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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 31, 1999
OR
|_| Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from __________ to
_____________
Commission File Number: 1-14979
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CABOT INDUSTRIAL PROPERTIES, L.P.
(Exact name of registrant as specified in its charter)
Delaware 04-3397874
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Two Center Plaza, Suite 200, Boston, Massachusetts 02108
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 723-0900
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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7.125% Redeemable Notes due 2004 New York Stock Exchange
(Issue Price: 99.724%)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[_]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant: Not applicable. No market for the registrant's
partnership units exists and therefore, a market value for such units cannot be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference from the definitive
proxy statement of Cabot Industrial Trust filed with respect to its 2000 Annual
Meeting of Shareholders.
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TABLE OF CONTENTS
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Description Page
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PART I
Item 1. Business................................................................ 1
Item 2. Properties..............................................................11
Item 3. Legal Proceedings.......................................................22
Item 4. Submission of Matters to a Vote of Security Holders.....................22
Item 4A. Executive Officers of Registrant........................................22
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.................................................................23
Item 6. Selected Financial Data.................................................24
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations...............................................25
Item 7A. Quantitative and Qualitative Disclosures About Market Risk..............30
Item 8. Financial Statements and Supplementary Data.............................32
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure................................................73
PART III
Item 10. Directors and Executive Officers of the Registrant......................73
Item 11. Executive Compensation ................................................73
Item 12. Principal and Management Shareholders...................................73
Item 13. Certain Relationships and Related Transactions..........................73
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K........75
SIGNATURES...........................................................................74
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PART I
Item 1. Business
Cabot Industrial Properties, L.P.
Cabot Industrial Properties, L.P. ("Cabot L.P.") was organized on October 10,
1997 as a Delaware limited partnership to continue and expand the national
industrial real estate business of Cabot Partners Limited Partnership ("Cabot
Partners"). The sole general partner of Cabot L.P. is Cabot Industrial Trust
(Cabot Trust), a Maryland real estate investment trust. Cabot L.P. and Cabot
Trust are organized in what is commonly referred to as an umbrella partnership,
or "UPREIT" structure, meaning that all of Cabot Trust's properties are held and
its business is conducted primarily through Cabot L.P. At December 31, 1999,
Cabot Trust held a 93% partnership interest in Cabot L.P. The balance of the
partnership interests in Cabot L.P. at that date was primarily held by investors
who had contributed properties or assets to Cabot L.P. in connection with the
commencement of the business of Cabot Trust and Cabot L.P. in their current
form, or in subsequent transactions. See "Formation Transactions; Organizational
Structure".
Cabot Trust is an internally managed, fully integrated real estate company
which, through Cabot L.P., acquires or develops, leases, manages and holds for
investment industrial real estate properties in principal markets throughout the
United States. At December 31, 1999, Cabot L.P. owned a geographically
diversified portfolio of 320 industrial properties having an aggregate of
approximately 38 million rentable square feet, approximately 97% of which space
was leased to 638 tenants. The properties are located in 22 states in each of
the five principal regions (West, Midwest, Northeast, Southeast and Southwest)
of the United States. As of December 31, 1999, no single tenant accounted for
more than 2.6% of Cabot L.P.'s total annualized base rent. Between December 31,
1999 and February 29, 2000, Cabot L.P. acquired 14 industrial properties
containing approximately 1,366,000 square feet and contracted to purchase seven
additional industrial properties containing approximately 770,000 square feet.
Cabot L.P.'s goal is to be the preeminent national real estate company focused
on serving a variety of industrial space users. As of December 31, 1999, Cabot
L.P. has a significant market presence across the United States, with properties
in a total of 22 markets (19 of which Cabot L.P. has identified as principal
targeted markets), including 11 markets in which Cabot L.P. owns properties with
more than one million rentable square feet. Its tenant base ranges from large
national distributors using bulk warehouse and other types of industrial space
in multiple locations to small companies located in single workspace properties.
Cabot L.P. believes that its geographic diversification and substantial presence
in multiple markets is a strategic advantage that allows it to serve industrial
space users with multiple site and industrial property type requirements, to
compete more effectively in its individual markets, and to respond quickly to
acquisition opportunities as they arise.
Cabot L.P. offers a broad spectrum of industrial property types to meet the
diverse needs of its tenants. Its properties are of three general types: bulk
distribution properties, multitenant distribution properties and workspace
properties (light industrial, R&D and similar facilities).
In addition to acquiring existing industrial properties, Cabot L.P. is engaged
in the development and construction of new properties. Its development
activities are conducted through relationships with local builders selected by
Cabot L.P. As of December 31, 1999, Cabot L.P. had approved 17 development
projects with total projected development costs of approximately $172.0 million.
The
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projects are located in 12 of Cabot L.P.'s existing submarkets and involve
construction of each of Cabot L.P.'s principal property types. Sixty-five
percent of the square footage in development projects which have reached shell
completion, with estimated total project costs of $66.8 million, have been
leased.
Cabot L.P. is taxed as a partnership under the Internal Revenue Code of 1986
(the "Code"), as amended. As a partnership, Cabot L.P. will not be subject to
federal and state income taxes as the partners report their respective shares of
net taxable income on their individual returns.
Cabot L.P.'s principal executive offices are located at Two Center Plaza, Suite
200, Boston, Massachusetts 02108, and its telephone number is (617) 723-0900.
Cabot L.P. has regional offices in the Atlanta, Baltimore, Chicago, Cincinnati,
Dallas, Los Angeles, Orlando and Phoenix markets.
Formation Transactions; Organizational Structure
In February 1998, Cabot Trust completed an initial public offering of 8,625,000
common shares of beneficial interest ("Common Shares") and a private placement
of 1,000,000 Common Shares, in each case at an offering price of $20.00 per
Common Share (collectively, the "Offerings"). The Offerings resulted in net
proceeds to Cabot Trust of approximately $176.3 million, which were contributed
to Cabot L.P. in exchange for a corresponding number of units of partnership
interest. Concurrently with the completion of the Offerings, Cabot Trust also
completed a series of business combinations (the "Formation Transactions")
involving Cabot Partners and a number of property-owning entities, including
both entities organized by Cabot Partners and its institutional advisory
clients, and institutional investors that had no prior relationship with Cabot
Partners (collectively, the "Contributing Investors"). The Formation
Transactions resulted, among other things, in the transfer of ownership of 122
industrial properties to Cabot L.P.
Cabot Trust's interest in Cabot L.P. entitles it to share in cash distributions
from, and in the profits and losses of, Cabot L.P. in proportion to Cabot
Trust's percentage ownership (apart from tax allocations of profits and losses
to take into account pre-contribution property appreciation). Limited
partnership interests in Cabot L.P. ("Units") are convertible into Common Shares
of Cabot Trust on a one-for-one basis subject to Cabot Trust's right to redeem
such interests for cash in lieu of issuing Common Shares.
As the general partner of Cabot L.P., Cabot Trust has the exclusive power under
the agreement of limited partnership to manage and conduct the business of Cabot
L.P. Cabot Trust holds one Unit in Cabot L.P. for each Common Share that it has
issued. The net proceeds of the issuance of Common Shares of Cabot Trust are
required to be contributed to Cabot L.P. in exchange for a corresponding number
of Units of partnership interest.
Business Strategies
Cabot L.P.'s fundamental business objective is to maximize the total return to
its unitholders through growth in its cash available for distribution per
partnership Unit and in the value of its portfolio of industrial properties and
operations. Cabot L.P. believes that it is well positioned to take advantage of
the opportunities presented by today's changing industrial real estate markets
through the business strategies and operations described below.
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Leveraging Substantial National Market Presence
Cabot L.P. believes that maintaining and expanding its market presence in its 19
principal targeted markets across the country is an important factor in
achieving future growth and its targeted returns on investment.
Cabot L.P. believes that its substantial presence in its principal markets
provides significant strategic advantages. Foremost among these advantages is
that, through a national tenant marketing program, Cabot L.P. is well positioned
to market its industrial space to national companies and third-party logistics
companies who have space requirements in multiple markets. The national tenant
marketing program emphasizes the advantages of dealing with a single source for
a company's industrial space needs in addition to the quality and attractive
locations of Cabot L.P.'s properties. These advantages include greater
efficiency of lease negotiations and day-to-day property management, as well as
better understanding of the tenants' current needs and prospective space
requirements. Cabot L.P. serves 55 tenants in multiple properties. These tenants
accounted for approximately 28% of Cabot L.P.'s annualized net rents as of
December 31, 1999.
Cabot L.P. believes that having a substantial inventory of properties and
significant leasing activities within each local market increases its visibility
to prospective tenants and enables it to establish strong relationships with
leasing brokers and other local market participants. These brokers and market
participants serve as sources of information and potential tenant referrals. In
addition, larger inventories increase Cabot L.P.'s opportunities to relocate
tenants to one or more of its other properties as their needs change. Increased
size of operations in a market also enables Cabot L.P. to bear the costs of the
management personnel and facilities needed to build long-term tenant
relationships in that market.
Serving a Variety of Tenants By Offering a Broad Spectrum of Industrial Property
Types
Cabot L.P. believes that its strategy of offering a variety of industrial
property types provides complementary benefits in meeting Cabot L.P.'s growth
objectives. Offering a broad spectrum of industrial property types and Cabot
L.P.'s size and professional management capability enable Cabot L.P. to provide
better service, on a more cost-efficient basis, to national customers who need
various types of workspace properties, in addition to distribution space, for
their local operations. At the same time, offering a variety of industrial
property types suitable for smaller companies enables Cabot L.P. to capture a
larger share of the growth in its chosen industrial property markets. Cabot
L.P.'s strategy of offering diverse industrial property types also enables Cabot
L.P. to pursue opportunities as they arise within its tenant base by responding
to shifts in demand at different stages of the economic cycle.
Growth Strategies
Cabot L.P. intends to achieve its growth objectives through a combination of
property acquisitions, development and internal growth.
Acquisitions
Cabot L.P. seeks to capitalize on its competitive advantages primarily by
acquiring additional modern, high-quality properties in attractive submarkets
within the industrial markets that it currently serves. During 1999, Cabot L.P.
acquired 113 properties, consisting of 10 million rentable square feet in 14
targeted markets, totaling $448.3 million in 42 separate transactions. Through
February 29, 2000, Cabot L.P. acquired 14 additional properties in the Atlanta,
Harrisburg and Phoenix markets, consisting of approximately 1,366,000 rentable
square feet. In addition, Cabot L.P. entered into
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contracts to acquire properties consisting of approximately 770,000 rentable
square feet in the Atlanta, Charlotte, Dallas, San Diego and San Francisco
markets. In the near term, Cabot L.P. expects to moderate the pace of its
acquisition program, compared to prior years.
Investment Criteria
Cabot L.P. follows a disciplined, value-oriented strategy in its property
acquisitions. Cabot L.P. seeks to acquire modern, cost-efficient buildings
located in key national and regional distribution centers. Cabot L.P.'s
investment considerations include (i) capitalization rates, (ii) economic
fundamentals in the market, (iii) replacement costs, (iv) rent levels and
trends, (v) construction quality and property condition, (vi) historical
occupancy rates, (vii) access to transportation, (viii) proximity to housing,
(ix) operating costs, (x) location in modern industrial parks and (xi) local
crime rates.
Emphasis on Market Research
Cabot L.P.'s property acquisitions are based on extensive research in each
targeted market regarding (i) economic and demographic trends, (ii) the supply
of and demand for industrial space in targeted submarkets, (iii) existing and
potential tenant space requirements, (iv) rent levels and trends and (v) the
physical characteristics of buildings within the market. Cabot L.P.'s research
includes extensive in-market activity by its employees, including physical site
inspections and continuing contacts with leasing brokers and other local market
participants in the local markets.
Diversification of Industrial Property Types
As of December 31, 1999, 69% of Cabot L.P.'s properties, based on annualized net
rents, have been bulk distribution and multitenant distribution facilities
because of the opportunities for superior returns such properties have provided.
While Cabot L.P. expects that both types of properties will continue to be part
of its future acquisition program, Cabot L.P. believes that workspace properties
(light industrial, R&D and similar facilities) are also attractive in selected
markets where they are in limited supply and strong demand exists. Cabot L.P.
continues to increase its acquisitions of workspace properties, which
represented approximately 31% of its properties at December 31, 1999 based on
annualized net rents. During 1999, Cabot L.P.'s acquisitions as defined by cost
were 22% bulk distribution, 40% multitenant distribution and 38% workspace
properties.
Relationships with Institutional Real Estate Investors
Prior to the formation of Cabot L.P., management operated Cabot Partners, which
was focused on serving public and private pension funds and other institutional
real estate investors in connection with investments in and management of
industrial real estate. This has provided Cabot L.P.'s management with an
extensive knowledge of and, Cabot L.P. believes, a favorable reputation with
such investors. Cabot L.P. believes that it will benefit from its relationships
with these investors through further acquisitions as they increasingly seek to
securitize their direct real estate investments.
Capital Resources and UPREIT Structure
As of December 31, 1999, Cabot L.P. had a debt-to-total market capitalization
ratio of approximately 35%. Cabot L.P. has used its relatively unleveraged
capital structure and substantial equity base in its acquisition and development
activities. Cabot L.P. believes that its ability to borrow using its $325
million revolving credit acquisition facility has enhanced its credibility with
potential property sellers. Cabot L.P.'s UPREIT structure, which enables it to
acquire industrial properties on a non-cash basis by exchanging Units in Cabot
L.P. for properties in a tax-deferred manner, also provides an alternative,
depending on market conditions, to a taxable cash sale for tax-paying property
owners.
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Development
Cabot L.P.'s senior management has extensive real estate development experience,
including experience derived from the industrial park development activities of
Cabot, Cabot and Forbes, a nationwide real estate development, investment,
construction and management firm that pioneered the development of large-scale,
planned industrial parks. Cabot L.P. believes that in select targeted markets
there are attractive opportunities for new development with potentially greater
returns than those available from the purchase of existing stabilized
properties, and Cabot L.P. pursues a development program where such
opportunities exist. Cabot L.P. is also engaging its existing tenants in
discussions about future space needs and, based on such discussions, believes
that financially attractive build-to-suit opportunities from its tenant base may
be available over time. In order to limit overhead expenses, Cabot L.P. executes
its development activities by engaging local or regional builders with whom it
has established strong relationships. Currently, Cabot L.P. is working with nine
local builders. Cabot L.P. intends to expand its in-house development staff as
Cabot L.P.'s development activities increase.
Internal Growth
Cabot L.P.'s primary internal growth strategy is to increase the cash flow
generated by its properties, and from properties that it proposes to acquire by
renewing or replacing expiring leases with new leases at higher rental rates and
through rent increase provisions in its leases. In addition, Cabot L.P. works
actively to (i) maintain its historically high occupancy levels by retaining
existing tenants, thereby minimizing "down time" and re-leasing costs, (ii)
improve the occupancy levels of newly acquired properties that have lower
occupancy levels than Cabot L.P. targets for its existing properties, (iii)
capitalize on economies of scale arising from the size of its portfolio of
properties and (iv) control costs. Cabot L.P. also seeks internal growth by
converting its properties to more intensive, higher-margin uses, if and to the
extent that suitable opportunities to do so arise. Leases covering approximately
13.7% and 16.4% of the total rentable space of Cabot L.P.'s properties will
expire in 2000 and 2001, respectively.
Leases
Cabot L.P.'s properties typically are leased on a triple net basis, meaning that
the tenants pay their proportionate share of real estate taxes and operating
costs. However, some of the properties are leased at higher gross rents with
Cabot L.P. being responsible for paying a stated amount of real estate taxes and
operating costs and tenants being responsible for any and all increases in such
taxes and costs above that stated amount. Excluding lease renewal options, lease
terms typically range from three to five years or, for leases that are renewed,
a shorter period of generally two to three years. Approximately 48% (based on
annualized net rent) of these leases contain provisions for automatic increases
of a specified amount or percentage at a certain point or points during the term
of the lease.
Policies
The following is a description of policies that have been adopted by the Cabot
Trust Board of Trustees for the conduct of the business of Cabot Trust and Cabot
L.P. These policies may be amended or revised from time to time without Cabot
Trust shareholder approval, except that shareholder approval would be required
for Cabot Trust to change its policy of holding its assets and conducting its
business only through Cabot L.P. and its subsidiaries and other affiliates,
including Cabot Advisors, Inc. ("Cabot
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Advisors") and joint ventures in which Cabot L.P. or a subsidiary may be a
partner. In addition, changes in policies with respect to conflicts of interest
must be consistent with legal requirements.
Investment Policies
Cabot Trust conducts all of its investment activities through Cabot L.P. and its
subsidiaries and other affiliates, including Cabot Advisors, and may in the
future conduct activities through joint ventures in which Cabot L.P. or a
subsidiary may be a partner. Cabot L.P.'s investment policy is to purchase
income-producing industrial properties primarily for long-term capital
appreciation and rental growth, and to expand and improve its properties or to
sell them, in whole or in part, when the circumstances warrant.
Cabot L.P.'s property investments may be subject to existing mortgage and other
indebtedness or to indebtedness that may be incurred in connection with
acquiring or refinancing such investments. Debt service with respect to such
indebtedness will have a priority over any distributions with respect to the
Units. Investments are also subject to Cabot L.P.'s policy not to be
treated as an investment company under the Investment Company Act of 1940.
Cabot L.P. currently invests primarily in existing improved properties, but also
invests in development projects. It does not limit its investment or development
activities to any geographic area or product type or to a specified percentage
of assets. While Cabot L.P. intends to maintain diversity in its investments in
terms of property location, size and market, Cabot L.P. does not have any limit
on the amount or percentage of its assets that may be invested in any one
property or any one geographic area. Cabot Trust intends to conduct the
investment and development activities of Cabot L.P. in a manner that is
consistent with the maintenance of Cabot Trust's status as a REIT for federal
income tax purposes.
Cabot L.P.'s current portfolio consists of, and its business objectives
emphasize, equity investments in industrial real estate. Cabot L.P. may also
make or invest in loans secured by mortgages or deeds of trust that are
consistent with Cabot Trust's continued qualification as a REIT for federal
income tax purposes, although it has no current plans to do so. These may
include participating or convertible mortgage loans if Cabot L.P. concludes
that it may benefit from the cash flow or any appreciation in value of the
property secured by such mortgages. Investments in real estate mortgage loans
entail the risk that one or more borrowers may default under such loans and that
the collateral securing such loans may not be sufficient to enable Cabot L.P.
to recoup its full investment.
Subject to the limitations on ownership of certain types of assets and the gross
income tests imposed by the Code, Cabot L.P. also may invest in the securities
of other REITs, other entities engaged in real estate activities or other
issuers, including investments made for the purpose of exercising control over
such entities. Cabot L.P. may enter into joint ventures or partnerships for the
purpose of obtaining an equity interest in a particular property in accordance
with its investment policies. Such investments may permit Cabot L.P. to own
interests in larger assets without unduly restricting diversification and,
therefore, add flexibility in structuring its portfolio. Cabot Trust does not
intend to enter into joint ventures or partnerships to make investments that
would not meet its own investment policies.
Financing Policies
As a general policy, Cabot Trust intends to limit its total consolidated
indebtedness incurred by directing the activities of Cabot L.P. so that at the
time any debt is incurred, Cabot L.P.'s debt-to-total market capitalization
ratio does not exceed 40%. Cabot Trust's Declaration of Trust and Bylaws and
Cabot L.P.'s Partnership Agreement do not, however, limit the amount or
percentage of indebtedness that it may incur. Moreover, due to fluctuations in
the value of Cabot L.P.'s portfolio of properties over time, and since any
determination
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of its debt-to-total market capitalization ratio is made only at the time debt
is incurred, the debt-to-total market capitalization ratio could exceed the 40%
level. In addition, Cabot L.P. may modify its debt policy from time to time in
light of changes in economic conditions, relative costs of debt and equity
capital, the market values of its properties, general conditions in the market
for debt and equity securities, fluctuations in the market price of its Units,
growth and acquisition opportunities and other factors. If its debt policy were
changed, Cabot L.P. could become more highly leveraged, resulting in an
increased risk of default on its obligations and a related increase in debt
service requirements that could adversely affect the financial condition and
results of operations of Cabot L.P. and its ability to make distributions to
unitholders.
Cabot L.P. has not established any limit on the number or amount of mortgages
that it may place on any single property or on its portfolio as a whole.
The Board of Trustees of Cabot Trust may decide to obtain additional capital,
from time to time through offerings of Cabot Trust's Common or Preferred Shares
or of Cabot L.P.'s partnership units, including preferred units, debt financings
or retention of cash available for distribution (subject to provisions in the
Code concerning the taxability of undistributed REIT income), or a combination
of these methods. As long as Cabot L.P. is in existence, the net proceeds of the
sale of Common Shares or Preferred Shares by Cabot Trust will be transferred to
Cabot L.P. in exchange for that number of Units or Preferred Units that equals
the number of Common Shares or Preferred Shares sold by Cabot Trust.
Cabot Trust presently anticipates that any borrowings would be made through
Cabot L.P., although Cabot Trust may incur indebtedness directly and loan the
proceeds to Cabot L.P. Borrowings may be unsecured or may be secured by any or
all of the assets of Cabot L.P. (to the extent not prohibited by existing debt
arrangements), or any existing or new property-owning partnership and may have
full or limited recourse to all or any portion of the assets of Cabot L.P., or
any existing or new property-owning partnership. Indebtedness incurred may be in
the form of bank borrowings, purchase money obligations to sellers of
properties, publicly or privately placed debt instruments or financing from
institutional investors or other lenders. The proceeds from borrowings may be
used for working capital, to refinance existing indebtedness or to finance
acquisitions, expansions or the development of new properties, and for the
payment of distributions.
Neither Cabot Trust nor Cabot L.P. has any present policy or intention to
repurchase or otherwise acquire any shares, units or other securities issued by
either of them.
Conflict of Interest Policies
Cabot L.P. has adopted policies that are intended to minimize potential
conflicts of interest. However, there can be no assurance that these policies
will be successful in eliminating the influence of such conflicts and, if they
are not successful, decisions could be made that do not fully reflect the
interests of all unitholders.
Policies with Respect to Other Activities
Cabot L.P. may, but does not presently intend to, make investments that are
different from those described herein. Cabot Trust has authority to offer its
Common Shares, other shares of beneficial interest or other securities for cash
or in exchange for property and to repurchase or otherwise reacquire its shares
or any other securities and may engage in such activities in the future. Cabot
L.P. and Cabot Trust have no outstanding loans to other entities or persons,
including officers and Trustees of Cabot Trust, except Cabot Advisors. Cabot
L.P. has not engaged in trading, underwriting or agency distribution or sales of
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securities of other issuers and does not currently intend to do so. Cabot L.P.
and Cabot Trust make and intend to continue to make investments in such a way
that neither of them will be treated as an investment company under the
Investment Company Act of 1940. Their policies with respect to such activities
may be reviewed and modified or amended from time to time by the Board of
Trustees of Cabot Trust without approval of Cabot Trust's shareholders or Cabot
L.P.'s limited partners.
Cabot L.P. intends to make investments in a manner consistent with the
requirements of the Code for Cabot Trust to qualify as a REIT unless, because of
changing circumstances or changes in the Code or applicable Treasury
regulations, the Board of Trustees of Cabot Trust determines that it is no
longer in the best interests of Cabot Trust to qualify as a REIT.
Working Capital Reserves
Cabot L.P. intends to maintain working capital reserves in amounts that the
Board of Trustees of Cabot Trust determines to be adequate to meet normal
contingencies in connection with the operation of Cabot L.P.'s business and
investments.
Declaration of Trust and Bylaw Provisions
Cabot Trust's Declaration of Trust requires, with limited exceptions, that a
majority of Cabot Trust's Board of Trustees be comprised of individuals who are
not officers or employees of Cabot Trust ("Independent Trustees"). This
requirement may not be amended, altered, changed or repealed without the
affirmative vote of a majority of all of the outstanding shares of Cabot Trust
entitled to vote on the matter. The Declaration of Trust also includes a
provision generally permitting Cabot Trust to enter into any agreement or
transaction with any person, including any Trustee, officer, employee or agent
of Cabot Trust.
Cabot Trust's Bylaws provide that Section 2-419 of the Maryland General
Corporation Law, relating to transactions by interested directors, will be
available for and apply to contracts and other transactions between Cabot Trust
and any of its Trustees or between Cabot Trust and any other trust, corporation
or other entity of or in which any of Cabot Trust's Trustees is a trustee or
director or has a material financial interest. Under Section 2-419, a contract
or other transaction between a corporation and any of its directors and any
other corporation, firm or other entity in which any of its directors is a
director or has a material financial interest is not void or voidable solely
because of (a) the common directorship or interest, (b) the presence of the
director at the meeting of the board or a committee of the board that
authorizes, approves or ratifies the contract or transaction, (c) the counting
of the vote of the director for the authorization, approval or ratification of
the contract or transaction if either (i) after disclosure of the interest, the
transaction is authorized, approved or ratified by the affirmative vote of a
majority of the disinterested directors, or by the affirmative vote of a
majority of the votes cast by shareholders entitled to vote other than the votes
of shares owned of record or beneficially by the interested director or such
corporation, firm or other entity, or (ii) the transaction is fair and
reasonable to the corporation.
Cabot L.P. Partnership Agreement
The Cabot L. P. Partnership Agreement gives Cabot Trust, in its capacity as
general partner, full and exclusive discretion in managing and controlling the
business of Cabot L.P. and in making all
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decisions affecting the business and assets of Cabot L.P., with limited
exceptions. In the Partnership Agreement, the limited partners have acknowledged
and agreed that Cabot Trust is acting on behalf of both Cabot L.P. and Cabot
Trust's shareholders generally and that, in its capacity as general partner of
Cabot L.P., Cabot Trust is under no obligation to consider separate interests of
the Cabot L.P. limited partners in deciding whether to cause Cabot L.P. to take
or to decline to take, any actions which Cabot Trust, in its capacity as general
partner, has undertaken in good faith on behalf of Cabot L.P. In addition, Cabot
Trust in its capacity as general partner is not responsible for any misconduct
or negligence on the part of its agents, provided that such agents were
appointed in good faith. The Cabot L.P. Partnership Agreement also provides that
neither Cabot Trust nor any of its affiliates (including its officers and
Trustees) may sell, transfer or convey any property to, or purchase any property
from, Cabot L.P., except on terms that are fair and reasonable and no less
favorable than would be obtained from an unaffiliated party.
Security Holder Reports
Cabot Trust makes annual reports to its shareholders regarding the business of
Cabot Trust and Cabot L.P. that include audited consolidated financial
statements. Cabot L.P. does not currently provide separate annual or other
reports to security holders of Cabot L.P. and does not expect to do so, except
to the extent it may specifically undertake to do so in connection with future
issuances of debt or other securities.
Competition
Numerous industrial properties compete with Cabot L.P.'s properties in
attracting tenants to lease space and additional properties can be expected to
be built in the markets in which the properties are located. The number and
quality of competitive industrial properties in a particular area has a material
effect on Cabot L.P.'s ability to lease space at the properties or at newly
acquired properties and on the rents charged. Some of these competing properties
may be newer or better located than Cabot L.P.'s properties.
In addition, the industrial real estate acquisition market has become highly
competitive. There are a significant number of buyers of industrial property,
including other publicly traded industrial REITs, many of which have significant
financial resources. Accordingly, it is possible that Cabot L.P. may not be able
to meet its targeted level of property acquisitions and developments due to such
competition or other factors that may have an adverse effect on Cabot L.P.'s
expected growth in Funds from Operations ("FFO").
Insurance
Cabot L.P. carries commercial general liability insurance, standard "all-risk"
property insurance, flood, earthquake and rental loss insurance with respect to
its properties with policy terms and conditions customarily carried for similar
properties. However, the insurance is subject to normal limitations on the
amounts of coverage and certain types of losses (such as from wars or from
earthquakes for properties located in California) may be either uninsurable or
not economically insurable. Should an uninsured loss or a loss in excess of the
amount of the insurance coverage occur, Cabot L.P. could lose the capital
invested in a property, as well as the anticipated future revenue from that
property, and
9
<PAGE>
Cabot L.P. would continue to be obligated on any mortgage indebtedness or other
obligations related to the property.
In light of the California earthquake risk, California building codes have since
the early 1970's established minimum construction standards for all new
buildings and also contain guidelines for seismic upgrading of existing
buildings that are intended to reduce the possibility and severity of loss from
earthquakes. The construction standards and upgrading, however, do not eliminate
the possibility of earthquake loss. Cabot L.P.'s current policy is to obtain
earthquake insurance if available at acceptable cost. As of December 31, 1999,
all of its 74 properties located in California are covered by earthquake
insurance in amounts believed by management to be reasonable. At December 31,
1999, seismic upgrading had been completed on 19 of the California properties
and seismic upgrading is expected to be completed on nine additional California
properties by December 31, 2000. Cabot L.P. currently maintains blanket
earthquake insurance coverage for all properties located outside California in
amounts Cabot L.P. believes to be reasonable.
Environmental Matters
Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws often impose liability whether or not
the owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances.
In addition, the presence of hazardous or toxic substances, or the failure to
remediate such property properly, may adversely affect the owner's ability to
borrow using such real property as collateral. Persons who arrange for the
disposal or treatment of hazardous or toxic substances may also be liable for
the costs of removal or remediation of hazardous substances at the disposal or
treatment facility, whether or not such facility is or ever was owned or
operated by such person.
Certain environmental laws and common law principles could be used to impose
liability for release of and exposure to hazardous substances and third parties
may seek recovery from owners or operators of real properties for personal
injury or property damage associated with exposure to released hazardous
substances. As the owner of real properties, Cabot L.P. may be potentially
liable for any such costs.
Phase I environmental site assessment reports ("Phase I ESAs") were obtained by
our original Contributing Investors in connection with their initial
acquisitions of the properties, or were obtained by Cabot Trust in connection
with the transactions resulting in Cabot Trust's formation as a publicly traded
company. In accordance with Cabot Trust's acquisition policies, Cabot Trust has
also obtained Phase I ESAs for all of the properties acquired since the
completion of the Formation Transactions. The purpose of Phase I ESAs is to
identify potential sources of contamination for which Cabot L.P. may be
responsible and to assess the status of environmental regulatory compliance. The
earliest of the Phase I ESAs for Cabot L.P.'s properties were obtained in 1988
and Phase I ESAs on approximately 14% of the properties owned as of December 31,
1999 were obtained prior to 1995. Commonly accepted standards and practices for
Phase I ESAs have evolved to encompass higher standards and more extensive
procedures over the period of 1988 to the present.
The Phase I ESAs obtained for Cabot L.P.'s properties have not revealed any
environmental liability that Cabot L.P. believes would have a material adverse
effect on its business, assets or results of
10
<PAGE>
operations, nor is Cabot L.P. aware of any such material environmental
liability. It is possible, even if prepared in accordance with professional
standards, that Phase I ESAs relating to the subject properties do not reveal
all environmental liabilities. Moreover, future laws, ordinances or regulations
may impose material environmental liability or the properties' current
environmental condition may be affected by tenants, by the condition of land or
operations in the vicinity of the properties (such as the presence of
underground storage tanks) or by third parties unrelated to Cabot L.P.
Cabot Advisors
Cabot Advisors provides investment advisory and asset management services to the
former clients of Cabot Partners that elected not to contribute some or all of
their industrial properties to Cabot Trust. In addition, Cabot Advisors provides
property management services to Cabot L.P. and to the properties of some clients
that are not associated with Cabot Trust. Cabot L.P. intends to explore
opportunities for co-investment, however, Cabot Advisors will not provide
services relating to any industrial real estate acquisition or development
activities that would conflict with Cabot L.P.'s own acquisition and development
activities. Cabot L.P. believes that its investment in Cabot Advisors will help
it achieve economies of scale with its property management systems, increase
market penetration and provide access to further acquisition opportunities.
To permit Cabot Trust to share in the income of Cabot Advisors while maintaining
its status as a REIT under the law as currently in effect, Cabot L.P. owns all
of Cabot Advisors' non-voting preferred stock (representing 95% of its economic
interest in Cabot Advisors) and Ferdinand Colloredo-Mansfeld, Cabot Trust's
Chief Executive Officer, owns all of Cabot Advisors' voting common stock
(representing 5% of its economic interest therein). Although Cabot Trust
receives substantially all of the economic benefit of Cabot Advisors' business
through distributions from Cabot L.P., Cabot Trust is not able to vote on the
election of Cabot Advisors' directors or officers and, as a result, does not
have the ability to control Cabot Advisors' operations or require its board of
directors to declare and pay cash dividends.
In late 1999, the REIT Modernization Act (RMA) was signed into law, to take
effect on January 1, 2001. The RMA will permit Cabot Trust and any corporation
in which it invests to elect to treat such corporation as a taxable REIT
subsidiary, which will be subject to corporate taxation on its earnings, but
which will be permitted to engage in certain activities that REITs and their
controlled subsidiaries cannot currently perform without jeopardizing REIT
status. Cabot Trust is currently assessing the impact of the RMA on its
operations and the operations of Cabot Advisors.
Employees
At December 31, 1999, Cabot L.P. and Cabot Advisors employed 95 persons, none of
who are represented by any collective bargaining organization. Cabot L.P.
believes it has good relations with its employees.
Item 2. Properties
For descriptive purposes, Cabot L.P.'s properties may generally be grouped into
three property types: bulk distribution properties, multitenant distribution
properties and workspace properties.
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Bulk distribution properties are oriented primarily to large national and
regional distribution tenants. These properties generally have at least 100,000
square feet of rentable space, building depths of at least 240 feet, clear
heights of 24 feet or more, truck courts in excess of 100 feet in depth to
accommodate larger modern trucks, a ratio of loading docks to rentable space of
one or more per 10,000 square feet and a location with good access to interstate
highways.
Multitenant distribution properties are oriented primarily to smaller regional
and local distribution tenants, and are generally designed to be subdivided to
suit tenants whose space requirements generally range from 10,000 square feet to
100,000 square feet. These properties generally have clear heights of 20 feet or
more, building depths of less than 240 feet (unless configured with loading
docks on two sides) and a location with good access to regional and interstate
highways. Both types of distribution property are used predominantly for the
storage and distribution of goods.
Workspace properties are designed to serve a variety of industrial tenants with
workspace-related requirements, including light manufacturing and assembly,
research, testing, re-packaging and sorting, back office and sales office
functions. Workspace tenants include smaller companies whose space requirements
generally range from 3,000 square feet to 70,000 square feet. Workspace
properties generally have clear heights of 14 to 24 feet, attractive building
exteriors, office finish of up to 30% or more, parking ratios of one to four
spaces per 1,000 rentable square feet and locations with good access to
executive residential areas and local highways, labor supply and dining and
shopping amenities.
The table set forth below summarizes information regarding Cabot L.P.'s
properties and markets as of December 31, 1999. All of the properties listed are
owned, directly or through title holding entities, by Cabot L.P.
Properties by Region and Market
As of December 31, 1999
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
BULK DISTRIBUTION PROPERTIES:
WEST REGION
Los Angeles Market
Vintage Avenue, Ontario, CA 1988 1 284,559 100% $ 973,200 0.6% $ 3.42
Dahlia Street, Fontana, CA 1989 1 278,560 100% 973,632 0.7% 3.50
South Vintage Avenue, Building 1, Ontario, CA 1986 1 272,448 100% 834,548 0.5% 3.06
Deforest Circle, Mira Loma, CA 1992 1 250,584 100% 872,032 0.6% 3.48
South Vintage Avenue, Building 2, Ontario, CA 1986 1 248,064 100% 796,644 0.5% 3.21
East Easy Street, Simi Valley, CA 1990 1 235,080 100% 1,297,641 0.9% 5.52
Santa Anita Avenue, Rancho Cucamonga, CA 1988 1 212,300 100% 792,864 0.5% 3.73
San Fernando Road, Sun Valley, CA 1980 1 181,670 100% 1,015,537 0.7% 5.61
Rowland Street, City of Industry, CA 1998 1 181,635 100% 824,374 0.5% 4.54
South Rockefeller Avenue, Ontario, CA 1986 1 164,140 100% 551,510 0.4% 3.36
East Jurupa Street, Ontario, CA 1986 1 142,404 100% 461,388 0.3% 3.24
---- ---------- ---- ------------ ------ ------
Market Subtotal 11 2,451,444 100% $ 9,393,370 6.2% $ 3.83
</TABLE>
12
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Phoenix Market
North 104th Avenue, Tolleson, AZ 1995 1 279,279 100% $ 805,634 0.5% $ 2.88
North 103rd Street, Phoenix, AZ 1999 1 279,186 100% 942,524 0.6% 3.38
West Van Buren, Tolleson, AZ 1997 1 278,142 100% 868,470 0.6% 3.12
South 84th Avenue, Tolleson, AZ 1989 1 236,007 100% 802,488 0.5% 3.40
South 41st Avenue, Building 2, Phoenix, AZ 1985 1 223,740 100% 696,009 0.5% 3.11
South 63rd Avenue, Phoenix, AZ 1990 1 168,165 100% 395,514 0.3% 2.35
North 47th Avenue, Phoenix, AZ 1986 1 163,200 100% 473,451 0.3% 2.90
South 49th Avenue, Phoenix, AZ 1989 1 114,871 100% 358,397 0.2% 3.12
South 55th Avenue, Phoenix, AZ 1986 1 100,000 100% 243,000 0.2% 2.43
---- ---------- ---- ------------ ------ ------
Market Subtotal 9 1,842,590 100% $ 5,585,487 3.7% $ 3.03
San Diego Market
Dornoch Court, San Diego, CA 1988 1 220,000 100% $ 1,077,292 0.7% $ 4.90
Newton Drive, Carlsbad, CA 1999 1 179,721 100% 1,189,716 0.8% 6.62
---- ---------- ---- ------------ ------ ------
Market Subtotal 2 399,721 100% $ 2,267,008 1.5% $ 5.67
---- ---------- ---- ------------ ------ ------
WEST REGION SUBTOTAL 22 4,693,755 100% $ 17,245,865 11.4% $ 3.67
SOUTHWEST REGION
Dallas Market
DFW Trade Center, Building 1, Grapevine, TX 1996 1 540,000 100% $ 1,705,803 1.1% $ 3.16
Patriot Drive, Building 2, Coppell, TX 1997 1 503,074 76% 1,296,812 0.9% 3.40
DFW Trade Center, Building 2, Grapevine, TX 1997 1 440,000 100% 1,278,000 0.8% 2.90
Luna Road, Carrollton, TX 1996 1 205,400 100% 679,992 0.5% 3.31
Patriot Drive, Building 1, Coppell, TX 1997 1 142,748 100% 470,289 0.3% 3.29
Airline Drive, Building 2, Coppell, TX 1990 1 140,800 100% 492,804 0.3% 3.50
---- ---------- ---- ------------ ------ ------
SOUTHWEST REGION/MARKET SUBTOTAL 6 1,972,022 94% $ 5,923,700 3.9% $ 3.20
MIDWEST REGION
Chicago Market
West 73rd Street, Building 2, Bedford Park, IL 1986 1 380,269 0% $ -- 0.0% $ --
Crossroads Parkway, Bolingbrook, IL 1995 1 299,520 100% 1,080,800 0.7% 3.61
Mark Street, Wood Dale, IL 1985 1 234,000 100% 833,040 0.5% 3.56
West 73rd Street, Building 1, Bedford Park, IL 1982 1 233,282 100% 735,279 0.5% 3.15
West 73rd Street, Building 3, Bedford Park, IL 1979 1 232,000 100% 735,862 0.5% 3.17
Arthur Avenue, Elk Grove, IL 1978 1 230,768 100% 699,228 0.5% 3.03
Harvester Drive, Chicago, IL 1974 1 212,922 0% -- 0.0% --
Remington Street, Bolingbrook, IL 1996 1 212,333 100% 796,926 0.5% 3.75
Ambassador Road, Naperville IL 1996 1 203,500 100% 737,633 0.5% 3.62
South Frontenac, Naperville, IL 1975 1 200,117 100% 623,080 0.4% 3.11
North Raddant Road, Batavia, IL 1991 1 170,462 100% 711,954 0.5% 4.18
---- ---------- ---- ------------ ------ ------
Market Subtotal 11 2,609,173 77% $ 6,953,802 4.6% $ 3.45
Cincinnati/Northern Kentucky Market
Holton Drive, Independence, KY 1996 1 352,000 100% $ 991,951 0.7% $ 2.82
Kingsley Drive, Building 2, Cincinnati, OH 1981 1 249,402 100% 726,085 0.5% 2.91
International Road, Building 2, Cincinnati, OH 1990 1 204,800 100% 721,520 0.5% 3.52
International Road, Building 1, Cincinnati, OH 1990 1 192,000 100% 547,200 0.4% 2.85
International Way, Hebron, KY 1990 1 192,000 100% 528,000 0.3% 2.75
Kingsley Drive, Building 1, Cincinnati, OH 1981 1 154,004 100% 484,275 0.3% 3.14
---- ---------- ---- ------------ ------ ------
Market Subtotal 6 1,344,206 100% $ 3,999,031 2.7% $ 2.98
Columbus Market
Westbelt Drive, Building 2, Columbus, OH 1980 1 229,200 100% $ 594,807 0.4% $ 2.60
Equity Drive, Building 1, Columbus, OH 1980 1 227,480 100% 516,595 0.3% 2.27
---- ---------- ---- ------------ ------ ------
Market Subtotal 2 456,680 100% $ 1,111,402 0.7% $ 2.43
</TABLE>
13
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Other Market
North State Road #9, Howe, IN 1988 1 346,515 100% $ 748,472 0.5% $ 2.16
---- ---------- ---- ------------ ------ ------
MIDWEST REGION SUBTOTAL 20 4,756,574 88% $ 12,812,707 8.5% $ 3.08
SOUTHEAST REGION
Atlanta Market
Highway 316, Dacula, GA 1989 1 326,019 100% $ 1,085,223 0.7% $ 3.33
Westgate Parkway, Fulton County, GA 1988 1 231,835 100% 695,505 0.5% 3.00
---- ---------- ---- ------------ ------ ------
Market Subtotal 2 557,854 100% $ 1,780,728 1.2% $ 3.19
Charlotte Market
Marine Drive, Rock Hill, SC 1997 1 471,744 100% $ 1,369,236 0.9% $ 2.90
Westinghouse Blvd., Building 3, Charlotte, NC 1994 1 183,551 100% 593,924 0.4% 3.24
Reames Road, Charlotte, NC 1994 1 105,600 100% 334,153 0.2% 3.16
---- ---------- ---- ------------ ------ ------
Market Subtotal 3 760,895 100% $ 2,297,313 1.5% $ 3.02
Memphis Market
Pilot Drive, Memphis, TN 1987 1 336,080 100% $ 812,130 0.5% $ 2.42
---- ---------- ---- ------------ ------ ------
Orlando Market
Landstreet Road, Building 1, Orlando, FL 1997 1 355,732 100% $ 1,639,782 1.1% $ 4.61
---- ---------- ---- ------------ ------ ------
SOUTHEAST REGION SUBTOTAL 7 2,010,561 100% $ 6,529,953 4.3% $ 3.25
NORTHEAST REGION
Baltimore/Washington Market
Oceano Avenue, Jessup, MD 1987 1 243,895 100% $ 834,121 0.6% $ 3.42
Tar Bay Drive, Jessup, MD 1990 1 210,000 100% 800,527 0.5% 3.81
---- ---------- ---- ------------ ------ ------
Market Subtotal 2 453,895 100% $ 1,634,648 1.1% $ 3.60
Harrisburg Market
Cumberland Parkway, Mechanicsburg, PA 1992 1 340,000 100% $ 1,144,967 0.8% $ 3.37
Brackbill Boulevard, Building 1, Mechanicsburg, PA 1984 1 259,200 100% 913,069 0.6% 3.52
Brackbill Boulevard, Building 2, Mechanicsburg, PA 1994 1 235,200 100% 828,432 0.5% 3.52
---- ---------- ---- ------------ ------ ------
Market Subtotal 3 834,400 100% $ 2,886,468 1.9% $ 3.46
New York/New Jersey Market
Herrod Boulevard, South Brunswick, NJ 1989 1 400,000 100% $ 1,719,547 1.1% $ 4.30
South Middlesex Avenue, Building 1, Cranbury, NJ 1989 1 204,369 100% 735,728 0.5% 3.60
Birch Creek Road, Bridgeport, NJ 1991/1997 1 203,229 100% 792,463 0.5% 3.90
Pepes Farm Road, Milford, CT 1980 1 200,000 100% 930,000 0.6% 4.65
Pierce Street, Franklin Township, NJ 1984 1 182,764 100% 776,748 0.5% 4.25
---- ---------- ---- ------------ ------ ------
Market Subtotal 5 1,190,362 100% $ 4,954,486 3.2% $ 4.16
---- ---------- ---- ------------ ------ ------
NORTHEAST REGION SUBTOTAL 10 2,478,657 100% $ 9,475,602 6.2% $ 3.82
---- ---------- ---- ------------ ------ ------
BULK DISTRIBUTION PROPERTIES TOTAL 65 15,911,569 95% $ 51,987,827 34.3% $ 3.42
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
MULTITENANT DISTRIBUTION PROPERTIES:
WEST REGION
Los Angeles Market
East Dyer Road, Santa Ana, CA 1954/1965 1 372,096 100% $ 1,480,660 1.0% $ 3.98
Alondra Blvd., La Mirada, CA 1969/1975 1 237,089 100% 910,421 0.6% 3.84
West Rincon Street, Corona, CA 1986 1 162,900 100% 740,400 0.5% 4.55
Industry Circle, La Mirada, CA 1966 1 112,946 100% 474,373 0.3% 4.20
12th Street, Chino, CA 1990 1 104,600 100% 402,000 0.3% 3.84
N. San Fernando Road, Building 1, Los Angeles, CA 1965 1 102,800 100% 627,118 0.4% 6.10
E. Vista Bella Way, Rancho Dominguez, CA 1973 1 100,000 100% 444,000 0.3% 4.44
W. Manville Street, Rancho Dominguez, CA 1980 1 100,000 100% 438,000 0.3% 4.38
East Santa Anna Street, Building 1, Ontario, CA 1990 1 98,782 100% 355,615 0.2% 3.60
Jersey Court, Rancho Cucamonga, CA 1989 1 88,134 100% 291,000 0.2% 3.30
Tyburn Street, Los Angeles, CA 1965 1 85,142 100% 559,572 0.4% 6.57
N. San Fernando Road, Building 2, Los Angeles, CA 1965 1 80,500 100% 590,274 0.4% 7.33
Parco Street, Ontario, CA 1999 1 72,000 100% 302,400 0.2% 4.20
East Santa Anna Street, Building 2, Ontario, CA 1990 1 62,398 100% 224,632 0.1% 3.60
N. San Fernando Road, Building 3, Los Angeles, CA 1965 1 58,860 100% 444,981 0.3% 7.56
---- ---------- ---- ------------ ------ ------
Market Subtotal 15 1,838,247 100% $ 8,285,446 5.5% $ 4.51
Phoenix Market
South 40th Avenue, Building 3, Phoenix, AZ 1987 1 201,600 100% $ 635,040 0.4% $ 3.15
South 41st Avenue, Building 1, Phoenix, AZ 1989 1 161,230 100% 440,157 0.3% 2.73
South 39th Avenue, Phoenix, AZ 1989 1 159,450 100% 658,368 0.4% 4.13
44th Avenue, Phoenix, AZ 1997 1 144,592 78% 405,333 0.3% 3.61
South 53rd Avenue, Phoenix, AZ 1987 1 127,680 100% 360,057 0.2% 2.82
South 40th Avenue, Building 2, Phoenix, AZ 1989 1 127,042 100% 384,872 0.3% 3.03
South 40th Avenue, Building 1, Phoenix, AZ 1990 1 126,360 100% 348,525 0.2% 2.76
South 9th Street, Phoenix, AZ 1983 1 89,423 100% 464,729 0.3% 5.20
---- ---------- ---- ------------ ------ ------
Market Subtotal 8 1,137,377 97% $ 3,697,081 2.4% $ 3.35
San Francisco Market
McLaughlin Avenue, San Jose, CA 1975 1 134,483 100% $ 713,640 0.5% $ 5.31
Reed Avenue, Building 2, West Sacramento, CA 1988 1 105,600 100% 461,460 0.3% 4.37
Reed Avenue, Building 1, West Sacramento, CA 1988 1 103,110 100% 466,765 0.3% 4.53
---- ---------- ---- ------------ ------ ------
Market Subtotal 3 343,193 100% $ 1,641,865 1.1% $ 4.78
Seattle Market
Kent West Corporate Park, II, Kent, WA 1989 1 250,820 100% $ 966,492 0.6% $ 3.85
---- ---------- ---- ------------ ------ ------
WEST REGION SUBTOTAL 27 3,569,637 99% $ 14,590,884 9.6% $ 4.12
SOUTHWEST REGION
Dallas Market
North Lake Drive, Coppell, TX 1982 1 230,400 100% $ 690,343 0.4% $ 3.00
East Plano Parkway, Plano, TX 1998 1 210,560 100% 989,640 0.6% 4.70
Hillguard Road, Building 3, Dallas, TX 1980 1 122,798 100% 423,990 0.3% 3.45
10th Street, Building 2, Plano, TX 1997 1 107,260 100% 423,086 0.3% 3.94
10th Street, Building 1, Plano, TX 1997 1 99,679 100% 439,824 0.3% 4.41
Diplomat Drive, Building 2, Farmers Branch, TX 1984 1 82,756 100% 325,697 0.2% 3.94
113th Street, Arlington, TX 1979 1 79,735 100% 291,032 0.2% 3.65
Airline Drive, Building 1, Coppell, TX 1991 1 75,000 100% 262,500 0.2% 3.50
Hillguard Road, Building 2, Dallas, TX 1980 1 71,565 100% 228,671 0.2% 3.20
Hillguard Road, Building 1, Dallas, TX 1980 1 53,647 100% 180,666 0.1% 3.37
---- ---------- ---- ------------ ------ ------
SOUTHWEST REGION/MARKET TOTAL 10 1,133,400 100% $ 4,255,449 2.8% $ 3.75
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
MIDWEST REGION
Chicago Market
Medinah Road, Building 1, Chicago, IL 1986 1 319,459 100% $ 1,741,840 1.1% $ 5.45
Medinah Road, Building 2, Chicago, IL 1986 1 160,799 100% 876,751 0.6% 5.45
Greenleaf Avenue, Elk Grove Village, IL 1968/1995 1 150,000 100% 652,308 0.4% 4.35
High Grove Lane, Naperville, IL 1994 1 95,000 100% 392,549 0.3% 4.13
South 78th Avenue, Hickory Hills, IL 1981 1 83,170 100% 394,210 0.3% 4.74
Swenson Avenue, St. Charles, IL 1988 1 81,110 100% 307,538 0.2% 3.79
Western Avenue, Lisle, IL 1979/1985 1 67,996 100% 383,143 0.2% 5.63
---- ---------- ---- ------------ ------ ------
Market Subtotal 7 957,534 100% $ 4,748,339 3.1% $ 4.96
Cincinnati/Northern Kentucky Market
Lake Forest Drive, Building 1, Blue Ash, OH 1978 1 239,891 100% $ 660,789 0.4% $ 2.75
Lake Forest Drive, Building 2, Blue Ash, OH 1979 1 176,956 100% 486,866 0.3% 2.75
Kenwood Road, Building 2, Blue Ash, OH 1963 1 144,843 100% 325,897 0.2% 2.25
Kenwood Road, Building 1, Blue Ash, OH 1965 1 121,284 100% 277,740 0.2% 2.29
Kenwood Road, Building 3, Blue Ash, OH 1964 1 103,415 100% 232,684 0.2% 2.25
Kenwood Road, Building 4, Blue Ash, OH 1969 1 102,100 100% 256,271 0.2% 2.51
Kenwood Road, Building 7, Blue Ash, OH 1973 1 100,320 62% 187,500 0.1% 3.00
Kenwood Road, Building 5, Blue Ash, OH 1970 1 100,000 100% 315,000 0.2% 3.15
Kenwood Road, Building 6, Blue Ash, OH 1971 1 98,093 100% 296,107 0.2% 3.02
---- ---------- ---- ------------ ------ ------
Market Subtotal 9 1,186,902 97% $ 3,038,854 2.0% $ 2.64
Columbus Market
Port Road, Building 1, Franklin County, OH 1995 1 205,109 100% $ 677,903 0.4% $ 3.31
Westbelt Drive, Building 1, Columbus, OH 1980 1 202,000 100% 1,070,600 0.7% 5.30
Twin Creek Drive, Columbus, OH 1989 1 176,000 59% 310,848 0.2% 3.01
Port Road, Building 2, Franklin County, OH 1995 1 156,000 100% 425,899 0.3% 2.73
International Street, Columbus, OH 1988 1 152,800 100% 435,479 0.3% 2.85
Dividend Drive, Columbus, OH 1980 1 144,850 100% 443,241 0.3% 3.06
---- ---------- ---- ------------ ------ ------
Market Subtotal 6 1,036,759 93% $ 3,363,970 2.2% $ 3.49
Minneapolis Market
Lexington Avenue, Eagan, MN 1979/1984 1 184,429 62% $ 385,890 0.2% $ 3.38
Trenton Lane, Plymouth, MN 1994 1 122,032 100% 617,930 0.4% 5.06
Woodale Drive, Building 1, Mounds View, MN 1992 1 78,016 74% 278,797 0.2% 4.80
---- ---------- ---- ------------ ------ ------
Market Subtotal 3 384,477 77% $ 1,282,617 0.8% $ 4.36
Other Market
Sysco Court, Grand Rapids, MI 1985 1 62,700 100% $ 372,957 0.3% $ 5.95
---- ---------- ---- ------------ ------ ------
MIDWEST REGION SUBTOTAL 26 3,628,372 94% $ 12,806,737 8.4% $ 3.74
SOUTHEAST REGION
Atlanta Market
Westpark, Building 1, Atlanta, GA 1981 1 216,074 100% $ 539,189 0.3% $ 2.50
Atlanta Industrial Drive, Atlanta, GA 1986 1 161,965 100% 422,922 0.3% 2.61
Westpark Drive, Building 2, Atlanta, GA 1981 1 130,722 100% 281,699 0.2% 2.15
Williams Drive, Building 1, Marietta, GA 1987 1 84,124 100% 329,992 0.2% 3.92
Williams Drive, Building 2, Marietta, GA 1987 1 70,164 100% 248,412 0.2% 3.54
Williams Drive, Building 3, Marietta, GA 1987 1 54,032 65% 144,054 0.1% 4.10
---- ---------- ---- ------------ ------ ------
Market Subtotal 6 717,081 97% $ 1,966,268 1.3% $ 2.82
Charlotte Market
Westinghouse Blvd., Building 4, Charlotte, NC 1988 1 159,085 100% $ 548,844 0.4% $ 3.45
Westinghouse Blvd., Building 1, Charlotte, NC 1994 1 121,900 100% 406,272 0.3% 3.33
Cordage Street, Charlotte, NC 1981 1 112,000 100% 348,598 0.2% 3.11
Westinghouse Blvd., Building 2, Charlotte, NC 1992 1 104,000 100% 340,930 0.2% 3.28
---- ---------- ---- ------------ ------ ------
Market Subtotal 4 496,985 100% $ 1,644,644 1.1% $ 3.31
</TABLE>
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Orlando Market
Orlando Central Park, Building 3, Orlando, FL 1991 1 356,583 90% $ 1,419,806 1.0% $ 4.42
Orlando Central Park, Building 1, Orlando, FL 1988 1 267,432 100% 901,986 0.6% 3.37
Orlando Central Park, Building 2, Orlando, FL 1983 1 156,660 100% 493,476 0.3% 3.15
Orlando Central Park, Building 5, Orlando, FL 1985 1 139,800 100% 494,187 0.3% 3.53
Orlando Central Park, Building 4, Orlando, FL 1984 1 133,424 100% 475,533 0.3% 3.56
Orlando Central Park, Building 6, Orlando, FL 1986 1 119,000 100% 497,635 0.4% 4.18
Exchange Drive, Orlando, FL 1979 1 115,728 87% 310,897 0.2% 3.09
Kingspointe Parkway, Orlando, FL 1991 1 101,903 100% 337,926 0.2% 3.32
---- ---------- ---- ------------ ------ ------
Market Subtotal 8 1,390,530 96% $ 4,931,446 3.3% $ 3.68
South Florida Market
N.W. 70th Avenue, Miami, FL 1977 1 215,019 100% $ 1,100,292 0.7% $ 5.12
---- ---------- ---- ------------ ------ ------
SOUTHEAST REGION SUBTOTAL 19 2,819,615 98% $ 9,642,650 6.4% $ 3.51
NORTHEAST REGION
Baltimore/Washington Market
Stayton Drive, Jessup, MD 1985 1 125,800 100% $ 514,688 0.4% $ 4.09
Bollman Place, Savage, MD 1985 1 104,409 100% 498,485 0.3% 4.77
Port Capital Drive, Jessup, MD 1974 1 94,381 100% 460,962 0.3% 4.88
Greenwood Place, Savage, MD 1985 1 77,424 100% 309,067 0.2% 3.99
---- ---------- ---- ------------ ------ ------
Market Subtotal 4 402,014 100% $ 1,783,202 1.2% $ 4.44
Boston Market
Sunnyslope Avenue, Tewksbury, MA 1987 1 153,641 100% $ 718,446 0.4% $ 4.68
Kenwood Circle, Franklin, MA 1987 1 153,369 100% 571,298 0.4% 3.72
South Street, Hopkinton, MA 1987 1 70,600 100% 291,325 0.2% 4.13
Progress Road, Building 2, Billerica, MA 1988 1 69,500 100% 329,975 0.2% 4.75
Progress Road, Building 1, Billerica, MA 1988 1 57,600 100% 298,800 0.2% 5.19
---- ---------- ---- ------------ ------ ------
Market Subtotal 5 504,710 100% $ 2,209,844 1.4% $ 4.38
Harrisburg Market
Ritter Road, Mechanicsburg, PA 1986 1 37,800 100% $ 248,970 0.2% $ 6.59
---- ---------- ---- ------------ ------ ------
New York/New Jersey Market
Port Jersey Boulevard, Building 1, Port Jersey, NJ 1974/1982 1 425,121 100% $ 1,780,062 1.2% $ 4.19
Industrial Drive, Building 1, Port Jersey, NJ 1976 1 263,717 100% 1,015,310 0.7% 3.85
Colony Road, Building 1, Jersey City, NJ 1976 1 262,453 100% 918,438 0.6% 3.50
Port Jersey Boulevard, Building 2, Port Jersey, NJ 1974/1982 1 204,564 100% 754,841 0.5% 3.69
South Middlesex Avenue, Building 2, Cranbury, NJ 1982 1 203,404 100% 864,467 0.6% 4.25
Industrial Drive, Building 2, Port Jersey, NJ 1976 1 154,000 100% 615,996 0.4% 4.00
Colony Road, Building 2, Jersey City, NJ 1974 1 124,933 100% 499,731 0.3% 4.00
Industrial Drive, Building 3, Port Jersey, NJ 1972 1 45,274 100% 181,095 0.1% 4.00
---- ---------- ---- ------------ ------ ------
Market Subtotal 8 1,683,466 100% $ 6,629,940 4.4% $ 3.94
---- ---------- ---- ------------ ------ ------
NORTHEAST REGION SUBTOTAL 18 2,627,990 100% $ 10,871,956 7.2% $ 4.14
---- ---------- ---- ------------ ------ ------
MULTITENANT DISTRIBUTION
PROPERTIES TOTAL 100 13,779,014 98% $ 52,167,676 34.4% $ 3.87
</TABLE>
17
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
WORKSPACE PROPERTIES:
WEST REGION
Los Angeles Market
Kovacs Lane, Huntington Beach, CA 1988 1 125,000 100% $ 951,060 0.6% $ 7.61
Lassen Street, Chatsworth, CA 1968 1 124,518 100% 732,165 0.5% 5.88
East Howell Avenue, Building 1, Anaheim, CA 1968 1 81,475 100% 347,385 0.2% 4.26
N. San Fernando Road, Building 4, Los Angeles, CA 1992 1 66,410 100% 620,008 0.4% 9.34
Commonwealth Avenue, Fullerton, CA 1965 1 64,292 100% 250,047 0.2% 3.89
Artesia Avenue, Building 2, Fullerton, CA 1991 1 60,502 100% 283,149 0.2% 4.68
Artesia Avenue, Building 1, Fullerton, CA 1991 1 55,498 100% 227,671 0.2% 4.10
N. San Fernando Road, Building 5, Los Angeles, CA 1992 1 41,894 100% 359,753 0.2% 8.59
Union Place, Building 2, Simi Valley, CA 1987 1 36,538 100% 330,847 0.2% 9.05
Shoemaker Avenue, Building 1, Santa Fe Springs, CA 1989 1 36,485 100% 199,189 0.1% 5.46
Shoemaker Avenue, Building 3, Santa Fe Springs, CA 1989 1 27,550 100% 133,762 0.1% 4.86
E. 166th Street, Cerritos, CA 1978 1 27,072 0% -- 0.0% --
Royal Avenue, Simi Valley, CA 1988 1 26,120 100% 157,380 0.1% 6.03
East Howell Avenue, Building 2, Anaheim, CA 1991 1 25,962 100% 109,040 0.1% 4.20
Union Place, Building 1, Simi Valley, CA 1985 1 22,710 100% 148,476 0.1% 6.54
Shoemaker Avenue, Building 2, Santa Fe Springs, CA 1989 1 17,800 100% 89,890 0.1% 5.05
N. San Fernando Road, Building 6, Los Angeles, CA 1993 1 17,000 100% 233,750 0.2% 13.75
Shoemaker Avenue, Building 4, Santa Fe Springs, CA 1989 1 10,784 100% 55,538 0.1% 5.15
Anza Drive, Building 1, Valencia, CA 1990 1 10,296 100% 65,121 0.0% 6.32
Anza Drive, Building 3, Valencia, CA 1990 1 8,663 100% 63,648 0.0% 7.35
Anza Drive, Building 2, Valencia, CA 1990 1 7,944 100% 58,187 0.0% 7.32
---- ---------- ---- ------------ ------ ------
Market Subtotal 21 894,513 97% $ 5,416,066 3.6% $ 6.24
Phoenix Market
East Watkins Street, Phoenix, AZ 1998 1 101,932 100% $ 953,228 0.6% $ 9.35
South 16th Street, Phoenix, AZ 1998 1 85,259 100% 763,024 0.5% 8.95
East Encanto Drive, Tempe, AZ 1990 1 81,817 100% 352,336 0.2% 4.31
South Priest Drive, Tempe, AZ 1998 1 54,900 100% 394,200 0.3% 7.18
West Alameda Drive, Building 1, Tempe, AZ 1984 1 30,606 100% 147,470 0.1% 4.82
West Alameda Drive, Building 2, Tempe, AZ 1984 1 30,606 100% 153,029 0.1% 5.00
West Alameda Drive, Building 3, Tempe, AZ 1984 1 30,606 100% 138,976 0.1% 4.54
West Alameda Drive, Building 4, Tempe, AZ 1984 1 30,606 100% 153,640 0.1% 5.02
---- ---------- ---- ------------ ------ ------
Market Subtotal 8 446,332 100% $ 3,055,903 2.0% $ 6.85
San Diego Market
Avenida Encinas, Building 2, Carlsbad, CA 1993 1 126,008 100% $ 752,689 0.5% $ 5.97
Avenida Encinas, Building 1, Carlsbad, CA 1972 1 80,000 100% 663,200 0.4% 8.29
Airway Road, Building. 2, Otay Mesa, CA 1996 1 78,296 100% 465,479 0.3% 5.95
Goldentop Road, San Diego, CA 1997 1 66,448 100% 622,736 0.4% 9.37
Oak Ridge Way, Vista, CA 1999 1 53,239 100% 403,428 0.3% 7.58
Airway Road, Building 1, Otay Mesa, CA 1996 1 44,840 80% 239,049 0.2% 6.71
Kellogg Avenue, Carlsbad, CA 1991 1 39,900 100% 301,644 0.2% 7.56
---- ---------- ---- ------------ ------ ------
Market Subtotal 7 488,731 98% $ 3,448,225 2.3% $ 7.19
</TABLE>
18
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
San Francisco Market
Brisbane Industrial Park, Building 10, Brisbane, CA 1961 1 116,400 100% $ 89,773 0.1% $ 0.77
Huntwood Avenue, Hayward, CA 1982 1 62,031 100% 477,445 0.3% 7.70
Brisbane Industrial Park, Building 13, Brisbane, CA 1962 1 58,000 100% 368,880 0.3% 6.36
Brisbane Industrial Park, Building 9, Brisbane, CA 1966 1 43,500 100% 325,685 0.2% 7.49
Brisbane Industrial Park, Building 4, Brisbane, CA 1968 1 40,680 100% 256,194 0.2% 6.30
Brisbane Industrial Park, Building 1, Brisbane, CA 1961 1 39,800 100% 225,800 0.1% 5.67
Brisbane Industrial Park, Building 5, Brisbane, CA 1966 1 37,040 100% 216,227 0.2% 5.84
Brisbane Industrial Park, Building 11, Brisbane, CA 1968 1 35,744 100% 220,897 0.1% 6.18
Brisbane Industrial Park, Building 7, Brisbane, CA 1967 1 32,211 100% 208,728 0.1% 6.48
Brisbane Industrial Park, Building 6, Brisbane, CA 1963 1 31,745 100% 211,982 0.1% 6.68
Brisbane Industrial Park, Building 12, Brisbane, CA 1968 1 24,786 100% 142,903 0.1% 5.77
Brisbane Industrial Park, Building 3, Brisbane, CA 1969 1 23,586 100% 173,862 0.1% 7.37
Brisbane Industrial Park, Building 2, Brisbane, CA 1960 1 21,186 100% 148,501 0.1% 7.01
Brisbane Industrial Park, Building 14, Brisbane, CA 1969 1 19,100 100% 102,204 0.1% 5.35
Brisbane Industrial Park, Building 8, Brisbane, CA 1961 1 18,600 100% 140,616 0.1% 7.56
---- ---------- ---- ------------ ------ ------
Market Subtotal 15 604,409 100% $ 3,309,697 2.2% $ 5.48
Seattle Market
Kent West Corporate Park I, Building 4, Kent, WA 1989 1 57,990 100% $ 225,216 0.1% $ 3.88
Kent West Corporate Park I, Building 1, Kent, WA 1989 1 41,700 100% 501,984 0.3% 12.04
Kent West Corporate Park I, Building 3, Kent, WA 1989 1 36,250 100% 144,768 0.1% 3.99
Kent West Corporate Park I, Building 2, Kent, WA 1989 1 16,000 100% 114,348 0.1% 7.15
---- ---------- ---- ------------ ------ ------
Market Subtotal 4 151,940 100% $ 986,316 0.6% $ 6.49
---- ---------- ---- ------------ ------ ------
WEST REGION SUBTOTAL 55 2,585,925 99% $ 16,216,207 10.7% $ 6.36
SOUTHWEST REGION
Dallas Market
DFW Trade Center, Building 3, Grapevine, TX 1997 1 202,361 100% $ 1,723,670 1.2% $ 8.52
Shiloh Road, Plano, TX 1998 1 76,320 75% 299,604 0.2% 5.23
Avenue F, Plano, TX 1984 1 73,086 87% 516,089 0.3% 8.10
Bradley Lane, Carrollton, TX 1984 1 56,531 100% 215,892 0.1% 3.82
Diplomat Drive, Building 1, Farmers Branch, TX 1997 1 53,375 100% 325,044 0.2% 6.09
---- ---------- ---- ------------ ------ ------
SOUTHWEST REGION/MARKET SUBTOTAL 5 461,673 94% $ 3,080,299 2.0% $ 7.11
MIDWEST REGION
Chicago Market
Beeline Drive/Meyer Road, Bensenville, IL 1968 1 96,550 100% $ 446,867 0.3% $ 4.63
Business Center, Building 2, Mount Prospect, IL 1989 1 79,900 100% 754,927 0.5% 9.45
Tower Lane, Bensenville, IL 1977 1 76,737 100% 459,097 0.3% 5.98
Territorial Drive, Building 2, Bolingbrook, IL 1998 1 58,283 100% 304,818 0.2% 5.25
Feehanville Drive, Mount Prospect, IL 1987 1 57,150 100% 454,342 0.3% 7.95
Kingsland Drive, Batavia, IL 1990 1 54,522 100% 314,468 0.2% 5.77
Territorial Drive, Building 1, Bolingbrook, IL 1998 1 51,874 100% 279,739 0.2% 5.39
Remington Boulevard, Bolingbrook, IL 1996 1 45,220 100% 226,100 0.1% 5.00
Business Center, Building 1, Mount Prospect, IL 1985 1 43,250 100% 367,191 0.2% 8.49
Northpoint Court, Bolingbrook, IL 1998 1 32,100 100% 160,884 0.1% 5.01
Penny Lane, Building 1, Schaumburg, IL 1988 1 27,742 100% 124,434 0.1% 4.49
Penny Lane, Building 2, Schaumburg, IL 1988 1 20,722 100% 94,053 0.1% 4.54
---- ---------- ---- ------------ ------ ------
Market Subtotal 12 644,050 100% $ 3,986,920 2.6% $ 6.19
</TABLE>
19
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Cincinnati/Northern Kentucky Market
Kentucky Drive, Florence, KY 1991 1 128,077 100% $ 367,515 0.2% $ 2.87
Empire Drive, Building 3, Florence, KY 1991 1 101,250 100% 318,999 0.2% 3.15
Airport Exchange Drive, Erlanger, KY 1997 1 67,749 100% 464,433 0.3% 6.86
Creek Road, Blue Ash, OH 1983 1 66,210 94% 467,963 0.3% 7.56
Foundation Drive, Building 2, Elsmere, KY 1983 1 62,560 100% 319,910 0.2% 5.11
Empire Drive, Building 2, Florence, KY 1990 1 47,842 100% 198,272 0.1% 4.14
Empire Drive, Building 1, Florence, KY 1990 1 47,840 100% 164,453 0.1% 3.44
Jamike Drive, Building 4, Erlanger, KY 1988 1 42,606 85% 127,251 0.1% 3.52
Turfway Road, Building 3, Erlanger, KY 1996 1 41,839 100% 150,300 0.1% 3.59
Turfway Road, Building 2, Erlanger, KY 1990 1 39,396 100% 185,480 0.1% 4.71
Jamike Drive, Building 3, Erlanger, KY 1986 1 38,900 100% 182,299 0.1% 4.69
Spiral Drive, Building 2, Florence, KY 1989 1 34,999 100% 296,101 0.2% 8.46
Commerce Boulevard, Loveland, OH 1989 1 34,600 100% 171,000 0.1% 4.94
Foundation Drive, Building 1, Elsmere, KY 1983 1 33,000 100% 110,220 0.1% 3.34
Jamike Drive, Building 7, Erlanger, KY 1985 1 31,540 78% 86,434 0.1% 3.54
Turfway Road, Building 1, Erlanger, KY 1990 1 30,711 100% 154,281 0.1% 5.02
Jamike Drive, Building 2, Erlanger, KY 1986 1 26,949 100% 125,076 0.1% 4.64
Jamike Drive, Building 6, Erlanger, KY 1985 1 26,560 100% 101,003 0.1% 3.80
Spiral Drive, Building 1, Florence, KY 1988 1 26,556 100% 240,144 0.2% 9.04
Jamike Drive, Building 5, Erlanger, KY 1985 1 24,640 100% 118,418 0.1% 4.81
Foundation Drive, Building 6, Elsmere, KY 1984 1 17,500 100% 57,203 0.0% 3.27
Jamike Drive, Building 1, Erlanger, KY 1986 1 15,000 100% 62,499 0.0% 4.17
Foundation Drive, Building 4, Elsmere, KY 1983 1 12,000 100% 48,199 0.0% 4.02
Foundation Drive, Building 5, Elsmere, KY 1983 1 12,000 100% 48,101 0.0% 4.01
Foundation Drive, Building 7, Elsmere, KY 1984 1 12,000 100% 36,160 0.0% 3.01
Foundation Drive, Building 8, Elsmere, KY 1984 1 10,000 100% 66,000 0.1% 6.60
Foundation Drive, Building 3, Elsmere, KY 1990 1 7,000 100% 90,000 0.1% 12.86
Power Line Drive, Elsmere, KY 1994 1 6,000 100% 38,588 0.0% 6.43
---- ---------- ---- ------------ ------ ------
Market Subtotal 28 1,045,324 98% $ 4,796,302 3.1% $ 4.67
Columbus Market
Equity Drive, Building 2, Columbus, OH 1980 1 116,160 100% $ 708,654 0.5% $ 6.10
Alum Creek Road, Columbus, OH 1988 1 34,600 100% 175,076 0.1% 5.06
---- ---------- ---- ------------ ------ ------
Market Subtotal 2 150,760 100% $ 883,730 0.6% $ 5.86
Minneapolis Market
Woodale Drive, Building 3, Mounds View, MN 1990 1 144,019 100% $ 844,751 0.6% $ 5.87
West 82nd Street, Bloomington, MN 1967 1 101,465 100% 481,130 0.3% 4.74
Woodale Drive, Building 2, Mounds View, MN 1989 1 55,742 100% 480,948 0.3% 8.63
Cahill Road, Edina, MN 1979 1 45,800 100% 251,157 0.2% 5.48
Woodale Drive, Building 4, Mounds View, MN 1992 1 42,551 100% 208,107 0.1% 4.89
Monticello Lane, Maple Grove, MN 1986 1 40,437 100% 157,704 0.1% 3.90
---- ---------- ---- ------------ ------ ------
Market Subtotal 6 430,014 100% $ 2,423,797 1.6% $ 5.64
Other Market
Rudolph Way, Greendale, IN 1990 1 50,000 100% $ 121,776 0.1% $ 2.44
---- ---------- ---- ------------ ------ ------
MIDWEST REGION SUBTOTAL 49 2,320,148 99% $ 12,212,525 8.0% $ 5.30
SOUTHEAST REGION
Atlanta Market
Highlands Parkway, Smyrna, GA 1997 1 150,000 100% $ 994,500 0.7% $ 6.63
Cobb International Place, Building 2, Kennesaw, GA 1996 1 68,000 100% 276,171 0.2% 4.06
Town Park Drive, Building 1, Kennesaw, GA 1995 1 65,830 100% 327,966 0.2% 4.98
Cobb International Place, Building 1, Kennesaw, GA 1996 1 60,000 80% 206,790 0.1% 4.31
Town Park Drive, Building 2, Kennesaw, GA 1995 1 55,554 100% 258,490 0.2% 4.65
South Royal Drive, Building 1, Tucker, GA 1987 1 53,402 87% 224,436 0.1% 4.83
South Royal Drive, Building 2, Tucker, GA 1987 1 43,720 100% 183,035 0.1% 4.19
South Royal Drive, Building 3, Tucker, GA 1989 1 37,041 100% 154,707 0.1% 4.18
---- ---------- ---- ------------ ------ ------
Market Subtotal 8 533,547 96% $ 2,626,095 1.7% $ 5.10
</TABLE>
20
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Charlotte Market
Old Charlotte Highway, Monroe, NC 1957/1972 1 135,000 100% $ 394,400 0.3% $ 2.92
Airport Road, Monroe, NC 1957/1972 1 118,930 100% 591,600 0.4% 4.97
Commerce Blvd., Charlotte, NC 1988 1 80,640 75% 214,963 0.1% 3.55
Woodpark Blvd., Bldg. 3, Charlotte, NC 1987 1 65,850 100% 186,356 0.1% 2.83
Woodpark Blvd., Bldg. 1, Charlotte, NC 1985 1 56,000 100% 177,368 0.1% 3.17
Woodpark Blvd., Bldg. 2, Charlotte, NC 1986 1 48,600 100% 160,185 0.1% 3.30
N. I-85 Service Road, Charlotte, NC 1988 1 44,150 100% 227,550 0.2% 5.15
---- ---------- ---- ------------ ------ ------
Market Subtotal 7 549,170 96% $ 1,952,422 1.3% $ 3.69
Orlando Market
Boggy Creek Road, Building 2, Orlando, FL 1996 1 55,456 100% $ 321,388 0.2% $ 5.80
Landstreet Road, Building 2, Orlando, FL 1997 1 55,456 100% 320,871 0.2% 5.79
Boggy Creek Road, Building 3, Orlando, FL 1998 1 55,456 100% 298,841 0.2% 5.39
Boggy Creek Road, Building 1, Orlando, FL 1992 1 52,500 99% 269,116 0.2% 5.17
Boggy Creek Road, Building 4, Orlando, FL 1999 1 50,108 100% 250,539 0.2% 5.00
Landstreet Road, Building 3, Orlando, FL 1996 1 50,018 100% 247,589 0.1% 4.95
---- ---------- ---- ------------ ------ ------
Market Subtotal 6 318,994 100% $ 1,708,344 1.1% $ 5.36
Other Market
Industrial Drive South, Gluckstadt, MS 1988 1 160,000 100% $ 873,490 0.6% $ 5.46
---- ---------- ---- ------------ ------ ------
SOUTHEAST REGION SUBTOTAL 22 1,561,711 97% $ 7,160,351 4.7% $ 4.70
NORTHEAST REGION
Baltimore/Washington Market
Guilford Road, Annapolis Junction, MD 1989 1 96,686 100% $ 592,392 0.4% $ 6.13
Nokes Boulevard, Building 1, Sterling, VA 1998 1 88,489 100% 726,495 0.5% 8.21
Nokes Boulevard, Building 2, Sterling, VA 1999 1 78,671 100% 567,432 0.4% 7.21
Beaumeade Circle, Ashburn, VA 1990 1 78,274 89% 468,929 0.3% 6.77
Oakville Industrial Park, Building 3, Alexandria, VA 1947 1 76,089 100% 551,399 0.4% 7.25
The Crysen Center, Building 2, Jessup, MD 1985 1 76,043 92% 354,335 0.2% 5.07
The Crysen Center, Building 1, Jessup, MD 1985 1 75,820 87% 348,196 0.2% 5.30
Bristol Court, Building 1, Jessup, MD 1988 1 73,071 91% 353,526 0.2% 5.32
Oakville Industrial Park, Building 1, Alexandria, VA 1949 1 67,225 100% 380,613 0.2% 5.66
Fontana Lane, Building 2, Baltimore, MD 1988 1 61,320 83% 391,389 0.3% 7.71
Bristol Court, Building 2, Jessup, MD 1986 1 60,000 100% 267,646 0.2% 4.46
Oakville Industrial Park, Building 5, Alexandria, VA 1955 1 56,134 98% 240,766 0.2% 4.36
Oakville Industrial Park, Building 6, Alexandria, VA 1946 1 50,876 100% 527,691 0.3% 10.37
Guilford Road, Building 2, Ashburn, VA 1988 1 50,355 100% 342,046 0.2% 6.79
West Nursery Road, Building 1, Linthicum, MD 1989 1 49,100 100% 343,700 0.2% 7.00
Guilford Road, Building 1, Ashburn, VA 1987 1 48,635 100% 280,498 0.2% 5.77
Fontana Lane, Building 1, Baltimore, MD 1988 1 47,434 100% 253,967 0.2% 5.35
West Nursery Road, Building 2, Linthicum, MD 1989 1 39,041 100% 380,720 0.3% 9.75
Oakville Industrial Park, Building 2, Alexandria, VA 1940 1 23,683 100% 122,567 0.1% 5.18
Oakville Industrial Park, Building 4, Alexandria, VA 1952 1 2,800 100% 21,127 0.0% 7.55
---- ---------- ---- ------------ ------ ------
Market Subtotal 20 1,199,746 96% $ 7,515,434 5.0% $ 6.50
Boston Market
Technology Drive, Auburn, MA 1973 1 54,400 100% $ 191,199 0.1% $ 3.51
John Hancock Road, Taunton, MA 1986 1 34,224 100% 206,147 0.1% 6.02
---- ---------- ---- ------------ ------ ------
Market Subtotal 2 88,624 100% $ 397,346 0.2% $ 4.48
</TABLE>
21
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<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ----------------------
Number Per
Year of Percent Leased
Built/ Proper- Percent of Sq.
