Exhibit 10.7
Execution Copy
FIFTH AMENDMENT TO AGREEMENT OF LIMITED
PARTNERSHIP OF CORNERSTONE PROPERTIES LIMITED PARTNERSHIP
THIS FIFTH AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF CORNERSTONE
PROPERTIES LIMITED PARTNERSHIP (this "AMENDMENT") is made and entered into as of
the 21st of January, 2000, by CORNERSTONE PROPERTIES INC., a Nevada corporation,
as general partner (the "GENERAL PARTNER") of Cornerstone Properties Limited
Partnership (the "PARTNERSHIP"), for itself and on behalf of the Limited
Partners of the Partnership, and the "Contributors" (as hereinafter defined).
WHEREAS, the Partnership was formed by the filing of that certain
Certificate of Limited Partnership with the Delaware Secretary of State on
December 23, 1997 and is organized pursuant to the provisions of the Delaware
Revised Uniform Limited Partnership Act and pursuant to that certain
Agreement of Limited Partnership of Cornerstone Properties Limited
Partnership, dated as of December 23, 1997, as amended by First Amendment to
Agreement of Limited Partnership of Cornerstone Properties Limited
Partnership, dated as of January 29, 1997 [sic], by Amendment to First
Amendment to Agreement of Limited Partnership of Cornerstone Properties
Limited Partnership, dated as of January 29, 1998, by Second Amendment to
Agreement of Limited Partnership of Cornerstone Properties Limited
Partnership, dated as of April 28, 1998, by Third Amendment of Agreement of
Limited Partnership dated as of June 3, 1998, and by the Fourth Amendment to
Agreement of Limited Partnership dated as of December 16, 1998 (the
"PARTNERSHIP AGREEMENT");
WHEREAS, on even date herewith, the parties identified as
"Contributors" on the signature page hereto (the "CONTRIBUTORS") have made
Capital Contributions to the Partnership in exchange for Class A Partnership
Common Units of limited partner interest in the Partnerships;
WHEREAS, each Contributor is not currently a Limited Partner (a "NEW
PARTNER") desires to become a party to the Partnership agreement as a Limited
Partner and to be bound by all terms, conditions and other provisions of this
Amendment and the Partnership Agreement; and
WHEREAS, the parties desire to amend the Partnership Agreement to
reflect the admission of each New Partner as an Additional Limited Partner and
the issuance to each Contributor of a certain number of Units and certain other
matters as herein provided;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. The terms used in this Amendment with an initial capital
letter or letters shall have the same meanings in this Amendment as the meanings
ascribed thereto in the Partnership Agreement.
2. ADMISSION OF NEW PARTNERS. Each New Partner is hereby admitted as
an Additional Limited Partner in accordance with Section 12.2 of the
Partnership Agreement holding such number of Units as is set forth on EXHIBIT
A. Each New Partner hereby agrees to become a party to the Partnership
Agreement as a Limited Partner and to be bound by all the terms, conditions
and other provisions of the Partnership Agreement, including but not limited
to the power of attorney set forth in Section 2.4 of the Partnership
Agreement. Pursuant to Section 12.2.B of the Partnership Agreement, the
General Partner hereby consents to the admission of each New Partner as an
Additional Limited Partner of the Partnership. The admission of each New
Partner shall become effective as of the date of this Amendment, which shall
also be the date on which the name of each New Partner is recorded on the
books and records of the Partnership.
3. RESTATEMENT OF EXHIBIT A. EXHIBIT A to the Partnership Agreement is
hereby amended and restated by replacing EXHIBIT A with EXHIBIT A attached to
this Amendment.
4. DISPOSITION OF PROPERTY. Notwithstanding anything to the contrary set
forth in the Partnership Agreement, but subject to Paragraph 5 hereof, the
Partnership agrees not to sell, transfer, exchange or otherwise dispose of, and
shall cause any Holding Company not to sell, transfer, exchange or otherwise
dispose of, all or any portion of the property commonly known as 000 Xxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxx (the "400 CAPITOL MALL PROPERTY"), or any property
acquired in exchange therefore pursuant to the succeeding sentence of this
Paragraph 4 (each a "DISPOSITION"), until the seventh anniversary of the date of
this Amendment. Notwithstanding the preceding sentence, the Partnership may (a)
make a Disposition by way of a like-kind exchange under Section 1031 of the Code
that does not result in the recognition of any taxable income or gain to a
Contributor, (b) make any other Disposition that pursuant to a non-recognition
provision of the Code does not result in the recognition of any taxable income
or gain to a Contributor under the United States federal income tax and
California tax law, or (c)make any Disposition in compliance with Paragraph 5
hereof.
