FOURTEENTH AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
ESSEX PORTFOLIO, L.P.
Dated as of December 26, 2007
This
Fourteenth Amendment, dated as of the date shown above (the
“Amendment”), is executed by Essex Property Trust,
Inc. a Maryland Corporation (the “Company”), as
the General Partner and as attorney in fact for all limited
partners of Essex Portfolio, L.P. (the
“Partnership”), for the purpose of amending the
First Amended and Restated Agreement of Limited Partnership of
Essex Portfolio, L.P., dated September 30, 1997 (the
“Partnership Agreement”).
RECITALS
WHEREAS, the Partnership desires to provide for equity
incentives to certain persons who provide services for the benefit
of the Partnership (the “Grantees”) in the form of
Partnership Units which shall be designated “LTIP
Units”;
WHEREAS, pursuant to the authority granted to the General
Partner under the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement to reflect the issuance
of the LTIP Units; and
WHEREAS , upon issuance of LTIP Units, each Grantee shall
become a party to the Partnership Agreement as a Limited Partner
and agree to be bound by all terms, conditions and other provisions
of this Amendment and the Partnership Agreement.
NOW THEREFORE , in consideration of the premises and for
other good and valuable consideration, the receipt and sufficiency
of which hereby are acknowledged, the General Partner hereby amends
the Partnership Agreement as follows:
1.
Definitions . Capitalized terms used herein, unless
otherwise defined herein, shall have the same meanings as set forth
in the Partnership Agreement.
2.
Issuance of LTIP Units . Pursuant to Section 4.3 of
the Partnership Agreement, the Partnership may from time to time
issue LTIP Units to the Grantees. The holder of any LTIP
Units shall have the benefits and obligations under the Partnership
Agreement to which the holder of such Partnership Interest may be
entitled or obliged under the Partnership Agreement, as amended
from time to time. The admission of a Grantee as a
Limited Partner shall become effective as of the date on which the
Grantee is awarded the LTIP Units, and Exhibit A and Exhibit M to
the Partnership Agreement will be amended to reflect such admission
as of such time.
3.
Admission of the Grantees as Limited Partners . Effective
immediately prior to the effectiveness of the next succeeding
sentence, the capital accounts of the Partnership shall be adjusted
to reflect each Partner’s share of the net fair market value
of the Partnership’s assets (a
“book-up”).
Each
of the Grantees is hereby admitted, as of the date on which the
Grantee is awarded LTIP Units, as an Additional Limited Partner in
accordance with Section 4.6 of the Partnership Agreement holding
that number of LTIP Units as is set forth next to his or her name
on Exhibit U hereof. Each of the Grantees 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, as amended by this Amendment.
Pursuant to Section 4.6(b) of the Partnership Agreement, the
General Partner hereby consents to the admission of each of the
Grantees as an Additional Limited Partner of the Partnership. The
admission of the Grantees shall become effective as of the date on
which the Grantee is awarded the LTIP Units, which shall also be
the date on which the name of each Grantee is recorded on the books
and records of the Partnership.
4.
Amendments to Partnership Agreement .
a. Section
1.1 of the Partnership Agreement is hereby amended to include
the following definition in alphabetical order:
“LTIP Units” shall mean the Partnership Units
designated as such having the rights, power, privileges,
restrictions, qualifications and limitations set forth on Exhibit T
hereto.
b. Section
1.1 of the Partnership Agreement is hereby amended to delete
the definition of “Percentage Interest” in its
entirety and to substitute the following definition of
“Percentage Interest” in its place:
“Percentage Interest ” shall mean with respect
to any Partner other than holders of Series B Preferred Units,
Series D Preferred Units, Series Z Incentive Units or Series Z-1
Incentive Units, the undivided percentage ownership interest of
such Partner in the Partnership, as determined by dividing
(i) the number of Partnership Units owned by such Partner by
(ii) the sum of (A) the total number of Partnership Units then
outstanding (excluding the Series B Preferred Interest, the Series
B Partnership Units, the Series D Preferred Interest, the Series D
Preferred Units, the Series F Preferred Interest, Series G
Preferred Interest, Series Z Incentive Units and the Series Z-1
Incentive Units), (B) the total number of outstanding Series Z
Incentive Units multiplied by the Distribution Ratchet Percentage
with respect to each such Series Z Incentive Unit, calculated on a
unit-by-unit basis, and (C) the total number of outstanding Series
Z-1 Incentive Units multiplied by the Series Z-1 Distribution
Ratchet Percentage with respect to each such Series Z-1 Incentive
Unit, calculated on a unit-by-unit basis. With respect to any
holder of Series Z Incentive Units, such Partner’s Percentage
Interest shall be equal to such Partner’s Series Z Percentage
Interest. With respect to any holder of Series Z-1 Incentive Units,
such Partner’s Percentage Interest shall be equal to such
Partner’s Series Z-1 Percentage Interest. If any Partner
holds a combination of Common Units, LTIP Units, Series Z Incentive
Units and/or Series Z-1 Incentive Units, then such
Partner’s Percentage Interest shall be equal to the sum of
(A) the Percentage Interest as calculated pursuant to the
first sentence of this definition (assuming for purposes of such
calculation that such Partner holds only Common Units and/or LTIP
Units, if any), (B) the Series Z Percentage Interest (assuming
for purposes of such calculation that such Partner holds only
Series Z Incentive Units, if any) and (C) the Series Z-1
Percentage Interest (assuming for purposes of such calculation that
such Partner holds only Series Z-1 Incentive Units, if
any).
c. Section
6.2 of the Partnership Agreement is hereby amended to add the
following new paragraph (f):
“(f) Distributions
made pursuant to this Section 6.2 shall be adjusted as
necessary to ensure that the amount apportioned to each LTIP
Unit does not exceed the amount attributable to items of
Partnership income or gain realized after the date such LTIP
Unit was issued by the Partnership. The intent of this
Section 6.2(f) is to ensure that any LTIP Units issued
after the date of this Amendment qualify as “profits
interests” under Revenue Procedure 93-27, 1993-2 C.B.