Property Type and Location Renovated ties Number Leased Amount Total Ft.
- -------------------------- --------- ---- ------ ------ ------ ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
New York/New Jersey Market
Memorial Drive, Franklin Township, NJ 1988 1 148,598 94% $ 624,617 0.4% $ 4.48
New England Avenue, Piscataway, NJ 1975/1995 1 101,553 100% 405,196 0.3% 3.99
---- ---------- ---- ------------ ------ ------
Market Subtotal 2 250,151 96% $ 1,029,813 0.7% $ 4.27
---- ---------- ---- ------------ ------ ------
NORTHEAST REGION SUBTOTAL 24 1,538,521 97% $ 8,942,593 5.9% $ 6.02
---- ---------- ---- ------------ ------ ------
WORKSPACE PROPERTIES TOTAL 155 8,467,978 98% $ 47,611,975 31.3% $ 5.74
---- ---------- ---- ------------ ------ ------
GRAND TOTAL 320 38,158,561 97% $151,767,478 100.0% $ 4.11
==== ========== ==== ============ ====== ======
</TABLE>
(1) "Annualized Net Rent" means annualized monthly net rent from leases in
effect as of December 31, 1999. "Net Rent" means contractual rent,
excluding any reimbursements for real estate taxes or operating expenses.
Item 3. Legal Proceedings
Cabot L.P. is not a party to any material litigation nor, to Cabot L.P.'s
knowledge, is any litigation threatened against Cabot L.P., other than routine
actions arising in the ordinary course of business, substantially all of which
are expected to be covered by liability insurance and which, in the aggregate,
are not expected to have a material adverse effect on the business, results of
operations or financial condition of Cabot L.P.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 4A. Executive Officers of the Registrant
Not applicable.
22
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
This is no established public trading market for Cabot L.P.'s units. As of
December 31, 1999, Cabot L.P. had outstanding 43,667,920 common equity limited
partnership units and Cumulative Redeemable Perpetual Preferred Units (Preferred
Units) as follows: 1,300,000 Series B Preferred Units, 2,600,000 Series C
Preferred Units, 200,000 Series D Preferred Units, 200,000 Series E Preferred
Units, and 1,800,000 Series F Preferred Units. Subject to certain terms and
conditions, the limited partnership units are redeemable by the holders or, at
Cabot L.P.'s option, exchangeable on a one-for-one basis for shares of Cabot
Trust common stock. As of December 31, 1999 there were 43 holders of common
partnership units of Cabot L.P. (including Cabot Trust's general partner
interest). As of the same date, there were six holders of the Preferred Units.
The following table sets forth the distributions paid on the Units with respect
to the periods indicated:
1998: Distributions(1)
----- ----------------
First Quarter (from January 30, 1998) $.202
Second Quarter .325
Third Quarter .325
Fourth Quarter .325
1999: Distributions(1)
----- ----------------
First Quarter $.340
Second Quarter .340
Third Quarter .340
Fourth Quarter .340
2000: Distributions(1)
----- ----------------
First Quarter (through February 29, 2000) $ --
(1) Cabot L.P. paid a distribution with respect to these quarters in the
quarter immediately following the quarter in which the cash flow was
generated and the distribution was deemed.
The operating cash flow realized by Cabot L.P. and the amount available for
distributions to unitholders is affected by a number of factors, including the
property revenues of Cabot L.P., the operating expenses of Cabot L.P., the
distributions to Preferred Unitholders of Cabot L.P., the interest expense on
borrowings and capital expenditures. Future distributions by Cabot L.P. and
Cabot Trust will be at the discretion of the Board of Trustees of Cabot Trust
and will depend on the actual FFO of Cabot L.P., its financial condition and
capital requirements, the annual income distribution requirements under the REIT
provisions of the Code and such other factors as Cabot Trust's Board of Trustees
deem relevant.
23
<PAGE>
Recent Sales of Unregistered Securities
Cumulative Redeemable Perpetual Preferred Equity
During 1999, Cabot L.P. completed private sales of the following Cumulative
Redeemable Perpetual Preferred Units:
<TABLE>
<CAPTION>
Sale Date Series Unit Price Liquidation Value Net Proceeds
- ------------------ --------------- ---------- ----------------- ------------
<S> <C> <C> <C> <C>
April 29, 1999 8.625% Series B $50 $ 65,000,000 $ 63,175,000
September 3, 1999 8.625% Series C 25 65,000,000 63,175,000
September 27, 1999 8.375% Series D 50 10,000,000 9,715,000
December 9, 1999 8.375% Series E 50 10,000,000 9,715,000
December 22, 1999 8.500% Series F 25 45,000,000 44,025,000
------------ ------------
$195,000,000 $189,805,000
============ ============
</TABLE>
Net proceeds from the offerings were used to repay borrowings under Cabot L.P.'s
Acquisition Facility. The Preferred Units, which may be called by Cabot L.P. at
par on or after the fifth anniversary of issuance in each case, have no stated
maturity or mandatory redemption and are not convertible into any other
securities of Cabot L.P. The Preferred Units are exchangeable after ten years
from issuance, or earlier upon the occurrence of certain events, for perpetual
preferred shares of Cabot Trust. All Preferred Units were sold to institutional
investment funds in reliance upon the exemption from registration in Section
4(2) of the Securities Act.
Issuances of Units in Cabot L.P.
On April 7, 1998, Cabot L.P. issued 101,149 Units in Cabot L.P., at a
then-current value of $2.3 million, in exchange for industrial properties. The
Units were issued solely to "accredited investors" within the meaning of Rule
501 of Regulation D, and the Units were issued in reliance upon the exemption
from registration set forth in Regulation D.
On March 11, 1999 and December 15, 1999, Cabot L.P. issued 143,087 and 34,361
Units in Cabot L.P., respectively, at then current values totaling $3.4 million,
in exchange for industrial properties. The Units were issued solely to
"accredited investors" and in reliance upon the exemption set forth in
Regulation D.
Private Placement of 1,000,000 Common Shares of Beneficial Interest of Cabot
Trust.
On February 4, 1998, Cabot Trust completed a private placement of 1,000,000
Common Shares to a group of investors represented by Morgan Stanley Asset
Management, Inc. ("Morgan Stanley"). Morgan Stanley acted as advisor to six
institutional investors in connection with the private placement. The aggregate
and sales offering price of such shares was $20,000,000. Cabot Trust relied on
Regulation D to effectuate the private placement. All of the investors who
purchased common stock in the private placement were qualified institutional
buyers within the meaning of Rule 144A, except for one institutional "accredited
investor" within the meaning of Rule 501 of Regulation D.
Item 6. Selected Financial Data
Cabot L.P. commenced operations in its current form on February 4, 1998, the
completion date of the Formation Transactions and the Offerings described
elsewhere herein. Set forth below are selected historical financial and other
data for the real estate advisory business of Cabot Partners, and for Cabot
24
<PAGE>
L.P. The selected financial data presented below as of December 31, 1997 and
1996 and for the two years in the period ended December 31, 1997 have been
derived from the Cabot Partners financial statements that have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports included in this report on Form 10-K. This information should be read in
conjunction with such financial statements and the notes thereto. The selected
financial data presented below as of and for the year ended December 31, 1995
for Cabot Partners is derived from Cabot Partners financial statements and the
notes thereto not included in this report on Form 10-K which have been audited
by Arthur Andersen LLP.
The selected financial data presented below as of and for the years ended
December 31, 1999 and 1998, have been derived from the financial statements of
Cabot L.P. that have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included in this report on Form 10-K.
This information should be read in conjunction with the financial statements and
notes thereto included elsewhere within this filing.
<TABLE>
<CAPTION>
Cabot L.P. Cabot Partners
-------------------------- -----------------------------------------
As of and for the As of and for the
Years Ended December 31, Years Ended December 31,
-------------------------- -----------------------------------------
In thousands, except per unit data 1999 1998(1) 1997 1996 1995
- ---------------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Operating Data
Revenues $ 157,471 $ 102,425 $ 9,080 $ 7,908 $ 6,516
General and administrative expenses 8,902 6,815 7,045 5,888 5,069
Depreciation and amortization expense 31,169 20,913 977 419 453
Net income 63,687 50,958 1,058 1,594 1,057
Net income allocable to partnership units 57,678 50,958 N/A N/A N/A
Net income per unit 1.32 1.17 -- -- --
Distributions per unit 1.36 1.177 -- -- --
Balance Sheet Data
Total assets $ 1,593,484 $ 1,110,570 $ 5,339 $ 6,075 $ 5,628
Total liabilities 584,768 293,272 760 485 563
Total partners' capital 1,008,716 817,298 4,579 5,590 5,065
Other Data
Cash flows provided by (used in):
Operating activities $ 101,293 $ 78,726 $ 1,062 $ 1,283 $ 1,351
Investing activities (454,195) (398,795) (193) 113 (6)
Financing activities 372,608 322,369 (2,069) (1,069) --
Assets under management (unaudited)(2) N/A N/A 861,000 979,000 778,000
</TABLE>
(1) Represents activity for the period from the commencement of operations on
February 4, 1998 through December 31, 1998.
(2) Based on the estimated fair market value of the managed assets as of the
dates indicated.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The statements regarding Cabot L.P. contained in this discussion and elsewhere
in this report that are not historical facts are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These forward-looking
25
<PAGE>
statements are based on current expectations, estimates and projections about
the industry and markets in which Cabot L.P. operates, management's beliefs and
assumptions made by management. Words such as "expects", "anticipates",
"intends", "plans", "believes", "seeks", "estimates" and variations of such
words and similar expressions are intended to identify such forward-looking
statements. Such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. Therefore, actual outcomes and
results may differ materially from what is expressed or suggested by such
forward-looking statements and readers of this document should not rely on them.
Cabot L.P.'s operating results depend primarily on income from industrial
properties, which may be affected by various factors, including changes in
national and local economic conditions, competitive market conditions,
uncertainties and costs related to and the imposition of conditions on receipt
of governmental approvals and costs of material and labor, all of which may
cause actual results to differ materially from what is expressed herein. Capital
and credit market conditions that affect Cabot L.P.'s cost of capital also
influence operating results.
INTRODUCTION
Cabot L.P.
Cabot L.P. owns and operates a diversified portfolio of bulk distribution,
multitenant distribution and "workspace" (light industrial, R&D and similar
facilities) properties throughout the United States. Cabot L.P. was formed on
October 10, 1997, but did not begin operations as a fully integrated real estate
company until the completion of the Formation Transactions and Offerings on
February 4, 1998, the closing date of Cabot Trust's initial public offering.
Cabot L.P. had no operations prior to February 4, 1998. At December 31, 1999,
Cabot L.P. owned 320 industrial properties, 119 of which properties were
acquired in connection with the Formation Transactions described in Notes 1 and
3 to the consolidated financial statements herein, 84 of which properties were
acquired during 1998 and 113 of which properties were acquired during the year
ended December 31, 1999. In addition, four properties from the development
program were placed into service in 1999 and 1998. In the near term, Cabot L.P.
expects to moderate the pace of its acquisition program, compared to prior
years, and Cabot L.P. expects development projects will provide an increasing
component of growth due to the higher potential returns on capital.
Cabot Partners
Cabot Partners was the real estate advisory and management entity that was the
sponsor and organizer of Cabot Trust. Its revenues consisted primarily of asset
management and acquisition fees earned under advisory contracts with large
institutional investors.
RESULTS OF OPERATIONS
Cabot L.P.
Since Cabot L.P. was formed in October 1997 and did not begin operations until
February 4, 1998, the results for the year ended December 31, 1998 represent
activity for 331 days (approximately 11 months) only, and no comparison of
results to prior periods is available.
26
<PAGE>
Year Ended December 31, 1999 Compared with Year Ended December 31, 1998
Net income allocable to partnership unitholders for the year ended December 31,
1999, totaled $57.7 million or $1.32 per unit, compared to $51.0 million or
$1.17 per unit for the year ended December 31, 1998. The increase is the result
of having a full year of operations in 1999 compared to 331 days in 1998 and
increased earnings from additional investments in real estate.
Rental revenues were $157.5 million, including tenant reimbursements of $21.6
million, for the year ended December 31, 1999, compared to $102.4 million,
including tenant reimbursements of $13.4 million, for the year ended December
31, 1998. Total rental revenue of $82.7 million and $72.9 million was generated
in 1999 and 1998, respectively, by the 119 properties owned as of February 4,
1998 as a result of the Formation Transactions and still owned at December 31,
1999 (the "Baseline Properties") and total rental revenue of $73.9 million and
$27.2 million in 1999 and 1998, respectively, was generated by the 201
properties acquired or developed after February 4, 1998. The remainder of total
rental revenue relates to properties sold.
Cabot L.P.'s operating margin (the ratio of total rental revenues minus property
operating and property tax expenses to total rental revenues) decreased slightly
to approximately 81% for the year ended December 31, 1999 compared with 82% for
the year ended December 31, 1998. The decrease is primarily due to a change in
the composition of leases, primarily as a result of acquisition of multitenant
and workspace properties, to more leases where Cabot L.P. pays property and
operating expenses and is reimbursed by the tenants compared to leases where the
tenant pays these expenses directly.
Depreciation and amortization related to real estate investments totaled $31.1
million and $20.9 million for the years ended December 31, 1999 and 1998,
respectively. The increase reflects the acquisition of approximately $448
million of real estate assets in 1999, as well as a full year of expense related
to 1998 acquisitions, and 365 days of operations in 1999 compared to 331 days in
1998.
General and administrative expense increased by $2.1 million, to $8.9 million
for the year ended December 31, 1999. The increase is primarily due to a full
year of operations in 1999 and it also reflects an increase in personnel to
manage the acquisition, development, asset management and financing activity,
from the increase in the number of Cabot L.P.'s properties during the two-year
period. As a percentage of rental revenues, general and administrative expense
decreased to 5.7% in 1999 from 6.7% in 1998.
Interest expense of $25.4 million for the year ended December 31, 1999
represents interest incurred on an additional $115.7 million of secured debt
incurred during 1999, $200.0 million of unsecured debt issued in May 1999, and
additional borrowings under Cabot L.P.'s Acquisition Facility, net of $3.2
million of interest capitalized to development projects. Interest expense of
$7.0 million for 1998, net of $959,000 of interest capitalized to development
projects, was incurred for only 331 days on average indebtedness of $116.2
million for 1998.
During 1998 Cabot L.P. entered into an interest rate hedge transaction (referred
to as the "Treasury Lock") involving the future sale of $100 million of Treasury
securities based on an interest rate of approximately 5.54% for such securities
in anticipation of a future debt issuance of at least $100 million with a
maturity of 10 years. At the March 31, 1999 contractual settlement date for this
transaction, Cabot L.P. paid $2.5 million to its counter party in the
transaction, reflecting the decrease in Treasury security yields since the July
1998 commencement of the transaction. Because an offering of the size and
maturity contemplated when the interest rate hedge transaction was executed was
not
27
<PAGE>
completed by the time of, or shortly after, the March 31, 1999 settlement date
of the transaction, Cabot L.P. recorded a loss related to the settlement of the
treasury lock of approximately $2.5 million during the year ended December 31,
1999.
During 1999, Cabot L.P. sold two properties, which resulted in a net gain of
$2.8 million. On June 22, 1999, Cabot L.P. sold a 120,000 square foot property
located in Massachusetts for a gross sales price of $10.5 million, which
resulted in a gain of $3.4 million, and on August 3, 1999, Cabot L.P. sold a
225,000 square foot property located in New Jersey for a gross sales price of
$6.6 million, which resulted in a loss of $653,000.
Interest and other income, which consists primarily of interest earned on Cabot
L.P.'s invested cash balances and earnings of Cabot Advisors, decreased by
$124,000, from $1.1 million for the year ended December 31, 1998 to $1.0 million
for the year ended December 31, 1999. The decrease is primarily due to a
decrease in Cabot L.P.'s share of earnings of Cabot Advisors for the year ended
December 31, 1999 compared with 1998.
Dividends accruable to Preferred Unitholders, which totaled $6.0 million in
1999, are deducted from Net Income to arrive at Net Income Allocable to
Partnership Units.
Cabot Partners
Year Ended December 31, 1997 Compared with Year Ended December 31, 1996
Revenues, primarily consisting of asset management fees and acquisition fees,
increased by $1.2 million for the year ended December 31, 1997, or 14.8%, to
$9.1 million as compared to $7.9 million for the year ended December 31, 1996.
The increase was due to a $191 million increase in average assets under
management for the year ended December 31, 1997, as compared to the year ended
December 31, 1996, which resulted in an $850,000 increase in asset management
fees. In addition, acquisition fees increased by $262,000 in 1997 as compared to
1996, due to an increase in fee-earning acquisitions of $37 million.
General and administrative expenses increased by $1.2 million for the year ended
December 31, 1997, or 19.7%, to $7.0 million as compared to $5.9 million for the
year ended December 31, 1996. Compensation expense increases accounted for
$798,000, or 69.0%, of the increase. The remainder of the increase was primarily
due to higher professional services fees. General and administrative expenses as
a percentage of revenues for 1997 and 1996 was 77.6% and 74.5%, respectively.
Depreciation and amortization expense increased by $558,000 for the year ended
December 31, 1997, to $977,000, due to increased amortization of two advisory
contracts terminated during 1997.
CAPITAL RESOURCES AND LIQUIDITY
Cabot L.P. intends to rely on cash provided by operations, unsecured and secured
borrowings from institutional sources, and public debt as its primary sources of
funding for acquisition, development, expansion and renovation of properties.
Cabot L.P. may also consider preferred and common equity financing when such
financing is available on attractive terms.
As a result of the completion of the Offerings in February 1998, Cabot Trust
issued 8,625,000 Common Shares to the public and 1,000,000 Common Shares in a
private placement. All of the Common Shares were sold at a price of $20.00 per
share. The proceeds from the Offerings, net of
28
<PAGE>
offering costs, were $176.3 million and were contributed to Cabot L.P. in
exchange for an equal number of Partnership Units.
As discussed in Note 1 to the financial statements, Cabot L.P. issued an
aggregate of $195 million of Cumulative Redeemable Perpetual Preferred Units in
five separate transactions in 1999. The net proceeds from these transactions
were $189.8 million which was used to pay down outstanding balances under the
Acquisition Facility. These Cumulative Redeemable Perpetual Preferred Units are
callable by Cabot L.P. at par on or after the fifth anniversary of issuance.
In March 1998, Cabot L.P. established a $325 million unsecured revolving line of
credit (the "Acquisition Facility"), with Morgan Guaranty Trust Company of New
York as lead agent for a syndicate of banks. The Acquisition Facility is used to
fund property acquisitions, development activities, building expansions, tenant
leasing costs and other general corporate purposes. The Acquisition Facility
contains certain restrictions and requirements such as total debt-to-assets,
debt service coverage and unencumbered assets to unsecured debt ratios, and
other limitations. Cabot L.P. believes cash flow from operations not distributed
to unitholders will be sufficient to cover tenant improvements and other costs
associated with renewal or replacement of current tenants as their leases expire
and recurring non-incremental revenue-generating capital expenditures.
As of December 31, 1999, Cabot L.P. had $163.9 million of fixed rate debt
secured by properties, $163.0 million of unsecured borrowings under its
Acquisition Facility, $200.0 million of unsecured debt and a 35% debt-to-total
market capitalization ratio. The debt-to-total market capitalization ratio is
calculated based on Cabot L.P.'s total consolidated debt as a percentage of the
sum of the market value of its outstanding Partnership Units, plus the
liquidation value of Cumulative Redeemable Perpetual Preferred Units plus debt.
In the normal course of its 2000 operations, through February 29, 2000, Cabot
L.P. purchased approximately $58 million of real estate assets in the current
year and has committed to purchase $41 million of additional real estate assets.
The completed real estate asset acquisitions were primarily funded through
Acquisition Facility borrowings and $6.1 million of assumed debt.
Cabot L.P. entered into an interest rate cap arrangement relating to its
LIBOR-based Acquisition Facility for a notional amount of $100 million for the
period October 1, 1999 through April 1, 2000. This arrangement is intended to
limit the LIBOR component of Cabot L.P.'s interest rate on an equivalent amount
of borrowings to 6.5% per annum.
Cash and cash equivalents totaled $22.0 million at December 31, 1999,
representing an increase of $19.7 million. This was the result of $101.3 million
of cash generated from operating activities and $372.6 million provided by
financing activities, reduced by $454.2 million used in investing activities.
YEAR 2000
During 1999, Cabot L.P. completed its program of determining whether its
business operations would be affected by date sensitive calculation errors that
might result from computers whose programs do not properly recognize the year
2000 (commonly referred to as the "Year 2000 Issue"). Cabot L.P. has not to date
experienced any effects on its results of operations or financial position from
the Year 2000
29
<PAGE>
Issue, nor have any of Cabot L.P.'s vendors communicated to Cabot L.P. that they
have experienced any such effects.
INFLATION
Substantially all of the leases of Cabot L.P.'s properties require the tenant to
pay, as additional rent, either all real estate taxes and operating expenses or
all increases in real estate taxes and operating expenses over a base amount. In
addition, many of such leases provide for fixed or indexed increases (based on
the consumer price index or other measures) in base rent. Management believes
that inflationary increases in operating expenses will be offset, in part, by
these expense reimbursements and contractual rent increases.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
In addition to using equity capital and retained earnings, Cabot L.P. finances
its acquisition and development programs and its ongoing operating cash needs
through the use of debt financing. Cabot L.P. uses short-term revolving debt,
primarily in the form of its Acquisition Facility, and long-term secured and
unsecured debt with original maturities of five years or more. Cabot L.P.
attempts to manage its debt maturities to reduce its exposure to the refinancing
risk that would arise from having significant maturities of principal at a time
when debt capital may not be available or may be available only at unfavorable
interest rates.
Cabot L.P. is exposed to market risk in the form of the effects of changes in
market interest rates on its existing and proposed debt financing. Its
Acquisition Facility bears interest at a variable rate, LIBOR plus 1%, while the
interest rates on proposed fixed-rate unsecured and secured debt instruments
will usually be based on Treasury securities yields plus a market-based spread.
Cabot L.P. has entered into various forms of interest rate protection agreements
with investment-grade financial institutions from time to time for the purpose
of managing a portion of its interest rate risk. For variable rate LIBOR-based
borrowings, these agreements include interest rate collar and interest rate cap
agreements that are intended to limit Cabot L.P.'s effective cost on variable
rate borrowings, either within an agreed range or below an agreed maximum level.
For proposed long-term instruments, Cabot L.P. has also entered into "Treasury
Lock transactions" that are intended to set the Treasury securities component of
the interest cost in advance through agreements for the sale of Treasury
securities having notional amounts and maturities comparable to Cabot L.P.'s
intended debt issuance. Cabot L.P. does not enter into interest rate protection
agreements or any other form of derivative financial instruments for speculative
trading purposes.
As of December 31, 1999, Cabot L.P. was a party to an interest rate cap
agreement that was intended to limit its exposure to changes in LIBOR through
April 1, 2000 on $100 million of borrowings on its Acquisition Facility. Under
the agreement, Cabot L.P.'s counter party is required to pay an amount equal to
interest on that notional principal amount of borrowings to the extent that the
relevant LIBOR exceeds 6.5%.
As of December 31, 1998, Cabot L.P. also had a Treasury Lock agreement in place
for the purpose of setting the Treasury securities component of the interest
rate on an intended future issuance of fixed rate debt. This agreement provided
for the sale of $100 million of 10-year Treasury securities at a yield of 5.54%
on March 31, 1999. Cabot L.P. paid its counter party $2.5 million upon the
maturity of
30
<PAGE>
this agreement, reflecting the decrease in Treasury yields and consequent
increase in cost of the notional amount of Treasury securities to be sold since
the July 1998 commencement date of the transaction.
Taking into account $163.0 million of variable rate borrowings that Cabot L.P.
had outstanding under its Acquisition Facility at December 31, 1999, and the
above-described interest rate cap agreement that was in effect at that date, an
instantaneous increase of 100 basis points in LIBOR at that date would, if LIBOR
remained at the increased levels thereafter, result in an estimated $1.4 million
reduction in Cabot L.P.'s net income in 2000. This estimate is provided for the
purpose of illustrating the possible effects on Cabot L.P.'s results of
operations of changing interest rates and Cabot L.P.'s interest rate protection
agreements. It does not take into account any other effects that changes in
interest rates might have on Cabot L.P.'s operations, such as higher interest
rates on new fixed rate borrowings, nor does it consider any additional interest
rate protection agreements that Cabot L.P. might enter into in reaction to or in
anticipation of changes in interest rates. While an increase in LIBOR of 100
basis points over a relatively short time period is possible, it is unlikely
that interest rates would increase instantaneously or stay at the same rate for
a sustained period as assumed for purposes of the illustration.
As of December 31, 1999, Cabot L.P. also had $163.9 million of fixed rate debt
at stated rates ranging from 7.25% to 9.67% secured by certain properties and
$200.0 million of fixed rate unsecured debt at a stated rate of 7.125%. The
current and future use of fixed rate debt is advantageous to Cabot L.P., as
compared with variable rate debt, in times of rising interest rates. However, in
an environment of falling interest rates, fixed rate debt would place Cabot L.P.
at a disadvantage as compared with competitors having larger components of
variable rate debt.
31
<PAGE>
Item 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
CABOT INDUSTRIAL PROPERTIES, L.P.
<S> <C>
Report of Independent Public Accountants...................................................33
Consolidated Balance Sheets as of December 31, 1999 and 1998...............................34
Consolidated Statements of Operations for the Years Ended December 31, 1999 and 1998.......35
Consolidated Statements of Partners' Equity for the Years Ended December 31, 1999
and 1998...................................................................................36
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999 and 1998.......37
Notes to Consolidated Financial Statements.................................................39
Schedule III - Real Estate and Accumulated Depreciation....................................55
CABOT PARTNERS LIMITED PARTNERSHIP
Report of Independent Public Accountants...................................................64
Balance Sheets as of December 31, 1997 and 1996............................................65
Statements of Operations for the Years Ended December 31, 1997 and 1996....................66
Statements of Partners' Capital for the Years Ended December 31, 1997 and 1996.............67
Statements of Cash Flows for the Years Ended December 31, 1997 and 1996....................68
Notes to Financial Statements..............................................................69
</TABLE>
32
<PAGE>
Report of Independent Public Accountants
To the Partners of Cabot Industrial Properties, L.P.:
We have audited the accompanying consolidated balance sheets of Cabot Industrial
Properties, L.P. and subsidiaries (Cabot L.P.), a Delaware Partnership, as of
December 31, 1999 and 1998, and the related consolidated statements of
operations, partners' equity and cash flows for the years then ended (Note 1).
These financial statements are the responsibility of Cabot L.P.'s management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cabot Industrial
Properties, L.P. and subsidiaries as of December 31, 1999 and 1998 and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to the
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not a required part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 14, 2000 (except with
respect to matters discussed in
Note 13, as to which the date is
February 29, 2000)
33
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
As of December 31,
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
ASSETS:
INVESTMENT IN REAL ESTATE:
Land $ 296,619 $ 199,145
Buildings 1,211,215 873,530
Less: Accumulated Depreciation (42,543) (17,290)
----------- -----------
Net Rental Properties $ 1,465,291 $ 1,055,385
Properties under Development 63,938 23,108
----------- -----------
$ 1,529,229 $ 1,078,493
----------- -----------
OTHER ASSETS:
Cash and Cash Equivalents $ 22,007 $ 2,301
Rents and Other Receivables, net of allowance for uncollectible
accounts of $574 and $312, in 1999 and 1998, respectively 3,828 2,872
Deferred Rent Receivable 6,079 2,638
Deferred Lease Acquisition Costs, net 23,913 17,362
Deferred Financing Costs, net 3,369 1,255
Investment in and Advances to Related Party 1,105 582
Other Assets 3,954 5,067
----------- -----------
TOTAL ASSETS $ 1,593,484 $ 1,110,570
=========== ===========
LIABILITIES AND PARTNERS' EQUITY:
LIABILITIES:
Mortgage Debt $ 163,866 $ 48,206
Unsecured Debt 200,000 --
Line of Credit Borrowings 163,000 200,000
Accounts Payable 889 511
Accrued Real Estate Taxes 10,254 7,309
Distributions Payable 15,437 14,134
Tenant Security Deposits and Prepaid Rents 11,205 4,956
Other Liabilities 20,117 18,156
----------- -----------
$ 584,768 $ 293,272
----------- -----------
Commitments and Contingencies (Note 11)
PARTNERS' EQUITY:
General Partner's Equity $ 761,742 $ 348,987
Limited Partners' Equity 57,169 468,311
Preferred Unitholders' Equity 189,805 --
----------- -----------
TOTAL PARTNERS' EQUITY $ 1,008,716 $ 817,298
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 1,593,484 $ 1,110,570
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
34
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit and per unit data)
<TABLE>
<CAPTION>
For the Years Ended
---------------------------------------
December 31, 1999 December 31, 1998
----------------- -----------------
(Note 1)
<S> <C> <C>
REVENUES:
Rental Income $ 135,859 $ 89,044
Tenant Reimbursements 21,612 13,381
------------ ------------
$ 157,471 $ 102,425
EXPENSES:
Property Operating $ 11,821 $ 6,579
Property Taxes 17,787 11,843
Depreciation and Amortization 31,169 20,913
General and Administrative 8,902 6,815
Interest 25,360 7,009
Settlement of Treasury Lock 2,492 --
------------ ------------
Total Expenses $ 97,531 $ 53,159
OTHER INCOME:
Net Gain on Sales of Real Estate $ 2,751 $ 572
Interest and Other Income 996 1,120
------------ ------------
Net Income $ 63,687 $ 50,958
Preferred Unitholders Distributions (6,009) --
------------ ------------
Net Income Allocable to Partnership Units $ 57,678 $ 50,958
============ ============
Earnings per Partnership Unit:
Basic $ 1.32 $ 1.17
============ ============
Diluted $ 1.32 $ 1.17
============ ============
Weighted Average Partnership Units:
Basic 43,608,110 43,493,198
============ ============
Diluted 43,631,869 43,586,876
============ ============
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
35
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(in thousands, except unit and per unit data)
<TABLE>
<CAPTION>
Common Preferred
----------------------------------------- -------------------------
General Limited Total
Partnership Partner's Partners' Partnership Unitholders' Partners'
Units Equity Equity Units Equity Equity
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997 50 $ 1 $ -- -- $ -- $ 1
Issuance of Units 43,576,149 349,302 469,965 -- -- 819,267
Repurchase of Units (85,727) (205) (1,513) -- -- (1,718)
Net Income -- 21,766 29,192 -- -- 50,958
Distributions ($1.177 per Unit) -- (21,877) (29,333) -- -- (51,210)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 1998 43,490,472 $ 348,987 $ 468,311 -- $ -- $ 817,298
----------- ----------- ----------- ----------- ----------- -----------
Issuance of Units 177,448 $ -- $ 3,413 6,100,000 $ 189,805 $ 193,218
Conversion of Units -- 419,082 (419,082) -- -- --
Net Income -- 49,048 8,630 -- 6,009 63,687
Distributions ($1.36 per Unit) -- (55,375) (4,103) -- (6,009) (65,487)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 1999 43,667,920 $ 761,742 $ 57,169 6,100,000 $ 189,805 $ 1,008,716
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
36
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except unit data)
<TABLE>
<CAPTION>
For the Years Ended
--------------------------------------
December 31, 1999 December 31, 1998
----------------- -----------------
(Note 1)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 63,687 $ 50,958
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
Depreciation and Amortization 31,169 20,913
Amortization of Deferred Financing Costs 1,003 466
Straight Line Rent (3,470) (2,638)
Cabot L.P.'s Share of Net Income of Cabot Advisors -- (231)
Net Gain on Sales of Real Estate (2,751) (572)
Increase in Rents and Other Receivables (956) (2,872)
Increase in Accounts Payable 419 406
Decrease (Increase) in Other Assets 531 (2,877)
Increase in Accrued Real Estate Taxes 2,945 7,309
Increase in Tenant Security Deposits and Prepaid Rents 6,249 4,956
Increase in Other Liabilities 2,467 2,908
--------- ---------
Net Cash Provided by Operating Activities $ 101,293 $ 78,726
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Investments in Real Estate $(402,150) $(376,816)
Properties Under Development (52,996) (19,532)
Proceeds from Sales of Real Estate 16,079 6,874
Purchases of and Increases in Lease Acquisition Costs (12,369) (6,857)
Improvements to Real Estate (1,938) (458)
Acquisition Deposits, net (844) (1,579)
Advances to Cabot Advisors (523) (351)
Purchases of Furniture, Fixtures and Equipment (83) (76)
Other 629 --
--------- ---------
Net Cash Used in Investing Activities $(454,195) $(398,795)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Unsecured Debt $ 200,000 $ --
Net Proceeds from Issuance of Preferred Units 191,383 --
Proceeds from Issuance of Mortgage Debt 93,215 --
Distributions Paid to Common Unitholders (58,641) (37,076)
Line of Credit Borrowings (Repayments), net (37,000) 200,000
Distributions Paid to Preferred Unitholders (5,419) --
Mortgage Debt Principal Repayments (5,737) (14,232)
Increase in Deferred Financing Costs (2,627) (1,721)
Proceeds from the Issuance of Common Units, net (1,412) 177,606
Other (1,154) (490)
Repurchase of Partnership Units -- (1,718)
--------- ---------
Net Cash Provided by Financing Activities $ 372,608 $ 322,369
--------- ---------
Net Increase in Cash and Cash Equivalents $ 19,706 $ 2,300
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 2,301 1
--------- ---------
CASH AND CASH EQUIVALENTS-END OF YEAR $ 22,007 $ 2,301
========= =========
Cash paid for interest, net of amounts capitalized $ 23,224 $ 5,771
========= =========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
37
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands, except unit data)
DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
In conjunction with the Offering and Formation Transactions, Cabot L.P.
assumed $18,413 of indebtedness and issued 33,850,000 Partnership Units in
exchange for real estate assets and the advisory business of Cabot Partners,
recorded at $659,021 and $77, respectively.
In conjunction with a sale of real estate in 1999, Cabot L.P. received a
promissory note in the amount of $627 as a component of total consideration due
from seller. This note was repaid in full during 1999.
In conjunction with the acquisitions of certain real estate, Cabot L.P.
assumed $44,025 of indebtedness and issued Units valued at $2,268 in 1998 and
assumed $28,182 of indebtedness and issued Units valued at $3,413 in 1999.
At December 31, 1999 and 1998, accrued capital expenditures (including
amounts included in accounts payable) totaled $6,520 and $7,243, development
costs totaled $3,610 and $3,576, preferred equity offering costs totaled $1,578
and $0, and common equity offering costs totaled $0 and $1,290, respectively.
The accompanying notes are an integral part
of these consolidated financial statements.
38
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
1. GENERAL
Organization
Cabot Industrial Properties, L.P. (Cabot L.P.), a Delaware limited
partnership, was formed on October 10, 1997. The general partner of Cabot L.P.
is Cabot Industrial Trust (Cabot Trust), a Maryland real estate investment
trust which was also formed on October 10, 1997. As the general partner of Cabot
L.P., Cabot Trust has the exclusive power under the agreement of limited
partnership to manage and conduct the business of Cabot L.P. Cabot Trust is a
fully-integrated, internally-managed real estate company formed to continue and
expand the national real estate business of Cabot Partners Limited Partnership
(Cabot Partners). Cabot Trust qualifies as a real estate investment
trust (a REIT) for federal income tax purposes. Since Cabot L.P. was formed on
October 10, 1997, and did not begin operations until February 4, 1998 (see The
Formation Transactions below), the results for the year ended December 31, 1998,
represent activity for 331 days, or approximately 11 months.
The Formation Transactions
On February 4, 1998, under a Contribution Agreement executed by Cabot Trust,
Cabot L.P., Cabot Partners, and various other contributors, 122 industrial real
estate properties, certain real estate advisory contracts and other assets were
(i) contributed to Cabot L.P. in exchange for general partnership units in Cabot
L.P. (Units) that may, subject to certain restrictions, be exchanged for Common
Shares of Cabot Trust (Common Shares) or (ii) contributed to Cabot Trust in
exchange for Common Shares. The properties contributed to Cabot Trust were
concurrently contributed by it to Cabot L.P. in exchange for the number of Units
equal to the number of Common Shares exchanged for the property.
Cabot L.P. contributed the real estate advisory contracts to Cabot Advisors,
Inc. (Cabot Advisors) and received 100% of the non-voting preferred stock of
Cabot Advisors, which entitles it to 95% of Cabot Advisors' net operating cash
flow. All of the common stock of Cabot Advisors is owned by an officer of Cabot
Trust.
At December 31, 1999, Cabot Trust owned 93.0% of Cabot L.P. Cabot Trust owned
42.7% of Cabot L.P. at December 31, 1998.
During the year ended December 31, 1999, Cabot L.P. issued 177,448 Units in
conjunction with acquisitions.
The Offerings
On February 4, 1998, Cabot Trust completed the offering of 8,625,000 Common
Shares at an offering price of $20.00 per share. In addition, Cabot Trust issued
1,000,000 Common Shares in a private offering at $20.00 per share (collectively,
the Offerings). Cabot Trust contributed the net proceeds of the Offerings to
Cabot L.P. in exchange for the number of general partnership interests in Cabot
L.P. equal to the number of Common Shares sold in the Offerings.
39
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
1. GENERAL (CONTINUED)
Cumulative Redeemable Perpetual Preferred Equity
During 1999, Cabot L.P. completed private sales of the following Cumulative
Redeemable Perpetual Preferred Units (the "Preferred Units"):
<TABLE>
<CAPTION>
Sale Date Series Unit Price Liquidation Value Net Proceeds
- ---------------------------- ----------------------- --------------- ------------------------- ------------------
<S> <C> <C> <C> <C>
April 29, 1999 8.625% Series B $50 $ 65,000,000 $ 63,175,000
September 3, 1999 8.625% Series C 25 65,000,000 63,175,000
September 27, 1999 8.375% Series D 50 10,000,000 9,715,000
December 9, 1999 8.375% Series E 50 10,000,000 9,715,000
December 22, 1999 8.500% Series F 25 45,000,000 44,025,000
------------ ------------
$195,000,000 $189,805,000
============ ============
</TABLE>
The Preferred Units, which may be called by Cabot L.P. at par on or after the
fifth anniversary of issuance in each case, have no stated maturity or mandatory
redemption provisions and are not convertible into any other securities of Cabot
L.P.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Cabot
L.P. and its subsidiaries over which it exercises control. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investment in Real Estate
Investments in real estate are carried at cost, less accumulated depreciation.
It is Cabot L.P.'s policy to review the carrying value of long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying value of such assets may not be recoverable. Measurement of the
impairment loss is based on the fair value of the asset. Generally, fair value
is determined using valuation techniques such as the present value of expected
future cash flows. No impairment adjustments have been made as a result of this
review process during 1999 or 1998.
40
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investments in real estate are primarily depreciated over 40 years using the
straight-line method. Expenditures for ordinary maintenance and repairs are
charged to operations as incurred. Significant building renovations and
improvements that extend the useful life of or improve the assets are
capitalized.
Cash Equivalents
Cabot L.P. considers all short-term investments with a maturity of three months
or less to be cash equivalents.
Capitalization of Costs
Cabot L.P. has capitalized as deferred costs certain expenditures related to the
financing and leasing of its properties. Capitalized loan fees are amortized
over the term of the related loans and lease acquisition costs are amortized
over the term of the related leases, or the estimated useful life of the
improvement, if shorter. Deferred Lease Acquisition Costs and Deferred Financing
Costs included in the accompanying consolidated balance sheets are presented net
of accumulated amortization totaling $8,620,000 and $1,413,000, respectively, as
of December 31, 1999 and $3,487,000 and $466,000, respectively, as of December
31, 1998.
Investment in Cabot Advisors
Cabot L.P.'s investment in Cabot Advisors is accounted for using the equity
method. Under the equity method of accounting, Cabot L.P.'s pro rata share of
Cabot Advisors' income (loss) is recorded as an increase (decrease) in the
carrying value of its investment and any distributions received are recorded as
decreases in the carrying value.
Rental Income
All leases are classified as operating leases. Certain leases provide for tenant
occupancy during periods for which no rent is due and minimum rent payments that
increase during the term of the lease. Cabot L.P. records rental income for the
full term of each lease on a straight-line basis. The resulting Deferred Rent
Receivable represents the amount due from tenants, net of reserves, which Cabot
L.P. expects to collect over the remaining life of the leases rather than
currently. Deferred rental revenue is not recognized for income tax purposes
until received. Cabot L.P. recorded a provision for uncollectible rental income
of $352,000 and $312,000 in 1999 and 1998, respectively, and wrote off $90,000
against its Allowance for Uncollectible Accounts in 1999.
Interest Rate Protection Agreements
Cabot L.P. uses various types of interest rate protection agreements from time
to time to manage its exposures to interest rate risk. During 1999 and 1998,
Cabot L.P. used interest rate collar agreements and interest rate cap agreements
to manage a portion of the interest rate risk arising from its LIBOR-based
acquisition facility and may, in the future, use other types of agreements. The
collar agreements effectively limited the LIBOR interest cost of a portion of
the outstanding balance on the acquisition facility to a specified interest rate
range by requiring Cabot L.P.'s counter party to pay amounts to Cabot L.P. to
the extent LIBOR increased above the ceiling of
41
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the specified range and requiring Cabot L.P. to make payments to the counter
party to the extent LIBOR declined below the floor of the range. The interest
rate cap agreements limited the LIBOR interest cost of a portion of the
outstanding balance on the acquisition facility to a maximum interest rate by
requiring Cabot L.P.'s counter party to pay amounts to Cabot L.P. to the extent
LIBOR increased above the ceiling as specified. Cabot L.P. accounts for such
agreements on the accrual method. Amounts to be received from or paid to the
counter parties of the agreements are accrued during the period to which the
amounts relate and are reflected as increases or decreases in interest expense.
The related amounts payable to the counter parties are included in accounts
payable in the accompanying balance sheets.
During 1998, Cabot L.P. entered into an interest rate hedge transaction
(referred to as a Treasury Lock) involving the future sale of $100.0 million of
Treasury securities based on a rate of approximately 5.54% for such securities
in anticipation of a future debt issuance of at least $100.0 million with a
maturity of 10 years. At the March 31, 1999 contractual settlement date for this
transaction, Cabot L.P. paid $2.5 million to its counter party in the
transaction, reflecting the decrease in Treasury security yields since the July
1998 commencement of the transaction. Because an offering of the size and
maturity contemplated when the interest rate hedge transaction was executed was
not completed by the time of, or shortly after, the March 31, 1999 settlement
date of the transaction, Cabot L.P. recorded a loss of $2.5 million in the year
ended December 31, 1999.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. In June 1999, the FASB issued SFAS No. 137
which deferred the effective date of SFAS No. 133. The statement is now
effective for fiscal years beginning after June 15, 2000; earlier adoption is
allowed. This statement requires companies to record derivatives on the balance
sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. Cabot L.P. is currently evaluating the impact of this statement and
does not anticipate a material effect on its results of operations or financial
position resulting from the adoption of SFAS No. 133, as amended by SFAS No.
137, due to its relatively limited use of derivative instruments.
3. ACQUISITIONS OF REAL ESTATE INVESTMENTS
In accordance with generally accepted accounting principles, Cabot L.P. has
accounted for the Formation Transactions using the purchase method of
accounting. As such, the assets acquired and liabilities assumed in connection
with the Formation Transactions are recorded at the fair value of the
consideration surrendered and liabilities assumed, except for the net assets
contributed by Cabot Partners, the sponsor and organizer, which were recorded at
their historical
42
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
3. ACQUISITIONS OF REAL ESTATE INVESTMENTS (CONTINUED)
cost basis. The acquisition cost was then allocated to all identifiable assets
based upon their individual estimated fair market values.
The following is a summary of the acquisition costs recorded in connection with
the Formation Transactions:
(in thousands)
--------------
Fair value of Cabot L.P.'s Units, based on the
February 4, 1998 value of $20 per Unit, issued
to the contributing investors (except Cabot Partners) $640,608
Value of Partnership Units issued to Cabot Partners,
recorded at carryover historical cost basis 77
Mortgage debt assumed 18,413
Other acquisition costs and liabilities assumed 8,713
--------
Total acquisition cost basis $667,811
========
(in thousands)
--------------
Acquisition cost basis allocated to:
Land $129,877
Buildings 525,471
Lease acquisition costs 12,412
--------
Acquisition cost basis allocated to real estate
as a result of the Formation Transactions $667,760
Acquisition cost basis allocated to other net assets 51
--------
Total cost basis allocated $667,811
========
Subsequent to the Formation Transactions, Cabot L.P. acquired 84 properties
during 1998 with an aggregate of approximately 9.6 million net rentable square
feet. The aggregate purchase price for the 84 properties was $426.2 million,
including $44.0 million of debt assumed and issuance of $2.3 million in Units of
Cabot L.P.
During 1999, Cabot L.P. acquired 113 properties with an aggregate of
approximately 10.0 million net rentable square feet. The aggregate purchase
price for the 113 properties was $448.3 million, including $28.2 million of debt
assumed and issuance of $3.4 million in Units in Cabot L.P.
4. DEBT FACILITIES
The Acquisition Facility
On March 16, 1998, Cabot L.P. obtained a $325 million unsecured revolving line
of credit facility (the Acquisition Facility). The Acquisition Facility matures
on March 16, 2001 and the
43
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
4. DEBT FACILITIES (CONTINUED)
interest rate for 1999 was LIBOR plus 100 basis points. At December 31, 1999 and
1998, outstanding borrowings under the Acquisition Facility were $163 million
and $200 million, respectively, and the interest rate was 7.50% and 6.60%,
respectively. The weighted average coupon interest rate for the years ended
December 31, 1999 and 1998 was 6.37% and 6.58%, respectively, including the
effect of the interest rate collar and cap arrangements described below. The
Acquisition Facility is used to acquire and develop properties and for working
capital purposes.
Cabot L.P. has entered into an interest rate cap arrangement relating to the
Acquisition Facility for a notional amount of $100 million for the period from
October 1, 1999 through April 1, 2000. This arrangement is intended to result in
limiting the variable nature of the LIBOR component of Cabot L.P.'s interest
rate on an equivalent amount of borrowings to 6.50% per annum. Cabot L.P. also
entered into similar arrangements during 1999 and 1998, which resulted in
interest expense of $86,000 and $47,000, respectively.
Unsecured Debt
On May 4, 1999, Cabot L.P. issued $200 million of senior unsecured redeemable
notes, due May 1, 2004. The notes have a 7.125% coupon interest rate and were
priced at 99.724%, resulting in a discount of $552,000.
Mortgage Debt
Cabot L.P. assumed certain loans in connection with the Formation Transactions,
entered into loan agreements during 1999, and assumed certain loans in
conjunction with several real estate acquisitions, all secured by certain
existing real estate assets (collectively, the Mortgage Loans). The Mortgage
Loans, totaling $163.9 million, bear coupon rates ranging from 7.25% - 9.67% and
are secured by properties with a net book value of $272.6 million. Certain of
the debt assumed in conjunction with the acquisition of properties bears a
coupon interest rate that differed from the fair market value interest rate at
the date of acquisition. In accordance with generally accepted accounting
principles, such debt was recorded at fair market value and interest expense
recorded in the accompanying consolidated statements of operations was adjusted
based on the fair market interest rate at the date of acquisition.
Aggregate principal payments on mortgage notes payable at December 31, 1999 for
the five years ending December 31 and thereafter are as follows:
(in thousands)
--------------
2000...................................................... $ 6,039
2001...................................................... 6,268
2002...................................................... 8,983
2003...................................................... 11,293
2004...................................................... 6,134
Thereafter................................................ 125,149
44
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
5. FUTURE MINIMUM RENTS
Future minimum rental receipts due Cabot L.P. on noncancelable operating leases
for the 320 industrial properties as of December 31, 1999 were as follows:
(in thousands)
--------------
2000.......................................................$ 149,117
2001....................................................... 128,853
2002....................................................... 101,959
2003....................................................... 76,090
2004....................................................... 51,355
Thereafter................................................. 143,520
Cabot L.P. is subject to the usual business risks associated with the collection
of the above-scheduled rents. The above amounts do not include additional rental
receipts that will become due as a result of the expense reimbursement and
escalation provisions in the leases. In addition, Cabot L.P.'s minimum future
rental receipts related to nonindustrial properties total $5.9 million.
6. INCOME TAXES
No provision for federal and state income taxes has been recorded relating to
Cabot L.P. as the partners report their respective share of net taxable income
on their individual tax returns.
7. EMPLOYEE BENEFIT PLANS
Cabot Trust has adopted the Cabot Industrial Trust Long-Term Incentive Plan (the
LTIP) and the Cabot Industrial Trust 1999 Long-Term Incentive Plan (the 1999
LTIP) (collectively referred to as the Plans), for the purpose of attracting and
retaining highly qualified executive officers, Trustees and employees. The 1999
LTIP is maintained as a broad-based plan within the meaning of the New York
Stock Exchange rules.
The Plans are administered by the Executive Compensation Committee of the Board
of Trustees of Cabot Trust, (the Administrator). Officers and other employees of
Cabot Trust, Cabot L.P. and designated subsidiaries and members of the Board of
Trustees of Cabot Trust who are not employees of Cabot Trust are eligible to
participate.
Options are awarded to Trustees or employees of Cabot Trust in the form of
Common Shares and to employees of Cabot L.P. or Cabot Advisors in the form of
Units. The LTIP, at December 31, 1999, authorizes the issuance of up to
4,366,792 Common Shares and Units and the 1999 LTIP authorizes the issuance of
up to 2,000,000 Common Shares and Units. The number of Common Shares and Units
available under the LTIP may increase to an amount equal to 10% of the aggregate
number of outstanding Common Shares and Units. The Plans provide
45
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
7. EMPLOYEE BENEFIT PLANS (CONTINUED)
for the grant of (i) Common Share options intended to qualify as incentive
options under Section 422 of the Code (the LTIP only), (ii) Common Share options
and Unit options not intended to qualify as incentive options under Section 422
of the Code and (iii) dividend equivalent rights and distribution equivalent
rights (collectively, "DEUs") which entitle a Participant to be credited with
additional Common Share or Unit rights.
In connection with the grant of options under the Plans, other than options to
nonemployee Trustees, the Administrator determines the terms of the option,
including the option exercise price, any vesting requirements and whether a DEU
shall be awarded. The Administrator has authority to award options at less than
fair market value but at this time has no intention of doing so. The options
granted under the Plans during 1999 and 1998 have 10-year terms and become
exercisable in four equal annual installments commencing on the first
anniversary of the date of grant, subject to acceleration of vesting upon a
change in control of Cabot Trust (as defined in the Plans). DEUs entitle an
option holder to an award of additional shares or units at year end with a
positive intrinsic value calculated using a formula that is based on the
difference, if any, between the annual distribution rate on the Units and Common
Shares versus the average dividend rate on stocks included in the S&P 500 index.
