Filed
Pursuant to Rule 424(b)(3)
Registration No. 333-173891
PROSPECTUS
AMB Property, L.P.
Unconditionally Guaranteed by AMB Property Corporation
Offers to Exchange
All Outstanding Notes of the Series Specified Below
and Solicitation of Consents to Amend the Related Indenture
Expiration Date: 9:00 a.m., New York City Time, June 3, 2011, unless extended
AMB Property, L.P., a limited partnership organized under the laws of Delaware (“AMB
LP”), is conducting the exchange offers and, on behalf of the combined company (as defined below),
the solicitation of consents set forth in this prospectus and related letter of transmittal and
consent (“letter of transmittal”) in connection with, and subject to the consummation of, the
planned Merger (as defined below) of ProLogis and AMB Property Corporation (“AMB”) pursuant to the
agreement and plan of merger referred to below. AMB LP is offering to exchange all validly
tendered and accepted notes that were issued by ProLogis with notes to be issued by AMB LP and
unconditionally guaranteed by AMB, the parent entity and sole general partner of AMB LP, each as
described in the table below.
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Series of Notes Issued by
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CUSIP No.
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Series of Notes to be
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Aggregate
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ProLogis to be Exchanged
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of the ProLogis
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Issued by AMB LP (Collectively,
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Principal
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(Collectively, the “ProLogis Non-Convertible
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Non-Convertible
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the “AMB LP Non-Exchangeable
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Amount
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Notes”)
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Notes
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Notes”)(1)
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$58,935,000
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5.500% Notes due April 1, 2012
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743410 AK8
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5.500% Notes due April 1, 2012
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$61,443,000
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5.500% Notes due March 1, 2013
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743410 AE2
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5.500% Notes due March 1, 2013
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$350,000,000
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7.625% Notes due August 15, 2014
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743410 AU6
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7.625% Notes due August 15, 2014
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$48,226,750 (2) (3)
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7.810% Notes due February 1, 2015
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81413WAA8
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7.810% Notes due February 1, 2015
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$5,511,625 (2) (3)
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9.340% Notes due March 1, 2015
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814138 AB9
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9.340% Notes due March 1, 2015
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$155,320,000
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5.625% Notes due November 15, 2015
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743410 AJ1
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5.625% Notes due November 15, 2015
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$197,758,000
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5.750% Notes due April 1, 2016
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743410 AL6
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5.750% Notes due April 1, 2016
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$36,402,700 (2) (4)
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8.650% Notes due May 15, 2016
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814138 AJ2
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8.650% Notes due May 15, 2016
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$182,104,000
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5.625% Notes due November 15, 2016
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743410 AN2
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5.625% Notes due November 15, 2016
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$300,000,000
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6.250% Notes due March 15, 2017
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743410 AX0
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6.250% Notes due March 15, 2017
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$100,000,000
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7.625% Notes due July 1, 2017
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814138 AK9
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7.625% Notes due July 1, 2017
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$600,000,000
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6.625% Notes due May 15, 2018
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743410 AT9
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6.625% Notes due May 15, 2018
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$396,641,000
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7.375% Notes due October 30, 2019
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743410 AV4
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7.375% Notes due October 30, 2019
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$561,049,000
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6.875% Notes due March 15, 2020
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743410 AW2
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6.875% Notes due March 15, 2020
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Series of Exchangeable Notes to be
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Series of Convertible Notes Issued by
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Issued by AMB LP (Collectively,
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ProLogis to be Exchanged
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the “AMB LP Exchangeable Notes” and,
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Aggregate
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(Collectively, the “ProLogis Convertible
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CUSIP No.
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together with the AMB LP Non-
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Principal
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Notes” and, together with the ProLogis Non-
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of the ProLogis
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Exchangeable Notes, the “AMB LP
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Amount
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Convertible Notes, the “ProLogis Notes”)
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Convertible Notes
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Notes”)(1)
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$460,000,000
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3.250% Convertible Senior Notes due 2015
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743410 AY8
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3.250% Exchangeable Senior Notes due 2015
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$592,980,000
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2.250% Convertible Senior Notes due 2037
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743410 AP7
743410 AQ5
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2.250% Exchangeable Senior Notes due 2037
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$141,635,000
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1.875% Convertible Senior Notes due 2037
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743410 AR3
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1.875% Exchangeable Senior Notes due 2037
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$386,250,000
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2.625% Convertible Senior Notes due 2038
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743410 AS1
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2.625% Exchangeable Senior Notes due 2038
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(1)
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The AMB LP Notes will be issued by AMB LP and will be fully and unconditionally guaranteed by
its parent entity and sole general partner, AMB.
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(2)
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In this prospectus, in the case of the ProLogis 7.810% 2015 Notes (as defined below),
ProLogis 9.340% 2015 Notes (as defined below) and ProLogis 8.650% 2016 Notes (as defined
below) (collectively, the “ProLogis Amortizing Notes” or singularly, a “ProLogis Amortizing
Note”), unless stated otherwise, the aggregate principal amount and the price per principal
amount refers to the current principal amount outstanding, after giving effect to the
mandatory principal repayments that have been made on each ProLogis Amortizing Note, including
the $4,600,300 repayment to be made on May 15, 2011 in the case of the ProLogis 8.650% 2016
Notes.
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(3)
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Such current aggregate principal amount reflects mandatory principal repayments already made
in accordance with the terms of the notes. The original principal amount for the ProLogis 7.810% 2015 Notes is $74,195,000.
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(4)
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Such current aggregate principal amount reflects mandatory principal repayments already made
in accordance with the terms of the notes, including the mandatory
repayment of $4,600,300 to
be made on May 15, 2011.
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In exchange for each ProLogis Note that is validly tendered and accepted, holders will
receive a new AMB LP Note in a principal amount equal to the applicable exchange price of such
tendered ProLogis Note. The principal amount of each new AMB LP Note will be rounded down, if
necessary, to the nearest whole multiple of $1,000, and AMB LP will pay cash equal to the remaining
portion, if any, of the exchange price of such ProLogis Note plus accrued and unpaid interest with
respect to that portion.
For each ProLogis Non-Convertible Note validly tendered (and not validly
withdrawn), the holder will receive (i) an exchange price equal to 100% of its principal amount
plus a cash consent fee equal to 0.25% of its principal amount (the “Non-Convertible Notes Consent
Fee”) if it is validly tendered (and not validly withdrawn) prior to 5:00 p.m., New York City time,
on May 16, 2011, unless extended (the “Early Consent Date”), and (ii) an exchange price equal to
97% of its
principal amount if it is validly tendered (and not validly withdrawn) after the Early Consent
Date and on or prior to the Expiration Date (as defined below) of the exchange offers. For each
ProLogis Convertible Note validly tendered (and not validly withdrawn), the holder will receive (i)
an exchange price equal to 100% of its principal amount plus a cash consent fee equal to 0.10% of
its principal amount (the “Convertible Notes Consent Fee”) if it is validly tendered (and not
validly withdrawn) prior to the Early Consent Date, and (ii) an exchange price equal to 97% of its
principal amount if it is validly tendered (and not validly withdrawn) after the Early Consent Date
and on or prior to the Expiration Date. If you validly tender ProLogis Notes prior to the Early
Consent Date, you may validly withdraw your tender and the related consent prior to the Early
Consent Date, but you will not receive the applicable cash consent fee unless you validly re-tender
prior to the Early Consent Date. If you validly tender ProLogis Notes prior to the Early Consent
Date, you may validly withdraw your tender after the Early Consent Date and before the Expiration
Date, but you may not withdraw the related consent and you will receive the applicable cash consent
fee. If you validly tender ProLogis Notes after the Early Consent Date and before the Expiration
Date, you will not receive the applicable cash consent fee and you may withdraw your tender and the
related consent at any time prior to the Expiration Date.
Tender
instructions for each series of ProLogis Notes will be accepted in
authorized denominations. Tenders of ProLogis 7.810% 2015 Notes will be accepted only in original principal amounts
(i.e., without giving effect to principal repayments already made) equal to $1,000 or integral
multiples thereof. The applicable exchange price and consent fee will be calculated only on
current principal amounts outstanding as of the settlement date. For illustrations on how the
exchange price and consent fee will be calculated, see “The Exchange Offers and Consent
Solicitations — ProLogis Amortizing Notes.”
Each new AMB LP Note issued in exchange for a ProLogis Note will have substantially the same
terms, including interest rate, interest payment dates, redemption terms, maturity and, if
applicable, exchange terms (other than the applicable initial exchange rates, dividend threshold
amounts, fundamental change make-whole amounts and, in the case of the AMB LP 3.250% 2015
Exchangeable Notes, the exchange consideration), as the corresponding ProLogis Note (prior to the
Proposed Amendments) for which it is offered in exchange, and will accrue interest from the most
recent interest payment date of the tendered ProLogis Note. The AMB LP Notes will be issued by AMB
LP and will be fully and unconditionally guaranteed by AMB, as compared with the ProLogis Notes,
which were issued by ProLogis and are not guaranteed. In the case of each new AMB LP 9.340% 2015
Note (as defined below) and AMB LP 8.650% 2016 Note (as defined below) issued in exchange for a
ProLogis 9.340% 2015 Note and a ProLogis 8.650% 2016 Note, respectively, the mandatory principal
repayment schedule will be revised from that contained in the corresponding ProLogis Note to
reflect the fact that, because previous mandatory principal repayments were not, and with respect to the principal payment to be made in May 15, 2011 with respect to the ProLogis 8.650% 2016 Notes is not expected to be, applied in
accordance with their respective terms with respect to the corresponding ProLogis Note, the
outstanding principal amount of each currently outstanding ProLogis 9.340% 2015 Note and ProLogis
8.650% 2016 Note is, and the AMB LP 9.340% 2015 Note and AMB LP 8.650% 2016 Note to be issued in
exchange thereof will be, $1,000. For more information, see “The Exchange Offers and Consent
Solicitations — ProLogis Amortizing Notes.” The AMB LP 3.250% 2015 Exchangeable Notes (as defined
below) will be exchangeable into AMB common stock, cash or a combination of the two, at the option
of AMB LP, as compared with the ProLogis 3.250% 2015 Convertible Notes (as defined below), which
are convertible only into ProLogis common shares and will be exchangeable only into AMB common
stock after the Merger. The AMB LP Exchangeable Notes will be exchangeable into AMB common stock,
cash or a combination of the two, at the option of AMB LP.
The exchange offers will expire at 9:00 a.m., New York City time, on June 3, 2011, unless
extended (the “Expiration Date”).
You may withdraw tendered ProLogis Notes at any time prior to the
Expiration Date. As of the date of this prospectus, after giving effect to the mandatory repayment
of $4,600,300 of the principal of the ProLogis 8.650% 2016 Notes to be made on May 15, 2011, there
was $3,053,391,075 principal amount of outstanding ProLogis Non-Convertible Notes and
$1,580,865,000 principal amount of outstanding ProLogis Convertible Notes, for a total of
$4,634,256,075 principal amount of outstanding ProLogis Notes.
Concurrently with the exchange offers, AMB LP is also soliciting consents on behalf of the
combined company from each holder of the ProLogis Notes upon the terms and conditions set forth in
this prospectus and the related letter of transmittal to certain proposed amendments described
below (the “Proposed Amendments”) to the indenture, dated as of March 1, 1995 (the “Base ProLogis
Indenture”), between ProLogis (formerly ProLogis Trust and prior thereto Security Capital
Industrial Trust) and U.S. Bank National Association, as successor in interest to State Street Bank
and Trust Company, as trustee (the “Trustee”), as amended and supplemented (the “ProLogis
Indenture”).
A holder validly tendering ProLogis Notes for exchange will, by tendering those notes, be
deemed to have validly delivered its consent to the Proposed Amendments to the ProLogis Indenture,
as further described under “The Proposed Amendments.” If the Requisite Consents (as defined below)
of the holders of a majority in aggregate principal amount of the relevant series of ProLogis Notes
are not received, then AMB LP may, in its sole discretion, extend the Early Consent Date until the
Requisite Consents are received. If the Requisite Consents of the holders of a majority in
aggregate principal amount of the relevant series of ProLogis Notes issued under the ProLogis
Indenture, as described more fully herein, are received, then it is anticipated that ProLogis
and the Trustee will enter into a supplemental indenture with respect to the affected notes that
will, subject to the successful completion of the applicable exchange offer, have the effect of
eliminating certain covenants contained in the ProLogis Indenture that afford protection to holders
of ProLogis Notes, including substantially all of the restrictive covenants, certain affirmative
covenants, certain events of default and substantially all of the restrictions on the ability of
ProLogis to merge, consolidate or sell all or substantially all of its properties or assets.
AMB LP’s obligations to complete the exchange offers and consent solicitations are conditioned
upon, among other things, consummation of the Merger, listing of AMB LP’s existing 6.750% Notes due
2011 on the New York Stock Exchange (the “NYSE”) and receipt of valid consents sufficient to effect
the Proposed Amendments to the ProLogis Indenture. The Merger and related transactions and listing
of AMB LP’s existing 6.750% Notes due 2011 on the NYSE are not conditioned upon the commencement or
completion of the exchange offers or consent solicitations.
The board of directors of AMB and the board of trustees of ProLogis have each approved an
agreement to combine AMB and ProLogis through a merger of equals. The combined company resulting
from such transactions (the “combined company”) will be organized as an umbrella partnership real
estate investment trust, or “UPREIT.” AMB will be the surviving entity in the Merger and following
the consummation of the Merger will change its name to “ProLogis, Inc.”, which will be the name of
the combined company. Following the consummation of the Merger, AMB LP will continue in existence
with its name changed to “ProLogis, L.P.”
In the proposed Merger, ProLogis shareholders will receive 0.4464 of a newly issued share of
AMB common stock for each ProLogis common share that they own. This exchange ratio is fixed and
will not be adjusted to reflect stock price changes prior to the closing. AMB common stock and
ProLogis common shares are each traded on the NYSE, under the ticker symbols “AMB” and “PLD”,
respectively. Based on the closing price of AMB common stock on the NYSE of $32.86 on January 26,
2011, the last trading day before ProLogis common share and AMB common stock prices may have been
affected by market speculation regarding a potential transaction involving AMB and ProLogis, the
exchange ratio represented approximately $14.67 in AMB common stock for each ProLogis common share.
Based on the closing price of AMB common stock on the NYSE of $32.93 on January 28, 2011, the last
trading day before public announcement of the proposed transactions, the exchange ratio represented
approximately $14.70 in AMB common stock for each ProLogis common share. Based on the closing price
of AMB common stock on the NYSE of $36.36 on May 2, 2011, the latest practicable date before the
date of this prospectus, the exchange ratio represented approximately
$16.23 in AMB common stock
for each ProLogis common share. The value of the Merger consideration will fluctuate with changes
in the market price of AMB common stock.
The merger of AMB and ProLogis will be accomplished through a first-step merger of ProLogis
and an indirect wholly owned subsidiary of ProLogis and a second-step merger of a parent entity of
that subsidiary with AMB. ProLogis will continue its existence as a subsidiary of the combined
company and will remain the obligor on any ProLogis Notes which remain outstanding following the
Merger.
Upon completion of the transactions, AMB and ProLogis estimate that former AMB stockholders
will own approximately 40% of the common stock of the combined company and former ProLogis
shareholders will own approximately 60% of the common stock of the combined company.
The combination of AMB and ProLogis, which is a condition to the completion of the exchange
offers and consent solicitations, cannot be completed without the approval of both the AMB
stockholders and the ProLogis shareholders, including the approval by AMB stockholders of certain
amendments to the amended and restated bylaws of AMB (the “AMB bylaws”). Each of AMB and ProLogis
is holding a special meeting to vote on the proposals necessary to complete the Merger
transactions. The obligations of AMB and ProLogis to complete the Merger are subject to the
satisfaction or waiver of several conditions set forth in the merger agreement. AMB LP intends to
extend the Expiration Date if needed so that it will occur after the Merger is closed.
AMB LP plans to issue new AMB LP Notes promptly after the Expiration Date in exchange for
ProLogis Notes that are validly tendered and not withdrawn before the Expiration Date. The
ProLogis Notes are not, and the AMB LP Notes will not be, listed on any securities exchange.
This investment involves risks. Prior to participating in any of the exchange offers and
consenting to the Proposed Amendments to the ProLogis Indenture, please see the section entitled
“Risk Factors” beginning on page 59 of this prospectus for a discussion of the risks that you
should consider in connection with your investment in the AMB LP Notes.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
None of AMB, AMB LP or their subsidiaries, ProLogis or its subsidiaries, the exchange agent,
the information agent, the Trustee or the dealer managers makes any recommendation as to whether
holders of ProLogis Notes should exchange their notes in the applicable exchange offers or deliver
consents to the Proposed Amendments to the ProLogis Indenture.
The dealer managers for the exchange offers and solicitation agents for the consent solicitations
are :
Citi
RBS
The
date of this prospectus is May 9, 2011
TABLE OF CONTENTS
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i
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ii
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iii
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1
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59
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77
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104
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119
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156
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180
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271
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309
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F-1
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ABOUT THIS PROSPECTUS
The information contained in this prospectus is not complete and may be changed. You should
rely only on the information provided in or incorporated by reference in this prospectus, any
prospectus supplement or documents to which AMB LP otherwise refers you. AMB LP has not authorized
anyone else to provide you with different information. AMB LP is not making an offer of any
securities in any jurisdiction where the offer is not permitted. You should not assume that the
information in this prospectus, any prospectus supplement or any document incorporated by reference
is accurate as of any date other than the date of the document in which such information is
contained or such other date referred to in such document, regardless of the time of any sale or
issuance of a security.
This prospectus is part of a registration statement that AMB and AMB LP have filed with the
Securities and Exchange Commission (the “SEC”). You should read this prospectus and any prospectus
supplement together with the registration statement, the exhibits thereto and the additional
information described under the heading “Where You Can Find More Information.”
i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this prospectus contain
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). These forward-looking statements, which are based on current expectations,
estimates and projections about the industry and markets in which AMB and ProLogis operate and
beliefs of and assumptions made by AMB management and ProLogis management, involve uncertainties
that could significantly affect the financial results of AMB or ProLogis or the combined company.
Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”,
variations of such words and similar expressions are intended to identify such forward-looking
statements, which generally are not historical in nature. Such forward-looking statements include,
but are not limited to, statements about the benefits of the business combination transaction
involving AMB and ProLogis, including future financial and operating results, the combined
company’s plans, objectives, expectations and intentions. All statements that address operating
performance, events or developments that AMB and ProLogis expect or anticipate will occur in the
future — including statements relating to rent and occupancy growth, development activity and
changes in sales or contribution volume of developed properties, general conditions in the
geographic areas where AMB and ProLogis operate and the availability of capital in existing or new
property funds — are forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are difficult to predict.
Although AMB and ProLogis believe the expectations reflected in any forward-looking statements are
based on reasonable assumptions, AMB and ProLogis can give no assurance that AMB’s and ProLogis’
expectations will be attained and, therefore, actual outcomes and results may differ materially
from what is expressed or forecasted in such forward-looking statements. Some of the factors that
may affect outcomes and results include, but are not limited to, those set forth under “Risk
Factors” beginning on page 59 of this prospectus as well as the following:
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national, international, regional and local economic climates,
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changes in financial markets, interest rates and foreign currency exchange rates,
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increased or unanticipated competition for AMB’s and ProLogis’ properties,
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risks associated with acquisitions,
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maintenance of real estate investment trust (“REIT”) status,
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availability of financing and capital,
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changes in demand for developed properties,
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risks associated with achieving expected revenue synergies or cost savings,
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risks associated with the ability to consummate the Merger and the timing of the
closing of the Merger, and
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those additional risks and factors discussed in reports filed with the SEC by AMB
and ProLogis from time to time, including those discussed under the heading “Risk
Factors” in their respective most recently filed reports on Forms 10-K and 10-Q.
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Neither AMB nor ProLogis undertakes any duty to update any forward-looking statements
appearing in this document, except as may be required by applicable securities laws.
ii
WHERE YOU CAN FIND MORE INFORMATION
AMB, AMB LP and ProLogis file annual, quarterly and special reports, proxy statements and
other information with the SEC under the Exchange Act. You may read and copy any of this
information at the Public Reference Room of the SEC at 100 F Street, N.E., Room 1580, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference
Room. The SEC also maintains an Internet website that contains reports, proxy and information
statements, and other information regarding AMB, AMB LP and ProLogis, each of which files
electronically with the SEC. The address of that site is www.sec.gov.
Investors may also consult the websites of AMB and AMB LP or ProLogis for more information
concerning the exchange offers and consent solicitations or Merger. The website of AMB and AMB LP
is www.AMB.com. The website of ProLogis is www.ProLogis.com. Information included on these websites
is not incorporated by reference into this prospectus.
AMB and AMB LP have filed with the SEC a registration statement of which this prospectus forms
a part. The registration statement registers the new AMB LP Notes, the related AMB guarantees and
the shares of AMB common stock deliverable upon exchange of the AMB LP Exchangeable Notes. The
registration statement, including the attached exhibits and schedules, contains additional relevant
information about the AMB LP Notes, the related AMB guarantees and the shares of AMB common stock.
The rules and regulations of the SEC allow AMB and AMB LP to omit certain information included in
the registration statement from this prospectus.
In addition, the SEC allows AMB and AMB LP to disclose important information to you by
referring you to other documents filed separately with the SEC. This information is considered to
be a part of this prospectus, except for any information that is superseded by information included
directly in this prospectus.
This prospectus incorporates by reference the documents listed below that AMB (File No.
001-13545) and AMB LP (File No. 001-14245) have previously filed with the SEC; provided, however,
that AMB and AMB LP are not incorporating by reference, in each case, any documents, portions of
documents or information deemed to have been furnished and not filed in accordance with SEC rules.
They may contain important information about AMB and AMB LP, their financial condition or other
matters:
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Combined Annual Report of AMB and AMB LP on Form 10-K for the fiscal year ended
December 31, 2010, filed on February 18, 2011, as amended by the Combined Annual Report
on Form 10-K/A filed on March 10, 2011.
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AMB’s definitive proxy statement with respect to the 2011 Annual Meeting of
Stockholders filed on March 23, 2011 and additional proxy materials filed on April 26,
2011.
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Combined Current Reports of AMB and AMB LP on Form 8-K, filed on February 1, 2011
and January 31, 2011.
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Item 8.01 of the Current Reports of AMB on Form 8-K, filed on April 20, 2011 and
February 3, 2011.
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In addition, AMB and AMB LP incorporate by reference herein any future filings they make with
the SEC under Section 11, 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and prior to the Expiration Date. Such documents are considered to be a part of this
prospectus, effective as of the date such documents are filed. In the event of conflicting
information in these documents, the information in the latest filed document should be considered
correct.
You can obtain any of the documents listed above from the SEC, through the website of the SEC
at the address described above or from AMB or AMB LP by requesting them in writing or by telephone
at the following address:
iii
AMB Property Corporation
AMB Property, L.P.
Pier 1, Bay 1
San Francisco, California 94111
Attention: Investor Relations
Telephone: (415) 394-9000
These documents are available from AMB and AMB LP without charge, excluding any exhibits to
them unless the exhibit is specifically listed as an exhibit to the registration statement of which
this prospectus forms a part.
This prospectus also incorporates by reference the documents listed below that ProLogis has
previously filed with the SEC (File No. 001-12846); provided, however, that AMB and AMB LP are not
incorporating by reference, in each case, any documents, portion of documents or information deemed
to have been furnished and not filed in accordance with SEC rules. They contain important
information about ProLogis, its financial condition or other matters.
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Annual Report on Form 10-K for the year ended December 31, 2010, filed on February
28, 2011, as amended by the Annual Report on Form 10-K/A filed on March 28, 2011.
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Proxy Statement on Schedule 14A filed March 30, 2010.
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Current Reports on Form 8-K, filed April 26, 2011, March 3, 2011, February 4, 2011,
February 1, 2011 and January 31, 2011 (other than documents or portions of those
documents not deemed to be filed).
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In addition, AMB and AMB LP incorporate by reference herein any future filings ProLogis makes
with the SEC under Section 11, 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and prior to the Expiration Date. Such documents are considered to be a part of this
prospectus, effective as of the date such documents are filed. In the event of conflicting
information in these documents, the information in the latest filed document should be considered
correct.
You can obtain any of these documents from the SEC, through the website of the SEC at the
address described above, or ProLogis will provide you with copies of these documents, without
charge, upon written or oral request to:
ProLogis
4545 Airport Way
Denver, Colorado 80239
Attention: Investor Relations
Telephone: (800) 820-0181
If you are a noteholder of ProLogis and would like to request documents, please do so by May
9, 2011 or May 26, 2011 to receive them before the Early Consent Date or Expiration Date,
respectively. If you request any documents from AMB, AMB LP or ProLogis, AMB, AMB LP or ProLogis
will mail them to you by first-class mail or by another equally prompt means.
This document is a prospectus of AMB LP. None of AMB, AMB LP or ProLogis has authorized anyone
to give any information or make any representation about the Merger, the exchange offers, the
consent solicitations or AMB, AMB LP or ProLogis that is different from, or in addition to, what is
contained in this prospectus or in any of the materials that AMB, AMB LP or ProLogis has
incorporated by reference into this prospectus. Therefore, if anyone does give you information of
this sort, you should not rely on it. The information contained in this prospectus reads only as of
the date of this prospectus unless the information specifically indicates that another date
applies.
iv
SUMMARY
This summary highlights information contained elsewhere in this prospectus and may not contain
all the information that is important to you. AMB and AMB LP urge you to read carefully the
remainder of this prospectus and the other documents to which AMB and AMB LP have referred you
because this section does not provide all the information that might be important to you with
respect to the Merger, the exchange offers, the consent solicitations and the related matters. See
also “Where You Can Find More Information.”
The AMB LP Notes will be solely the obligations of AMB LP and will be unconditionally
guaranteed by AMB. The AMB LP Exchangeable Notes (as defined below) will be exchangeable
into cash, AMB common stock or a combination of cash and AMB common stock, at AMB LP’s election.
Information About AMB and ProLogis
AMB Property Corporation
AMB, a Maryland corporation, is a self-administered and self-managed REIT for U.S. federal
income tax purposes. AMB, together with its subsidiaries, is a global owner, operator and developer
of industrial real estate, focused on major hub and gateway distribution markets in the Americas,
Europe and Asia. As of December 31, 2010, AMB owned, or had investments in, on a consolidated basis
or through unconsolidated joint ventures, properties and development projects totaling
approximately 159.6 million square feet (14.8 million square meters) in 49 markets within 15
countries.
The business of AMB is operated primarily through its operating partnership, AMB LP. As of
December 31, 2010, AMB owned an approximate 98.2% general partnership interest in AMB LP, excluding
preferred units, and, as its sole general partner, AMB has the full, exclusive and complete
responsibility for and discretion in the day-to-day management and control of AMB LP. AMB LP holds
substantially all the assets of AMB and directly or indirectly holds the ownership interests in
AMB’s joint ventures.
The principal offices of AMB are located at Pier 1, Bay 1, San Francisco, California 94111 and
its telephone number is (415) 394-9000. AMB common stock is listed on the NYSE, trading under the
symbol “AMB.”
Additional information about AMB and its subsidiaries is included in documents incorporated by
reference into this prospectus and under “Where You Can Find More Information.”
ProLogis
ProLogis, a Maryland real estate investment trust that has elected to be taxed as a REIT under
the Code (as defined below), is the leading global provider of distribution facilities, with more
than 435 million square feet (40 million square meters) of industrial space in markets across North
America, Europe and Asia. ProLogis leases its industrial facilities to more than 4,400 customers,
including manufacturers, retailers, transportation companies, third-party logistics providers and
other enterprises with large-scale distribution needs. ProLogis owns and manages a global portfolio
of properties in 19 countries, comprising over $31 billion in assets. New Pumpkin Inc., a Maryland
corporation (“New Pumpkin”), Upper Pumpkin LLC, a Delaware limited liability company (“Upper
Pumpkin”), and Pumpkin LLC, a Delaware limited liability company (“Pumpkin LLC”), are direct or
indirect wholly owned subsidiaries of ProLogis and were formed for the purpose of effecting the
Merger.
The principal offices of ProLogis are located at 4545 Airport Way, Denver, Colorado 80239 and
its telephone number is (303) 567-5000. ProLogis common shares of beneficial interest (“ProLogis
common shares”) are listed on the NYSE, trading under the symbol “PLD.”
Additional information about ProLogis and its subsidiaries is included in documents
incorporated by reference into this prospectus and under “Where You Can Find More Information.”
1
The Combined Company
The combined company will be named “ProLogis, Inc.” and will be a Maryland corporation that is
a self- administered and self-managed REIT for U.S. federal income tax purposes. The combined
company is expected to be a leading global owner, operator and developer of industrial real estate.
The combined company is expected to have a pro forma equity market capitalization of approximately
$14 billion, a total market capitalization in excess $24 billion, and gross assets owned and
managed of approximately $46 billion. The combined company will own or manage approximately 600
million square feet (approximately 55 million square meters) of modern distribution facilities
located in key gateway markets and logistics corridors in 22 countries.
References to the “combined company” in this document shall be to AMB Property Corporation
after the effective time of the Merger, which will be renamed “ProLogis, Inc.”
The business of the combined company will be operated through an operating partnership,
ProLogis, L.P. (which will be the renamed AMB LP, and will be the obligor under the AMB LP Notes).
On a pro forma basis giving effect to the Merger, the combined company will own an approximate
99.3% general partnership interest in the operating partnership, excluding preferred units, and, as
its sole general partner, the combined company will have the full, exclusive and complete
responsibility for and discretion in the day-to-day management and control of the operating
partnership.
The corporate headquarters of the combined company will be located at Pier 1, Bay 1, San
Francisco, California 94111 and its telephone number will be (415) 394-9000. The operational
headquarters of the combined company will be located at 4545 Airport Way, Denver, Colorado 80239
and its telephone number will be (303) 567-5000.
The common stock of the combined company will be listed on the NYSE, trading under the symbol
“PLD.”
The Merger
The Merger Agreement
AMB and ProLogis have agreed to a merger of equals under the terms of an Agreement and Plan of
Merger, dated as of January 30, 2011 and amended as of March 9, 2011 (the “merger agreement”), by
and among AMB LP, ProLogis, Upper Pumpkin, New Pumpkin and Pumpkin LLC. The AMB board of directors
and the ProLogis board of trustees have both unanimously approved the combination of AMB and
ProLogis in what the parties intend to be a “merger of equals.”
Form of the Merger
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Pursuant to the merger agreement, AMB and ProLogis will combine through a multi-step process:
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first, in the “ProLogis merger”, ProLogis will be reorganized into an UPREIT by
merging Pumpkin LLC with and into ProLogis, with ProLogis continuing as the
surviving entity and as a wholly owned subsidiary of Upper Pumpkin and an indirect
wholly owned subsidiary of New Pumpkin;
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following the ProLogis merger, in the “Topco merger”, New Pumpkin will be merged
with and into AMB, with AMB continuing as the surviving corporation under the name
of “ProLogis, Inc.” (the ProLogis merger together with the Topco merger, the
“Merger”); and
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following the Topco merger, the combined company will contribute all of the
outstanding equity interests of Upper Pumpkin to AMB LP, which will be renamed
“ProLogis, L.P.”, in exchange for the “issuance” of partnership units to the
combined company.
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ProLogis will continue its existence as a subsidiary of the combined company. The shares
of common stock of the combined company will be listed and traded on the NYSE under the symbol
“PLD.”
2
AMB and ProLogis expect that the former shareholders of ProLogis and the former
stockholders of AMB will own approximately 60% and 40%, respectively, of the outstanding common
stock of the combined company.
Merger Consideration
Upon completion of the Merger, holders of ProLogis common shares will receive 0.4464 of a
newly issued share of AMB common stock for each ProLogis common share they own at the effective
time of the Topco merger with cash paid in lieu of fractional shares. The exchange ratio is fixed
and will not be adjusted for changes in the market value of ProLogis common shares or AMB common
stock. Because of this, the implied value of the consideration to ProLogis shareholders will
fluctuate between now and the completion of the Merger. Based on the closing price of AMB common
stock on the NYSE of $32.86 on January 26, 2011, the last trading day before ProLogis common share
and AMB common stock prices may have been affected by market speculation regarding a potential
transaction involving AMB and ProLogis, the exchange ratio represented approximately $14.67 in AMB
common stock for each ProLogis common share. Based on the closing price of AMB common stock on the
NYSE of $32.93 on January 28, 2011, the last trading day before public announcement of the Merger,
the exchange ratio represented approximately $14.70 in AMB common stock for each ProLogis common
share. Based on the closing price of AMB common stock on the NYSE of
$36.36 on May 2, 2011, the
latest practicable date before the date of this prospectus, the exchange ratio represented
approximately $16.23 in AMB common stock for each ProLogis common share. See “Comparative Stock
Prices and Dividends.”
The following table presents trading information for AMB common stock and ProLogis common
shares on January 26, 2011, the last trading day before AMB common stock and ProLogis common share
prices may have been affected by market speculation regarding a potential transaction involving AMB
and ProLogis, January 28, 2011, the last trading day before public announcement of the Merger, and
May 2, 2011, the latest practicable date before the date of this prospectus. Equivalent per
share prices for ProLogis common shares, adjusted by the exchange ratio of 0.4464, are also
provided for each of these dates.
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AMB Common Stock
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ProLogis Common
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Equivalent Per Share
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(Close)
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Shares (Close)
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Price
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January 26, 2011
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$
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32.86
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$
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14.70
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$
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14.67
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January 28, 2011
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$
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32.93
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$
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15.21
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$
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14.70
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May 2, 2011
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$
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36.36
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$
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16.29
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$
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16.23
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Directors and Management Following the Merger
Following the consummation of the Merger, the board of directors of the combined company will
have eleven members, consisting of Mr. Hamid R. Moghadam, Mr. Walter C. Rakowich, Mr. George L.
Fotiades, Ms. Christine N. Garvey, Ms. Lydia H. Kennard, Mr. J. Michael Losh, Mr. Irving F. Lyons,
III, Mr. Jeffrey L. Skelton, Mr. D. Michael Steuert, Mr. Carl B. Webb and Mr. William D. Zollars.
Mr. Moghadam will become chairman of the board of directors of the combined company, and Mr.
Rakowich will become the chairman of the executive committee of the board of directors of the
combined company. Mr. Lyons will become the lead independent director of the combined company.
Following the Merger, the senior leadership team of the combined company will include Mr.
Moghadam and Mr. Rakowich as co-chief executive officers, Mr. William E. Sullivan as chief
financial officer, Mr. Thomas S. Olinger as chief integration officer, Mr. Michael S. Curless as
chief investment officer, Mr. Guy F. Jaquier as CEO, Private Capital, Mr. Gary E. Anderson as CEO,
Europe & Asia, Mr. Eugene F. Reilly as CEO, The Americas, Mr. Edward S. Nekritz as chief legal
officer and general counsel and Ms. Nancy Hemmenway as chief human resources officer.
See “The Merger — Directors and Management Following the Merger” for additional information.
3
Expected Timing of the Merger
AMB and ProLogis currently expect to complete the Merger in the second quarter of 2011,
subject to receipt of required shareholder and regulatory approvals and the satisfaction or waiver
of the other closing conditions summarized below. It is possible that factors outside the control
of AMB and ProLogis could result in the Merger being completed at a later time, or not at all. AMB
and ProLogis hope to complete the Merger as soon as reasonably practicable following the receipt of
all required approvals.
Regulatory Approvals Required for the Merger
Competition approvals for the Merger were sought and obtained in Canada, Germany and Mexico.
At any time before or after the combination, the Antitrust Division of the United States Department
of Justice and the Federal Trade Commission, or a United States state attorney general, could take
action under the antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the Merger or seeking divestiture of assets of AMB or ProLogis or their
subsidiaries. Private parties may also bring legal actions under the antitrust laws under certain
circumstances. While AMB and ProLogis do not expect any such action to be taken, they can give no
assurance that a challenge to the Merger will not be made or, if made, would be unsuccessful. See
“The Merger — Regulatory Approvals Required for the Merger.”
Conditions to Completion of the Merger
As more fully described in this prospectus and in the merger agreement, the completion of the
Merger depends on a number of conditions being satisfied or, where legally permissible, waived.
These conditions include, among others:
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receipt of the requisite approvals of AMB stockholders and ProLogis shareholders;
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the approval for listing of shares of AMB common stock, AMB Series R preferred stock
and AMB Series S preferred stock to be issued or reserved for issuance in connection
with the Merger on the NYSE;
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the SEC having declared effective the Merger registration statement of AMB on Form
S-4;
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the absence of any judgment or other legal prohibition or binding order of any court
or other governmental entity prohibiting the Merger;
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the receipt of regulatory approvals required in connection with the Merger;
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the correctness of all representations and warranties made by the parties in the
merger agreement and performance by the parties of their obligations under the merger
agreement (subject in each case to certain materiality standards);
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the receipt of a legal opinion from tax counsel of ProLogis regarding the
qualification of the ProLogis merger as a reorganization for U.S. federal income tax
purposes; and
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the receipt of legal opinions from the respective tax counsels of AMB and ProLogis
regarding the qualification of the Topco merger as a reorganization for U.S. federal
income tax purposes and the qualification of each of the parties as a REIT.
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AMB and ProLogis cannot be certain when, or if, the conditions to the Merger will be satisfied
or waived, or that the Merger will be completed.
4
Termination of the Merger Agreement
The merger agreement may be terminated prior to the effective time of the Merger, whether
before or after the required approvals of the AMB stockholders and ProLogis shareholders are
obtained:
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by mutual written consent of AMB and ProLogis;
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by either AMB or ProLogis, if the Merger is not consummated by September 30, 2011;
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by either AMB or ProLogis, if a court or other governmental entity issues a final
and nonappealable order prohibiting the Merger;
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by either AMB or ProLogis, if the required approvals of either the AMB stockholders
or the ProLogis shareholders are not obtained;
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by either AMB or ProLogis, if there is a breach of the representations or covenants
of the other party that would result in the failure of the related closing condition to
be satisfied, and such breach is not cured or is not curable by September 30, 2011;
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by either AMB or ProLogis, if the board of the other party changes its
recommendation in favor of the Topco merger, in the case of the board of AMB, or the
ProLogis merger or Topco merger in the case of the board of ProLogis;
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by either AMB or ProLogis, if the special meeting of the other party is not called
and held as required by the merger agreement; or
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by either AMB or ProLogis, upon a material breach of the other party’s
non-solicitation obligations under the merger agreement.
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Litigation Relating to the Merger
ProLogis, the members of the ProLogis board of trustees, New Pumpkin, Upper Pumpkin, Pumpkin
LLC, AMB and AMP LP have each been named as defendants in lawsuits brought by holders of ProLogis
common shares challenging the Merger and seeking, among other things, to enjoin the Merger, direct
defendants to exercise their fiduciary duties, rescind the merger agreement and award the
plaintiffs damages and expenses. The parties to the lawsuits brought in Maryland have executed a
memorandum of understanding that embodies their agreement in principle on the structure of a
proposed settlement, and the parties to the lawsuits brought in Colorado have also reached an
agreement in principle on a proposed settlement. ProLogis and AMB believe that the claims are
without merit and, absent court approval of the proposed settlement, intend to vigorously defend
against these actions. See “The Merger — Litigation Relating to the Merger” for more information
about litigation related to the Merger.
The consummation of the exchange offers and consent solicitations are not a condition to the
closing of the Merger.
5
Questions and Answers about the Exchange Offers and Consent Solicitations
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Q: Why is AMB LP making the exchange offers and consent solicitations on
behalf of the combined company?
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A:
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AMB LP is conducting the exchange offers in order to simplify the
capital structure and reporting obligations of the combined company
and its consolidated subsidiaries following the completion of the
Merger. AMB LP is commencing the exchange offers prior to the
completion of the Merger in order to achieve these benefits as soon as
practicable after consummation of the Merger.
The principal purpose of the consent solicitations on behalf of the
combined company and the Proposed Amendments to the ProLogis Indenture
is to eliminate certain covenants contained in the ProLogis Indenture
that afford protection to holders of ProLogis Notes, including
substantially all of the restrictive covenants, certain affirmative
covenants, certain events of default and substantially all of the
restrictions on the ability of ProLogis to merge, consolidate or sell
all or substantially all of its properties or assets.
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Q:
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What will I receive if I tender my ProLogis Notes in the applicable
exchange offers and give my consent in the consent solicitations?
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A:
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Subject to certain conditions described below, for each ProLogis Note
validly tendered (and concurrent consent to the Proposed Amendments
delivered) and not validly withdrawn prior to the Expiration Date and
accepted for exchange, you will be eligible to receive an AMB LP Note
(as designated in the table below) in a principal amount equal to the
applicable exchange price of such tendered ProLogis Note that will
have substantially the same terms, including interest rate, interest
payment dates, redemption terms, maturity and, if applicable, exchange
terms (other than the applicable initial exchange rates, dividend
threshold amounts, fundamental change make-whole amounts and, in the
case of the AMB LP 3.250% 2015 Exchangeable Notes, the exchange
consideration), as the corresponding ProLogis Note (prior to the
Proposed Amendments) for which it was exchanged. The AMB LP Notes
will be issued by AMB LP and will be fully and unconditionally
guaranteed by AMB, as compared with the ProLogis Notes, which were
issued by ProLogis and are not guaranteed. In the case of each new
AMB LP 9.340% 2015 Note and AMB LP 8.650% 2016 Note issued in exchange
for a ProLogis 9.340% 2015 Note and a ProLogis 8.650% 2016 Note,
respectively, the mandatory principal repayment schedule will be
revised from that contained in the corresponding ProLogis Note to
reflect the fact that, because previous mandatory principal repayments
were not, and with respect to the principal payment to be made on
May 15, 2011 with respect to the ProLogis 8.650% 2016 Notes is
not expected to be, applied in accordance with their respective terms with
respect to the corresponding ProLogis Note, the outstanding principal
amount of each currently outstanding ProLogis 9.340% 2015 Note and
ProLogis 8.650% 2016 Note is, and the AMB LP 9.340% 2015 Note and AMB
LP 8.650% 2016 Note to be issued in exchange thereof will be, $1,000.
For more information, see “The Exchange Offers and Consent
Solicitations — ProLogis Amortizing Notes.” The AMB LP 3.250% 2015
Exchangeable Notes will be exchangeable into AMB common stock, cash or
a combination of the two, at the option of AMB LP, as compared with
the ProLogis 3.250% 2015 Convertible Notes, which are convertible only
into ProLogis common shares and will be exchangeable only into AMB
common stock after the Merger. For each ProLogis Non-Convertible Note
validly tendered (and not validly withdrawn), the holder will receive
(i) an exchange price equal to 100% of its principal amount plus the
Non-Convertible Notes Consent Fee if it is validly tendered (and not
validly withdrawn) prior to the Early Consent Date, and (ii) an
exchange price equal to 97% of its principal amount if it is validly
tendered (and not validly withdrawn) after the Early Consent Date and
on or prior to the Expiration Date. For each ProLogis Convertible
Note validly tendered (and not validly withdrawn), the holder will
receive (i) an exchange price equal to 100% of its principal amount
plus the Convertible Notes Consent Fee if it is validly tendered (and
not validly withdrawn) prior to the Early Consent Date, and (ii) an
exchange price equal to 97% of its principal amount if it is validly
tendered (and not validly withdrawn) after the Early Consent Date and
on or prior to the Expiration Date. If you validly tender ProLogis
Notes prior to the Early Consent Date, you may validly withdraw your
tender and the related consent prior to the Early Consent Date, but
you will not receive the applicable cash consent fee unless you
validly re-tender prior to the Early Consent Date. If you validly
tender ProLogis Notes prior to the Early Consent Date, you may validly
withdraw your tender after the Early Consent Date and before the
Expiration Date, but you may not withdraw the related consent and you
will receive the applicable cash consent fee. If you validly tender
ProLogis Notes after the Early Consent Date and before
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the Expiration Date, you will not receive the applicable cash consent fee and you may
withdraw your tender and the related consent at any time prior to the Expiration Date.
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Notwithstanding the foregoing, the AMB LP Notes will be issued only in denominations of
$1,000 and whole multiples of $1,000 in excess thereof. See
“Description of the AMB LP Non-Exchangeable Notes — General”, “Description of the AMB LP
Contingent Exchangeable Notes — General” and “Description of the AMB LP 3.250% 2015 Notes
— General.” The AMB LP 7.810% 2015 Notes will be issued only in denominations of $1,000
original principal amount and whole multiples of $1,000 in excess thereof. However, for
each $1,000 original principal amount of AMB LP 7.810% 2015 Notes, holders will only be
entitled to receive repayment of principal in an amount equal to the current principal
amount outstanding under such notes, which is the amount of the unpaid principal at the time
of settlement. The current principal amount of each AMB LP 7.810% 2015 Note will be $650 at
the expected time of settlement. If AMB LP would otherwise be required to issue an AMB LP
Note in a denomination other than $1,000 or a whole multiple of
$1,000, AMB LP will, in lieu of such issuance:
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issue an AMB LP Note in a principal amount that has been rounded down to the nearest
whole multiple of $1,000; and
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pay cash, which AMB LP refers to as “cash exchange consideration”, in an amount
equal to:
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the difference between (i) the principal amount calculated by
the applicable exchange price formula and (ii) the principal amount of the AMB
LP Note actually issued in accordance with this paragraph;
plus
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accrued and unpaid interest on the principal amount
representing such difference to the date of the exchange.
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Tenders of ProLogis 7.810% 2015 Notes will be accepted only in original principal amounts
(i.e., without giving effect to principal repayments already made) equal to $1,000 or
integral multiples thereof. The applicable exchange price and consent fee will be
calculated only on current principal amounts outstanding as of the settlement date. For
illustrations on how the exchange price and consent fee will be calculated, see “The
Exchange Offers and Consent Solicitations — ProLogis Amortizing.”
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The AMB LP Notes will be issued under and governed by the terms of a new AMB LP Indenture
described under “The Exchange Offers and Consent Solicitations.” Except as otherwise set
forth above, instead of receiving a payment for accrued interest on ProLogis Notes that you
exchange, the AMB LP Notes you receive in exchange for those ProLogis Notes will accrue
interest from the most recent date to which interest has been paid on those ProLogis Notes.
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As a holder of ProLogis Notes, you may give your consent to the Proposed Amendments to the
ProLogis Indenture only by tendering your ProLogis Notes in the applicable exchange offer.
You may not withhold your consent to the Proposed Amendments when you tender your ProLogis
Notes in the applicable exchange offer.
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As described in the table below, AMB LP is offering to exchange all validly tendered and
accepted notes that were issued by ProLogis with notes to be issued by AMB LP and
unconditionally guaranteed by AMB.
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7
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Series of Notes Issued by ProLogis to be Exchanged
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Series of Notes to be Issued by AMB LP (1)
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5.500% Notes due April 1, 2012
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5.500% Notes due April 1, 2012
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(the “ProLogis 5.500% 2012 Notes”)
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(the “AMB LP 5.500% 2012 Notes”)
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5.500% Notes due March 1, 2013
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5.500% Notes due March 1, 2013
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(the “ProLogis 5.500% 2013 Notes”)
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(the “AMB LP 5.500% 2013 Notes”)
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7.625% Notes due August 15, 2014
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7.625% Notes due August 15, 2014
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(the “ProLogis 7.625% 2014 Notes”)
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(the “AMB LP 7.625% 2014 Notes”)
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7.810% Notes due February 1, 2015
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7.810% Notes due February 1, 2015
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(the “ProLogis 7.810% 2015 Notes”)
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(the “AMB LP 7.810% 2015 Notes”)
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9.340% Notes due March 1, 2015
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9.340% Notes due March 1, 2015
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(the “ProLogis 9.340% 2015 Notes”)
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(the “AMB LP 9.340% 2015 Notes”)
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5.625% Notes due November 15, 2015
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5.625% Notes due November 15, 2015
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(the “ProLogis 5.625% 2015 Notes”)
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(the “AMB LP 5.625% 2015 Notes”)
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5.750% Notes due April 1, 2016
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5.750% Notes due April 1, 2016
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(the “ProLogis 5.750% 2016 Notes”)
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(the “AMB LP 5.750% 2016 Notes”)
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8.650% Notes due May 15, 2016
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8.650% Notes due May 15, 2016
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(the “ProLogis 8.650% 2016 Notes”)
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(the “AMB LP 8.650% 2016 Notes”)
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5.625% Notes due November 15, 2016
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5.625% Notes due November 15, 2016
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(the “ProLogis 5.625% 2016 Notes”)
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(the “AMB LP 5.625% 2016 Notes”)
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6.250% Notes due March 15, 2017
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6.250% Notes due March 15, 2017
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(the “ProLogis 6.250% 2017 Notes”)
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(the “AMB LP 6.250% 2017 Notes”)
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7.625% Notes due July 1, 2017
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7.625% Notes due July 1, 2017
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(the “ProLogis 7.625% 2017 Notes”)
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(the “AMB LP 7.625% 2017 Notes”)
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6.625% Notes due May 15, 2018
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6.625% Notes due May 15, 2018
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(the “ProLogis 6.625% 2018 Notes”)
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(the “AMB LP 6.625% 2018 Notes”)
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7.375% Notes due October 30, 2019
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7.375% Notes due October 30, 2019
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(the “ProLogis 7.375% 2019 Notes”)
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(the “AMB LP 7.375% 2019 Notes”)
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6.875% Notes due March 15, 2020
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6.875% Notes due March 15, 2020
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(the “ProLogis 6.875% 2020 Notes” and, together with the ProLogis
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(the “AMB LP 6.875% 2020 Notes” and, together with the
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5.500% 2012 Notes, ProLogis 5.500% 2013 Notes, ProLogis 7.625%
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AMB LP 5.500% 2012 Notes, AMB LP 5.500% 2013 Notes,
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2014 Notes, ProLogis 7.810% 2015 Notes, ProLogis 9.340% 2015
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AMB LP 7.625% 2014 Notes, AMB LP 7.810% 2015 Notes,
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Notes, ProLogis 5.625% 2015 Notes, ProLogis 5.750% 2016 Notes,
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AMB LP 9.340% 2015 Notes, AMB LP 5.625% 2015 Notes,
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ProLogis 8.650% 2016 Notes, ProLogis 5.625% 2016 Notes,
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AMB LP 5.750% 2016 Notes, AMB LP 8.650% 2016 Notes,
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ProLogis 6.250% 2017 Notes, ProLogis 7.625% 2017 Notes,
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AMB LP 5.625% 2016 Notes, AMB LP 6.250% 2017 Notes,
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ProLogis 6.625% 2018 Notes and ProLogis 7.375% 2019 Notes, the
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AMB LP 7.625% 2017 Notes, AMB LP 6.625% 2018 Notes
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“ProLogis Non-Convertible Notes” or singularly, a “ProLogis Non-
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and AMB LP 7.375% 2019 Notes, the “AMB LP Non-
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Convertible Note”)
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Exchangeable Notes” or singularly, an “AMB LP Non-
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Exchangeable Note”)
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3.250% Convertible Senior Notes due March 15, 2015
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3.250% Exchangeable Senior Notes due March 15, 2015
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(the “ProLogis 3.250% 2015 Convertible Notes”)
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(the “AMB LP 3.250% 2015 Exchangeable Notes”)
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2.250% Convertible Senior Notes due April 1, 2037
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2.250% Exchangeable Senior Notes due April 1, 2037
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(the “ProLogis 2.250% 2037 Convertible Notes”)
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(the “AMB LP 2.250% 2037 Exchangeable Notes”)
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1.875% Convertible Senior Notes due November 15, 2037
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1.875% Exchangeable Senior Notes due November 15, 2037
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(the “ProLogis 1.875% 2037 Convertible Notes”)
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(the “AMB LP 1.875% 2037 Exchangeable Notes”)
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2.625% Convertible Senior Notes due May 15, 2038
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2.625% Exchangeable Senior Notes due May 15, 2038
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(the “ProLogis 2.625% 2038 Convertible Notes” and, together with
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(the “AMB LP 2.625% 2038 Exchangeable Notes” and,
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the ProLogis 2.250% 2037 Convertible Notes and ProLogis 1.875%
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together with the AMB LP 2.250% 2037 Exchangeable Notes
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2037 Convertible Notes, the “ProLogis Contingent Convertible
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and AMB LP 1.875% 2037 Exchangeable Notes, the “AMB LP
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Notes” or singularly, a “ProLogis Contingent Convertible Note” and,
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Contingent Exchangeable Notes” or singularly, an “AMB LP
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together with the ProLogis 3.250% 2015 Convertible Notes, the
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Contingent Exchangeable Note” and, together with the AMB
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“ProLogis Convertible Notes” or singularly, a “ProLogis Convertible
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LP 3.250% 2015 Exchangeable Notes, the “AMB LP
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Note” and, together with the ProLogis Non-Convertible Notes, the
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Exchangeable Notes” or singularly, an “AMB LP
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“ProLogis Notes” or singularly, a “ProLogis Note”)
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Exchangeable Note” and, together with the AMB LP Non-
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Exchangeable Notes, the “AMB LP Notes” or singularly, an
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“AMB LP Note”)
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(1)
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The AMB LP Notes will be issued by AMB LP and will be fully and unconditionally guaranteed by
its parent entity and sole general partner, AMB.
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8
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Q:
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What are the consequences of not consenting in the consent solicitations by failing to tender prior to
the Early Consent Date or Expiration Date, as applicable?
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A:
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Holders that fail to tender their ProLogis Non-Convertible Notes (and thereby fail to deliver valid
and unrevoked consents) prior to the Early Consent Date but who do so on or prior to the Expiration Date
will receive an exchange price equal to 97% of the aggregate principal amount of such tendered notes,
rather than 100% of such amount, and will not receive the Non-Convertible Notes Consent Fee. Holders that
fail to tender their ProLogis Convertible Notes (and thereby fail to deliver valid and unrevoked
consents) prior to the Early Consent Date but who do so on or prior to the Expiration Date will receive
an exchange price equal to 97% of the aggregate principal amount of such tendered notes, rather than 100%
of such amount, and will not receive the Convertible Notes Consent Fee. Holders that validly tender
ProLogis Notes prior to the Early Consent Date may validly withdraw their tender and the related consent
prior to the Early Consent Date, but will not receive the applicable cash consent fee unless they validly
re-tender prior to the Early Consent Date. Holders that validly tender ProLogis Notes prior to the Early
Consent Date may validly withdraw their tender after the Early Consent Date and before the Expiration
Date, but may not withdraw the related consent and will receive the applicable cash consent fee. Holders
that tender ProLogis Notes after the Early Consent Date and before the Expiration Date will not receive
the applicable cash consent fee and may withdraw their tender and the related consent at any time prior
to the Expiration Date.
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Q:
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What are the consequences of not tendering in the applicable exchange offers?
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A:
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If the Proposed Amendments to the ProLogis Indenture have been adopted, the amendments will apply to
the applicable ProLogis Notes governed by such indenture that are not validly tendered or not accepted by
AMB LP in the applicable exchange offers. Thereafter, all such ProLogis Notes will be governed by the
ProLogis Indenture as amended by the Proposed Amendments, which will have less restrictive terms and
afford reduced protections to the holders of such securities compared to those currently in the ProLogis
Indenture. See “Risk Factors — Risks Related to the Exchange Offers and Consent Solicitations — The
Proposed Amendments to the ProLogis Indenture will afford reduced protection to remaining holders of
ProLogis Notes.”
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If the Requisite Consents (as defined below) are not received and the Proposed Amendments to the ProLogis
Indenture are therefore not adopted, all of the ProLogis Notes will be governed by the existing ProLogis
Indenture as amended by the Eleventh Supplemental Indenture and the Twelfth Supplemental Indenture. The
obligor on the ProLogis Notes will continue to be ProLogis, which will continue its existence after the
Merger as a wholly owned subsidiary of the combined company, rather than as an independent public
company. Claims of holders of the ProLogis Notes under such ProLogis Notes, where applicable, will be
permitted to be made against assets of ProLogis, in accordance with the terms of the ProLogis Indenture,
and may not be made with respect to other assets of the combined company.
Additionally, after the consummation of the Merger, whether or not the Requisite Consents are received,
ProLogis Convertible Notes not validly tendered or not accepted by AMB LP in the applicable exchange
offers will be exchangeable for AMB common stock and will no longer be convertible into ProLogis common
shares.
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|
Q:
|
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How do the ProLogis Notes differ from the AMB LP Notes to be issued in the applicable exchange offers?
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A:
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The terms of each new series of AMB LP Notes will be substantially the same as the terms, including
interest rate, interest payment dates, redemption terms, maturity and, if applicable, exchange terms
(other than the applicable initial exchange rates, dividend threshold amounts, fundamental change
make-whole amounts and, in the case of the AMB LP 3.250% 2015 Exchangeable Notes, the exchange
consideration) of the corresponding series of outstanding ProLogis Notes (prior to the Proposed
Amendments) for which they are being offered in exchange. However, the AMB LP Notes will be guaranteed
by AMB LP’s parent entity and sole general partner, AMB, as compared with the ProLogis Notes, which were
issued by ProLogis and are not guaranteed. In the case of each new AMB LP 9.340% 2015 Note and AMB LP
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9
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8.650% 2016 Note issued in exchange for a ProLogis 9.340% 2015 Note and a ProLogis 8.650% 2016 Note,
respectively, the mandatory principal repayment schedule will be revised from that contained in the
corresponding ProLogis Note to reflect the fact that, because previous mandatory principal repayments
were not,
and with respect to the principal payment to be made on May 15,
2011 with respect to the ProLogis 8.650% 2016 Notes is not
expected to be, applied in accordance with their respective terms with respect to the corresponding ProLogis
Note, the outstanding principal amount of each currently outstanding ProLogis 9.340% 2015 Note and
ProLogis 8.650% 2016 Note is, and the AMB LP 9.340% 2015 Note and AMB LP 8.650% 2016 Note to be issued in
exchange thereof will be, $1,000. For more information, see “The Exchange Offers and Consent
Solicitations — ProLogis Amortizing Notes.” Additionally, the applicable initial exchange rates,
dividend threshold amounts and fundamental change make-whole amounts for the AMB LP Exchangeable Notes
will be adjusted relative to the conversion rate of the ProLogis Convertible Notes to account for
differences in the value of shares of AMB common stock and ProLogis common shares. In addition, what the
holder will receive upon exchange of the AMB LP Exchangeable Notes will change and the AMB LP 3.250% 2015
Exchangeable Notes will be exchangeable under certain circumstances into AMB common stock, cash or a
combination of the two, at the option of AMB LP, as compared with the ProLogis 3.250% 2015 Convertible
Notes, which are convertible only into ProLogis common shares and will be exchangeable only into AMB
common stock after the Merger. The ProLogis Indenture, without taking into effect the adoption of the
Proposed Amendments, and the new AMB LP Indenture will be substantially the same, except that, among
other things:
|
|
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•
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the new AMB LP Indenture will include the guarantees by AMB,
|
|
|
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•
|
|
the new AMB LP Indenture will not have a restriction preventing incurrence of
additional unsecured debt by AMB LP’s subsidiaries,
|
|
|
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|
•
|
|
the definition of debt will be revised to limit the amount of secured debt to
include the lesser of the amount of secured debt or the fair market value of the
property that secures such debt and to include letters of credit only to the extent
called,
|
|
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•
|
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the financial reporting obligations will be revised to include AMB,
|
|
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|
•
|
|
the AMB LP Exchangeable Notes will be exchangeable into AMB common stock and no
longer convertible into ProLogis common shares,
|
|
|
|
|
•
|
|
the applicable initial exchange rates, dividend threshold amounts and
fundamental change make-whole amounts of the AMB LP Exchangeable Notes will change,
and
|
|
|
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|
•
|
|
the AMB LP 3.250% 2015 Exchangeable Notes will be exchangeable into AMB common
stock, cash or a combination of the two, at the option of AMB LP.
|
|
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|
Additionally, after the consummation of the Merger, whether or not the
Requisite Consents are received, ProLogis Convertible Notes not
validly tendered or not accepted by AMB LP in the applicable exchange
offers will be exchangeable for AMB common stock and will no longer be
convertible into ProLogis common shares.
|
|
|
|
Q:
|
|
How will the ProLogis Notes differ if the Proposed Amendments to the
ProLogis Indenture are adopted?
|
|
|
|
A:
|
|
After giving effect to the Merger, the outstanding ProLogis Notes that
are not validly tendered or not accepted by AMB LP will continue to be
governed by the ProLogis Indenture. The Proposed Amendments to the
existing ProLogis Indenture will:
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|
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(i)
|
|
delete in their entirety Section 501(5), which addresses cross-acceleration,
and Section 501(6), which addresses judgment default of the Base ProLogis Indenture and
certain related cross-references and defined terms (collectively, the “Original Events
of Default Amendments”);
|
10
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(ii)
|
|
delete in their entirety the provisions addressing conditions to mergers,
sales, leases and conveyances set forth in Article Eight (Consolidation, Merger, Sale,
Lease or Conveyance) of the Base ProLogis Indenture and certain related
cross-references and defined terms;
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|
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|
(iii)
|
|
delete in its entirety Section 1006 (Maintenance of Properties) of the Base
ProLogis Indenture and certain related cross-references and defined terms
(collectively, the “Maintenance of Properties Amendments”);
|
|
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|
|
(iv)
|
|
delete in its entirety Section 1007 (Insurance) of the Base ProLogis Indenture
and certain related cross-references and defined terms (collectively, the “Insurance
Amendments”);
|
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|
|
(v)
|
|
delete in its entirety Section 1008 (Payment of Taxes and Other Claims) of the
Base ProLogis Indenture and certain related cross-references and defined terms;
|
|
|
|
|
(vi)
|
|
delete in their entirety the financial reporting obligations set forth in
Section 1009 (Provision of Financial Information) of the Base ProLogis Indenture (the
“Original Financial Information Provision”) and certain related cross-references and
defined terms (collectively, the “Original Financial Information Amendments”), which
are applicable to the ProLogis 9.340% 2015 Notes, ProLogis 8.650% 2016 Notes, ProLogis
7.810% 2015 Notes, ProLogis 7.625% 2017 Notes and ProLogis 5.500% 2013 Notes issued
under the ProLogis Indenture prior to the execution of the Second Supplemental
Indenture (as defined below) (collectively, the “Original Financial Information
Securities”);
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|
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|
|
(vii)
|
|
delete in their entirety the amended financial reporting obligations set forth
in Section 2.2 (Provision of Financial Information) of the Second Supplemental
Indenture (the “Second Supplemental Indenture”), dated as of November 2, 2005, between
ProLogis and the Trustee, and certain related cross-references and defined terms;
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|
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|
(viii)
|
|
delete in their entirety the amended financial reporting obligations set forth in
Section 2.2 (Provision of Financial Information) of the Seventh Supplemental Indenture
(the “Seventh Supplemental Indenture”), dated as of May 7, 2008, between ProLogis and
the Trustee, and certain related cross-references and defined terms;
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|
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(ix)
|
|
delete in their entirety (a) the amended debt incurrence restrictions set forth
in Section 2.1 (Limitations on Incurrence of Debt) and (b) the cross-acceleration and
judgment default provisions from the events of default set forth in Section 2.2 (Events
of Default) of the Eighth Supplemental Indenture (the “Eighth Supplemental Indenture”),
dated as of August 14, 2009, between ProLogis and the Trustee, and certain related
cross-references and defined terms;
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|
(x)
|
|
delete in their entirety (a) the amended debt incurrence restrictions set forth
in Section 2.1 (Limitations on Incurrence of Debt) and (b) the cross-acceleration and
judgment default provisions from the events of default set forth in Section 2.2 (Events
of Default) of the Ninth Supplemental Indenture (the “Ninth Supplemental Indenture”),
dated as of October 1, 2009, between ProLogis and the Trustee, and certain related
cross-references and defined terms;
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(xi)
|
|
delete in their entirety (a) the reference to Section 1008 of the Base ProLogis
Indenture in Section 4.05 (Exclusion of Certain Provisions From Base Indenture), (b)
the reference to Section 1009 of the Base ProLogis Indenture in Section 4.05 (Exclusion
of Certain Provisions From Base Indenture) and (c) Section 7.01 (Company May
Consolidate, Etc. on Certain Terms) from each of the Fourth Supplemental Indenture (the
“Fourth Supplemental Indenture”), dated as of March 26, 2007, the Fifth Supplemental
Indenture (the “Fifth Supplemental Indenture”), dated as of November 8, 2007, the Sixth
Supplemental Indenture (the “Sixth Supplemental Indenture”), dated as of May 7, 2008
and the Tenth Supplemental Indenture (the “Tenth Supplemental Indenture”), dated as of
March 16, 2010, each between ProLogis and the Trustee (collectively, the “ProLogis
|
11
|
|
|
|
Convertible Notes Supplemental Indentures” or singularly, a “ProLogis Convertible
Notes Supplemental Indenture”), and certain related cross-references and defined
terms;
|
|
|
|
|
(xii)
|
|
delete in their entirety the references to Section 501(5) (as amended by the
Second Supplemental Indenture) and Section 501(6) (as amended by the Second
Supplemental Indenture) of the Base ProLogis Indenture in Section 5.01 (Events of
Default) of the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the
Sixth Supplemental Indenture and certain related cross-references and defined terms
(the “Contingent Convertible Notes Events of Default Amendments”); and
|
|
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|
|
(xiii)
|
|
delete in their entirety the references to Section 501(5) (as amended by the Ninth
Supplemental Indenture) and Section 501(6) (as amended by the Ninth Supplemental
Indenture) of the Base ProLogis Indenture in Section 5.01 (Events of Default) of the
Tenth Supplemental Indenture and certain related cross-references and defined terms.
|
|
|
•
|
|
the proposed amendments described in clauses (ii) and (xi)(c) of the immediately
preceding sentence are referred to herein as the “Merger Restriction Amendments”;
|
|
|
|
|
•
|
|
the proposed amendments described in clauses (vii), (viii) and (xi)(b) of the
immediately preceding sentence are referred to herein as the “Financial Information
Amendments”;
|
|
|
|
|
•
|
|
the proposed amendments described in clauses (v) and (xi)(a) of the immediately
preceding sentence are referred to herein as the “Payment of Taxes and Other Claims
Amendments”;
|
|
|
|
|
•
|
|
the proposed amendments described in clauses (ix)(a) and (x)(a) of the
immediately preceding sentence are referred to herein as the “Incurrence of Debt
Amendments”; and
|
|
|
|
|
•
|
|
the proposed amendments described in clauses (ix)(b), (x)(b) and (xiii) of the
immediately preceding sentence are referred to herein as the “Events of Default
Amendments.”
|
|
|
|
The Original Events of Default Amendments, the Events of Default Amendments, the Contingent
Convertible Notes Events of Default Amendments, the Merger Restriction Amendments, the
Incurrence of Debt Amendments, the Maintenance of Properties Amendments, the Insurance
Amendments, the Payment of Taxes and Other Claims Amendments, the Original Financial
Information Amendments and the Financial Information Amendments are collectively referred to
herein as the “Proposed Amendments.” For a description of the Proposed Amendments, see “The
Proposed Amendments.”
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|
|
|
|
|
Pursuant to Section 3(g) of the Amended and Restated Security Agency Agreement (as amended,
the “Security Agency Agreement”) dated as of October 6, 2005 among ProLogis, Bank of
America, N.A., as collateral agent, and certain other creditors of ProLogis, Bank of
America, N.A., as collateral agent thereunder, may, without the consent of the holders of
the ProLogis Notes, release any collateral pledged pursuant to any Security Document, so
long as such release does not violate any other agreement of ProLogis. Upon or following
the effectiveness of the Thirteenth Supplemental Indenture, ProLogis intends to cause Bank
of America, N.A., in its capacity as collateral agent, to release all collateral under the
Security Documents. Following such release, the obligations of ProLogis under the ProLogis
Notes would not be secured by any collateral.
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|
|
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|
In addition, pursuant to Section 8(e) of the Security Agency Agreement, ProLogis may, upon
not less than 90 days notice after disclosing such revocation (in a footnote or otherwise)
in a Form 10-Q or 10-K filed with the SEC (but in no event before the earlier of (i) August
21, 2012 and (ii) the date on which the main revolving credit facility of ProLogis
terminates), without the consent of the holders of the ProLogis Notes, revoke the status of
the ProLogis Indenture as a “DSD Agreement” under the Security Agency Agreement and revoke
the classification of the ProLogis Notes as “Other DS Debt” thereunder. Upon any such
|
12
|
|
|
revocation, the holders of the ProLogis Notes would cease to have any rights under the
Security Agency Agreement. Upon or following the closing of the Merger, ProLogis intends to
terminate its main revolving credit facility and revoke the status of the ProLogis Indenture
and the ProLogis Notes as a “DSD Agreement” and “Other DS Debt,” respectively. Upon such
revocation, the benefits of the security and sharing arrangements afforded to the holders of
the ProLogis Notes pursuant to the Security Documents would be eliminated. Such revocation
may occur before or after the release of the collateral described above.
|
|
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|
|
The elimination of certain covenants contained in the ProLogis
Indenture that afford protection to holders of ProLogis Notes,
including substantially all of the restrictive covenants, certain
affirmative covenants, certain events of default and substantially
all of the restrictions on the ability of ProLogis to merge,
consolidate or sell all or substantially all of its properties or
assets, permit ProLogis and its subsidiaries to take actions that
could be adverse to the interests of the holders of the outstanding
ProLogis Notes. See “Description of the Differences Between the AMB
LP Notes and the ProLogis Notes”, “The Exchange Offers and Consent
Solicitations”, “The Proposed Amendments”, “Description of the AMB LP
Non-Exchangeable Notes”, “Description of the AMB LP Contingent
Exchangeable Notes” and “Description of the AMB LP 3.250% 2015
Notes.”
|
|
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|
|
The AMB LP Notes, which will be fully and unconditionally guaranteed
by AMB, will be AMB LP’s direct, unsecured and unsubordinated
obligations and will rank
pari passu
with all of AMB LP’s other
unsecured and unsubordinated indebtedness outstanding from time to
time. As of December 31, 2010, AMB’s unsecured senior debt
securities, unsecured credit facilities and other senior debt totaled
approximately $2.4 billion on a consolidated basis. AMB’s guarantee
of the AMB LP Notes will rank
pari passu
in right of payment with all
of AMB’s unsecured and unsubordinated indebtedness, including AMB’s
indebtedness for borrowed money, indebtedness evidenced by bonds,
debentures, notes or similar instruments, obligations arising from or
with respect to guarantees and direct credit substitutes, obligations
associated with hedges and derivative products, capitalized lease
obligations and other senior indebtedness. In addition, the guarantee
of the AMB LP Notes by AMB will be effectively subordinated to all of
the mortgages and other secured indebtedness of AMB and all of the
secured and unsecured indebtedness and other liabilities of its
subsidiaries, other than AMB LP.
|
|
|
|
Q:
|
|
What consents are required to effect the Proposed Amendments to the
ProLogis Indenture and consummate the exchange offers?
|
|
|
|
A:
|
|
The ProLogis Indenture provides that ProLogis and the Trustee may
amend, supplement or modify the ProLogis Indenture by entering into a
supplemental indenture with the consent of holders of not less than a
majority in principal amount of all outstanding securities affected
by such supplemental indenture. Accordingly, approval of each of the
Proposed Amendments in the table below requires the receipt of valid
unrevoked consents from holders of not less than a majority in
principal amount of the notes entitled to cast a consent for such
Proposed Amendment. The far right column in the table below provides
the defined term for the receipt of such requisite consents for each
of the Proposed Amendments. The table below also provides the amounts
of debt outstanding for each voting class as of the date of this
prospectus.
|
|
|
|
|
|
Depending on the series of ProLogis Notes you hold, you will be
entitled to cast your consent for the Proposed Amendments in the
table below marked with an “X”, but will not be allowed to cast a
consent for the Proposed Amendments marked with a “—”.
|
|
|
|
|
|
Holders must provide consents to all of the Proposed Amendments applicable
to a particular series of notes or none of them. A
consent purporting to consent only to some of the Proposed Amendments
(or any portion thereof) will not be valid (unless AMB LP waives the
defect in such consent).
|
13
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ProLogis Notes
|
|
|
|
|
|
($4,634,256,075)
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
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|
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ProLogis Convertible
|
|
|
|
|
|
ProLogis
Non-Convertible Notes
($3,053,391,075)
|
|
Notes
($1,580,865,000)
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ProLogis
Contingent
|
|
|
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|
Original Financial
|
|
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Convertible
|
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Information Securities
|
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|
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Notes
|
|
|
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|
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($251,584,075)
|
|
($2,801,807,000)
|
|
($1,120,865,000)
|
|
|
|
|
|
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
|
|
ProLogis
2.625%
|
|
ProLogis
2.250%
|
|
ProLogis
1.875%
|
|
ProLogis
3.250%
|
|
|
|
|
|
9.340%
|
|
8.650%
|
|
7.810%
|
|
7.625%
|
|
5.500%
|
|
5.500%
|
|
7.625%
|
|
5.625%
|
|
5.750%
|
|
5.625%
|
|
6.250%
|
|
6.625%
|
|
7.375%
|
|
6.875%
|
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2038
|
|
2037
|
|
2037
|
|
2015
|
|
|
|
Proposed
|
|
2015
|
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2016
|
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2015
|
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2017
|
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2013
|
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2012
|
|
2014
|
|
2015
|
|
2016
|
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2016
|
|
2017
|
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2018
|
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2019
|
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2020
|
|
Convertible
|
|
Convertible
|
|
Convertible
|
|
Convertible
|
|
Definition of
|
|
Amendment
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes
|
|
Notes ($460,000,000)
|
|
Requisite Consent
|
|
Original Events of Default Amendments
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
“Original Events of
Default Amendments Requisite Consent”
|
|
Events of Default
Amendments
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
—
|
|
—
|
|
—
|
|
X
|
|
“Events of Default
Amendments Requisite Consent”
|
|
Contingent
Convertible Notes
Events of Default
Amendments
|
|
—
|
|
—
|
|
—
|
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—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
X
|
|
X
|
|
X
|
|
—
|
|
“Contingent Convertible Notes
Events of Default Amendments Requisite Consent”
|
|
Merger Restriction
Amendments
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
“Merger Restriction Amendments
Requisite Consent”
|
|
Incurrence of Debt
Amendments
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
—
|
|
—
|
|
—
|
|
—
|
|
“Incurrence of Debt
Amendments Requisite Consent”
|
|
Maintenance of Properties
Amendments
|
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X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
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—
|
|
—
|
|
—
|
|
—
|
|
“Maintenance of Properties
Amendments Requisite Consent”
|
|
Insurance Amendments
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
—
|
|
—
|
|
—
|
|
—
|
|
“Insurance Amendments Requisite Consent”
|
|
Payment of Taxes
and Other Claims
Amendments
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
“Payment of Taxes and Other
Claims Amendments Requisite Consent”
|
|
Original
Financial Information Amendments
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
“Original Financial Information Amendments
Requisite Consent”
|
|
Financial
Information Amendments
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
“Financial Information
Amendments Requisite Consent”
|
14
|
|
|
The Original Events of Default Amendments Requisite Consent, Events of Default
Amendments Requisite Consent, Contingent Convertible Notes Events of Default Amendments
Requisite Consent, Merger Restriction Amendments Requisite Consent, Incurrence of Debt
Amendments Requisite Consent, Maintenance of Properties Amendments Requisite Consent,
Insurance Amendments Requisite Consent, Payment of Taxes and Other Claims Amendments
Requisite Consent, Original Financial Information Amendments Requisite Consent and Financial
Information Amendments Requisite Consent are collectively referred to herein as the
“Requisite Consents.” The Requisite Consent for each of the Proposed Amendments must be
received by the Expiration Date in order to amend the ProLogis Indenture to reflect such
Proposed Amendment.
|
|
|
|
|
|
The consent solicitation is being made on behalf of the combined company upon the terms and
is subject to the conditions set forth herein and the related letter of transmittal. AMB LP
reserves the right to accept consents on behalf of the combined company to effect any of the
Original Events of Default Amendments, the Events of Default Amendments, the Contingent
Convertible Notes Events of Default Amendments, the Merger Restriction Amendments, the
Incurrence of Debt Amendments, the Maintenance of Properties Amendments, the Insurance
Amendments, the Payment of Taxes and Other Claims Amendments, the Original Financial
Information Amendments and the Financial Information Amendments or any combination thereof,
to the extent that AMB LP has received the applicable Original Events of Default Amendments
Requisite Consent, Events of Default Amendments Requisite Consent, Contingent Convertible
Notes Events of Default Amendments Requisite Consent, Merger Restriction Amendments
Requisite Consent, Incurrence of Debt Amendments Requisite Consent, Maintenance of
Properties Amendments Requisite Consent, Insurance Amendments Requisite Consent, Payment of
Taxes and Other Claims Amendments Requisite Consent, Original Financial Information
Amendments Requisite Consent and Financial Information Amendments Requisite Consent, as the
case may be, even if AMB LP has not obtained each of the other Requisite Consents necessary
to effect all of the Proposed Amendments.
|
|
|
|
Q:
|
|
What is the completion of the exchange offers and consent solicitations conditioned upon?
|
|
|
|
A:
|
|
AMB LP’s obligations to complete the exchange offers and consent solicitations on behalf of the combined company are
conditioned upon, among other things, (i) receipt of Requisite Consents sufficient to effect the Proposed Amendments, (ii)
listing of AMB LP’s existing 6.750% Notes due 2011 on the NYSE and (iii) the consummation of the Merger, although AMB LP
may, at its option, waive any condition with respect to the exchange offers and consent solicitations. For information
about other conditions to AMB LP’s obligations to complete the exchange offers and consent solicitations, see “The Exchange
Offers and Consent Solicitations — Conditions to the Exchange Offers and Consent Solicitations.”
|
|
|
|
Q:
|
|
Will AMB LP accept consents on behalf of the combined company to the Proposed Amendments without holders tendering their
corresponding ProLogis Notes?
|
|
|
|
A:
|
|
No. As a holder of ProLogis Notes, you may give your consent to the Proposed Amendments to the ProLogis Indenture only by
tendering your ProLogis Notes of a series governed by the ProLogis Indenture in one of the aforementioned exchange offers.
If you validly tender ProLogis Notes prior to the Early Consent Date, you may validly withdraw your tender and the related
consent prior to the Early Consent Date. If you validly tender ProLogis Notes prior to the Early Consent Date, you may
validly withdraw your tender after the Early Consent Date and before the Expiration Date, but you may not withdraw the
related consent. If you tender ProLogis Notes after the Early Consent Date and before the Expiration Date you may withdraw
your tender and the related consent at any time prior to the Expiration Date.
|
|
|
|
Q:
|
|
Will AMB LP accept all tenders of ProLogis Notes?
|
|
|
|
A:
|
|
Subject to the satisfaction or waiver of the conditions to the exchange offers, AMB LP will accept for exchange any and all
ProLogis Notes that (i) have been validly tendered in the applicable exchange offers before the Expiration Date and (ii)
have not been validly withdrawn before the Expiration Date.
|
15
|
Q:
|
|
When will AMB LP issue new AMB LP Notes and pay cash exchange consideration (as applicable)?
|
|
|
|
A:
|
|
Assuming the conditions to the exchange offers, including the consummation of the Merger, are satisfied or waived, AMB LP
will issue new AMB LP Notes in book-entry form through The Depositary Trust Company (“DTC”) and pay cash exchange
consideration (as applicable) promptly after the Expiration Date in exchange for ProLogis Notes that are validly tendered
(and not validly withdrawn) before the Expiration Date and that are accepted for exchange.
|
|
|
|
Q:
|
|
When will the Proposed Amendments to the ProLogis Indenture become effective?
|
|
|
|
A:
|
|
If AMB LP receives the Requisite Consents, the Proposed Amendments to the ProLogis Indenture will be entered into and
become effective when AMB LP settles the exchange offers, which AMB LP expects to occur promptly after the Expiration Date.
This assumes that all other conditions of the exchange offers and consent solicitations are satisfied or waived, as
applicable.
|
|
|
|
Q:
|
|
When will the exchange offers expire?
|
|
|
|
A:
|
|
Each exchange offer will expire at 9:00 a.m., New York City time, on June 3, 2011, unless AMB LP, in its sole discretion,
extends such exchange offer, in which case the Expiration Date will be the latest date and time to which such exchange
offer is extended. AMB LP intends to extend the Expiration Date if needed so that it will occur after the Merger is closed.
See “The Exchange Offers and Consent Solicitations — Expiration Date; Extensions; Amendments.”
|
|
|
|
Q:
|
|
What are my rights if I change my mind after I tender my ProLogis Notes and deliver my consent?
|
|
|
|
A:
|
|
You may withdraw tendered ProLogis Notes at any time prior to the Expiration Date. Holders that validly tender ProLogis
Notes prior to the Early Consent Date may validly withdraw their tender and the related consent prior to the Early Consent
Date. Holders that validly tender ProLogis Notes prior to the Early Consent Date may validly withdraw their tender after
the Early Consent Date and before the Expiration Date, but may not withdraw the related consent. Holders that tender
ProLogis Notes after the Early Consent Date and before the Expiration Date may withdraw their tender and the related
consent at any time prior to the Expiration Date.
|
|
|
|
|
|
Once withdrawal rights have expired on the Expiration Date, tenders of ProLogis Notes may not be validly withdrawn unless
AMB LP is otherwise required by law to permit withdrawal. In the event of termination of an exchange offer, the ProLogis
Notes tendered pursuant to such exchange offer will be promptly returned to the tendering holders. See “The Exchange Offers
and Consent Solicitations — Procedures for Consenting and Tendering — Withdrawal of Tenders and Revocation of
Corresponding Consents.”
|
|
|
|
Q:
|
|
How do I exchange my ProLogis Notes if I am a beneficial owner of ProLogis Notes held of record by a custodian bank,
depositary, broker, trust company or other nominee? Will the record holder exchange my ProLogis Notes for me?
|
|
|
|
A:
|
|
Currently, all of the ProLogis Notes are held in book-entry form and can only be tendered through the applicable procedures
of DTC. However, if any ProLogis Notes are subsequently issued in certificated form and are held of record by a custodian
bank, depositary, broker, trust company or other nominee and you wish to tender the securities in the applicable exchange
offers, you should contact that institution promptly and instruct the institution to tender on your behalf. The record
holder will tender your notes on your behalf, but only if you instruct the record holder to do so. See “The Exchange
Offers and Consent Solicitations — Procedures for Consenting and Tendering — ProLogis Notes Held Through a Nominee.”
|
16
|
Q:
|
|
Do I have the right to dissent from the exchange offers or the consent solicitations or seek appraisal of the ProLogis
Notes I hold?
|
|
|
|
A:
|
|
Holders of ProLogis Notes do not have any appraisal or dissenters’ rights under New York law, the law governing the
ProLogis Indenture, or under the terms of the ProLogis Indenture in connection with the exchange offers and consent
solicitations.
|
|
|
|
Q:
|
|
What effect will the Merger have on conversion rights with respect to any ProLogis Convertible Notes that I hold?
|
|
|
|
A:
|
|
Pursuant to their terms, upon consummation of the Merger, the ProLogis Convertible Notes will become exchangeable into
shares of AMB common stock, rather than being convertible into ProLogis common shares, and ProLogis and the Trustee will be
required to enter into a supplemental indenture to effect such change. After the consummation of the Merger, pursuant to
Section 8.06 of each of the ProLogis Convertible Notes Supplemental Indentures, New Pumpkin, ProLogis and the Trustee will
execute an Eleventh Supplemental Indenture (the “Eleventh Supplemental Indenture”) in connection with the ProLogis merger
and shortly thereafter AMB, ProLogis and the Trustee will execute a Twelfth Supplemental Indenture (the “Twelfth
Supplemental Indenture”) in connection with the Topco merger. Each of the Eleventh Supplemental Indenture and the Twelfth
Supplemental Indenture will provide for the conversion and settlement of the ProLogis Convertible Notes as set forth in the
ProLogis Convertible Notes Supplemental Indentures, and for certain adjustments to the initial exchange rate, dividend
threshold amounts, contingent exchange trigger prices and fundamental change make-whole amounts to account for the Merger.
Additionally, each of the Eleventh Supplemental Indenture and Twelfth Supplemental Indenture will provide for adjustments
as nearly equivalent as may be practicable to the adjustments provided in Article VIII of each of the ProLogis Convertible
Notes Supplemental Indentures. The Twelfth Supplemental Indenture will provide for adjustments to account for differences
in the value of shares of AMB common stock and ProLogis common shares and for differences in the dividend thresholds of AMB
and ProLogis. The initial exchange rate, dividend threshold amounts, contingent exchange trigger prices and fundamental
change make-whole amounts will be adjusted as described herein and in the Eleventh Supplemental Indenture and the Twelfth
Supplemental Indenture. The ProLogis Indenture, as so amended by the Eleventh Supplemental Indenture and the Twelfth
Supplemental Indenture, will govern any ProLogis Convertible Notes that are not tendered and accepted in the exchange
offers. Other than such adjustments, the consummation of the Merger will not confer any additional or different conversion
or exchange rights to holders of the ProLogis Convertible Notes. See “Description of the Differences Between the AMB LP
Notes and the ProLogis Notes” for adjustments to the original initial conversion rates, dividend threshold amounts,
contingent exchange trigger prices and fundamental change make-whole amounts of the ProLogis Convertible Notes.
|
|
|
|
|
|
Holders of ProLogis 3.250% 2015 Convertible Notes will have the right to convert their notes into ProLogis common shares at
any time prior to the consummation of the Merger, at a rate of 57.8503 ProLogis common shares (subject to adjustment by
ProLogis as provided in Section 8.04 of the Tenth Supplemental Indenture) per $1,000 principal amount of the ProLogis
3.250% 2015 Convertible Notes.
|
|
|
|
|
|
Holders of ProLogis 3.250% 2015 Convertible Notes will have the right to exchange their notes for shares of AMB common
stock at any time during the period beginning upon the consummation of the Merger and ending at the close of business on
the trading day immediately preceding March 15, 2015, the final maturity date of the ProLogis 3.250% 2015 Convertible
Notes, at a rate of 25.8244 shares of AMB common stock (subject to adjustment by AMB LP as provided in Section 8.04 of the
Tenth Supplemental Indenture, as amended) per $1,000 principal amount of the ProLogis 3.250% 2015 Convertible Notes.
|
|
|
|
|
|
Holders of ProLogis Contingent Convertible Notes will have the right to convert their notes,
at the applicable rate described below, into ProLogis common shares at any time from the
fifteenth calendar day prior the date announced by ProLogis as the anticipated effective
date of the Merger to the effective date of the Merger, and then will have the right to
exchange their notes, at the applicable rate described below, into AMB common stock at any
time from the effective date of the Merger to and including the date that is fifteen
calendar days after the date that is the effective date of the Merger. ProLogis will give
notice to all
|
17
|
|
|
record holders of ProLogis Contingent Convertible Notes and the Trustee, and
ProLogis will issue a press release at least 20 calendar days prior to the
anticipated effective date of the Merger.
|
|
|
|
|
|
As described in the paragraph above, holders of ProLogis Contingent Convertible Notes will
have the right, at such holder’s option, to convert all or any portion of such notes prior
to the consummation of the Merger at a rate of:
|
|
|
•
|
|
ProLogis 2.250% 2037 Convertible Notes:
|
|
|
o
|
|
13.1614 ProLogis common shares (subject to adjustment
by ProLogis as provided in Section 8.04 of the Fourth Supplemental
Indenture) per $1,000 principal amount of the ProLogis 2.250% 2037
Convertible Notes.
|
|
|
•
|
|
ProLogis 1.875% 2037 Convertible Notes:
|
|
|
o
|
|
12.2926 ProLogis common shares (subject to adjustment
by ProLogis as provided in Section 8.04 of the Fifth Supplemental
Indenture) per $1,000 principal amount of the ProLogis 1.875% 2037
Convertible Notes.
|
|
|
•
|
|
ProLogis 2.625% 2038 Convertible Notes:
|
|
|
o
|
|
13.1203 ProLogis common shares (subject to adjustment
by ProLogis as provided in Section 8.04 of the Sixth Supplemental
Indenture) per $1,000 principal amount of the ProLogis 2.625% 2038
Convertible Notes.
|
|
|
|
Further, holders of ProLogis Contingent Convertible Notes will have the right, at such
holder’s option, to exchange all or any portion of such notes following the consummation of
the Merger at a rate of:
|
|
|
•
|
|
ProLogis 2.250% 2037 Convertible Notes:
|
|
|
o
|
|
5.8752 shares of AMB common stock (subject to
adjustment by AMB LP as provided in Section 8.04 of the Fourth Supplemental
Indenture, as amended) per $1,000 principal amount of the ProLogis 2.250%
2037 Convertible Notes.
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ProLogis 1.875% 2037 Convertible Notes:
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5.4874 shares of AMB common stock (subject to
adjustment by AMB LP as provided in Section 8.04 of the Fifth Supplemental
Indenture, as amended) per $1,000 principal amount of the ProLogis 1.875%
2037 Convertible Notes.
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•
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ProLogis 2.625% 2038 Convertible Notes:
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5.8569 shares of AMB common stock (subject to
adjustment by AMB LP as provided in Section 8.04 of the Sixth Supplemental
Indenture, as amended) per $1,000 principal amount of the ProLogis 2.625%
2038 Convertible Notes.
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Q:
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Will the AMB LP Notes be eligible for trading on an exchange?
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A:
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The AMB LP Notes will not be listed on any securities exchange and
there can be no assurance as to the development or liquidity of any
market for the AMB LP Notes. See “Risk Factors — Risks Related to
the AMB LP Notes — Your ability to transfer the AMB LP Notes may be
limited by the absence of a trading market.”
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Q:
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To whom should I direct any questions?
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A:
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Questions concerning the terms of the exchange offers or the consent
solicitations should be directed to the dealer managers; contact
information for the dealer managers is set forth on the back cover of
this prospectus. Questions concerning tender procedures and requests
for additional copies of this prospectus should be directed to the
information agent. The address and telephone numbers of the
information agent are also set forth on the back cover page of this
prospectus.
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AMB LP may be required to amend or supplement this prospectus at any time to add, update or
change the information contained in this prospectus. You should read this prospectus and any
amendment or supplement hereto, together with the documents incorporated by reference herein and
the additional information described under “Where You Can Find More Information.”
Risk Factors
An investment in the AMB LP Notes involves risks that a potential investor should carefully
evaluate prior to making such an investment. See “Risk Factors” beginning on page 59 of this
prospectus.
19
The Exchange Offers and Consent Solicitations
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Exchange Offers
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AMB LP is hereby offering to exchange, upon the
terms and conditions set forth in this
prospectus and the related letter of
transmittal, each series of outstanding
ProLogis Notes listed on the front cover of
this prospectus, for newly issued series of AMB
LP Notes with substantially the same terms,
including interest rate, interest payment
dates, redemption terms, maturity and, if
applicable, exchange terms (other than the
applicable initial exchange rates, dividend
threshold amounts, fundamental change
make-whole amounts and, in the case of the AMB
LP 3.250% 2015 Exchangeable Notes, the exchange
consideration), as the corresponding series of
ProLogis Notes (prior to the Proposed
Amendments) for which it is offered in
exchange. The AMB LP Notes will be issued by
AMB LP and fully and unconditionally guaranteed
by its parent and sole general partner, AMB, as
compared with the ProLogis Notes, which were
issued by ProLogis and are not guaranteed. In
the case of each new AMB LP 9.340% 2015 Note
and AMB LP 8.650% 2016 Note issued in exchange
for a ProLogis 9.340% 2015 Note and a ProLogis
8.650% 2016 Note, respectively, the mandatory
principal repayment schedule will be revised
from that contained in the corresponding
ProLogis Note to reflect the fact that, because
previous mandatory principal repayments were
not,
and with respect to the principal payment to be made on May 15,
2011 with respect to the ProLogis 8.650% 2016 Notes is not
expected to be, applied in accordance with their respective
terms with respect to the corresponding
ProLogis Note, the outstanding principal amount
of each currently outstanding ProLogis 9.340%
2015 Note and ProLogis 8.650% 2016 Note is, and
the AMB LP 9.340% 2015 Note and AMB LP 8.650%
2016 Note to be issued in exchange thereof will
be, $1,000. The AMB LP 3.250% 2015
Exchangeable Notes will be exchangeable into
AMB common stock, cash or a combination of the
two, at the option of AMB LP, as compared with
the ProLogis 3.250% 2015 Convertible Notes,
which are convertible only into ProLogis common
shares and will be exchangeable only into AMB
common stock after the Merger. Thus, all of the
AMB LP Exchangeable Notes are exchangeable into
cash, AMB common stock or a combination of cash
and AMB common stock, at AMB LP’s election. See
“The Exchange Offers and Consent Solicitations
— Terms of the Exchange Offers and Consent
Solicitations” and “— ProLogis Amortizing
Notes.”
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Consent Solicitations
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AMB LP is soliciting consents on behalf of the
combined company to the Proposed Amendments of
the ProLogis Indenture from holders of the
ProLogis Notes upon the terms and conditions
set forth in this prospectus and the related
letter of transmittal. You may not tender your
ProLogis Notes for exchange without delivering
a consent to the Proposed Amendments to the
ProLogis Indenture. See “The Exchange Offers
and Consent Solicitations — Terms of the
Exchange Offers and Consent Solicitations.”
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The Proposed Amendments
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If the Requisite Consents to amend the ProLogis
Indenture are obtained, the indenture
amendments will eliminate certain covenants
contained in the ProLogis Indenture that afford
protection to holders of ProLogis Notes,
including substantially all of the restrictive
covenants, certain affirmative covenants,
certain events of default and substantially all
of the restrictions on the ability of ProLogis
to merge, consolidate or sell all or
substantially all of its properties or assets.
See “The Proposed Amendments.”
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Requisite Consents
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The Requisite Consents collectively refer to:
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(i) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Notes voting as a single class, with respect to
the Original Events of Default Amendments;
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(ii) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Non-Convertible Notes and the ProLogis 3.250%
2015 Convertible Notes voting as a single class, with
respect to the Events of Default Amendments;
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(iii) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Contingent Convertible Notes, which are
comprised of the ProLogis 2.625% 2038 Convertible Notes,
the ProLogis 2.250% 2037 Convertible Notes and the
ProLogis 1.875% 2037 Convertible Notes, voting as a
single class, with respect to the Contingent Convertible
Notes Events of Default Amendments;
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(iv) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Notes voting as a single class, with respect to
the Merger Restriction Amendments;
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(v) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Non-Convertible Notes voting as a single class,
with respect to the Incurrence of Debt Amendments;
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(vi) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Non-Convertible Notes voting as a single class,
with respect to the Maintenance of Properties
Amendments;
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(vii) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Non-Convertible Notes voting as a single class,
with respect to the Insurance Amendments;
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(viii) the receipt of valid unrevoked consents from holders
of not less than a majority in principal amount of all
of the outstanding ProLogis Notes voting as a single
class, with respect to the Payment of Taxes and Other
Claims Amendments;
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(ix) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Notes voting as a single class, with respect to
the Original Financial Information Amendments; and
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(x) the receipt of
valid unrevoked consents from holders of not less than a
majority in principal amount of all of the outstanding
ProLogis Notes, excluding the Original Financial
Information Securities which are comprised of the
ProLogis 9.340% 2015 Notes, ProLogis 8.650% 2016 Notes,
ProLogis 7.810% 2015 Notes, ProLogis 7.625% 2017 Notes
and ProLogis 5.500% 2013 Notes, voting as a single
class, with respect to the Financial Information
Amendments.
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Consents may not be delivered on an alternative, conditional
or selective basis. Consents must be obtained before the
Expiration Date with respect to such series. See “The Exchange
Offers and Consent Solicitations — Terms of the Exchange
Offers and Consent Solicitations.”
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Procedures for Participating in
the Exchange Offers and Consent Solicitations
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If you hold ProLogis Notes through DTC in the form of
book-entry interests, and wish to participate in the
applicable exchange offers and consent solicitations, you must
cause the book-entry transfer of the ProLogis Notes to the
exchange agent’s account at DTC, and the exchange agent must
receive a confirmation of book-entry transfer and either:
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•
a completed letter of transmittal; or
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•
an agent’s message transmitted pursuant to DTC’s
Automated Tender Offer Program, by which each
tendering holder will agree to be bound by the
letter of transmittal.
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Alternatively, if you are the record or beneficial owner of
any ProLogis Notes issued in certificated form and you wish
to participate in the applicable exchange offers and consent
solicitations, you must complete, sign and date an original
or facsimile of the accompanying letter of transmittal in
accordance with the instructions contained in this prospectus
and the letter of transmittal, and send the letter of
transmittal or a facsimile of it and the outstanding ProLogis
Notes you wish to exchange and any other required
documentation to the exchange agent at the address set forth
on the back cover of this prospectus. These materials must
be received by the exchange agent prior to the Early Consent
Date or Expiration Date, as applicable. See “The Exchange
Offers and Consent Solicitations — Procedures for Consenting
and Tendering.”
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AMB LP reserves the right to accept consents on behalf of the
combined company to effect any of the Original Events of
Default Amendments, the Events of Default Amendments, the
Contingent Convertible Notes Events of Default Amendments,
the Merger Restriction Amendments, the Incurrence of Debt
Amendments, the Maintenance of Properties Amendments, the
Insurance Amendments, the Payment of Taxes and Other Claims
Amendments, the Original Financial Information Amendments and
the Financial Information Amendments or any combination
thereof, to the extent that AMB LP has received the
applicable Original Events of Default Amendments Requisite
Consent, Events of Default Amendments Requisite Consent,
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Contingent Convertible Notes Events of Default Amendments
Requisite Consent, Merger Restriction Amendments Requisite
Consent, Incurrence of Debt Amendments Requisite Consent,
Maintenance of Properties Amendments Requisite Consent,
Insurance Amendments Requisite Consent, Payment of Taxes and
Other Claims Amendments Requisite Consent, Original Financial
Information Amendments Requisite Consent and Financial
Information Amendments Requisite Consent, as the case may be,
even if AMB LP has not obtained each of the other Requisite
Consents necessary to effect all of the Proposed Amendments.
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See “The Exchange Offers and Consent Solicitations —
Procedures for Consenting and Tendering.”
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Early Consent Date
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The Early Consent Date is 5:00 p.m., New York
City time, on May 16, 2011, or a later date
and time to which AMB LP extends it. AMB LP
intends to extend the Early Consent Date
until AMB LP receives the Requisite Consents.
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Exchange Price
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For each ProLogis Non-Convertible Note
validly tendered (and not validly withdrawn),
the holder will receive (i) an exchange price
equal to 100% of its principal amount plus
the Non-Convertible Notes Consent Fee if it
is validly tendered (and not validly
withdrawn) prior to the Early Consent Date,
and (ii) an exchange price equal to 97% of
its principal amount if it is validly
tendered (and not validly withdrawn) after
the Early Consent Date and on or prior to the
Expiration Date.
