FIRST AMENDMENT
TO
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
CORPORATE OFFICE PROPERTIES, L.P.
THIS FIRST AMENDMENT (the "Amendment") to the Second Amended and
Restated Limited Partnership Agreement of Corporate Office Properties, L.P., a
Delaware limited partnership (the "Partnership"), is made and entered into as of
December 21, 1999, by the undersigned.
RECITALS
A. The Partnership is a limited partnership organized under the
Delaware Revised Uniform Limited Partnership Act and governed by that certain
Seconded Amended and Restated Limited Partnership Agreement dated as of December
7, 1999 (the "Partnership Agreement").
B. The sole general partner of the Partnership is Corporate Office
Properties Trust, a real estate investment trust formed under the laws of the
State of Maryland (the "General Partner").
C. Pursuant to Section 11.1(B) of the Partnership Agreement, the
General Partner desires to correct certain provisions of the Partnership
Agreement which are ambiguous and conflict with other provisions of the
Partnership Agreement.
NOW THEREFORE, the General Partner, intending to be legally bound,
hereby amends the Partnership Agreement as follows, effective as of the date set
forth above.
1. The foregoing recitals to this Amendment are hereby incorporated in
and made a part of this Amendment. Capitalized terms used in this Amendment not
defined herein shall have the meaning set forth in the Partnership Agreement.
2. Section 1.1 of the Partnership Agreement is amended by (i) deleting
the term "Redemption Rights," which such term was erroneously included in the
Partnership Agreement, (ii) adding the defined term "Redemption Ratio,"
initially equal to 1.0 and subject to anti-dilution adjustment, for the purpose
of redeeming Partnership Units for REIT Shares, which such concept was
erroneously deleted from the Partnership Agreement, and (iii) amending and
restating the terms "Share Payment" and "Unit Value" in order to (A) substitute
the new term "Redemption Ratio" for the incorrectly used term "Conversion
Factor" and (B) correct the "Share Payment" term by adding a fractional share
provision, as follows:
"REDEMPTION RATIO: The ratio (carried out to four decimal
places) applied when redeeming Partnership Units for REIT
Shares, which shall initially be 1.0. In the event that on or
after the date of this Agreement the General Partner (i)
declares or pays a dividend on its outstanding REIT Shares in
REIT Shares or makes a
distribution to all holders of its outstanding REIT Shares in
REIT Shares, (ii) subdivides its outstanding REIT Shares or
(iii) combines its outstanding REIT Shares into a smaller
number of REIT Shares, the Redemption Ratio shall be adjusted
by multiplying the Redemption Ratio by a fraction, the
numerator of which shall be the number of REIT Shares issued
and outstanding on the record date (assuming for such purposes
that such dividend, distribution, subdivision or combination
has occurred as of such time), and the denominator of which
shall be the actual number of REIT Shares (determined without
the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or
combination. In the event that the Partnership (a) declares or
pays a distribution on the outstanding Partnership Units or
makes a distribution to all Partners in Partnership Units, (b)
subdivides the outstanding Partnership Units or (c) combines
the outstanding Partnership Units into a smaller number of
Partnership Units, the Redemption Ratio shall be adjusted by
multiplying the Redemption Ratio by a fraction, the numerator
of which shall be the actual number of Partnership Units
issued and outstanding on the record date (determined without
giving effect to such dividend, distribution, subdivision or
combination), and the denominator of which shall be the actual
member of Partnership Units (determined after giving effect to
such dividend, distribution, subdivision or combination)
issued and outstanding on such record date. Any adjustment to
the Redemption Ratio shall become effective immediately after
the effective date of such event retroactive to the record
date, if any, for such event.