DEUs vest on a vesting schedule as determined by the Administrator and once
vested entitle the holder to a Common Share or Unit at the earlier of the year
of exercise, or the year of expiration, of the underlying option or, in some
cases, only upon a change in control. The options granted in 1998 were generally
awarded with DEUs, which resulted in compensation expense in 1999 of
approximately $475,000.
To the extent an option has not become exercisable at the time of the holder's
termination of employment, it will be forfeited unless the Administrator has
previously exercised its reasonable discretion to make such option exercisable
and all vested options which are not exercised by the expiration date described
in the Plans will be forfeited. Any Common Shares or Units subject to an option
which are forfeited (or which expire without exercise) will again be available
for grant under the Plans.
46
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
7. EMPLOYEE BENEFIT PLANS (CONTINUED)
A summary of Cabot Trust's option activity is as follows:
<TABLE>
<CAPTION>
1999 1998
---------------------------------------- ----------------------------------------
Number of Weighted Average Number of Weighted Average
Shares/Units Exercise Price Shares/Units Exercise Price
- ------------------------------------------------------------------------------------ ----------------------------------------
<S> <C> <C> <C> <C>
Options outstanding, beginning of year 3,126,615 $20.04 -- $ 0.00
Granted 878,300 19.29 3,195,015 20.04
Exercised -- 0.00 -- 0.00
Forfeited (22,325) 19.97 (68,400) 20.00
---------------------------------------- ----------------------------------------
Options outstanding, end of year 3,982,590 $19.88 3,126,615 $20.04
======================================== ========================================
Options exercisable, end of year 814,079 $20.04 -- $ 0.00
======================================== ========================================
DEUs outstanding, beginning of year 89,384 $ 0.00 -- $ 0.00
Credited 194,967 0.00 89,384 0.00
Exercised -- 0.00 -- 0.00
Forfeited (646) 0.00 -- 0.00
---------------------------------------- ----------------------------------------
DEUs outstanding, end of year 283,705 $ 0.00 89,384 $ 0.00
======================================== ========================================
DEUs exercisable, end of year 23,733 $ 0.00 -- $ 0.00
======================================== ========================================
Options available for grant 2,100,497 -- 1,131,501 --
======================================== ========================================
</TABLE>
For the DEUs outstanding as of December 31, 1999, 152,797 vest over the shorter
of a four-year period or upon a change of control and 130,908 vest only upon a
change of control.
A summary of the status of Cabot Trust's options outstanding at December 31,
1999, is as follows:
<TABLE>
<CAPTION>
Options Outstanding
-------------------------------------------------------------------------------------
Weighted Average Remaining Weighted Average
Range of Exercise Prices Number of Shares/Units Contractual Life Exercise Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$17.00 - $19.99 1,758,915 9.37 years $19.49
$20.00 2,015,500 8.09 years $20.00
$20.01 - $24.16 208,175 8.77 years $22.00
</TABLE>
47
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
7. EMPLOYEE BENEFIT PLANS (CONTINUED)
Pro Forma Stock-based Compensation Expense
In October 1995, the Financial Accounting Standards Board issued SFAS No. 123,
Accounting for Stock-based Compensation, which sets forth a fair-value based
method of recognizing stock-based compensation expense. As permitted by SFAS No.
123, Cabot L.P. has elected to apply APB Opinion No. 25 to account for its
stock-based compensation plans. Accordingly, except for the DEUs as described
above, no compensation cost has been recognized for Cabot Trust's Plans as the
option prices at the date of grant were equal to market prices. Had
compensation cost for awards in 1999 and 1998 under Cabot Trust's Plans been
determined based on the fair value at the grant dates consistent with the
method set forth under SFAS No. 123, the effect on Cabot L.P.'s net income
allocable to partnership units and earnings per unit would have been as
follows:
1999 1998
---------------------------------------
(in thousands, except per unit amounts)
Net income allocable to
partnership units:
As reported $ 57,678 $ 50,958
Pro forma 55,873 49,761
Basic earnings per unit:
As reported $ 1.32 $ 1.17
Pro forma 1.28 1.14
Diluted earnings per unit:
As reported $ 1.32 $ 1.17
Pro forma 1.28 1.14
Pro forma compensation expense for options granted is reflected over the vesting
period; therefore, future pro forma compensation expense may be greater as
additional options are granted.
The weighted average fair value per share/unit of options granted was $2.23 in
1999 and $2.58 in 1998. The fair value of each option grant was estimated on the
grant date using the Black-Scholes option pricing model with the following
weighted-average assumptions:
1999 1998
- --------------------------------------------------------------------------------
Expected volatility 19.21% 20.66%
Risk-free interest rate 4.82 - 6.60% 4.52 - 5.60%
Expected life of options 7 years 7 years
Expected dividend yield 6.9% 6.2%
48
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
7. EMPLOYEE BENEFIT PLANS (CONTINUED)
The Black-Scholes option pricing model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option pricing models require the input of highly
subjective assumptions including expected stock price volatility. Because Cabot
Trust's employee options have characteristics significantly different from those
of traded options and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of fair value of its
employee options.
401(k) Savings Plan
The Cabot Savings Plan 401(k) covers eligible full-time employees of Cabot
Trust, Cabot L.P. and their affiliates. Contributions to the plan are made by
both the employee and the employer. Employer contributions are based on the
level of employee contributions. For this plan, Cabot L.P. contributed and
charged to expense $58,000 in 1999 and $44,000 in 1998.
8. EARNINGS PER UNIT
In accordance with SFAS No. 128, Earnings per Share, basic earnings per unit
have been computed by dividing net income allocable to partnership unitholders
by the weighted average number of units outstanding during the period
subsequent to Cabot L.P.'s commencement of operations (see Note 1).
Diluted earnings per unit have been computed considering the potentially
dilutive effect of the exercise of Unit options granted by Cabot L.P. Basic and
diluted earnings per Unit were calculated as follows:
<TABLE>
<CAPTION>
Period Ended
Year Ended December 31, 1998
December 31, 1999 (see Note 1)
----------------- ------------
(in thousands, except per unit amounts)
<S> <C> <C>
Basic:
Net Income Allocable to Partnership Unitholders $57,678 $50,958
------- -------
Weighted Average Partnership Units 43,608 43,493
------- -------
Basic Earnings per Partnership Unit $ 1.32 $ 1.17
======= =======
Diluted:
Net Income Allocable to Partnership Unitholders $57,678 $50,958
------- -------
Weighted Average Partnership Units 43,608 43,493
Effect of Unit Options 24 94
------- -------
Weighted Average Partnership Units, as adjusted 43,632 43,587
======= =======
Diluted Earnings per Partnership Unit $ 1.32 $ 1.17
======= =======
</TABLE>
49
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial Instruments, requires Cabot L.P. to disclose fair value
information for all financial instruments, for which it is practicable to
estimate fair value, whether or not recognized in the balance sheets. Cabot
L.P.'s financial instruments, other than debt and interest rate protection
agreements are generally short-term in nature and contain minimal credit risk.
These instruments consist of cash and cash equivalents, rents and other
receivables and accounts payable. The carrying amount of these assets and
liabilities in the consolidated balance sheets approximate fair value.
The carrying amount and fair value of Cabot L.P.'s long-term obligations and
off-balance-sheet financial instruments as of December 31, 1999 and 1998 are as
follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(in thousands)
Long-term obligations:
Mortgage loans payable $(163,866) $(167,493) $ (48,206) $ (51,450)
Unsecured debt $(200,000) $(192,480) $ -- $ --
Off-balance-sheet financial instruments:
Interest rate protection agreements (liability) $ -- $ 1 $ -- $ (6,734)
</TABLE>
Cabot L.P.'s mortgage loans and unsecured debt are at fixed rates, which in
certain cases differ from borrowing rates currently available to Cabot L.P. with
similar terms and average maturities. The fair market values of mortgage loans
payable were estimated using a valuation technique which discounts expected
future cash flows to net present value. The fair market value of Cabot L.P.'s
unsecured debt was estimated based on publicly quoted market prices, which
represents the amount Cabot L.P. would have to pay to repurchase such borrowings
at year end. Cabot L.P.'s Acquisition Facility is at a variable rate, which
results in a carrying value that approximates its fair value. The fair value of
Cabot L.P.'s interest rate protection agreements is the estimated amount that
Cabot L.P. would receive or pay if it had terminated the contract as of December
31, 1999 or 1998, taking into account the change in interest rates and the
creditworthiness of the counter parties.
50
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
10. CABOT ADVISORS
Cabot Advisors is responsible for various activities including management of
Cabot L.P.'s properties and properties on behalf of third parties, as well as
providing other real estate related services for third parties. Total management
fees earned by Cabot Advisors related to Cabot L.P.'s properties are included in
Property Operating Expenses in the accompanying consolidated statements of
operations and amounted to $2,684,000 and $1,037,000 in 1999 and 1998,
respectively.
Summarized unaudited financial information for Cabot Advisors as of December 31,
1999 and 1998 and for the years then ended is as follows:
As of and for the Years Ended
------------------------------------------
December 31, 1999 December 31, 1998
- -------------------------------------------------------------------------------
(unaudited, in thousands)
Total assets ............................ $ 1,426 $ 1,104
Total revenue ........................... $ 5,344 $ 3,281
Net income (loss) ....................... $ (20) $ 244
Company's share of net income (loss) .... $ (19) $ 231
Cabot Advisors commenced operations on February 4, 1998. Its results for the
year ended December 31, 1998 therefore represent activity for 331 days, or
approximately 11 months. Cabot L.P.'s share of Cabot Advisors' net income (loss)
is included in Interest and Other Income in the accompanying consolidated
statements of operations.
11. COMMITMENTS AND CONTINGENCIES
Concentration of Credit Risk
Cabot L.P. maintains its cash and cash equivalents at financial institutions.
The combined account balances at each institution periodically exceed FDIC
insurance coverage and, as a result, there is a concentration of credit risk
related to amounts on deposit in excess of FDIC insurance coverage. Management
of Cabot L.P. believes the risk is not significant.
Environmental
Cabot L.P., as an owner of real estate, is subject to various environmental laws
of federal and local governments. All of Cabot L.P.'s properties were subject to
Phase I Environmental Assessments, which consist of, among other things, a
visual inspection of the property and its neighborhood and a review of pertinent
public records. Compliance by Cabot L.P. with existing laws has not had a
material adverse effect on Cabot L.P.'s consolidated financial condition or
results of operations and management does not believe it will have such a
material adverse effect in the future.
51
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
11. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Litigation
Management of Cabot L.P. does not believe there is any litigation threatened
against it other than routine litigation arising out of the ordinary course of
business, some of which is expected to be covered by liability insurance and
none of which is expected to have a material adverse effect on the consolidated
operating results or financial position of Cabot L.P.
Minimum Future Lease Obligations
Minimum future lease obligations of Cabot L.P. under noncancelable operating
leases for each of the next five years ending December 31 and thereafter are as
follows:
(in thousands)
--------------
2000 ..................................... $ 712
2001 ..................................... 698
2002 ..................................... 50
2003 ..................................... 22
2004 ..................................... 13
Thereafter ............................... --
------
$1,495
======
Cabot L.P. incurred rental expense of $389,000 and $192,000 for the years ended
December 31, 1999 and 1998, respectively. In addition, Cabot Advisors incurred
rental expense of $374,000 and $181,000 for the years ended December 31, 1999
and 1998, respectively. Cabot L.P.'s only significant leases are for its office
space. The leases provide for the payment of base rent and reimbursement of
operating expenses and real estate taxes over stated base amounts.
Employment Agreements
Senior executives have entered into employment agreements with Cabot L.P.
Agreements with three of the senior executives are for an initial term of three
years, and each year the term automatically extends an additional year unless
terminated in advance. Agreements with four other senior executives are for an
initial term of two years and each year the term automatically extends an
additional year unless terminated in advance. Each agreement provides for annual
base compensation in amounts ranging from $182,000 to $300,000 ($1,473,000 in
the aggregate in 1999) and an annual cash bonus to be determined by the
Executive Compensation Committee of Cabot Trust's Board of Trustees. The base
annual compensation may be increased in subsequent years by action of the
Executive Compensation Committee. Each of the employment agreements provides for
severance payments in the event of a change in control of Cabot Trust equal to
three times the sum of the current base salary and the annual bonus paid for the
preceding year and also provides for tax reimbursements in certain
circumstances.
52
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
11. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Severance Agreements
On December 17, 1998, Cabot Trust's Board of Trustees approved a retention and
severance plan covering all full-time employees of Cabot L.P. and their
affiliates not covered by employment agreements which will provide for six to 21
months of compensation to be paid, under certain circumstances, in the event of
a change in control.
As of December 31, 1999, total costs payable under the employment and severance
arrangements covering senior executives and other employees in the event of a
change in control approximated $17.2 million.
12. SUPPLEMENTARY QUARTERLY DATA
<TABLE>
<CAPTION>
March 31, 1999 June 30, 1999 September 30, 1999 December 31, 1999
- -------------------------------------------------------------------------------------------------------------------------------
(unaudited, in thousands, except per unit amounts)
<S> <C> <C> <C> <C>
Rental revenue $ 34,138 $ 37,182 $ 40,840 $ 45,311
Net gain (loss) on sales of real estate -- 3,404 (653) --
Net income 12,013 18,705 15,422 17,547
Net Income Allocable to Partnership Units 12,013 17,724 13,588 14,353
Earnings per unit, basic .28 .41 .31 .33
Earnings per unit, diluted .28 .41 .31 .33
<CAPTION>
March 31, 1998(1) June 30, 1998 September 30, 1998 December 31, 1998
- -------------------------------------------------------------------------------------------------------------------------------
(unaudited, in thousands, except per unit amounts)
<S> <C> <C> <C> <C>
Rental revenue $ 14,733 $ 26,159 $ 28,417 $ 33,116
Net gain on sale of real estate -- -- -- 572
Net income 8,126 14,242 14,055 14,535
Net Income Allocable to Partnership Units 8,126 14,242 14,055 14,535
Earnings per unit, basic .19 .33 .32 .33
Earnings per unit, diluted .19 .33 .32 .33
</TABLE>
(1) Since Cabot L.P. did not begin operations until February 4, 1998, the
results for the quarter ended March 31, 1998, represent activity for 56
days.
53
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 1999
13. SUBSEQUENT EVENTS
Subsequent to December 31, 1999, Cabot L.P. acquired the following industrial
properties, which acquisitions were funded primarily through proceeds from the
Acquisition Facility:
<TABLE>
<CAPTION>
Property Location Number and Type of Building Square Feet Acquisition Cost
- ----------------- --------------------------- ----------- ----------------
(in thousands)
<S> <C> <C> <C>
Phoenix, AZ Five Workspace 109,568 $ 9,000
Harrisburg, PA One Bulk Distribution 186,000 $ 7,300
Atlanta, GA One Bulk Distribution 180,000 $21,000
Two Multitenant Distribution 213,537
One Workspace 40,000
Atlanta, GA Four Multitenant Distribution 636,442 $20,300
</TABLE>
In addition, as of February 29, 2000, Cabot L.P. entered into separate
agreements to acquire seven additional industrial properties with an estimated
acquisition cost of $41 million.
54
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
North 104th Avenue 1 Tolleson, AZ $ -- $ 651 $ 6,476 $ -- $ 5
North 47th Avenue 1 Phoenix, AZ -- 471 3,675 -- 1
South 55th Avenue 1 Phoenix, AZ -- 334 1,953 149 222
South 63rd Avenue 1 Phoenix, AZ -- 528 4,471 -- 0
South 84th Avenue 1 Tolleson, AZ -- 553 6,067 -- 0
West Van Buren 1 Tolleson, AZ 4,834 475 6,224 -- 3
South 41st Avenue 2 Phoenix, AZ 8,338 1,261 10,988 -- 32
South 49th Avenue 1 Phoenix, AZ -- 787 3,069 -- 2
North 103rd Street 1 Phoenix, AZ -- 773 6,415 -- 0
44th Avenue 1 Phoenix, AZ 2,962 575 3,629 -- 106
South 9th Street 1 Phoenix, AZ 2,943 1,394 5,709 -- 1
South 39th Avenue 1 Phoenix, AZ 4,597 550 7,606 -- 2
South 40th Avenue 2 Phoenix, AZ 3,608 1,036 7,010 -- 2
South 53rd Avenue 1 Phoenix, AZ 2,358 226 3,667 -- 2
South 40th Avenue, Building 3 1 Phoenix, AZ -- 1,131 5,680 -- 1
East Encanto Drive 1 Tempe, AZ 850 460 2,906 -- 0
South Priest Drive 1 Tempe, AZ 2,729 813 3,140 -- 148
West Alameda Drive 4 Tempe, AZ 4,351 1,000 4,572 -- 12
East Watkins Street 1 Phoenix, AZ -- 3,707 5,574 -- 0
South 16th Street 1 Phoenix, AZ -- 0 7,598 -- 0
Deforest Circle 1 Mira Loma, CA -- 1,870 7,794 -- 150
Santa Anita Avenue 1 Rancho Cucamonga, CA -- 1,641 6,093 -- 0
East Jurupa Street 1 Ontario, CA -- 1,256 2,702 -- 169
South Rockefeller Avenue 1 Ontario, CA -- 1,259 4,249 -- 1
South Vintage Avenue 2 Ontario, CA -- 4,026 12,031 -- 23
Vintage Avenue 1 Ontario, CA -- 2,139 7,224 -- 0
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
North 104th Avenue $ 651 $ 6,481 $ 7,132 $ (308) 1995 02/04/98 10 - 40
North 47th Avenue 471 3,676 4,147 (187) 1986 02/04/98 10 - 40
South 55th Avenue 483 2,175 2,658 (96) 1986 02/04/98 10 - 40
South 63rd Avenue 528 4,471 4,999 (214) 1990 02/04/98 10 - 40
South 84th Avenue 553 6,067 6,620 (292) 1989 02/04/98 10 - 40
West Van Buren 475 6,227 6,702 (279) 1997 03/16/98 10 - 40
South 41st Avenue 1,261 11,020 12,281 (349) 1985/1989 09/22/98 10 - 40
South 49th Avenue 787 3,071 3,858 (99) 1989 09/22/98 10 - 40
North 103rd Street 773 6,415 7,188 (141) 1999 02/15/99 10 - 40
44th Avenue 575 3,735 4,310 (170) 1997 03/16/98 10 - 40
South 9th Street 1,394 5,710 7,104 (196) 1983 06/30/98 10 - 40
South 39th Avenue 550 7,608 8,158 (241) 1989 09/22/98 10 - 40
South 40th Avenue 1,036 7,012 8,048 (233) 1989/1990 09/22/98 10 - 40
South 53rd Avenue 226 3,669 3,895 (125) 1987 09/22/98 10 - 40
South 40th Avenue, Building 3 1,131 5,681 6,812 (153) 1987 12/29/98 10 - 40
East Encanto Drive 460 2,906 3,366 (129) 1990 03/17/98 10 - 40
South Priest Drive 813 3,288 4,101 (105) 1998 09/21/98 10 - 40
West Alameda Drive 1,000 4,584 5,584 (137) 1984 09/21/98 10 - 40
East Watkins Street 3,707 5,574 9,281 0 1998 12/23/99 10 - 40
South 16th Street 0 7,598 7,598 0 1998 12/22/99 10 - 40
Deforest Circle 1,870 7,944 9,814 (365) 1992 02/06/98 10 - 40
Santa Anita Avenue 1,641 6,093 7,734 (301) 1988 02/04/98 10 - 40
East Jurupa Street 1,256 2,871 4,127 (156) 1986 02/04/98 10 - 40
South Rockefeller Avenue 1,259 4,250 5,509 (215) 1986 02/04/98 10 - 40
South Vintage Avenue 4,026 12,054 16,080 (641) 1986 02/04/98 10 - 40
Vintage Avenue 2,139 7,224 9,363 (350) 1988 02/04/98 10 - 40
</TABLE>
55
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
San Fernando Road 1 Sun Valley, CA 6,486 2,612 7,118 -- 29
Rowland Street 1 City of Industry, CA -- 2,000 6,102 -- 764
Dahlia Street 1 Fontana, CA -- 2,318 7,604 -- 0
East Easy Street 1 Simi Valley, CA -- 4,751 8,251 -- 0
East Dyer Road 1 Santa Ana, CA -- 8,160 6,172 -- (53)
Parco Street 1 Ontario, CA -- 658 2,224 -- 0
Industry Circle 1 La Mirada, CA 2,986 1,802 3,325 -- 10
East Santa Ana Street 2 Ontario, CA 3,793 1,230 5,190 -- 7
Jersey Court 1 Rancho Cucamonga, CA 2,063 736 2,420 -- 8
12th Street 1 Chino, CA 2,778 889 3,170 -- 11
West Rincon Street 1 Corona, CA -- 1,955 6,318 -- 2
Tyburn Street 1 Los Angeles, CA -- 2,628 3,239 -- 0
E. Vista Bella Way 1 Rancho Dominguez, CA -- 1,183 3,297 -- 0
W. Manville Street 1 Rancho Dominguez, CA -- 1,347 3,187 -- 0
Alondra Blvd 1 La Mirada, CA -- 2,002 7,712 -- 0
Artesia Avenue 2 Fullerton, CA -- 1,186 3,208 -- 0
Commonwealth Avenue 1 Fullerton, CA -- 640 1,333 -- 0
East Howell Avenue 2 Anaheim, CA -- 1,382 3,242 -- 0
Kovacs Lane 1 Huntington Beach, CA 5,488 1,750 6,243 -- 8
Anza Drive 3 Valencia, CA -- 588 1,460 -- 0
Royal Avenue 1 Simi Valley, CA -- 443 1,320 -- 2
Union Place 2 Simi Valley, CA -- 915 4,032 -- 7
North San Fernando Road 6 Los Angeles, CA -- 11,796 14,622 -- 7
Lassen Street 1 Chatsworth, CA -- 2,429 4,370 -- 2
E. 166th Street 1 Cerritos, CA -- 780 1,404 -- 0
Shoemaker Avenue 4 Santa Fe Springs, CA -- 1,339 3,488 -- 0
Dornoch Court 1 San Diego, CA -- 1,870 9,030 -- 1
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
San Fernando Road 2,612 7,147 9,759 (315) 1980 04/07/98 10 - 40
Rowland Street 2,000 6,866 8,866 (212) 1998 09/01/98 10 - 40
Dahlia Street 2,318 7,604 9,922 (62) 1989 08/27/99 10 - 40
East Easy Street 4,751 8,251 13,002 (78) 1990 08/27/99 10 - 40
East Dyer Road 8,160 6,119 14,279 (299) 1954/1965 02/04/98 10 - 40
Parco Street 658 2,224 2,882 (36) 1999 08/01/99 10 - 40
Industry Circle 1,802 3,335 5,137 (101) 1966 10/21/98 10 - 40
East Santa Ana Street 1,230 5,197 6,427 (209) 1990 05/20/98 10 - 40
Jersey Court 736 2,428 3,164 (85) 1989 09/30/98 10 - 40
12th Street 889 3,181 4,070 (105) 1990 09/30/98 10 - 40
West Rincon Street 1,955 6,320 8,275 (205) 1986 09/30/98 10 - 40
Tyburn Street 2,628 3,239 5,867 (54) 1965 04/22/99 10 - 40
E. Vista Bella Way 1,183 3,297 4,480 (42) 1973 07/16/99 10 - 40
W. Manville Street 1,347 3,187 4,534 (41) 1980 07/16/99 10 - 40
Alondra Blvd 2,002 7,712 9,714 (61) 1969/1975 08/09/99 10 - 40
Artesia Avenue 1,186 3,208 4,394 (153) 1991 02/04/98 10 - 40
Commonwealth Avenue 640 1,333 1,973 (64) 1965 02/04/98 10 - 40
East Howell Avenue 1,382 3,242 4,624 (155) 1968/1991 02/04/98 10 - 40
Kovacs Lane 1,750 6,251 8,001 (241) 1988 06/17/98 10 - 40
Anza Drive 588 1,460 2,048 (62) 1990 06/29/98 10 - 40
Royal Avenue 443 1,322 1,765 (51) 1988 06/29/98 10 - 40
Union Place 915 4,039 4,954 (158) 1985/1987 06/29/98 10 - 40
North San Fernando Road 11,796 14,629 26,425 (230) 1965-1993 04/22/99 10 - 40
Lassen Street 2,429 4,372 6,801 (46) 1968 08/30/99 10 - 40
E. 166th Street 780 1,404 2,184 (7) 1978 10/19/99 10 - 40
Shoemaker Avenue 1,339 3,488 4,827 0 1989 12/28/99 10 - 40
Dornoch Court 1,870 9,031 10,901 (423) 1988 02/06/98 10 - 40
</TABLE>
56
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Newton Drive 1 Carlsbad, CA -- 4,416 8,560 -- 0
Avenida Encinas 2 Carlsbad, CA -- 3,675 9,900 -- 0
Airway Road 2 Otay Mesa, CA 5,128 1,301 6,460 -- 5
Kellogg Avenue 1 Carlsbad, CA -- 954 2,008 -- 0
Oak Ridge Way 1 Vista, CA -- 1,167 2,914 -- 0
Goldentop Road 1 San Diego, CA -- 2,108 3,341 -- 0
Reed Avenue 2 West Sacramento, CA -- 1,837 5,843 -- 0
McLaughlin Avenue 1 San Jose, CA -- 2,709 5,381 -- 0
Huntwood Avenue 1 Hayward, CA -- 880 3,587 -- 10
Brisbane Industrial Park 14 Brisbane, CA -- 10,007 15,220 -- 660
Pepes Farm Road 1 Milford, CT -- 1,637 6,533 -- 139
Landstreet Road, Building 1 1 Orlando, FL -- 1,340 13,221 -- 35
Kingspointe Parkway 1 Orlando, FL -- 600 2,791 -- 55
Orlando Central Park 6 Orlando, FL -- 7,083 31,176 -- 360
Exchange Drive 1 Orlando, FL 2,563 400 3,270 -- 128
N.W. 70th Avenue 1 Miami, FL -- 3,529 7,671 -- 0
Boggy Creek Road 2 Orlando, FL -- 649 4,939 -- 0
Landstreet Road 2 Orlando, FL -- 649 4,817 -- 3
Boggy Creek Road, Building 3 1 Orlando, FL -- 345 1,802 56 103
Boggy Creek 1 Orlando, FL -- 320 1,705 -- 0
Highway 316 1 Dacula, GA -- 1,279 10,424 -- 13
Westgate Parkway 1 Fulton County, GA -- 1,619 4,782 -- 232
Atlanta Industrial Drive 1 Atlanta, GA 2,927 1,032 2,999 -- 79
Westpark Drive 2 Fulton County, GA -- 1,404 7,065 -- 52
Williams Drive 3 Marietta, GA 4,583 1,223 6,030 -- 20
Cobb International Place 2 Kennesaw, GA -- 750 4,605 -- 10
South Royal Drive 3 Tucker, GA -- 1,125 4,426 -- 12
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Newton Drive 4,416 8,560 12,976 (61) 1999 09/29/99 10 - 40
Avenida Encinas 3,675 9,900 13,575 (472) 1972/1993 02/04/98 10 - 40
Airway Road 1,301 6,465 7,766 (262) 1996 05/08/98 10 - 40
Kellogg Avenue 954 2,008 2,962 (26) 1991 06/01/99 10 - 40
Oak Ridge Way 1,167 2,914 4,081 (39) 1999 06/01/99 10 - 40
Goldentop Road 2,108 3,341 5,449 (26) 1997 09/30/99 10 - 40
Reed Avenue 1,837 5,843 7,680 (279) 1988 02/04/98 10 - 40
McLaughlin Avenue 2,709 5,381 8,090 (46) 1975 08/27/99 10 - 40
Huntwood Avenue 880 3,597 4,477 (176) 1982 02/04/98 10 - 40
Brisbane Industrial Park 10,007 15,880 25,887 (770) 1960-1969 02/04/98 10 - 40
Pepes Farm Road 1,637 6,672 8,309 (314) 1980 02/04/98 10 - 40
Landstreet Road, Building 1 1,340 13,256 14,596 (631) 1997 02/04/98 10 - 40
Kingspointe Parkway 600 2,846 3,446 (134) 1991 02/04/98 10 - 40
Orlando Central Park 7,083 31,536 38,619 (1,545) 1983-1991 02/04/98 10 - 40
Exchange Drive 400 3,398 3,798 (121) 1979 07/30/98 10 - 40
N.W. 70th Avenue 3,529 7,671 11,200 (55) 1977 08/09/99 10 - 40
Boggy Creek Road 649 4,939 5,588 (235) 1992/1996 02/13/98 10 - 40
Landstreet Road 649 4,820 5,469 (223) 1996/1997 02/13/98 10 - 40
Boggy Creek Road, Building 3 401 1,905 2,306 (45) 1998 12/31/98 10 - 40
Boggy Creek 320 1,705 2,025 (35) 1999 03/01/99 10 - 40
Highway 316 1,279 10,437 11,716 (489) 1989 02/06/98 10 - 40
Westgate Parkway 1,619 5,014 6,633 (235) 1988 02/04/98 10 - 40
Atlanta Industrial Drive 1,032 3,078 4,110 (119) 1986 09/11/98 10 - 40
Westpark Drive 1,404 7,117 8,521 (296) 1981 09/08/98 10 - 40
Williams Drive 1,223 6,050 7,273 (82) 1987 06/29/99 10 - 40
Cobb International Place 750 4,615 5,365 (206) 1996 03/13/98 10 - 40
South Royal Drive 1,125 4,438 5,563 (176) 1987-1989 02/27/98 10 - 40
</TABLE>
57
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Town Park Drive 2 Kennesaw, GA 4,341 1,089 4,716 -- 3
Highlands Parkway 1 Smyrna, GA -- 2,584 7,787 -- 0
Ambassador Road 1 Naperville, IL -- 1,060 6,725 -- 0
Arthur Avenue 1 Elk Grove, IL -- 747 5,877 -- 0
Harvester Drive 1 Chicago, IL -- 763 6,358 -- 0
Mark Street 1 Wood Dale, IL -- 1,570 7,541 -- 0
Remington Street 1 Bolingbrook, IL -- 980 7,542 -- 0
West 73rd Street 3 Bedford Park, IL -- 2,540 20,809 -- 29
North Raddant Road 1 Batavia, IL -- 931 5,977 -- (43)
Crossroads Parkway 1 Bolingbrook, IL -- 2,048 8,839 -- 2
South Frontenac 1 Naperville, IL -- 890 5,350 -- 0
High Grove Lane 1 Naperville, IL -- 800 3,156 -- 0
Medinah Road 2 Chicago, IL -- 2,936 17,471 -- 0
Western Avenue 1 Lisle, IL -- 700 2,241 -- 0
Swenson Avenue 1 St. Charles, IL -- 650 2,479 -- 0
South 78th Avenue 1 Hickory Hills, IL -- 470 2,709 -- 0
Greenleaf Avenue 1 Elk Grove Village, IL -- 1,409 4,960 -- 0
Feehanville Drive 1 Mount Prospect, IL 3,256 1,043 3,819 -- 0
Business Center, Building 1 1 Mount Prospect, IL 2,460 757 2,867 -- 0
Tower Lane 1 Bensenville, IL 3,280 740 4,040 -- 7
Business Center, Building 2 1 Mount Prospect, IL -- 1,456 5,250 -- 20
Penny Lane 2 Schaumburg, IL -- 579 1,629 -- 0
Remington Boulevard 1 Bolingbrook, IL -- 505 2,053 -- 0
Territorial Drive, Building 2 1 Bolingbrook, IL -- 567 2,844 -- 0
Northpoint Court 1 Bolingbrook, IL -- 289 1,449 -- 0
Territorial Drive, Building 1 1 Bolingbrook, IL -- 569 2,605 -- 0
Beeline Drive & Meyer Road 1 Bensenville, IL -- 1,046 2,833 -- 0
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Town Park Drive 1,089 4,719 5,808 (192) 1995 03/31/98 10 - 40
Highlands Parkway 2,584 7,787 10,371 0 1997 11/09/99 10 - 40
Ambassador Road 1,060 6,725 7,785 (321) 1996 02/04/98 10 - 40
Arthur Avenue 747 5,877 6,624 (253) 1978 02/04/98 10 - 40
Harvester Drive 763 6,358 7,121 (304) 1974 02/04/98 10 - 40
Mark Street 1,570 7,541 9,111 (335) 1985 02/04/98 10 - 40
Remington Street 980 7,542 8,522 (359) 1996 02/04/98 10 - 40
West 73rd Street 2,540 20,838 23,378 (956) 1979-1986 02/04/98 10 - 40
North Raddant Road 931 5,934 6,865 (206) 1991 08/31/98 10 - 40
Crossroads Parkway 2,048 8,841 10,889 (65) 1995 09/23/99 10 - 40
South Frontenac 890 5,350 6,240 (27) 1975 10/22/99 10 - 40
High Grove Lane 800 3,156 3,956 (150) 1994 02/04/98 10 - 40
Medinah Road 2,936 17,471 20,407 (834) 1986 02/04/98 10 - 40
Western Avenue 700 2,241 2,941 (107) 1979/1985 02/04/98 10 - 40
Swenson Avenue 650 2,479 3,129 (80) 1988 09/24/98 10 - 40
South 78th Avenue 470 2,709 3,179 (27) 1981 08/25/99 10 - 40
Greenleaf Avenue 1,409 4,960 6,369 (38) 1968/1995 09/30/99 10 - 40
Feehanville Drive 1,043 3,819 4,862 (169) 1987 03/31/98 10 - 40
Business Center, Building 1 757 2,867 3,624 (115) 1985 05/26/98 10 - 40
Tower Lane 740 4,047 4,787 (156) 1977 07/14/98 10 - 40
Business Center, Building 2 1,456 5,270 6,726 (159) 1989 10/16/98 10 - 40
Penny Lane 579 1,629 2,208 (22) 1988 05/25/99 10 - 40
Remington Boulevard 505 2,053 2,558 (11) 1996 10/12/99 10 - 40
Territorial Drive, Building 2 567 2,844 3,411 (14) 1998 10/12/99 10 - 40
Northpoint Court 289 1,449 1,738 (7) 1998 10/12/99 10 - 40
Territorial Drive, Building 1 569 2,605 3,174 (13) 1998 10/12/99 10 - 40
Beeline Drive & Meyer Road 1,046 2,833 3,879 (11) 1968 11/08/99 10 - 40
</TABLE>
58
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kingsland Drive 1 Batavia, IL -- 291 1,775 -- 0
North State Road #9 1 Howe, IN -- 239 6,583 -- 0
Rudolph Way 1 Greendale, IN -- 210 803 -- 0
Holton Drive 1 Independence, KY -- 2,100 8,244 -- 25
International Way 1 Hebron, KY -- 663 4,897 -- 72
Empire Drive, Building 3 1 Florence, KY -- 403 2,563 -- 0
Spiral Drive 2 Florence, KY -- 317 3,734 -- 2
Airport Exchange Drive 1 Erlanger, KY 3,015 744 3,769 -- 1
Foundation Drive 8 Elsmere, KY -- 1,407 5,763 -- 22
Kentucky Drive 1 Florence, KY 2,246 848 4,542 -- 1
Power Line Drive 1 Elsmere, KY -- 69 267 -- 0
Empire Drive 2 Florence, KY -- 938 2,786 -- 0
Jamike Drive 7 Erlanger, KY -- 1,656 6,055 -- 8
Turfway Road 3 Erlanger, KY 2,607 1,083 3,870 -- 0
Kenwood Circle 1 Franklin, MA -- 920 5,020 -- 2
Progress Road 2 Billerica, MA -- 1,147 4,522 -- 4
Sunnyslope Avenue 1 Tewksbury, MA -- 705 5,535 -- 2
South Street 1 Hopkinton, MA -- 636 2,015 -- 2
John Hancock Road 1 Taunton, MA 1,455 257 1,872 -- 2
Technology Drive 1 Auburn, MA -- 663 1,269 -- 17
Oceano Avenue 1 Jessup, MD -- 1,629 7,862 -- 1
Tar Bay Drive 1 Jessup, MD -- 1,415 6,475 -- 1
Port Capital Drive 1 Jessup, MD 1,066 900 4,106 -- 36
Greenwood Place 1 Savage, MD -- 533 2,453 -- 2
Bollman Place 1 Savage, MD -- 1,079 3,916 -- 2
Stayton Drive 1 Jessup, MD -- 1,149 4,123 -- 2
The Crysen Center 2 Jessup, MD -- 1,365 5,454 -- 27
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Kingsland Drive 291 1,775 2,066 (5) 1990 11/08/99 10 - 40
North State Road #9 239 6,583 6,822 (316) 1988 02/04/98 10 - 40
Rudolph Way 210 803 1,013 (18) 1990 03/11/99 10 - 40
Holton Drive 2,100 8,269 10,369 (394) 1996 02/04/98 10 - 40
International Way 663 4,969 5,632 (234) 1990 02/04/98 10 - 40
Empire Drive, Building 3 403 2,563 2,966 (126) 1991 02/04/98 10 - 40
Spiral Drive 317 3,736 4,053 (160) 1988/1989 03/19/98 10 - 40
Airport Exchange Drive 744 3,770 4,514 (122) 1997 09/18/98 10 - 40
Foundation Drive 1,407 5,785 7,192 (96) 1983-1990 03/11/99 10 - 40
Kentucky Drive 848 4,543 5,391 (86) 1991 03/11/99 10 - 40
Power Line Drive 69 267 336 (5) 1994 03/11/99 10 - 40
Empire Drive 938 2,786 3,724 (51) 1990 03/11/99 10 - 40
Jamike Drive 1,656 6,063 7,719 (126) 1985-1988 03/11/99 10 - 40
Turfway Road 1,083 3,870 4,953 (73) 1990-1996 03/11/99 10 - 40
Kenwood Circle 920 5,022 5,942 (74) 1987 05/25/99 10 - 40
Progress Road 1,147 4,526 5,673 (74) 1988 05/07/99 10 - 40
Sunnyslope Avenue 705 5,537 6,242 (78) 1987 05/07/99 10 - 40
South Street 636 2,017 2,653 (33) 1987 05/07/99 10 - 40
John Hancock Road 257 1,874 2,131 (89) 1986 02/04/98 10 - 40
Technology Drive 663 1,286 1,949 (61) 1973 02/04/98 10 - 40
Oceano Avenue 1,629 7,863 9,492 (375) 1987 02/04/98 10 - 40
Tar Bay Drive 1,415 6,476 7,891 (309) 1990 02/04/98 10 - 40
Port Capital Drive 900 4,142 5,042 (145) 1974 08/06/98 10 - 40
Greenwood Place 533 2,455 2,988 (53) 1985 03/11/99 10 - 40
Bollman Place 1,079 3,918 4,997 (72) 1985 03/11/99 10 - 40
Stayton Drive 1,149 4,125 5,274 (86) 1985 03/11/99 10 - 40
The Crysen Center 1,365 5,481 6,846 (252) 1985 02/04/98 10 - 40
</TABLE>
59
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Guilford Road 1 Annapolis Junction, MD -- 1,123 4,718 -- 20
Bristol Court, Building 1 1 Jessup, MD -- 785 3,132 -- 24
West Nursery Road 2 Linthicum, MD 3,348 1,019 6,749 -- 41
Fontana Lane 2 Baltimore, MD 4,496 915 5,771 -- 45
Bristol Court, Building 2 1 Jessup, MD -- 561 2,194 -- 1
Sysco Court 1 Grand Rapids, MI 1,877 354 1,788 -- 0
Woodale Drive 4 Mounds View, MN 11,797 2,835 17,455 -- 4
Trenton Lane 1 Plymouth, MN 3,412 1,440 4,497 -- 0
Lexington Avenue 1 Eagan, MN 3,678 1,207 4,454 -- 0
Cahill Road 1 Edina, MN 1,248 665 2,000 -- 0
Monticello Lane 1 Maple Grove, MN 994 278 1,416 -- 0
West 82nd Street 1 Bloomington, MN -- 1,215 3,340 -- 0
Industrial Drive South 1 Gluckstadt, MS -- 320 5,697 -- 0
Reames Road 1 Charlotte, NC -- 365 2,922 -- 53
Cordage Street 1 Charlotte, NC -- 562 2,223 -- 1
Old Charlotte Highway 1 Monroe, NC -- 833 4,196 -- 0
Airport Road 1 Monroe, NC -- 555 2,793 -- 0
Woodpark Blvd 3 Charlotte, NC -- 803 4,503 -- 26
Commerce Blvd 1 Charlotte, NC -- 416 2,181 -- 3
N. I-85 Service Road 1 Charlotte, NC -- 351 1,998 -- 3
Westinghouse Blvd 4 Charlotte, NC 2,186 2,606 17,592 -- 0
Birch Creek Road 1 Bridgeport, NJ -- 862 6,900 -- 2
Herrod Boulevard 1 South Brunswick, NJ -- 2,600 15,289 -- 2
Pierce Street 1 Franklin Township, NJ -- 1,400 6,716 -- 3
Colony Road 2 Jersey City, NJ -- 2,816 10,266 -- 14
Industrial Drive 3 Port Jersey, NJ -- 3,024 13,298 -- 5
Port Jersey Boulevard 2 Port Jersey, NJ -- 5,493 18,974 -- 162
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Guilford Road 1,123 4,738 5,861 (169) 1989 08/03/98 10 - 40
Bristol Court, Building 1 785 3,156 3,941 (115) 1988 08/03/98 10 - 40
West Nursery Road 1,019 6,790 7,809 (220) 1989 08/03/98 10 - 40
Fontana Lane 915 5,816 6,731 (202) 1988 08/03/98 10 - 40
Bristol Court, Building 2 561 2,195 2,756 (30) 1986 06/01/99 10 - 40
Sysco Court 354 1,788 2,142 (85) 1985 02/04/98 10 - 40
Woodale Drive 2,835 17,459 20,294 (783) 1989-1992 03/31/98 10 - 40
Trenton Lane 1,440 4,497 5,937 (100) 1994 03/30/99 10 - 40
Lexington Avenue 1,207 4,454 5,661 (96) 1979/1994 03/30/99 10 - 40
Cahill Road 665 2,000 2,665 (47) 1979 03/30/99 10 - 40
Monticello Lane 278 1,416 1,694 (30) 1986 03/30/99 10 - 40
West 82nd Street 1,215 3,340 4,555 0 1967 09/10/99 10 - 40
Industrial Drive South 320 5,697 6,017 (273) 1988 02/04/98 10 - 40
Reames Road 365 2,975 3,340 (140) 1994 02/04/98 10 - 40
Cordage Street 562 2,224 2,786 (15) 1981 09/24/99 10 - 40
Old Charlotte Highway 833 4,196 5,029 (201) 1957/1972 02/04/98 10 - 40
Airport Road 555 2,793 3,348 (134) 1957/1972 02/04/98 10 - 40
Woodpark Blvd 803 4,529 5,332 (73) 1985-1987 06/23/99 10 - 40
Commerce Blvd 416 2,184 2,600 (36) 1988 06/23/99 10 - 40
N. I-85 Service Road 351 2,001 2,352 (32) 1988 06/23/99 10 - 40
Westinghouse Blvd 2,606 17,592 20,198 (222) 1988-1994 08/17/99 10 - 40
Birch Creek Road 862 6,902 7,764 (348) 1991/1997 02/04/98 10 - 40
Herrod Boulevard 2,600 15,291 17,891 (731) 1989 02/04/98 10 - 40
Pierce Street 1,400 6,719 8,119 (323) 1984 02/04/98 10 - 40
Colony Road 2,816 10,280 13,096 (497) 1974/1976 02/04/98 10 - 40
Industrial Drive 3,024 13,303 16,327 (642) 1972-1976 02/04/98 10 - 40
Port Jersey Boulevard 5,493 19,136 24,629 (983) 1974/1982 02/04/98 10 - 40
</TABLE>
60
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
South Middlesex Avenue 2 Cranbury, NJ -- 2,700 12,532 -- 22
Memorial Drive 1 Franklin Township, NJ -- 1,859 4,844 -- 115
New England Avenue 1 Piscataway, NJ 2,621 1,350 2,423 -- 76
Westbelt Drive 2 Columbus, OH -- 1,849 12,301 -- 43
Dividend Drive 1 Columbus, OH -- 449 3,712 -- 6
International Street 1 Columbus, OH -- 517 2,657 -- 1
Port Road 2 Franklin County, OH -- 1,402 10,085 -- 191
Twin Creek Drive 1 Columbus, OH -- 702 3,416 -- 41
Equity Drive 2 Columbus, OH -- 1,854 7,301 -- 281
Alum Creek Road 1 Columbus, OH -- 331 1,278 -- 1
International Road 2 Cincinnati, OH -- 2,041 9,833 -- 0
Kingsley Drive 2 Cincinnati, OH 7,944 2,766 9,519 1 31
Lake Forest Drive 2 Blue Ash, OH -- 2,320 9,482 -- 196
Kenwood Road 7 Blue Ash, OH -- 2,978 11,712 -- 0
Creek Road 1 Blue Ash, OH -- 902 2,790 -- 74
Commerce Boulevard 1 Loveland, OH -- 393 1,215 -- 0
Brackbill Blvd 2 Mechanicsburg, PA 6,456 3,722 14,226 -- 1
Cumberland Parkway 1 Harrisburg, PA -- 1,851 11,317 -- 15
Ritter Road 1 Mechanicsburg, PA 1,368 332 1,934 -- 1
Marine Drive 1 Rock Hill, SC -- 1,290 12,866 -- 0
Pilot Drive 1 Memphis, TN -- 1,364 6,231 -- 112
DFW Trade Center 3 Grapevine, TX -- 5,273 45,755 -- 127
Luna Road 1 Carrollton, TX -- 1,020 6,097 -- 0
Patriot Drive 2 Coppell, TX -- 2,264 15,207 -- 0
113th Street 1 Arlington, TX -- 506 2,055 -- 0
Airline Drive 2 Coppell, TX -- 1,012 5,999 -- 0
North Lake Drive 1 Coppell, TX -- 1,165 4,914 -- 0
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
South Middlesex Avenue 2,700 12,554 15,254 (607) 1982/1989 02/04/98 10 - 40
Memorial Drive 1,859 4,959 6,818 (247) 1988 02/04/98 10 - 40
New England Avenue 1,350 2,499 3,849 (99) 1975/1995 06/26/98 10 - 40
Westbelt Drive 1,849 12,344 14,193 (592) 1979/1980 02/04/98 10 - 40
Dividend Drive 449 3,718 4,167 (190) 1980 02/04/98 10 - 40
International Street 517 2,658 3,175 (127) 1988 02/04/98 10 - 40
Port Road 1,402 10,276 11,678 (493) 1995 02/04/98 10 - 40
Twin Creek Drive 702 3,457 4,159 (163) 1989 02/04/98 10 - 40
Equity Drive 1,854 7,582 9,436 (389) 1980 02/04/98 10 - 40
Alum Creek Road 331 1,279 1,610 (21) 1988 03/11/99 10 - 40
International Road 2,041 9,833 11,874 (490) 1990 02/04/98 10 - 40
Kingsley Drive 2,767 9,550 12,317 (378) 1981 06/09/98 10 - 40
Lake Forest Drive 2,320 9,678 11,998 (489) 1978/1979 02/04/98 10 - 40
Kenwood Road 2,978 11,712 14,690 0 1963-1973 12/15/99 10 - 40
Creek Road 902 2,864 3,766 (137) 1983 02/04/98 10 - 40
Commerce Boulevard 393 1,215 1,608 (21) 1989 03/11/99 10 - 40
Brackbill Blvd 3,722 14,227 17,949 (706) 1984/1994 02/17/98 10 - 40
Cumberland Parkway 1,851 11,332 13,183 (531) 1992 02/06/98 10 - 40
Ritter Road 332 1,935 2,267 (91) 1986 02/04/98 10 - 40
Marine Drive 1,290 12,866 14,156 (192) 1997 06/30/99 10 - 40
Pilot Drive 1,364 6,343 7,707 (298) 1987 02/04/98 10 - 40
DFW Trade Center 5,273 45,882 51,155 (2,110) 1996-1997 02/04/98 10 - 40
Luna Road 1,020 6,097 7,117 (291) 1996 02/04/98 10 - 40
Patriot Drive 2,264 15,207 17,471 0 1997 12/28/99 10 - 40
113th Street 506 2,055 2,561 (98) 1979 02/04/98 10 - 40
Airline Drive 1,012 5,999 7,011 (286) 1990/1991 02/04/98 10 - 40
North Lake Drive 1,165 4,914 6,079 (244) 1982 02/04/98 10 - 40
</TABLE>
61
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to
Initial Cost Acquisition
Number ------------------------- ------------------------
of Buildings and Buildings and
Property Name(s) Buildings Location Encumbrances Land Improvements Land Improvements
- ---------------- --------- -------- ------------ ---- ------------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
10th Street 2 Plano, TX 5,543 1,677 6,532 -- 1
Diplomat Drive, Building 2 1 Farmers Branch, TX -- 437 2,840 -- 0
Hillguard Road 3 Dallas, TX -- 1,448 6,011 -- 1
East Plano Parkway 1 Plano, TX -- 1,163 7,903 -- 0
Diplomat Drive, Building 1 1 Farmers Branch, TX -- 110 2,456 -- 0
Bradley Lane 1 Carrollton, TX -- 262 1,941 -- 0
Avenue F 1 Plano, TX -- 653 4,161 -- 0
Shiloh Road 1 Plano, TX -- 594 3,489 -- 0
Oakville Industrial Park 6 Alexandria, VA -- 5,720 13,736 1 393
Nokes Boulevard, Building 1 1 Sterling, VA -- 1,344 4,799 -- 25
Nokes Boulevard, Building 2 1 Sterling, VA -- 1,115 4,886 -- 0
Guilford Road 2 Ashburn, VA 3,736 1,562 5,113 -- 0
Beaumeade Circle 1 Ashburn, VA 3,071 1,208 4,267 -- 0
Kent West Corporate Park II 1 Kent, WA -- 2,528 9,256 -- 58
Kent West Corporate Park I 4 Kent, WA -- 1,549 5,691 -- 26
--- --------- ---------- ---------- ---------- ----------
320 $ 163,866 $ 296,412 $1,205,116 $ 207 $ 6,099
=== ========= ========== ========== ========== ==========
<CAPTION>
Gross Amount Carried
as of December 31, 1999 Date
------------------------ Constructed Depreciable
Buildings and Accumulated or Date Lives
Property Name(s) Land Improvements Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---- ------------ -------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
10th Street 1,677 6,533 8,210 (254) 1997 06/10/98 10 - 40
Diplomat Drive, Building 2 437 2,840 3,277 (68) 1984 01/28/99 10 - 40
Hillguard Road 1,448 6,012 7,460 (63) 1980 09/30/99 10 - 40
East Plano Parkway 1,163 7,903 9,066 0 1998 12/09/99 10 - 40
Diplomat Drive, Building 1 110 2,456 2,566 (117) 1997 02/04/98 10 - 40
Bradley Lane 262 1,941 2,203 (43) 1984 02/25/99 10 - 40
Avenue F 653 4,161 4,814 (46) 1984 07/30/99 10 - 40
Shiloh Road 594 3,489 4,083 0 1998 12/09/99 10 - 40
Oakville Industrial Park 5,721 14,129 19,850 (683) 1940-1955 02/04/98 10 - 40
Nokes Boulevard, Building 1 1,344 4,824 6,168 (120) 1998 12/15/98 10 - 40
Nokes Boulevard, Building 2 1,115 4,886 6,001 (44) 1999 08/27/99 10 - 40
Guilford Road 1,562 5,113 6,675 (28) 1987/1988 10/15/99 10 - 40
Beaumeade Circle 1,208 4,267 5,475 (24) 1990 10/15/99 10 - 40
Kent West Corporate Park II 2,528 9,314 11,842 (444) 1989 02/04/98 10 - 40
Kent West Corporate Park I 1,549 5,717 7,266 (273) 1989 02/04/98 10 - 40
---------- ---------- ---------- ----------
$ 296,619 $1,211,215 $1,507,834 $ (42,543)
========== ========== ========== ==========
</TABLE>
62
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation (continued)
December 31, 1999
Reconciliation of Real Estate
The changes in total investment in real estate assets for the years ended
December 31, 1999 and 1998 are as follows:
December 31, 1999 December 31, 1998
----------------- -----------------
(in thousands) (in thousands)
Balance, Beginning of Year $ 1,072,675 $ --
Acquisitions 443,951 1,077,863
Improvements 5,086 1,220
Dispositions (13,878) (6,408)
----------- -----------
Balance, End of Year $ 1,507,834 $ 1,072,675
=========== ===========
Reconciliation of Accumulated Depreciation
The changes in accumulated depreciation for the years ended December 31, 1999
and 1998 are as follows:
December 31, 1999 December 31, 1998
----------------- -----------------
(in thousands) (in thousands)
Balance, Beginning of Year $ 17,290 $ --
Depreciation Expense 25,677 17,396
Dispositions (424) (106)
-------- --------
Balance, End of Year $ 42,543 $ 17,290
======== ========
63
<PAGE>
Report of Independent Public Accountants
To the Partners of
Cabot Partners Limited Partnership:
We have audited the accompanying balance sheets of Cabot Partners Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the management of the
Partnership. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cabot Partners Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Boston, Massachusetts ARTHUR ANDERSEN LLP
March 27, 1998
64
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
As of December 31,
------------------
1997 1996
------ ------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 509 $1,709
Accounts receivable 2,689 1,637
Accounts receivable from related party 1,225 --
Investments 39 836
Cost of investment advisory contracts acquired, net of accumulated
amortization of $824 and $2,425, respectively 780 1,729
OTHER ASSETS 97 164
------ ------
TOTAL ASSETS $5,339 $6,075
====== ======
LIABILITIES AND PARTNERS' CAPITAL:
Accrued compensation $ 373 $ 385
Accounts payable and accrued liabilities 387 100
------ ------
760 485
------ ------
COMMITMENTS (NOTE 4)
PARTNERS' CAPITAL: 4,579 5,590
------ ------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $5,339 $6,075
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
65
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
For the Years Ended
-------------------------------------
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
REVENUES:
Advisory fees $ 9,010 $ 7,871
Other income 70 37
------- -------
9,080 7,908
------- -------
EXPENSES:
Compensation 4,685 3,887
Other general and administrative 2,360 2,001
Depreciation and amortization 977 419
------- -------
Total Expenses 8,022 6,307
------- -------
Income before income (loss) from
unconsolidated subsidiary 1,058 1,601
Equity in income (loss) from unconsolidated
subsidiary -- (7)
------- -------
Net income $ 1,058 $ 1,594
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
66
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL
For the Years Ended December 31, 1997 and 1996
(in thousands)
<TABLE>
<CAPTION>
Total
General Limited Partners Partners'
Partner Class A Class B Capital
------- ------- ------- -------
<S> <C> <C> <C> <C>
Partners' Capital, December 31, 1995 $ -- $ 5,065 $ -- $ 5,065
Net income for the year ended December 31, 1996 10 1,194 390 1,594
Distributions -- (1,069) -- (1,069)
------- ------- ------- -------
Partners' Capital, December 31, 1996 10 5,190 390 5,590
Net income for the year ended December 31, 1997 -- 1,058 -- 1,058
Distributions (10) (1,669) (390) (2,069)
------- ------- ------- -------
Partners' Capital, December 31, 1997 $ -- $ 4,579 $ -- $ 4,579
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
67
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the Years Ended
-------------------------------------
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,058 $ 1,594
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 977 419
Unrealized equity in loss of investment -- 7
(Increase) in accounts receivable (1,052) (695)
Increase (Decrease) in accrued liabilities 37 (70)
Decrease in accounts payable (5) (9)
Decrease in other assets 47 37
------- -------
Net cash provided by operating activities 1,062 1,283
------- -------
INVESTING ACTIVITIES:
Increase in accounts receivable from related party (984) --
Dividends received 797 183
Purchase of furniture, fixtures and equipment (6) (50)
Additional cost-basis investments -- (20)
------- -------
Net cash provided (used in) by investing activities (193) 113
------- -------
FINANCING ACTIVITIES:
Distributions to partners (2,069) (1,069)
------- -------
Net (decrease) increase in cash and cash equivalents (1,200) 327
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 1,709 1,382
------- -------
CASH AND CASH EQUIVALENTS - END OF YEAR $ 509 $ 1,709
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
68
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(dollars in thousands)
1. ORGANIZATION
Cabot Partners Limited Partnership (the Partnership), a Massachusetts limited
partnership, was formed as of July 11, 1990 to provide a variety of real estate
investment advisory and management services, primarily to a small number of
pension and profit-sharing plans and other institutional investors. Eight
investors represented 70% of fee revenues for 1997 and nine investors
represented 77% of fee revenues for 1996.
The Partnership has two classes of limited partners. The Class A limited
partners contributed cash on a disproportionate basis to their ownership
interest and are entitled to a cumulative guaranteed return on their Adjusted
Capital Contributions, as defined, of 10% through December 31, 1995 and 5%
thereafter, payable only out of available cash. In addition, the Class A limited
partners are entitled to a 5% return of their Adjusted Capital Contributions
prior to distributions of available cash to all the partners in accordance with
their ownership interest. As of December 31, 1997, the cumulative unpaid and
unrecognized return was $2,795.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income Taxes
No provision for federal and state income taxes has been recorded relating to
the Partnership, as the partners report their respective shares of the net
taxable income on their individual tax returns. The tax basis of assets and
liabilities does not significantly differ from their historical cost basis.
Furniture, Fixtures and Equipment
Furniture and equipment additions are recorded at cost and are depreciated over
an estimated useful life of five years. Fixtures include leasehold improvements
that are recorded at cost and amortized over the shorter of their useful life or
the remaining lease term.
Cost of Investment Advisory Contracts Acquired
The investment advisory contracts acquired are recorded at their fair market
value at the date of acquisition, based on independent appraisals, and are being
amortized over their estimated lives, which range from eight to 16 years.
Allocation of Profits and Losses
Income and losses have been allocated to the partners in accordance with the
provisions of the partnership agreement.
Cash Equivalents
At December 31, 1997, the Partnership had invested excess funds in money market
mutual funds, which have an original maturity of less than three months. For
purposes of the statement of cash flows, this investment has been considered a
cash equivalent.
69
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
(dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
The carrying amounts reported on the accompanying balance sheets for cash and
cash equivalents, receivables, accounts payable and accrued expenses approximate
fair value, due to the short-term nature of these investments.
3. INVESTMENTS
The Partnership owns a 1% managing general partnership interest in a real estate
operating company, CP Private Partners, L.P.-I (Private Partners), and accounts
for this investment under the equity method. Under this method of accounting,
the Partnership's pro rata share of Private Partners' income (loss) is recorded
each year as an increase (decrease) in the carrying value of its investment and
any distributions received are recorded as decreases in the carrying value.
The condensed unaudited historical cost balance sheets of Private Partners at
December 31, 1997 and 1996 is as follows:
As of December 31,
---------------------
1997 1996
------- -------
Assets
Cash and cash equivalents $ 576 $ 186
Real estate assets, net 3,140 58,776
Other assets 179 18,203
------- -------
Total Assets $ 3,895 $77,165
======= =======
Liabilities and Partners' Capital
Accounts payable and accrued liabilities $ 29 $ 453
Partners' Capital
The Partnership 39 767
Other Partners 3,827 75,945
------- -------
Total Partners' Capital 3,866 76,712
------- -------
Total Liabilities and Partners' Capital $ 3,895 $77,165
======= =======
70
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
(dollars in thousands)
3. INVESTMENTS (CONTINUED)
The condensed unaudited historical cost income statements of Private Partners
for the years ended December 31, 1997 and 1996 are as follows:
Years ended
December 31,
1997 1996
-------- --------
Sale of real estate assets $ 60,268 $ 20,817
Rental revenues 6,448 11,726
Cost of real estate sold (51,728) (20,411)
Note receivable reduction (2,078) (7,688)
Operating expenses (1,213) (5,163)
Write down of real estate to net realizable value (4,860) --
-------- --------
Net income $ 6,837 $ (719)
======== ========
Dividends paid $ 79,683 $ 18,292
======== ========
The Partnership's share of:
Net income $ 68 $ (7)
======== ========
Dividends paid $ 797 $ 183
======== ========
Private Partners' remaining real estate is vacant land that is held for sale. As
of December 31, 1997, its carrying cost has been reduced to its estimated net
realizable value.
4. MINIMUM FUTURE LEASE OBLIGATIONS
Minimum future lease obligations under noncancelable operating leases for each
of the next five years ending December 31 and thereafter are as follows:
1998......................................................... $ 298
1999......................................................... 313
2000......................................................... 325
2001......................................................... 310
Thereafter................................................... --
-------
$ 1,246
=======
The Partnership incurred rental expense of $332 and $304 for the years ended
December 31, 1997 and 1996, respectively. The Partnership's only significant
lease is for its office space. The lease provides for the payment of base rent
and operating expenses and real estate taxes over stated base amounts.
71
<PAGE>
CABOT PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (continued)
(dollars in thousands)
5. RELATED PARTY TRANSACTIONS
Under two separate agreements, the Partnership provides acquisition, asset
management and property management services to a partnership and a company
separately controlled by two Class A limited partners. The agreements are
cancelable by either party with 30 days notice. After a recent amendment, one
agreement provides for annual fixed fees of $158. The other agreement provides
for an acquisition fee of .25% of acquisition cost and an asset management fee
of 5% of net operating income. The Partnership received acquisition fees from
related parties of $345 for the year ended December 31, 1997, and other related
party fees of $287 and $164 for the years ended December 31, 1997 and 1996,
respectively.
As of December 31, 1997, the Partnership had incurred costs related to the
Formation Transactions described below of $1,225, of which $241 is unpaid and
included in accounts payable and accrued expenses. These costs are to be
reimbursed by Cabot Industrial L.P. subsequent to the Formation Transactions.
6. SUBSEQUENT EVENTS
Formation Transactions
Under the provisions of an agreement executed by the Partnership and several
other investors, Cabot Partners contributed its Advisory Contracts and certain
of its other net assets to Cabot Industrial Properties, L.P. (Cabot L.P.), a
subsidiary partnership of Cabot Industrial Trust (Cabot Trust) and received
1,819,587 Units from Cabot L.P. The units are convertible into common shares of
Cabot Trust on a one-to-one basis subject to certain limitations. As of February
4, 1998, the common shares had a fair market value of $20 per share. The
remainder of the Partnership's net assets will be distributed to its partners.
The impact of these proposed transactions is not reflected in the accompanying
financial statements.
The cumulative unpaid and unrecognized return discussed in Note 1 was settled
through these distribution of Units received in conjunction with these
transactions.
Sales of Assets Under Management
Under the terms of the investment advisory agreements, investors have the right
to terminate the Partnership as advisor with 30 days notice. In addition, a
significant portion of the Partnership's assets under management may be
transferred to other advisors or sold as a part of the investor's investment
strategy.
During 1997, all the properties of three portfolios have been sold. These
portfolios accounted for advisory and property management fees of $2,985 and
$3,249 for the years ended December 31, 1997 and 1996, respectively.
72
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Certain information required by Part III is omitted from this Report and is
incorporated herein by reference to parts of the definitive proxy statement of
Cabot Industrial Trust to be filed pursuant to Regulation 14A (the "Proxy
Statement"). Only those sections of the Proxy Statement which specifically
address the Items set forth herein are incorporated by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Cabot L.P. does not have any directors or officers. The information concerning
Cabot Trust's trustees required by this Item is incorporated by reference to the
Proxy Statement under the headings captioned "Election of Trustees" and
"Principal and Management Shareholders".
Cabot L.P. does not have any executive officers. The executive officers of Cabot
Trust and their respective positions, business experience and ages at February
29, 2000, are set forth below. The executive officers serve at the discretion of
the Board of Trustees of Cabot Trust.
Name Age Position
-------------------------------------------------------------------------
Ferdinand Colloredo-Mansfeld(1) 60 Chairman of the Board and Chief
Executive Officer, Trustee
Robert E. Patterson 54 President, Trustee
Franz Colloredo-Mansfeld(1) 37 Senior Vice President and Chief
Financial Officer
Andrew D. Ebbott 44 Senior Vice President - Director
of Acquisitions
Howard B. Hodgson, Jr. 44 Senior Vice President - Director
of Real Estate Operations
Neil E. Waisnor 45 Senior Vice President - Finance,
Treasurer and Secretary
Eugene F. Reilly 38 Senior Vice President - Director
of Development
(1) Messrs. Ferdinand and Franz Colloredo-Mansfeld are father and son.
Business Experience
-------------------
Ferdinand Colloredo-Mansfeld.. Ferdinand Colloredo-Mansfeld has served as our
Chairman of the Board of Trustees and Chief
Executive Officer since our formation in October
1997. Mr. Colloredo-Mansfeld also serves as the
Chairman and Chief Executive Officer of Cabot
Advisors. Mr. Colloredo-Mansfeld served as
Chairman, Chief Executive Officer and Chief
Investment Officer of Cabot Partners Limited
Partnership from 1990 to 1997, having previously
served in the same positions with Cabot, Cabot &
Forbes Realty Advisors, Inc., an affiliate of
Cabot, Cabot & Forbes, since its formation in
1986. Mr. Colloredo-Mansfeld began his real
estate career in 1970 when he joined Cabot, Cabot
& Forbes, a national real estate development,
management and construction firm, becoming its
Chief Financial Officer in 1973, Chief Operating
Officer in 1974 and Chief Executive Officer in
1976, a position he held until his retirement
from that company in 1989. As Chief Executive
Officer, Mr. Colloredo-Mansfeld oversaw the
development and management of approximately $4
billion of commercial properties in twenty
states, including 35 master-planned suburban
business and industrial parks. Mr. Colloredo-
Mansfeld is a graduate of Harvard College and
Harvard Business School. He is a limited partner
in Brown Brothers Harriman & Co. and is a
Director of Raytheon Company and former Director
of Shawmut National Corp. and Data General Corp.