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For each ProLogis Convertible Note validly
tendered (and not validly withdrawn), the
holder will receive (i) an exchange price
equal to 100% of its principal amount plus
the Convertible Notes Consent Fee if it is
validly tendered (and not validly withdrawn)
prior to the Early Consent Date, and (ii) an
exchange price equal to 97% of its principal
amount if it is validly tendered (and not
validly withdrawn) after the Early Consent
Date and on or prior to the Expiration Date.
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Tender instructions for each series
of ProLogis Notes will be accepted in authorized denominations. Tenders of ProLogis 7.810% 2015 Notes will be
accepted only in original principal amounts
(i.e., without giving effect to principal
repayments already made) equal to $1,000 or
integral multiples thereof. The applicable
exchange price and consent fee will be
calculated only on current principal amounts
outstanding as of the settlement date. For
illustrations on how the exchange price and
consent fee will be calculated, see “The
Exchange Offers and Consent Solicitations —
ProLogis Amortizing Notes.”
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If you validly tender ProLogis Notes prior to
the Early Consent Date, you may validly
withdraw your tender and the related consent
prior to the Early Consent Date, but you will
not receive the applicable cash consent fee
unless you validly re-tender prior to the
Early Consent Date. If you validly tender
ProLogis Notes prior to the Early Consent
Date, you may validly withdraw your tender
after the Early Consent Date and before the
Expiration Date, but you may not withdraw the
related consent and you will receive the
applicable cash consent fee. If you tender
ProLogis Notes after the Early Consent Date
and before the Expiration Date, you will not
receive the applicable cash consent fee and
you may withdraw your tender and the related
consent at any time prior to the Expiration
Date.
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Expiration Date
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Each of the exchange offers and consent
solicitations will expire at 9:00 a.m., New
York City time, on June 3, 2011, or a later
date and time to which AMB LP extends it.
AMB LP intends to extend the Expiration Date
if needed so that it occurs after the Merger
is closed.
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Withdrawal and Revocation
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Tenders of ProLogis Notes may be validly
withdrawn at any time prior to the Expiration
Date. Holders that validly tender ProLogis
Notes prior to the Early Consent Date may
validly withdraw their tender and the related
consent prior to the Early Consent Date.
Holders that validly tender ProLogis Notes
prior to the Early Consent Date may validly
withdraw their tender after the Early Consent
Date and before the Expiration Date, but may
not withdraw the related consent. Holders
that validly tender ProLogis Notes after the
Early Consent Date and before the Expiration
Date may withdraw their tender and the
related consent at any time prior to the
Expiration Date.
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Once withdrawal rights have expired on the Expiration Date,
tenders of ProLogis Notes may not be validly withdrawn unless
AMB LP is otherwise required by law to permit withdrawal. In
the event of termination of an exchange offer, the ProLogis
Notes tendered pursuant to such exchange offer will be
promptly returned to the tendering holders. See “The
Exchange Offers and Consent Solicitations — Procedures for
Consenting and Tendering — Withdrawal of Tenders and
Revocation of Corresponding Consents.”
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Conditions
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AMB LP’s obligations to complete the
exchange offers and consent
solicitations on behalf of the
combined company are conditioned upon,
among other things, consummation of
the Merger, listing of AMB LP’s
existing 6.750% Notes due 2011 on the
NYSE and receipt of the Requisite
Consents to effect the Proposed
Amendments to the ProLogis Indenture.
AMB LP reserves the right to accept
consents on behalf of the combined
company to effect any of the Proposed
Amendments to the extent that it has
received the applicable Requisite
Consents, even if it has not obtained
each of the other Requisite Consents
necessary to effect all of the
Proposed Amendments. Each exchange
offer is independent of the others,
and AMB LP may consummate any of them
without doing so with respect to any
other. The Merger and the related
transactions and listing of AMB LP’s
existing 6.750% Notes due 2011 on the
NYSE are not conditioned upon the
commencement or completion of the
exchange offers or consent
solicitations.
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Special Procedures for Beneficial
Owners of any Certificated Notes
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Currently, all of the ProLogis Notes
are held in book-entry form and can
only be tendered through the
applicable procedures of DTC.
However, if any ProLogis Notes are
subsequently issued to you in
certificated form and you are a
beneficial owner of ProLogis Notes
that are registered in the name of a
broker, dealer, commercial bank, trust
company or other nominee, and you wish
to tender those ProLogis Notes and
deliver your consent, you should
contact the registered holder promptly
and instruct the registered holder to
tender your ProLogis Notes and deliver
your consent on your behalf. See “The
Exchange Offers and Consent
Solicitations — Procedures for
Consenting and Tendering — ProLogis
Notes Held Through a Nominee.”
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Acceptance of ProLogis Notes and
Consents and Delivery of AMB LP
Notes
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Subject to the satisfaction or waiver
of the conditions to the exchange
offers and consent solicitations, AMB
LP will accept for exchange any and
all ProLogis Notes that are validly
tendered prior to the Expiration Date
and not validly withdrawn; likewise,
because the act of validly tendering
ProLogis Notes will also constitute
valid delivery of consents to the
Proposed Amendments to the ProLogis
Indenture, AMB LP will also accept on
behalf of the combined company all
consents that are validly delivered
prior to the Expiration Date that are
not validly revoked. All ProLogis
Notes exchanged will be cancelled.
The AMB LP Notes issued pursuant to
the exchange offers will be issued and
delivered through the facilities of
DTC promptly following the Expiration
Date. AMB LP will return to you any
ProLogis Notes that are not accepted
for exchange for any reason without
expense to you promptly after the
Expiration Date. See “The Exchange
Offers and Consent Solicitations —
Acceptance of ProLogis Notes for
Exchange; AMB LP Notes and Cash
Exchange Consideration; Effectiveness
of Proposed Amendments.”
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U.S. Federal Income Tax
Considerations
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Holders should consider certain U.S.
federal income tax consequences of the
exchange offers and consent
solicitations. Holders of ProLogis
Notes are urged to consult their
respective tax advisors with respect
to the tax consequences to them of the
exchange. See “Material United States
Federal Income Tax Consequences.”
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Consequences of Not Exchanging
ProLogis Notes for AMB LP Notes
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If the Proposed Amendments to the
ProLogis Indenture are adopted,
holders of ProLogis Notes will no
longer be entitled to the benefit of
substantially all of the restrictive
covenants, certain affirmative
covenants, certain events of default
and substantially all of the
restrictions on the ability of
ProLogis to merge, consolidate or sell
all or substantially all of its
properties or assets. Holders who do
not elect to tender their ProLogis
Notes will not receive the benefit of
the guarantee of AMB on the AMB LP
Notes. In addition, the trading market
for any ProLogis Notes not validly
tendered is likely to be significantly
more limited in the future if the
exchange offers are consummated. See
“Risk Factors — Risks Related to the
Exchange Offers and Consent
Solicitations — The liquidity of the
ProLogis Notes that are not exchanged
will be reduced.”
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Use of Proceeds
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AMB LP will not receive any cash
proceeds from the exchange offers.
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Exchange Agent, Information Agent
and Dealer Managers
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Global Bondholder Services Corporation
is serving as exchange agent and
information agent for the exchange
offers and consent solicitations.
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Citigroup Global Markets Inc. and RBS Securities Inc. are
serving as the dealer managers.
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The addresses and the facsimile and telephone numbers of
these parties appear on the back cover of this prospectus.
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AMB LP has other business relationships with the exchange
agent and the dealer managers, as described in “The Exchange
Offers and Consent Solicitations — Exchange Agent” and “—
Dealer Managers.”
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No Guaranteed Delivery Procedures
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No guaranteed delivery procedures are
being offered in connection with the
exchange offers and consent
solicitations. You must tender your
ProLogis Notes and deliver your consent
by the Expiration Date in order to
participate in the applicable exchange
offers.
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No Recommendation
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None of AMB, AMB LP or their
subsidiaries, ProLogis or its
subsidiaries, the dealer managers, the
information agent, the exchange agent or
the Trustee makes any recommendation in
connection with the exchange offers or
consent solicitations as to whether any
ProLogis noteholder should tender or
refrain from tendering all or any
portion of the principal amount of such
holder’s ProLogis Notes (and in so
doing, consent to the adoption of the
Proposed Amendments to the ProLogis
Indenture), and no one has been
authorized by any of them to make such a
recommendation.
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Risk Factors
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For risks related to the exchange offers
and consent solicitations, please read
the section entitled “Risk Factors”
beginning on page 59 of this prospectus.
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The AMB LP Non-Exchangeable Notes
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Issuer
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AMB LP (which will be known as ProLogis,
L.P. after the Merger) will issue the AMB
LP Non-Exchangeable Notes.
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General; Comparison to ProLogis
Non-Convertible Notes
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Each new series of AMB LP Non-Exchangeable
Notes will have substantially the same
terms, including interest rate, interest
payment dates, redemption terms and
maturity, as the corresponding series of
outstanding ProLogis Non-Convertible Notes
(prior to the Proposed Amendments) for
which they are being offered in exchange,
except that, among other things, the AMB
LP Non-Exchangeable Notes will be
guaranteed by AMB LP’s parent entity and
sole general partner, AMB, as compared
with the ProLogis Non-Convertible Notes,
which were issued by ProLogis and are not
guaranteed, the new AMB LP Indenture will
not have a restriction preventing
incurrence of additional unsecured debt by
AMB LP’s subsidiaries and the definition
of debt in the new AMB LP Indenture will
be revised to limit the amount of secured
debt to include the lesser of the amount
of secured debt or the fair market value
of the property that secures such debt and
to include letters of credit only to the
extent called upon. In the case of each
new AMB LP 9.340% 2015 Note and AMB LP
8.650% 2016 Note issued in exchange for a
ProLogis 9.340% 2015 Note and a ProLogis
8.650% 2016 Note, respectively, the
mandatory principal repayment schedule
will be revised from that contained in the
corresponding ProLogis Note to reflect the
fact that, because previous mandatory
principal repayments were not,
and with respect to the principal payment to be made on May 15,
2011 with respect to the ProLogis 8.650% 2016 Notes is not
expected to be, applied in
accordance with their respective terms
with respect to the corresponding ProLogis
Note, the outstanding principal amount of
each currently outstanding ProLogis 9.340%
2015 Note and ProLogis 8.650% 2016 Note
is, and the AMB LP 9.340% 2015 Note and
AMB LP 8.650% 2016 Note to be issued in
exchange thereof will be, $1,000.
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See “The Exchange Offers and Consent Solicitations — Terms
of the Exchange Offers and Consent Solicitations,” “—
ProLogis Amortizing Notes” and “Description of the
Differences Between the AMB LP Notes and the ProLogis Notes.”
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Interest Rates; Interest Payment
Dates; Maturity Dates
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Each new series of AMB LP
Non-Exchangeable Notes will have
substantially the same terms, including
interest rate, interest payment dates and
maturity, as the corresponding series of
ProLogis Non-Convertible Notes (prior to
the Proposed Amendments) for which they
are being offered in exchange, as
described in the table below.
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Each AMB LP Non-Exchangeable Note will bear interest from the
most recent date on which interest will have been paid on the
corresponding ProLogis Non-Convertible Note. Holders of
ProLogis Non-Convertible Notes that are accepted for exchange
will be deemed to have waived the right to receive any
payment from ProLogis in respect of interest accrued from the
date of the last interest payment date in respect of their
ProLogis Non-Convertible Notes until the date of the issuance
of the AMB LP Non-Exchangeable Notes. Consequently, holders
of AMB LP Non-Exchangeable Notes will receive the same
interest payments that they would have received had
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they not exchanged their ProLogis Non-Convertible Notes in
the applicable exchange offer.
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Interest on the AMB LP 7.810% 2015 Notes, AMB LP 9.340% 2015
Notes and AMB LP 8.650% 2016 Notes will accrue on the current
principal amount outstanding.
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Semi-Annual Interest Payment
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Interest Rates and Maturity Dates
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Dates
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5.500% Notes due April 1, 2012
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April 1 and October 1
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5.500% Notes due March 1, 2013
|
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March 1 and September 1
|
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7.625% Notes due August 15, 2014
|
|
February 15 and August 15
|
|
7.810% Notes due February 1, 2015
|
|
February 1 and August 1
|
|
9.340% Notes due March 1, 2015
|
|
March 1 and September 1
|
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5.625% Notes due November 15, 2015
|
|
May 15 and November 15
|
|
5.750% Notes due April 1, 2016
|
|
April 1 and October 1
|
|
8.650% Notes due May 15, 2016
|
|
May 15 and November 15
|
|
5.625% Notes due November 15, 2016
|
|
May 15 and November 15
|
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6.250% Notes due March 15, 2017
|
|
March 15 and September 15
|
|
7.625% Notes due July 1, 2017
|
|
January 1 and July 1
|
|
6.625% Notes due May 15, 2018
|
|
May 15 and November 15
|
|
7.375% Notes due October 30, 2019
|
|
April 30 and October 30
|
|
6.875% Notes due March 15, 2020
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|
March 15 and September 15
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Payment of Principal
|
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Installments of principal on each $1,000
original principal amount of the AMB LP
7.810% 2015 Notes shall be payable to each
holder of such notes annually on each
February 1 in the following amounts: $150 in
2012, $200 in 2013, $200 in 2014 and $100 in
2015. Each $1,000 original principal amount
of the AMB LP 7.810% 2015 Notes shall be
entitled to receive payments of principal in
an aggregate amount equal only to the current
principal amount outstanding under each such
note, which will be $650 at the expected time
of settlement.
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Installments of principal on each $1,000
principal amount of the AMB LP 9.340% 2015
Notes will be paid to each holder of such
notes annually on each March 1 in the
following amounts: $150 in 2012, $175 in
2013, $200 in 2014 and $250 in 2015. The
remaining $225 of principal will be paid at
or prior to the maturity date of the AMB LP
9.340% 2015 Notes. In each case, principal
on the AMB LP 9.340% 2015 Notes will be
payable to the Person in whose name the AMB
LP 9.340% 2015 Notes are registered in the
security register on the preceding February
15 (whether or not a business day). For more
information on the AMB LP 9.340% 2015 Notes,
see “The Exchange Offers and Consent
Solicitations — ProLogis Amortizing Notes.”
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Installments of principal on each $1,000
principal amount of the AMB LP 8.650% 2016
Notes will be paid to each holder of such
notes annually on each May 15 to the Person
in whose name the AMB LP 8.650% 2016 Notes
are registered in the security register on
the preceding May 1 (whether or not a
business day) in the following amounts: $100
in 2012, $100 in 2013, $150 in 2014, $200 in
2015 and $250 in 2016. The remaining $200 of
principal will be paid at or prior to the
maturity date of the AMB LP 8.650% 2016
Notes. For more information on the AMB LP
8.650% 2016 Notes, see “The Exchange Offers
and Consent Solicitations — ProLogis
Amortizing Notes.”
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The remaining series of the AMB LP
Non-Exchangeable Notes will receive
repayments of principal only on their
respective maturity dates, or otherwise in
accordance with the terms of each note.
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28
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Guarantor
|
|
AMB Property Corporation, a Maryland
corporation (which will be known as ProLogis,
Inc., and which is referred to as the
combined company, after the Merger).
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Guarantees
|
|
The AMB LP Non-Exchangeable Notes will be
fully and unconditionally guaranteed by AMB
except as may be limited to the maximum
amount permitted under applicable federal or
state law. AMB’s guarantee of the AMB LP
Notes will rank
pari passu
in right of
payment with all of AMB’s unsecured and
unsubordinated indebtedness, including AMB’s
indebtedness for borrowed money, indebtedness
evidenced by bonds, debentures, notes or
similar instruments, obligations arising from
or with respect to guarantees and direct
credit substitutes, obligations associated
with hedges and derivative products,
capitalized lease obligations and other
unsecured and unsubordinated indebtedness. In
addition, the guarantee of the AMB LP
Non-Exchangeable Notes by AMB will be
effectively subordinated to all of the
mortgages and other secured indebtedness of
AMB and all of the secured and unsecured
indebtedness and other liabilities of its
subsidiaries, other than AMB LP. See
“Description of the AMB LP Non-Exchangeable
Notes — AMB Guarantee.”
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Ranking
|
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The AMB LP Non-Exchangeable Notes will be AMB
LP’s direct, unsecured and unsubordinated
obligations and will rank
pari passu
with all
of AMB LP’s other unsecured and
unsubordinated indebtedness outstanding from
time to time. The AMB LP Non-Exchangeable
Notes will be effectively subordinated to AMB
LP’s mortgages and other secured indebtedness
to the extent of any collateral pledged as
security therefor and to all of the secured
and unsecured indebtedness and other
liabilities of AMB LP’s consolidated
subsidiaries and unconsolidated joint
ventures and co-investment ventures.
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Optional Redemption
|
|
AMB LP may redeem any series of the AMB LP
Non-Exchangeable Notes before their stated
maturity in whole, at any time, or in part,
from time to time, at a redemption price that
includes accrued and unpaid interest and a
make-whole premium.
For a more complete description of the
redemption provisions of the AMB LP
Non-Exchangeable Notes, see “Description of
the AMB LP Non-Exchangeable Notes — Optional
Redemption.”
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Use of Proceeds
|
|
AMB LP will not receive any cash proceeds
from the issuance of the AMB LP
Non-Exchangeable Notes in connection with the
exchange offers. In exchange for issuing the
AMB LP Non-Exchangeable Notes and paying the
cash exchange consideration (as applicable),
AMB LP will receive ProLogis Non-Convertible
Notes that will be retired and cancelled and
will not be reissued. See “Use of Proceeds.”
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|
U.S. Federal Income Tax
Considerations
|
|
The AMB LP Non-Exchangeable Notes are subject
to special and complex U.S. federal income
tax rules. Holders are urged to consult their
respective tax advisors with respect to the
application of the U.S. federal income tax
laws to their own particular situation. See
“Material United States Federal Income Tax
Consequences.”
|
29
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Trading
|
|
The AMB LP Non-Exchangeable Notes will be a
new issue of securities, and there is
currently no established trading market for
the AMB LP Non-Exchangeable Notes. An active
or liquid market may not develop for the AMB
LP Non-Exchangeable Notes or, if developed,
may not be maintained. AMB LP has not applied
and does not intend to apply for the listing
of the AMB LP Non-Exchangeable Notes on any
securities exchange or for quotation on any
automated dealer quotation system.
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Covenants
|
|
AMB LP will issue the AMB LP Non-Exchangeable
Notes under the new AMB LP Indenture. The
new AMB LP Indenture will include certain
covenants as described herein. Each covenant
is subject to a number of important
exceptions, limitations and qualifications
that are described under “Description of the
AMB LP Non-Exchangeable Notes — Covenants.”
|
30
The AMB LP Contingent Exchangeable Notes
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Issuer
|
|
AMB LP (which will be known as ProLogis,
L.P. after the Merger) will issue the AMB
LP Contingent Exchangeable Notes. AMB
will issue the shares of its common stock,
if any, deliverable upon exchange of the
AMB LP Contingent Exchangeable Notes.
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|
General; Comparison to ProLogis
Contingent Convertible Notes
|
|
Each new series of AMB LP Contingent
Exchangeable Notes will have substantially
the same terms, including interest rate,
interest payment dates, redemption terms,
maturity and exchange terms (other than
the applicable initial exchange rates,
dividend threshold amounts and fundamental
change make-whole amounts), as the
corresponding series of outstanding
ProLogis Contingent Convertible Notes
(prior to the Proposed Amendments) for
which they are being offered in exchange,
except that, among other things, the AMB
LP Contingent Exchangeable Notes will be
guaranteed by AMB LP’s parent entity and
sole general partner, AMB, as compared
with the ProLogis Contingent Convertible
Notes, which were issued by ProLogis and
are not guaranteed and will be
exchangeable into the common stock of AMB,
as compared with the ProLogis Contingent
Convertible Notes, which are convertible
into ProLogis common shares and will be
exchangeable into AMB common stock after
the Merger.
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See “The Exchange Offers and Consent Solicitations — Terms
of the Exchange Offers and Consent Solicitations” and
“Description of the Differences Between the AMB LP Notes and
the ProLogis Notes.”
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|
Interest Rates; Interest Payment
Dates; Maturity Dates
|
|
Each new series of AMB LP Contingent
Exchangeable Notes will have
substantially the same terms, including
interest rate, interest payment dates and
maturity, as the corresponding series of
ProLogis Contingent Convertible Notes
(prior to the Proposed Amendments) for
which they are being offered in exchange,
as described in the table below.
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Each AMB LP Contingent Exchangeable Note will bear interest
from the most recent date on which interest will have been
paid on the corresponding ProLogis Contingent Convertible
Note. Holders of ProLogis Contingent Convertible Notes that
are accepted for exchange will be deemed to have waived the
right to receive any payment from ProLogis in respect of
interest accrued from the date of the last interest payment
date in respect of their ProLogis Contingent Convertible
Notes until the date of the issuance of the AMB LP Contingent
Exchangeable Notes. Consequently, holders of AMB LP
Contingent Exchangeable Notes will receive the same interest
payments that they would have received had they not exchanged
their ProLogis Contingent Convertible Notes in the applicable
exchange offer.
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|
Semi-Annual Interest
|
|
Interest Rates and Maturity Dates
|
|
Payment Dates
|
|
|
|
2.250% Exchangeable Senior Notes due April 1, 2037
|
|
April 1 and October 1
|
|
1.875% Exchangeable Senior Notes due November 15, 2037
|
|
May 15 and November 15
|
|
2.625% Exchangeable Senior Notes due May 15, 2038
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|
May 15 and November 15
|
31
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|
|
Guarantor
|
|
AMB Property Corporation, a Maryland corporation
(which will be known as ProLogis, Inc., and which
is referred to as the combined company, after the
Merger).
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|
|
|
Guarantees
|
|
The AMB LP Contingent Exchangeable Notes will be
fully and unconditionally guaranteed by AMB except
as may be limited to the maximum amount permitted
under applicable federal or state law. AMB’s
guarantee of the AMB LP Notes will rank
pari passu
in right of payment with all of AMB’s unsecured and
unsubordinated indebtedness, including AMB’s
indebtedness for borrowed money, indebtedness
evidenced by bonds, debentures, notes or similar
instruments, obligations arising from or with
respect to guarantees and direct credit
substitutes, obligations associated with hedges and
derivative products, capitalized lease obligations
and other unsecured and unsubordinated
indebtedness. In addition, the guarantee of the AMB
LP Contingent Exchangeable Notes by AMB will be
effectively subordinated to all of the mortgages
and other secured indebtedness of AMB and all of
the secured and unsecured indebtedness and other
liabilities of its subsidiaries, other than AMB LP.
See “Description of the AMB LP Contingent
Exchangeable Notes — AMB Guarantee.”
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Ranking
|
|
The AMB LP Contingent Exchangeable Notes will be
AMB LP’s direct, unsecured and unsubordinated
obligations and will rank
pari passu
with all of
AMB LP’s other unsecured and unsubordinated
indebtedness outstanding from time to time. The
AMB LP Contingent Exchangeable Notes will be
effectively subordinated to AMB LP’s mortgages and
other secured indebtedness to the extent of any
collateral pledged as security therefor and to all
of the secured and unsecured indebtedness and other
liabilities of AMB LP’s consolidated subsidiaries
and unconsolidated joint ventures and co-investment
ventures.
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Optional Redemption
|
|
Prior to certain dates described below, AMB LP may
not redeem the AMB LP Contingent Exchangeable Notes
except to preserve AMB’s status as a REIT as
described below. If at any time AMB LP determines
it is necessary to redeem the AMB LP Contingent
Exchangeable Notes in order to preserve AMB’s
status as a REIT, AMB LP may redeem all, but not
less than all, of the AMB LP Contingent
Exchangeable Notes then outstanding for cash at a
price equal to 100% of the principal amount of the
AMB LP Contingent Exchangeable Notes being
redeemed, plus accrued and unpaid interest, if any,
to the redemption date. On or after certain dates
described below, AMB LP may at its option redeem
all or part of the AMB LP Contingent Exchangeable
Notes for cash at a price equal to 100% of the
principal amount of the AMB LP Contingent
Exchangeable Notes being redeemed, plus accrued and
unpaid interest, if any, to the redemption date.
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For a more complete description of the redemption
provisions of the AMB LP Contingent Exchangeable
Notes, see “Description of the AMB LP Contingent
Exchangeable Notes — Optional Redemption.”
|
32
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|
|
Exchange Rights
|
|
Holders may exchange their AMB LP Contingent
Exchangeable Notes prior to the close of business
on the trading day immediately preceding the
applicable maturity date, at the option of the
holder under the following circumstances:
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|
|
•
|
|
during the five business day period after any ten
consecutive trading day period (the “measurement
period”) in which the trading price per note for
each day of such measurement period was less than
98% of the product of the last reported sale price
per share of AMB common stock and the applicable
exchange rate on each such day;
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|
•
|
|
during any calendar quarter beginning after June
30, 2011, if the closing sale price per share of AMB
common stock for at least 20 trading days in the 30
consecutive trading days ending on the last day of
the preceding calendar quarter is more than 130% of
the exchange price per share of AMB common stock on
the last day of such preceding calendar quarter;
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|
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|
|
•
|
|
if AMB LP has called such series of AMB LP
Contingent Exchangeable Notes for redemption, at any
time prior to the close of business on the day that
is two business days prior to the redemption date;
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|
|
•
|
|
upon the occurrence of specified corporate
transactions described under “Description of the AMB
LP Contingent Exchangeable Notes — Exchange Rights
— Exchange of AMB LP Contingent Exchangeable Notes
Upon Specified Corporate Transactions”;
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|
•
|
|
if AMB’s common stock is not listed on a United
States national securities exchange; or
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|
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|
•
|
|
any time on or after
|
|
|
o
|
|
February 1, 2012 for the AMB LP 2.250% 2037
Exchangeable Notes,
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|
o
|
|
October 15, 2012 for the AMB LP 1.875% 2037
Exchangeable Notes, or
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|
o
|
|
February 15, 2013 for the AMB LP 2.625% 2038
Exchangeable Notes.
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|
|
The initial exchange rates and equivalent exchange price for
each series of AMB LP Contingent Exchangeable Notes, subject
to adjustment, are provided below:
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|
|
Initial
|
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|
|
Initial Exchange
|
|
Exchange Price
|
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|
|
Rate Per $1,000
|
|
Per Share of
|
|
|
|
Principal Amount
|
|
AMB Common
|
|
|
|
Of Notes
|
|
Stock
|
|
AMB LP 2.250% 2037 Exchangeable Notes
|
|
|
5.8752
|
|
|
|
170.2070
|
|
|
AMB LP 1.875% 2037 Exchangeable Notes
|
|
|
5.4874
|
|
|
|
182.2357
|
|
|
AMB LP 2.625% 2038 Exchangeable Notes
|
|
|
5.8569
|
|
|
|
170.7388
|
|
33
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|
|
Upon the occurrence of any of the circumstances
described above, holders may exchange any outstanding AMB LP
Contingent Exchangeable Notes into cash, shares of AMB common
stock or a combination of cash and shares of AMB common
stock, at AMB LP’s election. AMB LP will inform you through
the Trustee of the method AMB LP will choose to satisfy its
exchange obligations within two trading days immediately
after AMB LP’s receipt of your exchange notice; provided,
however, that at any time on or prior to:
|
|
|
|
•
February 1, 2012 for the AMB LP 2.250% 2037
Exchangeable Notes,
|
|
|
|
•
October 15, 2012 for the AMB LP 1.875% 2037
Exchangeable Notes, and
|
|
|
|
•
February 15, 2013 for the AMB LP 2.625% 2038
Exchangeable Notes,
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|
|
AMB LP may irrevocably elect, in its sole discretion without
the consent of the holders of such notes to settle all of
its future exchange obligations entirely in shares of AMB
common stock, and, provided further, that AMB LP is required
to settle all exchanges with an exchange date occurring on or
after:
|
|
|
|
•
February 1, 2012 for the AMB LP 2.250% 2037
Exchangeable Notes,
|
|
|
|
•
October 15, 2012 for the AMB LP 1.875% 2037
Exchangeable Notes, and
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|
|
•
February 15, 2013 for the AMB LP 2.625% 2038
Exchangeable Notes,
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|
in the same manner and AMB LP will notify holders of the
manner of settlement on or before such date. If AMB LP does
not elect otherwise, its exchange obligations will be settled
in a combination of cash and shares of AMB common stock as
follows: (i) AMB LP will pay cash in an amount equal to the
lesser of the principal amount of the AMB LP Contingent
Exchangeable Notes to be exchanged and the exchange value of
the AMB LP Contingent Exchangeable Notes to be exchanged,
calculated as described in this prospectus, and (ii) to the
extent that the exchange value of the AMB LP Contingent
Exchangeable Notes to be exchanged exceeds the principal
amount of the AMB LP Contingent Exchangeable Notes to be
exchanged (such difference being referred to as the “excess
amount”), AMB LP will deliver shares of AMB common stock or,
at AMB LP’s election, cash, equivalent to the excess amount.
The number of shares to be delivered will be determined based
on a daily exchange value, as described in this prospectus,
calculated on a proportionate basis for each day of a 20
trading day observation period, as described in this
prospectus. However, AMB LP may elect to deliver cash in
settlement of all or a portion of the excess amount or AMB LP
may elect to settle its exchange obligations entirely in
shares of AMB common stock. See “Description of the AMB LP
Contingent
Exchangeable Notes — Exchange Rights — Payment Upon
Exchange of the AMB LP Contingent Exchangeable Notes.”
|
34
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|
You will not receive any additional cash payment or
additional shares representing accrued and unpaid interest
upon exchange of an AMB LP Contingent Exchangeable Note,
except in limited circumstances. Instead, interest will be
deemed paid by cash and shares of AMB common stock, if any,
delivered to you upon exchange.
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|
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Use of Proceeds
|
|
AMB LP will not receive any cash proceeds
from the issuance of the AMB LP
Contingent Exchangeable Notes in
connection with the exchange offers. In
exchange for issuing the AMB LP
Contingent Exchangeable Notes and paying
the cash exchange consideration (as
applicable), AMB LP will receive ProLogis
Contingent Convertible Notes that will be
retired and cancelled and will not be
reissued. See “Use of Proceeds.”
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|
Repurchase at Holders’ Option
|
|
Holders may require AMB LP to repurchase
the AMB LP Contingent Exchangeable Notes
on:
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|
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|
•
April 1 of 2012, 2017, 2022, 2027 and 2032 with
respect to any outstanding AMB LP 2.250% 2037
Exchangeable Notes,
|
|
|
|
•
January 15, 2013 and November 15 of 2017, 2022,
2027, and 2032 with respect to any outstanding AMB
LP 1.875% 2037 Exchangeable Notes, and
|
|
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|
•
May 15 of 2013, 2018, 2023, 2028, and 2033 with
respect to any outstanding AMB LP 2.625% 2038
Exchangeable Notes,
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|
at a repurchase price equal to 100% of the principal amount
of the AMB LP Contingent Exchangeable Notes being repurchased
plus any accrued and unpaid interest to, but excluding, the
repurchase date. AMB LP will pay cash for all notes so
repurchased.
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Fundamental Change
|
|
If AMB LP undergoes a fundamental change (as defined under “Description of the AMB LP Contingent
Exchangeable Notes — Exchange Rights — Adjustment to Shares Delivered Upon Exchange Upon Fundamental
Change”), you will have the option to require AMB LP to repurchase all or any portion of your AMB LP
Contingent Exchangeable Notes.
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The fundamental change purchase price will be 100% of the principal amount of the AMB LP Contingent
Exchangeable Notes to be purchased plus any accrued and unpaid interest to, but excluding, the
fundamental change repurchase date. AMB LP will pay cash for all AMB LP Contingent Exchangeable Notes so
purchased.
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In addition, if a fundamental change occurs prior to:
|
|
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|
•
April 5, 2012 for the AMB LP 2.250% 2037
Exchangeable Notes,
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|
|
|
•
January 15, 2013 for the AMB LP 1.875% 2037
Exchangeable Notes, and
|
|
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|
•
May 20, 2013 for the AMB LP 2.625% 2038
Exchangeable Notes,
|
35
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|
AMB LP will increase the applicable
exchange rate for a holder who elects to
exchange its AMB LP Contingent
Exchangeable Notes in connection with such
a fundamental change as described under
“Description of the AMB LP Contingent
Exchangeable Notes — Exchange Rights —
Adjustment to Shares Delivered Upon
Exchange Upon Fundamental Change.”
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|
|
|
|
|
U.S. Federal Income Tax
Considerations
|
|
The AMB LP Contingent Exchangeable Notes
and the shares of AMB common stock into
which the AMB LP Contingent Exchangeable
Notes may be exchanged are subject to
special and complex U.S. federal income
tax rules. Holders are urged to consult
their respective tax advisors with respect
to the application of the U.S. federal
income tax laws to their own particular
situation. See “Material United States
Federal Income Tax Consequences.”
|
|
|
|
|
|
Trading
|
|
The AMB LP Contingent Exchangeable Notes
will be a new issue of securities, and
there is currently no established trading
market for the AMB LP Contingent
Exchangeable Notes. An active or liquid
market may not develop for the AMB LP
Contingent Exchangeable Notes or, if
developed, may not be maintained. AMB LP
has not applied and does not intend to
apply for the listing of the AMB LP
Contingent Exchangeable Notes on any
securities exchange or for quotation on
any automated dealer quotation system.
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|
New York Stock Exchange Symbol
for AMB Common Stock
|
|
Following the completion of the Merger,
the common stock of the combined company
will be listed on the NYSE, trading under
the symbol “PLD.”
|
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|
Ownership Limitation
|
|
In order to assist AMB in maintaining its
qualification as a REIT for U.S. federal
income tax purposes, no person may own
more than 9.8% (by value or number of
shares, whichever is more restrictive) of
the outstanding shares of AMB common
stock, with certain exceptions.
Notwithstanding any other provision of the
AMB LP Contingent Exchangeable Notes, in
addition to AMB LP’s right to elect to
deliver exchange consideration in whole or
in part in cash, no holder of AMB LP
Contingent Exchangeable Notes will be
entitled to exchange such AMB LP
Contingent Exchangeable Notes for shares
of AMB common stock to the extent that
receipt of such shares would cause such
holder (together with such holder’s
affiliates) to exceed such ownership
limit. See “Description of AMB Capital
Stock — AMB Common Stock — Ownership
Limitation.”
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No Stockholder Rights for
Holders of AMB LP Contingent
Exchangeable Notes
|
|
Holders of AMB LP Contingent Exchangeable
Notes will not have any rights as
stockholders of AMB (including, without
limitation, voting rights and rights to
receive dividends or other distributions
on AMB common stock).
|
36
|
|
|
|
|
Covenants
|
|
AMB LP will issue the AMB LP Contingent
Exchangeable Notes under a new AMB LP
Indenture. The new AMB LP Indenture will
include certain covenants as described
herein. The AMB LP Contingent
Exchangeable Notes will not be subject to
the Limitations on Incurrence of Debt
covenant. Each covenant is subject to a
number of important exceptions,
limitations and qualifications that are
described under “Description of the AMB LP
Contingent Exchangeable Notes —
Covenants.”
|
37
|
|
|
|
The AMB LP 3.250% 2015 Exchangeable Notes
|
|
|
|
|
|
Issuer
|
|
AMB LP (which will be known as ProLogis,
L.P. after the Merger) will issue the AMB
LP 3.250% 2015 Exchangeable Notes. AMB
will issue the shares of its common stock,
if any, deliverable upon exchange of the
AMB LP 3.250% 2015 Exchangeable Notes.
|
|
|
|
|
|
General; Comparison to ProLogis
2015 Convertible Notes
|
|
The AMB LP 3.250% 2015 Exchangeable Notes
will have substantially the same terms,
including interest rate, interest payment
dates, redemption terms, maturity and
exchange terms (other than the applicable
initial exchange rates, dividend threshold
amounts, fundamental change make-whole
amounts and the exchange consideration),
as the corresponding outstanding ProLogis
3.250% 2015 Convertible Notes (prior to
the Proposed Amendments) for which they
are being offered in exchange, except
that, among other things, the AMB LP
3.250% 2015 Exchangeable Notes will be
guaranteed by AMB LP’s parent entity and
sole general partner, AMB, as compared
with the ProLogis 3.250% 2015 Convertible
Notes, which were issued by ProLogis and
are not guaranteed, and will be
exchangeable into AMB common stock, cash
or a combination of the two, at the option
of AMB LP, as compared with the ProLogis
3.250% 2015 Convertible Notes, which are
convertible only into ProLogis common
shares and will be exchangeable only into
AMB common stock after the Merger.
|
|
|
|
|
|
|
|
See “The Exchange Offers and Consent Solicitations — Terms
of the Exchange Offers and Consent Solicitations” and
“Description of the Difference Between the AMB LP Notes and
the ProLogis Notes.”
|
|
|
|
|
|
Interest Rates; Interest Payment
Dates; Maturity Dates
|
|
The AMB LP 3.250% 2015 Exchangeable Notes
will have substantially the same terms,
including interest rate, interest payment
dates, and maturity, as the corresponding
ProLogis 3.250% 2015 Convertible Notes
(prior to the Proposed Amendments) for
which they are being offered in exchange,
as described in the table below.
|
|
|
|
|
|
|
|
Each AMB LP 3.250% 2015 Exchangeable Note will bear interest
from the most recent date on which interest will have been
paid on the ProLogis 3.250% 2015 Convertible Note. Holders
of ProLogis 3.250% 2015 Convertible Notes that are accepted
for exchange will be deemed to have waived the right to
receive any payment from ProLogis in respect of interest
accrued from the date of the last interest payment date in
respect of their ProLogis 3.250% 2015 Convertible Notes until
the date of the issuance of the AMB LP 3.250% 2015
Exchangeable Notes. Consequently, holders of AMB LP 3.250%
2015 Exchangeable Notes will receive the same interest
payments that they would have received had they not exchanged
their ProLogis 3.250% 2015 Convertible Notes in the
applicable exchange offer.
|
|
|
|
|
|
|
|
|
|
Semi-Annual Interest
|
|
Interest Rates and Maturity Dates
|
|
Payment Dates
|
|
|
|
3.250% Exchangeable Senior Notes due March 15, 2015
|
|
March 15 and September 15
|
|
|
|
|
|
Guarantor
|
|
AMB Property Corporation, a Maryland corporation
(which will be known as ProLogis, Inc., and which
is referred to as the combined company, after the
Merger).
|
38
|
|
|
|
|
Guarantees
|
|
The AMB LP 3.250% 2015 Exchangeable Notes will be
fully and unconditionally guaranteed by AMB except
as may be limited to the maximum amount permitted
under applicable federal or state law. AMB’s
guarantee of the AMB LP Notes will rank
pari passu
in right of payment with all of AMB’s unsecured and
unsubordinated indebtedness, including AMB’s
indebtedness for borrowed money, indebtedness
evidenced by bonds, debentures, notes or similar
instruments, obligations arising from or with
respect to guarantees and direct credit
substitutes, obligations associated with hedges and
derivative products, capitalized lease obligations
and other unsecured and unsubordinated
indebtedness. In addition, the guarantee of the AMB
LP 3.250% 2015 Notes by AMB will be effectively
subordinated to all of the mortgages and other
secured indebtedness of AMB and all of the secured
and unsecured indebtedness and other liabilities of
its subsidiaries, other than AMB LP. See
“Description of the AMB LP 3.250% 2015 Exchangeable
Notes — AMB Guarantee.”
|
|
|
|
|
|
Ranking
|
|
The AMB LP 3.250% 2015 Exchangeable Notes will be
AMB LP’s direct, unsecured and unsubordinated
obligations and will rank
pari passu
with all of
AMB LP’s other unsecured and unsubordinated
indebtedness outstanding from time to time. The
AMB LP 3.250% 2015 Notes will be effectively
subordinated to AMB LP’s mortgages and other
secured indebtedness to the extent of any
collateral pledged as security therefor and to all
of the secured and unsecured indebtedness and other
liabilities of AMB LP’s consolidated subsidiaries
and unconsolidated joint ventures and co-investment
ventures.
|
|
|
|
|
|
Optional Redemption
|
|
AMB LP may not redeem the AMB LP 3.250% 2015
Exchangeable Notes prior to maturity except to
preserve AMB’s status as a REIT. If at any time AMB
LP determines it is necessary to redeem the AMB LP
3.250% 2015 Exchangeable Notes in order to preserve
AMB’s status as a REIT, AMB LP may redeem all, but
not less than all, of the AMB LP 3.250% 2015
Exchangeable Notes then outstanding for cash at a
price equal to 100% of the principal amount of the
AMB LP 3.250% 2015 Exchangeable Notes being
redeemed, plus accrued and unpaid interest, if any,
to the redemption date.
For a more complete description of the redemption
provisions of the AMB LP 3.250% 2015 Exchangeable
Notes, see “Description of the AMB LP 3.250% 2015
Exchangeable Notes — Optional Redemption.”
|
|
|
|
|
|
Exchange Rights
|
|
Holders may exchange their AMB LP 3.250% 2015
Exchangeable Notes into cash, shares of AMB common
stock or a combination of cash and shares of AMB
common stock, at AMB LP’s election, based upon an
initial exchange rate of 25.8244 shares of AMB
common stock per $1,000 principal amount of AMB LP
3.250% 2015 Exchangeable Notes (equivalent to an
initial exchange price of approximately $38.7231
per share of AMB common stock), subject to
adjustment, at any time prior to the close of
business on the trading day immediately preceding
the maturity date, unless the AMB LP 3.250% 2015
Exchangeable Notes have been previously redeemed or
purchased by AMB LP. See “Description of the AMB LP
3.250% 2015 Exchangeable Notes — Exchange Rights.”
|
39
|
|
|
|
|
|
|
AMB LP will inform you through the Trustee of the method AMB
LP will choose to satisfy its exchange obligations within two
trading days immediately after AMB LP’s receipt of your
exchange notice. If AMB LP does not elect otherwise, its
exchange obligations will be settled in a combination of cash
and shares of AMB common stock as follows: (i) AMB LP will
pay cash in an amount equal to the lesser of the principal
amount of the AMB LP 3.250% 2015 Exchangeable Notes to be
exchanged and the exchange value of the AMB LP 3.250% 2015
Exchangeable Notes to be exchanged, calculated as described
in this prospectus, and (ii) to the extent that the exchange
value of the AMB LP 3.250% 2015 Exchangeable Notes to be
exchanged exceeds the principal amount of the AMB LP 3.250%
2015 Exchangeable Notes to be exchanged (such difference
being referred to as the “excess amount”), AMB LP will
deliver shares of AMB common stock or, at AMB LP’s election,
cash, equivalent to the excess amount. The number of shares
to be delivered will be determined based on a daily exchange
value, as described in this prospectus, calculated on a
proportionate basis for each day of a 20 trading day
observation period, as described in this prospectus. However,
AMB LP may elect to deliver cash in settlement of all or a
portion of the excess amount or AMB LP may elect to settle
its exchange obligations entirely in shares of AMB common
stock. See “Description of the AMB LP 3.250% 2015
Exchangeable Notes — Exchange Rights — Payment Upon
Exchange of the AMB LP 3.250% 2015 Exchangeable Notes.”
|
|
|
|
|
|
|
|
You will not receive any additional cash payment or
additional shares representing accrued and unpaid interest
upon exchange of an AMB LP 3.250% 2015 Exchangeable Note,
except in limited circumstances. Instead, interest will be
deemed paid by the shares of AMB common stock, cash or
combination of cash and AMB common stock delivered to you
upon exchange.
|
|
|
|
|
|
Use of Proceeds
|
|
AMB LP will not receive any cash proceeds from the
issuance of the AMB LP 3.250% 2015 Exchangeable
Notes in connection with the exchange offers. In
exchange for issuing the AMB LP 3.250% 2015
Exchangeable Notes and paying the cash exchange
consideration (as applicable), AMB LP will receive
ProLogis 3.250% 2015 Convertible Notes that will be
retired and cancelled and will not be reissued. See
“Use of Proceeds.”
|
|
|
|
|
|
Fundamental Change
|
|
If AMB LP undergoes a fundamental change (as defined
under “Description of the AMB LP 3.250% 2015
Exchangeable Notes — Exchange Rights — Adjustment
to Shares Delivered Upon Exchange Upon Fundamental
Change”), you will have the option to require AMB LP
to repurchase all or any portion of your AMB LP
3.250% 2015 Exchangeable Notes.
|
|
|
|
|
|
|
|
The fundamental change purchase price will be 100%
of the principal amount of the AMB LP 3.250% 2015
Exchangeable Notes to be purchased plus any accrued
and unpaid interest to, but excluding, the
fundamental change repurchase date. AMB LP will pay
cash for all notes so purchased.
|
|
|
|
|
|
|
|
In addition, if a fundamental change occurs at any
time, AMB LP will increase the exchange rate for a
holder who elects to exchange its AMB LP 3.250% 2015
Exchangeable Notes in connection with such a
|
40
|
|
|
|
|
|
|
fundamental change as described under “Description of the AMB LP 3.250% 2015
Exchangeable Notes — Exchange Rights — Adjustment to Shares Delivered Upon
Exchange Upon Fundamental Change.”
|
|
|
|
|
|
U.S. Federal Income Tax
Considerations
|
|
The AMB LP 3.250% 2015 Exchangeable
Notes and the shares of AMB common stock
into which the AMB LP 3.250% 2015
Exchangeable Notes may be exchanged are
subject to special and complex U.S.
federal income tax rules. Holders are
urged to consult their respective tax
advisors with respect to the application
of the U.S. federal income tax laws to
their own particular situation. See
“Material United States Federal Income
Tax Consequences.”
|
|
|
|
|
|
Trading
|
|
The AMB LP 3.250% 2015 Exchangeable
Notes will be a new issue of securities,
and there is currently no established
trading market for the AMB LP 3.250%
2015 Exchangeable Notes. An active or
liquid market may not develop for the
AMB LP 3.250% 2015 Exchangeable Notes
or, if developed, may not be maintained.
AMB LP has not applied and does not
intend to apply for the listing of the
AMB LP 3.250% 2015 Exchangeable Notes on
any securities exchange or for quotation
on any automated dealer quotation
system.
|
|
|
|
|
|
New York Stock Exchange
Symbol for AMB Common Stock
|
|
Following the completion of the Merger,
the common stock of the combined company
will be listed on the NYSE, trading
under the symbol “PLD.”
|
|
|
|
|
|
Ownership Limitation
|
|
In order to assist AMB in maintaining
its qualification as a REIT for U.S.
federal income tax purposes, no person
may own more than 9.8% (by value or
number of shares, whichever is more
restrictive) of the outstanding shares
of AMB common stock, with certain
exceptions. Notwithstanding any other
provision of the AMB LP 3.250% 2015
Exchangeable Notes, in addition to AMB
LP’s right to elect to deliver exchange
consideration in whole or in part in
cash, no holder of AMB LP 3.250% 2015
Exchangeable Notes will be entitled to
exchange such AMB LP 3.250% 2015
Exchangeable Notes for shares of AMB
common stock to the extent that receipt
of such shares would cause such holder
(together with such holder’s affiliates)
to exceed such ownership limit. See
“Description of AMB Capital Stock — AMB
Common Stock — Ownership Limitation.”
|
|
|
|
|
|
No Stockholder Rights
for Holders
of AMB LP 3.250% 2015
Exchangeable Notes
|
|
Holders of AMB LP 3.250% 2015
Exchangeable Notes will not have any
rights as stockholders of AMB
(including, without limitation, voting
rights and rights to receive dividends
or other distributions on AMB common
stock).
|
|
|
|
|
|
Covenants
|
|
AMB LP will issue the AMB LP 3.250% 2015
Exchangeable Notes under a new AMB LP
Indenture. The new AMB LP Indenture
will include certain covenants as
described herein. The AMB LP 3.250%
2015 Exchangeable Notes will not be
subject to the Limitations on Incurrence
of Debt covenant. Each covenant is
subject to a number of important
exceptions, limitations and
qualifications that are described under
“Description of the AMB LP 3.250% 2015
Exchangeable Notes — Covenants.”
|
41
Selected Historical Financial Data of AMB
The following tables set forth selected consolidated financial information for AMB. The
selected financial data as of and for the three months ended March 31, 2011 represents preliminary
operating and balance sheet data. AMB’s results of operations for the three months ended March 31,
2011 are not necessarily indicative of results that may be expected for any future period.
The selected statement of operations data for each of the years in the five-year period ended
December 31, 2010 and the selected balance sheet data as of December 31 for each of the years in
the five-year period ended December 31, 2010 have been derived from the consolidated financial
statements of AMB that were audited by PricewaterhouseCoopers LLP. The following information should
be read together with the consolidated financial statements of AMB, the notes related thereto and
the related reports of management on the financial condition and performance of AMB, all of which
are contained in the reports of AMB filed with the SEC and incorporated herein by reference. See
“Where You Can Find More Information.”
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
(In millions, except per
|
|
|
|
|
share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Rental revenues
|
|
$
|
158
|
|
|
$
|
147
|
|
|
Private capital revenues
|
|
|
8
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
166
|
|
|
|
154
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
Property operating costs
|
|
|
52
|
|
|
|
48
|
|
|
Depreciation and amortization
|
|
|
55
|
|
|
|
47
|
|
|
General and administrative
|
|
|
31
|
|
|
|
32
|
|
|
Merger transaction costs and restructuring charges
|
|
|
4
|
|
|
|
3
|
|
|
Fund costs and other expenses
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
143
|
|
|
|
132
|
|
|
Other Income and Expenses:
|
|
|
|
|
|
|
|
|
|
Development profits, net of taxes
|
|
|
—
|
|
|
|
5
|
|
|
Earnings from unconsolidated joint ventures, net
|
|
|
8
|
|
|
|
4
|
|
|
Interest expense, amortization and other income, net
|
|
|
(34
|
)
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
Income and gains from discontinued operations
|
|
|
17
|
|
|
|
1
|
|
|
Noncontrolling interests’ share of net income
|
|
|
(2
|
)
|
|
|
1
|
|
|
Preferred stock dividends & allocation to participating securities
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders
|
|
$
|
8
|
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share available to common stockholders — Basic
|
|
$
|
0.05
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share available to common stockholders — Diluted
|
|
$
|
0.05
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
168
|
|
|
|
149
|
|
|
Diluted
|
|
|
168
|
|
|
|
149
|
|
42
|
|
|
|
|
|
|
|
|
As of March 31, 2011
|
|
|
|
(In millions)
|
|
|
|
(Unaudited)
|
|
Balance sheet Data:
|
|
|
|
|
|
Investments in real estate (at cost)
|
|
$
|
6,841
|
|
|
Total assets
|
|
$
|
7,421
|
|
|
Total debt
|
|
$
|
3,426
|
|
|
Total liabilities and noncontrolling interests
|
|
$
|
4,118
|
|
|
Preferred stock
|
|
$
|
223
|
|
|
Total stockholders’ equity (excluding preferred stock)
|
|
$
|
3,080
|
|
|
Number of common shares outstanding
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
|
|
(In millions, except per share amounts)
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
634
|
|
|
$
|
618
|
|
|
$
|
678
|
|
|
$
|
636
|
|
|
$
|
679
|
|
|
Income (loss) from continuing operations
|
|
$
|
9
|
|
|
$
|
(124
|
)
|
|
$
|
(18
|
)
|
|
$
|
282
|
|
|
$
|
210
|
|
|
Income from discontinued operations
|
|
$
|
24
|
|
|
$
|
96
|
|
|
$
|
11
|
|
|
$
|
90
|
|
|
$
|
78
|
|
|
Net income (loss) before cumulative effect of
change in accounting principle
|
|
$
|
34
|
|
|
$
|
(28
|
)
|
|
$
|
(7
|
)
|
|
$
|
372
|
|
|
$
|
289
|
|
|
Net income (loss)
|
|
$
|
34
|
|
|
$
|
(28
|
)
|
|
$
|
(7
|
)
|
|
$
|
372
|
|
|
$
|
289
|
|
|
Net income (loss) available to common
stockholders
|
|
$
|
10
|
|
|
$
|
(50
|
)
|
|
$
|
(66
|
)
|
|
$
|
294
|
|
|
$
|
208
|
|
|
(Loss) income from continuing operations
available to common stockholders per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.08
|
)
|
|
$
|
(1.01
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
2.17
|
|
|
$
|
1.54
|
|
|
Diluted
|
|
$
|
(0.08
|
)
|
|
$
|
(1.01
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
2.12
|
|
|
$
|
1.49
|
|
|
Income from discontinued operations available
to common stockholders per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.14
|
|
|
$
|
0.64
|
|
|
$
|
0.09
|
|
|
$
|
0.85
|
|
|
$
|
0.83
|
|
|
Diluted
|
|
$
|
0.14
|
|
|
$
|
0.64
|
|
|
$
|
0.09
|
|
|
$
|
0.83
|
|
|
$
|
0.80
|
|
|
Net income (loss) available to common
stockholders per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.06
|
|
|
$
|
(0.37
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
3.02
|
|
|
$
|
2.37
|
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
(0.37
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
2.95
|
|
|
$
|
2.29
|
|
|
Cash dividends per common shares
|
|
$
|
1.12
|
|
|
$
|
1.12
|
|
|
$
|
1.56
|
|
|
$
|
2.00
|
|
|
$
|
1.84
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
162
|
|
|
|
134
|
|
|
|
97
|
|
|
|
97
|
|
|
|
88
|
|
|
Diluted
|
|
|
162
|
|
|
|
134
|
|
|
|
97
|
|
|
|
100
|
|
|
|
91
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
|
|
(In millions)
|
|
Balance sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in real estate (at cost)
|
|
$
|
6,906
|
|
|
$
|
6,709
|
|
|
$
|
6,604
|
|
|
$
|
6,710
|
|
|
$
|
6,576
|
|
|
Total assets
|
|
$
|
7,373
|
|
|
$
|
6,842
|
|
|
$
|
7,302
|
|
|
$
|
7,262
|
|
|
$
|
6,714
|
|
|
Total debt
|
|
$
|
3,331
|
|
|
$
|
3,213
|
|
|
$
|
3,990
|
|
|
$
|
3,495
|
|
|
$
|
3,437
|
|
|
Total liabilities and noncontrolling interests
|
|
$
|
4,052
|
|
|
$
|
3,902
|
|
|
$
|
4,787
|
|
|
$
|
4,498
|
|
|
$
|
4,547
|
|
|
Preferred stock
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
223
|
|
|
Total stockholders’ equity (excluding preferred
stock)
|
|
$
|
3,097
|
|
|
$
|
2,717
|
|
|
$
|
2,292
|
|
|
$
|
2,541
|
|
|
$
|
1,943
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
(In millions)
|
|
|
Funds from operations (FFO), as adjusted
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common
stockholders
|
|
$
|
10
|
|
|
$
|
(50
|
)
|
|
$
|
(66
|
)
|
|
$
|
294
|
|
|
$
|
208
|
|
|
Gains from sale or contribution of real estate
interests, net
|
|
|
(20
|
)
|
|
|
(39
|
)
|
|
|
(23
|
)
|
|
|
(86
|
)
|
|
|
(45
|
)
|
|
Total depreciation and amortization
|
|
|
190
|
|
|
|
174
|
|
|
|
162
|
|
|
|
158
|
|
|
|
176
|
|
|
Adjustments to derive FFO, as defined by NAREIT from
consolidated joint ventures
|
|
|
(22
|
)
|
|
|
(17
|
)
|
|
|
(19
|
)
|
|
|
(22
|
)
|
|
|
(35
|
)
|
|
Adjustments to derive FFO, as defined by NAREIT from
unconsolidated joint ventures
|
|
|
43
|
|
|
|
32
|
|
|
|
26
|
|
|
|
20
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations, as defined by
NAREIT
(1)
|
|
$
|
201
|
|
|
$
|
100
|
|
|
$
|
80
|
|
|
$
|
364
|
|
|
$
|
297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for impairment charges, restructuring
charges, preferred unit redemption (discount) premium
and debt extinguishment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate impairment losses
(2)
|
|
|
1
|
|
|
|
182
|
|
|
|
194
|
|
|
|
1
|
|
|
|
6
|
|
|
Pursuit costs and tax reserve
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
|
|
|
—
|
|
|
|
—
|
|
|
Restructuring charges
|
|
|
5
|
|
|
|
6
|
|
|
|
12
|
|
|
|
—
|
|
|
|
—
|
|
|
Loss on early extinguishment of debt
|
|
|
3
|
|
|
|
12
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
Preferred unit redemption (discount) premium
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
—
|
|
|
|
3
|
|
|
|
1
|
|
|
Allocation to participating securities
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted
(1)
|
|
$
|
210
|
|
|
$
|
289
|
|
|
$
|
298
|
|
|
$
|
368
|
|
|
$
|
303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB’s share of development profits, net of taxes
|
|
|
(7
|
)
|
|
|
(88
|
)
|
|
|
(77
|
)
|
|
|
(168
|
)
|
|
|
(106
|
)
|
|
Allocation to participating securities
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core funds from operations
(Core FFO), as adjusted
(1)
|
|
$
|
203
|
|
|
$
|
201
|
|
|
$
|
222
|
|
|
$
|
201
|
|
|
$
|
198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
253
|
|
|
$
|
243
|
|
|
$
|
303
|
|
|
$
|
241
|
|
|
$
|
336
|
|
|
Investing activities
|
|
$
|
(587
|
)
|
|
$
|
84
|
|
|
$
|
(882
|
)
|
|
$
|
(632
|
)
|
|
$
|
(881
|
)
|
|
Financing activities
|
|
$
|
330
|
|
|
$
|
(298
|
)
|
|
$
|
580
|
|
|
$
|
420
|
|
|
$
|
484
|
|
|
|
|
|
|
(1)
|
|
AMB believes that net income, as defined by generally accepted accounting principles as used
in the United States (“GAAP”), is the most appropriate earnings measure. However, AMB
considers funds from operations, as adjusted (“FFO, as adjusted”), funds from operations, as
defined by NAREIT (“FFO, as defined by NAREIT”) and core funds from operations, as adjusted
(“Core FFO, as adjusted”, which together with FFO, as adjusted and FFO, as defined by NAREIT,
AMB and ProLogis refer to as the “FFO Measures, as adjusted”) to be useful supplemental
measures of its operating performance. AMB calculates FFO, as adjusted, as net income (or
loss) available to common stockholders, calculated in accordance with GAAP, less gains (or
losses) from dispositions of real estate held for investment purposes and real estate-related
depreciation, and adjustments to derive AMB’s pro rata share of FFO, as adjusted, of
consolidated and unconsolidated joint ventures. AMB calculates Core FFO, as adjusted, as FFO,
as adjusted excluding the share of development profits of AMB. These calculations also include
adjustments for items as described below.
|
|
|
|
|
|
Unless stated otherwise, AMB includes the gains from development, including those from
value-added conversion projects, before depreciation recapture, as a component of FFO, as
adjusted. AMB believes gains from development should be included in FFO, as adjusted, to
more completely reflect the performance of one of AMB’s lines of business. AMB believes that
value-added conversion dispositions are in substance land sales and as such should be
included in FFO, as adjusted, consistent with the REIT industry’s long standing practice to
include gains on the sale of land in funds from operations. However, AMB’s interpretation of
FFO, as adjusted, may not be consistent with the views of others in the REIT industry, who
may consider it to be a divergence from the National Association of Real Estate Investment
|
44
|
|
|
|
|
|
|
Trusts (“NAREIT”) definition, and may not be comparable to funds from operations or funds
from operations per share reported by other REITs that interpret the current NAREIT
definition differently than AMB does. In connection with the formation of a joint venture,
AMB may warehouse assets that are acquired with the intent to contribute these assets to the
newly formed venture. Some of the properties held for contribution may, under certain
circumstances, be required to be depreciated under GAAP. AMB includes in its calculation of
FFO, as adjusted, gains or losses related to the contribution of previously depreciated real
estate to joint ventures. Although it is a departure from the current NAREIT definition, AMB
believes such calculation of FFO, as adjusted, better reflects the value created as a result
of the contributions.
|
|
|
|
|
|
In addition, AMB calculates FFO, as adjusted, to exclude impairment and restructuring
charges, debt extinguishment losses and preferred unit redemption discounts/premiums. The
impairment charges were principally a result of increases in estimated capitalization rates
and deterioration in market conditions that adversely impacted values. The restructuring
charges reflected costs associated with the reduction in global headcount and cost structure
of AMB. Debt extinguishment losses generally included the costs of repurchasing debt
securities. AMB repurchased certain tranches of senior unsecured debt to manage its debt
maturities in response to the current financing environment, resulting in greater debt
extinguishment costs. The preferred unit redemption discounts/premiums reflect the gain/loss
associated with the liquidation preference in the preferred unit redemption price less costs
incurred as a result of the redemption. In 2008, AMB also recognized charges to write-off
pursuit costs related to development projects it no longer planned to commence and to
establish a reserve against tax assets associated with the reduction of its development
activities. Although difficult to predict, these items may be recurring given the
uncertainty of the current economic climate and its adverse effects on the real estate and
financial markets. While not infrequent or unusual in nature, these items result from market
fluctuations that can have inconsistent effects on the results of operations of AMB. The
economics underlying these items reflect market and financing conditions in the short-term
but can obscure the performance of AMB and the value of the long-term investment decisions
and strategies of AMB. AMB management believes FFO, as adjusted, is significant and useful
to both it and its investors. FFO, as adjusted, more appropriately reflects the value and
strength of the business model of AMB and its potential performance isolated from the
volatility of the current economic environment and unobscured by costs (or gains) resulting
from the management of AMB of its financing profile in response to the tightening of the
capital markets. However, in addition to the limitations of the FFO Measures, as adjusted,
generally discussed below, FFO, as adjusted, does not present a comprehensive measure of the
financial condition and operating performance of AMB. This measure is a modification of the
NAREIT definition of funds from operations and should not be used as an alternative to net
income or cash flow from operations as defined by GAAP.
|
|
|
|
|
|
AMB believes that the FFO Measures, as adjusted, are meaningful supplemental measures of its
operating performance because historical cost accounting for real estate assets in
accordance with GAAP implicitly assumes that the value of real estate assets diminishes
predictably over time, as reflected through depreciation and amortization expenses. However,
since real estate values have historically risen or fallen with market and other conditions,
many industry investors and analysts have considered presentation of operating results for
real estate companies that use historical cost accounting to be insufficient. Thus, the FFO
Measures, as adjusted, are supplemental measures of operating performance for REITs that
exclude historical cost depreciation and amortization, among other items, from net income
available to common stockholders, as defined by GAAP. AMB believes that the use of the FFO
Measures, as adjusted, combined with the required GAAP presentations, has been beneficial in
improving the understanding of operating results of REITs among the investing public and
making comparisons of operating results among such companies more meaningful. AMB considers
the FFO Measures, as adjusted, to be useful measures for reviewing comparative operating and
financial performance because, by excluding gains or losses related to sales of previously
depreciated operating real estate assets and real estate depreciation and amortization, the
FFO Measures, as adjusted, can help the investing public compare the operating performance
of a company’s real estate between periods or as compared to other companies. While funds
from operations is a relevant and widely used measure of operating performance of REITs, the
FFO Measures, as adjusted, do not represent cash flow from operations or net income as
defined by GAAP and should not be considered as alternatives to those measures in evaluating
the liquidity or operating performance of AMB. The FFO Measures, as adjusted, also do not
consider the costs associated with capital expenditures related to the real
|
45
|
|
|
|
|
|
|
estate assets of AMB nor are the FFO Measures, as adjusted, necessarily indicative of cash
available to fund the future cash requirements of AMB. AMB management compensates for the
limitations of the FFO Measures, as adjusted, by providing investors with financial
statements prepared according to GAAP, along with this detailed discussion of the FFO
Measures, as adjusted, and a reconciliation of the FFO Measures, as adjusted, to net income
available to common stockholders, a GAAP measurement.
|
|
|
|
(2)
|
|
Includes adjustments for AMB’s share of real estate impairment losses from unconsolidated and
consolidated joint ventures.
|
46
Selected Historical Financial Data of AMB LP
The following tables set forth selected consolidated financial information for AMB LP. The
selected financial data as of and for the three months ended March 31, 2011 represents preliminary
operating and balance sheet data. AMB LP’s results of operations for the three months ended March
31, 2011 are not indicative of results that may be expected for any future period.
The selected statement of operations data for each of the years in the five-year period ended
December 31, 2010 and the selected balance sheet data as of December 31 for each of the years in
the five-year period ended December 31, 2010 have been derived from the consolidated financial
statements of AMB LP that were audited by PricewaterhouseCoopers LLP. The following information
should be read together with the consolidated financial statements of AMB LP, the notes related
thereto and the related reports of management on the financial condition and performance of AMB LP,
all of which are contained in the reports of AMB LP filed with the SEC and incorporated herein by
reference. See “Where You Can Find More Information.”
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
(In millions, except per
|
|
|
|
|
share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Rental revenues
|
|
$
|
158
|
|
|
$
|
147
|
|
|
Private capital revenues
|
|
|
8
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
166
|
|
|
|
154
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
Property operating costs
|
|
|
52
|
|
|
|
48
|
|
|
Depreciation and amortization
|
|
|
55
|
|
|
|
47
|
|
|
General and administrative
|
|
|
31
|
|
|
|
32
|
|
|
Merger transaction costs and restructuring charges
|
|
|
4
|
|
|
|
3
|
|
|
Fund costs and other expenses
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
143
|
|
|
|
132
|
|
|
Other Income and Expenses:
|
|
|
|
|
|
|
|
|
|
Development profits, net of taxes
|
|
|
—
|
|
|
|
5
|
|
|
Earnings from unconsolidated joint ventures, net
|
|
|
8
|
|
|
|
4
|
|
|
Interest expense, amortization and other income, net
|
|
|
(34
|
)
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
Income and gains from discontinued operations
|
|
|
17
|
|
|
|
1
|
|
|
Noncontrolling interests’ share of net income
|
|
|
(2
|
)
|
|
|
—
|
|
|
Preferred unit dividends & allocation to participating securities
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common unitholders
|
|
$
|
8
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per unit available to common unitholders — Basic
|
|
$
|
0.05
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per unit available to common unitholders — Diluted
|
|
$
|
0.05
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common unit outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
170
|
|
|
|
151
|
|
|
Diluted
|
|
|
170
|
|
|
|
151
|
|
47
|
|
|
|
|
|
|
|
|
As of March 31, 2011
|
|
|
|
(In millions)
|
|
|
|
(Unaudited)
|
|
Balance sheet Data:
|
|
|
|
|
|
Investments in real estate (at cost)
|
|
$
|
6,841
|
|
|
Total assets
|
|
$
|
7,421
|
|
|
Total debt
|
|
$
|
3,426
|
|
|
Total liabilities and noncontrolling interests
|
|
$
|
4,081
|
|
|
Preferred units
|
|
$
|
223
|
|
|
Total partners’ capital (excluding preferred units)
|
|
$
|
3,117
|
|
|
Number of common units outstanding
|
|
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
|
|
(In millions, except per share amounts)
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
634
|
|
|
$
|
618
|
|
|
$
|
678
|
|
|
$
|
636
|
|
|
$
|
679
|
|
|
Income (loss) from continuing operations
|
|
$
|
9
|
|
|
$
|
(124
|
)
|
|
$
|
(18
|
)
|
|
$
|
282
|
|
|
$
|
210
|
|
|
Income from discontinued operations
|
|
$
|
24
|
|
|
$
|
96
|
|
|
$
|
11
|
|
|
$
|
90
|
|
|
$
|
78
|
|
|
Net income (loss) before cumulative effect of
change in accounting principle
|
|
$
|
34
|
|
|
$
|
(28
|
)
|
|
$
|
(7
|
)
|
|
$
|
372
|
|
|
$
|
289
|
|
|
Net income (loss)
|
|
$
|
34
|
|
|
$
|
(28
|
)
|
|
$
|
(7
|
)
|
|
$
|
372
|
|
|
$
|
289
|
|
|
Net income (loss) available to common
unitholders
|
|
$
|
10
|
|
|
$
|
(51
|
)
|
|
$
|
(67
|
)
|
|
$
|
305
|
|
|
$
|
217
|
|
|
(Loss) income from continuing operations
available to common unitholders per common
unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.08
|
)
|
|
$
|
(1.02
|
)
|
|
$
|
(0.75
|
)
|
|
$
|
2.13
|
|
|
$
|
1.53
|
|
|
Diluted
|
|
$
|
(0.08
|
)
|
|
$
|
(1.02
|
)
|
|
$
|
(0.75
|
)
|
|
$
|
2.08
|
|
|
$
|
1.48
|
|
|
Income from discontinued operations available
to common unitholders per common unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.14
|
|
|
$
|
0.65
|
|
|
$
|
0.09
|
|
|
$
|
0.88
|
|
|
$
|
0.83
|
|
|
Diluted
|
|
$
|
0.14
|
|
|
$
|
0.65
|
|
|
$
|
0.09
|
|
|
$
|
0.86
|
|
|
$
|
0.80
|
|
|
Net income (loss) available to common
unitholders per common unit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.06
|
|
|
$
|
(0.37
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
3.01
|
|
|
$
|
2.36
|
|
|
Diluted
|
|
$
|
0.06
|
|
|
$
|
(0.37
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
2.94
|
|
|
$
|
2.28
|
|
|
Cash dividends per common unit
|
|
$
|
1.12
|
|
|
$
|
1.12
|
|
|
$
|
1.56
|
|
|
$
|
2.00
|
|
|
$
|
1.84
|
|
|
Weighted average common unit outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
164
|
|
|
|
136
|
|
|
|
101
|
|
|
|
102
|
|
|
|
92
|
|
|
Diluted
|
|
|
164
|
|
|
|
136
|
|
|
|
101
|
|
|
|
104
|
|
|
|
95
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
|
|
(In millions)
|
|
Balance sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in real estate (at cost)
|
|
$
|
6,906
|
|
|
$
|
6,709
|
|
|
$
|
6,604
|
|
|
$
|
6,710
|
|
|
$
|
6,576
|
|
|
Total assets
|
|
$
|
7,373
|
|
|
$
|
6,842
|
|
|
$
|
7,302
|
|
|
$
|
7,262
|
|
|
$
|
6,714
|
|
|
Total debt
|
|
$
|
3,331
|
|
|
$
|
3,213
|
|
|
$
|
3,990
|
|
|
$
|
3,495
|
|
|
$
|
3,437
|
|
|
Total liabilities and noncontrolling interests
|
|
$
|
4,015
|
|
|
$
|
3,864
|
|
|
$
|
4,736
|
|
|
$
|
4,428
|
|
|
$
|
4,395
|
|
|
Preferred units
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
223
|
|
|
Total partner’s capital (excluding preferred
units)
|
|
$
|
3,135
|
|
|
$
|
2,755
|
|
|
$
|
2,343
|
|
|
$
|
2,611
|
|
|
$
|
2,096
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
(In millions)
|
|
|
Funds from operations (FFO), as adjusted
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common
unitholders
|
|
$
|
10
|
|
|
$
|
(50
|
)
|
|
$
|
(66
|
)
|
|
$
|
294
|
|
|
$
|
208
|
|
|
Gains from sale or contribution of real estate
interests, net
|
|
|
(20
|
)
|
|
|
(39
|
)
|
|
|
(23
|
)
|
|
|
(86
|
)
|
|
|
(45
|
)
|
|
Total depreciation and amortization
|
|
|
190
|
|
|
|
174
|
|
|
|
162
|
|
|
|
158
|
|
|
|
176
|
|
|
Adjustments to derive FFO, as defined by NAREIT from
consolidated joint ventures
|
|
|
(22
|
)
|
|
|
(17
|
)
|
|
|
(19
|
)
|
|
|
(22
|
)
|
|
|
(35
|
)
|
|
Adjustments to derive FFO, as defined by NAREIT from
unconsolidated joint ventures
|
|
|
43
|
|
|
|
32
|
|
|
|
26
|
|
|
|
20
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations, as defined by
NAREIT
(1)
|
|
$
|
201
|
|
|
$
|
100
|
|
|
$
|
80
|
|
|
$
|
364
|
|
|
$
|
297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for impairment charges, restructuring
charges, preferred unit redemption (discount) premium
and debt extinguishment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate impairment losses
(2)
|
|
|
1
|
|
|
|
182
|
|
|
|
194
|
|
|
|
1
|
|
|
|
6
|
|
|
Pursuit costs and tax reserve
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
|
|
|
—
|
|
|
|
—
|
|
|
Restructuring charges
|
|
|
5
|
|
|
|
6
|
|
|
|
12
|
|
|
|
—
|
|
|
|
—
|
|
|
Loss on early extinguishment of debt
|
|
|
3
|
|
|
|
12
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
Preferred unit redemption (discount) premium
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
—
|
|
|
|
3
|
|
|
|
1
|
|
|
Allocation to participating securities
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted
(1)
|
|
$
|
210
|
|
|
$
|
289
|
|
|
$
|
298
|
|
|
$
|
368
|
|
|
$
|
303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB’s share of development profits, net of taxes
|
|
|
(7
|
)
|
|
|
(88
|
)
|
|
|
(77
|
)
|
|
|
(168
|
)
|
|
|
(106
|
)
|
|
Allocation to participating securities
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core funds from operations
(Core FFO), as adjusted
(1)
|
|
$
|
203
|
|
|
$
|
201
|
|
|
$
|
222
|
|
|
$
|
201
|
|
|
$
|
198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
253
|
|
|
$
|
243
|
|
|
$
|
303
|
|
|
$
|
241
|
|
|
$
|
336
|
|
|
Investing activities
|
|
$
|
(587
|
)
|
|
$
|
84
|
|
|
$
|
(882
|
)
|
|
$
|
(632
|
)
|
|
$
|
(881
|
)
|
|
Financing activities
|
|
$
|
330
|
|
|
$
|
(298
|
)
|
|
$
|
580
|
|
|
$
|
420
|
|
|
$
|
484
|
|
|
|
|
|
|
(1)
|
|
AMB LP believes that net income, as defined by GAAP, is the most appropriate earnings
measure. However, AMB LP considers FFO Measures, as adjusted, to be useful supplemental
measures of its operating performance. AMB LP calculates FFO, as adjusted, as net income (or
loss) available to common unitholders, calculated in accordance with GAAP, less gains (or
losses) from dispositions of real estate held for investment purposes and real estate-related
depreciation, and adjustments to derive AMB LP’s pro rata share of FFO, as adjusted, of
consolidated and unconsolidated joint ventures. AMB LP calculates Core FFO, as adjusted, as
FFO, as adjusted excluding the share of development profits of AMB LP. These calculations also
include adjustments for items as described below.
|
|
|
|
|
|
Unless stated otherwise, AMB LP includes the gains from development, including those from
value-added conversion projects, before depreciation recapture, as a component of FFO, as
adjusted. AMB LP believes gains from development should be included in FFO, as adjusted, to
more completely reflect the performance of one of AMB LP’s lines of business. AMB LP
believes that value-added conversion dispositions are in substance land sales and as such
should be included in FFO, as adjusted, consistent with the REIT industry’s long standing
practice to include gains on the sale of land in funds from operations. However, AMB LP’s
interpretation of FFO, as adjusted, may not be consistent with the views of others in the
REIT industry, who may consider it to be a divergence from the NAREIT definition, and may
not be comparable to funds from operations or funds from operations per share reported by
other REITs that interpret the current NAREIT definition differently than AMB LP does. In
connection with the formation
|
49
|
|
|
|
|
|
|
of a joint venture, AMB LP may warehouse assets that are acquired with the intent to
contribute these assets to the newly formed venture. Some of the properties held for
contribution may, under certain circumstances, be required to be depreciated under GAAP. AMB
LP includes in its calculation of FFO, as adjusted, gains or losses related to the
contribution of previously depreciated real estate to joint ventures. Although it is a
departure from the current NAREIT definition, AMB LP believes such calculation of FFO, as
adjusted, better reflects the value created as a result of the contributions.
|
|
|
|
|
|
In addition, AMB LP calculates FFO, as adjusted, to exclude impairment and restructuring
charges, debt extinguishment losses and preferred unit redemption discounts/premiums. The
impairment charges were principally a result of increases in estimated capitalization rates
and deterioration in market conditions that adversely impacted values. The restructuring
charges reflected costs associated with the reduction in global headcount and cost structure
of AMB LP. Debt extinguishment losses generally included the costs of repurchasing debt
securities. AMB LP repurchased certain tranches of senior unsecured debt to manage its debt
maturities in response to the current financing environment, resulting in greater debt
extinguishment costs. The preferred unit redemption discounts/premiums reflect the gain/loss
associated with the liquidation preference in the preferred unit redemption price less costs
incurred as a result of the redemption. In 2008, AMB LP also recognized charges to write-off
pursuit costs related to development projects it no longer planned to commence and to
establish a reserve against tax assets associated with the reduction of its development
activities. Although difficult to predict, these items may be recurring given the
uncertainty of the current economic climate and its adverse effects on the real estate and
financial markets. While not infrequent or unusual in nature, these items result from market
fluctuations that can have inconsistent effects on the results of operations of AMB LP. The
economics underlying these items reflect market and financing conditions in the short-term
but can obscure the performance of AMB and the value of the long-term investment decisions
and strategies of AMB LP. AMB LP management believes FFO, as adjusted, is significant and
useful to both it and its investors. FFO, as adjusted, more appropriately reflects the value
and strength of the business model of AMB LP and its potential performance isolated from the
volatility of the current economic environment and unobscured by costs (or gains) resulting
from the management of AMB LP of its financing profile in response to the tightening of the
capital markets. However, in addition to the limitations of the FFO Measures, as adjusted,
generally discussed below, FFO, as adjusted, does not present a comprehensive measure of the
financial condition and operating performance of AMB LP. This measure is a modification of
the NAREIT definition of funds from operations and should not be used as an alternative to
net income or cash flow from operations as defined by GAAP.
|
|
|
|
|
|
AMB LP believes that the FFO Measures, as adjusted, are meaningful supplemental measures of
its operating performance because historical cost accounting for real estate assets in
accordance with GAAP implicitly assumes that the value of real estate assets diminishes
predictably over time, as reflected through depreciation and amortization expenses. However,
since real estate values have historically risen or fallen with market and other conditions,
many industry investors and analysts have considered presentation of operating results for
real estate companies that use historical cost accounting to be insufficient. Thus, the FFO
Measures, as adjusted, are supplemental measures of operating performance for REITs that
exclude historical cost depreciation and amortization, among other items, from net income
available to common unitholders, as defined by GAAP. AMB LP believes that the use of the FFO
Measures, as adjusted, combined with the required GAAP presentations, has been beneficial in
improving the understanding of operating results of REITs among the investing public and
making comparisons of operating results among such companies more meaningful. AMB LP
considers the FFO Measures, as adjusted, to be useful measures for reviewing comparative
operating and financial performance because, by excluding gains or losses related to sales
of previously depreciated operating real estate assets and real estate depreciation and
amortization, the FFO Measures, as adjusted, can help the investing public compare the
operating performance of a company’s real estate between periods or as compared to other
companies. While funds from operations is a relevant and widely used measure of operating
performance of REITs, the FFO Measures, as adjusted, do not represent cash flow from
operations or net income as defined by GAAP and should not be considered as alternatives to
those measures in evaluating the liquidity or operating performance of AMB LP. The FFO
Measures, as adjusted, also do not consider the costs associated with capital expenditures
related to the real estate assets of AMB LP nor are the FFO Measures, as adjusted,
necessarily indicative of cash available to fund the future cash requirements of AMB LP. AMB
LP
|
50
|
|
|
|
|
|
|
management compensates for the limitations of the FFO Measures, as adjusted, by providing
investors with financial statements prepared according to GAAP, along with this detailed
discussion of the FFO Measures, as adjusted, and a reconciliation of the FFO Measures, as
adjusted, to net income available to common unitholders, a GAAP measurement.
|
|
|
|
(2)
|
|
Includes adjustments for AMB LP’s share of real estate impairment losses from unconsolidated
and consolidated joint ventures.
|
51
Selected Historical Financial Data of ProLogis
The following tables set forth selected consolidated financial information for ProLogis. The
selected financial data as of and for the three months ended March 31, 2011 represents preliminary
operating and financial condition data. ProLogis’ results of operations for the three months ended
March 31, 2011 are not necessarily indicative of results that may be expected for any future
period.
The selected data presented below under the captions “Operating Data”, “Common Share
Distributions”, “Cash Flow Data” and “Financial Position” for, and as of the end of, each of the
years in the five-year period ended December 31, 2010, are derived from the consolidated financial
statements of ProLogis and subsidiaries, which financial statements have been audited by KPMG LLP,
an independent registered public accounting firm. The information presented below under the caption
“FFO” is not included in the consolidated financial statements. The consolidated financial
statements and schedule as of December 31, 2010 and 2009, and for each of the years in the
three-year period ended December 31, 2010, and the reports thereon, are incorporated by reference
in this prospectus. The following information should be read together with the consolidated
financial statements of ProLogis, the notes related thereto and the related reports of management
on the financial condition and performance of ProLogis, all of which are contained in the reports
of ProLogis filed with the SEC and incorporated herein by reference. See “Where You Can Find More
Information.”
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
(In millions, except per
|
|
|
|
|
share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
$
|
205.3
|
|
|
$
|
187.5
|
|
|
Property management fees and other income
|
|
|
33.5
|
|
|
|
29.8
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
238.8
|
|
|
|
217.3
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Rental expenses
|
|
|
63.3
|
|
|
|
56.3
|
|
|
Investment management expenses
|
|
|
10.6
|
|
|
|
10.3
|
|
|
General and administrative
|
|
|
39.2
|
|
|
|
42.0
|
|
|
Merger integration expenses and reduction in workforce
|
|
|
6.0
|
|
|
|
—
|
|
|
Depreciation and other
|
|
|
87.3
|
|
|
|
79.4
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
206.4
|
|
|
|
188.0
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
32.4
|
|
|
|
29.3
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Earnings from unconsolidated investees, net
|
|
|
13.6
|
|
|
|
8.0
|
|
|
Loss on early extinguishment of debt
|
|
|
—
|
|
|
|
(47.6
|
)
|
|
Net gains on dispositions of investments in real estate
|
|
|
3.7
|
|
|
|
11.8
|
|
|
Interest, income taxes and other income (expenses), net
|
|
|
(98.1
|
)
|
|
|
(114.8
|
)
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(48.4
|
)
|
|
|
(113.3
|
)
|
|
Income from discontinued operations
|
|
|
8.2
|
|
|
|
28.8
|
|
|
|
|
|
|
|
|
|
|
Consolidated net loss
|
|
$
|
(40.2
|
)
|
|
$
|
(84.5
|
)
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common shares
|
|
$
|
(46.6
|
)
|
|
$
|
(91.1
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common shares — Basic
|
|
$
|
(0.08
|
)
|
|
$
|
(0.19
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common shares — Diluted
|
|
$
|
(0.08
|
)
|
|
$
|
(0.19
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
570.6
|
|
|
|
475.0
|
|
|
Diluted
|
|
|
570.6
|
|
|
|
475.0
|
|
52
|
|
|
|
|
|
|
|
|
As of March 31,
|
|
|
|
2011
|
|
|
|
(In millions)
|
|
|
|
(Unaudited)
|
|
Financial Position:
|
|
|
|
|
|
Real estate properties owned, excluding land held for development, before depreciation
|
|
$
|
11,541.5
|
|
|
Land held for development or targeted for disposition
|
|
$
|
1,600.0
|
|
|
Net investments in properties
|
|
$
|
11,484.7
|
|
|
Investments in and advances to unconsolidated investees
|
|
$
|
2,084.7
|
|
|
Total assets
|
|
$
|
14,935.7
|
|
|
Total debt
|
|
$
|
6,415.0
|
|
|
Total liabilities
|
|
$
|
7,309.3
|
|
|
Noncontrolling interests
|
|
$
|
17.7
|
|
|
ProLogis shareholders’ equity
|
|
$
|
7,608.7
|
|
|
Number of common shares outstanding
|
|
|
570.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
(In millions, except per share amounts)
|
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
(1)
|
|
$
|
909
|
|
|
$
|
1,055
|
|
|
$
|
5,396
|
|
|
$
|
5,944
|
|
|
$
|
2,209
|
|
|
Total expenses
(1)
|
|
$
|
1,503
|
|
|
$
|
1,089
|
|
|
$
|
4,897
|
|
|
$
|
4,922
|
|
|
$
|
1,556
|
|
|
Operating income (loss)
(1)(2)
|
|
$
|
(594
|
)
|
|
$
|
(35
|
)
|
|
$
|
500
|
|
|
$
|
1,022
|
|
|
$
|
654
|
|
|
Interest expense
|
|
$
|
461
|
|
|
$
|
373
|
|
|
$
|
385
|
|
|
$
|
389
|
|
|
$
|
294
|
|
|
Earnings (loss) from continuing operations
(2)
|
|
$
|
(1,582
|
)
|
|
$
|
(346
|
)
|
|
$
|
(359
|
)
|
|
$
|
853
|
|
|
$
|
609
|
|
|
Discontinued operations
|
|
$
|
311
|
|
|
$
|
370
|
|
|
$
|
(91
|
)
|
|
$
|
205
|
|
|
$
|
269
|
|
|
Consolidated net earnings (loss)
(2)
|
|
$
|
(1,270
|
)
|
|
$
|
24
|
|
|
$
|
(450
|
)
|
|
$
|
1,058
|
|
|
$
|
878
|
|
|
Net earnings (loss) attributable to common
shares
(2)
|
|
$
|
(1,296
|
)
|
|
$
|
(3
|
)
|
|
$
|
(479
|
)
|
|
$
|
1,028
|
|
|
$
|
849
|
|
|
Net earnings (loss) per share attributable to common
shares — Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(3.27
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(1.48
|
)
|
|
$
|
3.20
|
|
|
$
|
2.36
|
|
|
Discontinued operations
|
|
|
0.63
|
|
|
|
0.92
|
|
|
|
(0.34
|
)
|
|
|
0.80
|
|
|
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share attributable to common
shares — Basic
(2)
|
|
$
|
(2.64
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(1.82
|
)
|
|
$
|
4.00
|
|
|
$
|
3.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share attributable to common
shares — Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(3.27
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(1.48
|
)
|
|
$
|
3.09
|
|
|
$
|
2.27
|
|
|
Discontinued operations
|
|
|
0.63
|
|
|
|
0.92
|
|
|
|
(0.34
|
)
|
|
|
0.77
|
|
|
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share attributable to common
shares — Diluted
(2)
|
|
$
|
(2.64
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(1.82
|
)
|
|
$
|
3.86
|
|
|
$
|
3.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
492
|
|
|
|
403
|
|
|
|
263
|
|
|
|
257
|
|
|
|
246
|
|
|
Diluted
|
|
|
492
|
|
|
|
403
|
|
|
|
263
|
|
|
|
267
|
|
|
|
257
|
|
|
Common Share Distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share cash distributions paid
|
|
$
|
281
|
|
|
$
|
272
|
|
|
$
|
543
|
|
|
$
|
473
|
|
|
$
|
393
|
|
|
Common share distributions paid per share
|
|
$
|
0.56
|
|
|
$
|
0.70
|
|
|
$
|
2.07
|
|
|
$
|
1.84
|
|
|
$
|
1.60
|
|
|
FFO
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net earnings (loss) to FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common
shares
(2)
|
|
$
|
(1,296
|
)
|
|
$
|
(3
|
)
|
|
$
|
(479
|
)
|
|
$
|
1,028
|
|
|
$
|
849
|
|
|
Total NAREIT defined adjustments
|
|
|
241
|
|
|
|
213
|
|
|
|
449
|
|
|
|
150
|
|
|
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as defined by NAREIT
|
|
|
(1,055
|
)
|
|
|
210
|
|
|
|
(30
|
)
|
|
|
1,178
|
|
|
|
998
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
(In millions, except per share amounts)
|
|
|
ProLogis’ defined adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange losses (gains), net
|
|
|
11
|
|
|
|
(58
|
)
|
|
|
144
|
|
|
|
16
|
|
|
|
(19
|
)
|
|
Current income tax expense
|
|
|
—
|
|
|
|
4
|
|
|
|
10
|
|
|
|
3
|
|
|
|
23
|
|
|
Deferred income tax expense (benefit)
|
|
|
(52
|
)
|
|
|
(23
|
)
|
|
|
4
|
|
|
|
1
|
|
|
|
(54
|
)
|
|
ProLogis’ share of reconciling items from
unconsolidated investees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange losses (gains), net
|
|
|
(9
|
)
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
2
|
|
|
|
—
|
|
|
Unrealized losses (gains) on derivative contracts,
net
|
|
|
4
|
|
|
|
(8
|
)
|
|
|
23
|
|
|
|
—
|
|
|
|
—
|
|
|
Deferred income tax expense (benefit)
|
|
|
—
|
|
|
|
16
|
|
|
|
(19
|
)
|
|
|
6
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common shares as defined by
ProLogis, including significant non-cash
items
|
|
|
(1,101
|
)
|
|
|
139
|
|
|
|
134
|
|
|
|
1,206
|
|
|
|
945
|
|
|
Add (deduct) significant non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of real estate properties
(2)
|
|
|
824
|
|
|
|
331
|
|
|
|
275
|
|
|
|
—
|
|
|
|
—
|
|
|
Impairment of goodwill and other assets
(2)
|
|
|
413
|
|
|
|
164
|
|
|
|
321
|
|
|
|
—
|
|
|
|
—
|
|
|
Impairment (net gain) related to China
operations
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
198
|
|
|
|
—
|
|
|
|
—
|
|
|
Loss (gain) on early extinguishment of debt
|
|
|
31
|
|
|
|
(172
|
)
|
|
|
(91
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Write-off deferred financing fees associated with
credit facility restructuring
|
|
|
8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
ProLogis’ share of certain losses recognized by the
property funds, net
|
|
|
11
|
|
|
|
9
|
|
|
|
108
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common shares as defined by
ProLogis, excluding significant non-cash
items
|
|
$
|
186
|
|
|
$
|
468
|
|
|
$
|
945
|
|
|
$
|
1,206
|
|
|
$
|
945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
(1)
|
|
$
|
241
|
|
|
$
|
89
|
|
|
$
|
888
|
|
|
$
|
1,230
|
|
|
$
|
664
|
|
|
Net cash provided by (used in) investing
activities
|
|
$
|
733
|
|
|
$
|
1,235
|
|
|
$
|
(1,347
|
)
|
|
$
|
(4,076
|
)
|
|
$
|
(2,047
|
)
|
|
Net cash provided by (used in) financing
activities
|
|
$
|
(970
|
)
|
|
$
|
(1,463
|
)
|
|
$
|
358
|
|
|
$
|
2,742
|
|
|
$
|
1,645
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
2010
|
|
2009
|
|
2008
(1)
|
|
2007
(1)
|
|
2006
|
|
|
|
(in millions)
|
|
Financial Position:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate properties owned, excluding land held for
development, before depreciation
|
|
$
|
11,346
|
|
|
$
|
12,606
|
|
|
$
|
13,234
|
|
|
$
|
14,414
|
|
|
$
|
12,482
|
|
|
Land held for development or targeted for
disposition
(2)
|
|
$
|
1,534
|
|
|
$
|
2,574
|
|
|
$
|
2,483
|
|
|
$
|
2,153
|
|
|
$
|
1,397
|
|
|
Net investments in properties
|
|
$
|
11,284
|
|
|
$
|
13,508
|
|
|
$
|
14,134
|
|
|
$
|
15,199
|
|
|
$
|
12,615
|
|
|
Investments in and advances to unconsolidated investees
|
|
$
|
2,025
|
|
|
$
|
2,107
|
|
|
$
|
2,195
|
|
|
$
|
2,252
|
|
|
$
|
1,300
|
|
|
Total assets
|
|
$
|
14,903
|
|
|
$
|
16,797
|
|
|
$
|
19,210
|
|
|
$
|
19,652
|
|
|
$
|
15,827
|
|
|
Total debt
|
|
$
|
6,506
|
|
|
$
|
7,978
|
|
|
$
|
10,711
|
|
|
$
|
10,217
|
|
|
$
|
8,387
|
|
|
Total liabilities
|
|
$
|
7,382
|
|
|
$
|
8,790
|
|
|
$
|
12,452
|
|
|
$
|
11,848
|
|
|
$
|
9,376
|
|
|
Noncontrolling interests
|
|
$
|
15
|
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
79
|
|
|
$
|
52
|
|
|
ProLogis shareholders’ equity
|
|
$
|
7,505
|
|
|
$
|
7,987
|
|
|
$
|
6,738
|
|
|
$
|
7,725
|
|
|
$
|
6,399
|
|
|
Number of common shares outstanding
|
|
|
570
|
|
|
|
474
|
|
|
|
267
|
|
|
|
258
|
|
|
|
251
|
|
54
|
|
|
|
|
(1)
|
|
During 2010 and 2009, ProLogis contributed certain properties with any resulting gain
or loss reflected as net gains in the Consolidated Statements of Operations of ProLogis and as
cash provided by investing activities. In 2008 and previous years, ProLogis reflected these
contributions as gross revenues and expenses as cash provided by operating activities. See the
Consolidated Financial Statements of ProLogis contained in Item 8 of ProLogis’ Form 10-K for
the year ended December 31, 2010 for more information.
|
|
|
|
(2)
|
|
During 2010, ProLogis recognized impairment charges of $824.3 million on certain of
its real estate properties, which includes $87.7 million in discontinued operations and $412.7
million related to goodwill and other assets. During 2009, ProLogis recognized impairment
charges of $331.6 million on certain of its real estate properties and $163.6 million related
to goodwill and other assets. During 2008, ProLogis recognized impairment charges of $274.7
million on certain of its real estate properties and $320.6 million related to goodwill and
other assets. In addition, during 2008, ProLogis recognized impairment charges of $198.2
million in discontinued operations related to the net assets of ProLogis’ China operations
that were reclassified as held for sale and its share of impairment charges recorded by an
unconsolidated investee of $108.2 million. See ProLogis’ Consolidated Financial Statements
contained in Item 8 of ProLogis’ Form 10-K for the year ended December 31, 2010 in for more
information.
|
|
|
|
(3)
|
|
Funds from operations (“FFO”) is a non-GAAP measure that is commonly used in the real
estate industry. The most directly comparable GAAP measure to FFO is net earnings. Although
the NAREIT has published a definition of FFO, modifications to the NAREIT calculation of FFO
are common among REITs, as companies seek to provide financial measures that meaningfully
reflect their business. FFO, as ProLogis defines it, is presented as a supplemental financial
measure. FFO is not used by ProLogis as, nor should it be considered to be, an alternative to
net earnings computed under GAAP as an indicator of the operating performance of ProLogis or
as an alternative to cash from operating activities computed under GAAP as an indicator of the
ability of ProLogis to fund its cash needs.
|
|
|
|
|
|
FFO is not meant to represent a comprehensive system of financial reporting and does not
present, nor does ProLogis intend it to present, a complete picture of its financial
condition and operating performance. ProLogis believes net earnings computed under GAAP
remains the primary measure of performance and that FFO is only meaningful when it is used
in conjunction with net earnings computed under GAAP. Further, ProLogis believes that its
consolidated financial statements, prepared in accordance with GAAP, provide the most
meaningful picture of its financial condition and operating performance.
|
|
|
|
|
|
At the same time that NAREIT created and defined its FFO concept for the REIT industry, it
also recognized that “management of each of its member companies has the responsibility and
authority to publish financial information that it regards as useful to the financial
community.” ProLogis believes that financial analysts, potential investors and shareholders
who review the operating results of ProLogis are best served by a defined FFO measure that
includes other adjustments to net earnings computed under GAAP in addition to those included
in the NAREIT defined measure of FFO. The FFO measures of ProLogis are discussed in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Funds From Operations (“FFO”)” in its Annual Report on Form 10-K for its fiscal year ended
December 31, 2010, which is incorporated into this prospectus by reference. See “Where You
Can Find More Information.”
|
55
Summary Unaudited Pro Forma Combined Condensed Financial Information
The following table shows summary unaudited pro forma combined condensed financial information
about the combined financial condition and operating results after giving effect to the Merger. The
unaudited pro forma combined condensed financial information assumes that the Merger is accounted
for by applying the purchase method of accounting with ProLogis treated as the acquirer. The
unaudited pro forma combined condensed balance sheet data gives effect to the Merger as if it had
occurred on December 31, 2010. The unaudited pro forma combined condensed statement of operations
data gives effect to the Merger as if it had become effective at January 1, 2010, based on the most
recent valuation data available. The summary unaudited pro forma combined condensed financial
information listed below has been derived from and should be read in conjunction with (i) the more
detailed unaudited pro forma combined condensed financial information, including the notes thereto,
appearing elsewhere in this prospectus and (ii) the consolidated financial statements and the
related notes of both AMB and ProLogis contained in their respective Annual Reports on Form 10-K
for the year ended December 31, 2010, all of which are incorporated by reference into this
prospectus. See “Unaudited Pro Forma Condensed Consolidated Financial Information” and “Where You
Can Find More Information.”
The unaudited pro forma combined condensed financial information is presented for illustrative
purposes only and is not necessarily indicative of the combined operating results or financial
position that would have occurred if such transactions had been consummated on the dates and in
accordance with the assumptions described herein, nor is it necessarily indicative of the future
operating results or financial position of the combined company. The unaudited pro forma combined
condensed financial information does not give effect to (i) any potential revenue enhancements or
cost synergies that could result from the Merger or (ii) any transaction or integration costs
relating to the Merger. In addition, as explained in more detail in the accompanying notes to the
unaudited pro forma combined condensed financial information, the preliminary allocation of the pro
forma purchase price reflected in the unaudited pro forma combined condensed financial information
is subject to adjustment and may vary significantly from the definitive allocation of the final
purchase price that will be recorded subsequent to completion of the Merger. The determination of
the final purchase price will be based on the trading price of ProLogis common shares at closing.
|
|
|
|
|
|
|
|
|
December 31, 2010
|
|
|
|
(In millions, except
|
|
|
|
per share amounts)
|
|
Operating Data:
|
|
|
|
|
|
Total revenues
|
|
$
|
1,536
|
|
|
Operating loss
|
|
$
|
(495
|
)
|
|
Loss from continuing operations
|
|
$
|
(1,575
|
)
|
|
Loss from continuing operations attributable to common shares
|
|
$
|
(1,621
|
)
|
|
Loss from continuing operations per share attributable to common shares
|
|
|
|
|
|
Basic
|
|
$
|
(3.89
|
)
|
|
Diluted
|
|
$
|
(3.89
|
)
|
|
|
|
|
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
Net investments in real estate
|
|
$
|
23,742
|
|
|
Total assets
|
|
$
|
25,581
|
|
|
Total debt
|
|
$
|
9,906
|
|
|
ProLogis, Inc. shareholders’ equity
|
|
$
|
13,626
|
|
56
Equivalent and Comparative Per Share Information
The following table sets forth, for the year ended December 31, 2010, selected per share
information for ProLogis common shares on a historical and pro forma combined basis and for AMB
common stock on a historical and pro forma equivalent basis. You should read the table below
together with the historical consolidated financial statements and related notes of AMB and
ProLogis contained in their respective Annual Reports on Form 10-K for the year ended December 31,
2010, all of which are incorporated by reference into this prospectus. See “Where You Can Find More
Information.”
