Exhibit 10.1

 

THIRD AMENDMENT
TO

AGREEMENT OF LIMITED PARTNERSHIP
OF
HEALTHCARE TRUST OPERATING PARTNERSHIP, L.P.

 

Dated as of December 6, 2019

 

THIS THIRD AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF HEALTHCARE TRUST
OPERATING PARTNERSHIP, L.P. (this “Amendment”), dated as of December 6, 2019, is
entered into by HEALTHCARE TRUST, INC., a Maryland corporation, as general
partner (the “General Partner”) of HEALTHCARE TRUST OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership (the “Partnership”), for itself and on behalf of
any limited partners of the Partnership.

 

WHEREAS, the Agreement of Limited Partnership of the Partnership was entered
into on February 14, 2013 (as now or hereafter amended, restated, modified,
supplemented or replaced, the “Partnership Agreement”);

 

WHEREAS, Section 4.3 of the Partnership Agreement authorizes the General Partner
to cause the Partnership to issue additional Partnership Interests (or options
therefore) in the form of Partnership Units or other Partnership Interests in
one or more series or classes, or in one or more series of any such class
senior, on a parity with, or junior to the Partnership Units to any Persons at
any time or from time to time, on such terms and conditions, as the General
Partner shall establish in each case in its sole and absolute discretion subject
to Delaware law;

 

WHEREAS, the General Partner has authorized the issuance and sale of up to
1,610,000 shares of its 7.375% Series A Cumulative Redeemable Preferred Stock,
par value $0.01 per share (the “Series A Preferred Stock”), at a gross offering
price of $25.00 per share of Series A Preferred Stock and, in connection
therewith, the General Partner, pursuant to Section 4.3 of the Partnership
Agreement, is contributing the net proceeds of such issuance and sale to the
Partnership in exchange for, and is causing the Partnership to issue to the
General Partner, the Series A Preferred Units (as hereinafter defined); and

 

WHEREAS, pursuant to the authority granted to the General Partner pursuant to
Sections 4.3 and 14.1 of the Partnership Agreement, and as authorized by the
unanimous written consent, dated as of December 5, 2019, of the offering
committee of the Board of Directors of the General Partner, which has been
delegated certain power and authority of the Board of Directors of the General
Partner, the General Partner desires to amend the Partnership Agreement (i) to
set forth the designations, rights, powers, preferences and duties and other
terms of the Series A Preferred Units and (ii) to issue the Series A Preferred
Units to the General Partner.

 

NOW, THEREFORE, in consideration of good and valuable consideration, the receipt
and sufficiency of which hereby are acknowledged, the General Partner hereby
amends the Partnership Agreement as follows:

 

1.            The Partnership Agreement is hereby amended by the addition of a
new annex thereto, entitled “Annex A,” in the form attached hereto as Annex A,
which sets forth the designations, allocations, preferences, conversion or other
special rights, powers and duties of the Series A Preferred Units which exhibit
shall be attached to and made a part of, and shall be an exhibit to, the
Partnership Agreement.

 

2.            Pursuant to Sections 4.3 of the Partnership Agreement, effective
as of the applicable issuance date of any issuance of shares of Series A
Preferred Stock by the General Partner, the Partnership will issue Series A
Preferred Units to the General Partner in an amount that will be reflected on
Schedule A to the Partnership Agreement, as such Schedule A may be amended or
restated by the General Partner in its sole discretion from time to time to the
extent necessary to reflect such issuances, but in no event shall the number of
Series A Preferred Units issued pursuant to this Amendment exceed 1,610,000 or
such greater number of shares of Series A Preferred Stock as may be hereafter
authorized for issuance by the General Partner. The Series A Preferred Units
have been created and are being issued in conjunction with the General Partner’s
issuance and sale of the Series A Preferred Stock, and as such, the Series A
Preferred Units are intended to have designations, preferences and other rights
and terms that are substantially the same as those of the Series A Preferred
Stock, all such that the economic interests of the Series A Preferred Units and
the Series A Preferred Stock are substantially similar, and the provisions,
terms and conditions of this Amendment, including without limitation the
attached Annex A, shall be interpreted in a fashion consistent with this
intent. In return for the issuance to the General Partner of the Series A
Preferred Units, the General Partner has contributed to the Partnership the net
proceeds from its issuance and sale of the Series A Preferred Stock (the General
Partner’s capital contribution shall be deemed to equal the amount of the gross
proceeds of that share issuance (i.e., the net proceeds actually contributed,
plus any underwriter’s discount or other expenses incurred, with any such
discount or expense deemed to have been incurred by the General Partner on
behalf of the Partnership)).