He is a Trustee (former Chairman of the Board of
Trustees) of the Massachusetts General Hospital
and a member of the Board of Directors, Boston
Private Industry Council. Mr. Colloredo-Mansfeld
is the father of Franz Colloredo-Mansfeld, our
Chief Financial Officer.
Robert E. Patterson........... Mr. Patterson has served as our President and a
Trustee since our formation in October 1997. Mr.
Patterson served as Executive Vice President,
Director of Acquisitions and a member of the
Investment Committee of Cabot, Cabot & Forbes
Realty Advisors, Inc. and subsequently, Cabot
Partners Limited Partnership from 1987 to 1997.
Mr. Patterson began his real estate career in
1972 as a lawyer with the firm of Gaston, Snow &
Ely Bartlett. In 1978, he became the first
Executive Director of the Massachusetts
Industrial Finance Agency and remained in that
position until 1983 when he joined the Beal
Companies, a Boston-based real estate
development, management and investment firm as
Senior Vice President. He joined Cabot, Cabot &
Forbes Realty Advisors, Inc. in 1987 to head its
acquisitions group and was a founding partner of
Cabot Partners Limited Partnership upon its
formation as an independent entity in 1990. Mr.
Patterson is a graduate of Harvard College and
Harvard Law School. He is a Trustee of The Putnam
Group of Mutual Funds, a Trustee of the Sea
Education Association, Chairman of the Board of
Trustees of the Joslin Diabetes Center, and a
Director of the Brandywine Trust Company. He is a
member of numerous industry associations,
including the National Association of Real Estate
Investment Trusts and the Urban Land Institute.
Franz Colloredo-Mansfeld...... Franz Colloredo-Mansfeld has been our Chief
Financial Officer since October 1997 and served
as a Senior Vice President of Cabot Partners
Limited Partnership since 1996. He was a Senior
Engagement Manager of McKinsey & Company, Inc.
from 1992 through 1996. He previously worked for
the Deutsche Bank real estate investment group in
1992 and was a Robert Bosch Fellow at the German
Central Bank (Bundesbank) in Frankfurt, Germany
in 1991. He was also an investment banker with
Merrill Lynch & Co. from 1986 through 1989, where
he specialized in mergers and acquisitions. Mr.
Colloredo-Mansfeld is a graduate of Harvard
College and Harvard Business School. He is a
director or trustee of numerous corporate,
professional, and charitable organizations. Mr.
Colloredo-Mansfeld is the son of Ferdinand
Colloredo-Mansfeld, our Chief Executive Officer.
Andrew D. Ebbott.............. Mr. Ebbott has served as our Senior Vice
President, Director of Acquisitions since October
1997. Mr. Ebbott joined Cabot, Cabot & Forbes
Realty Advisors, Inc. in 1988 as Director of
Research and a member of its acquisition
department, becoming a Vice President in 1991 and
a Senior Vice President in 1995 of Cabot Partners
Limited Partnership. Mr. Ebbott is a graduate of
Dartmouth College and the University of Chicago
Business School. He has over 14 years experience
in real estate finance, investment and research
and is a member of the American Institute of
Certified Public Accountants and the National
Association of Real Estate Investment Trusts.
Howard B. Hodgson, Jr......... Mr. Hodgson has been our Senior Vice President,
Director of Real Estate Operations since October
1997 and has served as a Senior Vice President,
Director of Asset Management and Member of the
Investment Committee of Cabot Partners Limited
Partnership from 1992 to October 1997. Mr.
Hodgson began his real estate career in 1979 with
the Boston-based real estate firm of R.M. Bradley
& Co., Inc., becoming the head of its
institutional property management group prior to
joining Cabot, Cabot & Forbes Asset Management
Company in 1991 as a Senior Vice President and
head of its property management group. Mr.
Hodgson is a graduate of Northeastern University.
He is a Trustee and member of the Executive
Committee of the Cambridge Savings Bank and is a
Trustee of Cambridge Financial Group, Inc. He is
a member of the Building Owners and Managers
Association and is a corporate Trustee of the
Trustees of Reservations.
Neil E. Waisnor............... Mr. Waisnor has served as our Senior Vice
President-Finance, Treasurer and Secretary since
October 1997. Mr. Waisnor was a founding partner
of Cabot Partners Limited Partnership, joining as
Vice President and Treasurer in 1990 and becoming
a Senior Vice President and Chief Financial
Officer in 1995. Prior to joining Cabot Partners
Limited Partnership, he was Vice President and
Controller of Cabot, Cabot & Forbes, where he
served in a variety of financial capacities since
1985. He worked for Arthur Andersen & Co. from
1977 until 1985, where he was a senior audit
manager serving real estate and high technology
companies. Mr. Waisnor is a graduate of the
University of Massachuetts at Amherst and is a
member of the American Institute of Certified
Public Accountants and the Massachusetts Society
of Certified Public Accountants.
Eugene F. Reilly.............. Mr. Reilly has been our Senior Vice President-
Director of Development since October 1997. Mr.
Reilly served as Director of Leasing and
Marketing of Cabot Partners Limited Partnership
from 1992 to October 1997, becoming Senior Vice
President in 1996. Mr. Reilly began his real
estate career with the Boston commercial real
estate brokerage firm of Leggat McCall and Werner
in 1983 and subsequently became a leasing broker
with Julien J. Studley, Inc. In 1985, he joined
National Development Corporation where he became
a Senior Vice President prior to joining Cabot
Partners Limited Partnership as a Vice President
in 1992. Mr. Reilly is a graduate of Harvard
College. He is a member of the National
Association of Industrial and Office Parks.
ITEM 11. Executive Compensation
The information required by this Item is incorporated by reference to Cabot
Trust's Proxy Statement under the heading captioned "Executive Compensation."
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this Item is incorporated by reference to Cabot
Trust's Proxy Statement under the heading captioned "Principal and Management
Shareholders."
ITEM 13. Certain Relationships and Related Transactions
The information required by this Item is incorporated by reference to Cabot
Trust's Proxy Statement under the heading captioned "Certain Transactions."
73
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CABOT INDUSTRIAL PROPERTIES, L.P.
---------------------------------
Registrant
By CABOT INDUSTRIAL TRUST
Its general partner
By /s/ Robert E. Patterson
----------------------------
Title: President
----------------------------
Date: March 23, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Title Date
----- ----
<S> <C> <C>
/s/Ferdinand Colloredo-Mansfeld Chairman of the Board and March 23, 2000
- ---------------------------------- Chief Executive Officer
Ferdinand Colloredo-Mansfeld
/s/Robert E. Patterson President and Trustee March 23, 2000
- ----------------------------------
Robert E. Patterson
/s/Franz Colloredo-Mansfeld Senior Vice President and March 23, 2000
- ---------------------------------- Chief Financial Officer
Franz Colloredo-Mansfeld
/s/Neil E. Waisnor Senior Vice President - Finance, March 23, 2000
- ---------------------------------- Treasurer and Secretary
Neil E. Waisnor Chief Accounting Officer
/s/George M. Lovejoy, Jr. Trustee March 23, 2000
- ----------------------------------
George M. Lovejoy, Jr.
/s/Christopher C. Milliken Trustee March 23, 2000
- ----------------------------------
Christopher C. Milliken
/s/Maurice Segall Trustee March 23, 2000
- ----------------------------------
Maurice Segall
/s/W. Nicholas Thorndike Trustee March 23, 2000
- ----------------------------------
W. Nicholas Thorndike
/s/Ronald L. Skates Trustee March 23, 2000
- ----------------------------------
Ronald L. Skates
</TABLE>
74
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report:
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Included in Item 8 hereof.
INDEX TO EXHIBITS
Exhibit
Number Document Description
- ------ --------------------
3.1 Amended and Restated Cabot Trust Declaration of Trust, dated
January 26, 1998. Incorporated by reference to Exhibit 3.1 to
Cabot Trust's Form S-11 Registration Statement (File No.
333-38383); the "Form S-11").
3.2 Amended and Restated Bylaws of Cabot Trust. Incorporated by
reference to Exhibit 2 to Cabot Trust's Current Report on Form
8-K filed on September 16, 1998.
3.3 Second Amended and Restated Agreement of Limited Partnership
Agreement of Cabot L.P., dated February 4, 1998. Incorporated by
reference to Exhibit 3.5 to the Form S-11.
4.1 Contribution Agreement relating to the Capitalization of Cabot
Trust, dated as of October 10, 1997, among Cabot Trust, Cabot
L.P., Cabot Partners and Various Contributors and Title Holding
Entities Identified Therein. Incorporated by reference to Exhibit
4.1 to the Form S-11.
4.2 Form of Indenture by and among Cabot L.P., Cabot Trust and Bank
of New York as trustee. Incorporated by reference to Exhibit 4.11
to Cabot Trust's and Cabot L.P.'s Form S-3 Registration Statement
(File No. 333-71585).
4.3 Form of Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing Statement of Cabot L.P., as
borrower, for the benefit of Teachers Insurance and Annuity
Association of America, as lender, used in connection with
mortgage loans. Incorporated by reference to Exhibit 4.3 to Cabot
Trust's Annual Report on Form 10-K for the year ended December
31, 1998.
4.4 Form of Promissory Note of Cabot L.P., as borrower, in favor of
Teachers Insurance and Annuity Association of America, as lender,
used in connection with mortgage loans. Incorporated by reference
to Exhibit 4.4 to Cabot Trust's Annual Report on Form 10-K for
the year ended December 31, 1998.
4.5 First Amendment to Second Amended and Restated Agreement of
Limited Partnership of Cabot Industrial Properties, L.P., dated
April 29, 1999.
4.6 Articles Supplementary, 1,300,000 Shares of 8.625% Series B
Cumulative Redeemable Preferred Shares, dated April 29, 1999.
4.7 Second Amendment to Second Amended and Restated Agreement of
Limited Partnership of Cabot Industrial Properties, L.P., dated
September 3, 1999.
4.8 Articles Supplementary, 2,600,000 Shares of 8.625% Series C
Cumulative Redeemable Preferred Shares, dated September 3, 1999.
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4.9 Third Amendment to Second Amended and Restated Agreement of
Limited Partnership of Cabot Industrial Properties, L.P., dated
September 27, 1999.
4.10 Articles Supplementary, 200,000 Shares of 8.375% Series D
Cumulative Redeemable Preferred Shares, dated September 27, 1999.
4.11 Fourth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Cabot Industrial Properties, L.P., dated
December 9, 1999.
4.12 Articles Supplementary, 200,000 Shares of 8.375% Series E
Cumulative Redeemable Preferred Shares, dated December 9, 1999.
4.13 Fifth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Cabot Industrial Properties, L.P., dated
December 22, 1999.
4.14 Articles Supplementary, 1,800,000 Shares of 8.5% Series F
Cumulative Redeemable Preferred Shares, dated December 22, 1999.
10.1 Form of Indemnification Agreement between Cabot Trust and the
Trustees. Incorporated by reference to Exhibit 10.1 to the Form
S-11.
10.2 Form of Indemnification Agreement entered into between Cabot
Trust and the officers of Cabot Trust. Incorporated by reference
to Cabot Trust's Form S-11 Registration Statement (File No.
333-61543).
10.3 Form of Registration Rights and Lock-Up Agreement, dated as of
February 4, 1998, between Cabot Trust, the Contributing Investors
and various other persons identified therein (included as Exhibit
B to Exhibit 4.1).
10.4 Form of Registration Rights and Lock-Up Agreement, between Cabot
Trust and Morgan Stanley Asset Management Inc., on behalf of
certain of its institutional investors. Incorporated by reference
to Exhibit 10.3 to the Form S-11.
10.5 Cabot Trust Long-Term Incentive Plan (as Amended and Restated
Effective as of January 26, 1998).
10.6 Amended Employment Agreement between Cabot L.P. and Ferdinand
Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.6 to
Cabot Trust's Annual Report on Form 10-K for the year ended
December 31, 1998.
10.7 Amended Employment Agreement between Cabot L.P. and Robert E.
Patterson. Incorporated by reference to Exhibit 10.7 to Cabot
Trust's Annual Report on Form 10-K for the year ended December
31, 1998.
10.8 Amended Employment Agreement between Cabot L.P. and Franz
Colloredo-Mansfeld. Incorporated by reference to Exhibit 10.8 to
Cabot Trust's Annual Report on Form 10-K for the year ended
December 31, 1998.
10.9 Amended Employment Agreement between Cabot L.P. and Andrew D.
Ebbott. Incorporated by reference to Exhibit 10.9 to Cabot
Trust's Annual Report on Form 10-K for the year ended December
31, 1998.
10.10 Amended Employment Agreement between Cabot L.P. and Howard B.
Hodgson, Jr. Incorporated by reference to Exhibit 10.10 to Cabot
Trust's Annual Report on Form 10-K for the year ended December
31, 1998.
10.11 Amended Employment Agreement between Cabot L.P. and Neil
E.Waisnor. Incorporated by reference to Exhibit 10.11 to Cabot
Trust's Annual Report on Form 10-K for the year ended December
31, 1998.
10.12 Amended Employment Agreement between Cabot L.P. and Eugene F.
Reilly. Incorporated by reference to Exhibit 10.12 to Cabot
Trust's Annual Report on Form 10-K for the year ended December
31, 1998.
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10.13 Revolving Credit Agreement between Cabot L.P. and Morgan Guaranty
Trust Company of New York, dated March 27, 1998. Incorporated by
reference to Exhibit 10.9 to Cabot Trust's Annual Report on Form
10-K for the year ended December 31, 1997.
10.14 Rights Agreement, dated as of June 11, 1998, as amended, between
Cabot Trust and BankBoston, N.A., as Rights Agent, including
Exhibit A thereto (Form of Articles Supplementary relating to
Series A Junior Participating Preferred Shares) and Exhibit B
thereto (Form of Right Certificate). Incorporated by reference to
Exhibit 1 to Cabot Trust's Current Report on Form 8-K dated
September 10, 1998.
10.15 Cabot Trust 1999 Long-Term Incentive Plan.
23.1 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the fourth quarter of 1999.
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Exhibit 4.5
FIRST AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CABOT INDUSTRIAL PROPERTIES, L.P.
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP (this "Amendment") dated as of April 29, 1999, is entered
into by CABOT INDUSTRIAL TRUST, a Maryland real estate investment trust, as
general partner (the "General Partner") of CABOT INDUSTRIAL PROPERTIES, L.P.
(the "Partnership"), for itself and on behalf of the limited partners of the
Partnership, and BELAIR REAL ESTATE CORPORATION ("Belair") and BELCREST REALTY
CORPORATION ("Belcrest").
WHEREAS, Section 4.2(a) of the Second Amended and Restated Agreement
of Limited Partnership of the Partnership (the "Partnership Agreement")
authorizes the General Partner to cause the Partnership to issue additional
Partnership Units in one or more classes or series, with such designations,
preferences and relative, participating, optional or other special rights,
powers and duties as shall be determined by the General Partner, subject to the
provisions of such section; and
WHEREAS, pursuant to the authority granted to the General Partner
pursuant to Sections 4.2(a) and 14.1(b) of the Partnership Agreement, the
General Partner desires to amend the Partnership Agreement (i) to establish a
new class of Partnership Units, the Series B Preferred Units (as hereinafter
defined), and to set forth the designations, rights, powers, preferences and
duties of such Series B Preferred Units, (ii) to issue the Series B Preferred
Units to Belair and Belcrest and admit Belair and Belcrest as Additional Limited
Partners and (iii) to make certain other changes to the Partnership Agreement.
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:
Section 1. Definitions. For purposes of this Amendment, the term
"Parity Preferred Units" shall be used to refer to any class or series of
Partnership Interests of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the Partnership to rank on a parity with
Series B Preferred Units with respect to distributions and rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Partnership. The
term "Priority Return" shall mean, an amount equal to 8.625% per annum,
determined on the basis of a 360 day year of twelve 30 day months, cumulative to
the extent not distributed for any given distribution period pursuant to Section
5.1 of the Partnership Agreement, of the stated
<PAGE>
value of $50 per Series B Preferred Unit, commencing on the date of issuance of
such Series B Preferred Unit. The term "Subsidiary" shall mean with respect to
any person, any corporation, partnership, limited liability company, joint
venture or other entity of which a majority of (i) voting power of the voting
equity securities or (ii) the outstanding equity interests, is owned, directly
or indirectly, by such person. The term "PTP" shall mean a "publicly traded
partnership" within the meaning of Section 7704 of the Code. Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to
them in the Partnership Agreement.
Section 2. Designation and Number. A series of Partnership Units in
the Partnership designated as the "8.625% Series B Cumulative Redeemable
Preferred Units" (the "Series B Preferred Units") is hereby established. The
number of Series B Preferred Units shall be 1,300,000.
Section 3. Distributions. (a) Payment of Distributions. Subject to
the rights of holders of Parity Preferred Units as to the payment of
distributions, pursuant to Section 5.1 of the Partnership Agreement, holders of
Series B Preferred Units shall be entitled to receive, when, as and if declared
by the Partnership acting through the General Partner, out of Available Cash,
cumulative preferential cash distributions at the rate per annum of 8.625% of
the original Capital Contribution per Series B Preferred Unit. In the event that
on or prior to December 31, 1999 (i) the General Partner's senior unsecured debt
shall have an unconditional, published, Standard & Poor's rating of at least
"BBB" and (ii) neither Moody's nor any other rating agency with offices located
in at least five (5) cities in the United States shall have in effect an
unconditional, published, rating of the General Partner's senior unsecured debt
which is lower than its rating for such senior unsecured debt as of the date
hereof, then beginning on the date on which each of such foregoing conditions
are met, the rate per annum shall be 8.50% of the original Capital Contribution
per Series B Preferred Unit, in which case the designation of the Series B
Preferred Units will change accordingly to reflect such new distribution rate;
provided, that, if (y) either Moody's or any other rating agency with offices
located in at least five (5) cities in the United States shall have in effect on
December 31, 1999 an unconditional published rating of the General Partner's
senior unsecured debt which is lower than its rating of such senior unsecured
debt as of the date hereof or (z) a Standard & Poor's rating of at least "BBB"
shall no longer be in effect on December 31, 1999, then the revised rate herein
provided shall be void ab initio and the General Partner shall pay on December
31, 1999, in addition to the distribution due to the holders of the Series B
Preferred Units, the difference between (1) the dividend that would have accrued
at the original rate of 8.625% per annurn during the current and any prior
quarterly distribution period and (2) the distribution that actually accrued
during such distribution periods at the voided rate of 8.50% per annum. Promptly
after January 1, 2000 the parties hereto shall execute, acknowledge and deliver
or cause to be executed acknowledged and delivered all instruments and documents
as may be reasonably necessary or desirable to memorialize the revised
distribution rate. Such distributions shall be cumulative, shall accrue from the
original date of issuance and will be payable (i) quarterly in arrears, on March
31, June 30, September 30 and December 31 of each year commencing on June 30,
1999 and, (ii), in the event of (A) an exchange of Series B Preferred Units into
Series B Preferred Shares, or (B) a redemption of
2
<PAGE>
Series B Preferred Units, on the exchange date or redemption date, as applicable
(each a "Preferred Unit Distribution Payment Date"). The amount of the
distribution payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months and for any period shorter than a full quarterly
period for which distributions are computed, the amount of the distribution
payable will be computed on the basis of the actual number of days elapsed in
such period. If any date on which distributions are to be made on the Series B
Preferred Units is not a Business Day (as defined herein), then payment of the
distribution to be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
Distributions on the Series B Preferred Units will be made to the holders of
record of the Series B Preferred Units on the relevant record dates to be fixed
by the Partnership acting through the General Partner, which record dates shall
in no event exceed fifteen (15) Business Days prior to the relevant Preferred
Unit Distribution Payment Date (the "Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day other than a Saturday or
a Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulations or executive order to close.
(b) Distributions Cumulative. Distributions on the Series B Preferred
Units will accrue whether or not the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness at any
time prohibit the current payment of distributions, whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of such of such distributions and whether or not such distributions
are authorized. Accrued but unpaid distributions on the Series B Preferred Units
will accumulate as of the Preferred Unit Distribution Payment Date on which they
first become payable. Distributions on account of arrears for any past
distribution periods may be declared and paid at any time, without reference to
a regular Preferred Unit Distribution Payment Date to holders of record of the
Series B Preferred Units on the record date fixed by the Partnership acting
through the General Partner which date shall not exceed fifteen (15) Business
Days prior to the payment date. Accumulated and unpaid distributions will not
bear interest.
(c) Priority as to Distributions. (i) So long as any Series B Preferred
Units are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect to any
class or series of Partnership Interest of the Partnership ranking junior as to
the payment of distributions or rights upon a voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership to the Series B
Preferred Units (collectively, "Junior Units"), nor shall any cash or other
property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series B Preferred Units, any Parity
Preferred Units or any Junior Units, unless, in each case, all distributions
accumulated on all Series B Preferred Units and all classes and series of
outstanding Parity Preferred Units have been paid in full. The foregoing
sentence will not prohibit (a) distributions payable solely in Partnership Units
ranking junior to the Series B Preferred Units as
3
<PAGE>
to distributions and upon liquidation, winding-up or dissolution, (b) the
conversion of Junior Units or Parity Preferred Units into Partnership Units
ranking junior to the Series B Preferred Units as to distributions and upon
liquidation, winding-up or dissolution or (c) the redemption of Partnership
Interests corresponding to any Series B Preferred Shares (as hereinafter
defined), Parity Preferred Shares (as such term is defined in the Charter) or
Junior Shares (as such term is defined in the Charter) to be purchased by the
General Partner pursuant to Article 3 of the Declaration of Trust of the General
Partner (the "Charter") to preserve the General Partner's status as a real
estate investment trust, provided that such redemption shall be upon the same
terms as the corresponding purchase pursuant to Article 3 of the Charter.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series B Preferred Units, all distributions authorized and
declared on the Series B Preferred Units and all classes or series of
outstanding Parity Preferred Units shall be authorized and declared so that the
amount of distributions authorized and declared per Series B Preferred Unit and
such other classes or series of Parity Preferred Units shall in all cases bear
to each other the same ratio that accrued distributions per Series B Preferred
Unit and such other classes or series of Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such class or series of Parity Preferred Units do not
have cumulative distribution rights) bear to each other.
(d) No Further Rights. Holders of Series B Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Allocations. Sections 6.1(a) and 6.1(b)are hereby deleted
and replaced by the following:
(a) Net Income. After giving effect to the special allocations set forth
in Section 6.2 through Section 6.4 below, Net Income shall be allocated:
(i) first, to the General Partner to the extent that Net Losses
previously allocated to the General Partner pursuant to
Section 6.1(b)(iii) below for all prior taxable years exceed
Net Income previously allocated to the General Partner
pursuant to this Section 6.1(a)(i) for all prior taxable
years,
(ii) second, to Partners holding any Partnership Interests that are
entitled to any preference in distribution to the extent that
Net Losses previously allocated to such holders pursuant to
Section 6.1(b)(ii) below for all prior taxable years exceed
Net Income previously allocated to such Partners pursuant to
this Section 6.1(a)(ii) for all prior taxable years,
(iii) third, to Partners holding Partnership Units of a class not
entitled to
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<PAGE>
preference in distribution to the extent that Net Losses
previously allocated to such holders pursuant to Section
6.1(b)(i) below for all prior taxable years exceed Net Income
previously allocated to such holders pursuant to this Section
6.1(a)(iii) for all prior taxable years,
(iv) fourth, to Partners holding any Partnership Interests that are
entitled to any preference in distribution in accordance with
the rights of any such class of Partnership Interests until
each such Partnership Interest has been allocated, Net Income
equal to the excess of (x) the cumulative amount of preferred
distributions such Partners are entitled to receive to the
last day of the current taxable year or to the date of
redemption or exchange, to the extent such Partnership
Interests are redeemed or exchanged during such taxable year,
over (y) the cumulative Net Income allocated to such Partners,
pursuant to this Section 6.1(a)(iv) for all prior taxable
years (and, within each such class, pro rata in proportion to
the respective share of such Partnership Interests each
Partner holds as of the last day of the period for which such
allocation is being made), and
(v) fifth, with respect to Partnership Units that are not entitled
to any preference in the allocation of Net Income, pro rata to
each such class in accordance with the terms of such class
(and, within each such class, pro rata in proportion to each
Partner's respective share of such Partnership Units as of the
last day of the period for which such allocation is being
made).
(b) Net Losses. After giving effect to the special allocations set forth
in Section 6.2 through Section 6.4, Net Losses shall be allocated:
(i) first, with respect to classes of Partnership Units that are
not entitled to any preference in distribution (including the
General Partner Interest), pro rata to each such class in
accordance with the terms of such class (and, within such
class, pro rata in proportion to each Partner's respective
share of such Partnership Units as of the last day of the
period for which such allocation is being made) until the
Adjusted Capital Account (ignoring for this purpose any
amounts a 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)) of each
Partner with respect to such Partnership Units is reduced to
zero,
(ii) second, to the Partners holding any Partnership Interests that
are entitled to any preference in distribution in accordance
with the rights of any such class of Partnership Interests
(and, if there is more than one class of such Partnership
Interests, then in the reverse order of their preference in
distribution), until the Adjusted Capital Account (modified in
the same
5
<PAGE>
manner as in clause (i)) of each such Partner with respect to
such Partnership Interests is reduced to zero, and
(iii) third, to the General Partner.
Section 5. Liquidation Proceeds. (a) Upon voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, distributions on the
Series B Preferred Units shall be made in accordance with Section 13.2 of the
Partnership Agreement.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than thirty (30) and not more than sixty
(60) days prior to the payment date stated therein, to each record holder of the
Series B Preferred Units at the respective addresses of such holders as the same
shall appear on the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred
Units will have no right or claim to any of the remaining assets of the
Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the General Partner to, or the consolidation or merger or other
business combination of the Partnership with or into, any corporation, trust,
partnership, limited liability company or other entity (or of any corporation,
trust, partnership, limited liability company or other entity with or into the
Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
Section 6. Optional Redemption. (a) Right of Optional Redemption.
The Series B Preferred Units may not be redeemed prior to the fifth (5th)
anniversary of the issuance date. On or after such date, the Partnership shall
have the right to redeem the Series B Preferred Units, in whole or in part, at
any time or from time to time, upon not less than thirty (30) nor more than
sixty (60) days' written notice, at a redemption price, payable in cash, equal
to the Capital Account balance of the holders of Series B Preferred Units (the
"Redemption Price"); provided, however, that no redemption pursuant to this
Section 6 will be permitted if the Redemption Price does not equal or exceed the
original Capital Contribution of such holder plus the cumulative Priority
Return, whether or not declared, to the redemption date to the extent not
previously distributed or distributed pursuant to Section 3(a). If fewer than
all of the outstanding Series B Preferred Units are to be redeemed, the Series B
Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating factional units).
(b) Limitation on Redemption. The Partnership may not redeem fewer than
all of the outstanding Series B Preferred Units unless all accumulated and
unpaid distributions have been
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<PAGE>
paid on all Series B Preferred Units for all quarterly distribution periods
terminating on or prior to the date of redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (A) faxed,
and (B) mailed by the Partnership, by certified mail, postage prepaid, not less
than thirty (30) nor more than sixty (60) days prior to the redemption date,
addressed to the respective holders of record of the Series B Preferred Units at
their respective addresses as they appear on the records of the Partnership. No
failure to give or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series B Preferred Units except as to the
holder to whom such notice was defective or not given. In addition to any
information required by law, each such notice shall state: (1) the redemption
date, (2) the Redemption Price, (3) the aggregate number of Series B Preferred
Units to be redeemed and if fewer than all of the outstanding Series B Preferred
Units are to be redeemed, the number of Series B Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series B
Preferred Units the total number of Series B Preferred Units held by such holder
represents) of the aggregate number of Series B Preferred Units to be redeemed,
(4) the place or places where such Series B Preferred Units are to be
surrendered for payment of the Redemption Price, (5) that distributions on the
Series B Preferred Units to be redeemed will cease to accumulate on such
redemption date and (6) that payment of the Redemption Price will be made upon
presentation and surrender of such Series B Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of
Series B Preferred Units (which notice will be irrevocable) then, by 12:00 noon,
New York City time, on the redemption date, the Partnership will deposit
irrevocably in trust for the benefit of the Series B Preferred Units being
redeemed funds sufficient to pay the applicable Redemption Price and will give
irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series B Preferred Units upon surrender of the Series B Preferred
Units by such holders at the place designated in the notice of redemption. If
the Series B Preferred Units are evidenced by a certificate and if fewer than
all Series B Preferred Units evidenced by any certificate are being redeemed, a
new certificate shall be issued upon surrender of the certificate evidencing all
Series B Preferred Units, evidencing the unredeemed Series B Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series B Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series B Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series B Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
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<PAGE>
Section 7. Voting Rights. (a) General. Holders of the Series B
Preferred Units will not have any voting rights or right to consent to any
matter requiring the consent or approval of the Limited Partners, except as set
forth in the Partnership Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series B Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least two-thirds of the Series B Preferred Units outstanding at
the time (i) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests senior to the Series B
Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up of the Partnership or reclassify any
Partnership Interests of the Partnership into any such senior Partnership
Interest, or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such senior Partnership Interests,
authorize or create, or increase the authorized or issued amount of any Parity
Preferred Units or reclassify any Partnership Interest into any such Partnership
Interest or create, (ii) authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such Partnership
Interests but only to the extent such Parity Preferred Units are issued to an
Affiliate of the Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates of the
Partnership (or to Affiliates purchasing the preferred stock on the same terms
as nonaffiliated purchasers) or (iii) either (A) consolidate, merge into or
with, or convey, transfer or lease all or substantially all of its assets to,
any corporation or other entity or (B) amend, alter or repeal the provisions of
the Partnership Agreement, whether by merger, consolidation or otherwise, that
would materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series B Preferred Units or the holders
thereof; provided, however, that with respect to the occurrence of a merger,
consolidation or a sale or lease of all or substantially all of the
Partnership's assets as an entirety, so long as (1) the Partnership is the
surviving entity and the Series B Preferred Units remain outstanding with the
terms thereof unchanged, or (2) the resulting, surviving or transferee entity is
a partnership, limited liability company or other pass-through entity organized
under the laws of any state and substitutes the Series B Preferred Units for
other interests in such entity having substantially the same terms and rights as
the Series B Preferred Units, including with respect to distributions, voting
rights and rights upon liquidation, dissolution or winding-up of the
Partnership, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series B Preferred Units and no vote of the Series B Preferred
Units shall be required in such case; and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (y) junior to the
Series B Preferred Units with respect to payment of distributions or the
distribution of assets upon liquidation, dissolution or winding- up of the
Partnership, or (z) on a parity with the Series B Preferred Units with respect
to payment of distributions and the distribution of assets upon liquidation,
dissolution or winding- up of the Partnership to the extent such Partnership
Interests are issued to an affiliate of the Partnership, other than the General
Partner to the extent the issuance of such interests was to
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<PAGE>
allow the General Partner to issue corresponding preferred stock to persons who
are not affiliates of the Partnership, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers and no
vote of the Series B Preferred Units shall be required in such case.
Section 8. Transfer Restrictions. The Series B Preferred Units shall
be subject to the provisions of Article XI of the Partnership Agreement,
provided, however, that (i) the General Partner shall act reasonably in
exercising its discretion pursuant to the provisions of Section 11.4(a)(ii) to
transferees of Series B Preferred Units, (ii) the provisions of Clause B of
Section 11.3(d) shall not be applicable to holders of Series B Preferred Units
if at the time of such transfer, the Partnership already has 100 Partners; (iii)
if only a portion of the Series B Preferred Units shall be transferred, the
transferee of such transferred Series B Preferred Units shall, subject to the
provisions of Section 11.4, be substituted as a Limited Partner in place of the
transferring holders only as to the Series B Preferred Units so transferred; and
(iv) the provisions of Sections 11.6(c) and 11.6(d) shall not be applicable to
any transfer of Series B Preferred Units; and provided further that "transfer"
when used in Article 11 shall not be deemed to include any exchange pursuant to
Section 9 below.
Section 9. Exchange Rights. (a) Right to Exchange. (i) Series B
Preferred Units will be exchangeable in whole or in part at anytime on or after
the tenth (10th) anniversary of the date of issuance, at the option of the
holders thereof, for authorized but previously unissued shares of 8.625 % Series
B Cumulative Redeemable Preferred Shares of the General Partner (the "Series B
Preferred Shares") at an exchange rate of one Series B Preferred Share for one
Series B Preferred Unit, subject to adjustment as described below (the "Exchange
Price"), provided that the Series B Preferred Units will become exchangeable at
any time, in whole or in part, at the option of the holders of Series B
Preferred Units for Series B Preferred Shares if (y) at any time full
distributions shall not have been timely made on any Series B Preferred Unit
with respect to six (6) prior quarterly distribution periods, whether or not
consecutive, provided, however, that a distribution in respect of Series B
Preferred Units shall be considered timely made if made within two (2) Business
Days after the applicable Preferred Unit Distribution Payment Date if at the
time of such late payment there shall not be any prior quarterly distribution
periods in respect of which full distributions were not timely made or (z) upon
receipt by a holder or holders of Series B Preferred Units of (1) a notice from
the General Partner that the General Partner or a Subsidiary of the General
Partner has taken the position that the Partnership is, or upon the occurrence
of a defined event in the immediate future will be, a PTP and (2) an opinion
rendered by an outside nationally recognized independent counsel familiar with
such matters addressed to a holder or holders of Series B Preferred Units, that
the Partnership is or likely is, or upon the occurrence of a defined event in
the immediate future will be or likely will be, a PTP. In addition, the Series B
Preferred Units may be exchanged for Series B Preferred Shares, in whole or in
part, at the option of any holder prior to the tenth (10th) anniversary of the
issuance date and after the third (3rd) anniversary thereof if such holder of a
Series B Preferred Units shall deliver to the General Partner either (i) a
private letter ruling addressed to such holder of Series B Preferred Units or
(ii) an opinion of independent counsel reasonably acceptable to the General
Partner based on the enactment of temporary or final
9
<PAGE>
Treasury Regulations or the publication of a Revenue Ruling, in either case to
the effect that an exchange of the Series B Preferred Units at such earlier time
would not cause the Series B Preferred Units to be considered "stock and
securities" within the meaning of section 351(e) of the Code for purposes of
determining whether the holder of such Series B Preferred Units is an
"investment company" under section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, all the Series B Preferred Units
held by any holder thereof which is a real estate investment trust within the
meaning of Sections 856 through 859 of the Code for Series B Preferred Shares
may be exchanged in whole but not in part (but only if the exchange may be
accomplished consistently with the ownership limitations set forth under Article
3 of the Charter (taking into account exceptions thereto)) if at any time, (i)
the Partnership reasonably determines that the assets and income of the
Partnership for a taxable year after 1999 would not satisfy the income and
assets tests of Section 856 of the Code for such taxable year if the Partnership
were a real estate investment trust within the meaning of the Code or (ii) any
such holder of Series B Preferred Units shall deliver to the Partnership and the
General Partner an opinion of independent counsel reasonably acceptable to the
General Partner to the effect that, based on the assets and income of the
Partnership for a taxable year after 1999, the Partnership would not satisfy the
income and assets tests of Section 856 of the Code for such taxable year if the
Partnership were a real estate investment trust within the meaning of the Code
and that such failure would create a meaningful risk that a holder of the Series
B Preferred Units would fail to maintain qualification as a real estate
investment trust.
(ii) Notwithstanding anything to the contrary set forth in Section
9(a)(i) hereof, if an Exchange Notice (as defined herein) has been delivered to
the General Partner, then the General Partner may, at its option, elect to
redeem or cause the Partnership to redeem all or a portion of the outstanding
Series B Preferred Units for cash in an amount equal to the original Capital
Contribution per Series B Preferred Unit and all accrued and unpaid
distributions thereon to the date of redemption. The General Partner may
exercise its option to redeem the Series B Preferred Units for cash pursuant to
this Section 9(a)(ii) hereof by giving each holder of record of Series B
Preferred Units notice of its election to redeem for cash, within five (5)
Business Days after receipt of the Exchange Notice, by (y) fax, and (z)
registered mail, postage paid, at the address of each holder as it may appear on
the records of the Partnership stating (A) the redemption date, which shall be
no later than sixty (60) days following the receipt of the Exchange Notice, (B)
the redemption price, (C) the place or places where the Series B Preferred Units
are to be surrendered for payment of the redemption price, (D) that
distributions on the Series B Preferred Units will cease to accrue on such
redemption date (E) that payment of the redemption price will be made upon
presentation and surrender of the Series B Preferred Units and (F) the aggregate
number of Series B Preferred Units to be redeemed, and if fewer than all of the
outstanding Series B Preferred Units are to be redeemed, the number of Series B
Preferred Units to be redeemed held by such holder, which number shall equal
such holder's pro-rata share (based on the percentage of the aggregate number of
outstanding Series B Preferred Units the total number of Series B Preferred
Units held by such holder represents) of the aggregate number of Series B
Preferred Units being redeemed.
(iii) In the event an exchange of all or a portion of Series B
Preferred Units
10
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pursuant to Section 9(a)(i) hereof would violate the provisions on ownership,
limitation of the General Partner set forth in Article 3 of the Charter with
respect to the Series B Preferred Shares, the General Partner shall give written
notice thereof to each holder of record of Series B Preferred Units, within five
(5) Business Days following receipt of the Exchange Notice, by (y) fax, and (z)
registered mail, postage prepaid, at the address of each such holder set forth
in the records of the Partnership. In such event, each holder of Series B
Preferred Units shall be entitled to exchange, pursuant to the provision of
Section 9(b) a number of Series B Preferred Units which would comply with the
provisions on the ownership limitation of the General Partner set forth in such
Article 3 of the Charter and any Series B Preferred Units not so exchanged (the
"Excess Units") shall be redeemed by the Partnership for cash in an amount equal
to the original Capital Contribution per Excess Unit, plus any accrued and
unpaid distributions thereon, whether or not declared, to the date of
redemption. The written notice of the General Partner shall state (A) the number
of Excess Units held by such holder, (B) the redemption price of the Excess
Units, (C) the date on which such Excess Units shall be redeemed, which date
shall be no later than sixty (60) days following the receipt of the Exchange
Notice, (D) the place or places where such Excess Units are to be surrendered
for payment of the Redemption Price, (E) that distributions on the Excess Units
will cease to accrue on such redemption date, and (F) that payment of the
redemption price will be made upon presentation and surrender of such Excess
Units. In the event an exchange would result in Excess Units, as a condition to
such exchange, each holder of such units agrees to provide representations and
covenants reasonably requested by the General Partner relating to (1) the widely
held nature of the interests in such holder, sufficient to assure the General
Partner that the holder's ownership of stock of the General Partner (without
regard to the limits described above) will not cause any individual to
Beneficially Own in excess of the Ownership Limit (all as defined in the General
Partner's Charter); and (2) to the extent such holder can so represent and
covenant without obtaining information from its owners, the holder's ownership
of tenants of the Partnership and its affiliates.
(iv) The redemption of Series B Preferred Units described in Section
9(a)(ii) and (iii) shall be subject to the provisions of Section 6(b)(i) and
Section 6(c)(ii); provided, however, that the term "Redemption Price" in such
Section shall be read to mean the original Capital Contribution per Series B
Preferred Unit being redeemed plus all accrued and unpaid distributions to the
redemption date.
(b) Procedure for Exchange. (i) Any exchange shall be exercised pursuant
to a notice of exchange (the "Exchange Notice") delivered to the General Partner
by the holder who is exercising such exchange right, by (A) fax and (B) by
certified mail postage prepaid. The exchange of Series B Preferred Units, or a
specified portion thereof, may be effected after the fifth (5th) Business Day
following receipt by the General Partner of the Exchange Notice by delivering
certificates, if any, representing such Series B Preferred Units to be exchanged
together with, if applicable, written notice of exchange and a proper assignment
of such Series B Preferred Units to the office of the General Partner maintained
for such purpose. Currently, such office is Two Center Plaza, Suite 200, Boston,
Massachusetts 02108. Each exchange will be deemed to have been effected
immediately prior to the close of business on the date on which
11
<PAGE>
such Series B Preferred Units to be exchanged (together with all required
documentation) shall have been surrendered and notice shall have been received
by the General Partner as aforesaid and the Exchange Price shall have been paid.
Any Series B Preferred Shares issued pursuant to this Section 9 shall be
delivered as shares which are duly authorized, validly issued, fully paid and
nonassessable, free of pledge, lien, encumbrance or restriction other than those
provided in the Charter, the Bylaws of the General Partner, the Securities Act
and relevant state securities or blue sky laws.
(ii) In the event of an exchange of Series B Preferred Units for
Series B Preferred Shares, an amount equal to the accrued and unpaid
distributions, whether or not declared, to the date of exchange on any Series B
Preferred Units tendered for exchange shall (A) accrue on the Series B Preferred
Shares into which such Series B Preferred Units are exchanged, and (B) continue
to accrue on such Series B Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as the holder of such Series B
Preferred Units. Notwithstanding anything to the contrary set forth herein, in
no event shall a holder of a Series B Preferred Unit that was validly exchanged
into Series B Preferred Shares pursuant to this section (other than the General
Partner now holding such Series B Preferred Unit), receive a cash distribution
out of Available Cash of the Partnership, if such holder, after exchange, is
entitled to receive a distribution out of Available Cash with respect to the
Series B Preferred Shares for which such Series B Preferred Unit was exchanged
or redeemed.
(iii) Fractional shares of Series B Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the Series B Preferred Shares on
the day prior to the exchange date as determined in good faith by the Board of
Directors of the General Partner.
(c) Adjustment of Exchange Price. (i) The Exchange Price is subject to
adjustment upon certain events, including, (A) subdivisions, combinations and
reclassification of the Series B Preferred Shares, and (B) distributions to all
holders of Series B Preferred Shares of evidence of indebtedness of the General
Partner or assets (including securities, but excluding dividends and
distributions paid in cash out of equity applicable to Series B Preferred
Shares).
(ii) In case the General Partner shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of the General Partner's
capital stock or sale of all or substantially all of the General Partner's
assets), in each case as a result of which the Series B Preferred Shares will be
converted into the right to receive shares of capital stock, other securities or
other property (including cash or any combination thereof), each Series B
Preferred Unit will thereafter be exchangeable into the kind and amount of
shares of capital stock and other securities and property receivable (including
cash or any combination thereof) upon the consummation of such transaction by a
holder of that number of Series B Preferred Shares or fraction thereof into
which one Series B Preferred Unit was exchangeable immediately prior to such
transaction. The General Partner may not become a party to any such transaction
unless the terms thereof are consistent with the foregoing.
12
<PAGE>
Section 10. No Conversion Rights. (a) The holders of the Series B
Preferred Units shall not have any rights to convert such shares into shares of
any other class or series of shares or into any other securities of, or interest
in, the Partnership.
(b) The Series B Preferred Units shall not be subject to the
provisions of Section 4.2(e) of the Partnership Agreement.
Section 11. No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of Series B Preferred Units.
Section 12. Admission of Limited Partners, Exhibits to Partnership
Agreement. In accordance with Section 12.2(b), Belair and Belcrest are hereby
admitted as Additional Limited Partners. In order to duly reflect the issuance
of Series B Preferred Units provided for herein, the Partnership Agreement is
hereby amended by deleting Exhibit A attached thereto and substituting Exhibit A
attached hereto therefor.
Section 13. Reaffirmation. 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 affirms.
* * *
13
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed as of the date first
above written.
CABOT INDUSTRIAL TRUST
By: /s/ Franz Colloredo-Mansfeld
-------------------------------
Name: Franz Colloredo-Mansfeld
Title: Chief Financial Officer
BELCREST REALTY CORPORATION
By: /s/Thomas E. Faust, Jr.
-------------------------------
Name: Thomas E. Faust, Jr.
Title: Executive Vice President
BELAIR REAL ESTATE CORPORATION
By: /s/Thomas E. Faust, Jr.
-------------------------------
Name: Thomas E. Faust, Jr.
Title: Executive Vice President
14
<PAGE>
Exhibit 4.6
CABOT INDUSTRIAL TRUST
ARTICLES SUPPLEMENTARY
1,300,000 SHARES
8.625% SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARES
Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland (the "Department") that:
FIRST: Under a power contained in Article 2, Section 1 of the
Amended and Restated Declaration of Trust of the Company, filed with, and
accepted for record by, the State Department of Assessments and Taxation of
Maryland (the "SDAT") on January 26. 1998. as supplemented by Articles
Supplementary filed with, and accepted for record by. the SDAT on July 10, 1998
(the "Charter"), the Board of Trustees of the Company, as required by Section
8-203(b) of the Corporations and Associations Article of the Annotated Code of
Maryland, has unanimously adopted resolutions classifying and designating
1,300,000 unissued shares of beneficial interest (the "Shares") as 8.625% Series
B Cumulative Redeemable Preferred Shares, with the following preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions of
redemption, and other terms and conditions, which upon any restatement of the
Charter shall be made part of Article 2 of the Charter, with any necessary or
appropriate changes to the enumeration and lettering thereof:
8.625% SERIES B CUMULATIVE REDEEMABLE SHARES
Section 1. Designation and Number. A series of preferred shares,
designated the "8.625% Series B Cumulative Redeemable Preferred Shares" (the
"Series B Preferred Shares") is hereby established. The number of shares of
Series B Preferred Shares shall be 1,300,000.
Section 2. Rank. The Series B Preferred Shares shall, with respect
to distributions and rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Company. rank senior to all classes or series
of common Shares and to all classes or series of equity securities of the
Company now or hereafter authorized, issued or outstanding, other than any class
or series of equity securities of the Company expressly designated as ranking on
a parity with or senior to the Series B Preferred Shares as to distributions and
rights upon voluntary or involuntary liquidation, winding-up or dissolution of
the Company. For purposes of these Articles Supplementary, the term "Parity
Preferred Shares" shall be used to refer to any class or series of equity
securities of the Company now or hereafter authorized, issued or outstanding
expressly designated by the Company to rank on a parity with Series B Preferred
Shares with respect to distributions and rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Company. The term "equity
securities" does not include debt securities, which will rank senior to the
Series B Preferred Shares prior to conversion.
Section 3. Distributions. (a) Payment of Distributions. Subject to
the rights of holders of Parity Preferred Shares and holders of equity
securities ranking senior to the Series B Preferred Shares as to payment of
distributions, holders of Series B Preferred Shares will be entitled to receive,
when, as and if declared by the Board of Trustees of the Company, out of funds
legally available for the payment of distributions, cumulative preferential cash
distributions at the rate per annum of 8.625% of the $50 liquidation preference
per Series B Preferred Share. In the event that on or prior to December 31, 1999
(i) the Company's senior unsecured debt shall have an unconditional, published,
Standard & Poor's rating of at least "BBB" and (ii) neither Moody's nor any
other rating agency with offices located in at least five (5) cities in the
United States shall have in effect an unconditional,
<PAGE>
published, rating of the Company's senior unsecured debt which is lower than its
rating for such senior unsecured debt as of the date hereof, then beginning on
the date on which each of such foregoing conditions are met, the rate per annum
shall be 8.50% of the $50 liquidation preference per Series B Preferred Share,
in which case the designation of the Series B Preferred Shares will change
accordingly to reflect such new distribution rate; provided, that, if (y) either
Moody's or any other rating agency with offices located in at least five (5)
cities in the United States shall have in effect on December 31, 1999 an
unconditional published rating of the Company's senior unsecured debt which is
lower than its rating of such senior unsecured debt as of the date hereof or (z)
a Standard & Poor's rating of at least "BBB" shall no longer be in effect on
December 31, 1999, then the revised rate herein provided shall be void ab initio
and the Company shall pay on December 31, 1999, in addition to the dividend then
due to the holders of the Series B Preferred Shares, the difference between (1)
the dividend that would have accrued at the original rate of 8.625% per annum
during the current and any prior quarterly distribution period and (2) the
dividend that actually accrued during such distribution periods at the voided
rate of 8.50% per annum. Promptly after January 1, 2000 the parties hereto shall
execute, acknowledge and deliver or cause to be executed acknowledged and
delivered all instruments and documents as may be reasonably necessary or
desirable to memorialize the revised distribution rate. Such distributions shall
be cumulative, shall accrue from the original date of issuance and will be
payable (i) quarterly in arrears, on March 31, June 30, September 30 and
December 31 of each year commencing on the first of such dates to occur after
the original date of issuance and, (ii) in the event of a redemption, on the
redemption date (each a "Preferred Shares Distribution Payment Date"). The
amount of the distribution payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and for any period shorter than a full
quarterly period for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the actual number of days
elapsed in such period. If any date on which distributions are to be made on the
Series B Preferred Shares is not a Business Day (as defined herein), then
payment of the distribution to be made on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. Distributions on the Series B Preferred Shares will be made to the
holders of record of the Series B Preferred Shares on the relevant record dates,
which, unless otherwise provided by the Company with respect to any
distribution, will be fifteen (15) Business Days prior to the relevant Preferred
Shares Distribution Payment Date (each a "Distribution Record Date").
Notwithstanding anything to the contrary set forth herein, each Series B
Preferred Share shall also continue to accrue all accrued and unpaid
distributions up to the exchange date on any Series B Preferred Unit (as defined
in the Second Amended and Restated Agreement of Limited Partnership of Cabot
Industrial Properties, L.P., dated as of February 4, 1998 (the "Partnership
Agreement"). as amended through the date hereof) validly exchanged into such
Series B Preferred Share in accordance with the provisions of such Partnership
Agreement.
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Limitation on Distributions. No distributions on the Series B
Preferred Shares shall be declared or paid or set apart for payment by the
Company at such time as the terms and provisions of any agreement of the
Company, including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting a part for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law.
(c) Distributions Cumulative. Notwithstanding the foregoing, distributions
on the Series B Preferred Shares will accrue whether or not the terms and
provisions set forth in Section 3(b) hereof at any time prohibit the current
payment of distributions, whether or not the Company has earnings, whether or
not there are funds legally available for the payment of such distributions and
whether or not such distributions are authorized or declared. Accrued but unpaid
distributions on the Series B Preferred Shares will accumulate as of the
Preferred Shares Distribution Payment Date on which they first become payable.
Accumulated and unpaid distributions will not bear interest.
<PAGE>
(d) Priority as to Distributions. (i) So long as any Series B Preferred
Shares are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect to any
class or series of common Shares or any class or series of other Shares of the
Company ranking junior as to the payment of distributions or rights upon
voluntary or involuntary dissolution, liquidation or winding up of the Company
to the Series B Preferred Shares (such common Shares or other junior Shares,
including, without limitation Series A Junior Participating Preferred Shares
authorized pursuant to Articles Supplementary filed with the Department on July
10, 1998, collectively, "Junior Shares"), nor shall any cash or other property
be set aside for or applied to the purchase, redemption or other acquisition for
consideration of any Series B Preferred Shares, any Parity Preferred Shares or
any Junior Shares, unless, in each case, all distributions accumulated on all
Series B Preferred Shares and all classes and series of outstanding Parity
Preferred Shares have been paid in full. The foregoing sentence will not
prohibit (i) distributions payable solely in Shares of the Company ranking
junior to the Series B Preferred Shares as to distributions and upon
liquidation, winding-up or dissolution, (ii) the conversion of Junior Shares or
Parity Preferred Shares into Shares of the Company ranking junior to the Series
B Preferred Shares as to distributions and upon liquidation, windingup or
dissolution, and (iii) purchase by the Company of such Series B Preferred
Shares, Parity Preferred Shares or Junior Shares pursuant to Article 3 of the
Charter to the extent required to preserve the Company's status as a real estate
investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series B Preferred Shares, all distributions authorized and
declared on the Series B Preferred Shares and all classes or series of
outstanding Parity Preferred Shares shall be authorized and declared so that the
amount of distributions authorized and declared per share of Series B Preferred
Shares and such other classes or series of Parity Preferred Shares shall in all
cases bear to each other the same ratio that accrued distributions per share on
the Series B Preferred Shares and such other classes or series of Parity
Preferred Shares (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such class or series of Parity
Preferred Shares do not have cumulative distribution rights) bear to each other.
(e) No Further Rights. Holders of Series B Preferred Shares shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Liquidation Preference. (a) Payment of Liquidating
Distributions. Subject to the rights of holders of Parity Preferred Shares and
subject to equity securities ranking senior to the Series B Preferred Shares
with respect to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company. the holders of Series B Preferred
Shares shall be entitled to receive out of the assets of the Company legally
available for distribution or the proceeds thereof, after payment or provision
for debts and other liabilities of the Company, but before any payment or
distributions of the assets shall be made to holders of common Shares or any
other class or series of shares of the Company that ranks junior to the Series B
Preferred Shares as to rights upon liquidation, dissolution or winding-up of the
Company, an amount equal to the sum of (i) a liquidation preference of $50 per
Series B Preferred Share, and (ii) an amount equal to any accumulated and unpaid
distributions thereon, whether or not declared, to the date of payment. In the
event that, upon such voluntary or involuntary liquidation, dissolution or
winding-up, there are insufficient assets to permit full payment of liquidating
distributions to the holders of Series B Preferred Shares and any Parity
Preferred Shares, all payments of liquidating distributions on the Series B
Preferred Shares and such Parity Preferred Shares shall be made so that the
payments on the Series B Preferred Shares and such Parity Preferred Shares shall
in all cases bear to each other the same ratio that the respective rights of the
Series B Preferred Shares and such other Parity Preferred Shares (which shall
not include any accumulation in respect of unpaid distributions for prior
distribution periods if such Parity Preferred Shares do not have cumulative
distribution rights) upon liquidation, dissolution or winding-up of the Company
bear to each other.
<PAGE>
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Company, stating the payment date
or dates when, and the place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than thirty (30) and not more than sixty
(60) days prior to the payment date stated therein, to each record holder of the
Series B Preferred Shares at the respective addresses of such holders as the
same shall appear on the share transfer records of the Company.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred
Shares will have no right or claim to any of the remaining assets of the
Company.
(d) Consolidation. Merger or Certain Other Transactions. The voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company to, or the consolidation or merger or other business
combination of the Company with or into any corporation. trust or other entity
(or of any corporation, trust or other entity with or into the Company) shall
not be deemed to constitute a liquidation, dissolution or winding-up of the
Company.
Section 5. Optional Redemption. (a) Right of Optional Redemption.
The Series B Preferred Shares may not be redeemed prior to April 29, 2004. On or
after such date, the Company shall have the right to redeem the Series B
Preferred Shares, in whole or in part, at any time or from time to time, upon
not less than thirty (30) nor more than sixty (60) days' written notice, at a
redemption price, payable in cash, equal to $50 per share of Series B Preferred
Shares plus accumulated and unpaid distributions, whether or not declared, to
the date of redemption. If fewer than all of the outstanding Series B Preferred
Shares are to be redeemed, the Series B Preferred Shares to be redeemed shall be
selected pro rata (as nearly as practicable without creating fractional shares).
(b) Limitation on Redemption. The Company may not redeem fewer than all of
the outstanding shares of Series B Preferred Shares unless all accumulated and
unpaid distributions have been paid on all outstanding Series B Preferred Shares
for all quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (i) faxed,
and (ii) mailed by the Company, postage prepaid, not less than thirty (30) nor
more than sixty (60) days prior to the redemption date, addressed to the
respective holders of record of the Series B Preferred Shares to be redeemed at
their respective addresses as they appear on the transfer records of the
Company. No failure to give or defect in such notice shall affect the validity
of the proceedings for the redemption of any Series B Preferred Shares except as
to the holder to whom such notice was defective or not given. In addition to any
information required by law or by the applicable rules of any exchange upon
which the Series B Preferred Shares may be listed or admitted to trading, each
such notice shall state: (i) the redemption date, (ii) the redemption price,
(iii) the number of Series B Preferred Shares to be redeemed, (iv) the place or
places where such Series B Preferred Shares are to be surrendered for payment of
the redemption price, (v) that distributions on the Series B Preferred Shares to
be redeemed will cease to accumulate on such redemption date and (vi) that
payment of the redemption price and any accumulated and unpaid distributions
will be made upon presentation and surrender of such Series B Preferred Shares.
If fewer than all of the Series B Preferred Shares held by any holder are to be
redeemed, the notice mailed to such holder shall also specify the number of
Series B Preferred Shares held by such holder to be redeemed.
(ii) If the Company gives a notice of redemption in respect of
Series B Preferred Shares (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Company will deposit
irrevocably in trust for the benefit of the holders of the Series B Preferred
Shares being redeemed, funds sufficient to pay the applicable redemption price,
plus any accumulated and unpaid distributions, whether or not
<PAGE>
declared, if any, on such shares to the date fixed for redemption, without
interest, and will give irrevocable instructions and authority to pay such
redemption price and any accumulated and unpaid distributions, whether or not
declared, if any, on such shares to the holders of the Series B Preferred Shares
upon surrender of the certificates for the Series B Preferred Shares by such
holders at the place designated in the notice of redemption. If fewer than all
Series B Preferred Shares evidenced by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the certificate evidencing all
Series B Preferred Shares, evidencing the unredeemed Series B Preferred Shares
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series B Preferred Shares or
portions thereof called for redemption, unless the Company defaults in the
payment thereof. If any date fixed for redemption of Series B Preferred Shares
is not a Business Day, then payment of the redemption price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the redemption price
or any accumulated or unpaid distributions in respect of the Series B Preferred
Shares is improperly withheld or refused and not paid by the Company,
distributions on such Series B Preferred Shares will continue to accumulate from
the original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the applicable redemption price and any accumulated and unpaid
distributions.
(e) Status of Redeemed Shares. Any Series B Preferred Shares that
shall at any time have been redeemed shall after such redemption, have the
status of authorized but unissued Shares, without designation as to class or
series until such shares are once more designated as part of a particular class
or series by the Board.
Section 6. Voting Rights. (a) General. Holders of the Series B
Preferred Shares will not have any voting rights, except as set forth below.
(b) Right to Elect Trustees. (i) If at any time full distributions shall
not have been timely made on any Series B Preferred Shares with respect to any
six (6) prior quarterly distribution periods, whether or not consecutive, (a
"Preferred Distribution Default"), the holders of such Series B Preferred
Shares, voting together as a single class with the holders of each class or
series of Parity Preferred Shares upon which like voting rights have been
conferred and are exercisable, will have the right to elect two additional
Trustees to serve on the Company's Board (the "Preferred Shares Trustees") at a
special meeting called by the holders of record of at least 10% of the
outstanding Series B Preferred Shares or any such class or series of Parity
Preferred Shares or at the next annual meeting of Shareholders, and at each
subsequent annual meeting of Shareholders or special meeting for the election of
Trustees held in place thereof until all such distributions in arrears and
distributions for the current quarterly period on the Series B Preferred Shares
and each such class or series of Parity Preferred Shares have been paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Company shall call or cause to be called, upon written request of
holders of record of at least 10% of the outstanding Series B Preferred Shares,
a special meeting of the holders of Series B Preferred Shares and all the series
of Parity Preferred Shares upon which like voting rights have been conferred and
are exercisable (collectively, the "Parity Securities") by mailing or causing to
be mailed to such holders a notice of such special meeting to be held not less
than ten and not more than 45 days after the date such notice is given. The
record date for determining holders of the Parity Securities entitled to notice
of and to vote at such special meeting will be the close of business on the
third Business Day preceding the day on which such notice is mailed. At any such
special meeting, all of the holders of the Parity Securities, by plurality vote,
voting together as a single class without regard to series will be entitled to
elect two Trustees on the basis of one vote per $25.00 of liquidation preference
to which such Parity Securities are entitled by their terms (excluding amounts
in respect of accumulated and unpaid dividends) and not cumulatively. The holder
or holders of one-third of the Parity Securities then outstanding, present in
person or by proxy, will constitute a
<PAGE>
quorum for the election of the Preferred Shares Trustees except as otherwise
provided by law. Notice of all meetings at which holders of the Series B
Preferred Shares shall be entitled to vote will be given to such holders at
their addresses as they appear in the transfer records. At any such meeting or
adjournment thereof in the absence of a quorum, subject to the provisions of any
applicable law, a majority of the holders of the Parity Securities present in
person or by proxy shall have the power to adjourn the meeting for the election
of the Preferred Shares Trustees, without notice other than an announcement at
the meeting. until a quorum is present. If a Preferred Distribution Default
shall terminate after the notice of a special meeting has been given but before
such special meeting has been held, the Company shall, as soon as practicable
after such termination, mail or cause to be mailed notice of such termination to
holders of the Series B Preferred Shares that would have been entitled to vote
at such special meeting.
(iii) If and when all accumulated distributions and the
distributions for the current distribution period on the Series B Preferred
Shares shall have been paid in full or a sum sufficient for such payment is
irrevocably deposited in trust for payment, the holders of the Series B
Preferred Shares shall be divested of the voting rights set forth in this
Section 6(b) herein (subject to revesting in the event of each and every
Preferred Distribution Default) and, if all distributions in arrears and the
distributions for the current distribution period have been paid in full or set
aside for payment in full on all other classes or series of Parity Preferred
Shares upon which like voting rights have been conferred and are exercisable,
the term and office of each Preferred Shares Trustee so elected shall terminate.
Any Preferred Shares Trustee may be removed at any time with or without cause by
the vote of, and shall not be removed otherwise than by the vote of, the holders
of record of a majority of the outstanding Parity Securities when they have the
voting rights set forth in this Section 6(b). So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Shares Trustee may be filled by written consent of the Preferred Shares Trustee
remaining in office, or if none remains in office, by a vote of the holders of
record of a majority of the outstanding Parity Securities when they have the
voting rights set forth in this Section 6(b). The Preferred Shares Trustees
shall each be entitled to one vote per trustee on any matter.
(c) Certain Voting Rights. So long as any Series B Preferred Shares remain
outstanding. the Company shall not, without the affirmative vote of the holders
of at least two thirds of the Series B Preferred Shares outstanding at the time
(i) designate or create, or increase the authorized or issued amount of, any
class or series of shares ranking senior to or on parity with the Series B
Preferred Shares with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up of the Company or reclassify any
authorized shares of the Company into any such shares, or create, authorize or
issue any obligations or security convertible into or evidencing the right to
purchase any such shares, (ii) designate or create, or increase the authorized
or issued amount of, any Parity Preferred Shares or reclassify any authorized
shares of the Company into any such shares, or create, authorize or issue any
obligations or security convertible into or evidencing the right to purchase any
such shares, but only to the extent such Parity Preferred Shares are issued to
an affiliate of the Company, or (iii) either (A) consolidate, merge into or
with, or convey, transfer or lease its assets substantially as an entirety. to
any corporation or other entity. or (B) amend, alter or repeal the provisions of
the Company's Charter (including these Articles Supplementary) or By-laws,
whether by merger, consolidation or otherwise, in each case that would
materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series B Preferred Shares or the holders
thereof; provided, however, that with respect to the occurrence of a merger,
consolidation or a sale or lease of all or substantially all of the Company's
assets as an entirety, so long as (a) the Company is the surviving entity and
the Series B Preferred Shares remain outstanding with the terms thereof
unchanged, or (b) the resulting, surviving or transferee entity is a corporation
organized under the laws of any state and substitutes the Series B Preferred
Shares for other preferred Shares having substantially the same terms and same
rights as the Series B Preferred Shares, including with respect to
distributions, voting rights and rights upon liquidation, dissolution or
winding-up of the Company, then the occurrence of any such event shall not be
deemed to materially and adversely affect such rights, privileges or voting
powers of the holders of the Series B Preferred Shares and no vote of the Series
B Preferred Shares shall be required; and provided further that any increase in
the amount of authorized Shares or the creation or issuance of any other class
or series of Shares, or any increase in an amount of authorized shares of each
class or series, in each case ranking either (a) junior to the Series B
Preferred Shares with respect to payment of distributions and the distribution
of assets upon liquidation, dissolution or winding-up of the Company, or (b) on
a parity with the Series B Preferred Shares with respect to payment of
<PAGE>
distributions or the distribution of assets upon liquidation, dissolution or
winding-up of the Company to the extent such Shares are not issued to an
affiliate of the Company, shall not be deemed to materially and adversely affect
such rights, preferences, privileges or voting powers and no vote of the Series
B Preferred Shares shall be required.
Section 7. Transfer Restrictions. The Series B Preferred Shares
shall be subject to the provisions of Article 3 of the Charter; provided,
however, in no event shall the Ownership Limit with respect to the Series B
Preferred Shares (as defined in the Charter) be decreased pursuant to Section 10
of Article 3 of the Charter or otherwise (other than a decrease as a result of a
retroactive change in existing law that would require a decrease to retain real
estate investment trust status under the Internal Revenue Code of 1986, as
amended).
Section 8. No Conversion Rights. The holders of the Series B
Preferred Shares shall not have any rights to convert such shares into shares of
any other class or series of Shares or into any other securities of, or interest
in. the Company.
Section 9. No Sinking Fund. No sinking fund shall be established for
the retirement or redemption of Series B Preferred Shares.
Section 10. No Preemptive Rights. No holder of the Series B
Preferred Shares of the Company shall, as such holder, have any preemptive
rights to purchase or subscribe for additional Shares of the Company or any
other security of the Company which it may issue or sell.
