported, on the most recent day (not more than ten (10)
days prior to the date in question) for which prices have been so reported;
provided, that if there are no bid and asked prices reported during the ten (10)
days prior to the date in question, the Fair Market Value of such shares shall
be determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate. In the event the REIT Shares Amount for such shares includes rights
that a holder of such shares would be entitled to receive, then the Fair Market
Value of such rights shall be determined by the General Partner acting in good
faith on the basis of such quotations and other information as it considers, in
its reasonable judgment, appropriate; provided, that in connection with
determining the Deemed Value of the Partnership Interests for purposes of
determining the number of additional Partnership Units issuable upon a Capital
Contribution funded by an underwritten public offering of shares of capital
stock of the General Partner, the Fair Market Value of such shares shall be the
public offering price per share of such class of capital stock sold.
Notwithstanding the foregoing, the General Partner in its reasonable discretion
may use a different "Fair Market Value" for purposes of making the
determinations under subparagraph (ii) of the definition of "Gross Asset Value"
and Section 4.3.E. in connection with the contribution of Property to the
Partnership by a third-party, provided such value shall be based upon the value
per REIT Share (or per Partnership Unit) agreed upon by the General Partner and
such third-party for purposes of such contribution.
"Funding Debt" means the incurrence of any Debt by or on
behalf of the General Partner for the purpose of providing funds to the
Partnership.
"General Partner" means the Company or its successors as
general partner of the Partnership.
"General Partner Interest" means a Partnership Interest held
by the General Partner. A General Partner Interest may be expressed as a number
of Partnership Units.
"General Partner Loan" shall have the meaning set forth in
Section 4.3.B.
"General Partner Payment" shall have the meaning set forth in
Section 15.11.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for Federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the contributing Partner and the General Partner (as set forth
on Exhibit A attached hereto, as such Exhibit may be amended from time to time);
provided, that if the contributing Partner is the General Partner then, except
with respect to the General Partner's initial Capital Contribution which shall
be determined as set forth on Exhibit A, or capital contributions of cash, REIT
Shares or other shares of capital stock of the General Partner, the
determination of the fair market value of the contributed asset shall be
determined by (a) the price paid by the General Partner if the asset is
8
acquired by the General Partner contemporaneously with its contribution to the
Partnership or (b) by Appraisal if otherwise acquired by the General Partner.
(ii) Immediately prior to the times listed below, the Gross
Asset Values of all Partnership assets shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt; provided, however, that for
such purpose, the net value of all of the Partnership assets, in the aggregate,
shall be equal to the Deemed Value of the Partnership Interests of all classes
of Partnership Interests then outstanding, regardless of the method of valuation
adopted by the General Partner:
(a) the acquisition of an additional interest in the
Partnership by a new or existing Partner in exchange
for more than a de minimis Capital Contribution, if
the General Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the
relative economic interests of the Partners in the
Partnership;
(b) the distribution by the Partnership to a Partner of
more than a de minimis amount of Partnership property
as consideration for an interest in the Partnership
if the General Partner reasonably determines that
such adjustment is necessary or appropriate to
reflect the relative economic interests of the
Partners in the Partnership; the Partners agree that
such an adjustment is appropriate when the
Partnership effects a Redemption;
(c) the liquidation of the Partnership within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g);
(d) the issuance of Performance Units; and
(e) at such other times as the General Partner shall
reasonably determine necessary or advisable in order
to comply with Regulations Sections 1.704-1(b) and
1.704-2.
(iii) The Gross Asset Value of any Partnership asset
distributed to a Partner shall be the gross fair market value of such asset on
the date of distribution as determined by the distributee and the General
Partner; provided, that if the distributee is the General Partner, or if the
distributee and the General Partner cannot agree on such a determination, by
Appraisal.
(iv) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
subparagraph (iv) to the extent that the General Partner reasonably determines
that an adjustment pursuant to subparagraph (ii) is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this subparagraph (iv).
(v) If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Gross
Asset Value shall thereafter be
9
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Net Income and Net Losses.
"Holder" means either the Partner or Assignee owning a
Partnership Unit.
"Immediate Family" means, with respect to any natural Person,
such natural Person's estate or heirs or current spouse or former spouse,
parents, parents-in-law, children, siblings and grandchildren and any trust or
estate, all of the beneficiaries of which consist of such Person or such
Person's spouse, former spouse, parents, parents-in-law, children, siblings or
grandchildren.
"IMS" means AMB Investment Management, Inc., a Maryland
corporation, and any of its direct or indirect subsidiaries.
"Incapacity" or "Incapacitated" means: (i) as to any
individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating him or her incompetent to manage his or her
Person or his or her estate; (ii) as to any corporation which is a Partner, the
filing of a certificate of dissolution, or its equivalent, for the corporation
or the revocation of its charter; (iii) as to any partnership which is a
Partner, the dissolution and commencement of winding up of the partnership; (iv)
as to any estate which is a Partner, the distribution by the fiduciary of the
estate's entire interest in the Partnership; (v) as to any trustee of a trust
which is a Partner, the termination of the trust (but not the substitution of a
new trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For
purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when (a) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (b) the Partner is adjudged as
bankrupt or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred and twenty (120) days after the commencement
thereof, (g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment or (h) an appointment referred to in clause (g) is
not vacated within ninety (90) days after the expiration of any such stay.
"Indemnitee" means (i) any Person subject to a claim or demand
or made or threatened to be made a party to, or involved or threatened to be
involved in, an action, suit or proceeding by reason of his or her status as (a)
the General Partner or (b) a director, officer, employee or agent of the
Partnership or the General Partner and (ii) such other Persons (including
Affiliates of the General Partner or the Partnership) as the General Partner may
designate from time to time, in its sole and absolute discretion.
10
"IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
"Junior Units" means Partnership Units representing any class
or series of Partnership Interest ranking, as to distributions or voluntary or
involuntary liquidation, dissolution or winding up of the Partnership, junior to
the Series A Preferred Units, the Series B Preferred Units, the Series J
Preferred Units and the Series K Preferred Units.
"Limited Partner" means any Person (including any PLP) named
as a Limited Partner in Exhibit A attached hereto, as such Exhibit may be
amended from time to time, any Substituted Limited Partner or Additional Limited
Partner, in such Person's capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of
a Limited Partner representing a fractional part of the Partnership Interests of
all Limited Partners and includes any and all benefits to which the holder of
such a Partnership Interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement. A Limited Partnership Interest may be expressed as
a number of Partnership Units.
"Liquidating Events" shall have the meaning set forth in
Section 13.1.
"Liquidator" shall have the meaning set forth in Section
13.2.A.
"Majority in Interest of the Limited Partners" means Limited
Partners (other than the General Partner and any Limited Partner fifty percent
(50%) or more of whose equity is owned, directly or indirectly, by the General
Partner, and any Preferred Limited Partner) holding Percentage Interests that in
the aggregate are greater than fifty percent (50%) of the aggregate Percentage
Interests of all Limited Partners (other than the General Partner and any
Limited Partner fifty percent (50%) or more of whose equity is owned, directly
or indirectly, by the General Partner and any Preferred Limited Partner).
"Majority in Interest of Partners" means Partners (other than
Preferred Limited Partners) holding Percentage Interests that are greater than
fifty percent (50%) of the aggregate Percentage Interests of all Partners (other
than Preferred Limited Partners).
"Net Income" or "Net Loss" means for each fiscal year of the
Partnership, an amount equal to the Partnership's taxable income or loss for
such fiscal year, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
(i) Any income of the Partnership that is exempt from Federal
income tax and not otherwise taken into account in computing Net Income or Net
Loss pursuant to this definition of Net Income or Net Loss shall be added to
such taxable income or loss;
(ii) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Net Income or
11
Net Loss pursuant to this definition of Net Income or Net Loss shall be
subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to subparagraph (ii) or (iii) of the definition of
Gross Asset Value, the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such asset for purposes of computing Net
Income or Net Loss; in the event the Gross Asset Value of any Partnership asset
is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset
Value, the amount of such adjustment shall be taken into account as gain or loss
from the disposition of all Partnership assets in a Terminating Capital
Transaction for purposes of computing Net Income or Net Loss as set forth in
Article 6;
(iv) Gain or loss resulting from any disposition of property
with respect to which gain or loss is recognized for Federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year;
(vi) To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner's interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for
purposes of computing Net Income or Net Loss; and
(vii) Notwithstanding any other provision of this definition
of Net Income or Net Loss, any items which are specially allocated pursuant to
Section 6.3 shall not be taken into account in computing Net Income or Net Loss.
The amounts of the items of Partnership income, gain, loss, or deduction
available to be specially allocated pursuant to Section 6.3 shall be determined
by applying rules analogous to those set forth in this definition of Net Income
or Net Loss.
"New Securities" means (i) any rights, options, warrants or
convertible or exchangeable securities having the right to subscribe for or
purchase REIT Shares or other shares of capital stock of the General Partner,
excluding grants under any Stock Incentive Plan or (ii) any Debt issued by the
General Partner that provides any of the rights described in clause (i).
"Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"Nonrecourse Liability" shall have the meaning set forth in
Regulations Section 1.752-1(a)(2).
12
"Notice of Redemption" means the Notice of Redemption
substantially in the form of Exhibit B to this Agreement.
"Offering Costs" means the aggregate amounts expended by the
General Partner which related to the organization of the Partnership and the
General Partner, or to the initial public offering or subsequent offerings of
REIT Shares or other shares of capital stock of the General Partner, the net
proceeds of which were used to make a contribution to the Partnership, in each
case to the extent such expenses of the General Partner were not reimbursed by
the Partnership.
"Parity Preferred Unit" means any class or series of
Partnership Interests of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the Partnership to rank on a parity with the
Series A Preferred Units, the Series B Preferred Units, the Series J Preferred
Units and the Series K Preferred Units with respect to distributions or rights
upon voluntary or involuntary liquidation, winding up or dissolution of the
Partnership, or both, as the context may require.
"Partner" means a General Partner or a Limited Partner, and
"Partners" means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" shall have the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" shall have the meaning set
forth in Regulations Section 1.704-2(i)(2), and the amount of Partner
Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(i)(2).
"Partnership" means the limited partnership formed under the
Act and pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the
Partnership of either a Limited Partner or the General Partner and includes any
and all benefits to which the holder of such a Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement. There may be
one or more classes of Partnership Interests as provided in Section 4.3. A
Partnership Interest may be expressed as a number of Partnership Units. Unless
otherwise expressly provided for by the General Partner at the time of the
original issuance of any Partnership Interests, all Partnership Interests
(whether of a Limited Partner or a General Partner) shall be of the same class.
The Partnership Interests represented by the Common Units (including Performance
Units), the Series A Preferred Units, the Series B Preferred Units, the Series J
Preferred Units and the Series K Preferred Untis are the only Partnership
Interests and each such type of unit is a separate class of Partnership Interest
for all purposes of this Agreement.
13
"Partnership Minimum Gain" shall have the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"Partnership Record Date" means the record date established by
the General Partner for the distribution of Available Cash with respect to
Common Units pursuant to Section 5.1 which record date shall be the same as the
record date established by the General Partner for a distribution to its
stockholders of some or all of its portion of such distribution.
"Partnership Unit" means, with respect to any class of
Partnership Interest, a fractional, undivided share of such class of Partnership
Interest issued pursuant to Sections 4.1 and 4.3 (including Performance Units).
The ownership of Partnership Units may be evidenced by a certificate for units
substantially in the form of Exhibit D-1 or D-2 hereto or as the General Partner
may determine with respect to any class of Partnership Units issued from time to
time under Sections 4.1 and 4.3.
"Partnership Year" means the fiscal year of the Partnership,
which shall be the calendar year.
"Percentage Interest" means, as to a Partner holding a class
of Partnership Interests, its interest in the Partnership as determined by
dividing the Partnership Units of such class owned by such Partner by the total
number of Partnership Units of such class then outstanding as specified in
Exhibit A attached hereto, as such Exhibit may be amended from time to time. If
the Partnership issues more than one class of Partnership Interest, the interest
in the Partnership among the classes of Partnership Interests shall be
determined as set forth in the amendment to the Partnership Agreement setting
forth the rights and privileges of such additional classes of Partnership
Interest, if any, as contemplated by Section 4.3.C.
"Performance Amount" means, with respect to a PLP on a
specified date, (i) in the case of a Redemption, a number of Performance Units
equal to (a) the amount of such PLP's Capital Account balance immediately
following the revaluation of the Partnership's assets as of such date pursuant
to the definitions of "Gross Asset Value" (paragraph (ii) therein) and "Net
Income" (paragraph (iii) therein), divided by (b) the Fair Market Value of a
REIT Share; and (ii) in the case of an exchange of Performance Units for the
REIT Shares Amount, the same number of Performance Units as determined pursuant
to subparagraph (i) above.
"Performance Investors" means shareholders of the General
Partner and Limited Partners who are parties to one or more of the Escrow
Agreements.
"Performance Partners" means Partners which had the number of
their Partnership Units reduced pursuant to Section 4.3.F.
"Performance Shares" means a portion of the REIT Shares or
Partnership Units issued to the Performance Investors which were escrowed
pursuant to the Escrow Agreements for possible transfer to the General Partner
or the Partnership (as applicable), the applicable number of which for each
Performance Investor is described in the applicable Escrow Agreement.
14
"Performance Units" means those Partnership Units issued
pursuant to Section 4.3.F.
"Permitted Reason" means a termination of employment by reason
of death, disability, termination by the employer without "cause," or
termination by a Person of their employment for "good reason." For purposes of
this definition, "cause" shall mean (i) gross negligence or willful misconduct,
(ii) breach by the Person of the covenant not to compete provided in their
employment agreement during the one year period following the closing of the
initial public offering of common stock of the General Partner, (iii) fraud or
other conduct against the material best interests of the General Partner, the
Partnership or their subsidiaries, or (iv) conviction of a felony if such
conviction has a material adverse effect on the General Partner, the Partnership
or their subsidiaries. For purposes of this definition, "good reason" means (a)
a substantial adverse change in the nature or scope of a Person's
responsibilities or authority under the Person's employment agreement, or (b) an
uncured breach by the employer of any of its material obligations under such
employment agreement.
"Person" means an individual or a corporation, partnership,
limited liability company, trust, unincorporated organization, association or
other entity.
"Plan Asset Regulation" means the regulations promulgated by
the United States Department of Labor in Title 29, Code of Federal Regulations,
Part 2510, Section 101-3, and any successor regulations thereto.
"Pledge" shall have the meaning set forth in Section 11.3.A.
"PLP" means at any time, any Person who then owns one or more
Performance Units, including Performance Units which have not vested.
"Preferred Distribution Shortfall" shall have the meaning
given to such term in Section 5.1 hereof.
"Preferred Limited Partner" means any Person holding a
Preferred Unit, and named as a Preferred Limited Partner in Exhibit A attached
hereto, as such Exhibit may be amended from time to time, or any Substitute
Limited Partner or Additional Limited Partner, in such Person's capacity as a
Preferred Limited Partner in the Partnership.
"Preferred Share" means a share of the General Partner's
preferred stock, par value $.01 per share, with such rights, priorities and
preferences as shall be designated by the Board of Directors in accordance with
the Charter.
"Preferred Unit" means a Partnership Unit representing a
Partnership Interest, with such rights, priorities and preferences as shall be
designated by the General Partner pursuant to Section 4.3.C hereof, including
without limitation, the Series A Preferred Units, the Series B Preferred Units,
the Series J Preferred Units and the Series K Preferred Units.
"Priority Return" means with respect to (i) the Series A
Preferred Units, the Series A Priority Return, (ii) the Series B Preferred
Units, the Series B Priority Return, (iii) the Series J Preferred Units, the
Series J Priority Return and (iv) the Series K Preferred Units, the Series K
Priority Return.
15
"Properties" means such interests in real property and
personal property including without limitation, fee interests, interests in
ground leases, interests in joint ventures, interests in mortgages, and Debt
instruments as the Partnership may hold from time to time.
"Qualified REIT Subsidiary" means any Subsidiary of the
General Partner that is a "qualified REIT subsidiary" within the meaning of
Section 856(i) of the Code.
"Qualified Transferee" means an "Accredited Investor" as
defined in Rule 501 promulgated under the Securities Act.
"Redemption" shall have the meaning set forth in Section
8.6.A.
"Regulations" means the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" shall have the meaning set forth in
Section 6.3.A(viii).
"REIT" means a real estate investment trust under Sections 856
through 860 of the Code.
"REIT Requirements" shall have the meaning set forth in
Section 5.1.
"REIT Share" means a share of common stock, par value $.01 per
share, of the General Partner.
"REIT Shares Amount" means, as of any date, an aggregate
number of REIT Shares equal to the number of Tendered Units, or in the case of
Section 11.2.B, all Units, as adjusted pursuant to Section 7.5 (in the event the
General Partner acquires material assets, other than on behalf of the
Partnership) and for stock dividends and distributions, stock splits and
subdivisions, reverse stock splits and combinations, distributions of rights,
warrants or options, and distributions of evidences of indebtedness or assets
relating to assets not received by the General Partner pursuant to a pro rata
distribution by the Partnership.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
"Series A Articles Supplementary" means the Articles
Supplementary of the General Partner in connection with its Series A Preferred
Shares, as filed with the Maryland Department of Revenue and Taxation on July
23, 1998.
"Series A Preferred Capital" means a Capital Account balance
equal to the product of (i) the number of Series A Preferred Units then held by
the Partner multiplied by (ii) the sum of $25 and any Preferred Distribution
Shortfall per Series A Preferred Unit.
"Series A Preferred Share" means a share of 8 1/2% Series A
Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation
preference $25 per share, of the General Partner.
16
"Series A Preferred Units" means the Partnership's 8 1/2%
Series A Cumulative Redeemable Partnership Units.
"Series A Preferred Unit Distribution Payment Date" shall have
the meaning set forth in Section 16.3.A hereof.
"Series A Priority Return" shall mean an amount equal to 8
1/2% per annum on an amount equal to $25 per Series A Preferred Unit then
outstanding (equivalent to $2.125 per annum). Such amount shall be determined on
a daily basis computed on the basis of a 360-day year of twelve 30-day months
(or actual days for any month which is shorter than a full monthly period),
cumulative from July 27, 1998 to the extent not distributed for any given
distribution period pursuant to Sections 5.1 and 16.3 hereof. Notwithstanding
the foregoing, distributions on the Series A Preferred Units will accrue whether
or not the terms and provisions of any agreement of the Partnership at any time
prohibit the current payment of distributions, whether or not the Partnership
has earnings, whether or not there are funds legally available for the payment
of such distributions and whether or not such distributions are authorized.
Accrued but unpaid distributions on the Series A Preferred Units will accumulate
as of the Preferred Unit Distribution Payment Date on which they first become
payable.
"Series B Articles Supplementary" means the Articles
Supplementary of the General Partner in connection with its Series B Preferred
Shares, as filed with the Maryland Department of Revenue and Taxation on
November 12, 1998.
"Series B Limited Partner" means any Person holding Series B
Preferred Units and named as a Series B Limited Partner in Exhibit A attached
hereto, as such Exhibit may be amended from time to time, or any Substitute
Limited Partner, in such Person's capacity as a Limited Partner in the
Partnership.
"Series B Preferred Capital" means a Capital Account balance
equal to the product of (i) the number of Series B Preferred Units then held by
the Partner multiplied by (ii) the sum of $50 and any Preferred Distribution
Shortfall per Series B Preferred Unit.
"Series B Preferred Share" means a share of 8N% Series B
Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation
preference $50 per share, of the General Partner.
"Series B Preferred Units" means the Partnership's 8N%
Series B Cumulative Redeemable Partnership Units.
"Series B Preferred Unit Distribution Payment Date" shall have
the meaning set forth in Section 17.3.A hereof.
"Series B Priority Return" shall mean an amount equal to
8N% per annum on an amount equal to $50 per Series B Preferred Unit then
outstanding (equivalent to $4.3125 per annum). Such amount shall be determined
on a daily basis computed on the basis of a 360-day year of twelve 30-day months
(or actual days for any month which is shorter than a full monthly period),
cumulative from November 12, 1998 to the extent not distributed for any given
distribution period pursuant to Sections 5.1 and 17.3 hereof. Notwithstanding
the foregoing,
17
distributions on the Series B Preferred Units will accrue whether or not the
terms and provisions of any agreement of the Partnership at any time prohibit
the current payment of distributions, whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment of
such distributions and whether or not such distributions are authorized. Accrued
but unpaid distributions on the Series B Preferred Units will accumulate as of
the Preferred Unit Distribution Payment Date on which they first become payable.
"Series J Articles Supplementary" means the Articles
Supplementary of the General Partner in connection with its Series J Preferred
Shares, as filed with the Maryland Department of Revenue and Taxation on
September 24, 2001.
"Series J Limited Partner" means any Person holding Series J
Preferred Units and named as a Series J Limited Partner in Exhibit A attached
hereto, as such Exhibit may be amended from time to time, or any Substitute
Limited Partner, in such Person's capacity as a Limited Partner in the
Partnership.
"Series J Preferred Capital" means a Capital Account balance
equal to the product of (i) the number of Series J Preferred Units then held by
the Partner multiplied by (ii) the sum of $50 and any Preferred Distribution
Shortfall per Series J Preferred Unit.
"Series J Preferred Share" means a share of 7.95% Series J
Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation
preference $50 per share, of the General Partner.
"Series J Preferred Units" means the Partnership's 7.95%
Series J Cumulative Redeemable Partnership Units.
"Series J Preferred Unit Distribution Payment Date" shall have
the meaning set forth in Section 18.3.A hereof.
"Series J Priority Return" shall mean an amount equal to 7.95%
per annum on an amount equal to $50 per Series J Preferred Unit then outstanding
(equivalent to $3.975 per annum). Such amount shall be determined on a daily
basis computed on the basis of a 360-day year of twelve 30-day months (or actual
days for any month which is shorter than a full monthly period), cumulative from
September 21, 2001 to the extent not distributed for any given distribution
period pursuant to Sections 5.1 and 18.3 hereof. Notwithstanding the foregoing,
distributions on the Series J Preferred Units will accrue whether or not the
terms and provisions of any agreement of the Partnership at any time prohibit
the current payment of distributions, whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment of
such distributions and whether or not such distributions are authorized. Accrued
but unpaid distributions on the Series J Preferred Units will accumulate as of
the Preferred Unit Distribution Payment Date on which they first become payable.
"Series K Articles Supplementary" means the Articles
Supplementary of the General Partner in connection with its Series K Preferred
Shares, as filed with the Maryland Department of Revenue and Taxation on April
17, 2002.
"Series K Limited Partner" means any Person holding Series K
Preferred Units and named as a Series K Limited Partner in Exhibit A attached
hereto, as such Exhibit may be
18
amended from time to time, or any Substitute Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
"Series K Preferred Capital" means a Capital Account balance
equal to the product of (i) the number of Series K Preferred Units then held by
the Partner multiplied by (ii) the sum of $50 and any Preferred Distribution
Shortfall per Series K Preferred Unit.
"Series K Preferred Share" means a share of 7.95% Series K
Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation
preference $50 per share, of the General Partner.
"Series K Preferred Units" means the Partnership's 7.95%
Series K Cumulative Redeemable Partnership Units.
"Series K Preferred Unit Distribution Payment Date" shall have
the meaning set forth in Section 19.3.A hereof.
"Series K Priority Return" shall mean an amount equal to 7.95%
per annum on an amount equal to $50 per Series K Preferred Unit then outstanding
(equivalent to $3.975 per annum). Such amount shall be determined on a daily
basis computed on the basis of a 360-day year of twelve 30-day months (or actual
days for any month which is shorter than a full monthly period), cumulative from
April 17, 2002 to the extent not distributed for any given distribution period
pursuant to Sections 5.1 and 19.3 hereof. Notwithstanding the foregoing,
distributions on the Series K Preferred Units will accrue whether or not the
terms and provisions of any agreement of the Partnership at any time prohibit
the current payment of distributions, whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment of
such distributions and whether or not such distributions are authorized. Accrued
but unpaid distributions on the Series K Preferred Units will accumulate as of
the Preferred Unit Distribution Payment Date on which they first become payable.
"Specified Redemption Date" means the day of receipt by the
General Partner of a Notice of Redemption.
"Stock Incentive Plan" means any stock incentive plan of the
General Partner.
"Subsidiary" shall mean, with respect to any person, any
corporation, partnership, limited liability company, joint venture or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests, is owned, directly or
indirectly, by such person.
"Subsidiary Partnership" means any partnership or limited
liability company that is a Subsidiary of the Partnership.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section 11.4.
"Surviving Partnership" shall have the meaning set forth in
Section 11.2.C.
"Tax Items" shall have the meaning set forth in Section 6.4.A.
19
"Tenant" means any tenant from which the General Partner
derives rent either directly or indirectly through partnerships, including the
Partnership.
"Tendered Units" shall have the meaning set forth in Section
8.6.A.
"Tendering Partner" shall have the meaning set forth in
Section 8.6.A.
"Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the Partnership or a
related series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.
"Termination Transaction" shall have the meaning set forth in
Section 11.2.B.
Section 1.2 Rules of Construction
Unless otherwise indicated, all references herein to "REIT,"
"REIT Requirements," "REIT Shares" and "REIT Shares Amount" with respect to the
General Partner shall apply only with reference to the Company.
ARTICLE 2.
ORGANIZATIONAL MATTERS
Section 2.1 Organization
The Partnership is a limited partnership formed pursuant to
the provisions of the Act and upon the terms and conditions set forth in this
Agreement. Except as expressly provided herein, the rights and obligations of
the Partners and the administration and termination of the Partnership shall be
governed by the Act. The Partnership Interest of each Partner shall be personal
property for all purposes.
Section 2.2 Name
The name of the Partnership is AMB Property, L.P. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Limited Partners of such change in the next regular communication to the
Limited Partners.
Section 2.3 Resident Agent; Principal Office
The name and address of the resident agent of the Partnership
in the State of
Delaware is The Corporation Trust Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The address of the principal office of the
Partnership in the State of
Delaware is The Corporation Trust Company, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at such address. The principal office
of the Partnership is located at ▇▇▇▇ ▇, ▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of
Delaware as
the General Partner deems advisable.
Section 2.4 Power of Attorney
A. Each Limited Partner and each Assignee constitutes and
appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to:
(i) execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices: (a) all
certificates, documents and other instruments
(including, without limitation, this Agreement and the
Certificate and all amendments or restatements thereof)
that the General Partner or the Liquidator deems
appropriate or necessary to form, qualify or continue
the existence or qualification of the Partnership as a
limited partnership (or a partnership in which the
Limited Partners have limited liability) in the State
of
Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (b)
all instruments that the General Partner or any
Liquidator deems appropriate or necessary to reflect
any amendment, change, modification or restatement of
this Agreement in accordance with its terms; (c) all
conveyances and other instruments or documents that the
General Partner or any Liquidator deems appropriate or
necessary to reflect the dissolution and liquidation of
the Partnership pursuant to the terms of this
Agreement, including, without limitation, a certificate
of cancellation; (d) all instruments relating to the
admission, withdrawal, removal or substitution of any
Partner pursuant to, or other events described in,
Articles 11, 12 and 13 or the Capital Contribution of
any Partner; and (e) all certificates, documents and
other instruments relating to the determination of the
rights, preferences and privileges of Partnership
Interests; and
(ii) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other
instruments appropriate or necessary, in the sole and
absolute discretion of the General Partner or any
Liquidator, to make, evidence, give, confirm or ratify
any vote, consent, approval, agreement or other action
which is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or
appropriate or necessary, in the sole discretion of the
General Partner or any Liquidator, to effectuate the
terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14
or as may be otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying
21
upon the power of the General Partner and any Liquidator to act as contemplated
by this Agreement in any filing or other action by it on behalf of the
Partnership, and it shall survive and not be affected by the subsequent
Incapacity of any Limited Partner or Assignee and the transfer of all or any
portion of such Limited Partner's or Assignee's Partnership Units and shall
extend to such Limited Partner's or Assignee's heirs, successors, assigns and
personal representatives. Each such Limited Partner or Assignee hereby agrees to
be bound by any representation made by the General Partner or any Liquidator,
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses which may be available to
contest, negate or disaffirm the action of the General Partner or any
Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or any
Liquidator, within fifteen (15) days after receipt of the General Partner's or
Liquidator's request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator, as the case may be,
deems necessary to effectuate this Agreement and the purposes of the
Partnership.
Section 2.5 Term
The term of the Partnership commenced on October 15, 1997 and
shall continue until December 31, 2096 unless it is dissolved sooner pursuant to
the provisions of Article 13 or as otherwise provided by law.
Section 2.6 Number of Partners
Without the consent of the General Partner which may be given
or withheld in its sole discretion, the Partnership shall not at any time have
more than one hundred (100) partners (including as partners those persons
indirectly owning an interest in the Partnership through a partnership, limited
liability company, S corporation or grantor trust (such entity, a "flow through
entity"), but only if substantially all of the value of such person's interest
in the flow through entity is attributable to the flow through entity's interest
(direct or indirect) in the Partnership).
ARTICLE 3.
PURPOSE
Section 3.1 Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT for Federal income tax
purposes, unless the General Partner ceases to qualify as a REIT for reasons
other than the conduct of the business of the Partnership, (ii) to enter into
any partnership, joint venture or other similar arrangement to engage in any of
the foregoing or to own interests in any entity engaged, directly or indirectly,
in any of the foregoing and (iii) to do anything necessary or incidental to the
foregoing. In connection with the foregoing, and without limiting the General
Partner's right in its sole discretion to cease qualifying as a REIT, the
Partners acknowledge that the General Partner's current status as a REIT inures
to the benefit of all the Partners and not solely the General Partner.
22
Section 3.2 Powers
The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership, including, without
limitation, full power and authority, directly or through its ownership interest
in other entities, to enter into, perform and carry out contracts of any kind,
borrow money and issue evidences of indebtedness, whether or not secured by
mortgage, deed of trust, pledge or other lien, acquire and develop real
property, and manage, lease, sell, transfer and dispose of real property;
provided, however, not withstanding anything to the contrary in this Agreement,
the Partnership shall not take, or refrain from taking, any action which, in the
judgment of the General Partner, in its sole and absolute discretion, (i) could
adversely affect the ability of the General Partner to continue to qualify as a
REIT, (ii) absent the consent of the General Partner, which may be given or
withheld in its sole and absolute discretion, and except with respect to the
distribution of Available Cash to the Series B Limited Partners in accordance
with Section 17.3, the Series J Limited Partners in accordance with Section 18.3
and the Series K Limited Partners in accordance with Section 19.3, could subject
the General Partner to any taxes under Section 857 or Section 4981 of the Code,
or (iii) could violate any law or regulation of any governmental body or agency
having jurisdiction over the General Partner or its securities, unless any such
action (or inaction) under the foregoing clauses (i), (ii) or (iii) shall have
been specifically consented to by the General Partner in writing.
Section 3.3 Partnership Only for Purposes Specified
The Partnership shall be a partnership only for the purposes
specified in Section 3.1, and this Agreement shall not be deemed to create a
partnership among the Partners with respect to any activities whatsoever other
than the activities within the purposes of the Partnership as specified in
Section 3.1. Except as otherwise provided in this Agreement, no Partner shall
have any authority to act for, bind, commit or assume any obligation or
responsibility on behalf of the Partnership, its properties or any other
Partner. No Partner, in its capacity as a Partner under this Agreement, shall be
responsible or liable for any indebtedness or obligation of another Partner, nor
shall the Partnership be responsible or liable for any indebtedness or
obligation of any Partner, incurred either before or after the execution and
delivery of this Agreement by such Partner, except as to those responsibilities,
liabilities, indebtedness or obligations incurred pursuant to and as limited by
the terms of this Agreement and the Act.
Section 3.4 Representations and Warranties by the Parties
A. Each Partner that is an individual represents and warrants
to each other Partner that (i) such Partner has in the case of any Person other
than an individual, the power and authority, and in the case of an individual,
the legal capacity, to enter into this Agreement and perform such Partner's
obligations hereunder, (ii) the consummation of the transactions contemplated by
this Agreement to be performed by such Partner will not result in a breach or
violation of, or a default under, any agreement by which such Partner or any of
such Partner's property is or are bound, or any statute, regulation, order or
other law to which such Partner is subject, (iii) such Partner is neither a
"foreign person" within the meaning of Section 1445(f) of the Code nor a
"foreign partner" within the meaning of Section 1446(e) of the Code and (iv)
this
23
Agreement has been duly executed and delivered by such Partner and is binding
upon, and enforceable against, such Partner in accordance with its terms.
B. Each Partner that is not an individual represents and
warrants to each other Partner that (i) its execution and delivery of this
Agreement and all transactions contemplated by this Agreement to be performed by
it have been duly authorized by all necessary action, including without
limitation, that of its general partner(s), committee(s), trustee(s),
beneficiaries, directors and/or stockholder(s), as the case may be, as required,
(ii) the consummation of such transactions shall not result in a breach or
violation of, or a default under, its certificate of limited partnership,
partnership agreement, trust agreement, limited liability company operating
agreement, charter or by-laws, as the case may be, any agreement by which such
Partner or any of such Partner's properties or any of its partners,
beneficiaries, trustees or stockholders, as the case may be, is or are bound, or
any statute, regulation, order or other law to which such Partner or any of its
partners, trustees, beneficiaries or stockholders, as the case may be, is or are
subject, (iii) such Partner is neither a "foreign person" within the meaning of
Section 1445(f) of the Code nor a "foreign partner" within the meaning of
Section 1446(e) of the Code and (iv) this Agreement has been duly executed and
delivered by such Partner and is binding upon, and enforceable against, such
Partner in accordance with its terms.
C. Each Partner represents, warrants and agrees that it has
acquired and continues to hold its interest in the Partnership for its own
account for investment only and not for the purpose of, or with a view toward,
the resale or distribution of all or any part thereof, nor with a view toward
selling or otherwise distributing such interest or any part thereof at any
particular time or under any predetermined circumstances. Each Partner further
represents and warrants that it is a sophisticated investor, able and accustomed
to handling sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds it has invested in the Partnership in what it
understands to be a highly speculative and illiquid investment.
D. Each Partner further represents, warrants and agrees as
follows:
(i) Except as provided in Exhibit E, at any time such
Partner actually or Constructively Owns a 25% or greater capital
interest or profits interest in the Partnership, it does not and will
not, without the prior written consent of the General Partner, actually
own or Constructively Own (a) with respect to any Tenant that is a
corporation, any stock of such Tenant and (b) with respect to any
Tenant that is not a corporation, any interests in either the assets or
net profits of such Tenant.
(ii) Except as provided in Exhibit F, at any time
such Partner actually or Constructively Owns a 25% or greater capital
interest or profits interest in the Partnership, it does not, and
agrees that it will not without the prior written consent of the
General Partner, actually own or Constructively Own, any stock in the
General Partner, other than any REIT Shares or other shares of capital
stock of the General Partner such Partner may acquire (a) as a result
of an exchange of Tendered Units pursuant to Section 8.6 or (b) upon
the exercise of options granted or delivery of REIT Shares pursuant to
any Stock Incentive Plan, in each case subject to the ownership
limitations set forth in the General Partner's Charter.
24
(iii) Upon request of the General Partner, it will
disclose to the General Partner the amount of REIT Shares or other
shares of capital stock of the General Partner that it actually owns or
Constructively Owns.
(iv) It understands that if, for any reason, (a) the
representations, warranties or agreements set forth in Section 3.4.D(i)
or (ii) are violated or (b) the Partnership's actual or Constructive
Ownership of the REIT Shares or other shares of capital stock of the
General Partner violates the limitations set forth in the Charter, then
(x) some or all of the Redemption rights or rights of the Limited
Partners to exchange Partnership Interests for Series B Preferred
Shares, for Series J Preferred Shares or for Series K Preferred Shares
may become non-exercisable, and (y) some or all of such shares owned by
the Partners and/or some or all of the Partnership Interests owned by
the Limited Partners may be automatically transferred to a trust for
the benefit of a charitable beneficiary, as provided in the Charter and
Exhibit J of this Agreement, respectively.
E. The representations and warranties contained in Sections
3.4.A, 3.4.B, 3.4.C and 3.4.D shall survive the execution and delivery of this
Agreement by each Partner and the dissolution and winding up of the Partnership.
F. Each Partner hereby acknowledges that no representations as
to potential profit, cash flows, funds from operations or yield, if any, in
respect of the Partnership or the General Partner have been made by any Partner
or any employee or representative or Affiliate of any Partner, and that
projections and any other information, including, without limitation, financial
and descriptive information and documentation, which may have been in any manner
submitted to such Partner shall not constitute any representation or warranty of
any kind or nature, express or implied.