 

 

 

3.            The foregoing recitals are incorporated in and are made a part of
this Amendment.

 

4.            Except as specifically defined herein, all capitalized terms shall
have the definitions provided in the Partnership Agreement. This Amendment has
been authorized by the General Partner pursuant to Section 14.1 of the
Partnership Agreement and does not require execution by any Limited Partner or
any other Person.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date
first set forth above.

 

 

GENERAL PARTNER:       HEALTHCARE TRUST, INC.           By: /s/ Edward M. Weil,
Jr.     Name: Edward M. Weil, Jr.     Title: Chief Executive Officer and
President

 

[Signature Page to Third Amendment to Agreement of Limited Partnership]

 

 

 

ANNEX A

 

DESIGNATION OF THE SERIES A PREFERRED UNITS

OF

HEALTHCARE TRUST OPERATING PARTNERSHIP, L.P.

 

1.          Designation and Number. A series of Preferred Units (as defined
below) of Healthcare Trust Operating Partnership, L.P., a Delaware limited
partnership (the “Partnership”), designated the “7.375% Series A Cumulative
Redeemable Perpetual Preferred Units” (the “Series A Preferred Units”), is
hereby established. The number of authorized Series A Preferred Units shall be
1,610,000.

 

2.          Defined Terms. Capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the Agreement of Limited
Partnership of Healthcare Trust Operating Partnership, L.P. (as now or hereafter
amended, restated, modified, supplemented or replaced, the “Partnership
Agreement”). The following defined terms used herein shall have the meanings
specified below:

 

“Articles Supplementary” means the Articles Supplementary of the General Partner
filed with the State Department of Assessments and Taxation of the State of
Maryland on December 6, 2019, designating the terms, rights and preferences of
the Series A Preferred Stock.

 

“Base Liquidation Preference” shall have the meaning provided in Section 6(a).

 

“Capital Gains Amount” shall have the meaning provided in Section 5(g).

 

“Change of Control” shall have the meaning provided in the Articles
Supplementary.

 

“Common Stock” shall have the meaning provided in the Articles Supplementary.

 

“Delisting Event” shall have the meaning provided in the Articles Supplementary.

 

“Distribution Record Date” shall have the meaning provided in Section 5(a).

 

“Junior Preferred Units” shall have the meaning provided in Section 4.

 

“Liquidating Distribution” shall have the meaning provided in Section 6(a).

 

“Parity Preferred Units” shall have the meaning provided in Section 4.

 

“Partnership Agreement” shall have the meaning provided in Section 1.

 

“Redemption Date” shall have the meaning provided in Section 7(a).

 

“Preferred Units” means all Partnership Units designated as preferred units by
the General Partner from time to time in accordance with Section 4.3 of the
Partnership Agreement.

 

“Senior Preferred Units” shall have the meaning provided in Section 4.

 

“Series A Preferred Return” shall have the meaning provided in Section 5(a).

 

“Series A Preferred Stock” shall have the meaning provided in the Articles
Supplementary.

 

“Series A Preferred Unit Distribution Payment Date” shall have the meaning
provided in Section 5(a).

 

“Series A Preferred Units” shall have the meaning provided in Section 1.

 

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“Total Distributions” shall have the meaning provided in Section 5(g).

 

3.          Maturity. The Series A Preferred Units have no stated maturity and
will not be subject to any sinking fund or mandatory redemption.