FOURTH: The Series B Preferred Shares have been classified and
designated by the Board under the authority contained in the Charter.
FIFTH: These Articles Supplementary have been approved by the Board
in the manner and by the vote required by law.
SIXTH: The undersigned President of the Company acknowledges these
Articles Supplementary to be the corporate act of the Company and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of his knowledge, information and belief. these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
<PAGE>
IN WITNESS WHEREOF, the Company has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this _____th day of April, 1999.
CABOT INDUSTRIAL TRUST
By:
Name:
Title:
[SEAL]
ATTEST:
Name:
Title: Secretary
<PAGE>
Exhibit 4.7
SECOND AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CABOT INDUSTRIAL PROPERTIES, L.P.
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP (this "Amendment") dated as of September 3, 1999, is entered into by
CABOT INDUSTRIAL TRUST, a Maryland real estate investment trust, as general
partner (the "General Partner") of CABOT INDUSTRIAL PROPERTIES, L.P. (the
"Partnership"), for itself and on behalf of the limited partners of the
Partnership, and ________________ ("Contributor").
WHEREAS, Section 4.2(a) of the Second Amended and Restated Agreement of
Limited Partnership of the Partnership (the "Partnership Agreement") authorizes
the General Partner to cause the Partnership to issue additional Partnership
Units in one or more classes or series, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties as
shall be determined by the General Partner, subject to the provisions of such
section; and
WHEREAS, pursuant to the authority granted to the General Partner pursuant
to Sections 4.2(a) and 14.1(b) of the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement (i) to establish a new class of
Partnership Units, the Series C Preferred Units (as hereinafter defined), and to
set forth the designations, rights, powers, preferences and duties of such
Series C Preferred Units, (ii) to issue the Series C Preferred Units to
Contributor and admit Contributor as an Additional Limited Partner and (iii) to
make certain other changes to the Partnership Agreement.
WHEREAS, Contributor intends to transfer its Series C Preferred Units to
________ LLC Delaware limited liability company ("LLC"), whereupon reference
herein to Contributor shall be deemed to be references to LLC.
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:
Section 1. Definitions. For purposes of this Amendment, the term "Parity
Preferred Units" shall be used to refer to any class or series of Partnership
Interests of the Partnership now or hereafter authorized, issued or outstanding
expressly designated by the Partnership to rank on a parity with Series C
Preferred Units with respect to distributions and rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership. The term
"Priority Return" shall mean, an amount equal to 8.625% per annum, determined on
the basis of a 360 day year of twelve 30 day months, cumulative to the extent
not distributed for any given
<PAGE>
distribution period pursuant to Section 5.1 of the Partnership Agreement, of the
stated value of $25 per Series C Preferred Unit, commencing on the date of
issuance of such Series C Preferred Unit. The term "Subsidiary" shall mean with
respect to any person, any corporation, partnership, limited liability company,
joint venture or other entity of which a majority of(i) voting power of the
voting equity securities or (ii) the outstanding equity interests, is owned,
directly or indirectly, by such person. The term "PTP" shall mean a "publicly
traded partnership" within the meaning of Section 7704 of the Code. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Partnership Agreement. The term "Preferred Limited
Partner" means any Person holding a Preferred Unit, and named as a Preferred
Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended
from time to time, or any Substituted Limited Partner or Additional Limited
Partner, in such Person's capacity as a Preferred Limited Partner in the
Partnership.
Section 2. Designation and Number. A series of Partnership Units in the
Partnership designated as the "8.625% Series C Cumulative Redeemable Preferred
Units" (the "Series C Preferred Units") is hereby established. The number of
Series C Preferred Units shall be for 2,600,000.
Section 3. Distributions. (a) Payment of Distributions. Subject to the
rights of holders of Parity Preferred Units as to the payment of distributions,
pursuant to Section 5.1 of the Partnership Agreement, holders of Series C
Preferred Units shall be entitled to receive, when, as and if declared by the
Partnership acting through the General Partner, out of Available Cash,
cumulative preferential cash distributions at the rate per annum of 8.625% of
the original Capital Contribution per Series C Preferred Unit. In the event that
on or prior to March 31, 2000 (i) the General Partner's senior unsecured debt
shall have an unconditional, published Standard & Poor's rating of at least
"BBB" and (ii) neither Moody's nor any other rating agency with offices located
in at least five (5) cities in the United States shall have in effect an
unconditional, published rating of the General Partner's senior unsecured debt
which is lower than its rating for such senior unsecured debt as of the date
hereof, then beginning on the date on which each of such foregoing conditions
are met, the rate per annum shall be 8.50% of the original Capital Contribution
per Series C Preferred Unit, in which case the designation of the Series C
Preferred Units will change accordingly to reflect such new distribution rate;
provided, that, if (y) either Moody's or any other rating agency with offices
located in at least five (5) cities in the United States shall have in effect on
March 31, 2000 an unconditional, published rating of the General Partner's
senior unsecured debt which is lower than its rating of such senior unsecured
debt as of the date hereof or (z) a Standard & Poor's rating of at least "BBB"
shall no longer be in effect on March 31, 2000, then the revised rate herein
provided shall be void ab initio and the General Partner shall pay on March 31,
2000, in addition to the distribution due to the holders of the Series C
Preferred Units, the difference between (1) the dividend that would have accrued
at the original rate of 8.625% per annum during the current and any prior
quarterly distribution period and (2) the distribution that actually accrued
during such distribution periods at the voided rate of 8.50% per annum. Promptly
after April 1, 2000 the parties hereto shall execute, acknowledge and deliver or
cause to be executed acknowledged and delivered all instruments and documents as
may be reasonably necessary or desirable to memorialize the revised distribution
rate. Such
<PAGE>
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable (i) quarterly in arrears, on March 1, June 1,
September 1 and December 1 of each year commencing on December 1, 1999 and,
(ii), in the event of (A) an exchange of Series C Preferred Units into Series C
Preferred Shares, or (B) a redemption of Series C Preferred Units, on the
exchange date or redemption date, as applicable (each a "Preferred Unit
Distribution Payment Date"). The amount of the distribution payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and for any period shorter than a full quarterly period for which distributions
are computed, the amount of the distribution payable will be computed on the
basis of the actual number of days elapsed in such period. If any date on which
distributions are to be made on the Series C Preferred Units is not a Business
Day (as defined herein), then payment of the distribution to be made on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Distributions on the Series C Preferred Units
will be made to the holders of record of the Series C Preferred Units on the
relevant record dates to be fixed by the Partnership acting through the General
Partner, which record dates shall in no event exceed fifteen (15) Business Days
prior to the relevant Preferred Unit Distribution Payment Date (the "Preferred
Unit Partnership Record Date").
The term "Business Day" shall mean each day other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulations or executive order to close.
(b) Distributions Cumulative. Distributions on the Series C Preferred
Units will accrue whether or not the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness, at any
time prohibit the current payment of distributions, whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of such distributions and whether or not such distributions are
authorized. Accrued but unpaid distributions on the Series C Preferred Units
will accumulate as of the Preferred Unit Distribution Payment Date on which they
first become payable. Distributions on account of arrears for any past
distribution periods may be declared and paid at any time, without reference to
a regular Preferred Unit Distribution Payment Date to holders of record of the
Series C Preferred Units on the record date fixed by the Partnership acting
through the General Partner, which date shall not exceed fifteen (15) Business
Days prior to the payment date. Accumulated and unpaid distributions will not
bear interest.
(c) Priority as to Distributions. (i) So long as any Series C Preferred
Units are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect to any
class or series of Partnership Interests of the Partnership ranking junior as to
the payment of distributions or rights upon a voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership to the Series C
Preferred Units (collectively, "Junior Units"), nor shall any cash or other
property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series C Preferred Units, any Parity
Preferred Units or any Junior Units, unless, in each case, all
<PAGE>
distributions accumulated on all Series C Preferred Units and all classes and
series of outstanding Parity Preferred Units have been paid in full. The
foregoing sentence will not prohibit (a) distributions payable solely in Junior
Units, (b) the conversion of Junior Units or Parity Preferred Units into
Partnership Units ranking junior to the Series C Preferred Units as to
distributions and upon liquidation, winding-up or dissolution or (c) the
redemption of Partnership Interests corresponding to any Series C Preferred
Shares (as hereinafter defined), Parity Preferred Shares (as such term is
defined in the Declaration of Trust of the General Partner, as supplemented (the
"Charter")), or Junior Shares (as such term is defined in the Charter) to be
purchased by the General Partner pursuant to Article 3 of the Charter to
preserve the General Partner's status as a real estate investment trust,
provided that such redemption shall be upon the same terms as the corresponding
purchase pursuant to Article 3 of the Charter.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series C Preferred Units, all distributions authorized and
declared on the Series C Preferred Units and all classes or series of
outstanding Parity Preferred Units shall be authorized and declared so that the
amount of distributions authorized and declared per Series C Preferred Unit and
such other classes or series of Parity Preferred Units shall in all cases bear
to each other the same ratio that accrued distributions per Series C Preferred
Unit and such other classes or series of Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such class or series of Parity Preferred Units do not
have cumulative distribution rights) bear to each other.
(d) No Further Rights. Holders of Series C Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Liquidation Proceeds. (a) Upon voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, distributions on the
Series C Preferred Units shall be made in accordance with Section 13.2 of the
Partnership Agreement.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than thirty (30) and not more than sixty
(60) days prior to the payment date stated therein, to each record holder of the
Series C Preferred Units at the respective addresses of such holders as the same
shall appear on the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series C Preferred
Units will have no right or claim to any of the remaining assets of the
Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary
sale,
<PAGE>
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all of the property or assets of
the General Partner to, or the consolidation or merger or other business
combination of the Partnership with or into, any corporation, trust,
partnership, limited liability company or other entity (or of any corporation,
trust, partnership, limited liability company or other entity with or into the
Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
Section 5. Optional Redemption. (a) Right of Optional Redemption. The
Series C Preferred Units may not be redeemed prior to the fifth (5th)
anniversary of the issuance date. On or after such date, the Partnership shall
have the right to redeem the Series C Preferred Units, in whole or in part, at
any time or from time to time, upon not less than thirty (30) nor more than
sixty (60) days' written notice, at a redemption price, payable in cash, equal
to the Capital Account balance of the holders of Series C Preferred Units (the
"Redemption Price"); provided, however, that no redemption pursuant to this
Section 5 will be permitted if the Redemption Price does not equal or exceed the
original Capital Contribution of such holder plus the cumulative Priority
Return, whether or not declared, to the redemption date to the extent not
previously distributed or distributed pursuant to Section 3(a). If fewer than
all of the outstanding Series C Preferred Units are to be redeemed, the Series C
Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(b) Limitation on Redemption. The Partnership may not redeem fewer than
all of the outstanding Series C Preferred Units unless all accumulated and
unpaid distributions have been paid on all Series C Preferred Units for all
quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (A) faxed,
and (B) mailed by the Partnership, by certified mail, postage prepaid, not less
than thirty (30) nor more than sixty (60) days prior to the redemption date,
addressed to the respective holders of record of the Series C Preferred Units at
their respective addresses as they appear on the records of the Partnership. No
failure to give or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series C Preferred Units except as to the
holder to whom such notice was defective or not given. In addition to any
information required by law, each such notice shall state: (1) the redemption
date, (2) the Redemption Price, (3) the aggregate number of Series C Preferred
Units to be redeemed and if fewer than all of the outstanding Series C Preferred
Units are to be redeemed, the number of Series C Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series C
Preferred Units the total number of Series C Preferred Units held by such holder
represents) of the aggregate number of Series C Preferred Units to be redeemed,
(4) the place or places where such Series C Preferred Units are to be
surrendered for payment of the Redemption Price, (5) that distributions on the
Series C Preferred Units to be redeemed will cease to accumulate on such
redemption date and (6) that payment of the Redemption Price will be made upon
presentation and surrender of such Series C Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of
Series C
<PAGE>
Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Partnership will deposit irrevocably in
trust for the benefit of the Series C Preferred Units being redeemed funds
sufficient to pay the applicable Redemption Price and will give irrevocable
instructions and authority to pay such Redemption Price to the holders of the
Series C Preferred Units upon surrender of the Series C Preferred Units by such
holders at the place designated in the notice of redemption. If the Series C
Preferred Units are evidenced by a certificate and if fewer than all Series C
Preferred Units evidenced by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the certificate evidencing all
Series C Preferred Units, evidencing the unredeemed Series C Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series C Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series C Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series C Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
Section 6. Voting Rights. (a) General. Holders of the Series C Preferred
Units will not have any voting rights or right to consent to any matter
requiring the consent or approval of the Limited Partners, except as set forth
in the Partnership Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series C Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least two-thirds of the Series C Preferred Units outstanding at
the time (i) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests senior to the Series C
Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up of the Partnership or reclassify any
Partnership Interests of the Partnership into any such senior Partnership
Interests, or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such senior Partnership Interests,
(ii) authorize or create, or increase the authorized or issued amount of any
Parity Preferred Units or reclassify, any Partnership Interest into any such
Partnership Interest or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such Partnership
Interests but only to the extent such Parity Preferred Units are issued to an
Affiliate of the Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates of the
Partnership (or to Affiliates purchasing the preferred stock of the same series
on the same terms as non-affiliated purchasers) or (iii) either (A) consolidate,
merge into or with, or convey, transfer or lease all or substantially all of its
assets to, any
<PAGE>
corporation or other entity or (B) amend, alter or repeal the provisions of the
Partnership Agreement, including without limitation this Section, whether by
merger, consolidation or otherwise, in each case in a manner that would
materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series C Preferred Units or the holders
thereof; provided, however, that with respect to the occurrence of a merger,
consolidation or a sale or lease of all or substantially all of the
Partnership's assets as an entirety, so long as (1) the Partnership is the
surviving entity and the Series C Preferred Units remain outstanding with the
terms thereof unchanged, or (2) the resulting, surviving or transferee entity is
a partnership, limited liability company or other pass-through entity organized
under the laws of any state and substitutes the Series C Preferred Units for
other interests in such entity having substantially the same terms and rights as
the Series C Preferred Units, including with respect to distributions, voting
rights and rights upon liquidation, dissolution or winding-up of the
Partnership, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series C Preferred Units and no vote of the Series C Preferred
Units shall be required in such case; and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (y) junior to the
Series C Preferred Units with respect to payment of distributions or the
distribution of assets upon liquidation, dissolution or winding-up of the
Partnership, or (z) on a parity with the Series C Preferred Units with respect
to payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up of the Partnership to the extent such Partnership
Interests are not issued to an Affiliate, other than the General Partner to the
extent the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers and no vote of the Series C Preferred Units shall be required
in such case.
In addition to the foregoing, the Partnership will not (x) enter into any
contract, mortgage, loan or other agreement that prohibits or restricts, or has
the effect of prohibiting or restricting, the ability of a holder of Series C
Preferred Units to exercise its rights set forth herein to effect an exchange or
redemption pursuant to Section 8, except with the written consent of such
holder; or (y) amend, alter, or repeal or waive Section 3.1, 11.3(d) or 7.5(a)
of the Partnership Agreement without the affirmative vote of at least a majority
of the Series C Preferred Units outstanding at the time.
(c) No General Partner Voting Rights. Notwithstanding anything to the
contrary in this Section 6, in no event shall the General Partner or any of its
Affiliates have any voting, consent or approval rights in respect of any Series
C Preferred Units it or they may hold, and any percentage or portion of
outstanding Series C Preferred Units that may be required hereunder for any
vote, consent or approval of holders thereof shall be determined as if all
Series C Preferred Units then held by the General Partner or any of its
Affiliates were not outstanding.
Section 7. Transfer Restrictions. The Series C Preferred Units shall be
subject to the provisions of Article XI of the Partnership Agreement, provided,
however, that (i) notwithstanding the provisions of such Article XI, the holders
of the Series C Preferred Units
<PAGE>
shall have the absolute right to transfer their units so long as such transfers
(1) do not result in more than five (5) Partners in the aggregate holding the
Series C Preferred Units (within the meaning of Section 1.7704-1 (h)(1)(ii) of
the U.S. Treasury Regulations (including by reason of Section 1.7704-1 (h)(3) or
any successor provision of law)) and (2) do not violate Section 11.3(e) of
Article XI, (ii) the General Partner shall act reasonably in exercising its
discretion pursuant to the provisions of Section 11.4(a)(ii) to transferees of
Series C Preferred Units, (iii) the provisions of Clause B of Section 11.3(d)
shall not be applicable to holders of Series C Preferred Units if at the time of
such transfer, the Partnership already has 100 Partners; (iv) if only a portion
of the Series C Preferred Units shall be transferred, the transferee of such
transferred Series C Preferred Units shall, subject to the provisions of Section
11.4, be substituted as a Limited Partner in place of the transferring holders
only as to the Series C Preferred Units so transferred; and (v) the provisions
of Sections 11.6(c) and 11.6(d) shall not be applicable to any transfer of
Series C Preferred Units; and provided further that "transfer" when used in
Article XI shall not be deemed to include any exchange pursuant to Section 8
below. Notwithstanding anything in this Agreement to the contrary, the Series C
Preferred Units shall be freely transferable to LLC.
Section 8. Exchange Rights. (a) Right to Exchange. (i) Series C Preferred
Units will be exchangeable in whole or in part at anytime on or after the tenth
(10th) anniversary of the date of issuance, at the option of the holders of more
than 50% of all outstanding Series C Units, for authorized but previously
unissued shares of 8.625% Series C Cumulative Redeemable Preferred Shares of the
General Partner (the "Series C Preferred Shares") at an exchange rate of one
Series C Preferred Share for one Series C Preferred Unit, subject to adjustment
as described below (the "Exchange Price"), provided that the Series C Preferred
Units will become exchangeable at any time, in whole or in part, at the option
of the holders of more than 50% of all outstanding Series C Units, for Series C
Preferred Shares if (y) at any time full distributions shall not have been
timely made on any Series C Preferred Unit with respect to six (6) prior
quarterly distribution periods, whether or not consecutive; provided, however,
that a distribution in respect of Series C Preferred Units shall be considered
timely made if made within two (2) Business Days after the applicable Preferred
Unit Distribution Payment Date if at the time of such late payment there shall
not be any prior quarterly distribution periods in respect of which fall
distributions were not timely made or (z) upon receipt by a holder or holders of
Series C Preferred Units of (1) a notice from the General Partner that the
General Partner or a Subsidiary of the General Partner has become aware of facts
that will or likely will cause the Partnership to become a PTP, (2) an opinion
rendered by an outside nationally recognized independent counsel familiar with
such matters addressed to a holder or holders of Series C Preferred Units, that
the Partnership is or likely is, or upon the occurrence of a defined event in
the immediate future will be or likely will be, a PTP. In addition, the Series C
Preferred Units may be exchanged for Series C Preferred Shares, in whole or in
part, at the option of any holder prior to the tenth (10th) anniversary of the
issuance date and after the third (3rd) anniversary thereof if such holder of a
Series C Preferred Units shall deliver to the General Partner either (i) a
private letter ruling addressed to such holder of Series C Preferred Units or
(ii) an opinion of independent counsel reasonably acceptable to the General
Partner based on the enactment of temporary or final Treasury Regulations or the
publication of a Revenue Ruling, in either case to the effect that an exchange
of the Series C Preferred Units at such earlier time would not cause the Series
C
<PAGE>
Preferred Units to be considered "stock and securities" within the meaning of
Section 351(e) of the Code for purposes of determining whether the holder of
such Series C Preferred Units is an "investment company" under Section 721(b) of
the Code if an exchange is permitted at such earlier date. Furthermore, the
Series C Preferred Units, if a holder thereof so determines, may be exchanged in
whole or in part for Series C Preferred Shares if (1) such holder concludes
based on results or projected results that there exists (in the reasonable
judgment of such holder) an imminent and substantial risk that such holder's
interest in the Partnership represents or will represent more than 18.0% of the
total profits of or capital interests in the Partnership for a taxable year, (2)
such holder delivers to the General Partner an opinion of nationally recognized
independent counsel, reasonably acceptable to the General Partner to the effect
that there is a substantial risk that its interest in the Partnership does not
or will not satisfy the 18.0% limit and (3) the General Partner agrees with the
conclusions referred to in clauses (1) and (2) of this sentence, such agreement
not to be unreasonably withheld.
(ii) Notwithstanding anything to the contrary set forth in Section
8(a)(i) hereof, if an Exchange Notice (as defined herein) has been delivered to
the General Partner, then the General Partner may, at its option, elect to
redeem or cause the Partnership to redeem all or a portion of the outstanding
Series C Preferred Units for cash in an amount equal to the original Capital
Contribution per Series C Preferred Unit and all accrued and unpaid
distributions thereon to the date of redemption. The General Partner may
exercise its option to redeem the Series C Preferred Units for cash pursuant to
this Section 8(a)(ii) hereof by giving each holder of record of Series C
Preferred Units notice of its election to redeem for cash, within five (5)
Business Days after receipt of the Exchange Notice, by (y) fax, and (z)
registered mail, postage paid, at the address of each holder as it may appear on
the records of the Partnership stating (A) the redemption date, which shall be
no later than sixty (60) days following the receipt of the Exchange Notice, (B)
the redemption price, (C) the place or places where the Series C Preferred Units
are to be surrendered for payment of the redemption price, (D) that
distributions on the Series C Preferred Units will cease to accrue on such
redemption date; (E) that payment of the redemption price will be made upon
presentation and surrender of the Series C Preferred Units and (F) the aggregate
number of Series C Preferred Units to be redeemed, and if fewer than all of the
outstanding Series C Preferred Units are to be redeemed, the number of Series C
Preferred Units to be redeemed held by such holder, which number shall equal
such holder's pro-rata share (based on the percentage of the aggregate number of
outstanding Series C Preferred Units the total number of Series C Preferred
Units held by such holder represents) of the aggregate number of Series C
Preferred Units being redeemed.
(iii) In the event an exchange of all or a portion of Series C
Preferred Units pursuant to Section 8(a)(i) hereof would violate the provisions
on ownership limitation of the General Partner set forth in Article 3 of the
Charter with respect to the Series C Preferred Shares, the General Partner shall
give written notice thereof to each holder of record of Series C Preferred
Units, within five (5) Business Days following receipt of the Exchange Notice,
by (y) fax, and (z) registered mail, postage prepaid, at the address of each
such holder set forth in the records of the Partnership. In such event, each
holder of Series C Preferred Units shall be entitled to exchange, pursuant to
the provision of Section 8(b) a number of Series C Preferred Units
<PAGE>
which would comply with the provisions on the ownership limitation of the
General Partner set forth in such Article 3 of the Charter and any Series C
Preferred Units not so exchanged (the "Excess Units") shall be redeemed by the
Partnership for cash in an amount equal to the original Capital Contribution per
Excess Unit, plus any accrued and unpaid distributions thereon, whether or not
declared, to the date of redemption. The written notice of the General Partner
shall state (A) the number of Excess Units held by such holder, (B) the
redemption price of the Excess Units, (C) the date on which such Excess Units
shall be redeemed, which date shall be no later than sixty (60) days following
the receipt of the Exchange Notice, (D) the place or places where such Excess
Units are to be surrendered for payment of the Redemption Price, (E) that
distributions on the Excess Units will cease to accrue on such redemption date,
and (F) that payment of the redemption price will be made upon presentation and
surrender of such Excess Units. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of such units agrees to
provide representations and covenants reasonably requested by the General
Partner relating to (1) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above) will not
cause any individual to Beneficially Own in excess of the Ownership Limit (all
as defined in the General Partner's Charter); and (2) to the extent such holder
can so represent and covenant without obtaining information from its owners, the
holder's ownership of tenants of the Partnership and its affiliates.
To the extent the General Partner would not be able to pay the cash set
forth above in exchange for the Series C Excess Units, and to the extent
consistent with the Charter, the General Partner agrees that it will grant to
the holders of the Series C Preferred Units exceptions to the Beneficial
Ownership Limit and Constructive Ownership Limit set forth in the Charter
sufficient to allow such holders to exchange all of their Series C Preferred
Units for Series C Preferred Shares, provided such holders furnish to the
General Partner representations acceptable to the General Partner in its sole
and absolute discretion which assure the General Partner that such exceptions
will not jeopardize the General Partner's tax status as a REIT for purposes of
federal and applicable state law.
Notwithstanding any provision of this Agreement to the contrary, no Series
C Limited Partner shall be entitled to effect an exchange of Series C Preferred
Units for Series C Preferred Shares to the extent that ownership or right to
acquire such shares would cause the Partner or any other Person or, in the
opinion of counsel selected by the General Partner, may cause the Partner or any
other Person, to violate the restrictions on ownership and transfer of Series C
Preferred Shares set forth in the Charter. To the extent any such attempted
exchange for Series C Preferred Shares would be in violation of the previous
sentence, it shall be void ab initio and such Series C Limited Partner shall not
acquire any rights or economic interest in the Series C Preferred Shares
otherwise issuable upon such exchange.
(iv) The redemption of Series C Preferred Units described in Section
8(a)(ii) and (iii) shall be subject to the provisions of Section 5(c)(ii);
provided, however, that the term "Redemption Price" in such section shall be
read to mean the original Capital Contribution per
<PAGE>
Series C Preferred Unit being redeemed plus all accrued and unpaid distributions
to the redemption date.
(b) Procedure for Exchange. (i) Any exchange shall be exercised pursuant
to a notice of exchange (the "Exchange Notice") delivered to the General Partner
by the holder who is exercising such exchange right, by (A) fax and (B) by
certified mail postage prepaid. The exchange of Series C Preferred Units, or a
specified portion thereof, may be effected after the fifth (5th) Business Day
following receipt by the General Partner of the Exchange Notice by delivering
certificates, if any, representing such Series C Preferred Units to be exchanged
together with, if applicable, written notice of exchange and a proper assignment
of such Series C Preferred Units to the office of the General Partner maintained
for such purpose. Currently, such office is Two Center Plaza, Suite 200, Boston,
Massachusetts 02108. Each exchange will be deemed to have been effected
immediately prior to the close of business on the date on which such Series C
Preferred Units to be exchanged (together with all required documentation) shall
have been surrendered and notice shall have been received by the General Partner
as aforesaid and the Exchange Price shall have been paid. Any Series C Preferred
Shares issued pursuant to this Section 8 shall be delivered as shares which are
duly authorized, validly issued, fully paid and nonassessable, free of pledge,
lien, encumbrance or restriction other than those provided in the Charter, the
Bylaws of the General Partner, the Securities Act of 1933 and relevant state
securities or blue sky laws.
(ii) In the event of an exchange of Series C Preferred Units for
Series C Preferred Shares, an amount equal to the accrued and unpaid
distributions, whether or not declared, to the date of exchange on any Series C
Preferred Units tendered for exchange shall (A) accrue on the Series C Preferred
Shares into which such Series C Preferred Units are exchanged, and (B) continue
to accrue on such Series C Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as the holder of such Series C
Preferred Units. Notwithstanding anything to the contrary set forth herein, in
no event shall a holder of a Series C Preferred Unit that was validly exchanged
into Series C Preferred Shares pursuant to this section (other than the General
Partner now holding such Series C Preferred Unit), receive a cash distribution
out of Available Cash of the Partnership, if such holder, after exchange, is
entitled to receive a distribution out of Available Cash with respect to the
Series C Preferred Shares for which such Series C Preferred Unit was exchanged
or redeemed.
Further, for purposes of the foregoing, in the event of an exchange of
Series C Preferred Units for Series C Preferred Shares, if the accrued and
unpaid distributions per Series C Preferred Unit is not the same for all Series
C Preferred Units, the accrued and unpaid distributions per Series C Preferred
Unit for all Series C Preferred Units shall be equal to the greatest amount of
such accrued and unpaid distributions per Series C Preferred Unit on any such
unit.
(iii) Fractional shares of Series C Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the Series C Preferred Shares on
the day prior to the exchange date as determined in good faith by the Board of
Directors of the General Partner.
<PAGE>
(c) Adjustment of Exchange Price. (i) The Exchange Price is subject to
adjustment upon certain events, including (a) subdivisions, combinations and
reclassifications of the Series C Preferred Shares and (b) distributions to all
holders of Series C Preferred Shares of evidences of indebtedness of the General
Partner or assets (including securities but excluding dividends and
distributions paid out of equity applicable to Series C Preferred Shares).
(ii) In case the General Partner shall be a party to any
transaction (including, without limitation, a merger, consolidation, statutory
share exchange, tender offer for all or substantially all of the General
Partner's capital stock or sale of all or substantially all of the General
Partner's assets), in each case as a result of which the Series C Preferred
Shares will be converted into the right to receive shares of capital stock,
other securities or other property (including cash or any combination thereof),
each Series C Preferred Unit will thereafter be exchangeable into the kind and
amount of shares of capital stock and other securities and property receivable
(including cash or any combination thereof) upon the consummation of such
transaction by a holder of that number of Series C Preferred Shares or fraction
thereof into which one Series C Preferred Unit was exchangeable immediately
prior to such transaction. The General Partner may not become a party to any
such transaction, whether or not any Series C Preferred Shares are then
outstanding if the terms thereof are inconsistent with the foregoing. In
addition, so long as a Series C Limited Partner or any of its permitted
successors or assigns hold any Series C Preferred Units, as the case may be, the
General Partner shall not, without the affirmative vote of the holders of at
least two-thirds in the aggregate of the Series C Preferred Units outstanding at
the time and the holders of at least two-thirds of the Series C Preferred Shares
outstanding at the time: (a) designate or create, or increase the authorized or
issued amount of, any class or series of shares ranking senior to the Series C
Preferred Shares with respect to the payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any authorized shares of
the General Partner into any such shares, or create, authorize or issue any
obligations or securities convertible into or evidencing the right to purchase
any such shares; (b) designate or create, or increase the authorized or issued
amount of, any Parity Preferred Shares or reclassify any authorized shares of
the General Partner into any such shares, or create, authorize or issue any
obligations or security convertible into or evidencing the right to purchase any
such shares, but only to the extent that such Parity Preferred Shares are issued
to an Affiliate of the General Partner (unless the Affiliate is purchasing on
the same terms in the same series as a non- affiliate); (c) amend, alter or
repeal the provisions of the Charter or bylaws of the General Partner, whether
by merger, consolidation or otherwise, that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power of
the Series C Preferred Shares or the holders thereof; provided, however, that
any increase in the amount of authorized Preferred Shares or the creation or
issuance of any other series or class of Preferred Shares, or any increase in
the amount of authorized shares of each class or series, in each case ranking
either (1) junior to the Series C Preferred Shares with respect to the payment
of distributions and the distribution of assets upon liquidation, dissolution or
winding-up, or (2) on a parity with the Series C Preferred Shares with respect
to the payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up to the extent such Preferred Shares are not issued to
an Affiliate of the Company, shall not be deemed to materially and
<PAGE>
adversely affect such rights, preferences, privileges or voting powers.
Section 9. No Conversion Rights. (a) The holders of the Series C Preferred
Units shall not have any rights to convert such Partnership Units into any other
class of Partnership Interests or any interest in the Partnership; (b) The
Series C Preferred Units shall not be subject to the provisions of Section
4.2(e) of the Partnership Agreement.
Section 10. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of the Series C Preferred Units.
Section 11. Admission of Limited Partner; Exhibits to Partnership
Agreement. In accordance with Section 12.2(b), Contributor is hereby admitted as
an Additional Limited Partner. In order to duly reflect the issuance of Series C
Preferred Units provided for herein, the Partnership Agreement will be amended
by deleting Exhibit A attached thereto and substituting a new Exhibit A attached
hereto therefor within 10 business days hereof.
Section 12. Reaffirmation. 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 affirms.
Section 13. Amendments to Partnership Agreement. The following shall be
incorporated into Section 14.1(c) of the Partnership Agreement:
"Notwithstanding any other provisions of this Agreement, this
Agreement shall not be amended, and no action may be taken by the General
Partner, without the Consent of each Partner adversely affected if such
amendment or action would (i) convert a Limited Partner's interest in the
Partnership into a general partner's interest (except as the result of the
General Partner acquiring such interest), (ii) modify the limited
liability of a Limited Partner, (iii) alter rights of the Partner to
receive distributions pursuant to Article 5 or Section 13.2, or the
allocations specified in Article 6 (except as permitted pursuant to
Section 4.2(a)), (iv) cause the termination of the Partnership prior to
the time set forth in Sections 2.5 or 13.1, (v) alter the redemption or
exchange rights as set forth in Sections 5 and 8 hereof, respectively, or
(vi) amend this Section 12. Further, no amendment may alter the
restrictions on the General Partner's authority set forth elsewhere in
this Section 12 without the Consent specified in such section. Any such
amendment or action consented to by any Limited Partner shall be effective
as to that Limited Partner, notwithstanding the absence of such consent by
any other Limited Partner."
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed as of the date first
above written.
CABOT INDUSTRIAL TRUST
By: /s/ Neil Waisnor
-----------------------------------
Name: Neil Waisnor
Title: Senior Vice President
CONTRIBUTOR
By: ___________________, its Managing Member
By:
--------------------------------
Name:
Title Sr. Vice President
<PAGE>
Exhibit 4.8
CABOT INDUSTRIAL TRUST
ARTICLES SUPPLEMENTARY
2,600,000 SHARES
8.625% SERIES C CUMULATIVE REDEEMABLE PREFERRED SHARES
Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland (the "Department") that:
FIRST: Under a power contained in Article 2, Section 1 of the
Amended and Restated Declaration of Trust of the Company, filed with, and
accepted for record by, the State Department of Assessments and Taxation of
Maryland (the "SDAT") on January 26, 1998, as supplemented by Articles
Supplementary filed with, and accepted for record by, the SDAT on July 10, 1998
and on April 29, 1999 (the "Charter"), the Board of Trustees of the Company, as
required by Section 8-203(b) of the Corporations and Associations Article of the
Annotated Code of Maryland, has unanimously adopted resolutions classifying and
designating 2,600,000 unissued shares of beneficial interest (the "Shares") as
8.625% Series C Cumulative Redeemable Preferred Shares, with the following
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption, and other terms and conditions, which upon any
restatement of the Charter shall be made part of Article 2 of the Charter, with
any necessary or appropriate changes to the enumeration and lettering thereof:
8.625% SERIES C CUMULATIVE REDEEMABLE SHARES
SECTION 1. Designation and Number. A series of preferred shares,
designated the "8.625% Series C Cumulative Redeemable Preferred Shares" (the
"Series C Preferred Shares") is hereby established. The number of shares of
Series C Preferred Shares shall be 2,600,000.
SECTION 2. Rank. The Series C Preferred Shares shall, with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Company, rank senior to all classes or series of common
Shares and to all classes or series of equity securities of the Company now or
hereafter authorized, issued or outstanding, other than any class or series of
equity securities of the Company expressly designated as ranking on a parity
with or senior to the Series C Preferred Shares as to distributions and rights
upon voluntary or involuntary liquidation, winding-up or dissolution of the
Company. For purposes of these Articles Supplementary, the term "Parity
Preferred Shares" shall be used to refer to any class or series of equity
securities of the Company now or hereafter authorized, issued or outstanding
expressly designated by the Company to rank on a parity with Series C Preferred
Shares with respect to distributions and rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Company, including specifically
the Series B Cumulative Redeemable Preferred Shares. The term "equity
securities" does not include debt securities, which will rank senior to the
Series C Preferred Shares prior to conversion.
SECTION 3. Distributions.
(a) Payment of Distributions. Subject to the rights of holders of Parity
Preferred Shares and holders of equity securities ranking senior to the Series C
Preferred Shares as to payment of distributions, holders of Series C Preferred
Shares will be entitled to receive, when, as and if declared by the Board of
Trustees of the Company, out of funds legally available for the payment of
distributions, cumulative preferential cash distributions at the rate per annum
of 8.625", of the $25 liquidation preference per Series C Preferred Share. In
the event that on or prior to March 31, 2000 (i) the Company's senior unsecured
debt shall have an unconditional, published, Standard & Poor's rating of at
least "BBB" and (ii) neither Moody's nor any other rating agency with offices
located in at least five (5) cities in the United States shall have in effect an
unconditional, published, rating of the Company's senior unsecured
<PAGE>
debt which is lower than its rating for such senior unsecured debt as of the
date hereof, then beginning on the date on which each of such foregoing
conditions are met, the rate per annum shall be 8.50% of the $25 liquidation
preference per Series C Preferred Share, in which case the designation of the
Series C Preferred Shares will change accordingly to reflect such new
distribution rate; provided, that, if(y) either Moody's or any other rating
agency with offices located in at least five (5) cities in the United States
shall have in effect on March 31, 2000 an unconditional published rating of the
Company's senior unsecured debt which is lower than its rating of such senior
unsecured debt as of the date hereof or (z) a Standard & Poor's rating of at
least "BBB" shall no longer be in effect on March 31, 2000, then the revised
rate herein provided shall be void ab initio and the Company shall pay on March
31, 2000, in addition to the dividend then due to the holders of the Series C
Preferred Shares, the difference between (1) the dividend that would have
accrued at the original rate of 8.625% per annum during the current and any
prior quarterly distribution period and (2) the dividend that actually accrued
during such distribution periods at the voided rate of 8.50% per annum. Promptly
after April 1, 2000 the parties hereto shall execute, acknowledge and deliver or
cause to be executed acknowledged and delivered all instruments and documents as
may be reasonably necessary or desirable to memorialize the revised distribution
rate. Such distributions shall be cumulative, shall accrue from the original
date of issuance and will be payable (i) quarterly in arrears, on March 1, June
1, September 1 and December 1 of each year commencing on the first of such dates
to occur after the original date of issuance and, (ii) in the event of a
redemption, on the redemption date (each a "Preferred Shares Distribution
Payment Date"). The amount of the distribution payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months and for any
period shorter than a full quarterly period for which distributions are
computed, the amount of the distribution payable will be computed on the basis
of the actual number of days elapsed in such period. If any date on which
distributions are to be made on the Series C Preferred Shares is not a Business
Day (as defined herein), then payment of the distribution to be made on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Distributions on the Series C Preferred Shares
will be made to the holders of record of the Series C Preferred Shares on the
relevant record dates, which, unless otherwise provided by the Company with
respect to any distribution, will be fifteen (15) Business Days prior to the
relevant Preferred Shares Distribution Payment Date (each a "Distribution Record
Date"). Notwithstanding anything to the contrary set forth herein, each Series C
Preferred Share shall also continue to accrue all accrued and unpaid
distributions up to the exchange date on any Series C Preferred Unit (as defined
in the Second Amended and Restated Agreement of Limited Partnership of Cabot
Industrial Properties, L.P., dated as of February 4, 1998 (the "Partnership
Agreement"), as amended through the date hereof) validly exchanged into such
Series C Preferred Share in accordance with the provisions of such Partnership
Agreement.
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Limitation on Distributions. No distributions on the Series C
Preferred Shares shall be declared or paid or set apart for payment by the
Company at such time as the terms and provisions of any agreement of the
Company, including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law.
(c) Distributions Cumulative. Notwithstanding the foregoing, distributions
on the Series C Preferred Shares will accrue whether or not the terms and
provisions set forth in Section 3(b) hereof at any time prohibit the current
payment of distributions, whether or not the Company has earnings, whether or
not there are funds legally available for the payment of such distributions and
whether or not such distributions are authorized or declared. Accrued but unpaid
distributions on the Series C Preferred Shares will accumulate as of the
Preferred Shares Distribution Payment Date on which they first become payable.
Accumulated and unpaid distributions will not bear interest.
(d) Priority as to Distributions. (i) So long as any Series C Preferred
Shares are outstanding, no
<PAGE>
distribution of cash or other property shall be authorized, declared, paid or
set apart for payment on or with respect to any class or series of common Shares
or any class or series of other Shares of the Company ranking junior as to the
payment of distributions or rights upon voluntary or involuntary dissolution,
liquidation or winding up of the Company to the Series C Preferred Shares (such
common Shares or other junior Shares, including, without limitation Series A
Junior Participating Preferred Shares authorized pursuant to Articles
Supplementary filed with the Department on July 10, 1998, collectively, "Junior
Shares"), nor shall any cash or other property be set aside for or applied to
the purchase, redemption or other acquisition for consideration of any Series C
Preferred Shares, any Parity Preferred Shares or any Junior Shares, unless, in
each case, all distributions accumulated on all Series C Preferred Shares and
all classes and series of outstanding Parity Preferred Shares have been paid in
full. The foregoing sentence will not prohibit (i) distributions payable solely
in Shares of the Company ranking junior to the Series C Preferred Shares as to
distributions and upon liquidation, winding-up or dissolution, (ii) the
conversion of Junior Shares or Parity Preferred Shares into Shares of the
Company ranking junior to the Series C Preferred Shares as to distributions and
upon liquidation, winding up or dissolution, and (iii) purchase by the Company
of such Series C Preferred Shares. Parity Preferred Shares or Junior Shares
pursuant to Article 3 of the Charter to the extent required to preserve the
Company's status as a real estate investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series C Preferred Shares, all distributions authorized and
declared on the Series C Preferred Shares and all classes or series of
outstanding Parity Preferred Shares shall be authorized and declared so that the
amount of distributions authorized and declared per share of Series C Preferred
Shares and such other classes or series of Parity Preferred Shares shall in all
cases bear to each other the same ratio that accrued distributions per share on
the Series C Preferred Shares and such other classes or series of Parity
Preferred Shares (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such class or series of Parity
Preferred Shares do not have cumulative distribution rights) bear to each other.
(e) No Further Rights. Holders of Series C Preferred Shares shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
SECTION 4. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the rights of holders
of Parity Preferred Shares and subject to equity securities ranking senior to
the Series C Preferred Shares with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Company, the holders
of Series C Preferred Shares shall be entitled to receive out of the assets of
the Company legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Company, but before
any payment or distributions of the assets shall be made to holders of common
Shares or any other class or series of shares of the Company that ranks junior
to the Series C Preferred Shares as to rights upon liquidation, dissolution or
winding-up of the Company, an amount equal to the sum of (i) a liquidation
preference of $25 per Series C Preferred Share, and (ii) an amount equal to any
accumulated and unpaid distributions thereon, whether or not declared, to the
date of payment. In the event that, upon such voluntary or involuntary
liquidation, dissolution or winding-up, there are insufficient assets to permit
full payment of liquidating distributions to the holders of Series C Preferred
Shares and any Parity Preferred Shares, all payments of liquidating
distributions on the Series C Preferred Shares and such Parity Preferred Shares
shall be made so that the payments on the Series C Preferred Shares and such
Parity Preferred Shares shall in all cases bear to each other the same ratio
that the respective rights of the Series C Preferred Shares and such other
Parity Preferred Shares (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such Parity Preferred
Shares do not have cumulative distribution rights) upon liquidation, dissolution
or winding-up of the Company bear to each other.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Company, stating the payment date
or dates when, and the place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than thirty (30) and not more than sixty
(60) days prior to the payment date stated therein, to each record holder of the
Series C Preferred Shares at the respective addresses of such holders as the
same shall appear on the share transfer records of the Company.
<PAGE>
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series C Preferred
Shares will have no right or claim to any of the remaining assets of the
Company.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company to, or the consolidation or merger or other business
combination of the Company with or into any corporation, trust or other entity
(or of any corporation, trust or other entity with or into the Company) shall
not be deemed to constitute a liquidation, dissolution or winding-up of the
Company.
SECTION 5. Optional Redemption.
(a) Right of Optional Redemption. The Series C Preferred Shares may not be
redeemed prior to September 3, 2004. On or after such date, the Company shall
have the right to redeem the Series C Preferred Shares, in whole or in part, at
any time or from time to time, upon not less than thirty (30) nor more than
sixty (60) days' written notice, at a redemption price, payable in cash, equal
to $25 per share of Series C Preferred Shares plus accumulated and unpaid
distributions, whether or not declared, to the date of redemption. If fewer than
all of the outstanding Series C Preferred Shares are to be redeemed, the Series
C Preferred Shares to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional shares).
(b) Limitation on Redemption. The Company may not redeem fewer than all of
the outstanding shares of Series C Preferred Shares unless all accumulated and
unpaid distributions have been paid on all outstanding Series C Preferred Shares
for all quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (i) faxed,
and (ii) mailed by the Company, postage prepaid, not less than thirty (30) nor
more than sixty (60) days prior to the redemption date, addressed to the
respective holders of record of the Series C Preferred Shares to be redeemed at
their respective addresses as they appear on the transfer records of the
Company. No failure to give or defect in such notice shall affect the validity
of the proceedings for the redemption of any Series C Preferred Shares except as
to the holder to whom such notice was defective or not given. In addition to any
information required by law or by the applicable rules of any exchange upon
which the Series C Preferred Shares may be listed or admitted to trading, each
such notice shall state: (i) the redemption date, (ii) the redemption price,
(iii) the number of Series C Preferred Shares to be redeemed, (iv) the place or
places where such Series C Preferred Shares are to be surrendered for payment of
the redemption price, (v) that distributions on the Series C Preferred Shares to
be redeemed will cease to accumulate on such redemption date and (vi) that
payment of the redemption price and any accumulated and unpaid distributions
will be made upon presentation and surrender of such Series C Preferred Shares.
If fewer than all of the Series C Preferred Shares held by any holder are to be
redeemed, the notice mailed to such holder shall also specify the number of
Series C Preferred Shares held by such holder to be redeemed.
(ii) If the Company gives a notice of redemption in respect of
Series C Preferred Shares (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Company will deposit
irrevocably in trust for the benefit of the holders of the Series C Preferred
Shares being redeemed, funds sufficient to pay the applicable redemption price,
plus any accumulated and unpaid distributions, whether or not declared, if any,
on such shares to the date fixed for redemption, without interest, and will give
irrevocable instructions and authority to pay such redemption price and any
accumulated and unpaid distributions, whether or not declared, if any, on such
shares to the holders of the Series C Preferred Shares upon surrender of the
certificates for the Series C Preferred Shares by such holders at the place
designated in the notice of redemption. If fewer than all Series C Preferred
Shares evidenced by any certificate are being redeemed, a new certificate shall
be issued upon surrender of the certificate evidencing all Series C Preferred
Shares, evidencing the unredeemed Series C Preferred Shares without cost to the
holder thereof. On and after the date of redemption, distributions will cease to
accumulate on the Series C Preferred Shares or portions thereof called for
redemption, unless the Company defaults
<PAGE>
in the payment thereof. If any date fixed for redemption of Series C Preferred
Shares is not a Business Day, then payment of the redemption price payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
redemption price or any accumulated or unpaid distributions in respect of the
Series C Preferred Shares is improperly withheld or refused and not paid by the
Company, distributions on such Series C Preferred Shares will continue to
accumulate from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the applicable redemption price and any accumulated
and unpaid distributions.
(e) Status of Redeemed Shares. Any Series C Preferred Shares that shall at
any time have been redeemed shall after such redemption, have the status of
authorized but unissued Shares, without designation as to class or series until
such shares are once more designated as part of a particular class or series by
the Board.
SECTION 6. Voting Rights.
(a) General. Holders of the Series C Preferred Shares will not have any
voting rights, except as set forth below.
(b) Right to Elect Trustees. (i) If at any time full distributions shall
not have been timely made on any Series C Preferred Shares with respect to any
six (6) prior quarterly distribution periods, whether or not consecutive (a
"Preferred Distribution Default"), the holders of such Series C Preferred
Shares, voting together as a single class with the holders of each class or
series of Parity Preferred Shares upon which like voting rights have been
conferred and are exercisable, will have the right to elect two additional
Trustees to serve on the Company's Board (the "Preferred Shares Trustees") at a
special meeting called by the holders of record of at least 10% of the
outstanding Series C Preferred Shares or any such class or series of Parity
Preferred Shares or at the next annual meeting of Shareholders, and at each
subsequent annual meeting of Shareholders or special meeting for the election of
Trustees held in place thereof, until all such distributions in arrears and
distributions for the current quarterly period on the Series C Preferred Shares
and each such class or series of Parity Preferred Shares have been paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Company shall call or cause to be called, upon written request of
holders of record of at least 10% of the outstanding Series C Preferred Shares,
a special meeting of the holders of Series C Preferred Shares and all the series
of Parity Preferred Shares upon which like voting rights have been conferred and
are exercisable (collectively, the "Parity Securities") by mailing or causing to
be mailed to such holders a notice of such special meeting to be held not less
than ten and not more than 45 days after the date such notice is given. The
record date for determining holders of the Parity Securities entitled to notice
of and to vote at such special meeting will be the close of business on the
third Business Day preceding the day on which such notice is mailed. At any such
special meeting, all of the holders of the Parity Securities, by plurality vote,
voting together as a single class without regard to series will be entitled to
elect two Trustees on the basis of one vote per $25.00 of liquidation preference
to which such Parity Securities are entitled by their terms (excluding amounts
in respect of accumulated and unpaid dividends) and not cumulatively. The holder
or holders of one-third of the Parity Securities then outstanding, present in
person or by proxy, will constitute a quorum for the election of the Preferred
Shares Trustees except as otherwise provided by law. Notice of all meetings at
which holders of the Series C Preferred Shares shall be entitled to vote will be
given to such holders at their addresses as they appear in the transfer records.
At any such meeting or adjournment thereof in the absence of a quorum, subject
to the provisions of any applicable law, a majority of the holders of the Parity
Securities present in person or by proxy shall have the power to adjourn the
meeting for the election of the Preferred Shares Trustees, without notice other
than an announcement at the meeting, until a quorum is present. If a Preferred
Distribution Default shall terminate after the notice of a special meeting has
been given but before such special meeting has been held, the Company shall, as
soon as practicable after such termination, mail or cause to be mailed notice of
such termination to holders of the Series C Preferred Shares that would have
been entitled to vote at such special meeting.
<PAGE>
(iii) If and when all accumulated distributions and the
distributions for the current distribution period on the Series C Preferred
Shares shall have been paid in full or a sum sufficient for such payment is
irrevocably deposited in trust for payment, the holders of the Series C
Preferred Shares shall be divested of the voting rights set forth in this
Section 6(b) herein (subject to revesting in the event of each and every
Preferred Distribution Default) and, if all distributions in arrears and the
distributions for the current distribution period have been paid in full or set
aside for payment in full on all other classes or series of Parity Preferred
Shares upon which like voting rights have been conferred and are exercisable,
the term and office of each Preferred Shares Trustee so elected shall terminate.
Any Preferred Shares Trustee may be removed at any time with or without cause by
the vote of, and shall not be removed otherwise than by the vote of, the holders
of record of a majority of the outstanding Parity Securities when they have the
voting rights set forth in this Section 6(b). So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Shares Trustee may be filled by written consent of the Preferred Shares Trustee
remaining in office, or if none remains in office, by a vote of the holders of
record of a majority of the outstanding Parity Securities when they have the
voting rights set forth in this Section 6(b). The Preferred Shares Trustees
shall each be entitled to one vote per trustee on any matter.
(c) Certain Voting Rights. So long as any Series C Preferred Shares or
Series C Preferred Units remain outstanding, the Company shall not, without the
affirmative vote of the holders of at least two-thirds of the Series C Preferred
Shares and Series C Preferred Units outstanding at the time (together, as
applicable, voting as a single class) (collectively, the "Voting Securities")
(i) designate or create, or increase the authorized or issued amount of, any
class or series of shares ranking senior to the Series C Preferred Shares with
respect to payment of distributions or rights upon liquidation, dissolution or
winding-up of the Company or reclassify any authorized shares of the Company
into any such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, (ii)
designate or create, or increase the authorized or issued amount of, any Parity
Preferred Shares or reclassify any authorized shares of the Company into any
such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, but only
to the extent such Parity Preferred Shares are issued to an affiliate of the
Company (unless the affiliate is purchasing on the same terms as a
non-affiliate), or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety, to any corporation or
other entity, or (B) amend, alter or repeal the provisions of the Company's
Charter (including these Articles Supplementary) or By-laws, whether by merger,
consolidation or otherwise, in each case that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power of
the Series C Preferred Shares or the holders thereof; provided, however, that
with respect to the occurrence of a merger, consolidation or a sale or lease of
all or substantially all of the Company's assets as an entirety, so long as (a)
the Company is the surviving entity and the Series C Preferred Shares remain
outstanding (or the Series C Preferred Units remain exchangeable for Series C
Preferred Shares) with the terms thereof unchanged, or (b) the resulting,
surviving or transferee entity is a corporation organized under the laws of any
state and substitutes the Series C Preferred Shares for other preferred Shares
having substantially the same terms and same rights as the Series C Preferred
Shares, including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up of the Company, then the occurrence of
any such event shall not be deemed to materially and adversely affect such
rights, privileges or voting powers of the holders of the Series C Preferred
Shares and no vote of the Series C Preferred Shares shall be required; and
provided further that any increase in the amount of authorized Shares or the
creation or issuance of any other class or series of Shares, or any increase in
an amount of authorized shares of each class or series, in each case ranking
either (a) junior to the Series C Preferred Shares with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up of the Company, or (b) on a parity with the Series C Preferred Shares
with respect to payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up of the Company to the extent such Shares
are not issued to an affiliate of the Company, shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting powers and
no vote of the Voting Securities shall be required.
SECTION 7. Transfer Restrictions. The Series C Preferred Shares shall be
subject to the provisions of Article 3 of the Charter; provided, however, in no
event shall the Ownership Limit with respect to the Series C Preferred Shares
(as defined in the Charter) be decreased pursuant to Section 10 of Article 3 of
the Charter or otherwise (other than a decrease as a result of a retroactive
change in existing law that would require a decrease to retain real estate
investment trust status under the Internal Revenue Code of 1986, as amended).
<PAGE>
SECTION 8. No Conversion Rights. The holders of the Series C Preferred
Shares shall not have any rights to convert such shares into shares of any other
class or series of Shares or into any other securities of, or interest in, the
Company.
SECTION 9. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series C Preferred Shares.
SECTION 10. No Preemptive Rights. No holder of the Series C Preferred
Shares of the Company shall, as such holder, have any preemptive rights to
purchase or subscribe for additional Shares of the Company or any other security
of the Company which it may issue or sell.
FOURTH: The Series C Preferred Shares have been classified and
designated by the Board under the authority contained in the Charter.
FIFTH: These Articles Supplementary have been approved by the Board
in the manner and by the vote required by law.
SIXTH: The undersigned President of the Company acknowledges these
Articles Supplementary to be the corporate act of the Company and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
<PAGE>
IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to
be executed under seal in its name and on its behalf by its President and
attested to by its Secretary on this __ day of September, 1999.
CABOT INDUSTRIAL TRUST
By:______________________________
Name:
Title: President
[SEAL]
ATTEST:
By:______________________________
Name:
Title: Secretary
<PAGE>
Exhibit 4.9
THIRD AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CABOT INDUSTRIAL PROPERTIES, L.P.
THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP (this "Amendment") dated as of September 27, 1999, is entered into
by CABOT INDUSTRIAL TRUST, a Maryland real estate investment trust, as general
partner (the "General Partner") of CABOT INDUSTRIAL PROPERTIES, L.P. (the
"Partnership"), for itself and on behalf of the limited partners of the
Partnership, and J.P. MORGAN MOSAIC FUND II, LLC, a Delaware limited liability
company ("Contributor").
WHEREAS, Section 4.2(a) of the Second Amended and Restated Agreement of
Limited Partnership of the Partnership (the "Partnership Agreement") authorizes
the General Partner to cause the Partnership to issue additional Partnership
Units in one or more classes or series, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties as
shall be determined by the General Partner, subject to the provisions of such
section; and
WHEREAS, pursuant to the authority granted to the General Partner pursuant
to Sections 4.2(a) and 14.1(b) of the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement (i) to establish a new class of
Partnership Units, the Series D Preferred Units (as hereinafter defined), and to
set forth the designations, rights, powers, preferences and ditties of such
Series D Preferred Units, (ii) to issue the Series D Preferred Units to
Contributor and admit Contributor as an Additional Limited Partner and (iii) to
make certain other changes to the Partnership Agreement.
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:
Section 1. Definitions. For purposes of this Amendment, the term "Parity
Preferred Units" shall be used to refer to any class or series of Partnership
Interests of the Partnership now or hereafter authorized, issued or outstanding
expressly designated by the Partnership to rank on a parity with Series D
Preferred Units with respect to distributions and rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership. The term
"Priority Return" shall mean, an amount equal to 8.375% per annum, determined on
the basis of a 360 day year of twelve 30 day months, cumulative to the extent
not distributed for any given distribution period pursuant to Section 5.1 of the
Partnership Agreement, of the stated value of S50 per Series D Preferred Unit,
commencing on the date of issuance of such Series D Preferred Unit. The term
"Subsidiary" shall mean with respect to any person, any corporation,
partnership, limited liability company, joint venture or other entity of which a
majority of(i) voting power of the voting equity securities or (ii) the
outstanding equity interests, is owned, directly or indirectly, by such person.
The term "PTP" shall mean a "publicly traded partnership" within the meaning of
Section 7704 of the Code. Capitalized terms used herein and
<PAGE>
not otherwise defined herein shall have the meanings ascribed to them in the
Partnership Agreement.
Section 2. Designation and Number. A series of Partnership Units in the
Partnership designated as the "8.375% Series D Cumulative Redeemable Preferred
Units" (the "Series D Preferred Units") is hereby established. The number of
Series D Preferred Units shall be 200,000.
Section 3. Distributions. (a) Payment of Distributions. Subject to the
rights of holders of Parity Preferred Units as to the payment of distributions,
pursuant to Section 5.1 of the Partnership Agreement, holders of Series D
Preferred Units shall be entitled to receive, when, as and if declared by the
Partnership acting through the General Partner, out of Available Cash,
cumulative preferential cash distributions at the rate per annum of 8.375% of
the original Capital Contribution per Series D Preferred Unit. Such
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable (i) quarterly in arrears, on March 25, June 25,
September 25 and December 25 of each year commencing on December 25, 1999 and,
(ii), in the event of (A) an exchange of Series D Preferred Units into Series D
Preferred Shares, or (B) a redemption of Series D Preferred Units, on the
exchange date or redemption date, as applicable (each a "Preferred Unit
Distribution Payment Date"). The amount of the distribution payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and for any period shorter than a full quarterly period for which distributions
are computed, the amount of the distribution payable will be computed on the
basis of the actual number of days elapsed in such period. If any date on which
distributions are to be made on the Series D Preferred Units is not a Business
Day (as defined herein), then payment of the distribution to be made on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Distributions on the Series D Preferred Units
will be made to the holders of record of the Series D Preferred Units on the
relevant record dates to be fixed by the Partnership acting through the General
Partner, which record dates shall in no event exceed fifteen (15) Business Days
prior to the relevant Preferred Unit Distribution Payment Date (the "Preferred
Unit Partnership Record Date").
The term "Business Day" shall mean each day other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulations or executive order to close.
(b) Distributions Cumulative. Distributions on the Series D
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, at any time prohibit the current payment of distributions, whether
or not the Partnership has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on the Series D
Preferred Units will accumulate as of the Preferred Unit Distribution Payment
Date on which they first become payable. Distributions on account of arrears for
any past distribution periods may be declared and paid at any time, without
reference to a regular Preferred Unit Distribution Payment Date to holders of
record of the Series D Preferred Units on the record date fixed by the
Partnership acting through
<PAGE>
the General Partner, which date shall not exceed fifteen (15) Business Days
prior to the payment date. Accumulated and unpaid distributions will not bear
interest.
(c) Priority as to Distributions. (i) So long as any Series D
Preferred Units are outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or with respect to any
class or series of Partnership Interests of the Partnership ranking junior as to
the payment of distributions or rights upon a voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership to the Series D
Preferred Units (collectively, "Junior Units"), nor shall any cash or other
property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series D Preferred Units, any Parity
Preferred Units or any Junior Units, unless, in each case, all distributions
accumulated on all Series D Preferred Units and all classes and series of
outstanding Parity Preferred Units have been paid in full. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the conversion of Junior Units or Parity Preferred Units into Partnership Units
ranking junior to the Series D Preferred Units as to
distributions and upon liquidation, winding-up or dissolution or (c)
the redemption of Partnership Interests corresponding to any Series D Preferred
Shares (as hereinafter defined), Parity Preferred Shares (as such term is
defined in the Declaration of Trust of the General Partner, as supplemented (the
"Charter")), or Junior Shares (as such term is defined in the Charter) to be
purchased by the General Partner pursuant to Article 3 of the Charter to
preserve the General Partner's status as a real estate investment trust,
provided that such redemption shall be upon the same terms as the corresponding
purchase pursuant to Article 3 of the Charter.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series D Preferred Units, all distributions authorized and
declared on the Series D Preferred Units and all classes or series of
outstanding Parity Preferred Units shall be authorized and declared so that the
amount of distributions authorized and declared per Series D Preferred Unit and
such other classes or series of Parity Preferred Units shall in all cases bear
to each other the same ratio that accrued distributions per Series D Preferred
Unit and such other classes or series of Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such class or series of Parity Preferred Units do not
have cumulative distribution rights) bear to each other.
(d) No Further Rights. Holders of Series D Preferred Units shall not
be entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Liquidation Proceeds. (a) Upon voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, distributions on the
Series D Preferred Units shall be made in accordance with Section 13.2 of the
Partnership Agreement.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than thirty (30) and not more than sixty
(60) days prior to the payment date stated therein, to each record holder of the
Series D Preferred Units at the respective addresses of such holders as the same
shall appear on
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the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Series D
Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the General Partner to, or the consolidation or merger or
other business combination of the Partnership with or into, any corporation,
trust, partnership, limited liability company or other entity (or of any
corporation, trust, partnership, limited liability company or other entity with
or into the Partnership) shall not be deemed to constitute a liquidation,
dissolution or winding-up of the Partnership.
Section 5. Optional Redemption. (a) Right of Optional Redemption. The
Series D Preferred Units may not be redeemed prior to the fifth (5th)
anniversary of the issuance date. On or after such date, the Partnership shall
have the right to redeem the Series D Preferred Units, in whole or in part, at
any time or from time to time, upon not less than thirty (30) nor more than
sixty (60) days' written notice, at a redemption price, payable in cash, equal
to the Capital Account balance of the holders of Series D Preferred Units (the
"Redemption Price") provided, however, that no redemption pursuant to this
Section 5 will be permitted if the Redemption Price does not equal or exceed the
original Capital Contribution of such holder plus the cumulative Priority
Return, whether or not declared, to the redemption date to the extent not
previously distributed or distributed pursuant to Section 3(a). If fewer than
all of the outstanding Series D Preferred Units are to be redeemed, the Series D
Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(b) Limitation on Redemption. The Partnership may not redeem fewer
than all of the outstanding Series D Preferred Units unless all accumulated and
unpaid distributions have been paid on all Series D Preferred Units for all
quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (A)
faxed, and (B) mailed by the Partnership, by certified mail, postage prepaid,
not less than thirty (30) nor more than sixty (60) days prior to the redemption
date, addressed to the respective holders of record of the Series D Preferred
Units at their respective addresses as they appear on the records of the
Partnership. No failure to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any Series D Preferred Units
except as to the holder to whom such notice was defective or not given. In
addition to any information required by law, each such notice shall state: (1)
the redemption date, (2) the Redemption Price, (3) the aggregate number of
Series D Preferred Units to be redeemed and if fewer than all of the outstanding
Series D Preferred Units are to be redeemed, the number of Series D Preferred
Units to be redeemed held by such holder, which number shall equal such holder's
pro rata share (based on the percentage of the aggregate number of outstanding
Series D Preferred Units the total number of Series D Preferred Units held by
such holder represents) of the aggregate number of Series D Preferred Units to
be redeemed, (4) the place or places where such Series D Preferred Units are to
be surrendered for payment of the Redemption Price, (5) that distributions on
the Series D Preferred Units to be redeemed will cease to accumulate on such
redemption date and (6) that payment of the Redemption Price will be made upon
presentation and surrender of such Series D
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Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of Series
D Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New
York City time, on the redemption date, the Partnership will deposit irrevocably
in trust for the benefit of the Series D Preferred Units being redeemed funds
sufficient to pay the applicable Redemption Price and will give irrevocable
instructions and authority to pay such Redemption Price to the holders of the
Series D Preferred Units upon surrender of the Series D Preferred Units by such
holders at the place designated in the notice of redemption. If the Series D
Preferred Units are evidenced by a certificate and if fewer than all Series D
Preferred Units evidenced by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the certificate evidencing all
Series D Preferred Units, evidencing the unredeemed Series D Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series D Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series D Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series D Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
Section 6. Voting Rights. (a) General. Holders of the Series D Preferred
Units will not have any voting rights or right to consent to any matter
requiring the consent or approval of the Limited Partners, except as set forth
in the Partnership Agreement and except as set forth below. In the event of a
conflict between the terms of this Section 6 and any other terms of this
Amendment, the terms of this Section 6 shall control.