Section 3.5 Certain ERISA Matters
Each Partner acknowledges that the Partnership is intended to
qualify as a "real estate operating company" (as such term is defined in the
Plan Asset Regulation). The General Partner will use its reasonable best efforts
to structure the investments in, relationships with and conduct with respect to
Properties and any other assets of the Partnership so that the Partnership will
be a "real estate operating company" (as such term is defined in the Plan Asset
Regulation).
ARTICLE 4.
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions of the Partners
At the time of their respective execution of this Agreement,
the Partners shall make or shall have made Capital Contributions as set forth in
Exhibit A to this Agreement. The Partners shall own Partnership Units of the
class and in the amounts set forth in Exhibit A and shall have a Percentage
Interest in the Partnership as set forth in Exhibit A, which Percentage Interest
shall be adjusted in Exhibit A from time to time by the General Partner to the
extent necessary to accurately reflect exchanges, redemptions, Capital
Contributions, the issuance of additional Partnership Units (including the
issuance of Performance Units pursuant to Section 4.3.F) or similar events
having an effect on a Partner's Percentage Interest. Except as required by law
or as otherwise provided in Sections 4.3, 4.4 and 10.5, no Partner shall be
required or
25
permitted to make any additional Capital Contributions or loans to the
Partnership. Unless otherwise specified by the General Partner at the time of
the creation of any class of Partnership Interests, the corresponding class of
capital stock for any Partnership Units issued shall be REIT Shares.
Section 4.2 Loans by Third Parties
Subject to Section 4.3, the Partnership may incur Debt, or
enter into other similar credit, guarantee, financing or refinancing
arrangements for any purpose (including, without limitation, in connection with
any further acquisition of Properties) with any Person that is not the General
Partner upon such terms as the General Partner determines appropriate; provided,
that the Partnership shall not incur any Debt that is recourse to the General
Partner, except to the extent otherwise agreed to by the General Partner in its
sole discretion.
Section 4.3 Additional Funding and Capital Contributions
A. General. The General Partner may, at any time and from time
to time, determine that the Partnership requires additional funds ("Additional
Funds") for the acquisition of additional Properties or for such other
Partnership purposes as the General Partner may determine. Additional Funds may
be raised by the Partnership, at the election of the General Partner, in any
manner provided in, and in accordance with, the terms of this Section 4.3. No
Person shall have any preemptive, preferential or similar right or rights to
subscribe for or acquire any Partnership Interest, except as set forth in this
Section 4.3.
B. General Partner Loans. The General Partner may enter into a
Funding Debt, including, without limitation, Funding Debt that is convertible
into REIT Shares, and lend the Additional Funds to the Partnership (a "General
Partner Loan"); provided, however, that the General Partner shall not be
obligated to lend the net proceeds of any Funding Debt to the Partnership in a
manner that would be inconsistent with the General Partner's ability to remain
qualified as a REIT. If the General Partner enters into such a Funding Debt, the
General Partner Loan will consist of the net proceeds from such Funding Debt and
will be on comparable terms and conditions, including interest rate, repayment
schedule and costs and expenses, as shall be applicable with respect to or
incurred in connection with such Funding Debt.
C. Issuance of Additional Partnership Interests. The General
Partner may raise all or any portion of the Additional Funds by accepting
additional Capital Contributions of cash. The General Partner may also accept
additional Capital Contributions of real property or other non-cash assets. In
connection with any such additional Capital Contributions (of cash or property),
and subject to Sections 17.6, 18.6 and 19.6 hereof, the General Partner is
hereby authorized to cause the Partnership from time to time to issue to
Partners (including the General Partner) or other Persons (including, without
limitation, in connection with the contribution of property to the Partnership)
additional Partnership Units or other Partnership Interests in one or more
classes, or one or more series of any of such classes, with such designations,
preferences and relative, participating, optional or other special rights,
powers, and duties, including rights, powers, and duties senior to then existing
Limited Partnership Interests, all as shall be determined by the General Partner
in its sole and absolute discretion subject to
Delaware law, and as set forth by
amendment to this Agreement, including without limitation: (i) the allocations
of items of Partnership income, gain, loss, deduction, and credit to such class
or series of Partnership Interests; (ii) the right of each such class or series
of Partnership Interests to share in Partnership distributions; (iii) the rights
of each such class or series of
26
Partnership Interests upon dissolution and liquidation of the Partnership; and
(iv) the right to vote, including, without limitation, the limited partner
approval rights set forth in Section 11.2.A; provided, that no such additional
Partnership Units or other Partnership Interests shall be issued to the General
Partner unless either (a) the additional Partnership Interests are issued in
connection with the grant, award, or issuance of shares of the General Partner
pursuant to Section 4.3.D below, which shares have designations, preferences,
and other rights (except voting rights) such that the economic interests
attributable to such shares are substantially similar to the designations,
preferences and other rights of the additional Partnership Interests issued to
the General Partner in accordance with this Section 4.3.C or (b) the additional
Partnership Interests are issued to all Partners holding Partnership Interests
in the same class in proportion to their respective Percentage Interests in such
class. In the event that the Partnership issues additional Partnership Interests
pursuant to this Section 4.3.C, the General Partner shall make such revisions to
this Agreement (including but not limited to the revisions described in Sections
5.4, 6.2.C, and 8.6) as it determines are necessary to reflect the issuance of
such additional Partnership Interests.
D. Issuance of REIT Shares or Other Securities by the General
Partner. The General Partner shall not issue any additional REIT Shares (other
than REIT Shares issued pursuant to Section 8.6 or pursuant to a dividend or
distribution (including any stock split) of REIT Shares to all of its
stockholders or all of its stockholders who hold a class of stock of the General
Partner), other shares of capital stock of the General Partner (other than in
connection with the acquisition of Partnership Interests in exchange for capital
stock of the General Partner which corresponds in ranking to the Partnership's
Partnership Interests being acquired) or New Securities unless the General
Partner shall make a Capital Contribution of the net proceeds (including,
without limitation, cash and Properties) from the issuance of such additional
REIT Shares, other shares of capital stock or New Securities, as the case may
be, and from the exercise of the rights contained in such additional New
Securities, as the case may be. The General Partner's Capital Account shall be
increased by the amount of cash or the value of Properties so contributed.
E. Percentage Interest Adjustments in the Case of Capital
Contributions for Partnership Units. Upon the acceptance of additional Capital
Contributions in exchange for any class or series of Partnership Units, the
Percentage Interest related thereto shall be equal to a fraction, the numerator
of which is equal to the amount of cash and the Agreed Value of the Properties
contributed as of the Business Day immediately preceding the date on which the
additional Capital Contributions are made (an "Adjustment Date") and the
denominator of which is equal to the sum of (i) the Deemed Value of the
Partnership Interests of such class or series (computed as of the Business Day
immediately preceding the Adjustment Date) plus (ii) the aggregate amount of
cash and the Agreed Value of the Property contributed to the Partnership on such
Adjustment Date in respect of such class or series of Partnership Interests. The
Percentage Interest of each other Partner holding Partnership Interests of such
class or series not making a full pro rata Capital Contribution shall be
adjusted to equal a fraction, the numerator of which is equal to the sum of (i)
the Deemed Partnership Interest Value of such Limited Partner in respect of such
class or series (computed as of the Business Day immediately preceding the
Adjustment Date) plus (ii) the amount of cash and the Agreed Value of the
Property contributed by such Partner to the Partnership in respect of such class
or series as of such Adjustment Date, and the denominator of which is equal to
the sum of (a) the Deemed Value of the Partnership Interests of
27
such class (computed as of the Business Day immediately preceding the Adjustment
Date), plus (b) the aggregate amount of cash and the Agreed Value of the
Property contributed to the Partnership on such Adjustment Date in respect of
such class or series. Notwithstanding the foregoing, solely for purposes of
calculating a Partner's Percentage Interest pursuant to this Section 4.3.E, (i)
in the case of cash Capital Contributions by the General Partner, such Capital
Contributions will be deemed to equal the cash contributed by the General
Partner plus, in the case of cash contributions funded by an offering of REIT
Shares or other shares of capital stock of the General Partner, the offering
costs attributable to the cash contributed to the Partnership, and (ii) in the
case of the contribution of Properties (or any portion thereof) by the General
Partner which were acquired by the General Partner in exchange for REIT Shares
immediately prior to such contribution, the General Partner shall be issued a
number of Partnership Units equal to the number of REIT Shares issued by the
General Partner in exchange for such Properties, the Partnership Units held by
the other Partners shall not be adjusted, and the Partners' Percentage Interests
shall be adjusted accordingly. The General Partner shall promptly give each
Partner written notice of its Percentage Interest, as adjusted.
F. Issuance of Performance Units to the PLPs. Pursuant to the
terms of the Escrow Agreements, Performance Investors have transferred all or a
portion of their Performance Shares to the General Partner or the Partnership
(as applicable). To the extent Performance Shares (i.e., REIT Shares) were
transferred by Performance Investors to the General Partner pursuant to the
Escrow Agreements, the number of Partnership Units held by the General Partner
were automatically reduced by such amount on such date. To the extent
Performance Shares (i.e., Partnership Units) were transferred by Performance
Investors to the Partnership pursuant the Escrow Agreements, the number of
Partnership Units held by each such Performance Investor were automatically
reduced by such amount on such date. To the extent the Partnership Units held by
the General Partner or Performance Investors were reduced as set forth in the
preceding two sentences, the Partnership immediately issued an equal number of
Performance Units to the Persons listed on Schedule G-1 and Schedule G-2 to
Exhibit G in accordance with the allocations set forth on Exhibit G. The
adjustments in the number of Partnership Units held by the Performance Partners
and the PLPs set forth above did not effect each such Partners' Capital Account
in the Partnership (except with respect to subsequent allocations of items of
Partnership income, gain, loss, deduction, and credit made to such Partners and
possibly with respect to the reissuance of a Performance Unit subsequent to its
forfeiture by a PLP) and no PLP was obligated to make a contribution to the
capital of the Partnership in connection with the issuance of Performance Units.
Section 4.4 Stock Incentive Plan
If at any time or from time to time the General Partner sells
or issues REIT Shares pursuant to any Stock Incentive Plan, the General Partner
shall contribute any proceeds therefrom to the Partnership as an additional
Capital Contribution and shall receive an amount of additional Partnership Units
equal to the number of REIT Shares so sold or issued. The General Partner's
Capital Account shall be increased by the amount of cash so contributed.
Section 4.5 No Preemptive Rights
Except to the extent expressly granted by the Partnership
pursuant to another agreement, no Person shall have any preemptive, preferential
or other similar right with respect
28
to (i) additional Capital Contributions or loans to the Partnership or (ii)
issuance or sale of any Partnership Units or other Partnership Interests.
Section 4.6 Other Contribution Provisions
In the event that any Partner is admitted to the Partnership
and is given (or is treated as having received) a Capital Account in exchange
for services rendered to the Partnership, such transaction shall be treated by
the Partnership and the affected Partner as if the Partnership had compensated
such Partner in cash, and the Partner had contributed such cash to the capital
of the Partnership. In addition, with the consent of the General Partner, in its
sole discretion, one or more Limited Partners may enter into contribution
agreements with the Partnership which have the effect of providing a guarantee
of certain obligations of the Partnership.
ARTICLE 5.
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
The General Partner shall cause the Partnership to distribute
all, or such portion as the General Partner may in its discretion determine,
Available Cash generated by the Partnership (i) first, to the extent that the
amount of cash distributed with respect to any Partnership Interests that are
entitled to any preference in distribution for any prior distribution period was
less than the required distribution for such outstanding Partnership Interests
for such prior distribution period, and to the extent such deficiency has not
been subsequently distributed pursuant to this Section 5.1 (a "Preferred
Distribution Shortfall"), in accordance with the rights of such class of
Partnership Interests (and within such class, pro rata in proportion to the
respective Percentage Interests on the applicable record date) and to the
Partners who are Partners on the applicable record date with respect to such
distribution, (ii) second, with respect to any Partnership Interests that are
entitled to any preference in distribution, in accordance with the rights of
such class of Partnership Interests (and within such class, pro rata in
proportion to the respective Percentage Interests on the applicable record date)
and (iii) third, with respect to Partnership Interests that are not entitled to
any preference in distribution, pro rata to each such class on a quarterly basis
and in accordance with the terms of such class to Partners who are Partners of
such class on the Partnership Record Date with respect to such distribution (and
within each such class, pro rata in proportion with the respective Percentage
Interests on such Partnership Record Date). Except as expressly provided for in
Article 16 with respect to the Series A Preferred Units, Article 17 with respect
to the Series B Preferred Units, Article 18 with respect to the Series J
Preferred Units, Article 19 with respect to the Series K Preferred Units and in
an agreement, if any, entered into in connection with the creation of a new
class of Partnership Interests in accordance with Article 4, no Partnership
Interest shall be entitled to a distribution in preference to any other
Partnership Interest. 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 cause the Partnership to distribute sufficient
amounts to enable the General Partner, for so long as the General Partner has
determined to qualify as a REIT, to pay stockholder dividends that will (a)
satisfy the requirements for qualifying as a REIT under the Code and Regulations
("REIT Requirements") and (b) except to the extent otherwise determined by the
General Partner, avoid any Federal income or excise tax liability of the General
Partner, except to the extent that a distribution
29
pursuant to clause (b) would prevent the Partnership from making a distribution
to the holders of Series B Preferred Units in accordance with Section 17.3, the
holders of Series J Preferred Units in accordance with Section 18.3 and the
holders of Series K Preferred Units in accordance with Section 19.3.
Section 5.2 Distributions in Kind
Except as expressly provided herein, no right is given to any
Partner to demand and receive property other than cash. The General Partner may
determine, in its sole and absolute discretion, to make a distribution in kind
to the Partners of Partnership assets, and such assets shall be distributed in
such a fashion as to ensure that the fair market value is distributed and
allocated in accordance with Articles 5, 6 and 10; provided, however, that, in
such case, the General Partner shall distribute only cash to the Series B
Limited Partners, the Series J Limited Partners and the Series K Limited
Partners.
Section 5.3 Distributions Upon Liquidation
Notwithstanding Section 5.1, proceeds from a Liquidating Event
shall be distributed to the Partners in accordance with Section 13.2.
Section 5.4 Distributions to Reflect Issuance of Additional
Partnership Interests
In the event that the Partnership issues additional
Partnership Interests (other than Performance Units, which shall receive
distributions as set forth in Section 5.1) to the General Partner or any
Additional Limited Partner pursuant to Section 4.3.C or 4.4, the General Partner
shall make such revisions to this Article 5 as it determines are necessary to
reflect the issuance of such additional Partnership Interests. In the absence of
any agreement to the contrary, an Additional Limited Partner shall be entitled
to the distributions set forth in Section 5.1 (without regard to this Section
5.4) with respect to the quarter during which the closing of its contribution to
the Partnership occurs, multiplied by a fraction the numerator of which is the
number of days from and after the date of such closing through the end of the
applicable quarter, and the denominator of which is the total number of days in
such quarter.
Section 5.5 Character of PLP Distributions
Distributions to each PLP pursuant to this Agreement shall be
advances or drawings of money or property against such Partner's distributive
share of Net Income (or items thereof) as described in Treasury Regulation
Section 1.731-1(a)(1)(ii).
30
ARTICLE 6.
ALLOCATIONS
Section 6.1 Timing and Amount of Allocations of Net Income and
Net Loss
Net Income and Net Loss of the Partnership shall be determined
and allocated with respect to each fiscal year of the Partnership as of the end
of each such year. Subject to the other provisions of this Article 6, an
allocation to a Partner of a share of Net Income or Net Loss shall be treated as
an allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Income or Net Loss.
Section 6.2 General Allocations
A. In General. Except as otherwise provided in this Article 6,
Net Income and Net Loss allocable with respect to a class of Partnership
Interests, shall be allocated to each of the Partners holding such class of
Partnership Interests in accordance with their respective Percentage Interest of
such class.
B.1. Net Income. Except as provided in Sections 6.2.B.3 and
6.3, Net Income for any Partnership Year shall be allocated in the following
manner and order of priority:
(a) First, 100% to the General Partner in an amount equal
to the remainder, if any, of the cumulative Net Losses
allocated to the General Partner pursuant to Section
6.2.B.2(d) for all prior Partnership Years minus the
cumulative Net Income allocated to the General Partner
pursuant to this Section 6.2.B.1(a) for all prior
Partnership Years;
(b) Second, 100% to each Limited Partner in an amount equal
to the remainder, if any, of the cumulative Net Losses
allocated to each such Limited Partner pursuant to
Section 6.2.B.2(c) for all prior Partnership Years
minus the cumulative Net Income allocated to such
Limited Partner pursuant to this Section 6.2.B.1(b) for
all prior Partnership Years;
(c) Third, 100% to the General Partner and any Preferred
Limited Partners in an amount equal to the remainder,
if any, of the cumulative Net Losses allocated to such
Partners pursuant to Section 6.2.B.2(b) for all prior
Partnership Years minus the cumulative Net Income
allocated to such Partners pursuant to this Section
6.2.B.1(c) for all prior Partnership Years;
(d) Fourth, 100% to the General Partner and the Limited
Partners in an amount equal to the remainder, if any,
of the cumulative Net Losses allocated to each such
Partner pursuant to Section 6.2.B.2(a) for all prior
Partnership Years minus the cumulative Net Income
allocated to each Partner pursuant to this Section
6.2.B.1(d) for all prior Partnership Years;
(e) Fifth, 100% to the General Partner and any Preferred
Limited Partners in an amount equal to the excess of
(i) the cumulative Priority Return on such Partner's
Preferred Units to the last day of the current
Partnership Year or to the date of redemption of such
Preferred Units, to the extent such Preferred Units are
redeemed during such year, over (ii) the cumulative Net
Income allocated to the General Partner or such
Preferred Limited Partner, as applicable, pursuant to
this Section 6.2.B.1(e) for all prior Partnership
Years; and
31
(f) Sixth, 100% to the General Partner and the Limited
Partners in accordance with their respective Percentage
Interests in the Common Units.
To the extent the allocations of Net Income set forth above in
any paragraph of this Section 6.2.B.1 are not sufficient to entirely satisfy the
allocation set forth in such paragraph, such allocation shall be made in
proration to the total amount that would have been allocated pursuant to such
paragraph without regard to such shortfall.
B.2. Net Losses. Except as provided in Sections 6.2.B.3 and
6.3, Net Losses for any Partnership Year shall be allocated in the following
manner and order of priority:
(a) First, 100% to the General Partner and the Limited
Partners in accordance with their respective Percentage
Interests in the Common Units (to the extent consistent
with this Section 6.2.B.2(a)) until the Adjusted
Capital Account (ignoring for this purpose any amounts
a Partner is obligated to contribute to the capital of
the Partnership or is deemed obligated to contribute
pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)
and ignoring the Partner's Series A Preferred Capital,
Series B Preferred Capital, the Series J Preferred
Capital and the Series K Preferred Capital) of each
such Partner is zero;
(b) Second, 100% to the General Partner and any Preferred
Limited Partners, pro rata to each such Partner's
Adjusted Capital Account (ignoring for this purpose any
amounts a Partner is obligated to contribute to the
capital of the Partnership or is deemed obligated to
contribute pursuant to Regulations Section
1.704-1(b)(2)(ii)(c)(2)), until the Adjusted Capital
Account (as so modified) of each such Partner is zero;
(c) Third, 100% to the Limited Partners to the extent of,
and in proportion to, the positive balance (if any) in
their Adjusted Capital Accounts; and
(d) Fourth, 100% to the General Partner.
B.3. Terminating Capital Transactions.
(a) If no Performance Units are outstanding at the time of
a Terminating Capital Transaction, any Net Income
attributable to such Terminating Capital Transaction
shall first be allocated to the General Partner in an
amount equal to the Offering Costs, to the extent the
General Partner's Capital Account has not previously
been adjusted to account for such amounts.
(b) If Performance Units are outstanding at the time of a
Terminating Capital Transaction--
(1) any Net Income attributable to such
Terminating Capital Transaction shall be
allocated as follows: such Net Income shall
first be tentatively allocated solely as an
interim step in calculating final
allocations pursuant to this Section
6.2.B.3(b)(1), among the
32
Partners in accordance with Section
6.2.B.3(a), Section 6.2.A and Section
6.2.B.1. Then the amount so tentatively
allocated to each Performance Partner, to
the extent of each such Performance
Partner's Excess Performance Capital,
shall instead be allocated to the PLPs, pro
rata to the number of Performance Units held
by each PLP.
(2) any Net Loss attributable to such
Terminating Capital Transaction shall be
allocated as follows: such Net Loss shall
first be tentatively allocated, solely as an
interim step in calculating final
allocations pursuant to this Section
6.2.B.3(b)(2), among the Partners in
accordance with Section 6.2.A and Section
6.2.B.2. Then the amount so tentatively
allocated to the PLPs shall instead be
allocated to the Performance Partners to the
extent of the aggregate Excess Performance
Capital of the Performance Partners. Any
amounts so allocated away from the PLPs
shall be done on a basis which is
proportionate to each PLP's Performance
Units. Any amounts so allocated to the
Performance Partners shall be done on a
basis which is proportionate to each
Performance Partner's Excess Performance
Capital.
C. Allocations to Reflect Issuance of Additional Partnership
Interests. In the event that the Partnership issues additional Partnership
Interests to the General Partner or any Additional Limited Partner pursuant to
Section 4.3 or 4.4, the General Partner shall make such revisions to this
Section 6.2 or to Section 12.2.B as it determines are necessary to reflect the
terms of the issuance of such additional Partnership Interests, including making
preferential allocations to certain classes of Partnership Interests, subject to
the terms of the Series A Preferred Units, the Series B Preferred Units, Series
J Preferred Units and the Series K Preferred Units. In addition, for any quarter
in which Performance Units were issued, Net Income and Net Loss relating to such
units shall be allocated among (i) the PLPs who received such units and (ii) the
Performance Partners who returned the corresponding Partnership Units to the
Partnership, in accordance with any method selected by the General Partner which
is permitted under Section 706 of the Code.
Section 6.3 Additional Allocation Provisions
Notwithstanding the foregoing provisions of this Article 6:
A. Regulatory Allocations.
(i) Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2(f), notwithstanding the
provisions of Section 6.2, or any other provision of this Article 6, if
there is a net decrease in Partnership Minimum Gain during any fiscal
year, each Partner shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years) in
an amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, as determined under Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to
each
33
Partner pursuant thereto. The items to be allocated shall be
determined in accordance with Regulations Sections 1.704-2(f)(6) and
1.704-2(j)(2). This Section 6.3.A(i) is intended to qualify as a
"minimum gain chargeback" within the meaning of Regulation Section
1.704-2(f) which shall be controlling in the event of a conflict
between such Regulation and this Section 6.3.A(i).
(ii) Partner Minimum Gain Chargeback. Except as
otherwise provided in Regulations Section 1.704-2(i)(4), and
notwithstanding the provisions of Section 6.2, or any other provision
of this Article 6 (except Section 6.3.A(i)), if there is a net decrease
in Partner Minimum Gain attributable to a Partner Nonrecourse Debt
during any fiscal year, each Partner who has a share of the Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(5), shall be
specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts
required to be allocated to each General Partner and Limited Partner
pursuant thereto. The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2).
This Section 6.3.A(ii) is intended to qualify as a "chargeback of
partner nonrecourse debt minimum gain" within the meaning of Regulation
Section 1.704-2(i) which shall be controlling in the event of a
conflict between such Regulation and this Section 6.3.A(ii).
(iii) Nonrecourse Deductions and Partner Nonrecourse
Deductions. Any Nonrecourse Deductions for any fiscal year shall be
specially allocated to the Partners in accordance with their respective
Percentage Interest in Common Units. Any Partner Nonrecourse Deductions
for any fiscal year shall be specially allocated to the Partner(s) who
bears the economic risk of loss with respect to the Partner Nonrecourse
Debt to which such Partner Nonrecourse Deductions are attributable, in
accordance with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
(iv) Qualified Income Offset. If any Partner
unexpectedly receives an adjustment, allocation or distribution
described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6),
items of Partnership income and gain shall be allocated, in accordance
with Regulations Section 1.704-1(b)(2)(ii)(d), to the Partner in an
amount and manner sufficient to eliminate, to the extent required by
such Regulations, the Adjusted Capital Account Deficit of the Partner
as quickly as possible provided that an allocation pursuant to this
Section 6.3.A(iv) shall be made if and only to the extent that such
Partner would have an Adjusted Capital Account Deficit after all other
allocations provided in this Article 6 have been tentatively made as if
this Section 6.3.A(iv) were not in the Agreement. It is intended that
this Section 6.3.A(iv) qualify and be construed as a "qualified income
offset" within the meaning of Regulations 1.704-1(b)(2)(ii)(d), which
shall be controlling in the event of a conflict between such
Regulations and this Section 6.3.A(iv).
(v) Gross Income Allocation. In the event any Partner
has a deficit Capital Account at the end of any fiscal year which is in
excess of the sum of (a) the
34
amount (if any) such Partner is obligated to restore to the
Partnership and (b) the amount such Partner is deemed to be obligated
to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5), each such Partner shall be specially allocated items of
Partnership income and gain in the amount of such excess as quickly as
possible; provided, that an allocation pursuant to this Section
6.3.A(v) shall be made if and only to the extent that such Partner
would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 6 have been tentatively
made as if this Section 6.3.A(v) and Section 6.3.A(iv) were not in the
Agreement.
(vi) Limitation on Allocation of Net Loss. To the
extent any allocation of Net Loss would cause or increase an Adjusted
Capital Account Deficit as to any Partner, such allocation of Net Loss
shall be reallocated among the other Partners in accordance with their
respective Percentage Interests in Common Units, subject to the
limitations of this Section 6.3.A(vi).
(vii) Section 754 Adjustment. To the extent an
adjustment to the adjusted tax basis of any Partnership asset pursuant
to Code Section 734(b) or Code Section 743(b) is required, pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining
Capital Accounts as the result of a distribution to a Partner in
complete liquidation of his interest in the Partnership, the amount of
such adjustment to the Capital Accounts shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis) and such gain or loss shall be
specially allocated to the Partners in accordance with their interests
in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such
distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
(viii) Curative Allocation. The allocations set forth
in Sections 6.3.A(i), (ii), (iii), (iv), (v), (vi), and (vii) (the
"Regulatory Allocations") are intended to comply with certain
regulatory requirements, including the requirements of Regulations
Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of
Sections 6.1 and 6.2, the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction
among the Partners so that, to the extent possible, the net amount of
such allocations of other items and the Regulatory Allocations to each
Partner shall be equal to the net amount that would have been allocated
to each such Partner if the Regulatory Allocations had not occurred.
B. For purposes of determining a Partner's proportional share
of the "excess nonrecourse liabilities" of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3), each Partner's interest in Partnership
profits shall be such Partner's Percentage Interest in Common Units.
Section 6.4 Tax Allocations
A. In General. Except as otherwise provided in this Section
6.4, for income tax purposes each item of income, gain, loss and deduction
(collectively, "Tax Items") shall be
35
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Sections 6.2 and
6.3.
B. Allocations Respecting Section 704(c) Revaluations.
Notwithstanding Section 6.4.A, Tax Items with respect to Partnership property
that is contributed to the Partnership by a Partner shall be shared among the
Partners for income tax purposes pursuant to Regulations promulgated under
Section 704(c) of the Code, so as to take into account the variation, if any,
between the basis of the property to the Partnership and its initial Gross Asset
Value. With respect to Partnership property that is initially contributed to the
Partnership upon its formation pursuant to Section 4.1, such variation between
basis and initial Gross Asset Value shall be taken into account under the
"traditional method" as described in Regulations Section 1.704-3(b). With
respect to properties subsequently contributed to the Partnership, the
Partnership shall account for such variation under any method approved under
Section 704(c) of the Code and the applicable regulations as chosen by the
General Partner. In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value
(provided in Article 1), subsequent allocations of Tax Items with respect to
such asset shall take account of the variation, if any, between the adjusted
basis of such asset and its Gross Asset Value in the same manner as under
Section 704(c) of the Code and the applicable regulations consistent with the
requirements of Regulations Section 1.704-1(b)(2)(iv)(g) using any method
approved under 704(c) of the Code and the applicable regulations as chosen by
the General Partner.
36
ARTICLE 7.
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
A. Except as otherwise expressly provided in this Agreement,
all management powers over the business and affairs of the Partnership are
exclusively vested in the General Partner, and no Limited Partner shall have any
right to participate in or exercise control or management power over the
business and affairs of the Partnership. The General Partner may not be removed
by the Limited Partners with or without cause, except with the consent of the
General Partner. In addition to the powers now or hereafter granted a general
partner of a limited partnership under the Act and other applicable law or which
are granted to the General Partner under any other provision of this Agreement,
the General Partner, subject to the other provisions hereof including Section
7.3, shall have full power and authority to do all things deemed necessary or
desirable by it to conduct the business of the Partnership, to exercise all
powers set forth in Section 3.2 and to effectuate the purposes set forth in
Section 3.1, including, without limitation:
(i) the making of any expenditures, the lending or
borrowing of money (including, without limitation,
making prepayments on loans and borrowing money to
permit the Partnership to make distributions to its
Partners in such amounts as will permit the General
Partner (for so long as the General Partner has
determined to qualify as a REIT) to avoid the payment
of any Federal income tax (including, for this
purpose, any excise tax pursuant to Section 4981 of
the Code) and to make distributions to its
stockholders sufficient to permit the General Partner
to maintain REIT status), the assumption or guarantee
of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of
indebtedness (including the securing of same by
mortgage, deed of trust or other lien or encumbrance
on all or any of the Partnership's assets) and the
incurring of any obligations it deems necessary for
the conduct of the activities of the Partnership;
(ii) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental
or other agencies having jurisdiction over the
business or assets of the Partnership;
(iii) subject to the provisions of Section 7.3.D, the
acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any assets
of the Partnership or the merger or other combination
of the Partnership with or into another entity;
(iv) the mortgage, pledge, encumbrance or hypothecation of
all or any assets of the Partnership, and the use of
the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent
with the terms of this Agreement and on any terms it
sees fit, including, without
37
limitation, the financing of the conduct or the
operations of the General Partner or the Partnership
the lending of funds to other Persons (including,
without limitation, the General Partner (if necessary
to permit the financing or capitalization of a
subsidiary of the General Partner or the Partnership
and any Subsidiaries of the Partnership) and the
repayment of obligations of the Partnership, any of
its Subsidiaries and any other Person in which it
has an equity investment;
(v) the negotiation, execution, and performance of any
contracts, leases, conveyances or other instruments
that the General Partner considers useful or
necessary to the conduct of the Partnership's
operations or the implementation of the General
Partner's powers under this Agreement;
(vi) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement;
(vii) the selection and dismissal of employees of the
Partnership (including, without limitation, employees
having titles such as "president," "vice president,"
"secretary" and "treasurer"), and agents, outside
attorneys, accountants, consultants and contractors
of the Partnership, the determination of their
compensation and other terms of employment or hiring,
including waivers of conflicts of interest and the
payment of their expenses and compensation out of the
Partnership's assets;
(viii) the maintenance of such insurance for the benefit of
the Partnership and the Partners as it deems
necessary
or appropriate;
(ix) the formation of, or acquisition of an interest in,
and the contribution of property to, any further
limited or general partnerships, joint ventures or
other relationships that it deems desirable
(including, without limitation, the acquisition of
interests in, and the contributions of property to
any Subsidiary and any other Person in which it has
an equity investment from time to time); provided
that, as long as the General Partner has determined
to continue to qualify as a REIT, the Partnership
may not engage in any such formation, acquisition or
contribution that would cause the General Partner
to fail to qualify as a REIT;
(x) the control of any matters affecting the rights and
obligations of the Partnership, including the conduct
of litigation and the incurring of legal expense and
the settlement of claims and litigation, and the
indemnification of any Person against liabilities and
contingencies to the extent permitted by law;
(xi) the undertaking of any action in connection with the
Partnership's direct or indirect investment in any
Person (including, without limitation, contributing
or loaning Partnership funds to, incurring
indebtedness on behalf of, or guarantying the
obligations of any such Persons);
38
(xii) subject to the other provisions in this Agreement,
the determination of the fair market value of any
Partnership property distributed in kind using such
reasonable method of valuation as it may adopt;
provided that, such methods are otherwise consistent
with requirements of this Agreement;
(xiii) the management, operation, leasing, landscaping,
repair, alteration, demolition or improvement of any
real property or improvements owned by the
Partnership or any Subsidiary of the Partnership or
any Person in which the Partnership has made a direct
or indirect equity investment;
(xiv) holding, managing, investing and reinvesting cash and
other assets of the Partnership;
(xv) the collection and receipt of revenues and income of
the Partnership;
(xvi) the exercise, directly or indirectly through any
attorney-in-fact acting under a general or limited
power of attorney, of any right, including the right
to vote, appurtenant to any asset or investment held
by the Partnership;
(xvii) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of or
in connection with any Subsidiary of the Partnership
or any other Person in which the Partnership has a
direct or indirect interest, or jointly with any such
Subsidiary or other Person;
(xviii) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of any
Person in which the Partnership does not have an
interest, pursuant to contractual or other
arrangements with such Person; and
(xix) the making, execution and delivery of any and all
deeds, leases, notes, deeds to secure debt,
mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, warranties,
indemnities, waivers, releases or legal instruments
or other agreements in writing necessary or
appropriate in the judgment of the General Partner
for the accomplishment of any of the powers of the
General Partner enumerated in this Agreement.
B. Each of the Limited Partners agrees that the General
Partner is authorized to execute, deliver and perform the above-mentioned
agreements and transactions on behalf of the Partnership without any further
act, approval or vote of the partners, notwithstanding any other provisions of
this Agreement (except as provided in Section 7.3), the Act or any applicable
law, rule or regulation. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall not constitute a breach by the General Partner of any duty that
the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General
Partner may cause the Partnership to obtain and maintain (i) casualty, liability
and other insurance (including,
39
without limitation, earthquake insurance) on the properties of the Partnership
and (ii) liability insurance for the Indemnities hereunder.
D. At all times from and after the date hereof, the General
Partner may cause the Partnership to establish and maintain working capital and
other reserves in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time.
E. In exercising its authority under this Agreement, the
General Partner may, but other than as set forth in the following sentence and
as expressly set forth in the agreements listed on Exhibit I hereto, shall be
under no obligation to, take into account the tax consequences to any Partner
(including the General Partner) of any action taken by the General Partner. The
General Partner, on behalf of the Partnership, shall use commercially reasonable
efforts to cooperate with the Limited Partners to minimize any taxes payable in
connection with any sale, exchange or any other disposition of assets of the
Partnership. The General Partner and the Partnership shall not have liability to
a Limited Partner under any circumstances as a result of an income tax liability
incurred by such Limited Partner as a result of an action (or inaction) by the
General Partner pursuant to its authority under this Agreement.
F. Except as otherwise provided herein, to the extent the
duties of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that Partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
authorize or require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any individual
liability or obligation on behalf of the Partnership.
Section 7.2 Certificate of Limited Partnership
To the extent that such action is determined by the General
Partner to be reasonable and necessary or appropriate, the General Partner shall
file amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of
Delaware
and to maintain the Partnership's qualification to do business as a foreign
limited partnership in each other state, the District of Columbia or other
jurisdiction, in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5.A(iv), the General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate
or any amendment thereto to any Limited Partner. The General Partner shall use
all reasonable efforts to cause to be filed such other certificates or documents
as may be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of
Delaware, and any other state, or the District of Columbia or other
jurisdiction, in which the Partnership may elect to do business or own property.
Section 7.3 Restrictions on General Partner's Authority
A. The General Partner may not take any action in
contravention of this Agreement, including, without limitation:
40
(i) take any action that would make it impossible to
carry on the ordinary business of the Partnership,
except as otherwise provided in this Agreement;
(ii) possess Partnership property, or assign any rights in
specific Partnership property, for other than a
Partnership purpose except as otherwise provided in
this Agreement;
(iii) admit a Person as a Partner, except as otherwise
provided in this Agreement (including with respect to
the PLPs, who shall become Partners upon their
receipt of Performance Units);
(iv) perform any act that would subject a Limited Partner
to liability as a general partner in any jurisdiction
or any other liability except as provided herein or
under the Act; or
(v) enter into any contract, mortgage, loan or other
agreement that prohibits or restricts, or has the
effect of prohibiting or restricting, the ability of
a Limited Partner to exercise its rights to a
Redemption in full, except with the written consent
of such Limited Partner.