 

4.          Rank. In respect of rights to the payment of distributions and the
distribution of assets in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Partnership, the Series A
Preferred Units shall rank (a) senior to all classes or series of Common Units
and any class or series of Preferred Units issued by the Partnership, the terms
of which expressly provide that such units rank junior to the Series A Preferred
Units with respect to distribution rights and rights upon the voluntary or
involuntary liquidation, dissolution or winding up of the Partnership (the
“Junior Preferred Units”); (b) on parity with any class or series of Preferred
Units issued by the Partnership, the terms of which expressly provide that such
units rank on parity with the Series A Preferred Units with respect to
distribution rights and rights upon the voluntary or involuntary liquidation,
dissolution or winding up of the Partnership (the “Parity Preferred Units”); and
(c) junior to any class or series of Preferred Units issued by the Partnership,
the terms of which expressly provide that such units rank senior to the Series A
Preferred Units with respect to distribution rights and rights upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Partnership (the “Senior Preferred Units”).  The term “Preferred Units” does not
include convertible or exchangeable debt securities of the Partnership,
including convertible or exchangeable debt securities which will rank senior to
the Series A Preferred Units prior to the conversion or exchange. The Series A
Preferred Units will also rank junior in right or payment to the Partnership’s
existing and future indebtedness. All of the Series A Preferred Units shall rank
equally with one another and shall be identical in all respects.

 

5.          Distributions.

 

a.        Subject to the preferential rights of holders of any class or series
of Senior Preferred Units of the Partnership, the holders of Series A Preferred
Units shall be entitled to receive, when, as and if authorized by the General
Partner and declared by the Partnership, out of assets of the Partnership
legally available for payment of distributions, cumulative cash distributions in
the amount of $1.84375 per unit per year, which is equivalent to the rate of
7.375% of the Base Liquidation Preference (as defined below) per unit per year
(the “Series A Preferred Return”). The Series A Preferred Return shall accrue
and be cumulative from and including the date of original issue of any Series A
Preferred Units and shall be payable quarterly in arrears, on or about the 15th
day of each January, April, July and October of each year (or, if not a Business
Day, the next succeeding business day, each a “Series A Preferred Unit
Distribution Payment Date”) for the period ending on such Series A Preferred
Unit Distribution Payment Date, commencing on January 15, 2020.  The amount of
any distribution payable on the Series A Preferred Units for any partial
distribution period will be prorated and computed, and for any full distribution
period will be computed, on the basis of twelve 30-day months and a 360-day
year. Distributions will be payable in arrears to holders of record of the
Series A Preferred Units as they appear on the records of the Partnership at the
close of business on the applicable record date, which shall be the Series A
Record Date (as defined in the Articles Supplementary), which is the close of
business on the date set by the Board of Directors as the record date for the
payment of dividends on Series A Preferred Stock (each, a “Distribution Record
Date”).

 

b.        No distributions on the Series A Preferred Units shall be authorized
by the General Partner or declared and or set apart for payment by the
Partnership at such time as the terms and conditions of any agreement of the
General Partner or the Partnership, including any agreement relating to the
indebtedness of any of them, prohibits such authorization, payment or setting
apart for payment or provides that such authorization, payment or setting apart
for payment would constitute a breach thereof or a default thereunder, or if
such authorization, payment or setting apart for payment shall be restricted or
prohibited by law.

 

c.        Notwithstanding anything to the contrary contained herein, the Series
A Preferred Return will accrue whether or not distributions are authorized by
the General Partner or declared by the Partnership. No interest or additional
distributions shall be payable in respect of any accrued and unpaid Series A
Preferred Return.

 

d.        Except provided in Section 5(e) below, no distributions shall be
declared and paid or set apart for payment, and no other distribution of cash or
other property may be declared and made, directly or indirectly, on or with
respect to any Common Units, Parity Preferred Units or Junior Preferred Units of
the Partnership (other than a distribution paid in units of, or options,
warrants or rights to subscribe for or purchase units of, Common Units or Junior
Preferred Units) for any period, nor shall units of any class or series of
Common Units, Parity Preferred Units or Junior Preferred Units be redeemed (or
assets be paid to our made available for a sinking fund for the redemption of
any such units of the Partnership), purchased or otherwise acquired (except (i)
by conversion into or exchange for Common Units or Junior Preferred Units, (ii)
for the acquisition of units corresponding with the acquisition of shares
pursuant to the provisions of Section 5.7 of Article V of the Charter, and (iii)
for purchases or exchanges pursuant to a purchase or exchange offer made on the
same terms to all holders of Series A Preferred Units and all holders of Parity
Preferred Units), unless full cumulative distributions on the Series A Preferred
Units for all past distribution periods shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof is
set apart for such payment.