5. TAX GROSS-UP.
(a) Notwithstanding the first sentence of Paragraph 4 hereof,
the Partnership shall not be prohibited hereunder from making any Disposition
prior to the seventh anniversary of the date of this Amendment, provided that
concurrently with and as a condition to the consummation of any such
Disposition, the Partnership pays, in accordance with this Paragraph 5, to each
contributor and each direct and indirect partner, member or shareholder thereof
(each an "INDEMNITEE") to the extent such partner, member or shareholder is
required to take any income or gain of such Contributor into account in
determining his liability for "Taxes" (as hereinafter defined) an amount equal
to the "Tax Liability" of each such Indemnitee attributable to such Disposition.
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(b) For purposes of this Amendment, "TAXES" shall mean any tax,
levy or other assessment imposed on any Indemnitee attributable to the income
or gain that would have been allocated to the Indemnitee if the Property had
been disposed of in a fully taxable transaction as of the date of this
Amendment for total consideration equal to the sum of (i) the "Purchase
Price" (as defined in the Agreement of Sale and Purchase and Joint Escrow
Instructions dated as of January 14, 2000, between Xxxxxxx Properties Inc.
and the Partnership) and (ii) the "Consideration" (as defined in the
Contribution Agreement and Agreement and Sale and Purchase and Joint Escrow
Instructions dated as of January 21, 2000, between the partners of
WW-Sacramento, L.P. and the Partnership), including, without limitation, any
income tax or California franchise tax based on or measured by income or
gain, any alternative or add-on minimum tax, together with any interest
penalty, addition to tax or other additional amount imposed thereon that is
attributable to the Partnership's failure to provide an Indemnitee with
accurate information to allow such Indemnitee to timely comply with their
reporting and payment obligations with respect to such tax, levy or
assessment, imposed by any governmental authority, domestic or foreign,
having jurisdiction over the imposition, assessment, determination or
collection of any of the foregoing.
(c) For purposes of this Amendment, the "TAX LIABILITY" of each
Indemnitee shall mean the sum of (i) the amount of Taxes payable by such
Indemnitee as a result of a Disposition plus (ii) the amount of any Taxes
payable by such Indemnitee resulting from the Partnership's payments to such
Indemnitee pursuant to this Paragraph 5 (including any additional tax on the
amount described in this clause (ii)).
(d) The amount of an Indemnitee's Tax Liability and Taxes shall
be calculated based on the maximum combined stated and federal tax rates
applicable to such Indemnitee and as if such Indemnitee had no other items of
income, gain, loss, deduction or credit, other than the allowable federal
deduction, if any, for the amount of state, local or foreign Taxes included in
such calculation.
6. MISCELLANEOUS. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assign. The
Partners hereby ratify and confirm the Partnership Agreement, as amended by this
Amendment. This Amendment shall be governed by and construed in conformity with
the laws of the State of Delaware. This Amendment may be executed in
counterparts, each of which shall be an original, and all of which shall
constitute one and the same instrument.
[signatures commence on the following page]
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first set forth above.
CORNERSTONE PROPERTIES INC.,
a Nevada corporation, as General Partner of
Cornerstone Properties Limited Partnership and on
behalf of existing Limited Partners
By: /s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx
President and Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
Chief Administrative Officer and Secretary
"CONTRIBUTORS"
Xxxxxxx Xxxxxx III
Xxxxx X. Word
Xxxx X. Xxxxxxxx, III
Xxxxxxx X. Mayotte
Webcor Builders, Inc.
Xxxxx X. Xxxx
Reed L. and Xxxxxxxx X. Xxxxxxx, as Trustees of the
Xxxx and Xxxxxxxx Xxxxxxx Primary Trust u/a dated
August 23, 1994, Schedule A Property
Xxxxxx X. Xxxxxxxx, as Trustee of the Xxxxxx X.
Xxxxxxxx Revocable Trust u/a dated 3/29/99
Xxxx X. Xxxxxxxx, as Trustee of the Xxxx Xxxxx
Xxxxxxxx Revocable Trust u/a dated 3/19/99
Xxxx X. Xxxxxxxx, as Trustee with respect to her
Separate property under Trust Agreement dated
November 6, 1998
By: /s/ Xxxxxxx Xxxxxx III
-----------------------------
Xxxxxxx Xxxxxx III
Attorney-in-Fact
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