B. The General Partner shall not, without the prior Consent of
the Partners (in addition to any Consent of the Limited Partners required by any
other provision hereof), undertake, on behalf of the Partnership, any of the
following actions or enter into any transaction which would have the effect of
such transactions:
(i) except as provided in Section 7.3.D below, amend,
modify or terminate this Agreement other than to
reflect the admission, substitution, termination or
withdrawal of partners pursuant to Article 12;
(ii) make a general assignment for the benefit of
creditors or appoint or acquiesce in the appointment
of a custodian, receiver or trustee for all or any
part of the assets of the Partnership;
(iii) institute any proceeding for bankruptcy on behalf of
the Partnership;
(iv) confess a judgment against the Partnership; or
(v) enter into a merger (including a triangular merger),
consolidation or other combination of the Partnership
with or into another entity.
C. Except in the case of a Liquidating Event pursuant to
Section 13.1 (other than Section 13.1.F), the General Partner shall not, without
the prior Consent of the Limited Partners, undertake, on behalf of the
Partnership, any actions or enter into any transaction which would have the
effect of a dissolution of the Partnership, including a sale, exchange, transfer
or other disposition of all or substantially all of the Partnership's assets in
a single transaction or a series of related transactions.
41
D. Notwithstanding Sections 7.3.B and 7.3.C, but subject to
Section 7.3.E, the General Partner shall have the power, without the Consent of
the Partners, to amend this Agreement as may be required to facilitate or
implement any of the following purposes:
(i) to add to the obligations of the General Partner or
surrender any right or power granted to the General
Partner or any Affiliate of the General Partner for
the benefit of the Limited Partners;
(ii) to reflect the issuance of additional Partnership
Interests pursuant to Sections 4.3.C, 4.3.F and 4.4,
or the admission, substitution, termination,
reduction in Partnership Units or withdrawal of
Partners in accordance with this Agreement (which may
be effected through the replacement of Exhibit A with
an amended Exhibit A);
(iii) to set forth or amend the designations, rights,
powers, duties, and preferences of the holders of any
additional Partnership Interests issued pursuant to
Article 4;
(iv) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited
Partners in any material respect, or to cure any
ambiguity in, correct or supplement any provision, or
make other changes with respect to matters arising
under, this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;
(v) to satisfy any requirements, conditions, or
guidelines contained in any order, directive,
opinion, ruling or regulation of a Federal, state of
local agency or contained in Federal, state or local
law.
(vi) to reflect such changes as are reasonably necessary
for the General Partner to maintain its status as a
REIT, including changes which may be necessitated due
to a change in applicable law (or an authoritative
interpretation thereof) or a ruling of the IRS; and
(vii) to modify, as set forth in the definition of "Capital
Account," the manner in which Capital Accounts are
computed.
The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.D is taken.
E. Notwithstanding Sections 7.3.B, 7.3.C and 7.3.D, this
Agreement shall not be amended, and no action may be taken by the General
Partner, including in either case through merger or sale of assets of the
Partnership or otherwise, without the Consent of each Common Limited Partner or
Preferred Limited Partner adversely affected if such amendment or action would
(i) convert a Limited Partner's interest in the Partnership into a general
partner's interest (except as the result of the General Partner acquiring such
interest), (ii) modify the limited liability of a Limited Partner, (iii) alter
rights of the Partner to receive distributions pursuant to Article 5, Section
13.2.A(4), Article 16, Article 17, Article 18 or Article 19 or the allocations
specified in Article 6 (except as permitted pursuant to Section 4.3 and Section
7.3.D), (iv) alter or modify the rights to a Redemption or the REIT Shares
Amount as set forth in Section 8.6, and
42
related definitions hereof, (v) alter the redemption or exchange rights as set
forth in Sections 17.5, 17.8, 18.5, 18.8 19.5 and 19.8 hereof, respectively, or
(vi) amend this Section 7.3.E. Further, no amendment may alter the restrictions
on the General Partner's authority set forth elsewhere in this Section 7.3
without the Consent specified in such section. In addition, (a) Section 11.2 of
this Agreement shall not be amended, and no action in contravention of Section
11.2 shall be taken, including in either case through merger or sale of assets
of the Partnership or otherwise, without the Consent of the Limited Partners and
(b) this Agreement shall not be amended, and no action shall be taken, including
in either case through merger or sale of assets of the Partnership or otherwise,
which would adversely affect the rights of the Persons set forth in Exhibit G to
receive Performance Units as described herein.
F. Other than incident to a transaction pursuant to Sections
11.2.B or 11.2.C, the General Partner shall not undertake to dispose of any
Partnership Property specified in the agreements listed in Exhibit H in a
taxable sale or taxable exchange prior to the dates specified in such agreements
without the prior consent of each Limited Partner which contributed all or any
portion of an interest in such Property to the Partnership, as set forth in such
agreements.
Section 7.4 Reimbursement of the General Partner
A. Except as provided in this Section 7.4 and elsewhere in
this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
B. Subject to Section 15.11, the General Partner shall be
reimbursed on a monthly basis, or such other basis as the General Partner may
determine in its sole and absolute discretion, for all expenses it incurs
relating to the ownership of interests in and operation of, or for the benefit
of, the Partnership. The Limited Partners acknowledge that the General Partner's
sole business is the ownership of interests in and operation of the Partnership
and that such expenses are incurred for the benefit of the Partnership; provided
that, the General Partner shall not be reimbursed for expenses it incurs
relating to the organization of the Partnership and the General Partner, or the
initial public offering or subsequent offerings of REIT Shares, other shares of
capital stock or Funding Debt by the General Partner, but shall be reimbursed
for expenses it incurs with respect to any other issuance of additional
Partnership Interests pursuant to the provisions hereof. Such reimbursements
shall be in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.7.
C. If and to the extent any reimbursements to the General
Partner pursuant to this Section 7.4 constitute gross income of the General
Partner (as opposed to the repayment of advances made by the General Partner on
behalf of the Partnership), such amounts shall constitute guaranteed payments
within the meaning of Section 707(c) of the Code, shall be treated consistently
therewith by the Partnership and all Partners, and shall not be treated as
distributions for purposes of computing the Partners' Capital Accounts.
Section 7.5 Outside Activities of the General Partner
A. Except in connection with a transaction authorized in
Section 11.2, without the Consent of the Limited Partners, the General Partner
shall not, directly or indirectly,
43
enter into or conduct any business, other than in connection with the ownership,
acquisition and disposition of Partnership Interests as a General Partner and
the management of the business of the Partnership, its operation as a public
reporting company with a class (or classes) of securities registered under the
Exchange Act, its operation as a REIT and such activities as are incidental to
the same. Without the Consent of the Limited Partners, the General Partner shall
not, directly or indirectly, participate in or otherwise acquire any interest in
any real or personal property, except its General Partner Interest, its interest
in any Subsidiary Partnership(s) (held directly or indirectly through a
Qualified REIT Subsidiary) that the General Partner holds in order to maintain
such Subsidiary Partnership's status as a partnership, and such bank accounts,
similar instruments or other short-term investments as it deems necessary to
carry out its responsibilities contemplated under this Agreement and the
Charter. In the event the General Partner desires to contribute cash to any
Subsidiary Partnership to acquire or maintain an interest of 1% or less in the
capital of such partnership, the General Partner may acquire such cash from the
Partnership in exchange for a reduction in the General Partner's Units, in an
amount equal to the amount of such cash divided by the Fair Market Value of a
REIT Share on the day such cash is received by the General Partner.
Notwithstanding the foregoing, the General Partner may acquire Properties in
exchange for REIT Shares, to the extent such Properties are immediately
contributed by the General Partner to the Partnership, pursuant to the terms
described in Section 4.3.E. Any Limited Partner Interests acquired by the
General Partner, whether pursuant to exercise by a Limited Partner of its right
of Redemption, or otherwise, shall be automatically converted into a General
Partner Interest comprised of an identical number of Partnership Units with the
same rights, priorities and preferences as the class or series so acquired. If,
at any time, the General Partner acquires material assets (other than on behalf
of the Partnership) the definition of "REIT Shares Amount" and the definition of
"Deemed Value of Partnership Interests" shall be adjusted, as reasonably agreed
to by the General Partner and the other Limited Partners, to reflect the
relative Fair Market Value of a share of capital stock of the General Partner
relative to the Deemed Partnership Interest Value of the related Partnership
Unit. The General Partner's General Partner Interest in the Partnership, its
minority interest in any Subsidiary Partnership(s) (held directly or indirectly
through a Qualified REIT Subsidiary) that the General Partner holds in order to
maintain such Subsidiary Partnership's status as a partnership, and interests in
such short-term liquid investments, bank accounts or similar instruments as the
General Partner deems necessary to carry out its responsibilities contemplated
under this Agreement and the Charter are interests which the General Partner is
permitted to acquire and hold for purposes of this Section 7.5.A.
B. In the event the General Partner exercises its rights under
the Charter to purchase REIT Shares or Preferred Shares, then the General
Partner shall cause the Partnership to redeem from it a number of Partnership
Units of the appropriate class as determined based on, in the case of REIT
Shares, the REIT Shares Amount equal to the number of REIT Shares so purchased,
or in the case of Preferred Shares an equal number of Preferred Units which
correspond in ranking to the Preferred Shares so purchased, in each case on the
same terms that the General Partner purchased such REIT Shares or Preferred
Shares (as applicable).
Section 7.6 Contracts with Affiliates
A. Except as expressly permitted by this Agreement, the
Partnership shall not, directly or indirectly, sell, transfer or convey any
property to, or purchase any property from, or borrow funds from, or lend funds
to, any Partner or any Affiliate of the Partnership that is not
44
also a Subsidiary of the Partnership, except pursuant to transactions that are
on terms that are fair and reasonable and no less favorable to the Partnership
than would be obtained from an unaffiliated third party.
B. The General Partner, in its sole and absolute discretion
and without the approval of the Limited Partners, may propose and adopt on
behalf of the Partnership employee benefit plans funded by the Partnership for
the benefit of employees of the General Partner, the Partnership, Subsidiaries
of the Partnership or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Partnership, the
General Partner, or any of the Partnership's Subsidiaries. The General Partner
also is expressly authorized to cause the Partnership to issue to it Partnership
Units corresponding to REIT Shares issued by the General Partner pursuant to its
Stock Incentive Plan or any similar or successor plan and to repurchase such
Partnership Units from the General Partner to the extent necessary to permit the
General Partner to repurchase such REIT Shares in accordance with such plan.
Section 7.7 Indemnification
A. The Partnership shall indemnify an Indemnitee from and
against any and all losses, claims, damages, liabilities, joint or several,
expenses (including legal fees and expenses), judgments, fines, settlements, and
other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership as set forth in this Agreement in which any
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established that: (i) the act or omission of the
Indemnitee was material to the matter giving rise to the proceeding and either
was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to), and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into one
or more indemnity agreements consistent with the provisions of this Section 7.7
in favor of any Indemnitee having or potentially having liability for any such
indebtedness. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 7.7.A. The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
any entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 7.7.A. Any indemnification pursuant to this Section 7.7 shall be
made only out of the assets of the Partnership, and any insurance proceeds from
the liability policy covering the General Partner and any Indemnitee, and
neither the General Partner nor any Limited Partner shall have any obligation to
contribute to the capital of the Partnership or otherwise provide funds to
enable the Partnership to fund its obligations under this Section 7.7.
B. Reasonable expenses incurred by an Indemnitee who is a
party to a proceeding may be paid or reimbursed by the Partnership in advance of
the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of
45
the Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in Section 7.7.A has been met
and (ii) a written undertaking by or on behalf of the Indemnitee to repay the
amount if it shall ultimately be determined that the standard of conduct has not
been met.
C. The indemnification provided by this Section 7.7 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity.
D. The Partnership may purchase and maintain insurance, on
behalf of the Indemnitees and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by any such Person in connection with the Partnership's
activities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.
E. For purposes of this Section 7.7, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of Section 7.7; and actions taken or
omitted by the Indemnitee with respect to an employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the Partnership.
F. In no event may an Indemnitee subject the Limited Partners
to personal liability by reason of the indemnification provisions set forth in
this Agreement.
G. An Indemnitee shall not be denied indemnification in whole
or in part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of
the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
I. If and to the extent any reimbursements to the General
Partner pursuant to this Section 7.7 constitute gross income of the General
Partner (as opposed to the repayment of advances made by the General Partner on
behalf of the Partnership) such amounts shall constitute guaranteed payments
within the meaning of Section 707(c) of the Code, shall be
46
treated consistently therewith by the Partnership and all Partners, and shall
not be treated as distributions for purposes of computing the Partners' Capital
Accounts.
J. Any indemnification hereunder is subject to, and limited
by, the provisions of Section 17-108 of the Act.
K. In the event the Partnership is made a party to any
litigation or otherwise incurs any loss or expense as a result of or in
connection with any Partner's personal obligations or liabilities unrelated to
Partnership business, such Partner shall indemnify and reimburse the Partnership
for all such loss and expense incurred, including legal fees, and the
Partnership Interest of such Partner may be charged therefor. The liability of a
Partner under this Section 7.7.K shall not be limited to such Partner's
Partnership Interest, but shall be enforceable against such Partner personally.
Section 7.8 Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this
Agreement, none of the General Partner and any of its officers, directors,
agents and employees shall be liable or accountable in damages or otherwise to
the Partnership, any Partners or any Assignees, or their successors or assigns,
for losses sustained, liabilities incurred or benefits not derived as a result
of errors in judgment or mistakes of fact or law or any act or omission if the
General Partner acted in good faith.
B. The Limited Partners expressly acknowledge that the General
Partner is acting for the benefit of the Partnership, the Limited Partners and
the General Partner's stockholders collectively, that the General Partner is
under no obligation to give priority to the separate interests of the Limited
Partners or the General Partner's stockholders (including, without limitation,
the tax consequences to Limited Partners or Assignees or to stockholders) in
deciding whether to cause the Partnership to take (or decline to take) any
actions and that the General Partner shall not be liable to the Partnership or
to any Limited Partner for monetary damages for losses sustained, liabilities
incurred, or benefits not derived by Limited Partners in connection with such
decisions; provided, that the General Partner has acted in good faith.
C. Subject to its obligations and duties as General Partner
set forth in Section 7.1.A, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith. In no event shall the liability of the
General Partner and its officers, directors, agents and employees, to the
Partnership and the Limited Partners under this Section 7.8 be greater than the
Partnership Interest of the General Partner.
D. Any amendment, modification or repeal of this Section 7.8
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the liability of the General Partner and any of its
officers, directors, agents and employees to the Partnership and the Limited
Partners under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
47
Section 7.9 Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture,
or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
B. The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion of such Persons as to matters which such
General Partner reasonably believes to be within such Person's professional or
expert competence shall be conclusively presumed to have been done or omitted in
good faith and in accordance with such opinion.
C. The General Partner shall have the right, in respect of any
of its powers or obligations hereunder, to act through any of its duly
authorized officers and a duly appointed attorney or attorneys-in-fact. Each
such attorney shall, to the extent provided by the General Partner in the power
of attorney, have full power and authority to do and perform all and every act
and duty which is permitted or required to be done by the General Partner
hereunder.
D. Notwithstanding any other provisions of this Agreement or
any non-mandatory provision of the Act, any action of the General Partner on
behalf of the Partnership or any decision of the General Partner to refrain from
acting on behalf of the Partnership, undertaken in the good faith belief that
such action or omission is necessary or advisable in order to protect the
ability of the General Partner, for so long as the General Partner has
determined to qualify as a REIT, to (i) continue to qualify as a REIT or (ii)
except with respect to the distribution of Available Cash to the Series B
Limited Partners in accordance with Section 17.3, to the Series J Limited
Partners in accordance with Section 18.3 and to the Series K Limited Partners in
accordance with Section 19.3 avoid the General Partner incurring any taxes under
Section 857 or Section 4981 of the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
E. So long as the Company holds any interest in the
Partnership (as either a General Partner or Limited Partner), the Company shall
have "management rights" (as such term is defined in the Plan Asset Regulation)
with respect to the Partnership and its Properties to the extent necessary to
qualify the Company as a "venture capital operating company" (as such term is
defined in the Plan Asset Regulation).
Section 7.10 Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partners, individually or collectively, shall
have any ownership interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General Partner
may determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be deemed held by the General Partner or such
48
nominee or Affiliate for the use and benefit of the Partnership in accordance
with the provisions of this Agreement; provided, however, that the General
Partner shall use its best efforts to cause beneficial and record title to such
assets to be vested in the Partnership as soon as reasonably practicable. All
Partnership assets shall be recorded as the property of the Partnership in its
books and records, irrespective of the name in which legal title to such
Partnership assets is held.
Section 7.11 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement,
any Person dealing with the Partnership shall be entitled to assume that the
General Partner has full power and authority to encumber, sell or otherwise use
in any manner any and all assets of the Partnership and to enter into any
contracts on behalf of the Partnership, and such Person shall be entitled to
deal with the General Partner as if it were the Partnership's sole party in
interest, both legally and beneficially. Each Limited Partner hereby waives any
and all defenses or other remedies which may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection
with any such dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the General Partner or its representatives. Each and
every certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (i) at the time of the execution and delivery of such certificate, document
or instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and (iii)
such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.
ARTICLE 8.
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability
The Limited Partners shall have no liability under this
Agreement except as expressly provided in this Agreement or under the Act.
Section 8.2 Management of Business
No Limited Partner or Assignee (other than the General
Partner, any of its Affiliates or any officer, director, employee, general
partner, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such) shall take part in the operations,
management or control (within the meaning of the Act) of the Partnership's
business, transact any business in the Partnership's name or have the power to
sign documents for or otherwise bind the Partnership. The transaction of any
such business by the General Partner, any of its Affiliates or any officer,
director, employee, general partner, agent or trustee of the General Partner,
the Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
49
Section 8.3 Outside Activities of Limited Partners
Subject to any agreements entered into by a Limited Partner or
its Affiliates with the General Partner, Partnership or a Subsidiary, any
Limited Partner and any officer, director, employee, agent, trustee, Affiliate
or stockholder of any Limited Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership or that are enhanced by the activities of the Partnership.
Neither the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. Subject
to such agreements, none of the Limited Partners nor any other Person shall have
any rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person, other than the
Limited Partners benefiting from the business conducted by the General Partner,
and such other Person shall have no obligation pursuant to this Agreement to
offer any interest in any such business ventures to the Partnership, any Limited
Partner or any such other Person, even if such opportunity is of a character
which, if presented to the Partnership, any Limited Partner or such other
Person, could be taken by such other Person.
Section 8.4 Return of Capital
Except pursuant to the rights of Redemption set forth in
Section 8.6 and the redemption and exchange rights set forth in Sections 17.5,
17.8, 18.5, 18.8 19.5 and 19.8, no Limited Partner shall be entitled to the
withdrawal or return of his or her Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. Except as expressly set forth herein with
respect to the rights, priorities and preferences of the Preferred Limited
Partners holding any series of Preferred Units, no Limited Partner or Assignee
shall have priority over any other Limited Partner or Assignee either as to the
return of Capital Contributions, or as otherwise expressly provided in this
Agreement, as to profits, losses, distributions or credits.
Section 8.5 Rights of Limited Partners Relating to the
Partnership
A. In addition to other rights provided by this Agreement or
by the Act, and except as limited by Section 8.5.C, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at the Partnership's expense:
(i) to obtain a copy of the most recent annual and
quarterly reports filed with the Securities and
Exchange Commission by the General Partner pursuant
to the Exchange Act, and each communication sent to
the stockholders of the General Partner;
(ii) to obtain a copy of the Partnership's Federal, state
and local income tax returns for each Partnership
Year;
(iii) to obtain a current list of the name and last known
business, residence or mailing address of each
Partner;
(iv) to obtain a copy of this Agreement and the
Certificate and all amendments thereto, together with
executed copies of all powers of attorney pursuant to
50
which this Agreement, the Certificate and all
amendments thereto have been executed; and
(v) to obtain true and full information regarding the
amount of cash and a description and statement of any
other property or services contributed by each
Partner and which each Partner has agreed to
contribute in the future, and the date on which each
became a Partner.
B. The Partnership shall notify each Common Limited Partner in
writing of any adjustment made in the calculation of the REIT Shares Amount
within ten (10) Business Days of the date such change becomes effective.
C. Notwithstanding any other provision of this Section 8.5,
the General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or (ii) the Partnership or the General Partner
is required by law or by agreements with unaffiliated third parties to keep
confidential.
Section 8.6 Common Limited Partner Redemption Rights
A. On or after the date one year after the Effective Date, or
on or after such later date as expressly provided in an agreement entered into
between the Partnership and any Common Limited Partner, each Common Limited
Partner shall have the right (subject to the terms and conditions set forth
herein and in any other such agreement, as applicable) to require the
Partnership to redeem all or a portion of the Common Partnership Units held by
such Common Limited Partner (such Partnership Units being hereafter referred to
as "Tendered Units") in exchange for the Cash Amount (a "Redemption"); provided,
that the terms of such Common Partnership Units do not provide that such Common
Partnership Units are not entitled to a right of Redemption. Unless otherwise
expressly provided in this Agreement or a separate agreement entered into
between the Partnership and the holders of such Partnership Units, all Common
Partnership Units shall be entitled to a right of Redemption hereunder.
Notwithstanding the foregoing, a PLP shall not have the right to require the
Partnership to redeem, and the Partnership may not redeem, (i) a number of
Performance Units held by such PLP in excess of the Performance Amount; or (ii)
any Performance Units prior to the second anniversary of their issuance. Any
Redemption shall be exercised pursuant to a Notice of Redemption delivered to
the General Partner by the Common Limited Partner who is exercising the right
(the "Tendering Partner"). The Cash Amount shall be delivered as a certified
check payable to the Tendering Partner within ten (10) days of the Specified
Redemption Date in accordance with the instructions set forth in the Notice of
Redemption.
B. Notwithstanding Section 8.6.A above, if a Common Limited
Partner has delivered to the General Partner a Notice of Redemption then the
General Partner may, in its sole and absolute discretion, (subject to the
limitations on ownership and transfer of REIT Shares set forth in Article IV.E
of the Charter) elect to acquire some or all of the Tendered Units from the
Tendering Partner in exchange for the REIT Shares Amount (as of the Specified
Redemption Date) and, if the General Partner so elects, the Tendering Partner
shall sell the Tendered Units to
51
the General Partner in exchange for the REIT Shares Amount. In such event, the
Tendering Partner shall have no right to cause the Partnership to redeem such
Tendered Units. The General Partner shall promptly give such Tendering Partner
written notice of its election, and the Tendering Partner may elect to withdraw
its redemption request at any time prior to the acceptance of the Cash Amount or
REIT Shares Amount by such Tendering Partner.
C. The REIT Shares Amount, if applicable, shall be delivered
as duly authorized, validly issued, fully paid and nonassessable REIT Shares
and, if applicable, free of any pledge, lien, encumbrance or restriction, other
than those provided in the Charter, the Bylaws of the General Partner, the
Securities Act, relevant state securities or blue sky laws and any applicable
registration rights agreement with respect to such REIT Shares entered into by
the Tendering Partner. The REIT Shares Amount shall be registered in the name
and otherwise delivered as set forth in the Notice of Redemption.
Notwithstanding any delay in such delivery (but subject to Section 8.6.E below),
the Tendering Partner shall be deemed the owner of such REIT Shares for all
purposes, including without limitation, rights to vote or consent, and receive
dividends, as of the Specified Redemption Date.
D. Each Common Limited Partner covenants and agrees with the
General Partner that all Tendered Units shall be delivered to the General
Partner free and clear of all liens, claims and encumbrances whatsoever and
should any such liens, claims and/or encumbrances exist or arise with respect to
such Tendered Units, the General Partner shall be under no obligation to acquire
the same. Each Common Limited Partner further agrees that, in the event any
state or local property transfer tax is payable as a result of the transfer of
its Tendered Units to the General Partner (or its designee), such Common Limited
Partner shall assume and pay such transfer tax.
E. Notwithstanding the provisions of Sections 8.6.A, 8.6.B,
8.6.C or any other provision of this Agreement, a Common Limited Partner (i)
shall not be entitled to effect a Redemption for cash or an exchange for REIT
Shares to the extent the ownership or right to acquire REIT Shares pursuant to
such exchange by such Partner on the Specified Redemption Date would cause such
Partner or any other Person, or, in the opinion of counsel selected by the
General Partner, may cause such Partner or any other Person, to violate the
restrictions on ownership and transfer of REIT Shares set forth in Article IV.E
of the Charter and (ii) shall have no rights under this Agreement to acquire
REIT Shares which would otherwise be prohibited under the Charter. To the extent
any attempted Redemption or exchange for REIT Shares would be in violation of
this Section 8.6.E, it shall be null and void ab initio and such Common Limited
Partner shall not acquire any rights or economic interest in the cash otherwise
payable upon such redemption or the REIT Shares otherwise issuable upon such
exchange.
F. Notwithstanding anything herein to the contrary (but
subject to Section 8.6.E above), with respect to any Redemption or exchange for
REIT Shares pursuant to this Section 8.6:
(i) All Common Partnership Units acquired by the General
Partner pursuant thereto shall automatically, and
without further action required, be converted into
and deemed to be General Partner Interests comprised
of the same number and class of Common Partnership
Units.
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(ii) Without the consent of the General Partner, each
Common Limited Partner may not effect a Redemption
for less than 10,000 Partnership Units or, if the
Common Limited Partner holds less than 10,000
Partnership Units, all of the Common Partnership
Units held by such Common Limited Partner.
(iii) Without the consent of the General Partner, each
Common Limited Partner may not effect a Redemption
during the period after the Partnership Record Date
with respect to a distribution and before the record
date established by the General Partner for a
distribution to its common stockholders of some or
all of its portion of such distribution.
(iv) The consummation of any Redemption or exchange for
REIT Shares shall be subject to the expiration or
termination of the applicable waiting period, if any,
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
(v) Each Tendering Partner shall continue to own all
Common Partnership Units subject to any Redemption or
exchange for REIT Shares, and be treated as a Common
Limited Partner with respect to such Common
Partnership Units for all purposes of this Agreement,
until such Common Partnership Units are transferred
to the General Partner and paid for or exchanged as
of the Specified Redemption Date. Until a Specified
Redemption Date, the Tendering Partner shall have no
rights as a stockholder of the General Partner with
respect to such Tendering Partner's Common
Partnership Units.
G. In the event that the Partnership issues additional
Partnership Interests to any Additional Limited Partner pursuant to Section
4.3.C, the General Partner shall make such revisions to this Section 8.6 as it
determines are necessary to reflect the issuance of such additional Partnership
Interests.
ARTICLE 9.
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the
principal office of the Partnership appropriate books and records with respect
to the Partnership's business, including without limitation, all books and
records necessary to provide to the Limited Partners any information, lists and
copies of documents required to be provided pursuant to Section 9.3. Any records
maintained by or on behalf of the Partnership in the regular course of its
business may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, micrographics or any other information storage device; provided,
that the records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles.
53
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
Section 9.3 Reports
A. As soon as practicable, but in no event later than one
hundred and five (105) days after the close of each Partnership Year, or such
earlier date as they are filed with the Securities and Exchange Commission, the
General Partner shall cause to be mailed to each Limited Partner as of the close
of the Partnership Year, an annual report containing financial statements of the
Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, for such Partnership Year,
presented in accordance with generally accepted accounting principles, such
statements to be audited by a nationally recognized firm of independent public
accountants selected by the General Partner.
B. As soon as practicable, but in no event later than
forty-five (45) days after the close of each calendar quarter (except the last
calendar quarter of each year), or such earlier date as they are filed with the
Securities and Exchange Commission, the General Partner shall cause to be mailed
to each Limited Partner as of the last day of the calendar quarter, a report
containing unaudited financial statements of the Partnership, or of the General
Partner, if such statements are prepared solely on a consolidated basis with the
General Partner, presented in accordance with the applicable law or regulation,
or as the General Partner determines to be appropriate.
Section 9.4 Nondisclosure of Certain Information
Notwithstanding the provisions of Sections 9.1 and 9.3, the
General Partner may keep confidential from the Limited Partners any information
that the General Partner believes to be in the nature of trade secrets or other
information the disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or which the Partnership is
required by law or by agreements with unaffiliated third parties to keep
confidential.
ARTICLE 10.
TAX MATTERS
Section 10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and
timely filing of all returns of Partnership income, gains, deductions, losses
and other items required of the Partnership for Federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for Federal and state income tax reporting purposes. Each
Limited Partner shall promptly provide the General Partner with such information
relating to any Contributed Property contributed by such Limited Partner to the
Partnership.
Section 10.2 Tax Elections
Except as otherwise provided herein, the General Partner
shall, in its sole and absolute discretion, determine whether to make any
available election pursuant to the Code, including the election under Section
754 of the Code. The General Partner shall have the right to seek to revoke any
such election (including without limitation, any election under Section 754 of
54
the Code) upon the General Partner's determination in its sole and absolute
discretion that such revocation is the best interests of the Partners.
Section 10.3 Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of
the Partnership for Federal income tax purposes. Pursuant to Section 6223(c) of
the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address and profit interest of each
of the Limited Partners and Assignees; provided, however, that such information
is provided to the Partnership by the Limited Partners and Assignees.
B. The tax matters partner is authorized, but not required:
(i) to enter into any settlement with the IRS with
respect to any administrative or judicial proceedings
for the adjustment of Partnership items required to
be taken into account by a Partner for income tax
purposes (such administrative proceedings being
referred to as a "tax audit" and such judicial
proceedings being referred to as "judicial review"),
and in the settlement agreement the tax matters
partner may expressly state that such agreement
shall bind all Partners, except that such settlement
agreement shall not bind any Partner (a) who
(within the time prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing
that the tax matters partner shall not have the
authority to enter into a settlement agreement on
behalf of such Partner or (b) who is a "notice
partner" (as defined in Section 6231 of the Code) or
a member of a "notice group" (as defined in Section
6223(b)(2) of the Code);
(ii) in the event that a notice of a final administrative
adjustment at the Partnership level of any item
required to be taken into account by a Partner for
tax purposes (a "final adjustment") is mailed to the
tax matters partner, to seek judicial review of such
final adjustment, including the filing of a petition
for readjustment with the Tax Court or the United
States Claims Court, or the filing of a complaint for
refund with the District Court of the United States
for the district in which the Partnership's principal
place of business is located;
(iii) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(iv) to file a request for an administrative adjustment
with the IRS at any time and, if any part of such
request is not allowed by the IRS, to file an
appropriate pleading (petition or complaint) for
judicial review with respect to such request;
(v) to enter into an agreement with the IRS to extend the
period for assessing any tax which is attributable to
any item required to be taken into account by a
Partner for tax purposes, or an item affected by such
item; and
55
(vi) to take any other action on behalf of the Partners of
the Partnership in connection with any tax audit or
judicial review proceeding to the extent permitted by
applicable law or regulations.
The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion of the
tax matters partner and the provisions relating to indemnification of the
General Partner set forth in Section 7.7 shall be fully applicable to the tax
matters partner in its capacity as such.
C. The tax matters partner shall receive no compensation for
its services. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees)
shall be borne by the Partnership. Nothing herein shall be construed to restrict
the Partnership from engaging an accounting firm to assist the tax matters
partner in discharging its duties hereunder, so long as the compensation paid by
the Partnership for such services is reasonable.
Section 10.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any,
incurred by it in organizing the Partnership ratably over a sixty (60) month
period as provided in Section 709 of the Code.
Section 10.5 Withholding
Each Limited Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Limited Partner any
amount of Federal, state, local, or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the
Code. Any amount paid on behalf of or with respect to a Limited Partner shall
constitute a loan by the Partnership to such Limited Partner, which loan shall
be repaid by such Limited Partner within fifteen (15) days after notice from the
General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to the
Limited Partner or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of the
Partnership which would, but for such payment, be distributed to the Limited
Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii)
shall be treated as having been distributed to such Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner's Partnership Interest to secure
such Limited Partner's obligation to pay to the Partnership any amounts required
to be paid pursuant to this Section 10.5. In the event that a Limited Partner
fails to pay any amounts owed to the Partnership pursuant to this Section 10.5
when due, the General Partner may, in its sole and absolute discretion, elect to
make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner (including, without
limitation, the right to receive distributions and the holding of a security
interest in such Limited Partner's Partnership Interest). Any amounts payable by
a Limited
56
Partner hereunder shall bear interest at the base rate on corporate loans at
large United States money center commercial banks, as published from time to
time in the Wall Street Journal, plus two percentage points (but not higher than
the maximum lawful rate) from the date such amount is due (i.e., 15 days after
demand) until such amount is paid in full. Each Limited Partner shall take such
actions as the Partnership or the General Partner shall request in order to
perfect or enforce the security interest created hereunder.
ARTICLE 11.
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer," when used in this Article 11 with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which the General Partner purports to assign its General Partner Interest to
another Person or by which a Limited Partner purports to assign its Limited
Partnership Interest to another Person, and includes a sale, assignment, gift
(outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange
or any other disposition by law or otherwise. Except to the extent otherwise
specified, the term "transfer" when used in this Article 11 does not include any
Redemption or exchange for REIT Shares pursuant to Section 8.6, any redemption
of Preferred Units pursuant to Sections 16.5, 17.5, 18.5 or 19.5 or any exchange
for Preferred Shares pursuant to Section 17.8, 18.8 or 19.8. No part of the
interest of a Limited Partner shall be subject to the claims of any creditor,
any spouse for alimony or support, or to legal process, and may not be
voluntarily or involuntarily alienated or encumbered, except as may be
specifically provided for in this Agreement.
B. No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void ab initio unless
otherwise consented by the General Partner in its sole and absolute discretion.
Section 11.2 Transfer of General Partner's Partnership
Interest
A. The General Partner shall not withdraw from the Partnership
and shall not transfer all or any portion of its interest in the Partnership
(whether by sale, statutory merger, consolidation, liquidation or otherwise)
without the Consent of the Limited Partners which may be given or withheld by
each such Limited Partner in its sole and absolute discretion, and only upon the
admission of a successor General Partner pursuant to Section 12.1; provided,
however, that, subject to Sections 11.2.B, 11.2.C, 11.2.D and 11.2.E, the
General Partner may withdraw from the Partnership and transfer all of its
interest upon the merger, consolidation or sale of substantially all of the
assets of the General Partner without the consent of any Limited Partners. Upon
any transfer of a Partnership Interest in accordance with the provisions of this
Section 11.2, the transferee shall become a substitute General Partner for all
purposes herein, and shall be vested with the powers and rights of the
transferor General Partner, and shall be liable for all obligations and
responsible for all duties of the General Partner, once such transferee has
executed such instruments as may be necessary to effectuate such admission and
to confirm the agreement of such transferee to be bound by all the terms and
provisions of this Agreement with respect to the Partnership Interest so
acquired. It is a condition to any transfer otherwise
57
permitted hereunder that the transferee assumes, by operation of law or express
agreement, all of the obligations of the transferor General Partner under this
Agreement with respect to such transferred Partnership Interest, and no such
transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor General Partner are assumed by a
successor corporation by operation of law) shall relieve the transferor General
Partner of its obligations under this Agreement without the Consent of the
Partners, in their reasonable discretion. In the event the General Partner
withdraws from the Partnership, or otherwise dissolves or terminates, or upon
the Incapacity of the General Partner, all of the remaining Partners may elect
to continue the Partnership business by selecting a substitute General Partner
in accordance with the Act.
B. Neither the General Partner nor the Partnership may engage
in any merger, consolidation or other combination with or into another person,
or effect any reclassification, recapitalization or change of its outstanding
equity interests, and the General Partner may not sell all or substantially all
of its assets (each a "Termination Transaction") unless in connection with the
Termination Transaction all holders of Partnership Units either will receive, or
will have the right to elect to receive, for each Partnership Unit an amount of
cash, securities or other property equal to the product of the REIT Share Amount
and the greatest amount of cash, securities or other property paid to the holder
of one REIT Share in consideration of one REIT Share pursuant to the Termination
Transaction. If, in connection with the Termination Transaction, a purchase,
tender or exchange offer shall have been made to and accepted by the holders of
the outstanding REIT Shares, each holder of Partnership Units will receive, or
will have the right to elect to receive, the greatest amount of cash, securities
or other property which such holder would have received had it exercised its
rights to Redemption (as set forth in Section 8.6) and received REIT Shares in
exchange for its Partnership Units immediately prior to the expiration of such
purchase, tender or exchange offer and had thereupon accepted such purchase,
tender or exchange offer. The PLPs shall have the benefit of the foregoing
provisions with respect to all of their Performance Units, notwithstanding the
limitation set forth in Section 8.6.A on a PLPs ability to exercise its rights
to a Redemption.