(b) Certain Voting Rights. So long as any Series D Preferred Units
remain outstanding, the Partnership shall not, without the affirmative vote of
the holders of at least two-thirds of the Series D Preferred Units outstanding
at the time (i) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests senior to the Series D
Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up of the Partnership or reclassify any
Partnership Interests of the Partnership into any such senior Partnership
Interests, or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such senior Partnership Interests,
(ii) authorize or create, or increase the authorized or issued amount of any
Parity Preferred Units or reclassify any Partnership Interest into any such
Partnership Interest or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such Partnership
Interests but only to the extent such Parity Preferred Units are issued to an
Affiliate of the Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates of the
Partnership (or to Affiliates purchasing the preferred stock on the same terms
as non-affiliated purchasers) or (iii) either (A) consolidate, merge into or
with,
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or convey, transfer or lease all or substantially all of its assets to, any
corporation or other entity or (B) amend, alter or repeal the provisions of the
Partnership Agreement whether by merger, consolidation or otherwise, that would
materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series D Preferred Units or the holders
thereof, provided, however, that with respect to the occurrence of a merger,
consolidation or a sale or lease of all or substantially all of the
Partnership's assets as an entirety, so long as (1) the Partnership is the
surviving entity and the Series D Preferred Units remain outstanding with the
terms thereof unchanged, or (2) the resulting, surviving or transferee entity is
a partnership, limited liability company or other pass-through entity organized
under the laws of any state and substitutes the Series D Preferred Units for
other interests in such entity having substantially the same terms and rights as
the Series D Preferred Units, including with respect to distributions, voting
rights and rights upon liquidation, dissolution or winding-up of the
Partnership, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series D Preferred Units and no vote of the Series D Preferred
Units shall be required in such case; and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (y) junior to the
Series D Preferred Units with respect to payment of distributions or the
distribution of assets upon liquidation, dissolution or winding-up of the
Partnership, or (z) on a parity with the Series D Preferred Units with respect
to payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up of the Partnership to the extent such Partnership
Interests are not issued to an Affiliate, other than the General Partner to the
extent the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers and no vote of the Series D Preferred Units shall be required
in such case.
Section 7. Transfer Restrictions. The Series D Preferred Units shall be
subject to the provisions of Article XI of the Partnership Agreement, provided,
however, that (i) the General Partner shall act reasonably in exercising its
discretion pursuant to the provisions of Section 11.4(a)(ii) to transferees of
Series D Preferred Units, (ii) the provisions of Clause B of Section 11.3(d)
shall not be applicable to holders of Series D Preferred Units if at the time of
such transfer, the Partnership already has 100 Partners; (iii) if only a portion
of the Series D Preferred Units shall be transferred, the transferee of such
transferred Series D Preferred Units shall, subject to the provisions of Section
11.4, be substituted as a Limited Partner in place of the transferring holders
only as to the Series D Preferred Units so transferred; and (iv) the provisions
of Sections 11.6(c) and 11.6(d) shall not be applicable to any transfer of
Series D Preferred Units; and provided further that "transfer" when used in
Article XI shall not be deemed to include any exchange pursuant to Section 8
below.
Section 8. Exchange Rights. (a) Right to Exchange. (i) Series D Preferred
Units will be exchangeable in whole or in part at anytime on or after the tenth
(10th) anniversary of the date of issuance, at the option of the holders
thereof, for authorized but previously unissued shares of 8.375% Series D
Cumulative Redeemable Preferred Shares of the General Partner (the "Series D
Preferred Shares") at an exchange rate of one Series D Preferred Share for one
Series D Preferred Unit, subject to adjustment as described below (the "Exchange
Price"), provided that the Series D Preferred Units will become exchangeable at
any time, in whole or in part, at the
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option of the holders of Series D Units, for Series D Preferred Shares if (y) at
any time full distributions shall not have been timely made on any Series D
Preferred Unit with respect to six (6) prior quarterly distribution periods,
whether or not consecutive; provided, however, that a distribution in respect of
Series D Preferred Units shall be considered timely made if made within two (2)
Business Days after the applicable Preferred Unit Distribution Payment Date if
at the time of such late payment there shall not be any prior quarterly
distribution periods in respect of which full distributions were not timely made
or (z) upon receipt by a holder or holders of Series D Preferred Units of (1) a
notice from the General Partner that the General Partner or a Subsidiary of the
General Partner has taken the position that the Partnership is, or upon the
occurrence of a defined event in the immediate future will be, a PTP and (2) an
opinion rendered by an outside nationally recognized independent counsel
familiar with such matters addressed to a holder or holders of Series D
Preferred Units, that the Partnership is or likely is, or upon the occurrence of
a defined event in the immediate future will be or likely will be, a PTP. In
addition, the Series D Preferred Units may be exchanged for Series D Preferred
Shares, in whole or in part, at the option of any holder prior to the tenth
(10th) anniversary of the issuance date and after the third (3rd) anniversary
thereof if such holder of a Series D Preferred Units shall deliver to the
General Partner either (i) a private letter ruling addressed to such holder of
Series D Preferred Units or (ii) an opinion of independent counsel reasonably
acceptable to the General Partner based on the enactment of a statute, temporary
or final Treasury Regulations or the publication of a Revenue Ruling, in either
case to the effect that an exchange of the Series D Preferred Units at such
earlier time would not cause the Series D Preferred Units to be considered
"stock or securities" within the meaning of Section 351(e) of the Code for
purposes of determining whether the holder of such Series D Preferred Units is
an "investment company" under Section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, all the Series D Preferred Units,
held by any holder thereof which is a real estate investment trust within the
meaning of Sections 856 through 859 of the Code for Series D Preferred Shares
may be exchanged in whole but not in part (but only if the exchange may be
accomplished consistently with the ownership limitations set forth under Article
3 of the Charter (taking into account exceptions thereto)) if at any time, (i)
the Partnership reasonably determines that the assets and income of the
Partnership for a taxable year after 1999 would not satisfy the income and
assets tests of Section 856 of the Code for such taxable year if the Partnership
were a real estate investment trust within the meaning of the Code or (ii) any
such holder of Series B Preferred Units shall deliver to the Partnership and the
General Partner an opinion of independent counsel reasonably acceptable to the
General Partner to the effect that, based on the assets and income of the
Partnership for a taxable year after 1999, the Partnership would not satisfy the
income assets tests of Section 856 of the Code for such taxable year if the
Partnership were a real estate investment trust within the meaning of the Code
and that such failure would create a meaningful risk that a holder of the Series
B Preferred Units would fail to maintain qualification as a real estate
investment trust.
(ii) Notwithstanding anything to the contrary set forth in Section 8(a)(i)
hereof, if an Exchange Notice (as defined herein) has been delivered to the
General Partner, then the General Partner may, at its option, elect to redeem or
cause the Partnership to redeem all or a portion of the outstanding Series D
Preferred Units for cash in an amount equal to the original Capital Contribution
per Series D Preferred Unit and all accrued and unpaid distributions thereon to
the
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date of redemption. The General Partner may exercise its option to redeem the
Series D Preferred Units for cash pursuant to this Section 8(a)(ii) hereof by
giving each holder of record of Series D Preferred Units notice of its election
to redeem for cash, within ten (10) Business Days after receipt of the Exchange
Notice, by (y) fax, and (z) registered mail, postage paid, at the address of
each holder as it may appear on the records of the Partnership stating (A) the
redemption date, which shall be no later than sixty (60) days following the
receipt of the Exchange Notice, (B) the redemption price, (D) the place or
places where the Series D Preferred Units are to be surrendered for payment of
the redemption price, (D) that distributions on the Series D Preferred Units
will cease to accrue on such redemption date; (E) that payment of the redemption
price will be made upon presentation and surrender of the Series D Preferred
Units and (F) the aggregate number of Series D Preferred Units to be redeemed,
and if fewer than all of the outstanding Series D Preferred Units are to be
redeemed, the number of Series D Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro-rata share (based on the
percentage of the aggregate number of outstanding Series D Preferred Units the
total number of Series D Preferred Units held by such holder represents) of the
aggregate number of Series D Preferred Units being redeemed.
(iii) In the event an exchange of all or a portion of Series D Preferred
Units pursuant to Section 8(a)(i) hereof would violate the provisions on
ownership limitation of the General Partner set forth in Article 3 of the
Charter with respect to the Series D Preferred Shares, the General Partner shall
give written notice thereof to each holder of record of Series D Preferred
Units, within ten (10) Business Days following receipt of the Exchange Notice,
by (y) fax, and (z) registered mail, postage prepaid, at the address of each
such holder set forth in the records of the Partnership. In such event, each
holder of Series D Preferred Units shall be entitled to exchange, pursuant to
the provision of Section 8(b) a number of Series D Preferred Units which would
comply with the provisions on the ownership limitation of the General Partner
set forth in such Article 3 of the Charter and any Series D Preferred Units not
so exchanged (the "Excess Units") shall be redeemed by the Partnership for cash
in an amount equal to the original Capital Contribution per Excess Unit, plus
any accrued and unpaid distributions thereon, whether or not declared, to the
date of redemption. The written notice of the General Partner shall state (A)
the number of Excess Units held by such holder, (B) the redemption price of the
Excess Units, (D) the date on which such Excess Units shall be redeemed, which
date shall be no later than sixty (60) days following the receipt of the
Exchange Notice, (D) the place or places where such Excess Units are to be
surrendered for payment of the Redemption Price, (E) that distributions on the
Excess Units will cease to accrue on such redemption date, and (F) that payment
of the redemption price will be made upon presentation and surrender of such
Excess Units. In the event an exchange would result in Excess Units, as a
condition to such exchange, each holder of such units agrees to provide
representations and covenants reasonably requested by the General Partner
relating to (1) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above) will not
cause any individual to Beneficially Own in excess of the Ownership Limit (all
as defined in the General Partner's Charter); and (2) to the extent such holder
can so represent and covenant without obtaining information from its owners, the
holder's ownership of tenants of the Partnership and its affiliates.
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(iv) The redemption of Series D Preferred Units described in Section
8(a)(ii) and (iii) shall be subject to the provisions of Sections 5(b) and
5(c)(ii); provided, however, that the term "Redemption Price" in such section
shall be read to mean the original Capital Contribution per Series D Preferred
Unit being redeemed plus all accrued and unpaid distributions to the redemption
date.
(b) Procedure for Exchange. (i) Any exchange pursuant to this
Amendment shall be exercised pursuant to a notice of exchange (the "Exchange
Notice") delivered to the General Partner by the holder who is exercising such
exchange right, by (A) fax and (B) by certified mail postage prepaid. The
exchange of Series D Preferred Units, or a specified portion thereof, may be
effected after the fifth (5th) Business Day following receipt by the General
Partner of the Exchange Notice by delivering certificates, if any, representing
such Series D Preferred Units to be exchanged together with, if applicable,
written notice of exchange and a proper assignment of such Series D Preferred
Units to the office of the General Partner maintained for such purpose.
Currently, such office is Two Center Plaza, Suite 200, Boston, Massachusetts
02108. Each exchange will be deemed to have been effected immediately prior to
the close of business on the date on which such Series D Preferred Units to be
exchanged (together with all required documentation) shall have been surrendered
and notice shall have been received by the General Partner as aforesaid and the
Exchange Price shall have been paid. Any Series D Preferred Shares issued
pursuant to this Section 8 shall be delivered as shares which are duly
authorized, validly issued, fully paid and nonassessable, free of pledge, lien,
encumbrance or restriction other than those provided in the Charter, the Bylaws
of the General Partner, the Securities Act of 1933 and relevant state securities
or blue sky laws.
(ii) In the event of an exchange of Series D Preferred Units for Series D
Preferred Shares, an amount equal to the accrued and unpaid distributions,
whether or not declared, to the date of exchange on any Series D Preferred Units
tendered for exchange shall (A) accrue on the Series D Preferred Shares into
which such Series D Preferred Units are exchanged, and (B) continue to accrue on
such Series D Preferred Units, which shall remain outstanding following such
exchange, with the General Partner as the holder of such Series D Preferred
Units. Notwithstanding anything to the contrary set forth herein, in no event
shall a holder of a Series D Preferred Unit that was validly exchanged into
Series D Preferred Shares pursuant to this section (other than the General
Partner now holding such Series D Preferred Unit), receive a cash distribution
out of Available Cash of the Partnership, if such holder, after exchange, is
entitled to receive a distribution out of Available Cash with respect to the
Series D Preferred Shares for which such Series D Preferred Unit was exchanged
or redeemed.
(iii) Fractional shares of Series D Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the Series D Preferred Shares on
the day prior to the exchange date as determined in good faith by the Board of
Directors of the General Partner.
(c) Adjustment of Exchange Price. (i) The Exchange Price is subject
to adjustment upon certain events, including (a) subdivisions, combinations and
reclassifications of the Series D Preferred Shares and (b) distributions to all
holders of Series D Preferred Shares of evidences of indebtedness of the General
Partner or assets (including securities but excluding dividends and
distributions paid out of equity applicable to Series D Preferred Shares).
(ii) In case the General Partner shall be a party to any transaction
(including,
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without limitation, a merger, consolidation, statutory share exchange, tender
offer for all or substantially all of the General Partner's capital stock or
sale of all or substantially all of the General Partner's assets), in each case
as a result of which the Series D Preferred Shares will be converted into the
right to receive shares of capital stock, other securities or other property
(including cash or any combination thereof), each Series D Preferred Unit will
thereafter be exchangeable into the kind and amount of shares of capital stock
and other securities and property receivable (including cash or any combination
thereof) upon the consummation of such transaction by a holder of that number of
Series D Preferred Shares or fraction thereof into which one Series D Preferred
Unit was exchangeable immediately prior to such transaction. The General Partner
may not become a party to any such transaction unless the terms thereof are
inconsistent with the foregoing.
Section 9. No Conversion Rights. (a) The holders of the Series D Preferred
Units shall not have any rights to convert such Partnership Units into any other
class of Partnership Interests or any interest in the Partnership;
(b) The Series D Preferred Units shall not be subject to the provisions of
Section 4.2(e) of the Partnership Agreement.
Section 10. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of the Series D Preferred Units.
Section 11. Admission of Limited Partner; Exhibits to Partnership
Agreement. In accordance with Section 12.2(b), Contributor is hereby admitted as
an Additional Limited Partner. In order to duly reflect the issuance of Series D
Preferred Units provided for herein, the Partnership Agreement will be amended
by deleting Exhibit A attached thereto and substituting Exhibit A attached
hereto therefor.
Section 12. Reaffirmation. 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 affirms.
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11
IN WITNESS WHEREOF, this Amendment has been executed as of the date first above
written.
CABOT INDUSTRIAL TRUST
By: ____________________
Name: Neil Waisnor
Title: Senior Vice President
***Signatures Continued On Next Page***
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J.P. MORGAN MOSAIC FUND II, LLC
By: J.P. Morgan Private Investments Inc., as
manager of J.P. Morgan Fund II, LLC
By:___________________________________
Name:
Title:
Address:
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Exhibit 4.10
CABOT INDUSTRIAL TRUST
ARTICLES SUPPLEMENTARY
200,000 SHARES
8.375% SERIES D CUMULATIVE REDEEMABLE PREFERRED SHARES
Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland (the "Department") that:
FIRST: Under a power contained in Article 2, Section 1 of the
Amended and Restated Declaration of Trust of the Company, filed with, and
accepted for record by, the State Department of Assessments and Taxation of
Maryland (the "SDAT") on January 26, 1998, as supplemented by Articles
Supplementary filed with, and accepted for record by, the SDAT on July 10, 1998,
on April 29, 1999 and on September 3, 1999 (the "Charter"), the Board of
Trustees of the Company, as required by Section 8-203(b) of the Corporations and
Associations Article of the Annotated Code of Maryland, has unanimously adopted
resolutions classifying and designating 200,000 unissued shares of beneficial
interest (the "Shares") as 8.375% Series D Cumulative Redeemable Preferred
Shares, par value $0.01 per share, with the following preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends and
other distributions, qualifications and terms and conditions of redemption, and
other terms and conditions, which upon any restatement of the Charter shall be
made part of Article 2 of the Charter, with any necessary or appropriate changes
to the enumeration and lettering thereof.
SECOND:The following is a description of the Shares, including the
preference, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption thereof:
8.375% Series D CUMULATIVE REDEEMABLE SHARES
SECTION 1. Designation and Number. A series of preferred shares,
designated the "8.375% Series D Cumulative Redeemable Preferred Shares" (the
"Series D Preferred Shares") is hereby established. The number of shares of
Series D Preferred Shares shall be 200,000, par value $0.01 per share.
SECTION 2. Rank. The Series D Preferred Shares shall, with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Company, rank senior to all classes or series of common
shares and to all classes or series of equity securities of the Company now or
hereafter authorized, issued or outstanding, other than any class or series of
equity securities of the Company expressly designated as ranking on a parity
with or senior to the Series D Preferred Shares as to distributions and rights
upon voluntary or involuntary liquidation, winding-up or dissolution of the
Company. For purposes of these Articles Supplementary, the term "Parity
Preferred Shares" shall be used to refer to any class or series of equity
securities of the Company now or hereafter authorized, issued or outstanding
expressly designated by the Company to rank on a parity with Series D Preferred
Shares with respect to distributions and rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Company, including specifically
the Series B Cumulative Redeemable Preferred Shares and Series C Cumulative
Redeemable Preferred Shares. The term "equity securities" does not include debt
securities, which will rank senior to the Series D Preferred Shares prior to
conversion.
SECTION 3. Distributions.
(a) Payment of Distributions. Subject to the rights of holders of Parity
Preferred Shares and holders of equity securities ranking senior to the Series D
Preferred Shares as to payment of distributions, holders of Series D Preferred
Shares will be entitled to receive, when, as and if declared by the Board of
Trustees of the Company, out of funds legally available for the payment of
distributions, cumulative preferential cash distributions at the rate per annum
of 8.375% of the $50 liquidation preference per Series D Preferred Share. Such
distributions shall be
<PAGE>
cumulative, shall accrue from the original date of issuance and will be payable
(i) quarterly in arrears, on March 25, June 25, September 25 and December 25 of
each year commencing on the first of such dates to occur after the original date
of issuance and, (ii) in the event of a redemption, on the redemption date (each
a "Preferred Shares Distribution Payment Date"). The amount of the distribution
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months and for any period shorter than a full quarterly period for which
distributions are computed, the amount of the distribution payable will be
computed on the basis of the actual number of days elapsed in such period. If
any date on which distributions are to be made on the Series D Preferred Shares
is not a Business Day (as defined herein), then payment of the distribution to
be made on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. Distributions on the
Series D Preferred Shares will be made to the holders of record of the Series D
Preferred Shares on the relevant record dates, which, unless otherwise provided
by the Company with respect to any distribution, will be fifteen (15) Business
Days prior to the relevant Preferred Shares Distribution Payment Date (each a
"Distribution Record Date"). Notwithstanding anything to the contrary set forth
herein, each Series D Preferred Share shall also continue to accrue all accrued
and unpaid distributions up to the exchange date on any Series D Preferred Unit
(as defined in the Second Amended and Restated Agreement of Limited Partnership
of Cabot Industrial Properties, L.P., dated as of February 4, 1998 (the
"Partnership Agreement"), as amended through the date hereof) validly exchanged
into such Series D Preferred Share in accordance with the provisions of such
Partnership Agreement.
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Limitation on Distributions. No distributions on the Series D
Preferred Shares shall be declared or paid or set apart for payment by the
Company at such time as the terms and provisions of any agreement of the
Company, including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law.
(c) Distributions Cumulative. Notwithstanding the foregoing, distributions
on the Series D Preferred Shares will accrue whether or not the terms and
provisions set forth in Section 3(b) hereof at any time prohibit the current
payment of distributions, whether or not the Company has earnings, whether or
not there are funds legally available for the payment of such distributions and
whether or not such distributions are authorized or declared. Accrued but unpaid
distributions on the Series D Preferred Shares will accumulate as of the
Preferred Shares Distribution Payment Date on which they first become payable.
Accumulated and unpaid distributions will not bear interest.
(d) Priority as to Distributions. (i) So long as any Series D Preferred
Shares are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect to any
class or series of common shares or any class or series of other Shares of the
Company ranking junior as to the payment of distributions or rights upon
voluntary or involuntary dissolution, liquidation or winding up of the Company
to the Series D Preferred Shares (such common shares or other junior Shares,
including, without limitation Series A Junior Participating Preferred Shares
authorized pursuant to Articles Supplementary filed with the Department on July
10, 1998, collectively, "Junior Shares"), nor shall any cash or other property
be set aside for or applied to the purchase, redemption or other acquisition for
consideration of any Series D Preferred Shares, any Parity Preferred Shares or
any Junior Shares, unless, in each case, all distributions accumulated on all
Series D Preferred Shares and all classes and series of outstanding Parity
Preferred Shares have been paid in full. The foregoing sentence will not
prohibit (i) distributions payable solely in Shares of the Company ranking
junior to the Series D Preferred Shares as to distributions and upon
liquidation, winding-up or dissolution, (ii) the conversion of Junior Shares or
Parity Preferred Shares into Shares of the Company ranking junior to the Series
D Preferred Shares as to distributions and upon liquidation, winding up or
dissolution, and (iii) purchase by the Company of such Series
<PAGE>
D Preferred Shares, Parity Preferred Shares or Junior Shares pursuant to Article
3 of the Charter to the extent required to preserve the Company's status as a
real estate investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series D Preferred Shares, all distributions authorized and
declared on the Series D Preferred Shares and all classes or series of
outstanding Parity Preferred Shares shall be authorized and declared so that the
amount of distributions authorized and declared per share of Series D Preferred
Shares and such other classes or series of Parity Preferred Shares shall in all
cases bear to each other the same ratio that accrued distributions per share on
the Series D Preferred Shares and such other classes or series of Parity
Preferred Shares (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such class or series of Parity
Preferred Shares do not have cumulative distribution rights) bear to each other.
(e) No Further Rights. Holders of Series D Preferred Shares shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
SECTION 4. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the rights of holders
of Parity Preferred Shares and subject to equity securities ranking senior to
the Series D Preferred Shares with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Company, the holders
of Series D Preferred Shares shall be entitled to receive out of the assets of
the Company legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Company, but before
any payment or distributions of the assets shall be made to holders of common
shares or any other class or series of shares of the Company that ranks junior
to the Series D Preferred Shares as to rights upon liquidation, dissolution or
winding-up of the Company, an amount equal to the sum of (i) a liquidation
preference of $50 per Series D Preferred Share, and (ii) an amount equal to any
accumulated and unpaid distributions thereon, whether or not declared, to the
date of payment. In the event that, upon such voluntary or involuntary
liquidation, dissolution or winding-up, there are insufficient assets to permit
full payment of liquidating distributions to the holders of Series D Preferred
Shares and any Parity Preferred Shares, all payments of liquidating
distributions on the Series D Preferred Shares and such Parity Preferred Shares
shall be made so that the payments on the Series D Preferred Shares and such
Parity Preferred Shares shall in all cases bear to each other the same ratio
that the respective rights of the Series D Preferred Shares and such other
Parity Preferred Shares (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such Parity Preferred
Shares do not have cumulative distribution rights) upon liquidation, dissolution
or winding-up of the Company bear to each other.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Company, stating the payment date
or dates when, and the place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and (ii) by registered
mail, postage pre-paid, not less than thirty (30) and not more than sixty (60)
days prior to the payment date stated therein, to each record holder of the
Series D Preferred Shares at the respective addresses of such holders as the
same shall appear on the share transfer records of the Company.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series D Preferred
Shares will have no right or claim to any of the remaining assets of the
Company.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company to, or the consolidation or merger or other business
combination of the Company with or into any corporation, trust or other entity
(or of any corporation, trust or other entity with or into the Company) shall
not be deemed to constitute a liquidation, dissolution or winding-up of the
Company.
SECTION 5. Optional Redemption.
<PAGE>
(a) Right of Optional Redemption. The Series D Preferred Shares may not be
redeemed prior to September 27, 2004. On or after such date, the Company shall
have the right to redeem the Series D Preferred Shares, in whole or in part, at
any time or from time to time, upon not less than thirty (30) nor more than
sixty (60) days' written notice, at a redemption price, payable in cash, equal
to $50 per share of Series D Preferred Shares plus accumulated and unpaid
distributions, whether or not declared, to the date of redemption. If fewer than
all of the outstanding Series D Preferred Shares are to be redeemed, the Series
D Preferred Shares to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional shares).
(b) Limitation on Redemption. The Company may not redeem fewer than all of
the outstanding shares of Series D Preferred Shares unless all accumulated and
unpaid distributions have been paid on all outstanding Series D Preferred Shares
for all quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (i) faxed,
and (ii) mailed by the Company by registered mail, postage prepaid, not less
than thirty (30) nor more than sixty (60) days prior to the redemption date,
addressed to the respective holders of record of the Series D Preferred Shares
to be redeemed at their respective addresses as they appear on the transfer
records of the Company. No failure to give or defect in such notice shall affect
the validity of the proceedings for the redemption of any Series D Preferred
Shares except as to the holder to whom such notice was defective or not given.
In addition to any information required by law or by the applicable rules of any
exchange upon which the Series D Preferred Shares may be listed or admitted to
trading, each such notice shall state: (i) the redemption date, (ii) the
redemption price, (iii) the number of Series D Preferred Shares to be redeemed,
(iv) the place or places where such Series D Preferred Shares are to be
surrendered for payment of the redemption price, (v) that distributions on the
Series D Preferred Shares to be redeemed will cease to accumulate on such
redemption date and (vi) that payment of the redemption price and any
accumulated and unpaid distributions will be made upon presentation and
surrender of such Series D Preferred Shares. If fewer than all of the Series D
Preferred Shares held by any holder are to be redeemed, the notice mailed to
such holder shall also specify the number of Series D Preferred Shares held by
such holder to be redeemed.
(ii) If the Company gives a notice of redemption in respect of
Series D Preferred Shares (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Company will deposit
irrevocably in trust for the benefit of the holders of the Series D Preferred
Shares being redeemed, funds sufficient to pay the applicable redemption price,
plus any accumulated and unpaid distributions, whether or not declared, if any,
on such shares to the date fixed for redemption, without interest, and will give
irrevocable instructions and authority to pay such redemption price and any
accumulated and unpaid distributions, whether or not declared, if any, on such
shares to the holders of the Series D Preferred Shares upon surrender of the
certificates for the Series D Preferred Shares by such holders at the place
designated in the notice of redemption. If fewer than all Series D Preferred
Shares evidenced by any certificate are being redeemed, a new certificate shall
be issued upon surrender of the certificate evidencing all Series D Preferred
Shares, evidencing the unredeemed Series D Preferred Shares without cost to the
holder thereof. On and after the date of redemption, distributions will cease to
accumulate on the Series D Preferred Shares or portions thereof called for
redemption, unless the Company defaults in the payment thereof. If any date
fixed for redemption of Series D Preferred Shares is not a Business Day, then
payment of the redemption price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the redemption price or any accumulated
or unpaid distributions in respect of the Series D Preferred Shares is
improperly withheld or refused and not paid by the Company, distributions on
such Series D Preferred Shares will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable redemption price and any accumulated and unpaid distributions.
(d) Status of Redeemed Shares. Any Series D Preferred Shares that shall at
any time have been redeemed shall after such redemption, have the status of
authorized but unissued Shares, without designation as to
<PAGE>
class or series until such shares are once more designated as part of a
particular class or series by the Board.
SECTION 6. Voting Rights.
(a) General. Holders of the Series D Preferred Shares will not have any
voting rights, except as set forth below.
(b) Right to Elect Trustees. (i) If at any time full distributions shall
not have been timely made on any Series D Preferred Shares with respect to any
six (6) prior quarterly distribution periods, whether or not consecutive (a
"Preferred Distribution Default"), the holders of such Series D Preferred
Shares, voting together as a single class with the holders of each class or
series of Parity Preferred Shares upon which like voting rights have been
conferred and are exercisable, will have the right to elect two additional
Trustees to serve on the Company's Board (the "Preferred Shares Trustees") at a
special meeting called by the holders of record of at least 10% of the
outstanding Series D Preferred Shares or any such class or series of Parity
Preferred Shares or at the next annual meeting of Shareholders, and at each
subsequent annual meeting of Shareholders or special meeting for the election of
Trustees held in place thereof, until all such distributions in arrears and
distributions for the current quarterly period on the Series D Preferred Shares
and each such class or series of Parity Preferred Shares have been paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Company shall call or cause to be called, upon written request of
holders of record of at least 10% of the outstanding Series D Preferred Shares,
a special meeting of the holders of Series D Preferred Shares and all the series
of Parity Preferred Shares upon which like voting rights have been conferred and
are exercisable (collectively, the "Parity Securities") by mailing or causing to
be mailed to such holders a notice of such special meeting to be held not less
than ten and not more than 45 days after the date such notice is given. The
record date for determining holders of the Parity Securities entitled to notice
of and to vote at such special meeting will be the close of business on the
third Business Day preceding the day on which such notice is mailed. At any such
special meeting, all of the holders of the Parity Securities, by plurality vote,
voting together as a single class without regard to series will be entitled to
elect two Trustees on the basis of one vote per $25 of liquidation preference to
which such Parity Securities are entitled by their terms (excluding amounts in
respect of accumulated and unpaid dividends) and not cumulatively. The holder or
holders of one-third of the Parity Securities then outstanding, present in
person or by proxy, will constitute a quorum for the election of the Preferred
Shares Trustees except as otherwise provided by law. Notice of all meetings at
which holders of the Series D Preferred Shares shall be entitled to vote will be
given to such holders at their addresses as they appear in the transfer records.
At any such meeting or adjournment thereof in the absence of a quorum, subject
to the provisions of any applicable law, a majority of the holders of the Parity
Securities present in person or by proxy shall have the power to adjourn the
meeting for the election of the Preferred Shares Trustees, without notice other
than an announcement at the meeting, until a quorum is present. If a Preferred
Distribution Default shall terminate after the notice of a special meeting has
been given but before such special meeting has been held, the Company shall, as
soon as practicable after such termination, mail or cause to be mailed notice of
such termination to holders of the Series D Preferred Shares that would have
been entitled to vote at such special meeting.
(iii) If and when all accumulated distributions and the
distributions for the current distribution period on the Series D Preferred
Shares shall have been paid in full or a sum sufficient for such payment is
irrevocably deposited in trust for payment, the holders of the Series D
Preferred Shares shall be divested of the voting rights set forth in this
Section 6(b) herein (subject to revesting in the event of each and every
Preferred Distribution Default) and, if all distributions in arrears and the
distributions for the current distribution period have been paid in full or set
aside for payment in full on all other classes or series of Parity Preferred
Shares upon which like voting rights have been conferred and are exercisable,
the term and office of each Preferred Shares Trustee so elected shall terminate.
Any Preferred Shares Trustee may be removed at any time with or without cause by
the vote of, and shall not be removed otherwise than by the vote of, the holders
of record of a majority of the outstanding Parity Securities when they have the
voting rights set forth in this Section 6(b). So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Shares Trustee may be filled by written consent of the Preferred Shares Trustee
remaining in office, or if none remains in office, by a vote of the holders of
<PAGE>
record of a majority of the outstanding Parity Securities when they have the
voting rights set forth in this Section 6(b). The Preferred Shares Trustees
shall each be entitled to one vote per trustee on any matter.
(c) Certain Voting Rights. So long as any Series D Preferred Shares remain
outstanding, the Company shall not, without the approval of the holders of at
least two-thirds of the Series D Preferred Shares outstanding at the time (i)
designate or create, or increase the authorized or issued amount of, any class
or series of shares ranking senior to the Series D Preferred Shares with respect
to payment of distributions or rights upon liquidation, dissolution or
winding-up of the Company or reclassify any authorized shares of the Company
into any such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, (ii)
designate or create, or increase the authorized or issued amount of, any Parity
Preferred Shares or reclassify any authorized shares of the Company into any
such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, but only
to the extent such Parity Preferred Shares are issued to an affiliate of the
Company, or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety, to any corporation or
other entity, or (B) amend, alter or repeal the provisions of the Company's
Charter (including these Articles Supplementary) or Bylaws, whether by merger,
consolidation or otherwise, in each case that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power of
the Series D Preferred Shares or the holders thereof, provided, however, that
with respect to the occurrence of a merger, consolidation or a sale or lease of
all or substantially all of the Company's assets as an entirety, so long as (a)
the Company is the surviving entity and the Series D Preferred Shares remain
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a corporation organized under the laws of any state and
substitutes the Series D Preferred Shares for other preferred Shares having
substantially the same terms and same rights as the Series D Preferred Shares,
including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up of the Company, then the occurrence of
any such event shall not be deemed to materially and adversely affect such
rights, privileges or voting powers of the holders of the Series D Preferred
Shares and no vote of the Series D Preferred Shares shall be required; and
provided further that any increase in the amount of authorized Shares or the
creation or issuance of any other class or series of Shares, or any increase in
an amount of authorized shares of each class or series, in each case ranking
either (a) junior to the Series D Preferred Shares with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up of the Company, or (b) on a parity with the Series D Preferred Shares
with respect to payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up of the Company to the extent such Shares
are not issued to an affiliate of the Company, shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting powers and
no approval of the Series D Preferred Shares shall be required.
SECTION 7. Transfer Restrictions. The Series D Preferred Shares shall be
subject to the provisions of Article 3 of the Charter; provided, however, in no
event shall the Ownership Limit with respect to the Series D Preferred Shares
(as defined in the Charter) be decreased pursuant to Section 10 of Article 3 of
the Charter or otherwise (other than a decrease as a result of a retroactive
change in existing law that would require a decrease to retain real estate
investment trust status under the Internal Revenue Code of 1986, as amended).
SECTION 8. No Conversion Rights. The holders of the Series D Preferred
Shares shall not have any rights to convert such shares into shares of any other
class or series of Shares or into any other securities of, or interest in, the
Company.
SECTION 9. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series D Preferred Shares.
SECTION 10. No Preemptive Rights. No holder of the Series D Preferred
Shares of the Company shall, as such holder, have any preemptive rights to
purchase or subscribe for additional Shares of the Company or any other security
of the Company which it may issue or sell.
THIRD: The Series D Preferred Shares have been classified and
designated by the Board under the authority contained in the Charter.
<PAGE>
FOURTH: These Articles Supplementary have been approved by the Board
in the manner and by the vote required by law.
FIFTH: The undersigned President of the Company acknowledges these
Articles Supplementary to be the corporate act of the Company and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
<PAGE>
IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to
be executed under seal in its name and on its behalf by its Senior Vice
President and attested to by its Assistant Secretary on this __ day of
September, 1999.
CABOT INDUSTRIAL TRUST
By:______________________________
Name: Neil E. Waisnor
Title: Senior Vice President
[SEAL]
ATTEST:
By:____________________________
Name: Deborah L. Parolisi
Title: Assistant Secretary
<PAGE>
Exhibit 4.11
FOURTH AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CABOT INDUSTRIAL PROPERTIES, L.P.
This Fourth Amendment to Second Amended and Restated Agreement of Limited
Partnership (this "Amendment") is made as of December 9, 1999, by and among
CABOT INDUSTRIAL TRUST, a Maryland real estate investment trust, as general
partner (the "General Partner") of CABOT INDUSTRIAL PROPERTIES, L.P. (the
"Partnership"), for itself and on behalf of the limited partners of the
Partnership, and MONTEBELLO REALTY CORP., a Delaware corporation ("Montebello").
Recitals
Whereas, Section 4.2(a) of the Second Amended and Restated Agreement of
Limited Partnership of the Partnership, as amended by (i) that certain First
Amendment to Second Amended and Restated Agreement of Limited Partnership, dated
as of April 29, 1999, (ii) that certain Second Amendment to Second Amended and
Restated Agreement of Limited Partnership, dated as of September 3, 1999, and
(iii) that certain Third Amendment to Second Amended and Restated Agreement of
Limited Partnership, dated as of September 27, 1999 (collectively, as amended,
the "Partnership Agreement") authorizes the General Partner to cause the
Partnership to issue additional Partnership Units in one or more classes or
series, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties as shall be determined by
the General Partner, subject to the provisions of such section; and
Whereas, pursuant to the authority granted to the General Partner pursuant
to Sections 4.2(a) and 14. 1(b) of the Partnership Agreement, the General
Partner desires to amend the Partnership Agreement (i) to establish a new class
of Partnership Units, the Series E Preferred Units (as hereinafter defined), and
to set forth the designations, rights, powers, preferences and duties of such
Series E Preferred Units, (ii) to issue the Series E Preferred Units to
Montebello and admit Montebello as an Additional Limited Partner and (iii) to
make certain other changes to the Partnership Agreement.
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:
Section 1. Definitions. For purposes of this Amendment, the term "Series E
Parity Preferred Units" shall be used to refer to any class or series of
Partnership Interests of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the
<PAGE>
Partnership to rank on a parity with Series E Preferred Units with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Partnership, including, without limitation, the Series B
Preferred Units, the Series C Preferred Units and the Preferred Series D Units.
The term "Series E Priority Return" shall mean, an amount equal to 8.375% per
annum, determined on the basis of a 360 day year of twelve 30 day months,
cumulative to the extent not distributed for any given distribution period
pursuant to Section 5.1 of the Partnership Agreement, of the stated value of $50
per Series E Preferred Unit, commencing on the date of issuance of such Series E
Preferred Unit. The term "Subsidiary" shall mean with respect to any person, any
corporation, partnership, limited liability company, joint venture or other
entity of which a majority of(i) voting power of the voting equity securities or
(ii) the outstanding equity interests, is owned, directly or indirectly, by such
person. The term "PTP" shall mean a "publicly traded partnership" within the
meaning of Section 7704 of the Code. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the
Partnership Agreement.
Section 2. Designation and Number. A series of Partnership Units in the
Partnership designated as the "8.375% Series E Cumulative Redeemable Preferred
Units" (the "Series E Preferred Units") is hereby established. The number of
Series E Preferred Units shall be 200,000.
Section 3. Distributions.
(a) Payment of Distributions. Subject to the rights of holders of
Series E Parity Preferred Units as to the payment of distributions,
pursuant to Section 5.1 of the Partnership Agreement, holders of Series E
Preferred Units shall be entitled to receive, when, as and if declared by
the Partnership acting through the General Partner, out of Available Cash,
cumulative preferential cash distributions at the rate per annum of 8.375%
of the original Capital Contribution per Series E Preferred Unit. Such
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable (i) quarterly in arrears, on March 31, June
30, September 30 and December 31 of each year commencing on December 31,
1999 and, (ii), in the event of (A) an exchange of Series E Preferred
Units into Series E Preferred Shares, or (B) a redemption of Series E
Preferred Units, on the exchange date or redemption date, as applicable
(each a "Series E Preferred Unit Distribution Payment Date"). The amount
of the distribution payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and for any period shorter than
a full quarterly period for which distributions are computed, the amount
of the distribution payable will be computed on the basis of the actual
number of days elapsed in such period. If any date on which distributions
are to be made on the Series E Preferred Units is not a Business Day (as
defined herein), then payment of the distribution to be made on such date
will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. Distributions
on the Series E Preferred Units will be made to the holders of record of
the Series E Preferred
<PAGE>
Units on the relevant record dates to be fixed by the Partnership acting through
the General Partner, which record dates shall in no event exceed fifteen (15)
Business Days prior to the relevant Series E Preferred Unit Distribution Payment
Date (the "Series E Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulations or executive order to close.
(b) Distributions Cumulative. Distributions on the Series E Preferred
Units will accrue whether or not the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness at any
time prohibit the current payment of distributions, whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of such of such distributions and whether or not such distributions
are authorized. Accrued but unpaid distributions on the Series E Preferred Units
will accumulate as of the Series E Preferred Unit Distribution Payment Date on
which they first become payable. Distributions on account of arrears for any
past distribution periods may be declared and paid at any time, without
reference to a regular Series E Preferred Unit Distribution Payment Date to
holders of record of the Series E Preferred Units on the record date fixed by
the Partnership acting through the General Partner which date shall not exceed
fifteen (15) Business Days prior to the payment date. Accumulated and unpaid
distributions will not bear interest.
(c) Priority as to Distributions.
(i) So long as any Series E Preferred Units are outstanding, no
distribution of cash or other property shall be authorized, declared, paid
or set apart for payment on or with respect to any class or series of
Partnership Interest of the Partnership ranking junior as to the payment
of distributions or rights upon a voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership to the Series E Preferred
Units (collectively, "Units Junior to Series E"), nor shall any cash or
other property be set aside for or applied to the purchase, redemption or
other acquisition for consideration of any Series E Preferred Units, any
Series E Parity Preferred Units or any Units Junior to Series E, unless,
in each case, all distributions accumulated on all Series E Preferred
Units and all classes and series of outstanding Series E Parity Preferred
Units have been paid in full. The foregoing sentence will not prohibit (a)
distributions payable solely in Partnership Units ranking junior to the
Series E Preferred Units as to distributions and upon liquidation,
winding-up or dissolution, (b) the conversion of Units Junior to Series E
or Series E Parity Preferred Units into Partnership Units ranking junior
to the Series E Preferred Units as to distributions and upon liquidation,
winding-up or dissolution or (c) the redemption of Partnership Interests
corresponding to any Series E Preferred Shares (as hereinafter defined),
Parity Preferred Shares (as such term is defined in the Charter) or Junior
Shares (as such term is defined in the Charter) to be purchased
<PAGE>
by the General Partner pursuant to Article 3 of the Declaration of Trust
of the General Partner (the "Charter") to preserve the General Partner's
status as a real estate investment trust, provided that such redemption
shall be upon the same terms as the corresponding purchase pursuant to
Article 3 of the Charter.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series E Preferred Units, all distributions authorized
and declared on the Series E Preferred Units and all classes or series of
outstanding Series E Parity Preferred Units shall be authorized and
declared so that the amount of distributions authorized and declared per
Series E Preferred Unit and such other classes or series of Series E
Parity Preferred Units shall in all cases bear to each other the same
ratio that accrued distributions per Series E Preferred Unit and such
other classes or series of Series E Parity Preferred Units (which shall
not include any accumulation in respect of unpaid distributions for prior
distribution periods if such class or series of Series E Parity Preferred
Units do not have cumulative distribution rights) bear to each other.
(d) No Further Rights. Holders of Series E Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Intentionally Omitted.
Section 5. Liquidation Proceeds.
(a) Upon voluntary or involuntary liquidation, dissolution or winding-up
of the Partnership, distributions on the Series E Preferred Units shall be made
in accordance with Section 13.2 of the Partnership Agreement.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than thirty (30) and not more than sixty
(60) days prior to the payment date stated therein, to each record holder of the
Series E Preferred Units at the respective addresses of such holders as the same
shall appear on the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series E Preferred
Units will have no right or claim to any of the remaining assets of the
Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the General Partner to,
<PAGE>
or the consolidation or merger or other business combination of the Partnership
with or into, any corporation, trust, partnership, limited liability company or
other entity (or of any corporation, trust, partnership, limited liability
company or other entity with or into the Partnership) shall not be deemed to
constitute a liquidation, dissolution or winding-tip of the Partnership.
Section 6. Optional Redemption.
(a) Right of Optional Redemption. The Series E Preferred Units may not be
redeemed prior to the fifth (5th) anniversary of the issuance date. On or after
such date, the Partnership shall have the right to redeem the Series E Preferred
Units, in whole or in part, at any time or from time to time, upon not less than
thirty (30) nor more than sixty (60) days' written notice, at a redemption
price, payable in cash, equal to the Capital Account balance of the holders of
Series E Preferred Units (the "Series E Redemption Price"); provided, however,
that no redemption pursuant to this Section 6 will be permitted if the Series E
Redemption Price does not equal or exceed the original Capital Contribution of
such holder plus the cumulative Series E Priority Return, whether or not
declared, to the redemption date to the extent not previously distributed or
distributed pursuant to Section 3(a). If fewer than all of the outstanding
Series E Preferred Units are to be redeemed, the Series E Preferred Units to be
redeemed shall be selected pro rata (as nearly as practicable without creating
fractional units).
(b) Limitation on Redemption. The Partnership may not redeem fewer than
all of the outstanding Series E Preferred Units unless all accumulated and
unpaid distributions have been paid on all Series E Preferred Units for all
quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption.
(i) Notice of redemption will be (A) faxed, and (B) mailed by the
Partnership, by certified mail, postage prepaid, not less than thirty (30)
nor more than sixty (60) days prior to the redemption date, addressed to
the respective holders of record of the Series E Preferred Units at their
respective addresses as they appear on the records of the Partnership. No
failure to give or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series E Preferred Units except as
to the holder to whom such notice was defective or not given. In addition
to any information required by law, each such notice shall state: (1) the
redemption date, (2) the Series E Redemption Price, (3) the aggregate
number of Series E Preferred Units to be redeemed and if fewer than all of
the outstanding Series E Preferred Units are to be redeemed, the number of
Series E Preferred Units to be redeemed held by such holder, which number
shall equal such holder's pro rata share (based on the percentage of the
aggregate number of outstanding Series E Preferred Units the total number
of Series E Preferred Units held by such holder represents) of the
aggregate number of Series E Preferred Units to be redeemed, (4) the place
or places where such
<PAGE>
Series E Preferred Units are to be surrendered for payment of the Series E
Redemption Price, (5) that distributions on the Series E Preferred Units
to be redeemed will cease to accumulate on such redemption date and (6)
that payment of the Series E Redemption Price will be made upon
presentation and surrender of such Series E Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of
Series E Preferred Units (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series E Preferred
Units being redeemed funds sufficient to pay the applicable Series E
Redemption Price and will give irrevocable instructions and authority to
pay such Series E Redemption Price to the holders of the Series E
Preferred Units upon surrender of the Series E Preferred Units by such
holders at the place designated in the notice of redemption. If the Series
E Preferred Units are evidenced by a certificate and if fewer than all
Series E Preferred Units evidenced by any certificate are being redeemed,
a new certificate shall be issued upon surrender of the certificate
evidencing all Series E Preferred Units, evidencing the unredeemed Series
F Preferred Units without cost to the holder thereof. On and after the
date of redemption, distributions will cease to accumulate on the Series E
Preferred Units or portions thereof called for redemption, unless the
Partnership defaults in the payment thereof. If any date fixed for
redemption of Series E Preferred Units is not a Business Day, then payment
of the Series E Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Series E Redemption Price is improperly withheld or refused and not paid
by the Partnership, distributions on such Series E Preferred Units will
continue to accumulate from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the applicable Series E
Redemption Price.
Section 7. Voting Rights.
(a) General. Holders of the Series E Preferred Units will not have any
voting rights or right to consent to any matter requiring the consent or
approval of the Limited Partners, except as set forth in the Partnership
Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series E Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least two-thirds of the Series E Preferred Units outstanding at
the time (i) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests senior to the Series E
Preferred Units with respect to payment of distributions or
<PAGE>
rights upon liquidation, dissolution or winding-up of the Partnership or
reclassify any Partnership Interests of the Partnership into any such
senior Partnership Interest, or create, authorize or issue any obligations
or security convertible into or evidencing the right to purchase any such
senior Partnership Interests, (ii) authorize or create, or increase the
authorized or issued amount of any Series E Parity Preferred Units or
reclassify any Partnership Interest into any such Partnership Interest or
create, authorize or issue any obligations or security convertible into or
evidencing the right to purchase any such Partnership Interests but only
to the extent such Series E Parity Preferred Units are issued to an
Affiliate of the Partnership, other than the General Partner to the extent
the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates of the
Partnership (or to Affiliates purchasing the preferred stock on the same
terms as non-affiliated purchasers) or (iii) either (A) consolidate, merge
into or with, or convey, transfer or lease all or substantially all of its
assets to, any corporation or other entity or (B) amend, alter or repeal
the provisions of the Partnership Agreement, whether by merger,
consolidation or otherwise, that would materially and adversely affect the
powers, special rights, preferences, privileges or voting power of the
Series E Preferred Units or the holders thereof, provided, however, that
with respect to the occurrence of a merger, consolidation or a sale or
lease of all or substantially all of the Partnership's assets as an
entirety, so long as (1) the Partnership is the surviving entity and the
Series E Preferred Units remain outstanding with the terms thereof
unchanged, or (2) the resulting, surviving or transferee entity is a
partnership, limited liability company or other pass-through entity
organized under the laws of any state and substitutes the Series E
Preferred Units for other interests in such entity having substantially
the same terms and rights as the Series E Preferred Units, including with
respect to distributions, voting rights and rights upon liquidation,
dissolution or winding-up of the Partnership, then the occurrence of any
such event shall not be deemed to materially and adversely affect such
rights, privileges or voting powers of the holders of the Series E
Preferred Units and no vote of the Series E Preferred Units shall be
required in such case; and provided further that any increase in the
amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (y) junior
to the Series E Preferred Units with respect to payment of distributions
or the distribution of assets upon liquidation, dissolution or winding-up
of the Partnership, or (z) on a parity with the Series E Preferred Units
with respect to payment of distributions and the distribution of assets
upon liquidation, dissolution or winding-up of the Partnership to the
extent such Partnership Interests are issued to an affiliate of the
Partnership, other than the General Partner to the extent the issuance of
such interests was to allow the General Partner to issue corresponding
preferred stock to persons who are not affiliates of the Partnership,
shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers and no vote of the Series E
Preferred Units shall be required in such case.
Section 8. Transfer Restrictions. The Series E Preferred Units shall be
subject to the provisions of Article XI of the Partnership Agreement, provided,
however, that (i) the General Partner shall act reasonably in exercising its
discretion pursuant to the provisions of Section 1l.4(a)(ii) to transferees of
Series E Preferred Units, (ii) the provisions of Clause B of
<PAGE>
Section 11.3(d) shall not be applicable to holders of Series E Preferred Units
if at the time of such transfer, the Partnership already has 100 Partners; (iii)
if only a portion of the Series E Preferred Units shall be transferred, the
transferee of such transferred Series E Preferred Units shall, subject to the
provisions of Section 11.4, be substituted as a Limited Partner in place of the
transferring holders only as to the Series E Preferred Units so transferred; and
(iv) the provisions of Sections 11.6(c) and 11.6(d) shall not be applicable to
any transfer of Series E Preferred Units; and provided further that "transfer"
when used in Article 11 shall not be deemed to include any exchange pursuant to
Section 9 below.
Section 9. Exchange Rights.
(a) Right to Exchange.
(i) Series E Preferred Units will be exchangeable in whole or
in part at anytime on or after the tenth (10th) anniversary of the
date of issuance, at the option of the holders thereof, for
authorized but previously unissued shares of 8.375% Series E
Cumulative Redeemable Preferred Shares of the General Partner (the
"Series E Preferred Shares") at an exchange rate of one Series E
Preferred Share for one Series E Preferred Unit, subject to
adjustment as described below (the "Series E Exchange Price"),
provided that the Series E Preferred Units will become exchangeable
at any time, in whole or in part, at the option of the holders of
Series E Preferred Units for Series E Preferred Shares if(y) at any
time full distributions shall not have been timely made on any
Series E Preferred Unit with respect to six (6) prior quarterly
distribution periods, whether or not consecutive, provided, however,
that a distribution in respect of Series E Preferred Units shall be
considered timely made if made within two (2) Business Days after
the applicable Series E Preferred Unit Distribution Payment Date if
at the time of such late payment there shall not be any prior
quarterly distribution periods in respect of which full
distributions were not timely made or (z) upon receipt by a holder
or holders of Series E Preferred Units of (1) a notice from the
General Partner that the General Partner or a Subsidiary of the
General Partner has taken the position that the Partnership is, or
upon the occurrence of a defined event in the immediate future will
be, a PTP and (2) an opinion rendered by an outside nationally
recognized independent counsel familiar with such matters addressed
to a holder or holders of Series E Preferred Units, that the
Partnership is or likely is, or upon the occurrence of a defined
event in the immediate future will be or likely will be, a PTP. In
addition, the Series E Preferred Units may be exchanged for Series E
Preferred Shares, in whole or in part, at the option of any holder
prior to the tenth (10th) anniversary of the issuance date and after
the third (3rd) anniversary thereof if such holder of a Series E
Preferred Units shall deliver to the General Partner either (i) a
private letter ruling addressed to such holder of Series E Preferred
Units or (ii) an opinion of independent counsel reasonably
acceptable to the General Partner based on the enactment of
temporary or final Treasury Regulations or the publication of a
Revenue Ruling, in either case to the effect that an exchange of the
Series E Preferred Units at such earlier time would not
<PAGE>
cause the Series E Preferred Units to be considered "stock and
securities" within the meaning of section 351(e) of the Code for
purposes of determining whether the holder of such Series E
Preferred Units is an "investment company" under section 721(b) of
the Code if an exchange is permitted at such earlier date.
Furthermore, all the Series E Preferred Units held by any holder
thereof which is a real estate investment trust within the meaning
of Sections 856 through 859 of the Code for Series E Preferred
Shares may be exchanged in whole but not in part (but only if the
exchange may be accomplished consistently with the ownership
limitations set forth under Article 3 of the Charter (taking into
account exceptions thereto)) if at any time, (i) the Partnership
reasonably determines that the assets and income of the Partnership
for a taxable year after 1999 would not satisfy the income and
assets tests of Section 856 of the Code for such taxable year if the
Partnership were a real estate investment trust within the meaning
of the Code or (ii) any such holder of Series E Preferred Units
shall deliver to the Partnership and the General Partner an opinion
of independent counsel reasonably acceptable to the General Partner
to the effect that, based on the assets and income of the
Partnership for a taxable year after 1999, the Partnership would not
satisfy the income and assets tests of Section 856 of the Code for
such taxable year if the Partnership were a real estate investment
trust within the meaning of the Code and that such failure would
create a meaningful risk that a holder of the Series E Preferred
Units would fail to maintain qualification as a real estate
investment trust.
(ii) Notwithstanding anything to the contrary set forth in
Section 9(a)(i) hereof, if an Series E Exchange Notice (as defined
herein) has been delivered to the General Partner, then the General
Partner may, at its option, elect to redeem or cause the Partnership
to redeem all or a portion of the outstanding Series E Preferred
Units for cash in an amount equal to the original Capital
Contribution per Series E Preferred Unit and all accrued and unpaid
distributions thereon to the date of redemption. The General Partner
may exercise its option to redeem the Series E Preferred Units for
cash pursuant to this Section 9(a)(ii) hereof by giving each holder
of record of Series E Preferred Units notice of its election to
redeem for cash, within five (5) Business Days after receipt of the
Series E Exchange Notice, by (y) fax, and (z) registered mail,
postage paid, at the address of each holder as it may appear on the
records of the Partnership stating (A) the redemption date, which
shall be no later than sixty (60) days following the receipt of the
Series E Exchange Notice, (B) the redemption price, (C) the place or
places where the Series E Preferred Units are to be surrendered for
payment of the redemption price, (D) that distributions on the
Series E Preferred Units will cease to accrue on such redemption
date; (F) that payment of the redemption price will be made upon
presentation and surrender of the Series E ______ Preferred Units
and (F) the aggregate number of Series E Preferred Units to be
redeemed, and if fewer than all of the outstanding Series E
Preferred Units are to be redeemed, the number of Series E Preferred
Units to be redeemed held by such holder, which number shall equal
such holder's pro-rata share (based on the percentage of the
<PAGE>
aggregate number of outstanding Series E Preferred Units the total
number of Series E Preferred Units held by such holder represents)
of the aggregate number of Series E Preferred Units being redeemed.
(iii) In the event an exchange of all or a portion of Series E
Preferred Units pursuant to Section 9(a)(i) hereof would violate the
provisions on ownership limitation of the General Partner set forth
in Article 3 of the Charter with respect to the Series E Preferred
Shares, the General Partner shall give written notice thereof to
each holder of record of Series E Preferred Units, within five (5)
Business Days following receipt of the Series E Exchange Notice, by
(y) fax, and (z) registered mail, postage prepaid, at the address of
each such holder set forth in the records of the Partnership. In
such event, each holder of Series E Preferred Units shall be
entitled to exchange, pursuant to the provision of Section 9(b) a
number of Series E Preferred Units which would comply with the
provisions on the ownership limitation of the General Partner set
forth in such Article 3 of the Charter and any Series E Preferred
Units not so exchanged (the "Series E Excess Units") shall be
redeemed by the Partnership for cash in an amount equal to the
original Capital Contribution per Excess Unit, plus any accrued and
unpaid distributions thereon, whether or not declared, to the date
of redemption. The written notice of the General Partner shall state
(A) the number of Series E Excess Units held by such holder, (B) the
redemption price of the Series E Excess Units, (C) the date on which
such Series E Excess Units shall be redeemed, which date shall be no
later than sixty (60) days following the receipt of the Series E
Exchange Notice, (D) the place or places where such Series E Excess
Units are to be surrendered for payment of the Series E Redemption
Price, (E) that distributions on the Series E Excess Units will
cease to accrue on such redemption date, and (F) that payment of the
redemption price will be made upon presentation and surrender of
such Series E Excess Units. In the event an exchange would result in
Series E Excess Units, as a condition to such exchange, each holder
of such units agrees to provide representations and covenants
reasonably requested by the General Partner relating to (1) the
widely held nature of the interests in such holder, sufficient to
assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above)
will not cause any individual to Beneficially Own in excess of the
Ownership Limit (all as defined in the General Partner's Charter);
and (2) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's
ownership of tenants of the Partnership and its affiliates.
(iv) The redemption of Series E Preferred Units described in
Section 9(a)(ii) and (iii) shall be subject to the provisions of
Section 6(b)(i) and Section 6(c)(ii); provided, however, that the
term "Series E Redemption Price" in such Section shall be read to
mean the original Capital Contribution per Series E Preferred Unit
being redeemed plus all accrued and unpaid distributions to the
redemption date.
<PAGE>
(b) Procedure for Exchange.
(i) Any exchange shall be exercised pursuant to a notice of
exchange (the "Series E Exchange Notice") delivered to the General
Partner by the holder who is exercising such exchange right, by (A)
fax and (B) by certified mail postage prepaid. The exchange of
Series E Preferred Units, or a specified portion thereof, may be
effected after the fifth (5th) Business Day following receipt by the
General Partner of the Series E Exchange Notice by delivering
certificates, if any, representing such Series E Preferred Units to
be exchanged together with, if applicable, written notice of
exchange and a proper assignment of such Series E Preferred Units to
the office of the General Partner maintained for such purpose.
Currently, such office is Two Center Plaza, Suite 200, Boston,
Massachusetts 02108. Each exchange will be deemed to have been
effected immediately prior to the close of business on the date on
which such Series E Preferred Units to be exchanged (together with
all required documentation) shall have been surrendered and notice
shall have been received by the General Partner as aforesaid and the
Series E Exchange Price shall have been paid. Any Series E Preferred
Shares issued pursuant to this Section 9 shall be delivered as
shares which are duly authorized, validly issued, fully paid and
nonassessable, free of pledge, lien, encumbrance or restriction
other than those provided in the Charter, the Bylaws of the General
Partner, the Securities Act and relevant state securities or blue
sky laws.
(ii) In the event of an exchange of Series E Preferred Units
for Series E Preferred Shares, an amount equal to the accrued and
unpaid distributions, whether or not declared, to the date of
exchange on any Series E Preferred Units tendered for exchange shall
(A) accrue on the Series E Preferred Shares into which such Series E
Preferred Units are exchanged, and (B) continue to accrue on such
Series E Preferred Units, which shall remain outstanding following
such exchange, with the General Partner as the holder of such Series
F Preferred Units. Notwithstanding anything to the contrary set
forth herein, in no event shall a holder of a Series E Preferred
Unit that was validly exchanged into Series E Preferred Shares
pursuant to this section (other than the General Partner now holding
such Series E Preferred Unit), receive a cash distribution out of
Available Cash of the Partnership, if such holder, after exchange,
is entitled to receive a distribution out of Available Cash with
respect to the Series E Preferred Shares for which such Series E
Preferred Unit was exchanged or redeemed.
(iii) Fractional shares of Series E Preferred Shares are not
to be issued upon exchange but, in lieu thereof, the General Partner
will pay a cash adjustment based upon the fair market value of the
Series E Preferred Shares on the day prior to the exchange date as
determined in good faith by the Board of Directors of the General
Partner.
(c) Adjustment of Series E Exchange Price.
<PAGE>
(i) The Series E Exchange Price is subject to adjustment upon
certain events, including, (A) subdivisions, combinations and
reclassification of the Series E Preferred Shares, and (B)
distributions to all holders of Series E Preferred Shares of
evidence of indebtedness of the General Partner or assets (including
securities, but excluding dividends and distributions paid in cash
out of equity applicable to Series E Preferred Shares).
(ii) In case the General Partner shall be a party to any
transaction (including, without limitation, a merger, consolidation,
statutory share exchange, tender offer for all or substantially all
of the General Partner's capital stock or sale of all or
substantially all of the General Partner's assets), in each case as
a result of which the Series E Preferred Shares will be converted
into the right to receive shares of capital stock, other securities
or other property (including cash or any combination thereof), each
Series E Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other securities and
property receivable (including cash or any combination thereof) upon
the consummation of such transaction by a holder of that number of
Series E Preferred Shares or fraction thereof into which one Series
F Preferred Unit was exchangeable immediately prior to such
transaction. The General Partner may not become a party to any such
transaction unless the terms thereof are consistent with the
foregoing.
Section 10. No Conversion Rights.
(a) The holders of the Series E Preferred Units shall not have any
rights to convert such shares into shares of any other class or series of
shares or into any other securities of, or interest in, the Partnership.
(b) The Series E Preferred Units shall not be subject to the
provisions of Section 4.2(e) of the Partnership Agreement.
Section 11. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series E Preferred Units.
Section 12. Admission of Limited Partner; Exhibits to Partnership
Agreement. In accordance with Section 12.2(b), Montebello is hereby admitted as
an Additional Limited Partner. In order to duly reflect the issuance of Series E
Preferred Units provided for herein, the Partnership Agreement is hereby amended
by deleting Exhibit A attached thereto and substituting Exhibit A attached
hereto therefor.
Section 13. Reaffirmation. 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 affirms.
<PAGE>
(signatures appear on next page)
<PAGE>
In witness whereof, this Amendment has been executed as of the date first
above written.
GENERAL PARTNER
CABOT INDUSTRIAL TRUST
By:
Name:
Title:
ADDITIONAL LIMITED PARTNER
MONTEBELLO REALTY CORP.
By:
Name:
Title:
<PAGE>
EXHIBIT A
<PAGE>
Exhibit 4.12
CABOT INDUSTRIAL TRUST
ARTICLES SUPPLEMENTARY
200,000 SHARES
8.375% SERIES E CUMULATIVE REDEEMABLE PREFERRED SHARES
Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland (the "Department") that:
FIRST: Under a power contained in Article 2, Section 1 of the
Amended and Restated Declaration of Trust of the Company, filed with, and
accepted for record by, the State Department of Assessments and Taxation
of Maryland (the "SDAT") on January 26, 1998, as supplemented by Articles
Supplementaries filed with, and accepted for record by, the SDAT
respectively on July 10, 1998, April 29, 1999, September 3, 1999 and
September 27, 1999 and as corrected by that certain Certificate of
Correction filed with, and accepted for record by, the SDAT on October 12,
1999 (collectively, as supplemented and corrected, the "Charter"), the
Board of Trustees of the Company, as required by Section 8-203(b) of the
Corporations and Associations Article of the Annotated Code of Maryland,
has unanimously adopted resolutions classifying and designating 200,000
unissued shares of beneficial interest (the "Shares") as 8.375% Series E
Cumulative Redeemable Preferred Shares, with the following preferences,
conversion and other rights, voting powers, restrictions, limitations as
to dividends and other distributions, qualifications and terms and
conditions of redemption, and other terms and conditions, which upon any
restatement of the Charter shall be made part of Article 2 of the Charter,
with any necessary or appropriate changes to the enumeration and lettering
thereof:
SECOND: The following is a description of the 8.375% Series E
Cumulative Redeemable Preferred Shares, including the preferences,
conversion and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption
thereof:
8.375% SERIES E CUMULATIVE REDEEMABLE PREFERRED SHARES
Section 1. Designation and Number. A series of preferred
shares, designated the "8.375% Series E Cumulative Redeemable
Preferred Shares" (the "Series E Preferred Shares") is hereby
established. The number of shares of Series E Preferred Shares shall
be 200,000.
<PAGE>
Section 2. Rank. The Series E Preferred Shares shall, with
respect to distributions and rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Company, rank senior
to all classes or series of common Shares and to all classes or
series of equity securities of the Company now or hereafter
authorized, issued or outstanding, other than any class or series of
equity securities of the Company expressly designated as ranking on
a parity with or senior to the Series E Preferred Shares as to
distributions and rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Company. For purposes of these
Articles Supplementary, the term "Series E Parity Preferred Shares"
shall be used to refer to the Series B Cumulative Redeemable Shares
(authorized pursuant to that certain Articles Supplementary filed
with the SDAT on April 29, 1999), the Series C Cumulative Redeemable
Preferred Shares (authorized pursuant to that certain Articles
Supplementary filed with the SDAT on September 3, 1999), the Series
D Cumulative Redeemable Preferred Shares (authorized pursuant to
that certain Articles Supplementary filed with the SDAT on September
27, 1999) and any class or series of equity securities of the
Company now or hereafter authorized, issued or outstanding expressly
designated by the Company to rank on a parity with Series E
Preferred Shares with respect to distributions and rights upon
voluntary or involuntary liquidation, winding-up or dissolution of
the Company. The term "equity securities" does not include debt
securities, which will rank senior to the Series E Preferred Shares
prior to conversion.
Section 3. Distributions.
