Exhibit 10.39
SL GREEN OPERATING PARTNERSHIP, L.P.
Fifth Amendment to
First Amended and Restated Agreement of Limited
Partnership
This Amendment is made as of
March 15, 2006, by SL GREEN REALTY CORP., a Maryland
corporation, as general partner (the “ General Partner
”), of SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership (the “ Partnership ”), for
the purpose of amending the First Amended and Restated Agreement of
Limited Partnership of the Partnership dated August 20, 1997
(the “ Partnership Agreement ”). All capitalized
terms used herein and not defined shall have the respective
meanings ascribed to them in the Partnership Agreement.
WHEREAS, the Partnership desires to
provide for equity incentives to certain persons who provide
services for the benefit of the Partnership (“
Grantees ”) in the form of Partnership Units
which shall be designated “LTIP Units.”
WHEREAS, pursuant to
Section 4.2.A of the Partnership Agreement, the Partnership is
issuing LTIP Units to the Grantees.
WHEREAS, pursuant to Sections 4.2.A,
5.4, 6.2, 8.6.E and 14.1.B the General Partner is amending the
Partnership Agreement to facilitate the issuance of the LTIP
Units.
NOW, THEREFORE, in consideration of
the mutual covenants set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the General Partner hereby amends the
Agreements as follows:
1.
Issuance of
LTIP Units .
A.
Pursuant to
Section 4.2.A of the Partnership Agreement, the Partnership
hereby issues 750,000 LTIP Units to the Grantees
in the respective amounts set forth on Schedule A hereto. The holder of any
LTIP Units shall have the benefits and obligations under the
Partnership Agreement to which the holder of such a Limited Partner
Interest may be entitled or obliged under the Partnership
Agreement, as supplemented and amended by the rights, powers,
privileges, restrictions, qualifications and limitations specified
in Exhibit F to the Partnership Agreement as added by this
Amendment.
B.
The admission of
the Grantees as Additional Limited Partners of the Partnership
shall become effective as of the date of this Amendment, which
shall also be the date upon which the names of the Grantees are
recorded on the books and records of the Partnership, and
Exhibit A to the Partnership Agreement is amended to reflect
such admission.
2.
Amendments to
Partnership Agreement .
The General Partner, as general
partner of the Partnership and as attorney-in-fact for its Limited
Partners, hereby amends the Partnership Agreement as
follows:
A.
Article 1 of
the Partnership Agreement is amended by inserting the following
definitions in alphabetical order:
“ Class A Unit
Economic Balance ” has the meaning set forth in
Section 6.1.E.
“ Economic Capital Account
Balance ” has the meaning set forth in
Section 6.1.E.
“ LTIP Units ”
means the Partnership Units designated as such having the rights,
powers, privileges, restrictions, qualifications and limitations
set forth in Exhibit F hereto.
B.
Section 4.2.C of the
Partnership Agreement is amended by replacing the text thereof with
the following:
C.
Classes of Partnership
Units . From and after
the Effective Date, subject to Section 4.2.A above, the
Partnership shall have two classes of Partnership Units, entitled
“Class A Units” and “Class B
Units.” From and after March ,
2006, the Partnership shall have an additional class of
Partnership Units, entitled “LTIP Units.” Either
Class A Units or Class B Units, at the election of the
General Partner, in its sole and absolute discretion, may be
issued to newly admitted Partners in exchange for the contribution
by such Partners of cash, real estate partnership interests, stock,
notes or other assets or consideration, provided that, any
Partnership Unit that is not specifically designated by the General
Partner as being of a particular class shall be deemed to be a
Class A Unit.
C.
Section 4.2
of the Partnership Agreement is amended by appending the following
new paragraph D:
D.
Issuance of LTIP Units
. From time to time the General
Partner may issue LTIP Units to Persons providing services to
or for the benefit of the Partnership. LTIP Units shall have the
rights, powers, privileges, restrictions, qualifications and
limitations specified in Exhibit F hereto. LTIP Units are
intended to qualify as profits interests in the Partnership and for
the avoidance of doubt, the provisions of Section 4.4 shall
not apply to the issuance of LTIP Units.
D.
Section 5.1.A of the
Partnership Agreement is amended by replacing the text of the first
sentence thereof with the following:
A.
General . The General Partner shall distribute at least
quarterly an amount equal to one hundred percent (100%) of
Available Cash generated by the Partnership during such quarter or
shorter period to the Partners who are Partners on the Partnership
Record Date with respect to such quarter or shorter period as
provided in Sections 5.1.B, 5.1.C and 5.1.D below.
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E.
