EXHIBIT 10.71
FIRST AMENDMENT TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXXXX REALTY, L.P.
This First Amendment (the "First Amendment") to the Amended and
Restated Agreement of Limited Partnership (the "Partnership Agreement") of
Xxxxxx Realty, L.P. (the "Partnership") is made and entered into as of the 31
day of October, 1997, by and among the Partnership and the parties listed on the
signature pages hereto (each, an "Investor" and collectively, the "Investors").
Capitalized terms used and not defined herein shall have the meanings ascribed
to them in the Partnership Agreement.
RECITALS
A. In connection with the acquisition of certain properties (the
"Xxxxx Properties") by the Partnership as set forth in that certain Contribution
Agreement by and among the Partnership and the parties listed on the signature
pages thereto dated as of October 21, 1997 (the "Contribution Agreement"), the
Partnership desires to issue units of limited partnership ("Partnership Units")
in the Partnership to the Investors as set forth on Exhibit A hereto and to
issue Partnership Units after the date of this First Amendment to certain of the
Investors, all as set forth in, and in accordance with the terms of, the
Contribution Agreement.
B. The Partnership Agreement does not require the consent of any
party thereto other than Xxxxxx Realty Corporation ("Kilroy" or the "General
Partner"), as general partner thereunder, to admit the Investors as limited
partners to the Partnership upon the contribution of the Xxxxx Properties to the
Partnership or to enter into this First Amendment.
C. Each of the parties hereto desires to enter into this First
Amendment in order to establish certain rights and obligations of the Investors
under the Partnership Agreement in connection with the contribution of the Xxxxx
Properties to the Partnership pursuant to the Contribution Agreement and their
receipt of Partnership Units pursuant hereto.
AGREEMENT
1. Admission of Limited Partners. Effective as of the date hereof,
pursuant to Section 12.2 of the Partnership Agreement providing for the
admission to the Partnership of Additional Limited Partners, each of the
Investors making a Capital Contribution on the date hereof is hereby admitted as
a Limited Partner and agrees to be bound by all of the terms of this First
Amendment and the Partnership Agreement. In conjunction with such admission,
each such Investor has made a Capital Contribution to the Partnership in the
amount set forth on Exhibit A hereto in exchange for the number of Partnership
Units set forth on Exhibit A hereto. The General Partner will reflect the
admission of each such Investor on the books and records of the Partnership upon
such Investor making a Capital Contribution. Any Investor (other than any
Investor who makes a Capital Contribution on the date hereof) who makes a
Capital
Contribution after the date hereof will be admitted as a Limited Partner
at such time and Exhibit A will be revised to reflect such Capital Contribution.
2. Representations and Warranties. Each Investor hereby confirms
that the representations and warranties set forth in Section 3.4 of the
Partnership Agreement and Section 11.1(x) of the Contribution Agreement as to
such Investor are true and correct on the date hereof and on the date of any
subsequent Capital Contribution by such Investor.
3. Limited Partner Consent. With respect to matters requiring by
the terms of the Partnership Agreement the consent or approval of the Limited
Partners of the Partnership, including any amendments to, or waivers of, the
provisions of the Partnership Agreement, each of the Investors other than those
set forth on Schedule 1 hereby agrees that it shall vote (which term shall
include the giving of any written consent or approval) all of its Partnership
Units, and all of its Partnership Units shall be deemed to have been voted, in
the same proportion and in the same manner as the Partnership Units held and
voted by Xxxx X. Xxxxxx, Xx., or, in the event of his death, by his legal
representative; provided, however, that with respect to any matter requiring the
consent or approval of the Limited Partners that would amend the preferences,
rights or privileges of such Investor's Partnership Units under the provisions
of the Partnership Agreement in a materially adverse manner, which amendment
would not also similarly affect the other Limited Partners, such Investor's
Partnership Units shall be voted in accordance with such Investor's direction.
4. Redemption Rights.
(a) Pursuant to Section 8.6 of the Partnership Agreement, each
Limited Partner has the right, subject to the terms and conditions set forth
therein, to require the Partnership to redeem all or a portion of the
Partnership Units held by such Limited Partner for the Cash Amount or, at the
General Partner's election, the REIT Shares Amount (the "Redemption Right"),
provided, however, that such Redemption Right shall not be available to any
Investor with respect to any Partnership Unit until a holding period for any
such Partnership Unit has occurred ending on the date which is the later of (i)
three years from the date of this First Amendment (or, in the case of the
Investors set forth on Schedule 1, January 31, 1999) and (ii) one year from the
date of issuance of such Partnership Unit to such Investor.
(b) Provided further, that the fourth and fifth full sentences
under Section 8.6.B of the Partnership Agreement shall not be applicable to the
Redemption Rights of any Investor. Notwithstanding the foregoing subsection
4.(a), if any Partnership Unit of any Investor has been pledged to a lending
institution, which is not an Affiliate of such Investor (a "Lender"), as
collateral or security for a bona fide loan or other extension of credit, then,
to the extent the Lender has exercised its remedies under such pledge and
becomes the owner of such Partnership Unit, such Lender will be entitled to the
Redemption Right with respect to such Partnership Unit beginning January 31,
1999, but in no event shall such Partnership Unit of the Lender be subject to
the Redemption Right prior to the date which is one year from the date of
issuance of such Partnership Unit to such Investor.