(a) Payment of Distributions. Subject to the rights of
holders of Series E Parity Preferred Shares and holders of
equity securities ranking senior to the Series E Preferred
Shares as to payment of distributions, holders of Series E
Preferred Shares will be entitled to receive, when, as and if
declared by the Board of Trustees of the Company, out of funds
legally available for the payment of distributions, cumulative
preferential cash distributions at the rate per annum of
8.375% of the $50 liquidation preference per Series E
Preferred Share. Such distributions shall be cumulative, shall
accrue from the original date of issuance and will be payable
(i) quarterly in arrears, on March 31, June 30, September 30
and December 31 of each year commencing on the first of such
dates to occur after the original date of issuance and, (ii)
in the event of a redemption, on the redemption date (each a
"Series E Preferred Shares Distribution Payment Date"). The
amount of the distribution payable for any period will be
computed on the basis of a 360-day year of twelve 30-day
months and for any period shorter than a full quarterly period
for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the
actual number of days elapsed in such period. If any date on
which distributions are to be made on the Series E Preferred
<PAGE>
Shares is not a Business Day (as defined herein), then payment
of the distribution to be made on such date will be made on
the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date. Distributions on the Series E
Preferred Shares will be made to the holders of record of the
Series E Preferred Shares on the relevant record dates, which,
unless otherwise provided by the Company with respect to any
distribution, will be fifteen (15) Business Days prior to the
relevant Series E Preferred Shares Distribution Payment Date
(each a "Series E Distribution Record Date"). Notwithstanding
anything to the contrary set forth herein, each Series E
Preferred Share shall also continue to accrue all accrued and
unpaid distributions up to the exchange date on any Series E
Preferred Unit (as defined in the Second Amended and Restated
Agreement of Limited Partnership of Cabot Industrial
Properties, L.P., dated as of February 4, 1998 (the
"Partnership Agreement"), as amended through the date hereof)
validly exchanged into such Series E Preferred Share in
accordance with the provisions of such Partnership Agreement.
The term "Business Day" shall mean each day, other than
a Saturday or a Sunday, which is not a day on which banking
institutions in New York, New York are authorized or required
by law, regulation or executive order to close.
(b) Limitation on Distributions. No distributions on the
Series E Preferred Shares shall be declared or paid or set
apart for payment by the Company at such time as the terms and
provisions of any agreement of the Company, including any
agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides
that such declaration, payment or setting apart for payment
would constitute a breach thereof or a default thereunder, or
if such declaration, payment or setting apart for payment
shall be restricted or prohibited by law.
(c) Distributions Cumulative. Notwithstanding the
foregoing, distributions on the Series E Preferred Shares will
accrue whether or not the terms and provisions set forth in
Section 3(b) hereof at any time prohibit the current payment
of distributions, whether or not the Company has earnings,
whether or not there are funds legally available for the
payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid
distributions on the Series E Preferred Shares will accumulate
as of the Series E Preferred Shares Distribution Payment Date
on which they first become payable. Accumulated and unpaid
distributions will not bear interest.
<PAGE>
(d) Priority as to Distributions.
(i) So long as any Series E Preferred Shares are
outstanding, no distribution of cash or other property
shall be authorized, declared, paid or set apart for
payment on or with respect to any class or series of
common Shares or any class or series of other Shares of
the Company ranking junior as to the payment of
distributions or rights upon voluntary or involuntary
dissolution, liquidation or winding up of the Company to
the Series E Preferred Shares (such common Shares or
other junior Shares, including, without limitation
Series A Junior Participating Preferred Shares
authorized pursuant to Articles Supplementary filed with
the Department on July 10, 1998 collectively, "Shares
Junior to Series E"), nor shall any cash or other
property be set aside for or applied to the purchase,
redemption or other acquisition for consideration of any
Series E Preferred Shares, any Series E Parity Preferred
Shares or any Shares Junior to Series E, unless, in each
case, all distributions accumulated on all Series E
Preferred Shares and all classes and series of
outstanding Series E Parity Preferred Shares have been
paid in full. The foregoing sentence will not prohibit
(i) distributions payable solely in Shares of the
Company ranking junior to the Series E Preferred Shares
as to distributions and upon liquidation, winding-up or
dissolution, (ii) the conversion of Shares Junior to
Series E or Series E Parity Preferred Shares into Shares
of the Company ranking junior to the Series E Preferred
Shares as to distributions and upon liquidation,
winding-up or dissolution, and (iii) purchase by the
Company of such Series E Preferred Shares, Series E
Parity Preferred Shares or Shares Junior to Series E
pursuant to Article 3 of the Charter to the extent
required to preserve the Company's status as a real
estate investment trust.
(ii) So long as distributions have not been paid
in full (or a sum sufficient for such full payment is
not irrevocably deposited in trust for payment) upon the
Series E Preferred Shares, all distributions authorized
and declared on the Series E Preferred Shares and all
classes or series of outstanding Series E Parity
Preferred Shares shall be authorized and declared so
that the amount of distributions authorized and declared
per share of Series E Preferred Shares and such other
classes or series of Series E Parity Preferred Shares
shall in all cases bear to each other the same ratio
that accrued distributions per share on the Series E
Preferred Shares and such other classes or series of
Series E Parity Preferred Shares (which shall not
include any accumulation in
<PAGE>
respect of unpaid distributions for prior distribution
periods if such class or series of Series E Parity
Preferred Shares do not have cumulative distribution
rights) bear to each other.
(e) No Further Rights. Holders of Series E Preferred
Shares shall not be entitled to any distributions, whether
payable in cash, other property or otherwise, in excess of the
full cumulative distributions described herein.
Section 4. Liquidation Preference.
(a) Payment of Liquidation Distributions. Subject to the
rights of holders of Series E Parity Preferred Shares and
subject to equity securities ranking senior to the Series E
Preferred Shares with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the
Company, the holders of Series E Preferred Shares shall be
entitled to receive out of the assets of the Company legally
available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the
Company, but before any payment or distributions of the assets
shall be made to holders of common Shares or any other class
or series of shares of the Company that ranks junior to the
Series E Preferred Shares as to rights upon liquidation,
dissolution or winding-up of the Company, an amount equal to
the sum of (i) a liquidation preference of $50 per Series E
Preferred Share, and (ii) an amount equal to any accumulated
and unpaid distributions thereon, whether or not declared, to
the date of payment. In the event that, upon such voluntary or
involuntary liquidation, dissolution or winding-up, there are
insufficient assets to permit full payment of liquidating
distributions to the holders of Series E Preferred Shares and
any Series E Parity Preferred Shares, all payments of
liquidating distributions on the Series E Preferred Shares and
such Series E Parity Preferred Shares shall be made so that
the payments on the Series E Preferred Shares and such Series
E Parity Preferred Shares shall in all cases bear to each
other the same ratio that the respective rights of the Series
E Preferred Shares and such other Series E Parity Preferred
Shares (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such
Series E Parity Preferred Shares do not have cumulative
distribution rights) upon liquidation, dissolution or
winding-up of the Company bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the
Company, stating the payment date or dates when, and the place
or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and
(ii) by first class mail, postage pre-paid, not less than
<PAGE>
thirty (30) and not more than sixty (60) days prior to the
payment date stated therein, to each record holder of the
Series E Preferred Shares at the respective addresses of such
holders as the same shall appear on the share transfer records
of the Company.
(c) No Further Rights. After payment of the full amount
of the liquidating distributions to which they are entitled,
the holders of Series E Preferred Shares will have no right or
claim to any of the remaining assets of the Company.
(d) Consolidation, Merger or Certain Other Transactions.
The voluntary sale, conveyance, lease, exchange or transfer
(for cash, shares of stock, securities or other consideration)
of all or substantially all of the property or assets of the
Company to, or the consolidation or merger or other business
combination of the Company with or into any corporation, trust
or other entity (or of any corporation, trust or other entity
with or into the Company) shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Company.
Section 5. Optional Redemption.
(a) Right of Optional Redemption. The Series E Preferred
Shares may not be redeemed prior to December 9, 2004. On or
after such date, the Company shall have the right to redeem
the Series E Preferred Shares, in whole or in part, at any
time or from time to time, upon not less than thirty (30) nor
more than sixty (60) days' written notice, at a redemption
price, payable in cash, equal to $50 per share of Series E
Preferred Shares plus accumulated and unpaid distributions,
whether or not declared, to the date of redemption. If fewer
than all of the outstanding Series E Preferred Shares are to
be redeemed, the Series E Preferred Shares to be redeemed
shall be selected pro rata (as nearly as practicable without
creating fractional shares).
(b) Limitation on Redemption. The Company may not redeem
fewer than all of the outstanding shares of Series E Preferred
Shares unless all accumulated and unpaid distributions have
been paid on all outstanding Series E Preferred Shares for all
quarterly distribution periods terminating on or prior to the
date of redemption.
(c) Procedures for Redemption.
(i) Notice of redemption will be (i) faxed, and
(ii) mailed by the Company, postage prepaid, not less
than thirty (30) nor more than sixty (60) days prior to
the redemption date, addressed to the respective holders
of record of the Series E
<PAGE>
Preferred Shares to be redeemed at their respective
addresses as they appear on the transfer records of the
Company. No failure to give or defect in such notice
shall affect the validity of the proceedings for the
redemption of any Series E Preferred Shares except as to
the holder to whom such notice was defective or not
given. In addition to any information required by law or
by the applicable rules of any exchange upon which the
Series E Preferred Shares may be listed or admitted to
trading, each such notice shall state: (i) the
redemption date, (ii) the redemption price, (iii) the
number of Series E Preferred Shares to be redeemed, (iv)
the place or places where such Series E Preferred Shares
are to be surrendered for payment of the redemption
price, (v) that distributions on the Series E Preferred
Shares to be redeemed will cease to accumulate on such
redemption date and (vi) that payment of the redemption
price and any accumulated and unpaid distributions will
be made upon presentation and surrender of such Series E
Preferred Shares. If fewer than all of the Series E
Preferred Shares held by any holder are to be redeemed,
the notice mailed to such holder shall also specify the
number of Series E Preferred Shares held by such holder
to be redeemed.
(ii) If the Company gives a notice of redemption
in respect of Series E Preferred Shares (which notice
will be irrevocable) then, by 12:00 noon, New York City
time, on the redemption date, the Company will deposit
irrevocably in trust for the benefit of the holders of
the Series E Preferred Shares being redeemed, funds
sufficient to pay the applicable redemption price, plus
any accumulated and unpaid distributions, whether or not
declared, if any, on such shares to the date fixed for
redemption, without interest, and will give irrevocable
instructions and authority to pay such redemption price
and any accumulated and unpaid distributions, whether or
not declared, if any, on such shares to the holders of
the Series E Preferred Shares upon surrender of the
certificates for the Series E Preferred Shares by such
holders at the place designated in the notice of
redemption. If fewer than all Series E Preferred Shares
evidenced by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the
certificate evidencing all Series E Preferred Shares,
evidencing the unredeemed Series E Preferred Shares
without cost to the holder thereof. On and after the
date of redemption, distributions will cease to
accumulate on the Series E Preferred Shares or portions
thereof called for redemption, unless the Company
defaults in the payment thereof If any date fixed for
redemption of Series E Preferred Shares is not a
Business Day, then payment of the redemption price
payable on such date will be
<PAGE>
made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls
in the next calendar year, such payment will be made on
the immediately preceding Business Day, in each case
with the same force and effect as if made on such date
fixed for redemption. If payment of the redemption price
or any accumulated or unpaid distributions in respect of
the Series E Preferred Shares is improperly withheld or
refused and not paid by the Company, distributions on
such Series E Preferred Shares will continue to
accumulate from the original redemption date to the date
of payment, in which case the actual payment date will
be considered the date fixed for redemption for purposes
of calculating the applicable redemption price and any
accumulated and unpaid distributions.
(e) Status of Redeemed Shares. Any Series E Preferred
Shares that shall at any time have been redeemed shall after
such redemption, have the status of authorized but unissued
Shares, without designation as to class or series until such
shares are once more designated as part of a particular class
or series by the Board.
Section 6. Voting Rights.
(a) General. Holders of the Series E Preferred Shares
will not have any voting rights, except as set forth below.
(b) Right to Elect Trustees.
(i) If at any time full distributions shall not
have been timely made on any Series E Preferred Shares
with respect to any six (6) prior quarterly distribution
periods, whether or not consecutive, (a "Preferred
Distribution Default"), the holders of such Series E
Preferred Shares, voting together as a single class with
the holders of each class or series of Series E Parity
Preferred Shares upon which like voting rights have been
conferred and are exercisable, will have the right to
elect two additional Trustees to serve on the Company's
Board (the "Series E Preferred Shares Trustees") at a
special meeting called by the holders of record of at
least 10% of the outstanding Series E Preferred Shares
or any such class or series of Series E Parity Preferred
Shares or at the next annual meeting of Shareholders,
and at each subsequent annual meeting of Shareholders or
special meeting for the election of Trustees held in
place thereof, until all such distributions in arrears
and distributions for the current quarterly period on
the Series E Preferred Shares and each such class or
series of Series E
<PAGE>
Parity Preferred Shares have been paid in full.
(ii) At any time when such voting rights shall
have vested, a proper officer of the Company shall call
or cause to be called, upon written request of holders
of record of at least 10% of the outstanding Series E
Preferred Shares, a special meeting of the holders of
Series E Preferred Shares and all the series of Series E
Parity Preferred Shares upon which like voting rights
have been conferred and are exercisable (collectively,
the "Series E Parity Securities") by mailing or causing
to be mailed to such holders a notice of such special
meeting to be held not less than ten and not more than
45 days after the date such notice is given. The record
date for determining holders of the Series E Parity
Securities entitled to notice of and to vote at such
special meeting will be the close of business on the
third Business Day preceding the day on which such
notice is mailed. At any such special meeting, all of
the holders of the Series E Parity Securities, by
plurality vote, voting together as a single class
without regard to series will be entitled to elect two
Trustees on the basis of one vote per $25.00 of
liquidation preference to which such Series E Parity
Securities are entitled by their terms (excluding
amounts in respect of accumulated and unpaid dividends)
and not cumulatively. The holder or holders of one-third
of the Series E Parity Securities then outstanding,
present in person or by proxy, will constitute a quorum
for the election of the Series F Preferred Shares
Trustees except as otherwise provided by law. Notice of
all meetings at which holders of the Series E Preferred
Shares shall be entitled to vote will be given to such
holders at their addresses as they appear in the
transfer records. At any such meeting or adjournment
thereof in the absence of a quorum, subject to the
provisions of any applicable law, a majority of the
holders of the Series F Parity Securities present in
person or by proxy shall have the power to adjourn the
meeting for the election of the Series E Preferred
Shares Trustees, without notice other than an
announcement at the meeting, until a quorum is present.
If a Series E Preferred Distribution Default shall
terminate after the notice of a special meeting has been
given but before such special meeting has been held, the
Company shall, as soon as practicable after such
termination, mail or cause to be mailed notice of such
termination to holders of the Series E Preferred Shares
that would have been entitled to vote at such special
meeting.
(iii) If and when all accumulated distributions
and the distributions for the current distribution
period on the Series E Preferred Shares shall have been
paid in full or a sum sufficient for
<PAGE>
such payment is irrevocably deposited in trust for
payment, the holders of the Series E Preferred Shares
shall be divested of the voting rights set forth in this
Section 6(b) herein (subject to revesting in the event
of each and every Series E Preferred Distribution
Default) and, if all distributions in arrears and the
distributions for the current distribution period have
been paid in full or set aside for payment in full on
all other classes or series of Series E Parity Preferred
Shares upon which like voting rights have been conferred
and are exercisable, the term and office of each Series
E Preferred Shares Trustee so elected shall terminate.
Any Series E Preferred Shares Trustee may be removed at
any time with or without cause by the vote of, and shall
not be removed otherwise than by the vote of, the
holders of record of a majority of the outstanding
Series E Parity Securities when they have the voting
rights set forth in this Section 6(b). So long as a
Series E Preferred Distribution Default shall continue,
any vacancy in the office of a Series E Preferred Shares
Trustee may be filled by written consent of the Series E
Preferred Shares Trustee remaining in office, or if none
remains in office, by a vote of the holders of record of
a majority of the outstanding Series E Parity Securities
when they have the voting rights set forth in this
Section 6(b). The Series E Preferred Shares Trustees
shall each be entitled to one vote per trustee on any
matter.
(c) Certain Voting Rights. So long as any Series E
Preferred Shares remain outstanding, the Company shall not,
without the affirmative vote of the holders of at least
two-thirds of the Series E Preferred Shares outstanding at the
time (i) designate or create, or increase the authorized or
issued amount of, any class or series of shares ranking senior
to the Series E Preferred Shares with respect to payment of
distributions or rights upon liquidation, dissolution or
winding-up of the Company or reclassify any authorized shares
of the Company into any such shares, or create, authorize or
issue any obligations or security convertible into or
evidencing the right to purchase any such shares, (ii)
designate or create, or increase the authorized or issued
amount of, any Series F Parity Preferred Shares or reclassify
any authorized shares of the Company into any such shares, or
create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such
shares, but only to the extent such Series E Parity Preferred
Shares are issued to an affiliate of the Company, or (iii)
either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety, to
any corporation or other entity, or (B) amend, alter or repeal
the provisions of the Company's Charter (including these
Articles Supplementary) or By-laws, whether by merger,
consolidation or otherwise, in each case that would materially
and adversely affect the powers, special rights,
<PAGE>
preferences, privileges or voting power of the Series E
Preferred Shares or the holders thereof; provided, however,
that with respect to the occurrence of a merger, consolidation
or a sale or lease of all or substantially all of the
Company's assets as an entirety, so long as (a) the Company is
the surviving entity and the Series E Preferred Shares remain
outstanding with the terms thereof unchanged, or (b) the
resulting, surviving or transferee entity is a corporation
organized under the laws of any state and substitutes the
Series E Preferred Shares for other preferred Shares having
substantially the same terms and same rights as the Series E
Preferred Shares, including with respect to distributions,
voting rights and rights upon liquidation, dissolution or
winding-up of the Company, then the occurrence of any such
event shall not be deemed to materially and adversely affect
such rights, privileges or voting powers of the holders of the
Series E Preferred Shares and no vote of the Series E
Preferred Shares shall be required; and provided further that
any increase in the amount of authorized Shares or the
creation or issuance of any other class or series of Shares,
or any increase in an amount of authorized shares of each
class or series, in each case ranking either (a) junior to the
Series E Preferred Shares with respect to payment of
distributions and the distribution of assets upon liquidation,
dissolution or winding-up of the Company, or (b) on a parity
with the Series E Preferred Shares with respect to payment of
distributions or the distribution of assets upon liquidation,
dissolution or winding-up of the Company to the extent such
Shares are not issued to an affiliate of the Company, shall
not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers and no vote of the
Series E Preferred Shares shall be required.
Section 7. Transfer Restrictions. The Series E Preferred
Shares shall be subject to the provisions of Article 3 of the
Charter; provided, however, in no event shall the Ownership Limit
with respect to the Series E Preferred Shares (as defined in the
Charter) be decreased pursuant to Section 10 of Article 3 of the
Charter or otherwise (other than a decrease as a result of a
retroactive change in existing law that would require a decrease to
retain real estate investment trust status under the Internal
Revenue Code of 1986, as amended).
Section 8. No Conversion Rights. The holders of the Series E
Preferred Shares shall not have any rights to convert such shares
into shares of any other class or series of Shares or into any other
securities of, or interest in, the Company.
Section 9. No Sinking Fund. No sinking fund shall be
established for the retirement or redemption of Series E Preferred
Shares.
Section 10. No Preemptive Rights. No holder of the Series E
Preferred Shares of the Company shall, as such holder, have any
preemptive rights
<PAGE>
to purchase or subscribe for additional Shares of the Company or any
other security of the Company which it may issue or sell.
THIRD: The Series E Preferred Shares have been classified and
designated by the Board under the authority contained in the Charter.
FOURTH: These Articles Supplementary have been approved by the Board
in the manner and by the vote required by law.
FIFTH: The undersigned President of the Company acknowledges these
Articles Supplementary to be the corporate act of the Company and, as to
all matters or facts required to be verified under oath, the undersigned
President acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that
this statement is made under the penalties for perjury.
(signature appears on next page)
<PAGE>
In witness whereof, the Company has caused these Articles Supplementary to
be executed under seal in its name and on its behalf by its President and
attested to by its Secretary on this 9th day of December, 1999.
CABOT INDUSTRIAL TRUST
By:
Name:
Title:
[SEAL]
ATTEST:
Name:
Title: Secretary
<PAGE>
Exhibit 4.13
FIFTH AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CABOT INDUSTRIAL PROPERTIES, L.P.
THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP (this "Amendment") dated as of December 22, 1999, is entered into by
CABOT INDUSTRIAL TRUST, a Maryland real estate investment trust, as general
partner (the "General Partner") of CABOT INDUSTRIAL PROPERTIES, L.P. (the
"Partnership"), for itself and on behalf of the limited partners of the
Partnership, and SALOMON SMITH BARNEY TAX ADVANTAGED EXCHANGE FUND II, LLC, a
Delaware limited liability company ("Contributor").
WHEREAS, Section 4.2(a) of the Second Amended and Restated Agreement of
Limited Partnership of the Partnership (the "Partnership Agreement") authorizes
the General Partner to cause the Partnership to issue additional Partnership
Units in one or more classes or series, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties as
shall be determined by the General Partner, subject to the provisions of such
section; and
WHEREAS, pursuant to the authority granted to the General Partner pursuant
to Sections 4.2(a) and 14.1(b) of the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement (i) to establish a new class of
Partnership Units, the Series F Preferred Units (as hereinafter defined), and to
set forth the designations, rights, powers, preferences and duties of such
Series F Preferred Units, (ii) to issue the Series F Preferred Units to
Contributor and admit Contributor as an Additional Limited Partner and (iii) to
make certain other changes to the Partnership Agreement.
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:
Section 1. Definitions. For purposes of this Amendment, the term
"Parity Preferred Units" shall be used to refer to any class or series of
Partnership Interests of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the Partnership to rank on a parity with
Series F Preferred Units with respect to distributions and rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Partnership. The
term "Priority Return" shall mean, an amount equal to 8.5% per annum, determined
on the basis of a 360 day year of twelve 30 day months, cumulative to the extent
not distributed for any given distribution period pursuant to Section 5.1 of the
Partnership Agreement, of the stated value of $25 per Series F Preferred Unit,
commencing on the date of issuance of such Series F Preferred Unit. The term
"Subsidiary" shall mean with respect to any person, any corporation,
partnership, limited liability company, joint venture or other entity of which a
majority of(i) voting power of the voting equity securities or (ii) the
outstanding equity interests, is owned, directly or indirectly, by such person.
The term "PTP" shall mean a "publicly traded
<PAGE>
partnership" within the meaning of Section 7704 of the Code. Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to
them in the Partnership Agreement.
Section 2. Designation and Number. A series of Partnership Units in the
Partnership designated as the "8.5% Series F Cumulative Redeemable Preferred
Units" (the "Series F Preferred Units") is hereby established. The number of
Series F Preferred Units shall be 1,800,000.
Section 3. Distributions. (a) Payment of Distributions. Subject to the
rights of holders of Parity Preferred Units as to the payment of distributions,
pursuant to Section 5.1 of the Partnership Agreement, holders of Series F
Preferred Units shall be entitled to receive, when, as and if declared by the
Partnership acting through the General Partner, out of Available Cash,
cumulative preferential cash distributions at the rate per annum of 8.5% of the
original Capital Contribution per Series F Preferred Unit. Such distributions
shall be cumulative, shall accrue from the original date of issuance and will be
payable (i) quarterly in arrears, on March 25, June 25, September 25 and
December 25 of each year commencing on March 25, 2000 and, (ii), in the event of
(A) an exchange of Series F Preferred Units into Series F Preferred Shares, or
(B) a redemption of Series F Preferred Units, on the exchange date or redemption
date, as applicable (each a "Preferred Unit Distribution Payment Date"). The
amount of the distribution payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and for any period shorter than a full
quarterly period for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the actual number of days
elapsed in such period. If any date on which distributions are to be made on the
Series F Preferred Units is not a Business Day (as defined herein), then payment
of the distribution to be made on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
Distributions on the Series F Preferred Units will be made to the holders of
record of the Series F Preferred Units on the relevant record dates to be fixed
by the Partnership acting through the General Partner, which record dates shall
in no event exceed fifteen (15) Business Days prior to the relevant Preferred
Unit Distribution Payment Date (the "Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulations or executive order to close.
(b) Distributions Cumulative. Distributions on the Series F
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, at any time prohibit the current payment of distributions, whether
or not the Partnership has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on the Series F
Preferred Units will accumulate as of the Preferred Unit Distribution Payment
Date on which they first become payable. Distributions on account of arrears for
any past distribution periods may be declared and paid at any time, without
reference to a regular Preferred Unit Distribution Payment Date to holders of
<PAGE>
record of the Series F Preferred Units on the record date fixed by the
Partnership acting through the General Partner, which date shall not exceed
fifteen (15) Business Days prior to the payment date. Accumulated and unpaid
distributions will not bear interest.
(c) Priority as to Distributions. (i) So long as any Series F
Preferred Units are outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or with respect to any
class or series of Partnership Interests of the Partnership ranking junior as to
the payment of distributions or rights upon a voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership to the Series F
Preferred Units (collectively, "Junior Units"), nor shall any cash or other
property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series F Preferred Units, any Parity
Preferred Units or any Junior Units, unless, in each case, all distributions
accumulated on all Series F Preferred Units and all classes and series of
outstanding Parity Preferred Units have been paid in full. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the conversion of Junior Units or Parity Preferred Units into Partnership Units
ranking junior to the Series F Preferred Units as to distributions and upon
liquidation, winding-up or dissolution or (c) the redemption of Partnership
Interests corresponding to any Series F Preferred Shares (as hereinafter
defined), Parity Preferred Shares (as such term is defined in the Declaration of
Trust of the General Partner, as supplemented (the "Charter")), or Junior Shares
(as such term is defined in the Charter) to be purchased by the General Partner
pursuant to Article 3 of the Charter to preserve the General Partner's status as
a real estate investment trust, provided that such redemption shall be upon the
same terms as the corresponding purchase pursuant to Article 3 of the Charter.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series F Preferred Units, all distributions authorized and
declared on the Series F Preferred Units and all classes or series of
outstanding Parity Preferred Units shall be authorized and declared so that the
amount of distributions authorized and declared per Series F Preferred Unit and
such other classes or series of Parity Preferred Units shall in all cases bear
to each other the same ratio that accrued distributions per Series F Preferred
Unit and such other classes or series of Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such class or series of Parity Preferred Units do not
have cumulative distribution rights) bear to each other.
(d) No Further Rights. Holders of Series F Preferred Units shall not
be entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Liquidation Proceeds. (a) Upon voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, distributions on the
Series F Preferred Units shall be made in accordance with Section 13.2 of the
Partnership Agreement.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than thirty (30) and not more than sixty
(60) days prior to the payment date stated therein, to each record holder of the
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Series F Preferred Units at the respective addresses of such holders as the same
shall appear on the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Series F
Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the General Partner to, or the consolidation or merger or
other business combination of the Partnership with or into, any corporation,
trust, partnership, limited liability company or other entity (or of any
corporation, trust, partnership, limited liability company or other entity with
or into the Partnership) shall not be deemed to constitute a liquidation,
dissolution or winding-up of the Partnership.
Section 5. Optional Redemption. (a) Right of Optional Redemption. The
Series F Preferred Units may not be redeemed prior to the fifth (5th)
anniversary of the issuance date. On or after such date, the Partnership shall
have the right to redeem the Series F Preferred Units, in whole or in part, at
any time or from time to time, upon not less than thirty (30) nor more than
sixty (60) days' written notice, at a redemption price, payable in cash, equal
to the Capital Account balance of the holders of Series F Preferred Units (the
"Redemption Price"); provided, however, that no redemption pursuant to this
Section 5 will be permitted if the Redemption Price does not equal or exceed the
original Capital Contribution of such holder plus the cumulative Priority
Return, whether or not declared, to the redemption date to the extent not
previously distributed or distributed pursuant to Section 3(a). If fewer than
all of the outstanding Series F Preferred Units are to be redeemed, the Series F
Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(b) Limitation on Redemption. The Partnership may not redeem fewer
than all of the outstanding Series F Preferred Units unless all accumulated and
unpaid distributions have been paid on all Series F Preferred Units for all
quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (A)
faxed, and (B) mailed by the Partnership, by certified mail, postage prepaid,
not less than thirty (30) nor more than sixty (60) days prior to the redemption
date, addressed to the respective holders of record of the Series F Preferred
Units at their respective addresses as they appear on the records of the
Partnership. No failure to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any Series F Preferred Units
except as to the holder to whom such notice was defective or not given. In
addition to any information required by law, each such notice shall state: (1)
the redemption date, (2) the Redemption Price, (3) the aggregate number of
Series F Preferred Units to be redeemed and if fewer than all of the outstanding
Series F Preferred Units are to be redeemed, the number of Series F Preferred
Units to be redeemed held by such holder, which number shall equal such holder's
pro rata share (based on the percentage of the aggregate number of outstanding
Series F Preferred Units the total number of Series F Preferred Units held by
such holder represents) of the aggregate number of Series F Preferred Units to
be redeemed, (4) the place or places where such Series F Preferred Units are to
be surrendered for payment of the Redemption Price, (5) that distributions on
the Series F Preferred Units to be redeemed will cease to accumulate on such
redemption date and (6) that
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payment of the Redemption Price will be made upon presentation and surrender of
such Series F Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of Series
F Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New
York City time, on the redemption date, the Partnership will deposit irrevocably
in trust for the benefit of the Series F Preferred Units being redeemed funds
sufficient to pay the applicable Redemption Price and will give irrevocable
instructions and authority to pay such Redemption Price to the holders of the
Series F Preferred Units upon surrender of the Series F Preferred Units by such
holders at the place designated in the notice of redemption. If the Series F
Preferred Units are evidenced by a certificate and if fewer than all Series F
Preferred Units evidenced by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the certificate evidencing all
Series F Preferred Units, evidencing the unredeemed Series F Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series F Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series F Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series F Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
Section 6. Voting Rights. (a) General. Holders of the Series F Preferred
Units will not have any voting rights or right to consent to any matter
requiring the consent or approval of the Limited Partners, except as set forth
in the Partnership Agreement and except as set forth below. In the event of a
conflict between the terms of this Section 6 and any other terms of this
Amendment, the terms of this Section 6 shall control.
(b) Certain Voting Rights. So long as any Series F Preferred Units
remain outstanding, the Partnership shall not, without the affirmative vote of
the holders of at least two-thirds of the Series F Preferred Units outstanding
at the time (i) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests senior to the Series F
Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up of the Partnership or reclassify any
Partnership Interests of the Partnership into any such senior Partnership
Interests, or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such senior Partnership Interests,
(ii) authorize or create, or increase the authorized or issued amount of any
Parity Preferred Units or reclassify any Partnership Interest into any such
Partnership Interest or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such Partnership
Interests but only to the extent such Parity Preferred Units are issued to an
Affiliate of the Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates of the
Partnership (or to Affiliates purchasing the preferred stock
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on the same terms as non-affiliated purchasers) or (iii) either (A) consolidate,
merge into or with, or convey, transfer or lease all or substantially all of its
assets to, any corporation or other entity or (B) amend, alter or repeal the
provisions of the Partnership Agreement (including, without limitation, this
Amendment) whether by merger, consolidation or otherwise, that would materially
and adversely affect the powers, special rights, preferences, privileges or
voting power of the Series F Preferred Units or the holders thereof, provided,
however, that with respect to the occurrence of a merger, consolidation or a
sale or lease of all or substantially all of the Partnership's assets as an
entirety, so long as (1) the Partnership is the surviving entity and the Series
F Preferred Units remain outstanding with the terms thereof unchanged, or (2)
the resulting, surviving or transferee entity is a partnership, limited
liability company or other pass-through entity organized under the laws of any
state and substitutes the Series F Preferred Units for other interests in such
entity having substantially the same terms and rights as the Series F Preferred
Units, including with respect to distributions, redemptions, transfers, voting
rights and rights upon liquidation, dissolution or winding-up of the
Partnership, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series F Preferred Units and no vote of the Series F Preferred
Units shall be required in such case; and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (y) junior to the
Series F Preferred Units with respect to payment of distributions or the
distribution of assets upon liquidation, dissolution or winding-up of the
Partnership, or (z) on a parity with the Series F Preferred Units with respect
to payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up of the Partnership to the extent such Partnership
Interests are not issued to an Affiliate, other than the General Partner to the
extent the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not Affiliates, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers and no vote of the Series F Preferred Units shall be required
in such case.
Section 7. Transfer Restrictions. The Series F Preferred Units shall be
subject to the provisions of Article XI of the Partnership Agreement, provided,
however, that (i) the General Partner shall act reasonably in exercising its
discretion pursuant to the provisions of Section 11.4(a)(ii) to transferees of
Series F Preferred Units, (ii) the provisions of Clause B of Section 11.3(d)
shall not be applicable to holders of Series F Preferred Units if at the time of
such transfer, the Partnership already has 100 Partners; (iii) if only a portion
of the Series F Preferred Units shall be transferred, the transferee of such
transferred Series F Preferred Units shall, subject to the provisions of Section
11.4, be substituted as a Limited Partner in place of the transferring holders
only as to the Series F Preferred Units so transferred; and (iv) the provisions
of Sections 11.6(c) and 11.6(d) shall not be applicable to any transfer of
Series F Preferred Units; and provided further that "transfer" when used in
Article XI shall not be deemed to include any exchange pursuant to Section 8
below.
Section 8. Exchange Rights. (a) Right to Exchange. (i) Series F Preferred
Units will be exchangeable in whole or in part at anytime on or after the tenth
(10th) anniversary of the date of issuance, at the option of the holders
thereof, for authorized but previously unissued shares of 8.5% Series F
Cumulative Redeemable Preferred Shares of the General Partner (the "Series F
Preferred Shares") at an exchange rate of one Series F Preferred Share for one
Series F
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Preferred Unit, subject to adjustment as described below (the "Exchange Price"),
provided that the Series F Preferred Units will become exchangeable at any time,
in whole or in part, at the option of the holders of Series F Units, for Series
F Preferred Shares if (y) at any time full distributions shall not have been
timely made on any Series F Preferred Unit with respect to six (6) prior
quarterly distribution periods, whether or not consecutive; provided, however,
that a distribution in respect of Series F Preferred Units shall be considered
timely made if made within two (2) Business Days after the applicable Preferred
Unit Distribution Payment Date if at the time of such late payment there shall
not be any prior quarterly distribution periods in respect of which full
distributions were not timely made or (z) upon receipt by a holder or holders of
Series F Preferred Units of (1) a notice from the General Partner that the
General Partner or a Subsidiary of the General Partner has taken the position
that the Partnership is, or upon the occurrence of a defined event in the
immediate future will be, a PTP and (2) an opinion rendered by an outside
nationally recognized independent counsel familiar with such matters addressed
to a holder or holders of Series F Preferred Units, that the Partnership is or
likely is, or upon the occurrence of a defined event in the immediate future
will be or likely will be, a PTP. In addition, the Series F Preferred Units may
be exchanged for Series F Preferred Shares, in whole or in part, at the option
of any holder prior to the tenth (10th) anniversary of the issuance date and
after the third (3rd) anniversary thereof if such holder of a Series F Preferred
Units shall deliver to the General Partner either (i) a private letter ruling
addressed to such holder of Series F Preferred Units or (ii) an opinion of
independent counsel reasonably acceptable to the General Partner based on the
enactment of a statute, temporary or final Treasury Regulations or the
publication of a Revenue Ruling, in either case to the effect that an exchange
of the Series F Preferred Units at such earlier time would not cause the Series
F Preferred Units to be considered "stock or securities" within the meaning of
Section 351(e) of the Code for purposes of determining whether the holder of
such Series F Preferred Units is an "investment company" under Section 721(b) of
the Code if an exchange is permitted at such earlier date. Furthermore, all the
Series F Preferred Units, held by any holder thereof which is a real estate
investment trust within the meaning of Sections 856 through 859 of the Code for
Series F Preferred Shares may be exchanged in whole but not in part (but only if
the exchange may be accomplished consistently with the ownership limitations set
forth tinder Article 3 of the Charter (taking into account exceptions thereto))
if at any time, (i) the Partnership reasonably determines that the assets and
income of the Partnership for a taxable year after 1999 would not satisfy the
income and assets tests of Section 856 of the Code for such taxable year if the
Partnership were a real estate investment trust within the meaning of the Code
or (ii) any such holder of Series F Preferred Units shall deliver to the
Partnership and the General Partner an opinion of independent counsel reasonably
acceptable to the General Partner to the effect that, based on the assets and
income of the Partnership for a taxable year after 1999, the Partnership would
not satisfy the income assets tests of Section 856 of the Code for such taxable
year if the Partnership were a real estate investment trust within the meaning
of the Code and that such failure would create a meaningful risk that a holder
of the Series F Preferred Units would fail to maintain qualification as a real
estate investment trust.
(ii) Notwithstanding anything to the contrary set forth in Section 8(a)(i)
hereof, if an Exchange Notice (as defined herein) has been delivered to the
General Partner, then the General Partner may, at its option, elect to redeem or
cause the Partnership to redeem all or a portion of
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the outstanding Series F Preferred Units for cash in an amount equal to the
original Capital Contribution per Series F Preferred Unit and all accrued and
unpaid distributions thereon to the date of redemption. The General Partner may
exercise its option to redeem the Series F Preferred Units for cash pursuant to
this Section 8(a)(ii) hereof by giving each holder of record of Series F
Preferred Units notice of its election to redeem for cash, within ten (10)
Business Days after receipt of the Exchange Notice, by (y) fax, and (z)
registered mail, postage paid, at the address of each holder as it may appear on
the records of the Partnership stating (A) the redemption date, which shall be
no later than sixty (60) days following the receipt of the Exchange Notice, (B)
the redemption price, (C) the place or places where the Series F Preferred Units
are to be surrendered for payment of the redemption price, (D) that
distributions on the Series F Preferred Units will cease to accrue on such
redemption date; (E) that payment of the redemption price will be made upon
presentation and surrender of the Series F Preferred Units and (F) the aggregate
number of Series F Preferred Units to be redeemed, and if fewer than all of the
outstanding Series F Preferred Units are to be redeemed, the number of Series F
Preferred Units to be redeemed held by such holder, which number shall equal
such holder's pro-rata share (based on the percentage of the aggregate number of
outstanding Series F Preferred Units the total number of Series F Preferred
Units held by such holder represents) of the aggregate number of Series F
Preferred Units being redeemed.
(iii) In the event an exchange of all or a portion of Series F Preferred
Units pursuant to Section 8(a)(i) hereof would violate the provisions on
ownership limitation of the General Partner set forth in Article 3 of the
Charter with respect to the Series F Preferred Shares, the General Partner shall
give written notice thereof to each holder of record of Series F Preferred
Units, within ten (10) Business Days following receipt of the Exchange Notice,
by (y) fax, and (z) registered mail, postage prepaid, at the address of each
such holder set forth in the records of the Partnership. In such event, each
holder of Series F Preferred Units shall be entitled to exchange, pursuant to
the provision of Section 8(b) a number of Series F Preferred Units which would
comply with the provisions on the ownership limitation of the General Partner
set forth in such Article 3 of the Charter and any Series F Preferred Units not
so exchanged (the "Excess Units") shall be redeemed by the Partnership for cash
in an amount equal to the original Capital Contribution per Excess Unit, plus
any accrued and unpaid distributions thereon, whether or not declared, to the
date of redemption. The written notice of the General Partner shall state (A)
the number of Excess Units held by such holder, (B) the redemption price of the
Excess Units, (C) the date on which such Excess Units shall be redeemed, which
date shall be no later than sixty (60) days following the receipt of the
Exchange Notice, (D) the place or places where such Excess Units are to be
surrendered for payment of the Redemption Price, (E) that distributions on the
Excess Units will cease to accrue on such redemption date, and (F) that payment
of the redemption price will be made upon presentation and surrender of such
Excess Units. In the event an exchange would result in Excess Units, as a
condition to such exchange, each holder of such units agrees to provide
representations and covenants reasonably requested by the General Partner
relating to (1) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above) will not
cause any individual to Beneficially Own in excess of the Ownership Limit (all
as defined in the General Partner's Charter); and (2) to the extent such holder
can so represent and covenant without obtaining information from its owners, the
holder's
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ownership of tenants of the Partnership and its affiliates.
(iv) The redemption of Series F Preferred Units described in Section
8(a)(ii) and (iii) shall be subject to the provisions of Sections 5(b) and
5(c)(ii); provided, however, that the term "Redemption Price" in such section
shall be read to mean the original Capital Contribution per Series F Preferred
Unit being redeemed plus all accrued and unpaid distributions to the redemption
date.
(b) Procedure for Exchange. (i) Any exchange pursuant to this
Amendment shall be exercised pursuant to a notice of exchange (the "Exchange
Notice") delivered to the General Partner by the holder who is exercising such
exchange right, by (A) fax and (B) by certified mail postage prepaid. The
exchange of Series F Preferred Units, or a specified portion thereof, may be
effected after the fifth (5th) Business Day following receipt by the General
Partner of the Exchange Notice by delivering certificates, if any, representing
such Series F Preferred Units to be exchanged together with, if applicable,
written notice of exchange and a proper assignment of such Series F Preferred
Units to the office of the General Partner maintained for such purpose.
Currently, such office is Two Center Plaza, Suite 200, Boston, Massachusetts
02108. Each exchange will be deemed to have been effected immediately prior to
the close of business on the date on which such Series F Preferred Units to be
exchanged (together with all required documentation) shall have been surrendered
and notice shall have been received by the General Partner as aforesaid and the
Exchange Price shall have been paid. Any Series F Preferred Shares issued
pursuant to this Section 8 shall be delivered as shares which are duly
authorized, validly issued, fully paid and nonassessable, free of pledge, lien,
encumbrance or restriction other than those provided in the Charter, the Bylaws
of the General Partner, the Securities Act of 1933 and relevant state securities
or blue sky laws.
(ii) In the event of an exchange of Series F Preferred Units for Series F
Preferred Shares, an amount equal to the accrued and unpaid distributions,
whether or not declared, to the date of exchange on any Series F Preferred Units
tendered for exchange shall (A) accrue on the Series F Preferred Shares into
which such Series F Preferred Units are exchanged, and (B) continue to accrue on
such Series F Preferred Units, which shall remain outstanding following such
exchange, with the General Partner as the holder of such Series F Preferred
Units. Notwithstanding anything to the contrary set forth herein, in no event
shall a holder of a Series F Preferred Unit that was validly exchanged into
Series F Preferred Shares pursuant to this section (other than the General
Partner now holding such Series F Preferred Unit), receive a cash distribution
out of Available Cash of the Partnership, if such holder, after exchange, is
entitled to receive a distribution out of Available Cash with respect to the
Series F Preferred Shares for which such Series F Preferred Unit was exchanged
or redeemed.
(iii) Fractional shares of Series F Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the Series F Preferred Shares on
the day prior to the exchange date as determined in good faith by the Board of
Trustees of the General Partner.
(c) Adjustment of Exchange Price. (i) The Exchange Price is subject
to adjustment upon certain events, including (a) subdivisions, combinations and
reclassifications of the Series F Preferred Shares and (b) distributions to all
holders of Series F Preferred Shares of evidences of indebtedness of the General
Partner or assets (including securities but excluding dividends and
distributions paid out of equity applicable to Series F Preferred Shares).
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(ii) In case the General Partner shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of the General Partner's
capital stock or sale of all or substantially all of the General Partner's
assets), in each case as a result of which the Series F Preferred Shares will be
converted into the right to receive shares of capital stock, other securities or
other property (including cash or any combination thereof), each Series F
Preferred Unit will thereafter be exchangeable into the kind and amount of
shares of capital stock and other securities and property receivable (including
cash or any combination thereof) upon the consummation of such transaction by a
holder of that number of Series F Preferred Shares or fraction thereof into
which one Series F Preferred Unit was exchangeable immediately prior to such
transaction. The General Partner may not become a party to any such transaction
unless the terms thereof are inconsistent with the foregoing.
Section 9. No Conversion Rights. (a) The holders of the Series F Preferred
Units shall not have any rights to convert such Partnership Units into any other
class of Partnership Interests or any interest in the Partnership;
(b) The Series F Preferred Units shall not be subject to the provisions of
Section 4.2(e) of the Partnership Agreement.
Section 10. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of the Series F Preferred Units.
Section 11. Admission of Limited Partner; Exhibits to Partnership
Agreement. In accordance with Section 12.2(b), Contributor is hereby admitted as
an Additional Limited Partner. In order to duly reflect the issuance of Series F
Preferred Units provided for herein, the Partnership Agreement will be amended
by deleting Exhibit A attached thereto and substituting Exhibit A attached
hereto therefor.
Section 12. Reaffirmation. 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 affirms.
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11
IN WITNESS WHEREOF, this Amendment has been executed as of the date first above
written.
CABOT INDUSTRIAL TRUST
By: ___________________
Name: Neil Waisnor
Title: Senior Vice President
***Signatures Continued On Next Page***
<PAGE>
SALOMON SMITH BARNEY TAX
ADVANTAGED EXCHANGE FUND II, LLC
By:_________________________________________
Name:
Title:
Address: Salomon Smith Barney Tax Advantaged
Exchange Fund II, LLC
c/o Salomon Smith Barney, Inc.
388 Greenwich St., 17th Floor
New York, New York 10013
Attention: James DeLuise
Fax:(212) 816-0720
<PAGE>
Exhibit 4.14
CABOT INDUSTRIAL TRUST
ARTICLES SUPPLEMENTARY
1,800,000 SHARES
8.5% SERIES F CUMULATIVE REDEEMABLE PREFERRED SHARES
Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland (the "Department") that:
FIRST: Under a power contained in Article 2, Section 1 of the
Amended and Restated Declaration of Trust of the Company, filed with, and
accepted for record by, the State Department of Assessments and Taxation of
Maryland (the "SDAT") on January 26, 1998, as supplemented by Articles
Supplementary tiled with, and accepted for record by, the SDAT, respectively, on
July 10. 1998, on April 29, 1999, on September 3, 1999, on September 27, 1999
and on December 9, 1999 and as corrected by that certain Certificate of
Correction filed with, and accepted for record by, the SDAT on October 12, 1999
(as supplemented and corrected, the "Charter"). the Board of Trustees of the
Company, as required by Section 8-203(b) of the Corporations and Associations
Article of the Annotated Code of Maryland, has unanimously adopted resolutions
classifying and designating 1,800,000 unissued shares of beneficial interest as
8.5% Series F Cumulative Redeemable Preferred Shares, par value $0.01 per share,
with the following preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption, and other terms and
conditions, which upon any restatement of the Charter shall be made part of
Article 2 of the Charter, with any necessary or appropriate changes to the
enumeration and lettering thereof.
SECOND:The following is a description of the 8.5% Series F
Cumulative Redeemable Preferred Shares, including the preferences. conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption thereof:
8.5% SERIES F CUMULATIVE REDEEMABLE PREFERRED SHARES
SECTION 1. Designation and Number. A series of preferred shares,
designated the "8.5% Series F Cumulative Redeemable Preferred Shares" (the
"Series F Preferred Shares") is hereby established. The number of shares of
Series F Preferred Shares shall be 1,800,000, par value $0.01 per share.
SECTION 2. Rank. The Series F Preferred Shares shall, with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Company, rank senior to all classes or series of common
shares and to all classes or series of equity securities of the Company now or
hereafter authorized, issued or outstanding, other than any class or series of
equity securities of the Company expressly designated as ranking on a parity
with or senior to the Series F Preferred Shares as to distributions and rights
upon voluntary or involuntary liquidation, winding-tip or dissolution of the
Company. For purposes of these Articles Supplementary, the term "Parity
Preferred Shares" shall be used to refer to any class or series of equity
securities of the Company now or hereafter authorized, issued or outstanding
expressly designated by the Company to rank on a parity with the Series F
Preferred Shares with respect to distributions and rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Company, including
specifically the Series B Cumulative Redeemable Preferred Shares, the Series C
Cumulative Redeemable Preferred Shares, the Series D Cumulative Redeemable
Preferred Shares, and the Series E Cumulative Redeemable Preferred Shares. The
term "equity securities" does not include debt securities, which will rank
senior to the Series F Preferred Shares prior to conversion.
SECTION 3. Distributions.
(a) Payment of Distributions. Subject to the rights of holders of Parity
Preferred Shares and holders of equity securities ranking senior to the Series F
Preferred Shares as to payment of distributions, holders of Series F Preferred
Shares will be entitled to receive, when, as and if declared by the Board of
Trustees of the Company, out
<PAGE>
of funds legally available for the payment of distributions, cumulative
preferential cash distributions at the rate per annum of 8.5% of the $25
liquidation preference per Series F Preferred Share. Such distributions shall be
cumulative, shall accrue from the original date of issuance and will be payable
(i) quarterly in arrears, on March 25, June 25, September 25 and December 25 of
each year commencing on the first of such dates to occur after the original date
of issuance and, (ii) in the event of a redemption, on the redemption date (each
a "Preferred Shares Distribution Payment Date"). The amount of the distribution
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months and for any period shorter than a full quarterly period for which
distributions are computed, the amount of the distribution payable will be
computed on the basis of the actual number of days elapsed in such period. If
any date on which distributions are to be made on the Series F Preferred Shares
is not a Business Day (as defined herein), then payment of the distribution to
be made on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. Distributions on the
Series F Preferred Shares will be made to the holders of record of the Series F
Preferred Shares on the relevant record dates, which, unless otherwise provided
by the Company with respect to any distribution, will be fifteen (15) Business
Days prior to the relevant Preferred Shares Distribution Payment Date (each a
"Distribution Record Date"). Notwithstanding anything to the contrary set forth
herein, each Series F Preferred Share shall also continue to accrue all accrued
and unpaid distributions up to the exchange date on any Series F Preferred Unit
(as defined in the Second Amended and Restated Agreement of Limited Partnership
of Cabot Industrial Properties, L.P., dated as of February 4, 1998 (as amended
through the date hereof, the "Partnership Agreement") validly exchanged into
such Series F Preferred Share in accordance with the provisions of such
Partnership Agreement.
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Limitation on Distributions. No distributions on the Series F
Preferred Shares shall be declared or paid or set apart for payment by the
Company at such time as the terms and provisions of any agreement of the
Company, including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law.
(c) Distributions Cumulative. Notwithstanding the foregoing, distributions
on the Series F Preferred Shares will accrue whether or not the terms and
provisions set forth in Section 3(b) hereof at any time prohibit the current
payment of distributions, whether or not the Company has earnings, whether or
not there are funds legally available for the payment of such distributions and
whether or not such distributions are authorized or declared. Accrued but unpaid
distributions on the Series F Preferred Shares will accumulate as of the
Preferred Shares Distribution Payment Date on which they first become payable.
Accumulated and unpaid distributions will not bear interest.
(d) Priority as to Distributions. (i) So long as any Series F Preferred
Shares are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect to any
class or series of common shares or any class or series of other Shares of the
Company ranking junior as to the payment of distributions or rights upon
voluntary or involuntary dissolution, liquidation or winding up of the Company
to the Series F Preferred Shares (such common shares or other junior Shares,
including, without limitation Series A Junior Participating Preferred Shares
authorized pursuant to Articles Supplementary filed with the SDAT on July 10,
1998, collectively, "Junior Shares"), nor shall any cash or other property be
set aside for or applied to the purchase, redemption or other acquisition for
consideration of any Series F Preferred Shares, any Parity Preferred Shares or
any Junior Shares, unless, in each case, all distributions accumulated on all
Series F Preferred Shares and all classes and series of outstanding Parity
Preferred Shares have been paid in full. The foregoing sentence will not
prohibit (i) distributions payable solely in Shares of the Company ranking
junior to the Series F Preferred Shares as to distributions and upon
liquidation, winding-up or dissolution, (ii) the conversion of Junior
<PAGE>
Shares or Parity Preferred Shares into Shares of the Company ranking junior to
the Series F Preferred Shares as to distributions and upon liquidation, winding
up or dissolution, and (iii) purchase by the Company of such Series F Preferred
Shares, Parity Preferred Shares or Junior Shares pursuant to Article 3 of the
Charter to the extent required to preserve the Company's status as a real estate
investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series F Preferred Shares, all distributions authorized and
declared on the Series F Preferred Shares and all classes or series of
outstanding Parity Preferred Shares shall be authorized and declared so that the
amount of distributions authorized and declared per share of Series F Preferred
Shares and such other classes or series of Parity Preferred Shares shall in all
cases bear to each other the same ratio that accrued distributions per share on
the Series F Preferred Shares and such other classes or series of Parity
Preferred Shares (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such class or series of Parity
Preferred Shares do not have cumulative distribution rights) bear to each other.
(e) No Further Rights. Holders of Series F Preferred Shares shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
SECTION 4. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the rights of holders
of Parity Preferred Shares and subject to equity securities ranking senior to
the Series F Preferred Shares with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Company, the holders
of Series F Preferred Shares shall be entitled to receive out of the assets of
the Company legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Company, but before
any payment or distributions of the assets shall be made to holders of common
shares or any other class or series of shares of the Company that ranks junior
to the Series F Preferred Shares as to rights upon liquidation, dissolution or
winding-up of the Company, an amount equal to the sum of(i) a liquidation
preference of $25 per Series F Preferred Share, and (ii) an amount equal to any
accumulated and unpaid distributions thereon, whether or not declared, to the
date of payment. In the event that, upon such voluntary or involuntary
liquidation, dissolution or winding-up, there are insufficient assets to permit
full payment of liquidating distributions to the holders of Series F Preferred
Shares and any Parity Preferred Shares, all payments of liquidating
distributions on the Series F Preferred Shares and such Parity Preferred Shares
shall be made so that the payments on the Series F Preferred Shares and such
Parity Preferred Shares shall in all cases bear to each other the same ratio
that the respective rights of the Series F Preferred Shares and such other
Parity Preferred Shares (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such Parity Preferred
Shares do not have cumulative distribution rights) upon liquidation, dissolution
or winding-up of the Company bear to each other.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Company, stating the payment date
or dates when, and the place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and (ii) by registered
mail, postage pre-paid. not less than thirty (30) and not more than sixty (60)
days prior to the payment date stated therein, to each record holder of the
Series F Preferred Shares at the respective addresses of such holders as the
same shall appear on the share transfer records of the Company.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series F Preferred
Shares will have no right or claim to any of the remaining assets of the
Company.
(d) Consolidation. Merger or Certain Other Transactions. The voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company to, or the consolidation or merger or other business
combination of the Company with or into any corporation. trust or other entity
(or of any corporation, trust or other entity with or into the Company) shall
not be deemed to constitute a liquidation, dissolution or winding-up of the
Company.
<PAGE>
SECTION 5. Optional Redemption.
(a) Right of Optional Redemption. The Series F Preferred Shares may not be
redeemed prior to December 22, 2004. On or after such date, the Company shall
have the right to redeem the Series F Preferred Shares, in whole or in part, at
any time or from time to time, upon not less than thirty (30) nor more than
sixty (60) days' written notice, at a redemption price, payable in cash, equal
to $25 per share of Series F Preferred Shares plus accumulated and unpaid
distributions, whether or not declared, to the date of redemption. If fewer than
all of the outstanding Series F Preferred Shares are to be redeemed, the Series
F Preferred Shares to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional shares).
(b) Limitation on Redemption. The Company may not redeem fewer than all of
the outstanding shares of Series F Preferred Shares unless all accumulated and
unpaid distributions have been paid on all outstanding Series F Preferred Shares
for all quarterly distribution periods terminating on or prior to the date of
redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (i) faxed,
and (ii) mailed by the Company by registered mail, postage prepaid, not less
than thirty (30) nor more than sixty (60) days prior to the redemption date,
addressed to the respective holders of record of the Series F Preferred Shares
to be redeemed at their respective addresses as they appear on the transfer
records of the Company. No failure to give or defect in such notice shall affect
the validity of the proceedings for the redemption of any Series F Preferred
Shares except as to the holder to whom such notice was defective or not given.
In addition to any information required by law or by the applicable rules of any
exchange upon which the Series F Preferred Shares may be listed or admitted to
trading, each such notice shall state: (i) the redemption date, (ii) the
redemption price, (iii) the number of Series F Preferred Shares to be redeemed,
(iv) the place or places where such Series F Preferred Shares are to be
surrendered for payment of the redemption price, (v) that distributions on the
Series F Preferred Shares to be redeemed will cease to accumulate on such
redemption date and (vi) that payment of the redemption price and any
accumulated and unpaid distributions will be made upon presentation and
surrender of such Series F Preferred Shares. If fewer than all of the Series F
Preferred Shares held by any holder are to be redeemed, the notice mailed to
such holder shall also specify the number of Series F Preferred Shares held by
such holder to be redeemed.
(ii) If the Company gives a notice of redemption in respect of
Series F Preferred Shares (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Company will deposit
irrevocably in trust for the benefit of the holders of the Series F Preferred
Shares being redeemed, funds sufficient to pay the applicable redemption price,
plus any accumulated and unpaid distributions, whether or not declared, if any,
on such shares to the date fixed for redemption, without interest, and will give
irrevocable instructions and authority to pay such redemption price and any
accumulated and unpaid distributions, whether or not declared, if any. on such
shares to the holders of the Series F Preferred Shares upon surrender of the
certificates for the Series F Preferred Shares by such holders at the place
designated in the notice of redemption. If fewer than all Series F Preferred
Shares evidenced by any certificate are being redeemed, a new certificate shall
be issued upon surrender of the certificate evidencing all Series F Preferred
Shares, evidencing the unredeemed Series F Preferred Shares without cost to the
holder thereof. On and after the date of redemption, distributions will cease to
accumulate on the Series F Preferred Shares or portions thereof called for
redemption, unless the Company defaults in the payment of such redemption price.
If any date fixed for redemption of Series F Preferred Shares is not a Business
Day, then payment of the redemption price payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If payment of the redemption price or any
accumulated or unpaid distributions in respect of the Series F Preferred Shares
is improperly withheld or refused and not paid by the Company, distributions on
such Series F Preferred Shares will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable redemption price and any accumulated and unpaid distributions.
<PAGE>
(d) Status of Redeemed Shares. Any Series F Preferred Shares that shall at
any time have been redeemed shall after such redemption, have the status of
authorized but unissued Shares, without designation as to class or series until
such shares are once more designated as part of a particular class or series by
the Board.
SECTION 6. Voting Rights.
(a) General. Holders of the Series F Preferred Shares will not have any
voting rights, except as set forth below.
(b) Right to Elect Trustees. (i) If at any time full distributions shall
not have been timely made on any Series F Preferred Shares with respect to any
six (6) prior quarterly distribution periods, whether or not consecutive (a
"Preferred Distribution Default"), the holders of such Series F Preferred
Shares, voting together as a single class with the holders of each class or
series of Parity Preferred Shares upon which like voting rights have been
conferred and are exercisable, will have the right to elect two additional
Trustees to serve on the Company's Board (the "Preferred Shares Trustees") at a
special meeting called by the holders of record of at least 10% of the
outstanding Series F Preferred Shares or any such class or series of Parity
Preferred Shares or at the next annual meeting of Shareholders, and at each
subsequent annual meeting of Shareholders or special meeting for the election of
Trustees held in place thereof, until all such distributions in arrears and
distributions for the current quarterly period on the Series F Preferred Shares
and each such class or series of Parity Preferred Shares have been paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Company shall call or cause to be called, upon written request of
holders of record of at least 10% of the outstanding Series F Preferred Shares,
a special meeting of the holders of Series F Preferred Shares and all the series
of Parity Preferred Shares upon which like voting rights have been conferred and
are exercisable (collectively, the "Parity Securities") by mailing or causing to
be mailed to such holders a notice of such special meeting to be held not less
than ten and not more than 45 days after the date such notice is given. The
record date for determining holders of the Parity Securities entitled to notice
of and to vote at such special meeting will be the close of business on the
third Business Day preceding the day on which such notice is mailed. At any such
special meeting, all of the holders of the Parity Securities, by plurality vote,
voting together as a single class without regard to series will be entitled to
elect two Trustees on the basis of one vote per $25 of liquidation preference to
which such Parity Securities are entitled by their terms (excluding amounts in
respect of accumulated and unpaid dividends) and not cumulatively. The holder or
holders of one-third of the Parity Securities then outstanding, present in
person or by proxy, will constitute a quorum for the election of the Preferred
Shares Trustees except as otherwise provided by law. Notice of all meetings at
which holders of the Series F Preferred Shares shall be entitled to vote will be
given to such holders at their addresses as they appear in the transfer records.
At any such meeting or adjournment thereof in the absence of a quorum. subject
to the provisions of any applicable law, the holders of a majority of the votes
to which the Parity Securities are entitled, present in person or by proxy,
shall have the power to adjourn the meeting for the election of the Preferred
Shares Trustees, without notice other than an announcement at the meeting, until
a quorum is present. If a Preferred Distribution Default shall terminate after
the notice of a special meeting has been given but before such special meeting
has been held, the Company shall, as soon as practicable after such termination,
mail or cause to be mailed notice of such termination to holders of the Series F
Preferred Shares that would have been entitled to vote at such special meeting.
(iii) If and when all accumulated distributions and the
distributions for the current distribution period on the Series F Preferred
Shares shall have been paid in full or a sum sufficient for such payment is
irrevocably deposited in trust for payment, the holders of the Series F
Preferred Shares shall be divested of the voting rights set forth in this
Section 6(b) herein (subject to revesting in the event of each and every
Preferred Distribution Default) and, if all distributions in arrears and the
distributions for the current distribution period have been paid in full or set
aside for payment in full on all other classes or series of Parity Preferred
Shares upon which like voting rights have been conferred and are exercisable,
the term and office of each Preferred Shares Trustee so elected shall terminate.
Any Preferred Shares Trustee may be removed at any time with or without cause by
the vote of, and shall not be removed otherwise than by the vote of, the holders
of record of a majority of the votes to which the outstanding Parity Securities
are entitled, when they have the voting rights set forth in this Section 6(b).
<PAGE>
So long as a Preferred Distribution Default shall continue, any vacancy in the
office of a Preferred Shares Trustee may be filled by written consent of the
Preferred Shares Trustee remaining in office, or if none remains in office, by a
vote of the holders of record of a majority of the votes to which the
outstanding Parity Securities are entitled, when they have the voting rights set
forth in this Section 6(b). The Preferred Shares Trustees shall each be entitled
to one vote per trustee on any matter.
(c) Certain Voting Rights. So long as any Series F Preferred Shares remain
outstanding, the Company shall not, without the approval of the holders of at
least two-thirds of the Series F Preferred Shares outstanding at the time (i)
designate or create, or increase the authorized or issued amount of, any class
or series of shares ranking senior to the Series F Preferred Shares with respect
to payment of distributions or rights upon liquidation, dissolution or
winding-up of the Company or reclassify any authorized shares of the Company
into any such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, (ii)
designate or create, or increase the authorized or issued amount of, any Parity
Preferred Shares or reclassify any authorized shares of the Company into any
such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, but only
to the extent such Parity Preferred Shares are issued to an affiliate of the
Company, or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety, to any corporation or
other entity, or (B) amend, alter or repeal the provisions of the Company's
Charter (including these Articles Supplementary) or Bylaws, whether by merger,
consolidation or otherwise, in each case that would materially and adversely
affect the powers. special rights, preferences, privileges or voting power of
the Series F Preferred Shares or the holders thereof, provided, however, that
with respect to the occurrence of a merger, consolidation or a sale or lease of
all or substantially all of the Company's assets as an entirety, so long as (a)
the Company is the surviving entity and the Series F Preferred Shares remain
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a corporation or real estate investment trust organized
tinder the laws of any state and substitutes the Series F Preferred Shares for
other preferred Shares having substantially the same terms and same rights as
the Series F Preferred Shares, including with respect to distributions,
redemptions. transfers, voting rights and rights upon liquidation, dissolution
or winding-up of the Company, then the occurrence of any such event shall not be
deemed to materially and adversely affect such rights, privileges or voting
powers of the holders of the Series F Preferred Shares and no vote of the Series
F Preferred Shares shall be required; and provided further that any increase in
the amount of authorized Shares or the creation or issuance of any other class
or series of Shares, or any increase in an amount of authorized shares of each
class or series, in each case ranking either (a) junior to the Series F
Preferred Shares with respect to payment of distributions and the distribution
of assets upon liquidation, dissolution or winding-up of the Company, or (b) on
a parity with the Series F Preferred Shares with respect to payment of
distributions or the distribution of assets upon liquidation, dissolution or
winding-up of the Company to the extent such Shares are not issued to an
affiliate of the Company, shall not be deemed to materially and adversely affect
such rights, preferences, privileges or voting powers and no approval of the
Series F Preferred Shares shall be required.
SECTION 7. Transfer Restrictions. The Series F Preferred Shares shall be
subject to the provisions of Article 3 of the Charter; provided, however, in no
event shall the Ownership Limit with respect to the Series F Preferred Shares
(as defined in the Charter) be decreased pursuant to Section 10 of Article 3 of
the Charter or otherwise (other than a decrease as a result of a retroactive
change in existing law that would require a decrease to retain real estate
investment trust status tinder the Internal Revenue Code of 1986, as amended).
SECTION 8. No Conversion Rights. The holders of the Series F Preferred
Shares shall not have any rights to convert such shares into shares of any other
class or series of Shares or into any other securities of, or interest in. the
Company.
SECTION 9. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series F Preferred Shares.
SECTION 10. No Preemptive Rights. No holder of the Series F Preferred
Shares of the Company shall, as such holder, have any preemptive rights to
purchase or subscribe for additional Shares of the Company or any other security
of the Company which it may issue or sell.
<PAGE>
THIRD: The Series F Preferred Shares have been classified and
designated by the Board under the authority contained in the Charter.
FOURTH: These Articles Supplementary have been approved by the Board
in the manner and by the vote required by law.
FIFTH: The undersigned President of the Company acknowledges these
Articles Supplementary to be the corporate act of the Company and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
<PAGE>
IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to
be executed under seal in its name and on its behalf by its President and
attested to by its Secretary on this ___ day of December. 1999.