Sections 5.1.C
and 5.1.D of the Partnership Agreement are amended by appending the
following sentence to each such Section:
For purposes of the foregoing
calculations, LTIP Units with an associated Distribution
Participation Date (as defined in Exhibit F hereto) that falls
on or before the date of the relevant distribution shall be treated
as outstanding Class A Units.
F.
Section 5.1
of the Partnership Agreement is amended by appending the following
new paragraph F:
F.
LTIP Units Intended to Qualify as
Profits Interests. Distributions made pursuant to this
Section 5.1 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 5.1.F is to ensure that any LTIP Units issued
after the date of this Agreement 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 5.1 shall be interpreted
and applied consistently therewith. The General Partner at its
discretion may amend this Section 5.1.F to ensure that
any LTIP Units granted after the date of this Agreement 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).
G.
Section 6.1
of the Partnership Agreement is amended by appending the following
new paragraph E:
E.
Special Allocations With Respect
to LTIP Units . After
giving effect to the special allocations set forth in
Section 1 of Exhibit C hereto, and notwithstanding the
provisions of Sections 6.1.A and 6.1.B above, but subject to the
prior allocation of income and gain under clauses
6.1.A(i) through (v) above, any Liquidating Gains shall
first be allocated to the holders of LTIP Units until the Economic
Capital Account Balances of such holders, to the extent
attributable to their ownership of LTIP Units, are equal to
(i) the Class A Unit Economic Balance, multiplied by
(ii) the number of their LTIP Units; provided that no
such Liquidating Gains will be allocated with respect to any
particular LTIP Unit unless and to the extent that such Liquidating
Gains, when aggregated with other Liquidating Gains realized since
the issuance of such LTIP Unit, exceed Liquidating Losses realized
since the issuance of such LTIP Unit. After giving effect to the
special allocations set forth in Section 1 of Exhibit C
hereto, and notwithstanding the provisions of Sections 6.1.A and
6.1.B above, in the event that, due to distributions with respect
to Class A Units in which the LTIP Units do not participate or
otherwise, the Economic Capital Account Balance of any present or
former holder of LTIP Units, to the extent attributable to the
holder’s
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ownership of LTIP Units, exceeds the
target balance specified above, then Liquidating Losses shall be
allocated to such holder to the extent necessary to reduce or
eliminate the disparity. In the event that Liquidating Gains or
Liquidating Losses are allocated under this Section 6.1.E, Net
Income allocable under clause 6.1.A(vi) and any Net Losses
shall be recomputed without regard to the Liquidating Gains or
Liquidating Losses so allocated. For this purpose, “
Liquidating Gains ” means any net capital gain
realized in connection with the actual or hypothetical sale of all
or substantially all of the assets of the Partnership, including
but not limited to net capital gain realized in connection with an
adjustment to the Carrying Value of Partnership assets under
Section 1.D of Exhibit B to this Agreement. Similarly,
“ Liquidating Losses ” means any net capital
loss realized in connection with any such event. The “
Economic Capital Account Balances ” of the holders of
LTIP Units will be equal to their Capital Account balances, plus
the amount of their shares of any Partner Minimum Gain or
Partnership Minimum Gain, in either case to the extent attributable
to their ownership of LTIP Units. Similarly, the “
Class A Unit Economic Balance ” shall mean
(i) the Capital Account balance of the General Partner, plus
the amount of the General Partner’s share of any Partner
Minimum Gain or Partnership Minimum Gain, in either case to the
extent attributable to the General Partner’s ownership of
Class A Units and computed on a hypothetical basis after
taking into account all allocations through the date on which any
allocation is made under this Section 6.1.E, divided by
(ii) the number of the General Partner’s Class A
Units. Any such allocations shall be made among the holders of LTIP
Units in proportion to the amounts required to be allocated to each
under this Section 6.1.E. The parties agree that the intent of
this Section 6.1.E is to make the Capital Account balance
associated with each LTIP Unit economically equivalent to the
Capital Account balance associated with the General Partner’s
Class A Units (on a per-unit basis), but only if the
Partnership has recognized cumulative net gains with respect to its
assets since the issuance of the relevant LTIP Unit.
H.
Section 8.6.A of the
Partnership Agreement is amended by appending the following clause
(v):
(v)
Notwithstanding the foregoing, the
Redemption Right shall not be exercisable with respect to any
Class A Unit issued upon conversion of an LTIP Unit until on
or after the date that is two years after the date on which the
LTIP Unit was issued, provided however, that the foregoing
restriction shall not apply if the Redemption Right is exercised by
a LTIP Unit holder in connection with a transaction that falls
within the definition of a “change of control” under
the agreement or agreements pursuant to which the LTIP Units were
issued to him or her and provided further that the two
(2) year requirement set forth in the first sentence of
Section 8.6.A(i) shall not apply with respect to
Class A Units issued upon conversion of LTIP Units.
