FIRST AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT OF PARKWAY PROPERTIES OFFICE FUND II, L.P.
Exhibit 10.3
THIS FIRST AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT OF PARKWAY PROPERTIES OFFICE
FUND II , L.P. (the “Partnership”), a Delaware limited partnership (“Amendment”)
is made as of April 10, 2011 by and among, PPOF II, LLC, a Delaware limited liability company, as
the sole general partner of the Partnership (“General Partner”), Parkway Properties LP, a
Delaware limited partnership (“Parkway”), and Teacher Retirement System of Texas, a public
pension fund and public entity of the State of Texas (“TRST” and together with Parkway,
the “Limited Partners”). The General Partner and the Limited Partners are hereinafter
sometimes referred to collectively as the “Partners”.
WHEREAS, Offices at Two Liberty Place, L.P., a Delaware limited partnership (“Office
LP”) and Two Liberty Place, L.P., a Delaware limited partnership (“TLP LP”) (Office LP
and TLP LP are collectively referred to herein as the “Unit Owners”) own Xxxx X Xxxxxx,
Xxxx X Office and Unit C Office together with related parking facilities and other common
elements, (the “Commercial Units”).
WHEREAS, the Commercial Units are located within the mixed-use complex known as Xxx Xxxxxxx
Xxxxx, Xxxxxxxxxxxx Xxxxxxxxxxxx (“Two Liberty Place”).
WHEREAS, the Partnership intends to acquire through an Investment Vehicle all of the general
partnership interests and 88.99% of the limited partnership interest in the Unit Owners thereby
acquiring an 89% indirect interest in the Commercial Units and all related property rights
(“Two Liberty Acquisition”).
WHEREAS, the Partnership intends to finance the Two Liberty Acquisition by calling 78.65% of
the equity capital required by the Partnership from TRST and 21.35% of the equity capital required
by the Partnership from Parkway.
WHEREAS, following the consummation of the Two Liberty Acquisition and the contribution by
TRST and Parkway of the contemplated amounted of equity capital, TRST will own a 70% indirect
interest and Parkway will own a 19% indirect interest in the Commercial Units (“Two Liberty
Investment”).
WHEREAS, the Partners executed that certain Limited Partnership Agreement of Parkway
Properties Office Fund, L.P. (the “Partnership Agreement”), dated as of May 14, 2008.
WHEREAS, the terms of the Two Liberty Acquisition are not consistent with the investment
guidelines stated in the Partnership Agreement, and the Partners desire to amend the Partnership
Agreement in connection with the Two Liberty Acquisition.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Capitalized Terms. All capitalized terms used herein but not defined herein shall
have the meaning given to such terms in the Partnership Agreement.
2. Core Market. The defined term “Core Market” shall be expanded solely for
the purpose of the Two Liberty Acquisition to include Philadelphia, Pennsylvania as an additional
primary targeted market.
3. Percentage Interest. For purposes of the Two Liberty Acquisition, “Percentage
Interest” for each Partner shall be expressed as a percentage based on the relative aggregate
Capital Contributions made in connection with the Two Liberty Investment (collectively referred to
herein as “Two Liberty Percentage Interests”) and each Partners initial Capital
Contribution with respect to the Two Liberty Investment shall be made as follows:
| Percentage | Expected Capital Contribution | |||||||
TRST |
78.65 | % | $ | 63,129,897 | ||||
Parkway |
21.35 | % | $ | 17,136,978 | ||||
General Partner |
0 | % | $ | 0.00 | ||||
4. Allocation of Profits. Section 5.1 of the Partnership Agreement shall not
apply to the Two Liberty Investment. For purposes of the Two Liberty Investment the following
provision shall apply in lieu of Section 5.1:
5.1 Allocation of Profits. After giving effect to the Regulatory
Allocations set forth in Section 5.3 hereof, Profits for any fiscal year or other period of
the Partnership relating to the Two Liberty Investment shall be credited to the Capital
Accounts of the Partners established for purposes of the Two Liberty Investment in the
following order of priority:
(a) First, to the Partners in an amount sufficient to reverse the cumulative amount of
any Losses allocated to the Partners in all prior fiscal years, first pursuant to the
proviso after Section 5.2(c) hereof, and second pursuant to Section 5.2(c) hereof, allocated
to each Partner in the order and in proportion to their respective Two Liberty Percentage
Interests;
(b) Second, to the Partners, until the cumulative amount allocated pursuant to this
Section 5.1(b) for the current and all prior fiscal years is equal to their cumulative
Preferred Return, allocated to each Partner pro rata in proportion to their respective Two
Liberty Percentage Interest, plus the cumulative amount of any Losses allocated to them
pursuant to Section 5.2(b) hereof in all prior fiscal years (which Losses reverse Profits
allocated under this Section 5.1(b)) allocated to each Partner pro rata in proportion to the
allocation of such Losses to such Partners;
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(c) Thereafter, one hundred percent (100%) pro rata to the Partners in proportion to
their respective Two Liberty Percentage Interests.