The ProLogis pro forma combined loss per share was calculated using the methodology as
described below under the heading “Unaudited Pro Forma Condensed Consolidated Financial
Information”, and are subject to all the assumptions, adjustments and limitations described
thereunder. The pro forma financial information described below is presented as if the Merger
occurred on January 1, 2010 for the results of operations and December 31, 2010 for financial
position. As this is a reverse acquisition, the AMB pro forma equivalent per common share amounts
were calculated by multiplying the ProLogis pro forma combined per share amounts by 40%,
representing the approximate share of the combined company that will be owned by pre-Merger
shareholders of AMB. You should not rely on the pro forma amounts as being indicative of the
financial position or results of operations of the combined company that actually would have
occurred had the Merger been completed as of the dates indicated above, nor is it necessarily
indicative of the future operating results or financial position of the combined company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ProLogis
|
|
AMB
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
Pro Forma
|
|
|
|
Historical
|
|
Combined
|
|
Historical
|
|
Equivalent
|
|
Loss from continuing operations
available to common share, per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(3.27
|
)
|
|
$
|
(3.89
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.56
|
)
|
|
Diluted
|
|
$
|
(3.27
|
)
|
|
$
|
(3.89
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.56
|
)
|
|
Dividends declared per common share.
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
|
$
|
1.12
|
|
|
$
|
0.22
|
|
|
Book value per common share
|
|
$
|
12.55
|
|
|
$
|
30.80
|
|
|
$
|
18.36
|
|
|
$
|
12.32
|
|
57
Consolidated Ratio of Earnings to Fixed Charges
AMB’s consolidated ratios of earnings to fixed charges for each of the previous five years
ended December 31 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
Consolidated ratio of earnings to fixed charges (1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.0x
|
|
|
|
1.6x
|
|
AMB LP’s consolidated ratios of earnings to fixed charges for each of the previous five years
ended December 31 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
Consolidated ratio of earnings to fixed charges (1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.1x
|
|
|
|
1.6x
|
|
|
|
|
|
|
(1)
|
|
The consolidated ratio of earnings to fixed charges was less than one-to-one for the years
ended December 31, 2010, 2009 and 2008. For the years ended December 31, 2010, 2009 and 2008,
earnings were insufficient to cover fixed charges by $25.0 million, $167.3 million and $84.6
million, respectively, for each of AMB and AMB LP.
|
For the purposes of the above calculations, earnings include income from continuing operations
plus fixed charges, amortization of capitalized interest and distributed income from unconsolidated
entities. From that total, capitalized interest and income from unconsolidated entities is
subtracted. Fixed charges consist of interest costs, whether expensed or capitalized, the interest
component of rental expense, amortization of debt issuance costs and preferred distributions of
consolidated subsidiaries. Management calculates the interest component of rental expense as
one-third of total rental expense.
58
RISK FACTORS
In addition to the other information included in, or incorporated by reference into, this
prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking
Statements”, you should carefully consider the following risks before deciding whether to
participate in the applicable exchange offers and consent solicitations. In addition, you should
read and consider the risks associated with each of the businesses of AMB, AMB LP and ProLogis
because these risks will also affect the combined company. These risks can be found in AMB’s and
AMB LP’s and ProLogis’ respective Annual Reports on
Form 10-K
for the year ended December 31, 2010,
each of which is filed with the SEC and incorporated by reference into this prospectus. You should
also read and consider the other information in this prospectus and the other documents
incorporated by reference into this prospectus. See “Where You Can Find More Information.”
Risks Related to the Exchange Offers and Consent Solicitations
The exchange offers and consent solicitations may be cancelled or delayed.
AMB LP is not obligated to complete the exchange offers and consent solicitations on behalf of
the combined company unless and until it receives valid and unrevoked tenders and the Requisite
Consents and until the Merger has been consummated. If you validly tender ProLogis Notes prior to
the Early Consent Date, you may validly withdraw your tender and the related consent prior to the
Early Consent Date. If you validly tender ProLogis Notes prior to the Early Consent Date, you may
validly withdraw your tender after the Early Consent Date and before the Expiration Date, but you
may not withdraw the related consent. If you tender ProLogis Notes after the Early Consent Date
and before the Expiration Date you may withdraw your tender and the related consent at any time
prior to the Expiration Date. If the merger agreement is terminated for any reason, AMB LP intends
promptly to terminate the exchange offers and the consent solicitations. Even if each of the
exchange offers and consent solicitations are completed, the exchange offers and consent
solicitations may not be completed on the schedule described in this prospectus. Accordingly,
holders participating in the applicable exchange offers and consent solicitations may have to wait
longer than expected to receive their AMB LP Notes and cash consent fee, if any, during which time
those holders of ProLogis Notes will not be able to effect transfers of their ProLogis Notes
tendered for exchange.
The liquidity of the ProLogis Notes that are not exchanged will be reduced.
The current trading market for the ProLogis Notes is limited. The trading market for
unexchanged ProLogis Notes will become more limited and could cease to exist due to the reduction
in the amount of the ProLogis Notes outstanding upon consummation of the exchange offers. A more
limited trading market might adversely affect the liquidity, market price and price volatility of
these securities. If a market for unexchanged ProLogis Notes exists or develops, these securities
may trade at a discount to the price at which the securities would trade if the amount outstanding
were not reduced, depending on prevailing interest rates, the market for similar securities and
other factors. However, there can be no assurance that an active market in the unexchanged
ProLogis Notes will exist, develop or be maintained or as to the prices at which the unexchanged
ProLogis Notes may be traded.
Following the Merger, ProLogis will not have access to all of the cash flow available to AMB
LP when making its required principal and interest payments.
Following the Merger, ProLogis will be a subsidiary of AMB LP. If a holder does not
participate in an exchange offer or if AMB LP does not accept the holder’s tendered ProLogis Notes,
the applicable ProLogis Notes will remain outstanding as ProLogis’ notes. As a result, these
ProLogis Notes will not be guaranteed by AMB and ProLogis will not have access to all of the cash
flow available to AMB LP outside of that generated by ProLogis in making required principal and
interest payments on remaining ProLogis Notes.
59
The Proposed Amendments to the ProLogis Indenture and elimination of the benefits provided
to the holders of the ProLogis Notes by the Security Documents will afford reduced
protection to remaining holders of ProLogis Notes.
If the Proposed Amendments to the ProLogis Indenture are adopted and the Security Documents
are eliminated, the covenants and some other terms of the ProLogis Notes will be materially less
restrictive and will afford significantly reduced protection to holders of such securities compared
to the covenants and other provisions currently contained in the ProLogis Indenture.
The Proposed Amendments to the ProLogis Indenture would, among other things:
|
|
•
|
|
eliminate cross-acceleration and judgment default from the events of default;
|
|
|
|
|
•
|
|
eliminate certain requirements that must be met for ProLogis to consolidate, merge
or sell all or substantially all of its assets;
|
|
|
|
|
•
|
|
eliminate the covenant prohibiting ProLogis and its subsidiaries from incurring
additional unsecured indebtedness;
|
|
|
|
|
•
|
|
eliminate the covenants requiring ProLogis to maintain its properties in useful
condition, keep its properties insured and pay any taxes, governmental charges and
other claims; and
|
|
|
|
|
•
|
|
eliminate the covenant requiring ProLogis to prepare and file separate periodic
reports under the Exchange Act (except as required by the Trust Indenture Act of 1939,
as amended (the “Trust Indenture Act”)).
|
The release of the collateral pursuant to the Security Documents and the revocation of the
status of the ProLogis Indenture and the ProLogis Notes as a “DSD Agreement” and “Other DS Debt,”
respectively, thereunder will eliminate the benefits of the security and sharing arrangements
afforded to the holders of the ProLogis Notes pursuant to the Security Documents.
If the Proposed Amendments are adopted with respect to the ProLogis Notes, each non-exchanging
holder of ProLogis Notes will be bound by the Proposed Amendments even if that holder did not
consent to the Proposed Amendments. The elimination or modification of the covenants and other
provisions in the ProLogis Indenture contemplated by the Proposed Amendments would, among other
things, permit AMB, ProLogis and their respective subsidiaries to take actions that could increase
the credit risk with respect to ProLogis, and might adversely affect the liquidity, market price
and price volatility of the ProLogis Notes or otherwise be adverse to the interests of the holders
of the ProLogis Notes. See “The Proposed Amendments.”
You may recognize taxable gain or loss if the exchange of your ProLogis Notes for AMB LP
Notes constitutes a taxable exchange for U.S. federal income tax purposes, and AMB LP
believes that the exchange of ProLogis Notes (with certain exceptions) that are validly
tendered (and not validly withdrawn) after the Early Consent Date will constitute a taxable
exchange.
The modification of a debt instrument creates a deemed exchange upon which gain or loss is
realized if the modified debt instrument differs materially either in kind or in extent from the
original debt instrument. Although it is not entirely clear under U.S. tax law, AMB LP intends to
take the position that the exchange of the ProLogis Notes that are validly tendered (and not
validly withdrawn) prior to the Early Consent Date for AMB LP Notes does not constitute a
significant modification of such ProLogis Notes, and consequently is not treated as a taxable
exchange for U.S. federal income tax purposes. However, AMB LP believes that the exchange of
ProLogis Notes (other than the ProLogis Contingent Convertible Notes) that are validly tendered
(and not validly withdrawn) after the Early Consent Date for AMB LP Notes with a principal amount
equal to 97% of the principal amount of such ProLogis Notes will result in a significant
modification, and consequently will be treated as a taxable exchange for U.S. federal income tax
purposes, due to a significant change in the yield of such ProLogis Notes as a result of the
60
exchange. See “Material United States Federal Income Tax Consequences
—
U.S. Federal Income Tax
Considerations Relating to the Exchange Offers.”
Risks Related to the AMB LP Notes
Future installment payments on the AMB LP 9.340% 2015 Notes and the AMB LP 8.650% 2016 Notes
may not be made strictly in accordance with their terms due to the fact that installment
payments previously made by ProLogis on the ProLogis 9.340% 2015 Notes and the ProLogis
8.650% 2016 Notes were not, and with respect to the principal payment to be made on May 15, 2011 with respect to the ProLogis 8.650%
2016 Notes is not expected to be, applied in accordance with the terms of the respective notes.
ProLogis has made all installment payments required to be made pursuant to the terms of the
ProLogis 9.340% 2015 Notes and the ProLogis 8.650% 2016 Notes. However, ProLogis has recently
discovered that previous mandatory principal repayments were not, and with respect to the principal payment to be made on May 15, 2011 with respect to the ProLogis 8.650%
2016 Notes is not expected to be, applied in accordance with their
respective terms with respect to the corresponding ProLogis Note. Rather than making equal
installment payments across all outstanding notes of the affected series, random lots of $1,000
notes of the affected series were redeemed in amounts equal to the aggregate installment payment
amounts. Although the installment payments made by ProLogis to date have reduced the outstanding
aggregate principal amount of each of the ProLogis 9.340% 2015 Notes and the ProLogis 8.650% 2016
Notes, the outstanding principal amount of each note not redeemed has not been reduced from its
original $1,000 principal amount. In effect, the notes that were not redeemed have not been
amortizing. Therefore, the current principal amount of each note outstanding under these two
series is the same as the original principal amount when the notes were issued ($1,000).
To the extent a holder tenders ProLogis 9.340% 2015 Notes or ProLogis 8.650% 2016 Notes
pursuant to the applicable exchange offers, the letter of transmittal provides that such
holder waives any and all rights with respect to such ProLogis Notes (including any
existing or past defaults and their consequences in respect of such ProLogis Notes)
once such tendered ProLogis Notes are accepted by AMB LP, the applicable exchange
offers are consummated in accordance with their terms and, as a result, such person
ceases to be a holder of such ProLogis Notes.
AMB LP and ProLogis are working with their advisors, the Trustee and DTC to rectify the fact
that the previous mandatory principal repayments were not, and with respect to the principal payment to be made on May 15, 2011 with respect to the ProLogis 8.650%
2016 Notes is not expected to be, applied in accordance with their
respective terms with respect to the corresponding ProLogis Note, although there can be no
assurance as to when or how the situation will be resolved. AMB LP and ProLogis currently expect
that one or more future installment payments for each outstanding note may be increased so that at
or prior to maturity of the ProLogis 9.340% 2015 Notes and the ProLogis 8.650% 2016 Notes (and the
AMB LP 9.340% 2015 Notes and the AMB LP 8.650% 2016 Notes issued in the exchange offers) holders
will receive all principal amounts due to them pursuant to the terms of their respective notes. As
a result, the timing and amounts of future payments may not occur as provided for in the affected
notes.
In addition, if these principal payments
are deemed to be optional redemptions, additional amounts may be due to the
affected noteholders under the terms of the respective notes.
The market price of the AMB LP Notes may be volatile.
The market price of the AMB LP Notes will depend on many factors that may vary over time and
some of which are beyond AMB LP’s control, including:
|
|
•
|
|
AMB LP’s financial performance;
|
|
|
|
|
•
|
|
the amount of indebtedness AMB LP and its subsidiaries have outstanding;
|
|
|
|
|
•
|
|
market interest rates;
|
|
|
|
|
•
|
|
the market for similar securities;
|
|
|
|
|
•
|
|
competition;
|
|
|
|
|
•
|
|
the size and liquidity of the market for the AMB LP Notes; and
|
|
|
|
|
•
|
|
general economic conditions.
|
As a result of these factors, you may only be able to sell your AMB LP Notes at prices below those
you believe to be appropriate, including prices below the price you paid for them.
61
An increase in interest rates could result in a decrease in the relative value of the
AMB LP Notes.
In general, as market interest rates rise, notes bearing interest at a fixed rate generally
decline in value. Consequently, if you purchase AMB LP Notes and market interest rates increase,
the market value of your AMB LP Notes may decline. AMB LP cannot predict the future level of market
interest rates.
Ratings of AMB LP Notes may not reflect all risks of an investment in the AMB LP Notes.
AMB LP expects that the AMB LP Notes will be rated by at least one nationally recognized
statistical rating organization. The ratings of the AMB LP Notes will primarily reflect AMB LP’s
financial strength and will change in accordance with the rating of AMB LP’s financial strength.
Any rating is not a recommendation to purchase, sell or hold the AMB LP Notes. These ratings do not
correspond to market price or suitability for a particular investor. In addition, ratings at any
time may be lowered or withdrawn in their entirety. As a result, the ratings of the AMB LP Notes
may not reflect the potential impact of all risks related to structure and other factors on any
trading market for, or trading value of, your AMB LP Notes.
AMB LP’s financial performance and other factors could adversely impact AMB LP’s ability to
make payments on the AMB LP Notes.
AMB LP’s ability to make scheduled payments with respect to AMB LP’s indebtedness, including
the AMB LP Notes, will depend on AMB LP’s financial and operating performance, which, in turn, is
subject to prevailing economic conditions and to financial, business and other factors beyond AMB
LP’s control.
AMB LP may require cash from its subsidiaries to make payments on the AMB LP Notes.
AMB LP conducts the majority of its operations through its consolidated subsidiaries and
unconsolidated joint ventures and co-investment ventures, some of which are not wholly owned, and
AMB LP relies to a significant extent on dividends, distributions, proceeds from intercompany
transactions, interest payments and loans from those entities to meet its obligations for payment
of principal and interest on its outstanding debt obligations and corporate expenses, including
interest payments on the AMB LP Notes, which may be subject to contractual restrictions.
Accordingly, the AMB LP Notes will be structurally subordinated to all existing and future
indebtedness and other liabilities of AMB LP’s consolidated subsidiaries and unconsolidated joint
ventures and co-investment ventures. Holders of AMB LP Notes may look only to AMB LP’s assets and
the assets of AMB, and not directly to any of AMB LP’s consolidated subsidiaries or unconsolidated
joint ventures and co-investment ventures, for payments on the AMB LP Notes. If AMB LP is unable
to obtain cash from such entities to fund required payments in respect of the AMB LP Notes, AMB LP
may be unable to make payments of principal of or interest on those AMB LP Notes.
The AMB LP Notes will be
pari passu
with a substantial portion of its other senior
indebtedness.
AMB LP’s payment obligations under the AMB LP Notes will be unsecured. The AMB LP Notes will
be
pari passu
in right of payment with a substantial portion of AMB LP’s current and future
indebtedness, including its indebtedness for borrowed money, indebtedness evidenced by bonds,
debentures, notes or similar instruments, obligations arising from or with respect to guarantees
and direct credit substitutes, obligations associated with hedges and derivative products,
capitalized lease obligations and other senior indebtedness.
The new AMB LP Indenture, except with respect to the AMB Exchangeable Notes, will limit the
ability of AMB LP to incur additional indebtedness and other obligations, including indebtedness,
senior debt and other obligations that rank senior to or
pari passu
with the AMB LP Notes. At
December 31, 2010, AMB’s unsecured senior debt securities, unsecured credit facilities and other
senior debt totaled approximately $2.4 billion on a consolidated basis. As discussed below, the
AMB LP Notes will also be effectively subordinated to all of AMB LP’s consolidated subsidiaries’
and unconsolidated joint ventures’ and co-investment ventures’ existing and future secured and
unsecured indebtedness and other liabilities. At December 31, 2010, total indebtedness, including
current maturities, of AMB LP’s consolidated subsidiaries and unconsolidated joint ventures and
co-investment ventures totaled approximately $5.3 billion. After giving effect to the Merger, the
AMB LP Notes will be effectively subordinated to ProLogis’ indebtedness under any ProLogis Notes
not tendered.
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AMB’s guarantee of the AMB LP Notes will rank
pari passu
with all of its other senior
indebtedness.
AMB’s guarantee of the AMB LP Notes will rank
pari passu
in right of payment with all of AMB’s
unsecured and unsubordinated indebtedness, including AMB’s indebtedness for borrowed money,
indebtedness evidenced by bonds, debentures, notes or similar instruments, obligations arising from
or with respect to guarantees and direct credit substitutes, obligations associated with hedges and
derivative products, capitalized lease obligations and other senior indebtedness. At December 31,
2010, AMB’s unsecured senior debt securities, unsecured credit facilities and other senior debt
totaled approximately $2.4 billion on a consolidated basis.
The AMB LP Notes will be effectively subordinated to AMB LP’s and its subsidiaries’ secured
debt, and the guarantees will be effectively subordinated. Accordingly, other creditors may
be entitled to repayment before AMB’s and its subsidiaries’ assets are available to satisfy
AMB LP’s obligations under the AMB LP Notes and AMB’s obligations under the guarantees.
The AMB LP Notes will be effectively subordinated to AMB LP’s mortgages and other secured
indebtedness, which encumber certain of its assets, and to all of the secured and unsecured
indebtedness and other liabilities of AMB LP’s consolidated subsidiaries and unconsolidated joint
ventures and co-investment ventures. As a result, in the event of AMB LP’s bankruptcy or
liquidation, any holders of its mortgages or other secured indebtedness would be entitled to be
repaid in full before AMB LP’s pledged assets would be available to satisfy its obligations on the
AMB LP Notes, and, in the event of a bankruptcy or liquidation of any of its subsidiaries, the
creditors of that subsidiary would be entitled to be repaid in full before any assets of that
subsidiary would be available to satisfy AMB LP’s obligations on the AMB LP Notes. In addition, the
guarantee of the AMB LP Notes by AMB will be effectively subordinated to all of the mortgages and
other secured indebtedness of AMB and all of the secured and unsecured indebtedness and other
liabilities of its subsidiaries, other than AMB LP. Further, AMB’s only significant asset is its
ownership interest in AMB LP. As of December 31, 2010, the total outstanding indebtedness on a
consolidated basis for AMB LP, its subsidiaries and the other subsidiaries of AMB was approximately
$3.3 billion, of which approximately $1.0 billion was secured. Approximately $598.4 million of this
secured debt is non-recourse secured debt of consolidated joint ventures and co-investment
ventures. Subject to certain limitations, AMB and AMB LP may incur additional indebtedness.
The guarantees of the AMB LP Notes by AMB could be voided.
AMB’s obligations under its guarantees of the AMB LP Notes issued under this prospectus may be
subject to review under state or federal fraudulent transfer laws in the event of AMB’s bankruptcy
or other financial difficulty. Under those laws, in a lawsuit by an unpaid creditor or
representative of creditors of AMB, such as a trustee in bankruptcy, if a court were to find that,
when AMB entered into the guarantees, it received less than fair consideration or reasonably
equivalent value for the guarantees and either:
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was insolvent;
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was rendered insolvent;
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was engaged in a business or transaction for which its remaining unencumbered assets
constituted unreasonably small capital;
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intended to incur or believed that it would incur debts beyond its ability to pay as
the debts matured; or
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entered into the guarantees with actual intent to hinder, delay or defraud its
creditors,
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then the court could void the guarantees and AMB’s obligations under the guarantees and direct the
return of any amounts paid under the guarantees to AMB or to a fund for the benefit of its
creditors. Furthermore, to the extent that AMB’s obligations under the guarantees of the AMB LP
Notes exceed the actual benefit that it receives from the issuance of the AMB LP Notes, AMB may be
deemed not to have received fair consideration or reasonably equivalent value from the guarantees.
As a result, the guarantees and AMB’s obligations under the guarantees may be void. The measure of
insolvency for purposes of the factors above will vary depending on the law of the
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jurisdiction being applied. Generally, however, an entity would be considered insolvent if the sum
of its debts (including contingent or unliquidated debts) is greater than all of its property at a
fair valuation or if the present fair saleable value of its assets is less than the amount that
will be required to pay its probable liability on its existing debts as they become absolute and
matured.
Your ability to transfer the AMB LP Notes may be limited by the absence of a trading market.
The AMB LP Notes will be new securities for which there is no established trading market. AMB
LP does not currently intend to apply for listing of the AMB LP Notes on any securities exchange.
The liquidity of any market for the AMB LP Notes will depend on the number of holders of the AMB LP
Notes, AMB LP’s performance, the market for similar securities, the interest of securities dealers
in making a market for the AMB LP Notes, prevailing interest rates and other factors. Accordingly,
AMB LP can provide no assurance as to the development or liquidity of any market for the AMB LP
Notes.
The credit and risk profile of AMB could adversely affect AMB LP’s credit ratings and
profile.
The credit and business risk profiles of the general partner or owners of a general partner
may be factors in credit evaluations of a limited partnership. This is because the general partner
can exercise significant influence over the business activities of the partnership, including its
cash distribution and acquisition strategy and business risk profile. Another factor that may be
considered is the financial condition of the general partner and its owners, including the degree
of their financial leverage and their dependence on cash flow from the partnership to service their
indebtedness. Accordingly, AMB LP’s credit ratings and business risk profile could be adversely
affected if the ratings and risk profile of AMB were to decline or were viewed as substantially
lower or riskier than AMB LP’s ratings and risk profile.
AMB LP may elect to cause the redemption of the AMB LP Notes when prevailing interest rates
are relatively low.
AMB LP may redeem any series of the AMB LP Non-Exchangeable Notes in whole at any time, or in
part from time to time, at a price equal to the greater of (i) 100% of the principal amount of the
AMB LP Non-Exchangeable Notes to be redeemed or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest (at the rate in effect on the date of the calculation
of the redemption price) on the AMB LP Non-Exchangeable Notes to be redeemed (exclusive of interest
accrued to the date of redemption) discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at an applicable treasury yield, plus
a number of basis points dependent upon the original maturity of such series, plus, in either case,
accrued interest to the redemption date. See “Description of the AMB LP Non-Exchangeable Notes —
Optional Redemption.”
Prior to a specified date with respect to each series of AMB LP Contingent Exchangeable Notes,
AMB LP may not redeem the AMB LP Contingent Exchangeable Notes except to preserve AMB LP’s status
as a REIT as described below. If at any time AMB LP determines it is necessary to redeem the AMB LP
Contingent Exchangeable Notes in order to preserve its status as a REIT, AMB LP may redeem all, but
not less than all, of the AMB LP Contingent Exchangeable Notes then outstanding for cash at a price
equal to 100% of the principal amount of the AMB LP Contingent Exchangeable Notes being redeemed,
plus accrued and unpaid interest, if any, to the redemption date. On or after certain dates
described below, AMB LP may at its option redeem all or part of the AMB LP Contingent Exchangeable
Notes for cash at a price equal to 100% of the principal amount of the AMB LP Contingent
Exchangeable Notes being redeemed, plus accrued and unpaid interest, if any, to the redemption
date. See “Description of the AMB LP Contingent Exchangeable Notes — Optional Redemption.”
AMB LP may not redeem the AMB LP 3.250% 2015 Exchangeable Notes prior to maturity except to
preserve AMB LP’s status as a REIT. If at any time AMB LP determines it is necessary to redeem the
AMB LP 3.250% 2015 Exchangeable Notes in order to preserve its status as a REIT, AMB LP may redeem
all, but not less than all, of the AMB LP 3.250% 2015 Exchangeable Notes then outstanding for cash
at a price equal to 100% of the principal amount of the AMB LP 3.250% 2015 Exchangeable Notes being
redeemed, plus accrued and unpaid interest, if any, to the redemption date. See “Description of the
AMB LP 3.250% 2015 Notes — Optional Redemption.”
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If AMB LP were to redeem AMB LP Notes at a time when prevailing interest rates are less than
the interest rate on the AMB LP Notes being redeemed, you may not be able to reinvest the proceeds
from the redemption to obtain a comparable yield.
The Trustee has only limited rights of acceleration.
The Trustee under the new AMB LP Indenture governing the AMB LP Notes may accelerate payment
of the principal and accrued and unpaid interest on the AMB LP Notes only upon the occurrence and
continuation of an event of default. An event of default will generally be limited to payment
defaults, breach of other covenants after notice, acceleration of other indebtedness and judgment
defaults in excess of a specified amount, and specific events of bankruptcy, insolvency and
reorganization relating to AMB LP or AMB.
If AMB LP were to become subject to entity level taxation for U.S. federal or state tax
purposes, then AMB LP’s cash available for payment on the AMB LP Notes would be
substantially reduced.
Current law may change so as to cause AMB LP to be treated as a corporation for U.S. federal
income tax purposes or otherwise subject AMB LP to entity level U.S. federal income taxation. If
AMB LP were treated as a corporation for U.S. federal income tax purposes, AMB LP would pay U.S.
federal income tax on its taxable income at the corporate tax rate, which is currently a maximum of
35%, and it likely would pay state taxes as well. Because a tax would be imposed upon AMB LP as a
corporation, the cash available for payment on the AMB LP Notes would be substantially reduced.
Therefore, treatment of AMB LP as a corporation would result in a material reduction in its
anticipated cash flows and could cause a reduction in the value of the AMB LP Notes and would
materially and adversely affect the value of the AMB common stock.
In addition, several states are evaluating ways to subject partnerships to entity level
taxation through the imposition of state income, franchise and other forms of taxation. For
example, AMB LP is now subject to a new entity level tax on the portion of its gross income
apportioned to Texas. If any additional state were to impose an entity level tax on AMB LP, the
cash available for payment on the AMB LP Notes would be reduced.
Additional Risks Related to the AMB LP Exchangeable Notes
The conditional exchange feature of the AMB LP Contingent Exchangeable Notes could result in
your receiving less than the value of shares of AMB common stock into which an AMB LP
Contingent Exchangeable Note would otherwise be exchangeable.
The AMB LP Contingent Exchangeable Notes are exchangeable into cash, shares of AMB common
stock or a combination of both, at AMB LP’s election, only if specified conditions are met. If the
specific conditions for exchange are not met until a specified date with respect to each series of
AMB LP Contingent Exchangeable Notes, you will not be able to exchange your AMB LP Contingent
Exchangeable Notes, and you may not be able to receive the value of the cash and/or shares of AMB
common stock into which the AMB LP Contingent Exchangeable Notes would otherwise be exchangeable
until such specified date. If the specified conditions for the conditional exchange are met, you
could receive less than the value of shares of AMB common stock into which an AMB LP Contingent
Exchangeable Note would have otherwise been exchangeable had a specified condition for the
conditional exchange not occurred.
The settlement feature of the AMB LP Exchangeable Notes may have adverse consequences.
Unless AMB LP elects to satisfy its exchange obligations entirely in shares of AMB common
stock, the AMB LP Exchangeable Notes will be subject to net share settlement, which means that AMB
LP will satisfy its exchange obligation to holders by paying cash in settlement of the lesser of
the principal amount and the daily exchange value of the AMB LP Exchangeable Notes and by
delivering shares of AMB common stock or, at AMB LP’s election, cash, in settlement of any and all
exchange obligations in excess of the principal amount of the AMB LP Exchangeable Notes, as
described under “Description of the AMB LP Contingent Exchangeable Notes — Exchange Rights —
Payment Upon Exchange of the AMB LP Contingent Exchangeable Notes” and “Description of the AMB LP
3.250% 2015 Exchangeable Notes — Exchange Rights — Payment Upon Exchange of the AMB LP
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3.250% 2015 Exchangeable Notes.” Accordingly, upon exchange of an AMB LP Exchangeable Note,
holders might not receive any shares of AMB common stock, or they might receive fewer shares of AMB
common stock relative to the daily exchange value of the AMB LP Exchangeable Note. In addition, any
settlement of an exchange of AMB LP Exchangeable Notes will be delayed until at least the 25th
trading day following AMB LP’s receipt of the holder’s exchange notice. Accordingly, you may
receive less proceeds than expected, because the value of any shares of AMB common stock that you
receive may decline (or fail to appreciate as much as you may expect) between the day that you
exercise your exchange right and the day the daily exchange value of your AMB LP Exchangeable Notes
is determined.
AMB LP’s failure to exchange the AMB LP Exchangeable Notes into shares of AMB common stock, a
combination of cash and shares of AMB common stock, or, if AMB LP so elects, cash, upon exercise of
a holder’s exchange right in accordance with the provisions of the new AMB LP Indenture would
constitute a default under the new AMB LP Indenture. In addition, a default under the new AMB LP
Indenture could lead to a default under existing and future agreements governing AMB LP’s
indebtedness. If, due to a default, the repayment of related indebtedness were to be accelerated
after any applicable notice or grace periods, AMB LP may not have sufficient funds to repay such
indebtedness and amounts owing in respect of the exchange of any AMB LP Exchangeable Notes. If AMB
LP is unable to deliver registered shares of AMB common stock upon exchange, AMB LP may be more
likely to elect to settle its obligations under the exchange by delivering cash.
If the market price of AMB’s common stock decreases, the market price of AMB LP Exchangeable
Notes may similarly decrease.
AMB LP expects that the market price of the AMB LP Exchangeable Notes will be significantly
affected by the market price of AMB’s common stock. This may result in greater volatility in the
market price of the AMB LP Exchangeable Notes than would be expected for AMB LP’s non-exchangeable
debt securities. The market price of AMB’s common stock will likely continue to fluctuate in
response to factors, including the factors discussed elsewhere in this prospectus and AMB’s and AMB
LP’s Annual Report on Form 10-K for the year ended December 31, 2010, many of which are beyond AMB
LP’s control. For instance, the price of AMB’s common stock could be affected by possible sales of
shares of AMB common stock by investors who view the AMB LP Exchangeable Notes as a more attractive
means of equity participation in AMB and by hedging or arbitrage trading activity that may develop
involving AMB’s common stock. The hedging or arbitrage could, in turn, affect the trading prices of
the AMB LP Exchangeable Notes. In addition, anticipated exchange of the AMB LP Exchangeable Notes
issued in this offering into shares of AMB common stock could depress the price of AMB’s common
stock to the extent that any such exchange would result in the issuance by AMB of a significant
number of additional shares of AMB common stock. Future issuances of shares of AMB common stock in
other circumstances could likewise have a similar effect on the market price of AMB’s common stock
and, therefore, the market price of the AMB LP Exchangeable Notes.
AMB LP may be unable to repurchase AMB LP Exchangeable Notes upon the occurrence of a
fundamental change and with respect to the AMB LP Contingent Exchangeable Notes on specified
dates.
You have the right to require AMB LP to repurchase your AMB LP Exchangeable Notes upon the
occurrence of a fundamental change and with respect to the AMB LP Contingent Exchangeable Notes on
specified dates as described under “Description of the AMB LP Contingent Exchangeable Notes —
Fundamental Change Permits Holders to Require AMB LP to Repurchase AMB LP Contingent Exchangeable
Notes” and “Description of the AMB LP Contingent Exchangeable Notes — Repurchase of AMB LP
Contingent Exchangeable Notes at Your Option on Specified Dates.” AMB LP cannot assure you that it
will have enough funds to repurchase all of the AMB LP Contingent Exchangeable Notes of a
particular series on specified dates or all the AMB LP Exchangeable Notes if a fundamental change
event occurs. In addition, future debt AMB LP incurs may limit its ability to repurchase all of the
AMB LP Contingent Exchangeable Notes of a particular series on specified dates or the AMB LP
Exchangeable Notes upon a fundamental change. Moreover, if you or other investors in the AMB LP
Exchangeable Notes exercise the repurchase right on the specified dates or upon a fundamental
change, it may cause a default under that debt, even if the fundamental change itself does not
cause a default owing to the financial effect of such a repurchase on AMB LP.
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A change in control or a fundamental change may adversely affect AMB LP or the AMB LP
Exchangeable Notes.
A fundamental change or change in control transaction involving AMB LP could have a negative
effect on AMB LP and the trading price of AMB’s common stock and could negatively impact the
trading price of the AMB LP Exchangeable Notes. Furthermore, the fundamental change provisions,
including the provisions requiring the increase to the applicable exchange rate for exchanges in
connection with a fundamental change prior to a specified date with respect to the AMB LP
Contingent Exchangeable Notes or at any time with respect to the AMB LP 3.250% 2015 Exchangeable
Notes, may in certain circumstances make it more difficult to complete or discourage a takeover of
AMB LP and the removal of incumbent management.
The adjustment to the applicable exchange rate for AMB LP Exchangeable Notes exchanged
in connection with a fundamental change may not adequately compensate you for any lost value
of your AMB LP Exchangeable Notes as a result of such transaction.
If a fundamental change occurs prior to a specified date with respect to the AMB LP Contingent
Exchangeable Notes or at any time with respect to the AMB LP 3.250% 2015 Exchangeable Notes, AMB LP
will increase the applicable exchange rate by a number of additional shares of AMB common stock for
AMB LP Exchangeable Notes exchanged in connection with such fundamental change. The increase in the
applicable exchange rate will be determined based on the date on which the fundamental change
becomes effective and the price paid per share of AMB common stock in such transaction, as
described below under “Description of the AMB LP Contingent Exchangeable Notes — Exchange Rights
— Adjustment to Shares Delivered Upon Exchange Upon Fundamental Change” and “Description of the
AMB LP 3.250% 2015 Exchangeable Notes — Exchange Rights — Adjustment to Shares Delivered Upon
Exchange Upon Fundamental Change.” The adjustment to the applicable exchange rate for AMB LP
Exchangeable Notes exchanged in connection with a fundamental change may not adequately compensate
you for any lost value of your AMB LP Exchangeable Notes as a result of such transaction. In
addition, if the price per share of AMB common stock in the transaction is:
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greater than $380.82 per share or less than $142.97 per share (in each case, subject
to adjustment), no adjustment will be made to the applicable exchange rate for the AMB
LP 2.250% 2037 Exchangeable Notes,
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greater than $268.82 per share or less than $142.97 per share (in each case, subject
to adjustment), no adjustment will be made to the applicable exchange rate for the AMB
LP 1.875% 2037 Exchangeable Notes,
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greater than $268.82 per share or less than $140.82 per share (in each case, subject
to adjustment), no adjustment will be made to the applicable exchange rate for the AMB
LP 2.625% 2038 Exchangeable Notes, and
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greater than $89.61 per share or less than $30.02 per share (in each case, subject
to adjustment), no adjustment will be made to the applicable exchange rate for the AMB
LP 3.250% 2015 Exchangeable Notes.
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Moreover, in no event will the total number of shares of AMB common stock issuable upon exchange as
a result of this adjustment exceed:
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7.0410 per $1,000 principal amount of AMB LP 2.250% 2037 Exchangeable Notes,
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6.5762 per $1,000 principal amount of AMB LP 1.875% 2037 Exchangeable Notes,
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7.1015 per $1,000 principal amount of AMB LP 2.625% 2038 Exchangeable Notes, and
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33.3134 per $1,000 principal amount of AMB LP 3.250% 2015 Exchangeable Notes,
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subject to adjustments in the same manner as the applicable exchange rate as set forth under
“Description of the AMB LP Contingent Exchangeable Notes — Exchange Rights — Exchange Rate
Adjustments of the AMB LP
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Contingent Exchangeable Notes” and “Description of the AMB LP 3.250% 2015
Exchangeable Notes — Exchange Rights — Exchange Rate Adjustments of the AMB LP 3.250% 2015
Exchangeable Notes.” AMB LP’s obligation to increase the applicable exchange rate in connection
with a fundamental change could be considered a penalty, in which case the enforceability thereof
would be subject to general principles of reasonableness of economic remedies.
A change in control involving AMB LP may not constitute a fundamental change for
purposes of the AMB LP Exchangeable Notes.
The new AMB LP Indenture, with respect to the AMB LP Exchangeable Notes, contains no covenants
or other provisions to afford protection to holders of the AMB LP Exchangeable Notes in the event
of a change in control involving AMB LP except to the extent described under “Description of the
AMB LP Contingent Exchangeable Notes — Fundamental Change Permits Holders to Require AMB LP to
Repurchase AMB LP Contingent Exchangeable Notes” and “— Exchange Rights — Adjustment to Shares
Delivered Upon Exchange Upon Fundamental Change” and “Description of the AMB LP 3.250% 2015
Exchangeable Notes — Fundamental Change Permits Holders to Require AMB LP to Repurchase AMB LP
3.250% 2015 Notes” and “— Exchange Rights — Adjustment to Shares Delivered Upon Exchange Upon
Fundamental Change.” However, the term fundamental change is limited and may not include every
change in control event that might cause the market price of the AMB LP Exchangeable Notes to
decline. As a result, your rights under the AMB LP Exchangeable Notes upon the occurrence of a
fundamental change may not preserve the value of the AMB LP Exchangeable Notes in the event of a
change in control involving AMB LP. In addition, any change in control involving AMB LP may
negatively affect the liquidity, value or volatility of AMB’s common stock, negatively impacting
the value of the AMB LP Exchangeable Notes.
Ownership limitations in the charter of AMB may impair the ability of holders to
exchange AMB LP Exchangeable Notes for shares of AMB common stock.
AMB’s charter (including the AMB articles of incorporation, the “AMB charter”) prohibits the
actual or constructive ownership by any single person of more than 9.8% (by value or number of
shares, whichever is more restrictive) of the issued and outstanding shares of AMB’s common stock.
AMB refers to this limitation as the “ownership limit.” The purpose of the ownership limit is to
assist in protecting and preserving AMB’s REIT status under the Code. For AMB to qualify as a REIT
under the Code, not more than 50% in value of AMB’s outstanding shares of common stock may be owned
by five or fewer individuals at any time during the last half of any taxable year. The ownership
limit permits five persons to acquire up to a maximum of 9.8% each, or an aggregate of 49% of the
outstanding shares, and, thus, assists the board of directors in protecting and preserving AMB’s
REIT status under the Code.
AMB’s charter provides that shares acquired or held in violation of the ownership limit will
be transferred to a trust for the benefit of a designated charitable beneficiary. The charter
further provides that any person who acquires shares in violation of the ownership limit will not
be entitled to any dividends on the shares or be entitled to vote the shares or receive any
proceeds from the subsequent sale of the shares in excess of the lesser of the price paid for the
shares or the amount realized from the sale. A transfer of shares in violation of the above limits
may be void under certain circumstances. In addition, stockholders are required to disclose, upon
demand of the board of directors, such information with respect to their direct and indirect
ownership of shares of AMB as the board of directors deems necessary to comply with the provisions
of the Code pertaining to qualification, for tax purposes, of REITs, or to comply with the
requirements of any other appropriate taxing authority.
Notwithstanding any other provision of the AMB LP Exchangeable Notes, in addition to AMB LP’s
right to elect to deliver exchange consideration in whole or in part in cash, no holder of AMB LP
Exchangeable Notes will be entitled to receive shares of AMB common stock upon an exchange of AMB
LP Exchangeable Notes to the extent that receipt of such shares of AMB common stock (assuming AMB
LP elected to deliver common stock) would cause such holder (together with such holder’s
affiliates) to exceed such ownership limit.
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If you hold AMB LP Exchangeable Notes, you will not be entitled to any rights with
respect to AMB’s common stock, but you will be subject to all changes made with respect to
AMB’s common stock.
If you hold AMB LP Exchangeable Notes, you will not be entitled to any rights with respect to
AMB’s common stock (including, without limitation, voting rights and rights to receive any
dividends or other distributions on shares of AMB common stock), but, if you subsequently exchange
your AMB LP Exchangeable Notes for shares of AMB common stock, you will be subject to all changes
affecting AMB’s common stock. You will have rights as a holder of AMB common stock only if and when
AMB LP delivers shares of AMB common stock to you upon exchange of your AMB LP Exchangeable Notes.
For example, in the event that an amendment is proposed to AMB’s charter or bylaws requiring
stockholder approval and the record date for determining the stockholders of record entitled to
vote on the amendment occurs prior to delivery of shares of AMB common stock to you, you will not
be entitled to vote on the amendment, although you will nevertheless be subject to any changes in
the powers or rights of AMB’s common stock if you are issued shares upon exchange of your AMB LP
Exchangeable Notes.
The value of the exchange right associated with the AMB LP Exchangeable Notes may be
substantially lessened or eliminated if AMB is party to a merger, consolidation or other
similar transaction.
If AMB is party to a consolidation, merger, binding share exchange or sale of all or
substantially all of AMB’s assets pursuant to which shares of AMB common stock are exchanged into
the right to receive cash, securities or other property, at the effective time of the transaction,
the right to exchange the AMB LP Exchangeable Notes into shares of AMB common stock will be changed
into a right to exchange the AMB LP Exchangeable Notes into the kind and amount of cash, securities
or other property that the holder would have received if the holder had exchanged its AMB LP
Exchangeable Notes immediately prior to the transaction. This change could substantially lessen or
eliminate the value of the exchange privilege associated with the AMB LP Exchangeable Notes in the
future. For example, if all of the outstanding shares of AMB common stock were acquired for cash in
a merger transaction, each AMB LP Exchangeable Note would become exchangeable solely into cash and
would no longer be exchangeable into securities whose value would vary depending on AMB future
prospects and other factors.
In addition, holders of AMB LP Contingent Exchangeable Notes may not have the right to
exchange their AMB LP Contingent Exchangeable Notes upon the occurrence of such a transaction. The
fundamental change exchange provisions of the AMB LP Contingent Exchangeable Notes will not afford
holders the right to exchange their AMB LP Contingent Exchangeable Notes in the event of a
consolidation, merger, share exchange, sale or other transaction that does not constitute a
fundamental change, even if shares of AMB common stock would be exchanged into cash, securities or
other property in such transaction.
The applicable exchange rate of the AMB LP Exchangeable Notes may not be adjusted for all
dilutive events, which may adversely affect the trading price of the AMB LP Exchangeable
Notes.
The applicable exchange rate of the AMB LP Exchangeable Notes is subject to adjustment for
certain events, including, but not limited to, the issuance of stock dividends or payment of
certain cash dividends, whether quarterly or special, on AMB’s common stock, the issuance of
certain rights or warrants, subdivisions, combinations, distributions of shares of capital stock,
indebtedness, or assets and certain issuer tender or exchange offers as described under
“Description of the AMB LP Contingent Exchangeable Notes — Exchange Rights — Adjustment to Shares
Delivered Upon Exchange Upon Fundamental Change” and “Description of the AMB LP 3.250% 2015
Exchangeable Notes — Exchange Rights — Adjustment to Shares Delivered Upon Exchange Upon
Fundamental Change.” However, the applicable exchange rate will not be adjusted for other events,
such as certain exchange offers or an issuance of shares of AMB common stock for cash, that may
adversely affect the trading price of the AMB LP Exchangeable Notes or the shares of AMB common
stock. An event that adversely affects the value of the AMB LP Exchangeable Notes may occur, and
that event may not result in an adjustment to the applicable exchange rate.
You may be deemed to have received taxable income if the applicable exchange rate of
the AMB LP Exchangeable Notes is adjusted, even if you do not receive any cash.
If AMB pays a cash dividend on its common stock over a set dividend threshold amount described
below under clause (4) of the heading “Description of the AMB LP Contingent Exchangeable Notes —
Exchange Rights — Adjustment to Shares Delivered Upon Exchange Upon Fundamental Change —
Adjustment Events” and
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“Description of the AMB LP 3.250% 2015 Exchangeable Notes — Exchange Rights — Adjustment to
Shares Delivered Upon Exchange Upon Fundamental Change — Adjustment Events”, an adjustment to the
applicable exchange rate may result, and you may be deemed to have received a taxable dividend,
interest or other income subject to U.S. federal income tax without the receipt of any cash. In
addition, adjustments (or failures to make adjustments) that have the effect of increasing a
holder’s proportionate share in AMB assets or earnings may, in some circumstances, result in a
deemed distribution to such holder. For example, if the applicable exchange rate is increased at
AMB LP’s discretion or in certain other circumstances (including in connection with the payment of
a dividend to AMB’s common stockholders that results in an adjustment to the applicable exchange
rate and that is taxable to AMB’s common stockholders), such increase may result in a deemed
payment of a taxable dividend, interest or other income to holders of the AMB LP Exchangeable
Notes, notwithstanding the fact that the holders do not receive a cash payment. See “Material
United States Federal Income Tax Consequences — U.S. Federal Income Tax Considerations Relating to
the AMB LP Notes — U.S. Holders — Constructive Dividends.” If you are a non-U.S. holder (as
defined in “Material United States Federal Income Tax Consequences”), such deemed dividend,
interest or other income may be subject to U.S. federal withholding tax at a 30% rate or such lower
rate as may be specified by an applicable treaty. See “Material United States Federal Income Tax
Consequences — U.S. Federal Income Tax Considerations Relating to the AMB LP Notes — Non-U.S.
Holders — Adjustments to Exchange Rate.”
An exchange of AMB LP Exchangeable Notes for AMB common stock will result in taxable gain or
loss to you.
The tax consequences of exchanging AMB LP Exchangeable Notes is not the same as converting
ProLogis Convertible Notes. You would generally not have recognized taxable gain or loss on the
conversion of ProLogis Convertible Notes into ProLogis common shares. However, an exchange of the
AMB LP Exchangeable Notes for AMB common stock will generally result in taxable gain or loss to
you. See “Material United States Federal Income Tax Consequences — U.S. Federal Income Tax
Considerations Relating to the AMB LP Notes — U.S. Holders — Sale, Exchange or Other Disposition
of AMB LP Notes” and “— Non U.S. Holders — Sale, Exchange of Other Disposition of AMB LP Notes.”
AMB LP cannot assure you that it will not be required to withhold on payments to
non-U.S. holders of AMB LP Exchangeable Notes in connection with a sale, exchange,
redemption, repurchase, conversion or other disposition of AMB LP Exchangeable Notes based
on the facts and circumstances at the time.
Although AMB LP believes currently that the AMB LP Exchangeable Notes do not constitute “U.S.
real property interests” and AMB LP therefore does not currently intend to withhold under the
Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, AMB LP cannot assure you that the
AMB LP Exchangeable Notes will not constitute U.S. real property interests depending on the facts
or law in existence at the time of any sale, exchange, redemption, repurchase, exchange or other
disposition of an AMB LP Exchangeable Note. If the AMB LP Exchangeable Notes were to constitute
U.S. real property interests, withholding on payments to non-U.S. holders in connection with such a
sale, exchange, redemption, repurchase, exchange or other disposition of AMB LP Exchangeable Notes
may be required, regardless of whether such non-U.S. holders provided certification documenting
their non-U.S. status, which could materially and adversely affect the value of the AMB LP
Exchangeable Notes. See “Material United States Federal Income Tax Consequences — U.S. Federal
Income Tax Considerations Relating to the AMB LP Notes — Non-U.S. Holders — Sale, Exchange or
Other Dispositions of the Notes.”
Risks Related to the Merger
The exchange ratio is fixed and will not be adjusted in the event of any change in the
stock prices of either AMB or ProLogis and therefore the shares you receive upon exchange of
your ProLogis Convertible Notes or exchange of your AMB LP Exchangeable Notes, as
applicable, will not be further adjusted except for other circumstances as provided in the
applicable supplemental indenture.
Upon the closing of the Merger, each ProLogis common share (including ProLogis common shares
received by holders of ProLogis Convertible Notes who convert their notes into ProLogis common
shares prior to the consummation of the Merger) will be converted into the right to receive 0.4464
of a newly issued share of AMB
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common stock, with cash paid in lieu of fractional shares. The exchange ratio was fixed in the
merger agreement, and, while it will be adjusted in the event of a recapitalization, merger,
subdivision, issuer tender or exchange offer or other similar transaction involving AMB or
ProLogis, the exchange ratio will not be adjusted for changes in the market price of either AMB
common stock or ProLogis common shares. Changes in the price of AMB common stock prior to the
Merger will affect the market value of the merger consideration that ProLogis shareholders will
receive on the closing date of the Merger.
Therefore, while the number of shares of AMB common stock to be issued upon exchange per
ProLogis Convertible Note or AMB LP Exchangeable Note, as applicable, is fixed, such noteholders
cannot be sure of the market value of the consideration they will receive upon exchange of their
notes, as applicable.
Failure to complete the Merger could negatively affect the stock prices and the future
business and financial results of ProLogis.
If the Merger is not completed, the ongoing business of ProLogis may be adversely affected,
and ProLogis will be subject to numerous risks, including the following:
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ProLogis being required, under certain circumstances, to pay AMB a termination fee
of $315 million and reimburse AMB for up to $20 million of its expenses in connection
with the Merger;
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ProLogis having to pay certain costs relating to the proposed Merger, such as legal,
accounting, financial advisor, filing, printing and mailing fees; and
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the management of ProLogis focusing on the Merger instead of on pursuing other
opportunities that could be beneficial to ProLogis without realizing any of the
benefits of having the Merger completed.
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If the Merger is not completed, ProLogis cannot assure its shareholders that these risks will
not materialize and will not materially affect the business, financial results and stock prices of
ProLogis.
The pendency of the Merger could adversely affect the business and operations of AMB and
ProLogis.
In connection with the pending Merger, some customers or vendors of each of AMB and ProLogis
may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and
expenses of AMB and ProLogis, regardless of whether the Merger is completed. Similarly, current and
prospective employees of AMB and ProLogis may experience uncertainty about their future roles with
the combined company following the Merger, which may materially adversely affect the ability of
each of AMB and ProLogis to attract and retain key personnel during the pendency of the Merger. In
addition, due to operating covenants in the merger agreement, each of AMB and ProLogis may be
unable, during the pendency of the Merger, to pursue strategic transactions, undertake significant
capital projects, undertake certain significant financing transactions and otherwise pursue other
actions, even if such actions would prove beneficial.
Risk Related to the Combined Company
Operational Risks
The combined company expects to incur substantial expenses related to the Merger.
The combined company expects to incur substantial expenses in connection with completing the
Merger and integrating the business, operations, networks, systems, technologies, policies and
procedures of AMB and ProLogis. There are a large number of systems that must be integrated,
including billing, management information, purchasing, accounting and finance, sales, payroll and
benefits, fixed asset, lease administration and regulatory compliance. Although AMB and ProLogis
have assumed that a certain level of transaction and integration expenses would be incurred, there
are a number of factors beyond their control that could affect the total amount or the timing of
their integration expenses. Many of the expenses that will be incurred, by their nature, are
difficult to estimate accurately at the present time. Due to these factors, the transaction and
integration expenses associated with the
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Merger could, particularly in the near term, exceed the savings that the combined company
expects to achieve from the elimination of duplicative expenses and the realization of economies of
scale and cost savings related to the integration of the businesses following the completion of the
Merger. As a result of these expenses, both AMB and ProLogis expect to take charges against their
earnings before and after the completion of the Merger. The charges taken in connection with the
Merger are expected to be significant, although the aggregate amount and timing of such charges are
uncertain at present.
Following the Merger, the combined company may be unable to integrate the businesses of AMB
and ProLogis successfully and realize the anticipated synergies and related benefits of the
Merger or do so within the anticipated timeframe.
The Merger involves the combination of two companies that currently operate as independent
public companies. AMB and ProLogis expect that the transaction will generate $80 million of annual
gross savings in general and administrative expenses, based on preliminary estimates of certain
personnel and non-personnel reductions. The personnel cost reductions are estimated to be
approximately $65 million and relate to anticipated reductions of certain positions at both AMB and
ProLogis that are believed to be redundant for the combined company. The non-personnel cost
reductions are estimated to be approximately $15 million and relate to duplicative corporate
infrastructure and public company operating expenses. AMB and ProLogis expect to realize these
savings on an annualized run-rate basis by December 31, 2012.
However, the combined company will be required to devote significant management attention and
resources to integrating the business practices and operations of AMB and ProLogis. Potential
difficulties the combined company may encounter in the integration process include the following:
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the inability to successfully combine the businesses of AMB and ProLogis in a manner
that permits the combined company to achieve the cost savings anticipated to result
from the Merger, which would result in the anticipated benefits of the Merger not being
realized in the timeframe currently anticipated or at all;
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lost sales and customers as a result of certain customers of either of AMB or
ProLogis deciding not to do business with the combined company;
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the complexities associated with managing the combined businesses out of several
different locations and integrating personnel from AMB and ProLogis;
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the additional complexities of combining two AMB and ProLogis with different
histories, cultures, regulatory restrictions, markets and customer bases;
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the failure to retain key employees of either of AMB or ProLogis;
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potential unknown liabilities and unforeseen increased expenses, delays or
regulatory conditions associated with the Merger; and
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performance shortfalls at one or both of AMB or ProLogis as a result of the
diversion of management’s attention caused by completing the Merger and integrating
AMB’s or ProLogis’ operations.
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For all these reasons, you should be aware that it is possible that the integration process
could result in the distraction of the combined company’s management, the disruption of the
combined company’s ongoing business or inconsistencies in the combined company’s products,
services, standards, controls, procedures and policies, any of which could adversely affect the
ability of the combined company to maintain relationships with customers, vendors and employees or
to achieve the anticipated benefits of the Merger or could otherwise adversely affect the business
and financial results of the combined company.
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Following the Merger, the combined company may be unable to retain key employees.
The success of the combined company after the Merger will depend in part upon its ability to
retain key AMB and ProLogis employees. Key employees may depart either before or after the Merger
because of issues relating to the uncertainty and difficulty of integration or a desire not to
remain with the combined company following the Merger. Accordingly, no assurance can be given that
AMB, ProLogis or, following the Merger, the combined company will be able to retain key employees
to the same extent as in the past.
The Merger will result in changes to the board of directors and management of the combined
company that may affect the strategy of the combined company as compared to that of AMB and
ProLogis.
If the parties complete the Merger, the composition of the board of directors of the combined
company and management team will change from the boards and management teams of AMB and ProLogis.
The board of directors of the combined company will consist of 11 members, with five directors
selected by the current board of directors of AMB and six directors selected by the current board
of trustees of ProLogis. The combined company will also have executive officers from both AMB and
ProLogis. This new composition of the board of directors and the management team of the combined
company may affect the business strategy and operating decisions of the combined company upon the
completion of the Merger.
The future results of the combined company will suffer if the combined company does not
effectively manage its expanded operations following the Merger.
Following the Merger, the combined company may continue to expand its operations through
additional acquisitions and other strategic transactions, some of which involve complex challenges.
The future success of the combined company will depend, in part, upon the ability of the combined
company to manage its expansion opportunities, which pose substantial challenges for the combined
company to integrate new operations into its existing business in an efficient and timely manner,
and upon its ability to successfully monitor its operations, costs, regulatory compliance and
service quality and to maintain other necessary internal controls. The combined company cannot
assure you that its expansion or acquisition opportunities will be successful or that the combined
company will realize its expected operating efficiencies, cost savings, revenue enhancements,
synergies or other benefits.
The trading price of shares of the common stock of the combined company may be affected by
factors different from those affecting the price of shares of AMB common stock or ProLogis
common shares before the Merger.
If the Merger is completed, ProLogis shareholders will become holders of approximately 60% and
AMB stockholders will hold approximately 40% of the outstanding shares of common stock of the
combined company. The results of operations of the combined company, as well as the trading price
of the common stock of the combined company, after the Merger may be affected by factors different
from those currently affecting AMB’s or ProLogis’ results of operations and the trading prices of
AMB common stock and ProLogis common shares. These factors include:
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a greater number of shares of the combined company outstanding as compared to the
number of currently outstanding shares of AMB;
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different stockholders;
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different businesses; and
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different assets and capitalizations.
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Accordingly, the historical trading prices and financial results of AMB and ProLogis may not
be indicative of these matters for the combined company after the Merger. For a discussion of the
business of AMB and ProLogis and of certain factors to consider in connection with that business,
see the documents incorporated by reference by AMB or ProLogis into this prospectus referred to
under “Where You Can Find More Information.”
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Regulatory and Legal Risks
Counterparties to certain significant agreements with AMB or ProLogis may exercise
contractual rights under such agreements in connection with the Merger.
AMB and ProLogis are each party to certain agreements that give the counterparty certain
rights following a “change in control”, including in some cases the right to terminate the
agreement. Under some such agreements, the Merger will constitute a change in control, and,
therefore, the counterparty may exercise certain rights under the agreement upon the closing of the
Merger. Certain AMB and ProLogis funds, joint ventures, management and servicing contracts, leases
and debt obligations have agreements subject to such provisions. Any such counterparty may request
modifications of their respective agreements as a condition to granting a waiver or consent under
their agreement. There is no assurance that such counterparties will not exercise their rights
under the agreements, including termination rights where available, that the exercise of any such
rights will not result in a material adverse effect or that any modifications of such agreements
will not result in a material adverse effect.
In connection with the announcement of the merger agreement, several lawsuits have been
filed and are pending, seeking, among other things, to enjoin the Merger and rescind the
merger agreement, and an adverse judgment in any of the lawsuits may prevent the Merger from
being effective or from becoming effective within the expected timeframe.
ProLogis, the members of the ProLogis board of trustees, New Pumpkin, Upper Pumpkin, Pumpkin
LLC, AMB and AMP LP, have each been named as defendants in several lawsuits brought by holders of
ProLogis common shares challenging the Merger and seeking, among other things, to enjoin the
Merger, direct the defendants to exercise their fiduciary duties, rescind the merger agreement, and
award the plaintiffs damages and expenses. If the plaintiffs are successful in obtaining an
injunction prohibiting the parties from completing the Merger on the agreed upon terms, the
injunction may prevent the completion of the Merger in the expected timeframe (if at all). For more
information about litigation related to the Merger, including the agreements in principle with
respect to the proposed settlement of the litigation, see “The Merger — Litigation Relating to the
Merger.”
REIT Risks
The combined company would succeed to, and may incur, adverse tax consequences if AMB or
ProLogis has failed or fails to qualify as a REIT for U.S. federal income tax purposes.
If either AMB or ProLogis has failed or fails to qualify as a REIT for U.S. federal income tax
purposes and the Merger is completed, the combined company generally would succeed to and may incur
significant tax liabilities, and the combined company could possibly lose its REIT status should
disqualifying activities continue after the Merger.
REITs are subject to a range of complex organizational and operational requirements.
As REITs prior to the completion of the Merger, each of AMB and ProLogis, and as a REIT
following the completion of the Merger, the combined company, must distribute with respect to each
year at least 90% of its REIT taxable income to its stockholders or shareholders, as applicable.
Other restrictions apply to a REIT’s income and assets and share ownership. For any taxable year
that AMB, ProLogis or the combined company fails to qualify as a REIT, it will not be allowed a
deduction for dividends paid to its stockholders or shareholders, as applicable, in computing
taxable income and thus would become subject to U.S. federal and state income tax as if it were a
regular taxable corporation. In such an event, AMB, ProLogis or the combined company, as the case
may be, could be subject to potentially significant tax liabilities. Unless entitled to relief
under certain statutory provisions, AMB, ProLogis or the combined company, as the case may be,
would also be disqualified from treatment as a REIT for the four taxable years following the year
in which it lost its qualification. If AMB or ProLogis failed to qualify as a REIT, the market
price of the common stock of the combined company may decline, and the combined company may need to
reduce substantially the amount of distributions to its stockholders because of its increased tax
liability. See “Material United States Federal Income Tax Consequences — U.S. Federal Income Tax
Considerations Relating to the Ownership of AMB Common Stock — AMB’s Qualification as a REIT.”
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Other Risks
Failure to complete the exchange offers and consent solicitation could adversely affect the
operations of the combined company.
Although AMB LP expects the completion of the exchange offers and consent solicitations to
occur promptly after the completion of the Merger, it may occur a substantial period of time
following the completion of the Merger, or may not occur at all, which may subject the combined
company to certain risks and possible adverse consequences. If the Merger is completed but the
exchange offers and consent solicitation are not completed, the combined company will not benefit
from the simplification of its capital structure and the reporting obligations of the combined
company and its consolidated subsidiaries following the completion of the Merger. As a result, the
combined company would be required to undergo the effort and expense of fulfilling reporting
obligations under the ProLogis Indenture for ProLogis, which will be a subsidiary of ProLogis, Inc.
and ProLogis, L.P., both of which will have their own reporting obligations.
Similarly, the combined company would not benefit from the elimination of certain other
covenants contained in the ProLogis Indenture. Such covenants limit the ability of ProLogis and
its subsidiaries to take certain actions, effectively limiting the ability of the combined company
to take certain actions, that may be beneficial to the business or operations of the combined
company, through ProLogis or its subsidiaries (which will be subsidiaries of the combined company).
For example, if the covenants are not eliminated, the combined company generally would not be able
to cause the subsidiaries of ProLogis to incur debt on an unsecured basis (such as borrowings under
the combined company’s unsecured debt agreements) and any secured debt that was incurred or that
remains outstanding would be included as secured debt for purposes of calculating the combined
company’s covenants under its other debt agreements. Completion of the Merger is not conditioned on
completing the exchange offers and consent solicitations. No assurance can be given that the
exchange offers and consent solicitations will be completed substantially concurrently with the
Merger, or at all.
In connection with the Merger, the combined company is planning to refinance a significant
amount of indebtedness and cannot guarantee that it will be able to obtain the necessary
funds on favorable terms or at all.
In connection with the closing of the Merger, or at any time thereafter, the combined company
may elect to terminate certain (or all) of AMB’s and ProLogis’ respective credit facilities. Any
such termination would require the repayment of the amounts outstanding thereunder. In addition,
the Merger may trigger the mandatory prepayment of certain secured mortgage debt of AMB, ProLogis
or their affiliates. AMB and ProLogis are engaged in discussions with certain potential financing
providers regarding one or more bank credit facilities to be entered into by the combined company
at or around the time of the closing of the Merger, funds from which would be used in part to make
such repayments or mandatory prepayments and to provide a source of liquidity for the combined
company. However, the combined company’s ability to obtain such financing will depend on, among
other factors, prevailing market conditions at the time of the closing of the Merger and other
factors beyond the control of the combined company. AMB and ProLogis cannot assure you that the
combined company will be able to obtain additional financing on terms acceptable to the combined
company or at all. Completion of the Merger is not conditioned on completing such financing
transactions.
If the combined company is unable to obtain such financing, or is unable to do so on terms
acceptable to the combined company, the combined company or, prior to the closing of the Merger,
AMB and ProLogis, may seek to obtain the consent of their respective lenders to the Merger or,
alternatively, to seek waivers or amendments of certain provisions of their respective bank credit
facilities. ProLogis sought and obtained a consent and waiver from certain of its lenders with
respect to the signing of the merger agreement, but such waiver does not extend to any defaults
that would be triggered by the closing of the Merger. In addition, AMB and ProLogis have sought
certain consents related to mandatory prepayments of secured mortgage debt of the parties which may
be triggered by the closing of the Merger. As of the date hereof, substantially all of the consents
related to such mortgage debt requested by AMB have been received. ProLogis has delivered its
requests for consents and waivers required under such mortgage debt, which has an aggregate
principal amount of approximately $407 million (and could require the payment of associated
prepayment penalties of approximately $45 million), and is awaiting responses to such
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requests. AMB and ProLogis cannot assure you that any further consents or waivers will be
obtained if sought, or that the combined company will have sufficient funds available to make such
mandatory prepayments if necessary.
The combined company will have a substantial amount of indebtedness and may need to incur
more in the future.
The combined company will have substantial indebtedness. For example, as of December 31,
2010, the combined company would have had an estimated fixed charge coverage ratio of 2.5x and an
estimated debt as a percentage of total market capitalization of 41.3% (by comparison, as of that
date, the standalone figures for AMB were 2.6x and 37.2%, respectively, and for ProLogis were 2.3x
and 42.9%, respectively). In addition, in connection with executing the combined company’s business
strategies following the Merger, the combined company expects to continue to evaluate the
possibility of acquiring additional properties and making strategic investments, and the combined
company may elect to finance these endeavors by incurring additional indebtedness. Its substantial
indebtedness could have material adverse consequences for the combined company, including (i)
reducing the combined company’s credit ratings and thereby raising its borrowing costs, (ii)
hindering the combined company’s ability to adjust to changing market, industry or economic
conditions, (iii) limiting the combined company’s ability to access the capital markets to
refinance maturing debt or to fund acquisitions or emerging businesses, (iv) limiting the amount of
free cash flow available for future operations, acquisitions, dividends, stock repurchases or other
uses, (v) making the combined company more vulnerable to economic or industry downturns, including
interest rate increases, and (vi) placing the combined company at a competitive disadvantage
compared to less leveraged competitors.
Moreover, to respond to competitive challenges, the combined company may be required to raise
substantial additional capital to execute its business strategy. The combined company’s ability to
arrange additional financing will depend on, among other factors, the combined company’s financial
position and performance, as well as prevailing market conditions and other factors beyond the
combined company’s control. If the combined company is able to obtain additional financing, the
combined company’s credit ratings could be further adversely affected, which could further raise
the combined company’s borrowing costs and further limit its future access to capital and its
ability to satisfy its obligations under its indebtedness.
The historical and unaudited pro forma combined condensed financial information included
elsewhere in this prospectus may not be representative of the combined company’s results
after the Merger, and, accordingly, you have limited financial information on which to
evaluate the combined company.
The unaudited pro forma combined condensed financial information included elsewhere in this
prospectus has been presented for informational purposes only and is not necessarily indicative of
the financial position or results of operations that actually would have occurred had the Merger
been completed as of the date indicated, nor is it indicative of the future operating results or
financial position of the combined company. The unaudited pro forma combined condensed financial
information reflects adjustments, which are based upon preliminary estimates, to allocate the
purchase price to AMB’s assets and liabilities. The purchase price allocation reflected in the
unaudited pro forma combined condensed financial information included elsewhere in this prospectus
is preliminary, and the final allocation of the purchase price will be based upon the actual
purchase price and the fair value of the assets and liabilities of AMB as of the date of the
completion of the Merger. The unaudited pro forma combined condensed financial information does not
reflect future events that may occur after the Merger, including the costs related to the planned
integration of AMB and ProLogis and any future nonrecurring charges resulting from the Merger, and
does not consider potential impacts of current market conditions on revenues or expense
efficiencies. The unaudited pro forma combined condensed financial information presented elsewhere
in this prospectus is based in part on certain assumptions regarding the Merger that AMB and
ProLogis believe are reasonable under the circumstances. AMB and ProLogis cannot assure you that
the assumptions will prove to be accurate over time.
AMB, AMB LP and ProLogis face other risks.
The risks listed above are not exhaustive, and you should be aware that, following the Merger,
the combined company will face various other risks, including those discussed in reports filed by
AMB, AMB LP and ProLogis with the SEC. See “Where You Can Find More Information.”
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USE OF PROCEEDS
AMB LP will not receive any cash proceeds from the issuance of the AMB LP Notes in connection
with the exchange offers. In exchange for issuing the AMB LP Notes and paying the cash exchange
consideration (as applicable), AMB LP will receive accepted ProLogis Notes in an aggregate
principal amount equal to (i) the aggregate principal amount of such issued AMB LP Notes plus (ii)
the aggregate amount of such cash exchange consideration (only if AMB LP would otherwise be
required to issue an AMB LP Note in a denomination other than $1,000 or a
whole multiple of $1,000). AMB LP will not receive any cash proceeds from the consent
solicitations. The ProLogis Notes surrendered in connection with the exchange offers will be
retired and cancelled and will not be reissued.
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COMPARATIVE STOCK PRICES AND DIVIDENDS
AMB common stock and ProLogis common shares are traded on the NYSE under the symbols “AMB” and
“PLD”, respectively. The following table presents trading information for AMB common stock and
ProLogis common shares on January 26, 2011, the last trading day before ProLogis common share and
AMB common stock prices may have been affected by market speculation regarding a potential
transaction involving AMB and ProLogis, January 28, 2011, the last trading day before public
announcement of the merger agreement, and May 2, 2011, the latest practicable trading date
before the date of this prospectus.
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AMB Common Stock
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ProLogis Common Shares
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Date
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High
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Low
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Close
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High
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Low
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Close
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January 26, 2011
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$
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33.34
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$
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32.72
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$
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32.86
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$
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14.74
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$
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14.50
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$
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14.70
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January 28, 2011
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$
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34.08
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$
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32.80
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|
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$
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32.93
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$
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15.84
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$
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15.17
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$
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15.21
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May 2, 2011
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$
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37.05
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$
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35.94
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$
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36.36
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$
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16.60
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$
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16.08
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$
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16.29
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For illustrative purposes, the following table provides ProLogis equivalent per share
information on each of the specified dates. ProLogis equivalent per share amounts are calculated by
multiplying AMB per share amounts by the exchange ratio of 0.4464.
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ProLogis Equivalent
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AMB Common Stock
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Per Share
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Date
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High
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Low
|
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Close
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|
High
|
|
Low
|
|
Close
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|
January 26, 2011
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$
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33.34
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|
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$
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32.72
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|
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$
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32.86
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|
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$
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14.88
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|
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$
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14.61
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|
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$
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14.67
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January 28, 2011
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$
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34.08
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|
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$
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32.80
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|
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$
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32.93
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|
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$
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15.21
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$
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14.64
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|
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$
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14.70
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May 2, 2011
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$
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37.05
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|
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$
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35.94
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$
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36.36
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|
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$
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16.54
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|
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$
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16.04
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$
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16.23
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The following tables set forth the high and low sales prices of AMB common stock and ProLogis
common shares as reported in the NYSE’s consolidated transaction reporting system, and the
quarterly cash dividends declared per share, for the calendar quarters indicated.
AMB
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Dividend
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High
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Low
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Declared
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2009
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First Quarter
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$
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26.03
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|
|
$
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9.12
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|
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$
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0.28
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Second Quarter
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$
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20.75
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|
|
$
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13.81
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|
|
$
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0.28
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Third Quarter
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$
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25.96
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|
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$
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15.91
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|
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$
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0.28
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Fourth Quarter
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$
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27.43
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$
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20.71
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$
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0.28
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2010
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First Quarter
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$
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29.60
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$
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21.80
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$
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0.28
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Second Quarter
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$
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29.17
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$
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23.14
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|
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$
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0.28
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Third Quarter
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$
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26.97
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$
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22.05
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$
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0.28
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Fourth Quarter
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$
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32.18
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$
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26.14
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$
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0.28
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2011
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First Quarter
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$
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36.47
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$
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31.75
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$
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0.28
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Second Quarter (through May 2, 2011)
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$
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37.06
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|
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$
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34.52
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$
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—
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78
ProLogis
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Dividend
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|
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High
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Low
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Declared
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2009
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First Quarter
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$
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16.68
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$
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4.87
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$
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0.25
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Second Quarter
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$
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9.77
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$
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6.10
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$
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0.15
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Third Quarter
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$
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13.30
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$
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6.54
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$
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0.15
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Fourth Quarter
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$
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15.04
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$
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10.76
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$
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0.15
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2010
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First Quarter
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$
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14.71
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$
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11.32
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$
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0.15
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Second Quarter
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$
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14.67
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$
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9.61
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$
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0.15
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Third Quarter
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$
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12.22
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$
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9.15
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$
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0.15
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Fourth Quarter
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$
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14.97
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|
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$
|
11.66
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|
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$
|
0.1125
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2011
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|
|
|
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|
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|
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First Quarter
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$
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16.52
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$
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14.02
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$
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0.1125
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Second
Quarter (through May 2, 2011)
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|
$
|
16.70
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$
|
15.51
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$
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—
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79
INFORMATION ABOUT AMB, AMB LP AND PROLOGIS
AMB Property Corporation
AMB Property, L.P.
Pier 1, Bay 1
San Francisco, California 94111
(415) 394-9000
AMB, together with its subsidiaries, is a global owner, operator and developer of industrial
real estate, focused on major hub and gateway distribution markets in the Americas, Europe and
Asia. As of December 31, 2010, AMB owned, or had investments in, on a consolidated basis or through
unconsolidated joint ventures, properties and development projects expected to total approximately
159.6 million square feet (14.8 million square meters) in 49 markets within 15 countries.
The business of AMB is operated primarily through its operating partnership, AMB LP. As of
December 31, 2010, AMB owned an approximate 98.2% general partnership interest in the operating
partnership, excluding preferred units. As the sole general partner of AMB LP, AMB has the full,
exclusive and complete responsibility for and discretion in its day-to-day management and control.
AMB LP holds substantially all of the assets of AMB and directly or indirectly holds the ownership
interests in AMB’s joint ventures.
AMB, a Maryland corporation, is a self-administered and self-managed REIT, and it expects that
it has qualified, and will continue to qualify, as a REIT for U.S. federal income tax purposes
beginning with the year ended December 31, 1997. As a self-administered and self-managed REIT, the
employees of AMB perform its corporate, administrative and management functions, rather than AMB
relying on an outside manager for these services. AMB believes that real estate is fundamentally a
local business and is best operated by local teams in each of its markets. As a vertically
integrated company, AMB actively manages its portfolio of properties. In select markets, AMB may,
from time to time, establish relationships with third-party real estate management firms, brokers
and developers that provide some property-level administrative and management services under AMB’s
direction.
AMB was incorporated in the State of Maryland in 1997, and AMB LP was formed in the State of
Delaware in 1997. AMB common stock is listed on the NYSE, trading under the symbol “AMB.” The
primary office of AMB is located in San Francisco, California at the address above.
Additional information about AMB, AMB LP and their subsidiaries is included in documents
incorporated by reference into this prospectus. See “Where You Can Find More Information.”
ProLogis
4545 Airport Way
Denver, Colorado 80239
(303) 567-5000
ProLogis is a leading global provider of industrial distribution facilities. ProLogis is
organized as a Maryland real estate investment trust and has elected to be taxed as a REIT under
the Code. The world headquarters of ProLogis are located in Denver, Colorado. The European
headquarters of ProLogis are located in the Grand Duchy of Luxembourg with its European customer
service headquarters located in Amsterdam, the Netherlands. The primary office of ProLogis in Asia
is located in Tokyo, Japan.
ProLogis was formed in 1991, primarily as a long-term owner of industrial distribution space
operating in the United States. Over time, the business strategy of ProLogis evolved to include the
development of properties for contribution to property funds in which ProLogis maintains an
ownership interest and the management of those property funds and the properties they own.
Originally, ProLogis sought to differentiate itself from its competition by focusing on the
distribution space requirements of its corporate customers on a national, regional and local basis
80
and providing customers with consistent levels of service throughout the United States.
However, as the needs of its customers expanded to markets outside the United States, so did the
portfolio and management team of ProLogis. Today, ProLogis is an international real estate company
with operations in North America, Europe and Asia. The business strategy of ProLogis is to
integrate international scope and expertise with a strong local presence in its markets, thereby
becoming an attractive choice for its targeted customer base, the largest global users of
distribution space, while achieving long-term sustainable growth in cash flow.
ProLogis common stock is listed on the NYSE, trading under the symbol “PLD.”
New Pumpkin Inc., a Maryland corporation, Upper Pumpkin LLC, a Delaware limited liability
company, and Pumpkin LLC, a Delaware limited liability company, are direct and indirect, wholly
owned subsidiaries of ProLogis and were formed in January 2011 for the purpose of effecting the
Merger.
Additional information about ProLogis and its subsidiaries is included in documents
incorporated by reference into this prospectus. See “Where You Can Find More Information.”
The Combined Company
Corporate Headquarters:
Pier 1, Bay 1
San Francisco, California 94111
(415) 394-9000
Operational Headquarters:
4545 Airport Way
Denver, Colorado 80239
(303) 567-5000
The combined company will be named “ProLogis, Inc.” and will be a Maryland corporation that is
a self- administered and self-managed REIT for U.S. federal income tax purposes. The combined
company is expected to be a leading global owner, operator and developer of industrial real estate.
The combined company is expected to have a pro forma equity market capitalization of approximately
$14 billion, a total market capitalization in excess of $24 billion, and gross assets owned and
managed of approximately $46 billion. The combined company will own or manage approximately 600
million square feet (approximately 55 million square meters) of modern distribution facilities
located in key gateway markets and logistics corridors in 22 countries.
The business of the combined company will be operated through an operating partnership,
ProLogis, L.P. (which will be the renamed AMB LP, and will be the obligor under the AMB LP Notes
upon the consummation of the exchange offers). On a pro forma basis giving effect to the Merger,
the combined company will own an approximate 99.3% general partnership interest in the operating
partnership, excluding preferred units, and, as its sole general partner, the combined company will
have the full, exclusive and complete responsibility for and discretion in the day-to-day
management and control of the operating partnership.
The common stock of the combined company will be listed on the NYSE, trading under the symbol
“PLD.”
81
THE MERGER
The following is a discussion of the Merger and the material terms of the merger agreement
between AMB and ProLogis. You are urged to read the merger agreement carefully and in its entirety,
a copy of which is filed as an exhibit to the registration statement of which this prospectus is a
part.
Directors and Management Following the Merger
Initial Board Composition
Following the consummation of the Merger, the board of directors of the combined company will
have eleven members, consisting of (i) Mr. Hamid R. Moghadam, the current chief executive officer
of AMB; (ii) Mr. Walter C. Rakowich, the current chief executive officer of ProLogis; (iii) Ms.
Lydia H. Kennard, Mr. J. Michael Losh, Mr. Jeffrey Skelton and Mr. Carl B. Webb, each of whom was
selected by the AMB board of directors and is currently a member of the AMB board of directors; and
(iv) Mr. Irving F. Lyons III, Mr. George L. Fotiades, Ms. Christine Garvey, Mr. D. Michael Steuert
and Mr. William D. Zollars, each of whom were selected by the ProLogis board of trustees and each
of whom (other than Mr. Zollars) is currently a member of the ProLogis board of trustees.
Mr. Moghadam will become the chairman of the board of the combined company (which will not be
an executive officer position at the combined company), Mr. Rakowich will become the chairman of
the executive committee of the board, and Mr. Lyons will become the lead independent director.
Mr. Zollars, age 63, was a trustee of ProLogis from June 2001 to May 2010. Mr. Zollars has
been the chairman of the board and chief executive officer of YRC Worldwide Inc., a holding company
specializing in the transportation of industrial, commercial and retail goods, since November 1999.
Mr. Zollars is a director of Cerner Corporation (computer integrated systems design) and CIGNA
Corporation (hospital and medical service plans).
Board Committees
The board of directors of the combined company will have four committees, consisting of an
audit committee, a compensation committee, an executive committee and a nominating & governance
committee (which will include in its charter the current responsibilities of the corporate
responsibility committee of ProLogis). Mr. Losh (chair), Ms. Garvey and Mr. Steuert will serve as
members of the audit committee; Mr. Fotiades (chair), Mr. Webb and Mr. Zollars will serve as
members of the compensation committee; Mr. Rakowich (chair), Mr. Lyons, Mr. Moghadam and Mr.
Skelton will serve as members of the executive committee; and Ms. Kennard (chair), Mr. Skelton and
Mr. Zollars will serve as members of the nominating & governance committee. The role of the
executive committee will be to meet and act separately if board action is required, the matter is
time-sensitive and the full board of directors is unavailable or unable to act in the required time
frame.
Officers of the Combined Company
Upon the closing of the Merger, Mr. Moghadam and Mr. Rakowich will become co-chief executive
officers of the combined company. On December 31, 2012, Mr. Rakowich will resign as co-chief
executive officer and as a member of the board of directors, and Mr. Moghadam will become the sole
chief executive officer of the combined company and remain chairman of the board of the combined
company. The bylaws of the combined company will provide that the affirmative vote of at least 75%
of the independent directors of the combined company is required to take any of the following
actions:
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|
•
|
|
removal of Mr. Moghadam from the office of co-chief executive officer of the
combined company prior to December 31, 2012 or removal of Mr. Moghadam from the office
of chief executive officer or chairman of the board of directors of the combined
company prior to December 31, 2014;
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|
•
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|
removal of Mr. Rakowich as co-chief executive officer of the combined company prior
to December 31, 2012;
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82
|
|
•
|
|
appointment of any person as chief executive officer or co-chief executive officer
of the combined company, other than, prior to December 31, 2012, Mr. Moghadam or Mr.
Rakowich, or, after December 31, 2012 and prior to December 31, 2014, Mr. Moghadam;
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•
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appointment of any person, other than Mr. Moghadam, as chairman or co-chairman of
the board of directors of the combined company prior to December 31, 2014;
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|
|
•
|
|
failure to nominate Mr. Moghadam or Mr. Rakowich as a director of the combined
company in any election of directors where the term of such directorship commences
prior to December 31, 2014 or December 31, 2012, respectively; or
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|
•
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|
a material alteration, limitation or curtailment of the authority granted pursuant
to the bylaws of the combined company to the chief executive officer, co-chief
executive officer or chairman of the board prior to December 31, 2014.
|
In addition, the affirmative vote of at least 75% of the independent directors of the combined
company is required to amend, modify or repeal, or adopt any bylaw provision inconsistent with, the
foregoing provisions.
The current chief financial officer of ProLogis, Mr. William E. Sullivan, will become chief
financial officer of the combined company, and the current chief financial officer of AMB, Mr.
Thomas S. Olinger, will become chief integration officer of the combined company. On December 31,
2012, Mr. Sullivan will retire from the combined company, and Mr. Olinger will become the chief
financial officer of the combined company.
Following the closing of the Merger, Mr. Michael S. Curless will act as chief investment
officer of the combined company, Mr. Guy F. Jaquier will act as chief executive officer, private
capital, Mr. Gary E. Anderson will act as chief executive officer, Europe & Asia, Mr. Eugene F.
Reilly will act as chief executive officer, the Americas, Mr. Edward S. Nekritz will act as chief
legal officer and general counsel, and Ms. Nancy Hemmenway will act as chief human resources
officer.
Regulatory Approvals Required for the Merger
AMB and ProLogis are not required to make notifications under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules promulgated thereunder by the Federal Trade
Commission. Competition approvals for the Merger were required and have been obtained from the
antitrust authorities in Canada, Germany and Mexico. In particular, competition consents were
sought from the German antitrust authority (Bundeskartellamt), pursuant to the German Competition
Law (Act Against Restraints of Competition of 1998, as amended), and the Mexican competition
commission, Commission Federal de Competencia, pursuant to Article 20 of the Federal Law of
Economic Competition. Competition consent was also sought and obtained from the Canadian
Competition Bureau in Canada, pursuant to the Competition Act (Canada).
At any time before or after the combination, the Antitrust Division of the United States
Department of Justice, the Federal Trade Commission or a United States state attorney general could
take action under the antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the combination or seeking divestiture of assets of AMB or ProLogis or
their respective subsidiaries. Private parties may also bring legal actions under the antitrust
laws under certain circumstances. While AMB and ProLogis do not expect any such action to be taken,
they can give no assurance that a challenge to the combination will not be made or, if made, would
be unsuccessful.
Dividends
AMB and ProLogis plan to continue their current dividend policy until the closing of the
Merger. The parties each intend to pay distributions on their preferred shares at their stated
dividend or distribution rates and quarterly dividends to their common stockholders at a rate not
in excess of $0.28 per share of AMB common stock and $0.1125 per ProLogis common share. AMB and
ProLogis have agreed to coordinate their regular quarterly dividends for their common stockholders
so that, if one group of common stockholders receives any dividend for a
83
quarter, the other group of common stockholders will also receive a dividend for such quarter
at the same time. AMB and ProLogis have agreed that the other party, with notice to the other, can
declare or pay the minimum dividend as may be required in order for such party to qualify as a REIT
and to avoid to the extent reasonably possible the incurrence of income or excise tax (“REIT
dividend”). If one party declares a REIT dividend, the other party can declare a dividend per share
in the same amount, as adjusted by the exchange ratio.
Following the closing of the Merger, the parties intend that the combined company will
maintain a dividend policy that will allow it to maintain its status as a REIT and avoid to the
extent reasonably possible the incurrence of income or excise tax.
Listing of AMB Common Stock and Preferred Stock
It is a condition to the completion of the Merger that the AMB common stock, AMB Series R
preferred stock and AMB Series S preferred stock issuable in the Topco merger and the AMB common
stock to be authorized and reserved for issuance upon exchange or redemption of partnership units
by limited partners in certain of ProLogis’ partnerships, upon the conversion or exchange of
certain of ProLogis’ convertible debt or upon exercise or settlement of options and other equity
awards to purchase AMB common stock issued in substitution for ProLogis options and other equity
awards, be approved for listing on the NYSE, subject to official notice of issuance.
De-listing and Deregistration of ProLogis Common Shares and Preferred Shares
When the Merger is completed, the ProLogis common shares and each series of ProLogis preferred
shares currently listed on the NYSE will cease to be quoted on the NYSE and will be deregistered
under the Exchange Act.
Litigation Relating to the Merger
Three of the actions were filed in the District Court for the City and County of Denver,
Colorado. These cases have been consolidated, and on or about April 1, 2011, plaintiffs filed a
consolidated class action complaint against ProLogis, the members of the ProLogis board of
trustees, AMB, New Pumpkin, Upper Pumpkin, Pumpkin LLC and AMB LP. The complaint alleges that
ProLogis’ trustees breached their fiduciary duties in connection with entering into the merger
agreement and that ProLogis, AMB, New Pumpkin, Upper Pumpkin, Pumpkin LLC and AMB LP aided and
abetted the breaches of those fiduciary duties. The complaint further alleges that the Merger
registration statement contains material omissions and misstatements. The plaintiffs seek, among
other relief, an order to (i) enjoin the defendants from consummating the Merger unless and until
ProLogis adopts and implements a procedure or process reasonably designed to enter into a merger
agreement providing the best possible value for ProLogis’ shareholders, (ii) direct the defendants
to exercise their fiduciary duties to obtain a transaction that is in the best interests of
ProLogis’ shareholders and to refrain from entering into any transaction until the process for the
sale or merger of ProLogis is completed and the highest possible value obtained, (iii) rescind the
merger agreement, to the extent already implemented, and (iv) award plaintiffs’ costs and
disbursements of the action. Defendants have moved to stay the Colorado action in favor of the
Maryland action described below. Plaintiffs have moved for expedited discovery, and the defendants
have opposed that motion.
Two of the actions were filed in the Circuit Court of Maryland for Baltimore City. The actions
have been consolidated, and the plaintiffs filed a consolidated class action and derivative
complaint on or about March 28, 2011. The Maryland consolidated complaint names the same defendants
as the Colorado consolidated complaint. The complaint alleges that the members of the ProLogis
board of trustees breached their fiduciary duties in connection with the Merger and that AMB and
AMB LP aided and abetted the breaches of those fiduciary duties. The complaint further alleges that
the Merger registration statement is misleading and incomplete. The plaintiffs in this action seek,
among other relief, an order to (i) enjoin, preliminarily and permanently, the Merger, (ii) rescind
the Merger in the event it is consummated or award rescissory damages, (iii) direct the defendants
to account to plaintiffs and all other members of the class for all damages, profits and any
special benefits defendants obtained as a result of their breaches of fiduciary duties, and (iv)
award plaintiffs the costs of the action. Defendants moved
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to dismiss the Maryland action for failure to state a claim and to stay all discovery pending
a ruling on their motion to dismiss; plaintiffs moved for expedited discovery in advance of a
preliminary injunction hearing.
On April 15, 2011, the parties to the Maryland action executed a memorandum of understanding
that embodies their agreement in principle on the structure of a proposed settlement. The proposed
settlement, which is subject to confirmatory discovery and court approval following notice to the
class of all ProLogis shareholders during the period from January 30, 2011 through the date of the
consummation of the Merger (which is referred to as the “Class”), would dismiss all causes of
action asserted in the Maryland consolidated complaint and release all claims that members of the
Class may have arising out of or relating in any manner to the Merger, including all claims being
asserted in the Colorado action. Pursuant to the terms of the proposed settlement, defendants
agreed to make certain disclosures to shareholders in the registration statement of AMB on Form S-4
of which the Merger prospectus forms a part. The parties reported to the Maryland court on April
18, 2011 that they had reached agreement on a proposed settlement and executed a memorandum of
understanding. On April 27, 2011, the parties to the consolidated action in Colorado reached an
agreement in principle on the structure of a proposed settlement. Under the proposed settlement,
which is subject to confirmatory discovery and approval of the Maryland court following notice to
the Class, defendants agreed to make additional disclosures in the registration statement of AMB on
Form S-4 of which the Merger prospectus forms a part. On April 28, 2011, the parties in the
Colorado action advised the Colorado court of their agreement in principle to settle and jointly
moved for a stay of the Colorado action pending a ruling by the Maryland Circuit Court on the
proposed settlement.
The defendants believe that the claims asserted against them in these lawsuits are without
merit and, absent court approval of the proposed settlement, intend to defend themselves vigorously
against the claims.
The Merger Agreement
The following section summarizes material provisions of the merger agreement. This summary
does not purport to be complete and may not contain all of the information about the merger
agreement that is important to you. This summary is subject to, and qualified in its entirety by
reference to, the merger agreement, which is filed as an exhibit to the registration statement of
which this prospectus is a part. The rights and obligations of the parties are governed by the
express terms and conditions of the merger agreement and not by this summary or any other
information contained in this prospectus. You are urged to read the merger agreement carefully and
in its entirety before making any decisions regarding the Merger.
The merger agreement summary is included in this prospectus only to provide you with
information regarding the terms and conditions of the merger agreement and not to provide any other
factual information about AMB or ProLogis or their respective subsidiaries or businesses.
Accordingly, the representations and warranties and other provisions of the merger agreement should
not be read alone, but instead should be read together with the information provided elsewhere in
this prospectus and in the documents incorporated by reference herein. See “Where You Can Find More
Information.”
The representations, warranties and covenants contained in the merger agreement and described
in this prospectus were made only for purposes of the merger agreement and as of specific dates and
may be subject to more recent developments, were made solely for the benefit of the other parties
to the merger agreement and may be subject to limitations agreed upon by the contracting parties,
including being qualified by reference to confidential disclosures, for the purposes of allocating
risk between the parties to the merger agreement instead of establishing these matters as facts,
and may apply standards of materiality in a way that is different from what may be viewed as
material by you or other investors. The representations and warranties contained in the merger
agreement do not survive the effective time of the Merger. Investors should not rely on the
representations, warranties and covenants or any description thereof as characterizations of the
actual state of facts or conditions of AMB, ProLogis, or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter of the representations, warranties
and covenants may change after the date of the merger agreement, which subsequent information may
or may not be fully reflected in public disclosures by AMB or ProLogis.
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Form of the Merger
The merger agreement provides that, upon the terms and subject to the conditions set forth in
the merger agreement and in accordance with the applicable provisions of Maryland law and the
Delaware Limited Liability Company Act, AMB and ProLogis will combine through a multi-step process:
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first, in the ProLogis merger, ProLogis will be reorganized into an UPREIT structure
by merging Pumpkin LLC with and into ProLogis, with ProLogis continuing as the
surviving entity and as a direct wholly owned subsidiary of Upper Pumpkin and an
indirect wholly owned subsidiary of New Pumpkin;
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following the ProLogis merger, in the Topco merger, New Pumpkin will be merged with
and into AMB, with AMB continuing as the surviving corporation under the name of
“ProLogis, Inc.”; and
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following the Topco merger, the combined company will contribute all of the
outstanding equity interests of Upper Pumpkin to AMB LP, which will be renamed
“ProLogis, L.P.”, in exchange for the issuance of partnership interests in AMB LP to
the combined company.
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Following the consummation of the Merger, ProLogis will continue its existence as a subsidiary
of the combined company. The shares of common stock of the combined company will be listed and
traded on the NYSE under the symbol “PLD.”
Merger Consideration
At the effective time of the ProLogis merger, upon the terms and subject to the conditions set
forth in the merger agreement, (i) each outstanding ProLogis common share will be converted into
one newly issued share of common stock of New Pumpkin, (ii) in a share exchange effected by the
ProLogis merger, each outstanding ProLogis Series C preferred share will be exchanged for one newly
issued share of Series C Cumulative Redeemable Preferred Stock of New Pumpkin (“New Pumpkin Series
C preferred stock”), (iii) in a share exchange effected by the ProLogis merger, each outstanding
ProLogis Series F preferred share will be exchanged for one newly issued share of Series F
Cumulative Redeemable Preferred Stock of New Pumpkin (“New Pumpkin Series F preferred stock”), and
(iv) in a share exchange effected by the ProLogis merger, each outstanding ProLogis Series G
preferred share will be exchanged for one newly issued share of Series G Cumulative Redeemable
Preferred Stock of New Pumpkin (“New Pumpkin Series G preferred stock”).
Pursuant to the Topco merger, upon the terms and subject to the conditions set forth in the
merger agreement, (i) each outstanding share of New Pumpkin common stock will be converted into
0.4464 of a newly issued share of AMB common stock, (ii) each outstanding share of New Pumpkin
Series C preferred stock will be converted into one newly issued share of AMB Series Q preferred
stock (“AMB Series Q preferred stock”), (iii) each outstanding share of New Pumpkin Series F
preferred stock will be converted into one newly issued share of AMB Series R preferred stock (“AMB
Series R preferred stock”) and (iv) each outstanding share of New Pumpkin Series G preferred stock
will be converted into one newly issued share of AMB Series S preferred stock (“AMB Series S
preferred stock”).
AMB will not issue any fractional shares of AMB common stock in the Topco merger. Instead, a
holder of New Pumpkin common stock who otherwise would have received a fraction of a share of AMB
common stock will receive an amount in cash, without interest, equal to such fractional amount
multiplied by the NYSE closing price for a share of AMB common stock on the last trading day
immediately prior to the effective time of the Topco merger.
Each share of AMB common stock and AMB preferred stock will remain outstanding following the
effective time of the Topco merger as shares of stock of the combined company.
As a result of the Merger, each outstanding right of a limited partner in each of ProLogis
Fraser, L.P. and ProLogis Limited Partnership I to redeem or exchange such limited partner’s
partnership interests therein for
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ProLogis common shares (or cash equivalents thereof) will be converted into the right to
redeem or exchange such partnership interests for shares of AMB common stock (or cash equivalents
thereof) adjusted by the exchange ratio, upon the terms and subject to the conditions set forth in
the merger agreement. Each outstanding right of a holder of ProLogis’ convertible notes to convert
such convertible notes into ProLogis common shares will be converted into the right to exchange
such convertible notes into shares of AMB common stock, upon the terms and subject to the
conditions set forth in the merger agreement.
As a result of the contribution and the issuance, Upper Pumpkin and, accordingly, ProLogis
will become a wholly owned subsidiary of AMB LP. Following the contribution and the issuance, AMB
LP shall change its name to “ProLogis, L.P.”
Treatment of ProLogis Share Options and Other Equity-Based Awards
Upon the completion of the Topco merger, each outstanding option to purchase ProLogis common
shares, whether or not then exercisable, will be assumed by the combined company. Each such option
so assumed by the combined company will otherwise continue to be subject to the same terms and
conditions as applicable immediately prior to the effective date of the Topco merger, except that:
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each such option will be exercisable for that number of shares of common stock of
the combined company equal to the product of the number of ProLogis common shares that
were subject to such option immediately prior to the Topco merger, multiplied by the
exchange ratio (0.4464) and rounded down to the nearest whole number of shares; and
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the per share exercise price for the shares of common stock of the combined company
issuable upon exercise of such option will be equal to the quotient determined by
dividing the exercise price of the option immediately prior to the Topco merger by the
exchange ratio (0.4464), rounded up to the nearest whole cent.
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The foregoing provisions recognize and take into account that each ProLogis common share will,
at the effective time of the ProLogis merger, be converted into a share of New Pumpkin common
stock.
On the effective date of the Topco merger, the following will occur with respect to each
outstanding share unit award with respect to ProLogis common shares, dividend equivalent unit award
with respect to ProLogis common shares and performance share award denominated in ProLogis common
shares:
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each such award, whether or not then vested or earned, will be assumed by the
combined company by virtue of the Merger;
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each such award will be converted into the right to receive the number of shares of
common stock of the combined company equal to the number of ProLogis common shares
underlying or subject to such award immediately prior to the Topco merger, multiplied
by the exchange ratio (0.4464) and rounded down to the nearest whole number of shares;
and
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each such award will otherwise continue to be subject to the same terms and
conditions as applicable immediately prior to the Topco merger effective date.
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The foregoing provisions recognize and take into account that each ProLogis common share will,
at the effective time of the ProLogis merger, be converted into a share of New Pumpkin common
stock.
The ProLogis board of trustees has agreed to adopt such resolutions and take such other
actions as may be required to provide that with respect to ProLogis’ Employee Stock Purchase Plan:
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participants may not increase their payroll deductions under such plan from those in
effect on January 30, 2011, the date of the merger agreement;
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no new participants may join such plan following January 30, 2011;
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all participation in, and purchases under such plan will be suspended effective as
of the earlier of June 30, 2011 or ProLogis’ payroll period ending immediately prior to
the closing of the Topco merger, but in no event less than ten business days prior to
the closing of the Topco merger (the “suspension date”), such that the offering period
in effect as of January 30, 2011, the date of the merger agreement, will be the final
offering period under the plan until otherwise determined by the board of directors of
the combined company; and
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with respect to any offering period under such plan in effect as of January 30,
2011, ProLogis will ensure that such offering period ends on the suspension date and
that each participant’s accumulated contributions for such offering period will be
applied to the purchase of ProLogis common shares in accordance with the terms of the
plan.
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Any cash remaining in ProLogis’ Employee Share Purchase Plan after the purchases occurring on
the suspension date will be promptly refunded to participants.
Closing; Effective Time of the Merger
Unless the parties otherwise agree, the closing of the Merger, the contribution and the
issuance will take place on the date that is the second business day after the satisfaction or
waiver of the conditions set forth in the merger agreement (other than those conditions that, by
their terms, are to be satisfied on the closing date, but subject to the satisfaction or waiver of
those conditions at the time of closing).
Unless the parties otherwise agree, the ProLogis merger will become effective following the
close of business on the closing date, and the Topco merger will become effective before the open
of business on the first business day following the closing date. After the Topco merger becomes
effective, the combined company will change its name to “ProLogis, Inc.” The contribution and the
issuance will take place immediately after the Topco merger becomes effective.
Charter and Bylaws
The AMB charter as in effect immediately prior to the Topco merger will be the charter of the
combined company following the Topco merger, except that the name of the combined company will be
“ProLogis, Inc.” and, if the charter amendment is approved by AMB stockholders at the AMB special
meeting, the charter amendment will become effective upon consummation of the Topco merger.
