<PAGE>
PARTNERSHIP UNIT DESIGNATION OF
7.375% SERIES H CUMULATIVE REDEEMABLE PREFERRED UNITS
The following partnership unit designation (this "Partnership
Unit
Designation") is a statement of the
designations, qualifications, special or
relative rights and privileges of the
7.375% Series H Cumulative Redeemable
Preferred Units of Keystone Operating
Partnership, L.P. (the "Partnership").
Capitalized terms used but not otherwise
defined in this Partnership Unit
Designation shall have the same meanings
ascribed to them in the Partnership's
Amended and Restated Agreement of Limited
Partnership, dated as of October 13,
1999, and any amendments thereto
(collectively, the "Partnership Agreement").
Section 1. NUMBER OF PREFERRED UNITS AND
DESIGNATION. A series of Partnership
Units, designated as 7.375% Series H
Cumulative Redeemable Preferred Units (the
"Series H Preferred Units"), is hereby
established. The number of Series H
Preferred Units shall be 2,200,000, which
number may be decreased (but not below
the number thereof then outstanding) from
time to time by the General Partner.
Section 2. DEFINITIONS.
"Articles Supplementary for the Series E
Preferred Stock" shall mean the
Articles Supplementary Establishing and
Fixing the Rights and Preferences of a
Series of Shares of Preferred Stock as
7.375% Series E Cumulative Redeemable
Preferred.
"Business Day" shall mean any day, other
than a Saturday or Sunday, that is
neither a legal holiday nor a day on which
banking institutions in The City of
New York are authorized or required by law,
regulation or executive order to
close.
"General Partner" shall mean Keystone
Property Trust, a Maryland statutory real
estate investment trust and the general
partner of the Partnership.
"OP Units" shall mean any class or series
of units of limited partnership
interest in the Partnership that are not
Preferred Units.
"Preferred Units" shall mean any units
issued by the Partnership that may be
issued in one or more series or classes,
having such rights, possible duties and
preferences as may be determined by the
General Partner in its sole and absolute
discretion.
"Series E Preferred Stock" shall mean the
7.375% Series E Cumulative Redeemable
Preferred Stock of the General Partner, par
value $.001 per share.
"Series D Preferred Units" shall mean the
Series D Convertible Preferred Units
of the Partnership.
"Series F Preferred Units" shall mean the
Series F Convertible Preferred Units
of the Partnership.
"Series G Preferred Units" shall mean the
Series G Convertible Preferred Units
of the Partnership.
<PAGE>
Section 3. DISTRIBUTIONS.
(a) Subject to the rights of holders of any classes or series
of
units of partnership interest of the
Partnership senior to the Series H
Preferred Units as to the payment of
distributions, the General Partner, in its
capacity as the holder of the then
outstanding Series H Preferred Units, shall
be entitled to receive, when, as and if
authorized by the General Partner,
cumulative quarterly preferential cash
distributions in an amount per unit equal
to 7.375% of the $25.00 liquidation
preference per annum (equivalent to a fixed
annual amount of $1.84375 per unit).
Distributions on the Series H Preferred
Units shall accrue and be fully cumulative
from the date of original issuance
and shall be payable quarterly when, as and
if authorized by the General
Partner, in equal amounts in arrears on the
last calendar day of each January,
April, July and October or, if not a
Business Day, the next succeeding Business
Day (each, a "Series H Preferred Unit
Distribution Payment Date"). Any
distribution (including the initial
distribution) payable on the Series H
Preferred Units for any partial
distribution period shall be prorated and
computed on the basis of a 360-day year
consisting of twelve 30-day months. The
term "distribution period" shall mean the
period from the date of original
issuance and ending on and including the
next Series H Preferred Unit
Distribution Payment Date, and each
subsequent period from but excluding such
Series H Preferred Unit Distribution
Payment Date and ending on and including
the next following Series H Preferred Unit
Distribution Payment Date.
(b) No distribution on the Series H Preferred Units shall be
authorized by the General Partner or
declared or paid or set apart for payment
by the Partnership at such time as the
terms and provisions of any agreement of
the General Partner or the Partnership,
including any agreement relating to its
indebtedness, prohibits such authorization,
declaration, payment or setting
apart for payment or provides that such
authorization, declaration, payment or
setting apart for payment would constitute
a breach thereof, or a default
thereunder, or if such authorization,
declaration, payment or setting apart for
payment shall be restricted or prohibited
by law. No interest, or sum of money
in lieu of interest, shall be payable in
respect of any distribution payment or
payments on the Series H Preferred Units
which may be in arrears.
Notwithstanding the foregoing, distributions with respect to
the
Series H Preferred Units shall accumulate
whether or not any of the foregoing
restrictions exist, whether or not there is
sufficient available cash for the
payment thereof and whether or not such
distributions are authorized.
Accumulated but unpaid distributions on
Series H Preferred Units shall not bear
interest and holders of the Series H
Preferred Units shall not be entitled to
any distributions in excess of full
cumulative distributions. Any distribution
payment made on the Series H Preferred
Units shall first be credited against the
earliest accumulated but unpaid
distribution due with respect to such units
which remains payable.
(c) Except as provided in Section 3(d) below, unless full
cumulative
distributions have been or
contemporaneously are authorized, declared and paid
or authorized, declared and a sum
sufficient for the payment thereof set apart
for such payment on the Series H Preferred
Units for all past distribution
periods and the then current distribution
period, no distributions (other than
in any classes or series of units of
partnership interest of the Partnership
ranking junior to the Series H Preferred
Units as to the pay