 

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e.        When cumulative distributions are not paid in full (or declared and a
sum sufficient for such full payment is not set apart) on the Series A Preferred
Units and any Parity Preferred Units, all distributions (other than (i) any
acquisition of units corresponding with the acquisition of shares pursuant to
the provisions of Section 5.7 of Article V of the Charter or (ii) a purchase or
exchange pursuant to a purchase or exchange offer made on the same terms to all
holders of Series A Preferred Units and all holders of Parity Preferred Units)
declared on the Series A Preferred Units and any Parity Preferred Units shall be
declared pro rata so that the amount of distributions declared per Series A
Preferred Unit and such Parity Preferred Units shall in all cases bear to each
other the same ratio that accrued distributions per Series A Preferred Unit and
such Parity Preferred Units (which shall not include any accrual in respect of
unpaid distributions on any Parity Preferred Units for prior distribution
periods if such Parity Preferred Units do not have a cumulative distribution)
bear to each other. No interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution payment or payments on Series A Preferred
Units which may be in arrears.

 

f.         Holders of Series A Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or units of the Partnership, in
excess of the Series A Preferred Return on the Series A Preferred Units as
provided above. Any distribution made on the Series A Preferred Units shall
first be credited against the earliest accrued but unpaid Series A Preferred
Return which remains payable.

 

g.        If, for any taxable year, the General Partner elects to designate as
“capital gain dividends” (as defined in Section 857 of the Code) any portion
(the “Capital Gains Amount”) of the total distributions not in excess of the
General Partner’s earnings and profits (as determined for U.S. federal income
tax purposes) paid or made available for such taxable year to holders of all
classes and series of the General Partner’s stock (the “Total Distributions”),
then the portion of the Capital Gains Amount that shall be allocable to holders
of Series A Preferred Units shall be in the same proportion that the Total
Distributions paid or made available to the holders of Series A Preferred Units
for such taxable year bears to the Total Distributions for such taxable year
made with respect to all classes or series of Partnership Units outstanding.

 

6.          Liquidation Preference.

 

a.        Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Partnership, after payment of or provision for the
Partnership’s debts and liabilities and any other class or series of equity
securities of the Partnership ranking, with respect to rights upon the
Partnership’s voluntary or involuntary liquidation, dissolution or winding up,
senior to the Series A Preferred Units and before any distribution or payment
shall be made to the holders of any Common Units or Junior Preferred Units, the
holders of the Series A Preferred Units then outstanding shall be entitled to be
paid out of the assets of the Partnership legally available for distribution to
its Partners a liquidation preference in cash of $25.00 per Series A Preferred
Unit (the “Base Liquidation Preference”), plus an amount equal to any accrued
and unpaid Series A Preferred Return to, but not including, the date of payment
(together with the Base Liquidation Preference, the “Liquidating Distribution”).

 

b.       If upon any such voluntary or involuntary liquidation, dissolution or
winding up of the Partnership, the available assets of the Partnership are
insufficient to pay the full amount of the Liquidating Distributions on all
outstanding Series A Preferred Units and the corresponding amounts payable on
all outstanding Parity Preferred Units, then the holders of Series A Preferred
Units and Parity Preferred Units shall share ratably in any such distribution of
assets in proportion to the full Liquidating Distributions to which they would
otherwise be respectively entitled.

 

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c.        After payment of the full amount of the Liquidating Distributions to
which they are entitled, holders of Series A Preferred Units will have no right
or claim to any of the remaining assets of the Partnership.

 

d.        For the avoidance of doubt, the consolidation, merger or conversion of
the Partnership with or into another entity, the merger of another entity with
or into the Partnership, a statutory unit exchange by the Partnership or the
sale, lease, transfer or conveyance of all or substantially all of the assets or
business of the Partnership shall not be considered a liquidation, dissolution
or winding up of the affairs of the Partnership.

 

7.          Optional Redemption.

 

a.        The Series A Preferred Units are not redeemable prior to December 11,
2024, except as otherwise provided in this Section 7. On and after December 11,
2024, the Partnership, at its option, upon not fewer than 30 nor more than 60
days’ written notice, may redeem the Series A Preferred Units, in whole or in
part, at any time or from time to time, for cash, at a redemption price equal to
$25.00 per Series A Preferred Unit, plus any accrued and unpaid distributions
thereon (whether or not authorized or declared) to, but not including, the date
fixed for redemption (the “Redemption Date”). Such notice shall be deemed to
have been given to the General Partner, in its capacity as holder of the Series
A Preferred Units, upon the giving of any notice by the General Partner to
holders of shares of Series A Preferred Stock with respect to the redemption of
such shares. If fewer than all of the outstanding Series A Preferred Units are
to be redeemed, the Series A Preferred Units to be redeemed may be selected pro
rata (as nearly as practicable without creating fractional units) or by lot.