Unless the parties otherwise agree, AMB has agreed to use its reasonable best efforts to
submit the charter amendment to the vote of its stockholders. The approval of the charter amendment
is not a condition to the parties’ obligations to effect the Merger and other transactions
contemplated by the merger agreement.
The AMB bylaws as in effect immediately prior to the Topco merger will be the bylaws of the
combined company following the Topco merger, except that amendments effected by the bylaw amendment
will become effective upon the consummation of the Topco merger. Approval by the AMB stockholders
of the bylaw amendment is a condition to parties’ obligations to effect the Merger and other
transactions contemplated by the merger agreement.
Directors and Management Following the Merger
The parties have agreed that following the consummation of the Merger, the board of the
directors of the combined company will have eleven members. The members of the initial board of
directors of the combined company will consist of:
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Mr. Hamid R. Moghadam, the current chief executive officer of AMB;
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Mr. Walter C. Rakowich, the current chief executive officer of ProLogis;
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Ms. Lydia H. Kennard, Mr. J. Michael Losh, Mr. Jeffrey L. Skelton and Mr. Carl B.
Webb, each of whom was designated as a director by the AMB board of directors and each
of whom is currently a member of the AMB board of directors; and
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Mr. George L. Fotiades, Ms. Christine Garvey, Mr. Irving F. Lyons III, Mr. D.
Michael Steuert and Mr. William D. Zollars each of whom was designated as a director by
the ProLogis board of trustees and each of whom (other than Mr. Zollars) is currently a
member of the ProLogis board of trustees.
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The board of directors of the combined company will have four committees, consisting of an
audit committee, a compensation committee, an executive committee, and a nominating and governance
committee, which will include in its charter the current responsibilities of ProLogis’ corporate
responsibility committee. The role of the executive committee will be to meet and act separately if
board action is required, the matter is time-sensitive and the full board of directors is
unavailable or unable to act in the required time frame. The members of the committees of the
initial board of directors of the combined companies have been mutually agreed on by the AMB board
of directors and the ProLogis board of trustees of ProLogis and will consist of:
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Audit Committee.
Mr. Losh (chair), Ms. Garvey and Mr. Steuert;
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Compensation Committee.
Mr. Fotiades (chair), Mr. Webb and Mr. Zollars;
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Nominating & Governance Committee.
Ms. Kennard (chair), Mr. Skelton and
Mr. Zollars; and
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Executive Committee.
Mr. Rakowich (chair), Mr. Lyons, Mr. Moghadam and
Mr. Skelton.
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Upon the consummation of the Merger, (i) Mr. Moghadam and Mr. Rakowich will become co-chief
executive officers of the combined company, (ii) Mr. William E. Sullivan, the current chief
financial officer of ProLogis, will become the chief financial officer of the combined company,
(iii) Mr. Lyons will become the lead independent director of the combined company, (iv) Mr.
Moghadam will become the chairman of the board of directors of the combined company and (v) Mr.
Rakowich will become the chairman of the executive committee of the board of directors of the
combined company.
Unless earlier terminated in accordance with the bylaws of the combined company, on December
31, 2012, (i) the employment of Mr. Rakowich as co-chief executive officer will terminate and Mr.
Rakowich will retire as co-chief executive officer and as a director of the combined company, (ii)
Mr. Moghadam will become the sole chief executive officer (and will remain the chairman of the
board of directors) of the combined company, (iii) the employment of Mr. Sullivan as the chief
financial officer of the combined company will terminate and Mr. Thomas S. Olinger, the current
chief financial officer of AMB, will become the chief financial officer of the combined company.
Representations and Warranties of AMB and ProLogis
The merger agreement contains representations and warranties made by each of AMB and ProLogis
to each other. These representations and warranties are subject to qualifications and limitations
agreed to by AMB and ProLogis in connection with negotiating the terms of the merger agreement.
Some of the significant representations and warranties contained in the merger agreement relate to,
among other things:
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organization, standing and corporate power and charter documents;
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capital structure;
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authority relative to execution and delivery of, and performance of obligations
under, the merger agreement;
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the absence of conflicts with, or violations of, laws, organizational documents or
other obligations or contracts as a result of the Merger;
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required consents and approvals relating to the Merger;
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SEC documents, financial statements, internal controls and accounting or auditing
practices;
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accuracy of information supplied or to be supplied in the Merger prospectus and the
registration statement of AMB on Form S-4 of which it forms a part;
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compliance with applicable laws;
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absence of certain litigation;
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tax matters, including qualification as a REIT under the Code;
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existence and validity of certain material contracts;
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benefits matters and ERISA (as defined below) compliance;
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collective bargaining agreements and other labor matters;
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absence of certain changes and non-existence of a material adverse effect;
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board approval of the merger agreement and the transactions contemplated thereby;
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exemption from anti-takeover statutes;
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required shareholder approval;
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ownership of or interest in, and condition of, certain owned and leased real
property;
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compliance with environmental laws;
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ownership of or licenses to certain intellectual property;
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possession of certain permits, licenses and other approvals from governmental
entities;
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existence of insurance policies;
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inapplicability of the Investment Company Act of 1940;
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brokers’ and finders’ fees in connection with the Merger and other transactions
contemplated by the merger agreement; and
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receipt of opinions from each party’s financial advisor.
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The merger agreement also contains certain representations and warranties of ProLogis with
respect to its wholly owned subsidiaries, Upper Pumpkin, New Pumpkin and Pumpkin LLC, including
their organization and authorization, lack of prior business activities, lack of liabilities and
execution and approval of the merger agreement.
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Many of the representations of AMB and ProLogis are qualified by a “material adverse effect”
standard (that is, they will not be deemed to be untrue or incorrect unless their failure to be
true or correct, individually or in the aggregate, would have a material adverse effect). “Material
adverse effect” for purposes of the merger agreement means any event, development, change or
occurrence that is materially adverse to the financial condition, business or results of operations
of AMB or ProLogis, as applicable, in each case including its subsidiaries, taken as a whole,
except that no event, development, change or occurrence arising out of, relating to or resulting
from any of the following will constitute a material adverse effect or will be considered in
determining whether a material adverse effect has occurred:
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changes generally affecting the economy, financial or securities markets or
political or regulatory conditions, to the extent such changes do not have a materially
disproportionate effect on the financial condition, business or results of operations
of AMB or ProLogis, as applicable, in each case including its subsidiaries, taken as a
whole, relative to other similarly situated owners, operators and developers of
industrial real estate;
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changes in the industrial real estate sector or changes generally affecting owners,
operators or developers of industrial real estate, to the extent such changes do not
have a materially disproportionate effect on the financial condition, business or
results of operations of AMB or ProLogis, as applicable, in each case including its
subsidiaries, taken as a whole, relative to other similarly situated owners, operators
and developers of industrial real estate;
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any change after the date of the merger agreement in law or the interpretation
thereof or GAAP or the interpretation thereof, to the extent such changes do not have a
materially disproportionate effect on the financial condition, business or results of
operations of AMB or ProLogis, as applicable, in each case including its subsidiaries,
taken as a whole, relative to other similarly situated owners, operators and developers
of industrial real estate;
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acts of war, armed hostility or terrorism or any worsening thereof, to the extent
such changes do not have a materially disproportionate effect on the financial
condition, business or results of operations of AMB or ProLogis, as applicable, in each
case including its subsidiaries, taken as a whole, relative to other similarly situated
owners, operators and developers of industrial real estate;
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earthquakes, hurricanes, tornados or other natural disasters or calamities, to the
extent such changes do not have a materially disproportionate effect on the financial
condition, business or results of operations of AMB or ProLogis, as applicable, in each
case including its subsidiaries, taken as a whole, relative to other similarly situated
owners, operators and developers of industrial real estate;
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any change to the extent attributable to the negotiation, execution or announcement
of the merger agreement, including any litigation resulting therefrom, and any adverse
change in customer, distributor, employee, supplier, financing source, licensor
licensee, sub-licensee, stockholder, joint venture partner or similar relationships,
including as a result of the identity of the other party;
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any failure by AMB or ProLogis, as applicable, to meet any internal or published
industry analyst projections or forecasts or estimates of revenues or earnings for any
period (although facts and circumstances giving rise to such failure that are not
otherwise excluded from the definition of material adverse effect may be taken into
account in determining whether there has been a material adverse effect);
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any change in the price or trading volume of the common stock
of AMB or common shares of ProLogis, as applicable (although facts and circumstances giving rise to such
change that are not otherwise excluded from the definition of material adverse effect
may be taken into account in determining whether there has been a material adverse
effect);
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compliance with the terms of, or the taking of any action required by, the merger
agreement; and
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the outcome of certain litigation, claims or other proceedings.
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Notwithstanding the above, any event, development, change or occurrence that has caused or is
reasonably likely to cause AMB or ProLogis, as applicable, to fail to qualify as a REIT for U.S.
federal income tax purposes will be considered a material adverse effect, unless such failure has
been, or is able to be, cured on commercially reasonable terms under the applicable provisions of
the Code.
Conduct of Business
Under the merger agreement, between January 30, 2011 and the earlier of the effective time of
the Topco merger and the termination of the merger agreement, subject to certain exceptions, unless
(i) expressly contemplated or permitted by the merger agreement, (ii) required by applicable law or
regulation, or (iii) consented to by the other party (which consent may not be unreasonably
withheld, conditioned or delayed), each of AMB and ProLogis has agreed to conduct its business in
the ordinary course consistent with past practice and to use commercially reasonable efforts to
preserve intact its business organization and maintain its existing relations and goodwill with
customers, suppliers, distributions, creditors, lessors and tenants.
In addition, between January 30, 2011 and the earlier of the effective time of the Topco
merger, and the termination of the merger agreement, subject to certain exceptions, unless (i)
expressly contemplated or permitted by the merger agreement, (ii) required by applicable law or
regulation, or (iii) consented to by the other party (which consent may not be unreasonably
withheld, conditioned or delayed), each of AMB and ProLogis has agreed that it will not, and will
cause its subsidiaries not to:
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enter into any new material line of business;
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declare, set aside or pay any dividends or other distributions, other than (i) as
described under “— Dividends”, (ii) regular distributions that are required to be made
in respect of partnership units of certain specified subsidiaries of each of AMB and
ProLogis, and (iii) dividends by or among an entity and its subsidiaries;
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split, combine or reclassify any of its capital stock or shares of beneficial
interest, as the case may be, or issue any other securities in substitution for such
shares;
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repurchase, redeem or otherwise acquire its capital stock or other securities
convertible into or exercisable for any shares of capital stock, except upon the
exercise by a limited partner in certain specified subsidiaries of each of AMB and
ProLogis of its right to redeem or exchange partnership units pursuant to the terms of
the related partnership agreements;
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issue, deliver or sell, or authorize any issuance, delivery or sale of, shares of
its capital stock or shares of beneficial interest, as applicable, equity-based awards,
voting debt or convertible or exchangeable securities, except (i) in connection with
the exercise or settlement of existing equity awards in accordance with the existing
terms of the related plans or awards, (ii) upon the exercise by a limited partner in
certain specified subsidiaries of each of AMB and ProLogis of its right to redeem or
exchange partnership units pursuant to the terms of the related partnership agreements,
(iii) issuances by a subsidiary of AMB or ProLogis to AMB, ProLogis or another
subsidiary thereof, as applicable, or (iv) issuances by ProLogis of ProLogis common
shares upon conversion of any of ProLogis’ existing convertible debt;
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amend the charter, declaration of trust, bylaws or equivalent governing documents of
AMB, ProLogis, Upper Pumpkin, Pumpkin LLC, New Pumpkin, or certain significant
subsidiaries of AMB or ProLogis;
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make acquisitions of businesses, entities, properties or assets, other than (i)
acquisitions for consideration with a fair market value that does not exceed
$50,000,000 individually or $250,000,000 per calendar quarter in the aggregate and
which would not reasonably be expected to materially delay,
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impede or affect the consummation of the Merger, (ii) internal reorganizations or
consolidations of subsidiaries that would not present a material risk of a material
delay in the consummation of the Merger, (iii) acquisitions pursuant to agreements,
arrangements or understandings existing on January 30, 2011, or (iv) the creation of new
subsidiaries organized to continue or conduct activities otherwise permitted by the
merger agreement;
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sell, assign, encumber or otherwise dispose of any assets (including capital stock
of subsidiaries and indebtedness of others owned by such party) which are material,
individually or in the aggregate, to AMB or ProLogis, as applicable, other than (i)
internal reorganizations or consolidations involving existing subsidiaries that would
not present a material risk of any material delay in the consummation of the Merger,
(ii) dispositions disclosed in SEC filings of AMB or ProLogis, as applicable, made
prior to January 30, 2011, (iii) other activities in the ordinary course of business
consistent with past practice, (iv) other dispositions if the fair market value of the
total consideration received in respect of such assets does not exceed $50,000,000
individually or $250,000,000 per calendar quarter in the aggregate or (v) the
incurrence of indebtedness specifically permitted pursuant to the provision described
in the immediately succeeding bullet;
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incur, create, assume or guarantee any long-term indebtedness, modify any of the
material terms of any outstanding long-term indebtedness, guarantee any long-term
indebtedness or issue or sell any long-term debt securities (or securities with the
right to acquire any long-term debt securities), other than (i) in the ordinary course
of business consistent with past practice, (ii) certain qualifying debt incurred to
refinance or repay existing debt, (iii) indebtedness between an entity and a subsidiary
of which it owns at least 90% of the voting interests, or between such 90% owned
subsidiaries of the same entity, (iv) other indebtedness incurred by non-wholly owned
subsidiaries of AMB or ProLogis, as applicable, in individual amounts below certain
thresholds, which thresholds vary by currency, (v) certain indebtedness specified in
the disclosures made in connection with the merger agreement, or (vi) certain
borrowings under existing credit agreements in the ordinary course of business
consistent with past practice;
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change its methods of accounting, except as required by changes in GAAP as concurred
in by such party’s independent auditors or as previously disclosed in an SEC filing by
such party;
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adopt a plan of complete or partial liquidation or resolutions providing for a
liquidation, dissolution, restructuring, recapitalization or reorganization;
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terminate, cancel, renew or request or agree to any material amendment or
modification to or waiver under or assignment of, any of certain specified types of
material contracts, or enter into or materially amend any contract that, if existing on
January 30, 2011, would have qualified as one of such types of material contracts;
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waive the excess share provision of its charter, in the case of AMB, or declaration
of trust, in the case of ProLogis, for anyone other than the other parties to the
merger agreement and their subsidiaries;
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take or fail to take any action which would reasonably be expected to cause such
party to fail to qualify as a REIT under the Code;
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take or fail to take any action which would reasonably be expected to cause any
subsidiary of such party to cease to be treated as a partnership or disregarded entity
for U.S. federal income tax purposes or as a qualified REIT subsidiary, a taxable REIT
subsidiary or a REIT under the Code;
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make or commit to make any capital expenditures in excess of $50,000,000, other than
in the ordinary course of business consistent with past practice;
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take or knowingly fail to take any action which could reasonably be expected to
prevent the ProLogis merger or the Topco merger from qualifying as a reorganization
under the Code;
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make, change or rescind any material tax election or change a material method of tax
accounting, amend any material tax return, settle or compromise any material income tax
liability, audit, assessment or claim, enter into any material closing agreement
related to taxes or knowingly surrender any right to claim any material tax refund, in
each case, except (i) in the ordinary course of business, (ii) as necessary to preserve
the status of AMB or ProLogis, as applicable, as a REIT under the Code, or (iii) as
necessary to qualify or preserve the status of any subsidiary of AMB or ProLogis, as
applicable, as a partnership or disregarded entity for U.S. federal income tax purposes
or as a qualified REIT subsidiary, a taxable REIT subsidiary or a REIT under the Code;
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waive, release, assign, compromise or settle any claim, action or proceeding, other
than waivers, releases, assignments, compromises or settlements that (i) with respect
to the payment of monetary damages, involve only the payment of monetary damages
(excluding any amounts payable under existing property-level insurance policies) either
equal to or lesser than the amount specifically reserved with respect to the most
recent balance sheet of AMB or ProLogis, as applicable, filed with the SEC prior to
January 30, 2011, or that do not exceed $10,000,000 individually or $100,000,000 in the
aggregate, (ii) do not involve the imposition of injunctive relief against AMB,
ProLogis, any of their subsidiaries or the surviving corporation following the
effective time of the Topco merger, and (iii) do not provide for any admission of
material liability by AMB, ProLogis or any of their subsidiaries;
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increase the compensation or other benefits to directors, officers or employees,
except in the ordinary course of business consistent with past practice and as would
not result in a material increase in cost to AMB or ProLogis, as applicable;
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enter into any employment, change of control, severance or retention agreement with
any director, officer or employee, except for (i) agreements entered into with newly
hired employees or (ii) severance agreements entered into with employees in connection
with terminations of employment, in the case of each of (i) and (ii) with employees who
are not executive officers, and in each case only in the ordinary course of business
consistent with past practice and as would not result in a material increase in cost to
AMB or ProLogis, as applicable;
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establish, adopt, enter into or amend any benefit plan or other plan, policy,
program or arrangement for the benefit of any director, officer or employee or their
beneficiaries, except as permitted pursuant to the two preceding bullets or in the
ordinary course of business consistent with past practice, in each case only with
respect to awards or grants made to newly hired employees in the ordinary course of
business consistent with past practice that would not result in a material increase in
cost to AMB or ProLogis, as applicable;
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enter into or amend any collective bargaining agreement or similar agreement, other
than in the ordinary course of business consistent with past practice that would not
result in a material increase in cost to ProLogis;
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repay, refinance or replace any direct indebtedness maturing within twelve months
from January 30, 2011, subject to certain exceptions;
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form any new funds;
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effect any deed in lieu of foreclosure, or sell, lease, assign or encumber or
transfer to a lender any property securing indebtedness owed to such lender; or
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agree to take or authorize any of the foregoing actions.
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Other Covenants and Agreements
The merger agreement contains certain other covenants and agreements, including covenants
related to:
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cooperation between AMB and ProLogis in the preparation of the prospectus contained
in the Merger registration statement of AMB on Form S-4;
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each party’s agreement to (i) afford the representatives of the other party access
to its books, contracts and records during normal business hours and (ii) provide the
other party, upon reasonable request, with copies of certain information;
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each party’s agreement to maintain the confidentiality of certain non-public
information provided by the other party;
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each party’s agreement to use its reasonable best efforts to take all actions
reasonably appropriate to consummate the Merger and other transactions contemplated by
the merger agreement;
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each party’s agreement to use its reasonable best efforts to cooperate to obtain all
governmental consents, clearances, approvals, permits or authorizations required to
complete the Merger;
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each party’s agreement to (i) cooperate in all respects in connection with any
investigation or other inquiry, (ii) promptly inform the other party of any
communication concerning the merger agreement or the transactions contemplated thereby
from or with any governmental entity, (iii) permit the other party to review and
comment on any proposed communication to any government entity, (iv) consult with the
other party in advance of any meeting with any governmental entity or in connection
with a proceeding by a private party and (v) resolve objections and avoid or eliminate
impediments to the closing of the Merger;
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cooperation between AMB and ProLogis in connection with the development of a joint
communications plan and in connection with press releases and other public statements
with respect to the Merger;
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AMB’s agreement to use its reasonable best efforts to cause the shares of AMB common
stock and preferred stock to be issued in, or reserved for issuance in connection with,
the Topco merger to be approved for listing on the NYSE, subject to official notice of
issuance, prior to the consummation of the Merger;
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the use by each party of reasonable best efforts to cause each of the ProLogis
merger and Topco merger to qualify as a reorganization under the Code; and
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cooperation between AMB and ProLogis to implement necessary or appropriate
agreements under each party’s indentures or other indebtedness with respect to
financing matters.
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Dividends
The merger agreement provides that between January 30, 2011 and the earlier of the effective
time of the Topco merger and the termination of the merger agreement, none of AMB, New Pumpkin or
ProLogis may make, declare, set aside for payment or pay any dividend or other distribution to its
respective stockholders or shareholders without the prior written consent of AMB (in the case of
New Pumpkin or ProLogis) or ProLogis (in the case of AMB), except that such written consent will
not be required for the authorization and payment of:
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distributions at their respective stated dividend or distribution rates with respect
to AMB preferred stock and ProLogis preferred shares; and
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quarterly distributions at a rate not in excess of the regular quarterly cash
dividend most recently declared prior to January 30, 2011 ($0.28 per share of AMB
common stock and $0.1125 per share of ProLogis common shares).
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AMB and ProLogis have agreed to coordinate their regular quarterly dividends for their common
shareholders so that, if one group of common shareholders receives any dividend for a calendar
quarter, the other group of common stockholders will also receive a dividend for such calendar
quarter with the same record and payment dates. AMB and ProLogis have also agreed that one party,
with notice to the other, can declare or pay the minimum dividend that may be required in order for
such party to qualify as a REIT and to avoid to the extent reasonably possible the incurrence of
income or excise tax. If one party declares a REIT dividend, the other party can declare a dividend
per share in the same amount, as adjusted by the exchange ratio.
Conditions to Completion of Merger
The obligations of AMB and ProLogis to complete the Merger are subject to a number of
conditions being satisfied or, where legally permissible, waived. These conditions include, among
others:
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the affirmative vote of the holders of two-thirds of the outstanding shares of AMB
common stock to approve the Topco merger;
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the affirmative vote of the holders of a majority of the outstanding shares of AMB
common stock to approve the bylaw amendment;
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the affirmative vote of the holders of a majority of the
outstanding ProLogis common shares to approve the Merger;
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the approval for listing by the NYSE of shares of AMB common stock, AMB Series R
preferred stock and AMB Series S preferred stock to be issued or reserved for issuance
in connection with the Topco merger;
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the SEC having declared effective the Merger registration statement of AMB on Form
S-4 of which the Merger prospectus forms a part;
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the absence of any judgment or other legal prohibition or binding order of any court
or other governmental entity that prohibits the Merger;
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the absence of any action taken or statute, rule, regulation or order enacted by any
governmental entity which makes the consummation of the Merger illegal; and
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the receipt of all requisite regulatory approvals and the termination or expiration
of all requisite waiting periods, subject to the material adverse effect standard
provided in the merger agreement and summarized above.
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In addition, the obligation of AMB to effect the Topco merger is subject to the satisfaction
or waiver of the following additional conditions:
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the representations and warranties of ProLogis set forth in the merger agreement
with respect to its capital structure and authority to enter into the merger agreement
and to consummate the transactions contemplated thereby being true and correct in all
material respects as of January 30, 2011 and the closing date (except to the extent
made as of an earlier date, in which case as of such earlier date);
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the representations and warranties of ProLogis set forth in the merger agreement
with respect to all other matters being true and correct as of January 30, 2011 and the
closing date (except to the extent made as of an earlier date, in which case as of such
earlier date), except for the failure to be true and
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correct (without giving effect to any limitations as to materiality or a material
adverse effect) as would not have or reasonably be expected to have a material adverse
effect;
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each of ProLogis, Upper Pumpkin, New Pumpkin and Pumpkin LLC having performed, in
all material respects, all obligations required to be performed under the merger
agreement at or prior to the closing date;
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the receipt of an officers’ certificate signed by the chief executive officer and
chief financial officer of ProLogis, certifying that the three preceding conditions
have been satisfied;
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the receipt of an opinion of AMB’s counsel to the effect that the Topco merger will
qualify as a reorganization under the Code; and
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the receipt of an opinion from ProLogis’ counsel that, since December 31, 1993,
ProLogis has been organized and operated in conformity with REIT requirements under the
Code.
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The obligation of ProLogis to effect the Merger is subject to the satisfaction or waiver of
the following additional conditions:
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the representations and warranties of AMB set forth in the merger agreement with
respect to its capital structure and authority to enter into the merger agreement and
to consummate the transactions contemplated thereby being true and correct in all
material respects as of January 30, 2011 and the closing date (except to the extent
made as of an earlier date, in which case as of such earlier date);
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the representations and warranties of AMB set forth in the merger agreement with
respect to all other matters being true and correct as of January 30, 2011 and the
closing date (except to the extent made as of an earlier date, in which case as of such
earlier date), except for the failure to be true and correct (without giving effect to
any limitations as to materiality or a material adverse effect) as would not have or
reasonably be expected to have a material adverse effect;
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each of AMB and AMB LP having performed, in all material respects, all obligations
required to be performed under the merger agreement at or prior to the closing date;
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the receipt of an officers’ certificate signed by the chief executive officer and
chief financial officer of AMB, certifying that the three preceding conditions have
been satisfied;
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the receipt of an opinion of ProLogis’ counsel to the effect that each of the
ProLogis merger and the Topco merger will qualify as a reorganization under the Code;
and
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the receipt of an opinion from AMB’s counsel that, since December 31, 1997, AMB has
been organized and operated in conformity with REIT requirements under the Code.
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No Solicitation
AMB and ProLogis have agreed that, from the time of the execution of the merger agreement,
none of AMB or ProLogis, or their respective subsidiaries, officers, trustees, directors or
representatives, will, directly or indirectly, (i) initiate, solicit or knowingly encourage or
facilitate any inquiries or the making of any acquisition proposal, (ii) participate in any
discussions or negotiations with or provide any confidential information to any person concerning
an acquisition proposal, (iii) approve or execute or enter into any letter of intent, agreement in
principle, merger agreement, asset purchase or share exchange agreement, option agreement or other
similar agreement related to any acquisition proposal, or (iv) propose or agree to any of the
foregoing.
For purposes of the merger agreement, an “acquisition proposal” means any proposal or offer
with respect to, or a transaction to effect, (i) a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution or similar
transaction involving AMB, ProLogis or any of their significant
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subsidiaries, (ii) any purchase or sale of 20% or more of the consolidated assets (including
stock or other ownership interests of its subsidiaries) of AMB or ProLogis, in each case taken as a
whole with each of its subsidiaries, or (iii) any tender or exchange offer for its voting
securities that, if consummated, would result in any person (or the stockholders or other equity
interest holders of such person) beneficially owning securities representing 20% or more of the
total voting power of either AMB or ProLogis (or of the surviving parent entity in such
transaction) or the voting power of any significant subsidiary of either AMB or ProLogis (in each
case other than any proposal or offer made by one party to the merger agreement to another such
party). For purposes of the merger agreement, a “significant subsidiary” is any subsidiary of AMB
or ProLogis that would constitute a significant subsidiary of such party within the meaning of Rule
1-02 of Regulation S-X promulgated by the SEC.
Notwithstanding the foregoing, the AMB board of directors and the ProLogis board of trustees
will each be permitted, prior to its respective special meeting of stockholders or shareholders,
subject to first entering into a confidentiality agreement and subject to its compliance with the
other provisions of this covenant, to engage in discussion and negotiations with, or provide
information to, any person making an unsolicited bona fide written acquisition proposal with
respect to AMB or ProLogis (but not with respect to any of their subsidiaries) which did not result
from a breach of the terms of this covenant and which the board of directors or board of trustees,
as the case may be, concludes in good faith (after consultation with outside legal counsel and
financial advisors) constitutes, or is reasonably likely to result in, a acquisition proposal that
is both (i) more favorable to its stockholders or shareholders, as the case may be, than the
Merger, and (ii) is fully financed, reasonably likely to receive all required governmental
approvals and otherwise reasonably capable of being completed on the terms proposed, in each case
taking into account all financial, regulatory, legal and other aspects of such proposal and the
person making the proposal, and provided that the references to “20% or more” in the definition of
acquisition proposal are replaced with a reference to “a majority” (any proposal meeting such
criteria is referred to as a “superior proposal”). The foregoing actions may be undertaken only if
the directors or trustees, as the case may be, conclude in good faith (after consultation with
outside legal counsel) that failure to do so would be inconsistent with their duties under
applicable law.
Each party has agreed to notify the other party within 24 hours after receipt of an
acquisition proposal or receipt of any inquiry from any party relating to a possible acquisition
proposal, or if either party enters into discussions or negotiations concerning any acquisition
proposal or provides nonpublic information to any person in connection with an acquisition
proposal. Each party has agreed to keep the other party informed of the status and terms of any
such proposals. Neither party will submit to the vote of its shareholders or stockholders, as the
case may be, any alternative acquisition proposal prior to the termination of the merger agreement.
The merger agreement required each of AMB and ProLogis and their subsidiaries and
representatives to, upon execution of the merger agreement, immediately cease and terminate any
existing activities, discussions or negotiations with any third parties conducted prior to the
execution of the merger agreement regarding an acquisition proposal, and prohibits each party from
releasing any third party from any confidentiality or standstill agreement with respect to any
acquisition proposal.
Reasonable Best Efforts to Obtain Shareholder Vote
AMB has agreed to take all lawful action to hold a meeting of its stockholders as promptly as
practicable following the effective date of the registration statement of AMB on Form S-4 of which
the Merger prospectus forms a part for the purpose of obtaining AMB stockholder approval of the
Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis
shareholders in connection with the Topco merger) and the bylaw amendment. Unless a permitted
change in recommendation has occurred as described below, the AMB board of directors has agreed to
use its reasonable best efforts to obtain such stockholder approval, which includes issuing a
recommendation to its stockholders to approve the Topco merger. AMB has agreed to submit the Topco
merger to a vote of its stockholders even if a permitted change in recommendation has occurred.
ProLogis has agreed to take all lawful action to hold a meeting of its shareholders as
promptly as practicable following the effective date of the registration statement of AMB on Form
S-4 of which the Merger prospectus forms a part for the purpose of obtaining ProLogis shareholder
approval of the Merger. Unless a permitted change in recommendation has occurred as described
below, the ProLogis board of trustees has agreed to use its reasonable best efforts to obtain such
shareholder approval, which includes issuing a recommendation to its
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shareholders to approve the ProLogis merger and the Topco merger. ProLogis has agreed to
submit the Merger to a vote of its shareholders even if a permitted change in recommendation has
occurred.
Each party has agreed to use its reasonable best efforts to cause the AMB stockholders meeting
and the ProLogis shareholders meeting to be held on the same date.
The AMB board of directors and the ProLogis board of trustees have agreed they will not, and
will not publicly propose to, withhold, withdraw or modify in any manner adverse to the other party
its approval, recommendation or declaration of advisability with respect to the merger agreement or
the transactions contemplated thereby (“change in recommendation”). Nevertheless, the AMB board of
directors or the ProLogis board of trustees may make a change in recommendation in the following
circumstances:
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if the board of directors or trustees, as the case may be, has determined in good
faith that an unsolicited bona fide written acquisition proposal which it has received
from a third party and which did not result from any violation of the non-solicitation
covenant constitutes a superior proposal, and that the failure to make such change in
recommendation would be inconsistent with the board’s duties under applicable law,
subject to informing the other party of its decision to change its recommendation; or
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if a material development or change in circumstances, which does not relate to an
acquisition proposal and was neither known to nor reasonably foreseeable by the
directors or trustees, as the case may be, as of January 30, 2011, has occurred after
such date, and the directors or trustees, as the case may be, have reasonably
determined that the failure to make such a change in recommendation would be
inconsistent with their duties under applicable law.
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Prior to making any change in recommendations, the AMB board of directors or ProLogis board of
trustees, as applicable, must give five business days notice of its intention to do so to the other
party, which notice must contain certain information relating to the acquisition proposal,
development or change in circumstances leading to the proposed change in recommendation, and must
engage in good faith discussions with the other party regarding any adjustments or modifications to
the terms of the merger agreement proposed by such party. Following such five business day period
and prior to making any change in recommendation, the party proposing to make a change in
recommendation must again reasonably determine in good faith (after consultation with outside legal
counsel, and taking into account any adjustment or modification of the terms of the merger
agreement proposed by the other party) that failure to do so would be inconsistent with its duties
under applicable law.
Fees and Expenses
Other than as provided in the provisions of the merger agreement summarized below, all fees
and expenses incurred in connection with the Merger and the transactions contemplated by the merger
agreement will be paid by the party incurring those expenses, whether or not the Topco merger is
completed, provided that (i) each party will share equally the expenses incurred in connection with
the Merger prospectus which forms a part of the registration statement of AMB on Form S-4 and all
filings in connection with antitrust or other merger control laws and (ii) if the Topco merger is
completed, the combined company will pay all property or transfer taxes imposed on either party in
connection with the Topco merger.
Termination of the Merger Agreement
Termination.
The merger agreement may be terminated at any time prior to the effective time of
the Topco merger, whether before or after the receipt of the requisite stockholder and shareholder
approvals, under the following circumstances:
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by mutual written consent of AMB and ProLogis;
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by either AMB or ProLogis:
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if any court or other governmental entity issues a final and nonappealable
order, decree or ruling or takes any other action that permanently enjoins or
otherwise prohibits the Merger, provided that such right to terminate will not be
available to any party whose failure to comply with any provision of the merger
agreement has been the cause of such action;
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if the Merger is not consummated on or before September 30, 2011, provided that
such right to terminate will not be available to any party whose failure to comply
with any provision of the merger agreement has been the cause of such delay;
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if there has been a breach by the other party of any covenants or agreements or
any of the representations and warranties set forth in the merger agreement, which
breach would result in the related closing conditions set forth in the merger
agreement not being satisfied on the closing date, and such breach is not cured or
is not curable by September 30, 2011; or
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if the required approvals of either AMB stockholders or ProLogis shareholders
have not been obtained upon a vote thereon at the duly convened AMB stockholders
meeting or ProLogis shareholders meeting;
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upon a change in recommendation of the ProLogis board of trustees regarding the
approval of the Merger;
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if a meeting of ProLogis shareholders to approve the Merger has not been called
and held as promptly as practicable following the date on which the registration
statement of AMB on Form S-4 of which the Merger prospectus forms a part becomes
effective; or
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upon a material breach by ProLogis of its obligations under the merger agreement
regarding non- solicitation of acquisition proposals;
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upon a change in recommendation of the AMB board of directors regarding the
approval of the Topco merger;
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if a meeting of AMB stockholders to approve the Topco merger and the bylaw
amendment, has not been called and held as promptly as practicable following the
date on which the registration statement of AMB on Form S-4 of which the Merger
prospectus forms a part becomes effective; or
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upon a material breach by AMB of its obligations under the merger agreement
regarding non- solicitation of acquisition proposals.
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Effect of Termination.
If the merger agreement is validly terminated, the agreement will
become void and have no effect, without any liability or obligation on the part of any party,
except that no party will be relieved or released from any liabilities or damages arising out of
its fraud or willful and material breach of the merger agreement, and except that the provisions of
the merger agreement relating to confidentiality, fees and expenses, effects of termination,
termination fees, governing law, jurisdiction, waiver of jury trial and specific performance will
continue in effect notwithstanding termination of the merger agreement.
Termination Fees.
AMB has agreed to pay a termination fee of $210 million plus expenses to
ProLogis in the following circumstances:
100
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if ProLogis terminates the merger agreement due to the AMB stockholders meeting not
being called and held as required by the merger agreement and, after the date of the
merger agreement and prior to the date of such termination, an acquisition proposal for
AMB has been publicly announced or otherwise communicated to the senior management or
AMB board of directors and not withdrawn prior to the date of termination;
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if either party terminates the merger agreement due to the fact that the AMB
stockholders failed to approve the Topco merger and the bylaw amendment at a meeting of
the AMB stockholders held for such purpose and, after the date of the merger agreement
and prior to the date of the meeting of AMB stockholders, an acquisition proposal for
AMB had been publicly announced and not withdrawn prior to the date of the special
meeting of AMB stockholders;
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if ProLogis terminates the merger agreement due to a change in recommendation by the
AMB board of directors and, within twelve months of the termination date, AMB or any of
its subsidiaries executes a definitive agreement with respect to, or consummates, an
acquisition proposal (provided that for these purposes, references to “20% or more” in
the definition of acquisition proposal will be replaced with references to “35% or
more”); or
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if ProLogis terminates the merger agreement due to a material breach by AMB of its
obligations regarding non-solicitation of alternative proposals.
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Such termination fee plus ProLogis’ expenses (up to $20,000,000) will be the maximum amount
owed by AMB in connection with any termination of the merger agreement, except in the case of any
fraud or willful and material breach of the merger agreement by AMB. The amount payable by AMB may
also be reduced to the extent necessary to maintain ProLogis’ qualification as a REIT under the
Code.
ProLogis has agreed to pay a termination fee of $315 million plus expenses to AMB in the
following circumstances:
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if AMB terminates the merger agreement due to the ProLogis shareholders meeting not
being called and held as required by the merger agreement and, after the date of the
merger agreement and prior to the date of such termination, an acquisition proposal for
ProLogis has been publicly announced or otherwise communicated to the senior management
or board of trustees of ProLogis and not withdrawn prior to the date of termination;
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if either party terminates the merger agreement due to the fact that ProLogis
shareholders failed to approve the Merger at a meeting of the ProLogis shareholders
held for such purpose and, after the date of the merger agreement and prior to the date
of the meeting of ProLogis shareholders, an acquisition proposal for ProLogis had been
publicly announced and not withdrawn prior to the date of the special meeting of
ProLogis shareholders;
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if AMB terminates the merger agreement due to a change in recommendation by the
ProLogis board of trustees and, within twelve months of the termination date, ProLogis
or any of its subsidiaries executes a definitive agreement with respect to, or
consummates, an acquisition proposals (provided that for these purposes, references to
“20% or more” in the definition of acquisition proposal will be replaced with
references to “35% or more”); or
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if AMB terminates the merger agreement due to a material breach by ProLogis of its
obligations regarding non-solicitation of acquisition proposals.
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Such termination fee plus AMB’s expenses (up to $20,000,000) will be the maximum amount owed
by ProLogis in connection with any termination of the merger agreement, except in the case of any
fraud or willful and material breach of the merger agreement by ProLogis. The amount payable by
ProLogis may also be reduced to the extent necessary to maintain AMB’s qualification as a REIT
under the Code.
101
If either party terminates the merger agreement due solely to a change in the other party’s
recommendation to stockholders or shareholders, as the case may be, or due to the other party’s
breach of any covenants, agreements or representations or warranties in the merger agreement, the
non-terminating party will pay the terminating party’s expenses in connection with the merger
agreement and the transactions contemplated thereby, including attorneys’ fees and costs and
banking and bankers’ fees and costs in an amount up to $20 million.
Indemnification and Insurance
The combined company will, to the fullest extent permitted by law, exculpate, indemnify,
defend and hold harmless, and provide advancement of expenses to, each person who is or has been an
officer, director or trustee of AMB, ProLogis or their respective subsidiaries against all losses,
claims, damages, costs, expenses, liabilities or judgments or amounts arising from any claim,
action, suit, proceeding or investigation based in whole or in part on the fact that such person is
or was a director, trustee or officer of AMB, ProLogis or their respective subsidiaries, or was
serving at the request of any such party as a trustee, director, officer, partner, or employee of
another entity, to the same extent such persons are exculpated or indemnified as of January 30,
2011 by AMB, ProLogis or their respective subsidiaries. Additionally, prior to the effective date
of the Topco merger, each of AMB and ProLogis will use reasonable best efforts to obtain and fully
pay for “tail” directors’ and officers’ liability insurance and fiduciary insurance policies with a
claim period of six years following the effective time of the Topco merger for the current and
former directors, trustees and officers of AMB, ProLogis and their respective subsidiaries, subject
to certain limitations on cost and requirements on terms set forth in the merger agreement. The
combined company will enter into indemnification agreements with each of its directors and officers
who does not have such an agreement as of immediately prior to the effective time of the Topco
merger.
Employee Benefit Matters
From and after the effective date of the Topco merger, the AMB and ProLogis benefit plans in
effect as of such effective date (other than certain ProLogis share plans), shall remain in effect
for the respective employees of AMB and ProLogis, until such time as the combined company shall
otherwise determine, subject to applicable laws and the terms of such plans. Nevertheless, nothing
in the merger agreement prohibits any amendment, modification or termination of any benefit plan,
arrangement or agreement in accordance with their terms as in effect immediately prior to the Topco
merger effective date and nothing prohibits the termination of employment of any AMB or ProLogis
employee.
With respect to any benefit plan in which any combined company employees who were employees of
AMB or ProLogis (or their subsidiaries) prior to the Merger first become eligible to participate on
or after the effective date of the Topco merger, the combined company will:
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waive all pre-existing conditions, exclusions and waiting periods with respect to
such new plans in which employees may be eligible to participate after the effective
date of the Topco merger, except to the extent such pre-existing conditions, exclusions
or waiting periods would apply under the analogous AMB or ProLogis benefit plan;
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provide each combined company employee and their eligible dependents with credit for
any co-payments and deductibles paid prior to the Topco merger effective date (to the
same extent that such credit was given under the analogous AMB or ProLogis benefit
plan) in satisfying any applicable deductible or out-of-pocket requirements under any
new plan; and
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recognize all service of the combined company employees with ProLogis and AMB for
all purposes (including for purposes of eligibility to participate, vesting credit,
entitlement to benefits and except with respect to defined benefit pension plans
benefit accrual) in any new plan in which such employees may be eligible to
participate, including any severance plan, to the extent such service is taken into
account under the applicable new plan.
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The foregoing will not apply to the extent it would result in the duplication of benefits.
102
Amendment, Extension and Waiver of the Merger Agreement
Amendment.
At any time prior to the receipt of stockholder or shareholder approval, the merger
agreement may be amended by authorization of the AMB board of directors and ProLogis board of
trustees. After any such stockholder or shareholder approval, no amendment which requires further
approval by stockholders or shareholders may be made without such further approval by such
stockholders or shareholders.
Extension; Waiver.
At any time prior to the effective time of the Topco merger, any party may
(i) extend the time for the performance of any of the obligations or other acts of the other party,
(ii) waive any inaccuracies in the representations and warranties contained in the merger agreement
or other merger documents and (iii) waive compliance by the other party with any of the agreements
or conditions contained in the merger agreement.
Governing Law
The merger agreement is governed by the laws of the State of Maryland (without giving effect
to choice of law principles thereof).
103
THE EXCHANGE OFFERS AND CONSENT SOLICITATIONS
Purpose of the Exchange Offers and Consent Solicitations
AMB LP is conducting the exchange offers in order to simplify the capital structure of the
combined company and its consolidated subsidiaries following the completion of the Merger. The AMB
LP Notes will be issued by AMB LP and will be guaranteed by AMB, AMB LP’s parent and sole general
partner, as compared with the ProLogis Notes, which were issued by ProLogis and are not guaranteed.
The AMB LP Exchangeable Notes will be exchangeable into AMB common stock, cash or a combination of
the two, at the option of AMB LP. AMB LP is commencing the exchange offers prior to the completion
of the Merger in order to achieve these benefits as soon as practicable after consummation of the
Merger.
The principal purpose of the consent solicitations on behalf of the combined company and the
Proposed Amendments to the ProLogis Indenture is to eliminate certain covenants contained in the
ProLogis Indenture that afford protection to holders of ProLogis Notes, including substantially all
of the restrictive covenants, certain affirmative covenants, certain events of default and
substantially all of the restrictions on the ability of ProLogis to merge, consolidate or sell all
or substantially all of its properties or assets.
Terms of the Exchange Offers and Consent Solicitations
In the exchange offers, AMB LP is offering in exchange for a holder’s outstanding ProLogis
Notes the following AMB LP Notes:
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Semi-Annual Interest
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Aggregate
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Series of Notes Issued by ProLogis to be
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Series of Notes to be Issued by AMB LP
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Payment Dates for both
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Principal Amount
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Exchanged (1)
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(2)
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ProLogis and AMB LP Notes
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$58,935,000
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5.500% Notes due April 1, 2012
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5.500% Notes due April 1, 2012
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April 1 and October 1
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$61,443,000
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5.500% Notes due March 1, 2013
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5.500% Notes due March 1, 2013
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March 1 and September 1
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$350,000,000
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7.625% Notes due August 15, 2014
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7.625% Notes due August 15, 2014
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February 15 and August 15
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$48,226,750 (3) (4)
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7.810% Notes due February 1, 2015
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7.810% Notes due February 1, 2015
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February 1 and August 1
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$5,511,625 (3) (4)
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9.340% Notes due March 1, 2015
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9.340% Notes due March 1, 2015
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March 1 and September 1
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$155,320,000
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5.625% Notes due November 15, 2015
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5.625% Notes due November 15, 2015
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May 15 and November 15
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$197,758,000
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5.750% Notes due April 1, 2016
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5.750% Notes due April 1, 2016
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April 1 and October 1
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$36,402,700 (3) (5)
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8.650% Notes due May 15, 2016
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8.650% Notes due May 15, 2016
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May 15 and November 15
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$182,104,000
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5.625% Notes due November 15, 2016
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5.625% Notes due November 15, 2016
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May 15 and November 15
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$300,000,000
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6.250% Notes due March 15, 2017
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6.250% Notes due March 15, 2017
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March 15 and September 15
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$100,000,000
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7.625% Notes due July 1, 2017
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7.625% Notes due July 1, 2017
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January 1 and July 1
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$600,000,000
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6.625% Notes due May 15, 2018
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6.625% Notes due May 15, 2018
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May 15 and November 15
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$396,641,000
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7.375% Notes due October 30, 2019
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7.375% Notes due October 30, 2019
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April 30 and October 30
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$561,049,000
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6.875% Notes due March 15, 2020
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6.875% Notes due March 15, 2020
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March 15 and September 15
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$460,000,000
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3.250% Convertible Senior Notes due
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3.250% Exchangeable Senior Notes due
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March 15 and September 15
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March 15, 2015
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March 15, 2015
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$592,980,000
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2.250% Convertible Senior Notes due
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2.250% Exchangeable Senior Notes due
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April 1 and October 1
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April 1, 2037
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April 1, 2037
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$141,635,000
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1.875% Convertible Senior
Notes due
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1.875% Exchangeable Senior
Notes due
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May 15 and November 15
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November 15, 2037
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November 15, 2037
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$386,250,000
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2.625% Convertible Senior
Notes due
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2.625% Exchangeable Senior
Notes due
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May 15 and November 15
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May 15, 2038
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May 15, 2038
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(1)
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The ProLogis Notes are not fully and unconditionally guaranteed.
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(2)
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The AMB LP Notes will be issued by AMB LP and will be fully and unconditionally guaranteed by
its parent entity and sole general partner, AMB.
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(3)
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In this prospectus, in the case of the ProLogis Amortizing Notes, unless stated otherwise,
the aggregate principal amount and the price per principal amount refers to the current
principal amount outstanding, after giving effect to the mandatory principal repayments that
have been made on each ProLogis
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Amortizing Note, including the $4,600,300 repayment to be made on May 15, 2011 in the case
of the ProLogis 8.650% 2016 Notes.
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(4)
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Such current aggregate principal amount reflects mandatory principal repayments already made
in accordance with the terms of the notes. The original principal amount for the ProLogis 7.810% 2015 Notes is $74,195,000.
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(5)
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Such current aggregate principal amount reflects mandatory principal repayments already made
in accordance with the terms of the notes, including the mandatory
repayment of $4,600,300 to
be made on May 15, 2011.
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For each ProLogis Non-Convertible Note validly tendered (and not validly withdrawn), the
holder will receive (i) an exchange price equal to 100% of its principal amount plus the
Non-Convertible Notes Consent Fee if it is validly tendered (and not validly withdrawn) prior to
the Early Consent Date, and (ii) an exchange price equal to 97% of its principal amount if it is
validly tendered (and not validly withdrawn) after the Early Consent Date and on or prior to the
Expiration Date (as defined below) of the exchange offers. For each ProLogis Convertible Note
validly tendered (and not validly withdrawn), the holder will receive (i) an exchange price equal
to 100% of its principal amount plus the Convertible Notes Consent Fee if it is validly tendered
(and not validly withdrawn) prior to the Early Consent Date, and (ii) an exchange price equal to
97% of its principal amount if it is validly tendered (and not validly withdrawn) after the Early
Consent Date and on or prior to the Expiration Date. If you validly tender ProLogis Notes prior to
the Early Consent Date, you may validly withdraw your tender and the related consent prior to the
Early Consent Date, but you will not receive the applicable cash consent fee unless you validly
re-tender prior to the Early Consent Date. If you validly tender ProLogis Notes prior to the
Early Consent Date, you may validly withdraw your tender after the Early Consent Date and before
the Expiration Date, but you may not withdraw the related consent and you will receive the
applicable cash consent fee. If you tender ProLogis Notes after the Early Consent Date and before
the Expiration Date, you will not receive the applicable cash consent fee and you may withdraw your
tender and the related consent at any time prior to the Expiration Date.
Notwithstanding the foregoing, the AMB LP Notes will be issued only in denominations of
$1,000 and whole multiples of $1,000 in excess thereof. See “Description of the
AMB LP Non-Exchangeable Notes — General”, “Description of the AMB LP Contingent Exchangeable Notes
— General” and “Description of the AMB LP 3.250% 2015 Notes — General.” The AMB LP 7.810% 2015
Notes will be issued only in denominations of $1,000 original principal amount and whole multiples
of $1,000 in excess thereof. However, for each $1,000 original principal amount of AMB LP 7.810%
2015 Notes, holders will only be entitled to receive repayment of principal in an amount equal to
the current principal amount outstanding under such notes, which is the amount of the unpaid
principal at the time of settlement. The current principal amount of each AMB LP 7.810% 2015 Note
will be $650 at the expected time of settlement. If AMB LP would otherwise be required to issue an
AMB LP Note in a denomination other than $1,000 or a whole multiple of
$1,000, AMB LP will, in lieu of such issuance:
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issue an AMB LP Note in a principal amount that has been rounded down to the nearest
whole multiple of $1,000; and
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pay cash, which AMB LP refers to as “cash exchange consideration”, in an amount
equal to:
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the difference between (i) the principal amount calculated by
the applicable exchange formula and (ii) the principal amount of the AMB LP
Note actually issued in accordance with this paragraph;
plus
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accrued and unpaid interest on the principal amount
representing such difference to the date of the exchange.
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Each new AMB LP Note issued in exchange for a ProLogis Note will have substantially the same
terms, including interest rate, interest payment dates, redemption terms, maturity and, if
applicable, exchange terms (other than the applicable initial exchange rates, dividend threshold
amounts, fundamental change make-whole amounts and, in the case of the AMB LP 3.250% 2015
Exchangeable Notes, the exchange consideration), as the corresponding ProLogis Note (prior to the
Proposed Amendments) for which it is offered in exchange. The AMB LP Notes received in exchange for
the tendered ProLogis Notes will accrue interest from the most recent date to which
105
interest has been paid on those ProLogis Notes. Except as otherwise set forth above, you will
not receive a payment for accrued interest on ProLogis Notes you exchange at the time of the
exchange. In the case of each new AMB LP 9.340% 2015 Note and AMB LP 8.650% 2016 Note issued in
exchange for a ProLogis 9.340% 2015 Note and a ProLogis 8.650% 2016 Note, respectively, the
mandatory principal repayment schedule will be revised from that contained in the corresponding
ProLogis Note to reflect the fact that, because previous mandatory principal repayments were not, and with respect to the principal payment
to be made on May 15, 2011 with respect to the ProLogis 8.650% 2016 Notes is not expected to be,
applied in accordance with their respective terms with respect to the corresponding ProLogis Note,
the outstanding principal amount of each currently outstanding ProLogis 9.340% 2015 Note and
ProLogis 8.650% 2016 Note is, and the AMB LP 9.340% 2015 Note and AMB LP 8.650% 2016 Note to be
issued in exchange thereof will be, $1,000. For more information, see “— ProLogis Amortizing
Notes.”
The AMB LP Notes will be a new series of debt securities that will be issued under a new
indenture to be dated as of the first date on which AMB LP exchanges AMB LP Notes for ProLogis
Notes pursuant to the exchange offers among AMB LP (which will be known as ProLogis, L.P. after the
Merger), as issuer, AMB (which will be known as ProLogis, Inc., and which is referred to as the
combined company, after the Merger), as parent guarantor, and U.S. Bank National Association, as
trustee (as amended by a new supplemental indenture for each series of the AMB LP Exchangeable
Notes to be dated as of the first date on which AMB LP exchanges such AMB LP Exchangeable Notes,
the “AMB LP Indenture”). The terms of the AMB LP Notes will include those expressly set forth in
the new AMB LP Indenture and those made part of the new AMB LP Indenture by reference to the Trust
Indenture Act.
In conjunction with the exchange offers, AMB LP is also soliciting consents on behalf of the
combined company from the holders of the ProLogis Notes to effect a number of amendments to the
ProLogis Indenture. As a holder of ProLogis Notes, you may give your consent to the Proposed
Amendments to the ProLogis Indenture only by tendering your ProLogis Notes of a series governed by
such ProLogis Indenture in one of the aforementioned exchange offers. AMB LP’s obligations to
complete the exchange offers and consent solicitations are conditioned on, among other things,
completion of the Merger, listing of AMB LP’s existing 6.750% Notes due 2011 on the NYSE and
receipt of the Requisite Consents, although AMB LP may, at its option, waive certain conditions
with respect to the exchange offers.
Section 902 of the ProLogis Indenture provides that ProLogis and the Trustee may amend,
supplement or modify the ProLogis Indenture by entering into a supplemental indenture with the
consent of holders of not less than a majority in principal amount of all outstanding securities
affected by such supplemental indenture. Accordingly,
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(i)
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approval of the Original Events of Default Amendments requires receipt of the
Original Events of Default Amendments Requisite Consent;
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(ii)
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approval of the Events of Default Amendments requires receipt of the Events of
Default Amendments Requisite Consent;
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(iii)
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approval of the Contingent Convertible Notes Events of Default Amendments
requires receipt of the Contingent Convertible Notes Events of Default Amendments
Requisite Consent;
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(iv)
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approval of the Merger Restriction Amendments requires receipt of the Merger
Restriction Amendments Requisite Consent;
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(v)
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approval of the Incurrence of Debt Amendments requires receipt of the
Incurrence of Debt Amendments Requisite Consent;
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(vi)
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approval of the Maintenance of Properties Amendments requires receipt of the
Maintenance of Properties Amendments Requisite Consent;
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(vii)
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approval of the Insurance Amendments requires receipt of the Insurance
Amendments Requisite Consent;
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106
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(viii)
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approval of the Payment of Taxes and Other Claims Amendments requires receipt of the
Payment of Taxes and Other Claims Amendments Requisite Consent;
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(ix)
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approval of the Original Financial Information Amendments requires receipt of
the Original Financial Information Amendments Requisite Consent; and
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(x)
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approval of the Financial Information Amendments requires receipt of the
Financial Information Amendments Requisite Consent.
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For a description of the Proposed Amendments, see “The Proposed Amendments.”
As of the date of this prospectus, after giving effect to the mandatory repayment of a portion
of the principal of the ProLogis 8.650% 2016 Notes to be made on May 15, 2011, there was
$4,634,256,075 in aggregate principal amount of outstanding ProLogis Notes, consisting of:
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(i)
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$3,053,391,075 in aggregate principal amount of ProLogis Non-Convertible Notes,
which includes $251,584,075 in aggregate principal amount of Original Financial
Information Securities which are comprised of the ProLogis 9.340% 2015 Notes, ProLogis
8.650% 2016 Notes, ProLogis 7.810% 2015 Notes, ProLogis 7.625% 2017 Notes, and ProLogis
5.500% 2013 Notes; and
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(ii)
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$1,580,865,000 in aggregate principal amount of ProLogis Convertible Notes,
which includes:
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(a)
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$1,120,865,000 in aggregate principal amount of ProLogis
Contingent Convertible Notes, which are comprised of the ProLogis 2.625% 2038
Convertible Notes, the ProLogis 2.250% 2037 Convertible Notes and the ProLogis
1.875% 2037 Convertible Notes; and
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(b)
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$460,000,000 in aggregate principal amount of ProLogis 3.250%
2015 Convertible Notes.
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As of the date of this prospectus, neither AMB LP nor any of its affiliates held any ProLogis
Notes. For purposes of determining whether any such requisite principal amount of ProLogis Notes
have given consents, ProLogis Notes owned by AMB LP, or by any of its affiliates, will be
disregarded. For additional details regarding the amounts outstanding, see “The Proposed
Amendments.”
If the Requisite Consents are received and accepted with respect to the ProLogis Notes, then
ProLogis and the Trustee will execute a supplemental indenture setting forth such Proposed
Amendments in respect of such ProLogis Notes. Under the terms of this supplemental indenture, the
Proposed Amendments will become effective on the exchange date with respect to such ProLogis Notes,
which is expected to occur promptly after the Expiration Date. Further, if the Requisite Consents
are received and accepted with respect to the ProLogis Notes before the Early Consent Date, then
ProLogis and the Trustee will execute a supplemental indenture setting forth such Proposed
Amendments in respect of such ProLogis Notes when AMB LP settles the exchange offers, which AMB LP
expects to occur promptly after the Expiration Date. Under the terms of this supplemental
indenture, the Proposed Amendments will become effective on the Early Consent Date with respect to
such ProLogis Notes. Each non-consenting holder of ProLogis Notes entitled to vote on any Proposed
Amendments will nonetheless be bound by the supplemental indenture.
ProLogis Amortizing Notes
Pursuant to the terms of the ProLogis 9.340% 2015 Notes, ProLogis is required to make
installments of principal on each $1,000 original principal amount to the holders of such notes
annually on each March 1, which commenced on March 1, 2010, in the following amounts: $100 in 2010,
$125 in 2011, $150 in 2012, $175 in 2013, $200 in 2014 and $250 in 2015.
Pursuant to the terms of the ProLogis 8.650% 2016 Notes, ProLogis is required to make
installments of principal on each $1,000 original principal amount to the holders of such notes
annually on each May 15, which
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commenced on May 15, 2010, in the following amounts: $100 in 2010, $100 in 2011, $100 in 2012, $100
in 2013, $150 in 2014, $200 in 2015 and $250 in 2016.
ProLogis has made all installment payments required to be made pursuant to the terms of the
ProLogis 9.340% 2015 Notes and the ProLogis 8.650% 2016 Notes. However, ProLogis has recently
discovered that previous mandatory principal repayments were not, and with respect to the principal payment to be made on
May 15, 2011 with respect to the ProLogis 8.650% 2016 Notes is
not expected to be,
applied in accordance with their
respective terms with respect to the corresponding ProLogis Note. Rather than making equal
installment payments across all outstanding notes of the affected series, random lots of $1,000
notes of the affected series were redeemed in amounts equal to the aggregate installment payment
amounts. Although the installment payments made by ProLogis to date have reduced the outstanding
aggregate principal amount of each of the ProLogis 9.340% 2015 Notes and the ProLogis 8.650% 2016
Notes, the outstanding principal amount of each note not redeemed has not been reduced from its
original $1,000 principal amount. In effect, the notes that were not redeemed have not been
amortizing. Therefore, the current principal amount of each note outstanding under these two
series is the same as the original principal amount when the notes were issued ($1,000).
As a result, pursuant to the terms of the AMB LP 9.340% 2015 Notes, AMB LP will be required
to make installments of principal on each $1,000 principal amount to the holders of such notes
annually on each March 1, commencing on March 1, 2012, in the following amounts: $150 in 2012, $175
in 2013, $200 in 2014 and $250 in 2015. The remaining $225 of principal will be paid at or prior
to the maturity date of the AMB LP 9.340% 2015 Notes.
In addition, pursuant to the terms of the AMB LP 8.650% 2016 Notes, AMB LP will be required to
make installments of principal on each $1,000 principal amount to the holders of such notes
annually on each May 15, commencing on May 15, 2012, in the following amounts: $100 in 2012, $100
in 2013, $150 in 2014, $200 in 2015 and $250 in 2016. The remaining $200 of principal will be paid
at or prior to the maturity date of the AMB LP 8.650% 2016 Notes.
AMB LP and ProLogis are working with their advisors, the Trustee and DTC to rectify the fact
that the previous mandatory principal repayments were not, and with respect to the principal payment to be made on
May 15, 2011 with respect to the ProLogis 8.650% 2016 Notes is
not expected to be, applied in accordance with their
respective terms with respect to the corresponding ProLogis Note, although there can be no
assurance as to when or how the situation will be resolved. AMB LP and ProLogis currently expect
that one or more future installment payments for each outstanding note may be increased so that at
or prior to maturity of the ProLogis 9.340% 2015 Notes and the ProLogis 8.650% 2016 Notes (and the
AMB LP 9.340% 2015 Notes and the AMB LP 8.650% 2016 Notes issued in the exchange offers) holders
will receive all principal amounts due to them pursuant to the terms of their respective notes. As
a result, the timing and amounts of future payments may not occur as provided for in the affected
notes.
ProLogis 7.810% 2015 Notes
Pursuant to the terms of the ProLogis 7.810% 2015 Notes, ProLogis is required to make
installments of principal on each $1,000 original principal amount to the holders of such notes
annually on each February 1, which commenced on February 1, 2010, in the following amounts: $200 in
2010 (previously paid), $150 in 2011 (previously paid), $150 in 2012, $200 in 2013, $200 in 2014
and $100 in 2015.
Tenders of ProLogis 7.810% 2015 Notes will be accepted only in original principal amounts
(i.e., without giving effect to principal repayments already made) equal to $1,000 or integral
multiples thereof. The applicable exchange price and consent fee will be calculated only on
current principal amounts outstanding as of the settlement date.
For each $1,000 original principal amount of ProLogis 7.810% 2015 Notes validly tendered (and
not validly withdrawn) before the Early Consent Date, you will be entitled to receive an exchange
price equal to (i) 100% of the current $650 principal amount outstanding for such $1,000 original
principal amount of tendered ProLogis 7.810% 2015 Notes, which reflects the mandatory principal
repayments already made, and (ii) the Non-Convertible Notes Consent Fee equal to 0.25% of the
current $650 principal amount outstanding for such $1,000 original principal amount of tendered
ProLogis 7.810% 2015 Notes. You will receive such exchange price for two tendered and accepted
ProLogis 7.810% 2015 Notes in the following form:
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(i)
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two AMB LP 7.810% 2015 Notes, each with an original principal amount of $1,000
that has $650 of current principal amount outstanding;
plus
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(ii)
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a cash consent fee of $3.25, which is the sum of the current $650 principal
amount outstanding for each tendered ProLogis 7.810% 2015 Note multiplied by .0025.
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For each $1,000 original principal amount of ProLogis 7.810% 2015 Notes validly tendered (and
not validly withdrawn) after the Early Consent Date and on or prior to the Expiration Date, you
will be entitled to receive an exchange price equal to 97% of the current $650 principal amount
outstanding for such $1,000 original principal amount of tendered ProLogis 7.810% 2015 Notes, which
reflects the mandatory principal repayments already made. The exchange price you will be entitled
to receive per note will be $630.50. You will receive such exchange price for two tendered and
accepted ProLogis 7.810% 2015 Notes in the following form:
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(i)
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one AMB LP 7.810% 2015 Note with an original principal amount of $1,000 that
has $650 of current principal amount outstanding;
plus
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(ii)
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cash of $611, which is the difference between the exchange price of $1,261.00
($630.50 multiplied by two) to which you are entitled and the current $650.00
principal amount that you are entitled to receive under the issued AMB LP 7.810% 2015
Note;
plus
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(iii)
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accrued and unpaid interest on the current principal amount outstanding
representing such difference to the date of the exchange.
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Conditions to the Exchange Offers and Consent Solicitations
AMB LP’s obligations to complete the exchange offers and consent solicitations on behalf of
the combined company are subject to the satisfaction or waiver (by AMB LP) of the following
conditions as applicable: (a) AMB LP having received the Requisite Consents described above under
"— Terms of the Exchange Offers and Consent Solicitations”, (b) the Merger having been
consummated, (c) the listing of AMB LP’s existing 6.750% Notes due 2011 on the NYSE and (d) the
following statements being true:
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(1)
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In AMB LP’s reasonable judgment, no action or event has occurred or been
threatened (including a default under an agreement, indenture or other instrument or
obligation to which AMB LP or one of its affiliates is a party or by which AMB LP or
one of its affiliates is bound), no action is pending, no action has been taken, and no
statute, rule, regulation, judgment, order, stay, decree or injunction has been
promulgated, enacted, entered, enforced or deemed applicable to the exchange offers,
the exchange of ProLogis Notes under an exchange offer, the consent solicitations or
the Proposed Amendments, by or before any court or governmental, regulatory or
administrative agency, authority or tribunal, which either:
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challenges the exchange offers, the exchange of ProLogis Notes under an
exchange offer, the consent solicitations or the Proposed Amendments or
might, directly or indirectly, prohibit, prevent, restrict or delay
consummation of, or might otherwise adversely affect in any material
manner, the exchange offers, the exchange of ProLogis Notes under an
exchange offer, the consent solicitations or the Proposed Amendments; or
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in AMB LP’s reasonable judgment, could materially affect the business,
condition (financial or otherwise), income, operations, properties, assets,
liabilities or prospects of AMB and its subsidiaries, taken as a whole, or
materially impair the contemplated benefits to AMB of the exchange offers,
the exchange of ProLogis Notes under an exchange offer, the consent
solicitations or the Proposed Amendments, or might be material to holders
of ProLogis Notes in deciding whether to accept the exchange offers and
give their consents;
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(2)
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None of the following has occurred:
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any general suspension of or limitation on trading in securities on any
United States national securities exchange or in the over-the-counter
market (whether or not mandatory);
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a material impairment in the general trading market for debt securities;
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a declaration of a banking moratorium or any suspension of payments in
respect of banks by federal or state authorities in the United States
(whether or not mandatory);
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a commencement or escalation of a war, armed hostilities, terrorist act
or other national or international crisis directly or indirectly relating
to the United States;
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any limitation (whether or not mandatory) by any governmental authority
on, or other event having a reasonable likelihood of affecting, the
extension of credit by banks or other lending institutions in the United
States;
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any material adverse change in United States securities or financial
markets generally; or
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in the case of any of the foregoing existing at the time of the
commencement of the exchange offers, a material acceleration or worsening
thereof; and
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(3)
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The Trustee under the ProLogis Indenture has not objected in any respect to the
execution and delivery of a supplemental indenture relating to the Proposed Amendments,
or taken any action that could in AMB LP’s reasonable judgment adversely affect the
consummation of, any of the exchange offers, the exchange of ProLogis Notes under an
exchange offer, the consent solicitations or ProLogis’ ability to effect the Proposed
Amendments, nor has the Trustee taken any action that challenges the validity or
effectiveness of the procedures used by AMB LP in soliciting consents on behalf of the
combined company (including the form thereof) or AMB LP in making the exchange offers,
the exchange of the ProLogis Notes under an exchange offer or the consent
solicitations.
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All of these conditions are for AMB LP’s sole benefit and may be waived by AMB LP, in whole or
in part, and in AMB LP’s sole discretion. Any determination made by AMB LP concerning these
events, developments or circumstances shall be conclusive and binding.
If any of these conditions are not satisfied with respect to the ProLogis Notes, AMB LP may,
at any time before the consummation of the exchange offers or consent solicitations:
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(1)
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terminate any one or more of the exchange offers or the consent solicitations
and promptly return all applicable tendered ProLogis Notes to the holders thereof
(whether or not AMB LP terminates the other exchange offers or consent solicitations);
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(2)
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modify, extend or otherwise amend any one or more of the exchange offers or
consent solicitations and retain all tendered ProLogis Notes and consents until the
Expiration Date or consent solicitations, subject, however, to the withdrawal rights of
holders (see “— Expiration Date; Extensions; Amendments” and “— Procedures for
Consenting and Tendering — Withdrawal of Tenders and Revocation of Corresponding
Consents”); or
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(3)
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waive the unsatisfied conditions with respect to any one or more of the
exchange offers or consent solicitations to the extent permitted and accept all
ProLogis Notes tendered and not previously validly withdrawn.
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If the merger agreement is terminated for any reason, AMB LP intends promptly to terminate the
exchange offers and the consent solicitations and to return any tendered ProLogis Notes and revoke
consents.
Expiration Date; Extensions; Amendments
For purposes of each of the exchange offers, the term “Expiration Date” means 9:00 a.m., New
York City time, on June 3, 2011, subject to AMB LP’s right to extend that date and time in its sole
discretion, in which case the Expiration Date shall be the latest date and time to which AMB LP has
extended the exchange offer. AMB LP intends to extend the Expiration Date if needed so that it
occurs after the Merger is closed.
AMB LP reserves the right, in its sole discretion, to (1) delay accepting any validly tendered
ProLogis Notes, (2) extend any of the exchange offers, or (3) terminate or amend any of the
exchange offers, by giving written notice of such delay, extension, termination or amendment to the
exchange agent. Any such delay in acceptance, extension, termination or amendment will be followed
promptly by a public announcement thereof which, in the case of an extension, will be made no later
than 9:00 a.m., New York City time, on the next business day after the previously scheduled
Expiration Date.
If any of the exchange offers are amended in a manner determined by AMB LP to constitute a
material change, AMB LP will promptly disclose such amendment by means of a supplement to this
prospectus that will be distributed to holders of ProLogis Notes and AMB LP will extend the
relevant exchange offer to a date at least ten business days after disclosing the amendment,
depending upon the significance of the amendment and the manner of disclosure to the holders, if
such exchange offer would otherwise have expired during such ten business-day period.
Without limiting the manner in which AMB LP may choose to make a public announcement of any
delay, extension, amendment or termination of any of the exchange offers and consent solicitations,
AMB LP will have no obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a timely release to any appropriate news agency, including the
Dow Jones News Service.
Effect of Tender
Any tender of a ProLogis Note by a noteholder prior to the Expiration Date that is not validly
withdrawn prior to the Expiration Date will constitute a binding agreement between that holder and
AMB LP and a consent to the Proposed Amendments, upon the terms and subject to the conditions of
the relevant exchange offer and the letter of transmittal. The acceptance of the exchange offers
by a tendering holder of ProLogis Notes will constitute the agreement by that holder to deliver
good and marketable title to the tendered ProLogis Notes, free and clear of all liens, charges,
claims, encumbrances, interests and restrictions of any kind.
Holders that fail to tender their ProLogis Non-Convertible Notes (and thereby fail to deliver
valid and unrevoked consents) prior to the Early Consent Date but who do so prior to the Expiration
Date will receive an exchange price equal to 97% of the aggregate principal amount of such tendered
ProLogis Non-Convertible Notes, rather than 100% of such amount, and will not receive the
Non-Convertible Notes Consent Fee. Holders that fail to tender their ProLogis Convertible Notes
(and thereby fail to deliver valid and unrevoked consents) prior to the Early Consent Date but who
do so prior to the Expiration Date will receive an exchange price equal to 97% of the aggregate
principal amount of such tendered ProLogis Convertible Notes, rather than 100% of such amount, and
will not receive the Convertible Notes Consent Fee. If you validly tender ProLogis Notes prior to
the Early Consent Date, you may validly withdraw your tender and the related consent prior to the
Early Consent Date, but you will not receive the applicable cash consent fee unless you validly
re-tender prior to the Early Consent Date. If you validly tender ProLogis Notes prior to the
Early Consent Date, you may validly withdraw your tender after the Early Consent Date and before
the Expiration Date, but you may not withdraw the related consent and you will receive the
applicable cash consent fee. If you tender ProLogis Notes after the Early Consent Date and before
the Expiration Date, you will not receive the applicable cash consent fee and you may withdraw your
tender and the related consent at any time prior to the Expiration Date. If the Proposed Amendments
to the ProLogis Indenture have been adopted, the amendments will apply to all ProLogis Notes
governed by such indentures that are not validly tendered or not accepted by AMB LP in the
applicable exchange offers. Thereafter, all such ProLogis Notes will be governed by the ProLogis
Indenture as amended by the Proposed Amendments, which will have less restrictive terms and afford
reduced protections to the holders of such securities compared to those currently in the ProLogis
Indenture. See
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“Risk Factors — Risks Related to the Exchange Offers and Consent Solicitations — The
Proposed Amendments to the ProLogis Indenture will afford reduced protection to remaining holders
of ProLogis Notes.”
Absence of Dissenters’ Rights
Holders of the ProLogis Notes do not have any appraisal or dissenters’ rights under New York
law, the law governing the ProLogis Indenture and the ProLogis Notes, or under the terms of the
ProLogis Indenture in connection with the exchange offers and consent solicitations.
Accounting Treatment of the Exchange Offers
The exchange offers will be accounted for by AMB and AMB LP as debt modifications under United
States generally accepted accounting principles and there will be no gain or loss for accounting
purposes upon the consummation of the exchange offers. The direct costs incurred with third
parties will be expensed. At consummation of the exchange offers, the conversion feature related
to the exchangeable notes will be separated from the debt instrument and accounted for separately
as a derivative.
Acceptance of ProLogis Notes for Exchange; AMB LP Notes and Cash Exchange Consideration;
Effectiveness of Proposed Amendments
Assuming the conditions to the exchange offers are satisfied or waived, AMB LP will issue new
AMB LP Notes in book-entry form through DTC and pay any cash exchange consideration, as applicable,
in connection with the exchange offers promptly after consummation of the Merger and the Expiration
Date in exchange for ProLogis Notes that are properly tendered (and not validly withdrawn) before
the Expiration Date and accepted for exchange.
AMB LP refers to each date on which AMB LP exchanges AMB LP Notes for ProLogis Notes pursuant
to the exchange offers as an “exchange date.”
AMB LP will be deemed to have accepted validly tendered ProLogis Notes and to have accepted
validly delivered consents to the Proposed Amendments to the ProLogis Indenture if and when AMB LP
has given written notice of its acceptance to the exchange agent. Subject to the terms and
conditions of the exchange offers, delivery of AMB LP Notes and payment of any cash exchange
consideration, as applicable, in connection with the exchange of ProLogis Notes accepted by AMB LP
will be made by the exchange agent on the exchange date upon receipt of such notice. The exchange
agent will act as agent for participating holders of the ProLogis Notes for the purpose of
receiving consents and ProLogis Notes from, and transmitting AMB LP Notes and cash exchange
consideration to, such holders. If any tendered ProLogis Notes are not accepted for any reason set
forth in the terms and conditions of the exchange offers or if ProLogis Notes are withdrawn prior
to the Expiration Date, such unaccepted or withdrawn ProLogis Notes will be returned without
expense to the tendering holder promptly after the expiration or termination of the exchange
offers.
If AMB LP receives the Requisite Consents, the Proposed Amendments to the ProLogis Indenture
will be entered into and become effective when AMB LP settles the exchange offers, which AMB LP
expects to occur promptly after the Expiration Date. This assumes that all other conditions of the
exchange offers and consent solicitations are satisfied or waived, as applicable.
Procedures for Consenting and Tendering
If you hold ProLogis Notes and wish to have those ProLogis Notes exchanged for AMB LP Notes
and, as applicable, cash exchange consideration, you must validly tender (or cause the valid tender
of) your ProLogis Notes using the procedures described in this prospectus and in the accompanying
letter of transmittal. The proper tender of ProLogis Notes will constitute an automatic consent to
the Proposed Amendments to the ProLogis Indenture.
Holders must provide consents to all of the Proposed Amendments applicable to a particular
series of notes or none of them. A consent purporting to consent only to some of the Proposed
Amendments (or any portion thereof) will not be valid (unless AMB LP, in its sole discretion,
waives the defect in such consent). AMB LP
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reserves the right to accept consents on behalf of the combined company to effect any of the
Original Events of Default Amendments, the Events of Default Amendments, the Contingent Convertible
Notes Events of Default Amendments, the Merger Restriction Amendments, the Incurrence of Debt
Amendments, the Maintenance of Properties Amendments, the Insurance Amendments, the Payment of
Taxes and Other Claims Amendments, the Original Financial Information Amendments and the Financial
Information Amendments or any combination thereof, to the extent that AMB LP has received the
applicable Original Events of Default Amendments Requisite Consent, Events of Default Amendments
Requisite Consent, Contingent Convertible Notes Events of Default Amendments Requisite Consent,
Merger Restriction Amendments Requisite Consent, Incurrence of Debt Amendments Requisite Consent,
Maintenance of Properties Amendments Requisite Consent, Insurance Amendments Requisite Consent,
Payment of Taxes and Other Claims Amendments Requisite Consent, Original Financial Information
Amendments Requisite Consent and Financial Information Amendments Requisite Consent, as the case
may be, even if AMB LP has not obtained each of the other Requisite Consents necessary to effect
all of the Proposed Amendments.
The procedures by which you may tender or cause to be tendered ProLogis Notes will depend upon
the manner in which you hold the ProLogis Notes, as described below.
ProLogis Notes Held Through a Nominee
Currently, all of the ProLogis Notes are held in book-entry form with DTC and can only be
tendered by following the procedures described below under “— ProLogis Notes Held with DTC.”
However, if you are a beneficial owner of ProLogis Notes that are subsequently issued in
certificated form and that are held of record by a custodian bank, depositary, broker, trust
company or other nominee, and you wish to tender ProLogis Notes in the applicable exchange offers,
you should contact the record holder promptly and instruct the record holder to tender the ProLogis
Notes and thereby deliver a consent on your behalf using one of the procedures described below.
ProLogis Notes Held with DTC
Pursuant to authority granted by DTC, if you are a DTC participant that has ProLogis Notes
credited to your DTC account and thereby held of record by DTC’s nominee, you may directly tender
your ProLogis Notes and deliver a consent as if you were the record holder. Accordingly,
references herein to record holders include DTC participants with ProLogis Notes credited to their
accounts. Promptly after the date of this prospectus, the exchange agent will establish accounts
with respect to the ProLogis Notes at DTC for purposes of the exchange offers.
Any participant in DTC may tender ProLogis Notes and thereby deliver a consent to the Proposed
Amendments to the ProLogis Indenture by effecting a book-entry transfer of the ProLogis Notes to be
tendered in the applicable exchange offers into the account of the exchange agent at DTC and either
(1) electronically transmitting its acceptance of the exchange offers through DTC’s Automated
Tender Offer Program (“ATOP”) procedures for transfer; or (2) completing and signing the letter of
transmittal according to the instructions contained therein and delivering it, together with any
signature guarantees and other required documents, to the exchange agent at its address on the back
cover page of this prospectus, in either case before the exchange offers expire.
If ATOP procedures are followed, DTC will verify each acceptance transmitted to it, execute a
book-entry delivery to the exchange agent’s account at DTC and send an agent’s message to the
exchange agent. An “agent’s message” is a message, transmitted by DTC to and received by the
exchange agent and forming part of a book-entry confirmation, which states that DTC has received an
express acknowledgement from a DTC participant tendering ProLogis Notes that the participant has
received and agrees to be bound by the terms of the letter of transmittal and that AMB LP may
enforce the agreement against the participant. DTC participants following this procedure should
allow sufficient time for completion of the ATOP procedures prior to the Expiration Date.
The letter of transmittal (or facsimile thereof), with any required signature guarantees, or
(in the case of book-entry transfer) an agent’s message in lieu of the letter of transmittal, and
any other required documents, must be transmitted to and received by the exchange agent prior to
the Expiration Date at one of its addresses set forth on the back cover page of this prospectus.
Delivery of such documents to DTC does not constitute delivery to the exchange agent.
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Letter of Transmittal
Subject to and effective upon the acceptance for exchange and issuance of AMB LP Notes and, as
applicable, the payment of cash exchange consideration, in exchange for ProLogis Notes tendered by
a letter of transmittal in accordance with the terms and subject to the conditions set forth in
this prospectus, by executing and delivering a letter of transmittal (or agreeing to the terms of a
letter of transmittal pursuant to an agent’s message) a tendering holder of ProLogis Notes:
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irrevocably sells, assigns and transfers to or upon the order of AMB, AMB LP or
their respective subsidiaries all right, title and interest in and to, and all claims
in respect of or arising or having arisen as a result of the holder’s status as a
holder of the ProLogis Notes tendered thereby;
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waives any and all rights with respect to the ProLogis Notes (including any existing
or past defaults and their consequences in respect of the ProLogis Notes);
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releases and discharges AMB, AMB LP, ProLogis and their respective subsidiaries and
the Trustee under the ProLogis Indenture from any and all claims such holder may have,
now or in the future, arising out of or related to the ProLogis Notes, including any
claims that such holder is entitled to receive additional principal or interest
payments with respect to the ProLogis Notes (other than as expressly provided in this
document and in the letter of transmittal) or to participate in any redemption or
defeasance of the ProLogis Notes;
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represents and warrants that the ProLogis Notes tendered were owned as of the date
of tender, free and clear of all liens, charges, claims, encumbrances, interests and
restrictions of any kind;
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consents to the Proposed Amendments described below under “The Proposed Amendments”,
as applicable; and
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irrevocably constitutes and appoints the exchange agent as the true and lawful agent
and attorney-in-fact of the holder with respect to any tendered ProLogis Notes (with
full knowledge that the exchange agent also acts as the agent of AMB LP), with full
powers of substitution and revocation (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to cause the ProLogis Notes tendered to be
assigned, transferred and exchanged in the applicable exchange offers.
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Proper Execution and Delivery of Letter of Transmittal
If you wish to participate in the applicable exchange offers and consent solicitations,
delivery of your ProLogis Notes, signature guarantees and other required documents are your
responsibility. Delivery is not complete until the required items are actually received by the
exchange agent. If you mail these items, AMB LP recommends that you (1) use registered mail
properly insured with return receipt requested and (2) mail the required items in sufficient time
to ensure timely delivery.
Except as otherwise provided below, all signatures on the letter of transmittal or a notice of
withdrawal must be guaranteed by a recognized participant in the Securities Transfer Agents
Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program,
each a “Medallion Guarantee Program.” Signatures on the letter of transmittal need not be
guaranteed if:
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the letter of transmittal is signed by a participant in DTC whose name appears on a
security position listing of DTC as the owner of the ProLogis Notes and the portion
entitled “Special Issuance and Payment Instructions” or “Special Delivery Instructions”
on the letter of transmittal has not been completed; or
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the ProLogis Notes are tendered for the account of an eligible institution. See
Instruction 4 in the letter of transmittal.
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Withdrawal of Tenders and Revocation of Corresponding Consents
Tenders of ProLogis Notes in connection with any of the exchange offers may be withdrawn at
any time prior to the Expiration Date. Tenders of ProLogis Notes may not be withdrawn at any time
thereafter. Consents to the Proposed Amendments given by holders of ProLogis Notes in connection
with the consent solicitations prior to the Early Consent Date may be revoked at any time prior to
the Early Consent Date, but may not be revoked at any time thereafter. A valid withdrawal of
tendered ProLogis Notes prior to the Early Consent Date will be deemed to be a concurrent
revocation of the related consent to the Proposed Amendments to the ProLogis Indenture.
Holders that tender ProLogis Notes after the Early Consent Date and before the Expiration Date
will not receive the applicable cash consent fee and may withdraw their tender and the related
consent at any time prior to the Expiration Date. If you validly withdraw your ProLogis
Non-Convertible Notes before the Early Consent Date, your consent will be revoked and any
subsequent tender and corresponding consent of the withdrawn ProLogis Non-Convertible Notes after
the Early Consent Date and prior to the Expiration Date shall be for an exchange price of 97% of
the re-tendered ProLogis Non-Convertible Notes’ aggregate principal amount (rather than 100% of the
aggregate principal amount of the withdrawn ProLogis Non-Convertible Notes plus the Non-Convertible
Notes Consent Fee, as would be obtained by validly tendering and not withdrawing your ProLogis
Non-Convertible Notes prior to the Early Consent Date). If you validly withdraw your ProLogis
Non-Convertible Notes following the Early Consent Date but before the Expiration Date, your consent
will continue to be deemed delivered and you will receive the Non-Convertible Notes Consent Fee,
and any subsequent tender of the withdrawn ProLogis Non-Convertible Notes prior to the Expiration
Date shall be for an exchange price equal to 97% of the re-tendered ProLogis Non-Convertible Notes’
aggregate principal amount (rather than 100% of the aggregate principal amount of the withdrawn
ProLogis Non-Convertible Notes, as would have been obtained if you had validly tendered and not
withdrawn your ProLogis Non-Convertible Notes prior to the Early Consent Date). If you validly
withdraw your ProLogis Convertible Notes before the Early Consent Date, your consent will be
revoked and any subsequent tender and corresponding consent of the withdrawn ProLogis Convertible
Notes after the Early Consent Date and prior to the Expiration Date shall be for an exchange price
equal to 97% of the re-tendered ProLogis Convertible Notes’ aggregate principal amount (rather than
100% of the aggregate principal amount of the withdrawn ProLogis Convertible Notes plus the
Convertible Notes Consent Fee, as would be obtained by validly tendering and not withdrawing your
ProLogis Convertible Notes prior to the Early Consent Date). If you validly withdraw your ProLogis
Convertible Notes following the Early Consent Date but before the Expiration Date, your consent
will continue to be deemed delivered and you will receive the Convertible Notes Consent Fee, and
any subsequent tender of the withdrawn ProLogis Convertible Notes prior to the Expiration Date
shall be for an exchange price equal to 97% of the re-tendered ProLogis Convertible Notes’
aggregate principal amount (rather than 100% of the aggregate principal amount of the withdrawn
ProLogis Convertible Notes, as would have been obtained if you had validly tendered and not
withdrawn your ProLogis Convertible Notes prior to the Early Consent Date).
Beneficial owners desiring to withdraw ProLogis Notes previously tendered through the ATOP
procedures should contact the DTC participant through which they hold their ProLogis Notes. In
order to withdraw ProLogis Notes previously tendered, a DTC participant may, prior to the
Expiration Date, withdraw its instruction previously transmitted through ATOP by (1) withdrawing
its acceptance through ATOP, or (2) delivering to the exchange agent by mail, hand delivery or
facsimile transmission, notice of withdrawal of such instruction. The notice of withdrawal must
contain the name and number of the DTC participant. Withdrawal of a prior instruction will be
effective upon receipt of such notice of withdrawal by the exchange agent. All signatures on a
notice of withdrawal must be guaranteed by a recognized participant in a Medallion Guarantee
Program, except that signatures on the notice of withdrawal need not be guaranteed if the ProLogis
Notes being withdrawn are held for the account of an eligible institution. A withdrawal of an
instruction must be executed by a DTC participant in the same manner as such DTC participant’s name
appears on its transmission through ATOP to which such withdrawal relates. A DTC participant may
withdraw a tender only if such withdrawal complies with the provisions described in this section.
If you are a beneficial owner of ProLogis Notes issued in certificated form and have tendered
these ProLogis Notes (but not through DTC) and you wish to withdraw your tendered ProLogis Notes,
you should contact the exchange agent for instructions.
Withdrawals of tenders of ProLogis Notes may not be rescinded and any ProLogis Notes withdrawn
will thereafter be deemed not validly tendered for purposes of the exchange offers. Properly
withdrawn ProLogis Notes,
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however, may be re-tendered by following the procedures described above at any time prior to
the Expiration Date of the applicable exchange offer; if such withdrawn ProLogis Non-Convertible
Notes are so re-tendered after the Early Consent Date, the holder will only be eligible to receive
an exchange price equal to 97% of the aggregate principal amount of such ProLogis Non-Convertible
Notes and if such withdrawn ProLogis Convertible Notes are so re-tendered after the Early Consent
Date, the holder will only be eligible to receive an exchange price equal to 97% of the aggregate
principal amount of such ProLogis Convertible Notes.
Miscellaneous
All questions as to the validity, form, eligibility (including time of receipt) and acceptance
for exchange of any tender of ProLogis Notes in connection with the exchange offers will be
determined by AMB LP, in its sole discretion, and its determination will be final and binding. AMB
LP reserves the absolute right to reject any or all tenders not in proper form or the acceptance
for exchange of which may, in the opinion of AMB LP’s counsel, be unlawful. AMB LP also reserves
the absolute right to waive any defect or irregularity in the tender of any ProLogis Notes in the
applicable exchange offers, and AMB LP’s interpretation of the terms and conditions of the exchange
offers (including the instructions in the letter of transmittal) will be final and binding on all
parties. None of AMB or its subsidiaries, ProLogis or its subsidiaries, the exchange agent, the
information agent, the dealer managers or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability for failure to give
any such notification.
Tenders of ProLogis Notes involving any irregularities will not be deemed to have been made
until such irregularities have been cured or waived. ProLogis Notes received by the exchange agent
in connection with any exchange offer that are not validly tendered and as to which the
irregularities have not been cured or waived will be returned by the exchange agent to (i) you by
mail if they were tendered in certificated form or (ii) if they were tendered through the ATOP
procedures, to the DTC participant who delivered such ProLogis Notes by crediting an account
maintained at DTC designated by such DTC participant, in either case promptly after the Expiration
Date of the applicable exchange offer or the withdrawal or termination of the applicable exchange
offer.
Transfer Taxes
AMB LP will pay all transfer taxes, if any, applicable to the transfer and sale of ProLogis
Notes to AMB LP in the applicable exchange offers. If transfer taxes are imposed for any other
reason, the amount of those transfer taxes, whether imposed on the registered holders or any other
persons, will be payable by the tendering holder.
If satisfactory evidence of payment of or exemption from those transfer taxes is not submitted
with the letter of transmittal, the amount of those transfer taxes will be billed directly to the
tendering holder and/or withheld from any payments due with respect to the ProLogis Notes tendered
by such holder.
U.S. Federal Backup Withholding
U.S. federal income tax law requires that a holder of ProLogis Notes, whose ProLogis Notes are
accepted for exchange, provide the exchange agent, as payer, with the holder’s correct taxpayer
identification number or otherwise establish a basis for an exemption from backup withholding. For
U.S. holders, this information should be provided on Internal Revenue Service (“IRS”) Form W-9. In
the case of a holder who is an individual, other than a resident alien, this identification number
is his or her social security number. For holders other than individuals, the identification
number is an employer identification number. Exempt holders, including, among others, all
corporations and certain foreign individuals, are not subject to these backup withholding and
reporting requirements, but must establish that they are so exempt. If you do not provide the
exchange agent with your correct taxpayer identification number or an adequate basis for an
exemption or, in the case of a non-U.S. holder, a completed IRS Form W-8BEN (or other applicable
IRS Form W-8), you may be subject to backup withholding on payments made in exchange for any
ProLogis Notes and a penalty imposed by the IRS. Backup withholding is not an additional U.S.
federal income tax. Rather, the amount of tax withheld will be credited against the U.S. federal
income tax liability of the holder subject to backup withholding. If backup withholding results in
an overpayment of taxes, you may obtain a refund from the IRS. You should consult with a tax
advisor regarding qualifications for exemption from backup withholding and the procedure for
obtaining the exemption.
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To prevent backup withholding, you must either (1) provide a completed IRS Form W-9 and
indicate either (a) your correct taxpayer identification number or (b) an adequate basis for an
exemption, or (2) provide a completed Form W-8BEN (or other applicable IRS Form
W-8).
Each of AMB, AMB LP and ProLogis reserves the right in its sole discretion to take all
necessary or appropriate measures to comply with its respective obligations regarding backup
withholding.
Exchange Agent
Global Bondholder Services Corporation has been appointed the exchange agent for the exchange
offers and consent solicitations. Letters of transmittal and consent and all correspondence in
connection with the exchange offers should be sent or delivered by each holder of ProLogis Notes,
or a beneficial owner’s custodian bank, depositary, broker, trust company or other nominee, to the
exchange agent at the address and telephone numbers set forth on the back cover page of this
prospectus. AMB LP will pay the exchange agent reasonable and customary fees for its services and
will reimburse it for its reasonable, out-of-pocket expenses in connection therewith.
Information Agent
Global Bondholder Services Corporation has been appointed as the information agent for the
exchange offers and the consent solicitations, and will receive customary compensation for its
services. Questions concerning tender procedures and requests for additional copies of this
prospectus or the letter of transmittal should be directed to the information agent at the address
and telephone numbers set forth on the back cover page of this prospectus. Holders of any ProLogis
Notes issued in certificated form and that are held of record by a custodian bank, depositary,
broker, trust company or other nominee may also contact such record holder for assistance
concerning the exchange offers.
Dealer Managers
AMB LP has retained Citigroup Global Markets Inc. and RBS Securities Inc. to act as dealer
managers in connection with the exchange offers and consent solicitations and will pay a customary
fee to the dealer managers as compensation for their services. AMB LP will also reimburse the
dealer managers for certain expenses. The obligations of the dealer managers to perform such
function are subject to certain conditions. AMB LP has agreed to indemnify the dealer managers
against certain liabilities, including liabilities under the federal securities laws. Questions
regarding the terms of the exchange offers or the consent solicitations may be directed to the
dealer managers at their respective addresses and telephone numbers set forth on the back cover
page of this prospectus.
The dealer managers and certain of their affiliates have provided from time to time, and may
provide in the future, investment and commercial banking and financial advisory services to AMB,
AMB LP, ProLogis and their respective affiliates in the ordinary course of business, for which they
have received and may continue to receive customary fees and commissions. In the ordinary course
of their business, the dealer managers and their respective affiliates may actively trade or hold
securities or loans of AMB, AMB LP and ProLogis and their respective affiliates for their own
accounts or for the accounts of customers and, accordingly, may at any time hold long or short
positions in these securities or loans. From time to time, as a result of market making
activities, the dealer managers may own common shares, common stock or other equity or debt
securities issued by AMB, AMB LP, ProLogis or their respective affiliates. In addition, Citigroup
Global Markets Inc. is acting as a lender under and its affiliates own a 63% equity interest in and
are lenders to North American Industrial Fund II, a joint venture property fund sponsored by
ProLogis. Citigroup Global Markets Inc. is also acting as a lender under AMB LP’s multi-year
revolving credit facility and ProLogis’s existing global credit facility. RBS Securities Inc. is
also acting as a lender under one of AMB LP’s revolving credit facilities and ProLogis’ existing
global credit facility. Additionally, The Royal Bank of Scotland plc and The Royal Bank of
Scotland NV, each an affiliate of RBS Securities Inc., lend to wholly-owned subsidiaries and
partially owned related entities of ProLogis in the United Kingdom and Europe.
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Other Fees and Expenses
The expenses of soliciting tenders and consents with respect to the ProLogis Notes will be
borne by AMB LP. The principal solicitations are being made by mail; however, additional
solicitations may be made by facsimile transmission, telephone or in person by the dealer managers
and the information agent, as well as by officers and other employees of AMB, AMB LP, ProLogis and
their affiliates.
Tendering holders of ProLogis Notes will not be required to pay any fee or commission to the
dealer managers. However, if a tendering holder handles the transaction through its broker,
dealer, commercial bank, trust company or other institution, such holder may be required to pay
brokerage fees or commissions.
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DESCRIPTION OF THE DIFFERENCES BETWEEN
THE AMB LP NOTES AND THE PROLOGIS NOTES
The following is a summary comparison of the material terms of the AMB LP Notes and the
ProLogis Notes (prior to the Proposed Amendments). The AMB LP Notes issued in the applicable
exchange offers will be governed by the new AMB LP Indenture. This summary does not purport to be
complete, does not include changes to the relevant defined terms and cross-references related
thereto and is qualified in its entirety by reference to the new AMB LP Indenture and the ProLogis
Indenture, without giving effect to the Proposed Amendments. Copies of those indentures are
available from the information agent upon request. Copies of the forms of the new AMB LP Indenture
and the new supplemental indentures related thereto for each respective series of the AMB LP
Exchangeable Notes are filed as exhibits to the registration statement of which this prospectus is
a part.
The ProLogis Notes represent, as of the date of this prospectus, the only debt securities
issued under the ProLogis Indenture.
Other terms used in the comparison of the AMB LP Notes and the ProLogis Notes below and not
otherwise defined in this prospectus have the meanings given to such terms in the new AMB LP
Indenture and the ProLogis Indenture, respectively. Article and section references in the
descriptions of the notes below are references to the applicable indenture under which the notes
were or will be issued.
Each new series of AMB LP Notes will have substantially the same terms, including interest
rate, interest payment dates, redemption terms, maturity and, if applicable, exchange terms (other
than the applicable initial exchange rates, dividend threshold amounts, fundamental change
make-whole amounts and, in the case of the AMB LP 3.250% 2015 Exchangeable Notes, the exchange
consideration), as the corresponding series of outstanding ProLogis Notes (prior to the Proposed
Amendments) for which they are being offered in exchange, except that, among other things, the AMB
LP Notes will be guaranteed by AMB LP’s parent entity and sole general partner, AMB, as compared
with the ProLogis Notes, which were issued by ProLogis and are not guaranteed. In the case of each
new AMB LP 9.340% 2015 Note and AMB LP 8.650% 2016 Note issued in exchange for a ProLogis 9.340%
2015 Note and a ProLogis 8.650% 2016 Note, respectively, the mandatory principal repayment schedule
will be revised from that contained in the corresponding ProLogis Note to reflect the fact that,
because previous mandatory principal repayments were not, and with respect to the principal payment to be made on
May 15, 2011 with respect to the ProLogis 8.650% 2016 Notes is
not expected to be, applied in accordance with their
respective terms with respect to the corresponding ProLogis Note, the outstanding principal amount
of each currently outstanding ProLogis 9.340% 2015 Note and ProLogis 8.650% 2016 Note is, and the
AMB LP 9.340% 2015 Note and AMB LP 8.650% 2016 Note to be issued in exchange thereof will be,
$1,000. For more information, see “The Exchange Offers and Consent Solicitations — ProLogis
Amortizing Notes.” Additionally, the applicable initial exchange rates, dividend threshold amounts
and fundamental change make-whole amounts for the AMB LP Exchangeable Notes will be adjusted
relative to the conversion rate of the ProLogis Convertible Notes to account for differences in the
value of shares of AMB common stock and ProLogis common shares, and the AMB LP 3.250% 2015
Exchangeable Notes will be exchangeable into AMB common stock, cash or a combination of the two, at
the option of AMB LP, as compared with the ProLogis 3.250% 2015 Convertible Notes, which are
convertible only into ProLogis common shares and will be exchangeable only into AMB common stock
after the Merger. As described in the table below, the ProLogis Indenture, without giving effect
to the Proposed Amendments, and the new AMB LP Indenture will be substantially the same, except
that, among other things:
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the new AMB LP Indenture will include the guarantees by AMB,
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the new AMB LP Indenture will not have a restriction preventing incurrence of
additional unsecured debt by AMB LP’s subsidiaries,
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the definition of debt will be revised to limit the amount of secured debt to
include the lesser of the amount of secured debt or the fair market value of the
property that secures such debt and to include letters of credit only to the extent
called upon,
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the financial reporting obligations will be revised to include AMB,
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the AMB LP Exchangeable Notes will be exchangeable and no longer convertible
and the applicable initial exchange rates, dividend threshold amounts and fundamental
change make-whole amounts of the AMB LP Exchangeable Notes will change, and
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the AMB LP 3.250% 2015 Exchangeable Notes will be exchangeable into AMB common
stock, cash or a combination of the two, at the option of AMB LP.
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The following description of the ProLogis Notes reflects the ProLogis Notes as currently
constituted and does not reflect any changes to the covenants and other terms of the ProLogis Notes
or the ProLogis Indenture that may be effected following the consent solicitations as described
under “The Proposed Amendments.”
