AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY, L.P.
----------------------------------------
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TABLE OF CONTENTS
PAGE
---- ARTICLE 1. DEFINED TERMS..................................................................1
ARTICLE 2. ORGANIZATIONAL MATTERS........................................................16
Section 2.1. Organization.....................................................16
Section 2.2. Name ............................................................16
Section 2.3. Resident Agent; Principal Office.................................16
Section 2.4. Power of Attorney................................................17
Section 2.5. Term ............................................................18
Section 2.6. Number of Partners...............................................18
ARTICLE 3. PURPOSE.......................................................................18
Section 3.1. Purpose and Business.............................................18
Section 3.2. Powers ..........................................................19
Section 3.3. Partnership Only for Purposes Specified..........................19
Section 3.4. Representations and Warranties by the Parties....................19
ARTICLE 4. CAPITAL CONTRIBUTIONS.........................................................21
Section 4.1. Capital Contributions of the Partners............................21
Section 4.2. Loans by Third Parties...........................................22
Section 4.3. Additional Funding and Capital Contributions.....................22
Section 4.4. Stock Incentive Plan.............................................24
Section 4.5. No Preemptive Rights.............................................25
Section 4.6. Other Contribution Provisions....................................25
ARTICLE 5. DISTRIBUTIONS.................................................................25
Section 5.1. Requirement and Characterization of Distributions................25
Section 5.2. Distributions in Kind............................................25
Section 5.3. Distributions Upon Liquidation...................................26
Section 5.4. Distributions to Reflect Issuance of Additional
Partnership Interests..........................................26
ARTICLE 6. ALLOCATIONS...................................................................26
Section 6.1. Timing and Amount of Allocations of Net Income and Net Loss......26
Section 6.2. General Allocations..............................................26
Section 6.3. Additional Allocation Provisions.................................28
Section 6.4. Tax Allocations..................................................30
ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS.........................................30
Section 7.1. Management.......................................................30
Section 7.2. Certificate of Limited Partnership...............................34
Section 7.3. Restrictions on General Partner's Authority......................34
Section 7.4. Reimbursement of the General Partner.............................37
Section 7.5. Outside Activities of the General Partner........................37
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Section 7.6. Contracts with Affiliates........................................38
Section 7.7. Indemnification..................................................39
Section 7.8. Liability of the General Partner.................................41
Section 7.9. Other Matters Concerning the General Partner.....................41
Section 7.10. Title to Partnership Assets.....................................42
Section 7.11. Reliance by Third Parties.......................................42
ARTICLE 8. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS....................................43
Section 8.1. Limitation of Liability..........................................43
Section 8.2. Management of Business...........................................43
Section 8.3. Outside Activities of Limited Partners...........................43
Section 8.4. Return of Capital................................................44
Section 8.5. Rights of Limited Partners Relating to the Partnership...........44
Section 8.6. Redemption Rights................................................45
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS........................................47
Section 9.1. Records and Accounting...........................................47
Section 9.2. Fiscal Year......................................................47
Section 9.3. Reports .........................................................47
Section 9.4. Nondisclosure of Certain Information.............................48
ARTICLE 10. TAX MATTERS...................................................................48
Section 10.1. Preparation of Tax Returns......................................48
Section 10.2. Tax Elections...................................................48
Section 10.3. Tax Matters Partner.............................................48
Section 10.4. Organizational Expenses.........................................50
Section 10.5. Withholding.....................................................50
ARTICLE 11. TRANSFERS AND WITHDRAWALS.....................................................51
Section 11.1. Transfer........................................................51
Section 11.2. Transfer of General Partner's Partnership Interest..............51
Section 11.3. Limited Partners' Rights to Transfer............................53
Section 11.4. Substituted Limited Partners....................................55
Section 11.5. Assignees.......................................................55
Section 11.6. General Provisions..............................................56
ARTICLE 12. ADMISSION OF PARTNERS.........................................................58
Section 12.1. Admission of Successor General Partner..........................58
Section 12.2. Admission of Additional Limited Partners........................58
Section 12.3. Amendment of Agreement and Certificate of Limited
Partnership...................................................59
ARTICLE 13. DISSOLUTION AND LIQUIDATION...................................................59
Section 13.1. Dissolution.....................................................59
Section 13.2. Winding Up......................................................60
Section 13.3. Compliance with Timing Requirements of Regulations..............61
Section 13.4. Deemed Distribution and Recontribution..........................61
Section 13.5. Rights of Limited Partners......................................62
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Section 13.6. Notice of Dissolution...........................................62
Section 13.7. Cancellation of Certificate of Limited Partnership..............62
Section 13.8. Reasonable Time for Winding-Up..................................62
Section 13.9. Waiver of Partition.............................................62
ARTICLE 14. AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS..................................63
Section 14.1. Amendments......................................................63
Section 14.2. Action by the Partners..........................................63
ARTICLE 15. GENERAL PROVISIONS............................................................64
Section 15.1. Addresses and Notice............................................64
Section 15.2. Titles and Captions.............................................64
Section 15.3. Pronouns and Plurals............................................64
Section 15.4. Further Action..................................................64
Section 15.5. Binding Effect..................................................64
Section 15.6. Creditors.......................................................65
Section 15.7. Waiver .........................................................65
Section 15.8. Counterparts....................................................65
Section 15.9. Applicable Law..................................................65
Section 15.10. Invalidity of Provisions.......................................65
Section 15.11. Limitation to Preserve REIT Status.............................65
Section 15.12. Entire Agreement...............................................66
Section 15.13. No Rights as Stockholders......................................66
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of November __, 1997, 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, together with any other Persons who become Partners in the Partnership as provided herein.
WHEREAS, the Company proposes to effect a public offering of its common stock, to acquire and cause the Partnership to acquire direct and indirect interests in [100] industrial and retail properties and other assets, to cause the Partnership to enter into certain mortgage financing transactions, and to contribute the remaining net proceeds from the public offering to the Partnership;
WHEREAS, the Partnership will issue Partnership Interests to the Company and other persons in accordance with the foregoing transactions;
NOW, THEREFORE, BE IT RESOLVED, that for good and adequate consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1.
DEFINED TERMS
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
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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" means, with respect to any Capital Contribution, the close of business on the Business Day last preceding the date of the Capital Contribution; provided that, if such Capital Contribution is being made by the General Partner in respect of the proceeds from the issuance of REIT Shares (or the issuance of the General Partner's securities exercisable for, convertible into or exchangeable for REIT Shares), then the Adjustment Date shall be as of the close of business on the Business Day last preceding the date of the issuance of such securities.
"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 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:
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(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,
(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.
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"Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in Los Angeles, California and New York, New York are authorized or required by law to be closed.
"Capital Account" means, with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions:
(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 (which does not result in a termination of the Partnership for Federal income tax purposes), 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.
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"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.
"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 Articles of Incorporation of the General Partner filed with the Maryland State Department of Assessments and Taxation on ___________________, 1997, as 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.
"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, 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 holding Percentage Interests that in the aggregate are equal to or greater than a majority of the aggregate Percentage Interests of all 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 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.
"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
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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 of Partnership Interests, (i) the total number of Partnership Units of the General Partner in such class 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 of Partnership Interests; (ii) divided by the Percentage Interest of the General Partner in such class of Partnership Interests on such date.
"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 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
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