 

b.       Unless full cumulative distributions on all Series A Preferred Units
shall have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods, (i) no Series A Preferred Units shall be redeemed unless
all outstanding Series A Preferred Units are simultaneously redeemed, and (ii)
the Partnership shall not purchase or otherwise acquire directly or indirectly
for any consideration, nor shall any monies be paid to or be made available for
a sinking fund for the redemption of, any Series A Preferred Units (except by
conversion into or exchange for Common Units or Junior Preferred Units of the
Partnership); provided, however, that the foregoing shall not prevent the
redemption or purchase of Series A Preferred Units by the Partnership in
connection with a redemption or purchase by the General Partner of Series A
Preferred Stock pursuant to Article V of the Charter or otherwise in order to
ensure that the General Partner remains qualified as a REIT for federal income
tax purposes or pursuant to the terms of the Articles Supplementary, or the
purchase or acquisition of Series A Preferred Units pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding Series A
Preferred Units and any other Parity Preferred Units.

 

c.        If a Redemption Date falls after a Distribution Record Date and on or
prior to the corresponding Series A Preferred Unit Distribution Payment Date,
each holder of Series A Preferred Units on such Distribution Record Date shall
be entitled to the distribution payable on such units on the corresponding
Series A Preferred Unit Distribution Payment Date (including any accrued and
unpaid distributions for prior distribution periods) notwithstanding the
redemption of such units on or prior to such Series A Preferred Unit
Distribution Payment Date.  Except as provided above, the Partnership will make
no payment or allowance for unpaid distributions, whether or not in arrears, on
Series A Preferred Units for which a notice of redemption has been given.

 

d.       Upon the occurrence of a Delisting Event or Change of Control, if and
when the General Partner exercises its option to redeem shares of Series A
Preferred Stock as provided in Section 6 of the Articles Supplementary, the
General Partner shall cause the Partnership to concurrently redeem an equal
number of Series A Preferred Units if and when such shares of Series A Preferred
Stock are so redeemed, at a redemption price per Series A Preferred Unit payable
in cash and equal to the same price per share paid by the General Partner to
redeem the shares of Series A Preferred Stock (i.e., a redemption price of
$25.00 per share of Series A Preferred Stock, plus an amount equal to any
accrued and unpaid dividends thereon). No interest shall accrue for the benefit
of the Series A Preferred Units to be redeemed on any cash set aside by the
Partnership.

 

e.        Notwithstanding anything to the contrary contained herein, the
Partnership may redeem one Series A Preferred Unit for each share of Series A
Preferred Stock purchased in the open market, through tender or by private
agreement by the General Partner.

 

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f.        All Series A Preferred Units redeemed or otherwise acquired by the
Partnership in any manner whatsoever shall be retired and reclassified as
authorized but unissued Preferred Units, without designation as to class or
series, and may thereafter be reissued as any class or series of Preferred Units
in accordance with the applicable provisions of the Partnership Agreement.

 

g.       Notwithstanding anything to the contrary contained herein, the
Partnership may redeem Series A Preferred Units at any time in connection with
any redemption by the General Partner of the Series A Preferred Stock.

 

h.        In addition, upon the occurrence of a Delisting Event, the
distributions rate specified in Section 5(a) hereof shall be increased on the
day after the occurrence of the Delisting Event by 2.00% per annum to the rate
of 9.375% of the Base Liquidation Preference per unit per year (equivalent to
$2.34375 per unit per year) from and after the date of the Delisting Event.
Following the cure of such Delisting Event, the distribution rate shall revert
to the rate specified in Section 5(a) hereof.

 

8.          Voting Rights. Holders of the Series A Preferred Units will not have
any voting rights.

 

9.          Conversion. The Series A Preferred Units are not convertible or
exchangeable for any other property or securities, except as provided herein.

