THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY II, L.P.
--------------------------------------
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINED TERMS AND RULES OF CONSTRUCTION 2
Section 1.1. Definitions 2
ARTICLE 2. ORGANIZATIONAL MATTERS 15
Section 2.1. Organization 15
Section 2.2. Name 15
Section 2.3. Resident Agent; Principal Office 16
Section 2.4. Power of Attorney 16
Section 2.5. Term 17
Section 2.6. Number of Partners 17
ARTICLE 3. PURPOSE 18
Section 3.1. Purpose and Business 18
Section 3.2. Powers 18
Section 3.3. Partnership Only for Purposes Specified 18
Section 3.4. Representations and Warranties by the Parties 19
Section 3.5. Certain ERISA Matters 21
ARTICLE 4. CAPITAL CONTRIBUTIONS 21
Section 4.1. Capital Contributions of the Partners 21
Section 4.2. Loans 21
Section 4.3. Additional Funding and Capital Contributions 21
Section 4.4. No Preemptive Rights 22
Section 4.5. Other Contribution Provisions 22
ARTICLE 5. DISTRIBUTIONS 23
Section 5.1. Requirement and Characterization of Distributions 23
Section 5.2. Distributions in Kind 23
Section 5.3. Distributions Upon Liquidation 24
Section 5.4. Distributions to Reflect Issuance of Additional Partnership Interests 24
ARTICLE 6. ALLOCATIONS 24
Section 6.1. Timing and Amount of Allocations of Net Income and Net Loss 24
Section 6.2. General Allocations 24
Section 6.3. Additional Allocation Provisions 26
Section 6.4. Tax Allocations 28
ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS 29
Section 7.1. Management 29
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Section 7.2. Certificate of Limited Partnership 33
Section 7.3. Restrictions on General Partner's Authority 33
Section 7.4. Reimbursement of the General Partner 35
Section 7.5. Outside Activities of the General Partner 36
Section 7.6. Employee Benefit Plans 36
Section 7.7. Indemnification 36
Section 7.8. Liability of the General Partner 38
Section 7.9. Other Matters Concerning the General Partner 39
Section 7.10. Title to Partnership Assets 40
Section 7.11. Reliance by Third Parties 40
ARTICLE 8. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 41
Section 8.1. Limitation of Liability 41
Section 8.2. Management of Business 41
Section 8.3. Outside Activities of Limited Partners 41
Section 8.4. Return of Capital 42
Section 8.5. Rights of Limited Partners Relating to the Partnership 42
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS 43
Section 9.1. Records and Accounting 43
Section 9.2. Fiscal Year 43
Section 9.3. Reports 43
Section 9.4. Nondisclosure of Certain Information 44
ARTICLE 10. TAX MATTERS 44
Section 10.1. Preparation of Tax Returns 44
Section 10.2. Tax Elections 44
Section 10.3. Tax Matters Partner 44
Section 10.4. Organizational Expenses 46
Section 10.5. Withholding 46
ARTICLE 11. TRANSFERS AND WITHDRAWALS 46
Section 11.1. Transfer 46
Section 11.2. Transfer of General Partner's and Common Limited Partner's Partnership
Interest 47
Section 11.3. Preferred Limited Partners' Rights to Transfer 47
Section 11.4. Substituted Limited Partners 49
Section 11.5. Assignees 49
Section 11.6. General Provisions 50
ARTICLE 12. ADMISSION OF PARTNERS 52
Section 12.1. Admission of Successor General Partner 52
Section 12.2. Admission of Additional Limited Partners 52
Section 12.3. Amendment of Agreement and Certificate of Limited Partnership 53
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ARTICLE 13. DISSOLUTION AND LIQUIDATION 53
Section 13.1. Dissolution 53
Section 13.2. Winding Up 54
Section 13.3. Compliance with Timing Requirements of Regulations 55
Section 13.4. Deemed Distribution and Recontribution 56
Section 13.5. Rights of Limited Partners 56
Section 13.6. Notice of Dissolution 56
Section 13.7. Cancellation of Certificate of Limited Partnership 56
Section 13.8. Reasonable Time for Winding-Up 57
Section 13.9. Waiver of Partition 57
ARTICLE 14. AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS 57
Section 14.1. Amendments 57
Section 14.2. Action by the Partners 57
ARTICLE 15. GENERAL PROVISIONS 58
Section 15.1. Addresses and Notice 58
Section 15.2. Titles and Captions 58
Section 15.3. Pronouns and Plurals 58
Section 15.4. Further Action 59
Section 15.5. Binding Effect 59
Section 15.6. Creditors 59
Section 15.7. Waiver 59
Section 15.8. Counterparts 59
Section 15.9. Applicable Law 59
Section 15.10. Invalidity of Provisions 59
Section 15.11. Entire Agreement 59
Section 15.12. No Rights as Stockholders 60
ARTICLE 16. SERIES C PREFERRED UNITS 60
Section 16.1. Designation and Number 60