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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Definitions; Debt
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Section 101 of the Base ProLogis
Indenture, as amended by Section
1.2(c) of the Eighth
Supplemental Indenture and the
Ninth Supplemental Indenture
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Section 101 of the new AMB LP Indenture
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“Debt” of the Company or any
Subsidiary means any
indebtedness of the Company or
any Subsidiary, excluding any
accrued expense or trade
payable, whether or not
contingent, in respect of (i)
borrowed money evidenced by
bonds, notes, debentures or
similar instruments, (ii)
indebtedness secured by any
mortgage, pledge, lien, charge,
encumbrance or any security
interest existing on property
owned by the Company or any
Subsidiary, (iii) the
reimbursement obligations,
contingent or otherwise, in
connection with any letters of
credit actually issued or
amounts representing the balance
deferred and unpaid of the
purchase price of any property
or services, or all conditional
sale obligations or obligations
under any title retention
agreement, (iv) the principal
amount of all obligations of the
Company or any Subsidiary with
respect to redemption, repayment
or other repurchase of any
Disqualified Stock or (v) any
lease of property by the Company
or any Subsidiary as lessee
which is reflected on the
Company’s Consolidated Balance
Sheet as a capitalized lease in
accordance with GAAP and to the
extent, in the case of items of
indebtedness under (i) through
(iii) above, that any such items
(other than letters of credit)
would appear as a liability on
the Company’s Consolidated
Balance Sheet in accordance with
GAAP, and also includes, to the
extent
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“Debt” of the Company or any Subsidiary
means any indebtedness of the Company
or any Subsidiary, excluding any
accrued expense or trade payable,
whether or not contingent, in respect
of (i) borrowed money evidenced by
bonds, notes, debentures or similar
instruments, (ii) indebtedness secured
by any mortgage, pledge, lien, charge,
encumbrance or any security interest
existing on property owned by the
Company or any Subsidiary, but only to
the extent of the lesser of (x) the
amount of indebtedness so secured and
(y) the fair market value of the
property subject to such mortgage,
pledge, lien, charge, encumbrance or
any security interest, (iii) the
reimbursement obligations, contingent
or otherwise, in connection with any
letters of credit actually issued and
called or amounts representing the
balance deferred and unpaid of the
purchase price of any property or
services, or all conditional sale
obligations or obligations under any
title retention agreement, (iv) the
principal amount of all obligations of
the Company or any Subsidiary with
respect to redemption, repayment or
other repurchase of any Disqualified
Stock or (v) any lease of property by
the Company or any Subsidiary as lessee
which is reflected on the Company’s
Consolidated Balance Sheet as a
capitalized lease in accordance with
GAAP and to the extent, in the case of
items of indebtedness under (i) through
(iii) above, that any such items (other
than letters of credit) would appear as
a liability on the Company’s
Consolidated Balance Sheet in
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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not otherwise included,
any obligation by the Company or
any Subsidiary to be liable for,
or to pay, as obligor, guarantor
or otherwise (other than for
purposes of collection in the
ordinary course of business),
Debt of another Person (other
than the Company or any
Subsidiary).
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accordance with GAAP, and also
includes, to the extent not otherwise
included, any obligation by the Company
or any Subsidiary to be liable for, or
to pay, as obligor, guarantor or
otherwise (other than for purposes of
collection in the ordinary course of
business), Debt of another Person
(other than the Company or any
Subsidiary).
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Definitions; Pari
Passu Debt
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Section 101 of the Base ProLogis
Indenture, as amended by Section
1.2(c) of the Eighth
Supplemental Indenture and the
Ninth Supplemental Indenture
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Section N/A
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“Pari Passu Debt” means (i) any
Debt of the Company or a
Subsidiary that is secured only
by Encumbrances that also secure
the Securities issued hereunder
on an equal and ratable basis
and (ii) any series of
Securities issued hereunder that
is secured only by Encumbrances
that also secure all other
series of Securities issued
hereunder on an equal and
ratable basis.
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There is no comparable provision.
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Definitions;
Subsidiary
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Section 101 of the Base ProLogis
Indenture
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Section 101 of the new AMB LP Indenture
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“Subsidiary“ means, with respect
to any Person, any corporation
or other entity of which a
majority of the voting power
of the voting equity securities
or (b) in the case of a
partnership or any other entity
other than a corporation, the
outstanding equity interests of
which are owned, directly or
indirectly, by such Person. For
the purposes of this definition,
“voting equity securities” means
equity securities having voting
power for the election of
directors, whether at all times
or only so long as no senior
class of security has such
voting power by reason of any
contingency.
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“Subsidiary” means, with respect to any
Person, (i) a corporation, partnership,
joint venture, limited liability
company or other entity the majority of
the shares, if any, of the non-voting
capital stock or other equivalent
ownership interests of which (except
directors’ qualifying shares) are at
the time directly or indirectly owned
by such Person and/or any other
Subsidiary or Subsidiaries of such
Person, and the majority of the shares
of the voting capital stock or other
equivalent ownership interests of which
(except directors’ qualifying shares)
are at the time directly or indirectly
owned by such Person, any other
Subsidiary or Subsidiaries of such
Person, and (ii) any other entity the
accounts of which are consolidated with
the accounts of such Person. For the
purposes of this definition, “voting
capital stock” means capital stock
having voting power for the election of
directors, whether at all times or only
so long as no senior class of capital
stock has such voting power by reason
of any
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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contingency.
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Definitions;
Subsidiary
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Section 101 of the Base ProLogis
Indenture, as amended by Section
1.2(c) of the Eighth
Supplemental Indenture and the
Ninth Supplemental Indenture
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Section 101 of the new AMB LP Indenture
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“Subsidiary” means, with respect
to any Person, any corporation
or other entity of which a
majority of (a) the voting power
of the voting equity securities
or (b) in the case of a
partnership or any other entity
other than a corporation, the
outstanding equity interests of
which are owned, directly or
indirectly, by such Person. For
the purposes of this definition,
“voting equity securities” means
equity securities having voting
power for the election of
directors, whether at all times
or only so long as no senior
class of security has such
voting power by reason of any
contingency.
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“Subsidiary” means, with respect to any
Person, (i) a corporation, partnership,
joint venture, limited liability
company or other entity the majority of
the shares, if any, of the non-voting
capital stock or other equivalent
ownership interests of which (except
directors’ qualifying shares) are at
the time directly or indirectly owned
by such Person and/or any other
Subsidiary or Subsidiaries of such
Person, and the majority of the shares
of the voting capital stock or other
equivalent ownership interests of which
(except directors’ qualifying shares)
are at the time directly or indirectly
owned by such Person, any other
Subsidiary or Subsidiaries of such
Person, and (ii) any other entity the
accounts of which are consolidated with
the accounts of such Person. For the
purposes of this definition, “voting
capital stock” means capital stock
having voting power for the election of
directors, whether at all times or only
so long as no senior class of capital
stock has such voting power by reason
of any contingency.
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Temporary Securities
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Section 304 of the Base ProLogis
Indenture
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Section 304 of the new AMB LP Indenture
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(a) Pending the preparation of
definitive Securities of any
series, the Company may execute,
and upon Company Order the
Trustee shall authenticate and
deliver, temporary Securities
which are printed, lithographed,
typewritten, mimeographed or
otherwise produced, in any
authorized denomination,
substantially of the tenor of
the definitive Securities in
lieu of which they are issued,
in registered form, or, if
authorized, in bearer form with
one or more coupons or without
coupons, and with such
appropriate insertions,
omissions, substitutions and
other variations as the officers
executing such Securities may
determine, as
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Pending the preparation of definitive
Securities of any series, the Company
may execute, and upon Company Order the
Trustee shall authenticate and deliver,
temporary Securities which are printed,
lithographed, typewritten, mimeographed
or otherwise produced, in any
authorized denomination, substantially
of the tenor of the definitive
Securities in lieu of which they are
issued, in registered form, and with
such appropriate insertions, omissions,
substitutions and other variations as
the officers executing such Securities
may determine, as evidenced by their
execution of such Securities. In the
case of Securities of any series, such
temporary Securities may be
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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conclusively
evidenced by their execution of
such Securities. In the case of
Securities of any series, such
temporary Securities may be in
global form.
Except in the case of temporary
Securities in global form (which
shall be exchanged in accordance
with Section 304(b) or as
otherwise provided in or
pursuant to a Board Resolution),
if temporary Securities of any
series are issued, the Company
will cause definitive Securities
of that series to be prepared
without unreasonable delay.
After the preparation of
definitive Securities of such
series, the temporary Securities
of such series shall be
exchangeable for definitive
Securities of such series upon
surrender of the temporary
Securities of such series at the
office or agency of the Company
in a Place of Payment for that
series, without charge to the
Holder. Upon surrender for
cancellation of any one or more
temporary Securities of any
series (accompanied by any
non-matured coupons appertaining
thereto), the Company shall
execute and the Trustee shall
authenticate and deliver in
exchange therefor a like
principal amount of definitive
Securities of the same series of
authorized denominations;
provided, however, that no
definitive Bearer Security shall
be delivered in exchange for a
temporary Registered Security;
and provided further that a
definitive Bearer Security shall
be delivered in exchange for a
temporary Bearer Security only
in compliance with the
conditions set forth in Section
303. Until so exchanged, the
temporary Securities of any
series shall in all respects be
entitled to the same benefits
under this Indenture as
definitive Securities of such
series.
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in global form.
If temporary Securities of any series
are issued, the Company will cause
definitive Securities of that series to
be prepared without unreasonable delay.
After the preparation of definitive
Securities of such series, the
temporary Securities of such series
shall be exchangeable for definitive
Securities of such series upon
surrender of the temporary Securities
of such series at the office or agency
of the Company in a Place of Payment
for that series, without charge to the
Holder. Upon surrender for cancellation
of any one or more temporary Securities
of any series, the Company shall
execute and the Trustee shall
authenticate and deliver in exchange
therefor a like principal amount of
definitive Securities of the same
series of authorized denominations.
Until so exchanged, the temporary
Securities of any series shall in all
respects be entitled to the same
benefits under this Indenture as
definitive Securities of such series.
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(b) Unless otherwise provided as
contemplated in Section 301,
this Section 304(b) shall govern
the exchange of temporary
Securities issued in global form
other than through the
facilities of
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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DTC. If any such
temporary Security is issued in
global form, then such temporary
global Security shall, unless
otherwise provided therein, be
delivered to the London office
of a depositary or common
depositary (the “Common
Depositary”), for the benefit of
Euroclear and CEDEL.
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Without unnecessary delay but in
any event not later than the
date specified in, or determined
pursuant to the terms of, any
such temporary global Security
(the “Exchange Date”), the
Company shall deliver to the
Trustee definitive Securities,
in an aggregate principal amount
equal to the principal amount of
such temporary global Security,
executed by the Company. On or
after the Exchange Date, such
temporary global Security shall
be surrendered by the Common
Depositary to the Trustee, as
the Company’s agent for such
purpose, to be exchanged, in
whole or from time to time in
part, for definitive Securities
without charge, and the Trustee
shall authenticate and deliver,
in the name of Euroclear or
CEDEL, as the case may be, in
exchange for each portion of
such temporary global Security,
an equal aggregate principal
amount of definitive Securities
of or within the same series of
authorized denominations and of
like tenor as the portion of
such temporary global Security
to be exchanged. The definitive
Securities to be delivered in
exchange for any such temporary
global Security shall be in
bearer form, registered form,
permanent global bearer form or
permanent global registered
form, or any combination
thereof, as specified as
contemplated by Section 301,
and, if any combination thereof
is so specified, as requested by
the Common Depository; provided,
however, that, unless otherwise
specified in such temporary
global Security, upon such
presentation by the Common
Depositary, such temporary
global Security is accompanied
by a certificate dated the
Exchange Date or a subsequent
date and signed by Euroclear as
to the portion of
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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such temporary
global Security held for its
account then to be exchanged and
a certificate dated the Exchange
Date or a subsequent date and
signed by CEDEL as to the
portion of such temporary global
Security held for its account
then to be exchanged, each in
the form set forth in Exhibit
A-2 to this Indenture or in such
other form as may be established
pursuant to Section 301; and
provided further that definitive
Bearer Securities shall be
delivered in exchange for a
portion of a temporary global
Security only in compliance with
the requirements of Section 303.
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Unless otherwise specified in
such temporary global Security,
the interest of a beneficial
owner of Securities of a series
in a temporary global Security
shall be exchanged for
definitive Securities of the
same series and of like tenor
following the Exchange Date when
the account holder instructs
Euroclear or CEDEL, as the case
may be, to request such exchange
on his behalf and delivers to
Euroclear or CEDEL, as the case
may be, a certificate in the
form set forth in Exhibit A-1 to
this Indenture (or in such other
form as may be established
pursuant to Section 301), dated
no earlier than 15 days prior to
the Exchange Date, copies of
which certificate shall be
available from the offices of
Euroclear and CEDEL, the
Trustee, any Authenticating
Agent appointed for such series
of Securities and each Paying
Agent.
Unless otherwise
specified in such temporary
global Security, any such
exchange shall be made free of
charge to the beneficial owners
of such temporary global
Security, except that a Person
receiving definitive Securities
must bear the cost of insurance,
postage, transportation and the
like unless such Person takes
delivery of such definitive
Securities in person at the
offices of Euroclear or CEDEL.
Definitive Securities in bearer
form to be delivered in exchange
for any portion of a temporary
global Security shall be
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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delivered only outside the
United States.
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Until exchanged in full as
hereinabove provided, the
temporary Securities of any
series shall in all respects be
entitled to the same benefits
under this Indenture as
definitive Securities of the
same series and of like tenor
authenticated and delivered
hereunder, except that, unless
otherwise specified as
contemplated by Section 301,
interest payable on a temporary
global Security on an Interest
Payment Date for Securities of
such series occurring prior to
the applicable Exchange Date
shall be payable to Euroclear
and CEDEL on such Interest
Payment Date upon delivery by
Euroclear and CEDEL to the
Trustee of a certificate or
certificates in the form set
forth in Exhibit A-2 to this
Indenture (or in such other
forms as may be established
pursuant to Section 301), for
credit without further interest
on or after such Interest
Payment Date to the respective
accounts of Persons who are the
beneficial owners of such
temporary global Security on
such Interest Payment Date and
who have each delivered to
Euroclear or CEDEL, as the case
may be, a certificate dated no
earlier than 15 days prior to
the Interest Payment Date
occurring prior to such Exchange
Date in the form set forth as
Exhibit A-1 to this Indenture
(or in such other forms as may
be established pursuant to
Section 301). Notwithstanding
anything to the contrary herein
contained, the certifications
made pursuant to this paragraph
shall satisfy the certification
requirements of the preceding
two paragraphs of this Section
304(b) and of the third
paragraph of Section 303 of this
Indenture and the interests of
the Persons who are the
beneficial owners of the
temporary global Security with
respect to which such
certification was made will be
exchanged for definitive
Securities of the same series
and of like tenor on the
Exchange Date or the date of
certification if such date
occurs after the Exchange Date,
without further act or deed by
such beneficial owners. Except
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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as otherwise provided in this
paragraph, no payments of
principal or interest owing with
respect to a beneficial interest
in a temporary global Security
will be made unless and until
such interest in such temporary
global Security shall have been
exchanged for an interest in a
definitive Security. Any
interest so received by
Euroclear and CEDEL and not paid
as herein provided shall be
returned to the Trustee prior to
the expiration of two years
after such Interest Payment Date
in order to be repaid to the
Company.
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Events of Default
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Sections 501(5), 501(6), 501(7)
and 501(8) of the Base ProLogis
Indenture
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Sections 501(5), 501(6), 501(7) and
501(8) of the new AMB LP Indenture
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(5) a default under any bond,
debenture, note or other
evidence of indebtedness of the
Company, or under any mortgage,
indenture or other instrument of
the Company (including a default
with respect to Securities of
any series other than that
series) under which there may be
issued or by which there may be
secured any indebtedness of the
Company (or by any Subsidiary,
the repayment of which the
Company has guaranteed or for
which the Company is directly
responsible or liable as obligor
or guarantor), whether such
indebtedness now exists or shall
hereafter be created, which
default shall constitute a
failure to pay an aggregate
principal amount exceeding
$10,000,000 of such indebtedness
when due and payable after the
expiration of any applicable
grace period with respect
thereto and shall have resulted
in such indebtedness in an
aggregate principal amount
exceeding $10,000,000 becoming
or being declared due and
payable prior to the date on
which it would otherwise have
become due and payable, without
such indebtedness having been
discharged, or such acceleration
having been rescinded or
annulled, within a period of 10
days after there shall have been
given, by registered or
certified mail, to the Company
by the Trustee or to the Company
and the Trustee by the Holders
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(5) a default under any bond,
debenture, note or other evidence of
indebtedness of the Company, or under
any mortgage, indenture or other
instrument of the Company (including a
default with respect to Securities of
any series other than that series)
under which there may be issued or by
which there may be secured any
indebtedness of the Company (or by any
Subsidiary, the repayment of which the
Company has guaranteed or for which the
Company is directly responsible or
liable as obligor or guarantor),
whether such indebtedness now exists or
shall hereafter be created, which
default shall constitute a failure to
pay an aggregate principal amount
exceeding $50,000,000 of such
indebtedness when due and payable after
the expiration of any applicable grace
period with respect thereto and shall
have resulted in such indebtedness in
an aggregate principal amount exceeding
$50,000,000 becoming or being declared
due and payable prior to the date on
which it would otherwise have become
due and payable, without such
indebtedness having been discharged, or
such acceleration having been rescinded
or annulled, within a period of 10 days
after there shall have been given, by
registered or certified mail, to the
Company by the Trustee or to the
Company and the Trustee by the Holders
of at least 10% in principal amount of
the Outstanding Securities of that
series a written notice specifying such
default and requiring the
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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of at least 10% in principal
amount of the Outstanding
Securities of that series a
written notice specifying such
default and requiring the
Company to cause such
indebtedness to be discharged or
cause such acceleration to the
rescinded or annulled and
stating that such notice is a
“Notice of Default” hereunder;
or
(6) the entry by a court of
competent jurisdiction of one or
more judgments, orders or
decrees against the Company or
any of its Subsidiaries in an
aggregate amount (excluding
amounts covered by insurance) in
excess of $10,000,000 and such
judgments, orders or decrees
remain undischarged, unstayed
and unsatisfied in an aggregate
amount (excluding amounts
covered by insurance) in excess
of $10,000,000 for a period of
30 consecutive days; or
(7) the Company or any
Significant Subsidiary pursuant
to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an
order for relief against it in
an involuntary case,
(C) consents to the appointment
of a Custodian of it or for all
or substantially all of its
property, or
(D) makes a general assignment
for the benefit of its
creditors; or
(8) a court of competent
jurisdiction enters an order or
decree under any Bankruptcy Law
that:
(A) is for relief against the
Company or any Significant
Subsidiary in an involuntary
case,
(B) appoints a Custodian of the
Company or any Significant
Subsidiary or for all or
substantially all of either of
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Company to
cause such indebtedness to be
discharged or cause such acceleration
to the rescinded or annulled and
stating that such notice is a “Notice
of Default” hereunder; or
(6) the entry by a court of competent
jurisdiction of final judgments, orders
or decrees against the Company or any
of its Subsidiaries in an aggregate
amount (excluding amounts covered by
insurance) in excess of $50,000,000 and
such judgments, orders or decrees
remain undischarged, unstayed and
unsatisfied in an aggregate amount
(excluding amounts covered by
insurance) in excess of $50,000,000 for
a period of 60 consecutive days; or
(7) the Company, the General Partner or
any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order
for relief against it in an involuntary
case,
(C) consents to the appointment of a
Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the
benefit of its creditors; or
(8) a court of competent jurisdiction
enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company,
the General Partner or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the
Company, the General Partner or any
Significant Subsidiary or for all or
substantially all of either of its
property, or
(C) orders the liquidation of the
Company, the General Partner or any
Significant Subsidiary,
and the order or decree remains
unstayed and
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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its property, or
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in effect for 90 days; or
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(C) orders the liquidation of
the Company or any Significant
Subsidiary, and the order or
decree remains unstayed and in
effect for 90 days; or
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Events of Default
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Sections 501(5) and 501(6) of
the Base ProLogis Indenture, as
amended by Section 2.3 of the
Second Supplemental Indenture
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Sections 501(5) and 501(6) of the new
AMB LP Indenture
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Pursuant to Section 901(5) of
the Base Indenture, clauses (5)
and (6) of Section 501 of the
Base Indenture are hereby
amended for the benefit of the
Holders of Securities issued on
or after the date of this
Supplemental Indenture, unless
otherwise provided in the
Officers’ Certificate or
supplemental indenture
authorizing any series of such
Securities, to provide that
references to $10,000,000
contained in clauses (5) and (6)
of Section 501 of the Indenture
are amended to be $50,000,000;
provided, however, that the
provisions of this Section 2.3
shall become effective only when
there are no Securities
Outstanding of any series
created prior to the execution
of this Supplemental Indenture.
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(5) a default under any bond,
debenture, note or other evidence of
indebtedness of the Company, or under
any mortgage, indenture or other
instrument of the Company (including a
default with respect to Securities of
any series other than that series)
under which there may be issued or by
which there may be secured any
indebtedness of the Company (or by any
Subsidiary, the repayment of which the
Company has guaranteed or for which the
Company is directly responsible or
liable as obligor or guarantor),
whether such indebtedness now exists or
shall hereafter be created, which
default shall constitute a failure to
pay an aggregate principal amount
exceeding $50,000,000 of such
indebtedness when due and payable after
the expiration of any applicable grace
period with respect thereto and shall
have resulted in such indebtedness in
an aggregate principal amount exceeding
$50,000,000 becoming or being declared
due and payable prior to the date on
which it would otherwise have become
due and payable, without such
indebtedness having been discharged, or
such acceleration having been rescinded
or annulled, within a period of 10 days
after there shall have been given, by
registered or certified mail, to the
Company by the Trustee or to the
Company and the Trustee by the Holders
of at least 10% in principal amount of
the Outstanding Securities of that
series a written notice specifying such
default and requiring the Company to
cause such indebtedness to be
discharged or cause such acceleration
to the rescinded or annulled and
stating that such notice is a “Notice
of Default” hereunder; or
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(6) the entry by a court of competent
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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jurisdiction of final judgments, orders
or decrees against the Company or any
of its Subsidiaries in an aggregate
amount (excluding amounts covered by
insurance) in excess of $50,000,000 and
such judgments, orders or decrees
remain undischarged, unstayed and
unsatisfied in an aggregate amount
(excluding amounts covered by
insurance) in excess of $50,000,000 for
a period of 60 consecutive days; or
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Events of Default
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Sections 501(5) and 501(6) of
the Base ProLogis Indenture, as
amended by Section 2.2 of the
Eighth Supplemental Indenture
and the Ninth Supplemental
Indenture
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Sections 501(5) and 501(6) of the new
AMB LP Indenture
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Pursuant to Section 901(5) of
the Base Indenture, clauses (5)
and (6) of Section 501 of the
Base Indenture are hereby
amended for the benefit of the
Holders of Securities issued on
or after the date of this
Supplemental Indenture, unless
otherwise provided in the
Officers’ Certificate or
supplemental indenture
authorizing any series of such
Securities, to provide that
references to $10,000,000
contained in clauses (5) and (6)
of Section 501 of the Indenture
are amended to be $50,000,000.
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(5) a default under any bond,
debenture, note or other evidence of
indebtedness of the Company, or under
any mortgage, indenture or other
instrument of the Company (including a
default with respect to Securities of
any series other than that series)
under which there may be issued or by
which there may be secured any
indebtedness of the Company (or by any
Subsidiary, the repayment of which the
Company has guaranteed or for which the
Company is directly responsible or
liable as obligor or guarantor),
whether such indebtedness now exists or
shall hereafter be created, which
default shall constitute a failure to
pay an aggregate principal amount
exceeding $50,000,000 of such
indebtedness when due and payable after
the expiration of any applicable grace
period with respect thereto and shall
have resulted in such indebtedness in
an aggregate principal amount exceeding
$50,000,000 becoming or being declared
due and payable prior to the date on
which it would otherwise have become
due and payable, without such
indebtedness having been discharged, or
such acceleration having been rescinded
or annulled, within a period of 10 days
after there shall have been given, by
registered or certified mail, to the
Company by the Trustee or to the
Company and the Trustee by the Holders
of at least 10% in principal amount of
the Outstanding Securities of that
series a written notice specifying such
default and requiring the Company to
cause such indebtedness to be
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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discharged or cause such acceleration
to the rescinded or annulled and
stating that such notice is a “Notice
of Default” hereunder; or
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(6) the entry by a court of competent
jurisdiction of final judgments, orders
or decrees against the Company or any
of its Subsidiaries in an aggregate
amount (excluding amounts covered by
insurance) in excess of $50,000,000 and
such judgments, orders or decrees
remain undischarged, unstayed and
unsatisfied in an aggregate amount
(excluding amounts covered by
insurance) in excess of $50,000,000 for
a period of 60 consecutive days; or
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Reports by Company
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Section N/A
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Section 703(b) of the new AMB LP
Indenture
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There is no comparable provision.
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(b) Delivery of such reports,
information, and documents to the
Trustee is for informational purposes
only and the Trustee’s receipt of such
shall not constitute constructive
notice of any information contained
therein or determinable from
information contained therein,
including the Company’s compliance with
any of its covenants hereunder (as to
which the Trustee is entitled to
conclusively rely exclusively on
Officers’ Certificates).
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Supplemental
Indentures
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Section 901(5) of the Base
ProLogis Indenture
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Section 901(5) of the new AMB LP
Indenture
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(5) to change or eliminate any
of the provisions of this
Indenture, provided that any
such change or elimination shall
become effective only when there
is no Security Outstanding of
any series created prior to the
execution of such supplemental
indenture which is entitled to
the benefit of such provision;
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(5) to add to, change or eliminate any
of the provisions of this Indenture in
respect of one or more series of
Securities, provided that any such
addition, change or elimination (i)
shall neither (A) apply to any Security
of any series created prior to the
execution of such supplemental
indenture and entitled to the benefit
of such provision nor (B) modify the
rights of the Holder of any such
Security with respect to such provision
or (ii) shall become effective only
when there is no such Security
Outstanding; or
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Limitations on
Incurrence of Debt
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Section 1004(c) of the Base
ProLogis Indenture, as amended
by Section 2.1 of the Eighth
Supplemental Indenture and the
Ninth Supplemental Indenture
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Section N/A
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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(c) In addition to the
limitation set forth in
subsections (a) and (b) of this
Section 1004, no Subsidiary may
incur any Unsecured Debt;
provided, however, that the
Company or a Subsidiary may
acquire an entity that becomes a
Subsidiary that has Unsecured
Debt if the incurrence of such
Debt (including any guarantees
of such Debt assumed by the
Company or any Subsidiary) was
not intended to evade the
foregoing restrictions and the
incurrence of such Debt
(including any guarantees of
such Debt assumed by the Company
or any Subsidiary) would
otherwise be permitted under
this Indenture.
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There is no comparable provision.
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Limitations on
Incurrence of Debt
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Section 1004(d) and (e) of the
Base ProLogis Indenture, as
amended by Section 2.1 of the
Eighth Supplemental Indenture
and the Ninth Supplemental
Indenture
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Section 1004(c) and (d) of the new AMB
LP Indenture
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(d) In addition to the
limitation set forth in
subsections (a), (b) and (c) of
this Section 1004, the Company
and its Subsidiaries may not at
any time own Total Unencumbered
Assets equal to less than 150%
of the aggregate outstanding
principal amount of the
Unsecured Debt and Pari Passu
Debt of the Company and its
Subsidiaries on a consolidated
basis.
(e) In addition to the
limitation set forth in
subsections (a), (b), (c) and
(d) of this Section 1004, the
Company will not, and will not
permit any Subsidiary to, incur
any Debt for borrowed money
secured by any mortgage, lien,
charge, pledge, encumbrance or
security interest upon any of
the property of the Company or
any Subsidiary, whether owned at
the date hereof or hereafter
acquired (other than Pari Passu
Debt), if, immediately after
giving effect to the incurrence
of such additional Debt and the
application of the proceeds
thereof, the aggregate principal
amount of all outstanding Debt
of the Company and its
Subsidiaries on a consolidated
basis for borrowed money which
is secured by any mortgage,
lien, charge, pledge,
encumbrance or security
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(c) In addition to the limitation set
forth in subsections (a) and (b) of
this Section 1004, the Company and its
Subsidiaries may not at any time own
Total Unencumbered Assets equal to less
than 150% of the aggregate outstanding
principal amount of the Unsecured Debt
of the Company and its Subsidiaries on
a consolidated basis.
(d) In addition to the limitation set
forth in subsections (a), (b) and (c)
of this Section 1004, the Company will
not, and will not permit any Subsidiary
to, incur any Debt for borrowed money
secured by any mortgage, lien, charge,
pledge, encumbrance or security
interest upon any of the property of
the Company or any Subsidiary, whether
owned at the date hereof or hereafter
acquired, if, immediately after giving
effect to the incurrence of such
additional Debt and the application of
the proceeds thereof, the aggregate
principal amount of all outstanding
Debt of the Company and its
Subsidiaries on a consolidated basis
for borrowed money which is secured by
any mortgage, lien, charge, pledge,
encumbrance or security interest on
property of the Company or any
Subsidiary is greater than 40% of the
sum of (without duplication): (i) Total
Assets as of
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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interest
on property of the Company or
any Subsidiary (excluding any
Pari Passu Debt) is greater than
40% of the sum of (without
duplication): (i) Total Assets
as of the end of the calendar
quarter covered in the Company’s
Annual Report on Form 10-K or
Quarterly Report on Form 10-Q,
as the case may be, most
recently filed with the
Commission (or, if such filing
is not permitted under the
Exchange Act, with the Trustee)
prior to the incurrence of such
additional Debt and (ii) the
purchase price of any real
estate assets or mortgages
receivable acquired, and the
amount of any securities
offering proceeds received (to
the extent that such proceeds
were not used to acquire real
estate assets or mortgages
receivable or used to reduce
Debt), by the Company or any
Subsidiary since the end of such
calendar quarter, including
those proceeds obtained in
connection with the incurrence
of such additional Debt.
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the end of the calendar
quarter covered in the Company’s Annual
Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, most
recently filed with the Commission (or,
if such filing is not permitted under
the Exchange Act, with the Trustee)
prior to the incurrence of such
additional Debt and (ii) the purchase
price of any real estate assets or
mortgages receivable acquired, and the
amount of any securities offering
proceeds received (to the extent that
such proceeds were not used to acquire
real estate assets or mortgages
receivable or used to reduce Debt), by
the Company or any Subsidiary since the
end of such calendar quarter, including
those proceeds obtained in connection
with the incurrence of such additional
Debt.
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Insurance
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Section 1007 of the Base
ProLogis Indenture
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Section 1007 of the new AMB LP Indenture
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The Company will, and will cause
each of its Subsidiaries to,
keep all of its insurable
properties insured against loss
or damage at least equal to
their then full insurable value
with financially sound and
reputable insurance companies.
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The Company will, and will cause each
of its Subsidiaries to, keep in force
upon all of its properties and
operations policies of insurance
carried with responsible companies in
such amounts and covering all such
risks as shall be customary in the
industry in accordance with prevailing
market conditions and availability.
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Provision of
Financial
Information
|
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Section 1009 of the Base
ProLogis Indenture
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Section 1009 of the new AMB LP Indenture
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Whether or not the Company is
subject to Section 13 or 15(d)
of the Exchange Act, the Company
will, to the extent permitted
under the Exchange Act, file
with the Commission the annual
reports, quarterly reports and
other documents which the
Company would have been required
to file with the Commission
pursuant to such Section 13 or
15(d) (the “Financial
Statements”) if the Company were
so subject, such documents to be
filed with the Commission on or
prior to
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Whether or not the Company or the
General Partner are subject to Section
13 or 15(d) of the Exchange Act, the
Company and the General Partner will,
to the extent permitted under the
Exchange Act, file with the Commission
the annual reports, quarterly reports
and other documents which the Company
and the General Partner would have been
required to file with the Commission
pursuant to such Section 13 or 15(d)
(the “Financial Statements”) if the
Company and the General Partner were so
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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the respective dates
(the “Required Filing Dates”) by
which the Company would have
been required so to file such
documents if the Company were so
subject.
The Company will also in any
event (x) within 15 days of each
Required Filing Date (i)
transmit by mail to all Holders,
as their names and addresses
appear in the Security Register,
without cost to such Holders,
copies of the annual reports and
quarterly reports which the
Company would have been required
to file with the Commission
pursuant to Section 13 or 15(d)
of the Exchange Act if the
Company were subject to such
Sections, and (ii) file with the
Trustee copies of annual
reports, quarterly reports and
other documents which the
Company would have been required
to file with the Commission
pursuant to Section 13 or 15(d)
of the Exchange Act if the
Company were subject to such
Sections and (y) if filing such
documents by the Company with
the Commission is not permitted
under the Exchange Act, promptly
upon written request and payment
of the reasonable cost of
duplication and delivery, supply
copies of such documents to any
prospective Holder.
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subject, such documents to be filed
with the Commission on or prior to the
respective dates (the “Required Filing
Dates”) by which the Company and the
General Partner would have been
required so to file such documents if
the Company and the General Partner
were so subject.
The Company and the General Partner
will also in any event (x) within 15
days of each Required Filing Date (i)
transmit by mail or electronic
transmittal to all Holders, as their
names and addresses appear in the
Security Register, without cost to such
Holders, copies of the annual reports
and quarterly reports which the Company
and the General Partner are required to
file or would have been required to
file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act
if the Company and the General Partner
were subject to such Sections, and (ii)
file with the Trustee copies of annual
reports, quarterly reports and other
documents which the Company and the
General Partner would have been
required to file with the Commission
pursuant to Section 13 or 15(d) of the
Exchange Act if the Company and the
General Partner were subject to such
Sections and (y) if filing such
documents by the Company or the General
Partner with the Commission is not
permitted under the Exchange Act,
promptly upon written request and
payment of the reasonable cost of
duplication and delivery, supply copies
of such documents to any prospective
Holder.
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Provision of
Financial
Information
|
|
Section 1009 of the Base
ProLogis Indenture, as amended
by Section 2.2 of the Second
Supplemental Indenture and the
Seventh Supplemental Indenture
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Section 1009 of the new AMB LP Indenture
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Whether or not the Company is
subject to Section 13 or 15(d)
of the Exchange Act, the Company
will, to the extent permitted
under the Exchange Act, file
with the Commission the annual
reports, quarterly reports and
other documents which the
Company would have been required
to file with the Commission
pursuant to such Section 13 or
15(d) (the “Financial
Statements”) if the Company
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Whether or not the Company or the
General Partner are subject to Section
13 or 15(d) of the Exchange Act, the
Company and the General Partner will,
to the extent permitted under the
Exchange Act, file with the Commission
the annual reports, quarterly reports
and other documents which the Company
and the General Partner would have been
required to file with the Commission
pursuant to such Section 13 or
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ProLogis Notes without giving effect to
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|
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the Proposed Amendments to the
|
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|
ProLogis Indenture
|
|
AMB LP Notes
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were
so subject, such documents to be
filed with the Commission on or
prior to the respective dates
(the “Required Filing Dates”) by
which the Company would have
been required so to file such
documents if the Company were so
subject.
The Company will also in any
event (x) within 15 days of each
Required Filing Date (i)
transmit by mail or electronic
transmittal to all Holders, as
their names and addresses appear
in the Security Register,
without cost to such Holders,
copies of the annual reports and
quarterly reports which the
Company is required to file or
would have been required to file
with the Commission pursuant to
Section 13 or 15(d) of the
Exchange Act if the Company were
subject to such Sections, and
(ii) file with the Trustee
copies of annual reports,
quarterly reports and other
documents which the Company
would have been required to file
with the Commission pursuant to
Section 13 or 15(d) of the
Exchange Act if the Company were
subject to such Sections and (y)
if filing such documents by the
Company with the Commission is
not permitted under the Exchange
Act, promptly upon written
request and payment of the
reasonable cost of duplication
and delivery, supply copies of
such documents to any
prospective Holder.
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15(d) (the “Financial Statements”) if the
Company and the General Partner were so
subject, such documents to be filed
with the Commission on or prior to the
respective dates (the “Required Filing
Dates”) by which the Company and the
General Partner would have been
required so to file such documents if
the Company and the General Partner
were so subject.
The Company and the General Partner
will also in any event (x) within 15
days of each Required Filing Date (i)
transmit by mail or electronic
transmittal to all Holders, as their
names and addresses appear in the
Security Register, without cost to such
Holders, copies of the annual reports
and quarterly reports which the Company
and the General Partner are required to
file or would have been required to
file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act
if the Company and the General Partner
were subject to such Sections, and (ii)
file with the Trustee copies of annual
reports, quarterly reports and other
documents which the Company and the
General Partner would have been
required to file with the Commission
pursuant to Section 13 or 15(d) of the
Exchange Act if the Company and the
General Partner were subject to such
Sections and (y) if filing such
documents by the Company or the General
Partner with the Commission is not
permitted under the Exchange Act,
promptly upon written request and
payment of the reasonable cost of
duplication and delivery, supply copies
of such documents to any prospective
Holder.
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Statements as to
Compliance
|
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Section 1010 of the Base
ProLogis Indenture
|
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Section 1010 of the new AMB LP Indenture
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The Company will deliver to the
Trustee, within 120 days after
the end of each fiscal year, a
brief certificate from the
principal executive officer,
principal financial officer or
principal accounting officer as
to his or her knowledge of the
Company’s compliance with all
conditions and covenants under
this Indenture verified in the
case of conditions precedent
compliance with
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The Company will deliver to the
Trustee, within 120 days after the end
of each fiscal year, a brief
certificate from its General Partner’s
principal executive officer, principal
financial officer or principal
accounting officer as to his or her
knowledge of the Company’s compliance
with all conditions and covenants under
this Indenture and, in the event of any
noncompliance, specifying such
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ProLogis Notes without giving effect to
|
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|
|
the Proposed Amendments to the
|
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|
|
ProLogis Indenture
|
|
AMB LP Notes
|
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which is subject
to verification by accountants
by the certificate or opinion of
an accountant and, in the event
of any noncompliance, specifying
such noncompliance and the
nature and status thereof. For
purposes of this Section 1010,
such compliance shall be
determined without regard to any
period of grace or requirement
of notice under this Indenture.
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noncompliance and the nature and status
thereof, provided that if the Company
has been succeeded to by a corporate
successor pursuant to the provisions
hereof such certificate will be from
such successor’s principal executive
officer, principal financial officer or
principal accounting officer. For
purposes of this Section 1010, such
compliance shall be determined without
regard to any period of grace or
requirement of notice under this
Indenture.
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Guarantees
|
|
Section N/A
|
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Section 1601 of the new AMB LP Indenture
|
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There is no comparable provision.
|
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The provisions of this Article shall be
applicable to the Securities and
Guarantees. Each Guarantor (which term
includes any successor Person under
this Indenture) for consideration
received hereby jointly and severally
unconditionally and irrevocably
guarantees on a senior basis (each a
“Guarantee”, and collectively, the
“Guarantees”) to the Holders from time
to time of the Securities (a) the full
and prompt payment of the principal of
and any premium, if any, on any
Security when and as the same shall
become due, whether at the maturity
thereof, by acceleration, redemption or
otherwise and (b) the full and prompt
payment of any interest on any Security
when and as the same shall become due
and payable. Each and every default in
the payment of the principal of or
interest or any premium on any Security
shall give rise to a separate cause of
action under each applicable Guarantee,
and separate suits may be brought under
each applicable Guarantee as each cause
of action arises. The obligations of
the Guarantors hereunder shall be
evidenced by Guarantees affixed to the
Securities issued hereunder.
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An Event of Default under this
Indenture or the Securities shall
constitute an event of default under
the Guarantees, and shall entitle the
Holders to accelerate the obligations
of the Guarantors hereunder in the same
manner and to the same extent as the
obligations of the Company.
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The obligations of the Guarantors
hereunder shall be absolute and
unconditional and shall
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136
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
|
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AMB LP Notes
|
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remain in full
force and effect until the entire
principal and interest and any premium
on the Securities shall have been paid
or provided for in accordance with
provisions of this Indenture, and,
unless otherwise expressly set forth in
this Article, such obligations shall
not be affected, modified or impaired
upon the happening from time to time of
any event, including without limitation
any of the following, whether or not
with notice to, or the consent of, the
Guarantors:
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(a) the failure to give notice to the
Guarantors of the occurrence of an
Event of Default;
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(b) the waiver, surrender, compromise,
settlement, release or termination of
the payment, performance or observance
by the Company or the Guarantors of any
or all of the obligations, covenants or
agreements of either of them contained
in this Indenture or the Securities;
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(c) the acceleration, extension or any
other changes in the time for payment
of any principal of or interest or any
premium on any Security or for any
other payment under this Indenture or
of the time for performance of any
other obligations, covenants or
agreements under or arising out of this
Indenture or the Securities;
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(d) the modification or amendment
(whether material or otherwise) of any
obligation, covenant or agreement set
forth in this Indenture or the
Securities;
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(e) the taking or the omission of any
of the actions referred to in this
Indenture and in any of the actions
under the Securities;
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(f) any failure, omission, delay or
lack on the part of the Trustee to
enforce, assert or exercise any right,
power or remedy conferred on the
Trustee in this Indenture, or any other
action or acts on the part of the
Trustee or any of the Holders from time
to time of the Securities;
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(g) the voluntary or involuntary
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137
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
|
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AMB LP Notes
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liquidation, dissolution, sale or other
disposition of all or substantially all
the assets, marshaling of assets and
liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit
of creditors, reorganization,
arrangement, composition with creditors
or readjustment of, or other similar
proceedings affecting the Guarantors or
the Company or any of the assets of any
of them, or any allegation or contest
of the validity of the Guarantee in any
such proceedings;
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(h) to the extent permitted by law, the
release or discharge by operation of
law of the Guarantors from the
performance or observance of any
obligation, covenant or agreement
contained in this Indenture;
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(i) to the extent permitted by law, the
release or discharge by operation of
law of the Company from the performance
or observance of any obligation,
covenant or agreement contained in this
Indenture;
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(j) the default or failure of the
Company or the Trustee fully to perform
any of its obligations set forth in
this Indenture or the Securities;
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(k) the invalidity, irregularity or
unenforceability of this Indenture or
the Securities or any part of any
thereof;
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(l) any judicial or governmental action
affecting the Company or any Securities
or consent or indulgence granted by the
Company by the Holders or by the
Trustee; or
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(m) the recovery of any judgment
against the Company or any action to
enforce the same or any other
circumstance which might constitute a
legal or equitable discharge of a
surety or guarantor.
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The Guarantees shall remain in full
force and effect and continue to be
effective should any petition be filed
by or against the Company for
liquidation or reorganization of the
Company, should the Company become
insolvent or make an assignment for the
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
|
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ProLogis Indenture
|
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AMB LP Notes
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benefit of creditors or should a
receiver or trustee be appointed for
all or any significant part of the
Company’s assets, and shall, to the
fullest extent permitted by law,
continue to be effective or be
reinstated, as the case may be, if at
any time any payment in respect of the
Securities is, pursuant to applicable
law, rescinded or reduced in amount, or
must otherwise be restored or returned
by any obligee on the Securities,
whether as a “voidable preference,”
“fraudulent transfer” or otherwise, all
as though such payment had not been
made. In the event that any payment, or
any part thereof, is rescinded,
reduced, restored or returned, the
Securities shall, to the fullest extent
permitted by law, be reinstated and
deemed reduced only by such amount paid
and not so rescinded, reduced, restored
or returned.
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The Guarantors shall have the right to
seek contribution from any non-paying
Guarantor so long as the exercise of
such right does not impair the rights
of the Holders under the Guarantees.
The validity and enforceability of any
Guarantee shall not be affected by the
fact that it is not affixed to any
particular Security.
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Each of the Guarantors hereby agrees
that its Guarantee set forth in this
Section shall remain in full force and
effect notwithstanding any failure to
endorse on each Security a notation of
such Guarantee.
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If an officer of a Guarantor whose
signature is on this Indenture or a
Security no longer holds that office at
the time the Trustee authenticates such
Security or at any time thereafter,
such Guarantor’s Guarantee of such
Security shall be valid nevertheless.
The delivery of any Security by the
Trustee, after the authentication
thereof hereunder shall constitute due
delivery of any Guarantee set forth in
this Indenture on behalf of the
Guarantor.
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139
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ProLogis Notes without giving effect to
|
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|
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the Proposed Amendments to the
|
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|
|
|
|
ProLogis Indenture
|
|
AMB LP Notes
|
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Proceedings Against
Guarantors
|
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Section N/A
|
|
Section 1602 of the new AMB LP Indenture
|
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|
|
|
|
|
|
|
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There is no comparable provision.
|
|
In the event of a default in the
payment of principal of or any premium
on any Security when and as the same
shall become due, whether at the Stated
Maturity thereof, by acceleration, call
for redemption or otherwise, or in the
event of a default in the payment of
any interest on any Security when and
as the same shall become due, the
Trustee shall have the right to proceed
first and directly against the
Guarantors under this Indenture without
first proceeding against the Company or
exhausting any other remedies which it
may have and without resorting to any
other Security held by the Trustee.
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The Trustee shall have the right, power
and authority to do all things it deems
necessary or otherwise advisable to
enforce the provisions of this
Indenture relating to the Guarantees
and protect the interests of the
Holders of the Securities and, in the
event of a default in payment of the
principal of or any premium on any
Security when and as the same shall
become due, whether at the Stated
Maturity thereof, by acceleration, call
for redemption or otherwise, or in the
event of a default in the payment of
any interest on any Security when and
as the same shall become due, the
Trustee may institute or appear in such
appropriate judicial proceedings as the
Trustee shall deem most effectual to
protect and enforce any of its rights
and the rights of the Holders, whether
for the specific enforcement of any
covenant or agreement in this Indenture
relating to the Guarantee or in aid of
the exercise of any power granted
herein, or to enforce any other proper
remedy. Without limiting the generality
of the foregoing, in the event of a
default in payment of the principal of
or interest or any premium on any
Security when due, the Trustee may
institute a judicial proceeding for the
collection of the sums so due and
unpaid, and may prosecute such
proceeding to judgment or final decree,
and may enforce the same against the
Guarantors and collect the moneys
adjudged or decreed to be payable in
the manner provided by law out of the
property of the
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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Guarantors, wherever situated.
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Guarantees for
Benefit of Holders
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Section N/A
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Section 1603 of the new AMB LP Indenture
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There is no comparable provision.
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The Guarantees contained in this
Indenture are entered into by the
Guarantors for the benefit of the
Holders from time to time of the
Securities. Such provisions shall not
be deemed to create any right in, or to
be in whole or in part for the benefit
of, any person other than the Trustee,
the Guarantors, the Holders from time
to time of the Securities, and their
permitted successors and assigns.
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Merger or
Consolidation of
Guarantors
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Section N/A
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Section 1604 of the new AMB LP Indenture
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There is no comparable provision.
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Each Guarantor will not, in any
transaction or series of related
transactions, consolidate with, or
sell, lease, assign, transfer or
otherwise convey all or substantially
all of its assets to, or merge with or
into, any other Person unless (i)
either such Guarantor shall be the
continuing Person, or the successor
Person (if other than such Guarantor)
formed by or resulting from any such
consolidation or merger or which shall
have received the transfer of such
assets is a corporation, partnership,
limited liability company or other
entity organized and existing under the
laws of the United States of America or
a State thereof or the District of
Columbia and shall expressly assume, by
supplemental indenture executed by such
successor and delivered by it to the
Trustee (which supplemental indenture
shall comply with Article Nine hereof
and shall be reasonably satisfactory to
the Trustee), all of such Guarantor’s
obligations with respect to Securities
Outstanding and the observance of all
of the covenants and conditions
contained in this Indenture and its
Guarantee to be performed or observed
by the Guarantor; (ii) immediately
after giving effect to such
transaction, no Event of Default, and
no event which, after notice or the
lapse of time, or both, would become an
Event of Default, shall have occurred
and shall be continuing; and (iii) such
Guarantor shall have delivered
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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to the
Trustee the Officers’ Certificate and
Opinion of Counsel required pursuant to
this Section. In the event that such
Guarantor is not the continuing
corporation, then, for purposes of
clause (ii) of the preceding sentence,
the successor shall be deemed to be
such “Guarantor” referred to in such
clause (ii). Any consolidation, merger,
sale, lease, assignment, transfer or
conveyance permitted under this Section
is also subject to the condition
precedent that the Trustee receive an
Officers’ Certificate and an Opinion of
Counsel to the effect that any such
consolidation, merger, sale, lease,
assignment, transfer or conveyance, and
the assumption by any successor,
complies with the provisions of this
Article and that all conditions
precedent herein provided for relating
to such transaction have been complied
with.
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Additional
Guarantors
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Section N/A
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Section 1605 of the new AMB LP Indenture
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There is no comparable provision.
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Any Person may become a Guarantor by
executing and delivering to the Trustee
(a) a supplemental indenture, which
subjects such person to the provisions
of this Indenture as a Guarantor, and
(b) an Opinion of Counsel to the effect
that such supplemental indenture has
been duly authorized and executed by
such person and constitutes the legal,
valid, binding and enforceable
obligation of such person (subject to
such customary exceptions concerning
fraudulent conveyance laws, creditors’
rights and equitable principles).
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Guarantee
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Section N/A
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Section 10.01 of the new supplemental
indentures to the new AMB LP Indenture
for each series of AMB LP Exchangeable
Notes
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There is no comparable provision.
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Article Sixteen of the Base Indenture
shall be applicable to the Notes.
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Exclusion of
Certain Provisions
From Base Indenture
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Section 4.05 of the ProLogis
Convertible Notes Supplemental
Indentures
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Section 4.05 of the new supplemental
indentures to the new AMB LP Indenture
for each series of AMB LP Exchangeable
Notes
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Section 1004, Section 1006,
Section 1007 and Section 1011 of
the Base Indenture shall not
apply to the
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Section 1004, Section 1006,
Section 1007, Section 1011 and Article
Fourteen of the Base Indenture shall
not apply to the Notes.
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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Notes.
Section 1002, Section 1003,
Section 1005, Section 1008,
Section 1009 (as amended by
Section 2.2 of the Second
Supplemental Indenture to the
Base Indenture), Section 1010
and Section 1012 of the Base
Indenture shall be applicable to
the Notes.
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Section 1002,
Section 1003, Section 1005,
Section 1008, Section 1009,
Section 1010 and Section 1012 of the
Base Indenture shall be applicable to
the Notes.
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Notice of Redemption
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Section N/A
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Section 3.03(d) of the new supplemental
indenture governing the AMB LP 3.250%
2015 Exchangeable Notes
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There is no comparable provision.
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(d) whether the Company will satisfy
its Exchange Obligation with respect to
any Notes called for redemption that
are surrendered for exchange in cash,
shares of Common Stock or both as
provided herein; provided that the
Company may not provide notice of a
redemption of Notes at the Company’s
option that specifies that the Company
will settle exchanges of Notes prior to
such redemption in cash and shares of
Common Stock unless, at the time of
such notice, the Company has available
to it a sufficient number of authorized
shares of Common Stock to satisfy its
Exchange Obligation in respect of the
Notes to be redeemed.
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Exchange Procedures
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Section 8.02(a) and (b) of the
Tenth Supplemental Indenture
(a) (1) The Company shall
settle its Conversion
Obligations entirely in Common
Shares. In satisfying its
Conversion Obligations, the
Company shall deliver a number
of Common Shares equal to (i)
the aggregate principal amount
of Notes to be converted divided
by $1,000, multiplied by (ii)
the applicable Conversion Rate
(which shall include any
increases to reflect any
Additional Shares that such
Holder is entitled to receive
pursuant to Section 8.01(g)
above). The Company shall
deliver such Common Shares,
together with any cash in lieu
of fractional Common Shares as
set forth pursuant to clause (k)
below, on the third Business Day
immediately following the
applicable Conversion Date.
Notwithstanding the preceding
sentence, if any calculation
required in order to
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Section 8.02(a) and (b) of the new
supplemental indenture governing the
AMB LP 3.250% 2015 Exchangeable Notes
(a) (1) The Company shall settle its
Exchange Obligations as described in
Section 8.02(a)(3), unless, within the
applicable time period specified in
this Section 8.02(a)(1), the Company
elects to settle its Exchange
Obligations as described in Section
8.02(a)(2) or Section 8.02(a)(4). The
cash and/or shares of Common Stock
which the Company is required to
deliver in accordance with this Section
8.02 in settlement of its Exchange
Obligations is referred to herein as
the “Settlement Amount.” If the
Company desires to settle its Exchange
Obligations as described in Section
8.02(a)(2) or Section 8.02(a)(4), the
Company shall notify each exchanging
Noteholder by notice to the Trustee
(for further distribution to
Noteholders) of the method the Company
will choose to satisfy its Exchange
Obligations no later than the second
Trading Day immediately following
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143
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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determine
the number of Common Shares to
be delivered by the Company in
respect of a particular
conversion is based upon data
that will not be available to
the Company on the applicable
Conversion Date, the Company
shall be entitled to delay
settlement of that conversion
until the third Business Day
after the relevant data become
available.
(b)
Intentionally Omitted
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the Company’s receipt of a Notice of
Exchange from such Holder, and such
notice shall specify the section of
this Fourth Supplemental Indenture
pursuant to which the Company is
electing to satisfy its exchange
obligations. The Company shall treat
all Noteholders exchanging on the same
Trading Day in the same manner;
however, the Company shall not have any
obligation to settle its Exchange
Obligations arising on different
Trading Days in the same manner.
(2) If the Company has elected, within
the applicable time periods specified
in Section 8.02(a)(1), to settle its
Exchange Obligations as described in
this Section 8.02(a)(2), the Company
shall have the right to settle its
Exchange Obligations entirely in shares
of Common Stock. If the Company elects
to satisfy its Exchange Obligation
entirely in shares of Common Stock, the
Company shall deliver a number of
shares of Common Stock equal to (i) the
aggregate principal amount of Notes to
be exchanged divided by $1,000,
multiplied by (ii) the applicable
Exchange Rate (which shall include any
increases to reflect any Additional
Shares that such Holder is entitled to
receive pursuant to Section 8.01(g)
above). The Company shall deliver such
shares of Common Stock as soon as
practicable after it has notified the
exchanging Holder, pursuant to Section
8.02(a)(1) above, that it has elected
to satisfy its Exchange Obligation
entirely in shares of Common Stock.
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(3) If the Company does not elect,
within the applicable time periods
specified in Section 8.02(a)(1), to
settle its Exchange Obligations as
described in Section 8.02(a)(2) or
8.02(a)(4), the Company shall settle
its Exchange Obligations as described
in this Section 8.02(a)(3), subject to
Section 8.02(b) hereof. The Company
shall deliver in respect of each $1,000
principal amount of Notes being
exchanged a Settlement Amount equal to
the sum of the Daily Settlement Amounts
for each of the 20 consecutive Trading
Days during the Observation Period, on
the third Trading
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144
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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Day immediately
following the last day of the related
Observation Period; provided that the
Company will deliver cash in lieu of
fractional shares of Common Stock as
set forth pursuant to clause (k) below.
The Daily Settlement Amounts shall be
determined by the Company promptly
following the last day of the
Observation Period.
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(4) If the Company has elected, within
the applicable time periods specified
in Section 8.02(a)(1), to settle its
Exchange Obligations as described in
this Section 8.02(a)(4), the Company
shall have the right to settle all or a
portion of the amount by which the
Daily Exchange Value exceeds $50 in
cash in accordance with this Section
8.02(a)(4). In such case, the Company
shall specify a percentage of the
amount by which the Daily Exchange
Value exceeds $50 that will be settled
in cash, or the “cash percentage.” The
Company will inform exchanging Holders
by notice to the Trustee (for further
distribution to Noteholders) no later
than two Trading Days prior to the
first day of the applicable Observation
Period if it elects to pay cash upon
exchange of the Notes and shall specify
in such notice (the “cash percentage
notice”) the applicable cash
percentage. If the Company elects to
specify a cash percentage, the amount
of cash that the Company shall deliver
in respect of each Trading Day in the
applicable Observation Period shall
equal the product of (w) the cash
percentage and (x) the amount by which
the Daily Exchange Value exceeds $50
for such Trading Day. The number of
shares of Common Stock deliverable in
respect of each Trading Day in the
applicable Observation Period shall
equal (i) the product of (y) 100% minus
the cash percentage and (z) the amount
by which the Daily Exchange Value
exceeds $50 for such Trading Day,
divided by (ii) the Daily VWAP of the
Common Stock for such Trading Day. If
the Company does not specify a cash
percentage, it must settle the entire
amount by which the Daily Exchange
Value exceeds $50 with shares of Common
Stock pursuant to Section 8.02(a)(3)
above;
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145
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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provided, however, that the
Company will deliver cash in lieu of
fractional shares of Common Stock as
set forth pursuant to clause (k) below.
If the Company specifies a cash
percentage, the Company shall satisfy
its Exchange Obligation by delivering,
on the third Trading Day immediately
following the last day of the related
Observation Period, the amount of cash
and the number of shares of Common
Stock deliverable pursuant to this
Section 8.02(a)(4).
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(b) Notwithstanding Section 8.02(a),
the Company shall satisfy the Exchange
Obligation with respect to each $1,000
principal amount of Notes tendered for
exchange to which Additional Shares
shall be added to the Exchange Rate as
set forth in Section 8.01(g) pursuant
to this clause (b).
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(1) If the last day of the applicable
Observation Period related to Notes
surrendered for exchange is prior to
the third Trading Day preceding the
Effective Date of the Fundamental
Change, the Company will satisfy the
related Exchange Obligation with
respect to each $1,000 principal amount
of Notes tendered for exchange as
described in Section 8.01(a) by
delivering the amount of cash and
shares of Common Stock, if any (based
on the Exchange Rate, but without
regard to the number of Additional
Shares to be added to the Exchange Rate
pursuant to Section 8.01(g)) on the
third Trading Day immediately following
the last day of the applicable
Observation Period. In addition, as
soon as practicable following the
Effective Date of the Fundamental
Change, the Company will deliver the
increase in such amount of cash and
Reference Property deliverable in lieu
of shares of Common Stock, if any, as
if the Exchange Rate had been increased
by such number of Additional Shares
during the related Observation Period
(and based upon the related Daily VWAP
prices during such Observation Period).
If such increased amount of cash and
Common Stock, if any, results in an
increase to the amount of cash
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146
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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to be
paid to Holders, the Company will pay
such increase in cash, and if such
increased amount results in an increase
to the number of shares of Common
Stock, the Company will deliver such
increase by delivering Reference
Property based on such increased number
of shares.
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(2) If the last day of the applicable
Observation Period related to Notes
surrendered for exchange is on or
following the third scheduled Trading
Day preceding the Effective Date of
such Fundamental Change, the Company
will satisfy the Exchange Obligation
with respect to each $1,000 principal
amount of Notes tendered for exchange
as described in Section 8.01(a) (based
on the Exchange Rate as increased by
the Additional Shares pursuant to
Section 8.01(g) above) on the later to
occur of (x) the Effective Date of the
Fundamental Change and (y) the third
Trading Day immediately following the
last day of the applicable Observation
Period.
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Effect of
Reclassification,
Consolidation,
Merger or Sale
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Section 8.06(b) of the Tenth
Supplemental Indenture
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Section 8.06(b) of the new supplemental
indenture governing the AMB LP 3.250%
2015 Exchangeable Notes
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Notwithstanding the provisions
of Section 8.02(a), and subject
to the provisions of
Section 8.01, at the effective
time of such Reorganization
Event, the right to convert each
$1,000 principal amount of Notes
will be changed to a right to
convert such Note by reference
to the kind and amount of stock,
other securities or other
property, assets or cash (or any
combination thereof) that such
holder of Notes would have owned
immediately after such
Reorganization Event if such
holder had converted their Notes
immediately prior to such
Reorganization Event (the
“Reference Property”). For
purposes of the foregoing, where
a Reorganization Event involves
consideration based upon any
form of stockholder election,
the consideration will be deemed
to be the weighted average of
the types and amounts of
consideration received by the
holders of Common Shares that
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Notwithstanding the provisions of
Section 8.02(a) and Section 8.02(b),
and subject to the provisions of
Section 8.01, at the effective time of
such Reorganization Event, the right to
exchange each $1,000 principal amount
of Notes will be changed to a right to
exchange such Note by reference to the
kind and amount of stock, other
securities or other property, assets or
cash (or any combination thereof) that
such holder of Notes would have owned
immediately after such Reorganization
Event if such holder had exchanged
their Notes immediately prior to such
Reorganization Event (the “Reference
Property”) such that from and after the
effective time of such transaction, a
Noteholder will be entitled thereafter
to exchange its Notes, subject to the
successor’s right to deliver cash,
shares of Common Stock or common stock
of such successor or a combination of
cash and shares of Common Stock as set
forth in
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147
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ProLogis Notes without giving effect to
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the Proposed Amendments to the
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ProLogis Indenture
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AMB LP Notes
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affirmatively make such an
election. The Company shall not
become a party to any such
transaction unless its terms are
consistent with the preceding.
None of the foregoing provisions
shall affect the right of a
Holder of Notes to convert its
Notes in accordance with the
provisions of Article VIII
hereof prior to the effective
date of a Reorganization Event.
For the avoidance of doubt,
adjustments to the Conversion
Rate set forth under Section
8.04 do not apply to
distributions to the extent that
the right to convert Notes has
been changed into the right to
convert into Reference Property.
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Section 8.02(b), into cash (up
to the aggregate principal amount
thereof) and, in lieu of the shares of
Common Stock otherwise deliverable, the
same type (and in the same proportion)
of Reference Property, based on the
Daily Settlement Amounts of Reference
Property in an amount equal to the
applicable Exchange Rate, as described
under Section 8.02(b). For purposes of
the foregoing, where a Reorganization
Event involves consideration based upon
any form of stockholder election, the
consideration will be deemed to be the
weighted average of the types and
amounts of consideration received by
the holders of shares of Common Stock
that affirmatively make such an
election. Parent shall not become a
party to any such transaction unless
its terms are consistent with the
preceding. None of the foregoing
provisions shall affect the right of a
Holder of Notes to exchange its Notes
in accordance with the provisions of
Article VIII hereof prior to the
effective date of a Reorganization
Event. For the avoidance of doubt,
adjustments to the Exchange Rate set
forth under Section 8.04 do not apply
to distributions to the extent that the
right to exchange Notes has been
changed into the right to exchange into
Reference Property.
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In addition to the new sections in the new AMB LP Indenture described above regarding the
guarantees, proceedings against the guarantors, guarantees for the benefit of holders, merger
or consolidation of guarantors and additional guarantors, the new AMB LP Indenture will include
related defined terms and cross-references related thereto and several sections in the new AMB LP
Indenture will be revised to include references to the guarantees and guarantors.
The new AMB LP Indenture will also remove and revise provisions regarding securities in bearer
form and related defined terms and cross-references related thereto.
Further, in addition to the new sections in the new supplemental indenture governing the AMB
LP 3.250% 2015 Exchangeable Notes making such notes exchangeable into AMB common stock, cash or a
combination of the two, at the option of AMB LP, as compared with the ProLogis 3.250% 2015
Convertible Notes, which are convertible only into ProLogis common shares and will be exchangeable
only into AMB common stock after the Merger, such new supplemental indenture will include related
defined terms and cross-references related thereto and several sections will be removed and revised
to adjust for such change.
Pursuant to Section 3(g) of the Security Agency Agreement, Bank of America, N.A., as
collateral agent thereunder, may, without the consent of the holders of the ProLogis Notes, release
any collateral pledged pursuant to any Security Document, so long as such release does not violate
any other agreement of ProLogis. Upon or following the effectiveness of the Thirteenth
Supplemental Indenture, ProLogis intends to cause Bank of America,
148
N.A., in its capacity as collateral agent, to release all collateral under the Security
Documents. Following such release, the obligations of ProLogis under the ProLogis Notes would not
be secured by any collateral.
In addition, pursuant to Section 8(e) of the Security Agency Agreement, ProLogis may, upon not
less than 90 days notice after disclosing such revocation (in a footnote or otherwise) in a Form
10-Q or 10-K filed with the SEC (but in no event before the earlier of (i) August 21, 2012 and (ii)
the date on which the main revolving credit facility of ProLogis terminates), without the consent
of the holders of the ProLogis Notes, revoke the status of the ProLogis Indenture as a “DSD
Agreement” under the Security Agency Agreement and revoke the classification of the ProLogis Notes
as “Other DS Debt” thereunder. Upon or following any such revocation, the holders of the ProLogis
Notes would cease to have any rights under the Security Agency Agreement. Upon the closing of the
Merger, ProLogis intends to terminate its main revolving credit facility and revoke the status of
the ProLogis Indenture and the ProLogis Notes as a “DSD Agreement” and “Other DS Debt,”
respectively. Upon such revocation, the benefits of the security and sharing arrangements afforded
to the holders of the ProLogis Notes pursuant to the Security Documents would be eliminated. Such
revocation may occur before or after the release of the collateral described above.
Further, the applicable initial exchange rates, dividend threshold amounts, contingent
exchange trigger prices and fundamental change make-whole amounts with respect to the AMB LP
Exchangeable Notes will be different from the applicable initial conversion rates, dividend
threshold amounts, contingent exchange trigger prices and fundamental change make-whole amounts
with respect to the ProLogis Convertible Notes. Such initial exchange rates, dividend threshold
amounts, contingent exchange trigger prices and fundamental change make-whole amounts for the AMB
LP Exchangeable Notes will be adjusted relative to the conversion rate, dividend threshold amounts,
contingent exchange trigger prices and fundamental change make-whole amounts of the ProLogis
Convertible Notes to account for differences in the dividend amounts between AMB and ProLogis and
the value of shares of AMB common stock and ProLogis common shares. The tables below provide the
original initial conversion rates, dividend threshold amounts, contingent exchange trigger prices
and fundamental change make-whole amounts for the ProLogis Convertible Notes before the
consummation of the Merger and the initial exchange rates, dividend threshold amounts, contingent
exchange trigger prices and fundamental change make-whole amounts, as adjusted, for the AMB LP
Exchangeable Notes. The new supplemental indentures governing the AMB LP Exchangeable Notes will
reflect these adjustments and will be revised throughout to reflect the change from being
convertible into exchangeable.
Exchange Rates
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Conversion Rates
|
|
Initial Exchange Rates, as
|
|
|
|
for the ProLogis
|
|
adjusted, for the AMB LP
|
|
|
|
Convertible Notes
|
|
Exchangeable Notes
|
|
AMB LP 2.250% 2037 Exchangeable Notes
|
|
|
13.1614
|
|
|
|
5.8752
|
|
|
AMB LP 1.875% 2037 Exchangeable Notes
|
|
|
12.2926
|
|
|
|
5.4874
|
|
|
AMB LP 2.625% 2038 Exchangeable Notes
|
|
|
13.1203
|
|
|
|
5.8569
|
|
|
AMB LP 3.250% 2015 Exchangeable Notes
|
|
|
57.8503
|
|
|
|
25.8244
|
|
|
Dividend Threshold Amounts
|
|
|
|
|
|
Dividend Threshold
|
|
Dividend Threshold Amounts,
|
|
|
|
Amounts for the
|
|
as adjusted, for the AMB LP
|
|
|
|
ProLogis Convertible Notes
|
|
Exchangeable Notes
|
|
AMB LP 2.250% 2037 Exchangeable Notes
|
|
$
|
0.46
|
|
|
$
|
1.0305
|
|
|
AMB LP 1.875% 2037 Exchangeable Notes
|
|
$
|
0.46
|
|
|
$
|
1.0305
|
|
|
AMB LP 2.625% 2038 Exchangeable Notes
|
|
$
|
0.5175
|
|
|
$
|
1.1593
|
|
|
AMB LP 3.250% 2015 Exchangeable Notes
|
|
$
|
0.15
|
|
|
$
|
0.3360
|
|
149
Contingent Exchange Trigger Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent Exchange Trigger
|
|
|
|
Contingent Exchange
|
|
Price, as adjusted, for the AMB
|
|
|
|
Trigger Price per
|
|
LP Exchangeable Notes per
|
|
|
|
ProLogis Common Share
|
|
Share of AMB Common Stock
|
|
AMB LP 2.250% 2037 Exchangeable Notes
|
|
$
|
98.77
|
|
|
$
|
221.27
|
|
|
AMB LP 1.875% 2037 Exchangeable Notes
|
|
$
|
105.75
|
|
|
$
|
236.91
|
|
|
AMB LP 2.625% 2038 Exchangeable Notes
|
|
$
|
99.08
|
|
|
$
|
221.96
|
|
|
AMB LP 3.250% 2015 Exchangeable Notes
|
|
|
N/A
|
|
|
|
N/A
|
|
Fundamental Change Make-Whole Amounts
ProLogis 2.250% 2037 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$63.82
|
|
$70.00
|
|
$80.00
|
|
$90.00
|
|
$100.00
|
|
$110.00
|
|
$120.00
|
|
$130.00
|
|
$140.00
|
|
$150.00
|
|
$160.00
|
|
$170.00
|
|
April 1, 2011
|
|
|
2.6115
|
|
|
|
1.4809
|
|
|
|
0.5642
|
|
|
|
0.1748
|
|
|
|
0.0384
|
|
|
|
0.0060
|
|
|
|
0.0027
|
|
|
|
0.0024
|
|
|
|
0.0003
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
April 1, 2012
|
|
|
2.6115
|
|
|
|
1.2281
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$170.00 per share or less than $63.82 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable conversion rate for the ProLogis 2.250% 2037 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 15.6691 per $1,000 principal amount of ProLogis 2.250% 2037
Convertible Notes.
AMB LP 2.250% 2037 Exchangeable Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$142.97
|
|
$156.81
|
|
$179.21
|
|
$201.61
|
|
$224.01
|
|
$246.42
|
|
$268.82
|
|
$291.22
|
|
$313.62
|
|
$336.02
|
|
$358.42
|
|
$380.82
|
|
April 1, 2011
|
|
|
1.1658
|
|
|
|
0.6611
|
|
|
|
0.2519
|
|
|
|
0.0780
|
|
|
|
0.0171
|
|
|
|
0.0027
|
|
|
|
0.0012
|
|
|
|
0.0011
|
|
|
|
0.0001
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
April 1, 2012
|
|
|
1.1658
|
|
|
|
0.5482
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $380.82 per share or less than $142.97 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the AMB LP 2.250% 2037 Exchangeable
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 7.0410 per $1,000 principal amount of AMB LP 2.250%
2037 Exchangeable Notes.
ProLogis 1.875% 2037 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$68.33
|
|
$70.00
|
|
$75.00
|
|
$80.00
|
|
$85.00
|
|
$90.00
|
|
$95.00
|
|
$100.00
|
|
$105.00
|
|
$110.00
|
|
$115.00
|
|
$120.00
|
|
January 15, 2012
|
|
|
2.4391
|
|
|
|
2.0800
|
|
|
|
1.4313
|
|
|
|
0.9500
|
|
|
|
0.6035
|
|
|
|
0.3614
|
|
|
|
0.1980
|
|
|
|
0.0916
|
|
|
|
0.0249
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
January 15, 2013
|
|
|
2.4391
|
|
|
|
2.0282
|
|
|
|
1.0799
|
|
|
|
0.2759
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$120.00 per share or less than $68.33 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 1.875% 2037 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 14.6349 per $1,000 principal amount of ProLogis 1.875% 2037
Convertible Notes.
150
AMB LP 1.875% 2037 Exchangeable Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$153.07
|
|
$156.81
|
|
$168.01
|
|
$179.21
|
|
$190.41
|
|
$201.61
|
|
$212.81
|
|
$224.01
|
|
$235.22
|
|
$246.42
|
|
$257.62
|
|
$268.82
|
|
January 15, 2012
|
|
|
1.0888
|
|
|
|
0.9285
|
|
|
|
0.6389
|
|
|
|
0.4241
|
|
|
|
0.2694
|
|
|
|
0.1613
|
|
|
|
0.0884
|
|
|
|
0.0409
|
|
|
|
0.0111
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
January 15, 2013
|
|
|
1.0888
|
|
|
|
0.9054
|
|
|
|
0.4821
|
|
|
|
0.1232
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $268.82 per share or less than $153.07 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the AMB LP 1.875% 2037 Exchangeable
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 6.5762 per $1,000 principal amount of AMB LP 1.875%
2037 Exchangeable Notes.
ProLogis 2.625% 2038 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$62.86
|
|
$65.00
|
|
$67.50
|
|
$70.00
|
|
$72.50
|
|
$75.00
|
|
$77.50
|
|
$80.00
|
|
$85.00
|
|
$90.00
|
|
$95.00
|
|
$100.00
|
|
$110.00
|
|
$120.00
|
|
May 20, 2011
|
|
|
2.7880
|
|
|
|
2.3192
|
|
|
|
1.9988
|
|
|
|
1.7186
|
|
|
|
1.4736
|
|
|
|
1.2597
|
|
|
|
1.0731
|
|
|
|
0.9106
|
|
|
|
0.6468
|
|
|
|
0.4490
|
|
|
|
0.3024
|
|
|
|
0.1953
|
|
|
|
0.0661
|
|
|
|
0.0099
|
|
|
May 20, 2012
|
|
|
2.7880
|
|
|
|
2.2643
|
|
|
|
1.7817
|
|
|
|
1.4817
|
|
|
|
1.2250
|
|
|
|
1.0061
|
|
|
|
0.8204
|
|
|
|
0.6634
|
|
|
|
0.4208
|
|
|
|
0.2530
|
|
|
|
0.1411
|
|
|
|
0.0700
|
|
|
|
0.0048
|
|
|
|
0.0000
|
|
|
May 20, 2013
|
|
|
2.7880
|
|
|
|
2.2643
|
|
|
|
1.6945
|
|
|
|
1.1654
|
|
|
|
0.6728
|
|
|
|
0.2130
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$120.00 per share or less than $62.86 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 2.625% 2038 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 15.9083 per $1,000 principal amount of ProLogis 2.625% 2038
Convertible Notes.
AMB LP 2.625% 2038 Exchangeable Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$140.82
|
|
$145.61
|
|
$151.21
|
|
$156.81
|
|
$162.41
|
|
$168.01
|
|
$173.61
|
|
$179.21
|
|
$190.41
|
|
$201.61
|
|
$212.81
|
|
$224.01
|
|
$246.42
|
|
$268.82
|
|
May 20, 2011
|
|
|
1.2446
|
|
|
|
1.0353
|
|
|
|
0.8923
|
|
|
|
0.7672
|
|
|
|
0.6578
|
|
|
|
0.5623
|
|
|
|
0.4790
|
|
|
|
0.4065
|
|
|
|
0.2887
|
|
|
|
0.2004
|
|
|
|
0.1350
|
|
|
|
0.0872
|
|
|
|
0.0295
|
|
|
|
0.0044
|
|
|
May 20, 2012
|
|
|
1.2446
|
|
|
|
1.0108
|
|
|
|
0.7954
|
|
|
|
0.6614
|
|
|
|
0.5468
|
|
|
|
0.4491
|
|
|
|
0.3662
|
|
|
|
0.2961
|
|
|
|
0.1878
|
|
|
|
0.1129
|
|
|
|
0.0630
|
|
|
|
0.0312
|
|
|
|
0.0021
|
|
|
|
0.0000
|
|
|
May 20, 2013
|
|
|
1.2446
|
|
|
|
1.0108
|
|
|
|
0.7564
|
|
|
|
0.5202
|
|
|
|
0.3003
|
|
|
|
0.0951
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $268.82 per share or less than $140.82 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the AMB LP 2.625% 2038 Exchangeable
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 7.1015 per $1,000 principal amount of AMB LP 2.625%
2038 Exchangeable Notes.
ProLogis 3.250% 2015 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$13.40
|
|
$15.00
|
|
$17.50
|
|
$20.00
|
|
$22.50
|
|
$25.00
|
|
$27.50
|
|
$30.00
|
|
$32.50
|
|
$35.00
|
|
$37.50
|
|
$40.00
|
|
March 15, 2012
|
|
|
16.7765
|
|
|
|
12.4979
|
|
|
|
7.2319
|
|
|
|
4.1631
|
|
|
|
2.3658
|
|
|
|
1.3110
|
|
|
|
0.6940
|
|
|
|
0.3377
|
|
|
|
0.1397
|
|
|
|
0.0396
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2013
|
|
|
16.7765
|
|
|
|
11.7694
|
|
|
|
6.3041
|
|
|
|
3.2875
|
|
|
|
1.6518
|
|
|
|
0.7814
|
|
|
|
0.3305
|
|
|
|
0.1106
|
|
|
|
0.0174
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2014
|
|
|
16.7765
|
|
|
|
10.5088
|
|
|
|
4.7035
|
|
|
|
1.8907
|
|
|
|
0.6585
|
|
|
|
0.1765
|
|
|
|
0.0207
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2015
|
|
|
16.7765
|
|
|
|
8.8164
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$40.00 per share or less than $13.40 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 3.250% 2015 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 74.6268 per $1,000 principal amount of ProLogis 3.250% 2015
Convertible Notes.
151
AMB LP 3.250% 2015 Exchangeable Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$30.02
|
|
$33.60
|
|
$39.20
|
|
$44.80
|
|
$50.40
|
|
$56.00
|
|
$61.60
|
|
$67.20
|
|
$72.80
|
|
$78.41
|
|
$84.01
|
|
$89.61
|
|
March 15, 2012
|
|
|
7.4890
|
|
|
|
5.5791
|
|
|
|
3.2283
|
|
|
|
1.8584
|
|
|
|
1.0561
|
|
|
|
0.5852
|
|
|
|
0.3098
|
|
|
|
0.1507
|
|
|
|
0.0624
|
|
|
|
0.0177
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2013
|
|
|
7.4890
|
|
|
|
5.2539
|
|
|
|
2.8142
|
|
|
|
1.4675
|
|
|
|
0.7374
|
|
|
|
0.3488
|
|
|
|
0.1475
|
|
|
|
0.0494
|
|
|
|
0.0078
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2014
|
|
|
7.4890
|
|
|
|
4.6911
|
|
|
|
2.0996
|
|
|
|
0.8440
|
|
|
|
0.2940
|
|
|
|
0.0788
|
|
|
|
0.0092
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2015
|
|
|
7.4890
|
|
|
|
3.9356
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $89.61 per share or less than $30.02 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the AMB LP 3.250% 2015 Exchangeable
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 33.3134 per $1,000 principal amount of AMB LP 3.250%
2015 Exchangeable Notes.
Pursuant to their terms, upon consummation of the Merger, the ProLogis Convertible Notes will
become exchangeable into shares of AMB common stock, rather than convertible into ProLogis common
shares, and ProLogis and the Trustee will be required to enter into a supplemental indenture to
effect such change. Each of the Eleventh Supplemental Indenture and the Twelfth Supplemental
Indenture will provide for the conversion and settlement of the ProLogis Convertible Notes as set
forth in the ProLogis Convertible Notes Supplemental Indentures. Additionally, each of the
Eleventh Supplemental Indenture and Twelfth Supplemental Indenture will provide for adjustments as
nearly equivalent as may be practicable to the adjustments provided in Article VIII of each of the
ProLogis Convertible Notes Supplemental Indentures. The Twelfth Supplemental Indenture will
provide for adjustments to account for differences in the value of shares of AMB common stock and
ProLogis common shares and for differences in the dividend thresholds of AMB and ProLogis. The
initial exchange rate, dividend threshold amounts, contingent exchange trigger prices and
fundamental change make-whole amounts will be adjusted as described herein and in the Eleventh
Supplemental Indenture and the Twelfth Supplemental Indenture. The ProLogis Indenture, as so
amended by the Eleventh Supplemental Indenture and the Twelfth Supplemental Indenture, will govern
any ProLogis Convertible Notes that are not tendered and accepted in the exchange offers. Other
than such adjustments, the consummation of the Merger will not confer any additional or different
conversion or exchange rights to holders of the ProLogis Convertible Notes.
The tables below provide the original initial conversion rates, dividend threshold amounts,
contingent exchange trigger prices and fundamental change make-whole amounts for the ProLogis
Convertible Notes before the consummation of the Merger and the initial exchange rates, dividend
threshold amounts, contingent exchange trigger prices and fundamental change make-whole amounts, as
adjusted, for the ProLogis Convertible Notes after the consummation of the Merger and execution of
the Eleventh Supplemental Indenture and the Twelfth Supplemental Indenture.
Exchange Rates
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Conversion Rates
|
|
Initial Exchange Rates, as
|
|
|
|
for the ProLogis
|
|
adjusted, for the ProLogis
|
|
|
|
Convertible Notes
|
|
Convertible Notes
|
|
ProLogis 2.250% 2037 Convertible Notes
|
|
|
13.1614
|
|
|
|
5.8752
|
|
|
ProLogis 1.875% 2037 Convertible Notes
|
|
|
12.2926
|
|
|
|
5.4874
|
|
|
ProLogis 2.625% 2038 Convertible Notes
|
|
|
13.1203
|
|
|
|
5.8569
|
|
|
ProLogis 3.250% 2015 Convertible Notes
|
|
|
57.8503
|
|
|
|
25.8244
|
|
152
Dividend Threshold Amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Threshold
|
|
|
|
|
|
Amounts for the
|
|
Dividend Threshold Amounts,
|
|
|
|
ProLogis Convertible
|
|
as adjusted, for the ProLogis
|
|
|
|
Notes
|
|
Convertible Notes
|
|
ProLogis 2.250% 2037 Convertible Notes
|
|
$
|
0.46
|
|
|
$
|
1.0305
|
|
|
ProLogis 1.875% 2037 Convertible Notes
|
|
$
|
0.46
|
|
|
$
|
1.0305
|
|
|
ProLogis 2.625% 2038 Convertible Notes
|
|
$
|
0.5175
|
|
|
$
|
1.1593
|
|
|
ProLogis 3.250% 2015 Convertible Notes
|
|
$
|
0.15
|
|
|
$
|
0.3360
|
|
Contingent Exchange Trigger Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent Exchange Trigger
|
|
|
|
Contingent Exchange
|
|
Price, as adjusted, for the
|
|
|
|
Trigger Price per
|
|
ProLogis Convertible Notes per
|
|
|
|
ProLogis Common Share
|
|
Share of AMB Common Stock
|
|
ProLogis 2.250% 2037 Convertible Notes
|
|
$
|
98.77
|
|
|
$
|
221.27
|
|
|
ProLogis 1.875% 2037 Convertible Notes
|
|
$
|
105.75
|
|
|
$
|
236.91
|
|
|
ProLogis 2.625% 2038 Convertible Notes
|
|
$
|
99.08
|
|
|
$
|
221.96
|
|
|
ProLogis 3.250% 2015 Convertible Notes
|
|
|
N/A
|
|
|
|
N/A
|
|
Fundamental Change Make-Whole Amounts
ProLogis 2.250% 2037 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$63.82
|
|
$70.00
|
|
$80.00
|
|
$90.00
|
|
$100.00
|
|
$110.00
|
|
$120.00
|
|
$130.00
|
|
$140.00
|
|
$150.00
|
|
$160.00
|
|
$170.00
|
|
April 1, 2011
|
|
|
2.6115
|
|
|
|
1.4809
|
|
|
|
0.5642
|
|
|
|
0.1748
|
|
|
|
0.0384
|
|
|
|
0.0060
|
|
|
|
0.0027
|
|
|
|
0.0024
|
|
|
|
0.0003
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
April 1, 2012
|
|
|
2.6115
|
|
|
|
1.2281
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$170.00 per share or less than $63.82 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable conversion rate for the ProLogis 2.250% 2037 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 15.6691 per $1,000 principal amount of ProLogis 2.250% 2037
Convertible Notes.
ProLogis 2.250% 2037 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$142.97
|
|
$156.81
|
|
$179.21
|
|
$201.61
|
|
$224.01
|
|
$246.42
|
|
$268.82
|
|
$291.22
|
|
$313.62
|
|
$336.02
|
|
$358.42
|
|
$380.82
|
|
April 1, 2011
|
|
|
1.1658
|
|
|
|
0.6611
|
|
|
|
0.2519
|
|
|
|
0.0780
|
|
|
|
0.0171
|
|
|
|
0.0027
|
|
|
|
0.0012
|
|
|
|
0.0011
|
|
|
|
0.0001
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
April 1, 2012
|
|
|
1.1658
|
|
|
|
0.5482
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $380.82 per share or less than $142.97 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 2.250% 2037 Convertible
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 7.0410 per $1,000 principal amount of ProLogis
2.250% 2037 Convertible Notes.
153
ProLogis 1.875% 2037 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$68.33
|
|
$70.00
|
|
$75.00
|
|
$80.00
|
|
$85.00
|
|
$90.00
|
|
$95.00
|
|
$100.00
|
|
$105.00
|
|
$110.00
|
|
$115.00
|
|
$120.00
|
|
January 15, 2012
|
|
|
2.4391
|
|
|
|
2.0800
|
|
|
|
1.4313
|
|
|
|
0.9500
|
|
|
|
0.6035
|
|
|
|
0.3614
|
|
|
|
0.1980
|
|
|
|
0.0916
|
|
|
|
0.0249
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
January 15, 2013
|
|
|
2.4391
|
|
|
|
2.0282
|
|
|
|
1.0799
|
|
|
|
0.2759
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$120.00 per share or less than $68.33 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 1.875% 2037 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 14.6349 per $1,000 principal amount of ProLogis 1.875% 2037
Convertible Notes.
ProLogis 1.875% 2037 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$153.07
|
|
$156.81
|
|
$168.01
|
|
$179.21
|
|
$190.41
|
|
$201.61
|
|
$212.81
|
|
$224.01
|
|
$235.22
|
|
$246.42
|
|
$257.62
|
|
$268.82
|
|
January 15, 2012
|
|
|
1.0888
|
|
|
|
0.9285
|
|
|
|
0.6389
|
|
|
|
0.4241
|
|
|
|
0.2694
|
|
|
|
0.1613
|
|
|
|
0.0884
|
|
|
|
0.0409
|
|
|
|
0.0111
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
January 15, 2013
|
|
|
1.0888
|
|
|
|
0.9054
|
|
|
|
0.4821
|
|
|
|
0.1232
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $268.82 per share or less than $153.07 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 1.875% 2037 Convertible
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 6.5762 per $1,000 principal amount of ProLogis
1.875% 2037 Convertible Notes.
ProLogis 2.625% 2038 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$62.86
|
|
$65.00
|
|
$67.50
|
|
$70.00
|
|
$72.50
|
|
$75.00
|
|
$77.50
|
|
$80.00
|
|
$85.00
|
|
$90.00
|
|
$95.00
|
|
$100.00
|
|
$110.00
|
|
$120.00
|
|
May 20, 2011
|
|
|
2.7880
|
|
|
|
2.3192
|
|
|
|
1.9988
|
|
|
|
1.7186
|
|
|
|
1.4736
|
|
|
|
1.2597
|
|
|
|
1.0731
|
|
|
|
0.9106
|
|
|
|
0.6468
|
|
|
|
0.4490
|
|
|
|
0.3024
|
|
|
|
0.1953
|
|
|
|
0.0661
|
|
|
|
0.0099
|
|
|
May 20, 2012
|
|
|
2.7880
|
|
|
|
2.2643
|
|
|
|
1.7817
|
|
|
|
1.4817
|
|
|
|
1.2250
|
|
|
|
1.0061
|
|
|
|
0.8204
|
|
|
|
0.6634
|
|
|
|
0.4208
|
|
|
|
0.2530
|
|
|
|
0.1411
|
|
|
|
0.0700
|
|
|
|
0.0048
|
|
|
|
0.0000
|
|
|
May 20, 2013
|
|
|
2.7880
|
|
|
|
2.2643
|
|
|
|
1.6945
|
|
|
|
1.1654
|
|
|
|
0.6728
|
|
|
|
0.2130
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$120.00 per share or less than $62.86 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 2.625% 2038 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 15.9083 per $1,000 principal amount of ProLogis 2.625% 2038
Convertible Notes.
ProLogis 2.625% 2038 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$140.82
|
|
$145.61
|
|
$151.21
|
|
$156.81
|
|
$162.41
|
|
$168.01
|
|
$173.61
|
|
$179.21
|
|
$190.41
|
|
$201.61
|
|
$212.81
|
|
$224.01
|
|
$246.42
|
|
$268.82
|
|
May 20, 2011
|
|
|
1.2446
|
|
|
|
1.0353
|
|
|
|
0.8923
|
|
|
|
0.7672
|
|
|
|
0.6578
|
|
|
|
0.5623
|
|
|
|
0.4790
|
|
|
|
0.4065
|
|
|
|
0.2887
|
|
|
|
0.2004
|
|
|
|
0.1350
|
|
|
|
0.0872
|
|
|
|
0.0295
|
|
|
|
0.0044
|
|
|
May 20, 2012
|
|
|
1.2446
|
|
|
|
1.0108
|
|
|
|
0.7954
|
|
|
|
0.6614
|
|
|
|
0.5468
|
|
|
|
0.4491
|
|
|
|
0.3662
|
|
|
|
0.2961
|
|
|
|
0.1878
|
|
|
|
0.1129
|
|
|
|
0.0630
|
|
|
|
0.0312
|
|
|
|
0.0021
|
|
|
|
0.0000
|
|
|
May 20, 2013
|
|
|
1.2446
|
|
|
|
1.0108
|
|
|
|
0.7564
|
|
|
|
0.5202
|
|
|
|
0.3003
|
|
|
|
0.0951
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $268.82 per share or less than $140.82 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 2.625% 2038 Convertible
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 7.1015 per $1,000 principal amount of ProLogis
2.625% 2038 Convertible Notes.
154
ProLogis 3.250% 2015 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$13.40
|
|
$15.00
|
|
$17.50
|
|
$20.00
|
|
$22.50
|
|
$25.00
|
|
$27.50
|
|
$30.00
|
|
$32.50
|
|
$35.00
|
|
$37.50
|
|
$40.00
|
|
March 15, 2012
|
|
|
16.7765
|
|
|
|
12.4979
|
|
|
|
7.2319
|
|
|
|
4.1631
|
|
|
|
2.3658
|
|
|
|
1.3110
|
|
|
|
0.6940
|
|
|
|
0.3377
|
|
|
|
0.1397
|
|
|
|
0.0396
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2013
|
|
|
16.7765
|
|
|
|
11.7694
|
|
|
|
6.3041
|
|
|
|
3.2875
|
|
|
|
1.6518
|
|
|
|
0.7814
|
|
|
|
0.3305
|
|
|
|
0.1106
|
|
|
|
0.0174
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2014
|
|
|
16.7765
|
|
|
|
10.5088
|
|
|
|
4.7035
|
|
|
|
1.8907
|
|
|
|
0.6585
|
|
|
|
0.1765
|
|
|
|
0.0207
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2015
|
|
|
16.7765
|
|
|
|
8.8164
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price of ProLogis common shares in the transaction is greater than
$40.00 per share or less than $13.40 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 3.250% 2015 Convertible
Notes. Moreover, in no event will the total number of ProLogis common shares issuable upon exchange
as a result of this adjustment exceed 74.6268 per $1,000 principal amount of ProLogis 3.250% 2015
Convertible Notes.
ProLogis 3.250% 2015 Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$30.02
|
|
$33.60
|
|
$39.20
|
|
$44.80
|
|
$50.40
|
|
$56.00
|
|
$61.60
|
|
$67.20
|
|
$72.80
|
|
$78.41
|
|
$84.01
|
|
$89.61
|
|
March 15, 2012
|
|
|
7.4890
|
|
|
|
5.5791
|
|
|
|
3.2283
|
|
|
|
1.8584
|
|
|
|
1.0561
|
|
|
|
0.5852
|
|
|
|
0.3098
|
|
|
|
0.1507
|
|
|
|
0.0624
|
|
|
|
0.0177
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2013
|
|
|
7.4890
|
|
|
|
5.2539
|
|
|
|
2.8142
|
|
|
|
1.4675
|
|
|
|
0.7374
|
|
|
|
0.3488
|
|
|
|
0.1475
|
|
|
|
0.0494
|
|
|
|
0.0078
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2014
|
|
|
7.4890
|
|
|
|
4.6911
|
|
|
|
2.0996
|
|
|
|
0.8440
|
|
|
|
0.2940
|
|
|
|
0.0788
|
|
|
|
0.0092
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
March 15, 2015
|
|
|
7.4890
|
|
|
|
3.9356
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
In addition, if the price per share of AMB common stock in the transaction is greater
than $89.61 per share or less than $30.02 per share (in each case, subject to adjustment), no
adjustment will be made to the applicable exchange rate for the ProLogis 3.250% 2015 Convertible
Notes. Moreover, in no event will the total number of shares of AMB common stock deliverable upon
exchange as a result of this adjustment exceed 33.3134 per $1,000 principal amount of ProLogis
3.250% 2015 Convertible Notes.
155
THE PROPOSED AMENDMENTS
Background
The Base ProLogis Indenture was originally executed by ProLogis and the Trustee on March 1,
1995, and provides that ProLogis may issue from time to time an unlimited amount of senior debt
securities thereunder. Section 901(2) of the Base ProLogis Indenture provides that ProLogis and
the Trustee may enter into an indenture supplemental to the Base ProLogis Indenture to add
covenants of ProLogis for the benefit of the holders of all or any series of securities. The
Second Supplemental Indenture and the Seventh Supplemental Indenture, in each case, among other
things, amended and supplemented the terms of the Original Financial Information Provision pursuant
to Section 901(2) of the ProLogis Indenture. Further the Second Supplemental Indenture amended and
supplemented the Base ProLogis Indenture to include provisions on collateral and security
arrangements pursuant to Section 901(6) of the ProLogis Indenture. The Eighth Supplemental
Indenture and the Ninth Supplemental Indenture, in each case, among other things, amended and
supplemented the limitations on incurrence of debt provisions pursuant to Section 901(5) and
Section 902, respectively, of the ProLogis Indenture, as amended by the First Supplemental
Indenture, dated as of February 9, 2005, between ProLogis and the Trustee (the “First Supplemental
Indenture”), the Second Supplemental Indenture and the Seventh Supplemental Indenture.
Additionally, the Third Supplemental Indenture, dated as of November 2, 2005, between ProLogis
and the Trustee (the “Third Supplemental Indenture”), issued the ProLogis 5.625% 2015 Notes, the
Fourth Supplemental Indenture issued the ProLogis 2.250% 2037 Convertible Notes, the Fifth
Supplemental Indenture issued the ProLogis 1.875% 2037 Convertible Notes, the Sixth Supplemental
Indenture issued the ProLogis 2.625% 2038 Convertible Notes and the Tenth Supplemental Indenture
issued the ProLogis 3.250% 2015 Convertible Notes.
The table below identifies the various outstanding principal amounts of ProLogis Notes as of
the date of this prospectus.
156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Amount
|
|
|
Date of Issuance
|
|
Description of Securities
|
|
Outstanding
|
|
|
ProLogis Non-Convertible Notes
|
|
|
|
|
|
|
|
|
|
Original Financial Information Securities:
|
|
|
|
|
|
|
|
|
|
March 2, 1995
|
|
9.340% Notes due 2015
|
|
$
|
5,511,625
|
(1)
|
|
May 17, 1996
|
|
8.650% Notes due 2016
|
|
$
|
36,402,700
|
(2)
|
|
February 4, 1997
|
|
7.810% Notes due 2015
|
|
$
|
48,226,750
|
(1)
|
|
July 11, 1997
|
|
7.625% Notes due 2017
|
|
$
|
100,000,000
|
|
|
February 24, 2003
|
|
5.500% Notes due 2013
|
|
$
|
61,443,000
|
|
|
|
|
|
|
|
|
|
|
|
Total Original Financial Information Securities
|
|
|
|
|
|
$
|
251,584,075
|
|
|
ProLogis Non-Convertible Notes other than Original
Financial Information Securities
|
|
|
|
|
|
|
|
|
|
November 2, 2005
|
|
5.625% Notes due 2015
|
|
$
|
155,320,000
|
|
|
March 27, 2006
|
|
5.500% Notes due 2012
|
|
$
|
58,935,000
|
|
|
March 27, 2006
|
|
5.750% Notes due 2016
|
|
$
|
197,758,000
|
|
|
November 14, 2006
|
|
5.625% Notes due 2016
|
|
$
|
182,104,000
|
|
|
May 7, 2008
|
|
6.625% Notes due 2018
|
|
$
|
600,000,000
|
|
|
August 14, 2009
|
|
7.625% Notes due 2014
|
|
$
|
350,000,000
|
|
|
October 30, 2009
|
|
7.375% Notes due 2019
|
|
$
|
396,641,000
|
|
|
March 16, 2010
|
|
6.250% Notes due 2017
|
|
$
|
300,000,000
|
|
|
March 16, 2010
|
|
6.875% Notes due 2020
|
|
$
|
561,049,000
|
|
|
|
|
|
|
|
|
|
|
|
Total ProLogis Non-Convertible Notes, except
for Original Financial Information Securities
|
|
|
|
|
|
$
|
2,801,807,000
|
|
|
|
|
|
|
|
|
|
|
|
Total ProLogis Non-Convertible Notes
|
|
|
|
|
|
$
|
3,053,391,075
|
|
|
ProLogis Convertible Notes
|
|
|
|
|
|
|
|
|
|
ProLogis 3.250% 2015 Convertible Notes
|
|
|
|
|
|
|
|
|
|
March 16, 2010
|
|
3.250% Convertible Senior Notes due 2015
|
|
$
|
460,000,000
|
|
|
|
|
|
|
|
|
|
|
|
ProLogis Contingent Convertible Notes
|
|
|
|
|
|
|
|
|
|
March 26, 2007
|
|
2.250% Convertible Senior Notes due 2037
|
|
$
|
592,980,000
|
|
|
November 8, 2007
|
|
1.875% Convertible Senior Notes due 2037
|
|
$
|
141,635,000
|
|
|
May 7, 2008
|
|
2.625% Convertible Senior Notes due 2038
|
|
$
|
386,250,000
|
|
|
|
|
|
|
|
|
|
|
|
Total ProLogis Contingent Convertible Notes
|
|
|
|
|
|
$
|
1,120,865,000
|
|
|
|
|
|
|
|
|
|
|
|
Total ProLogis Convertible Notes
|
|
|
|
|
|
$
|
1,580,865,000
|
|
|
|
|
|
|
|
|
|
|
|
Total ProLogis Non-Convertible Notes and ProLogis 3.250%
2015 Convertible Notes
|
|
|
|
|
|
$
|
3,513,391,075
|
|
|
|
|
|
|
|
|
|
|
|
Total ProLogis Notes
|
|
|
|
|
|
$
|
4,634,256,075
|
|
|
|
|
|
|
|
|
|
|
|
Total ProLogis Notes, except for Original Financial
Information Securities
|
|
|
|
|
|
$
|
4,382,672,000
|
|
|
|
|
|
|
(1)
|
|
Such current aggregate principal amount reflects mandatory principal repayments already made
in accordance with the terms of the notes.
|
|
|
|
(2)
|
|
Such current aggregate principal amount reflects mandatory principal repayments already made
in accordance with the terms of the notes, including the mandatory
repayment of $4,600,300 to
be made on May 15, 2011.
|
General
AMB LP is soliciting the consents on behalf of the combined company of the holders of ProLogis
Notes to (1) eliminate certain covenants in the ProLogis Indenture that afford protection to
holders of ProLogis Notes, including substantially all of the restrictive covenants and certain
affirmative covenants, (2) eliminate certain events of default and (3) eliminate the restrictions
on ProLogis’ ability to consolidate, merge or sell all or substantially all of its assets. If the
Proposed Amendments described below are adopted, the amendments will apply to all ProLogis Notes
not validly tendered or not accepted by AMB LP in the applicable exchange offers. Thereafter, all
such ProLogis Notes will be governed by the ProLogis Indenture as amended by the Proposed
Amendments, which will have less restrictive terms and afford reduced protections to the holders of
such securities compared to those currently in the ProLogis Indenture. See “Risk Factors — Risks
Related to the Exchange Offers and Consent Solicitations — The Proposed Amendments to the ProLogis
Indenture will afford reduced protection to remaining holders of ProLogis Notes.”