 

a.        In the event that a holder of shares of Series A Preferred Stock
exercises its right to convert such shares of Series A Preferred Stock into
Common Stock in accordance with the terms of the Articles Supplementary, then,
concurrently with any conversion that actually occurs pursuant to such exercise
(i.e. such shares are not redeemed for cash prior thereto in accordance with the
terms of the Articles Supplementary), an equivalent number of Series A Preferred
Units of the Partnership held by the General Partner shall be automatically
converted into a number of OP Units of the Partnership equal to the number of
shares of Common Stock issued upon conversion of such Series A Preferred Stock;
provided, however, that if a holder of Series A Preferred Stock receives cash or
other consideration in addition to or in lieu of Common Stock in connection with
such conversion, then the General Partner, as the holder of the Series A
Preferred Units, shall be entitled to receive cash or such other consideration
equal (in amount and form) to the cash or other consideration to be paid by the
General Partner to such holder of the Series A Preferred Stock. Any such
conversion will be effective at the same time the conversion of Series A
Preferred Stock into Common Stock is effective.

 

b.        No fractional units will be issued in connection with the conversion
of Series A Preferred Units into OP Units. In lieu of fractional OP Units, the
General Partner shall be entitled to receive a cash payment in respect of any
fractional unit in an amount equal to the fractional interest multiplied by the
Common Stock Price (as defined in the Articles Supplementary) on the date the
shares of Series A Preferred Stock are surrendered for conversion by a holder
thereof.

 

10.        Allocation of Net Income and Net Loss.

 

Subparagraphs 1(a) and (b) of Exhibit B of the Partnership Agreement are hereby
deleted in their entirety and replaced by Sections 1(a) and (b) below:

 

“(a)       Allocations of Net Income and Net Loss. Except as otherwise provided
in this Agreement, after giving effect to the special allocations in
subparagraph 1(c) and paragraph 2, Net Income, Net Loss and, to the extent
necessary, individual items of income, gain, loss or deduction, of the
Partnership, without duplication, shall be allocated among the Partners as
follows:

 

(i)        first, if the Partnership has Net Income for any taxable year or
portion thereof, such Net Income shall be allocated to the General Partner in
respect of the Series A Preferred Units until it has been allocated Net Income
equal to the excess of (A) the cumulative amount of distributions of Cash
Available for Distribution the General Partner has received for all prior
taxable years or portions thereof with respect to the Series A Preferred Units,
over (B) the cumulative Net Income allocated to the General Partner, pursuant to
this subparagraph 1(a)(i) for all prior taxable years or portions thereof;

 

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(ii)       thereafter, to the General Partner and Limited Partners in accordance
with their respective Percentage Interests.

 

(b)        Allocations of Net Property Gain and Net Property Loss. Except as
otherwise provided in this Agreement, after giving effect to the special
allocations in subparagraphs 1(c) and paragraph 2, Net Property Gain, Net
Property Loss and, to the extent necessary, individual items of gain or loss
comprising Net Property Gain and Net Property Loss of the Partnership, without
duplication, shall be allocated among the Partners as follows:

 

(i)        first, if the Partnership has Net Property Gain for any taxable year
or portion thereof, such Net Property Gain shall be allocated to the General
Partner in respect of the Series A Preferred Units until it has been allocated
Net Property Gain equal to the excess of (A) the cumulative amount of
distributions of Net Sales Proceeds the General Partner has received for all
prior taxable years or portions thereof with respect to the Series A Preferred
Units, over (B) the cumulative Net Property Gain allocated to the General
Partner, pursuant to this subparagraph 1(b)(i) for all prior taxable years or
portions thereof;

 

(ii)       thereafter, in a manner determined in the reasonable discretion of
the General Partner that will, as nearly as possible cause the Capital Account
balance of each Partner at the end of such fiscal year or other applicable
period to equal (A) the amount of distributions that would be made to such
Partner pursuant to Section 5.1(b) if the Partnership were dissolved, its
affairs wound up and its assets sold for cash equal to their Gross Asset Value,
taking into account any adjustments thereto for such period, all Partnership
liabilities were satisfied in full in cash according to their terms (limited
with respect to each nonrecourse liability to the Gross Asset Value of the
assets securing such liability), and Net Sales Proceeds (after satisfaction of
such liabilities) were distributed in full in accordance with Section 5.1(b) to
the Partners immediately after making such allocations, minus (ii) the sum of
such Partner’s share of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain and the amount, if any and without duplication, that the Partner
would be obligated to contribute to the capital of the Partnership, all computed
immediately prior to the hypothetical sale of assets