C. A Termination Transaction may also occur if the following
conditions are met: (i) substantially all of the assets directly or indirectly
owned by the surviving entity are held directly or indirectly by the Partnership
or another limited partnership or limited liability company which is the
survivor of a merger, consolidation or combination of assets with the
Partnership (in each case, the "Surviving Partnership"); (ii) the holders of
Partnership Units, including the holders of Performance Units issued or to be
issued, own a percentage interest of the Surviving Partnership based on the
relative fair market value of the net assets of the Partnership and the other
net assets of the Surviving Partnership immediately prior to the consummation of
such transaction; (iii) the rights, preferences and privileges of such holders
in the Surviving Partnership, including the holders of Performance Units issued
or to be issued, are at least as favorable as those in effect immediately prior
to the consummation of such transaction and as those applicable to any other
limited partners or non-managing members of the Surviving Partnership (except,
as to Performance Units, for such differences with Partnership Units regarding
liquidation, Redemption and exchange as are set forth herein); and (iv) such
rights of the Limited Partners, including the holders of Performance Units
issued or to be issued, include at least one of the following: (a) the right to
redeem their interests in the Surviving Partnership for the consideration
available to such persons pursuant to Section 11.2.B; or (b) the right to redeem
their Partnership Units for cash on terms equivalent to those in effect with
respect to their
58
Partnership Units immediately prior to the consummation of such transaction, or,
if the ultimate controlling person of the Surviving Partnership has publicly
traded common equity securities, such common equity securities, with an exchange
ratio based on the determination of relative fair market value of such
securities and the REIT Shares.
D. In connection with any transaction permitted by Section
11.2.B or 11.2.C the determination of relative fair market values and rights,
preferences and privileges of the Limited Partners shall be reasonably
determined by the General Partner's Board of Directors as of the time of the
Termination Transaction and, to the extent applicable, the values shall be no
less favorable to the holders of Partnership Units than the relative values
reflected in the terms of the Termination Transaction.
E. In the event of a Termination Transaction, the arrangements
with respect to Performance Units and Performance Shares will be equitably
adjusted to reflect the terms of the transaction, including, to the extent that
the REIT Shares are exchanged for consideration other than publicly traded
common equity, the transfer or release of remaining Performance Shares pursuant
to the Escrow Agreements, and resulting issuance of any Performance Units as set
forth in Section 4.3.F.
Section 11.3 Limited Partners' Rights to Transfer
A. Any Limited Partner may, at any time without the consent of
the General Partner, (i) transfer all or any portion of its Partnership Interest
to the General Partner, (ii) transfer all or any portion of its Partnership
Interest to an Affiliate controlled thereby or to an Immediate Family member,
subject to the provisions of Section 11.6, (iii) transfer all or any portion of
its Partnership Interest to a trust for the benefit of a charitable beneficiary
or to a charitable foundation, subject to the provisions of Section 11.6 and
(iv) subject to the provisions of Section 11.6, (a) pledge (a "Pledge") all or
any portion of its Partnership Interest to a lending institution, which is not
an Affiliate of such Limited Partner, as collateral or security for a bona fide
loan or other extension of credit, or (b) transfer such pledged Partnership
Interest to such lending institution in connection with the exercise of remedies
under such loan or extension of credit. In addition, each Limited Partner or
Assignee (resulting from a transfer made pursuant to clauses (i)-(iv) of the
preceding sentence) shall have the right to transfer all or any portion of its
Partnership Interest, subject to the provisions of Section 11.6 and the
satisfaction of each of the following conditions:
(a) General Partner Right of First Refusal. The
transferring Partner shall give written notice of the
proposed transfer to the General Partner, which notice
shall state (x) the identity of the proposed transferee
and (y) the amount and type of consideration proposed
to be received for the transferred Partnership Units.
The General Partner shall have ten (10) days upon which
to give the transferring Partner notice of its election
to acquire the Partnership Units on the proposed terms.
If it so elects, it shall purchase the Partnership
Units on such terms within ten (10) days after giving
notice of such election. If it does not so elect, the
transferring Partner may transfer such Partnership
Units to a third party, on economic terms no more
favorable to the transferee than the proposed terms,
subject to the other conditions of this Section 11.3.
59
(b) Qualified Transferee. Any transfer of a Partnership
Interest shall be made only to Qualified Transferees.
It is a condition to any transfer otherwise permitted
hereunder that the transferee assumes by operation of law or express agreement
all of the obligations of the transferor Limited Partner under this Agreement
with respect to such transferred Partnership Interest and no such transfer
(other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor Partner are assumed by a successor
corporation by operation of law) shall relieve the transferor Partner of its
obligations under this Agreement without the approval of the General Partner, in
its reasonable discretion. Notwithstanding the foregoing, any transferee of any
transferred Partnership Interest shall be subject to any and all ownership
limitations contained in the Charter, which may limit or restrict such
transferee's ability to exercise its exchange rights set forth in Section 17.8,
18.8 and 19.8 and to the representations set forth in Section 3.4.D. Any
transferee, whether or not admitted as a Substituted Limited Partner, shall take
subject to the obligations of the transferor hereunder. Unless admitted as a
Substituted Limited Partner, no transferee, whether by a voluntary transfer, by
operation of law or otherwise, shall have any rights hereunder, other than the
rights of an Assignee as provided in Section 11.5.
B. If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator, or receiver
of such Limited Partner's estate shall have all the rights of a Limited Partner,
but not more rights than those enjoyed by other Limited Partners, for the
purpose of settling or managing the estate, and such power as the Incapacitated
Limited Partner possessed to transfer all or any part of his or its interest in
the Partnership. The Incapacity of a Limited Partner, in and of itself, shall
not dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer otherwise
permitted under this Section 11.3 by a Limited Partner of his or her Partnership
Units if, in the opinion of legal counsel to the Partnership, such transfer
would require the filing of a registration statement under the Securities Act by
the Partnership or would otherwise violate any Federal or state securities laws
or regulations applicable to the Partnership or the Partnership Unit.
D. No transfer by a Limited Partner of his or her Partnership
Units (including any Redemption or exchange for REIT Shares pursuant to Section
8.6, the redemption or exchange rights set forth in Sections 17.5 and 17.8,
Sections 18.5 and 18.8 or Sections 19.5 and 19.8, or any other acquisition of
Common Units, Series B Preferred Partnership Units, Series J Preferred
Partnership Units and Series K Preferred Partnership Units by the General
Partner or the Partnership) may be made to any person if (i) in the opinion of
legal counsel for the Partnership, it could result in the Partnership being
treated as an association taxable as a corporation or (ii) absent the consent of
the General Partner, which may be given or withheld in its sole and absolute
discretion, such transfer could be treated as effectuated through an
"established securities market" or a "secondary market (or the substantial
equivalent thereof)" within the meaning of Section 7704 of the Code.
E. No transfer of any Partnership Units may be made to a
lender to the Partnership or any Person who is related (within the meaning of
Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose
loan constitutes a Nonrecourse Liability, without the consent of the General
Partner, in its sole and absolute discretion; provided, that as a condition to
such consent, the lender will be required to enter into an arrangement with the
60
Partnership and the General Partner to redeem or exchange for the REIT Shares
Amount, or the specified amount of Series B Preferred Shares, Series J Preferred
Shares and Series K Preferred Shares, as the case may be, any Partnership Units
in which a security interest is held simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.
F. No Limited Partner may withdraw from the Partnership except
as a result of transfer, Redemption or exchange of Partnership Units pursuant
hereto.
G. No PLP (or any transferee described below) shall be
entitled to transfer any Performance Units prior to the second anniversary of
their issuance, without the consent of the General Partner, which may be given
or withheld in its sole discretion; provided, however, no such consent shall be
required under this Section 11.3.G (but subject to the other limitations of this
Article 11) for a transfer of all or a portion of such Performance Units to an
Affiliate, to Immediate Family Members, to a trust described in Section
11.3.A(iii), pursuant to a Pledge, or a transfer of such pledged units to such
lending institution in connection with the exercise of remedies under such loan
or extension of credit.
Section 11.4 Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a
transferee as a Limited Partner in his or her place (including any transferee
permitted by Section 11.3 above). The General Partner shall, however, have the
right to consent to the admission of a permitted transferee of the interest of a
Limited Partner, as a Substituted Limited Partner, pursuant to this Section
11.4, which consent may be given or withheld by the General Partner in its sole
and absolute discretion. The General Partner's failure or refusal to permit a
transferee of any such interests to become a Substituted Limited Partner shall
not give rise to any cause of action against the Partnership or any Partner.
B. A transferee who has been admitted as a Substituted Limited
Partner in accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner
under this Agreement. The admission of any transferee as a Substituted Limited
Partner shall be subject to the transferee executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
(including, without limitation, the provisions of Section 2.4 and such other
documents or instruments as may be required to effect the admission, each in
form and substance satisfactory to the General Partner) and the acknowledgment
by such transferee that each of the representations and warranties set forth in
Section 3.4 are true and correct with respect to such transferee as of the date
of the transfer of the Partnership Interest to such transferee and will continue
to be true to the extent required by such representations and warranties.
C. Upon the admission of a Substituted Limited Partner, the
General Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units, and Percentage Interest of such Substituted Limited Partner
and to eliminate or adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Limited Partner.
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Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion,
does not consent to the admission of any permitted transferee under Section 11.3
as a Substituted Limited Partner, as described in Section 11.4, such transferee
shall be considered an Assignee for purposes of this Agreement. An Assignee
shall be entitled to all the rights of an assignee of a limited partnership
interest under the Act, including the right to receive distributions from the
Partnership and the share of Net Income, Net Losses, gain and loss attributable
to the Partnership Units assigned to such transferee, the rights to transfer the
Partnership Units provided in this Article 11, the right of Redemption provided
in Section 8.6, the right of exchange for Series B Preferred Shares set forth in
Section 17.8, the right of exchange for Series J Preferred Shares set forth in
Section 18.8 and the right of exchange for Series K Preferred Shares set forth
in Section 19.8, but shall not be deemed to be a holder of Partnership Units for
any other purpose under this Agreement, and shall not be entitled to effect a
Consent with respect to such Partnership Units on any matter presented to the
Limited Partners for approval (such Consent remaining with the transferor
Limited Partner). In the event any such transferee desires to make a further
assignment of any such Partnership Units, such transferee shall be subject to
all the provisions of this Article 11 to the same extent and in the same manner
as any Limited Partner desiring to make an assignment of Partnership Units.
Notwithstanding anything contained in this Agreement to the contrary, as a
condition to becoming an Assignee, any prospective Assignee must first execute
and deliver to the Partnership an acknowledgment that each of the
representations and warranties set forth in Section 3.4 hereof are true and
correct with respect to such prospective Assignee as of the date of the
prospective assignment of the Partnership Interest to such prospective Assignee
and will continue to be true to the extent required by such representations or
warranties.
Section 11.6 General Provisions
A. No Limited Partner may withdraw from the Partnership other
than (i) as a result of a permitted transfer of all of such Limited Partner's
Partnership Units in accordance with this Article 11 and the transferee(s) of
such Units being admitted to the Partnership as a Substituted Limited Partner(s)
or (ii) pursuant to the exercise of its right of Redemption of all of such
Limited Partner's Partnership Units under Section 8.6, its right of exchange of
all of such Limited Partner's Series B Preferred Units under Section 17.8, its
right of exchange of all of such Limited Partner's Series J Preferred Units
under Section 18.8 or its right of exchange of all of such Limited Partner's
Series K Preferred Units under Section 19.8, or upon the redemption of all of
such Limited Partner's Series B Preferred Units pursuant to Section 17.5, the
redemption of all of such Limited Partner's Series J Preferred Units pursuant to
Section 18.5 or the redemption of all of such Limited Partner's Series K
Preferred Units pursuant to Section 19.5; provided that after such transfer,
exchange or redemption such Limited Partner owns no Partnership Units.
B. Any Limited Partner who shall assign all of such Limited
Partner's Partnership Units (i) in a transfer permitted pursuant to this Article
11 where such transferee was admitted as a Substituted Limited Partner, (ii)
pursuant to the exercise of (1) its rights of Redemption of all of such Limited
Partner's Partnership Units under Section 8.6, (2) its right of exchange of all
of such Limited Partner's Series B Preferred Units under Section 17.8, (3) its
right of exchange of all of such Limited Partner's Series J Preferred Units
under Section 18.8 or (4) its right of exchange of all of such Limited Partner's
Series K Preferred Units under Section 19.8, or (iii) upon the redemption of all
of such Limited Partner's Series B Preferred Units pursuant to Section 17.5, the
redemption of all of such Limited Partner's Series J Preferred Units
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pursuant to Section 18.5 or the redemption of all of such Limited Partner's
Series K Preferred Units pursuant to Section 19.5 shall cease to be a Limited
Partner; provided that after such transfer, exchange or redemption such Limited
Partner owns no Partnership Units .
C. Transfers pursuant to this Article 11 may only be made
effective on the last day of the month set forth on the written instrument of
transfer, unless the General Partner otherwise agrees.
D. If any Partnership Interest is transferred, assigned or
redeemed during any quarterly segment of the Partnership's fiscal year in
compliance with the provisions of this Article 11 or transferred or redeemed
pursuant to Sections 8.6, 17.5, 18.5 or 19.5, on any day other than the first
day of a Partnership Year, then Net Income, Net Losses, each item thereof and
all other items attributable to such Partnership Interest for such fiscal year
shall be divided and allocated between the transferor Partner and the transferee
Partner by taking into account their varying interests during the fiscal year in
accordance with Section 706(d) of the Code, using the interim closing of the
books method. Except as otherwise required by Section 706(d) of the Code or as
otherwise specified in this Agreement or as otherwise determined by the General
Partner (to the extent consistent with Section 706(d) of the Code), solely for
purposes of making such allocations, each of such items for the calendar month
in which the transfer, assignment or redemption occurs shall be allocated among
all the Partners and Assignees in a manner determined by the General Partner in
its sole discretion.
E. In addition to any other restrictions on transfer herein
contained, including without limitation the provisions of this Article 11 and
Section 2.6, in no event may any transfer or assignment of a Partnership
Interest by any Partner (including by way of a Redemption or exchange for Series
B Preferred Shares, Series J Preferred Shares or Series K Preferred Shares, or
any other acquisition of Common Units, Series B Preferred Units, Series J
Preferred Units or Series K Preferred Units by the Partnership or the General
Partner) be made (i) to any person or entity who lacks the legal right, power or
capacity to own a Partnership Interest; (ii) in violation of applicable law;
(iii) except with the consent of the General Partner, which may be given or
withheld in its sole and absolute discretion, of any component portion of a
Partnership Interest, such as the Capital Account, or rights to distributions,
separate and apart from all other components of a Partnership Interest; (iv)
except with the consent of the General Partner, which may be given or withheld
in its sole and absolute discretion, if in the opinion of legal counsel to the
Partnership such transfer would cause a termination of the Partnership for
Federal or state income tax purposes (except as a result of the Redemption or
exchange for REIT Shares, and a Redemption or exchange for Preferred Shares or
cash pursuant to Sections 17.5, 17.8, 18.5, 18.8, 19.5 and 19.8, of all
Partnership Units held by all Limited Partners or pursuant to a Termination
Transaction expressly permitted under Section 11.2); (v) if in the opinion of
counsel to the Partnership such transfer would cause the Partnership to cease to
be classified as a partnership for Federal or state income tax purposes (except
as a result of the Redemption or exchange for REIT Shares and a Redemption or
exchange for Preferred Shares pursuant to Sections 17.5, 17.8, 18.5, 18.8, 19.5
and 19.8 of all Partnership Units held by all Limited Partners); (vi) if such
transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA, a "party-in-interest" (as defined in
Section 3(14) of ERISA) or a "disqualified person" (as defined in Section
4975(c) of the Code); (vii) if such transfer would, in the opinion of counsel to
the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations
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Section 2510.2-101; (viii) if such transfer requires the registration of such
Partnership Interest or requires the registration of the exchange of such
Partnership Interests for any capital stock pursuant to any applicable Federal
or state securities laws; (ix) except with the consent of the General Partner,
which may be given or withheld in its sole and absolute discretion, if such
transfer is effectuated through an "established securities market" or a
"secondary market" (or the substantial equivalent thereof) within the meaning of
Section 7704 of the Code or such transfer causes the Partnership to become a
"Publicly Traded Partnership," as such term is defined in Sections 469(k)(2) or
7704(b) of the Code; (x) if such transfer subjects the Partnership to be
regulated under the Investment Company Act of 1940, the Investment Advisors Act
of 1940 or the Employee Retirement Income Security Act of 1974, each as amended;
(xi) if the transferee or assignee of such Partnership Interest is unable to
make the representations set forth in Section 3.4.D or such transfer could
otherwise adversely affect the ability of the General Partner to remain
qualified as a REIT; or (xii) if in the opinion of legal counsel for the
Partnership such transfer would adversely affect the ability of the General
Partner to continue to qualify as a REIT or, except with the consent of the
General Partner, which may be given or withheld in its sole and absolute
discretion, subject the General Partner to any additional taxes under Section
857 or Section 4981 of the Code.
F. The General Partner shall monitor the transfers of
interests in the Partnership (including any acquisition of Common Units, Series
B Preferred Partnership Units, Series J Preferred Units or Series K Preferred
Units by the Partnership or the General Partner) to determine (i) if such
interests are being traded on an "established securities market" or a "secondary
market (or the substantial equivalent thereof)" within the meaning of Section
7704 of the Code and (ii) whether such transfers of interests would result in
the Partnership being unable to qualify for at least one of the "safe harbors"
set forth in Regulations Section 1.7704-1 (or such other applicable guidance
subsequently published by the IRS setting forth safe harbors under which
interests will not be treated as "readily tradable on a secondary market (or the
substantial equivalent thereof)" within the meaning of Section 7704 of the Code)
(the "Safe Harbors"). The General Partner shall have authority (but shall not be
required to) to take any steps it determines are necessary or appropriate in its
sole and absolute discretion to prevent any trading of interests which could
cause the Partnership to become a "publicly traded partnership," or any
recognition by the Partnership of such transfers, or to insure that at least one
of the Safe Harbors is met.
ARTICLE 12.
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner
A successor to all of the General Partner's General Partner
Interest pursuant to Section 11.2 who is proposed to be admitted as a successor
General Partner shall be admitted to the Partnership as the General Partner,
effective upon such transfer. Any such transferee shall carry on the business of
the Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission. In the case of such admission on any day other than the first day of
a Partnership Year, all items attributable to the General Partner Interest for
such Partnership Year shall be allocated between the transferring General
Partner and such successor as provided in Article 11.
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Section 12.2 Admission of Additional Limited Partners
A. A Person who makes a Capital Contribution to the
Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 2.4 and (ii) such other
documents or instruments as may be required in the discretion of the General
Partner in order to effect such Person's admission as an Additional Limited
Partner.
B. Notwithstanding anything to the contrary in this Section
12.2, no Person shall be admitted as an Additional Limited Partner without the
consent of the General Partner, which consent may be given or withheld in the
General Partner's sole and absolute discretion. The admission of any Person as
an Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the receipt of the Capital Contribution in respect of such Limited
Partner, the documents set forth in this Section 12.2.A and the consent of the
General Partner to such admission. If any Additional Limited Partner is admitted
to the Partnership on any day other than the first day of a Partnership Year,
then Net Income, Net Losses, each item thereof and all other items allocable
among Partners and Assignees for such Partnership Year shall be allocated among
such Limited Partner and all other Partners and Assignees by taking into account
their varying interests during the Partnership Year in accordance with Section
706(d) of the Code, using the interim closing of the books method. Solely for
purposes of making such allocations, each of such items for the calendar month
in which an admission of an Additional Limited Partner occurs shall be allocated
among all the Partners and Assignees, including such Additional Limited Partner,
in a manner determined by the General Partner in its sole discretion.
Section 12.3 Amendment of Agreement and Certificate of Limited
Partnership
For the admission to the Partnership of any Partner, the
General Partner shall take all steps necessary and appropriate under the Act to
amend the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4.
ARTICLE 13.
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution
The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by the admission
of a successor General Partner in accordance with the terms of this Agreement.
Upon the withdrawal of the General Partner, any successor General Partner
(selected as described in Section 13.1.B below) shall continue the business of
the Partnership. The Partnership shall dissolve, and its affairs shall be wound
up, upon the first to occur of any of the following ("Liquidating Events"):
65
A. the expiration of its term as provided in Section 2.5;
B. an event of withdrawal of the General Partner, as defined
in the Act, unless, within ninety (90) days after the withdrawal, all of the
remaining Partners agree in writing, in their sole and absolute discretion, to
continue the business of the Partnership and to the appointment, effective as of
the date of withdrawal, of a substitute General Partner;
C. prior to December 31, 2096, an election to dissolve the
Partnership made by the General Partner with the consent of Limited Partners who
hold ninety percent (90%) of the outstanding Units held by Limited Partners;
D. subject to the provisions of Section 7.3.C, an election to
dissolve the Partnership made by the General Partner in its sole and absolute
discretion;
E. entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act;
F. the sale or disposition of all or substantially all of the
assets and properties of the Partnership;
G. final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that the General Partner is bankrupt or insolvent,
or a final and non-appealable order for relief is entered by a court with
appropriate jurisdiction against the General Partner, in each case under any
Federal or state bankruptcy or insolvency laws as now or hereafter in effect,
unless prior to or at the time of the entry of such order or judgment a Majority
in Interest of the remaining Limited Partners Consent in writing to continue the
business of the Partnership and to the appointment, effective as of a date prior
to the date of such order or judgment, of a substitute General Partner; or
H. the Redemption or exchange for REIT Shares , Series B
Preferred Shares, Series J Preferred Shares or Series K Preferred Shares of all
Partnership Units (other than those of the General Partner) pursuant to this
Agreement.
Section 13.2 Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its creditors and
Partners. No Partner shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Partnership's business
and affairs. The General Partner (or, in the event there is no remaining General
Partner, any Person elected by a Majority in Interest of the Limited Partners
(the "Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and assets and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock of the General Partner) shall be applied and distributed
in the following order:
(i) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors
other than the Partners;
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(ii) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the General
Partner;
(iii) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the other
Partners; and
(iv) The balance, if any, to the Partners in accordance
with their Capital Account balances determined after
giving effect to all contributions and distributions
for all periods, and after taking into account all
Capital Account adjustments for the Partnership
taxable year during which the liquidation occurs
(other than those made as a result of the liquidating
distribution set forth in this Section 13.2.A(iv)).
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13 other than reimbursement of its
expenses as provided in Section 7.4.
B. Notwithstanding the provisions of Section 13.2.A which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A, undivided interests in such
Partnership assets as the Liquidator deems not suitable for liquidation. Any
such distributions in kind shall be made only if, in the good faith judgment of
the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
C. The Partnership shall be terminated when any notes received
in connection with any such sale or disposition referenced in Section 13.1.E
above, or in connection with the liquidation of the Partnership have been paid
and all of the cash or property available for application and distribution under
this Agreement have been applied and distributed in accordance with this
Agreement.
Section 13.3 Compliance with Timing Requirements of
Regulations
In the event the Partnership is "liquidated" within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
pursuant to this Article 13 to the General Partner and Limited Partners who have
positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in his or her
Capital Account (after giving effect to all contributions, distributions and
allocations for the taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and
such deficit shall not be considered a debt owed to the Partnership or to any
other
67
Person for any purpose whatsoever, except to the extent otherwise agreed to by
such Partner and the General Partner. In the discretion of the Liquidator or the
General Partner, a pro rata portion of the distributions that would otherwise be
made to the General Partner and Limited Partners pursuant to this Article 13 may
be:
A. distributed to a trust established for the benefit of the
General Partner and Limited Partners for the purposes of liquidating Partnership
assets, collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership. The assets of any
such trust shall be distributed to the General Partner and Limited Partners from
time to time, in the reasonable discretion of the Liquidator or the General
Partner, in the same proportions and the amount distributed to such trust by the
Partnership would otherwise have been distributed to the General Partner and
Limited Partners pursuant to this Agreement; or
B. withheld to establish any reserves deemed necessary or
appropriate for any contingent or unforeseen liabilities or obligations of the
Partnership; and to reflect the unrealized portion of any installment
obligations owed to the Partnership; provided that, such withheld amounts shall
be distributed to the General Partner and Limited Partners as soon as
practicable.
Section 13.4 Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the
event the Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, the Partnership shall be deemed to have distributed the Partnership
property in kind to the General Partner and Limited Partners, who shall be
deemed to have assumed and taken such property subject to all Partnership
liabilities, all in accordance with their respective Capital Accounts.
Immediately thereafter, the General Partner and Limited Partners shall be deemed
to have recontributed the Partnership property in kind to the Partnership, which
shall be deemed to have assumed and taken such property subject to all such
liabilities.
Section 13.5 Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited
Partner shall look solely to the assets of the Partnership for the return of his
Capital Contribution and shall have no right or power to demand or receive
property from the General Partner. Except as expressly set forth herein with
respect to the rights, priorities and preferences of the Preferred Limited
Partners holding any series of Preferred Units, no Limited Partner shall have
priority over any other Limited Partner as to the return of his Capital
Contributions, distributions or allocations.
Section 13.6 Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs
that would, but for provisions of Section 13.1, result in a dissolution of the
Partnership, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Partners and to all other parties
with whom the Partnership regularly conducts business (as determined in the
discretion of the General Partner) and shall publish notice thereof in a
newspaper of general
68
circulation in each place in which the Partnership regularly conducts business
(as determined in the discretion of the General Partner).
Section 13.7 Cancellation of Certificate of Limited
Partnership
Upon the completion of the liquidation of the Partnership cash
and property as provided in Section 13.2, the Partnership shall be terminated
and the Certificate and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the State of
Delaware shall be
canceled and such other actions as may be necessary to terminate the Partnership
shall be taken.
Section 13.8 Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up
of the business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2, in order to minimize any losses otherwise attendant
upon such winding-up, and the provisions of this Agreement shall remain in
effect between the Partners during the period of liquidation.
Section 13.9 Waiver of Partition
Each Partner hereby waives any right to partition of the
Partnership property.
ARTICLE 14.
AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS
Section 14.1 Amendments
A. The actions requiring consent or approval of the Partners
or of the Limited Partners pursuant to this Agreement, including Section 7.3, or
otherwise pursuant to applicable law, are subject to the procedures in this
Article 14.
B. Amendments to this Agreement requiring the consent or
approval of Limited Partners may be proposed by the General Partner or by
Limited Partners holding twenty-five percent (25%) or more of the Partnership
Interests held by Limited Partners. Following such proposal, the General Partner
shall submit any proposed amendment to the Partners or of the Limited Partners,
as applicable. The General Partner shall seek the written consent or approval of
the Partners or of the Limited Partners on the proposed amendment or shall call
a meeting to vote thereon and to transact any other business that it may deem
appropriate. For purposes of obtaining a written consent, the General Partner
may require a response within a reasonable specified time, but not less than
fifteen (15) days, and failure to respond in such time period shall constitute a
consent which is consistent with the General Partner's recommendation (if so
recommended); provided that, an action shall become effective at such time as
requisite consents are received even if prior to such specified time.
Section 14.2 Action by the Partners
A. Meetings of the Partners may be called by the General
Partner and shall be called upon the receipt by the General Partner of a written
request by Limited Partners holding twenty-five percent (25%) or more of the
Partnership Interests held by the Limited Partners. The
69
call shall state the nature of the business to be transacted. Notice of any such
meeting shall be given to all Partners not less than seven days nor more than
thirty (30) days prior to the date of such meeting. Partners may vote in person
or by proxy at such meeting. Whenever the vote of the Percentage Interests of
the Partners, or the Consent of the Partners or Consent of the Limited Partners
is permitted or required under this Agreement, such vote or Consent may be given
at a meeting of Partners or may be given in accordance with the procedure
prescribed in Section 14.1.
B. Any action required or permitted to be taken at a meeting
of the Partners may be taken without a meeting if a written consent setting
forth the action so taken is signed by the Percentage Interests as is expressly
required by this Agreement for the action in question. Such consent may be in
one instrument or in several instruments, and shall have the same force and
effect as a vote of the Percentage Interests of the Partners (expressly required
by this Agreement). Such consent shall be filed with the General Partner. An
action so taken shall be deemed to have been taken at a meeting held on the
effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to
act for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it.
D. Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate.
E. On matters on which Limited Partners are entitled to vote,
each Limited Partner shall have a vote equal to the number of Partnership Units
held.
ARTICLE 15.
GENERAL PROVISIONS
Section 15.1 Addresses and Notice
Any notice, demand, request or report required or permitted to
be given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by certified first class United States mail, nationally recognized overnight
delivery service or facsimile transmission to the Partner or Assignee at the
address set forth in Exhibit A or such other address as the Partners shall
notify the General Partner in writing.
Section 15.2 Titles and Captions
All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and in
no way define, limit, extend or describe the scope or intent of any provisions
hereof. Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
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Section 15.3 Pronouns and Plurals
Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.
Section 15.4 Further Action
The parties shall execute and deliver all documents, provide
all information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect
This Agreement shall be binding upon and inure to the benefit
of the parties hereto including the Persons set forth in Exhibit G, and their
heirs, executors, administrators, successors, legal representatives and
permitted assigns.
Section 15.6 Creditors
Other than as expressly set forth herein with respect to
Indemnitees, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor of the Partnership.
Section 15.7 Waiver
No failure or delay by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon any breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
Section 15.8 Counterparts
This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
Section 15.9 Applicable Law
This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law.
Section 15.10 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
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Section 15.11 Limitation to Preserve REIT Status
To the extent that any amount paid or credited to the General
Partner or its officers, directors, employees or agents pursuant to Section 7.4
or 7.7 would constitute gross income to the General Partner for purposes of
Sections 856(c)(2) or 856(c)(3) of the Code (a "General Partner Payment") then,
notwithstanding any other provision of this Agreement, the amount of such
General Partner Payments for any fiscal year shall not exceed the lesser of:
(i) an amount equal to the excess, if any, of (a) 4.17%
of the General Partner's total gross income (but not
including the amount of any General Partner Payments)
for the fiscal year which is described in subsections
(A) through (H) of Section 856(c)(2) of the Code over
(b) the amount of gross income (within the meaning of
Section 856(c)(2) of the Code) derived by the General
Partner from sources other than those described in
subsections (A) through (H) of Section 856(c)(2) of
the Code (but not including the amount of any General
Partner Payments); or
(ii) an amount equal to the excess, if any, of (a) 25% of
the General Partner's total gross income (but not
including the amount of any General Partner Payments)
for the fiscal year which is described in subsections
(A) through (I) of Section 856(c)(3) of the Code over
(b) the amount of gross income (within the meaning of
Section 856(c)(3) of the Code) derived by the General
Partner from sources other than those described in
subsections (A) through (I) of Section 856(c)(3) of
the Code (but not including the amount of any General
Partner Payments);
provided, however, that General Partner Payments in excess of the amounts set
forth in subparagraphs (i) and (ii) above may be made if the General Partner, as
a condition precedent, obtains an opinion of tax counsel that the receipt of
such excess amounts would not adversely affect the General Partner's ability to
qualify as a REIT. To the extent General Partner Payments may not be made in a
year due to the foregoing limitations, such General Partner Payments shall carry
over and be treated as arising in the following year; provided, however, that
such amounts shall not carry over for more than five years, and if not paid
within such five year period, shall expire; provided, further, that (a) as
General Partner Payments are made, such payments shall be applied first to carry
over amounts outstanding, if any and (b) with respect to carry over amounts for
more than one Partnership Year, such payments shall be applied to the earliest
Partnership Year first.
Section 15.12 Entire Agreement
This Agreement (together with the agreements listed on Exhibit
I hereto as to rights and obligations in respect of the Units held by the
Limited Partners who are parties thereto, or their permitted transferees)
contains the entire understanding and agreement among the Partners with respect
to the subject matter hereof and supersedes any other prior written or oral
understandings or agreements among them with respect thereto.
Section 15.13 No Rights as Stockholders
Nothing contained in this Agreement shall be construed as
conferring upon the holders of Partnership Units any rights whatsoever as
stockholders of the General Partner,
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including without limitation any right to receive dividends or other
distributions made to stockholders of the General Partner or to vote or to
consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the General Partner or any other
matter.
ARTICLE 16.
SERIES A PREFERRED UNITS
Section 16.1 Designation and Number
A series of Partnership Units in the Partnership designated as
the 8 1/2% Series A Cumulative Redeemable Preferred Units (the "Series A
Preferred Units") is hereby established. The number of Series A Preferred Units
shall be 4,600,000.
Section 16.2 Ranking
The Series A Preferred Units shall, with respect to
distribution rights and rights upon voluntary or involuntary liquidation,
winding up or dissolution of the Partnership, rank (i) senior to the Common
Units and to all Partnership Units the terms of which provide that such
Partnership Units shall rank junior to the Series A Preferred Units; (ii) on a
parity with the Series B Preferred Units, the Series J Preferred Units, the
Series K Preferred Units and all other Parity Preferred Units; and (iii) junior
to all Partnership Units which rank senior to the Series A Preferred Units.
Section 16.3 Distributions
A. Payments of Distribution. Subject to the rights of holders
of Parity Preferred Units (including Series B Preferred Units, Series J
Preferred Units and Series K Preferred Units) as to the payment of
distributions, pursuant to Section 5.1, Section 17.3.A, Section 18.3.A and
Section 19.3.A hereof, the General Partner, as holder of the Series A Preferred
Units, will 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 in an amount equal to the Series A Priority
Return. Such distributions will be payable (A) quarterly in arrears, on the 15th
day of January, April, July and October of each year and (B) in the event of a
redemption of Series A Preferred Units, on the redemption date (each a "Series A
Preferred Unit Distribution Payment Date"), commencing on the first of such
payment dates to occur following their original date of issuance. If any date on
which distributions are to be made on the Series A Preferred Units is not a
Business Day, then payment of the distribution to be made on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
B. No Distributions in Contravention of Agreements. No
distribution on the Series A Preferred Units shall be authorized by the General
Partner or made or set apart for payment by the Partnership at such time as the
terms and provisions of any agreement of the Partnership or the General Partner,
including any agreement relating to indebtedness, prohibits such declaration,
73
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.
C. Priority as to Distributions. (i) Except to the extent set
forth in Section 16.3.C(ii), so long as any Series A Preferred Units are
outstanding, no distribution of cash or other property shall be authorized,
declared, paid or set apart for payment on or with respect to any class or
series of Partnership Interest represented by Junior Units, nor shall any Junior
Units or Parity Preferred Units (including the Series B Preferred Units, the
Series J Preferred Units and the Series K Preferred Units) be redeemed,
purchased or otherwise acquired for any consideration (or any monies be paid to
or made available for a sinking fund for the redemption of any such Junior Units
or Parity Preferred Units) by the Partnership (except by conversion into or
exchange for other Junior Units or Parity Preferred Units) unless, in each case,
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 A Preferred Units for all past distribution periods
and the current distribution period. The foregoing sentence will not prohibit
(a) distributions payable solely in Junior Units, (b) the exchange of Junior
Units or Parity Preferred Units (including the Series B Preferred Units, Series
J Preferred Units and Series K Preferred Units) into Partnership Interests of
the Partnership ranking junior to the Series A Preferred Units as to
distributions, or (c) the redemption of Partnership Interests corresponding to
Series A Preferred Shares, Parity Preferred Stock (including Series B Preferred
Shares, Series J Preferred Shares and Series K Preferred Shares) with respect to
distributions or Junior Stock to be purchased by the General Partner pursuant to
the Charter 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 stock purchase pursuant to the Charter.
(ii) So long as distributions have not been paid in full (or a
sum sufficient for such full payment is not so set apart) upon the Series A
Preferred Units and any other Parity Preferred Units (including the Series B
Preferred Units, Series J Preferred Units and Series K Preferred Units), all
distributions authorized and declared on the Series A Preferred Units and all
classes or series of outstanding Parity Preferred Units (including the Series B
Preferred Units, Series J Preferred Units and Series K Preferred Units) shall be
authorized and declared pro rata so that the amount of distributions authorized
and declared per Series A Preferred Unit and such other classes or series of
Parity Preferred Units shall in all cases bear to each other the same ratio that
accrued distributions per Series A Preferred Unit and such other classes or
series of Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such class or
series of Parity Preferred Units do not have cumulative distribution rights)
bear to each other. No interest, or sum of money in lieu of interest, shall be
payable in respect of any distributions or payments on Series A Preferred Units
which may be in arrears.