343 (June 9, 1993) and Revenue Procedure 2001-43, 2001-2
C.B. 191 (August 3, 2001), and Section 6.2 shall be
interpreted and applied consistently therewith. The General
Partner at its discretion may amend this
Section 6.2(f) to ensure that any LTIP Units granted
after the date of this Amendment will qualify as
“profits interests” under Revenue Procedure 93-27,
1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure
2001-43, 2001-2 C.B. 191 (August 3, 2001) (and any other
similar rulings or regulations that may be in effect at
such time).”
5.
Continuing Effect of Partnership Agreement . Except
as modified herein, the Partnership Agreement is hereby ratified
and confirmed in its entirety and shall remain and continue in full
force and effect, provided, however, that to the extent there shall
be a conflict between the provisions of the Partnership Agreement
and this Amendment the provisions in this Amendment will prevail.
All references in any document to the Partnership Agreement shall
mean the Partnership Agreement, as amended hereby.
6.
Counterparts . This Amendment may be executed in any
number of counterparts, each of which shall be deemed to be an
original and all of which shall constitute one and the same
agreement. Facsimile signatures shall be deemed
effective execution of this Amendment and may be relied upon as
such by the other party. In the event facsimile
signatures are delivered, originals of such signatures shall be
delivered to the other party within three (3) business days after
execution.
[Remainder of Page Left Blank Intentionally]
IN
WITNESS WHEREOF, the General Partner has executed this
Amendment as of the date indicated above.
GENERAL PARTNER
ESSEX PROPERTY TRUST, INC.,
a
Maryland corporation as General Partner of Essex Portfolio,
L.P. and on behalf of the existing Limited
Partners
By:
/s/ Michael T. Dance
Name: Michael T. Dance
Title:
Executive Vice
President and
Chief Financial
Officer
EXHIBIT T
DESIGNATION OF THE RIGHTS, POWERS,
PRIVILEGES,
RESTRICTIONS, QUALIFICATIONS AND LIMITATIONS
OF THE LTIP UNITS
The
following are the terms of the LTIP Units:
A.
Vesting, Generally . LTIP Units may, in the sole
discretion of the General Partner, be issued subject to vesting,
forfeiture and additional restrictions on transfer pursuant to the
terms of an award, vesting or other similar agreement (a
“Vesting Agreement”). The terms of any Vesting
Agreement may be modified by the General Partner from time to
time in its sole discretion, subject to any restrictions on
amendment imposed by the relevant Vesting Agreement or by the terms
of any plan pursuant to which the LTIP Units are issued, if
applicable. LTIP Units that have vested and are no longer subject
to forfeiture under the terms of a Vesting Agreement are referred
to as “Vested LTIP Units”; all other LTIP Units are
referred to as “Unvested LTIP Units.” Subject to
the terms of any Vesting Agreement, a holder of LTIP Units shall be
entitled to transfer his or her LTIP Units to the same extent, and
subject to the same restrictions, as holders of Common Units
pursuant to Article IX of the Partnership
Agreement.
B.
Forfeiture or Transfer of Unvested LTIP Units
. Unless otherwise specified in the relevant Vesting
Agreement, upon the occurrence of any event specified in a Vesting
Agreement as resulting in either the forfeiture of any LTIP Units,
or the right of the Partnership or the General Partner to
repurchase LTIP Units at a specified purchase price, then upon the
occurrence of the circumstances resulting in such forfeiture or if
the Partnership or the General Partner exercises such right to
repurchase, then the relevant LTIP Units shall immediately, and
without any further action, be treated as cancelled or transferred
to the General Partner, as applicable, and no longer outstanding
for any purpose. Unless otherwise specified in the Vesting
Agreement, no consideration or other payment shall be due with
respect to any LTIP Units that have been forfeited, other than any
distributions declared with a record date prior to the effective
date of the forfeiture.
C.
Legend . Any certificate evidencing an LTIP Unit
shall bear an appropriate legend indicating that additional terms,
conditions and restrictions on transfer, including without
limitation any Vesting Agreement, apply to the LTIP
Unit.
A.
LTIP Distribution Amount . Commencing from the
Distribution Participation Date (as defined below) established for
any LTIP Units, for any quarterly or other period holders of such
LTIP Units shall be entitled to receive, if, when and as authorized
by the General Partner out of funds legally available for the
payment of distributions, regular cash distributions in an amount
per unit equal to the distribution payable on each Common Unit for
the corresponding quarterly or other period (the “LTIP
Distribution Amount”). In addition, from and after the
Distribution Participation Date, LTIP Units shall be entitled to
receive, if, when and as authorized by the General Partner out of
funds or other property legally available for the
payment
of distributions, non-liquidating special, extraordinary or other
distributions in an amount per unit equal to the amount of any
non-liquidating special, extraordinary or other distributions
payable on the Common Units which may be made from time to
time. LTIP Units shall also be entitled to receive, if, when and as
authorized by the General Partner out of funds or other property
legally available for the payment of distributions, distributions
representing proceeds of a sale or other disposition of all or
substantially all of the assets of the Partnership in an amount per
unit equal to the amount of any such distributions payable on the
Common Units, whether made prior to, on or after the Distribution
Participation Date
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