SHARE PAYMENT: The payment to a Redeeming Party of a number of
REIT Shares determined by multiplying (i) the number of
Partnership Units tendered for redemption by such Redeeming
Party pursuant to a validly proffered Redemption Notice by
(ii) the Redemption Ratio. In the event the General Partner
grants any REIT Share Rights on or after the date of this
Agreement and prior to such payment, any Share Payment shall
include for the Redeeming Party such Redeeming Party's ratable
share of such REIT Share Rights other than REIT Share Rights
which have expired. In any case in which the Share Payment
would result in the issuance of a fractional REIT Share, the
General Partner shall pay the converting Redeeming Party cash
in lieu of issuance of a fractional REIT Share, with the value
of such fractional interest being determined by reference to
the Unit Value applicable on the Redemption Date.
UNIT VALUE: With respect to any Partnership Unit, the average
of the daily market price for a REIT Share for the ten (10)
consecutive trading days immediately preceding the date of
receipt of a Redemption Notice by the General Partner
multiplied by the Redemption Ratio. If the REIT Shares are
traded on a securities exchange or the NASDAQ Small Cap Market
or National Market System, the market price for each such
trading day shall be the reported last sale price on such day
or, if no sales take place on such day, the average of the
closing bid and asked prices on such day. If the REIT Shares
are not traded on a securities exchange or the NASDAQ Small
Cap Market or National Market System, the market price for
each such trading day shall be determined by the
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General Partner using any reasonable method of valuation. If a
Share Payment would include any REIT Share Rights, the value
of such REIT Share Rights shall be determined by the General
Partner using any reasonable method of valuation, taking into
account the Unit Value determined hereunder and the factors
used to make such determination and the value of such REIT
Share Rights shall be included in the Unit Value."
3. Section 9.1(A) of the Partnership Agreement is amended and restated in
order to delete the sole use in the Partnership Agreement of the term
"Redemption Rights," as follows:
"(A) Subject to compliance with (v) the Act, (w) the terms and
conditions of the REIT Charter, (x) all requirements under the
Code applicable to real estate investment trusts, (y) Title 8
of the Corporations and Associations Article of the Annotated
Code of Maryland, as amended, or any other law as in effect
from time to time and (z) any applicable rule or policy of any
stock exchange or self-regulatory organization (a "Redemption
Restriction"), except if prohibited by other contractual
obligations, during each Redemption Period each Redeeming
Party shall have the right to redeem its Partnership Units by
providing the General Partner with a Redemption Notice. A
Limited Partner may invoke its rights under this Article IX
with respect to one or more Partnership Units or all of the
Partnership Units held by such Limited Partner. Upon the
General Partner's receipt of a Redemption Notice from a
Redeeming Party, the Partnership shall be obligated (subject
to the existence of any Redemption Restriction) to redeem the
Partnership Units from such Redeeming Party (the "Redemption
Obligation")."
4. Section 9.3 of the Partnership Agreement is amended and restated in
order to delete the incorrect use of the term "Conversion Ratio," as follows:
"SECTION 9.3 REDEMPTION PRICE. On or before the Redemption
Date, the Partnership (or the General Partner if it elects
pursuant to Section 9.4) shall deliver to the Redeeming Party,
in the sole and absolute discretion of the General Partner,
either (i) a Share Payment or (ii) a Cash Payment; provided,
however, that a Share Payment shall not be made, and a Cash
Payment shall instead be made in all cases, if, in the sole
and absolute discretion of the General Partner, the making of
a Share Payment would result in a material risk of termination
of the General Partner's status as a REIT under the Code. In
order to enable the Partnership to effect a redemption by
making a Share Payment pursuant to this Section 9.3, the
General Partner in its sole and absolute discretion may issue
to the Partnership the number of REIT Shares required to make
such Share Payment in exchange for the issuance to the General
Partner of Partnership Units equal in number to the quotient
of the number of REIT Shares issued divided by the Redemption
Ratio. Any such Partnership Unit redeemed by the Redeeming
Party shall be deemed canceled."
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In witness whereof, the General Partner has executed this Amendment as
of the day and year first above written.
CORPORATE OFFICE PROPERTIES TRUST, a
Maryland Real Estate Investment Trust
By: /s/ ROGER A. WAESCHE, JR.
-------------------------------------
Name: Roger A. Waesche, Jr.
Its: Senior Vice President
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