I.
Section 10.2
of the Partnership Agreement is amended by designating the existing
text of Section 10.2 as paragraph A, and by appending the
following new paragraph B:
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B.
To the extent provided for in
Treasury Regulations, revenue rulings, revenue procedures and/or
other IRS guidance issued after the date hereof, the Partnership is
hereby authorized to, and at the direction of the General Partner
shall, elect a safe harbor under which the fair market value of any
Partnership Interests issued after the effective date of such
Treasury Regulations (or other guidance) will be treated as equal
to the liquidation value of such Partnership Interests (i.e., a
value equal to the total amount that would be distributed with
respect to such interests if the Partnership sold all of its assets
for their fair market value immediately after the issuance of such
Partnership Interests, satisfied its liabilities (excluding any
non-recourse liabilities to the extent the balance of such
liabilities exceeds the fair market value of the assets that secure
them) and distributed the net proceeds to the Partners under the
terms of this Agreement). In the event that the Partnership makes a
safe harbor election as described in the preceding sentence, each
Partner hereby agrees to comply with all safe harbor requirements
with respect to transfers of such Partnership Interests while the
safe harbor election remains effective.
J.
Section 1.D(2) of
Exhibit B to the Partnership Agreement is amended by replacing
the text thereof with the following:
(2)
Such adjustments shall be made as of
the following times: (a) immediately prior to the
acquisition of an additional interest in the Partnership by any new
or existing Partner in exchange for more than a de minimis Capital
Contribution; (b) immediately prior to the acquisition of a
more than de minimis additional interest in the Partnership by any
new or existing Partner as consideration for the provision of
services to or for the benefit of the Partnership in a partner
capacity or in anticipation of becoming a partner;
(c) immediately prior to the distribution by the Partnership
to a Partner of more than a de minimis amount of property as
consideration for an interest in the Partnership; and
(d) immediately prior to the liquidation of the Partnership
within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g) (except for a liquidation
resulting from the termination of the Partnership under
Section 708(b)(1)(B) of the Code), provided
however that adjustments pursuant to clauses (a),
(b) and (c) above shall be made only if the General
Partner determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the
Partners in the Partnership.
K.
Section 1 of
Exhibit C to the Partnership Agreement is hereby amended by
appending the following new paragraph H:
H.
Forfeiture Allocations
. Upon a forfeiture of any unvested
Partnership Interest by any Partner, gross items of income, gain,
loss or deduction shall be allocated to such Partner if and to the
extent required by final Treasury Regulations promulgated after the
Effective Date to ensure that allocations made
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with respect to all unvested
Partnership Interests are recognized under Code
Section 704(b).
L.
The Partnership
Agreement is hereby amended by appending Exhibit F to this
Amendment as Exhibit F to the Partnership
Agreement.
3.
Continuation
of Partnership Agreement .
The Partnership Agreement and this
Amendment shall be read together and shall have the same force and
effect as if the provisions of the Partnership Agreement and this
Amendment (including Exhibit F hereto) were contained in one
document. Any provisions of the Partnership Agreement not amended
by this Amendment shall remain in full force and effect as provided
in the Partnership Agreement immediately prior to the date
hereof.
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IN WITNESS WHEREOF, the parties
hereto have executed this Amendment to the Partnership Agreement as
of the
day of March, 2006.
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GENERAL PARTNER:
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SL GREEN REALTY CORP.
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By:
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Name:
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Title:
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GRANTEES:
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*Individual
Counterpart Signature Pages Attached.
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[Signature Page to Amendment to the
Partnership Agreement]
SL GREEN OPERATING PARTNERSHIP,
L.P.
Limited Partner Signature
Page
The undersigned, desiring to become
one of the within named Limited Partners of SL Green Operating
Partnership, L.P. (the “ Partnership ”) hereby
becomes a party to the First Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of August 20,
1997 and amended through the date hereof (the “
Partnership Agreement ”), by and among SL Green Realty
Corp. and such Limited Partners. The undersigned agrees that this
signature page may be attached to any counterpart of
the Partnership Agreement.
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Date:
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Name of Limited Partner (please
print)
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Signature
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Address
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Schedule A to Fifth
Amendment to Partnership Agreement
EXHIBIT F
SL GREEN OPERATING PARTNERSHIP,
L.P.
DESIGNATION OF THE RIGHTS, POWERS,
PRIVILEGES,
RESTRICTIONS, QUALIFICATIONS AND
LIMITATIONS
OF THE LTIP UNITS
The following are the terms of the
LTIP Units:
1.
Vesting
.
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 t