 

Paragraph 1 of Exhibit B of the Partnership Agreement is hereby amended with the
addition of Subparagraph 1(d), below:

 

“(d)      It is the intention of the parties hereunder that the aggregate
Capital Account balance of the General Partner in respect of the Series A
Preferred Units at any date shall not exceed the amount of the original Capital
Contributions made in respect of the Series A Preferred Units plus all accrued
and unpaid distributions thereon, whether or not declared, to the extent not
previously distributed. Notwithstanding anything to the contrary contained
herein, in connection with the liquidation of the Partnership or the interest of
a holder of Series A Preferred Units, and prior to making any other allocations
of Net Income or Net Loss, items of income and gain or deduction and loss shall
first be allocated to the General Partner in respect of the Series A Preferred
Units in such amounts as is required to cause the General Partner’s adjusted
Capital Account in respect of the Series A Preferred Units (taking into account
any amounts such Partner is obligated to contribute to the capital of the
Partnership or is deemed obligated to contribute pursuant to Regulations Section
1.704-1(b)(2)(ii)(c)(2)) to equal the amount the General Partner is entitled to
receive pursuant to the provisions of the Partnership Agreement in respect to
the Series A Preferred Units.”

 

11. Additional Allocation Provisions.

 

Article XIII, Section 13.2(a)(iii)(D) of the Partnership Agreement is hereby
deleted in its entirety and replaced by Section 13.2(a)(iii)(D), below:

 

“(D)     the balance, if any, shall be distributed, subject to Section 5.07(b),
first to the General Partner in respect of the Series A Preferred Units until
its Capital Account with respect to the Series A Preferred Units has been
reduced to zero and then to all Partners (including the Special Limited Partner)
with positive Capital Accounts in accordance with their respective positive
Capital Accounts after giving effect to all allocations in Exhibit B and all
prior distributions under Section 5.1.”

 

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Exhibit B of the Partnership Agreement is hereby amended with the addition of
Paragraph 3, below:

 

“3.        Notwithstanding anything to the contrary in this Agreement, it is the
intent of the Partners (including the Special Limited Partner) that the
allocation provisions of Exhibit B produce (a) a final Capital Account balance
of the General Partner in respect of the Series A Preferred Units equal to the
aggregate Base Liquidation Preference, plus any accrued but unpaid Series A
Preferred Return for each Series A Preferred Unit and (b) final Capital Account
balances of the Partners (including the Special Limited Partner) equal to the
amount such Partners would receive with respect to their GP Units, OP Units,
Class B Units, or the Special Limited Partner Interest pursuant to Section 5.1.
To the extent the allocation provisions of Exhibit B would fail to produce such
final Capital Account balances, (y) such provisions shall be amended by the
General Partner if and to the extent necessary to produce such result and (z)
Net Income, Net Loss, Net Property Gain, Net Property Loss and, to the extent
necessary, individual items of income, gain, loss and deduction, of the
Partnership for prior open years shall be reallocated by the General Partner, in
its sole and absolute discretion, among the Partners to the extent it is not
possible to achieve such result with allocations of Net Income, Net Loss, Net
Property Gain, Net Property Loss and, to the extent necessary, individual items
of income, gain, loss and deduction, of the Partnership for the current year and
future years, and if necessary, as a guaranteed payment as defined in Section
707(c) of the Code (unless the treatment of a portion of the return on the
Series A Preferred Return as a guaranteed payment would cause the entire Series
A Preferred Return to be a guaranteed payment, in which case none of such return
shall be so treated). This Paragraph 3 shall control notwithstanding any
reallocation or adjustment of taxable Net Income, Net Loss, Net Property Gain,
Net Property Loss and, to the extent necessary, individual items of income,
gain, loss and deduction, of the Partnership by the Service or any other taxing
authority. The General Partner shall have the authority to amend this Agreement
without the consent of the Limited Partners or the Special Limited Partner, as
it reasonably considers advisable, to make the allocations and adjustments
described in this Paragraph 3.”

 

12. Except as modified herein, all terms and conditions of the Partnership
Agreement shall remain in full force and effect, which terms and conditions the
General Partner hereby ratifies and confirms.

 

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