Section 16.2. Ranking 60
Section 16.3. Distributions 60
Section 16.4. Liquidation Proceeds 62
Section 16.5. Redemption 62
Section 16.6. Voting Rights 64
Section 16.7. Transfer Restrictions 65
Section 16.8. Exchange Rights 65
Section 16.9. No Conversion Rights 70
Section 16.10. No Sinking Fund 70
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THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY II, L.P.
THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of November 24, 1998, is entered into by and among AMB Property Holding 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, the General Partner and the Existing Limited Partners are parties to that certain Second Amended and Restated Agreement of Limited Partnership, dated June 29, 1998, as amended;
WHEREAS, pursuant to Section 4.3.B of the Partnership Agreement, the General Partner may, in its sole and absolute discretion subject to Delaware law, in connection with any Capital Contribution, issue additional Partnership Interests in one or more classes, or one or more series of any 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;
WHEREAS, on the date hereof, Belcrest Realty Corporation, a Delaware corporation and Belair Real Estate Corporation, a Delaware corporation (each a "Contributor" and, together the "Contributors") have made an aggregate Capital Contribution of $110,000,000, in cash, to the Partnership in exchange for which Contributors are entitled to receive an aggregate of 2,200,000 Series C Preferred Units in the Partnership with rights, preferences, exchange and other rights, voting powers and restrictions, limitations as to distributions, qualifications and terms and conditions as set forth herein;
WHEREAS, pursuant to the authority granted to the General Partner under the Partnership Agreement, the General Partner desires to amend and restate the Partnership Agreement to reflect (i) the issuance of the Series C Preferred Units, (ii) the admission of the Contributors as Additional Limited Partners and holder of a certain number of Series C Preferred Units and (iii) certain other matters described herein;
WHEREAS, each of the Contributors desire to become a party to the Partnership Agreement as a Limited Partner and to be bound by all terms, conditions and other provisions of the Partnership Agreement; and
WHEREAS, by virtue of the execution of this Agreement by the Company in its capacity as General Partner of the Partnership, the General Partner hereby consent to the
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amendment and restatement of the Second Amended and Restated Agreement of Limited Partnership.
NOW, THEREFORE, for good and adequate consideration, the receipt of which is hereby acknowledged, the parties hereto agree 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.D.
"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
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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 Third Amended and Restated Agreement of Limited Partnership, as it may be amended, modified, supplemented or restated from time to time.
"AMB" means AMB Property Corporation, a Maryland corporation, in its capacity as the owner of 100% of the common stock of the General Partner and as the sole general partner of the Operating Partnership.
"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,
(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, 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:
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(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 AMB.
"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:
(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.
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(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.
"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 filed with the Maryland Department of Assessments and Taxation on November 24, 1997.
"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.
"Common Limited Partner" means any Person holding Common Units, and named as a Common Limited Partner in Exhibit A attached hereto, as such Exhibit may be
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amended from time to time, or any Substituted Limited Partner or Additional Limited Partner, in such Person's capacity as a Common Limited Partner in 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.
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