D. No Further Rights. The General Partner, as holder of the
Series A Preferred Units, shall not be entitled to any distributions, whether
payable in cash, other property or otherwise, in excess of the full cumulative
distributions described herein. Any distribution payment made on the Series A
Preferred Units shall first be credited against the earliest accrued but unpaid
distribution due with respect to such Series A Preferred Units which remain
payable.
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Section 16.4 Liquidation Proceeds
A. Upon voluntary or involuntary liquidation, dissolution or
winding-up of the Partnership, distributions on the Series A Preferred Units
shall be made in accordance with Article 13 of this Agreement.
B. Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by the General Partner
pursuant to Section 13.6 hereof.
C. No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, the General Partner, as
holder of the Series A Preferred Units, will have no right or claim to any of
the remaining assets of the Partnership.
D. Consolidation, Merger or Certain Other Transactions. None
of a consolidation or merger of the Partnership with or into another entity, a
merger of another entity with or into the Partnership, or a sale, lease,
transfer or conveyance of all or substantially all of the Partnership's property
or business shall be considered a liquidation, dissolution or winding up of the
Partnership.
Section 16.5 Redemption
A. Redemption. The Series A Preferred Units may not be
redeemed prior to July 27, 2003. If, on or after such date, the General Partner
elects to redeem any of the Series A Preferred Shares, the Partnership shall, on
the date set for redemption of such Series A Preferred Shares, redeem the number
of Series A Preferred Units equal to the number of Series A Preferred Shares for
which the General Partner has given notice of redemption pursuant to Section 5
of Article Third of the Series A Articles Supplementary, at a redemption price,
payable in cash, equal to the product of (i) the number of Series A Preferred
Units being redeemed, and (ii) the sum of $25 and the Preferred Distribution
Shortfall per Series A Preferred Unit, if any.
B. Limitation on Redemption. The redemption price of the
Series A Preferred Units (other than the portion thereof consisting of
accumulated but unpaid distributions) is payable solely out of the sale proceeds
of capital stock of the General Partner, which will be contributed by the
General Partner to the Partnership as an additional capital contribution, or out
of the sale of limited partner interests in the Partnership and from no other
source. For purposes of the preceding sentence, "capital stock" means any equity
securities (including Common Stock and Preferred Stock (as such terms are
defined in the Charter)), depository shares, interests, participation 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.
C. Payment of Accumulated Distributions. Immediately prior to
any redemption of Series A Preferred Units, the Partnership shall pay, in cash,
any accumulated and unpaid distributions on the Series A Preferred Units to be
redeemed through the redemption date. Except as provided above, the Partnership
will make no payment or allowance for unpaid distributions, whether or not in
arrears, on Series A Preferred Units for which a notice of redemption has been
given.
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D. Procedures for Redemption. The following provisions set
forth the procedures for Redemption:
(i) Notice of redemption will be given by the General
Partner to the Partnership concurrently with the notice
of the General Partner sent to the holders of its
Series A Preferred Shares in connection with such
redemption. Such notice shall state: (A) the redemption
date; (B) the redemption price; (C) the number of
Series A Preferred Units to be redeemed; (D) the place
or places where the Series A Preferred Units are to be
surrendered for payment of the redemption price; and
(E) that distributions on the Series A Preferred Units
to be redeemed will cease to accumulate on such
redemption date. If less than all of the Series A
Preferred Units are to be redeemed, the notice shall
also specify the number of Series A Preferred Units to
be redeemed.
(ii) On or after the redemption date, the General Partner
shall present and surrender the certificates, if any,
representing the Series A Preferred Units to the
Partnership at the place designated in the notice of
redemption and thereupon the redemption price of such
Units (including all accumulated and unpaid
distributions up to the redemption date) shall be paid
to the General Partner and each surrendered Unit
certificate, if any, shall be canceled. If fewer than
all the Units represented by any such certificate
representing Series A Preferred Units are to be
redeemed, a new certificate shall be issued
representing the unredeemed shares.
(iii) From and after the redemption date (unless the
Partnership defaults in payment of the redemption
price), all distributions on the Series A Preferred
Units designated for redemption in such notice shall
cease to accumulate and all rights of the General
Partner, except the right to receive the redemption
price thereof (including all accumulated and unpaid
distributions up to the redemption date), shall cease
and terminate, and such Units shall not be deemed to be
outstanding for any purpose whatsoever. At its
election, the Partnership, prior to a redemption date,
may irrevocably deposit the redemption price (including
accumulated and unpaid distributions to the redemption
date) of the Series A Preferred Units so called for
redemption in trust for the General Partner with a bank
or trust company, in which case the redemption notice
to General Partner shall (A) state the date of such
deposit, (B) specify the office of such bank or trust
company as the place of payment of the redemption price
and (C) require the General Partner to surrender the
certificates, if any, representing such Series A
Preferred Units at such place on or about the date
fixed in such redemption notice (which may not be later
than the redemption date) against payment of the
redemption price (including all accumulated and unpaid
distributions to the redemption date). Any monies so
deposited which remain unclaimed by the General Partner
at the end of two years after the redemption date shall
be returned by such bank or trust company to the
Partnership.
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E. No Further Rights. Any Series A Preferred Units that shall
at any time have been redeemed shall, after such redemption, have the status of
authorized but unissued Preferred Units, without designation as to series until
such shares are once more designated as part of a particular series by the
General Partner.
Section 16.6 Voting Rights
A. The General Partner shall not have any voting or consent
rights in respect of its partnership interest represented by the Series A
Preferred Units.
Section 16.7 Transfer Restrictions
The Series A Preferred Units shall not be transferable.
Section 16.8 No Conversion Rights
The Series A Preferred Units shall not be convertible into any
other class or series of interest in the Partnership.
Section 16.9 No Sinking Fund
No sinking fund shall be established for the retirement or
redemption of Series A Preferred Units.
ARTICLE 17.
SERIES B PREFERRED UNITS
Section 17.1 Designation and Number
A series of Partnership Units in the Partnership designated as
the 8N% Series B Cumulative Redeemable Preferred Units (the "Series B
Preferred Units") is hereby established. The number of Series B Preferred Units
shall be 1,300,000.
Section 17.2 Ranking
The Series B Preferred Units shall, with respect to
distribution rights and rights upon voluntary or involuntary liquidation,
winding up or dissolution of the Partnership, rank (i) senior to the Common
Units and to all Partnership Units the terms of which provide that such
Partnership Units shall rank junior to the Series B Preferred Units; (ii) on a
parity with the Series A Preferred Units, the Series J Preferred Units, Series K
Preferred Units and all other Parity Preferred Units; and (iii) junior to all
Partnership Units which rank senior to the Series B Preferred Units.
Section 17.3 Distributions
A. Payment of Distributions. Subject to the rights of holders
of Parity Preferred Units (including the Series A Preferred Units, the Series J
Preferred Units and the Series K Preferred Units) as to the payment of
distributions, pursuant to Section 5.1, Section
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16.3.A, Section 18.3.A and Section 19.3.A hereof, holders of Series B Preferred
Units will 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 in an amount equal to the Series B Priority
Return. Such distributions will be payable (A) quarterly in arrears, on the 15th
day of January, April, July and October of each year and (B) in the event of (i)
an exchange of Series B Preferred Units into Series B Preferred Shares, or (ii)
a redemption of Series B Preferred Units, on the exchange date or redemption
date, as applicable (each a "Series B Preferred Unit Distribution Payment
Date"), commencing on the first of such payment dates to occur following their
original date of issuance. If any date on which distributions are to be made on
the Series B Preferred Units is not a Business Day, then payment of the
distribution to be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
Distributions on the Series B Preferred Units will be made to the holders of
record of the Series B Preferred Units on the relevant record dates, which will
be fifteen (15) days prior to the relevant Preferred Unit Distribution Payment
Date (the "Series B Preferred Unit Partnership Record Date").
B. Distributions Cumulative. Notwithstanding the foregoing,
distributions on the Series B Preferred Units will accrue whether or not the
terms and provisions of any agreement of the Partnership at any time prohibit
the current payment of distributions, whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment of
such of such distributions and whether or not such distributions are authorized.
Accrued but unpaid distributions on the Series B Preferred Units will accumulate
as of the Preferred Unit Distribution Payment Date on which they first become
payable.
C. Priority as to Distributors.
(i) So long as any Series B Preferred Units are outstanding,
no distribution of cash or other property shall be authorized, declared, paid or
set apart for payment on or with respect to any class or series of Partnership
Interest represented by Junior Units, nor shall any Junior Units or Parity
Preferred Units (including the Series A Preferred Units, the Series J Preferred
Units and the Series K Preferred Units) be redeemed, purchased or otherwise
acquired for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such Junior Units or Parity Preferred
Units) by the Partnership (except by conversion into or exchange for other
Junior Units or Parity Preferred Units) unless, in each case, 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 B Preferred Units and all classes and series of
outstanding Parity Preferred Units for all distribution periods. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the exchange of Junior Units or Parity Preferred Units (including the Series A
Preferred Units, the Series J Preferred Units and the Series K Preferred Units)
into Partnership Interests of the Partnership ranking junior to the Series B
Preferred Units as to distributions, or (c) the redemption of Partnership
Interests corresponding to Series B Preferred Shares, Parity Preferred Stock
(including the Series A Preferred Shares, the Series J Preferred Shares and the
Series K Preferred Shares) with respect to distributions or Junior Stock to be
purchased by the General Partner pursuant to the Charter to preserve the General
Partner's status as a real estate
78
investment trust, provided that such redemption shall be upon the same terms as
the corresponding stock purchase pursuant to the Charter.
(ii) So long as distributions have not been paid in full (or a
sum sufficient for such full payment is not so set apart) upon the Series B
Preferred Units and any other Parity Preferred Units (including the Series A
Preferred Units, the Series J Preferred Units and the Series K Preferred Units),
all distributions authorized and declared on the Series B Preferred Units and
all classes or series of outstanding Parity Preferred Units (including the
Series A Preferred Units, the Series J Preferred Units and the Series K
Preferred Units) shall be authorized and declared pro rata so that the amount of
distributions authorized and declared per Series B Preferred Unit and such other
classes or series of Parity Preferred Units shall in all cases bear to each
other the same ratio that accrued distributions per Series B Preferred Unit and
such other classes or series of Parity Preferred Units (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such class or series of Parity Preferred Units do not have cumulative
distribution rights) bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any distributions or payments on Series
B Preferred Units which may be in arrears.
(iii) Notwithstanding anything to the contrary set forth
herein, distributions on Partnership Interests held by either (a) the General
Partner or (b) any other holder of Partnership Interest in the Partnership, in
each case ranking junior to or on parity with the Series B Preferred Units may
be made, without preserving the priority of distributions described in Sections
17.3.C(i) and (ii), but only to the extent such distributions are required to
preserve the real estate investment trust status of the General Partner and in
the case of any holder other than the General Partner only to the extent
required by the Partnership Agreement.
D. No Further Rights. Holders of Series B Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
Section 17.4 Liquidation Proceeds
A. Distributions. Upon voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, distributions on the Series B
Preferred Units shall be made in accordance with Article 13 of this Agreement.
B. Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by the General Partner
pursuant to Section 13.6 hereof.
C. No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, Holders of Series B
Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
D. Consolidation, Merger or Certain Other Transactions. None
of a consolidation or merger of the Partnership with or into another entity, a
merger of another entity with or into the Partnership, or a sale, lease,
transfer or conveyance of all or substantially all of
79
the Partnership's property or business shall be considered a liquidation,
dissolution or winding up of the Partnership.
Section 17.5 Redemption
A. Redemption. The Series B Preferred Units may not be
redeemed prior to November 12, 2003. On or after such date, the Partnership
shall have the right to redeem the Series B Preferred Units, in whole or in
part, at any time or from time to time, upon not less than 30 nor more than 60
days' written notice, at a redemption price, payable in cash, equal to the
Capital Account balance of the holder of Series B Preferred Units (the
"Redemption Price"); provided, however, that no redemption pursuant to this
Section 17.5 will be permitted if the Redemption Price does not equal or exceed
the original Capital Contribution of such holder plus the cumulative Priority
Return to the redemption date to the extent not previously distributed. If fewer
than all of the outstanding Series B Preferred Units are to be redeemed, the
Series B Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
B. Limitation on Redemption. (i) The Redemption Price of the
Series B Preferred Units (other than the portion thereof consisting of
accumulated but unpaid distributions) is payable solely out of the sale proceeds
of capital stock of the General Partner, which will be contributed by the
General Partner to the Partnership as an additional capital contribution, or out
of the sale of limited partner interests in the Partnership and from no other
source. For purposes of the preceding sentence, "capital stock" means any equity
securities (including Common Stock and Preferred Stock (as such terms are
defined in the Charter)), depository shares, interests, participation 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.
(ii) The Partnership may not redeem fewer than all of the
outstanding Series B Preferred Units unless all accumulated and unpaid
distributions have been paid on all Series B Preferred Units for all quarterly
distribution periods terminating on or prior to the date of redemption.
C. Procedures for Redemption. (i) Notice of redemption will be
(i) faxed, and (ii) mailed by the Partnership, by certified mail, postage
prepaid, not less than 30 nor more than 60 days prior to the redemption date,
addressed to the respective holders of record of the Series B Preferred Units at
their respective addresses as they appear on the records of the Partnership. No
failure to give or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series B Preferred Units except as to the
holder to whom such notice was defective or not given. In addition to any
information required by law, each such notice shall state: (a) the redemption
date, (b) the Redemption Price, (c) the aggregate number of Series B Preferred
Units to be redeemed and if fewer than all of the outstanding Series B Preferred
Units are to be redeemed, the number of Series B Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series B
Preferred Units that the total number of Series B Preferred Units held by such
holder represents) of the aggregate number of Series B Preferred Units to be
redeemed, (d) the place or places where such Series B Preferred Units are to be
surrendered for payment of the Redemption Price, (e) that distributions on the
Series B
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Preferred Units to be redeemed will cease to accumulate on such redemption date
and (f) that payment of the Redemption Price will be made upon presentation and
surrender of such Series B Preferred Units.
(ii) If the Partnership gives a notice of redemption in
respect of Series B Preferred Units (which notice will be irrevocable) then, by
12:00 noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series B Preferred Units
being redeemed funds sufficient to pay the applicable Redemption Price and will
give irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series B Preferred Units upon surrender of the Series B Preferred
Units by such holders at the place designated in the notice of redemption. On
and after the date of redemption, distributions will cease to accumulate on the
Series B Preferred Units or portions thereof called for redemption, unless the
Partnership defaults in the payment thereof. If any date fixed for redemption of
Series B Preferred Units is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price is improperly withheld or refused and not paid
by the Partnership, distributions on such Series B Preferred Units will continue
to accumulate from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the applicable Redemption Price.
Section 17.6 Voting Rights
A. General. Holders of the Series B Preferred Units will not
have any voting rights or right to consent to any matter requiring the consent
or approval of the Limited Partners, except as set forth below and in Section
7.3.E.
B. Certain Voting Rights. So long as any Series B Preferred
Units remains outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series B Preferred Units
outstanding at the time (i) authorize or create, or increase the authorized or
issued amount of, any class or series of Partnership Interests ranking prior to
the Series B Preferred Units with respect to payment of distributions or rights
upon liquidation, dissolution or winding-up or reclassify any Partnership
Interests of the Partnership into any such Partnership Interest, or create,
authorize or issue any obligations or security convertible into or evidencing
the right to purchase any such Partnership Interests, (ii) authorize or create,
or increase the authorized or issued amount of any Parity Preferred Units or
reclassify any Partnership Interest of the Partnership into any such Partnership
Interest or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such Partnership Interests but only
to the extent such Parity Preferred Units are issued to an affiliate of the
Partnership, other than the General Partner to the extent the issuance of such
interests was to allow the General Partner to issue corresponding preferred
stock to persons who are not affiliates of the Partnership or (iii) either
consolidate, merge into or with, or convey, transfer or lease its assets
substantially as an entirety to, any corporation or other entity or amend, alter
or repeal the provisions of the Partnership Agreement (including, without
limitation, this Article 17), whether by merger, consolidation or otherwise, in
each case in a manner that would materially and
81
adversely affect the powers, special rights, preferences, privileges or voting
power of the Series B Preferred Units or the holders thereof; provided, however,
that with respect to the occurrence of any event set forth in (iii) above, so
long as (a) the Partnership is the surviving entity and the Series B Preferred
Units remain outstanding with the terms thereof unchanged, or (b) the resulting,
surviving or transferee entity is a partnership, limited liability company or
other pass-through entity organized under the laws of any state and substitutes
the Series B Preferred Units for other interests in such entity having
substantially the same terms and rights as the Series B Preferred Units,
including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series B Preferred Units; and provided
further, that any increase in the amount of Partnership Interests or the
creation or issuance of any other class or series of Partnership Interests
represented by Junior Units or Parity Preferred Units are not issued to an
affiliate of the Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers.
Section 17.7 Transfer Restrictions
The Series B Preferred Units shall be subject to the
provisions of Article 11 hereof; provided, however, that the Series B Preferred
Units shall not be subject to the right of first refusal of the General Partner
as described in Section 11.3 hereof. No transfer of Series B Preferred Units, or
other action by the holder or holders of such Units, is permitted, without the
consent of the General Partner which consent may be given or withheld in its
sole and absolute discretion, if such transfer or other action would result in
more than four partners holding all outstanding Series B Preferred Units within
the meaning of Treasury Regulation Section 1.7704-1(h)(3)(i); provided, however,
that the General Partner's consent may not be unreasonably withheld if (a) such
transfer or other action would not result in more than ten partners holding all
outstanding Series B Preferred Units within the meaning of Treasury Regulation
Section 1.7704-1(h)(3)(i) and (b) the General Partner is relying on a provision
other than Treasury Regulation Section 1.7704-1(h) to avoid classification of
Operating Partnership as a "publicly traded partnership" within the meaning of
Code Section 7704 (a "PTP"). In addition, no transfer may be made to any person
if such transfer would cause the exchange of the Series B Preferred Units for
Series B Preferred Shares, as provided herein, to be required to be registered
under the Securities Act of 1933, as amended, or any state securities laws. If
(i) Contributor concludes based on results or projected results that there
exists (in the reasonable judgment of Contributor) an imminent and substantial
risk that the Contributor's interest in the Partnership represents or will
represent more than 19.5% of the total profits or capital interests in the
Partnership for a taxable year, (ii) Contributor delivers to the General Partner
an opinion of independent counsel to the effect that there is a substantial risk
that Contributor's interest in the Partnership represents or will represent more
than 19.5% (the "19.5% Limit") of the total profits or capital interests in the
Partnership (determined in accordance with Regulations Section 1.731-2(e)(4)),
and (iii) the General Partner agrees with the conclusions referred to in clauses
(i) and (ii) of this sentence, such agreement not to be unreasonably withheld,
then Contributor shall, subject to the above limitations, be permitted to
transfer so much of its Series B Preferred Units as may be appropriate to
alleviate the risk of not satisfying the 19.5% Limit to the trust described in
Exhibit J, with the Contributor having the rights set forth in such Exhibit.
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Section 17.8 Exchange Rights
A. Right to Exchange. (i) Series B Preferred Units will be
exchangeable in whole but not in part unless expressly otherwise provided herein
at anytime on or after November 12, 2008, at the option of 51% of the holders of
all outstanding Series B Preferred Units, for authorized but previously unissued
Series B Preferred Shares at an exchange rate of one Series B Preferred Share
from the General Partner for one Series B Preferred Unit, subject to adjustment
as described below (the "Exchange Price"), provided that the Series B Preferred
Units will become exchangeable at any time, in whole but not in part unless
expressly otherwise provided herein, at the option of 51% of the holders of all
outstanding Series B Preferred Units for Series B Preferred Shares if (y) at any
time full distributions shall not have been timely made on any Series B
Preferred Unit with respect to six (6) prior quarterly distribution periods,
whether or not consecutive, provided, however, that a distribution in respect of
Series B Preferred Units shall be considered timely made if made within two (2)
Business Days after the applicable Preferred Unit Distribution Payment Date if
at the time of such late payment there shall not be any prior quarterly
distribution periods in respect of which full distributions were not timely made
or (z) upon receipt by a holder or holders of Series B Preferred Units of (A)
notice from the General Partner that the General Partner or a Subsidiary of the
General Partner has taken the position that the Partnership is, or upon the
consummation of an identified event in the immediate future will be, a PTP and
(B) an opinion rendered by independent counsel familiar with such matters
addressed to a holder or holders of Series B Preferred Units, that the
Partnership is or likely is, or upon the occurrence of a defined event in the
immediate future will be or likely will be, a PTP. In addition, the Series B
Preferred Units may be exchanged for Series B Preferred Shares, in whole but not
in part unless expressly otherwise provided herein, at the option of 51% of the
holders of all outstanding Series B Preferred Units after November 12, 2001 and
prior to November 12, 2008 if such holders of a Series B Preferred Units shall
deliver to the General Partner either (i) a private ruling letter addressed to
such holder of Series B Preferred Units or (ii) an opinion of independent
counsel reasonably acceptable to the General Partner based on the enactment of
temporary or final Treasury Regulations or the publication of a Revenue Ruling,
in either case to the effect that an exchange of the Series B Preferred Units at
such earlier time would not cause the Series B Preferred Units to be considered
"stock and securities" within the meaning of section 351(e) of the Code for
purposes of determining whether the holder of such Series B Preferred Units is
an "investment company" under section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the Series B Preferred Units, if
Contributor so determines, may be exchanged in whole but not in part (regardless
of whether held by Contributor) for Series B Preferred Shares (but only if the
exchange in whole may be accomplished consistently with the ownership
limitations set forth under the Series B Articles Supplementary (as defined
herein), taking into account exceptions thereto) if (1) Contributor concludes
based on results or projected results that there exists (in the reasonable
judgment of Contributor) an imminent and substantial risk that the Contributor's
interest in the Partnership represents or will represent more than the 19.5%
Limit for a taxable year, (2) Contributor delivers to the General Partner an
opinion of independent counsel to the effect that there is a substantial risk
that its interest in the Partnership does not or will not satisfy the 19.5%
Limit and (3) the General Partner agrees with the conclusions referred to in
clauses (1) and (2) of this sentence, such agreement not to be unreasonably
withheld; provided, however, that if, as a result of such conclusion,
Contributor's interest in the Partnership is reduced pursuant to the last
sentence of Section 17.7 hereof (which procedure shall be available to
Contributor to the exclusion of the procedure under this sentence for so long
as, on a cumulative basis, sales of 10%
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or fewer of the Series B Preferred Units originally acquired by Contributor
would in the opinion of the above-referenced counsel reduce the risk that
Contributor's interest in the Partnership would not satisfy the 19.5% Limit to
less than a substantial risk, and thereafter shall be a permitted alternative to
the procedure pursuant to this sentence) or the risk of Contributor not
satisfying the 19.5% Limit otherwise is reduced below a substantial risk, then
an exchange in whole under this sentence shall not be permitted unless and until
a change in facts occurs and a further determination by Contributor is made
under this sentence.
(ii) Notwithstanding anything to the contrary set forth in
Section 17.8.A(i), if an Exchange Notice (as defined herein) has been delivered
to the General Partner, then the General Partner may, at its option, within ten
(10) Business Days after receipt of the Exchange Notice, elect to cause the
Partnership to redeem all or a portion of the outstanding Series B Preferred
Units for cash in an amount equal to the original Capital Contribution per
Series B Preferred Unit and all accrued and unpaid distributions thereon to the
date of redemption. If the General Partner elects to redeem fewer than all of
the outstanding Series B Preferred Units, the number of Series B Preferred Units
held by each holder to be redeemed shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series B
Preferred Units that the total number of Series B Preferred Units held by such
holder represents) of the aggregate number of Series B Preferred Units being
redeemed.
(iii) In the event an exchange of all Series B Preferred Units
pursuant to Section 17.8.A would violate the provisions on ownership limitation
of the General Partner set forth in Section 7 of the Articles Supplementary to
the Charter with respect to Series B Preferred Shares (the "Series B Articles
Supplementary"), each holder of Series B Preferred Units shall be entitled to
exchange, pursuant to the provisions of Section 17.8.B, a number of Series B
Preferred Units which would comply with the provisions on the ownership
limitation of the General Partner set forth in such Section 7 of the Series B
Articles Supplementary, with respect to such holder, and any Series B Preferred
Units not so exchanged (the "Excess Units") shall be redeemed by the Partnership
for cash in an amount equal to the original Capital Contribution per Excess
Unit, plus any accrued and unpaid distributions thereon to the date of
redemption subject to any restriction thereon contained in any debt instrument
or agreement of the Partnership. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of such units agrees to
provide representations and covenants reasonably requested by the General
Partner relating to (i) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above) will not
cause any individual to own in excess of 9.0% of the stock of the General
Partner; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates. For purposes of determining the number of
Excess Units under this Section 17.8.A(iii), the "Beneficial Ownership Limit"
and "Constructive Ownership Limit" set forth in the Series B Articles
Supplementary shall be deemed to be 9.0%. To the extent the General Partner
would not be able to pay the cash set forth above in exchange for the Excess
Units, and to the extent consistent with the Charter, the General Partner agrees
that it will grant to the holders of the Series B Preferred Units exceptions to
the Beneficial Ownership Limit and Constructive Ownership Limit set forth in the
Series B Articles Supplementary sufficient to allow such holders to exchange all
of their Series B Preferred Units for REIT Series B Preferred Stock, provided
such holders furnish to the General Partner representations acceptable to the
General Partner in its sole and absolute discretion which assure the General
Partner that such
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exceptions will not jeopardize the General Partner's tax status as a REIT for
purposes of federal and applicable state law. Notwithstanding any provision of
this Agreement to the contrary, no Series B Limited Partner shall be entitled to
effect an exchange of Series B Preferred Units for Series B Preferred Shares to
the extent that ownership or right to acquire such shares would cause the
Partner or any other Person or, in the opinion of counsel selected by the
General Partner, may cause the Partner or any other Person, to violate the
restrictions on ownership and transfer of Series B Preferred Shares set forth in
the Charter. To the extent any such attempted exchange for Series B Preferred
Shares would be in violation of the previous sentence, it shall be void ab
initio and such Series B Limited Partner shall not acquire any rights or
economic interest in the Series B Preferred Shares otherwise issuable upon such
exchange.
(iv) The redemption of Series B Preferred Units described in
Section 17.8.A(ii) and (iii) shall be subject to the provisions of Section
17.5.B(i) and Section 17.5.C(ii); provided, however, that the term "Redemption
Price" in such Sections 17.5.B(i) and 17.5.C(ii) shall be read to mean the
original Capital Contribution per Series B Preferred Unit being redeemed as set
forth on Exhibit A plus all accrued and unpaid distributions to the redemption
date.
B. Procedure for Exchange and/or Redemption of Series B
Preferred Units.
(i) Any exchange shall be exercised pursuant to a notice of
exchange (the "Exchange Notice") delivered to the General Partner by the
Partners representing at least 51% of the outstanding Series B Preferred Units
(or by Contributor in the case of an exchange pursuant to the last sentence of
Section 17.8.A.(i) hereof) by (a) fax and (b) by certified mail postage prepaid.
The General Partner may effect any exchange of Series B Preferred Units, or
exercise its option to cause the Partnership to redeem any portion of the Series
B Preferred Units for cash pursuant to Section 17.8.A(ii) or redeem Excess Units
pursuant to Section 17.8.A(iii), by delivering to each holder of record of
Series B Preferred Units, within ten (10) Business Days following receipt of the
Exchange Notice, (a) if the General Partner elects to cause the Partnership to
acquire any of the Series B Preferred Units then outstanding, (1) certificates
representing the Series B Preferred Shares being issued in exchange for the
Series B Preferred Units of such holder being exchanged and (2) a written notice
(a "Redemption Notice") stating (A) the redemption date, which may be the date
of such Redemption Notice or any other date which is not later than sixty (60)
days following the receipt of the Exchange Notice, (B) the redemption price, (C)
the place or places where the Series B Preferred Units are to be surrendered and
(D) that distributions on the Series B Preferred Units will cease to accrue on
such redemption date, or (b) if the General Partner elects to cause the
Partnership to redeem all of the Series B Preferred Units then outstanding in
exchange for cash, a Redemption Notice. Series B Preferred Units shall be deemed
canceled (and any corresponding Partnership Interest represented thereby deemed
terminated) simultaneously with the delivery of shares of Series B Preferred
Shares (with respect to Series B Preferred Units exchanged) or simultaneously
with the redemption date (with respect to Series B Preferred Units redeemed).
Holders of Series B Preferred Units shall deliver any canceled certificates
representing Series B Preferred Units which have been exchanged or redeemed to
the office of General Partner (which currently is located at ▇▇▇▇ ▇, ▇▇▇ ▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 94111) within ten (10) Business Days of the exchange or
redemption with respect thereto. Notwithstanding anything to the contrary
contained herein, any and all Series B Preferred Units to be exchanged for REIT
Series B Preferred Stock pursuant to this Section 17.8 shall be so exchanged in
a single transaction at one time. As a condition to exchange, the General
Partner may require the holders of Series B
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Preferred Units to make such representations as may be reasonably necessary for
the General Partner to establish that the issuance of Series B Preferred Shares
pursuant to the exchange shall not be required to be registered under the
Securities Act or any state securities laws. Any Series B Preferred Shares
issued pursuant to this Section 17.8 shall be delivered as shares which are duly
authorized, validly issued, fully paid and nonassessable, free of any pledge,
lien, encumbrance or restriction other than those provided in the Charter, the
Bylaws of the General Partner, the Securities Act and relevant state securities
or blue sky laws.
The certificates representing the Series B Preferred Shares
issued upon exchange of the Series B Preferred Units shall contain the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS OR (B) IF THE
CORPORATION HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER OF THE SHARES REPRESENTED HEREBY, OR
OTHER EVIDENCE SATISFACTORY TO THE CORPORATION, THAT SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE
ACT AND STATE SECURITIES LAWS AND THE RULES AND REGULATIONS
THEREUNDER.
(ii) In the event of an exchange of Series B Preferred Units
for Series B Preferred Shares, an amount equal to the accrued and unpaid
distributions to the date of exchange on any Series B Preferred Units tendered
for exchange shall (i) accrue on the Series B Preferred Shares into which such
Series B Preferred Units are exchanged, and (ii) continue to accrue on such
Series B Preferred Units, which shall remain outstanding following such
exchange, with the General Partner as the holder of such REIT Series B Preferred
Units. Notwithstanding anything to the contrary set forth herein, in no event
shall a holder of a Series B Preferred Unit that was validly exchanged for
Series B Preferred Shares pursuant to this section (other than the General
Partner holding such Series B Preferred Unit following any such exchange),
receive a distribution out of Available Cash of the Partnership, if such holder,
after exchange, is entitled to receive a distribution out of Available Cash with
respect to the Series B Preferred Shares for which such Series B Preferred Unit
was exchanged or redeemed. Further for purposes of the foregoing, in the event
of an exchange of Series B Preferred Units for Series B Preferred Shares, if the
accrued and unpaid distributions per Series B Preferred Unit is not the same for
each Series B Preferred Unit, the accrued and unpaid distributions per Series B
Preferred Unit for each such Series B Preferred Unit shall be equal to the
greatest amount of such accrued and unpaid distributions per Series B Preferred
Unit on any such unit.
(iii) Fractional Series B Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market
86
value of the Series B Preferred Shares on the day prior to the exchange date as
determined in good faith by the Board of Directors of the General Partner.
C. Adjustment of Exchange Price. In case the General Partner
shall be a party to any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, tender offer for all or substantially
all of the General Partner's capital stock or sale of all or substantially all
of the General Partner's assets), in each case as a result of which the Series B
Preferred Shares will be converted into the right to receive shares of capital
stock, other securities or other property (including cash or any combination
thereof), each Series B Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the consummation of
such transaction by a holder of that number of Series B Preferred Shares or
fraction thereof into which one Series B Preferred Unit was exchangeable
immediately prior to such transaction. The General Partner may not become a
party to any such transaction unless the terms thereof are consistent with the
foregoing.
Section 17.9 No Conversion Rights
The Series B Preferred Units shall not be convertible into any
other class or series of interest in the Partnership.
Section 17.10 No Sinking Fund
No sinking fund shall be established for the retirement or
redemption of Series B Preferred Units.
ARTICLE 18.
SERIES J PREFERRED UNITS
Section 18.1 Designation and Number
A series of Partnership Units in the Partnership designated as
the 7.95% Series J Cumulative Redeemable Preferred Units (the "Series J
Preferred Units") is hereby established. The number of Series J Preferred Units
shall be 800,000.
Section 18.2 Ranking
The Series J Preferred Units shall, with respect to
distribution rights and rights upon voluntary or involuntary liquidation,
winding up or dissolution of the Partnership, rank (i) senior to the Common
Units and to all Partnership Units the terms of which provide that such
Partnership Units shall rank junior to the Series J Preferred Units; (ii) on a
parity with the Series A Preferred Units, the Series B Preferred Units, the
Series K Preferred Units and all other Parity Preferred Units; and (iii) junior
to all Partnership Units which rank senior to the Series J Preferred Units.
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Section 18.3 Distributions
A. Payment of Distributions. Subject to the rights of holders
of Parity Preferred Units (including the Series A Preferred Units, the Series B
Preferred Units and the Series K Preferred Units) as to the payment of
distributions, pursuant to Section 5.1, Section 16.3.A, Section 17.3.A and
Section 19.3.A hereof, holders of Series J Preferred Units will 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 in an
amount equal to the Series J Priority Return. Such distributions will be payable
(A) quarterly in arrears, on the 15th day of January, April, July and October of
each year and (B) in the event of (i) an exchange of Series J Preferred Units
into Series J Preferred Shares, or (ii) a redemption of Series J Preferred
Units, on the exchange date or redemption date, as applicable (each a "Series J
Preferred Unit Distribution Payment Date"), commencing on the first of such
payment dates to occur following their original date of issuance. If any date on
which distributions are to be made on the Series J Preferred Units is not a
Business Day, then payment of the distribution to be made on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. Distributions on the Series J Preferred Units will be
made to the holders of record of the Series J Preferred Units on the relevant
record dates, which will be fifteen (15) days prior to the relevant Preferred
Unit Distribution Payment Date (the "Series J Preferred Unit Partnership Record
Date").
B. Distributions Cumulative. Notwithstanding the foregoing,
distributions on the Series J Preferred Units will accrue whether or not the
terms and provisions of any agreement of the Partnership at any time prohibit
the current payment of distributions, whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment of
such distributions and whether or not such distributions are authorized. Accrued
but unpaid distributions on the Series J Preferred Units will accumulate as of
the Preferred Unit Distribution Payment Date on which they first become payable.
C. Priority as to Distributors.
(i) So long as any Series J Preferred Units are outstanding,
no distribution of cash or other property shall be authorized, declared, paid or
set apart for payment on or with respect to any class or series of Partnership
Interest represented by Junior Units, nor shall any Junior Units or Parity
Preferred Units (including the Series A Preferred Units, the Series B Preferred
Units and the Series K Preferred Units) be redeemed, purchased or otherwise
acquired for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such Junior Units or Parity Preferred
Units) by the Partnership (except by conversion into or exchange for other
Junior Units or Parity Preferred Units) unless, in each case, 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 J Preferred Units and all classes and series of
outstanding Parity Preferred Units for all distribution periods. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the exchange of Junior Units or Parity Preferred Units (including the Series A
Preferred Units, the Series B Preferred Units and the Series K Preferred Units)
into Partnership Interests of the Partnership ranking junior to the Series J
Preferred Units as to distributions, or (c) the redemption of Partnership
Interests corresponding to Series J Preferred Shares, Parity Preferred Stock
(including Series A Preferred Shares, Series B Preferred Shares and Series K
88
Preferred Shares) with respect to distributions or Junior Stock to be purchased
by the General Partner pursuant to the Charter 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 stock purchase pursuant to the Charter.
(ii) So long as distributions have not been paid in full (or a
sum sufficient for such full payment is not so set apart) upon the Series J
Preferred Units and any other Parity Preferred Units (including the Series A
Preferred Units, the Series B Preferred Units and the Series K Preferred Units),
all distributions authorized and declared on the Series J Preferred Units and
all classes or series of outstanding Parity Preferred Units (including the
Series A Preferred Units, the Series B Preferred Units and the Series K
Preferred Units) shall be authorized and declared pro rata so that the amount of
distributions authorized and declared per Series J Preferred Unit and such other
classes or series of Parity Preferred Units shall in all cases bear to each
other the same ratio that accrued distributions per Series J Preferred Unit and
such other classes or series of Parity Preferred Units (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such class or series of Parity Preferred Units do not have cumulative
distribution rights) bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any distributions or payments on Series
J Preferred Units which may be in arrears.