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(c) Notwithstanding the foregoing subsections 4(a) and 4(b),
following the occurrence of a Change of Control (as defined below), each
Investor may exercise the Redemption Right, provided, that such Redemption Right
shall not be available to any Investor with respect to any Partnership Unit
until a holding period for any such Partnership Unit of no less than one year
from the date of issuance of such Partnership Unit to such Investor has
occurred. "Change of Control" means the sale, transfer or other conveyance by
Xxxx X. Xxxxxx, Xx. (the "Transfer"), in one or more transactions, of a total of
at least 70% of the Equity Interests (as defined below) beneficially owned by
Xxxx X. Xxxxxx, Xx. on the date of this First Amendment, other than (i) any
involuntary Transfer, (ii) any Transfer in respect of a marital dissolution or
similar proceeding, (iii) any Transfer to a trust for the benefit of Xxxx X.
Xxxxxx, Xx., his spouse or any member of his immediate family, (iv) any Transfer
to a trust for which Xxxx X. Xxxxxx, Xx. serves as trustee, and (v) any Transfer
to any entity, all of the interests of which are beneficially owned by Xxxx X.
Xxxxxx, Xx. "Equity Interests" means Partnership Units and capital stock of
Kilroy.
5. Activities of Investors. Section 8.3 of the Partnership
Agreement relating to the business activities of Limited Partners and certain
other persons is modified with respect to each Investor in all respects by the
terms of the Contribution Agreement and any other documents that are entered
into in connection with the acquisition of the Xxxxx Properties.
6. Sale of Xxxxx Properties. The General Partner shall not sell
any of the Xxxxx Properties prior to the fifth anniversary of the date of this
First Amendment unless (i) the sale will not constitute a taxable event to the
Investors, or (ii) the sale is incident to a transaction pursuant to Section
11.2.B or 11.2.C of the Partnership Agreement.
7. Transfer of Partnership Units.
(a) The provisions of Section 11.3.A of the Partnership
Agreement are amended hereby, but only with respect to the Investors, to replace
the words "Prior to the second anniversary of the closing of the initial public
offering of REIT Shares" in the first sentence thereof with the words "Prior to
the third anniversary of the First Amendment." If any Partnership Units of an
Investor shall be pledged in accordance with the terms of Section 11.3.A(iv) of
the Partnership Agreement and the pledgee exercises its remedies under such
pledge by acceleration, notice of intent to foreclose or other exercise, the
Partnership may either:
(i) purchase the indebtedness, security interest in the
Partnership Units and any other rights with respect to the Partnership Units
held by the pledgee for the amounts owed to pledgee or any lesser amount agreed
to by such pledgee and the Partnership or
(ii) after a foreclosure of such pledgee's security
interest in the Partnership Units, at any time until the later of (A) the third
anniversary of the date of this Agreement or (B) the date that such Partnership
Units become subject to the Redemption Right, acquire the Partnership Units from
such pledgee for an amount equal to the Deemed Partnership Interest Value for
such Partnership Units.
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The pledgee shall give the Partnership any notice of default or delinquency
given to such Investor and no less than 30 days written notice of any proposed
public or private sale, transfer or exchange of such Partnership Units.
(b) Upon the transfer of Partnership Units by an Investor
pursuant to the terms of the Partnership Agreement, the transferee shall be
subject to and bound by all of the provisions of the Partnership Agreement and
the provisions of this First Amendment as if such transferee were an Investor
thereunder and hereunder.
8. Distributions and Allocations.
(a) For the fiscal quarter in which Partnership Units are issued
to an Investor, such Investor shall be entitled to a distribution equal to its
pro rata share of the distributions made on all Limited Partnership Interests
multiplied by a fraction, the numerator of which shall be the number of days in
such fiscal quarter in which the Investor has held the Partnership Units, and
the denominator of which shall be the total number of days in such fiscal
quarter.
(b) For the fiscal quarter in which the Partnership Units are
issued to an Investor, net income and net loss (and items thereof) shall be
allocated to such Investor and the other Partners by taking into account their
varying interests in the Partnership during the year using a method selected by
the General Partner in its sole discretion, which is in accordance with Section
706(d) of the Code.
9. Binding Agreement. Each Investor hereby agrees to be bound by
the terms and conditions of the Partnership Agreement, as amended by this First
Amendment.
10. Effect on Agreement. Except as expressly amended by this First
Amendment, the Partnership Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment as of the day and year first above written.
XXXXXX REALTY, L.P., a Delaware limited
partnership
By: XXXXXX REALTY CORPORATION, a
Maryland corporation, its General
Partner
By: /s/ Xxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxx X. Xxxxxx, Xx.
---------------------------
Title: President and C.E.O.
---------------------------
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INVESTORS
INVESTORS WHO WILL RECEIVE UNITS ON THE DATE OF THIS FIRST AMENDMENT:
XXXXXXX X. XXXXX, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx,
President
COMMERCIAL MANAGEMENT CORPORATION,
a Tennessee corporation
By: /s/ Xxx Xxxxx
-------------------------------
Xxx Xxxxx, President
XXXXX INVESTMENTS, INC.,
a Florida corporation
By: /s/ R.E. Xxxxx
-------------------------------
R.E. Xxxxx, President
/s/ Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx, an individual
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxx, an individual
SELF DIRECTED INDIVIDUAL RETIREMENT
ACCOUNT(S) OF XXXXXX X. XXXXXXXXX
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxxx, Owner
XXXXX DEVELOPMENT, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: CEO
----------------------------
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THE FOLLOWING INVESTORS MAY RECEIVE UNITS AFTER THE DATE OF THIS FIRST AMENDMENT
AND MAY EXECUTE THIS FIRST AMENDMENT AT A LATER DATE:
__________________________________
T. Xxxxxxx Xxxxx, an individual
XXXXX & ASSOCIATES, INC.,
a California corporation
By: ______________________________
Xxxx X. Xxxxx, President
LPL HOLDINGS, INC.,
a Delaware corporation
By: ___________________________
Name: ___________________________
Title: ___________________________
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