5. Allocation of Losses. Section 5.2 of the Partnership Agreement shall not apply to
the Two Liberty Investment. For purposes of the Two Liberty Investment the following provision
shall apply in lieu of Section 5.2:
5.2 Allocation of Losses. After giving effect to the Regulatory Allocations
set forth in Section 5.3 hereof, Losses for any fiscal year or other period will be charged
to the Capital Accounts of the Partners in the following order of priority:
(a) First, to the Partners to reverse the cumulative amount of any Profits
allocated under Section 5.1(c) hereof in all prior fiscal years allocated to each Partner
pro rata in proportion to their respective Two Liberty Percentage Interests;
(b) Second, to the Partners until the cumulative amount allocated pursuant to
this Section 5.2(b) for the current and all prior fiscal years is equal to the cumulative
amount of any Profits allocated to them under Section 5.1(b) hereof in all prior fiscal
years, allocated to each Partner pro rata in proportion to the allocation of such Profits to
such Partners; and
(c) Third, Thereafter, one hundred percent (100%) pro rata to the Partners in
proportion to their respective Two Liberty Percentage Interests;
provided, however, that Losses will not be allocated to any Partner if such Losses would
result in or increase an Adjusted Capital Account Deficit with respect to such Partner, and
any Losses that cannot be allocated to any Partner as a result of this proviso shall be
allocated first to the Capital Accounts of the other Partners in proportion to the amounts
allocable without causing or increasing an Adjusted Capital Account Deficit and then one
hundred percent (100%) to the General Partner.
6. Distributions. Section 6.1(b) of the Partnership Agreement shall not apply to
the Two Liberty Investment. For purposes of the Two Liberty Investment the following provision
shall apply in lieu of Section 6.1(b):
(b) Distributions of Net Distributable Cash with respect to Two Liberty Investment
shall be made at such times as determined by the General Partner in its reasonable
discretion not less than quarterly; distributions of Net Distributable Cash shall be made
with respect to Two Liberty Investment to the Partners one hundred percent (100%) pro rata
in proportion to their respective Two Liberty Percentage Interests.
7. Asset Management Fee. Solely with respect to the Two Liberty Investment, the
Asset Management Fee payable to the General Partner shall be equal to 1.00% of ADOCAB of TRST.
The Asset Management Fee shall not be adjusted for any other Investment. Except as provided in
this Paragraph 7, all other terms regarding the Asset Management Fee set forth in the Partnership
Agreement, including Exhibit B thereto, shall apply to the Two Liberty Investment.
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8. Exhibit F. Exhibit F of the Partnership Agreement is hereby deleted and shall be
replaced in its entirety with Exhibit F attached hereto.
9. No Other Amendments. In all other respects the Partnership Agreement shall remain
in full force and effect as executed by the Partners. Except as expressly stated in this Amendment,
all other terms and provisions of the Partnership Agreement shall apply to the Two Liberty
Investment.
10. Facsimile/PDF Signatures. In order to expedite the execution of this Amendment,
telecopied or PDF signatures may be used in place of original signatures on this Amendment.
Partners intend to be bound by the signatures on the telecopied or PDF document, are aware that the
other party will rely on such signatures, and hereby waive any defenses to the enforcement of the
terms of this Amendment based on the form of signature.
11. Counterparts. This Amendment may be executed and delivered in any number of
counterparts, each of which so executed and delivered shall be deemed to be an original and all of
which shall constitute one and the same instrument.
Signatures to follow on next page
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IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above
written.
| GENERAL PARTNER: | PPOF II, LLC, a Delaware limited liability company | |||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | ||||||
| Title: | Executive Vice President and Chief Investment Officer | |||||
| By: | /s/ M. Xxxxxx Xxxxxx | |||||
| Name: | ||||||
| Title: | Senior Vice President and Fund Manager | |||||
| PARKWAY: | PARKWAY PROPERTIES LP, a Delaware limited partnership |
|||||
| By: Parkway Properties General Partners, Inc., a Delaware corporation, its sole general partner | ||||||
| By: | /s/ Xxxxx X. Xxxx | |||||
| Name: | ||||||
| Title: | Executive Vice President, Chief Accounting Officer & Secretary |
|||||
| By: | /s/ Xxx X. Xxxxx | |||||
| Name: | ||||||
| Title: | Sr. Vice President & Treasurer | |||||
| TRST: | TEACHER RETIREMENT SYSTEM OF TEXAS, a public pension fund and public entity of the State of Texas | |||||
| By: | /s/ Xxxx X. Xxxx | |||||
| Name: | ||||||
| Title: | Managing Director | |||||
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EXHIBIT F
LIST OF PRIMARY EXECUTIVE OFFICERS OF PARKWAY AND PARKWAY
PROPERTIES, INC.
PROPERTIES, INC.
Xxxxxx X. Xxxxxx
|
President and Chief Executive Officer | |
Xxxxxxx X. Xxxxxxx XX
|
Executive Vice President | |
Xxxxx X. Xxxxxx
|
Executive Vice President | |
Xxxxxxx X. Xxxxx
|
Executive Vice President | |
Xxxxx X. Xxxx
|
Executive Vice President |
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