Pursuant to Section 3(g) of the Security Agency Agreement, Bank of America, N.A., as
collateral agent thereunder, may, without the consent of the holders of the ProLogis Notes, release
any collateral pledged pursuant to any Security Document, so long as such release does not violate
any other agreement of ProLogis. Upon or following the effectiveness of the Thirteenth
Supplemental Indenture, ProLogis intends to cause Bank of America,
157
N.A., in its capacity as collateral agent, to release all collateral under the Security
Documents. Following such release, the obligations of ProLogis under the ProLogis Notes would not
be secured by any collateral.
In addition, pursuant to Section 8(e) of the Security Agency Agreement, ProLogis may, upon not
less than 90 days notice after disclosing such revocation (in a footnote or otherwise) in a Form
10-Q or 10-K filed with the SEC (but in no event before the earlier of (i) August 21, 2012 and (ii)
the date on which the main revolving credit facility of ProLogis terminates), without the consent
of the holders of the ProLogis Notes, revoke the status of the ProLogis Indenture as a “DSD
Agreement” under the Security Agency Agreement and revoke the classification of the ProLogis Notes
as “Other DS Debt” thereunder. Upon or following any such revocation, the holders of the ProLogis
Notes would cease to have any rights under the Security Agency Agreement. Upon the closing of the
Merger, ProLogis intends to terminate its main revolving credit facility and revoke the status of
the ProLogis Indenture and the ProLogis Notes as a “DSD Agreement” and “Other DS Debt,”
respectively. Upon such revocation, the benefits of the security and sharing arrangements afforded
to the holders of the ProLogis Notes pursuant to the Security Documents would be eliminated. Such
revocation may occur before or after the release of the collateral described above.
Pursuant to their terms, upon consummation of the Merger, the ProLogis Convertible Notes will
become exchangeable into shares of AMB common stock, rather than convertible into ProLogis common
shares, and ProLogis and the Trustee will be required to enter into a supplemental indenture to
effect such change. Each of the Eleventh Supplemental Indenture and the Twelfth Supplemental
Indenture will provide for the conversion and settlement of the ProLogis Convertible Notes as set
forth in the ProLogis Convertible Notes Supplemental Indentures. Additionally, each of the
Eleventh Supplemental Indenture and Twelfth Supplemental Indenture will provide for adjustments as
nearly equivalent as may be practicable to the adjustments provided in Article VIII of each of the
ProLogis Convertible Notes Supplemental Indentures. The Twelfth Supplemental Indenture will
provide for adjustments to account for differences in the value of shares of AMB common stock and
ProLogis common shares and for differences in the dividend thresholds of AMB and ProLogis. The
initial exchange rate, dividend threshold amounts, contingent exchange trigger prices and
fundamental change make-whole amounts will be adjusted as described herein and in the Eleventh
Supplemental Indenture and the Twelfth Supplemental Indenture. The ProLogis Indenture, as so
amended by the Eleventh Supplemental Indenture and the Twelfth Supplemental Indenture, will govern
any ProLogis Convertible Notes that are not tendered and accepted in the exchange offers. Other
than such adjustments, consummation of the Merger will not confer any additional or different
conversion or exchange rights to holders of the ProLogis Convertible Notes. This summary does not
purport to be complete and is qualified in its entirety by reference to the form of the Eleventh
Supplemental Indenture and the Twelfth Supplemental Indenture, which are filed as a exhibits to the
registration statement of which this prospectus is a part. Also, see “Description of the
Differences Between the AMB LP Notes and the ProLogis Notes” for changes to the original initial
conversion rates, dividend threshold amounts, contingent exchange trigger prices and fundamental
change make-whole amounts for the ProLogis Convertible Notes.
Set forth below is a summary of the Proposed Amendments. This summary does not purport to be
complete and is qualified in its entirety by reference to the form of the Thirteenth Supplemental
Indenture, which is filed as an exhibit to the registration statement of which this prospectus is a
part. Copies of the ProLogis Indenture and all of the supplemental indentures previously adopted
thereunder relating to the ProLogis Notes (including the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the
Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture,
the Eighth Supplemental Indenture, the Ninth Supplemental Indenture and the Tenth Supplemental
Indenture), are on file with the SEC and are also available upon request from the information
agent. Any capitalized terms which are used but not defined in the following summary of the
Proposed Amendments have the meanings assigned thereto in the ProLogis Indenture.
By consenting to the Proposed Amendments to the ProLogis Indenture, you will be deemed to have
waived any default, event of default or other consequence under such indenture for failure to
comply with the terms of the provisions identified above (whether before or after the date of the
supplemental indenture effecting the amendments described above).
The text of the provisions prior to and after the Proposed Amendments follows the brief
summary below.
158
Original Events of Default Amendments
The Original Events of Default Amendments would, with respect to the outstanding ProLogis
Notes, delete in their entirety Sections 501(5) and 501(6) (cross-acceleration and judgment events
of default) of the Base ProLogis Indenture and each of the relevant defined terms and
cross-references related thereto.
Events of Default Amendments
The Events of Default Amendments would, with respect to the outstanding ProLogis
Non-Convertible Notes, delete in their entirety the amendments to Sections 501(5) and 501(6)
(cross-acceleration and judgment events of default) of the Base ProLogis Indenture from the events
of default set forth in Section 2.2 of the Eighth Supplemental Indenture and the Ninth Supplemental
Indenture and each of the relevant defined terms and cross-references related thereto.
Additionally, the Events of Default Amendments would, with respect to the outstanding ProLogis
3.250% 2015 Convertible Notes, delete in their entirety the references to Sections 501(5) and
501(6) (cross-acceleration and judgment events of default) of the Base ProLogis Indenture as
amended by the Ninth Supplemental Indenture in Section 5.01 of the Tenth Supplemental Indenture and
each of the relevant defined terms and cross-references related thereto.
Contingent Convertible Notes Events of Default Amendments
The Contingent Convertible Notes Events of Default Amendments would, with respect to the
outstanding ProLogis Contingent Convertible Notes, delete in their entirety the references to
Sections 501(5) and 501(6) (cross-acceleration and judgment events of default) of the Base ProLogis
Indenture as amended by the Second Supplemental Indenture in Section 5.01 of the Fourth
Supplemental Indenture, the Fifth Supplemental Indenture and the Sixth Supplemental Indenture and
each of the relevant defined terms and cross-references related thereto.
Merger Restriction Amendments
The Merger Restriction Amendments would, with respect to the outstanding ProLogis Notes,
delete in their entirety Article Eight (Consolidation, Merger, Sale, Lease or Conveyance) of the
Base ProLogis Indenture and each of the relevant defined terms and cross-references related
thereto. Additionally, the Merger Restriction Amendments would, with respect to the outstanding
ProLogis Convertible Notes, delete in their entirety Section 7.01 (Company May Consolidate, Etc. on
Certain Terms) of each ProLogis Convertible Notes Supplemental Indenture and each of the relevant
defined terms and cross-references related thereto.
Incurrence of Debt Amendments
The Incurrence of Debt Amendments would, with respect to the outstanding ProLogis
Non-Convertible Notes, delete in their entirety Section 2.1 (Limitations on Incurrence of Debt) of
the Eighth Supplemental Indenture and the Ninth Supplemental Indenture and each of the relevant
defined terms and cross-references related thereto.
Maintenance of Properties Amendments
The Maintenance of Properties Amendments would, with respect to the outstanding ProLogis
Non-Convertible Notes, delete in their entirety Section 1006 (Maintenance of Properties) of the
Base ProLogis Indenture and each of the relevant defined terms and cross-references related
thereto.
Insurance Amendments
The Insurance Amendments would, with respect to the outstanding ProLogis Non-Convertible
Notes, delete in their entirety Section 1007 (Insurance) of the Base ProLogis Indenture and each of
the relevant defined terms and cross-references related thereto.
159
Payment of Taxes and Other Claims Amendments
The Payment of Taxes and Other Claims Amendments would, with respect to the outstanding
ProLogis Non-Convertible Notes, delete in their entirety Section 1008 (Payment of Taxes and Other
Claims) of the Base ProLogis Indenture and each of the relevant defined terms and cross-references
related thereto. Additionally, the Payment of Taxes and Other Claims Amendments would, with respect
to the outstanding ProLogis Convertible Notes, delete in their entirety the reference to Section
1008 of the Base ProLogis Indenture in Section 4.05 (Exclusion of Certain Provisions From Base
Indenture) of each ProLogis Convertible Notes Supplemental Indenture and each of the relevant
defined terms and cross-references related thereto.
Original Financial Information Amendments
The Original Financial Information Amendments would, with respect to the outstanding ProLogis
Notes, delete in their entirety Section 1009 (Provision of Financial Information) of the Base
ProLogis Indenture and each of the relevant defined terms and cross-references related thereto.
Financial Information Amendments
The Financial Information Amendments would, with respect to the outstanding ProLogis Notes,
excluding the Original Financial Information Securities, delete in their entirety Section 2.2
(Provision of Financial Information) of the Second Supplemental Indenture and the Seventh
Supplemental Indenture and each of the relevant defined terms and cross-references related thereto.
Additionally, the Financial Information Amendments would, with respect to the outstanding ProLogis
Convertible Notes, delete in their entirety the reference to Section 1009 of the Base ProLogis
Indenture in Section 4.05 (Exclusion of Certain Provisions From Base Indenture) of each ProLogis
Convertible Notes Supplemental Indenture and each of the relevant defined terms and
cross-references related thereto.
Effectiveness of Proposed Amendments
If AMB LP receives the Requisite Consents, the Proposed Amendments to the ProLogis Indenture
will be entered into and become effective when AMB LP settles the exchange offers, which AMB LP
expects to occur promptly after the Expiration Date. This assumes that all other conditions of the
exchange offers and consent solicitations are satisfied or waived, as applicable.
Summary Comparison of Proposed Amendments
The following is a summary comparison of the material terms of the ProLogis Notes, as governed
by the ProLogis Indenture, and the ProLogis Notes that are either not validly tendered or accepted
by AMB LP, which will be governed by the ProLogis Indenture, as if amended by all of the Proposed
Amendments. The description of the ProLogis Notes reflects the changes to the covenants and other
terms of the ProLogis Notes or the ProLogis Indenture that may be effected following the receipt of
the required consents to the Proposed Amendments.
This summary does not purport to be complete, does not include changes to the relevant defined
terms and cross-references related thereto and is qualified in its entirety by reference to the
ProLogis Indenture and the Proposed Amendments.
Other terms used in the comparison of the ProLogis Notes below and not otherwise defined in
this prospectus have the meanings given to such terms in the ProLogis Indenture, as if amended by
all of the Proposed Amendments. Article and section references in the descriptions of the notes
below are references to the applicable indenture under which the notes were or will be issued.
160
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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Events of Default
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Sections 501(5) and 501(6) of the Base ProLogis Indenture
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Section N/A
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(5) a default under any bond, debenture, note or other
evidence of indebtedness of the Company, or under any
mortgage, indenture or other instrument of the Company
(including a default with respect to Securities of any
series other than that series) under which there may be
issued or by which there may be secured any indebtedness
of the Company (or by any Subsidiary, the repayment of
which the Company has guaranteed or for which the
Company is directly responsible or liable as obligor or
guarantor), whether such indebtedness now exists or
shall hereafter be created, which default shall
constitute a failure to pay an aggregate principal
amount exceeding $10,000,000 of such indebtedness when
due and payable after the expiration of any applicable
grace period with respect thereto and shall have
resulted in such indebtedness in an aggregate principal
amount exceeding $10,000,000 becoming or being declared
due and payable prior to the date on which it would
otherwise have become due and payable, without such
indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a
period of 10 days after there shall have been given, by
registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders
of at least 10% in principal amount of the Outstanding
Securities of that series a written notice specifying
such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration
to the rescinded or annulled and stating that such
notice is a “Notice of Default” hereunder; or
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There are no
comparable
provisions.
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(6) the entry by a court of competent jurisdiction of
one or more judgments, orders or decrees against the
Company or any of its Subsidiaries in an aggregate
amount (excluding amounts covered by insurance) in
excess of $10,000,000 and such judgments, orders or
decrees remain undischarged, unstayed and unsatisfied in
an aggregate amount (excluding amounts covered by
insurance) in excess of $10,000,000 for a period of 30
consecutive days; or
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Events of Default
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Sections 501(5) and 501(6) of the Base ProLogis
Indenture, as amended by Section 2.3 of the Second
Supplemental Indenture
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Section N/A
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Pursuant to Section 901(5) of the Base Indenture,
clauses (5) and (6) of Section 501 of the Base Indenture
are hereby amended for the benefit of the Holders of
Securities issued on or after the date of this
Supplemental Indenture, unless otherwise provided in the
Officers’ Certificate or supplemental indenture
authorizing any series of such Securities, to provide
that references to $10,000,000 contained in clauses (5)
and (6) of Section 501 of the Indenture are amended to
be $50,000,000; provided, however, that the provisions
of this
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There is no
comparable provision.
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161
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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Section 2.3 shall become effective only when
there are no Securities Outstanding of any series
created prior to the execution of this Supplemental
Indenture.
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Events of Default
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Sections 501(5) and 501(6) of the Base ProLogis
Indenture, as amended by Section 2.2 of the Eighth
Supplemental Indenture
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Section N/A
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Pursuant to Section 901(5) of the Base Indenture,
clauses (5) and (6) of Section 501 of the Base Indenture
are hereby amended for the benefit of the Holders of
Securities issued on or after the date of this
Supplemental Indenture, unless otherwise provided in the
Officers’ Certificate or supplemental indenture
authorizing any series of such Securities, to provide
that references to $10,000,000 contained in clauses (5)
and (6) of Section 501 of the Indenture are amended to
be $50,000,000.
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There is no
comparable provision.
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Events of Default
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Sections 501(5) and 501(6) of the Base ProLogis
Indenture, as amended by Section 2.2 of the Ninth
Supplemental Indenture
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Section N/A
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Pursuant to Section 902 of the Base Indenture: (i)
clauses (5) and (6) of Section 501 of the Original
Indenture as they relate to (a) the Consent Securities
and (b) Securities issued on or after the date of this
Supplemental Indenture (unless, with respect to
Securities referenced in the immediately preceding
clause (b), otherwise provided in the Officers’
Certificate or supplemental indenture authorizing any
such series of Securities) are hereby amended to provide
that references to $10,000,000 contained in clauses (5)
and (6) of Section 501 of the Original Indenture are
amended to be $50,000,000; and (ii) Section 2.3 of the
Second Supplemental Indenture and Section 2.3 of the
Seventh Supplemental Indenture shall not apply to (x)
the Consent Securities or (y) any Securities issued on
or after the date of this Supplemental Indenture
(unless, with respect to Securities referenced in the
immediately preceding clause (y), otherwise provided in
the Officers’ Certificate or Supplemental Indenture
authorizing any such series of Securities).
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There is no
comparable provision.
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Events of Default
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Section 5.01 of the Fourth Supplemental Indenture, Fifth
Supplemental Indenture and Sixth Supplemental Indenture
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Section 1.3(j) of the
Thirteenth
Supplemental
Indenture
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The provisions of Section 501(2) and Section 501(3) of
the Base Indenture shall not be applicable to the Notes.
As contemplated under Section 301 and Section 501(9) of
the Base Indenture, the following events, in addition to
the events described in clauses (1), (4), (5) (as
amended by the Second Supplemental Indenture to the Base
Indenture), (6) (as amended by the Second Supplemental
Indenture to the Base Indenture), (7) and (8) of the
Base Indenture, shall be Events of
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The provisions of
Section 501(2),
Section 501(3),
Section 501(5) and
Section 501(6) of the
Base Indenture shall
not be applicable to
the Notes. As
contemplated under
Section 301 and
Section 501(9) of the
Base
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162
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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Default with respect to the Notes:
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Indenture, the
following events, in
addition to the
events described in
clauses (1), (4), (7)
and (8) of Section
501 of the Base
Indenture, shall be
Events of Default
with respect to the
Notes:
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Events of Default
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Section 5.01 of the Tenth Supplemental Indenture
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Section 1.3(k) of the
Thirteenth
Supplemental
Indenture
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The provisions of Section 501(2) and Section 501(3) of
the Base Indenture shall not be applicable to the Notes.
As contemplated under Section 301 and Section 501(9) of
the Base Indenture, the following events, in addition to
the events described in clauses (1), (4), (5) (as
amended by the Ninth Supplemental Indenture to the Base
Indenture), (6) (as amended by the Ninth Supplemental
Indenture to the Base Indenture), (7) and (8) of Section
501 of the Base Indenture, shall be Events of Default
with respect to the Notes:
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The provisions of
Section 501(2),
Section 501(3),
Section 501(5) and
Section 501(6) of the
Base Indenture shall
not be applicable to
the Notes. As
contemplated under
Section 301 and
Section 501(9) of the
Base Indenture, the
following events, in
addition to the
events described in
clauses (1), (4), (7)
and (8) of Section
501 of the Base
Indenture, shall be
Events of Default
with respect to the
Notes:
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Consolidation,
Merger, Sale, Lease or Conveyance
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Article Eight of the Base ProLogis Indenture
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Article N/A
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Section 801. Consolidations and Mergers of Company and
Sales, Leases and Conveyances Permitted Subject to
Certain Conditions. The Company may consolidate with,
or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other Person,
provided that in any such case, (i) either the Company
shall be the continuing entity, or the successor (if
other than the Company) entity shall be a Person
organized and existing under the laws of the United
States or a State thereof and such successor entity
shall expressly assume the due and punctual payment of
the principal of (and premium or Make-Whole Amount, if
any) and any interest (including all Additional Amounts,
if any, payable pursuant to Section 1011) on all of the
Securities, according to their tenor, and the due and
punctual performance and observance of all of the
covenants and conditions of this Indenture to be
performed by the Company by supplemental indenture,
complying with
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There are no
comparable
provisions.
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163
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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Article Nine hereof, satisfactory to the
Trustee, executed and delivered to the Trustee by such
Person and (ii) immediately after giving effect to such
transaction and treating any indebtedness which becomes
an obligation of the Company or any Subsidiary as a
result thereof as having been incurred by the Company or
such Subsidiary at the time of such transaction, no
Event of Default, and no event which, after notice or
the lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.
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Section 802. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, lease
or conveyance and upon any such assumption by the
successor entity, such successor entity shall succeed to
and be substituted for the Company, with the same effect
as if it had been named herein as the party of the first
part, and the predecessor entity, except in the event of
a lease, shall be relieved of any further obligation
under this Indenture and the Securities. Such successor
entity thereupon may cause to be signed, and may issue
either in its own name or in the name of the Company,
any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of
such successor entity, instead of the Company, and
subject to all the terms, conditions and limitations in
this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the
officers of the Company to the Trustee for
authentication, and any Securities which such successor
entity thereafter shall cause to be signed and delivered
to the Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank
and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
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In case of any such consolidation, merger, sale, lease
or conveyance, such changes in phraseology and form (but
not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.
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Section 803. Officers’ Certificate and Opinion of
Counsel. Any consolidation, merger, sale, lease or
conveyance permitted under Section 801 is also subject
to the condition that the Trustee receive an Officers’
Certificate and an Opinion of Counsel to the effect that
any such consolidation, merger, sale, lease or
conveyance, and the assumption by any successor entity,
complies with the provisions of this Article and that
all conditions precedent herein provided for relating to
such transaction have been complied with.
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164
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
|
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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Consolidation,
Merger, Sale, Lease
or Conveyance
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Article VII of each of the ProLogis Convertible Notes
Supplemental Indentures
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Article N/A
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Section 7.01 Company May Consolidate, Etc. on Certain
Terms. Article Eight of the Base Indenture shall be
applicable to the Notes.
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There is no
comparable provision.
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Limitations on
Incurrence of Debt
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Section 1004 of the Base ProLogis Indenture, as amended
and replaced by Section 2.1 of the Eighth Supplemental
Indenture
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Section 1.3(f) of the
Thirteenth
Supplemental
Indenture
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Section 2.1. Limitations on Incurrence of Debt. Pursuant
to Section 901(5) of the Base Indenture, Section 1004 of
the Base Indenture is hereby amended and restated in its
entirety as follows for the benefit of the Holders of
Securities issued on or after the date of this
Supplemental Indenture (which covenants shall replace
and apply in lieu of the covenants set forth in Section
1004 of the Original Indenture, Section 2.1 of the
Second Supplemental Indenture and Section 2.1 of the
Seventh Supplemental Indenture), unless otherwise
provided in the Officers’ Certificate or supplemental
indenture authorizing any series of such Securities:
(a) The Company will not, and will not permit any
Subsidiary to, incur any Debt if, immediately after
giving effect to the incurrence of such additional Debt
and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Debt of
the Company and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 60%
of the sum of (without duplication) (i) Total Assets as
of the end of the calendar quarter covered in the
Company’s Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, most recently filed
with the Commission (or, if such filing is not permitted
under the Exchange Act, with the Trustee) prior to the
incurrence of such additional Debt and (ii) the purchase
price of any real estate assets or mortgages receivable
acquired, and the amount of any securities offering
proceeds received (to the extent such proceeds were not
used to acquire real estate assets or mortgages
receivable or used to reduce Debt), by the Company or
any Subsidiary since the end of such calendar quarter,
including those proceeds obtained in connection with the
incurrence of such additional Debt.
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Section 1004 of the
Original Indenture
and all
cross-references and
definitions related
thereto, as amended
by Section 2.1 of the
First Supplemental
Indenture, dated as
of February 9, 2005,
between the Company
and the Trustee,
Section 2.1 of the
Second Supplemental
Indenture and Section
2.1 of the Seventh
Supplemental
Indenture, shall not
apply to the
Securities issued on
or after the date of
this Supplemental
Indenture.
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(b) In addition to the limitation set forth in
subsection (a) of this Section 1004, the Company will
not, and will not permit any Subsidiary to, incur any
Debt if the ratio of Consolidated
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165
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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Income Available for
Debt Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended prior to
the date on which such additional Debt is to be incurred
shall have been less than 1.5, on a pro forma basis
after giving effect thereto and to the application of
the proceeds therefrom, and calculated on the assumption
that (i) such Debt and any other Debt incurred by the
Company and its Subsidiaries since the first day of such
four-quarter period and the application of the proceeds
therefrom, including to refinance other Debt, had
occurred at the beginning of such period; (ii) the
repayment or retirement of any other Debt by the Company
and its Subsidiaries since the first day of such
four-quarter period had been incurred, repaid or retired
at the beginning of such period (except that, in making
such computation, the amount of Debt under any revolving
credit facility shall be computed based upon the average
daily balance of such Debt during such period); (iii) in
the case of Acquired Debt or Debt incurred in connection
with any acquisition since the first day of such
four-quarter period, the related acquisition had
occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition
being included in such pro forma calculation; and (iv)
in the case of any acquisition or disposition by the
Company or its Subsidiaries of any asset or group of
assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset
purchase or sale, such acquisition or disposition or any
related repayment of Debt had occurred as of the first
day of such period with the appropriate adjustments with
respect to such acquisition or disposition being
included in such pro forma calculation.
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(c) In addition to the limitation set forth in
subsections (a) and (b) of this Section 1004, no
Subsidiary may incur any Unsecured Debt; provided,
however, that the Company or a Subsidiary may acquire an
entity that becomes a Subsidiary that has Unsecured Debt
if the incurrence of such Debt (including any guarantees
of such Debt assumed by the Company or any Subsidiary)
was not intended to evade the foregoing restrictions and
the incurrence of such Debt (including any guarantees of
such Debt assumed by the Company or any Subsidiary)
would otherwise be permitted under this Indenture.
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(d) In addition to the limitation set forth in
subsections (a), (b) and (c) of this Section 1004, the
Company and its Subsidiaries may not at any time own
Total Unencumbered Assets equal to less than 150% of the
aggregate outstanding principal amount of the Unsecured
Debt and Pari Passu Debt of the Company and its
Subsidiaries on a consolidated basis.
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(e) In addition to the limitation set forth in
subsections
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166
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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(a), (b), (c) and (d) of this Section 1004,
the Company will not, and will not permit any Subsidiary
to, incur any Debt for borrowed money secured by any
mortgage, lien, charge, pledge, encumbrance or security
interest upon any of the property of the Company or any
Subsidiary, whether owned at the date hereof or
hereafter acquired (other than Pari Passu Debt), if,
immediately after giving effect to the incurrence of
such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all
outstanding Debt of the Company and its Subsidiaries on
a consolidated basis for borrowed money which is secured
by any mortgage, lien, charge, pledge, encumbrance or
security interest on property of the Company or any
Subsidiary (excluding any Pari Passu Debt) is greater
than 40% of the sum of (without duplication): (i) Total
Assets as of the end of the calendar quarter covered in
the Company’s Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not
permitted under the Exchange Act, with the Trustee)
prior to the incurrence of such additional Debt and (ii)
the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any
securities offering proceeds received (to the extent
that such proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Debt),
by the Company or any Subsidiary since the end of such
calendar quarter, including those proceeds obtained in
connection with the incurrence of such additional Debt.
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(f) For purposes of this Section 1004, Debt shall be
deemed to be “incurred” by the Company or a Subsidiary
whenever the Company or such Subsidiary shall create,
assume, guarantee or otherwise become liable in respect
thereof.
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(g) Notwithstanding the foregoing, nothing in the above
covenants shall prevent: (i) the incurrence by the
Company or any Subsidiary of Debt between or among the
Company, any Subsidiary or any Equity Investee or (ii)
the Company or any Subsidiary from incurring Refinancing
Debt.
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Limitations on
Incurrence of Debt
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Section 1004 of the Base ProLogis Indenture, as amended
and replaced by Section 2.1 of the Ninth Supplemental
Indenture
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Section 1.3(g) of the
Thirteenth
Supplemental
Indenture
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Section 2.1. Limitations on Incurrence of Debt. Pursuant
to Section 902 of the Base Indenture: (i) Section 1004
of the Base Indenture is hereby amended and restated in
its entirety as set forth below (which covenants shall
replace and apply in lieu of the covenants set forth in
Section 1004 of the Original Indenture, Section 2.1 of
the First Supplemental Indenture, Section 2.1 of the
Second Supplemental Indenture and Section 2.1 of the
Seventh Supplemental Indenture); and (ii) the covenants
set forth in Section 2.1 of the First Supplemental
Indenture, Section
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Section 1004 of the
Original Indenture
and all
cross-references and
definitions related
thereto, as amended
by Section 2.1 of the
First Supplemental
Indenture, Section
2.1 of the Second
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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2.1 of the Second Supplemental
Indenture and Section 2.1 of the Seventh Supplemental
Indenture are hereby deleted in their entirety:
(a) The Company will not, and will not permit any
Subsidiary to, incur any Debt if, immediately after
giving effect to the incurrence of such additional Debt
and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Debt of
the Company and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 60%
of the sum of (without duplication) (i) Total Assets as
of the end of the calendar quarter covered in the
Company’s Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, most recently filed
with the Commission (or, if such filing is not permitted
under the Exchange Act, with the Trustee) prior to the
incurrence of such additional Debt and (ii) the purchase
price of any real estate assets or mortgages receivable
acquired, and the amount of any securities offering
proceeds received (to the extent such proceeds were not
used to acquire real estate assets or mortgages
receivable or used to reduce Debt), by the Company or
any Subsidiary since the end of such calendar quarter,
including those proceeds obtained in connection with the
incurrence of such additional Debt.
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Supplemental
Indenture and Section
2.1 of the Seventh
Supplemental
Indenture, shall not
apply to the Consent
Securities.
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(b) In addition to the limitation set forth in
subsection (a) of this Section 1004, the Company will
not, and will not permit any Subsidiary to, incur any
Debt if the ratio of Consolidated Income Available for
Debt Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended prior to
the date on which such additional Debt is to be incurred
shall have been less than 1.5, on a pro forma basis
after giving effect thereto and to the application of
the proceeds therefrom, and calculated on the assumption
that (i) such Debt and any other Debt incurred by the
Company and its Subsidiaries since the first day of such
four-quarter period and the application of the proceeds
therefrom, including to refinance other Debt, had
occurred at the beginning of such period; (ii) the
repayment or retirement of any other Debt by the Company
and its Subsidiaries since the first day of such
four-quarter period had been incurred, repaid or retired
at the beginning of such period (except that, in making
such computation, the amount of Debt under any revolving
credit facility shall be computed based upon the average
daily balance of such Debt during such period); (iii) in
the case of Acquired Debt or Debt incurred in connection
with any acquisition since the first day of such
four-quarter period, the related acquisition had
occurred as of the first day of such period with the
appropriate adjustments with respect to such
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168
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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acquisition
being included in such pro forma calculation; and (iv)
in the case of any acquisition or disposition by the
Company or its Subsidiaries of any asset or group of
assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset
purchase or sale, such acquisition or disposition or any
related repayment of Debt had occurred as of the first
day of such period with the appropriate adjustments with
respect to such acquisition or disposition being
included in such pro forma calculation.
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(c) In addition to the limitation set forth in
subsections (a) and (b) of this Section 1004, no
Subsidiary may incur any Unsecured Debt; provided,
however, that the Company or a Subsidiary may acquire an
entity that becomes a Subsidiary that has Unsecured Debt
if the incurrence of such Debt (including any guarantees
of such Debt assumed by the Company or any Subsidiary)
was not intended to evade the foregoing restrictions and
the incurrence of such Debt (including any guarantees of
such Debt assumed by the Company or any Subsidiary)
would otherwise be permitted under this Indenture.
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(d) In addition to the limitation set forth in
subsections (a), (b) and (c) of this Section 1004, the
Company and its Subsidiaries may not at any time own
Total Unencumbered Assets equal to less than 150% of the
aggregate outstanding principal amount of the Unsecured
Debt and Pari Passu Debt of the Company and its
Subsidiaries on a consolidated basis.
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(e) In addition to the limitation set forth in
subsections (a), (b), (c) and (d) of this Section 1004,
the Company will not, and will not permit any Subsidiary
to, incur any Debt for borrowed money secured by any
mortgage, lien, charge, pledge, encumbrance or security
interest upon any of the property of the Company or any
Subsidiary, whether owned at the date hereof or
hereafter acquired (other than Pari Passu Debt), if,
immediately after giving effect to the incurrence of
such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all
outstanding Debt of the Company and its Subsidiaries on
a consolidated basis for borrowed money which is secured
by any mortgage, lien, charge, pledge, encumbrance or
security interest on property of the Company or any
Subsidiary (excluding any Pari Passu Debt) is greater
than 40% of the sum of (without duplication): (i) Total
Assets as of the end of the calendar quarter covered in
the Company’s Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not
permitted under the Exchange Act, with the Trustee)
prior to the incurrence of such additional Debt and (ii)
the purchase price of any real estate assets or
mortgages receivable acquired, and the amount
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169
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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of any
securities offering proceeds received (to the extent
that such proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Debt),
by the Company or any Subsidiary since the end of such
calendar quarter, including those proceeds obtained in
connection with the incurrence of such additional Debt.
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(f) For purposes of this Section 1004, Debt shall be
deemed to be “incurred” by the Company or a Subsidiary
whenever the Company or such Subsidiary shall create,
assume, guarantee or otherwise become liable in respect
thereof.
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(g) Notwithstanding the foregoing, nothing in the above
covenants shall prevent: (i) the incurrence by the
Company or any Subsidiary of Debt between or among the
Company, any Subsidiary or any Equity Investee or (ii)
the Company or any Subsidiary from incurring Refinancing
Debt.
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Maintenance of
Properties
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Section 1006 of the Base ProLogis Indenture
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Section N/A
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The Company will cause all of its properties used or
useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with
all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in the judgment of the
Company may be necessary so that the business carried on
in connection therewith may be properly and
advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the
Company or any Subsidiary from selling or otherwise
disposing for value its properties in the ordinary
course of its business.
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There is no
comparable provision.
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Insurance
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Section 1007 of the Base ProLogis Indenture
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Section N/A
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The Company will, and will cause each of its
Subsidiaries to, keep all of its insurable properties
insured against loss or damage at least equal to their
then full insurable value with financially sound and
reputable insurance companies.
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There is no
comparable provision.
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Payment of Taxes
and Other Claims
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Section 1008 of the Base ProLogis Indenture
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Section N/A
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The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1)
all taxes, assessments and governmental charges levied
or imposed upon it or any Subsidiary or upon the income,
profits
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There is no
comparable provision.
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170
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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or property of the Company or any Subsidiary,
and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
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Provision of
Financial
Information
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Section 1009 of the Base ProLogis Indenture
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Section N/A
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Whether or not the Company is subject to Section 13 or
15(d) of the Exchange Act, the Company will, to the
extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and
other documents which the Company would have been
required to file with the Commission pursuant to such
Section 13 or 15(d) (the “Financial Statements”) if the
Company were so subject, such documents to be filed with
the Commission on or prior to the respective dates (the
“Required Filing Dates”) by which the Company would have
been required so to file such documents if the Company
were so subject.
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There is no
comparable provision.
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The Company will also in any event (x) within 15 days of
each Required Filing Date (i) transmit by mail to all
Holders, as their names and addresses appear in the
Security Register, without cost to such Holders, copies
of the annual reports and quarterly reports which the
Company would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such
Sections, and (ii) file with the Trustee copies of
annual reports, quarterly reports and other documents
which the Company would have been required to file with
the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such
Sections and (y) if filing such documents by the Company
with the Commission is not permitted under the Exchange
Act, promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply
copies of such documents to any prospective Holder.
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Provision of
Financial
Information
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Section 1009 of the Base ProLogis Indenture, as amended
by Section 2.2 of the Second Supplemental Indenture
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Section N/A
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Whether or not the Company is subject to Section 13 or
15(d) of the Exchange Act, the Company will, to the
extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and
other documents which the
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There is no
comparable provision.
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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Company would have been
required to file with the Commission pursuant to such
Section 13 or 15(d) (the “Financial Statements”) if the
Company were so subject, such documents to be filed with
the Commission on or prior to the respective dates (the
“Required Filing Dates”) by which the Company would have
been required so to file such documents if the Company
were so subject.
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The Company will also in any event (x) within 15 days of
each Required Filing Date (i) transmit by mail or
electronic transmittal to all Holders, as their names
and addresses appear in the Security Register, without
cost to such Holders, copies of the annual reports and
quarterly reports which the Company is required to file
or would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if
the Company were subject to such Sections, and (ii) file
with the Trustee copies of annual reports, quarterly
reports and other documents which the Company would have
been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Company
were subject to such Sections and (y) if filing such
documents by the Company with the Commission is not
permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of
duplication and delivery, supply copies of such
documents to any prospective Holder
.
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Provision of
Financial
Information
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Section 1009 of the Base ProLogis Indenture, as amended
by Section 2.2 of the Seventh Supplemental Indenture
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Section N/A
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Whether or not the Company is subject to Section 13 or
15(d) of the Exchange Act, the Company will, to the
extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and
other documents which the Company would have been
required to file with the Commission pursuant to such
Section 13 or 15(d) (the “Financial Statements”) if the
Company were so subject, such documents to be filed with
the Commission on or prior to the respective dates (the
“Required Filing Dates”) by which the Company would have
been required so to file such documents if the Company
were so subject.
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There is no
comparable provision.
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The Company will also in any event (x) within 15 days of
each Required Filing Date (i) transmit by mail or
electronic transmittal to all Holders, as their names
and addresses appear in the Security Register, without
cost to such Holders, copies of the annual reports and
quarterly reports which the Company is required to file
or would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if
the Company were subject to such Sections, and (ii) file
with the Trustee copies of annual reports, quarterly
reports and
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172
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ProLogis Notes after giving
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effect to the Proposed
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ProLogis Notes without giving effect to the Proposed
|
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Amendments to the
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Amendments to the ProLogis Indenture
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ProLogis Indenture
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other documents which the Company would have
been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Company
were subject to such Sections and (y) if filing such
documents by the Company with the Commission is not
permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of
duplication and delivery, supply copies of such
documents to any prospective Holder.
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Exclusion of
Certain Provisions
from Base Indenture
|
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Section 4.05 of each of the ProLogis Convertible Notes
Supplemental Indentures
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Section 1.3(i) of the
Thirteenth
Supplemental
Indenture
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Section 1004, Section 1006, Section 1007 and Section
1011 of the Base Indenture shall not apply to the Notes.
Section 1002, Section 1003, Section 1005, Section 1008,
Section 1009 (as amended by Section 2.2 of the Second
Supplemental Indenture to the Base Indenture), Section
1010 and Section 1012 of the Base Indenture shall be
applicable to the Notes.
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Section 1004, Section
1006, Section 1007,
Section 1008, Section
1009 and Section 1011
of the Base Indenture
shall not apply to
the Notes. Section
1002, Section 1003,
Section 1005, Section
1010 and Section 1012
of the Base Indenture
shall be applicable
to the Notes.
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173
COMPARISON OF RIGHTS OF AMB STOCKHOLDERS AND PROLOGIS SHAREHOLDERS
Both AMB and ProLogis are organized in Maryland. If the Merger is consummated, shareholders of
ProLogis will become stockholders of AMB, which will be renamed “ProLogis, Inc.” The rights of
ProLogis shareholders are governed currently by the Maryland REIT Law (“MRL”) and the declaration
of trust and bylaws of ProLogis. Upon consummation of the Merger, the rights of the former ProLogis
shareholders who receive AMB common stock or preferred stock will be governed by the Maryland
General Corporation Law (“MGCL” and, together with MRL, “Maryland law”) and will be governed by the
AMB charter and the AMB bylaws, rather than the declaration of trust and bylaws of ProLogis.
The following is a summary of the material differences between the rights of AMB stockholders
(which will be the rights of stockholders of the combined company following the Merger) and
ProLogis shareholders, but does not purport to be a complete description of those differences or a
complete description of the terms of the AMB common stock subject to issuance in connection with
the Topco merger. The following summary is qualified in its entirety by reference to the relevant
provisions of (i) Maryland law, (ii) the AMB charter, (iii) the Amended and Restated Declaration of
Trust of ProLogis (the “ProLogis declaration of trust”), (iv) the AMB bylaws, (v) the Amended and
Restated Bylaws of ProLogis (the “ProLogis bylaws”), (vi) the proposed bylaw amendment and (vii)
the proposed charter amendment.
This section does not include a complete description of all differences among the rights of
AMB stockholders and ProLogis shareholders, nor does it include a complete description of the
specific rights of such holders. Furthermore, the identification of some of the differences in the
rights of such holders as material is not intended to indicate that other differences that may be
equally important do not exist. You are urged to read carefully the relevant provisions of Maryland
law, as well as the governing corporate instruments of each of AMB and ProLogis, copies of which
are available, without charge, to any person, by following the instructions listed under “Where You
Can Find More Information.”
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Rights of AMB Stockholders
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Rights of ProLogis Shareholders
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Corporate Governance
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AMB is a Maryland corporation that is a
REIT for U.S. federal income tax
purposes.
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ProLogis is a Maryland real estate
investment trust that is a REIT for U.S.
federal income tax purposes.
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The rights of AMB stockholders are
governed by the MGCL, the AMB charter and
the AMB bylaws.
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The rights of ProLogis shareholders are
governed by the MRL, the ProLogis
declaration of trust and the ProLogis
bylaws.
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Authorized Capital
Stock or Shares of
Beneficial Interest
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AMB is authorized to issue an aggregate
of 600 million shares of capital stock,
consisting of (1) 500 million shares of
common stock, $0.01 par value per share;
and (2) 100 million shares of preferred
stock, $0.01 par value per share.
Preferred Stock
. The AMB board of
directors is authorized, without
stockholder action, to issue preferred
stock from time to time and to establish,
amongst other things, the designations,
preferences and relative, participating,
optional, conversion, or other rights and
qualifications, limitations and
restrictions thereof; the rates and times
of payment of dividends, the price and
manner of redemption; the amount payable
in the event of liquidation, dissolution,
and winding-up or in the event of any
merger or
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ProLogis is authorized to issue an
aggregate of 750 million shares of
beneficial interest, consisting of (1)
737,580,000 common shares of beneficial
interest, $0.01 par value per share; (2)
2,300,000 Series C cumulative redeemable
preferred shares, par value $0.01 per
share; (3) 5,060,000 Series F cumulative
redeemable preferred shares, par value
$0.01 per share; and (4) 5,060,000 Series
G cumulative redeemable preferred shares,
par value $0.01 per share.
Preferred Shares
. The board of trustees
of ProLogis may classify or reclassify
any unissued shares from time to time by
setting or changing the preferences,
conversion or other rights, voting
powers, restrictions, limitations as to
dividends or distributions,
qualifications or terms or conditions of
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Rights of AMB Stockholders
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Rights of ProLogis Shareholders
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consolidation of or sale of
assets; the rights (if any) to convert
the preferred stock into, and/or to
purchase, stock of any other class or
series, the terms of any sinking fund or
redemption or purchase account (if any)
to be provided for shares of such class
of preferred stock; restrictions on
ownership and transfer to preserve tax
benefits; and the voting powers (if any)
of the holders of any class of preferred
stock generally or with respect to any
particular matter, which may be less
than, equal to or greater than one vote
per share.
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redemption of the shares by filing
articles supplementary pursuant to
Maryland law. The ProLogis board is
authorized to issue from the authorized
but unissued shares of ProLogis preferred
shares in series and to establish from
time to time the number of preferred
shares to be included in each such series
and to fix the designation and any
preferences, conversion and other rights,
voting powers, restrictions, limitations
as to dividends, qualifications and terms
and conditions of redemption of the
shares of each series. The authority of
the ProLogis board with respect to each
unissued series includes, determination
of the following: number and designation;
dividend rates; voting rights; conversion
rights; redemption rights; liquidation
preferences; sinking funds provisions;
and any other relative rights,
preferences, limitations and powers.
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Cumulative Voting
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Neither holders of AMB stock or ProLogis shares have the right to cumulate their votes
with respect to the election of directors or trustees, as the case may be.
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Size of the Board
of Directors
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The number of directors, which must be
between five and 13, may be changed by
the board of directors. Currently, the
AMB board of directors consists of nine
directors.
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The number of trustees, which must be
between three and 15, may be changed by
the board of trustees. Currently, the
ProLogis board of trustees consists of
ten trustees.
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Upon completion of the Merger, the board
of directors of the combined company will
be increased to 11 directors.
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Independent
Directors
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At least a majority of the directors on
the AMB board of directors must be
independent directors.
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A majority of the trustees on the
ProLogis board of trustees must not be
officers or employees of ProLogis.
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Classified Board /
Term of Directors
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Neither the AMB board of directors nor the ProLogis board of trustees is classified.
Generally, directors of AMB or trustees of ProLogis, as the case may be, hold office for
a term expiring at the next succeeding annual meeting of stockholders or shareholders,
respectively, and until their successors are duly elected and qualify. In the event of an
increase or decrease in the size of the board, each incumbent director or trustee will
generally continue as a director or trustee.
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Removal of Directors
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Directors may be removed, but only for
cause, by the affirmative vote of holders
of two-thirds of the votes entitled to be
cast in the election of directors.
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Trustees may be removed, but only for
cause, by (1) the affirmative vote of
two-thirds of the votes entitled to be
cast in the election of trustees; or (2)
the vote of two-thirds of the trustees
then in office.
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Election of
Directors
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The bylaws of both AMB and ProLogis provide that, in the case of a non- contested
election, directors or trustees, as the case may be, must receive a majority of
affirmative votes cast for election at a meeting at which a quorum is present. For this
purpose, a majority of the votes
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Rights of AMB Stockholders
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Rights of ProLogis Shareholders
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cast means that the number of shares of AMB common stock
or ProLogis common shares that are cast and are voted “for” the election of a director or
trustee, as the case may be, must exceed the number of common shares that are withheld
from or voted against his or her election. If a director or trustee fails to obtain a
majority, he or she must tender his or her resignation to the board. The board will
determine whether to accept the tendered resignation. If the board determines to reject
the tendered resignation, the board must publicly announce its decision.
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Filling Vacancies
of Directors
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Any vacancies on the AMB board of directors or the ProLogis board of trustees can be
filled by their stockholders or shareholders, respectively, at an annual or special
meeting.
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Any vacancies on the AMB board of
directors may also be filled by the
affirmative vote of a majority of the
remaining directors, although less than a
quorum, provided that a vacancy caused by
an increase in the number of directors
may be filled only by the affirmative
vote of a majority of the entire board.
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Any vacancies on the ProLogis board of
trustees may also be filled by the
affirmative vote of a majority of the
remaining trustees, although less than a
quorum.
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Charter Amendments
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The affirmative vote of stockholders
entitled to cast at least two-thirds of
the votes entitled to be cast on the
matter is required to amend the AMB
charter.
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The affirmative vote of shareholders
entitled to cast at least a majority of
the votes entitled to be cast on the
matter is required to amend the ProLogis
declaration of trust.
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After the effective time of the Topco
merger and assuming the charter amendment
is approved, the affirmative vote of
stockholders entitled to cast at least a
majority of the votes entitled to be cast
on the matter will be required to amend
the charter of the combined company;
provided that (i) any amendment to any
provision of the charter of the combined
company which expressly requires for any
purpose a greater proportion of the votes
entitled to be cast will require the
proportion of votes specified in that
provision and (ii) any amendment to the
stockholder voting threshold established
by the charter amendment will require the
affirmative vote of the holders of shares
entitled to cast two-thirds of all of the
votes entitled to be cast on the matter.
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The trustees may also amend the charter
by a two-thirds vote to enable ProLogis
to qualify as a REIT.
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Bylaw Amendments
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The AMB bylaws may be amended by (1) the
AMB board of directors or (2) the
affirmative vote of the majority of all
outstanding shares of common stock
entitled to vote; provided, that certain
sections of the bylaws relating to
amendments, notice of meetings, affiliate
transactions and control share
acquisitions may only be amended by the
affirmative vote of the majority of all
outstanding shares of common stock
entitled to vote.
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The power to amend the ProLogis bylaws
vests in the board of trustees of
ProLogis by vote of a majority of the
trustees, subject to repeal or change by
action of the shareholders of ProLogis
entitled to vote thereon.
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Rights of AMB Stockholders
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Rights of ProLogis Shareholders
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After the effective time of the Topco
merger, the affirmative vote of at least
75% of the independent directors of the
combined company will be required to
amend, modify or repeal, or adopt any
bylaw provision inconsistent with,
certain provisions of the AMB bylaws,
which will be the bylaws of the combined
company, pertaining to features of the
leadership structure of the combined
company.
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Irrevocable Board
Resolutions
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The AMB board of directors may designate
any of its resolutions to be
“irrevocable.” Resolutions so designated
may not be revoked, altered or amended
subsequently by the board of directors
without approval of a majority of the
outstanding shares of common stock
entitled to vote.
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N/A
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Vote on Merger,
Consolidation or
Sale of
Substantially all
Assets
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Generally, the affirmative vote of
stockholders entitled to cast at least
two-thirds of the votes entitled to be
cast on the matter is required to approve
extraordinary actions, including a merger
or similar business combination.
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Generally, the affirmative vote of
shareholders entitled to cast at least a
majority of the votes entitled to be cast
on the matter is required to approve a
merger or similar business combination.
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Upon the effective time of the Topco
merger and assuming the AMB charter
amendment is approved, the affirmative
vote of stockholders entitled to cast at
least a majority of the votes entitled to
be cast on the matter will be required to
approve extraordinary actions, including
a merger or similar business combination.
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Ownership
Limitations
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With certain exceptions, the actual, constructive or beneficial ownership by any person
of more than 9.8% (in value or number of votes, whichever is more restrictive) of the
issued and outstanding shares of common stock of AMB and the issued and outstanding
shares of ProLogis is generally prohibited. Each of AMB and ProLogis requires its
stockholders or shareholders, respectively, to provide it with certain information
relating to maintenance of REIT status.
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The 9.8% ownership limitation applies
separately to each series of existing AMB
preferred stock, as well as to the common
stock. The New AMB Preferred Stock is
subject to an ownership limit of 9.8% of
the issued and outstanding capital stock,
and a 25% ownership limit for each series
of New AMB Preferred Stock.
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The ownership limit threshold for each
series of the outstanding preferred
shares of ProLogis is 25%.
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Annual Meetings of
the Stockholders
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An annual meeting of AMB stockholders is
required to be held each year during the
month of May in San Francisco, at a time
and
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The annual meeting of ProLogis
shareholders is required to be held at a
time and place as
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Rights of AMB Stockholders
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Rights of ProLogis Shareholders
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place as designated by the AMB board
of directors.
After the effective time of the Topco
merger, the board of directors of the
combined company will be able to hold the
annual meeting at a time and place as
designated by the board of directors of
the combined company.
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designated by the ProLogis board of trustees.
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Special Meetings of
the Stockholders
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A special meeting of AMB stockholders may
be called at any time by the president,
the chairman of the board, or a majority
of the directors, or by a committee of
the board of directors which has been
duly designated by the board of directors
to call such meetings.
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A special meeting of ProLogis
shareholders may be called at any time by
a majority of the trustees or by the
chairman or any co-chairman.
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Subject to certain exceptions, a special
meeting will also be called by the
secretary upon the written request of AMB
stockholders entitled to cast at least
50% of the votes entitled to be cast at
the meeting.
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A special meeting will also be called by
the secretary upon the written request of
ProLogis shareholders holding in the
aggregate a majority of the outstanding
shares entitled to vote.
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Upon the effective time of the Topco
merger, the chief executive officer and
co-chief executive officers will also be
able to call a special meeting.
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Business transacted at the special
meeting of stockholders will be limited
to the purposes stated in the notice.
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Business transacted at the special
meeting of shareholders will be limited
to the purposes stated in the notice.
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Maryland Business
Combination Act
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The Maryland Business Combination Act provides, generally, that “business combinations”
between a Maryland corporation and an interested stockholder or an affiliate of an
interested stockholder are prohibited for five years after the most recent date on which
the interested stockholder becomes an interested stockholder. These business combinations
include a merger, consolidation, share exchange, or, in circumstances specified in the
statute, an asset transfer or issuance or reclassification of equity securities. Subject
to certain exceptions, an interested stockholder is defined as: (i) any person who
beneficially owns ten percent or more of the voting power of the corporation’s
outstanding stock; or (ii) an affiliate or associate of the corporation who, at any time
within the two-year period prior to the date in question, was the beneficial owner of ten
percent or more of the voting power of the then outstanding voting stock of the
corporation. A person is not an interested stockholder under the statute if the board of
directors approved in advance the transaction by which he otherwise would have become an
interested stockholder. However, in approving a transaction, the board of directors may
provide that its approval is subject to compliance, at or after the time of approval,
with any terms and conditions determined by the board. After the five-year prohibition,
any business combination between the corporation and the interested stockholder that does
not meet certain fair price requirements generally must be (1) recommended by the board
of directors, (2) approved by the affirmative vote of at least 80% of the votes entitled
to be cast by the holders of outstanding voting stock and (3) approved by two-thirds of
the votes entitled to be cast by holders of voting stock of the corporation other than
shares held by the interested stockholder with whom or with whose affiliate the business
combination is to be effected or
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Rights of AMB Stockholders
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Rights of ProLogis Shareholders
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held by an affiliate or associate of the interested
stockholder.
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AMB has opted not to be subject to the
Maryland Business Combination Act.
The AMB board of directors may not
revoke, alter or amend its prior
resolution to opt out of the Maryland
Business Combination Act, or otherwise
elect to have any business combination of
AMB be subject to such act without the
approval of a majority of the outstanding
shares of AMB common stock entitled to
vote.
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ProLogis has opted not to be subject to
the Maryland Business Combination Act
only with respect to business
combinations with Security Capital Group
and its affiliates and successors.
The ProLogis board of trustees has by
resolution opted out of the Maryland
Business Combination Act with respect to
the Merger.
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Shareholder Rights
Plan
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Neither AMB nor ProLogis has a shareholder rights plan in effect.
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REIT Qualification
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If the AMB board of directors determines
that it is no longer in the best
interests of AMB to qualify or continue
to be qualified as a REIT and such
determination is approved by the
affirmative vote of holders of at least
two-thirds of the shares of the
outstanding capital stock of AMB entitled
to vote thereon, the board of directors
may revoke or otherwise terminate the
REIT election of AMB pursuant to Section
856(g) of the Code.
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The ProLogis board of trustees is
required to seek to authorize ProLogis to
pay such dividends and distributions as
shall be necessary for ProLogis to
qualify as a REIT under the Code (so long
as such qualification, in the opinion of
the ProLogis board of trustees, is in the
best interests of ProLogis shareholders).
The ProLogis board of trustees, by a
two-thirds vote, may amend provisions of
the ProLogis declaration of trust from
time to time to enable ProLogis to
qualify as a REIT under the Code.
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Additionally, in connection with the Merger, AMB has proposed an amendment to the AMB charter,
which will be the charter of the combined company, effective upon the consummation of the Topco
merger, in the form attached as an exhibit to the registration statement of which this prospectus
is a part.
Specifically, if the proposed amendment is adopted in connection with the Merger:
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the board of directors of the combined company will have the right, with the approval of
a majority of the entire board, and without action by the stockholders of the combined
company, to amend the charter of the combined company to increase or decrease the aggregate
number of shares of stock of the combined company or the number of shares of stock of any
class or series that the combined company has authority to issue; and
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notwithstanding any provision of law permitting or requiring any action to be taken or
approved by the affirmative vote of the holders of shares entitled to cast a greater number
of votes, any such action shall be effective and valid if declared advisable by the board
of directors and taken or approved by the affirmative vote of holders of shares entitled to
cast a majority of all the votes entitled to be cast on the matter; provided that (i) any
amendment to any provision of the charter which expressly requires for any purpose a
greater proportion of the votes entitled to be cast shall require the proportion of votes
specified in that provision, (ii) any amendment to this provision shall require the
affirmative vote of the holders of shares entitled to cast two-thirds of all of the votes
entitled to be cast on the matter and (iii) any action requiring a different vote as
expressly provided in the charter shall require such different vote.
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DESCRIPTION OF THE AMB LP NON-EXCHANGEABLE NOTES
AMB LP has summarized below certain material terms and provisions of the AMB LP
Non-Exchangeable Notes. This summary is not a complete description of all of the terms and
provisions of the AMB LP Non-Exchangeable Notes. For more information, AMB LP refers you to the
AMB LP Non-Exchangeable Notes and the new AMB LP Indenture, all of which are available from AMB LP.
AMB LP urges you to read the new AMB LP Indenture because it, and not this description, defines
your rights as a holder of the AMB LP Non-Exchangeable Notes. This summary is subject to and
qualified in its entirety by reference to all the provisions of those documents, including
definitions of terms referred to in this prospectus.
AMB LP (which will be known as ProLogis, L.P. after the Merger) will issue the AMB LP
Non-Exchangeable Notes. The AMB LP Non-Exchangeable Notes will be issued under the new AMB LP
Indenture. The terms of the AMB LP Non-Exchangeable Notes will include those expressly set forth in
the AMB LP Non-Exchangeable Notes, the new AMB LP Indenture and those made part of the new AMB LP
Indenture by reference to the Trust Indenture Act.
General
The AMB LP Non-Exchangeable Notes will be AMB LP’s direct, unsecured and unsubordinated
obligations and will rank
pari passu
with all of AMB LP’s other unsecured and unsubordinated
indebtedness outstanding from time to time and will be fully and unconditionally guaranteed by AMB
except as may be limited to the maximum amount permitted under applicable federal or state law.
Each guarantee of the AMB LP Non-Exchangeable Notes will be an unsecured and unsubordinated
obligation of AMB and will rank
pari passu
in right of payment with all of its current and future
unsecured and unsubordinated indebtedness. The AMB LP Non-Exchangeable Notes and each guarantee
will be effectively subordinated to any current and future indebtedness of AMB LP and AMB that is
both secured and unsubordinated to the extent of the assets securing such indebtedness.
A substantial portion (amounting to approximately 88%) of the total assets of AMB LP at
December 31, 2010 are held directly by AMB LP’s consolidated subsidiaries and unconsolidated joint
ventures and co-investment ventures. Accordingly, the cash flow of AMB LP and the consequent
ability to service its debt, including the AMB LP Non-Exchangeable Notes, are partially dependent
on the earnings of such consolidated subsidiaries and unconsolidated joint ventures and
co-investment ventures and the AMB LP Non-Exchangeable Notes will be effectively subordinated to
all existing and future indebtedness, guarantees and other liabilities of such consolidated
subsidiaries and unconsolidated joint ventures and co-investment ventures. As of December 31, 2010,
AMB LP’s consolidated subsidiaries and unconsolidated joint ventures and co-investment ventures had
total liabilities (excluding intercompany liabilities) of approximately $5.9 billion.
The AMB LP Non-Exchangeable Notes will be effectively subordinated to AMB LP’s mortgages and
other secured indebtedness to the extent of any collateral pledged as security therefor. As of
December 31, 2010, AMB LP (excluding its consolidated subsidiaries and unconsolidated joint
ventures and co-investment ventures) had amounts outstanding under unsecured credit facilities and
senior indebtedness (including the notes) aggregating approximately $1.6 billion and no amounts
outstanding for mortgages and other secured indebtedness. Although the covenants described under
“— Covenants — Limitations on incurrence of debt” impose certain limitations on the incurrence of
additional indebtedness, AMB LP and its subsidiaries will retain the ability to incur substantial
additional secured and unsecured indebtedness and other liabilities in the future.
Under the new AMB LP Indenture, in addition to the ability to issue notes with terms different
from the AMB LP Non-Exchangeable Notes, AMB LP will have the ability to reopen a previous issue of
a series of AMB LP Non-Exchangeable Notes and issue additional AMB LP Non-Exchangeable Notes of any
series without the consent of the holders. Each series may be as established from time to time in
or pursuant to authority granted by a resolution of AMB LP’s general partner, AMB, or as
established in one or more indentures supplemental to the new AMB LP Indenture.
Except as set forth below under “— Covenants — Limitations on incurrence of debt”, the new
AMB LP Indenture will not contain any provisions that would limit AMB LP’s ability to incur
indebtedness or that would
180
afford holders of AMB LP Non-Exchangeable Notes protection in the event of a highly leveraged
or similar transaction involving AMB LP or in the event of a change of control.
AMB Guarantee
AMB LP’s obligations under the AMB LP Non-Exchangeable Notes will be fully and unconditionally
guaranteed by AMB (which will be known as ProLogis, Inc., and which is referred to as the combined
company, after the Merger). AMB’s guarantee of the AMB LP Notes will rank
pari passu
in right of
payment with all of AMB’s unsecured and unsubordinated indebtedness, including AMB’s indebtedness
for borrowed money, indebtedness evidenced by bonds, debentures, notes or similar instruments,
obligations arising from or with respect to guarantees and direct credit substitutes, obligations
associated with hedges and derivative products, capitalized lease obligations and other unsecured
and unsubordinated indebtedness. The guarantee of the AMB LP Non-Exchangeable Notes by AMB will be
effectively subordinated to all of the mortgages and other secured indebtedness of AMB and all of
the secured and unsecured indebtedness and other liabilities of its subsidiaries, other than AMB
LP. The obligations of AMB under each guarantee will be limited to the maximum amount permitted
under applicable federal or state law.
Denominations
The AMB LP Non-Exchangeable Notes will be issued in registered form and in denominations of
$1,000 and in integral multiples of $1,000 in
excess thereof.
Principal, Maturity and Interest
The principal of, and premium or make-whole amounts, if any, and interest on the AMB LP
Non-Exchangeable Notes will be payable at the corporate trust office of U.S. Bank National
Association, initially located at 100 Wall Street, Suite 1600, New York, New York 10005; provided
that, at AMB LP’s option, payment of interest may be made by check mailed to the address of the
person entitled to the payment as it appears in the security register or by wire transfer of funds
to the person to an account maintained within the United States.
Interest on the AMB LP Non-Exchangeable Notes will be computed on the basis of a 360-day year
consisting of twelve 30-day months. If any interest payment date, principal payment date or the
maturity date falls on a day that is not a business day, the required payment will be made on the
next business day as if it were made on the date the payment was due and no interest will accrue on
the amount so payable for the period from and after the interest payment date, principal payment
date or the maturity date, as the case may be, until the next business day. “Business day” means
any day, other than a Saturday, Sunday or legal holidays, on which banks in New York, New York are
not authorized or required by law or executive order to be closed. Any interest not punctually paid
or duly provided for on any interest payment date with respect to an AMB LP Non-Exchangeable Note,
will cease to be payable to the holder on the applicable regular record date and either may be paid
to the person in whose name the AMB LP Non-Exchangeable Note is registered at the close of business
on a special record date for the payment of the defaulted interest to be fixed by the Trustee,
notice of which will be given to the holder of the AMB LP Non-Exchangeable Note not less than ten
days prior to the special record date, or may be paid at any time in any other lawful manner, all
as more completely described in the new AMB LP Indenture.
The AMB LP 5.500% 2012 Notes will mature on April 1, 2012. Up to approximately $59.0 million
in aggregate principal amount of AMB LP 5.500% 2012 Notes may be issued in the applicable exchange
offers. Interest on the AMB LP 5.500% 2012 Notes will:
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accrue at the rate of 5.500% per annum, from April 1, 2011 (the most recent date on
which interest will have been paid on the ProLogis 5.500% 2012 Notes);
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be payable in cash semi-annually in arrears on each April 1 and October 1,
commencing on October 1, 2011; and
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be payable to holders of record on the March 15 and September 15 immediately
preceding the related interest payment dates.
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The AMB LP 5.500% 2013 Notes will mature on March 1, 2013. Up to approximately $61.5 million
in aggregate principal amount of AMB LP 5.500% 2013 Notes may be issued in the applicable exchange
offers. Interest on the AMB LP 5.500% 2013 Notes will:
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accrue at the rate of 5.500% per annum, from March 1, 2011 (the most recent date on
which interest will have been paid on the ProLogis 5.500% 2013 Notes);
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be payable in cash semi-annually in arrears on each March 1 and September 1,
commencing on September 1, 2011; and
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be payable to holders of record on the February 15 and August 15 immediately
preceding the related interest payment dates.
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The AMB LP 7.625% 2014 Notes will mature on August 15, 2014. Up to $350.0 million in
aggregate principal amount of AMB LP 7.625% 2014 Notes may be issued in the applicable exchange
offers. Interest on the AMB LP 7.625% 2014 Notes will:
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accrue at the rate of 7.625% per annum, from February 15, 2011 (the most recent date
on which interest will have been paid on the ProLogis 7.625% 2014 Notes);
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be payable in cash semi-annually in arrears on each February 15 and August 15,
commencing on August 15, 2011; and
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be payable to holders of record on the February 1 and August 1 immediately preceding
the related interest payment dates.
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The AMB LP 7.810% 2015 Notes will mature on February 1, 2015. Up to approximately $48.3
million in aggregate principal amount of AMB LP 7.810% 2015 Notes may be issued in the applicable
exchange offers. Interest on the AMB LP 7.810% 2015 Notes will:
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accrue at the rate of 7.810% per annum, from February 1, 2011 (the most recent date
on which interest will have been paid on the ProLogis 7.810% 2015 Notes);
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be payable in cash semi-annually in arrears on each February 1 and August 1,
commencing on August 1, 2011; and
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be payable to holders of record on the January 15 and July 15 immediately preceding
the related interest payment dates.
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Installments of current principal on each $1,000 original principal amount of the AMB LP 7.810%
2015 Notes shall be payable to each holder of such notes annually on each February 1 in the
following amounts: $150 in 2012, $200 in 2013, $200 in 2014 and $100 in 2015.
The AMB LP 9.340% 2015 Notes will mature on March 1, 2015. Up to approximately $5.6 million
in aggregate principal amount of AMB LP 9.340% 2015 Notes may be issued in the applicable exchange
offers. Interest on the AMB LP 9.340% 2015 Notes will:
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accrue at the rate of 9.340% per annum, from March 1, 2011 (the most recent date on
which interest will have been paid on the ProLogis 9.340% 2015 Notes);
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be payable in cash semi-annually in arrears on March 1 and September 1, commencing
on September 1, 2011; and
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be payable to holders of record on the February 15 and August 15 immediately
preceding the related interest payment dates.
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Installments of principal on each $1,000 principal amount of the AMB LP 9.340% 2015 Notes will be
paid to each holder of such notes annually on each March 1 in the following amounts: $150 in 2012,
$175 in 2013, $200 in 2014 and $250 in 2015. The remaining $225 of principal will be paid at or
prior to the maturity date of the AMB LP 9.340% 2015 Notes. In each case, principal on the AMB LP
9.340% 2015 Notes will be payable to the Person in whose name the AMB LP 9.340% 2015 Notes are
registered in the security register on the preceding February 15 (whether or not a business day).
The AMB LP 5.625% 2015 Notes will mature on November 15, 2015. Up to approximately $155.4
million in aggregate principal amount of AMB LP 5.625% 2015 Notes may be issued in the applicable
exchange offers. Interest on the AMB LP 5.625% 2015 Notes will:
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accrue at the rate of 5.625% per annum, from May 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 5.625% 2015 Notes);
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be payable in cash semi-annually in arrears on each May 15 and November 15,
commencing on November 15, 2011; and
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be payable to holders of record on the May 1 and November 1 immediately preceding
the related interest payment dates.
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The AMB LP 5.750% 2016 Notes will mature on April 1, 2016. Up to approximately $197.8 million
in aggregate principal amount of AMB LP 5.750% 2016 Notes may be issued in the applicable exchange
offers. Interest on the AMB LP 5.750% 2016 Notes will:
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accrue at the rate of 5.750% per annum, from April 1, 2011 (the most recent date on
which interest will have been paid on the ProLogis 5.750% 2016 Notes);
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be payable in cash semi-annually in arrears on each April 1 and October 1,
commencing on October 1, 2011; and
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be payable to holders of record on the March 15 and September 15 immediately
preceding the related interest payment dates.
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The AMB LP 8.650% 2016 Notes will mature on May 15, 2016. Up to approximately $36.4 million
in aggregate principal amount of AMB LP 8.650% 2016 Notes may be issued in the applicable exchange
offers, which reflects the mandatory repayment of a portion of the principal to be made on May 15,
2011. Interest on the AMB LP 8.650% 2016 Notes will:
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accrue at the rate of 8.650% per annum, from May 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 8.650% 2016 Notes);
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be payable in cash semi-annually in arrears on each May 15 and November 15,
commencing on November 15, 2011; and
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be payable to holders of record on the May 1 and November 1 immediately preceding
the related interest payment dates.
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Installments of principal on each $1,000 principal amount of the AMB LP 8.650% 2016 Notes will be
paid to each holder of such notes annually on each May 15 to the Person in whose name the AMB LP
8.650% 2016 Notes are
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registered in the security register on the preceding May 1 (whether or not a business day) in the
following amounts: $100 in 2012, $100 in 2013, $150 in 2014, $200 in 2015 and $250 in 2016. The
remaining $200 of principal will be paid at or prior to the maturity date of the AMB LP 8.650% 2016
Notes.
The AMB LP 5.625% 2016 Notes will mature on November 15, 2016. Up to approximately $182.2
million in aggregate principal amount of AMB LP 5.625% 2016 Notes may be issued in the applicable
exchange offers. Interest on the AMB LP 5.625% 2016 Notes will:
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accrue at the rate of 5.625% per annum, from May 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 5.625% 2016 Notes);
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be payable in cash semi-annually in arrears on each May 15 and November 15,
commencing on November 15, 2011; and
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be payable to holders of record on the May 1 and November 1 immediately preceding
the related interest payment dates.
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The AMB LP 6.250% 2017 Notes will mature on March 15, 2017. Up to $300.0 million in aggregate
principal amount of AMB LP 6.250% 2017 Notes may be issued in the applicable exchange offers.
Interest on the AMB LP 6.250% 2017 Notes will:
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accrue at the rate of 6.250% per annum, from March 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 6.250% 2017 Notes);
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be payable in cash semi-annually in arrears on each March 15 and September 15,
commencing on September 15, 2011; and
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be payable to holders of record on the March 1 and September 1 immediately preceding
the related interest payment dates.
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The AMB LP 7.625% 2017 Notes will mature on July 1, 2017. Up to $100.0 million in aggregate
principal amount of AMB LP 7.625% 2017 Notes may be issued in the applicable exchange offers.
Interest on the AMB LP 7.625% 2017 Notes will:
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accrue at the rate of 7.625% per annum, from January 1, 2011 (the most recent date
on which interest will have been paid on the ProLogis 7.625% 2017 Notes);
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be payable in cash semi-annually in arrears on each January 1 and July 1, commencing
on July 1, 2011; and
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be payable to holders of record on the June 15 and December 15 immediately preceding
the related interest payment dates.
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The AMB LP 6.625% 2018 Notes will mature on May 15, 2018. Up to $600.0 million in aggregate
principal amount of AMB LP 6.625% 2018 Notes may be issued in the applicable exchange offers.
Interest on the AMB LP 6.625% 2018 Notes will:
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accrue at the rate of 6.625% per annum, from May 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 6.625% 2018 Notes);
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be payable in cash semi-annually in arrears on each May 15 and November 15,
commencing on November 15, 2011; and
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be payable to holders of record on the May 1 and November 1 immediately preceding
the related interest payment dates.
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The AMB LP 7.375% 2019 Notes will mature on October 30, 2019. Up to approximately $396.7
million in aggregate principal amount of AMB LP 7.375% 2019 Notes may be issued in the applicable
exchange offers. Interest on the AMB LP 7.375% 2019 Notes will:
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accrue at the rate of 7.375% per annum, from April 30, 2011 (the most recent date on
which interest will have been paid on the ProLogis 7.375% 2019 Notes);
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be payable in cash semi-annually in arrears on each April 30 and October 30,
commencing on October 30, 2011; and
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be payable to holders of record on the April 15 and October 15 immediately preceding
the related interest payment dates.
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The AMB LP 6.875% 2020 Notes will mature on March 15, 2020. Up to approximately $561.1
million in aggregate principal amount of AMB LP 6.875% 2020 Notes may be issued in the applicable
exchange offers. Interest on the AMB LP 6.875% 2020 Notes will:
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accrue at the rate of 6.875% per annum, from March 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 6.875% 2020 Notes);
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be payable in cash semi-annually in arrears on each March 15 and September 15,
commencing on September 15, 2011; and
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be payable to holders of record on the March 1 and September 1 immediately preceding
the related interest payment dates.
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Optional Redemption
AMB LP Non-Exchangeable Notes, except for the AMB LP 9.340% 2015 Notes, AMB LP 7.810% 2015 Notes,
AMB LP 8.650% 2016 Notes and AMB LP 7.625% 2017 Notes
Each series of AMB LP Non-Exchangeable Notes, except for the AMB LP 9.340% 2015 Notes, AMB LP
7.810% 2015 Notes, AMB LP 8.650% 2016 Notes and AMB LP 7.625% 2017 Notes, will be redeemable in
whole at any time or in part from time to time, at AMB LP’s option, at a redemption price equal to
the greater of:
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100% of the principal amount of such AMB LP Non-Exchangeable Notes to be
redeemed; or
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the sum of the present values of the remaining scheduled payments of principal
and interest on such AMB LP Non-Exchangeable Notes to be redeemed (exclusive of
interest accrued to the date of redemption) discounted to the date of redemption on
a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at
the then current Treasury Rate plus 15 basis points in the case of the AMB LP
5.500% 2012 Notes, 20 basis points in the case of the AMB LP 5.625% 2016 Notes, 25
basis points in the case of the AMB LP 5.500% 2013 Notes, AMB LP 5.625% 2015 Notes
and AMB LP 5.750% 2016 Notes and 50 basis points in the case of the AMB LP 7.625%
2014 Notes, AMB LP 6.250% 2017 Notes, AMB LP 6.625% 2018 Notes, AMB LP 7.375% 2019
Notes and AMB LP 6.875% 2020 Notes.
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Notwithstanding the foregoing, if the AMB LP 6.250% 2017 Notes are redeemed on or after
December 15, 2016, or the AMB LP 6.875% 2020 Notes are redeemed on or after December 16, 2019, the
redemption price will be 100% of the principal amount of the applicable series of AMB LP
Non-Exchangeable Notes to be redeemed.
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In each case AMB LP will pay accrued and unpaid interest on the principal amount being
redeemed to the date of redemption.
“Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining
Life”) of such AMB LP Non-Exchangeable Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the Remaining Life.
“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means one of the Reference Treasury Dealers that AMB LP
appoints to act as the Independent Investment Banker from time to time.
“Reference Treasury Dealer” means either Barclays Capital Inc., Citigroup Global Markets Inc.,
Deutsche Bank Securities Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and/or RBS Securities Inc.,
as applicable, and their successors, and either one, two or three, as applicable, other firms that
are primary United States Government securities dealers (each a “Primary Treasury Dealer”) which
AMB LP specifies from time to time; provided, however, that if any of them ceases to be a Primary
Treasury Dealer, AMB LP will substitute another Primary Treasury Dealer.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third business day preceding such redemption date.
“Treasury Rate” means, with respect to any redemption date, the rate per year equal to: (1)
the yield, under the heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated “H.15 (519)” or any
successor publication which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption “Treasury Constant Maturities”, for the maturity
corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three
months before or after the Remaining Life of such AMB LP Non-Exchangeable Notes to be redeemed,
yields for the two published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated or extrapolated from those yields
on a straight line basis, rounding to the nearest month; or (2) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such redemption
date. The Treasury Rate shall be calculated on the third business day preceding the redemption
date.
Notice of redemption will be mailed at least 30 but not more than 60 days before the
redemption date to each holder of record of such AMB LP Non-Exchangeable Notes to be redeemed at
its registered address. The notice of redemption for such AMB LP Non-Exchangeable Notes will state,
among other things, the amount of such AMB LP Non-Exchangeable Notes to be redeemed, the redemption
date, the redemption price and the place or places that payment will be made upon presentation and
surrender of such AMB LP Non-Exchangeable Notes to be redeemed. Unless AMB LP defaults in payment
of the redemption price, interest will cease to accrue on any such AMB LP Non-Exchangeable Notes
that have been called for redemption at the redemption date.
If less than all of the AMB LP Non-Exchangeable Notes within a series are to be redeemed at
AMB LP’s option, AMB LP will notify the Trustee under the new AMB LP Indenture at least 45 days
prior to the redemption date, or any shorter period as may be satisfactory to the Trustee, of the
aggregate principal amount of such AMB LP
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Non-Exchangeable Notes of such series to be redeemed and the redemption date. The Trustee will
select, in the manner as it deems fair and appropriate, such AMB LP Non-Exchangeable Notes to be
redeemed. Such AMB LP Non-Exchangeable Notes may be redeemed in part in the minimum authorized
denomination for such AMB LP Non-Exchangeable Notes or in any integral multiple of such amount.
AMB LP 9.340% 2015 Notes, AMB LP 7.810% 2015 Notes, AMB LP 8.650% 2016 Notes and AMB LP 7.625% 2017
Notes
The AMB LP 9.340% 2015 Notes, AMB LP 7.810% 2015 Notes, AMB LP 8.650% 2016 Notes and AMB LP
7.625% 2017 Notes will be redeemable at any time at the option of AMB LP, in whole or in part, at a
redemption price equal to the sum of (i) the current principal amount outstanding of the such notes
being redeemed plus accrued and unpaid interest thereon to the redemption date and (ii) the
Make-Whole Amount, if any, with respect to such notes (the “Redemption Price”).
From and after the date notice has been given as provided in the new AMB LP Indenture, if
funds for the redemption of any AMB LP 9.340% 2015 Notes, AMB LP 7.810% 2015 Notes, AMB LP 8.650%
2016 Notes and AMB LP 7.625% 2017 Notes called for redemption shall have been made available on
such redemption date, such notes will cease to bear interest on the date fixed for such redemption
specified in such notice and the only right of the holders of the such notes will be to receive
payment of the Redemption Price.
Notice of any optional redemption of any AMB LP 9.340% 2015 Notes, AMB LP 7.810% 2015 Notes,
AMB LP 8.650% 2016 Notes and AMB LP 7.625% 2017 Notes will be given to holders at their addresses,
as shown in the security register, not more than 60 nor less than 30 days prior to the date fixed
for redemption. The notice of redemption will specify, among other items, the Redemption Price and
the principal amount of such notes held by such holder to be redeemed.
If less than all the AMB LP 9.340% 2015 Notes, AMB LP 7.810% 2015 Notes, AMB LP 8.650% 2016
Notes and AMB LP 7.625% 2017 Notes are to be redeemed at the option of AMB LP, AMB LP will notify
the Trustee at least 45 days prior to the redemption date (or such shorter period as satisfactory
to the Trustee) of the aggregate principal amount of such notes to be redeemed and the redemption
date. The Trustee shall select, in such manner as it shall deem fair and appropriate, such notes to
be redeemed in whole or in part. Such notes may be redeemed in part in the minimum authorized
denomination for notes or in any integral multiple thereof.
“Make-Whole Amount” means, in connection with any optional redemption or accelerated payment
of any AMB LP 9.340% 2015 Notes, AMB LP 7.810% 2015 Notes, AMB LP 8.650% 2016 Notes and AMB LP
7.625% 2017 Notes, the excess, if any, of (i) the aggregate present value as of the date of such
redemption or accelerated payment of each dollar of principal being redeemed or paid and the amount
of interest (exclusive of interest accrued to the date of redemption or accelerated payment) that
would have been payable in respect of such dollar if such redemption or accelerated payment had not
been made, determined by discounting, on a semi-annual basis, such principal and interest at the
Reinvestment Rate (determined on the third business day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or accelerated payment had not
been made, over (ii) the aggregate principal amount of such notes being redeemed or paid.
“Reinvestment Rate” means 0.25%, 0.25%, 0.25% and 0.20%, in the case of AMB LP 9.340% 2015
Notes, AMB LP 7.810% 2015 Notes, AMB LP 8.650% 2016 Notes and AMB LP 7.625% 2017 Notes,
respectively, plus the arithmetic mean of the yields under the respective headings “This Week” and
“Last Week” published in the Statistical Release under the caption “Treasury Constant Maturities”
for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity, as
of the payment date of the principal being redeemed or paid. If no maturity exactly corresponds to
such maturity, yields for the two published maturities most closely corresponding to such maturity
shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall
be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For the purposes of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of determination of the Make-Whole
Amount shall be used.
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“Statistical Release” means the statistical release designated “H.15(519)” or any successor
publication which is published weekly by the Federal Reserve System and which establishes yields on
actively traded United States government securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any determination under the Indenture, then
such other reasonably comparable index which shall be designated by AMB LP.
Merger, Consolidation or Sale
AMB LP may consolidate with or merge with or into another entity, or sell, lease or convey all
or substantially all of its assets to another entity, provided that the following three conditions
are met:
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(1)
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After the transaction, AMB LP is, or a person organized and existing under the
laws of the United States or one of the fifty states is, the continuing entity. If the
continuing entity is an entity other than AMB LP, that entity must also assume AMB LP’s
payment obligations under the new AMB LP Indenture, as well as the due and punctual
performance and observance of all of the covenants contained in the new AMB LP
Indenture;
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(2)
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After giving effect to the transaction and treating any indebtedness which
became an obligation of AMB LP or any of AMB LP’s subsidiaries as a result of the
transaction as having been incurred by AMB LP or such subsidiary at the time of such
transaction, an event of default (or an event which, with notice or lapse of time or
both, would become an event of default) has not occurred under the new AMB LP
Indenture. Additionally, the transaction may not cause an event which, after notice or
a lapse of time, or both, would become an event of default; and
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(3)
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The continuing entity delivers an officers’ certificate and legal opinion
covering (1) and (2) above.
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The new AMB LP Indenture provides that AMB, as guarantor of the AMB LP Non-Exchangeable Notes,
and any other guarantor, will not, in any transaction or series of transactions, consolidate with,
or sell, lease, assign, transfer or otherwise convey all or substantially all of its assets to, or
merge with or into any other person unless:
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either such guarantor is the continuing person or the successor person (if other
than such guarantor) is a corporation, partnership, limited liability company or other
entity organized and existing under the laws of the United States of America or a State
of the United States of America or the District of Columbia and expressly assumes such
guarantor’s obligations with respect to the AMB LP Non-Exchangeable Notes and the
observance of all of the covenants and conditions contained in the new AMB LP Indenture
and its guarantee;
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immediately after giving effect to the transaction, no event of default, and no
event which, after notice or lapse of time, or both, would become an event of default,
shall have occurred and shall be continuing; and
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such guarantor delivers to the Trustee an officers’ certificate and legal opinion
covering compliance with these conditions.
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In the event that such guarantor is not the continuing entity, then, for purposes of the
second bullet point above, the successor entity will be deemed to be such guarantor.
Any consolidation, merger, sale, lease, assignment, transfer or conveyance permitted above is
also subject to the condition precedent that the Trustee receive an officers’ certificate and
legal opinion to the effect that any such consolidation, merger, sale, lease, assignment, transfer
or conveyance, and the assumption by any successor corporation, complies with the provisions of
the new AMB LP Indenture and that all conditions precedent provided for in the new AMB LP
Indenture relating to such transaction have been complied with.
Although there is a limited body of case law interpreting the phrase “all or substantially
all”, there is no precise established definition of the phrase under applicable law. Accordingly,
in certain circumstances
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there may be a degree of uncertainty as to whether a particular transaction would involve
“all or substantially all” of the property or assets of a person.
Covenants
This section describes covenants AMB LP makes in the new AMB LP Indenture, for the benefit of
the holders of certain series of AMB LP Non-Exchangeable Notes.
Existence.
Except as permitted under “— Merger, Consolidation or Sale”, AMB LP will do or
cause to be done all things necessary to preserve and keep in full force and effect the existence,
rights, both charter and statutory, and franchises of AMB LP and its subsidiaries; provided,
however, that AMB LP will not be required to preserve any right or franchise if AMB LP determines
that the preservation of the right or franchise is no longer desirable in the conduct of AMB LP’s
business and that the loss of the right or franchise is not disadvantageous in any material respect
to the holders of the AMB LP Non-Exchangeable Notes.
Payment of taxes and other claims
. AMB LP will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon AMB LP or any subsidiary or upon its income, profits or property or
any subsidiary and all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon AMB LP’s property or any subsidiary; provided, however, that AMB LP will not
be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good faith by appropriate
proceedings.
Provision of financial information
. Whether or not AMB LP or AMB are subject to Section 13 or
15(d) of the Exchange Act, AMB LP and AMB will, to the extent permitted under the Exchange Act,
file with the SEC the annual reports, quarterly reports and other documents which AMB LP and AMB
would have been required to file with the SEC pursuant to such Section 13 or 15(d) (the “Financial
Statements”) if AMB LP and AMB were so subject, such documents to be filed with the SEC on or prior
to the respective dates (the “Required Filing Dates”) by which AMB LP and AMB would have been
required so to file such documents if AMB LP and AMB were so subject.
AMB LP and AMB will also in any event (x) within 15 days of each Required Filing Date (i)
transmit by mail or electronic transmittal to all holders, as their names and addresses appear in
the security register, without cost to such Holders, copies of the annual reports and quarterly
reports which AMB LP and AMB are required to file or would have been required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act if AMB LP and AMB were subject to such
sections, and (ii) file with the Trustee copies of annual reports, quarterly reports and other
documents which AMB LP and AMB would have been required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act if AMB LP and AMB were subject to such sections and (y) if filing such
documents by AMB LP or AMB with the SEC is not permitted under the Exchange Act, promptly upon
written request and payment of the reasonable cost of duplication and delivery, supply copies of
such documents to any prospective holder.
Limitations on incurrence of debt.
AMB LP will not, and will not permit any Subsidiary to,
incur any Debt if, immediately after giving effect to the incurrence of such additional Debt and
the application of the proceeds of the additional Debt, the aggregate principal amount of all AMB
LP’s outstanding Debt and that of its Subsidiaries on a consolidated basis as determined in
accordance with GAAP is greater than 60% of the sum of (without duplication):
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(1)
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AMB LP’s Total Assets as of the end of the calendar quarter covered in AMB
LP’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
most recently filed with the SEC (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such additional Debt; and
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(2)
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the purchase price of any real estate assets or mortgages receivable
acquired, and the amount of any securities offering proceeds received (to the extent
such proceeds were not used to acquire real estate assets or mortgages receivable or
used to reduce Debt), by AMB LP or any Subsidiary since the end of
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such calendar quarter, including those proceeds obtained in connection with the
incurrence of such additional Debt.
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Additionally, AMB LP will not, and will not permit any Subsidiary to, incur any Debt if the
ratio of Consolidated Income Available for Debt Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended prior to the date on which such additional Debt is
to be incurred shall have been less than 1.5, on a pro forma basis after giving effect thereto and
to the application of the proceeds therefrom, and calculated on the assumption that:
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(1)
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such Debt and any other Debt incurred by AMB LP and its Subsidiaries since
the first day of such four-quarter period and the application of the proceeds
therefrom, including to refinance other Debt, had occurred at the beginning of such
period;
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(2)
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the repayment or retirement of any other Debt by AMB LP and its Subsidiaries
since the first day of such four-quarter period had been incurred, repaid or retired at
the beginning of such period (except that, in making such computation, the amount of
Debt under any revolving credit facility shall be computed based upon the average daily
balance of such Debt during such period);
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(3)
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in the case of Acquired Debt or Debt incurred in connection with any
acquisition since the first day of such four-quarter period, the related acquisition
had occurred as of the first day of such period with the appropriate adjustments with
respect to such acquisition being included in such pro forma calculation; and
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(4)
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in the case of any acquisition or disposition by AMB LP or its Subsidiaries
of any asset or group of assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset purchase or sale, such acquisition
or disposition or any related repayment of Debt had occurred as of the first day of
such period with the appropriate adjustments with respect to such acquisition or
disposition being included in such pro forma calculation.
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AMB LP and its Subsidiaries may not at any time own Total Unencumbered Assets equal to less
than 150% of the aggregate outstanding principal amount of the Unsecured Debt of AMB LP and its
Subsidiaries on a consolidated basis.
In addition to the foregoing limitations on the incurrence of Debt, AMB LP will not, and will
not permit any Subsidiary to, incur any Debt for borrowed money secured by any mortgage, lien,
charge, pledge, encumbrance or security interest upon any of AMB LP’s property or the property of
any Subsidiary, whether owned at the date hereof or hereafter acquired, if, immediately after
giving effect to the incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all of AMB LP’s outstanding Debt and the outstanding
Debt of AMB LP’s Subsidiaries on a consolidated basis for borrowed money which is secured by any
mortgage, lien, charge, pledge, encumbrance or security interest on AMB LP property or the property
of any Subsidiary is greater than 40% of the sum of (without duplication):
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(1)
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AMB LP’s Total Assets as of the end of the calendar quarter covered in AMB
LP’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
most recently filed with the SEC (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such additional Debt; and
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(2)
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the purchase price of any real estate assets or mortgages receivable
acquired, and the amount of any securities offering proceeds received (to the extent
that such proceeds were not used to acquire real estate assets or mortgages receivable
or used to reduce Debt), by AMB LP or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of such
additional Debt.
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For purposes of the covenants described under this “— Limitations on incurrence of debt”,
Debt shall be deemed to be “incurred” by AMB LP or a Subsidiary whenever AMB LP or such Subsidiary
shall create, assume, guarantee or otherwise become liable in respect thereof.
Nothing in the above covenants shall prevent: (i) the incurrence by AMB LP or any Subsidiary
of Debt between or among AMB LP, any Subsidiary or any Equity Investee or (ii) AMB LP or any
Subsidiary from incurring Refinancing Debt.
For purposes of the foregoing covenants the following definitions apply:
“Acquired Debt” means Debt of a Person (i) existing at the time such Person becomes a
Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each
case, other than Debt incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.
“Annual Service Charge” as of any date means the maximum amount which is payable in any period
for interest on, and original issue discount of, AMB LP or its subsidiaries’ Debt and the amount of
dividends which are payable in respect of any Disqualified Stock.
“Consolidated Income Available for Debt Service” for any period means Earnings from Operations
of AMB LP and its Subsidiaries plus amounts which have been deducted, and minus amounts which have
been added, for the following (without duplication):
(A) interest on Debt of AMB LP and its Subsidiaries,
(B) provision for taxes of AMB LP and its Subsidiaries based on income,
(C) amortization of debt discount,
(D) provisions for unrealized gains and losses, depreciation and amortization, and the
effect of any other non-cash items,
(E) extraordinary, non-recurring and other unusual items (including, without limitation, any
costs and fees incurred in connection with any debt financing or amendments thereto, any
acquisition, disposition, recapitalization or similar transaction (regardless of whether such
transaction is completed)),
(F) the effect of any noncash charge resulting from a change in accounting principles in
determining Earnings from Operations for such period,
(G) amortization of deferred charges, and
(H) any of the items described in clauses (D) and (E) above that were included in Earnings
From Operations on account of an Equity Investee.
“Debt” of AMB LP or any Subsidiary means any indebtedness of AMB LP or any Subsidiary,
excluding any accrued expense or trade payable, whether or not contingent, in respect of
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(1)
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borrowed money evidenced by bonds, notes, debentures or similar instruments,
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(2)
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indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or
any security interest existing on property owned by AMB LP or any Subsidiary, but only
to the extent of the lesser of (x) the amount of indebtedness so secured and (y) the
fair market value of the property subject to such mortgage, pledge, lien, charge,
encumbrance or any security interest existing on property owned by AMB LP or any
Subsidiary,
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(3)
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the reimbursement obligations, contingent or otherwise, in connection with
any letters of credit actually issued and called or amounts representing the balance
deferred and unpaid of the purchase price of any property or services, or all
conditional sale obligations or obligations under any title retention agreement,
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(4)
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the principal amount of all obligations of AMB LP or any Subsidiary with
respect to redemption, repayment or other repurchase of any Disqualified Stock or
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(5)
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any lease of property by AMB LP or any Subsidiary as lessee which is reflected
on AMB LP’s consolidated balance sheet as a capitalized lease in accordance with GAAP
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and to the extent, in the case of items of indebtedness under (1) through (3) above, that any such
items (other than letters of credit) would appear as a liability on AMB LP’s consolidated balance
sheet in accordance with GAAP, and also includes, to the extent not otherwise included, any
obligation by AMB LP or any Subsidiary to be liable for, or to pay, as obligor, guarantor or
otherwise (other than for purposes of collection in the ordinary course of business), Debt of
another Person (other than AMB LP or any Subsidiary).
“Disqualified Stock” means, with respect to any person, any capital stock of such person which
by the terms of such capital stock (or by the terms of any security into which it is convertible or
for which it is exchangeable or exercisable), upon the happening of any event or otherwise, (i)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (ii) is
convertible into or exchangeable or exercisable for Debt or Disqualified Stock or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to
the stated maturity of a series of debt securities.
“Earnings from Operations” for any period means net earnings excluding gains and losses on
sales of investments, net, as reflected in the financial statements of AMB LP and its Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP.
“Encumbrance” means any mortgage, pledge, lien, charge, encumbrance or any security interest
existing on property owned by AMB LP or any Subsidiary securing indebtedness for borrowed money,
other than a Permitted Encumbrance.
“
Equity Investee
”
means any Person in which AMB LP or any Subsidiary hold an ownership
interest that is accounted for by AMB LP or a Subsidiary under the equity method of accounting.
“GAAP” means generally accepted accounting principles as used in the United States applied on
a consistent basis as in effect from time to time; provided, that solely for purposes of
calculating these financial covenants, “GAAP” means generally accepted accounting principles as
used in the United States on August 14, 2009 consistently applied.
“Permitted Encumbrances” means leases, Encumbrances securing taxes, assessments and similar
charges, mechanics liens and other similar Encumbrances.
“Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
“Refinancing Debt” means Debt issued in exchange for, or the net proceeds of which are used to
refinance or refund, then outstanding Debt (including the principal amount, accrued interest and
premium, if any, of such Debt plus any fees and expenses incurred in connection with such
refinancing); provided that (a) if such new Debt, or the proceeds of such new Debt, are used to
refinance or refund Debt that is subordinated in right of payment to the notes, such new Debt shall
only be permitted if it is expressly made subordinate in right of payment to the notes at least to
the extent that the Debt to be refinanced is subordinated to the notes and (b) such new Debt does
not mature prior to the stated maturity of the Debt to be refinanced or refunded, and the weighted
average life of such new Debt is at least equal to the remaining weighted average life of the Debt
to be refinanced or refunded.
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“Subsidiary” means, with respect to any Person, (i) a corporation, partnership, joint venture,
limited liability company or other entity the majority of the shares, if any, of the non-voting
capital stock or other equivalent ownership interests of which (except directors’ qualifying
shares) are at the time directly or indirectly owned by such Person and/or any other Subsidiary or
Subsidiaries of such Person, and the majority of the shares of the voting capital stock or other
equivalent ownership interests of which (except directors’ qualifying shares) are at the time
directly or indirectly owned by such Person, any other Subsidiary or Subsidiaries of such Person,
and (ii) any other entity the accounts of which are consolidated with the accounts of such Person.
For the purposes of this definition, “voting capital stock” means capital stock having voting power
for the election of directors, whether at all times or only so long as no senior class of capital
stock has such voting power by reason of any contingency.
“Total Assets” means, as of any date, the sum of (i) Undepreciated Real Estate Assets and (ii)
all of AMB LP and its Subsidiaries’ other assets, but excluding accounts receivable and
intangibles, determined in accordance with GAAP.
“Total Unencumbered Assets” means the sum of AMB LP and its Subsidiaries’ Undepreciated Real
Estate Assets and the value determined in accordance with GAAP of all AMB LP and its Subsidiaries’
other assets, other than accounts receivable and intangibles, in each case not subject to an
Encumbrance.
“Undepreciated Real Estate Assets” as of any date means the cost (original cost plus capital
improvements) of real estate assets of AMB LP and its Subsidiaries on such date, before
depreciation, amortization and impairment charges determined on a consolidated basis in accordance
with GAAP.
“Unsecured Debt” means Debt of the types described in clauses (1), (3) and (4) of the
definition thereof which is not secured by any mortgage, lien, charge, pledge or security interest
of any kind upon any of the properties of AMB LP or any Subsidiary.
Maintenance of properties
. AMB LP will cause all of its properties used or useful in the
conduct of its business or the business of any subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements of AMB LP’s
properties, all as in its judgment may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided, however, that AMB LP
and its subsidiaries will not be prevented from selling or otherwise disposing for value AMB LP’s
properties in the ordinary course of business.
Insurance
. AMB LP will, and will cause each of AMB LP’s subsidiaries to, keep in force upon
all of AMB LP’s properties and operations policies of insurance carried with responsible companies
in such amounts and covering all such risks as shall be customary in the industry in accordance
with prevailing market conditions and availability.
Events of Default, Notice and Waiver
The new AMB LP Indenture provides that the following events are events of default with respect
to any series of AMB LP Non-Exchangeable Notes issued pursuant to it:
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(1)
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default in the payment of any installment of interest or additional amounts
payable on any AMB LP Non-Exchangeable Notes of such series which continues for 30
days;
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(2)
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default in the payment of the principal, or premium or make-whole amount, if
any, on any AMB LP Non-Exchangeable Notes of such series at its maturity or redemption
date;
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(3)
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default in making any sinking fund payment as required for any AMB LP
Non-Exchangeable Notes of such series;
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(4)
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default in the performance of any other of AMB LP’s covenants contained in the
new AMB LP Indenture, other than a covenant in the new AMB LP Indenture solely for the
benefit of another series
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of AMB LP Non-Exchangeable Notes issued under the new AMB LP Indenture, which continues
for 60 days after written notice as provided in the new AMB LP Indenture;
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(5)
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default in the payment of an aggregate principal amount exceeding $50,000,000
under any bond, note or other evidence of indebtedness or any mortgage, indenture or
other instrument under which such indebtedness is issued or by which such indebtedness
is secured (or any such indebtedness of any of AMB LP’s subsidiaries, which AMB LP has
guaranteed), such default having occurred after the expiration of any applicable grace
period and having resulted in the acceleration of the maturity of such indebtedness,
but only if such indebtedness is not discharged or such acceleration is not rescinded
or annulled within ten days after written notice as provided in the new AMB LP
Indenture;
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(6)
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the entry by a court of competent jurisdiction of final judgments, orders or
decrees against AMB LP or any of AMB LP’s subsidiaries in an aggregate amount,
excluding amounts fully covered by insurance, in excess of $50,000,000 and such
judgments, orders or decrees remain undischarged, unstayed and unsatisfied in an
aggregate amount, excluding amounts fully covered by insurance, in excess of
$50,000,000 for a period of 60 consecutive days; and
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(7)
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events of bankruptcy, insolvency or reorganization, or court appointment of a
receiver, liquidator or trustee for AMB LP, AMB or any significant subsidiary or for
all or substantially all of AMB LP’s or its significant subsidiary’s property.
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The term significant subsidiary means each of AMB LP’s significant subsidiaries, as defined in
Regulation S-X promulgated under the Securities Act.
If an event of default under the new AMB LP Indenture with respect to a series of AMB LP
Non-Exchangeable Notes occurs and is continuing, then in every such case, unless the principal of
the AMB LP Non-Exchangeable Notes of such series shall already have become due and payable, the
Trustee or the holders of not less than 25% in principal amount of such series of AMB LP
Non-Exchangeable Notes may declare the principal and the make-whole amount on the AMB LP
Non-Exchangeable Notes of such series to be due and payable immediately by written notice to AMB LP
that payment of the AMB LP Non-Exchangeable Notes is due, and to the Trustee if given by the
holders. However, at any time after such a declaration of acceleration with respect to a series of
AMB LP Non-Exchangeable Notes has been made, but before a judgment or decree for payment of the
money due has been obtained by the Trustee, the holders of not less than a majority in principal
amount of the AMB LP Non-Exchangeable Notes of a series may rescind and annul such declaration and
its consequences if AMB LP shall have deposited with the Trustee all required payments of the
principal of, and premium or make-whole amount and interest on, the AMB LP Non-Exchangeable Notes
of such series, plus fees, expenses, disbursements and advances of the Trustee and all events of
default, other than the nonpayment of accelerated principal, the make-whole amount or interest with
respect to AMB LP Non-Exchangeable Notes of such series have been cured or waived as provided in
the new AMB LP Indenture. The new AMB LP Indenture also provides that the holders of not less than
a majority in principal amount of the AMB LP Non-Exchangeable Notes of a series may waive any past
default with respect to such series and its consequences, except a default in the payment of the
principal of, or premium or make-whole amount or interest payable on the AMB LP Non-Exchangeable
Notes or in respect of a covenant or provision contained in the new AMB LP Indenture that cannot be
modified or amended without the consent of the holder of each outstanding AMB LP Non-Exchangeable
Note affected by the proposed modification or amendment.