CABOT INDUSTRIAL TRUST
By: /s/ Robert B. Pattersnon
----------------------------------
Name: Robert B. Patterson
Title: President
[SEAL]
ATTEST:
By: /s/ Neil E. Waisnor
-------------------------------
Name: Neil E. Waisnor
Title: Secretary
<PAGE>
Exhibit 10.5
CABOT INDUSTRIAL TRUST
LONG-TERM INCENTIVE PLAN
(As Amended and Restated Effective
as of January 26, 1998)
<PAGE>
CABOT INDUSTRIAL TRUST
LONG-TERM INCENTIVE PLAN
(As Amended and Restated Effective
as of January 26, 1998)
TABLE OF CONTENTS
SECTION 1 GENERAL
1.1. Purpose.......................................................1
1.2. Participation.................................................1
SECTION 2 OPTIONS
2.1. Definition....................................................2
2.2. Eligibility...................................................2
2.3. Formula Awards of Options to Non-Employee
Trustees.....................................................3
2.4. Price.........................................................3
2.5. Exercise......................................................5
2.6. Post-Exercise Limitations.....................................5
2.7. Expiration Date...............................................6
SECTION 3 DIVIDEND AND DISTRIBUTION EQUIVALENT UNITS
3.1. Award of Dividend Equivalent Units to
Non-Employee Trustees........................................6
3.2. Terms and Conditions of Non-Employee Trustee
Dividend Equivalent Units....................................7
3.3. Award of Dividend and Distribution Equivalent
Units to Participants other than Non-Employee
Trustees.....................................................8
3.4. Terms and Conditions of Dividend and
Distribution Equivalent Units for Participants
other than Non-Employee Trustees.............................9
SECTION 4 OPERATION AND ADMINISTRATION
4.1. Effective Date...............................................10
4.2. Shares and Units Subject to Plan.............................10
4.3. Reservation of Shares........................................10
4.4. Adjustment...................................................10
4.5. Individual Limits on Awards..................................11
4.6. Limitation on Grant of Options...............................12
4.7. Change in Control............................................12
4.8. Limit on Distribution........................................13
4.9. Withholding..................................................13
<PAGE>
4.10. Transferability.............................................14
4.11. Notices.....................................................14
4.12. Form and Time of Elections..................................14
4.13. Option Agreement............................................14
4.14. Limitation of Implied Rights................................15
4.15. Evidence....................................................15
4.16. Action by REIT or Related Company...........................15
4.17. Gender and Number...........................................15
SECTION 5 COMMITTEES
5.1. Administration...............................................16
5.2. Selection of REIT Committee..................................16
5.3. Powers of Committee..........................................16
5.4. Delegation by Committee......................................17
5.5. Information to be Furnished to Committees....................17
5.6. Liability and Indemnification of Committees..................17
SECTION 6 AMENDMENT AND TERMINATION........................................18
<PAGE>
CABOT INDUSTRIAL TRUST
LONG-TERM INCENTIVE PLAN
(As Amended and Restated Effective
as of January 26, 1998)
SECTION 1
GENERAL
1.1. Purpose. Cabot Industrial Trust, a Maryland real estate investment
trust (the "REIT"), established the Cabot Industrial Trust Long-Term Incentive
Plan (the "Plan") effective January 26, 1998 (the "Effective Date"). The
provisions that follow constitute an amendment and restatement of the Plan
effective as of the Effective Date. The Plan was established by the REIT to:
(a) attract and retain employees and other persons providing services
to the REIT and the Related Companies (as defined below);
(b) motivate Participants (as defined in subsection 1.2), by means of
appropriate incentives, to achieve long-range goals;
(c) provide incentive compensation opportunities that are competitive
with those of other corporations and real estate investment trusts;
and
(d) further identify Participants' interests with those of the REIT's
other shareholders through compensation that is based on the value
of the REIT's common shares;
and thereby promote the long-term financial interest of the REIT and the Related
Companies, including the growth in value of the REIT's equity and enhancement of
long-term shareholder return. The term "Related Company" means any company
during any period in which it is a "subsidiary corporation" (as that term is
defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code")), with respect to the REIT or any affiliate of the REIT which is
designated as a Related Company by the REIT Committee (as defined in subsection
5.1 below), including Cabot Industrial Properties, L.P. (the "Partnership") and
Cabot Advisors, Inc. (the "Management Company").
1.2. Participation. Subject to the terms and conditions of the Plan, the
Committees (as described in Section 5) shall determine and designate, from time
to time, from among the Eligible Individuals (as defined below), those persons
who will
<PAGE>
be granted one or more awards under Sections 2 or 3 of the Plan (an "Award"),
and thereby become "Participants" in the Plan. In the discretion of the granting
Committee, and subject to the terms of the Plan, a Participant may be granted
any Award permitted under the provisions of the Plan, and more than one Award
may be granted to a Participant. Except as otherwise agreed by the REIT and the
Participant, or except as otherwise provided in the Plan, an Award under the
Plan shall not affect any previous Award under the Plan or an award under any
other plan maintained by the REIT or the Related Companies. For purposes of the
Plan, the term "Eligible Individual" shall mean any employee, officer,
consultant, adviser or member of the Board of the REIT or a Related Company;
provided, however, that a member of the Board of Trustees of the REIT (the
"Board") who is not an employee of the REIT or a Related Company (a
"Non-Employee Trustee") shall be granted Options in accordance with the formula
award provisions of subsection 2.3.
SECTION 2
OPTIONS
2.1. Definitions. The grant of an "Option" under this Section 2 entitles
the Participant to purchase common shares of beneficial interest of the REIT
("Shares") or units of interest in the Partnership ("Units") at a price fixed at
the time the Option is granted, subject to the terms of this Section. Share
Options granted under this Section may be either Incentive Share Options or
Share Options that are Non-Qualified Options, as determined in the discretion of
the REIT Committee. An "Incentive Share Option" is a Share Option that is
intended to satisfy the requirements applicable to an "incentive stock option"
described in section 422 of the Code. A "Non-Qualified Option" is an Option that
is not intended to be an Incentive Share Option.
2.2. Eligibility. Each Committee shall designate the Participants to whom
Options are to be granted under this Section and shall determine the number of
Shares or Units, as applicable, subject to each such Option. If the REIT
Committee grants Incentive Share Options, to the extent that the aggregate fair
market value of Shares with respect to which Incentive Share Options are
exercisable for the first time by any individual during any calendar year (under
all plans of the REIT and all related companies within the meaning of section
424(f) of the Code) exceeds $100,000, such Options shall be treated as
Non-Qualified Options, to the extent required by section 422 of the Code.
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2.3. Formula Awards of Options to Non-Employee Trustees. At the time of
his initial election or appointment as a Trustee (or, if later, as of the date
of closing of the initial public offering of Shares pursuant to the REIT's first
effective registration statement for the sale to the public of the Shares filed
under the Securities Act of 1933, as amended (the "Initial Public Offering")),
each Non-Employee Trustee shall automatically receive a Non-Qualified Option for
10,000 Shares, which Option shall become exercisable on the first anniversary
after the date of grant, provided the Non-Employee Trustee remains in continuous
service as a Non-Employee Trustee until such anniversary of the date of grant.
Thereafter, at the closing of each annual meeting of the REIT's shareholders,
each Non-Employee Trustee who has been reelected or who is continuing as a
Trustee as of the adjournment of the annual meeting shall automatically receive
a Non-Qualified Option for an additional 4,000 Shares, which Option shall become
exercisable on the first anniversary after the date of grant. To the extent
Options granted pursuant to subsection 2.2 of the Plan are adjusted pursuant to
subsection 4.4 of the Plan, Options granted under this subsection shall
automatically be adjusted in the same manner. All Options granted under this
subsection 2.3 shall provide for an exercise price per Share equal to the Fair
Market Value (as defined below) of a Share as of the date of grant (or par
value, if greater). Each Option granted under this subsection shall be awarded
with Dividend Equivalent Units, as described in subsection 3.1.
2.4. Price. The exercise price for each Share purchasable under any
Non-Qualified Option granted to a Non-Employee Trustee is set forth in
subsection 2.3. The determination and payment of the purchase price of a Share
or Unit under each other Option granted under this Section shall be subject to
the following:
(a) The purchase price shall be established by the granting Committee at
the time the Option is granted; provided, however, that:
(i) in no event shall the price of a Share Option be less than
the par value of a Share on such date;
(ii) in no event shall the purchase price of a Share under an
Incentive Share Option be less than the Fair Market Value of a
Share at the time the Option is granted and in the case of any
Incentive Share Option granted to an optionee who, at the time
the Option is granted, owns shares of beneficial interest
representing more than 10% of the voting power of all classes
of shares of
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beneficial interest of the REIT or any of its subsidiaries
within the meaning of section 424(f) of the Code, the exercise
price for each Share purchasable under such Option shall not
be less than 110% of the Fair Market Value of a Share on the
date of grant of the Option; and
(b) Subject to the following provisions of this subsection, the full
purchase price of each Share or Unit purchased upon the exercise of
any Option shall be paid at the time of such exercise (or such later
date as may be permitted by the Committee in the case of a cashless
exercise) and, as soon as practicable thereafter, a certificate
representing the Shares or Units so purchased shall be delivered to
the person entitled thereto.
(c) The purchase price of a Share Option shall be payable in cash or
in Shares (valued at Fair Market Value as of the day of exercise)
that have been held by the Participant at least six months, or in
any combination thereof, as determined by the REIT Committee.
The purchase price of a Unit Option shall be payable in cash or
in Units (valued at Fair Market Value as of the day of exercise)
that have been held by the Participant at least six months, or in
any combination thereof, as determined by the REIT Committee.
(d) The "Fair Market Value" of a Share or Unit as of any date shall be
determined in accordance with the following rules:
(i) If the Shares are at the time listed or admitted to trading on
any stock exchange, then the Fair Market Value of a Share
shall be the average of the highest and lowest sales price per
Share on such date on the principal exchange on which the
Shares are then listed or admitted to trading or, if no such
sale is reported on that date, on the last preceding date on
which a sale was so reported.
(ii) If the Shares are not at the time listed or admitted to
trading on a stock exchange, the Fair Market Value of a Share
shall be the average of the lowest reported bid price and
highest reported asked price of the Shares on the date in
question in the over-the-counter market, as such prices are
reported in a publication of general circulation
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selected by the REIT Committee and regularly reporting the
market price of Shares in such market.
(iii) If the Shares are not listed or admitted to trading on any
stock exchange or traded in the over-the-counter market, the
Fair Market Value of a Share shall be as determined by the
REIT Committee in good faith.
(iv) For purposes of determining the Fair Market Value of Shares
that are sold pursuant to a cashless exercise program, Fair
Market Value shall be the price at which such Shares are sold.
(v) As of any date, the Fair Market Value of a Unit shall equal
the Fair Market Value of a Share on such date.
(vi) For a Share or Unit subject to an Option granted on the date
of the closing of the Initial Public Offering, the Fair Market
Value of such Share or Unit will be deemed to be the initial
public offering price for a Share.
2.5. Exercise. Except as otherwise expressly provided in the Plan, an
Option granted under this Section shall be exercisable in accordance with the
following terms of this subsection:
(a) The terms and conditions relating to exercise of an Option
granted pursuant to subsection 2.2 shall be established by the
granting Committee, and may include, without limitation,
conditions relating to completion of a specified period of
service (subject to paragraph (b) below), achievement of
performance standards prior to exercise of the Option or the
achievement of Share ownership objectives by the Participant.
The granting Committee, in its sole discretion, may accelerate
the vesting of any Option under circumstances designated by it at
the time the Option is granted or thereafter.
(b) No Option may be exercised by a Participant after the Expiration
Date (as defined in subsection 2.7) applicable to that Option.
2.6. Post-Exercise Limitations. The REIT Committee, in its discretion, may
impose such restrictions on Shares acquired pursuant to the exercise of a Share
Option or delivered in
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connection with the right described in Section 4.2(e) of the Agreement of
Limited Partnership of Cabot Industrial Properties, L.P. providing for the
exchange of Units for Shares (the "Conversion Right") as it determines to be
desirable, including, without limitation, restrictions relating to disposition
of the Shares and forfeiture restrictions based on service, performance, Share
ownership by the Participant and such other factors as the REIT Committee
determines to be appropriate.
2.7. Expiration Date. The "Expiration Date" with respect to an Option
granted pursuant to subsection 2.2 means the date established as the Expiration
Date by the granting Committee at the time of the grant; provided, however, that
unless determined otherwise by the Committee, the Expiration Date with respect
to any Option shall not be later than the earliest to occur of:
(a) the ten-year anniversary of the date on which the Option is granted;
(b) if the Participant's Date of Termination occurs by reason of
death or Disability, the one-year anniversary of such Date of
Termination; or
(c) if the Participant's Date of Termination occurs for reasons other
than death or Disability, the three-month anniversary of such Date
of Termination.
The "Expiration Date" with respect to any Option granted to a Non-Employee
Trustee pursuant to subsection 2.3 means the date which is the earlier to occur
of the ten-year anniversary of the date on which the Option is granted or the
five-year anniversary of the date his trusteeship terminates. For purposes of
the Plan, a Participant's "Date of Termination" shall be the date on which he
both ceases to be an employee of the REIT and the Related Companies and ceases
to perform material services for the REIT and the Related Companies, regardless
of the reason for the cessation; provided that a "Date of Termination" shall not
be considered to have occurred during the period in which the reason for the
cessation of services is a leave of absence approved by the REIT or the Related
Company which was the recipient of the Participant's services. Except as
otherwise provided by the Committee, a Participant shall be considered to have a
"Disability" during the period in which he is unable, by reason of a medically
determinable physical or mental impairment, to engage in the material and
substantial duties of his regular occupation, which condition is expected to be
permanent.
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SECTION 3
DIVIDEND AND DISTRIBUTION EQUIVALENT UNITS
3.1. Award of Dividend Equivalent Units to Non-Employee Trustees. A
Non-Employee Trustee who is awarded a Share Option under subsection 2.3 of the
Plan shall also be entitled to receive "Dividend Equivalent Units" with respect
to the Share Option.
(a) Annual crediting of Dividend Equivalent Units. As of the last day of
each calendar year, each Non-Employee Trustee shall be credited with
a number of Dividend Equivalent Units equal to (i) the amount the
REIT Committee determines to be the average dividend yield per Share
for such calendar year, reduced by the amount that the REIT
Committee determines to be the S&P 500 average dividend yield for
such year, multiplied by (ii) the number of Shares underlying the
Non-Employee Trustee's outstanding Share Options (reduced pro rata
to reflect Shares underlying such Share Options that were not
outstanding on the record date with respect to each dividend payment
date during such year).
(b) Additional credits to reflect dividend payments on Dividend
Equivalent Units. As of the last day of each calendar year, each
Non-Employee Trustee shall be credited with additional Dividend
Equivalent Units equal to (i) the amount the REIT Committee
determines to be the average dividend yield per Share for such
calendar year, multiplied by (ii) the number of Dividend Equivalent
Units outstanding during such calendar year (reduced pro rata to
reflect Dividend Equivalent Units that were not outstanding on each
dividend payment date during such year).
3.2. Terms and Conditions of Non-Employee Trustee Dividend Equivalent
Units. Dividend Equivalent Units of Non-Employee Trustees shall be subject to
the following terms and conditions:
(a) Dividend Equivalent Units of Non-Employee Trustees shall vest in
accordance with the vesting schedule applicable to the Share Option
with respect to which the Dividend Equivalent Unit was awarded.
(b) Each vested Dividend Equivalent Unit shall entitle the holder
thereof to a Share on the last day of the calendar year in which
occurs the first of (i) the date
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the Non-Employee Trustee exercises the Share Option with respect to
which the Dividend Equivalent Unit was awarded, or (ii) the date
such Option expires by its terms; provided, however, prior to the
date the Shares would otherwise be payable, to the extent permitted
by the REIT Committee, a Non-Employee Trustee may irrevocably elect
to defer receipt of such Shares until the last date of a later
calendar year, but in no event later than the last day of the
calendar year in which occurs the tenth anniversary of the grant of
the underlying Option. Any such deferral election shall be made in
such form and at such times as the REIT Committee may determine and
shall be subject to such other terms, conditions and limitations as
the REIT Committee may establish.
(c) All Dividend Equivalent Units which are not vested upon the date a
Non-Employee Trustee's trusteeship terminates shall be forfeited.
(d) Settlement of a Non-Employee Trustee's Dividend Equivalent Units
shall be made in the form of whole Shares. Any fractional Shares
shall be settled in cash.
3.3. Award of Dividend and Distribution Equivalent Units to Participants
other than Non-Employee Trustees. To the extent determined by an affirmative
action of the granting Committee at the time an Option is awarded, a Participant
other than a Non-Employee Trustee who is awarded an Option under the Plan shall
also be entitled to receive "Dividend Equivalent Units" with respect to a Share
Option and "Distribution Equivalent Units" with respect to a Unit Option, as
applicable.
(a) Crediting of Dividend Equivalent Units. As of the last day of each
calendar year, each Participant other than a Non-Employee Trustee
who has been awarded Dividend Equivalent Units with respect to a
Share Option shall be credited with a number of Dividend Equivalent
Units equal to (i) the amount the REIT Committee determines to be
the average dividend yield per Share for such calendar year, reduced
by the amount that the REIT Committee determines to be the S&P 500
average dividend yield for such year, multiplied by (ii) the number
of Shares underlying the Participant's outstanding Share Option that
are entitled to Awards under this Section 3 during such calendar
year (reduced pro rata to reflect Shares underlying such Share
Option that were not outstanding on the record date with respect to
each
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dividend payment date during such year).
(b) Crediting of Distribution Equivalent Units. As of the last day of
each calendar year, each Participant who has been awarded
Distribution Equivalent Units with respect to a Unit Option shall be
credited with a number of Distribution Equivalent Units equal to (i)
the amount the REIT Committee determines to be the average
distribution per Unit for such calendar year, reduced by the amount
that the REIT Committee determines to be the S&P 500 average
distribution yield for such year, multiplied by (ii) the number of
Units underlying the Participant's outstanding Unit Option that are
entitled to Awards under this Section 3 during such calendar year
(reduced pro rata to reflect Units underlying such Unit Option that
were not outstanding on the date each distribution was paid during
such year).
3.4. Terms and Conditions of Dividend and Distribution Equivalent Units
for Participants other than Non-Employee Trustees.
(a) The granting Committee shall determine whether a Dividend Equivalent
Unit or a Distribution Equivalent Unit credited pursuant to
subsection 3.3 shall vest over such period as may be designated by
the Committee or only upon a Change in Control (as defined in
subsection 4.7).
(b) Each vested Dividend Equivalent Unit and Distribution Equivalent
Unit shall entitle the holder thereof to a Share or Unit, as
applicable, on the last day of the calendar year in which occurs the
first of (i) the date the Participant exercises the Option with
respect to which the Dividend or Distribution Equivalent Unit was
awarded, (ii) the date such Option expires by reason of termination
of employment, or (iii) the tenth anniversary of the date on which
the Option was granted or, if later, the first anniversary of the
date the Dividend or Distribution Equivalent Unit is fully vested if
the holder is employed by the REIT or a Related Company on such
date; provided, however, prior to the date the Shares or Units would
otherwise be payable, to the extent permitted by the REIT Committee,
a Participant may irrevocably elect to defer receipt of such Shares
or Units until the last day of a later calendar year, but in no
event later than the last day of the calendar year in which occurs
the tenth
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anniversary of the grant of the underlying Option. Any such deferral
election shall be made in such form and at such times as the
Committee may determine and shall be subject to such other terms,
conditions and limitations as the Committee may establish.
(c) All Dividend Equivalent Units and Distribution Equivalent Units
which are not vested upon the Participant's Date of Termination
shall be forfeited.
(d) Settlement of all Dividend and Distribution Equivalent Units shall
be made in the form of whole Shares or Units, as applicable. Any
fractional Shares or Units shall be settled in cash.
SECTION 4
OPERATION AND ADMINISTRATION
4.1. Effective Date. The Plan was originally effective as of the date it
was adopted by the Board; provided, however, that Awards granted under the Plan
prior to its approval by shareholders were contingent on approval of the Plan by
the REIT's shareholders. The Plan shall be unlimited in duration and, in the
event of Plan termination, shall remain in effect as long as any Options awarded
under it are outstanding and have not been exercised, terminated or expired;
provided, however, that no new Awards shall be made under the Plan on or after
the tenth anniversary of the date on which the Plan was originally adopted by
the Board.
4.2. Shares and Units Subject to Plan. The Shares with respect to which
Awards may be made under the Plan, including Shares delivered in connection with
the Conversion Right, shall be Shares currently authorized but unissued or
currently held or subsequently acquired by the REIT as treasury shares,
including Shares purchased in the open market or in private transactions.
Subject to the provisions of subsection 4.4, the number of Shares and Units
which may be issued with respect to Awards under the Plan shall not exceed
4,347,500 Shares or Units in the aggregate. In the event the number of
outstanding Shares and Units increases after the Effective Date, the maximum
number of Shares and Units reserved for Awards will be adjusted automatically so
that the maximum number equals 10% of the outstanding Shares and Units on a
fully-diluted basis, provided that the number of Shares reserved for grants of
Options designated as Incentive Share Options will not be so increased over the
number of such Shares as of the date the shareholders approve the Plan. Except
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as otherwise provided herein, any Shares or Units subject to an Award which for
any reason expires or is terminated without issuance of Shares or Units
(including Shares reserved in connection with the Conversion Rights of the Units
and Shares or Units that are not issued because they are withheld to satisfy tax
withholding) shall again be available under the Plan.
4.3. Reservation of Shares. There shall be reserved by the REIT at all
times for sale under the Plan and for exchange pursuant to a Conversion Right
for a Unit received upon the exercise of a Unit Option an aggregate number of
Shares equal to the maximum number of Shares and Units which may be subject to
the granting of Awards under subsection 4.2.
4.4. Adjustment. In the event the REIT Committee shall determine that any
extraordinary dividend or other distribution (whether in the form of cash,
Shares, Units, other securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase or exchange of Shares, Units or other
securities, the issuance of warrants or other rights to purchase Shares, Units
or other securities, or other similar corporate, trust or partnership
transaction or event affects the Shares or Units with respect to which Options
have been or may be issued under the Plan, such that an adjustment is determined
by the REIT Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the REIT Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares and Units that
thereafter may be made the subject of Options, (ii) the number and type of
Shares and Units subject to outstanding Options, and (iii) the grant or exercise
price with respect to any Option, or, if deemed appropriate, make provisions for
a cash payment to the holder of any outstanding Option; provided, that:
(a) with respect to Incentive Share Options, no adjustment shall be made
to the extent that the adjustment would cause the Option to violate
section 422 of the Code or any successor provision;
(b) the number of Shares or Units subject to any Option shall
always be a whole number; and
(c) in the event of a merger or sale of substantially all of the
assets of the REIT, the Board, in its sole discretion, may
substitute awards of equal value for Awards under the Plan or
cancel outstanding Awards, provided that the Participant
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receives an amount that the Board believes is reasonable
payment therefor.
4.5. Individual Limits on Awards. Notwithstanding any other provision of
the Plan to the contrary, no Participant shall receive any Award of an Option
under the Plan to the extent that the sum of:
(a) the number of Shares and Units subject to such Award;
(b) the number of Shares and Units subject to all other prior Awards of
Options under the Plan during the one-year period ending on the date
of the Award; and
(c) the number of Shares and Units subject to all other prior awards of
options granted to the Participant under other plans or arrangements
of the REIT or the Partnership during the one-year period ending on
the date of the award;
would exceed the Participant's Individual Limit under the Plan. The
determination made under the foregoing provisions of this subsection shall be
based on the Shares and Units subject to the Awards at the time of grant,
regardless of when the Awards become exercisable. Subject to the provisions of
subsection 4.4, a Participant's "Individual Limit" shall be 500,000 Shares or
500,000 Units, or any combination of the foregoing.
4.6. Limitation on Grant of Options. Notwithstanding any provision of the
Plan to the contrary, in no event shall an Option be granted under the Plan if
the granting of such Option may, in the determination of the REIT Committee,
cause the REIT to lose its status as a real estate investment trust under
section 856 of the Code (including sections 856()(6) and 856(h) thereof) and
applicable regulations thereunder.
4.7. Change in Control. In the event of a Change in Control of the REIT
(as defined below), all Options and related Awards which have not otherwise
expired shall become immediately exercisable and all other Awards shall become
fully vested. For purposes of the Plan, a "Change in Control" means the
happening of any of the following:
(a) the shareholders of the REIT approve a definitive agreement to merge
the REIT into or consolidate the REIT with another entity, sell or
otherwise dispose of all or substantially all of its assets or adopt
a plan of liquidation, provided, however, that a Change in Control
shall not be deemed to have occurred by reason
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of a transaction, or a substantially concurrent or otherwise related
series of transactions, upon the completion of which 50% or more of
the beneficial ownership of the voting power of the REIT, the
surviving corporation or corporation directly or indirectly
controlling the REIT or the surviving corporation, as the case may
be, is held by the same persons (as defined below) (although not
necessarily in the same proportion) as held the beneficial ownership
of the voting power of the REIT immediately prior to the transaction
or the substantially concurrent or otherwise related series of
transactions, except that upon the completion thereof, employees or
employee benefit plans of the REIT may be a new holder of such
beneficial ownership; provided, further, that any transaction
described in this paragraph (a) with an "Affiliate" of the REIT (as
defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) shall not be treated as a Change in Control; or
(b) the "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing 25% or more of the combined
voting power of the REIT is acquired, other than from the REIT, by
any "person" as defined in Sections 13(d) and 14(d) of the Exchange
Act (other than any trustee or other fiduciary holding securities
under an employee benefit or other similar stock plan of the REIT);
or
(c) at any time during any period of two consecutive years, individuals
who at the beginning of such period were members of the Board cease
for any reason to constitute at least a majority thereof (unless the
election, or the nomination for election by the REIT's shareholders,
of each new trustee was approved by a vote of at least two-thirds of
the trustees still in office at the time of such election or
nomination who were trustees at the beginning of such period).
4.8. Limit on Distribution. Distribution of Shares or Units under the Plan
shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the REIT shall have
no liability to deliver any Shares or Units under the Plan unless
such delivery would comply with all applicable laws and the
applicable requirements of any securities exchange or similar
entity.
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(b) In the case of a Participant who is subject to Section 16(a) and
16(b) of the Exchange Act, the REIT Committee may, at any time, add
such conditions and limitations to any Award to such Participant, or
any feature of any such Award, as the REIT Committee, in its sole
discretion, deems necessary or desirable to comply with Section
16(a) or 16(b) and the rules and regulations thereunder or to obtain
any exemption therefrom.
(c) To the extent that the Plan provides for issuance of certificates to
reflect the transfer of Shares or Units, the transfer of such Shares
or Units may be effected on a non-certificated basis, to the extent
not prohibited by applicable law or the rules of any stock exchange.
4.9. Withholding. All Awards and other payments under the Plan are subject
to withholding of all applicable taxes, which withholding obligations with
respect to Share Options may be satisfied, with the consent of the REIT
Committee, through the surrender of Shares which the Participant already owns or
to which a Participant is otherwise entitled under the Plan; provided, however,
previously-owned Shares that have been held by the Participant less than six
months or Shares to which the Participant is entitled under the Plan may only be
used to satisfy the minimum tax withholding required by applicable law.
4.10. Transferability. Awards under the Plan are not transferable except
as designated by the Participant by will or by the laws of descent and
distribution. In no event shall an Incentive Share Option be transferable to the
extent that such transferability would violate the requirements applicable to
such option under Code section 422. To the extent that the Participant who
receives an Award under the Plan has the right to exercise such Award, the Award
may be exercised during the lifetime of the Participant only by the Participant.
Notwithstanding the foregoing provisions of this subsection, the Committee may
permit Awards under the Plan to be transferred to or for the benefit of the
Participant's family (including, without limitation, to a trust or partnership
for the benefit of a Participant's family), subject to such limits as the
Committee may establish. In no event shall an Incentive Share Option be
transferable to the extent that such transferability would violate the
requirements applicable to such option under Code section 422.
4.11. Notices. Any notice or document required to be filed with the
granting Committee under the Plan will be properly filed if delivered or mailed
by registered mail, postage prepaid, to
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such Committee, in care of the REIT or the Management Company, as applicable, at
its principal executive offices. The Committee may, by advance written notice to
affected persons, revise such notice procedure from time to time. Any notice
required under the Plan (other than a notice of election) may be waived by the
person entitled to notice.
4.12. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
4.13. Option Agreement. At the time of an Award to a Participant under the
Plan, the granting Committee may require a Participant to enter into an
agreement with the REIT or the Management Company, as applicable (the
"Agreement"), in a form specified by the Committee, agreeing to the terms and
conditions of the Plan and to such additional terms and conditions, not
inconsistent with the Plan, as the Committee may, in its sole discretion,
prescribe.
4.14. Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property
of the REIT or any Related Company whatsoever, including, without
limitation, any specific funds, assets, or other property which the
REIT or any Related Company, in its sole discretion, may set aside
in anticipation of a liability under the Plan. A Participant shall
have only a contractual right to the amounts, if any, payable under
the Plan, unsecured by any assets of the REIT and any Related
Company. Nothing contained in the Plan shall constitute a guarantee
by the REIT or any Related Company that the assets of such companies
shall be sufficient to pay any benefits to any person.
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(b) The Plan does not constitute a contract of employment, and selection
as a Participant will not give any employee the right to be retained
in the employ of the REIT or any Related Company, nor any right or
claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan. Except as
otherwise provided in the Plan, no Award under the Plan shall confer
upon the holder thereof any right as a shareholder of the REIT or as
a holder of interests in the Partnership prior to the date on which
he fulfills all service requirements and other conditions for
receipt of such rights and Shares or Units are registered in his
name.
4.15. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
4.16. Action by REIT or Related Company. Any action required or permitted
to be taken by the REIT or any Related Company shall be by resolution of its
board of trustees or directors, as applicable, or by action of one or more
members of the board (including a committee of the board) who are duly
authorized to act for the board or (except to the extent prohibited by
applicable law or the rules of any stock exchange) by a duly authorized officer
of the REIT.
4.17. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
4.18. Applicable Law. The provisions of the Plan shall be construed in
accordance with the laws of the State of Maryland, without giving effect to
choice of law principles.
SECTION 5
COMMITTEES
5.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a REIT Committee and a Management
Company Committee (the "Committees") in accordance with this Section 5.
5.2. Selection of REIT Committee. So long as the REIT is
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subject to Section 16 of the Exchange Act, the Committee shall be selected by
the Board and shall consist of not fewer than two members of the Board or such
greater number as may be required for compliance with Rule 16b-3 issued under
the Exchange Act.
5.3. Powers of Committees. The authority to manage and control the
operation and administration of the Plan shall be vested in the Committees,
subject to the following:
(a) Subject to the provisions of the Plan, the REIT Committee will have
the authority and discretion to grant Share Options and Unit Options
and Dividend and Distribution Equivalent Unit rights to individuals
who, at the time of grant, perform services for the REIT or the
Partnership, or who are officers, trustees, directors or other
persons subject to Section 16(a) of the Exchange Act with respect to
the REIT. The Management Company Committee shall have sole and
exclusive authority to grant Unit Options and Distribution
Equivalent Unit rights to persons who, at the time of grant, perform
services for the Management Company and are not officers, trustees,
directors or other persons subject to Section 16(a) of the Exchange
Act with respect to the REIT. Each Committee shall have the
authority to determine the time or times of receipt, to determine
the types of Awards and the number of Shares or Units covered by the
Awards, to establish the terms, conditions, performance criteria,
restrictions, and other provisions of such Awards, and to cancel or
suspend Awards. In making such Award determinations, the Committee
may take into account the nature of services rendered by the
respective individual, the individual's present and potential
contribution to the REIT's success and such other factors as the
Committee deems relevant.
(b) The Committee will have the authority and discretion to interpret
the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any
agreements made pursuant to the Plan and to make all other
determinations that may be necessary or advisable for the
administration of the Plan.
(c) Any interpretation of the Plan by the Committee and any decision
made by it under the Plan is final and binding on all persons.
(d) Except as otherwise expressly provided in the Plan,
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where the Committee is authorized to make a determination with
respect to any Award, such determination shall be made at the time
the Award is made, except that the Committee may reserve the
authority to have such determination made by the Committee in the
future (but only if such reservation is made at the time the Award
is granted and is expressly stated in the Agreement reflecting the
Award).
5.4. Delegation by Committee. Except to the extent prohibited by
applicable law or the rules of any stock exchange or NASDAQ (if appropriate), a
Committee may allocate all or any portion of its responsibilities and powers to
any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it. Any such
allocation or delegation may be revoked by the Committee at any time.
5.5. Information to be Furnished to Committees. The REIT and Related
Companies shall furnish the Committee such data and information as may be
required for it to discharge its duties. The records of the REIT and Related
Companies as to an employee's or Participant's employment (or other provision of
services), termination of employment (or cessation of the provision of
services), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committees such evidence,
data or information as the Committees consider desirable to carry out the terms
of the Plan.
5.6. Liability and Indemnification of Committees. No member or authorized
delegate of either Committee shall be liable to any person for any action taken
or omitted in connection with the administration of the Plan unless attributable
to his own fraud or willful misconduct; nor shall the REIT or any Related
Company be liable to any person for any such action unless attributable to fraud
or willful misconduct on the part of a trustee or employee of the REIT or
Related Company. Each Committee, the individual members thereof, and persons
acting as the authorized delegates of the Committee under the Plan, shall be
indemnified by the REIT against any and all liabilities, losses, costs and
expenses (including legal fees and expenses) of whatsoever kind and nature which
may be imposed on, incurred by or asserted against the Committee or its members
or authorized delegates by reason of the performance of a Committee function if
the Committee or its members or authorized delegates did not act dishonestly or
in willful violation of the law or regulation
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under which such liability, loss, cost or expense arises. This indemnification
shall not duplicate but may supplement any coverage available under any
applicable insurance.
SECTION 6
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 4.4 (relating to certain adjustments to shares), no
amendment or termination may materially adversely affect the rights of any
Participant or beneficiary under any Award made under the Plan prior to the date
such amendment is adopted by the Board.
19
<PAGE>
Exhibit 10.15
CABOT INDUSTRIAL TRUST
1999 LONG-TERM INCENTIVE PLAN
<PAGE>
CABOT INDUSTRIAL TRUST
1999 LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
SECTION 1 GENERAL......................................................1
1.1. Purpose.......................................................1
1.2. Participation.................................................1
SECTION 2 OPTIONS......................................................2
2.1. Definition....................................................2
2.2. Eligibility...................................................2
2.3. Price.........................................................2
2.4. Exercise......................................................3
2.5. Post-Exercise Limitations.....................................4
2.6. Expiration Date...............................................4
SECTION 3 DIVIDEND AND DISTRIBUTION EQUIVALENT UNITS...................4
3.1. Award of Dividend and Distribution Equivalent Units...........4
3.2. Terms and Conditions of Dividend and Distribution
Equivalent Units..............................................5
SECTION 4 SHARE AWARDS.................................................6
4.1. Definition....................................................6
4.2. Eligibility...................................................6
4.3. Terms and Conditions of Awards................................6
SECTION 5 OPERATION AND ADMINISTRATION.................................7
5.1. Effective Date................................................7
5.2. Shares and Units Subject to Plan..............................7
5.3. Reservation of Shares.........................................8
5.4. Adjustment....................................................8
5.5. Individual Limits on Awards...................................8
5.6. Limitation on Grant of Awards.................................9
5.7. Change in Control.............................................9
5.8. Limit on Distribution........................................10
5.9. Performance-Based Compensation...............................10
5.10. Withholding.................................................11
5.11. Transferability.............................................11
5.12. Notices.....................................................11
5.13. Form and Time of Elections..................................11
5.14. Agreement with REIT or Related Company......................11
5.15. Limitation of Implied Rights................................12
5.16. Evidence....................................................12
5.17. Action by REIT or Related Company...........................12
5.18. Gender and Number...........................................12
<PAGE>
SECTION 6 COMMITTEES..................................................13
6.1. Administration...............................................13
6.2. Selection of REIT Committee..................................13
6.3. Powers of Committee..........................................13
6.4. Delegation by Committee......................................14
6.5. Information to be Furnished to Committees....................14
6.6. Liability and Indemnification of Committees..................14
SECTION 7 AMENDMENT AND TERMINATION...................................15
<PAGE>
CABOT INDUSTRIAL TRUST
1999 LONG-TERM INCENTIVE PLAN
SECTION 1
GENERAL
1.1. Purpose. The Cabot Industrial Trust 1999 Long-Term Incentive Plan
(the "Plan") has been established effective December 22, 1999 (the "Effective
Date") by Cabot Industrial Trust, a Maryland real estate investment trust (the
"REIT") to:
(a) attract and retain employees and other persons providing services to
the REIT and the Related Companies (as defined below);
(b) motivate Participants (as defined in subsection 1.2), by means of
appropriate incentives, to achieve long-range goals;
(c) provide incentive compensation opportunities that are competitive
with those of other corporations and real estate investment trusts;
and
(d) further identify Participants' interests with those of the REIT's
other shareholders through compensation that is based on the value
of the REIT's common shares;
and thereby promote the long-term financial interest of the REIT and the Related
Companies, including the growth in value of the REIT's equity and enhancement of
long-term shareholder return. The term "Related Company" means any company
during any period in which it is a "subsidiary corporation" (as that term is
defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code")), with respect to the REIT or any affiliate of the REIT which is
designated as a Related Company by the REIT Committee (as defined in subsection
6.1 below), including Cabot Industrial Properties, L.P. (the "Partnership") and
Cabot Advisors, Inc. (the "Management Company"). The Plan is intended to be a
broadly-based plan within the meaning of the shareholder approval policy of the
New York Stock Exchange listing requirements in which all employees of the REIT
and the Related Companies shall be eligible to participate.
1.2. Participation. Subject to the terms and conditions of the Plan, the
Committees (as described in Section 6) shall determine and designate, from time
to time, from among the Eligible Individuals (as defined below), those persons
who will be granted one or more awards under Sections 2, 3 or 4 of the Plan (an
"Award"), and thereby become "Participants" in the Plan. In the discretion of
the granting Committee, and subject to the terms of the Plan, a Participant may
be granted any Award permitted under the provisions of the Plan, and more than
one Award may be granted to a Participant. Except as otherwise agreed by the
REIT and the Participant, or except as otherwise provided in the Plan, an Award
under the Plan shall not affect any previous Award under the Plan or an award
under any other plan maintained by the REIT or the Related Companies. For
purposes of the Plan, the term "Eligible Individual" shall mean any employee,
officer, consultant, adviser or member of the Board of the REIT or a Related
Company; provided, however, that a member
<PAGE>
SECTION 2
OPTIONS
of the Board of Trustees of the REIT (the "Board") who is not an employee of the
REIT or a Related Company shall not be an Eligible Individual.
2.1. Definitions. The grant of an "Option" under this Section 2 entitles
the Participant to purchase common shares of beneficial interest of the REIT
("Shares") or units of interest in the Partnership ("Units") at a price fixed at
the time the Option is granted, subject to the terms of this Section. Share
Options granted under this Section will be Share Options that are Non-Qualified
Options. A "Non-Qualified Option" is an Option that is not intended to satisfy
the requirements of an "incentive stock option" described in section 422 of the
Code.
2.2. Eligibility. Each Committee shall designate the Participants to whom
Options are to be granted under this Section and shall determine the number of
Shares or Units, as applicable, subject to each such Option.
2.3. Price. The determination and payment of the purchase price of a Share
or Unit under each other Option granted under this Section shall be subject to
the following:
(a) The purchase price shall be established by the granting Committee at
the time the Option is granted; provided, however, that in no event
shall the price of a Share Option be less than the par value of a
Share on such date.
(b) Subject to the following provisions of this subsection, the full
purchase price of each Share or Unit purchased upon the exercise of
any Option shall be paid at the time of such exercise (or such later
date as may be permitted by the Committee in the case of a cashless
exercise) and, as soon as practicable thereafter, a certificate
representing the Shares or Units so purchased shall be delivered to
the person entitled thereto.
(c) The purchase price of a Share Option shall be payable in cash or in
Shares (valued at Fair Market Value as of the day of exercise) that
have been held by the Participant at least six months, or in any
combination thereof, as determined by the REIT Committee. The
purchase price of a Unit Option shall be payable in cash or in Units
(valued at Fair Market Value as of the day of exercise) that have
been held by the Participant at least six months, or in any
combination thereof, as determined by the REIT Committee.
(d) The "Fair Market Value" of a Share or Unit as of any date shall be
determined in accordance with the following rules:
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(i) If the Shares are at the time listed or admitted to trading on
any stock exchange, then the Fair Market Value of a Share
shall be the average of the highest and lowest sales price per
Share on such date on the principal exchange on which the
Shares are then listed or admitted to trading or, if no such
sale is reported on that date, on the last preceding date on
which a sale was so reported.
(ii) If the Shares are not at the time listed or admitted to
trading on a stock exchange, the Fair Market Value of a Share
shall be the average of the lowest reported bid price and
highest reported asked price of the Shares on the date in
question in the over-the-counter market, as such prices are
reported in a publication of general circulation selected by
the REIT Committee and regularly reporting the market price of
Shares in such market.
(iii) If the Shares are not listed or admitted to trading on any
stock exchange or traded in the over-the-counter market, the
Fair Market Value of a Share shall be as determined by the
REIT Committee in good faith.
(iv) For purposes of determining the Fair Market Value of Shares
that are sold pursuant to a cashless exercise program, Fair
Market Value shall be the price at which such Shares are sold.
(v) As of any date, the Fair Market Value of a Unit shall equal
the Fair Market Value of a Share on such date.
2.4. Exercise. Except as otherwise expressly provided in the Plan, an
Option granted under this Section shall be exercisable in accordance with the
following terms of this subsection:
(a) The terms and conditions relating to exercise of an Option shall be
established by the granting Committee, and may include, without
limitation, conditions relating to completion of a specified period
of service (subject to paragraph (b) below), achievement of
performance standards prior to exercise of the Option or the
achievement of Share ownership objectives by the Participant. The
granting Committee, in its sole discretion, may accelerate the
vesting of any Option under circumstances designated by it at the
time the Option is granted or thereafter.
(b) No Option may be exercised by a Participant after the Expiration
Date (as defined in subsection 2.6) applicable to that Option.
2.5. Post-Exercise Limitations. The REIT Committee, in its discretion, may
impose such restrictions on Shares acquired pursuant to the exercise of a Share
Option or delivered in connection with the right described in Section
3
<PAGE>
4.2(e) of the Agreement of Limited Partnership of Cabot Industrial Properties,
L.P. providing for the exchange of Units for Shares (the "Conversion Right") as
it determines to be desirable, including, without limitation, restrictions
relating to disposition of the Shares and forfeiture restrictions based on
service, performance, Share ownership by the Participant and such other factors
as the REIT Committee determines to be appropriate.
2.6. Expiration Date. The "Expiration Date" with respect to an Option
means the date established as the Expiration Date by the granting Committee at
the time of the grant; provided, however, that unless determined otherwise by
the Committee, the Expiration Date with respect to any Option shall not be later
than the earliest to occur of:
(a) the ten-year anniversary of the date on which the Option is granted;
(b) if the Participant's Date of Termination occurs by reason of death
or Disability, the one-year anniversary of such Date of Termination;
or
(c) if the Participant's Date of Termination occurs for reasons other
than death or Disability, the three-month anniversary of such Date
of Termination.
For purposes of the Plan, a Participant's "Date of Termination" shall be the
date on which he both ceases to be an employee of the REIT and the Related
Companies and ceases to perform material services for the REIT and the Related
Companies, regardless of the reason for the cessation; provided that a "Date of
Termination" shall not be considered to have occurred during the period in which
the reason for the cessation of services is a leave of absence approved by the
REIT or the Related Company which was the recipient of the Participant's
services. Except as otherwise provided by the Committee, a Participant shall be
considered to have a "Disability" during the period in which he is unable, by
reason of a medically determinable physical or mental impairment, to engage in
the material and substantial duties of his regular occupation, which condition
is expected to be permanent.
SECTION 3
DIVIDEND AND DISTRIBUTION EQUIVALENT UNITS
3.1. Award of Dividend and Distribution Equivalent Units. To the extent
determined by an affirmative action of the granting Committee at the time an
Option is awarded, a Participant who is awarded an Option under the Plan shall
also be entitled to receive "Dividend Equivalent Units" with respect to a Share
Option and "Distribution Equivalent Units" with respect to a Unit Option, as
applicable.
(a) Crediting of Dividend Equivalent Units. Except to the extent
4
<PAGE>
provided otherwise in a Participant's Option agreement, as of the
last day of each calendar year, each Participant who has been
awarded Dividend Equivalent Units with respect to a Share Option
shall be credited with a number of Dividend Equivalent Units equal
to (i) the amount the REIT Committee determines to be the average
dividend yield per Share for such calendar year, reduced by the
amount that the REIT Committee determines to be the S&P 500 average
dividend yield for such year, multiplied by (ii) the number of
Shares underlying the Participant's outstanding Share Option that
are entitled to Awards under this Section 3 during such calendar
year (reduced pro rata to reflect Shares underlying such Share
Option that were not outstanding on the record date with respect to
each dividend payment date during such year).
(b) Crediting of Distribution Equivalent Units. Except to the extent
provided otherwise in a Participant's Option agreement, as of the
last day of each calendar year, each Participant who has been
awarded Distribution Equivalent Units with respect to a Unit Option
shall be credited with a number of Distribution Equivalent Units
equal to (i) the amount the REIT Committee determines to be the
average distribution per Unit for such calendar year, reduced by the
amount that the REIT Committee determines to be the S&P 500 average
distribution yield for such year, multiplied by (ii) the number of
Units underlying the Participant's outstanding Unit Option that are
entitled to Awards under this Section 3 during such calendar year
(reduced pro rata to reflect Units underlying such Unit Option that
were not outstanding on the date each distribution was paid during
such year).
3.2. Terms and Conditions of Dividend and Distribution Equivalent Units.
(a) The granting Committee shall determine whether a Dividend Equivalent
Unit or a Distribution Equivalent Unit credited pursuant to
subsection 3.1 shall vest over such period as may be designated by
the Committee or only upon a Change in Control (as defined in
subsection 5.7).
(b) Each vested Dividend Equivalent Unit and Distribution Equivalent
Unit shall entitle the holder thereof to a Share or Unit, as
applicable, on the last day of the calendar year in which occurs the
first of (i) the date the Participant exercises the Option with
respect to which the Dividend or Distribution Equivalent Unit was
awarded, (ii) the date such Option expires by reason of termination
of employment, or (iii) the tenth anniversary of the date on which
the Option was granted or, if later, the first anniversary of the
date the Dividend or Distribution Equivalent Unit is fully vested if
the holder is employed by the REIT or a Related Company on such
date; provided, however, prior to the date the Shares or Units would
otherwise be payable, to the extent
5
<PAGE>
permitted by the REIT Committee, a Participant may irrevocably elect
to defer receipt of such Shares or Units until the last day of a
later calendar year, but in no event later than the last day of the
calendar year in which occurs the tenth anniversary of the grant of
the underlying Option. Any such deferral election shall be made in
such form and at such times as the Committee may determine and shall
be subject to such other terms, conditions and limitations as the
Committee may establish.
(c) All Dividend Equivalent Units and Distribution Equivalent Units
which are not vested upon the Participant's Date of Termination
shall be forfeited.
(d) Settlement of all Dividend and Distribution Equivalent Units shall
be made in the form of whole Shares or Units, as applicable. Any
fractional Shares or Units shall be settled in cash.
SECTION 4
SHARE AWARDS
4.1. Definition. Subject to the terms of this Section, a Share Award under
the Plan is a grant of Shares to a Participant, the earning, vesting or
distribution of which is subject to one or more conditions established by the
REIT Committee. Such conditions may relate to events (such as performance or
continued employment) occurring before or after the date the Share Award is
granted, or the date the Shares are earned by, vested in or delivered to the
Participant. If the vesting of Share Awards is subject to conditions occurring
after the date of grant, the period beginning on the date of grant of a Share
Award and ending on the vesting or forfeiture of such Shares (as applicable) is
referred to as the "Restricted Period". Share Awards may provide for delivery of
the shares of Shares at the time of grant or may provide for a deferred delivery
date. A Share Award may, but need not, be made in conjunction with a cash-based
incentive compensation program maintained by the REIT and may, but need not, be
in lieu of cash otherwise awardable under such program.
4.2. Eligibility. The REIT Committee shall designate the Participants to
whom Share Awards are to be granted and the number of Shares that are subject to
each such Award.
4.3. Terms and Conditions of Awards. Share Awards granted to Participants
under the Plan shall be subject to the following terms and conditions:
(a) Beginning on the date of grant (or, if later, the date of
distribution) of Shares comprising a Share Award, and including any
applicable Restricted Period, the Participant as owner of such
Shares shall have the right to vote such Shares.
6
<PAGE>
(b) Payment of dividends with respect to Share Awards shall be subject
to the following:
(i) On and after the date that a Participant has a fully earned
and vested right to the Shares comprising a Share Award and
the Shares have been distributed to the Participant, the
Participant shall have all dividend rights (and other rights)
of a shareholder with respect to such Shares.
(ii) Prior to the date that a Participant has a fully earned and
vested right to the shares comprising a Share Award, the REIT
Committee, in its sole discretion, may award Dividend Rights
with respect to such shares.
(iii) On and after the date that a Participant has a fully earned
and vested right to the Shares comprising a Share Award, but
before the Shares have been distributed to the Participant,
the Participant shall be entitled to Dividend Rights with
respect to such Shares, at the time and in the form determined
by the REIT Committee.
(iv) A "Dividend Right" with respect to shares comprising a Share
Award shall entitle the Participant, as of each dividend
payment date, to an amount equal to the dividends payable with
respect to a Share multiplied by the number of such Shares.
Dividend Rights shall be settled in cash or in Shares valued
at Fair Market Value as of the date of settlement, as
determined by the REIT Committee, shall be payable at the time
determined by the REIT Committee and shall be subject to such
other terms and conditions as the REIT Committee may
determine.
SECTION 5
OPERATION AND ADMINISTRATION
5.1. Effective Date. The Plan shall be effective as of the date it was
adopted by the Board. The Plan shall be unlimited in duration and, in the event
of Plan termination, shall remain in effect as long as any Awards awarded under
it are outstanding and have not been exercised, terminated or expired; provided,
however, that no new Awards shall be made under the Plan on or after the tenth
anniversary of the date on which the Plan was originally adopted by the Board.
5.2. Shares and Units Subject to Plan. The Shares with respect to which
Awards may be made under the Plan, including Shares delivered in connection with
the Conversion Right, shall be Shares currently authorized but unissued or
currently held or subsequently acquired by the REIT as treasury
7
<PAGE>
shares, including Shares purchased in the open market or in private
transactions. Subject to the provisions of subsection 5.4, the number of Shares
and Units which may be issued with respect to Awards under the Plan shall not
exceed 2,000,000 Shares or Units in the aggregate. Except as otherwise provided
herein, any Shares or Units subject to an Award which for any reason expires or
is terminated without issuance of Shares or Units (including Shares reserved in
connection with the Conversion Rights of the Units and Shares or Units that are
not issued because they are withheld to satisfy tax withholding) shall again be
available under the Plan.
5.3. Reservation of Shares. There shall be reserved by the REIT at all
times for sale under the Plan and for exchange pursuant to a Conversion Right
for a Unit received upon the exercise of a Unit Option an aggregate number of
Shares equal to the maximum number of Shares and Units which may be subject to
the granting of Awards under subsection 5.2.
5.4. Adjustment. In the event the REIT Committee shall determine that any
extraordinary dividend or other distribution (whether in the form of cash,
Shares, Units, other securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase or exchange of Shares, Units or other
securities, the issuance of warrants or other rights to purchase Shares, Units
or other securities, or other similar corporate, trust or partnership
transaction or event affects the Shares or Units with respect to which Awards
have been or may be issued under the Plan, such that an adjustment is determined
by the REIT Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the REIT Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares and Units that
thereafter may be made the subject of Awards, (ii) the number and type of Shares
and Units subject to outstanding Awards, and (iii) the grant or exercise price
with respect to any Option, or, if deemed appropriate, make provisions for a
cash payment to the holder of any outstanding Award; provided, that:
(a) the number of Shares or Units subject to any Award shall always be a
whole number; and
(b) in the event of a merger or sale of substantially all of the assets
of the REIT, the Board, in its sole discretion, may substitute
awards of equal value for Awards under the Plan or cancel
outstanding Awards, provided that the Participant receives an amount
that the Board believes is reasonable payment therefor.
5.5. Individual Limits on Awards. Notwithstanding any other provision of
the Plan to the contrary, no Participant shall receive any Award of an Option
under the Plan to the extent that the sum of:
(a) the number of Shares and Units subject to such Award;
8
<PAGE>
(b) the number of Shares and Units subject to all other prior Awards of
Options under the Plan during the one-year period ending on the date
of the Award; and
(c) the number of Shares and Units subject to all other prior awards of
options granted to the Participant under other plans or arrangements
of the REIT or the Partnership during the one-year period ending on
the date of the award;
would exceed the Participant's Individual Limit under the Plan. The
determination made under the foregoing provisions of this subsection shall be
based on the Shares and Units subject to the Awards at the time of grant,
regardless of when the Awards become exercisable. Subject to the provisions of
subsection 5.4, a Participant's "Individual Limit" shall be 500,000 Shares or
500,000 Units, or any combination of the foregoing.
5.6. Limitation on Grant of Awards. Notwithstanding any provision of the
Plan to the contrary, in no event shall an Award be granted under the Plan if
the granting of such Award may, in the determination of the REIT Committee,
cause the REIT to lose its status as a real estate investment trust under
section 856 of the Code and applicable regulations thereunder.
5.7. Change in Control. In the event of a Change in Control of the REIT
(as defined below), all Options and related Awards which have not otherwise
expired shall become immediately exercisable and all other Awards shall become
fully vested. For purposes of the Plan, a "Change in Control" means the
happening of any of the following:
(a) the shareholders of the REIT approve a definitive agreement to merge
the REIT into or consolidate the REIT with another entity, sell or
otherwise dispose of all or substantially all of its assets or adopt
a plan of liquidation, provided, however, that a Change in Control
shall not be deemed to have occurred by reason of a transaction, or
a substantially concurrent or otherwise related series of
transactions, upon the completion of which 50% or more of the
beneficial ownership of the voting power of the REIT, the surviving
corporation or corporation directly or indirectly controlling the
REIT or the surviving corporation, as the case may be, is held by
the same persons (as defined below) (although not necessarily in the
same proportion) as held the beneficial ownership of the voting
power of the REIT immediately prior to the transaction or the
substantially concurrent or otherwise related series of
transactions, except that upon the completion thereof, employees or
employee benefit plans of the REIT may be a new holder of such
beneficial ownership; provided, further, that any transaction
described in this paragraph (a) with an "Affiliate" of the REIT (as
defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) shall not be treated as a Change in Control; or
9
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(b) the "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing 25% or more of the combined
voting power of the REIT is acquired, other than from the REIT, by
any "person" as defined in Sections 13(d) and 14(d) of the Exchange
Act (other than any trustee or other fiduciary holding securities
under an employee benefit or other similar stock plan of the REIT);
or
(c) at any time during any period of two consecutive years, individuals
who at the beginning of such period were members of the Board cease
for any reason to constitute at least a majority thereof (unless the
election, or the nomination for election by the REIT's shareholders,
of each new trustee was approved by a vote of at least two-thirds of
the trustees still in office at the time of such election or
nomination who were trustees at the beginning of such period).
5.8. Limit on Distribution. Distribution of Shares or Units under the Plan
shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the REIT shall have
no liability to deliver any Shares or Units under the Plan unless
such delivery would comply with all applicable laws and the
applicable requirements of any securities exchange or similar
entity.
(b) In the case of a Participant who is subject to Section 16(a) and
16(b) of the Exchange Act, the REIT Committee may, at any time, add
such conditions and limitations to any Award to such Participant, or
any feature of any such Award, as the REIT Committee, in its sole
discretion, deems necessary or desirable to comply with Section
16(a) or 16(b) and the rules and regulations thereunder or to obtain
any exemption therefrom.
(c) To the extent that the Plan provides for issuance of certificates to
reflect the transfer of Shares or Units, the transfer of such Shares
or Units may be effected on a non-certificated basis, to the extent
not prohibited by applicable law or the rules of any stock exchange.
5.9. Performance-Based Compensation. To the extent that the REIT Committee
determines that it is necessary or desirable to conform any Awards under the
Plan with the requirements applicable to "Performance-Based Compensation", as
that term is used in Code section 162(m)(4)(C), it may, at or prior to the time
an Award is granted, take such steps and impose such restrictions with respect
to such Award as it determines to be necessary to satisfy such requirements
including, without limitation:
(a) The establishment of performance goals that must be satisfied prior
to the payment or distribution of benefits under such
10
<PAGE>
Awards.
(b) The submission of such Awards and performance goals to the REIT's
shareholders for approval and making the receipt of benefits under
such Awards contingent on receipt of such approval.
(c) Providing that no payment or distribution be made under such Awards
unless the REIT Committee certifies that the goals and the
applicable terms of the Plan and Agreement reflecting the Awards
have been satisfied.
To the extent that the REIT Committee determines that the foregoing requirements
relating to Performance-Based Compensation do not apply to Awards under the Plan
because the Awards constitute Options, the REIT Committee may, at the time the
Award is granted, conform the Awards to alternative methods of satisfying the
requirements applicable to Performance-Based Compensation.
5.10. Withholding. All Awards and other payments under the Plan are
subject to withholding of all applicable taxes, which withholding obligations
may be satisfied, with the consent of the REIT Committee, through the surrender
of Shares which the Participant already owns or to which a Participant is
otherwise entitled under the Plan; provided, however, previously-owned Shares
that have been held by the Participant less than six months or Shares to which
the Participant is entitled under the Plan may only be used to satisfy the
minimum tax withholding required by applicable law.
5.11. Transferability. Awards under the Plan are not transferable except
as designated by the Participant by will or by the laws of descent and
distribution. To the extent that the Participant who receives an Award under the
Plan has the right to exercise such Award, the Award may be exercised during the
lifetime of the Participant only by the Participant. Notwithstanding the
foregoing provisions of this subsection, the REIT Committee may permit Awards
under the Plan to be transferred to or for the benefit of the Participant's
family (including, without limitation, to a trust or partnership for the benefit
of a Participant's family), subject to such limits as the REIT Committee may
establish.
5.12. Notices. Any notice or document required to be filed with the
granting Committee under the Plan will be properly filed if delivered or mailed
by registered mail, postage prepaid, to such Committee, in care of the REIT or
the Management Company, as applicable, at its principal executive offices. Each
Committee may, by advance written notice to affected persons, revise such notice
procedure from time to time. Any notice required under the Plan (other than a
notice of election) may be waived by the person entitled to notice.
5.13. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the applicable Committee at
11
<PAGE>
such times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall require.
5.14. Agreement with REIT or Related Company. At the time of an Award to a
Participant under the Plan, the granting Committee may require a Participant to
enter into an agreement with the REIT or the Management Company, as applicable
(the "Agreement"), in a form specified by the granting Committee, agreeing to
the terms and conditions of the Plan and to such additional terms and
conditions, not inconsistent with the Plan, as the granting Committee may, in
its sole discretion, prescribe.
5.15. Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property
of the REIT or any Related Company whatsoever, including, without
limitation, any specific funds, assets, or other property which the
REIT or any Related Company, in its sole discretion, may set aside
in anticipation of a liability under the Plan. A Participant shall
have only a contractual right to the amounts, if any, payable under
the Plan, unsecured by any assets of the REIT and any Related
Company. Nothing contained in the Plan shall constitute a guarantee
by the REIT or any Related Company that the assets of such companies
shall be sufficient to pay any benefits to any person.
(b) The Plan does not constitute a contract of employment, and selection
as a Participant will not give any employee the right to be retained
in the employ of the REIT or any Related Company, nor any right or
claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan. Except as
otherwise provided in the Plan, no Award under the Plan shall confer
upon the holder thereof any right as a shareholder of the REIT or as
a holder of interests in the Partnership prior to the date on which
he fulfills all service requirements and other conditions for
receipt of such rights and Shares or Units are registered in his
name.
5.16. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
5.17. Action by REIT or Related Company. Any action required or permitted
to be taken by the REIT or any Related Company shall be by resolution of its
board of trustees or directors, as applicable, or by action of one or more
members of the board (including a committee of the board) who are duly
authorized to act for the board or (except to the extent prohibited by
applicable law or the rules of any stock exchange) by a duly authorized officer
of the REIT.
12
<PAGE>
5.18. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
5.19. Applicable Law. The provisions of the Plan shall be construed in
accordance with the laws of the State of Maryland, without giving effect to
choice of law principles.
SECTION 6
COMMITTEES
6.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a REIT Committee and a Management
Company Committee (the "Committees") in accordance with this Section 6.
6.2. Selection of REIT Committee. So long as the REIT is subject to
Section 16 of the Exchange Act, the REIT Committee shall be selected by the
Board and shall consist of not fewer than two members of the Board or such
greater number as may be required for compliance with Rule 16b-3 issued under
the Exchange Act.
6.3. Powers of Committees. The authority to manage and control the
operation and administration of the Plan shall be vested in the Committees,
subject to the following:
(a) Subject to the provisions of the Plan, the REIT Committee will have
the authority and discretion to grant Share Options and Unit Options
and Dividend and Distribution Equivalent Unit rights to individuals
who, at the time of grant, perform services for the REIT or the
Partnership, or who are officers, trustees, directors or other
persons subject to Section 16(a) of the Exchange Act with respect to
the REIT. The Management Company Committee shall have sole and
exclusive authority to grant Share Options and Unit Options and
Dividend and Distribution Equivalent Unit rights to persons who, at
the time of grant, perform services for the Management Company and
are not officers, trustees, directors or other persons subject to
Section 16(a) of the Exchange Act with respect to the REIT. Each
Committee shall have the authority to determine the time or times of
receipt, to determine the types of Awards and the number of Shares
or Units covered by the Awards, to establish the terms, conditions,
performance criteria, restrictions, and other provisions of such
Awards, and to cancel or suspend Awards. In making such Award
determinations, the granting Committee may take into account the
nature of services rendered by the respective individual, the
individual's present and potential contribution to the REIT's
success and such other
13
<PAGE>
factors as the granting Committee deems relevant.
(b) Subject to the provisions of the Plan, the REIT Committee will have
the authority and discretion to determine the extent to which Awards
under the Plan will be structured to conform to the requirements
applicable to Performance-Based Compensation, and to take such
action, establish such procedures, and impose such restrictions at
the time such Awards are granted as the REIT Committee determines to
be necessary or appropriate to conform to such requirements.
(c) Subject to the provisions of the Plan, the REIT Committee will have
the authority and discretion to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any agreements made pursuant
to the Plan and to make all other determinations that may be
necessary or advisable for the administration of the Plan.
(d) Any interpretation of the Plan by a Committee and any decision made
by it under the Plan is final and binding on all persons.
(e) Except as otherwise expressly provided in the Plan, where a
Committee is authorized to make a determination with respect to any
Award, such determination shall be made at the time the Award is
made, except that the granting Committee may reserve the authority
to have such determination made by the granting Committee in the
future (but only if such reservation is made at the time the Award
is granted and is expressly stated in the Agreement reflecting the
Award).
6.4. Delegation by Committee. Except to the extent prohibited by
applicable law or the rules of any stock exchange or NASDAQ (if appropriate), a
Committee may allocate all or any portion of its responsibilities and powers to
any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it. Any such
allocation or delegation may be revoked by the Committee at any time.
6.5. Information to be Furnished to Committees. The REIT and Related
Companies shall furnish each Committee such data and information as may be
required for it to discharge its duties. The records of the REIT and Related
Companies as to an employee's or Participant's employment (or other provision of
services), termination of employment (or cessation of the provision of
services), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committees such evidence,
data or information as the Committees consider desirable to carry out the terms
of the Plan.
6.6. Liability and Indemnification of Committees. No member or
14
<PAGE>
authorized delegate of either Committee shall be liable to any person for any
action taken or omitted in connection with the administration of the Plan unless
attributable to his own fraud or willful misconduct; nor shall the REIT or any
Related Company be liable to any person for any such action unless attributable
to fraud or willful misconduct on the part of a trustee or employee of the REIT
or Related Company. Each Committee, the individual members thereof, and persons
acting as the authorized delegates of the Committee under the Plan, shall be
indemnified by the REIT against any and all liabilities, losses, costs and
expenses (including legal fees and expenses) of whatsoever kind and nature which
may be imposed on, incurred by or asserted against the Committee or its members
or authorized delegates by reason of the performance of a Committee function if
the Committee or its members or authorized delegates did not act dishonestly or
in willful violation of the law or regulation under which such liability, loss,
cost or expense arises. This indemnification shall not duplicate but may
supplement any coverage available under any applicable insurance.
SECTION 7
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 5.4 (relating to certain adjustments to shares), no
amendment or termination may materially adversely affect the rights of any
Participant or beneficiary under any Award made under the Plan prior to the date
such amendment is adopted by the Board.
15
<PAGE>
Exhibit 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference of our reports included in this Form 10-K, into Cabot Industrial
Properties, L.P.'s previously filed Registration Statement on Form S-3 (File No.
333-71585).
Boston, Massachusetts Arthur Andersen LLP
March 27, 2000
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<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>
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