(iii) Notwithstanding anything to the contrary set forth
herein, distributions on Partnership Interests held by either (a) the General
Partner or (b) any other holder of Partnership Interest in the Partnership, in
each case ranking junior to or on parity with the Series J Preferred Units may
be made, without preserving the priority of distributions described in Sections
18.3.C(i) and (ii), but (i) only to the extent such distributions are required
to preserve the real estate investment trust status of the General Partner and
(ii) in the case of any holder other than the General Partner only to the extent
required by the Partnership Agreement.
D. No Further Rights. Holders of Series J Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
Section 18.4 Liquidation Proceeds
A. Distributions. Upon voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, distributions on the Series J
Preferred Units shall be made in accordance with Article 13 of this Agreement.
B. Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by the General Partner
pursuant to Section 13.6 hereof.
C. No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, Holders of Series J
Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
D. Consolidation, Merger or Certain Other Transactions. None
of a consolidation or merger of the Partnership with or into another entity, a
merger of another entity
89
with or into the Partnership, or a sale, lease, transfer or conveyance of all or
substantially all of the Partnership's property or business shall be considered
a liquidation, dissolution or winding up of the Partnership.
Section 18.5 Redemption
A. Redemption. The Series J Preferred Units may not be
redeemed prior to September 21, 2006. On or after such date, the Partnership
shall have the right to redeem the Series J Preferred Units, in whole or in
part, at any time or from time to time, upon not less than 30 nor more than 60
days' written notice, at a redemption price, payable in cash, equal to the
Capital Account balance of the holder of Series J Preferred Units (the
"Redemption Price"); provided, however, that no redemption pursuant to this
Section 18.5 will be permitted if the Redemption Price does not equal or exceed
the original Capital Contribution of such holder plus the cumulative Priority
Return to the redemption date to the extent not previously distributed. If fewer
than all of the outstanding Series J Preferred Units are to be redeemed, the
Series J Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
B. Limitation on Redemption. (i) The Redemption Price of the
Series J Preferred Units (other than the portion thereof consisting of
accumulated but unpaid distributions) is payable solely out of the sale proceeds
of capital stock of the General Partner, which will be contributed by the
General Partner to the Partnership as an additional capital contribution, or out
of the sale of limited partner interests in the Partnership and from no other
source. For purposes of the preceding sentence, "capital stock" means any equity
securities (including Common Stock and Preferred Stock (as such terms are
defined in the Charter)), depository shares, interests, participation 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.
(ii) The Partnership may not redeem fewer than all of the
outstanding Series J Preferred Units unless all accumulated and unpaid
distributions have been paid on all Series J Preferred Units for all quarterly
distribution periods terminating on or prior to the date of redemption.
C. Procedures for Redemption. (i) Notice of redemption will be
(i) faxed, and (ii) mailed by the Partnership, by certified mail, postage
prepaid, not less than 30 nor more than 60 days prior to the redemption date,
addressed to the respective holders of record of the Series J Preferred Units at
their respective addresses as they appear on the records of the Partnership. No
failure to give or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series J Preferred Units except as to the
holder to whom such notice was defective or not given. In addition to any
information required by law, each such notice shall state: (a) the redemption
date, (b) the Redemption Price, (c) the aggregate number of Series J Preferred
Units to be redeemed and if fewer than all of the outstanding Series J Preferred
Units are to be redeemed, the number of Series J Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series J
Preferred Units that the total number of Series J Preferred Units held by such
holder represents) of the aggregate number of Series J Preferred Units to be
redeemed, (d) the place or places where such Series J Preferred Units are to be
90
surrendered for payment of the Redemption Price, (e) that distributions on the
Series J Preferred Units to be redeemed will cease to accumulate on such
redemption date and (f) that payment of the Redemption Price will be made upon
presentation and surrender of such Series J Preferred Units.
(ii) If the Partnership gives a notice of redemption in
respect of Series J Preferred Units (which notice will be irrevocable) then, by
12:00 noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series J Preferred Units
being redeemed funds sufficient to pay the applicable Redemption Price and will
give irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series J Preferred Units upon surrender of the Series J Preferred
Units by such holders at the place designated in the notice of redemption. On
and after the date of redemption, distributions will cease to accumulate on the
Series J Preferred Units or portions thereof called for redemption, unless the
Partnership defaults in the payment thereof. If any date fixed for redemption of
Series J Preferred Units is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price is improperly withheld or refused and not paid
by the Partnership, distributions on such Series J Preferred Units will continue
to accumulate from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the applicable Redemption Price.
Section 18.6 Voting Rights
A. General. Holders of the Series J Preferred Units will not
have any voting rights or right to consent to any matter requiring the consent
or approval of the Limited Partners, except as set forth below and in Section
7.3.E.
B. Certain Voting Rights. So long as any Series J Preferred
Units remain outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series J Preferred Units
outstanding at the time (i) authorize or create, or increase the authorized or
issued amount of, any class or series of Partnership Interests ranking prior to
the Series J Preferred Units with respect to payment of distributions or rights
upon liquidation, dissolution or winding-up or reclassify any Partnership
Interests of the Partnership into any such Partnership Interest, or create,
authorize or issue any obligations or security convertible into or evidencing
the right to purchase any such Partnership Interests, (ii) authorize or create,
or increase the authorized or issued amount of any Parity Preferred Units or
reclassify any Partnership Interest of the Partnership into any such Partnership
Interest or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such Partnership Interests but only
to the extent such Parity Preferred Units are issued to an affiliate of the
Partnership, other than the General Partner to the extent the issuance of such
interests was to allow the General Partner to issue corresponding preferred
stock to persons who are not affiliates of the Partnership or (iii) either
consolidate, merge into or with, or convey, transfer or lease its assets
substantially as an entirety to, any corporation or other entity or amend, alter
or repeal the provisions of the Partnership Agreement (including, without
limitation, this Article 18), whether
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by merger, consolidation or otherwise, in each case in a manner that would
materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series J Preferred Units or the holders
thereof; provided, however, that with respect to the occurrence of any event set
forth in (iii) above, so long as (a) the Partnership is the surviving entity and
the Series J Preferred Units remain outstanding with the terms thereof
unchanged, or (b) the resulting, surviving or transferee entity (I) is a
partnership, limited liability company or other pass-through entity organized
under the laws of any state, (II) is not taxable as a corporation for U.S.
federal income tax purposes and (III) substitutes the Series J Preferred Units
for other interests in such entity having substantially the same terms and
rights as the Series J Preferred Units, including with respect to distributions,
voting rights and rights upon liquidation, dissolution or winding-up, then the
occurrence of any such event shall not be deemed to materially and adversely
affect such rights, privileges or voting powers of the holders of the Series J
Preferred Units; and provided further, that any increase in the amount of
Partnership Interests or the creation or issuance of any other class or series
of Partnership Interests represented by Junior Units or Parity Preferred Units
are not issued to an affiliate of the Partnership, other than the General
Partner to the extent the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to persons who are not affiliates
of the Partnership, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
Section 18.7 Transfer Restrictions
The Series J Preferred Units shall be subject to the
provisions of Article 11 hereof; provided, however, that the Series J Preferred
Units shall not be subject to the right of first refusal of the General Partner
as described in Section 11.3 hereof. No transfer of Series J Preferred Units, or
other action by the holder or holders of such Units, is permitted, without the
consent of the General Partner which consent may be given or withheld in its
sole and absolute discretion, if such transfer or other action would result in
more than two partners holding all outstanding Series J Preferred Units within
the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to
Treasury Regulation Section 1.7704-1(h)(3)(ii)); provided, however, that the
General Partner's consent may not be unreasonably withheld if (a) such transfer
or other action would not result in more than five partners holding all
outstanding Series J Preferred Units within the meaning of Treasury Regulation
Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation Section
1.7704-1(h)(3)(ii)) and (b) the General Partner cannot rely on Treasury
Regulation Section 1.7704-1(h) to avoid classification of Operating Partnership
as a PTP. In addition, no transfer may be made to any person if such transfer
would cause the exchange of the Series J Preferred Units for Series J Preferred
Shares, as provided herein, to be required to be registered under the Securities
Act of 1933, as amended, or any state securities laws. If (i) the holders of 51%
of the Series J Preferred Units conclude based on results or projected results
that there exists (in the reasonable judgment of such holders) an imminent and
substantial risk that such holder's interest in the Partnership represents or
will represent more than 19.5% of the total profits or capital interests in the
Partnership for a taxable year (the "19.5% Limit"), (ii) such holders deliver to
the General Partner an opinion of independent counsel to the effect that there
is a substantial risk that such holder's interest in the Partnership represents
or will represent more than the 19.5% Limit (determined in accordance with
Regulations Section 1.731-2(e)(4)), and (iii) the General Partner agrees with
the conclusions referred to in clauses (i) and (ii) of this sentence, such
agreement not to be unreasonably withheld, then such holders shall, subject to
the above limitations, be permitted to transfer so
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much of their Series J Preferred Units as may be appropriate to alleviate the
risk of not satisfying the 19.5% Limit to the trust described in Exhibit J, with
such holders having the rights set forth in such Exhibit.
Section 18.8 Exchange Rights
A. Right to Exchange. (i) Series J Preferred Units will be
exchangeable in whole but not in part unless expressly otherwise provided herein
at anytime on or after September 21, 2011, at the option of the holders of 51%
of all outstanding Series J Preferred Units, for authorized but previously
unissued Series J Preferred Shares at an exchange rate of one Series J Preferred
Share from the General Partner for one Series J Preferred Unit, subject to
adjustment as described below (the "Exchange Price"), provided that the Series J
Preferred Units will become exchangeable at any time, in whole but not in part
unless expressly otherwise provided herein, at the option of the holders of 51%
of all outstanding Series J Preferred Units for Series J Preferred Shares (x) if
at any time full distributions shall not have been timely made on any Series J
Preferred Unit with respect to six (6) prior quarterly distribution periods,
whether or not consecutive, provided, however, that a distribution in respect of
Series J Preferred Units shall be considered timely made if made within two (2)
Business Days after the applicable Preferred Unit Distribution Payment Date if
at the time of such late payment there shall not be any prior quarterly
distribution periods in respect of which full distributions were not timely
made, or (y) at any time (A) the holders of 51% of the Series J Preferred Units
conclude (in the reasonable judgment of such holders) that the Partnership, if
it otherwise were taxable as a real estate investment trust, either (1) will not
or likely will not satisfy the income tests of Section 856 of the Code for the
year in which such determination is made or (2) will not or likely will not
satisfy the asset tests of Section 856 of the Code as of the end of the calendar
quarter in which such determination is made, which failure will not or is
unlikely to be (or is subsequently not) cured as permitted under Section 856 of
the Code, (B) the holders deliver to the General Partner an opinion of a
nationally recognized independent counsel to the effect of the conclusion set
forth in clause (A) of this sentence, (C) such failure would create a meaningful
risk that a holder of the Series J Preferred Units would fail to maintain its
qualification as a real estate investment trust and (D) the General Partner
agrees with the conclusions referred to in clauses (A) and (B) of this sentence,
such agreement not to be unreasonably withheld. Furthermore, the Series J
Preferred Units, if the holders of 51% of all outstanding Series J Preferred
Units so determine, may be exchanged in whole but not in part (regardless of
whether held by one or more holders) for Series J Preferred Shares if (1) the
holders of 51% of all outstanding Series J Preferred Units conclude based on
results or projected results that there exists (in the reasonable judgment of
such holder) an imminent and substantial risk that the holder's interest in the
Partnership represents or will represent more than the 19.5% Limit, (2) such
holders deliver to the General Partner an opinion of independent counsel to the
effect that there is a substantial risk that its interest in the Partnership
does not or will not satisfy the 19.5% Limit and (3) the General Partner agrees
with the conclusions referred to in clauses (1) and (2) of this sentence, such
agreement not to be unreasonably withheld; provided, however, that if, as a
result of such conclusion, such holders' interest in the Partnership is reduced
pursuant to the last sentence of Section 18.7 hereof (which procedure shall be
available to such holders to the exclusion of the procedure under this sentence
for so long as, on a cumulative basis, sales of 10% or fewer of the Series J
Preferred Units originally issued by the Partnership would in the opinion of the
above-referenced counsel reduce the risk that such holders' interest in the
Partnership would not satisfy the 19.5% Limit to less than a substantial risk,
and thereafter shall be a permitted alternative to
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the procedure pursuant to this sentence) or the risk of such holder not
satisfying the 19.5% Limit otherwise is reduced below a substantial risk, then
an exchange in whole under this sentence shall not be permitted unless and until
a change in facts occurs and a further determination by such holders is made
under this sentence.
(ii) Notwithstanding anything to the contrary set forth in
Section 18.8.A(i), if an Exchange Notice (as defined herein) has been delivered
to the General Partner, then the General Partner may, at its option, within ten
(10) Business Days after receipt of the Exchange Notice, elect to cause the
Partnership to redeem all or a portion of the outstanding Series J Preferred
Units for cash in an amount equal to the original Capital Contribution per
Series J Preferred Unit and all accrued and unpaid distributions thereon to the
date of redemption. If the General Partner elects to redeem fewer than all of
the outstanding Series J Preferred Units, the number of Series J Preferred Units
held by each holder to be redeemed shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series J
Preferred Units that the total number of Series J Preferred Units held by such
holder represents) of the aggregate number of Series J Preferred Units being
redeemed.
(iii) In the event an exchange of all Series J Preferred Units
pursuant to Section 18.8.A would violate the provisions on ownership limitation
of the General Partner set forth in Section 7 of the Third Article of the
Articles Supplementary to the Charter with respect to Series J Preferred Shares
(the "Series J Articles Supplementary"), each holder of Series J Preferred Units
shall be entitled to exchange, pursuant to the provisions of Section 18.8.B, a
number of Series J Preferred Units which would comply with the provisions on the
ownership limitation of the General Partner set forth in such Section 7 of the
Series J Articles Supplementary, with respect to such holder, and any Series J
Preferred Units not so exchanged (the "Excess Units") shall be redeemed by the
Partnership for cash in an amount equal to the original Capital Contribution per
Excess Unit, plus any accrued and unpaid distributions thereon to the date of
redemption subject to any restriction thereon contained in any debt instrument
or agreement of the Partnership. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of such units agrees to
provide representations and covenants reasonably requested by the General
Partner relating to (i) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above) will not
cause any individual to own in excess of 9.0% of the stock of the General
Partner; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates. For purposes of determining the number of
Excess Units under this Section 18.8.A(iii), the "Beneficial Ownership Limit"
and "Constructive Ownership Limit" set forth in the Series J Articles
Supplementary shall be deemed to be 9.0%. To the extent the General Partner
would not be able to pay the cash set forth above in exchange for the Excess
Units, and to the extent consistent with the Charter, the General Partner agrees
that it will grant to the holders of the Series J Preferred Units exceptions to
the Beneficial Ownership Limit and Constructive Ownership Limit set forth in the
Series J Articles Supplementary sufficient to allow such holders to exchange all
of their Series J Preferred Units for Series J Preferred Stock, provided such
holders furnish to the General Partner representations acceptable to the General
Partner in its sole and absolute discretion which assure the General Partner
that such exceptions will not jeopardize the General Partner's tax status as a
REIT for purposes of federal and applicable state law. Notwithstanding any
provision of this Agreement to the contrary, no Series J Limited Partner shall
be entitled to effect an exchange of Series J
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Preferred Units for Series J Preferred Shares to the extent that ownership or
right to acquire such shares would cause the Partner or any other Person or, in
the opinion of counsel selected by the General Partner, may cause the Partner or
any other Person, to violate the restrictions on ownership and transfer of
Series J Preferred Shares set forth in the Charter, taking into account any
exceptions thereto granted by the Company in accordance with the terms of the
Charter. To the extent any such attempted exchange for Series J Preferred Shares
would be in violation of the previous sentence, it shall be void ab initio and
such Series J Limited Partner shall not acquire any rights or economic interest
in the Series J Preferred Shares otherwise issuable upon such exchange.
(iv) The redemption of Series J Preferred Units described in
Section 18.8.A(ii) and (iii) shall be subject to the provisions of Section
18.5.B(i) and Section 18.5.C(ii); provided, however, that the term "Redemption
Price" in such Sections 18.5.B(i) and 18.5.C(ii) shall be read to mean the
original Capital Contribution per Series J Preferred Unit being redeemed as set
forth on Exhibit A plus all accrued and unpaid distributions to the redemption
date.
B. Procedure for Exchange and/or Redemption of Series J
Preferred Units.
(i) Any exchange shall be exercised pursuant to a notice of
exchange (the "Exchange Notice") delivered to the General Partner by the
Partners representing at least 51% of the outstanding Series J Preferred Units
(or by Contributor in the case of an exchange pursuant to the last sentence of
Section 18.8.A.(i) hereof) by (a) fax and (b) by certified mail postage prepaid.
The General Partner may effect any exchange of Series J Preferred Units, or
exercise its option to cause the Partnership to redeem any portion of the Series
J Preferred Units for cash pursuant to Section 18.8.A(ii) or redeem Excess Units
pursuant to Section 18.8.A(iii), by delivering to each holder of record of
Series J Preferred Units, within ten (10) Business Days following receipt of the
Exchange Notice, (a) if the General Partner elects to cause the Partnership to
acquire any of the Series J Preferred Units then outstanding, (1) certificates
representing the Series J Preferred Shares being issued in exchange for the
Series J Preferred Units of such holder being exchanged and (2) a written notice
(a "Redemption Notice") stating (A) the redemption date, which may be the date
of such Redemption Notice or any other date which is not later than sixty (60)
days following the receipt of the Exchange Notice, (B) the redemption price, (C)
the place or places where the Series J Preferred Units are to be surrendered and
(D) that distributions on the Series J Preferred Units will cease to accrue on
such redemption date, or (b) if the General Partner elects to cause the
Partnership to redeem all of the Series J Preferred Units then outstanding in
exchange for cash, a Redemption Notice. Series J Preferred Units shall be deemed
canceled (and any corresponding Partnership Interest represented thereby deemed
terminated) simultaneously with the delivery of shares of Series J Preferred
Shares (with respect to Series J Preferred Units exchanged) or simultaneously
with the redemption date (with respect to Series J Preferred Units redeemed).
Holders of Series J Preferred Units shall deliver any canceled certificates
representing Series J Preferred Units which have been exchanged or redeemed to
the office of General Partner (which currently is located at ▇▇▇▇ ▇, ▇▇▇ ▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 94111) within ten (10) Business Days of the exchange or
redemption with respect thereto. Notwithstanding anything to the contrary
contained herein, any and all Series J Preferred Units to be exchanged for
Series J Preferred Stock pursuant to this Section 18.8 shall be so exchanged in
a single transaction at one time. As a condition to exchange, the General
Partner may require the holders of Series J Preferred Units to make such
representations as may be reasonably necessary for the General Partner to
establish that the issuance of Series J
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Preferred Shares pursuant to the exchange shall not be required to be registered
under the Securities Act or any state securities laws. Any Series J Preferred
Shares issued pursuant to this Section 18.8 shall be delivered as shares which
are duly authorized, validly issued, fully paid and nonassessable, free of any
pledge, lien, encumbrance or restriction other than those provided in the
Charter, the Bylaws of the General Partner, the Securities Act and relevant
state securities or blue sky laws.
The certificates representing the Series J Preferred Shares
issued upon exchange of the Series J Preferred Units shall contain the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS OR (B) IF THE
CORPORATION HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER OF THE SHARES REPRESENTED HEREBY, OR
OTHER EVIDENCE SATISFACTORY TO THE CORPORATION, THAT SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE
ACT AND STATE SECURITIES LAWS AND THE RULES AND REGULATIONS
THEREUNDER.
(ii) In the event of an exchange of Series J Preferred Units
for Series J Preferred Shares, an amount equal to the accrued and unpaid
distributions to the date of exchange on any Series J Preferred Units tendered
for exchange shall (i) accrue on the Series J Preferred Shares into which such
Series J Preferred Units are exchanged, and (ii) continue to accrue on such
Series J Preferred Units, which shall remain outstanding following such
exchange, with the General Partner as the holder of such Series J Preferred
Units. Notwithstanding anything to the contrary set forth herein, in no event
shall a holder of a Series J Preferred Unit that was validly exchanged for
Series J Preferred Shares pursuant to this section (other than the General
Partner holding such Series J Preferred Unit following any such exchange),
receive a distribution out of Available Cash of the Partnership, if such holder,
after exchange, is entitled to receive a distribution out of Available Cash with
respect to the Series J Preferred Shares for which such Series J Preferred Unit
was exchanged or redeemed. Further for purposes of the foregoing, in the event
of an exchange of Series J Preferred Units for Series J Preferred Shares, if the
accrued and unpaid distributions per Series J Preferred Unit is not the same for
each Series J Preferred Unit, the accrued and unpaid distributions per Series J
Preferred Unit for each such Series J Preferred Unit shall be equal to the
greatest amount of such accrued and unpaid distributions per Series J Preferred
Unit on any such unit.
(iii) Fractional Series J Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the Series J Preferred Shares on
the day prior to the exchange date as determined in good faith by the Board of
Directors of the General Partner.
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C. Adjustment of Exchange Price. In case the General Partner
shall be a party to any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, tender offer for all or substantially
all of the General Partner's capital stock or sale of all or substantially all
of the General Partner's assets), in each case as a result of which the Series J
Preferred Shares will be converted into the right to receive shares of capital
stock, other securities or other property (including cash or any combination
thereof), each Series J Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the consummation of
such transaction by a holder of that number of Series J Preferred Shares or
fraction thereof into which one Series J Preferred Unit was exchangeable
immediately prior to such transaction. The General Partner may not become a
party to any such transaction unless the terms thereof are consistent with the
foregoing.
Section 18.9 No Conversion Rights
The Series J Preferred Units shall not be convertible into any
other class or series of interest in the Partnership.
Section 18.10 No Sinking Fund
No sinking fund shall be established for the retirement or redemption of Series
J Preferred Units.
ARTICLE 19.
SERIES K PREFERRED UNITS
Section 19.1 Designation and Number
A series of Partnership Units in the Partnership designated as
the 7.95% Series K Cumulative Redeemable Preferred Units (the "Series K
Preferred Units") is hereby established. The number of Series K Preferred Units
shall be 800,000.
Section 19.2 Ranking
The Series K Preferred Units shall, with respect to
distribution rights and rights upon voluntary or involuntary liquidation,
winding up or dissolution of the Partnership, rank (i) senior to the Common
Units and to all Partnership Units the terms of which provide that such
Partnership Units shall rank junior to the Series K Preferred Units; (ii) on a
parity with the Series A Preferred Units, the Series B Preferred Units, the
Series J Preferred Units and all other Parity Preferred Units; and (iii) junior
to all Partnership Units which rank senior to the Series K Preferred Units.
Section 19.3 Distributions
A. Payment of Distributions. Subject to the rights of holders
of Parity Preferred Units (including the Series A Preferred Units, the Series B
Preferred Units and the Series J Preferred Units) as to the payment of
distributions, pursuant to Section 5.1, Section 16.3.A, Section 17.3.A and
Section 18.3.A hereof, holders of Series K Preferred Units will be
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entitled to receive, when, as and if declared by the Partnership acting through
the General Partner, out of Available Cash, cumulative preferential cash
distributions in an amount equal to the Series K Priority Return. Such
distributions will be payable (A) quarterly in arrears, on the 15th day of
January, April, July and October of each year and (B) in the event of (i) an
exchange of Series K Preferred Units into Series K Preferred Shares, or (ii) a
redemption of Series K Preferred Units, on the exchange date or redemption date,
as applicable (each a "Series K Preferred Unit Distribution Payment Date"),
commencing on the first of such payment dates to occur following their original
date of issuance. If any date on which distributions are to be made on the
Series K Preferred Units is not a Business Day, then payment of the distribution
to be made on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. Distributions
on the Series K Preferred Units will be made to the holders of record of the
Series K Preferred Units on the relevant record dates, which will be fifteen
(15) days prior to the relevant Preferred Unit Distribution Payment Date (the
"Series K Preferred Unit Partnership Record Date").
B. Distributions Cumulative. Notwithstanding the foregoing,
distributions on the Series K Preferred Units will accrue whether or not the
terms and provisions of any agreement of the Partnership at any time prohibit
the current payment of distributions, whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment of
such distributions and whether or not such distributions are authorized. Accrued
but unpaid distributions on the Series K Preferred Units will accumulate as of
the Preferred Unit Distribution Payment Date on which they first become payable.
C. Priority as to Distributors.
(i) So long as any Series K Preferred Units are outstanding,
no distribution of cash or other property shall be authorized, declared, paid or
set apart for payment on or with respect to any class or series of Partnership
Interest represented by Junior Units, nor shall any Junior Units or Parity
Preferred Units (including the Series A Preferred Units, the Series B Preferred
Units and the Series J Preferred Units) be redeemed, purchased or otherwise
acquired for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such Junior Units or Parity Preferred
Units) by the Partnership (except by conversion into or exchange for other
Junior Units or Parity Preferred Units) unless, in each case, 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 K Preferred Units and all classes and series of
outstanding Parity Preferred Units for all distribution periods. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the exchange of Junior Units or Parity Preferred Units (including the Series A
Preferred Units, the Series B Preferred Units and the Series J Preferred Units)
into Partnership Interests of the Partnership ranking junior to the Series K
Preferred Units as to distributions, or (c) the redemption of Partnership
Interests corresponding to Series K Preferred Shares, Parity Preferred Stock
(including Series A Preferred Shares, Series B Preferred Shares and Series J
Preferred Shares) with respect to distributions or Junior Stock to be purchased
by the General Partner pursuant to the Charter 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 stock purchase pursuant to the Charter.
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(ii) So long as distributions have not been paid in full (or a
sum sufficient for such full payment is not so set apart) upon the Series K
Preferred Units and any other Parity Preferred Units (including the Series A
Preferred Units, the Series B Preferred Units and the Series J Preferred Units),
all distributions authorized and declared on the Series K Preferred Units and
all classes or series of outstanding Parity Preferred Units (including the
Series A Preferred Units, the Series B Preferred Units and the Series J
Preferred Units) shall be authorized and declared pro rata so that the amount of
distributions authorized and declared per Series K Preferred Unit and such other
classes or series of Parity Preferred Units shall in all cases bear to each
other the same ratio that accrued distributions per Series K Preferred Unit and
such other classes or series of Parity Preferred Units (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such class or series of Parity Preferred Units do not have cumulative
distribution rights) bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any distributions or payments on Series
K Preferred Units which may be in arrears.
(iii) Notwithstanding anything to the contrary set forth
herein, distributions on Partnership Interests held by either (a) the General
Partner or (b) any other holder of Partnership Interest in the Partnership, in
each case ranking junior to or on parity with the Series K Preferred Units may
be made, without preserving the priority of distributions described in Sections
19.3.C(i) and (ii), but (i) only to the extent such distributions are required
to preserve the real estate investment trust status of the General Partner and
(ii) in the case of any holder other than the General Partner only to the extent
required by the Partnership Agreement.
D. No Further Rights. Holders of Series K Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
Section 19.4 Liquidation Proceeds
A. Distributions. Upon voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, distributions on the Series K
Preferred Units shall be made in accordance with Article 13 of this Agreement.
B. Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by the General Partner
pursuant to Section 13.6 hereof.
C. No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, Holders of Series K
Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
D. Consolidation, Merger or Certain Other Transactions. None
of a consolidation or merger of the Partnership with or into another entity, a
merger of another entity with or into the Partnership, or a sale, lease,
transfer or conveyance of all or substantially all of the Partnership's property
or business shall be considered a liquidation, dissolution or winding up of the
Partnership.
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Section 19.5 Redemption
A. Redemption. The Series K Preferred Units may not be
redeemed prior to April 17, 2007. On or after such date, the Partnership shall
have the right to redeem the Series K Preferred Units, in whole or in part, at
any time or from time to time, upon not less than 30 nor more than 60 days'
written notice, at a redemption price, payable in cash, equal to the Capital
Account balance of the holder of Series K Preferred Units (the "Redemption
Price"); provided, however, that no redemption pursuant to this Section 19.5
will be permitted if the Redemption Price does not equal or exceed the original
Capital Contribution of such holder plus the cumulative Priority Return to the
redemption date to the extent not previously distributed. If fewer than all of
the outstanding Series K Preferred Units are to be redeemed, the Series K
Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
B. Limitation on Redemption. (i) The Redemption Price of the
Series K Preferred Units (other than the portion thereof consisting of
accumulated but unpaid distributions) is payable solely out of the sale proceeds
of capital stock of the General Partner, which will be contributed by the
General Partner to the Partnership as an additional capital contribution, or out
of the sale of limited partner interests in the Partnership and from no other
source. For purposes of the preceding sentence, "capital stock" means any equity
securities (including Common Stock and Preferred Stock (as such terms are
defined in the Charter)), depository shares, interests, participation 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.
(ii) The Partnership may not redeem fewer than all of the
outstanding Series K Preferred Units unless all accumulated and unpaid
distributions have been paid on all Series K Preferred Units for all quarterly
distribution periods terminating on or prior to the date of redemption.
C. Procedures for Redemption. (i) Notice of redemption will be
(i) faxed, and (ii) mailed by the Partnership, by certified mail, postage
prepaid, not less than 30 nor more than 60 days prior to the redemption date,
addressed to the respective holders of record of the Series K Preferred Units at
their respective addresses as they appear on the records of the Partnership. No
failure to give or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series K Preferred Units except as to the
holder to whom such notice was defective or not given. In addition to any
information required by law, each such notice shall state: (a) the redemption
date, (b) the Redemption Price, (c) the aggregate number of Series K Preferred
Units to be redeemed and if fewer than all of the outstanding Series K Preferred
Units are to be redeemed, the number of Series K Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series K
Preferred Units that the total number of Series K Preferred Units held by such
holder represents) of the aggregate number of Series K Preferred Units to be
redeemed, (d) the place or places where such Series K Preferred Units are to be
surrendered for payment of the Redemption Price, (e) that distributions on the
Series K Preferred Units to be redeemed will cease to accumulate on such
redemption date and (f) that payment of the Redemption Price will be made upon
presentation and surrender of such Series K Preferred Units.
100
(ii) If the Partnership gives a notice of redemption in
respect of Series K Preferred Units (which notice will be irrevocable) then, by
12:00 noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series K Preferred Units
being redeemed funds sufficient to pay the applicable Redemption Price and will
give irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series K Preferred Units upon surrender of the Series K Preferred
Units by such holders at the place designated in the notice of redemption. On
and after the date of redemption, distributions will cease to accumulate on the
Series K Preferred Units or portions thereof called for redemption, unless the
Partnership defaults in the payment thereof. If any date fixed for redemption of
Series K Preferred Units is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price is improperly withheld or refused and not paid
by the Partnership, distributions on such Series K Preferred Units will continue
to accumulate from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the applicable Redemption Price.
Section 19.6 Voting Rights
A. General. Holders of the Series K Preferred Units will not
have any voting rights or right to consent to any matter requiring the consent
or approval of the Limited Partners, except as set forth below and in Section
7.3.E.
B. Certain Voting Rights. So long as any Series K Preferred
Units remain outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series K Preferred Units
outstanding at the time (i) authorize or create, or increase the authorized or
issued amount of, any class or series of Partnership Interests ranking prior to
the Series K Preferred Units with respect to payment of distributions or rights
upon liquidation, dissolution or winding-up or reclassify any Partnership
Interests of the Partnership into any such Partnership Interest, or create,
authorize or issue any obligations or security convertible into or evidencing
the right to purchase any such Partnership Interests, (ii) authorize or create,
or increase the authorized or issued amount of any Parity Preferred Units or
reclassify any Partnership Interest of the Partnership into any such Partnership
Interest or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such Partnership Interests but only
to the extent such Parity Preferred Units are issued to an affiliate of the
Partnership, other than the General Partner to the extent the issuance of such
interests was to allow the General Partner to issue corresponding preferred
stock to persons who are not affiliates of the Partnership or (iii) either
consolidate, merge into or with, or convey, transfer or lease its assets
substantially as an entirety to, any corporation or other entity or amend, alter
or repeal the provisions of the Partnership Agreement (including, without
limitation, this Article 19), whether by merger, consolidation or otherwise, in
each case in a manner that would materially and adversely affect the powers,
special rights, preferences, privileges or voting power of the Series K
Preferred Units or the holders thereof; provided, however, that with respect to
the occurrence of any event set forth in (iii) above, so long as (a) the
Partnership is the surviving entity and the Series K Preferred Units remain
outstanding with the terms thereof unchanged, or (b) the
101
resulting, surviving or transferee entity (I) is a partnership, limited
liability company or other pass-through entity organized under the laws of any
state, (II) is not taxable as a corporation for U.S. federal income tax purposes
and (III) substitutes the Series K Preferred Units for other interests in such
entity having substantially the same terms and rights as the Series K Preferred
Units, including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series K Preferred Units; and provided
further, that any increase in the amount of Partnership Interests or the
creation or issuance of any other class or series of Partnership Interests
represented by Junior Units or Parity Preferred Units are not issued to an
affiliate of the Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers.
Section 19.7 Transfer Restrictions
The Series K Preferred Units shall be subject to the
provisions of Article 11 hereof; provided, however, that the Series K Preferred
Units shall not be subject to the right of first refusal of the General Partner
as described in Section 11.3 hereof. No transfer of Series K Preferred Units, or
other action by the holder or holders of such Units, is permitted, without the
consent of the General Partner which consent may be given or withheld in its
sole and absolute discretion, if such transfer or other action would result in
more than two partners holding all outstanding Series K Preferred Units within
the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to
Treasury Regulation Section 1.7704-1(h)(3)(ii)); provided, however, that the
General Partner's consent may not be unreasonably withheld if (a) such transfer
or other action would not result in more than five partners holding all
outstanding Series K Preferred Units within the meaning of Treasury Regulation
Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation Section
1.7704-1(h)(3)(ii)) and (b) the General Partner cannot rely on Treasury
Regulation Section 1.7704-1(h) to avoid classification of Operating Partnership
as a PTP. In addition, no transfer may be made to any person if such transfer
would cause the exchange of the Series K Preferred Units for Series K Preferred
Shares, as provided herein, to be required to be registered under the Securities
Act of 1933, as amended, or any state securities laws. If (i) the holders of 51%
of the Series K Preferred Units conclude based on results or projected results
that there exists (in the reasonable judgment of such holders) an imminent and
substantial risk that such holder's interest in the Partnership represents or
will represent more than 19.5% of the total profits or capital interests in the
Partnership for a taxable year (the "19.5% Limit"), (ii) such holders deliver to
the General Partner an opinion of independent counsel to the effect that there
is a substantial risk that such holder's interest in the Partnership represents
or will represent more than the 19.5% Limit (determined in accordance with
Regulations Section 1.731-2(e)(4)), and (iii) the General Partner agrees with
the conclusions referred to in clauses (i) and (ii) of this sentence, such
agreement not to be unreasonably withheld, then such holders shall, subject to
the above limitations, be permitted to transfer so much of their Series K
Preferred Units as may be appropriate to alleviate the risk of not satisfying
the 19.5% Limit to the trust described in Exhibit J, with such holders having
the rights set forth in such Exhibit.
102
Section 19.8 Exchange Rights
A. Right to Exchange. (i) Series K Preferred Units will be
exchangeable in whole but not in part unless expressly otherwise provided herein
at anytime on or after April 17, 2012, at the option of the holders of 51% of
all outstanding Series K Preferred Units, for authorized but previously unissued
Series K Preferred Shares at an exchange rate of one Series K Preferred Share
from the General Partner for one Series K Preferred Unit, subject to adjustment
as described below (the "Exchange Price"), provided that the Series K Preferred
Units will become exchangeable at any time, in whole but not in part unless
expressly otherwise provided herein, at the option of the holders of 51% of all
outstanding Series K Preferred Units for Series K Preferred Shares if at any
time full distributions shall not have been timely made on any Series K
Preferred Unit with respect to six (6) prior quarterly distribution periods,
whether or not consecutive, provided, however, that a distribution in respect of
Series K Preferred Units shall be considered timely made if made within two (2)
Business Days after the applicable Preferred Unit Distribution Payment Date if
at the time of such late payment there shall not be any prior quarterly
distribution periods in respect of which full distributions were not timely
made. Furthermore, the Series K Preferred Units, if the holders of 51% of all
outstanding Series K Preferred Units so determine, may be exchanged in whole but
not in part (regardless of whether held by one or more holders) for Series K
Preferred Shares if (1) the holders of 51% of all outstanding Series K Preferred
Units conclude based on results or projected results that there exists (in the
reasonable judgment of such holder) an imminent and substantial risk that the
holder's interest in the Partnership represents or will represent more than the
19.5% Limit, (2) such holders deliver to the General Partner an opinion of
independent counsel to the effect that there is a substantial risk that its
interest in the Partnership does not or will not satisfy the 19.5% Limit and (3)
the General Partner agrees with the conclusions referred to in clauses (1) and
(2) of this sentence, such agreement not to be unreasonably withheld; provided,
however, that if, as a result of such conclusion, such holders' interest in the
Partnership is reduced pursuant to the last sentence of Section 19.7 hereof
(which procedure shall be available to such holders to the exclusion of the
procedure under this sentence for so long as, on a cumulative basis, sales of
10% or fewer of the Series K Preferred Units originally issued by the
Partnership would in the opinion of the above-referenced counsel reduce the risk
that such holders' interest in the Partnership would not satisfy the 19.5% Limit
to less than a substantial risk, and thereafter shall be a permitted alternative
to the procedure pursuant to this sentence) or the risk of such holder not
satisfying the 19.5% Limit otherwise is reduced below a substantial risk, then
an exchange in whole under this sentence shall not be permitted unless and until
a change in facts occurs and a further determination by such holders is made
under this sentence.