The Trustee is required to give notice to the holders of the AMB LP Non-Exchangeable Notes
within 90 days of a default under the new AMB LP Indenture known to the Trustee, unless the default
has been cured or waived; provided, however, that the Trustee may withhold notice to the holders of
the AMB LP Non-Exchangeable Notes of any default with respect to such series, except a default in
the payment of the principal of, or premium or make-whole amount, if any, or interest payable on
the AMB LP Non-Exchangeable Notes if the responsible officers of the Trustee consider such
withholding to be in the interest of such holders.
The new AMB LP Indenture provides that no holders of the AMB LP Non-Exchangeable Notes may
institute any proceedings, judicial or otherwise, with respect to the new AMB LP Indenture or for
any remedy which the new AMB LP Indenture provides, except in the case of failure of the Trustee,
for 60 days, to act after it has received a written request to institute proceedings in respect of
an event of default from the holders of not less than
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25% in principal amount of the outstanding AMB LP Non-Exchangeable Notes, as well as an offer
of reasonable indemnity. This provision will not prevent, however, any holder of the AMB LP
Non-Exchangeable Notes from instituting suit for the enforcement of payment of the principal of,
and premium or make-whole amount, or interest on the AMB LP Non-Exchangeable Notes at the due date
of the AMB LP Non-Exchangeable Notes.
Subject to provisions in the new AMB LP Indenture relating to its duties in case of default,
the Trustee is under no obligation to exercise any of its rights or powers under the new AMB LP
Indenture at the request or direction of any holders of any series of AMB LP Non-Exchangeable Notes
then outstanding under the new AMB LP Indenture, unless such holders shall have offered to the
Trustee reasonable security or indemnity. The holders of not less than a majority in principal
amount of the AMB LP Non-Exchangeable Notes of a series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or of
exercising any trust or power conferred upon the Trustee with respect to that series. However, the
Trustee may refuse to follow any direction which is in conflict with any law or the new AMB LP
Indenture, which may involve the Trustee in personal liability or which may be unduly prejudicial
to the holders of the AMB LP Non-Exchangeable Notes not joining in the proceeding.
Within 120 days after the close of each fiscal year, AMB LP must deliver to the Trustee a
certificate, signed by one of several specified officers, stating whether or not such officer has
knowledge of any default under the new AMB LP Indenture and, if so, specifying each such default
and the nature and status of the default.
Modification of the New AMB LP Indenture
Modifications and amendments of the new AMB LP Indenture may be made with the consent of the
holders of not less than a majority in principal amount of all outstanding debt securities issued
under the new AMB LP Indenture, including the AMB LP Non-Exchangeable Notes, which are affected by
such modification or amendment; provided, however, that no such modification or amendment may,
without the consent of the holder of each debt security affected by the modification or amendment:
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(1)
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change the stated maturity of the principal of, or premium or make-whole
amounts, if any, or any installment of principal of or interest or additional amounts
payable on, any such debt security;
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(2)
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reduce the principal amount of, or the rate or amount of interest on, or any
premium or make-whole amounts payable on redemption of, or any additional amounts
payable with respect to, any such debt security, or reduce the amount of principal of
an original issue discount security or make-whole amount, if any, that would be due and
payable upon declaration of acceleration of the maturity of the security or would be
provable in bankruptcy, or adversely affect any right of repayment of the holder of any
such debt security;
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(3)
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change the place of payment, or the coin or currency, for payment of principal
of, and premium or make-whole amounts, if any, or interest on, or any additional
amounts payable with respect to, any such debt security;
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(4)
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impair the right to institute suit for the enforcement of any payment on or
with respect to any such debt security;
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(5)
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reduce the above-stated percentage of outstanding debt securities of any
series necessary to modify or amend the new AMB LP Indenture, to waive compliance with
a provisions of the debt security or defaults and consequences under the new AMB LP
Indenture or to reduce the quorum or voting requirements set forth in the new AMB LP
Indenture;
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(6)
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modify any of the provisions relating to modification of the new AMB LP
Indenture or any of the provisions relating to the waiver of past defaults or
covenants, except to increase the required percentage to effect such action or to
provide that other provisions may not be modified or waived without the consent of the
holder of the affected debt security; or
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(7)
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release any guarantor from any of its obligations under its guarantee or the
new AMB LP Indenture, except in accordance with the terms of the new AMB LP Indenture.
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The holders of not less than a majority in principal amount of outstanding debt securities
have the right to waive AMB LP’s compliance with covenants in the new AMB LP Indenture applicable
to such debt securities other than those covenants which require the consent of each affected
holder of debt securities with respect to modifications or amendments to such covenant.
Modifications and amendments of the new AMB LP Indenture may be made by AMB LP and the Trustee
without the consent of any holder of debt securities for any of the following purposes:
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(1)
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to evidence the succession of another person to AMB LP as obligor or to any
guarantor under the new AMB LP Indenture;
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(2)
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to add to AMB LP’s or any guarantor’s covenants for the benefit of the
holders of all or any series of debt securities or to surrender any right or power
conferred upon AMB LP or any guarantor in the new AMB LP Indenture;
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(3)
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to add events of default for the benefit of the holders of all or any series
of debt securities;
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(4)
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to add to or change any of the provisions of the new AMB LP Indenture to such
extent as shall be necessary to permit or facilitate the issuance of debt securities in
bearer form, registrable or not registrable as to principal, and with or without
interest coupons, or to permit or facilitate the issuance of securities in
uncertificated form;
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(5)
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to add to, change or eliminate any of the provisions of the new AMB LP
Indenture in respect of one or more series of securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any security of any
series created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (B) modify the rights of the holder of any such
security with respect to such provision or (ii) shall become effective only when there
is no such security outstanding;
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(6)
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to secure the debt securities or related guarantees;
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(7)
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to establish the form or terms of debt securities of any series;
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(8)
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to provide for the acceptance of appointment by a successor trustee or
facilitate the administration of the trust under the new AMB LP Indenture by more than
one trustee;
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(9)
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to cure any ambiguity, defect or inconsistency in the new AMB LP Indenture or
to make any other changes, provided that in each case, the action shall not adversely
affect the interests of holders of debt securities or related guarantees of any series
in any material respect;
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(10)
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to close the new AMB LP Indenture with respect to the authentication and
delivery of additional series of debt securities or any related guarantees or to
qualify, or maintain qualification of, the new AMB LP Indenture under the Trust
Indenture Act; or
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(11)
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to supplement any of the provisions of the new AMB LP Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of such debt
securities, provided that the action shall not adversely affect the interests of the
holders of the debt securities and any related guarantees of any series in any material
respect.
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The new AMB LP Indenture provides that in determining whether the holders of the requisite
principal amount of outstanding debt securities of a series have given any request, demand,
authorization, direction, notice,
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consent or waiver under the new AMB LP Indenture or whether a quorum is present at a meeting
of holders of debt securities:
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(1)
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the principal amount of an original issue discount security that will be
deemed to be outstanding shall be the amount of the principal of the security that
would be due and payable as of the date of the determination upon declaration of
acceleration of the maturity of the debt securities;
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(2)
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the principal amount of a debt security denominated in a foreign currency
that will be deemed outstanding shall be the United States dollar equivalent,
determined on the issue date for the debt securities, of the principal amount, or, in
the case of an original issue discount security, the United States dollar equivalent on
the issue date of the debt securities of the amount determined as provided in (1)
above;
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(3)
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the principal amount of an indexed security that shall be deemed outstanding
will be the principal face amount of the indexed security at original issuance, unless
otherwise provided with respect to the indexed security pursuant to Section 301 of the
new AMB LP Indenture; and
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(4)
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debt securities owned by AMB LP or any other obligor upon the debt securities
or any of AMB LP’s affiliates or of the other obligor will be disregarded.
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The new AMB LP Indenture contains provisions for convening meetings of the holders of debt
securities of a series. A meeting may be called at any time by the Trustee, and also, upon request,
by AMB LP or the holders of at least 10% in principal amount of the outstanding debt securities of
that series, in any such case upon notice given as provided in the new AMB LP Indenture.
Except for any consent that must be given by the holder of each debt security affected by
modifications and amendments of the new AMB LP Indenture, any resolution presented at a meeting or
at an adjourned meeting duly reconvened, at which a quorum is present, may be adopted by the
affirmative vote of the holders of a majority in principal amount of the outstanding debt
securities of that series; provided, however, that, except as referred to above, any resolution
with respect to any request, demand, authorization, direction, notice, consent, waiver or other
action that may be made, given or taken by the holders of a specified percentage, which is less
than a majority, in principal amount of the outstanding debt securities of a series may be adopted
at a meeting or adjourned meeting duly reconvened at which a quorum is present by the affirmative
vote of the holders of the specified percentage in principal amount of the outstanding debt
securities of that series. Any resolution passed or decision taken at any meeting of holders of
debt securities of any series duly held in accordance with the new AMB LP Indenture will be binding
on all holders of debt securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding debt securities of a series; provided, however, that if any
action is to be taken at the meeting with respect to a consent or waiver which may be given by the
holders of not less than a specified percentage in principal amount of the outstanding debt
securities of a series, the persons holding or representing the specified percentage in principal
amount of the outstanding debt securities of that series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a meeting of holders
of debt securities of any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the new AMB LP Indenture expressly provides may be
made, given or taken by the holders of a specified percentage in principal amount of all
outstanding debt securities affected by the action, or of the holders of that series and one or
more additional series:
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(1)
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there shall be no minimum quorum requirement for the meeting; and
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(2)
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the principal amount of the outstanding debt securities of that series that
vote in favor of the request, demand, authorization, direction, notice, consent, waiver
or other action will be taken into account in determining whether the request, demand,
authorization, direction, notice, consent, waiver or other action has been made, given
or taken under the new AMB LP Indenture.
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197
Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by the new AMB LP Indenture to be given or taken by a specified percentage in principal
amount of the holders of any or all series of debt securities may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by the specified percentage of
holders in person or by agent duly appointed in writing; and, except as otherwise expressly
provided in the new AMB LP Indenture, the action will become effective when the instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any agent will be sufficient for any purpose of the new AMB LP Indenture and, subject to
the new AMB LP Indenture provisions relating to the appointment of any such agent, conclusive in
favor of the Trustee and AMB LP, if made in the manner specified above.
Discharge, Defeasance and Covenant Defeasance
AMB LP may discharge various obligations to holders of AMB LP Non-Exchangeable Notes that have
not already been delivered to the Trustee for cancellation and that either have become due and
payable or will become due and payable within one year, or that are scheduled for redemption within
one year. The discharge will be completed by irrevocably depositing with the Trustee the funds
needed to pay the principal, any make-whole amounts, interest and additional amounts payable to the
date of deposit or to the date of maturity, as the case may be.
AMB LP may take either of the following actions with respect to the AMB LP Non-Exchangeable
Notes:
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(1)
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AMB LP may defease and be discharged from any and all obligations with
respect to the AMB LP Non-Exchangeable Notes. However, AMB LP would continue to be
obligated to pay any additional amounts resulting from tax events, assessment or
governmental charges with respect to payments on the AMB LP Non-Exchangeable Notes and
the obligations to register the transfer or exchange of the AMB LP Non-Exchangeable
Notes. Additionally, AMB LP would remain responsible for replacing temporary or
mutilated, destroyed, lost or stolen AMB LP Non-Exchangeable Notes, for maintaining an
office or agency in respect of AMB LP Non-Exchangeable Notes and for holding moneys for
payment in trust.
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(2)
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With respect to the AMB LP Non-Exchangeable Notes, AMB LP may elect to effect
covenant defeasance and be released from AMB LP’s obligations to fulfill the covenants
contained under the heading “— Covenants” in this prospectus. Further, AMB LP may
elect to be released from AMB LP’s obligations with respect to any other covenant in
the new AMB LP Indenture, if such a provision is included in the series of AMB LP
Non-Exchangeable Notes at the time that they are issued. Once AMB LP has made this
election, any omission to comply with those covenants shall not constitute a default or
an event of default with respect to the series of AMB LP Non-Exchangeable Notes.
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In either case, AMB LP must irrevocably deposit the needed funds in trust with the
Trustee.
The trust may only be established if, among other things, AMB LP has delivered an opinion of
counsel to the Trustee. The opinion of counsel shall state that the holders of the series of AMB LP
Non-Exchangeable Notes will not recognize income, gain or loss for United States federal income tax
purposes as a result of the defeasance or covenant defeasance and will be subject to United States
federal income tax on the same amounts, in the same manner and at the same times as would have been
the case if the defeasance or covenant defeasance had not occurred. The opinion of counsel, in the
case of defeasance, must refer to and be based upon a ruling of the IRS or a change in applicable
United States federal income tax law occurring after the date of the new AMB LP Indenture.
If after AMB LP has deposited funds and/or government obligations to effect defeasance or
covenant defeasance with respect to AMB LP Non-Exchangeable Notes of any series and
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(1)
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the holder of a series of AMB LP Non-Exchangeable Notes is entitled to and
elects to receive payment in a currency, currency unit or composite currency other than
that in which the deposit has been made in respect of the AMB LP Non-Exchangeable
Notes; or
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(2)
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a conversion event occurs in respect of the currency, currency unit or
composite currency in which such deposit has been made,
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the indebtedness represented by the AMB LP Non-Exchangeable Notes will be deemed to have been, and
will be, fully discharged. The indebtedness will be satisfied through the payment of the principal
of, and premium or any make-whole amount and interest on, the AMB LP Non-Exchangeable Note as they
become due out of the proceeds yielded by converting the amount so deposited in respect of the AMB
LP Non-Exchangeable Note into the currency, currency unit or composite currency in which the AMB LP
Non-Exchangeable Note becomes payable as a result of the holder’s election or the cessation of
usage based on the applicable market exchange rate.
“Conversion event” means the cessation of use of:
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(1)
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a currency, currency unit or composite currency, other than the Euro or other
currency unit, both by the government of the country which issued such currency and for
the settlement of transactions by a central bank or other public institutions of or
within the international banking community;
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(2)
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the Euro for the settlement of transactions by public institutions of or
within the European Union; or
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(3)
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any currency unit or composite currency other than the Euro for the purposes
for which it was established.
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All payments of principal of, and premium or any make-whole amount and interest on any AMB LP
Non-Exchangeable Note that is payable in a foreign currency that ceases to be used by its
government of issuance shall be made in United States dollars.
In the event AMB LP effects covenant defeasance with respect to any AMB LP Non-Exchangeable
Notes and the AMB LP Non-Exchangeable Notes are declared due and payable because of the occurrence
of any event of default, other than the events of default that would no longer be applicable
because of the covenant defeasance or an event of default triggered by an event of bankruptcy or
other insolvency proceeding, the amount of funds on deposit with the Trustee will be sufficient to
pay amounts due on the AMB LP Non-Exchangeable Notes at the time of their stated maturity, but may
not be sufficient to pay amounts due on the AMB LP Non-Exchangeable Notes at the time of the
acceleration resulting from the event of default. However, AMB LP would remain liable to make
payment of the amounts due at the time of acceleration.
Registration and Transfer
Subject to limitations imposed upon AMB LP Non-Exchangeable Notes issued in book-entry form,
the AMB LP Non-Exchangeable Notes of any series will be exchangeable for other AMB LP
Non-Exchangeable Notes of the same series and of a like aggregate principal amount and tenor of
different authorized denominations upon surrender of the AMB LP Non-Exchangeable Notes at the
corporate trust office of the Trustee referred to above. In addition, subject to the limitations
imposed upon AMB LP Non-Exchangeable Notes issued in book-entry form, the AMB LP Non-Exchangeable
Notes of any series may be surrendered for exchange or registration of transfer of the security at
the corporate trust office of the Trustee referred to above. Every AMB LP Non-Exchangeable Note
surrendered for registration of transfer or exchange will be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any registration of transfer or
exchange of any AMB LP Non-Exchangeable Notes, but AMB LP may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith. AMB LP may at any
time designate a transfer agent, in addition to the Trustee, with respect to any series of AMB LP
Non-Exchangeable Notes. If AMB LP has designated such a transfer agent or transfer agents, AMB LP
may at any time rescind the designation of any such transfer agent or approve a change in the
location at which any such transfer agent acts, except that AMB LP will be required to maintain a
transfer agent in each place of payment for the series.
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Neither AMB LP nor the Trustee will be required to:
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(1)
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issue, register the transfer of or exchange AMB LP Non-Exchangeable Notes of
any series during a period beginning at the opening of business 15 days before any
selection of AMB LP Non-Exchangeable Notes of that series to be redeemed and ending at
the close of business on the day of mailing of the relevant notice of redemption;
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(2)
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register the transfer of or exchange any AMB LP Non-Exchangeable Note, or
portion of security, called for redemption, except the unredeemed portion of any AMB LP
Non-Exchangeable Note being redeemed in part; or
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(3)
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issue, register the transfer of or exchange any AMB LP Non-Exchangeable Note
which has been surrendered for repayment at the option of the holder, except the
portion, if any, of such AMB LP Non-Exchangeable Note not to be so repaid.
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Global Securities
DTC, New York, New York, will act as securities depository for the AMB LP Non-Exchangeable
Notes. The AMB LP Non-Exchangeable Notes will be issued as fully registered securities registered
in the name of Cede & Co., which is DTC’s nominee. Fully registered global notes, without interest
coupons, will be issued with respect to the AMB LP Non-Exchangeable Notes.
Redemption notices will be sent to DTC. If less than all of the AMB LP Non-Exchangeable Notes
within a series are being redeemed, DTC’s practice is to determine by lot the amount of the
interest of each direct participant in the series to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the AMB LP Non-Exchangeable
Notes. Under its usual procedures, DTC mails an omnibus proxy to AMB LP as soon as possible after
the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those direct
participants to whose accounts the notes are credited on the record date, which are identified in a
listing attached to the omnibus proxy.
AMB LP may, at any time, decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, certificates representing the
AMB LP Non-Exchangeable Notes will be printed and delivered.
You may hold your beneficial interests in the global securities directly through DTC if you
have an account at DTC, or indirectly through organizations that have accounts at DTC.
What is a global security?
A global security is a special type of indirectly held security in
the form of a certificate held by a depository for the investors in a particular issue of
securities. The AMB LP Non-Exchangeable Notes will be issued in the form of global securities, and
the ultimate beneficial owners can only be indirect holders. AMB LP does this by requiring that the
global securities be registered in the name of a financial institution AMB LP selects and by
requiring that the AMB LP Non-Exchangeable Notes included in the global securities not be
transferred to the name of any other direct holder unless the special circumstances described below
occur. The financial institution that acts as the sole direct holder of the global securities is
called the “Depository.” Any person wishing to own an AMB LP Non-Exchangeable Note must do so
indirectly by virtue of an account with a broker, bank or other financial institution that in turn
has an account with the Depository.
Except as described below, each global security may be transferred, in whole and not in part,
only to DTC, to another nominee of DTC or to a successor of DTC or its nominee. Beneficial
interests in global securities will be represented, and transfers of such beneficial interests will
be made, through accounts of financial institutions acting on behalf of beneficial owners either
directly as account holders, or indirectly through account holders, at DTC.
Special investor considerations for global securities
. As an indirect holder, an investor’s
rights relating to global securities will be governed by the account rules of the investor’s
financial institution and of the Depository,
200
DTC, as well as general laws relating to securities transfers. AMB LP does not recognize this
type of investor as a holder of AMB LP Non-Exchangeable Notes and instead deals only with DTC, the
Depository that holds global securities.
An investor in global securities should be aware that because the AMB LP Non-Exchangeable
Notes are issued only in the form of global securities:
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•
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The investor cannot get AMB LP Non-Exchangeable Notes registered in his or her own
name.
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•
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The investor cannot receive physical certificates for his or her interest in the AMB
LP Non-Exchangeable Notes.
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•
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The investor will be a “street name” holder and must look to his or her own bank or
broker for payments on the AMB LP Non-Exchangeable Notes and protection of his or her
legal rights relating to the AMB LP Non-Exchangeable Notes.
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•
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The investor may not be able to sell interests in the AMB LP Non-Exchangeable Notes
to some insurance companies and other institutions that are required by law to own
their securities in the form of physical certificates.
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•
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DTC’s policies will govern payments, transfers, exchanges and other matters relating
to the investor’s interest in the global notes. AMB LP and the Trustee have no
responsibility for any aspect of DTC’s actions or for its records of ownership
interests in the global securities. AMB LP and the Trustee also do not supervise DTC in
any way.
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Exchanges among the global securities
. Any beneficial interest in one of the global securities
that is transferred to a person who takes delivery in the form of an interest in another global
security will, upon transfer, cease to be an interest in such global note and become an interest in
the other global security and, accordingly, will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to beneficial interests in such other global
security for as long as it remains such an interest.
Certain book-entry procedures for the global securities.
The descriptions of the operations
and procedures of DTC, Euroclear and Clearstream set forth below are provided solely as a matter of
convenience. These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither AMB LP nor the
dealer managers take any responsibility for these operations or procedures, and investors are urged
to contact the relevant system or its participants directly to discuss these matters.
Beneficial interests in the global securities will be represented through book-entry accounts
of financial institutions acting on behalf of beneficial owners as direct and indirect participants
in DTC. Investors may elect to hold interests in the global securities through DTC either directly
if they are participants in DTC or indirectly through organizations that are participants in DTC.
Clearstream
. Clearstream is incorporated under the laws of the Grand Duchy of Luxembourg as a
professional depositary. Clearstream holds securities for its participating organizations
(“Clearstream Participants”) and facilitates the clearance and settlement of securities
transactions between Clearstream Participants through electronic book-entry changes in accounts of
Clearstream Participants, thereby eliminating the need for physical movement of certificates.
Clearstream provides Clearstream Participants with, among other things, services for safekeeping,
administration, clearance and establishment of internationally traded securities and securities
lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a
professional depositary, Clearstream is subject to regulation by the Luxembourg Monetary Institute.
Clearstream Participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations, and may include the dealer mangers. Indirect access to Clearstream is
also available to others, such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Clearstream Participant either directly or indirectly.
201
Distributions with respect to AMB LP Non-Exchangeable Notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its
rules and procedures to the extent received by a United States depositary for Clearstream.
Euroclear
. Euroclear was created in 1968 to hold securities for participants of Euroclear
(“Euroclear Participants”) and to clear and settle transactions between Euroclear Participants
through simultaneous electronic book-entry delivery against payment, thereby eliminating the need
for physical movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including securities lending and
borrowing and interfaces with domestic markets in several markets in several countries. Euroclear
is operated by Euroclear Bank S.A./N.V. (the “Euroclear Operator”), under contract with Euroclear
Clearance Systems S.C., a Belgian cooperative corporation (the “Cooperative”). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear
cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and other professional
financial intermediaries and may include the dealer managers. Indirect access to Euroclear is also
available to other firms that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is regulated and examined by the Belgian Banking Commission.
DTC
. DTC has advised AMB LP that it is:
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(1)
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a limited-purpose trust company organized under the New York State Banking Law;
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(2)
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a “banking organization” within the meaning of the New York State Banking Law;
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(3)
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a member of the Federal Reserve System;
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(4)
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a “clearing corporation” within the meaning of the New York Uniform
Commercial Code, as amended; and
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(5)
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a “clearing agency” registered pursuant to Section 17A of the Exchange Act.
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DTC was created to hold securities for its participants and facilitates the clearance and
settlement of securities transactions between participants through electronic book-entry changes to
the accounts of its participants, thereby eliminating the need for physical transfer and delivery
of certificates. DTC’s participants include securities brokers and dealers, banks and trust
companies, clearing corporations and certain other organizations. Indirect access to DTC’s system
is also available to other entities such as banks, brokers, dealers and trust companies
(collectively, the “Indirect Participants”) that clear through or maintain a custodial relationship
with a participant, either directly or indirectly. Investors who are not participants may
beneficially own securities held by or on behalf of DTC only through participants or Indirect
Participants.
AMB LP expects that pursuant to procedures established by DTC (1) upon deposit of each global
security, DTC will credit the accounts of participants with an interest in the global security and
(2) ownership of the AMB LP Non-Exchangeable Notes will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect to the interests of
participants) and the records of participants and the Indirect Participants (with respect to the
interests of persons other than participants).
The laws of some jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Accordingly, the ability to transfer interests in
the AMB LP Non-Exchangeable Notes represented by a global security to such persons may be limited.
In addition, because DTC can act only on behalf of its participants, who in turn act on behalf of
persons who hold interests through participants, the ability of a person having an interest in AMB
LP Non-Exchangeable Notes represented by a global security to pledge or transfer such interest to
persons or entities that do not participate in DTC’s system, or to otherwise take actions in
respect of such interest, may be affected by the lack of a physical definitive security in respect
of such interest.
202
So long as DTC or its nominee is the registered owner of a global security, DTC or such
nominee, as the case may be, will be considered the sole owner or holder of the AMB LP
Non-Exchangeable Notes represented by the global note for all purposes under the new AMB LP
Indenture. Owners of beneficial interests in a global security will not be entitled to have AMB LP
Non-Exchangeable Notes represented by such global security registered in their names, will not
receive or be entitled to receive physical delivery of certificated notes, and will not be
considered the owners or holders thereof under the new AMB LP Indenture for any purpose, including
with respect to the giving of any direction, instruction or approval to the Trustee thereunder.
Accordingly, each holder owning a beneficial interest in a global security must rely on the
procedures of DTC and, if such holder is not a participant or an Indirect Participant, on the
procedures of the participant through which such holder owns its interest, to exercise any rights
of a holder of AMB LP Non-Exchangeable Notes under the new AMB LP Indenture or such global
security. AMB LP understands that under existing industry practice, in the event that AMB LP
requests any action of holders of AMB LP Non-Exchangeable Notes, or a holder that is an owner of a
beneficial interest in a global security desires to take any action that DTC, as the holder of such
global security, is entitled to take, DTC would authorize the participants to take such action and
the participants would authorize holders owning through such participants to take such action or
would otherwise act upon the instruction of such holders. Neither AMB LP nor the Trustee will have
any responsibility or liability for any aspect of the records relating to or payments made on
account of AMB Non-Exchangeable LP Notes by DTC, or for maintaining, supervising or reviewing any
records of DTC relating to such AMB LP Non-Exchangeable Notes.
Payments with respect to the principal of, and premium, if any, additional interest, if any,
and interest on, any AMB LP Non-Exchangeable Notes represented by a global security registered in
the name of DTC or its nominee on the applicable record date will be payable by the Trustee to or
at the direction of DTC or its nominee in its capacity as the registered holder of the global note
representing such AMB LP Non-Exchangeable Notes under the new AMB LP Indenture. Under the terms of
the new AMB LP Indenture, AMB LP and the Trustee may treat the persons in whose names the AMB LP
Non-Exchangeable Notes, including the global securities, are registered as the owners thereof for
the purpose of receiving payment thereon and for any and all other purposes whatsoever.
Accordingly, neither AMB LP nor the Trustee has or will have any responsibility or liability for
the payment of such amounts to owners of beneficial interests in a global security (including
principal, premium, if any, additional interest, if any, and interest). Payments by the
participants and the Indirect Participants to the owners of beneficial interests in a global
security will be governed by standing instructions and customary industry practice and will be the
responsibility of the participants or the Indirect Participants and DTC.
Transfers between participants in DTC will be effected in accordance with DTC’s procedures,
and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream
will be effected in the ordinary way in accordance with their respective rules and operating
procedures. Subject to compliance with the transfer restrictions applicable to the AMB LP
Non-Exchangeable Notes, cross-market transfers between the participants in DTC, on the one hand,
and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in
accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its
respective depositary; however, such cross-market transactions will require delivery of
instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines (Brussels, Belgium
time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets
its settlement requirements, deliver instructions to DTC to take action to effect final settlement
on its behalf by delivering or receiving interests in the relevant global securities in DTC, and
making or receiving payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions
directly to the depositaries for Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or Clearstream
participant purchasing an interest in a global security from a participant in DTC will be credited,
and any such crediting will be reported to the relevant Euroclear or Clearstream participant,
during the securities settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or
Clearstream as a result of sales of interests in a global security by or through a Euroclear or
Clearstream participant to a participant in DTC will be received with value on the settlement date
of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the
business day for Euroclear or Clearstream following DTC’s settlement date.
203
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate
transfers of interests in global securities among participants in DTC, Euroclear and Clearstream,
they are under no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. Neither AMB LP nor the Trustee will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their respective
participants or indirect participants of their respective obligations under the rules and
procedures governing their operations.
Links have been established among DTC, Clearstream and Euroclear to facilitate the initial
issuance of the AMB LP Non-Exchangeable Notes sold outside of the United States and cross-market
transfers of the notes associated with secondary market trading. Although DTC, Clearstream and
Euroclear have agreed to the procedures provided below in order to facilitate transfers, they are
under no obligation to perform these procedures, and these procedures may be modified or
discontinued at any time.
Clearstream and Euroclear will record the ownership interests of their participants in much
the same way as DTC, and DTC will record the total ownership of each of the United States agents of
Clearstream and Euroclear, as participants in DTC. When AMB LP Non-Exchangeable Notes are to be
transferred from the account of a DTC participant to the account of a Clearstream participant or a
Euroclear participant, the purchaser must send instructions to Clearstream or Euroclear through a
participant at least one day prior to settlement. Clearstream or Euroclear, as the case may be,
will instruct its United States agent to receive AMB LP Non-Exchangeable Notes against payment.
After settlement, Clearstream or Euroclear will credit its participant’s account. Credit for the
notes will appear on the next day (European time).
Because settlement is taking place during New York business hours, DTC participants will be
able to employ their usual procedures for sending AMB LP Non-Exchangeable Notes to the relevant
United States agent acting for the benefit of Clearstream or Euroclear participants. The sale
proceeds will be available to the DTC seller on the settlement date. As a result, to the DTC
participant, a cross-market transaction will settle no differently than a trade between two DTC
participants. When a Clearstream or Euroclear participant wishes to transfer AMB LP
Non-Exchangeable Notes to a DTC participant, the seller will be required to send instructions to
Clearstream or Euroclear through a participant at least one business day prior to settlement. In
these cases, Clearstream or Euroclear will instruct its United States agent to transfer these AMB
LP Non-Exchangeable Notes against payment for them. The payment will then be reflected in the
account of the Clearstream or Euroclear participant the following day, with the proceeds back
valued to the value date, which would be the preceding day, when settlement occurs in New York, if
settlement is not completed on the intended value date, that is, the trade fails, proceeds credited
to the Clearstream or Euroclear participant’s account will instead be valued as of the actual
settlement date.
You should be aware that you will only be able to make and receive deliveries, payments and
other communications involving the AMB LP Non-Exchangeable Notes through Clearstream and Euroclear
on the days when those clearing systems are open for business. Those systems may not be open for
business on days when banks, brokers and other institutions are open for business in the United
States. In addition, because of time zone differences there may be problems with completing
transactions involving Clearstream and Euroclear on the same business day as in the United States.
Definitive securities.
A global security is exchangeable for definitive securities in
registered certificated form (“Certificated Securities”) if:
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(1)
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DTC (a) notifies the issuer that it is unwilling or unable to continue as
depositary for the global securities or (b) has ceased to be a clearing agency
registered under the Exchange Act, and in each cash the issuer fails to appoint a
successor depositary;
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(2)
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the issuer, at its option, notifies the Trustee in writing that it elects to
cause the issuance of the Certificated Securities; or
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(3)
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there shall have occurred and be continuing a default or event of default
with respect to the AMB LP Non-Exchangeable Notes.
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In all cases, Certificated Securities delivered in exchange for any global security or
beneficial interests in global securities will be registered in the names, and issued in any
approved denominations, requested by or on behalf of DTC (in accordance with its customary
procedures).
Settlement and Payment
Transfers between participants in DTC will be effected in the ordinary way in accordance with
DTC rules and will be settled in same-day funds. All payments of principal and interest will be
made by AMB LP in immediately available funds or the equivalent, so long as DTC continues to make
its Same-Day Funds Settlement System available to it.
No Personal Liability
Except as provided in the new AMB LP Indenture, no past, present or future trustee, officer,
employee, stockholder or partner of AMB LP or AMB or any successor to AMB LP or AMB will have any
liability for any of AMB LP’s or AMB’s obligations under the AMB LP Non-Exchangeable Notes or the
new AMB LP Indenture or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each holder of AMB LP Non-Exchangeable Notes by accepting the AMB LP
Non-Exchangeable Notes waives and releases all such liability. The waiver and release are part of
the consideration for the issue of AMB LP Non-Exchangeable Notes.
Trustee
U.S. Bank National Association will be the trustee, registrar and paying agent. Under the new
AMB LP Indenture, the Trustee may resign or be removed with respect to the AMB LP Non-Exchangeable
Notes, and a successor trustee may be appointed to act with respect to the AMB LP Non-Exchangeable
Notes. If an event of default occurs and is continuing, the Trustee will be required to use the
degree of care and skill of a prudent man in the conduct of his own affairs. The Trustee will
become obligated to exercise any of its powers under the new AMB LP Indenture at the request of any
of the holders of any AMB LP Non-Exchangeable Notes only after those holders have offered the
Trustee indemnity satisfactory to it. If the Trustee becomes one of a creditor of AMB LP or AMB,
it will be subject to limitations on its rights to obtain payment of claims or to realize on some
property received for any such claim, as security or otherwise. The Trustee is permitted to engage
in other transactions with AMB LP and AMB. If, however, it acquires any conflicting interest, it
must eliminate that conflict or resign.
The new AMB LP Indenture provides that there may be more than one trustee, each with respect
to one or more series of debt securities. Any trustee under the new AMB LP Indenture may resign or
be removed with respect to one or more series of debt securities, and a successor trustee may be
appointed to act with respect to the series. In the event that two or more persons are acting as
trustee with respect to different series of debt securities, each such trustee will be a trustee of
a trust under the new AMB LP Indenture separate and apart from the trust administered by any other
trustee. Except as otherwise indicated in this prospectus, any action described in this prospectus
to be taken by the trustee may be taken by each such trustee with respect to, and only with respect
to, the one or more series of debt securities for which it is trustee under the new AMB LP
Indenture.
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DESCRIPTION OF THE AMB LP CONTINGENT EXCHANGEABLE NOTES
AMB LP has summarized below certain material terms and provisions of the AMB LP Contingent
Exchangeable Notes. This summary is not a complete description of all of the terms and provisions
of the AMB LP Contingent Exchangeable Notes. For more information, AMB LP refers you to the AMB LP
Contingent Exchangeable Notes and the new AMB LP Indenture, all of which are available from AMB LP.
AMB LP urges you to read the new AMB LP Indenture because it, and not this description, defines
your rights as a holder of the AMB LP Contingent Exchangeable Notes. This summary is subject to
and qualified in its entirety by reference to all the provisions of those documents, including
definitions of terms referred to in this prospectus.
AMB LP (which will be known as ProLogis, L.P. after the Merger) will issue the AMB LP
Contingent Exchangeable Notes. The AMB LP Contingent Exchangeable Notes will be issued under the
new AMB LP Indenture. The terms of the AMB LP Contingent Exchangeable Notes will include those
expressly set forth in the AMB LP Contingent Exchangeable Notes and the new AMB LP Indenture and
those made part of the new AMB LP Indenture by reference to the Trust Indenture Act.
General
The AMB LP Contingent Exchangeable Notes will be AMB LP’s direct, unsecured and unsubordinated
obligations and will rank
pari passu
with all of AMB LP’s other unsecured and unsubordinated
indebtedness outstanding from time to time and will be fully and unconditionally guaranteed by AMB
except as may be limited to the maximum amount permitted under applicable federal or state law.
Each guarantee of the AMB LP Contingent Exchangeable Notes will be an unsecured and unsubordinated
obligation of AMB and will rank
pari passu
in right of payment with all of its current and future
unsecured and unsubordinated indebtedness. The AMB LP Contingent Exchangeable Notes and each
guarantee will be effectively subordinated to any current and future indebtedness of AMB LP and AMB
that is both secured and unsubordinated to the extent of the assets securing such indebtedness.
A substantial portion (amounting to approximately 88%) of the total assets of AMB LP at
December 31, 2010 are held directly by AMB LP’s consolidated subsidiaries and unconsolidated joint
ventures and co-investment ventures. Accordingly, the cash flow of AMB LP and the consequent
ability to service its debt, including the AMB LP Contingent Exchangeable Notes, are partially
dependent on the earnings of such consolidated subsidiaries and unconsolidated joint ventures and
co-investment ventures and the AMB LP Contingent Exchangeable Notes will be effectively
subordinated to all existing and future indebtedness, guarantees and other liabilities of such
consolidated subsidiaries and unconsolidated joint ventures and co-investment ventures. As of
December 31, 2010, AMB LP’s consolidated subsidiaries and unconsolidated joint ventures and
co-investment ventures had total liabilities (excluding intercompany liabilities) of approximately
$5.9 billion.
The AMB LP Contingent Exchangeable Notes will be effectively subordinated to AMB LP’s
mortgages and other secured indebtedness to the extent of any collateral pledged as security
therefor. As of December 31, 2010, AMB LP (excluding its consolidated subsidiaries and
unconsolidated joint ventures and co-investment ventures) had amounts outstanding under unsecured
credit facilities and senior indebtedness (including the notes) aggregating approximately $1.6
billion and no amounts outstanding for mortgages and other secured indebtedness.
Under the new AMB LP Indenture, in addition to the ability to issue notes with terms different
from the AMB LP Contingent Exchangeable Notes, AMB LP will have the ability to reopen a previous
issue of a series of AMB LP Contingent Exchangeable Notes and issue additional AMB LP Contingent
Exchangeable Notes of any series without the consent of the holders. Each series may be as
established from time to time in or pursuant to authority granted by a resolution of AMB LP’s
general partner, AMB, or as established in one or more indentures supplemental to the new AMB LP
Indenture.
Other than the restrictions described under “— Fundamental Change Permits Holders to Require
AMB LP to Repurchase AMB LP Contingent Exchangeable Notes” and “— Merger, Consolidation or Sale”
below, and except for the provisions set forth under “— Exchange Rights — Adjustment to Shares
Delivered Upon Exchange Upon Fundamental Change”, the new AMB LP Indenture as supplemented with
respect to a series of AMB LP Contingent Exchangeable Notes contains no other provisions that would
limit AMB LP’s ability to incur indebtedness or that would afford holders of the AMB LP Contingent
Exchangeable Notes protection in the event of
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a highly leveraged or similar transaction involving AMB LP or in the event of a change of
control or a decline in the credit rating of AMB LP as the result of a takeover, recapitalization,
highly leveraged transaction or similar restructuring involving AMB LP that could adversely affect
such holders.
AMB Guarantee
AMB LP’s obligations under the AMB LP Contingent Exchangeable Notes will be fully and
unconditionally guaranteed by AMB (which will be known as ProLogis, Inc., and which is referred to
as the combined company, after the Merger). AMB’s guarantee of the AMB LP Notes will rank
pari
passu
in right of payment with all of AMB’s unsecured and unsubordinated indebtedness, including
AMB’s indebtedness for borrowed money, indebtedness evidenced by bonds, debentures, notes or
similar instruments, obligations arising from or with respect to guarantees and direct credit
substitutes, obligations associated with hedges and derivative products, capitalized lease
obligations and other unsecured and unsubordinated indebtedness. The guarantee of the AMB LP
Contingent Exchangeable Notes by AMB will be effectively subordinated to all of the mortgages and
other secured indebtedness of AMB and all of the secured and unsecured indebtedness and other
liabilities of its subsidiaries, other than AMB LP. The obligations of AMB under each guarantee
will be limited to the maximum amount permitted under applicable federal or state law.
Denominations
The AMB LP Contingent Exchangeable Notes will be issued in registered form and in
denominations of $1,000 and integral multiples of $1,000.
Principal, Maturity and Interest
The principal of, and premium or make-whole amounts, if any, and interest on the AMB LP
Contingent Exchangeable Notes will be payable at the corporate trust office of U.S. Bank National
Association, initially located at 100 Wall Street, Suite 1600, New York, New York 10005; provided
that, at AMB LP’s option, payment of interest may be made by check mailed to the address of the
person entitled to the payment as it appears in the security register or by wire transfer of funds
to the person to an account maintained within the United States.
Interest on the AMB LP Contingent Exchangeable Notes will be computed on the basis of a
360-day year consisting of twelve 30-day months. If any interest payment date, principal payment
date or the maturity date falls on a day that is not a business day, the required payment will be
made on the next business day as if it were made on the date the payment was due and no interest
will accrue on the amount so payable for the period from and after the interest payment date,
principal payment date or the maturity date, as the case may be, until the next business day.
“Business day” means any day, other than a Saturday, Sunday or legal holidays, on which banks in
New York, New York are not authorized or required by law or executive order to be closed. In
addition, you will not receive any separate cash payment for accrued and unpaid interest, if any,
upon exchange, except as described under “— Exchange Rights.” Any interest not punctually paid or
duly provided for on any interest payment date with respect to an AMB LP Contingent Exchangeable
Note, will cease to be payable to the holder on the applicable regular record date and either may
be paid to the person in whose name the AMB LP Contingent Exchangeable Note is registered at the
close of business on a special record date for the payment of the defaulted interest to be fixed by
the Trustee, notice of which will be given to the holder of the AMB LP Contingent Exchangeable Note
not less than ten days prior to the special record date, or may be paid at any time in any other
lawful manner, all as more completely described in the new AMB LP Indenture.
The AMB LP 2.250% 2037 Exchangeable Notes will mature on April 1, 2037. Up to approximately
$593.0 million in aggregate principal amount of AMB LP 2.250% 2037 Exchangeable Notes may be issued
in the applicable exchange offers. Interest on the AMB LP 2.250% 2037 Exchangeable Notes will:
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accrue at the rate of 2.250% per annum, from April 1, 2011 (the most recent date on
which interest will have been paid on the ProLogis 2.250% 2037 Convertible Notes);
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be payable in cash semi-annually in arrears on each April 1 and October 1,
commencing on October 15, 2011; and
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be payable to holders of record on the March 15 and September 15 immediately
preceding the related interest payment dates.
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The AMB LP 1.875% 2037 Exchangeable Notes will mature on November 15, 2037. Up to
approximately $141.7 million in aggregate principal amount of AMB LP 1.875% 2037 Exchangeable Notes
may be issued in the applicable exchange offers. Interest on the AMB LP 1.875% 2037 Exchangeable
Notes will:
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accrue at the rate of 1.875% per annum, from May 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 1.875% 2037 Convertible Notes);
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be payable in cash semi-annually in arrears on each May 15 and November 15,
commencing on November 15, 2011; and
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be payable to holders of record on the May 1 and November 1 immediately preceding
the related interest payment dates.
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The AMB 2.625% 2038 Exchangeable Notes will mature on May 15, 2038. Up to approximately
$386.3 million in aggregate principal amount of AMB 2.625% 2038 Exchangeable Notes may be issued in
the applicable exchange offers. Interest on the AMB 2.625% 2038 Exchangeable Notes will:
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accrue at the rate of 2.625% per annum, from May 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 2.625% 2038 Convertible Notes);
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be payable in cash semi-annually in arrears on each May 15 and November 15,
commencing on November 15, 2011; and
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be payable to holders of record on the May 1 and November 1 immediately preceding
the related interest payment dates.
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Ownership Limitation
In order to assist AMB in maintaining its qualification as a REIT for U.S. federal income tax
purposes, no person may own more than 9.8% (by value or number of shares, whichever is more
restrictive) of AMB’s common stock, subject to certain exceptions. Notwithstanding any other
provision of the AMB LP Contingent Exchangeable Notes, in addition to AMB LP’s right to elect to
deliver exchange consideration in whole or in part in cash, no holder of AMB LP Contingent
Exchangeable Notes will be entitled to exchange such AMB LP Contingent Exchangeable Notes for
shares of AMB common stock to the extent that receipt of such shares (assuming AMB LP elected to
deliver common stock) would cause such holder (together with such holder’s affiliates) to exceed
such ownership limit. See “Description of AMB Capital Stock — AMB Common
Stock — Ownership
Limitation.”
No Stockholder Rights for Holders of AMB LP Contingent Exchangeable Notes
Holders of AMB LP Contingent Exchangeable Notes, as such, will not have any rights as
stockholders of AMB (including, without limitation, voting rights and rights to receive dividends
or other distributions on AMB’s common stock). See “Risk Factors — Additional Risks Related to
the AMB LP Exchangeable Notes — If you hold AMB LP Exchangeable Notes, you will not be entitled to
any rights with respect to AMB’s common stock, but you will be subject to all changes made with
respect to AMB’s common stock.”
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Calculations in Respect of the AMB LP Contingent Exchangeable Notes
Except as explicitly specified otherwise herein, AMB LP will be responsible for making all
calculations required under the AMB LP Contingent Exchangeable Notes. These calculations include,
but are not limited to, determinations of the exchange price and exchange rate applicable to the
AMB LP Contingent Exchangeable Notes. AMB LP will make all these calculations in good faith and,
absent manifest error, AMB LP’s calculations will be final and binding on holders of the AMB LP
Contingent Exchangeable Notes. AMB LP will provide a schedule of its calculations to the Trustee,
and the Trustee is entitled to rely upon the accuracy of AMB LP’s calculations without independent
verification. The Trustee will forward AMB LP’s calculations to any holder of AMB LP Contingent
Exchangeable Notes upon request.
Optional Redemption
Prior to April 5, 2012, January 15, 2013 and May 20, 2013, AMB LP may not redeem the AMB LP
2.250% 2037 Exchangeable Notes, AMB LP 1.875% 2037 Exchangeable Notes and AMB LP 2.625% 2038
Exchangeable Notes, respectively, except to preserve AMB’s status as a REIT as described below. On
or after April 5, 2010, January 15, 2013 and May 20, 2013, AMB LP may at its option redeem all or
part of the AMB LP 2.250% 2037 Exchangeable Notes, AMB LP 1.875% 2037 Exchangeable Notes and AMB LP
2.625% 2038 Exchangeable Notes, respectively, for cash at a price equal to 100% of the principal
amount of the AMB LP Contingent Exchangeable Notes being redeemed, plus accrued and unpaid
interest, if any, to the redemption date, on at least 30 days’ and no more than 60 days’ notice.
AMB LP may not provide notice of a redemption of AMB LP Contingent Exchangeable Notes at its option
that specifies that it will settle exchanges of AMB LP Contingent Exchangeable Notes prior to such
redemption in cash and shares of AMB common stock unless, at the time of such notice, AMB LP has
available to it sufficient registered shares of AMB common stock to satisfy AMB LP’s obligations in
respect of any such AMB LP Contingent Exchangeable Notes that are exchanged into cash and shares of
AMB common stock.
You may exchange AMB LP Contingent Exchangeable Notes or portions of AMB LP Contingent
Exchangeable Notes called for redemption even if the AMB LP Contingent Exchangeable Notes are not
otherwise exchangeable at that time, until the close of business on the day that is two business
days prior to the redemption date.
If AMB LP decides to redeem fewer than all of the AMB LP Contingent Exchangeable Notes, the
Trustee will select the AMB LP Contingent Exchangeable Notes to be redeemed by lot, or in its
discretion, on a pro rata basis. If any AMB LP Contingent Exchangeable Note is to be redeemed in
part only, a new AMB LP Contingent Exchangeable Note in principal amount equal to the unredeemed
principal portion will be issued. If a portion of your AMB LP Contingent Exchangeable Notes is
selected for partial redemption and you exchange a portion of your AMB LP Contingent Exchangeable
Notes, the exchanged portion will be deemed to be part of the portion selected for redemption.
If at any time AMB LP determines it is necessary to redeem the AMB LP Contingent Exchangeable
Notes in order to preserve AMB’s status as a REIT, AMB LP may, on at least 30 days’ and no more
than 60 days’ notice, redeem all, but not less than all, of the AMB LP Contingent Exchangeable
Notes then outstanding for cash at a price equal to 100% of the principal amount of the AMB LP
Contingent Exchangeable Notes being redeemed, plus accrued and unpaid interest, if any, to the
redemption date.
AMB LP or a third party may, to the extent permitted by applicable law, at any time purchase
AMB LP Contingent Exchangeable Notes in the open market, by tender at any price or by private
agreement. Any AMB LP Contingent Exchangeable Notes so purchased may, to the extent permitted by
applicable law and subject to restrictions contained in a dealer manager agreement with the dealer
managers, be reissued or resold or may, at AMB LP’s or such third party’s option, be surrendered to
the Trustee for cancellation. Any AMB LP Contingent Exchangeable Notes surrendered for cancellation
may not be reissued or resold and will be canceled promptly.
AMB LP may deduct and withhold, from the amount payable upon redemption, any amounts required
to be deducted and withheld under applicable law.
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No sinking fund is provided for the AMB LP Contingent Exchangeable Notes.
Repurchase of AMB LP Contingent Exchangeable Notes at Your Option on Specified Dates
You may require AMB LP to repurchase the AMB LP Contingent Exchangeable Notes on:
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April 1 of 2012, 2017, 2022, 2027 and 2032 with respect to any outstanding AMB LP
2.250% 2037 Exchangeable Notes;
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January 15, 2013 and November 15 of 2017, 2022, 2027, and 2032 with respect to any
outstanding AMB LP 1.875% 2037 Exchangeable Notes; and
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May 15 of 2013, 2018, 2023, 2028, and 2033 with respect to any outstanding AMB LP
2.625% 2038 Exchangeable Notes;
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for which you have properly delivered and not withdrawn a written repurchase notice, subject to
certain additional conditions. You may submit your AMB LP Contingent Exchangeable Notes for
repurchase to the paying agent at any time from the opening of business on the date that is 25
business days prior to the repurchase date until the close of business on the fifth business day
prior to the repurchase date.
AMB LP will repurchase each outstanding AMB LP Contingent Exchangeable Note for which you have
properly delivered and not withdrawn a written repurchase notice at a repurchase price equal to
100% of the principal amount of the AMB LP Contingent Exchangeable Note being repurchased plus
accrued and unpaid interest up to, but excluding, the repurchase date.
AMB LP will pay the repurchase price in cash. For a discussion of the tax treatment of a
holder receiving cash, see “Material United States Federal Income Tax Consequences — Taxation of
Noteholders — U.S. Holders — Sale or other Disposition of AMB LP Notes.”
Fundamental Change Permits Holders to Require AMB LP to Repurchase AMB LP Contingent Exchangeable
Notes
If a fundamental change, as defined below, occurs at any time, you will have the right, at
your option, to require AMB LP to repurchase all of your AMB LP Contingent Exchangeable Notes, or
any portion of the principal amount thereof that is equal to $1,000 or an integral multiple of
$1,000, on a date (the “fundamental change repurchase date”) of AMB LP’s choosing that is not less
than 20 nor more than 35 business days after the date of AMB LP’s notice of the fundamental change.
The price AMB LP is required to pay is equal to 100% of the principal amount of the AMB LP
Contingent Exchangeable Notes to be repurchased plus accrued and unpaid interest to, but excluding,
the fundamental change repurchase date. Any AMB LP Contingent Exchangeable Notes repurchased by AMB
LP will be paid for in cash.
On or before the 20th day after the occurrence of a fundamental change, AMB LP will provide to
all holders of the AMB LP Contingent Exchangeable Notes, the Trustee and the paying agent a notice
of the occurrence of the fundamental change and of the resulting repurchase right. Such notice
shall state, among other things:
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the events causing the fundamental change;
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the date of the fundamental change;
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the last date on which a holder may exercise the repurchase right;
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the fundamental change repurchase price;
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the fundamental change repurchase date;
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the name and address of the paying agent and the exchange agent, if applicable;
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the applicable exchange rate and any adjustments to the applicable exchange rate;
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that the AMB LP Contingent Exchangeable Notes with respect to which a fundamental
change repurchase notice has been delivered by a holder may be exchanged only if the
holder withdraws the fundamental change repurchase notice in accordance with the terms
of the new AMB LP Indenture; and
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the procedures that holders must follow to require AMB LP to repurchase their AMB LP
Contingent Exchangeable Notes.
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Simultaneously with providing such notice, AMB LP will publish a notice containing this
information in a newspaper of general circulation in New York City or publish the information on
its website or through such other public medium as it may use at that time.
To exercise the repurchase right, you must deliver, on or before the fundamental change
repurchase date, the AMB LP Contingent Exchangeable Notes to be purchased, duly endorsed for
transfer, together with a written repurchase notice and the form entitled “Form of Fundamental
Change Repurchase Notice” on the reverse side of the AMB LP Contingent Exchangeable Notes duly
completed, to the paying agent. Your repurchase notice must state:
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if certificated, the certificate numbers of your AMB LP Contingent Exchangeable
Notes to be delivered for repurchase;
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the portion of the principal amount of AMB LP Contingent Exchangeable Notes to be
purchased, which must be $1,000 or an integral multiple thereof; and
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that the AMB LP Contingent Exchangeable Notes are to be purchased by AMB LP pursuant
to the applicable provisions of the AMB LP Contingent Exchangeable Notes and the new
AMB Indenture.
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You may withdraw any repurchase notice (in whole or in part) by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the business day prior to the
fundamental change repurchase date. The notice of withdrawal shall state:
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the principal amount of the withdrawn AMB LP Contingent Exchangeable Notes;
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if certificated AMB LP Contingent Exchangeable Notes have been issued, the
certificate numbers of the withdrawn AMB LP Contingent Exchangeable Notes, or if not
certificated, your notice must comply with appropriate DTC procedures; and
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the principal amount, if any, which remains subject to the repurchase notice.
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AMB LP will be required to repurchase the AMB LP Contingent Exchangeable Notes on the
fundamental change repurchase date. You will receive payment of the fundamental change repurchase
price promptly following the later of the fundamental change repurchase date or the time of
book-entry transfer or the delivery of the AMB LP Contingent Exchangeable Notes. If the paying
agent holds money or securities sufficient to pay the fundamental change repurchase price of the
AMB LP Contingent Exchangeable Notes on the second business day following the fundamental change
repurchase date, then:
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the AMB LP Contingent Exchangeable Notes will cease to be outstanding and interest
will cease to accrue (whether or not book-entry transfer of the AMB LP Contingent
Exchangeable Notes is made or whether or not the AMB LP Contingent Exchangeable Note is
delivered to the paying agent); and
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all other rights of the holder will terminate (other than the right to receive the
fundamental change repurchase price and previously accrued and unpaid interest upon
delivery or transfer of the AMB LP Contingent Exchangeable Notes).
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The repurchase rights of the holders could discourage a potential acquirer of AMB LP. The
fundamental change repurchase feature, however, is not the result of management’s knowledge of any
specific effort to obtain control of AMB LP by any means or part of a plan by management to adopt a
series of anti-takeover provisions.
If a fundamental change were to occur, AMB LP may not have enough funds to pay the fundamental
change repurchase price. See “Risk Factors — Additional Risks Related to the AMB LP Exchangeable
Notes — AMB LP may be unable to repurchase AMB LP Exchangeable Notes upon the occurrence of a
fundamental change and with respect to the AMB LP Contingent Exchangeable Notes on specified
dates.” If AMB LP fails to repurchase the AMB LP Contingent Exchangeable Notes when required
following a fundamental change, AMB LP will be in default under the new AMB LP Indenture. In
addition, AMB LP has incurred, and may in the future incur, other indebtedness with change in
control provisions permitting the holders thereof to accelerate or to require AMB LP to repurchase
such indebtedness upon the occurrence of specified change in control events or on some specific
dates.
Certain of AMB LP’s debt agreements may limit its ability to repurchase AMB LP Contingent
Exchangeable Notes.
No AMB LP Contingent Exchangeable Notes may be purchased at the option of holders upon a
fundamental change if there has occurred and is continuing an event of default other than an event
of default that is cured by the payment of the fundamental change repurchase price.
Exchange Rights
General
Upon the occurrence of any of the conditions described under the headings “— Exchange of AMB
LP Contingent Exchangeable Notes Upon Satisfaction of Trading Price Condition”, “— Exchange of AMB
LP Contingent Exchangeable Notes Based Upon AMB’s Common Stock Price”, “— Exchange of AMB LP
Contingent Exchangeable Notes Upon Notice of Redemption”, “— Exchange of AMB LP Contingent
Exchangeable Notes Upon Specified Corporate Transactions”, “— Exchange of AMB LP Contingent
Exchangeable Notes Upon AMB’s Common Stock No Longer Being Listed” and “— Exchange of AMB LP
Contingent Exchangeable Notes on or after February 1, 2012, October 15, 2012 and February 15,
2013”, and subject to the restrictions on ownership of shares of AMB common stock, holders may
exchange each of their AMB LP Contingent Exchangeable Notes at an initial “exchange rate” of:
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5.8752 shares of AMB common stock per $1,000 principal amount of AMB LP 2.250% 2037
Exchangeable Notes (equivalent to an exchange price of approximately $170.2070 per
share of AMB common stock) at any time prior to the close of business on the trading
day immediately preceding the final maturity date;
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5.4874 shares of AMB common stock per $1,000 principal amount of AMB LP 1.875% 2037
Exchangeable Notes (equivalent to an exchange price of approximately $182.2357 per
share of AMB common stock) at any time prior to the close of business on the trading
day immediately preceding the final maturity date; and
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5.8569 shares of AMB common stock per $1,000 principal amount of AMB LP 2.625% 2038
Exchangeable Notes (equivalent to an exchange price of approximately $170.7388 per
share of AMB common stock) at any time prior to the close of business on the trading
day immediately preceding the final maturity date.
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The exchange rate and the equivalent exchange price in effect at any given time are referred
to as the “applicable exchange rate” and the “applicable exchange price”, respectively, and will be
subject to adjustment as described below. The exchange price at any given time will be computed by
dividing $1,000 by the applicable exchange rate at such time. A holder may exchange fewer than all
of such holder’s AMB LP Contingent Exchangeable Notes so long as the AMB LP Contingent Exchangeable
Notes exchanged are an integral multiple of $1,000 principal amount.
Upon exchange, AMB LP will have the right to deliver cash, shares of AMB common stock, or a
combination of cash and shares of AMB common stock, in each case as described under “— Payment
Upon Exchange of the AMB LP Contingent Exchangeable Notes.” AMB LP will inform you through the
Trustee of the method AMB LP will choose to satisfy its exchange obligations within two trading
days immediately after its receipt of your exchange notice; provided, however, that at any time on
or prior to:
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February 1, 2012 AMB LP may irrevocably elect, in its sole discretion without the
consent of the holders of the AMB LP 2.250% 2037 Exchangeable Notes;
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October 15, 2012 AMB LP may irrevocably elect, in its sole discretion without the
consent of the holders of the AMB LP 1.875% 2037 Exchangeable Notes; and
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February 15, 2013 AMB LP may irrevocably elect, in its sole discretion without the
consent of the holders of the AMB LP 2.625% 2038 Exchangeable Notes;
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to satisfy all of its future exchange obligations entirely in shares of AMB common stock, and,
provided further, that AMB LP is required to settle all exchanges with an exchange date occurring
on or after:
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February 1, 2012 in the same manner and AMB LP will notify holders of the AMB LP
2.250% 2037 Exchangeable Notes, of the manner of settlement on or before such date;
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October 15, 2012 in the same manner and AMB LP will notify holders of the AMB LP
1.875% 2037 Exchangeable Notes, of the manner of settlement on or before such date; and
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February 15, 2013 in the same manner and AMB LP will notify holders of the AMB LP
2.625% 2038 Exchangeable Notes, of the manner of settlement on or before such date.
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If AMB LP does not elect otherwise, AMB LP’s exchange obligations will be settled in a combination
of cash and shares of AMB common stock as follows: (i) AMB LP will pay cash in an amount equal to
the lesser of the principal amount of the AMB LP Contingent Exchangeable Notes to be exchanged and
the exchange value of the AMB LP Contingent Exchangeable Notes to be exchanged, calculated as
described in this prospectus, and (ii) to the extent that the exchange value of the AMB LP
Contingent Exchangeable Notes to be exchanged exceeds the principal amount of the AMB LP Contingent
Exchangeable Notes to be exchanged, AMB LP will issue shares of AMB common stock. The number of
shares to be delivered will be determined based on a daily exchange value, as described below under
“— Payment Upon Exchange of the AMB LP Contingent Exchangeable Notes — Net Share Settlement”,
calculated on a proportionate basis for each day of a 20 trading day observation period, as
described in this prospectus. However, AMB LP may elect to deliver cash in settlement of all or a
portion of the amount by which the exchange value of the AMB LP Contingent Exchangeable Notes to be
exchanged exceeds the principal amount of such AMB LP Contingent Exchangeable Notes or AMB LP may
elect to settle its exchange obligations entirely in shares of AMB common stock. If AMB LP is
unable to deliver registered shares of AMB common stock upon exchange, AMB LP may be more likely to
elect to settle its obligations under the exchange by delivering cash.
Except as described below, you will not receive any separate cash payment for accrued and
unpaid interest upon exchange of your AMB LP Contingent Exchangeable Notes. AMB LP’s settlement of
exchanges as described below under “— Payment Upon Exchange of the AMB LP Contingent Exchangeable
Notes” will be deemed to satisfy its obligation to pay:
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the principal amount of the AMB LP Contingent Exchangeable Notes; and
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accrued and unpaid interest to, but not including, the exchange date.
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As a result, accrued and unpaid interest to, but not including, the exchange date will be
deemed to be paid in full rather than cancelled, extinguished or forfeited.
Notwithstanding the preceding paragraph, if AMB LP Contingent Exchangeable Notes are exchanged
after 5:00 p.m., New York City time, on a record date, holders of such AMB LP Contingent
Exchangeable Notes at 5:00 p.m., New York City time, on the record date will receive the interest
payable on such AMB LP Contingent Exchangeable Notes on the corresponding interest payment date
notwithstanding the exchange. AMB LP Contingent Exchangeable Notes surrendered for exchange during
the period from 5:00 p.m., New York City time, on any regular record date to 9:00 a.m., New York
City time, on the immediately following interest payment date must be accompanied by funds equal to
the amount of interest payable on such AMB LP Contingent Exchangeable Notes on such interest
payment date; provided that no such payment need be made with respect to AMB LP Contingent
Exchangeable Notes surrendered for exchange:
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if AMB LP has called the AMB LP Contingent Exchangeable Notes for redemption and the
redemption date falls within such period;
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in connection with a fundamental change if AMB LP has specified a fundamental change
repurchase date that falls within such period;
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after the record date, with respect to the AMB LP 2.250% 2037 Exchangeable Notes and
AMB LP 1.875% 2037 Exchangeable Notes, or after 5:00 p.m., New York City time on the
record date, with respect to the AMB LP 2.625% 2038 Exchangeable Notes, immediately
preceding the maturity date; or
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to the extent of any overdue interest, if any overdue interest exists at the time of
exchange with respect to such AMB LP Contingent Exchangeable Notes.
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If a holder exchanges AMB LP Contingent Exchangeable Notes, AMB LP will pay any documentary,
stamp or similar issue or transfer tax due on the issue of any shares of AMB common stock upon the
exchange, unless the tax is due because the holder requests any shares to be issued in a name other
than the holder’s name, in which case the holder will pay that tax.
The AMB LP Contingent Exchangeable Notes in respect of which a holder has delivered a notice
of exercise of its option to require AMB LP to repurchase its AMB LP Contingent Exchangeable Notes
upon the occurrence of a fundamental change (as defined below) may not be surrendered for exchange
until the holder has withdrawn the notice in accordance with the new AMB LP Indenture.
Exchange of AMB LP Contingent Exchangeable Notes Upon Satisfaction of Trading Price Condition
A holder may exchange AMB LP Contingent Exchangeable Notes during the five business day period
after any ten consecutive trading day period (the “measurement period”) in which the “trading
price” per $1,000 principal amount of AMB LP Contingent Exchangeable Notes was less than 98% of the
product of the last reported sale price per share of AMB common stock and the applicable exchange
rate for such date, subject to compliance with the procedures and conditions described below
concerning AMB LP’s obligation to make a trading price determination.
The “trading price” of a series of AMB LP Contingent Exchangeable Notes on any date of
determination means the average of the secondary market bid quotations obtained by the Trustee for
$2.0 million principal amount of the corresponding series of AMB LP Contingent Exchangeable Notes
of such series at approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers AMB LP selects; provided that, if three
such bids cannot reasonably be obtained, but two such bids are obtained, then the average of the
two bids shall be used, and if only one such bid can reasonably be obtained, that one bid shall be
used. If AMB LP cannot reasonably obtain at least one bid for $2.0 million principal amount of a
series of AMB LP Contingent Exchangeable Notes of such series from a nationally recognized
securities dealer to provide to the
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Trustee, then the trading price per $1,000 principal amount of AMB LP Contingent Exchangeable
Notes will be deemed to be less than 98% of the product of the “last reported sale price” per share
of AMB common stock and the applicable exchange rate.
In connection with any exchange upon satisfaction of the above trading pricing condition, the
Trustee shall have no obligation to determine the trading price of the AMB LP Contingent
Exchangeable Notes unless AMB LP has requested such determination; and AMB LP shall have no
obligation to make such request for a determination of the trading price unless a holder or holders
of at least $1,000,000 aggregate principal amount of AMB LP Contingent Exchangeable Notes of such
series provides AMB LP with reasonable evidence that the trading price per $1,000 principal amount
of AMB LP Contingent Exchangeable Notes would be less than 98% of the product of the last reported
sale price per share of AMB common stock and the applicable exchange rate. At such time, AMB LP
shall select three independent nationally recognized securities dealers to determine the trading
price of the AMB LP Contingent Exchangeable Notes beginning on the next trading day and on each
successive trading day until the trading price per $1,000 principal amount of AMB LP Contingent
Exchangeable Notes is greater than or equal to 98% of the product of the last reported sale price
per share of AMB common stock and the applicable exchange rate.
If the trading price condition has been met with respect to a series of AMB LP Contingent
Exchangeable Notes, AMB LP shall so notify the holders of the AMB LP Contingent Exchangeable Notes
of such series. If, at any time after the trading price condition has been met with respect to a
series of AMB LP Contingent Exchangeable Notes, the trading price per $1,000 principal amount of
AMB LP Contingent Exchangeable Notes is greater than 98% of the product of the last reported sale
price per share of AMB common stock and the applicable exchange rate for such date, AMB LP shall so
notify the holders of AMB LP Contingent Exchangeable Notes of such series.
The “last reported sale price” per share of AMB common stock on any date means the closing
sale price per share (or if no closing sale price is reported, the average of the last bid and last
ask prices or, if more than one in either case, the average of the average last bid and the average
last ask prices) on that date as reported in composite transactions for the principal United States
securities exchange on which AMB’s common stock is traded. If AMB’s common stock is not listed for
trading on a United States national or regional securities exchange on the relevant date, the “last
reported sale price” will be the last quoted bid price per share of AMB common stock in the
over-the-counter market on the relevant date as reported by the National Quotation Bureau or
similar organization. If shares of AMB common stock are not so quoted, the last reported sale price
will be the average of the mid-point of the last bid and ask prices per share of AMB common stock
on the relevant date from each of at least three nationally recognized independent investment
banking firms selected by AMB LP for this purpose. The last reported sale price will be determined
without reference to extended or after-hours trading.
“Trading day”, only for the purposes of this section, means a day during which (i) trading in
shares of AMB common stock generally occurs, (ii) there is no market disruption event (as defined
below) and (iii) a last reported sale price per share of AMB common stock (other than a last
reported sale price referred to in the next to last sentence of such definition) is available for
such day; provided that if shares of AMB common stock are not admitted for trading or quotation on
or by any exchange, bureau or other organization referred to in the preceding paragraph (excluding
the next to last sentence of that paragraph), “trading day” will mean any business day.
“Market disruption event” means the occurrence or existence for more than one-half hour period
in the aggregate on any scheduled trading day for AMB’s common stock of any suspension or
limitation imposed on trading (by reason of movements in price exceeding limits permitted by the
stock exchange or otherwise) in AMB’s common stock or in any options, contracts or future contracts
relating to AMB’s common stock, and such suspension or limitation occurs or exists at any time
before 1:00 p.m. (New York City time) on such day.
Exchange of AMB LP Contingent Exchangeable Notes Based Upon AMB’s Common Stock Price
Holders may surrender of AMB LP Contingent Exchangeable Notes for exchange in any calendar
quarter commencing at any time after June 30, 2011 and only during such calendar quarter, if the
last reported sale price per share of AMB common stock for at least 20 trading days in a period of
30 consecutive trading days ending on the last trading day of the preceding calendar quarter is
more than 130% of the exchange price per share of AMB common stock on such last trading day of such
preceding calendar quarter, which AMB LP refers to as the “contingent exchange trigger price.”
215
The contingent exchange trigger price immediately following issuance of the AMB LP Contingent
Exchangeable Notes is approximately:
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$221.27 in the case of the AMB LP 2.250% 2037 Exchangeable Notes,
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$236.91 in the case of the AMB LP 1.875% 2037 Exchangeable Notes, and
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$221.96 in the case of the AMB LP 2.625% 2038 Exchangeable Notes,
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which, in each case, is 130% of the initial exchange price per share of AMB common stock. The
foregoing contingent exchange trigger price assumes that no events have occurred that would require
an adjustment to the applicable exchange rate.
The exchange agent will, on AMB LP’s behalf, determine at the beginning of each calendar
quarter whether the AMB LP Contingent Exchangeable Notes are exchangeable as a result of the price
of shares of AMB common stock and notify AMB LP and the Trustee.
Exchange of AMB LP Contingent Exchangeable Notes Upon Notice of Redemption
A holder may exchange any AMB LP Contingent Exchangeable Note called for redemption at any
time prior to the close of business on the day that is two business days prior to the redemption
date, even if the AMB LP Contingent Exchangeable Note is not otherwise exchangeable at such time.
However, if a holder has already delivered a fundamental change repurchase notice with respect to
an AMB LP Contingent Exchangeable Note, the holder may not exchange until the holder has withdrawn
the notice in accordance with the terms of the AMB LP Contingent Exchangeable Note and the new AMB
LP Indenture.
Exchange of AMB LP Contingent Exchangeable Notes Upon Specified Corporate Transactions
If AMB or AMB LP elects to:
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distribute to all or substantially all holders of shares of AMB common stock certain
rights entitling them to purchase, for a period expiring within 60 days, shares of AMB
common stock at less than the last reported sale price of a share of AMB common stock
on the trading day immediately preceding the declaration date of the distribution; or
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distribute to all or substantially all holders of shares of AMB common stock AMB’s
assets, debt securities or certain rights to purchase AMB’s securities, which
distribution has a per share value as determined by AMB LP’s board of directors
exceeding 15% of the last reported sale price per share of AMB common stock on the day
preceding the declaration date for such distribution.
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AMB LP must notify the holders of the AMB LP Contingent Exchangeable Notes at least 35 business
days prior to the ex-dividend date (as defined below) for such distribution. Once AMB LP has given
such notice, holders may surrender their AMB LP Contingent Exchangeable Notes for exchange at any
time until the earlier of 5:00 p.m., New York City time, on the business day immediately prior to
the ex-dividend date or AMB LP’s announcement that such distribution will not take place, even if
the AMB LP Contingent Exchangeable Notes are not otherwise exchangeable at such time. The
ex-dividend date is the first date upon which a sale of shares of AMB common stock does not
automatically transfer the right to receive the relevant dividend from the seller of the common
shares to its buyer. In addition, if AMB LP is party to any transaction or event that constitutes a
fundamental change, a holder may surrender AMB LP Contingent Exchangeable Notes for exchange at any
time from and after the 30th scheduled trading day prior to the anticipated effective date of such
transaction or event until the corresponding fundamental change repurchase date. Holders who
exchange AMB LP Contingent Exchangeable Notes in connection with any such fundamental change
occurring prior to:
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April 5, 2012 in the case of the AMB LP 2.250% 2037 Exchangeable Notes,
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January 15, 2013 in the case of the AMB LP 1.875% 2037 Exchangeable Notes, and
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May 20, 2013 in the case of the AMB LP 2.625% 2038 Exchangeable Notes,
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will also be entitled to an increase in the applicable exchange rate to the extent described
below under “— Adjustment to Shares Delivered Upon Exchange Upon Fundamental Change.” Upon the
occurrence of a fundamental change, holders will also have the right to require AMB LP to
repurchase their AMB LP Contingent Exchangeable Notes as set forth below under “— Fundamental
Change Permits Holders to Require AMB LP to Repurchase AMB LP Contingent Exchangeable Notes.” AMB
LP will notify holders of the occurrence of a fundamental change and issue a press release no later
than 30 scheduled trading days prior to the anticipated effective date of such transaction.
A holder will also have the right to exchange AMB LP Contingent Exchangeable Notes if AMB is a
party to a consolidation, merger, binding share exchange or sale or conveyance of all or
substantially all of its property and assets consummated after the consummation of the exchange
offers, in each case pursuant to which AMB’s common stock would be exchanged into cash, securities
and/or other property, even if such transaction does not also constitute a fundamental change. A
holder may exercise this exchange right at any time beginning on the 15th calendar day prior to the
anticipated effective date of such transaction and ending on the 15th calendar day following the
effective date of such transaction. AMB LP will notify holders of any such transaction at least 20
calendar days prior to the anticipated effective date of such transaction.
Exchange of AMB LP Contingent Exchangeable Notes Upon AMB’s Common Stock No Longer Being Listed
A holder may surrender AMB LP Contingent Exchangeable Notes for exchange at any time beginning
on the first business day after any 30 consecutive trading day period during which AMB’s common
stock is not listed on a United States national securities exchange.
Exchange of AMB LP Contingent Exchangeable Notes on or after February 1, 2012, October 15,
2012 and February 15, 2013
On or after:
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February 1, 2012 a holder may surrender AMB LP 2.250% 2037 Exchangeable Notes,
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October 15, 2012 a holder may surrender AMB LP 1.875% 2037 Exchangeable Notes, and
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February 15, 2013 a holder may surrender AMB LP 2.625% 2038 Exchangeable Notes,
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for exchange at any time prior to the close of business on the trading day immediately preceding
the final maturity date of that series of AMB LP Contingent Exchangeable Notes.
Exchange Procedures of AMB LP Contingent Exchangeable Notes
If you hold a beneficial interest in a global note representing an AMB LP Contingent
Exchangeable Note, to exercise your exchange right you must comply with DTC’s procedures for
converting a beneficial interest in a global note and, if required, pay funds equal to interest
payable on the next interest payment date and, if required, pay all taxes or duties, if any.
If you hold a certificated AMB LP Contingent Exchangeable Note, to exchange you must:
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complete and manually sign the exchange notice on the back of the AMB LP Contingent
Exchangeable Note, or a facsimile of the exchange notice;
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deliver the exchange notice, which is irrevocable, and the AMB LP Contingent
Exchangeable Note to the exchange agent;
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if required, furnish appropriate endorsements and transfer documents; and
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if required, pay all transfer or similar taxes; and if required, pay funds equal to
interest payable on the next interest payment date.
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The date you comply with these requirements is the “exchange date” under the new AMB LP
Indenture. If a holder has already delivered a repurchase notice as described under “— Fundamental
Change Permits Holders to Require AMB LP to Repurchase AMB LP Contingent Exchangeable Notes” with
respect to an AMB LP Contingent Exchangeable Note, the holder may not surrender that AMB LP
Contingent Exchangeable Note for exchange until the holder has withdrawn the notice in accordance
with the new AMB LP Indenture.
Payment Upon Exchange of the AMB LP Contingent Exchangeable Notes
In satisfaction of AMB LP’s obligation upon exchange of AMB LP Contingent Exchangeable Notes,
AMB LP may elect to deliver cash, shares of AMB common stock or a combination of cash and shares of
AMB common stock, if applicable.
AMB LP will inform the holders through the Trustee of the method it chooses to satisfy its
obligation upon exchange no later than the second trading day immediately following its receipt of
a notice of exchange, provided, however, that AMB LP may irrevocably elect, in its sole discretion
and without the consent of the holders of the AMB LP Contingent Exchangeable Notes, on or prior to:
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February 1, 2012 in the case of the AMB LP 2.250% 2037 Exchangeable Notes,
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October 15, 2012 in the case of the AMB LP 1.875% 2037 Exchangeable Notes, and
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February 15, 2013 in the case of the AMB LP 2.625% 2038 Exchangeable Notes,
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to settle all of AMB LP’s future exchange obligations entirely in shares of AMB common stock, and
provided further, that AMB LP is required to settle all exchanges with an exchange date occurring
on or after:
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February 1, 2012 in the same manner and AMB LP will notify holders of the AMB LP
2.250% 2037 Exchangeable Notes, through the Trustee of the manner of settlement on or
before such date;
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October 15, 2012 in the same manner and AMB LP will notify holders of the AMB LP
1.875% 2037 Exchangeable Notes , through the Trustee of the manner of settlement on or
before such date; and
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February 15, 2013 in the same manner and AMB LP will notify holders of the AMB LP
2.625% 2038 Exchangeable Notes, through the Trustee of the manner of settlement on or
before such date.
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If AMB LP does not give notice, as described above, as to how it intends to settle, AMB LP
will satisfy its exchange obligation in cash and shares of AMB common stock or, at its option, cash
in accordance with the net share settlement upon exchange method as described below under “— Net
Share Settlement.” AMB LP will treat all holders of AMB LP Contingent Exchangeable Notes converting
on the same trading day in the same manner. AMB LP will not, however, have any obligation to settle
AMB LP’s exchange obligations arising on different trading days in the same manner, except for
exchanges with an exchange date occurring on or after:
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February 1, 2012 in the case of the AMB LP 2.250% 2037 Exchangeable Notes,
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October 15, 2012 in the case of the AMB LP 1.875% 2037 Exchangeable Notes, and
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February 15, 2013 in the case of the AMB LP 2.625% 2038 Exchangeable Notes.
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218
That is, AMB LP may choose on one trading date to settle in shares of AMB common stock only and
choose on another trading day to settle in cash or a combination of cash and shares of AMB common
stock, provided that AMB LP will settle all exchanges of:
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the AMB LP 2.250% 2037 Exchangeable Notes with an exchange date occurring on or
after February 1, 2012 in the same manner,
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the AMB LP 1.875% 2037 Exchangeable Notes with an exchange date occurring on or
after October 15, 2012 in the same manner, and
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the AMB LP 2.625% 2038 Exchangeable Notes with an exchange date occurring on or
after February 15, 2013 in the same manner.
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Settlement in Shares
. If AMB LP elects to satisfy its exchange obligation entirely in shares
of AMB common stock, AMB LP will deliver to you a number of shares equal to (i) the aggregate
principal amount of AMB LP Contingent Exchangeable Notes to be exchanged divided by $1,000,
multiplied by (ii) the applicable exchange rate (which will include any increases to reflect any
additional shares which you may be entitled to receive as described under “— Adjustment to Shares
Delivered Upon Exchange Upon Fundamental Change”). AMB LP will deliver such shares as soon as
practicable after AMB LP has informed you that it has elected to satisfy AMB LP’s exchange
obligations entirely in shares of AMB common stock.
Net Share Settlement
. If AMB LP does not elect otherwise, it will settle each $1,000
principal amount of AMB LP Contingent Exchangeable Notes being exchanged by delivering, on the
third trading day immediately following the last day of the related observation period (as defined
below), cash and shares of AMB common stock or, at AMB LP’s option, cash, equal to the sum of the
daily settlement amounts (as defined below) for each of the 20 trading days during the related
observation period.
The “observation period” with respect to any AMB LP Contingent Exchangeable Note means the 20
consecutive trading day period beginning on and including the second trading day after you deliver
your exchange notice to the exchange agent.
The “daily settlement amount”, for each of the 20 trading days during the observation period,
shall consist of:
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cash equal to the lesser of $50 and the daily exchange value relating to such day,
and
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if such daily exchange value exceeds $50, a number of shares of AMB common stock
equal to (i) the difference between such daily exchange value and $50, divided by (ii)
the daily VWAP of AMB’s common stock for such day,
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subject to AMB LP’s right to deliver cash in lieu of all or a portion of such shares of AMB common
stock as described below under “— Cash Settlement.”
The “daily exchange value” means, for each of the 20 consecutive trading days during the
observation period, one-twentieth (1/20) of the product of (1) the applicable exchange rate and (2)
the daily VWAP of AMB’s common stock (or the consideration into which AMB’s common stock have been
exchanged in connection with certain corporate transactions) on such day.
The “daily VWAP” of AMB’s common stock means, for each of the 20 consecutive trading days
during the observation period, the per share volume-weighted average price as displayed under the
heading “Bloomberg VWAP” on Bloomberg page PLD <equity> AQR in respect of the period from
9:30 a.m. to 4:00 p.m. (New York City time) on such trading day (or if such volume-weighted average
price is unavailable, the market value of one share of AMB common stock on such trading day as AMB
LP’s board of directors determines in good faith using a volume-weighted method).
219
Cash Settlement
. If AMB LP so elects, as described in the second paragraph of this “—
Payment Upon Exchange of the AMB LP Contingent Exchangeable Notes” section, AMB LP may specify a
percentage of the amount by which the daily exchange value exceeds $50 that will be settled in
cash, or the “cash percentage”, and AMB LP will notify you of such cash percentage in the
applicable time period as described in the second paragraph of this “— Payment Upon Exchange of
the AMB LP Contingent Exchangeable Notes” section, which notice AMB LP refers to as the “cash
percentage notice” (such settlement method is being referred to herein as the “cash settlement
method upon exchange”). If AMB LP elects to specify a cash percentage, the amount of cash that AMB
LP will deliver in respect of each trading day in the applicable observation period will equal to
the product of (1) the cash percentage and (2) the amount by which the daily exchange value exceeds
$50 for such trading day. The number of shares of AMB common stock deliverable in respect of each
trading day in the applicable observation period will equal (i) the product of (a) 100% minus the
cash percentage and (b) the amount by which the daily exchange value exceeds $50 for such trading
day, divided by (ii) the daily VWAP of AMB’s common stock for such trading day. If AMB LP does not
specify a cash percentage, AMB LP must settle the entire amount by which the daily exchange value
exceeds $50 with shares of AMB common stock as described under “— Net Share Settlement” above;
provided, however, that AMB LP will deliver cash in lieu of any fractional shares of AMB common
stock deliverable in connection with payment of the settlement amount as described above.
Except as described in this paragraph, no holder of AMB LP Contingent Exchangeable Notes will
be entitled, upon exchange of the AMB LP Contingent Exchangeable Notes, to any cash payment or
adjustment on account of accrued and unpaid interest, including additional interest, if any, on an
exchanged AMB LP Contingent Exchangeable Note, or on account of dividends or distributions on AMB’s
common stock deliverable in connection with the exchange. If AMB LP Contingent Exchangeable Notes
are exchanged after the close of business on a record date and prior to the opening of business on
the next interest payment date, including the date of maturity, holders of such AMB LP Contingent
Exchangeable Notes at the close of business on the record date will receive interest, including
additional interest, if any, payable on such AMB LP Contingent Exchangeable Notes on the
corresponding interest payment date notwithstanding the exchange. In such event, when the holder
surrenders the AMB LP Contingent Exchangeable Note for exchange, the holder must deliver payment to
AMB LP of an amount equal to the interest payable on the interest payment date, including
additional interest, if any, on the principal amount to be converted. The foregoing sentence shall
not apply to AMB LP Contingent Exchangeable Notes called for redemption on a redemption date within
the period between the close of business on the record date and the opening of business on the
interest payment date, to AMB LP Contingent Exchangeable Notes surrendered for exchange in
connection with a fundamental change in which AMB LP has specified a fundamental change repurchase
date that is after a record date and on or prior to the next interest payment date, to AMB LP
Contingent Exchangeable Notes surrendered for exchange after the record date immediately preceding
the maturity date or to AMB LP Contingent Exchangeable Notes surrendered for exchange on the
interest payment date.
Exchange Rate Adjustments of the AMB LP Contingent Exchangeable Notes
The applicable exchange rate will be adjusted as described below, except that AMB LP will not
make any adjustments to the applicable exchange rate if holders of the AMB LP Contingent
Exchangeable Notes participate, as a result of holding the AMB LP Contingent Exchangeable Notes,
in any of the transactions described below without having to exchange their AMB LP Contingent
Exchangeable Notes.
Adjustment Events
(1) If AMB issues common shares as a dividend or distribution on AMB’s common stock, or
if AMB effects a share split or share combination, the applicable exchange rate will be adjusted
based on the following formula:
where,
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ER
0
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=
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the applicable exchange rate in effect immediately prior to such event, in
the case of the AMB LP 2.250% 2037 Contingent Exchangeable Notes and the AMB LP 1.875%
2037 Contingent
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchangeable Notes, or immediately prior to the “ex-date” (as defined below) for such
dividend or distribution or the effective date of such share split or combination, as
the case may be, in the case of the AMB LP 2.625% 2038 Contingent Exchangeable Notes;
|
|
|
|
|
|
ER’
|
|
=
|
|
the applicable exchange rate in effect immediately after such event, in the
case of the AMB LP 2.250% 2037 Contingent Exchangeable Notes and the AMB LP 1.875%
2037 Contingent Exchangeable Notes, or in effect as of the ex-date for such dividend
or distribution or the effective date of such share split or combination, as the case
may be, in the case of the AMB LP 2.625% 2038 Contingent Exchangeable Notes;
|
|
|
|
|
|
OS
0
|
|
=
|
|
the number of shares of AMB common stock outstanding immediately prior to
such event; and
|
|
|
|
|
|
OS’
|
|
=
|
|
the number of shares of AMB common stock outstanding immediately after such
event.
|
(2) If AMB issues to all or substantially all holders of shares of AMB common stock any
rights, warrants or convertible securities entitling them, for a period of not more than 60
calendar days, to subscribe for or purchase shares of AMB common stock at a price per share less
than the last reported sale price per share of AMB common stock on the business day immediately
preceding the date of announcement of such issuance, the applicable exchange rate will be adjusted
based on the following formula (provided that the applicable exchange rate will be readjusted to
the extent that such rights, warrants or convertible securities are not exercised prior to their
expiration):
where,
|
|
|
|
|
|
|
|
|
|
|
ER
0
|
|
=
|
|
the applicable exchange rate in effect immediately prior to such event, in
the case of the AMB LP 2.250% 2037 Contingent Exchangeable Notes and the AMB LP 1.875%
2037 Contingent Exchangeable Notes, or immediately prior to the ex-date for such
distribution, in the case of the AMB LP 2.625% 2038 Contingent Exchangeable Notes;
|
|
|
|
|
|
|
|
|
|
|
|
ER’
|
|
=
|
|
the applicable exchange rate in effect immediately after such event, in the
case of the AMB LP 2.250% 2037 Contingent Exchangeable Notes and the AMB LP 1.875% 2037
Contingent Exchangeable Notes, or in effect as of the ex-date for such distribution, in
the case of the AMB LP 2.625% 2038 Contingent Exchangeable Notes;
|
|
|
|
|
|
|
|
|
|
|
|
OS
0
|
|
=
|
|
the number of shares of AMB common stock outstanding immediately prior to
such event;
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
=
|
|
the total number of shares of AMB common stock issuable pursuant to such
rights, warrants or convertible securities; and
|
|
|
|
|
|
|
|
|
|
|
|
Y
|
|
=
|
|
the number of shares of AMB common stock equal to the aggregate price
payable to exercise such rights, warrants or convertible securities divided by the
average of the last reported sale prices per share of AMB common stock over the ten
consecutive trading day period ending on the business day immediately preceding the
record date (or, if later, the ex-date relating such distribution) for the issuance of
such rights, warrants or convertible securities.
|
(3) If AMB distributes shares of capital stock, evidences of indebtedness or other assets or
property of AMB to all or substantially all holders of shares of AMB common stock, excluding:
|
|
•
|
|
dividends or distributions and rights or warrants referred to in clause (1) or (2)
above;
|
|
|
•
|
|
dividends or distributions paid exclusively in cash; and
|
|
|
•
|
|
spin-offs to which the provisions set forth below in this paragraph (3) shall apply;
|
221
then the applicable exchange rate will be adjusted based on the following formula:
where,
|
|
|
|
|
|
|
|
|
|
|
ER
0
|
|
=
|
|
the applicable exchange rate in effect immediately prior to such
distribution, in the case of the AMB LP 2.250% 2037 Contingent Exchangeable Notes and
the AMB LP 1.875% 2037 Contingent Exchangeable Notes, or immediately prior to the
ex-date for such distribution, in the case of the AMB LP 2.625% 2038 Contingent
Exchangeable Notes;
|
|
|
|
|
|
|
|
|
|
|
|
ER’
|
|
=
|
|
the applicable exchange rate in effect immediately after such distribution,
in the case of the AMB LP 2.250% 2037 Contingent Exchangeable Notes and the AMB LP
1.875% 2037 Contingent Exchangeable Notes, or in effect as of the ex-date for such
distribution, in the case of the AMB LP 2.625% 2038 Contingent Exchangeable Notes;
|
|
|
|
|
|
|
|
|
|
|
|
SP
0
|
|
=
|
|
the average of the last reported sale prices per share of AMB common
stock over the ten consecutive trading day period ending on the business day
immediately preceding the record date for such distribution (or, if earlier, the
ex-date relating to such distribution); and
|
|
|
|
|
|
|
|
|
|
|
|
FMV
|
|
=
|
|
the fair market value (as determined by the board of directors of AMB) of the
shares of capital stock, evidences of indebtedness, assets or property distributed with
respect to each outstanding share of AMB common stock on the record date for such
distribution (or, if earlier, the ex-date relating to such distribution).
|
With respect to an adjustment pursuant to this clause (3) where there has been a payment of
a dividend or other distribution on shares of AMB common stock in shares of capital stock of
any class or series, or similar equity interest, of or relating to a subsidiary or other
business unit, which AMB LP refers to as a “spin-off”, unless AMB or AMB LP distributes such
shares of capital stock or equity interests to holders of the AMB LP Contingent Exchangeable
Notes on the same basis as they would have received had they exchanged their AMB LP
Contingent Exchangeable Notes solely into shares of AMB common stock immediately prior to
such dividend or distribution, the applicable exchange rate in effect immediately before
5:00 p.m., New York City time, on the record date fixed for determination of stockholders
entitled to receive the distribution will be increased based on the following formula:
where,
|
|
|
|
|
|
|
|
|
|
|
ER
0
|
|
=
|
|
the applicable exchange rate in effect immediately prior to the
effective date of such distribution;
|
|
|
|
|
|
|
|
|
|
|
|
ER’
|
|
=
|
|
the applicable exchange rate in effect as of the effective date of such
distribution;
|
|
|
|
|
|
|
|
|
|
|
|
FMV
0
|
|
=
|
|
the average of the last reported sale prices of the shares of capital
stock or similar equity interest distributed to holders of shares of AMB common stock
applicable to one share of AMB common stock over the first ten consecutive trading day
period after the effective date of the spin-off; and
|
|
|
|
|
|
|
|
|
|
|
|
MP
0
|
|
=
|
|
the average of the last reported sale prices per share of AMB common
stock over the first ten consecutive trading day period after the effective date of the
spin-off.
|
The adjustment to the applicable exchange rate under the preceding paragraph will occur on
the tenth trading day from, and including, the effective date of the spin-off; provided that
in respect of any exchange within the ten trading days following any spin-off, references
within this paragraph (3) to ten days shall be deemed
222
replaced with such lesser number of trading days as have elapsed between such spin-off and
the exchange date in determining the applicable exchange rate.
(4) If AMB pays any cash dividend or distribution to all or substantially all holders of
shares of AMB common stock, to the extent that the aggregate of all such cash dividends or
distributions paid in any quarter exceeds the dividend threshold amount (as defined below) for such
quarter, the applicable exchange rate will be adjusted based on the following formula:
where,
|
|
|
|
|
|
|
|
|
|
|
ER
0
|
|
=
|
|
the applicable exchange rate in effect immediately prior to the record date
for such distribution, in the case of the AMB LP 2.250% 2037 Contingent Exchangeable
Notes and the AMB LP 1.875% 2037 Contingent Exchangeable Notes, or immediately prior to
the ex-date for such distribution, in the case of the AMB LP 2.625% 2038 Contingent
Exchangeable Notes;
|
|
|
|
|
|
|
|
|
|
|
|
ER’
|
|
=
|
|
the applicable exchange rate in effect immediately after the record date for
such distribution, in the case of the AMB LP 2.250% 2037 Contingent Exchangeable Notes
and the AMB LP 1.875% 2037 Contingent Exchangeable Notes, or in effect as of the
ex-date for such distribution, in the case of the AMB LP 2.625% 2038 Contingent
Exchangeable Notes;
|
|
|
|
|
|
|
|
|
|
|
|
SP
0
|
|
=
|
|
the average of the last reported sale prices per share of AMB common stock
over the ten consecutive trading-day period ending on the business day immediately
preceding the record date for such distribution (or, if earlier, the ex-date relating
to such distribution);
|
|
|
|
|
|
|
|
|
|
|
|
T
|
|
=
|
|
the dividend threshold amount, which shall initially be $1.0305, $1.0305
and $1.1593, for the AMB LP 2.250% 2037 Exchangeable Notes, AMB LP 1.875% 2037
Exchangeable Notes and AMB LP 2.625% 2038 Exchangeable Notes, respectively, per quarter
and which amount shall be appropriately adjusted from time to time for any stock
dividends on, or subdivisions or combinations of, AMB’s common stock; provided, that if
an applicable exchange rate adjustment is required to be made as a result of a
distribution that is not a quarterly dividend either in whole or in part, the dividend
threshold amount shall be deemed to be zero; and
|
|
|
|
|
|
|
|
|
|
|
|
C
|
|
=
|
|
the amount in cash per share that AMB distributes to holders of shares of AMB
common stock.
|
(5) If AMB or any of its subsidiaries makes a payment in respect of a tender offer or exchange
offer for shares of AMB common stock, if the cash and value of any other consideration included in
the payment per share of AMB common stock exceeds the last reported sale price per share of AMB
common stock on the trading day next succeeding the last date on which tenders or exchanges may be
made pursuant to such tender or exchange offer, the applicable exchange rate will be increased
based on the following formula:
where,
|
|
|
|
|
|
|
|
|
|
|
ER
0
|
|
=
|
|
the applicable exchange rate in effect on the date such tender or exchange
offer expires;
|
|
|
|
|
|
|
|
|
|
|
|
ER’
|
|
=
|
|
the applicable exchange rate in effect on the day next succeeding the date
such tender or exchange offer expires;
|
|
|
|
|
|
|
|
|
|
|
|
AC
|
|
=
|
|
the aggregate value of all cash and any other consideration (as determined
by the board of directors of AMB) paid or payable for shares purchased in such tender
or exchange offer;
|
223
|
|
|
|
|
|
|
|
|
|
|
OS
0
|
|
=
|
|
the number of shares of AMB common stock outstanding immediately prior to
the date such tender or exchange offer expires;
|
|
|
|
|
|
|
|
|
|
|
|
OS’
|
|
=
|
|
the number of shares of AMB common stock outstanding immediately after the
date such tender or exchange offer expires; and
|
|
|
|
|
|
|
|
|
|
|
|
SP’
|
|
=
|
|
the average of the last reported sale prices per share of AMB common stock
over the ten consecutive trading-day period commencing on the trading day next
succeeding the date such tender or exchange offer expires.
|
If, however, the application of the foregoing formula would result in a decrease in the
applicable exchange rate, no adjustment to the applicable exchange rate will be made.
As used in this section, “ex-date” means the first date on which the shares of AMB common
stock trade on the applicable exchange or in the applicable market, regular way, without the right
to receive the issuance or distribution in question.
Except as stated herein, AMB LP will not adjust the applicable exchange rate for the issuance
of shares of AMB common stock or any securities exchangeable into or exchangeable for shares of
AMB common stock or the right to purchase shares of AMB common stock or such exchangeable
securities.
Events That Will Not Result in Adjustments
|
|
The applicable exchange rate will not be adjusted:
|
|
|
•
|
|
upon the issuance of any shares of AMB common stock pursuant to any present or
future plan providing for the reinvestment of dividends or interest payable on AMB
securities and the investment of additional optional amounts in shares of AMB common
stock under any plan;
|
|
|
•
|
|
upon the issuance of any shares of AMB common stock or options or rights to
purchase those shares pursuant to any present or future employee, director or
consultant benefit plan or program of or assumed by AMB LP or any of its subsidiaries;
|
|
|
•
|
|
upon the issuance of any shares of AMB common stock pursuant to any option,
warrant, right or exercisable or exchangeable security not described in the second
bullet above and outstanding as of the date the AMB LP Contingent Exchangeable Notes
were first issued;
|
|
|
•
|
|
in the case of the AMB LP 2.625% 2038 Exchangeable Notes, upon the issuance of any
shares of AMB common stock pursuant to any option, warrant or exercisable or
exchangeable security not described in the second bullet above issued after the date
the AMB LP 2.625% 2038 Exchangeable Notes were first issued so long as those
securities are not issued to all or substantially all holders of shares of AMB common
stock;
|
|
|
•
|
|
for a change in the par value of shares of AMB common stock;
|
|
|
•
|
|
for accrued and unpaid interest; or
|
|
|
•
|
|
for the avoidance of doubt, for the payment of cash or the issuance of shares of
AMB common stock by AMB upon exchange, redemption or repurchase of AMB LP Contingent
Exchangeable Notes.
|
Adjustments to the applicable exchange rate will be calculated to the nearest 1/10,000th of a
share of stock. AMB LP will not be required to make an adjustment in the applicable exchange rate
unless the adjustment would require a change of at least 1% in the applicable exchange rate.
However, AMB LP will carry forward any adjustments that are less than 1% of the applicable exchange
rate and make such carried forward adjustments, regardless of whether the aggregate adjustment is
less than 1% within one year of the first such adjustment carried
224
forward, upon a fundamental change, upon any call of the AMB LP Contingent Exchangeable Notes for
redemption or upon maturity. Except as described in this section, AMB LP will not adjust the
applicable exchange rate.
Treatment of Reference Property
|
|
•
|
|
any reclassification of AMB’s common stock; or
|
|
|
•
|
|
a consolidation, merger or combination involving AMB; or
|
|
|
•
|
|
a sale or conveyance to another person of all or substantially all of the property
and assets of AMB,
|
in each case in which holders of the outstanding shares of AMB common stock would be entitled to
receive cash, securities or other property or assets for their shares of AMB common stock, you will
be entitled thereafter to exchange your AMB LP Contingent Exchangeable Notes, subject to its
successor’s right to deliver cash, shares of AMB common stock or common stock of AMB LP’s successor
or a combination of cash and shares of AMB common stock, as described under “— Payment Upon
Exchange of the AMB LP Contingent Exchangeable Notes”, into:
|
|
•
|
|
cash up to the aggregate principal amount thereof; and
|
|
|
•
|
|
in lieu of the shares of AMB common stock otherwise deliverable, the same type (in
the same proportions) of consideration received by holders of shares of AMB common
stock in the relevant event (“reference property”).
|
The amount of cash and any reference property you receive will be based on the daily exchange
values of reference property and the applicable exchange rate, as described above.