(ii) Notwithstanding anything to the contrary set forth in
Section 19.8.A(i), if an Exchange Notice (as defined herein) has been delivered
to the General Partner, then the General Partner may, at its option, within ten
(10) Business Days after receipt of the Exchange Notice, elect to cause the
Partnership to redeem all or a portion of the outstanding Series K Preferred
Units for cash in an amount equal to the original Capital Contribution per
Series K Preferred Unit and all accrued and unpaid distributions thereon to the
date of redemption. If the General Partner elects to redeem fewer than all of
the outstanding Series K Preferred Units, the number of Series K Preferred Units
held by each holder to be redeemed shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series K
Preferred Units that the total number of Series K Preferred Units held by such
holder represents) of the aggregate number of Series K Preferred Units being
redeemed.
103
(iii) In the event an exchange of all Series K Preferred Units
pursuant to Section 19.8.A would violate the provisions on ownership limitation
of the General Partner set forth in Section 7 of the Third Article of the
Articles Supplementary to the Charter with respect to Series K Preferred Shares
(the "Series K Articles Supplementary"), each holder of Series K Preferred Units
shall be entitled to exchange, pursuant to the provisions of Section 19.8.B, a
number of Series K Preferred Units which would comply with the provisions on the
ownership limitation of the General Partner set forth in such Section 7 of the
Series K Articles Supplementary, with respect to such holder, and any Series K
Preferred Units not so exchanged (the "Excess Units") shall be redeemed by the
Partnership for cash in an amount equal to the original Capital Contribution per
Excess Unit, plus any accrued and unpaid distributions thereon to the date of
redemption subject to any restriction thereon contained in any debt instrument
or agreement of the Partnership. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of such units agrees to
provide representations and covenants reasonably requested by the General
Partner relating to (i) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above) will not
cause any individual to own in excess of 9.0% of the stock of the General
Partner; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates. For purposes of determining the number of
Excess Units under this Section 19.8.A(iii), the "Beneficial Ownership Limit"
and "Constructive Ownership Limit" set forth in the Series K Articles
Supplementary shall be deemed to be 9.0%. To the extent the General Partner
would not be able to pay the cash set forth above in exchange for the Excess
Units, and to the extent consistent with the Charter, the General Partner agrees
that it will grant to the holders of the Series K Preferred Units exceptions to
the Beneficial Ownership Limit and Constructive Ownership Limit set forth in the
Series K Articles Supplementary sufficient to allow such holders to exchange all
of their Series K Preferred Units for Series K Preferred Stock, provided such
holders furnish to the General Partner representations acceptable to the General
Partner in its sole and absolute discretion which assure the General Partner
that such exceptions will not jeopardize the General Partner's tax status as a
REIT for purposes of federal and applicable state law. Notwithstanding any
provision of this Agreement to the contrary, no Series K Limited Partner shall
be entitled to effect an exchange of Series K Preferred Units for Series K
Preferred Shares to the extent that ownership or right to acquire such shares
would cause the Partner or any other Person or, in the opinion of counsel
selected by the General Partner, may cause the Partner or any other Person, to
violate the restrictions on ownership and transfer of Series K Preferred Shares
set forth in the Charter, taking into account any exceptions thereto granted by
the Company in accordance with the terms of the Charter. To the extent any such
attempted exchange for Series K Preferred Shares would be in violation of the
previous sentence, it shall be void ab initio and such Series K Limited Partner
shall not acquire any rights or economic interest in the Series K Preferred
Shares otherwise issuable upon such exchange.
(iv) The redemption of Series K Preferred Units described in
Section 19.8.A(ii) and (iii) shall be subject to the provisions of Section
19.5.B(i) and Section 19.5.C(ii); provided, however, that the term "Redemption
Price" in such Sections 19.5.B(i) and 19.5.C(ii) shall be read to mean the
original Capital Contribution per Series K Preferred Unit being redeemed as set
forth on Exhibit A plus all accrued and unpaid distributions to the redemption
date.
104
B. Procedure for Exchange and/or Redemption of Series K
Preferred Units.
(i) Any exchange shall be exercised pursuant to a notice of
exchange (the "Exchange Notice") delivered to the General Partner by the
Partners representing at least 51% of the outstanding Series K Preferred Units
(or by Contributor in the case of an exchange pursuant to the last sentence of
Section 19.8.A.(i) hereof) by (a) fax and (b) by certified mail postage prepaid.
The General Partner may effect any exchange of Series K Preferred Units, or
exercise its option to cause the Partnership to redeem any portion of the Series
K Preferred Units for cash pursuant to Section 19.8.A(ii) or redeem Excess Units
pursuant to Section 19.8.A(iii), by delivering to each holder of record of
Series K Preferred Units, within ten (10) Business Days following receipt of the
Exchange Notice, (a) if the General Partner elects to cause the Partnership to
acquire any of the Series K Preferred Units then outstanding, (1) certificates
representing the Series K Preferred Shares being issued in exchange for the
Series K Preferred Units of such holder being exchanged and (2) a written notice
(a "Redemption Notice") stating (A) the redemption date, which may be the date
of such Redemption Notice or any other date which is not later than sixty (60)
days following the receipt of the Exchange Notice, (B) the redemption price, (C)
the place or places where the Series K Preferred Units are to be surrendered and
(D) that distributions on the Series K Preferred Units will cease to accrue on
such redemption date, or (b) if the General Partner elects to cause the
Partnership to redeem all of the Series K Preferred Units then outstanding in
exchange for cash, a Redemption Notice. Series K Preferred Units shall be deemed
canceled (and any corresponding Partnership Interest represented thereby deemed
terminated) simultaneously with the delivery of shares of Series K Preferred
Shares (with respect to Series K Preferred Units exchanged) or simultaneously
with the redemption date (with respect to Series K Preferred Units redeemed).
Holders of Series K Preferred Units shall deliver any canceled certificates
representing Series K Preferred Units which have been exchanged or redeemed to
the office of General Partner (which currently is located at ▇▇▇▇ ▇, ▇▇▇ ▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 94111) within ten (10) Business Days of the exchange or
redemption with respect thereto. Notwithstanding anything to the contrary
contained herein, any and all Series K Preferred Units to be exchanged for
Series K Preferred Stock pursuant to this Section 19.8 shall be so exchanged in
a single transaction at one time. As a condition to exchange, the General
Partner may require the holders of Series K Preferred Units to make such
representations as may be reasonably necessary for the General Partner to
establish that the issuance of Series K Preferred Shares pursuant to the
exchange shall not be required to be registered under the Securities Act or any
state securities laws. Any Series K Preferred Shares issued pursuant to this
Section 19.8 shall be delivered as shares which are duly authorized, validly
issued, fully paid and nonassessable, free of any pledge, lien, encumbrance or
restriction other than those provided in the Charter, the Bylaws of the General
Partner, the Securities Act and relevant state securities or blue sky laws.
The certificates representing the Series K Preferred Shares
issued upon exchange of the Series K Preferred Units shall contain the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND STATE SECURITIES LAWS
105
OR (B) IF THE CORPORATION HAS BEEN FURNISHED WITH A
SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER OF THE SHARES
REPRESENTED HEREBY, OR OTHER EVIDENCE SATISFACTORY TO THE
CORPORATION, THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE
PROVISIONS OF SECTION 5 OF THE ACT AND STATE SECURITIES LAWS
AND THE RULES AND REGULATIONS THEREUNDER.
(ii) In the event of an exchange of Series K Preferred Units
for Series K Preferred Shares, an amount equal to the accrued and unpaid
distributions to the date of exchange on any Series K Preferred Units tendered
for exchange shall (i) accrue on the Series K Preferred Shares into which such
Series K Preferred Units are exchanged, and (ii) continue to accrue on such
Series K Preferred Units, which shall remain outstanding following such
exchange, with the General Partner as the holder of such Series K Preferred
Units. Notwithstanding anything to the contrary set forth herein, in no event
shall a holder of a Series K Preferred Unit that was validly exchanged for
Series K Preferred Shares pursuant to this section (other than the General
Partner holding such Series K Preferred Unit following any such exchange),
receive a distribution out of Available Cash of the Partnership, if such holder,
after exchange, is entitled to receive a distribution out of Available Cash with
respect to the Series K Preferred Shares for which such Series K Preferred Unit
was exchanged or redeemed. Further for purposes of the foregoing, in the event
of an exchange of Series K Preferred Units for Series K Preferred Shares, if the
accrued and unpaid distributions per Series K Preferred Unit is not the same for
each Series K Preferred Unit, the accrued and unpaid distributions per Series K
Preferred Unit for each such Series K Preferred Unit shall be equal to the
greatest amount of such accrued and unpaid distributions per Series K Preferred
Unit on any such unit.
(iii) Fractional Series K Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the Series K Preferred Shares on
the day prior to the exchange date as determined in good faith by the Board of
Directors of the General Partner.
C. Adjustment of Exchange Price. In case the General Partner
shall be a party to any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, tender offer for all or substantially
all of the General Partner's capital stock or sale of all or substantially all
of the General Partner's assets), in each case as a result of which the Series K
Preferred Shares will be converted into the right to receive shares of capital
stock, other securities or other property (including cash or any combination
thereof), each Series K Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the consummation of
such transaction by a holder of that number of Series K Preferred Shares or
fraction thereof into which one Series K Preferred Unit was exchangeable
immediately prior to such transaction. The General Partner may not become a
party to any such transaction unless the terms thereof are consistent with the
foregoing.
106
Section 19.9 No Conversion Rights
The Series K Preferred Units shall not be convertible into any
other class or series of interest in the Partnership.
Section 19.10 No Sinking Fund
No sinking fund shall be established for the retirement or redemption of Series
K Preferred Units.
(Signature Pages Follow)
107
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
GENERAL PARTNER:
AMB PROPERTY CORPORATION,
a Maryland corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. Coke
--------------------------------
▇▇▇▇▇▇▇ ▇. Coke
Chief Financial Officer and
Executive Vice President
LIMITED PARTNERS:
AMB PROPERTY CORPORATION,
as attorney-in-fact for each of
the Limited Partners
By: /s/ ▇▇▇▇▇▇▇ ▇. Coke
--------------------------------
▇▇▇▇▇▇▇ ▇. Coke
Chief Financial Officer and
Executive Vice President
S-1
SERIES K LIMITED PARTNER:
GSEP 2002 REALTY CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇
---------------------------
Title: President and CEO
--------------------------
S-2
EXHIBIT A
PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS
I. COMMON UNITS
AGREED VALUE OF COMMON
CONTRIBUTION CASH CONTRIBUTED TOTAL PARTNERSHIP PERCENTAGE
NAME OF PARTNER DATE CONTRIBUTIONS PROPERTY CONTRIBUTIONS UNITS INTEREST
-------------------------------------------------------------------------------------------------------------------------------
GENERAL PARTNER:
AMB Property Corporation (a) 11/26/97 $73,798,710 $1,693,339,826 $1,767,138,536 85,645,102 96.48192%
AMB Property Corporation 12/15/98 $930,048 $0 $930,048 43,008 0.04845%
AMB Property Corporation 01/20/99 $1,000 $0 $1,000 100,000 0.11265%
AMB Property Corporation 01/25/99 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 02/11/99 $131,250 $0 $131,250 6,250 0.00704%
AMB Property Corporation 03/05/99 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 04/20/99 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 04/23/99 $0 $88,290 $88,290 3,600 0.00406%
AMB Property Corporation 05/07/99 ($20,155) $0 ($20,155) (932) -0.00105%
AMB Property Corporation 05/12/99 $0 $10,125,213 $10,125,213 482,153 0.54316%
AMB Property Corporation 05/13/99 $78,750 $0 $78,750 3,750 0.00422%
AMB Property Corporation 06/04/99 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 06/11/99 $13,125 $0 $13,125 625 0.00070%
AMB Property Corporation 06/30/99 $13,125 $0 $13,125 625 0.00070%
AMB Property Corporation 07/02/99 $52,500 $0 $52,500 2,500 0.00282%
AMB Property Corporation 08/03/99 $0 $244,000 $244,000 10,000 0.01127%
AMB Property Corporation 08/06/99 $131,250 $0 $131,250 6,250 0.00704%
AMB Property Corporation 09/15/99 $0 $840,000 $840,000 40,000 0.04506%
AMB Property Corporation 09/15/99 ($15,159) $0 ($15,159) (701) -0.00079%
AMB Property Corporation 12/10/99 ($198,750) $0 ($198,750) (10,000) -0.01127%
AMB Property Corporation 12/10/99 ($197,500) $0 ($197,500) (10,000) -0.01127%
AMB Property Corporation 12/10/99 ($1,657,500) $0 ($1,657,500) (85,000) -0.09576%
AMB Property Corporation 12/13/99 ($1,950,000) $0 ($1,950,000) (100,000) -0.11265%
AMB Property Corporation 12/14/99 ($9,500,000) $0 ($9,500,000) (500,000) -0.56327%
AMB Property Corporation 12/16/99 ($950,000) $0 ($950,000) (50,000) -0.05633%
AMB Property Corporation 12/16/99 ($1,813,888) $0 ($1,813,888) (96,100) -0.10826%
AMB Property Corporation 12/17/99 ($937,500) $0 ($937,500) (50,000) -0.05633%
AMB Property Corporation 12/17/99 ($8,730,150) $0 ($8,730,150) (471,900) -0.53161%
AMB Property Corporation 12/20/99 ($918,750) $0 ($918,750) (50,000) -0.05633%
AMB Property Corporation 12/20/99 ($375,950) $0 ($375,950) (20,600) -0.02321%
AMB Property Corporation 01/07/00 ($28,777,960) $0 ($28,777,960) (1,465,926) -1.65141%
AMB Property Corporation 02/29/00 $0 $0 $0 155,675 0.17537%
AMB Property Corporation 03/31/00 $262,500 $0 $262,500 12,500 0.01408%
AMB Property Corporation 05/01/00 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 05/02/00 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 05/03/00 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 05/05/00 $52,500 $0 $52,500 2,500 0.00282%
AMB Property Corporation 05/05/00 $0 $0 $0 1,000 0.00113%
AMB Property Corporation 05/10/00 $13,125 $0 $13,125 625 0.00070%
AMB Property Corporation 05/31/00 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 06/09/00 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 06/13/00 $254,334 $0 $254,334 11,790 0.01328%
AMB Property Corporation 07/06/00 $0 $4,774,010 $4,774,010 206,425 0.23254%
AMB Property Corporation 07/14/00 $128,747 $0 $128,747 6,072 0.00684%
AMB Property Corporation 07/19/00 $52,500 $0 $52,500 2,500 0.00282%
AMB Property Corporation 07/21/00 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 07/26/00 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 08/10/00 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 08/11/00 $26,250 $0 $26,250 1,250 0.00141%
AMB Property Corporation 08/25/00 $157,500 $0 $157,500 7,500 0.00845%
AMB Property Corporation 09/06/00 $31,594 $0 $31,594 1,500 0.00169%
AMB Property Corporation 09/11/00 $94,500 $0 $94,500 4,500 0.00507%
AMB Property Corporation 09/12/00 $5,250 $0 $5,250 250 0.00028%
AMB Property Corporation 09/15/00 $52,500 $0 $52,500 2,500 0.00282%
AMB Property Corporation 10/01/00 ($7,152) $0 ($7,152) (298) -0.00034%
AMB Property Corporation 11/27/00 $12,600 $0 $12,600 600 0.00068%
AMB Property Corporation 11/28/00 $5,000 $0 $5,000 5,000 0.00563%
AMB Property Corporation 11/29/00 $78,750 $0 $78,750 3,750 0.00422%
AMB Property Corporation 12/01/00 $0 $0 $0 622 0.00070%
AMB Property Corporation 12/05/00 $250,250 $0 $250,250 11,789 0.01328%
AMB Property Corporation 12/06/00 $78,750 $0 $78,750 3,750 0.00422%
AMB Property Corporation 12/13/00 $12,600 $0 $12,600 600 0.00068%
AMB Property Corporation 12/15/00 $10,500 $0 $10,500 500 0.00056%
AMB Property Corporation 01/30/01 $12,446 $0 $12,446 584 0.00066%
A-1
EXHIBIT A
PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS
AGREED VALUE OF COMMON
CONTRIBUTION CASH CONTRIBUTED TOTAL PARTNERSHIP PERCENTAGE
NAME OF PARTNER DATE CONTRIBUTIONS PROPERTY CONTRIBUTIONS UNITS INTEREST
-------------------------------------------------------------------------------------------------------------------------------
AMB Property Corporation 02/27/01 $46,193 $0 $46,193 2,053 0.00231%
AMB Property Corporation 02/27/01 $0 $0 $0 196,517 0.22138%
AMB Property Corporation 02/28/01 $107,952 $0 $107,952 4,992 0.00562%
AMB Property Corporation 02/28/01 $0 $36,750 $36,750 1,554 0.00175%
AMB Property Corporation 03/07/01 $0 $872,202 $872,202 37,115 0.04181%
AMB Property Corporation 03/07/01 $13,125 $0 $13,125 625 0.00070%
AMB Property Corporation 03/08/01 $774,736 $0 $774,736 36,667 0.04131%
AMB Property Corporation 03/23/01 $0 $11,752,188 $11,752,188 559,268 0.63003%
AMB Property Corporation 04/18/01 ($568,750) $0 ($568,750) (25,000) -0.02816%
AMB Property Corporation 05/17/01 $0 $0 $0 1,000 0.00113%
AMB Property Corporation 05/21/01 $16,800 $0 $16,800 800 0.00090%
AMB Property Corporation 05/22/01 $0 $0 $0 41,204 0.04642%
AMB Property Corporation 06/14/01 $95,586 $0 $95,586 4,584 0.00516%
AMB Property Corporation 07/01/01 ($11,248) $0 ($11,248) (461) -0.00052%
AMB Property Corporation 07/12/01 $23,520 $0 $23,520 1,120 0.00126%
AMB Property Corporation 07/13/01 $5,094 $0 $5,094 250 0.00028%
AMB Property Corporation 07/16/01 $286,424 $0 $286,424 13,459 0.01516%
AMB Property Corporation 07/26/01 $21,000 $0 $21,000 1,000 0.00113%
AMB Property Corporation 07/27/01 $14,700 $0 $14,700 700 0.00079%
AMB Property Corporation 08/02/01 $90,300 $0 $90,300 4,300 0.00484%
AMB Property Corporation 08/03/01 $11,500 $0 $11,500 500 0.00056%
AMB Property Corporation 08/08/01 $5,000 $0 $5,000 250 0.00028%
AMB Property Corporation 08/09/01 $5,775 $0 $5,775 275 0.00031%
AMB Property Corporation 08/10/01 $78,750 $0 $78,750 3,750 0.00422%
AMB Property Corporation 08/14/01 $11,406 $0 $11,406 500 0.00056%
AMB Property Corporation 08/15/01 $31,500 $0 $31,500 1,500 0.00169%
AMB Property Corporation 08/17/01 $14,063 $0 $14,063 625 0.00070%
AMB Property Corporation 08/22/01 $420,000 $0 $420,000 20,000 0.02253%
AMB Property Corporation 09/18/01 $0 $557,838 $557,838 23,700 0.02670%
AMB Property Corporation 09/20/01 ($597,500) $0 ($597,500) (25,000) -0.02816%
AMB Property Corporation 09/24/01 ($7,087,000) $0 ($7,087,000) (298,400) -0.33616%
AMB Property Corporation 09/25/01 ($550,780) $0 ($550,780) (23,100) -0.02602%
AMB Property Corporation 09/26/01 ($7,108,893) $0 ($7,108,893) (301,200) -0.33931%
AMB Property Corporation 09/27/01 ($5,857,250) $0 ($5,857,250) (250,000) -0.28163%
AMB Property Corporation 09/28/01 ($236,000) $0 ($236,000) (10,000) -0.01127%
AMB Property Corporation 10/01/01 ($1,069,350) $0 ($1,069,350) (45,000) -0.05069%
AMB Property Corporation 10/02/01 ($2,192,275) $0 ($2,192,275) (91,900) -0.10353%
AMB Property Corporation 10/19/01 $11,406 $0 $11,406 500 0.00056%
AMB Property Corporation 10/25/01 ($3,515,636) $0 ($3,515,636) (150,000) -0.16898%
AMB Property Corporation 10/26/01 ($32,550) $0 ($32,550) (1,400) -0.00158%
AMB Property Corporation 10/29/01 ($4,002,822) $0 ($4,002,822) (171,600) -0.19331%
AMB Property Corporation 10/31/01 $0 $0 $0 (340) -0.00038%
AMB Property Corporation 11/02/01 $14,258 $0 $14,258 625 0.00070%
AMB Property Corporation 11/09/01 $0 $337,710 $337,710 13,801 0.01555%
AMB Property Corporation 11/12/01 $10,500 $0 $10,500 500 0.00056%
AMB Property Corporation 11/16/01 $84,121 $0 $84,121 4,167 0.00469%
AMB Property Corporation 11/19/01 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 11/20/01 $39,375 $0 $39,375 1,875 0.00211%
AMB Property Corporation 11/23/01 $5,344 $0 $5,344 250 0.00028%
AMB Property Corporation 11/26/01 $13,125 $0 $13,125 625 0.00070%
AMB Property Corporation 11/27/01 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 11/28/01 $52,500 $0 $52,500 2,500 0.00282%
AMB Property Corporation 12/05/01 $105,000 $0 $105,000 5,000 0.00563%
AMB Property Corporation 12/07/01 $77,344 $0 $77,344 3,125 0.00352%
AMB Property Corporation 12/11/01 $210,000 $0 $210,000 10,000 0.01127%
AMB Property Corporation 12/17/01 $6,063 $0 $6,063 250 0.00028%
AMB Property Corporation 12/26/01 $1,346,486 $0 $1,346,486 64,009 0.07211%
AMB Property Corporation 01/01/02 ($780,067) $0 ($780,067) (29,945) -0.03373%
AMB Property Corporation 01/02/02 $88,863 $0 $88,863 4,168 0.00470%
AMB Property Corporation 01/11/02 $0 $266,413 $266,413 10,227 0.01152%
AMB Property Corporation 01/11/02 $5,219 $0 $5,219 250 0.00028%
AMB Property Corporation 01/29/02 $182,128 $0 $182,128 8,500 0.00958%
AMB Property Corporation 01/31/02 $53,976 $0 $53,976 2,496 0.00281%
AMB Property Corporation 02/01/02 $0 $634,825 $634,825 25,884 0.02916%
AMB Property Corporation 02/06/02 $0 $53,275 $53,275 2,501 0.00282%
AMB Property Corporation 02/12/02 $0 $38,746 $38,746 1,917 0.00216%
A-2
EXHIBIT A
PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS
AGREED VALUE OF COMMON
CONTRIBUTION CASH CONTRIBUTED TOTAL PARTNERSHIP PERCENTAGE
NAME OF PARTNER DATE CONTRIBUTIONS PROPERTY CONTRIBUTIONS UNITS INTEREST
-------------------------------------------------------------------------------------------------------------------------------
AMB Property Corporation 02/26/02 $0 $0 $0 194,585 0.21921%
AMB Property Corporation 02/27/02 $0 $28,750 $28,750 1,250 0.00141%
AMB Property Corporation 02/27/02 $1,500 $0 $1,500 1,500 0.00169%
AMB Property Corporation 03/06/02 $0 $13,125 $13,125 625 0.00070%
AMB Property Corporation 03/13/02 $0 $70,000 $70,000 3,000 0.00338%
AMB Property Corporation 03/14/02 $0 $210,000 $210,000 10,000 0.01127%
AMB Property Corporation 03/15/02 $0 $98,805 $98,805 4,834 0.00545%
AMB Property Corporation 03/18/02 $0 $25,547 $25,547 1,250 0.00141%
--------------------------------------------------------------------------------
TOTAL GENERAL PARTNER (7,619,199) 1,724,407,513 1,716,788,314 83,835,114 94.44291%
A-3
EXHIBIT A
PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS
AGREED VALUE OF COMMON
CONTRIBUTION CASH CONTRIBUTED TOTAL PARTNERSHIP PERCENTAGE
NAME OF PARTNER DATE CONTRIBUTIONS PROPERTY CONTRIBUTIONS UNITS INTEREST
-----------------------------------------------------------------------------------------------------------------------------------
LIMITED PARTNERS:
▇▇▇▇▇ ▇▇▇▇▇ 11/26/97 $0 $1,150,359 $1,150,359 54,779 0.06171%
▇▇▇▇▇▇ ▇▇▇▇▇▇ 11/26/97 $0 $6,174 $6,174 294 0.00033%
▇▇▇▇▇ ▇▇▇▇▇▇ 11/26/97 $0 $216,447 $216,447 10,307 0.01161%
GP Met Phase I 11/26/97 $0 $1,774,164 $1,774,164 84,484 0.09517%
GP Met 4 & 12 11/26/97 $0 $1,486,212 $1,486,212 70,772 0.07973%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 54 Trust 11/26/97 $0 $1,118,754 $1,118,754 53,274 0.06001%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 54 Trust 11/26/97 $0 $1,118,754 $1,118,754 53,274 0.06001%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 54 Trust 11/26/97 $0 $1,118,754 $1,118,754 53,274 0.06001%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 57 Trust 11/26/97 $0 $3,919,734 $3,919,734 186,654 0.21027%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 57 Trust 11/26/97 $0 $3,919,734 $3,919,734 186,654 0.21027%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 57 Trust 11/26/97 $0 $3,919,734 $3,919,734 186,654 0.21027%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 58 Trust 11/26/97 $0 $3,919,734 $3,919,734 186,654 0.21027%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 58 Trust 11/26/97 $0 $3,919,734 $3,919,734 186,654 0.21027%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 58 Trust 11/26/97 $0 $3,919,734 $3,919,734 186,654 0.21027%
Allmerica 11/26/97 $0 $11,752,188 $11,752,188 559,628 0.63044%
▇▇▇▇▇▇ 11/26/97 $0 $10,125,213 $10,125,213 482,153 0.54316%
▇▇▇▇▇▇▇▇▇▇ Investment Properties (b) 03/30/98 $0 $12,435,871 $12,435,871 517,547 0.58303%
▇▇▇▇▇▇▇▇▇▇ Enterprises (c) 03/30/98 $0 $10,334,678 $10,334,678 438,110 0.49354%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 03/31/98 $0 $1,990,798 $1,990,798 81,174 0.09145%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 03/31/98 $0 $634,825 $634,825 25,884 0.02916%
▇▇▇▇ ▇▇▇▇▇▇▇▇ 03/31/98 $0 $266,073 $266,073 10,849 0.01222%
▇▇▇▇▇ ▇▇▇▇▇▇ 03/31/98 $0 $806,404 $806,404 32,880 0.03704%
▇▇▇▇▇▇▇▇ Properties, Inc. 06/04/98 $0 $61,250 $61,250 2,590 0.00292%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 06/04/98 $0 $660,275 $660,275 27,916 0.03145%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 06/04/98 $0 $319,725 $319,725 13,518 0.01523%
▇▇▇▇▇▇ ▇. ▇▇▇▇ 06/04/98 $0 $147,000 $147,000 6,215 0.00700%
▇▇▇▇▇▇ ▇▇▇▇▇ 06/04/98 $0 $36,750 $36,750 1,554 0.00175%
▇▇▇▇▇ ▇. ▇▇▇▇▇ as trustee of the ▇▇▇▇▇
▇. ▇▇▇▇▇ Living Trust under Agreement
dated August 22, 1995 06/30/98 $0 $580,747 $580,747 23,801 0.02681%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 06/30/98 $0 $580,747 $580,747 23,801 0.02681%
Lincoln Property Company No. 238 Ltd. 09/24/98 $0 $8,320,955 $8,320,955 353,520 0.39825%
Lincoln Property Company No. 287, LTD 09/24/98 $0 $2,760,957 $2,760,957 117,300 0.13214%
Lincoln Property Company No. 355, LTD 09/24/98 $0 $739,600 $739,600 31,422 0.03540%
Lincoln Property Company No. 440, LTD 09/24/98 $0 $767,640 $767,640 32,614 0.03674%
Lincoln Property Company No. 1179 09/24/98 $0 $3,883,230 $3,883,230 164,981 0.18586%
▇▇▇▇ ▇▇▇▇▇▇▇▇ 12/31/98 $0 ($44,145) ($44,145) (1,800) -0.00203%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 12/31/98 $0 $22,073 $22,073 900 0.00101%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 12/31/98 $0 $22,073 $22,073 900 0.00101%
▇▇▇▇ ▇▇▇▇▇▇▇▇ 01/31/99 $0 ($44,145) ($44,145) (1,800) -0.00203%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/31/99 $0 $22,073 $22,073 900 0.00101%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/31/99 $0 $22,073 $22,073 900 0.00101%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III 02/09/99 $0 $2,376 $2,376 99 0.00011%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 02/09/99 $0 $4,056 $4,056 169 0.00019%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 02/09/99 $0 $2,808 $2,808 117 0.00013%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 02/09/99 $0 $2,592 $2,592 108 0.00012%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 02/09/99 $0 $144 $144 6 0.00001%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 02/09/99 $0 $144 $144 6 0.00001%
RA & DM, Inc. 02/09/99 $0 $96 $96 4 0.00000%
RA & FM, Inc. 02/09/99 $0 $888 $888 37 0.00004%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 02/09/99 $0 $7,080 $7,080 295 0.00033%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 02/09/99 $0 $1,080 $1,080 45 0.00005%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 02/09/99 $0 $1,536 $1,536 64 0.00007%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 02/09/99 $0 $672 $672 28 0.00003%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 02/09/99 $0 $432 $432 18 0.00002%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Sirota 02/09/99 $0 $912 $912 38 0.00004%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 04/23/99 $0 ($44,145) ($44,145) (1,800) -0.00203%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 04/23/99 $0 ($44,145) ($44,145) (1,800) -0.00203%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III 04/30/99 $0 $888,379 $888,379 37,016 0.04170%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 04/30/99 $0 $1,479,701 $1,479,701 61,654 0.06946%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 04/30/99 $0 $1,046,686 $1,046,686 43,612 0.04913%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 04/30/99 $0 $966,601 $966,601 40,275 0.04537%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 04/30/99 $0 $55,873 $55,873 2,328 0.00262%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 04/30/99 $0 $55,873 $55,873 2,328 0.00262%
RA & DM, Inc. 04/30/99 $0 $93,122 $93,122 3,880 0.00437%
A-4
EXHIBIT A
PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS
AGREED VALUE OF COMMON
CONTRIBUTION CASH CONTRIBUTED TOTAL PARTNERSHIP PERCENTAGE
NAME OF PARTNER DATE CONTRIBUTIONS PROPERTY CONTRIBUTIONS UNITS INTEREST
-----------------------------------------------------------------------------------------------------------------------------------
RA & FM, Inc. 04/30/99 $0 $121,732 $121,732 5,072 0.00571%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 04/30/99 $0 $2,777,815 $2,777,815 115,742 0.13039%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 04/30/99 $0 $569,904 $569,904 23,746 0.02675%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 04/30/99 $0 $569,904 $569,904 23,746 0.02675%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 04/30/99 $0 $246,772 $246,772 10,282 0.01158%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 04/30/99 $0 $159,238 $159,238 6,635 0.00747%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Sirota 04/30/99 $0 $343,618 $343,618 14,317 0.01613%
▇▇▇▇▇▇ 05/12/99 $0 ($10,125,213) ($10,125,213) (482,153) -0.54316%
▇▇▇▇▇▇▇▇▇▇ Investment Properties, LLC 05/21/99 $0 $450,811 $450,811 18,638 0.02100%
CBDV Investors, L.L.C. 05/26/99 $0 $5,000,000 $5,000,000 212,766 0.23969%
▇▇▇▇▇▇ ▇. ▇▇▇▇ 06/04/99 $0 ($147,000) ($147,000) (6,215) -0.00700%
CBDV Investors, L.L.C. 07/30/99 $0 ($5,000,000) ($5,000,000) (212,766) -0.23969%
Tiger Lafayette, L.L.C. 07/30/99 $0 $3,255,596 $3,255,596 138,536 0.15607%
Divco Western Commercial, L.L.C. 07/30/99 $0 $872,202 $872,202 37,115 0.04181%
ICCL East, L.L.C. 07/30/99 $0 $872,202 $872,202 37,115 0.04181%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 08/03/99 $0 ($244,000) ($244,000) (10,000) -0.01127%
GP Met 4 & 12 09/15/99 $0 ($840,000) ($840,000) (40,000) -0.04506%
Lincoln Property Company No. 238 Ltd. 09/30/99 $0 $282 $282 12 0.00001%
Lincoln Property Company No. 287, Ltd 09/30/99 $0 $26,668 $26,668 1,133 0.00128%
Lincoln Property Company No. 355, Ltd. 09/30/99 $0 $45,780 $45,780 1,945 0.00219%
Lincoln Property Company No. 440, Ltd. 09/30/99 $0 $10,639 $10,639 452 0.00051%
Lincoln Property Company No. 1179 09/30/99 $0 $2,354 $2,354 100 0.00011%
Lincoln Property Company No. 238 Ltd. 09/30/99 $0 ($8,321,259) ($8,321,259) (353,532) -0.39827%
Lincoln Property Company No. 287, Ltd 09/30/99 $0 ($2,508,862) ($2,508,862) (106,590) -0.12008%
Lincoln Property Company No. 355, Ltd. 09/30/99 $0 ($765,722) ($765,722) (32,532) -0.03665%
Lincoln Property Company No. 440, Ltd. 09/30/99 $0 ($762,733) ($762,733) (32,405) -0.03651%
Lincoln Property Company No. 1179 09/30/99 $0 ($3,613,595) ($3,613,595) (153,525) -0.17295%
▇▇▇▇ ▇▇▇▇▇ 09/30/99 $0 $98,834 $98,834 4,199 0.00473%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 09/30/99 $0 $2,006,831 $2,006,831 85,261 0.09605%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 09/30/99 $0 $6,539,424 $6,539,424 277,830 0.31298%
▇▇▇▇ ▇. ▇▇▇▇▇ 09/30/99 $0 $112,933 $112,933 4,798 0.00541%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 09/30/99 $0 $46,698 $46,698 1,984 0.00224%
▇▇▇▇ ▇▇▇▇▇ Inc. 09/30/99 $0 $5,073,438 $5,073,438 215,547 0.24282%
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ 09/30/99 $0 $743,761 $743,761 31,599 0.03560%
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 09/30/99 $0 $1,350,252 $1,350,252 57,366 0.06462%
Lincoln Property Company No. 287, Ltd. 11/30/99 $0 ($278,763) ($278,763) (11,843) -0.01334%
Lincoln Property Company No. 355, Ltd. 11/30/99 $0 ($19,658) (19,658) (835) -0.00094%
Lincoln Property Company No. 440, Ltd. 11/30/99 $0 ($15,546) ($15,546) (661) -0.00074%
Lincoln Property Company No. 1179 11/30/99 $0 ($271,989) ($271,989) (11,556) -0.01302%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/07/00 $0 $0 $0 312,071 0.35156%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Trust) 01/07/00 $0 $0 $0 37,013 0.04170%
T. ▇▇▇▇▇▇ ▇▇▇▇▇ 01/07/00 $0 $0 $0 235,506 0.26530%
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 62,366 0.07026%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 78,988 0.08898%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 25,868 0.02914%
▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/07/00 $0 $0 $0 32,206 0.03628%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 01/07/00 $0 $0 $0 56,028 0.06312%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 388,126 0.43724%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 91,158 0.10269%
W. ▇▇▇▇▇ ▇▇▇▇▇ 01/07/00 $0 $0 $0 25,569 0.02880%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 5,114 0.00576%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇▇▇▇ ▇. Coke 01/07/00 $0 $0 $0 8,439 0.00951%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/07/00 $0 $0 $0 15,257 0.01719%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 5,114 0.00576%
▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/07/00 $0 $0 $0 6,818 0.00768%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Trust) 01/07/00 $0 $0 $0 6,818 0.00768%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇ ▇. ▇▇▇▇▇ 01/07/00 $0 $0 $0 5,114 0.00576%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 01/07/00 $0 $0 $0 8,439 0.00951%
▇▇▇▇ ▇. ▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 6,733 0.00758%
A-5
EXHIBIT A
PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS
AGREED VALUE OF COMMON
CONTRIBUTION CASH CONTRIBUTED TOTAL PARTNERSHIP PERCENTAGE
NAME OF PARTNER DATE CONTRIBUTIONS PROPERTY CONTRIBUTIONS UNITS INTEREST
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/07/00 $0 $0 $0 5,114 0.00576%
▇▇▇▇▇ ▇. ▇▇▇▇▇ 01/07/00 $0 $0 $0 5,114 0.00576%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 6,818 0.00768%
▇.▇. ▇▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 6,818 0.00768%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/07/00 $0 $0 $0 3,409 0.00384%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 01/07/00 $0 $0 $0 2,045 0.00230%
GP Met 4 +12 07/06/00 $0 ($646,212) ($646,212) (30,772) -0.03467%
ICCL East, L.L.C. 07/06/00 $0 ($872,202) ($872,202) (37,115) -0.04181%
Tiger Lafayette, L.L.C. 07/06/00 $0 ($3,255,596) ($3,255,596) (138,536) -0.15607%
AFCO Cargo DFW Limited Partnership 11/07/00 $0 $1,046,849 $1,046,849 44,523 0.05016%
WEST*PAC Limited Partnership 11/07/00 $0 $134,609 $134,609 5,725 0.00645%
AFCO Cargo SEA Limited Partnership 11/07/00 $0 $1,046,848 $1,046,848 44,523 0.05016%
▇▇▇▇▇▇▇▇▇▇ Investment Properties, LLC 11/09/00 $0 ($798,804) ($798,804) (34,046) -0.03835%
▇▇▇▇▇▇ ▇▇▇▇▇ 02/28/01 $0 ($36,750) ($36,750) (1,554) -0.00175%
Divco Western Commercial, L.L.C. 03/07/01 $0 ($872,202) ($872,202) (37,115) -0.04181%
Allmerica 03/23/01 $0 ($11,752,188) ($11,752,188) (559,628) -0.63044%
▇▇▇▇▇▇▇▇▇▇ Investment Properties, LLC 08/17/01 $0 ($1,597,608) ($1,597,608) (68,092) -0.07671%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 08/17/01 $0 $798,804 $798,804 34,046 0.03835%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 08/17/01 $0 $798,804 $798,804 34,046 0.03835%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 08/17/01 $0 ($798,804) ($798,804) (34,046) -0.03835%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 08/17/01 $0 ($798,804) ($798,804) (34,046) -0.03835%
▇▇▇▇▇▇▇▇▇▇ Investment Properties, LLC 09/07/01 $0 ($8,494,501) ($8,494,501) (362,046) -0.40786%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 09/07/01 $0 $1,923,924 $1,923,924 82,000 0.09238%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 09/07/01 $0 $1,923,924 $1,923,924 82,000 0.09238%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Revocable Holding Trust 09/07/01 $0 $2,722,729 $2,722,729 116,046 0.13073%
Trust B u/w ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 09/07/01 $0 $1,923,924 $1,923,924 82,000 0.09238%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 09/07/01 $0 ($1,818,750) ($1,818,750) (75,000) -0.08449%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 09/07/01 $0 ($1,818,750) ($1,818,750) (75,000) -0.08449%
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ 09/18/01 $0 ($557,838) ($557,838) (23,700) -0.02670%
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 11/09/01 $0 ($337,710) ($337,710) (13,801) -0.01555%
Trust B u/w ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 11/16/01 $0 ($121,900) ($121,900) (5,000) -0.00563%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 01/11/02 $0 ($177,609) ($177,609) (6,818) -0.00768%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01/11/02 $0 ($88,804) ($88,804) (3,409) -0.00384%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 02/01/02 $0 ($634,825) ($634,825) (25,884) -0.02916%
▇▇▇▇▇▇▇▇▇▇ Enterprises 03/29/02 $0 ($10,334,678) ($10,334,678) (438,110) -0.49354%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 03/29/02 $0 $2,325,302 $2,325,302 98,575 0.11105%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 03/29/02 $0 $2,325,302 $2,325,302 98,575 0.11105%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Revocable Holding Trust 03/29/02 $0 $2,325,302 $2,325,302 98,575 0.11105%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 03/29/02 $0 $2,325,302 $2,325,302 98,575 0.11105%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 03/29/02 $0 $1,033,468 $1,033,468 43,810 0.04935%
--------------------------------------------------------------------------------
TOTAL LIMITED PARTNERS $0 $78,459,613 $78,459,613 4,932,916 5.55709%
--------------------------------------------------------------------------------
TOTAL GENERAL PARTNER AND LIMITED PARTNERS (7,619,199) 1,802,867,126 1,795,247,927 88,768,030 100.0%
================================================================================
(a) Excludes 229,411 of Sub OP and Long Gate LLC shares/units and preferred partnership units.
(b) Includes 934 units reserved.
(c) Includes 8,268 units reserved.
RECONCILIATION:
Total Units per above 88,768,030
Plus Sub OP & Long Gate LLC shares/units excluded (a) 229,411
Total Shares & Units as of 2/01/02 88,997,441
A-6
EXHIBIT A
PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS
II. SERIES A PREFERRED UNITS
Agreed Value of
Contribution Cash Contributed Total Partnership Percentage
Name of Partner Date Contributions Property Contributions Units Interest
--------------- ------------ ------------- --------------- ------------- ----------- ----------
GENERAL PARTNER:
AMB Property Corporation 7/27/98 $96,100,000 $0 $96,100,000 4,000,000 100.00000%
----------- -- ----------- --------- ---------
TOTAL SERIES A PREFERRED UNITS $96,100,000 $0 $96,100,000 4,000,000 100.00000%
=========== == =========== ========= =========
III. SERIES B PREFERRED UNITS
Agreed Value of
Contribution Cash Contributed Total Partnership Percentage
Name of Partner Date Contributions Property Contributions Units Interest
----------------------------- ------------ ------------- -------------- ------------- ----------- -----------
LIMITED PARTNER:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ 11/12/98 $65,000,000 $0 $65,000,000 1,300,000 100.00000%
Fund, ▇.▇.
▇▇▇▇▇▇▇ Sachs 1998 Exchange 1/1/02 -- -- -- (1,300,000) (100.00000%)
Place Fund, L.P. (f/k/a ▇▇▇▇▇▇
Street 1998 Exchange Fund, L.P.)
GSEP 1998 Realty Corp. 1/1/02 -- -- -- 1,300,000 100.00000%
----------- -- ----------- --------- ---------
TOTAL SERIES B PREFERRED UNITS $65,000,000 $0 $65,000,000 1,300,000 100.00000%
=========== == =========== ========= =========
IV. SERIES J PREFERRED UNITS
Agreed Value of
Contribution Cash Contributed Total Partnership Percentage
Name of Partner Date Contributions Property Contributions Units Interest
--------------- ------------ ------------- --------------- ------------- ----------- ----------
LIMITED PARTNER:
GSEP 2001 Realty Corp. 8/21/01 $40,000,000 $0 $40,000,000 800,000 100.00000%
----------- -- ----------- --------- ---------
TOTAL SERIES J PREFERRED UNITS $40,000,000 $0 $40,000,000 800,000 100.00000%
=========== == =========== ========= =========
V. SERIES K PREFERRED UNITS
Agreed Value of
Contribution Cash Contributed Total Partnership Percentage
Name of Partner Date Contributions Property Contributions Units Interest
--------------- ------------ ------------- --------------- ------------- ----------- ----------
LIMITED PARTNER:
GSEP 2002 Realty Corp. 4/17/02 $40,000,000 $0 $40,000,000 800,000 100%
----------- -- ----------- --------- ---------
TOTAL SERIES K PREFERRED UNITS $40,000,000 $0 $40,000,000 800,000 100%
=========== == =========== ========= =========
A-7
EXHIBIT B
NOTICE OF REDEMPTION
The undersigned hereby [irrevocably] (i) exchanges
____________ Limited Partnership Units in AMB Property, L.P. in accordance with
the terms of the
Limited Partnership Agreement of AMB Property, L.P. dated as of
_________________, as amended, and the rights of Redemption referred to therein,
(ii) surrenders such Limited Partnership Units and all right, title and interest
therein and (iii) directs that the cash (or, if applicable, REIT Shares)
deliverable upon Redemption or exchange be delivered to the address specified
below, and if applicable, that such REIT Shares be registered or placed in the
name(s) and at the address(es) specified below.
Dated:
----------------------------
Name of Limited Partner:
---------------------------------
(Signature of Limited Partner)
---------------------------------
(Street Address)
---------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
---------------------------------
Issue REIT Shares in the name of:
Please insert social security or identifying number:
Address (if different than above):
B-1
EXHIBIT C
CONSTRUCTIVE OWNERSHIP DEFINITION
The term "Constructively Owns" means ownership determined
through the application of the constructive ownership rules of Section 318 of
the Code, as modified by Section 856(d)(5) of the Code. Generally, these rules
provide the following:
a. an individual is considered as owning the Ownership Interest that is
owned, actually or constructively, by or for his spouse, his children, his
grandchildren, and his parents;
b. an Ownership Interest that is owned, actually or constructively, by
or for a partnership, limited liability company or estate is considered as owned
proportionately by its partners, members or beneficiaries;
c. an Ownership Interest that is owned, actually or constructively, by
or for a trust is considered as owned by its beneficiaries in proportion to the
actuarial interest of such beneficiaries (provided, however, that in the case of
a "grantor trust" the Ownership Interest will be considered as owned by the
grantors);
d. if ten percent (10%) or more in value of the stock in a corporation
is owned, actually or constructively, by or for any person, such person shall be
considered as owning the Ownership Interest that is owned, actually or
constructively, by or for such corporation in that proportion which the value of
the stock which such person so owns bears to the value of all the stock in such
corporation;
e. an Ownership Interest that is owned, actually or constructively, by
or for a partner or member which actually or constructively owns a 25% or
greater capital interest or profits interest in a partnership or limited
liability company, or by or for a beneficiary of an estate or trust, shall be
considered as owned by the partnership, limited liability company, estate, or
trust (or, in the case of a grantor trust, the grantors);
f. if ten percent (10%) or more in value of the stock in a corporation
is owned, actually or constructively, by or for any person, such corporation
shall be considered as owning the Ownership Interest that is owned, actually or
constructively, by or for such person;
g. if any person has an option to acquire an Ownership Interest
(including an option to acquire an option or any one of a series of such
options), such Ownership Interest shall be considered as owned by such person;
h. an Ownership Interest that is constructively owned by a person by
reason of the application of the rules described in paragraphs (a) through (g)
above shall, for purposes of applying paragraphs (a) through (g), be considered
as actually owned by such person provided, however, that (i) an Ownership
Interest constructively owned by an individual by reason of paragraph (a) shall
not be considered as owned by him for purposes of again applying paragraph (a)
in order to make another the constructive owner of such Ownership Interest, (ii)
an Ownership Interest constructively owned by a partnership, estate, trust, or
corporation by reason of the application of paragraphs (e) or (f) shall not be
considered as owned by it for purposes of applying paragraphs (b), (c), or (d)
in order to make another the constructive owner of such Ownership Interest,
(iii) if an Ownership Interest may be considered as owned by an individual under
paragraphs (a) or (g), it shall be considered as owned by him under paragraph
(g) and (iv) for purposes of the above described rules, an S corporation shall
be treated as a partnership and any stockholder of the S corporation shall be
treated as a partner of such partnership except that this rule shall not apply
for purposes of determining whether stock in the S corporation is constructively
owned by any person.
i. For purposes of the above summary of the constructive ownership
rules, the term "Ownership Interest" means the ownership of stock with respect
to a corporation and, with respect to any other type of entity, the ownership of
an interest in either its assets or net profits.
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF PARTNERSHIP UNIT CERTIFICATE
CERTIFICATE FOR PARTNERSHIP UNITS OF
AMB PROPERTY, L.P.
No. UNITS
-------------- ----------
AMB Property Corporation as the General Partner of AMB Property, L.P.,
a Delaware limited partnership (the "Operating Partnership"), hereby certifies
that is a Limited Partner of the Operating Partnership whose Partnership
Interests therein, as set forth in the Agreement of Limited Partnership of AMB
Property, L.P., dated as of ______________, 200_ (as it may be amended, modified
or supplemented from time to time in accordance with its terms, (the
"Partnership Agreement"), under which the Operating Partnership is existing and
as filed in the office of the Delaware [State Department of Assessments and
Taxation] (copies of which are on file at the Operating Partnership's principal
offices at ▇▇▇▇ ▇, ▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, represent units of
limited partnership interest in the Operating Partnership (the "Partnership
Units").
THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT (A COPY OF
WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED
IN THE PARTNERSHIP AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF
THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER OF THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE
THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER.
DATED: , 200 .
-------------------- -
AMB PROPERTY CORPORATION
General Partner of AMB
Property, L.P.
ATTEST:
By: By:
------------------------------ -----------------------
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF PARTNERSHIP UNIT CERTIFICATE
CERTIFICATE FOR PERFORMANCE UNITS OF
AMB PROPERTY, L.P.
No. UNITS
-------------- ----------
AMB Property Corporation as the General Partner of AMB Property, L.P.,
a Delaware limited partnership (the "Operating Partnership"), hereby certifies
that is a Limited Partner of the Operating Partnership whose Partnership
Interests therein, as set forth in the Agreement of Limited Partnership of AMB
Property, L.P., dated as of ______________, 200_ (as it may be amended, modified
or supplemented from time to time in accordance with its terms, (the
"Partnership Agreement"), under which the Operating Partnership is existing and
as filed in the office of the Delaware [State Department of Assessments and
Taxation] (copies of which are on file at the Operating Partnership's principal
offices at ▇▇▇▇ ▇, ▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, represent performance
units (as defined in the Partnership Agreement) of limited partnership interest
in the Operating Partnership (the "Performance Units").
THE PERFORMANCE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT (A COPY OF
WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED
IN THE PARTNERSHIP AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE PERFORMANCE UNITS REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF
THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER OF THE PERFORMANCE UNITS REPRESENTED BY THIS CERTIFICATE
THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER.
DATED: , 200 .
-------------------- -
AMB PROPERTY CORPORATION
General Partner of AMB
Property, L.P.
ATTEST:
By: By:
------------------------------ -----------------------
D-2
EXHIBIT E
SCHEDULE OF PARTNERS' OWNERSHIP
WITH RESPECT TO TENANTS
None.
E-1
EXHIBIT F
SCHEDULE OF REIT SHARES
ACTUALLY OR CONSTRUCTIVELY OWNED BY 25% LIMITED PARTNERS
OTHER THAN THOSE ACQUIRED PURSUANT TO AN EXCHANGE
None.
F-1
EXHIBIT G
PERFORMANCE UNITS
The Performance Units issued by the Partnership pursuant to
Section 4.3.F. were issued to the following Persons in the following amounts on
January 7, 2000:
1. The first 3,000,000 Performance Units were issued 90% to
the "Old PLPs" (as defined below) and 10% to the "New PLPs" (as defined below).
2. Any Performance Units issued in excess of those set forth
in paragraph 1 above were issued 80% to the Old PLPs and 20% to the New PLPs.
3. The Performance Units allocable to each group of PLPs
pursuant to paragraphs 1 and 2 above were allocated among the PLPs within such
group in accordance with each PLP's percentage interest as set forth in the
definitions below.
4. The receipt of Performance Units by a PLP was not subject
to any vesting requirements.
Definitions
"Old PLPs" means the Persons set forth on Schedule G-1 attached hereto, with the
percentage interest so indicated.
"New PLPs" means the Persons set forth on Schedule G-2 attached hereto, with the
percentage interest so indicated.
G-1
SCHEDULE ▇-▇
▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ Percentage
--------------- ----------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 23.6537%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 2.8055%
T. ▇▇▇▇▇▇ ▇▇▇▇▇ 17.8504%
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 4.7271%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 5.9870%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1.9607%
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2.4411%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 4.2467%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 29.4184%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 6.9094%
G-1
SCHEDULE ▇-▇
▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------- ----------
W. ▇▇▇▇▇ ▇▇▇▇▇ 17.4419%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 3.4884%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 2.3256%
▇▇▇▇▇▇▇ ▇. Coke 5.7558%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 2.3256%
▇▇▇▇▇ ▇. ▇▇▇▇▇ 2.3256%
▇▇▇▇▇ ▇. ▇▇▇▇▇ 10.4070%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 3.4884%
▇▇▇▇ ▇. ▇▇▇▇▇▇ 4.6512%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 2.3256%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 4.6512%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2.3256%
▇▇▇▇ ▇. ▇▇▇▇▇ 3.4884%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 5.7558%
▇▇▇▇ ▇. ▇▇▇▇▇ 2.3256%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2.3256%
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 4.5930%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3.4884%
▇▇▇▇▇ ▇. ▇▇▇▇▇ 3.4884%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 4.6512%
▇.▇. ▇▇▇▇▇▇▇▇ 4.6512%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2.3256%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1.3953%
G-2
EXHIBIT H
SCHEDULE OF CERTAIN AGREEMENTS RELATING TO
PROPERTIES WITH RESTRICTIONS ON DISPOSITION
PURSUANT TO SECTION 7.3.F
1. Joint Venture Interest Exchange /Contribution Agreement, dated November 26,
1997, by and among AMB Property, L.P., ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇.
2. Joint Venture Interest Exchange/Contribution Agreement, dated November 26,
1997, by and among AMB Property, L.P., GP Met Phase One 95, Ltd. and GP Met
4/12, Ltd.
3. Agreement for Transfer of Realty and Assets, dated November 26, 1997, by
and among AMB Property, L.P. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as Trustees for the ▇▇▇▇▇▇▇ Family Trusts.
4. Contribution Agreement, dated November 26, 1997, between AMB Property, L.P.
and ▇▇▇▇▇▇ Skokie Real Estate Corporation. (Allmerica Portfolio)
5. Agreement for Transfer of Realty and Assets, dated November 26, 1997, by
and among AMB Property, L.P., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
6. Contribution Agreement, dated March 30, 1998, by and among AMB Property,
L.P. and the other parties named therein. (▇▇▇▇▇▇▇▇▇▇ Portfolio)
7. Contribution Agreement, dated March 31, 1998, by and among AMB Property,
L.P., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇.
8. Contribution Agreement, dated June 4, 1998 by and among AMB Property, L.P.
and the other parties named therein. (Southfield Portfolio)
9. Amended and Restated Contribution Agreement, dated as of August 6, 1998, by
and among AMB Property, L.P., AMB Property Corporation and the other
parties named therein. (Willow Park Portfolio)
10. Portfolio Contribution Agreement, dated as of November 17, 1998, by and
among AMB Property, L.P., AMB Property Corporation and the individuals
named therein, as amended by the First Amendment, dated as of February 1,
1999, and the Second Amendment, dated as of April 30, 1999. (Manekin
Portfolio)
11. Purchase and Sale Agreement, dated as of December 4, 1998, by and between
AMB Property, L.P. and CBDV Investors, L.L.C. (WOCAC Portfolio)
H-1
EXHIBIT I
SCHEDULE OF CERTAIN AGREEMENTS CONTAINING
LIMITATIONS ON GENERAL PARTNERS GENERAL AUTHORITY
1. Contribution Agreements, dated March 30, 1998, by and among AMB Property,
L.P. and the other parties named therein. (▇▇▇▇▇▇▇▇▇▇ Portfolio)
2. AMB Property, L.P., First Amendment to Amended and Restated Agreement of
Limited Partnership, dated as of March 30, 1998.
3. Contribution Agreement, dated March 31, 1998, by and among AMB Property,
L.P. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇.
4. AMB Property, L.P., Second Amendment to Amended and Restated Agreement of
Limited Partnership, dated as of March 31, 1998.
5. Contribution Agreement, dated June 4, 1998 by and among AMB Property, L.P.
and the other parties named therein. (Southfield Portfolio)
6. AMB Property, L.P. Third Amendment to Amended and Restated Agreement of
Limited Partnership, dated as of June 4, 1998.
7. Contribution Agreement, dated May 21, 1998, by and among AMB Property, L.P.
and the other parties named therein. (Alsip Industrial Portfolio)
8. AMB Property, L.P. Fourth Amendment to Amended and Restated Agreement of
Limited Partnership, dated as of June 30, 1998.
9. Amended and Restated Contribution Agreement dated as of August 6, 1998, by
and among AMB Property, L.P., AMB Property Corporation and the other
parties named therein. (Willow Park Portfolio)
10. AMB Property, L.P. First Amendment to Second Amended and Restated Agreement
of Limited Partnership, dated as of September 24, 1998.
11. Portfolio Contribution Agreement, dated as of November 17, 1998, by and
among AMB Property, L.P., AMB Property Corporation and the individuals
named therein, as amended by the First Amendment, dated as of February 1,
1999, and the Second Amendment, dated as of April 30, 1999. (Manekin
Portfolio)
12. Purchase and Sale Agreement, dated as of December 4, 1998, by and between
AMB Property, L.P. and CBDV Investors, L.L.C. (WOCAC Portfolio)
13. AMB Property, L.P. Fourth Amendment to Third Amended and Restated Agreement
of Limited Partnership, dated as of February 1, 1999.
I-1
14. AMB Property, L.P. Fifth Amendment to Third Amended and Restated Agreement
of Limited Partnership, dated as of April 30, 1999.
15. AMB Property, L.P. Sixth Amendment to Third Amended and Restated Agreement
of Limited Partnership, dated as of May 21, 1999.
16. AMB Property, L.P. Ninth Amendment to Third Amended and Restated Agreement
of Limited Partnership, dated as of September 30, 1999.
17. AMB Property, L.P. Fourth Amended and Restated Agreement of Limited
Partnership, dated as of August 10, 2000.
18. AMB Property, L.P. First Amendment to Fourth Amended and Restated Agreement
of Limited Partnership dated as of November 7, 2000.
19. Assignment and Assumption Agreement dated as of December 31, 2000 by and
between the AMB Property Corporation and AMB Property, L.P.
20. AMB Property, L.P. Fifth Amended and Restated Agreement of Limited
Partnership, dated as of September 21, 2001.
21. Assignment and Assumption Agreement dated as of September 21, 2001 by and
between the AMB Property Corporation and AMB Property, L.P.
22. AMB Property, L.P. First Amendment to Fifth Amended and Restated Agreement
of Limited Partnership dated as of January 1, 2002.
I-2
EXHIBIT J
RESTRICTIONS ON OWNERSHIP AND TRANSFER TO PRESERVE TAX BENEFIT
(a) Definitions. for the purposes of this Exhibit J, the following
terms shall have the following meanings:
"Charitable Beneficiary" shall mean one or more
beneficiaries of a Trust, as determined pursuant to subsection
(c)(vi), each of which shall be an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
"Code" shall mean the Internal Revenue Code of 1986,
as amended.
"Constructive Ownership" shall mean ownership of
Partnership Units by a Person who is or would be treated as an
owner of such Partnership Units either actually or
constructively through the application of Section 318 of the
Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructive Owner," "Constructively Owns" and
"Constructively Owned" shall have the correlative meanings.
"Exempted Person" shall mean any Person exempted from
time to time by the General Partner in its sole and absolute
discretion.
"Market Price" shall mean the market price of the
Partnership Units on the relevant date as determined in good
faith by the General Partner; provided, however, if the
General Partner has outstanding shares of capital stock which
correspond to such Partnership Units, the Market Price of each
such Partnership Unit shall be equal to the Value of a share
of such capital stock, subject to adjustment if the right to
exchange such Partnership Units for such stock is other than
one-to-one.
"Ownership Limit" shall mean 24.9% of the capital or
profits interests of the Partnership.
"Person" shall mean an individual, corporation,
partnership, limited liability company, estate, trust
(including a trust qualified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set
aside for or to be used exclusively for the purposes described
in Section 642(c) of the Code, association, private foundation
within the meaning of Section 509(a) of the Code, joint stock
company or other entity.
"Purported Beneficial Transferee" shall mean, with
respect to any purported Transfer (or other event) which
results in a transfer to a Trust, as provided in subsection
(b)(ii), the Purported Record Transferee, unless the Purported
Record Transferee would have acquired or owned Partnership
Units for another Person who is the beneficial transferee or
owner of such Partnership Units, in which case the Purported
Beneficial Transferee shall be such Person.
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"Purported Record Transferee" shall mean, with
respect to any purported Transfer (or other event) which
results in a transfer to a Trust, as provided in subsection
(b)(ii), the holder of the Partnership Units as set forth or
to be set forth in Exhibit A to the Partnership Agreement, and
any Assignee of such Partnership Units, if such Transfer or
ownership had been valid under subsection (b)(i).
"Restriction Termination Date" shall mean the first
day after the date hereof on which the General Partner
determines, in its sole and absolute discretion, that
compliance with subsection (b)(i) is no longer necessary or
advisable.
"Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Partnership Units,
(including (i) the granting of any option or entering into any
agreement for the sale, transfer or other disposition of
Partnership Units or (ii) the sale, transfer, assignment or
other disposition of any securities (or rights convertible
into or exchangeable for Partnership Units), whether voluntary
or involuntary, whether such transfer has occurred of record
or beneficially or Constructively (including but not limited
to transfers of interests in other entities which results in
changes in Constructive Ownership of Partnership Units), and
whether such transfer has occurred by operation of law or
otherwise.
"Trust" shall mean each of the trusts provided for in
subsection (c).
"Trustee" shall mean any Person unaffiliated with the
Partnership, or a Purported Beneficial Transferee, or a
Purported Record Transferee, that is appointed by the
Partnership to serve as trustee of a Trust.
Capitalized terms used and not defined herein shall have the meanings ascribed
to them in the Fourth Amended and Restated Agreement of Limited Partnership of
AMB Property, L.P. (the "Partnership Agreement), as such agreement may be
amended from time to time. All references to "Section" refer to the Partnership
Agreement.
(b) Restriction on Ownership and Transfers.
(i) Prior to the Restriction Termination Date, no Person,
other than an Exempted Person, shall at any time Constructively Own Partnership
Units in excess of the Ownership Limit if the representations contained in
Section 3.4.D are not at such time true and correct.
(ii) If, prior to the Restriction Termination Date, any
Transfer or other event occurs that, if effective, would result in any Person
Constructively Owning Partnership Units in violation of subsection (b)(i), (1)
then that number of Partnership Units that otherwise would cause such Person to
violate subsection (b)(i) (rounded up to the nearest whole Partnership Unit)
shall be automatically transferred (provided such Transfer is not in violation
of the restrictions on transfer set forth in the Partnership Agreement, except
to the extent the General Partner waives such restrictions) to a Trust for the
benefit of a Charitable Beneficiary, as described in subsection (c), effective
as of the close of business on the business day prior to the date of such
Transfer or other event, and such Purported Beneficial Transferee shall
thereafter have no rights in such Partnership Units or (2) if, for any reason,
the transfer to the Trust described in clause (1) of this sentence is not
J-2
automatically effective as provided therein to prevent any Person from
Constructively Owning Partnership Units in violation of subsection (b)(i), then
the Transfer of that number of Partnership Units that otherwise would cause any
Person to violate subsection (b)(i) shall be void ab initio, and the Purported
Beneficial Transferee shall have no rights in such Partnership Units.
(c) Transfers of Partnership Units in Trust.
(i) Upon any purported Transfer or other event described in
subsection (b)(ii), such Partnership Units shall be deemed to have been
transferred to the Trustee in his capacity as trustee of a Trust for the
exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the
Trustee shall be deemed to be effective as of the close of business on the
business day prior to the purported Transfer or other event that results in a
transfer to the Trust pursuant to subsection (b)(ii). The Trustee shall be
appointed by the Partnership and shall be a Person unaffiliated with the
Partnership, any Purported Beneficial Transferee, or any Purported Record
Transferee. Each Charitable Beneficiary shall be designated by the Partnership
as provided in subsection (c)(vi).
(ii) Partnership Units held by the Trustee shall be issued and
outstanding Partnership Units of the Partnership. The Purported Beneficial
Transferee or Purported Record Transferee shall have no rights in the
Partnership Units held by the Trustee. The Purported Beneficial Transferee or
Purported Record Transferee shall not benefit economically from ownership of any
Partnership Units held in trust by the Trustee, shall have no rights to
distributions or allocations with respect to Partnership Units held in the Trust
and shall not possess any rights to vote or other rights attributable to the
Partnership Units held in the Trust.
(iii) The Trustee shall have all voting rights and rights to
distributions and allocations with respect to Partnership Units held in the
Trust, which rights shall be exercised for the exclusive benefit of the
Charitable Beneficiary. Any distribution paid prior to the discovery by the
Partnership that Partnership Units have been transferred to the Trustee shall be
paid to the Trustee upon demand, and any distribution with respect to such
Partnership Units shall be paid when due to the Trustee. Any distributions so
paid over to the Trustee shall be held in trust for the Charitable Beneficiary.
The Purported Record Transferee and Purported Beneficial
Transferee shall have no voting rights with respect to the Partnership Units
held in the Trust and, subject to Delaware law, effective as of the date the
Partnership Units has been transferred to the Trustee, the Trustee shall have
the authority (at the Trustee's sole discretion) (i) to rescind as void any vote
cast by a Purported Record Transferee with respect to such Partnership Units
prior to the discovery by the Partnership that the Partnership Units has been
transferred to the Trustee and (ii) to recast such vote in accordance with the
desires of the Trustee acting for the benefit of the Charitable Beneficiary;
provided, however, that if the Partnership has already taken irreversible
action, then the Trustee shall not have the authority to rescind and recast such
vote. Notwithstanding any other provision of this Exhibit J to the contrary,
until the Partnership has received notification that the Partnership Units have
been transferred into a Trust, the Partnership shall be entitled to rely on its
Partnership Unit transfer and other unitholder records for purposes of preparing
Exhibit A to the Partnership Agreement, lists of unitholders entitled to vote at
meetings, and otherwise conducting votes of Partners.
J-3
(iv) Within 20 days of receiving notice from the Partnership
that Partnership Units have been transferred to the Trust, the Trustee of the
Trust shall, in accordance with the terms of (and subject to the limitations
contained in) the Partnership Agreement, sell the Partnership Units held in the
Trust to a Person, designated by the Trustee, whose ownership of the Partnership
Units will not violate the ownership limitations set forth in subsection (b)(i).
Upon such sale, the interest of the Charitable Beneficiary in the Partnership
Units sold shall terminate and the Trustee shall distribute the net proceeds of
the sale to the Purported Record Transferee and to the Charitable Beneficiary as
provided in this subsection (c)(iv). The Purported Record Transferee shall
receive the lesser of (1) the price paid by the Purported Record Transferee for
the Partnership Units in the transaction that resulted in such transfer to the
Trust (or, if the event which resulted in the transfer to the Trust did not
involve a purchase of such Partnership Units at Market Price, the Market Price
of such Partnership Units on the day of the event which resulted in the transfer
of such Partnership Units to the Trust) and (2) the price per Partnership Unit
received by the Trustee (net of any commissions and other expenses of sale) from
the sale or other disposition of the Partnership Units held in the Trust. Any
net sales proceeds in excess of the amount payable to the Purported Record
Transferee shall be immediately paid to the Charitable Beneficiary together with
any distributions thereon. If, prior to the discovery by the Partnership that
Partnership Units have been transferred to the Trustee, such Partnership Units
are sold by a Purported Record Transferee then (i) such Partnership Units shall
be deemed to have been sold on behalf of the Trust and (ii) to the extent that
the Purported Record Transferee received an amount for such Partnership Units
that exceeds the amount that such Purported Record Transferee was entitled to
receive pursuant to this subsection (c)(iv), such excess shall be paid to the
Trustee upon demand. The expenses described in item (2) above shall include any
expenses of administering the Trust, any transfer of Partnership Units thereto
or disposition of Partnership Units thereby, which shall be allocated equitably
among the Partnership Units which are transferred to the Trust.
(v) Partnership Units transferred to the Trustee shall be
deemed to have been offered for sale to the Partnership, or its designee, at a
price per Partnership Unit equal to the lesser of (i) the price paid by the
Purported Record Transferee for the Partnership Units in the transaction that
resulted in such transfer to the Trust (or, if the event which resulted in the
transfer to the Trust did not involve a purchase of such Partnership Units at
Market Price, the Market Price of such Partnership Units on the day of the event
which resulted in the transfer of such Partnership Units to the Trust) and (ii)
the Market Price on the date the Partnership, or its designee, accepts such
offer. The Partnership shall have the right to accept such offer until the
Trustee has sold the Partnership Units held in the Trust pursuant to subsection
(c)(iv). Upon such a sale to the Partnership, the interest of the Charitable
Beneficiary in the Partnership Units sold shall terminate and the Trustee shall
distribute the net proceeds of the sale to the Purported Record Transferee and
any distributions held by the Trustee with respect to such Partnership Units
shall thereupon be paid to the Charitable Beneficiary.
(vi) By written notice to the Trustee, the Partnership shall
designate one or more nonprofit organizations to be the Charitable Beneficiary
of the interest in the Trust such that the Partnership Units held in the Trust
would not violate the restrictions set forth in subsection (b)(i) in the hands
of such Charitable Beneficiary.
(d) Remedies For Breach. If the General Partner shall at any time
determine in good faith that a Transfer or other event has taken place in
violation of subsection (b) or that a Person intends to acquire, has attempted
to acquire or may acquire beneficial ownership (determined
J-4
without reference to any rules of attribution) or Constructive Ownership of any
Partnership Units of the Partnership in violation of subsection (b), the General
Partner shall take such action as it deems advisable to refuse to give effect or
to prevent such Transfer, including, but not limited to, causing the Partnership
to redeem Partnership Units, refusing to give effect to such Transfer on the
books of the Partnership or instituting proceedings to enjoin such Transfer;
provided, however, that any Transfers (or, in the case of events other than a
Transfer, ownership or Constructive Ownership) in violation of subsection
(b)(i), shall automatically result in the transfer to a Trust as described in
subsection (b)(ii).
(e) Notice of Restricted Transfer. Any Person who acquires or attempts
to acquire or own Partnership Units in violation of subsection (b), or any
Person who is a Purported Beneficial Transferee such that an automatic transfer
to a Trust results under subsection (b)(ii), shall immediately give written
notice to the Partnership of such event and shall provide to the Partnership
such other information as the Partnership may request in order to determine the
effect, if any, of such Transfer or attempted Transfer on such Person's
compliance with subsection (b)(i).
(f) Owners Required To Provide Information. Prior to the Restriction
Termination Date each Person who is a beneficial owner or Constructive Owner of
Partnership Units and each Person who is holding Partnership Units for a
beneficial owner or Constructive Owner shall provide to the Partnership such
information that the Partnership may request, in good faith, in order to
determine the Partnership's status as a partnership (as opposed to a
corporation) or the General Partner's status as a REIT for federal income tax
purposes.
(g) Remedies Not Limited. Nothing contained in this Exhibit J shall
limit the authority of the General Partner to take such other action as it deems
necessary or advisable to protect the Partnership and the interests of its
Partners by preservation of the Partnership's status as a partnership (as
opposed to a corporation) or the General Partner's status as a REIT for federal
income tax purposes.
(h) Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this Exhibit J, including any definition contained in
subsection (a), the General Partner shall have the power to determine the
application of the provisions of this Exhibit J with respect to any situation
based on the facts known to it. In the event that a provision of this Exhibit J
requires an action by the General Partner and Exhibit J fails to provide
specific guidance with respect to such action, the General Partner shall have
the power to determine the action to be taken so long as such action is not
contrary to the provisions of Exhibit J. Absent a decision to the contrary by
the General Partner (which the General Partner may make in its sole and absolute
discretion), if a Person would have (but for the remedies set forth in
subsection (b)) acquired Constructive Ownership of Partnership Units in
violation of subsection (b)(i), such remedies (as applicable) shall apply first
to the Partnership Units which, but for such remedies, would have been actually
owned by such Person, and second to Partnership Units which, but for such
remedies, would have been Constructively Owned (but not actually owned) by such
Person, pro rata among the Persons who actually own such Partnership Units based
upon the relative number of the Partnership Units held by each such Person.
J-5