For purposes of the foregoing, the type and amount of consideration that a holder of shares of
AMB common stock would have been entitled to in the case of reclassifications, consolidations,
mergers, sales or transfers of assets or other transactions that cause shares of AMB common stock
to be exchanged into the right to receive more than a single type of consideration (determined
based in part upon any form of stockholder election) will be deemed to be the weighted average of
the types and amounts of consideration received by the holders of shares of AMB common stock that
affirmatively make such an election.
Treatment of Rights
To the extent that AMB LP has a rights plan in effect upon exchange of the AMB LP Contingent
Exchangeable Notes into shares of AMB common stock, you will receive, in addition to shares of AMB
common stock, the rights under the rights plan, unless prior to any exchange, the rights have
separated from the shares of AMB common stock, in which case the applicable exchange rate will be
adjusted at the time of separation as if AMB distributed to all holders of shares of AMB common
stock, shares of capital stock, evidences of indebtedness or other assets or property of AMB as
described in clause (3) under ‘‘— Adjustment Events” above, subject to readjustment in the event
of the expiration, termination or redemption of such rights.
Voluntary Increases of Exchange Rate
AMB LP is permitted to the extent permitted by law and subject to the applicable rules of the
NYSE to increase the applicable exchange rate of the AMB LP Contingent Exchangeable Notes by any
amount for a period of at least 20 days if AMB LP’s board of directors determines that such
increase would be in AMB LP’s best interest. AMB LP may also (but is not required to) increase the
applicable exchange rate to avoid or diminish income tax to holders of shares of AMB common stock
or rights to purchase shares of AMB common stock in connection with a dividend or distribution of
shares (or rights to acquire shares) or similar event.
225
Tax Effect
A holder may, in certain circumstances, including the distribution of cash dividends to
holders of shares of AMB common stock, be deemed to have received a dividend subject to U.S.
federal income tax as a result of an adjustment or the nonoccurrence of an adjustment to the
applicable exchange rate. For a discussion of the U.S. federal income tax treatment of an
adjustment to the applicable exchange rate, see “Material United States Federal Income Tax
Consequences.”
Adjustment to Shares Delivered Upon Exchange Upon Fundamental Change
If a fundamental change (as defined below) occurs prior to:
|
|
•
|
|
April 5, 2012 for the AMB LP 2.250% 2037 Exchangeable Notes,
|
|
|
|
|
•
|
|
January 15, 2013 for the AMB LP 1.875% 2037 Exchangeable Notes, and
|
|
|
|
|
•
|
|
May 20, 2013 for the AMB LP 2.625% 2038 Exchangeable Notes,
|
and if you elect to exchange your AMB LP Contingent Exchangeable Notes at any time on or after the
30th scheduled trading day prior to the anticipated effective date of such fundamental change until
the related fundamental change repurchase date, the applicable exchange rate will be increased by
an additional number of shares of AMB common stock (the “additional shares”) as described below
(subject to AMB LP’s right to satisfy all or any part of its exchange obligations in cash as
described under “— Payment Upon Exchange of the AMB LP Contingent Exchangeable Notes”). AMB LP
will notify holders of the occurrence of any such fundamental change and issue a press release no
later than 30 scheduled trading days prior to the anticipated effective date of such transaction.
AMB LP will settle exchanges of AMB LP Contingent Exchangeable Notes as described herein.
In the case of the AMB LP 2.625% 2038 Exchangeable Notes, a “fundamental change” means a
change of control or a termination of trading.
In the case of the AMB LP 2.250% 2037 Exchangeable Notes and AMB LP 1.875% 2037 Exchangeable
Notes, a “fundamental change” means a change of control.
A “change of control” shall be deemed to occur upon the consummation of any transaction or
event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection with which more than
50% of the shares of AMB common stock are exchanged for, exchanged into, acquired for or
constitutes solely the right to receive, consideration which is not at least 90% common stock (or
American Depositary Shares representing common shares) that is:
|
|
•
|
|
listed on, or immediately after consummation of such transaction or event will be
listed on, a United States national securities exchange; or
|
|
|
|
|
•
|
|
approved, or immediately after the transaction or event will be approved, for
listing or quotation on any United States system of automated dissemination of
quotations of securities prices.
|
A “termination of trading”, which is only applicable to the AMB LP 2.625% 2038 Exchangeable
Notes, shall be deemed to occur if shares of AMB common stock, or any shares of common stock (or
American Depositary Receipts in respect of common shares) into which the AMB LP 2.625% 2038
Exchangeable Notes are exchangeable pursuant to the terms of the new AMB LP Indenture, are not
listed for trading on any of the NYSE, the NASDAQ Global Market or the NASDAQ Global Select Market
(or any of their respective successors).
The term fundamental change is limited to specified transactions and may not include other
events that might adversely affect AMB LP’s financial condition. In addition, the requirement that
AMB LP offers to
226
repurchase the AMB LP Contingent Exchangeable Notes upon a fundamental change may not protect
holders in the event of a highly leveraged transaction, reorganization, merger or similar
transaction involving AMB LP.
The number of additional shares by which the applicable exchange rate will be increased for
each series of AMB LP Contingent Exchangeable Notes will be determined by reference to the tables
below, based on the date on which the fundamental change occurs or becomes effective (the
“effective date”) and the price (the “share price”) paid per share of AMB common stock in the
fundamental change. If holders of AMB common stock receive only cash in the fundamental change, the
share price will be the cash amount paid per share. Otherwise, the share price will be the average
of the last reported sale prices per share of AMB common stock over the five trading-day period
ending on the trading day preceding the effective date of the fundamental change.
The share prices set forth in the first row of the tables below (i.e., column headers) will be
adjusted as of any date on which the applicable exchange rate of the AMB LP Contingent Exchangeable
Notes is otherwise adjusted. The adjusted share prices will equal the share prices applicable
immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the
applicable exchange rate immediately prior to the adjustment giving rise to the share price
adjustment and the denominator of which is the applicable exchange rate as so adjusted. The number
of additional shares will be adjusted in the same manner as the applicable exchange rate as set
forth under “— Exchange Rate Adjustments of the AMB LP Contingent Exchangeable Notes.”
The following tables set forth the share price and the number of additional shares by which
the exchange rate per $1,000 principal amount of AMB LP Contingent Exchangeable Notes of each
series will be increased.
AMB LP 2.250% 2037 Exchangeable Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price
|
|
Effective Date
|
|
$142.97
|
|
$156.81
|
|
$179.21
|
|
$201.61
|
|
$224.01
|
|
$246.42
|
|
$268.82
|
|
$291.22
|
|
$313.62
|
|
$336.02
|
|
$358.42
|
|
$380.82
|
|
April 1, 2011
|
|
|
1.1658
|
|
|
|
0.6611
|
|
|
|
0.2519
|
|
|
|
0.0780
|
|
|
|
0.0171
|
|
|
|
0.0027
|
|
|
|
0.0012
|
|
|
|
0.0011
|
|
|
|
0.0001
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
April 1, 2012
|
|
|
1.1658
|
|
|
|
0.5482
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
The exact share prices and effective dates may not be set forth in the table above, in
which case:
|
|
•
|
|
If the share price is between two share price amounts in the table or the effective
date is between two effective dates in the table, the number of additional shares will
be determined by a straight-line interpolation between the number of additional shares
set forth for the higher and lower share price amounts and the two dates, as
applicable, based on a 365-day year.
|
|
|
|
|
•
|
|
If the share price is greater than $380.82 per share (subject to adjustment), the
applicable exchange rate will not be adjusted.
|
|
|
|
|
•
|
|
If the share price is less than $142.97 per share (subject to adjustment), the
applicable exchange rate will not be adjusted.
|
Notwithstanding the foregoing, in no event will the total number of shares of AMB common stock
deliverable upon exchange exceed 7.0410 per $1,000 principal amount of AMB LP 2.250% 2037
Exchangeable Notes subject to adjustments in the same manner as the applicable exchange rate as set
forth under sections (1) through (5) of “— Exchange Rate Adjustments of the AMB LP Contingent
Exchangeable Notes.”
AMB LP 1.875% 2037 Exchangeable Notes
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Share Price
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Effective Date
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$153.07
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$156.81
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|
$168.01
|
|
$179.21
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$190.41
|
|
$201.61
|
|
$212.81
|
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$224.01
|
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$235.22
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$246.42
|
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$257.62
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$268.82
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January 15, 2012
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1.0888
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|
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0.9285
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|
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0.6389
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|
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0.4241
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|
|
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0.2694
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|
|
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0.1613
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|
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0.0884
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|
|
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0.0409
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|
|
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0.0111
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|
|
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0.0000
|
|
|
|
0.0000
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|
|
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0.0000
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January 15, 2013
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1.0888
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|
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0.9054
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|
|
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0.4821
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|
|
|
0.1232
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|
|
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0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
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|
|
|
0.0000
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227
The exact share prices and effective dates may not be set forth in the table above, in
which case:
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|
•
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If the share price is between two share price amounts in the table or the effective
date is between two effective dates in the table, the number of additional shares will
be determined by a straight-line interpolation between the number of additional shares
set forth for the higher and lower share price amounts and the two dates, as
applicable, based on a 365-day year.
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•
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If the share price is greater than $268.82 per share (subject to adjustment), the
applicable exchange rate will not be adjusted.
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|
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•
|
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If the share price is less than $153.07 per share (subject to adjustment), the
applicable exchange rate will not be adjusted.
|
Notwithstanding the foregoing, in no event will the total number of shares of AMB common stock
deliverable upon exchange exceed 6.5762 per $1,000 principal amount of AMB LP 1.875% 2037
Exchangeable Notes, subject to adjustments in the same manner as the applicable exchange rate as
set forth under sections (1) through (3) of “— Exchange Rate Adjustments of the AMB LP Contingent
Exchangeable Notes.”
AMB LP 2.625% 2038 Exchangeable Notes
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Share Price
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Effective Date
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$140.82
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$145.61
|
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$151.21
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$156.81
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$162.41
|
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$168.01
|
|
$173.61
|
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$179.21
|
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$190.41
|
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$201.61
|
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$212.81
|
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$224.01
|
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$246.42
|
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$268.82
|
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May 20, 2011
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1.2446
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1.0353
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0.8923
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0.7672
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0.6578
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0.5623
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0.4790
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0.4065
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0.2887
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0.2004
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0.1350
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0.0872
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0.0295
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0.0044
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May 20, 2012
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1.2446
|
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|
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1.0108
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|
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0.7954
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0.6614
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|
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0.5468
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|
|
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0.4491
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0.3662
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0.2961
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0.1878
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0.1129
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0.0630
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0.0312
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0.0021
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0.0000
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May 20, 2013
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1.2446
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1.0108
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0.7564
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0.5202
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0.3003
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0.0951
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0.0000
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0.0000
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0.0000
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0.0000
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|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
The exact share prices and effective dates may not be set forth in the table above, in
which case:
|
|
•
|
|
If the share price is between two share price amounts in the table or the effective
date is between two effective dates in the table, the number of additional shares will
be determined by a straight-line interpolation between the number of additional shares
set forth for the higher and lower share price amounts and the two dates, as
applicable, based on a 365-day year.
|
|
|
|
|
•
|
|
If the share price is greater than $268.82 per share (subject to adjustment), the
applicable exchange rate will not be adjusted.
|
|
|
|
|
•
|
|
If the share price is less than $140.82 per share (subject to adjustment), the
applicable exchange rate will not be adjusted.
|
Notwithstanding the foregoing, in no event will the total number of shares of AMB common stock
deliverable upon exchange exceed 7.1015 per $1,000 principal amount of AMB LP 2.625% 2038
Exchangeable Notes, subject to adjustments in the same manner as the applicable exchange rate as
set forth under sections (1) through (3) of “— Exchange Rate Adjustments of the AMB LP Contingent
Exchangeable Notes.”
AMB LP’s obligation to increase the applicable exchange rate as described above could be
considered a penalty, in which case the enforceability thereof would be subject to general
principles of economic remedies.
Settlement of Exchanges of AMB LP Contingent Exchangeable Notes in a Fundamental Change
As described above under “Exchange Rate Adjustments of the AMB LP Contingent Exchangeable
Notes — Treatment of Reference Property”, upon effectiveness of any fundamental change, the AMB LP
Contingent Exchangeable Notes will be exchangeable into cash or cash and reference property, as
applicable. If, as described above, AMB LP is required to increase the applicable exchange rate by
the additional shares as a result of the fundamental change, AMB LP Contingent Exchangeable Notes
surrendered for exchange will be settled as follows:
228
|
|
•
|
|
If the last day of the applicable observation period related to AMB LP Contingent
Exchangeable Notes surrendered for exchange is prior to the third trading day preceding
the effective date of the fundamental change, AMB LP will settle such exchange as
described under “— Payment Upon Exchange of the AMB LP Contingent Exchangeable Notes”
above by delivering the amount of shares of AMB common stock or cash and shares of AMB
common stock, if any (based on the applicable exchange rate without regard to the
number of additional shares to be added to the applicable exchange rate as described
above), on the third trading day immediately following the last day of the applicable
observation period. In addition, as soon as practicable following the effective date of
the fundamental change, AMB LP will deliver the increase in such amount of cash and
reference property deliverable in lieu of shares of AMB common stock, if any, as if the
applicable exchange rate had been increased by such number of additional shares during
the related observation period (and based upon the related daily VWAP prices during
such observation period). If such increased amount results in an increase to the amount
of cash to be paid to holders, AMB LP will pay such increase in cash, and if such
increased settlement amount results in an increase to the number of shares of AMB
common stock, AMB LP will deliver such increase by delivering reference property based
on such increased number of shares.
|
|
|
|
|
•
|
|
If the last day of the applicable observation period related to AMB LP Contingent
Exchangeable Notes surrendered for exchange is on or following the third scheduled
trading day preceding the effective date of the fundamental change, AMB LP will settle
such exchange as described under “— Payment upon Exchange of the AMB LP Contingent
Exchangeable Notes” above (based on the applicable exchange rate as increased by the
additional shares described above) on the later to occur of (1) the effective date of
the transaction and (2) the third trading day immediately following the last day of the
applicable observation period.
|
Merger, Consolidation or Sale
AMB LP may consolidate with or merge with or into another entity, or sell, lease or convey all
or substantially all of its assets to another entity, provided that the following three conditions
are met:
|
|
(1)
|
|
After the transaction, AMB LP is, or a person organized and existing under the
laws of the United States or one of the fifty states is, the continuing entity. If the
continuing entity is an entity other than AMB LP, that entity must also assume AMB LP’s
payment obligations under the new AMB LP Indenture, as well as the due and punctual
performance and observance of all of the covenants contained in the new AMB LP
Indenture;
|
|
|
|
|
(2)
|
|
After giving effect to the transaction and treating any indebtedness which
became an obligation of AMB LP or any of AMB LP’s subsidiaries as a result of the
transaction as having been incurred by AMB LP or such subsidiary at the time of such
transaction, an event of default (or an event which, with notice or lapse of time or
both, would become an event of default) has not occurred under the new AMB LP
Indenture. Additionally, the transaction may not cause an event which, after notice or
a lapse of time, or both, would become an event of default; and
|
|
|
|
|
(3)
|
|
The continuing entity delivers an officers’ certificate and legal opinion
covering (1) and (2) above.
|
The new AMB LP Indenture provides that AMB, as guarantor of a the AMB LP Contingent
Exchangeable Notes, and any other guarantor, will not, in any transaction or series of
transactions, consolidate with, or sell, lease, assign, transfer or otherwise convey all or
substantially all of its assets to, or merge with or into any other person unless:
|
|
•
|
|
either such guarantor is the continuing person or the successor person (if other
than such guarantor) is a corporation, partnership, limited liability company or other
entity organized and existing under the laws of the United States of America or a State
of the United States of America or the District of Columbia and expressly assumes such
guarantor’s obligations with respect to the AMB LP Contingent Exchangeable Notes and
the observance of all of the covenants and conditions contained in the new AMB LP
Indenture and its guarantee;
|
229
|
|
•
|
|
immediately after giving effect to the transaction, no event of default, and no
event which, after notice or lapse of time, or both, would become an event of default,
shall have occurred and shall be continuing; and
|
|
|
|
|
•
|
|
such guarantor delivers to the Trustee an officers’ certificate and legal opinion
covering compliance with these conditions.
|
In the event that such guarantor is not the continuing entity, then, for purposes of the
second bullet point above, the successor entity will be deemed to be such guarantor.
Any consolidation, merger, sale, lease, assignment, transfer or conveyance permitted above is
also subject to the condition precedent that the Trustee receive an officers’ certificate and
legal opinion to the effect that any such consolidation, merger, sale, lease, assignment, transfer
or conveyance, and the assumption by any successor corporation, complies with the provisions of
the new AMB LP Indenture and that all conditions precedent provided for in the new AMB LP
Indenture relating to such transaction have been complied with.
Covenants
This section describes covenants AMB LP makes in the new AMB LP Indenture, for the benefit of
the holders of certain series of AMB LP Contingent Exchangeable Notes.
Existence.
Except as permitted under “— Merger, Consolidation or Sale”, AMB LP will do or
cause to be done all things necessary to preserve and keep in full force and effect the existence,
rights, both charter and statutory, and franchises of AMB LP and its subsidiaries; provided,
however, that AMB LP will not be required to preserve any right or franchise if AMB LP determines
that the preservation of the right or franchise is no longer desirable in the conduct of AMB LP’s
business and that the loss of the right or franchise is not disadvantageous in any material respect
to the holders of the AMB LP Contingent Exchangeable Notes.
Payment of taxes and other claims
. AMB LP will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon AMB LP or any subsidiary or upon its income, profits or property or
any subsidiary and all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon AMB LP’s property or any subsidiary; provided, however, that AMB LP will not
be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good faith by appropriate
proceedings.
Provision of financial information
. Whether or not AMB LP or AMB are subject to Section 13 or
15(d) of the Exchange Act, AMB LP and AMB will, to the extent permitted under the Exchange Act,
file with the SEC the annual reports, quarterly reports and other documents which AMB LP and AMB
would have been required to file with the SEC pursuant to such Section 13 or 15(d) (the “Financial
Statements”) if AMB LP and AMB were so subject, such documents to be filed with the SEC on or prior
to the respective dates (the “Required Filing Dates”) by which AMB LP and AMB would have been
required so to file such documents if AMB LP and AMB were so subject.
AMB LP and AMB will also in any event (x) within 15 days of each Required Filing Date (i)
transmit by mail or electronic transmittal to all holders, as their names and addresses appear in
the security register, without cost to such Holders, copies of the annual reports and quarterly
reports which AMB LP and AMB are required to file or would have been required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act if AMB LP and AMB were subject to such
sections, and (ii) file with the Trustee copies of annual reports, quarterly reports and other
documents which AMB LP and AMB would have been required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act if AMB LP and AMB were subject to such sections and (y) if filing such
documents by AMB LP or AMB with the SEC is not permitted under the Exchange Act, promptly upon
written request and payment of the reasonable cost of duplication and delivery, supply copies of
such documents to any prospective holder.
230
Events of Default, Notice and Waiver
The new AMB LP Indenture provides that the following events are events of default with respect
to any series of AMB LP Contingent Exchangeable Notes issued pursuant to it:
|
|
(1)
|
|
default in the payment of any installment of interest or additional amounts
payable on any AMB LP Contingent Exchangeable Notes of such series which continues for
30 days;
|
|
|
|
|
(2)
|
|
default in the payment of the principal, or premium or make-whole amount, if
any, on any AMB LP Contingent Exchangeable Notes of such series at its maturity or
redemption date;
|
|
|
|
|
(3)
|
|
default in the performance of any other of AMB LP’s covenants contained in the
new AMB LP Indenture, other than a covenant in the new AMB LP Indenture solely for the
benefit of another series of AMB LP Contingent Exchangeable Notes issued under the new
AMB LP Indenture, which continues for 60 days after written notice as provided in the
new AMB LP Indenture;
|
|
|
|
|
(4)
|
|
default in the payment of an aggregate principal amount exceeding $50,000,000
under any bond, note or other evidence of indebtedness or any mortgage, indenture or
other instrument under which such indebtedness is issued or by which such indebtedness
is secured (or any such indebtedness of any of AMB LP’s subsidiaries, which AMB LP has
guaranteed), such default having occurred after the expiration of any applicable grace
period and having resulted in the acceleration of the maturity of such indebtedness,
but only if such indebtedness is not discharged or such acceleration is not rescinded
or annulled within ten days after written notice as provided in the new AMB LP
Indenture;
|
|
|
|
|
(5)
|
|
the entry by a court of competent jurisdiction of final judgments, orders or
decrees against AMB LP or any of AMB LP’s subsidiaries in an aggregate amount,
excluding amounts fully covered by insurance, in excess of $50,000,000 and such
judgments, orders or decrees remain undischarged, unstayed and unsatisfied in an
aggregate amount, excluding amounts fully covered by insurance, in excess of
$50,000,000, for a period of 60 consecutive days;
|
|
|
|
|
(6)
|
|
events of bankruptcy, insolvency or reorganization, or court appointment of a
receiver, liquidator or trustee for AMB LP, AMB or any significant subsidiary or for
all or substantially all of AMB LP’s or its significant subsidiary’s property;
|
|
|
|
|
(7)
|
|
failure by AMB LP to comply with its obligation to exchange the AMB LP
Contingent Exchangeable Notes into cash, shares of AMB common stock or a combination
thereof, as applicable, upon exercise of a holder’s exchange right, and such failure
continues for a period of ten days; and
|
|
|
|
|
(8)
|
|
failure by AMB LP to issue a fundamental change notice when due, and such
failure continues for a period of two days.
|
The term significant subsidiary means each of AMB LP’s significant subsidiaries, as defined in
Regulation S-X promulgated under the Securities Act.
If an event of default under the new AMB LP Indenture with respect to a series of AMB LP
Contingent Exchangeable Notes occurs and is continuing, then in every such case, unless the
principal of the AMB LP Contingent Exchangeable Notes of such series shall already have become due
and payable, the Trustee or the holders of not less than 25% in principal amount of such series of
AMB LP Contingent Exchangeable Notes may declare the principal and the make-whole amount on the AMB
LP Contingent Exchangeable Notes of such series to be due and payable immediately by written notice
to AMB LP that payment of the AMB LP Contingent Exchangeable Notes is due, and to the Trustee if
given by the holders. However, at any time after such a declaration of acceleration with respect to
a series of AMB LP Contingent Exchangeable Notes has been made, but before a judgment or decree for
payment of the money due has been obtained by the Trustee, the holders of not less than a majority
in principal amount of the AMB LP Contingent Exchangeable Notes of a series may rescind and annul
such declaration and its consequences if AMB LP shall have deposited with the Trustee all required
payments of the
231
principal of, and premium or make-whole amount and interest on, the AMB LP Contingent
Exchangeable Notes of such series, plus fees, expenses, disbursements and advances of the Trustee
and all events of default, other than the nonpayment of accelerated principal, and the make-whole
amount or interest, with respect to AMB LP Contingent Exchangeable Notes of such series have been
cured or waived as provided in the new AMB LP Indenture. The new AMB LP Indenture also provides
that the holders of not less than a majority in principal amount of the AMB LP Contingent
Exchangeable Notes of a series may waive any past default with respect to such series and its
consequences, except a default in the payment of the principal of, or premium or make-whole amount
or interest payable on the AMB LP Contingent Exchangeable Notes or in respect of a covenant or
provision contained in the new AMB LP Indenture that cannot be modified or amended without the
consent of the holder of each outstanding AMB LP Contingent Exchangeable Note affected by the
proposed modification or amendment.
The Trustee is required to give notice to the holders of the AMB LP Contingent Exchangeable
Notes within 90 days of a default under the new AMB LP Indenture known to the Trustee, unless the
default has been cured or waived; provided, however, that the Trustee may withhold notice to the
holders of the AMB LP Contingent Exchangeable Notes of any default with respect to such series,
except a default in the payment of the principal of, or premium or make-whole amount, if any, or
interest payable on the AMB LP Contingent Exchangeable Notes if the responsible officers of the
Trustee consider such withholding to be in the interest of such holders.
The new AMB LP Indenture provides that no holders of the AMB LP Contingent Exchangeable Notes
may institute any proceedings, judicial or otherwise, with respect to the new AMB LP Indenture or
for any remedy which the new AMB LP Indenture provides, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to institute proceedings in
respect of an event of default from the holders of not less than 25% in principal amount of the
outstanding AMB LP Contingent Exchangeable Notes, as well as an offer of reasonable indemnity. This
provision will not prevent, however, any holder of the AMB LP Contingent Exchangeable Notes from
instituting suit for the enforcement of payment of the principal of, and premium or make-whole
amount, or interest on the AMB LP Contingent Exchangeable Notes at the due date of the AMB LP
Contingent Exchangeable Notes.
Subject to provisions in the new AMB LP Indenture relating to its duties in case of default,
the Trustee is under no obligation to exercise any of its rights or powers under the new AMB LP
Indenture at the request or direction of any holders of any series of AMB LP Contingent
Exchangeable Notes then outstanding under the new AMB LP Indenture, unless such holders shall have
offered to the Trustee reasonable security or indemnity. The holders of not less than a majority in
principal amount of the AMB LP Contingent Exchangeable Notes of a series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or of exercising any trust or power conferred upon the Trustee with respect to that
series. However, the Trustee may refuse to follow any direction which is in conflict with any law
or the new AMB LP Indenture, which may involve the Trustee in personal liability or which may be
unduly prejudicial to the holders of the AMB LP Contingent Exchangeable Notes not joining in the
proceeding.
Within 120 days after the close of each fiscal year, AMB LP must deliver to the Trustee a
certificate, signed by one of several specified officers, stating whether or not such officer has
knowledge of any default under the new AMB LP Indenture and, if so, specifying each such default
and the nature and status of the default.
Modification of the New AMB LP Indenture
Modifications and amendments of the new AMB LP Indenture may be made with the consent of the
holders of not less than a majority in principal amount of all outstanding debt securities issued
under the new AMB LP Indenture, including the AMB LP Contingent Exchangeable Notes, which are
affected by such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each debt security affected by the modification
or amendment:
|
|
(1)
|
|
change the stated maturity of the principal of, or premium or make-whole
amounts, if any, or any installment of principal of or interest or additional amounts
payable on, any such debt security;
|
|
|
|
|
(2)
|
|
reduce the principal amount of, or the rate or amount of interest on, or any
premium or make-whole amounts payable on redemption of, or any additional amounts
payable with respect to, any such debt
|
232
|
|
|
|
security, or reduce the amount of principal of an original issue discount security or
make-whole amount, if any, that would be due and payable upon declaration of
acceleration of the maturity of the security or would be provable in bankruptcy, or
adversely affect any right of repayment of the holder of any such debt security;
|
|
|
|
|
(3)
|
|
change the place of payment, or the coin or currency, for payment of principal
of, and premium or make-whole amounts, if any, or interest on, or any additional
amounts payable with respect to, any such debt security;
|
|
|
|
|
(4)
|
|
impair the right to institute suit for the enforcement of any payment on or
with respect to any such debt security;
|
|
|
|
|
(5)
|
|
reduce the above-stated percentage of outstanding debt securities of any
series necessary to modify or amend the new AMB LP Indenture, to waive compliance with
a provisions of the debt security or defaults and consequences under the new AMB LP
Indenture or to reduce the quorum or voting requirements set forth in the new AMB LP
Indenture;
|
|
|
|
|
(6)
|
|
modify any of the provisions relating to modification of the new AMB LP
Indenture or any of the provisions relating to the waiver of past defaults or
covenants, except to increase the required percentage to effect such action or to
provide that other provisions may not be modified or waived without the consent of the
holder of the affected debt security; or
|
|
|
|
|
(7)
|
|
release any guarantor from any of its obligations under its guarantee or the
new AMB LP Indenture, except in accordance with the terms of the new AMB LP Indenture.
|
In addition, with respect to the AMB LP Contingent Exchangeable Notes, without the consent of
each holder of an outstanding AMB LP Contingent Exchangeable Note affected, no amendment may make
any change that adversely affects the exchange rights of such AMB LP Contingent Exchangeable Notes,
or reduce the fundamental change repurchase price, redemption price or the repurchase price, of any
AMB LP Contingent Exchangeable Note or amend or modify in any manner adverse to the holders of AMB
LP Contingent Exchangeable Notes AMB LP’s obligation to make such payments or the provisions
relating to redemption or repurchase of the AMB LP Contingent Exchangeable Notes, whether through
an amendment or waiver of provisions in the covenants, definitions or otherwise.
The holders of not less than a majority in principal amount of outstanding debt securities
have the right to waive AMB LP’s compliance with covenants in the new AMB LP Indenture applicable
to such debt securities other than those covenants which require the consent of each affected
holder of debt securities with respect to modifications or amendments to such covenant.
Modifications and amendments of the new AMB LP Indenture may be made by AMB LP and the Trustee
without the consent of any holder of debt securities for any of the following purposes:
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(1)
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to evidence the succession of another person to AMB LP as obligor or any
guarantor under the new AMB LP Indenture;
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(2)
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to add to AMB LP’s or any guarantor’s covenants for the benefit of the
holders of all or any series of debt securities or to surrender any right or power
conferred upon AMB LP or any guarantor in the new AMB LP Indenture;
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(3)
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to add events of default for the benefit of the holders of all or any series
of debt securities;
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(4)
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to add to or change any of the provisions of the new AMB LP Indenture to such
extent as shall be necessary to permit or facilitate the issuance of debt securities in
bearer form, registrable or not registrable as to principal, and with or without
interest coupons, or to permit or facilitate the issuance of securities in
uncertificated form;
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(5)
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to add to, change or eliminate any of the provisions of the new AMB LP
Indenture in respect of one or more series of securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any security of any
series created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (B) modify the rights of the holder of any such
security with respect to such provision or (ii) shall become effective only when there
is no such security outstanding;
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(6)
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to secure the debt securities or related guarantees;
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(7)
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to establish the form or terms of debt securities of any series;
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(8)
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to provide for the acceptance of appointment by a successor trustee or
facilitate the administration of the trust under the new AMB LP Indenture by more than
one trustee;
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(9)
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to cure any ambiguity, defect or inconsistency in the new AMB LP Indenture or
to make any other changes, provided that in each case, the action shall not adversely
affect the interests of holders of debt securities or related guarantees of any series
in any material respect;
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(10)
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to close the new AMB LP Indenture with respect to the authentication and
delivery of additional series of debt securities or any guarantees or to qualify, or
maintain qualification of, the new AMB LP Indenture under the Trust Indenture Act; or
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(11)
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to supplement any of the provisions of the new AMB LP Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of such debt
securities, provided that the action shall not adversely affect the interests of the
holders of the debt securities or related guarantees of any series in any material
respect.
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The new AMB LP Indenture provides that in determining whether the holders of the requisite
principal amount of outstanding debt securities of a series have given any request, demand,
authorization, direction, notice, consent or waiver under the new AMB LP Indenture or whether a
quorum is present at a meeting of holders of debt securities:
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(1)
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the principal amount of an original issue discount security that will be
deemed to be outstanding shall be the amount of the principal of the security that
would be due and payable as of the date of the determination upon declaration of
acceleration of the maturity of the debt securities;
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(2)
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the principal amount of a debt security denominated in a foreign currency
that will be deemed outstanding shall be the United States dollar equivalent,
determined on the issue date for the debt securities, of the principal amount, or, in
the case of an original issue discount security, the United States dollar equivalent on
the issue date of the debt securities of the amount determined as provided in (1)
above;
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(3)
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the principal amount of an indexed security that shall be deemed outstanding
will be the principal face amount of the indexed security at original issuance, unless
otherwise provided with respect to the indexed security pursuant to Section 301 of the
new AMB LP Indenture; and
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(4)
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debt securities owned by AMB LP or any other obligor upon the debt securities
or any of AMB LP’s affiliates or of the other obligor will be disregarded.
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The new AMB LP Indenture contains provisions for convening meetings of the holders of debt
securities of a series. A meeting may be called at any time by the Trustee, and also, upon request,
by AMB LP or the holders of at least 10% in principal amount of the outstanding debt securities of
that series, in any such case upon notice given as provided in the new AMB LP Indenture.
234
Except for any consent that must be given by the holder of each debt security affected by
modifications and amendments of the new AMB LP Indenture, any resolution presented at a meeting or
at an adjourned meeting duly reconvened, at which a quorum is present, may be adopted by the
affirmative vote of the holders of a majority in principal amount of the outstanding debt
securities of that series; provided, however, that, except as referred to above, any resolution
with respect to any request, demand, authorization, direction, notice, consent, waiver or other
action that may be made, given or taken by the holders of a specified percentage, which is less
than a majority, in principal amount of the outstanding debt securities of a series may be adopted
at a meeting or adjourned meeting duly reconvened at which a quorum is present by the affirmative
vote of the holders of the specified percentage in principal amount of the outstanding debt
securities of that series. Any resolution passed or decision taken at any meeting of holders of
debt securities of any series duly held in accordance with the new AMB LP Indenture will be binding
on all holders of debt securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding debt securities of a series; provided, however, that if any
action is to be taken at the meeting with respect to a consent or waiver which may be given by the
holders of not less than a specified percentage in principal amount of the outstanding debt
securities of a series, the persons holding or representing the specified percentage in principal
amount of the outstanding debt securities of that series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a meeting of holders
of debt securities of any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the new AMB LP Indenture expressly provides may be
made, given or taken by the holders of a specified percentage in principal amount of all
outstanding debt securities affected by the action, or of the holders of that series and one or
more additional series:
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(1)
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there shall be no minimum quorum requirement for the meeting; and
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(2)
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the principal amount of the outstanding debt securities of that series that
vote in favor of the request, demand, authorization, direction, notice, consent, waiver
or other action will be taken into account in determining whether the request, demand,
authorization, direction, notice, consent, waiver or other action has been made, given
or taken under the new AMB LP Indenture.
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Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by the new AMB LP Indenture to be given or taken by a specified percentage in principal
amount of the holders of any or all series of debt securities may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by the specified percentage of
holders in person or by agent duly appointed in writing; and, except as otherwise expressly
provided in the new AMB LP Indenture, the action will become effective when the instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any agent will be sufficient for any purpose of the new AMB LP Indenture and, subject to
the new AMB LP Indenture provisions relating to the appointment of any such agent, conclusive in
favor of the Trustee and AMB LP, if made in the manner specified above.
Discharge
AMB LP may discharge various obligations to holders of AMB LP Contingent Exchangeable Notes
that have not already been delivered to the Trustee for cancellation and that either have become
due and payable or will become due and payable within one year, or that are scheduled for
redemption within one year. The discharge will be completed by irrevocably depositing with the
Trustee the funds needed to pay the principal, any make-whole amounts, interest and additional
amounts payable to the date of deposit or to the date of maturity, as the case may be.
Registration and Transfer
Subject to limitations imposed upon AMB LP Contingent Exchangeable Notes issued in book-entry
form, the AMB LP Contingent Exchangeable Notes of any series will be exchangeable for other AMB LP
Contingent Exchangeable Notes of the same series and of a like aggregate principal amount and tenor
of different authorized denominations upon surrender of the AMB LP Contingent Exchangeable Notes at
the corporate trust office of the Trustee referred to above. In addition, subject to the
limitations imposed upon AMB LP Contingent Exchangeable
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Notes issued in book-entry form, the AMB LP Contingent Exchangeable Notes of any series may be
surrendered for exchange or registration of transfer of the security at the corporate trust office
of the Trustee referred to above. Every AMB LP Contingent Exchangeable Note surrendered for
registration of transfer or exchange will be duly endorsed or accompanied by a written instrument
of transfer. No service charge will be made for any registration of transfer or exchange of any AMB
LP Contingent Exchangeable Notes, but AMB LP may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. AMB LP may at any time designate
a transfer agent, in addition to the Trustee, with respect to any series of AMB LP Contingent
Exchangeable Notes. If AMB LP has designated such a transfer agent or transfer agents, AMB LP may
at any time rescind the designation of any such transfer agent or approve a change in the location
at which any such transfer agent acts, except that AMB LP will be required to maintain a transfer
agent in each place of payment for the series.
Neither AMB LP nor the Trustee will be required to:
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(1)
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issue, register the transfer of or exchange AMB LP Contingent Exchangeable
Notes of any series during a period beginning at the opening of business 15 days before
any selection of AMB LP Contingent Exchangeable Notes of that series to be redeemed and
ending at the close of business on the day of mailing of the relevant notice of
redemption;
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(2)
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register the transfer of or exchange any AMB LP Contingent Exchangeable Note,
or portion of security, called for redemption, except the unredeemed portion of any AMB
LP Contingent Exchangeable Note being redeemed in part; or
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(3)
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issue, register the transfer of or exchange any AMB LP Contingent
Exchangeable Note which has been surrendered for repayment at the option of the holder,
except the portion, if any, of such AMB LP Contingent Exchangeable Note not to be so
repaid.
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Global Securities
DTC, New York, New York, will act as securities depository for the AMB LP Contingent
Exchangeable Notes. The AMB LP Contingent Exchangeable Notes will be issued as fully registered
securities registered in the name of Cede & Co., which is DTC’s nominee. Fully registered global
notes, without interest coupons, will be issued with respect to the AMB LP Contingent Exchangeable
Notes.
Redemption notices will be sent to DTC. If less than all of the AMB LP Contingent Exchangeable
Notes within a series are being redeemed, DTC’s practice is to determine by lot the amount of the
interest of each direct participant in the series to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the AMB LP Contingent
Exchangeable Notes. Under its usual procedures, DTC mails an omnibus proxy to AMB LP as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights
to those direct participants to whose accounts the notes are credited on the record date, which are
identified in a listing attached to the omnibus proxy.
AMB LP may, at any time, decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, certificates representing the
AMB LP Contingent Exchangeable Notes will be printed and delivered.
You may hold your beneficial interests in the global securities directly through DTC if you
have an account at DTC, or indirectly through organizations that have accounts at DTC.
What is a global security?
A global security is a special type of indirectly held security in
the form of a certificate held by a depository for the investors in a particular issue of
securities. The AMB LP Contingent Exchangeable Notes will be issued in the form of global
securities, and the ultimate beneficial owners can only be indirect holders. AMB LP does this by
requiring that the global securities be registered in the name of a financial institution AMB LP
selects and by requiring that the AMB LP Contingent Exchangeable Notes included in the global
securities not be transferred to the name of any other direct holder unless the special
circumstances described
236
below occur. The financial institution that acts as the sole direct holder of the global
securities is called the “Depository.” Any person wishing to own an AMB LP Contingent Exchangeable
Note must do so indirectly by virtue of an account with a broker, bank or other financial
institution that in turn has an account with the Depository.
Except as described below, each global security may be transferred, in whole and not in part,
only to DTC, to another nominee of DTC or to a successor of DTC or its nominee. Beneficial
interests in global securities will be represented, and transfers of such beneficial interests will
be made, through accounts of financial institutions acting on behalf of beneficial owners either
directly as account holders, or indirectly through account holders, at DTC.
Special investor considerations for global securities
. As an indirect holder, an investor’s
rights relating to global securities will be governed by the account rules of the investor’s
financial institution and of the Depository, DTC, as well as general laws relating to securities
transfers. AMB LP does not recognize this type of investor as a holder of AMB LP Contingent
Exchangeable Notes and instead deals only with DTC, the Depository that holds global securities.
An investor in global securities should be aware that because the AMB LP Contingent
Exchangeable Notes are issued only in the form of global securities:
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The investor cannot get AMB LP Contingent Exchangeable Notes registered in his or
her own name.
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The investor cannot receive physical certificates for his or her interest in the AMB
LP Contingent Exchangeable Notes.
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The investor will be a “street name” holder and must look to his or her own bank or
broker for payments on the AMB LP Contingent Exchangeable Notes and protection of his
or her legal rights relating to the AMB LP Contingent Exchangeable Notes.
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The investor may not be able to sell interests in the AMB LP Contingent Exchangeable
Notes to some insurance companies and other institutions that are required by law to
own their securities in the form of physical certificates.
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DTC’s policies will govern payments, transfers, exchanges and other matters relating
to the investor’s interest in the global notes. AMB LP and the Trustee have no
responsibility for any aspect of DTC’s actions or for its records of ownership
interests in the global securities. AMB LP and the Trustee also do not supervise DTC in
any way.
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Exchanges among the global securities
. Any beneficial interest in one of the global securities
that is transferred to a person who takes delivery in the form of an interest in another global
security will, upon transfer, cease to be an interest in such global note and become an interest in
the other global security and, accordingly, will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to beneficial interests in such other global
security for as long as it remains such an interest.
Certain book-entry procedures for the global securities.
The descriptions of the operations
and procedures of DTC, Euroclear and Clearstream set forth below are provided solely as a matter of
convenience. These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither AMB LP nor the
dealer managers take any responsibility for these operations or procedures, and investors are urged
to contact the relevant system or its participants directly to discuss these matters.
Beneficial interests in the global securities will be represented through book-entry accounts
of financial institutions acting on behalf of beneficial owners as direct and indirect participants
in DTC. Investors may elect to hold interests in the global securities through DTC either directly
if they are participants in DTC or indirectly through organizations that are participants in DTC.
Clearstream
. Clearstream is incorporated under the laws of the Grand Duchy of Luxembourg as a
professional depositary. Clearstream holds securities for its participating organizations
(“Clearstream Participants”)
237
and facilitates the clearance and settlement of securities transactions between Clearstream
Participants through electronic book-entry changes in accounts of Clearstream Participants, thereby
eliminating the need for physical movement of certificates. Clearstream provides Clearstream
Participants with, among other things, services for safekeeping, administration, clearance and
establishment of internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a professional depositary,
Clearstream is subject to regulation by the Luxembourg Monetary Institute. Clearstream Participants
are recognized financial institutions around the world, including underwriters, securities brokers
and dealers, banks, trust companies, clearing corporations and certain other organizations, and may
include the dealer mangers. Indirect access to Clearstream is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship
with a Clearstream Participant either directly or indirectly.
Distributions with respect to AMB LP Contingent Exchangeable Notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its
rules and procedures to the extent received by a United States depositary for Clearstream.
Euroclear
. Euroclear was created in 1968 to hold securities for participants of Euroclear
(“Euroclear Participants”) and to clear and settle transactions between Euroclear Participants
through simultaneous electronic book-entry delivery against payment, thereby eliminating the need
for physical movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including securities lending and
borrowing and interfaces with domestic markets in several markets in several countries. Euroclear
is operated by Euroclear Bank S.A./N.V. (the “Euroclear Operator”), under contract with Euroclear
Clearance Systems S.C., a Belgian cooperative corporation (the “Cooperative”). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear
cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and other professional
financial intermediaries and may include the dealer managers. Indirect access to Euroclear is also
available to other firms that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is regulated and examined by the Belgian Banking Commission.
DTC
. DTC has advised AMB LP that it is:
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(1)
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a limited-purpose trust company organized under the New York State Banking Law;
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(2)
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a “banking organization” within the meaning of the New York State Banking Law;
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(3)
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a member of the Federal Reserve System;
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(4)
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a “clearing corporation” within the meaning of the New York Uniform
Commercial Code, as amended; and
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(5)
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a “clearing agency” registered pursuant to Section 17A of the Exchange Act.
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DTC was created to hold securities for its participants and facilitates the clearance and
settlement of securities transactions between participants through electronic book-entry changes to
the accounts of its participants, thereby eliminating the need for physical transfer and delivery
of certificates. DTC’s participants include securities brokers and dealers, banks and trust
companies, clearing corporations and certain other organizations. Indirect access to DTC’s system
is also available to other entities such as banks, brokers, dealers and trust companies
(collectively, the “Indirect Participants”) that clear through or maintain a custodial relationship
with a participant, either directly or indirectly. Investors who are not participants may
beneficially own securities held by or on behalf of DTC only through participants or Indirect
Participants.
AMB LP expects that pursuant to procedures established by DTC (1) upon deposit of each global
security, DTC will credit the accounts of participants with an interest in the global security and
(2) ownership of the AMB LP
238
Contingent Exchangeable Notes will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the interests of participants)
and the records of participants and the Indirect Participants (with respect to the interests of
persons other than participants).
The laws of some jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Accordingly, the ability to transfer interests in
the AMB LP Contingent Exchangeable Notes represented by a global security to such persons may be
limited. In addition, because DTC can act only on behalf of its participants, who in turn act on
behalf of persons who hold interests through participants, the ability of a person having an
interest in AMB LP Contingent Exchangeable Notes represented by a global security to pledge or
transfer such interest to persons or entities that do not participate in DTC’s system, or to
otherwise take actions in respect of such interest, may be affected by the lack of a physical
definitive security in respect of such interest.
So long as DTC or its nominee is the registered owner of a global security, DTC or such
nominee, as the case may be, will be considered the sole owner or holder of the AMB LP Contingent
Exchangeable Notes represented by the global note for all purposes under the new AMB LP Indenture.
Owners of beneficial interests in a global security will not be entitled to have AMB LP Contingent
Exchangeable Notes represented by such global security registered in their names, will not receive
or be entitled to receive physical delivery of certificated notes, and will not be considered the
owners or holders thereof under the new AMB LP Indenture for any purpose, including with respect to
the giving of any direction, instruction or approval to the Trustee thereunder. Accordingly, each
holder owning a beneficial interest in a global security must rely on the procedures of DTC and, if
such holder is not a participant or an Indirect Participant, on the procedures of the participant
through which such holder owns its interest, to exercise any rights of a holder of AMB LP
Contingent Exchangeable Notes under the new AMB LP Indenture or such global security. AMB LP
understands that under existing industry practice, in the event that AMB LP requests any action of
holders of AMB LP Contingent Exchangeable Notes, or a holder that is an owner of a beneficial
interest in a global security desires to take any action that DTC, as the holder of such global
security, is entitled to take, DTC would authorize the participants to take such action and the
participants would authorize holders owning through such participants to take such action or would
otherwise act upon the instruction of such holders. Neither AMB LP nor the Trustee will have any
responsibility or liability for any aspect of the records relating to or payments made on account
of AMB LP Contingent Exchangeable Notes by DTC, or for maintaining, supervising or reviewing any
records of DTC relating to such AMB LP Contingent Exchangeable Notes.
Payments with respect to the principal of, and premium, if any, additional interest, if any,
and interest on, any AMB LP Contingent Exchangeable Notes represented by a global security
registered in the name of DTC or its nominee on the applicable record date will be payable by the
Trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of
the global note representing such AMB LP Contingent Exchangeable Notes under the new AMB LP
Indenture. Under the terms of the new AMB LP Indenture, AMB LP and the Trustee may treat the
persons in whose names the AMB LP Contingent Exchangeable Notes, including the global securities,
are registered as the owners thereof for the purpose of receiving payment thereon and for any and
all other purposes whatsoever. Accordingly, neither AMB LP nor the Trustee has or will have any
responsibility or liability for the payment of such amounts to owners of beneficial interests in a
global security (including principal, premium, if any, additional interest, if any, and interest).
Payments by the participants and the Indirect Participants to the owners of beneficial interests in
a global security will be governed by standing instructions and customary industry practice and
will be the responsibility of the participants or the Indirect Participants and DTC.
Transfers between participants in DTC will be effected in accordance with DTC’s procedures,
and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream
will be effected in the ordinary way in accordance with their respective rules and operating
procedures. Subject to compliance with the transfer restrictions applicable to the AMB LP
Contingent Exchangeable Notes, cross-market transfers between the participants in DTC, on the one
hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in
accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its
respective depositary; however, such cross-market transactions will require delivery of
instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines (Brussels, Belgium
time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets
its settlement requirements, deliver instructions to DTC to take action to effect final settlement
on its behalf by delivering or receiving interests in the relevant global securities in DTC, and
making or
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receiving payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions
directly to the depositaries for Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or Clearstream
participant purchasing an interest in a global security from a participant in DTC will be credited,
and any such crediting will be reported to the relevant Euroclear or Clearstream participant,
during the securities settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or
Clearstream as a result of sales of interests in a global security by or through a Euroclear or
Clearstream participant to a participant in DTC will be received with value on the settlement date
of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the
business day for Euroclear or Clearstream following DTC’s settlement date.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate
transfers of interests in global securities among participants in DTC, Euroclear and Clearstream,
they are under no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. Neither AMB LP nor the Trustee will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their respective
participants or indirect participants of their respective obligations under the rules and
procedures governing their operations.
Links have been established among DTC, Clearstream and Euroclear to facilitate the initial
issuance of the AMB LP Contingent Exchangeable Notes sold outside of the United States and
cross-market transfers of the notes associated with secondary market trading. Although DTC,
Clearstream and Euroclear have agreed to the procedures provided below in order to facilitate
transfers, they are under no obligation to perform these procedures, and these procedures may be
modified or discontinued at any time.
Clearstream and Euroclear will record the ownership interests of their participants in much
the same way as DTC, and DTC will record the total ownership of each of the United States agents of
Clearstream and Euroclear, as participants in DTC. When AMB LP Contingent Exchangeable Notes are to
be transferred from the account of a DTC participant to the account of a Clearstream participant or
a Euroclear participant, the purchaser must send instructions to Clearstream or Euroclear through a
participant at least one day prior to settlement. Clearstream or Euroclear, as the case may be,
will instruct its United States agent to receive AMB LP Contingent Exchangeable Notes against
payment. After settlement, Clearstream or Euroclear will credit its participant’s account. Credit
for the notes will appear on the next day (European time).
Because settlement is taking place during New York business hours, DTC participants will be
able to employ their usual procedures for sending AMB LP Contingent Exchangeable Notes to the
relevant United States agent acting for the benefit of Clearstream or Euroclear participants. The
sale proceeds will be available to the DTC seller on the settlement date. As a result, to the DTC
participant, a cross-market transaction will settle no differently than a trade between two DTC
participants. When a Clearstream or Euroclear participant wishes to transfer AMB LP Contingent
Exchangeable Notes to a DTC participant, the seller will be required to send instructions to
Clearstream or Euroclear through a participant at least one business day prior to settlement. In
these cases, Clearstream or Euroclear will instruct its United States agent to transfer these AMB
LP Contingent Exchangeable Notes against payment for them. The payment will then be reflected in
the account of the Clearstream or Euroclear participant the following day, with the proceeds back
valued to the value date, which would be the preceding day, when settlement occurs in New York, if
settlement is not completed on the intended value date, that is, the trade fails, proceeds credited
to the Clearstream or Euroclear participant’s account will instead be valued as of the actual
settlement date.
You should be aware that you will only be able to make and receive deliveries, payments and
other communications involving the AMB LP Contingent Exchangeable Notes through Clearstream and
Euroclear on the days when those clearing systems are open for business. Those systems may not be
open for business on days when banks, brokers and other institutions are open for business in the
United States. In addition, because of time zone differences there may be problems with completing
transactions involving Clearstream and Euroclear on the same business day as in the United States.
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Definitive securities.
A global security is exchangeable for definitive securities in
registered certificated form (“Certificated Securities”) if:
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(1)
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DTC (a) notifies the issuer that it is unwilling or unable to continue as
depositary for the global securities or (b) has ceased to be a clearing agency
registered under the Exchange Act, and in each case the issuer fails to appoint a
successor depositary;
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(2)
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the issuer, at its option, notifies the Trustee in writing that it elects to
cause the issuance of the Certificated Securities; or
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(3)
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there shall have occurred and be continuing a default or event of default
with respect to the AMB LP Contingent Exchangeable Notes.
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In all cases, Certificated Securities delivered in exchange for any global security or
beneficial interests in global securities will be registered in the names, and issued in any
approved denominations, requested by or on behalf of DTC (in accordance with its customary
procedures).
Settlement and Payment
Transfers between participants in DTC will be effected in the ordinary way in accordance with
DTC rules and will be settled in same-day funds. All payments of principal and interest will be
made by AMB LP in immediately available funds or the equivalent, so long as DTC continues to make
its Same-Day Funds Settlement System available to it.
No Personal Liability
Except as provided in the new AMB LP Indenture, no past, present or future trustee, officer,
employee, stockholder or partner of AMB LP or AMB or any successor to AMB LP or AMB will have any
liability for any of AMB LP’s or AMB’s obligations under the AMB LP Contingent Exchangeable Notes
or the new AMB LP Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of AMB LP Contingent Exchangeable Notes by accepting the
AMB LP Contingent Exchangeable Notes waives and releases all such liability. The waiver and release
are part of the consideration for the issue of AMB LP Contingent Exchangeable Notes.
Trustee
U.S. Bank National Association will be the trustee, registrar, exchange agent, bid
solicitation agent and paying agent. Under the new AMB LP Indenture, the Trustee may resign or be
removed with respect to the AMB LP Contingent Exchangeable Notes, and a successor trustee may be
appointed to act with respect to the AMB LP Contingent Exchangeable Notes. If an event of default
occurs and is continuing, the Trustee will be required to use the degree of care and skill of a
prudent man in the conduct of his own affairs. The Trustee will become obligated to exercise any
of its powers under the new AMB LP Indenture at the request of any of the holders of any AMB LP
Contingent Exchangeable Notes only after those holders have offered the Trustee indemnity
satisfactory to it. If the Trustee becomes one of a creditor of AMB LP or AMB, it will be subject
to limitations on its rights to obtain payment of claims or to realize on some property received
for any such claim, as security or otherwise. The Trustee is permitted to engage in other
transactions with AMB LP and AMB. If, however, it acquires any conflicting interest, it must
eliminate that conflict or resign.
The new AMB LP Indenture provides that there may be more than one trustee, each with respect
to one or more series of debt securities. Any trustee under the new AMB LP Indenture may resign or
be removed with respect to one or more series of debt securities, and a successor trustee may be
appointed to act with respect to the series. In the event that two or more persons are acting as
trustee with respect to different series of debt securities, each such trustee will be a trustee of
a trust under the new AMB LP Indenture separate and apart from the trust administered by any other
trustee. Except as otherwise indicated in this prospectus, any action described in this prospectus
to be taken by the trustee may be taken by each such trustee with respect to, and only with respect
to, the one or more series of debt securities for which it is trustee under the new AMB LP
Indenture.
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DESCRIPTION OF THE AMB LP 3.250% 2015 EXCHANGEABLE NOTES
AMB LP has summarized below certain material terms and provisions of the AMB LP 3.250% 2015
Exchangeable Notes. This summary is not a complete description of all of the terms and provisions
of the AMB LP 3.250% 2015 Exchangeable Notes. For more information, AMB LP refers you to the AMB
LP 3.250% 2015 Exchangeable Notes and the new AMB LP Indenture, all of which are available from AMB
LP. AMB LP urges you to read the new AMB LP Indenture because it, and not this description,
defines your rights as a holder of the AMB LP 3.250% 2015 Exchangeable Notes. This summary is
subject to and qualified in its entirety by reference to all the provisions of those documents,
including definitions of terms referred to in this prospectus.
AMB LP (which will be known as ProLogis, L.P. after the Merger) will issue the AMB LP 3.250%
2015 Exchangeable Notes. The AMB LP 3.250% 2015 Exchangeable Notes will be issued under the new AMB
LP Indenture. The terms of the AMB LP Notes will include those expressly set forth in the AMB LP
3.250% 2015 Exchangeable Notes and the new AMB LP Indenture and those made part of the new AMB LP
Indenture by reference to the Trust Indenture Act.
General
The AMB LP 3.250% 2015 Exchangeable Notes will be AMB LP’s direct, unsecured and
unsubordinated obligations and will rank
pari passu
with all of AMB LP’s other unsecured and
unsubordinated indebtedness outstanding from time to time and will be fully and unconditionally
guaranteed by AMB except as may be limited to the maximum amount permitted under applicable federal
or state law. Each guarantee of the AMB LP 3.250% 2015 Exchangeable Notes will be an unsecured and
unsubordinated obligation of AMB and will rank
pari passu
in right of payment with all of its
current and future unsecured and unsubordinated indebtedness. The AMB LP 3.250% 2015 Exchangeable
Notes and each guarantee will be effectively subordinated to any current and future indebtedness of
AMB LP and AMB that is both secured and unsubordinated to the extent of the assets securing such
indebtedness.
A substantial portion (amounting to approximately 88%) of the total assets of AMB LP at
December 31, 2010 are held directly by AMB LP’s consolidated subsidiaries and unconsolidated joint
ventures and co-investment ventures. Accordingly, the cash flow of AMB LP and the consequent
ability to service its debt, including the AMB LP 3.250% 2015 Exchangeable Notes, are partially
dependent on the earnings of such consolidated subsidiaries and unconsolidated joint ventures and
co-investment ventures and the AMB LP 3.250% 2015 Exchangeable Notes will be effectively
subordinated to all existing and future indebtedness, guarantees and other liabilities of such
consolidated subsidiaries and unconsolidated joint ventures and co-investment ventures. As of
December 31, 2010, AMB LP’s consolidated subsidiaries and unconsolidated joint ventures and
co-investment ventures had total liabilities (excluding intercompany liabilities) of approximately
$5.9 billion.
The AMB LP 3.250% 2015 Exchangeable Notes will be effectively subordinated to AMB LP’s
mortgages and other secured indebtedness to the extent of any collateral pledged as security
therefor. As of December 31, 2010, AMB LP (excluding its consolidated subsidiaries and
unconsolidated joint ventures and co-investment ventures) had amounts outstanding under unsecured
credit facilities and senior indebtedness (including the notes) aggregating approximately $1.6
billion and no amounts outstanding for mortgages and other secured indebtedness.
Under the new AMB LP Indenture, in addition to the ability to issue notes with terms different
from the AMB LP 3.250% 2015 Exchangeable Notes, AMB LP will have the ability to reopen this series
of AMB LP 3.250% 2015 Exchangeable Notes and issue additional AMB LP 3.250% 2015 Exchangeable Notes
without the consent of the holders. Each series may be as established from time to time in or
pursuant to authority granted by a resolution of AMB LP’s general partner, AMB, or as established
in one or more indentures supplemental to the new AMB LP Indenture.
Other than the restrictions described under “— Fundamental Change Permits Holders to Require
AMB LP to Repurchase AMB 2015 Exchangeable Notes” and “— Merger, Consolidation or Sale” below, and
except for the provisions set forth under “— Exchange Rights — Adjustment to Shares Delivered
Upon Exchange upon Fundamental Change”, the new AMB LP Indenture as supplemented with respect to a
series of AMB LP 3.250% 2015 Exchangeable Notes contains no other provisions that would limit AMB
LP’s ability to incur indebtedness or
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that would afford holders of the AMB LP 3.250% 2015 Exchangeable Notes protection in the event
of a highly leveraged or similar transaction involving AMB LP or in the event of a change of
control or a decline in the credit rating of AMB LP as the result of a takeover, recapitalization,
highly leveraged transaction or similar restructuring involving AMB LP that could adversely affect
such holders.
AMB Guarantee
AMB LP’s obligations under the AMB LP 3.250% 2015 Exchangeable Notes will be fully and
unconditionally guaranteed by AMB (which will be known as ProLogis, Inc., and which is referred to
as the combined company, after the Merger). AMB’s guarantee of the AMB LP Notes will rank
pari
passu
in right of payment with all of AMB’s unsecured and unsubordinated indebtedness, including
AMB’s indebtedness for borrowed money, indebtedness evidenced by bonds, debentures, notes or
similar instruments, obligations arising from or with respect to guarantees and direct credit
substitutes, obligations associated with hedges and derivative products, capitalized lease
obligations and other unsecured and unsubordinated indebtedness. The guarantee of the AMB LP 3.250%
2015 Exchangeable Notes by AMB will be effectively subordinated to all of the mortgages and other
secured indebtedness of AMB and all of the secured and unsecured indebtedness and other liabilities
of its subsidiaries, other than AMB LP. The obligations of AMB under each guarantee will be limited
to the maximum amount permitted under applicable federal or state law.
Denominations
The AMB LP 3.250% 2015 Exchangeable Notes will be issued in registered form and in
denominations of $1,000 and integral multiples of $1,000.
Principal, Maturity and Interest
The principal of, and premium or make-whole amounts, if any, and interest on the AMB LP 3.250%
2015 Exchangeable Notes will be payable at the corporate trust office of U.S. Bank National
Association, initially located at 100 Wall Street, Suite 1600, New York, New York 10005; provided
that, at AMB LP’s option, payment of interest may be made by check mailed to the address of the
person entitled to the payment as it appears in the security register or by wire transfer of funds
to the person to an account maintained within the United States.
Interest on the AMB LP 3.250% 2015 Exchangeable Notes will be computed on the basis of a
360-day year consisting of twelve 30-day months. If any interest payment date, principal payment
date or the maturity date falls on a day that is not a business day, the required payment will be
made on the next business day as if it were made on the date the payment was due and no interest
will accrue on the amount so payable for the period from and after the interest payment date,
principal payment date or the maturity date, as the case may be, until the next business day.
“Business day” means any day, other than a Saturday, Sunday or legal holidays, on which banks in
New York, New York are not authorized or required by law or executive order to be closed. In
addition, you will not receive any separate cash payment for accrued and unpaid interest, if any,
upon exchange, except as described under “— Exchange Rights.” Any interest not punctually paid or
duly provided for on any interest payment date with respect to an AMB LP 3.250% 2015 Exchangeable
Note, will cease to be payable to the holder on the applicable regular record date and either may
be paid to the person in whose name the AMB LP 3.250% 2015 Exchangeable Note is registered at the
close of business on a special record date for the payment of the defaulted interest to be fixed by
the Trustee, notice of which will be given to the holder of the AMB LP 3.250% 2015 Exchangeable
Note not less than ten days prior to the special record date, or may be paid at any time in any
other lawful manner, all as more completely described in the new AMB LP Indenture.
The AMB LP 3.250% 2015 Exchangeable Notes will mature on March 15, 2015. Up to $460.0 million
in aggregate principal amount of AMB LP 3.250% 2015 Exchangeable Notes may be issued in the
applicable exchange offers. Interest on the AMB LP 3.250% 2015 Exchangeable Notes will:
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accrue at the rate of 3.250% per annum, from March 15, 2011 (the most recent date on
which interest will have been paid on the ProLogis 3.250% 2015 Convertible Notes);
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be payable in cash semi-annually in arrears on each March 15 and September 15,
commencing on September 15, 2011; and
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be payable to holders of record on the March 1 and September 1 immediately preceding
the related interest payment dates.
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Ownership Limitation
In order to assist AMB in maintaining its qualification as a REIT for U.S. federal income tax
purposes, no person may own more than 9.8% (by value or number of shares, whichever is more
restrictive) of AMB’s common stock, subject to certain exceptions. Notwithstanding any other
provision of the AMB LP 3.250% 2015 Exchangeable Notes, in addition to AMB LP’s right to elect to
deliver exchange consideration in whole or in part in cash, no holder of AMB LP 3.250% 2015
Exchangeable Notes will be entitled to exchange such AMB LP 3.250% 2015 Exchangeable Notes for
shares of AMB common stock to the extent that receipt of such shares (assuming AMB LP elected to
deliver common stock) would cause such holder (together with such holder’s affiliates) to exceed
such ownership limit. See “Description of AMB Capital Stock — AMB Common
Stock — Ownership
Limitation.”
Moreover, the holders of the AMB LP 3.250% 2015 Exchangeable Notes will have no right to
receive cash or other consideration in lieu of shares of AMB common stock upon the exchange of
their AMB LP 3.250% 2015 Exchangeable Notes to the extent such exchange would otherwise result in
their aggregate ownership of shares of AMB common stock, options, warrants, convertible securities
or other rights to acquire shares of AMB common stock exceeding 9.8% (by value or number of shares,
whichever is more restrictive) of the outstanding shares of AMB common stock (provided that such
holders will be entitled to receive on the same basis as all other note holders cash that AMB LP
pays to redeem or repurchase the notes for cash as described herein). See “Description of AMB
Capital Stock — AMB Common Stock — Ownership Limitation.”
No Stockholder Rights for Holders of AMB LP 3.250% 2015 Exchangeable Notes
Holders of AMB LP 3.250% 2015 Exchangeable Notes, as such, will not have any rights as
stockholders of AMB (including, without limitation, voting rights and rights to receive dividends
or other distributions on shares of AMB common stock). See “Risk Factors — Additional Risks
Related to the AMB LP Exchangeable Notes — If you hold AMB LP Exchangeable Notes, you will not be
entitled to any rights with respect to AMB’s common stock, but you will be subject to all changes
made with respect to AMB’s common stock.”
Calculations in Respect of the AMB LP 3.250% 2015 Exchangeable Notes
Except as explicitly specified otherwise herein, AMB LP will be responsible for making all
calculations required under the AMB LP 3.250% 2015 Exchangeable Notes. These calculations include,
but are not limited to, determinations of the exchange price and exchange rate applicable to the
AMB LP 3.250% 2015 Exchangeable Notes. AMB LP will make all these calculations in good faith and,
absent manifest error, AMB LP’s calculations will be final and binding on holders of the AMB LP
3.250% 2015 Exchangeable Notes. AMB LP will provide a schedule of its calculations to the Trustee,
and the Trustee is entitled to rely upon the accuracy of AMB LP’s calculations without independent
verification. The Trustee will forward AMB LP’s calculations to any holder of AMB LP 3.250% 2015
Exchangeable Notes upon request.
Optional Redemption
AMB LP may not redeem the AMB LP 3.250% 2015 Exchangeable Notes prior to maturity except to
preserve AMB’s status as a REIT. If at any time AMB LP determines it is necessary to redeem the AMB
LP 3.250% 2015 Exchangeable Notes in order to preserve AMB’s status as a REIT, AMB LP may, on at
least 30 days’ and no more than 60 days’ notice, redeem all, but not less than all, of the AMB LP
3.250% 2015 Exchangeable Notes then outstanding for cash at a price equal to 100% of the principal
amount of the AMB LP 3.250% 2015 Exchangeable Notes being redeemed, plus accrued and unpaid
interest, if any, to the redemption date. You may exchange AMB LP
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3.250% 2015 Exchangeable Notes or portions of AMB LP 3.250% 2015 Exchangeable Notes called for
redemption until the close of business on the day that is two business days prior to the redemption
date.
AMB LP or a third party may, to the extent permitted by applicable law, at any time purchase
AMB LP 3.250% 2015 Exchangeable Notes in the open market, by tender at any price or by private
agreement. Any AMB LP 3.250% 2015 Exchangeable Notes so purchased may, to the extent permitted by
applicable law and subject to restrictions contained in a dealer manager agreement with the dealer
managers, be reissued or resold or may, at AMB LP’s or such third party’s option, be surrendered to
the Trustee for cancellation. Any AMB LP 3.250% 2015 Exchangeable Notes surrendered for
cancellation may not be reissued or resold and will be canceled promptly.
AMB LP may deduct and withhold, from the amount payable upon redemption, any amounts required
to be deducted and withheld under applicable law.
No sinking fund is provided for the AMB LP 3.250% 2015 Exchangeable Notes.
Fundamental Change Permits Holders to Require AMB LP to Repurchase AMB LP 3.250% 2015 Exchangeable
Notes
If a fundamental change, as defined below, occurs at any time, you will have the right, at
your option, to require AMB LP to repurchase all of your AMB LP 3.250% 2015 Exchangeable Notes, or
any portion of the principal amount thereof that is equal to $1,000 or an integral multiple of
$1,000, on a date (the “fundamental change repurchase date”) of AMB LP’s choosing that is not less
than 20 nor more than 35 business days after the date of AMB LP’s notice of the fundamental change.
The price AMB LP is required to pay is equal to 100% of the principal amount of the AMB LP 3.250%
2015 Exchangeable Notes to be purchased plus accrued and unpaid interest to, but excluding, the
fundamental change repurchase date. Any AMB LP 3.250% 2015 Exchangeable Notes purchased by AMB LP
will be paid for in cash.
On or before the 20th day after the occurrence of a fundamental change, AMB LP will provide to
all holders of the AMB LP 3.250% 2015 Exchangeable Notes, the Trustee and the paying agent a notice
of the occurrence of the fundamental change and of the resulting repurchase right. Such notice
shall state, among other things:
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the events causing the fundamental change;
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the date of the fundamental change;
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the last date on which a holder may exercise the repurchase right;
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the fundamental change repurchase price;
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the fundamental change repurchase date;
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the name and address of the paying agent and the exchange agent, if applicable;
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the applicable exchange rate and any adjustments to the applicable exchange rate;
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that the AMB LP 3.250% 2015 Exchangeable Notes with respect to which a fundamental
change repurchase notice has been delivered by a holder may be exchanged only if the
holder withdraws the fundamental change repurchase notice in accordance with the terms
of the new AMB LP Indenture; and
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the procedures that holders must follow to require AMB LP to repurchase their AMB LP
3.250% 2015 Exchangeable Notes.
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Simultaneously with providing such notice, AMB LP will publish a notice containing this
information in a newspaper of general circulation in New York City or publish the information on
its website or through such other public medium as it may use at that time.
To exercise the repurchase right, you must deliver, on or before the fundamental change
repurchase date, the AMB LP 3.250% 2015 Exchangeable Notes to be purchased, duly endorsed for
transfer, together with a written repurchase notice and the form entitled “Form of Fundamental
Change Repurchase Notice” on the reverse side of the AMB LP 3.250% 2015 Exchangeable Notes duly
completed, to the paying agent. Your repurchase notice must state:
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if certificated, the certificate numbers of your AMB LP 3.250% 2015 Exchangeable
Notes to be delivered for repurchase;
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the portion of the principal amount of AMB LP 3.250% 2015 Exchangeable Notes to be
purchased, which must be $1,000 or an integral multiple thereof; and
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that the AMB LP 3.250% 2015 Exchangeable Notes are to be purchased by AMB LP
pursuant to the applicable provisions of the AMB LP 3.250% 2015 Exchangeable Notes and
the new AMB Indenture.
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You may withdraw any repurchase notice (in whole or in part) by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the business day prior to the
fundamental change repurchase date. The notice of withdrawal shall state:
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the principal amount of the withdrawn AMB LP 3.250% 2015 Exchangeable Notes;
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if certificated AMB LP 3.250% 2015 Exchangeable Notes have been issued, the
certificate numbers of the withdrawn AMB LP 3.250% 2015 Exchangeable Notes, or if not
certificated, your notice must comply with appropriate DTC procedures; and
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the principal amount, if any, which remains subject to the repurchase notice.
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AMB LP will be required to repurchase the AMB LP 3.250% 2015 Exchangeable Notes on the
fundamental change repurchase date. You will receive payment of the fundamental change repurchase
price promptly following the later of the fundamental change repurchase date or the time of
book-entry transfer or the delivery of the AMB LP 3.250% 2015 Exchangeable Notes. If the paying
agent holds money or securities sufficient to pay the fundamental change repurchase price of the
AMB LP 3.250% 2015 Exchangeable Notes on the second business day following the fundamental change
repurchase date, then:
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the AMB LP 3.250% 2015 Exchangeable Notes will cease to be outstanding and interest
will cease to accrue (whether or not book-entry transfer of the AMB LP 3.250% 2015
Exchangeable Notes is made or whether or not the AMB LP 3.250% 2015 Exchangeable Note
is delivered to the paying agent); and
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all other rights of the holder will terminate (other than the right to receive the
fundamental change repurchase price and previously accrued and unpaid interest upon
delivery or transfer of the AMB LP 3.250% 2015 Exchangeable Notes).
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The repurchase rights of the holders could discourage a potential acquirer of AMB LP. The
fundamental change repurchase feature, however, is not the result of management’s knowledge of any
specific effort to obtain control of AMB LP by any means or part of a plan by management to adopt a
series of anti-takeover provisions.
If a fundamental change were to occur, AMB LP may not have enough funds to pay the fundamental
change repurchase price. See “Risk Factors — Additional Risks Related to the AMB LP Exchangeable
Notes — AMB LP may be unable to repurchase AMB LP Exchangeable Notes upon the occurrence of a
fundamental change and with respect to the AMB LP Contingent Exchangeable Notes on specified
dates.” If AMB LP fails to repurchase
the AMB LP 3.250% 2015 Exchangeable Notes when required following a fundamental change, AMB LP
will be in
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default under the new AMB LP Indenture. In addition, AMB LP has incurred, and may in the
future incur, other indebtedness with change in control provisions permitting the holders thereof
to accelerate or to require AMB LP to repurchase such indebtedness upon the occurrence of specified
change in control events or on some specific dates.
Certain of AMB LP’s debt agreements may limit its ability to repurchase AMB LP 3.250% 2015
Exchangeable Notes.
No AMB LP 3.250% 2015 Exchangeable Notes may be purchased at the option of holders upon a
fundamental change if there has occurred and is continuing an event of default other than an event
of default that is cured by the payment of the fundamental change repurchase price.
Exchange Rights
General
Subject to the restrictions on ownership of shares of AMB common stock, holders may exchange
their AMB LP 3.250% 2015 Exchangeable Notes at an initial “exchange rate” of 25.8244 shares of AMB
common stock per $1,000 principal amount of AMB LP 3.250% 2015 Exchangeable Notes (equivalent to an
exchange price of approximately $38.7231 per share of AMB common stock) at any time prior to the
close of business on the trading day immediately preceding the final maturity date of the AMB LP
3.250% 2015 Exchangeable Notes.
The exchange rate and the equivalent exchange price in effect at any given time are referred
to as the “applicable exchange rate” and the “applicable exchange price”, respectively, and will be
subject to adjustment as described below. The exchange price at any given time will be computed by
dividing $1,000 by the applicable exchange rate at such time. A holder may exchange fewer than all
of such holder’s AMB LP 3.250% 2015 Exchangeable Notes so long as the AMB LP 3.250% 2015
Exchangeable Notes exchanged are an integral multiple of $1,000 principal amount.
Upon exchange, AMB LP will have the right to deliver cash, shares of AMB common stock, or a
combination of cash and shares of AMB common stock, in each case as described under “— Payment
Upon Exchange of the AMB LP 3.250% 2015 Exchangeable Notes.” AMB LP will inform you through the
Trustee of the method AMB LP will choose to satisfy its exchange obligations within two trading
days immediately after its receipt of your exchange notice.
If AMB LP does not elect otherwise, AMB LP’s exchange obligations will be settled in a
combination of cash and shares of AMB common stock as follows: (i) AMB LP will pay cash in an
amount equal to the lesser of the principal amount of the AMB LP 3.250% 2015 Exchangeable Notes to
be exchanged and the exchange value of the AMB LP 3.250% 2015 Exchangeable Notes to be exchanged,
calculated as described in this prospectus, and (ii) to the extent that the exchange value of the
AMB LP 3.250% 2015 Exchangeable Notes to be exchanged exceeds the principal amount of the AMB LP
3.250% 2015 Exchangeable Notes to be exchanged, AMB LP will issue shares of AMB common stock. The
number of shares to be delivered will be determined based on a daily exchange value, as described
below under “— Payment Upon Exchange of the AMB LP 3.250% 2015 Exchangeable Notes — Net Share
Settlement”, calculated on a proportionate basis for each day of a 20 trading day observation
period, as described in this prospectus. However, AMB LP may elect to deliver cash in settlement of
all or a portion of the amount by which the exchange value of the AMB LP 3.250% 2015 Exchangeable
Notes to be exchanged exceeds the principal amount of such AMB LP 3.250% 2015 Exchangeable Notes or
AMB LP may elect to settle its exchange obligations entirely in shares of AMB common stock. If AMB
LP is unable to deliver registered shares of AMB common stock upon exchange, AMB LP may be more
likely to elect to settle its obligations under the exchange by delivering cash.
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Except as described below, you will not receive any separate cash payment for accrued and
unpaid interest upon exchange of your AMB LP 3.250% 2015 Exchangeable Notes. AMB LP’s settlement of
exchanges as described below under “— Payment Upon Exchange of the AMB LP 3.250% 2015 Exchangeable
Notes” will be deemed to satisfy its obligation to pay:
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the principal amount of the AMB LP 3.250% 2015 Exchangeable Notes; and
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accrued and unpaid interest to, but not including, the exchange date.
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As a result, accrued and unpaid interest to, but not including, the exchange date will be
deemed to be paid in full rather than cancelled, extinguished or forfeited.
Notwithstanding the preceding paragraph, if AMB LP 3.250% 2015 Exchangeable Notes are
exchanged after 5:00 p.m., New York City time, on a record date, holders of such AMB LP 3.250% 2015
Exchangeable Notes at 5:00 p.m., New York City time, on the record date will receive the interest
payable on such AMB LP 3.250% 2015 Exchangeable Notes on the corresponding interest payment date
notwithstanding the exchange. AMB LP 3.250% 2015 Exchangeable Notes surrendered for exchange during
the period from 5:00 p.m., New York City time, on any regular record date to 9:00 a.m., New York
City time, on the immediately following interest payment date must be accompanied by funds equal to
the amount of interest payable on such AMB LP 3.250% 2015 Exchangeable Notes on such interest
payment date; provided that no such payment need be made with respect to AMB LP 3.250% 2015
Exchangeable Notes surrendered for exchange:
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if AMB LP has called the AMB LP 3.250% 2015 Exchangeable Notes for redemption and
the redemption date falls within such period;
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in connection with a fundamental change if AMB LP has specified a fundamental change
repurchase date that falls within such period;
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after 5:00 p.m., New York City time on the record date immediately preceding the
maturity date; or
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to the extent of any overdue interest, if any overdue interest exists at the time of
exchange with respect to such AMB LP 3.250% 2015 Exchangeable Notes.
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If a holder exchanges AMB LP 3.250% 2015 Exchangeable Notes, AMB LP will pay any documentary,
stamp or similar issue or transfer tax due on the issue of any shares of AMB common stock upon the
exchange, unless the tax is due because the holder requests any shares to be issued in a name other
than the holder’s name, in which case the holder will pay that tax.
The AMB LP 3.250% 2015 Exchangeable Notes in respect of which a holder has delivered a notice
of exercise of its option to require AMB LP to repurchase its AMB LP 3.250% 2015 Exchangeable Notes
upon the occurrence of a fundamental change (as defined below) may not be surrendered for exchange
until the holder has withdrawn the notice in accordance with the new AMB LP Indenture.
Exchange Procedures of AMB LP 3.250% 2015 Exchangeable Notes
If you hold a beneficial interest in a global note representing an AMB LP 3.250% 2015
Exchangeable Note, to exercise your exchange right you must comply with DTC’s procedures for
converting a beneficial interest in a global note and, if required, pay funds equal to interest
payable on the next interest payment date and, if required, pay all taxes or duties, if any.
If you hold a certificated AMB LP 3.250% 2015 Exchangeable Note, to exchange you must:
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complete and manually sign the exchange notice on the back of the AMB LP 3.250% 2015
Exchangeable Note, or a facsimile of the exchange notice;
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deliver the exchange notice, which is irrevocable, and the AMB LP 3.250% 2015
Exchangeable Note to the exchange agent;
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if required, furnish appropriate endorsements and transfer documents; and
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if required, pay all transfer or similar taxes; and if required, pay funds equal to
interest payable on the next interest payment date.
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The date you comply with these requirements is the “exchange date” under the new AMB LP
Indenture. If a holder has already delivered a repurchase notice as described under “— Fundamental
Change Permits Holders to Require AMB LP to Repurchase AMB LP 3.250% 2015 Exchangeable Notes” with
respect to an AMB LP 3.250% 2015 Exchangeable Note, the holder may not surrender that AMB LP 3.250%
2015 Exchangeable Note for exchange until the holder has withdrawn the notice in accordance with
the new AMB LP Indenture.
Payment Upon Exchange of the AMB LP 3.250% 2015 Exchangeable Notes
In satisfaction of AMB LP’s obligation upon exchange of AMB LP 3.250% 2015 Exchangeable Notes,
AMB LP may elect to deliver cash, shares of AMB common stock or a combination of cash and shares of
AMB common stock, if applicable.
AMB LP will inform the holders through the Trustee of the method it chooses to satisfy its
obligation upon exchange no later than the second trading day immediately following its receipt of
a notice of exchange. If AMB LP does not give notice as to how it intends to settle, AMB LP will
satisfy its exchange obligation in cash and shares of AMB common stock or, at its option, cash in
accordance with the net share settlement upon exchange method as described below under “— Net
Share Settlement.” AMB LP will treat all holders of AMB LP 3.250% 2015 Exchangeable Notes
converting on the same trading day in the same manner. AMB LP will not, however, have any
obligation to settle AMB LP’s exchange obligations arising on different trading days in the same
manner. That is, AMB LP may choose on one trading date to settle in shares of AMB common stock
only and choose on another trading day to settle in cash or a combination of cash and shares of AMB
common stock.
Settlement in Shares
. If AMB LP elects to satisfy its exchange obligation entirely in shares
of AMB common stock, AMB LP will deliver to you a number of shares equal to (i) the aggregate
principal amount of AMB LP 3.250% 2015 Exchangeable Notes to be exchanged divided by $1,000,
multiplied by (ii) the applicable exchange rate (which will include any increases to reflect any
additional shares which you may be entitled to receive as described under “— Adjustment to Shares
Delivered Upon Exchange Upon Fundamental Change”). AMB LP will deliver such shares as soon as
practicable after AMB LP has informed you that it has elected to satisfy AMB LP’s exchange
obligations entirely in shares of AMB common stock.
Net Share Settlement
. If AMB LP does not elect otherwise, it will settle each $1,000
principal amount of AMB LP 3.250% 2015 Exchangeable Notes being exchanged by delivering, on the
third trading day immediately following the last day of the related observation period (as defined
below), cash and shares of AMB common stock or, at AMB LP’s option, cash, equal to the sum of the
daily settlement amounts (as defined below) for each of the 20 trading days during the related
observation period.
The “observation period” with respect to any AMB LP 3.250% 2015 Exchangeable Note means the 20
consecutive trading day period beginning on and including the second trading day after you deliver
your exchange notice to the exchange agent.
The “daily settlement amount”, for each of the 20 trading days during the observation period,
shall consist of:
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cash equal to the lesser of $50 and the daily exchange value relating to such day,
and
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if such daily exchange value exceeds $50, a number of shares of AMB common stock
equal to (i) the difference between such daily exchange value and $50, divided by (ii)
the daily VWAP of AMB’s common stock for such day,
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subject to AMB LP’s right to deliver cash in lieu of all or a portion of such shares of AMB common
stock as described below under “— Cash Settlement.”
The “daily exchange value” means, for each of the 20 consecutive trading days during the
observation period, one-twentieth (1/20) of the product of (1) the applicable exchange rate and (2)
the daily VWAP of AMB’s common stock (or the consideration into which AMB’s common stock have been
exchanged in connection with certain corporate transactions) on such day.
The “daily VWAP” of AMB’s common stock means, for each of the 20 consecutive trading days
during the observation period, the per share volume-weighted average price as displayed under the
heading “Bloomberg VWAP” on Bloomberg page PLD <equity> AQR in respect of the period from
9:30 a.m. to 4:00 p.m. (New York City time) on such trading day (or if such volume-weighted average
price is unavailable, the market value of one share of AMB common stock on such trading day as AMB
LP’s board of directors determines in good faith using a volume-weighted method).
Cash Settlement
. If AMB LP so elects, as described in the second paragraph of this “—
Payment Upon Exchange of the AMB LP 3.250% 2015 Exchangeable Notes” section, AMB LP may specify a
percentage of the amount by which the daily exchange value exceeds $50 that will be settled in
cash, or the “cash percentage”, and AMB LP will notify you of such cash percentage in the
applicable time period as described in the second paragraph of this “— Payment Upon Exchange of
the AMB LP 3.250% 2015 Exchangeable Notes” section, which notice AMB LP refers to as the “cash
percentage notice” (such settlement method is being referred to herein as the “cash settlement
method upon exchange”). If AMB LP elects to specify a cash percentage, the amount of cash that AMB
LP will deliver in respect of each trading day in the applicable observation period will equal to
the product of (1) the cash percentage and (2) the amount by which the daily exchange value exceeds
$50 for such trading day. The number of shares of AMB common stock deliverable in respect of each
trading day in the applicable observation period will equal (i) the product of (a) 100% minus the
cash percentage and (b) the amount by which the daily exchange value exceeds $50 for such trading
day, divided by (ii) the daily VWAP of AMB’s common stock for such trading day. If AMB LP does not
specify a cash percentage, AMB LP must settle the entire amount by which the daily exchange value
exceeds $50 with shares of AMB common stock as described under “— Net Share Settlement” above;
provided, however, that AMB LP will deliver cash in lieu of any fractional shares of AMB common
stock deliverable in connection with payment of the settlement amount as described above.
Except as described in this paragraph, no holder of AMB LP 3.250% 2015 Exchangeable Notes will
be entitled, upon exchange of the AMB LP 3.250% 2015 Exchangeable Notes, to any cash payment or
adjustment on account of accrued and unpaid interest, including additional interest, if any, on an
exchanged AMB LP 3.250% 2015 Exchangeable Note, or on account of dividends or distributions on
AMB’s common stock deliverable in connection with the exchange. If AMB LP 3.250% 2015 Exchangeable
Notes are exchanged after the close of business on a record date and prior to the opening of
business on the next interest payment date, including the date of maturity, holders of such AMB LP
3.250% 2015 Exchangeable Notes at the close of business on the record date will receive interest,
including additional interest, if any, payable on such AMB LP 3.250% 2015 Exchangeable Notes on the
corresponding interest payment date notwithstanding the exchange. In such event, when the holder
surrenders the AMB LP 3.250% 2015 Exchangeable Note for exchange, the holder must deliver payment
to AMB LP of an amount equal to the interest payable on the interest payment date, including
additional interest, if any, on the principal amount to be converted. The foregoing sentence shall
not apply to AMB LP 3.250% 2015 Exchangeable Notes called for redemption on a redemption date
within the period between the close of business on the record date and the opening of business on
the interest payment date, to AMB LP 3.250% 2015 Exchangeable Notes surrendered for exchange in
connection with a fundamental change in which AMB LP has specified a fundamental change repurchase
date that is after a record date and on or prior to the next interest payment date, to AMB LP
3.250% 2015 Exchangeable Notes surrendered for exchange after the record date immediately preceding
the maturity date or to AMB LP 3.250% 2015 Exchangeable Notes surrendered for exchange on the
interest payment date.
250
Notwithstanding the foregoing, if any calculation required in order to determine the number of
shares of AMB common stock AMB LP must deliver in respect of a particular exchange is based upon
data that will not be available to AMB LP on the exchange date, AMB LP will delay settlement of
that exchange until the third business day after the relevant data become available. This will be
the case, in particular, for any exchange immediately following a spin-off described in paragraph
(3) of “— Exchange Rate Adjustments of the AMB LP 3.250% 2015 Exchangeable Notes” below, or a
tender offer or exchange offer described in paragraph (5) of “— Exchange Rate Adjustments of the
AMB LP 3.250% 2015 Exchangeable Notes” below.
Exchange Rate Adjustments of the AMB LP 3.250% 2015 Exchangeable Notes
The exchange rate will be adjusted as described below, except that AMB LP will not make any
adjustments to the exchange rate if holders of the AMB LP 3.250% 2015 Exchangeable Notes
participate, as a result of holding the AMB LP 3.250% 2015 Exchangeable Notes, in any of the
transactions described below without having to exchange their AMB LP 3.250% 2015 Exchangeable
Notes.
Adjustment Events
(1) If AMB issues common stock as a dividend or distribution on AMB’s common stock, or
if AMB effects a share split or share combination, the exchange rate will be adjusted based on the
following formula:
where,
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0
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the exchange rate in effect immediately prior to the “ex-date” (as defined
below) for such dividend or distribution or the effective date of such share split or
combination, as the case may be;
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ER’
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=
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the exchange rate in effect as of the ex-date for such dividend or
distribution or the effective date of such share split or combination, as the case may
be;
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OS
0
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=
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the number of shares of AMB common stock outstanding immediately prior to
such event; and
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OS’
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the number of shares of AMB common stock outstanding immediately after such
event.
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(2) If AMB issues to all or substantially all holders of shares of AMB common stock any
rights, warrants or convertible securities entitling them, for a period of not more than 60
calendar days, to subscribe for or purchase shares of AMB common stock at a price per share less
than the last reported sale price per share of AMB common stock on the business day immediately
preceding the date of announcement of such issuance, the exchange rate will be adjusted based on
the following formula (provided that the exchange rate will be readjusted to the extent that such
rights, warrants or convertible securities are not exercised prior to their expiration):
where,
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ER
0
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=
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the exchange rate in effect immediately prior to the ex-date
for such distribution;
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ER’
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=
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the exchange rate in effect as of the ex-date for such
distribution;
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OS
0
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=
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the number of shares of AMB common stock outstanding immediately prior to
such event;
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X
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the total number of shares of AMB common stock issuable pursuant to such
rights, warrants or convertible securities; and
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Y
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=
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the number of shares of AMB common stock equal to the aggregate price
payable to exercise such rights, warrants or convertible securities divided by the
average of the last reported sale prices per share of AMB common stock over the ten
consecutive trading day period ending on the business day immediately preceding the
record date (or, if later, the ex-date relating such distribution) for the issuance of
such rights, warrants or convertible securities.
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(3) If AMB distributes shares of capital stock, evidences of indebtedness or other assets or
property of AMB to all or substantially all holders of shares of AMB common stock, excluding:
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dividends or distributions and rights or warrants referred to in clause (1) or (2) above;
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dividends or distributions paid exclusively in cash; and
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spin-offs to which the provisions set forth below in this paragraph (3) shall apply;
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then the exchange rate will be adjusted based on the following formula:
where,
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ER
0
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=
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the exchange rate in effect immediately prior to the ex-date for such
distribution;
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ER’
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the exchange rate in effect as of the ex-date for such distribution;
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SP
0
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=
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the average of the last reported sale prices per share of AMB common
stock over the ten consecutive trading day period ending on the business day
immediately preceding the record date for such distribution (or, if earlier, the
ex-date relating to such distribution); and
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FMV
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the fair market value (as determined by the board of directors of AMB) of the
shares of capital stock, evidences of indebtedness, assets or property distributed with
respect to each outstanding share of AMB common stock on the record date for such
distribution (or, if earlier, the ex-date relating to such distribution).
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With respect to an adjustment pursuant to this clause (3) where there has been a payment of
a dividend or other distribution on shares of AMB common stock in shares of capital stock of
any class or series, or similar equity interest, of or relating to a subsidiary or other
business unit, which AMB LP refers to as a “spin-off”, unless AMB LP distributes such shares
of capital stock or equity interests to holders of the AMB LP 3.250% 2015 Exchangeable Notes
on the same basis as they would have received had they exchanged their AMB LP 3.250% 2015
Exchangeable Notes solely into shares of AMB common stock immediately prior to such dividend
or distribution, the exchange rate in effect immediately before 5:00 p.m., New York City
time, on the record date fixed for determination of stockholders entitled to receive the
distribution will be increased based on the following formula:
where,
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ER
0
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the exchange rate in effect immediately prior to the effective date of
such distribution;
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ER’
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the exchange rate in effect as of the effective date of such
distribution;
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FMV
0
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the average of the last reported sale prices of the capital stock or
similar equity interest distributed to holders of shares of AMB common stock applicable
to one share of AMB common stock over the first ten consecutive trading day period
after the effective date of the spin-off; and
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MP
0
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the average of the last reported sale prices per share of AMB common
stock over the first ten consecutive trading day period after the effective date of the
spin-off.
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The adjustment to the exchange rate under the preceding paragraph will occur on the tenth
trading day from, and including, the effective date of the spin-off; provided that in
respect of any exchange within the ten trading days following any spin-off, references
within this paragraph (3) to ten days shall be deemed replaced with such lesser number of
trading days as have elapsed between such spin-off and the exchange date in determining the
applicable exchange rate.
(4) If AMB pays any cash dividend or distribution to all or substantially all holders of
shares of AMB common stock, to the extent that the aggregate of all such cash dividends or
distributions paid in any quarter exceeds the dividend threshold amount (as defined below) for such
quarter, the exchange rate will be adjusted based on the following formula:
where,
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ER
0
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=
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the exchange rate in effect immediately prior to the ex-date
for such distribution;
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ER’
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=
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the exchange rate in effect as of the ex-date for such
distribution;
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SP
0
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=
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the average of the last reported sale prices per share of AMB common stock
over the ten consecutive trading-day period ending on the business day immediately
preceding the record date for such distribution (or, if earlier, the ex-date relating
to such distribution);
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T
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the dividend threshold amount, which shall initially be $0.3360 per
quarter and which amount shall be appropriately adjusted from time to time for any
stock dividends on, or subdivisions or combinations of, AMB’s common stock; provided,
that if an exchange rate adjustment is required to be made as a result of a
distribution that is not a quarterly dividend either in whole or in part, the dividend
threshold amount shall be deemed to be zero; and
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C
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the amount in cash per share that AMB distributes to holders of shares of AMB
common stock.
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(5) If AMB or any of its subsidiaries makes a payment in respect of a tender offer or exchange
offer for shares of AMB common stock, if the cash and value of any other consideration included in
the payment per share of AMB common stock exceeds the last reported sale price per share of AMB
common stock on the trading day next succeeding the last date on which tenders or exchanges may be
made pursuant to such tender or exchange offer, the exchange rate will be increased based on the
following formula:
where,
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ER
0
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=
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the exchange rate in effect on the date such tender or exchange offer
expires;
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ER’
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=
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the exchange rate in effect on the day next succeeding the date such tender
or exchange offer expires;
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AC
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=
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the aggregate value of all cash and any other consideration (as determined
by the board of directors of AMB) paid or payable for shares purchased in such tender
or exchange offer;
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OS
0
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=
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the number of shares of AMB common stock outstanding immediately prior to
the date such tender or exchange offer expires;
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OS’
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=
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the number of shares of AMB common stock outstanding immediately after the
date such tender or exchange offer expires; and
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SP’
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=
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the average of the last reported sale prices per share of AMB common stock
over the ten consecutive trading-day period commencing on the trading day next
succeeding the date such tender or exchange offer expires.
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If, however, the application of the foregoing formula would result in a decrease in the
exchange rate, no adjustment to the exchange rate will be made.
As used in this section, “ex-date” means the first date on which the shares of AMB common
stock trade on the applicable exchange or in the applicable market, regular way, without the right
to receive the issuance or distribution in question.
Except as stated herein, AMB LP will not adjust the exchange rate for the issuance of shares
of AMB common stock or any securities exchangeable into or exchangeable for shares of AMB common
stock or the right to purchase shares of AMB common stock or such exchangeable securities.
Events That Will Not Result in Adjustments
The applicable exchange rate will not be adjusted:
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upon the issuance of any shares of AMB common stock pursuant to any present or
future plan providing for the reinvestment of dividends or interest payable on AMB
securities and the investment of additional optional amounts in shares of AMB common
stock under any plan;
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upon the issuance of any shares of AMB common stock or options or rights to
purchase those shares pursuant to any present or future employee, director or
consultant benefit plan or program of or assumed by AMB LP or any of its subsidiaries;
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upon the issuance of any shares of AMB common stock pursuant to any option,
warrant, right or exercisable or exchangeable security not described in the second
bullet above and outstanding as of the date the AMB LP 3.250% 2015 Exchangeable Notes
were first issued;
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upon the issuance of any shares of AMB common stock pursuant to any option, warrant
or exercisable or exchangeable security not described in the second bullet above
issued after the date the AMB LP 3.250% 2015 Exchangeable Notes were first issued so
long as those securities are not issued to all or substantially all holders of shares
of AMB common stock;
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for a change in the par value of shares of AMB common stock;
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•
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for accrued and unpaid interest; or
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•
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for the avoidance of doubt, for the payment of cash or the issuance of shares of
AMB common stock by AMB upon exchange, redemption or repurchase of AMB LP 3.250% 2015
Exchangeable Notes.
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Adjustments to the applicable exchange rate will be calculated to the nearest 1/10,000th of a
share of stock. AMB LP will not be required to make an adjustment in the applicable exchange rate
unless the adjustment would require a change of at least 1% in the exchange rate. However, AMB LP
will carry forward any adjustments that are less than 1% of the exchange rate and make such carried
forward adjustments, regardless of whether the aggregate adjustment is less than 1% within one year
of the first such adjustment carried forward, upon a fundamental change,
254
upon any call of the AMB LP 3.250% 2015 Exchangeable Notes for redemption or upon maturity. Except
as described in this section, AMB LP will not adjust the exchange rate.
Treatment of Reference Property
In the event of any of the following (each, a “reorganization event”):
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any reclassification of AMB’s common stock; or
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a consolidation, merger or combination involving AMB; or
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•
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a sale or conveyance to another person of all or substantially all of the property
and assets of AMB, in which holders of the outstanding shares of AMB common stock would
be entitled to receive cash, securities or other property for their shares of AMB
common stock;
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in each case as a result of which holders of shares of AMB common stock are entitled to receive
stock, other securities, other property, assets or cash (or any combination thereof) with respect
to or in exchange for shares of AMB common stock, then from and after the effective date of the
reorganization event, the consideration for the settlement of the exchange obligation will be based
on, and each share deliverable upon exchange in respect of any settlement will consist of, the kind
and amount of shares of stock, other securities or other property, assets or cash (or any
combination thereof) that such holder of AMB LP 3.250% 2015 Exchangeable Notes would have owned
immediately after such reorganization event if such holder had exchanged the AMB LP 3.250% 2015
Exchangeable Notes immediately prior to such reorganization event (such consideration, the
“reference property”). For purposes of the foregoing, where a reorganization event involves
consideration based upon any form of stockholder election, the consideration will be deemed to be
the weighted average of the types and amounts of consideration received by the holders of shares of
AMB common stock that affirmatively make such an election. AMB LP may not become party to any
transaction of that type unless its terms are materially consistent with the preceding. None of the
foregoing provisions shall affect the right of a holder of AMB LP 3.250% 2015 Exchangeable Notes to
exchange its AMB LP 3.250% 2015 Exchangeable Notes prior to the effective date of the
reorganization event. For the avoidance of doubt, adjustments to the exchange rate set forth under
“— Exchange Rate Adjustments of the AMB LP 3.250% 2015 Exchangeable Notes” do not apply to
distributions to the extent that the right to exchange AMB LP 3.250% 2015 Exchangeable Notes has
been changed into the right to exchange into reference property.
Treatment of Rights
To the extent that AMB LP has a rights plan in effect upon exchange of the AMB LP 3.250% 2015
Exchangeable Notes into shares of AMB common stock, you will receive, in addition to shares of AMB
common stock, the rights under the rights plan, unless prior to any exchange, the rights have
separated from the shares of AMB common stock, in which case the exchange rate will be adjusted at
the time of separation as if AMB distributed to all holders of shares of AMB common stock, shares
of capital stock, evidences of indebtedness or other assets or property of AMB as described in
clause (3) under “— Adjustment Events” above, subject to readjustment in the event of the
expiration, termination or redemption of such rights.
Voluntary Increases of Exchange Rate
AMB LP is permitted to the extent permitted by law and subject to the applicable rules of the
NYSE to increase the exchange rate of the AMB LP 3.250% 2015 Exchangeable Notes by any amount for a
period of at least 20 days if AMB LP’s board of directors determines that such increase would be in
AMB LP’s best interest. AMB LP may also (but is not required to) increase the exchange rate to
avoid or diminish income tax to holders of shares of AMB common stock or rights to purchase shares
of AMB common stock in connection with a dividend or distribution of shares (or rights to acquire
shares) or similar event.
255
Tax Effect
A holder may, in certain circumstances, including the distribution of cash dividends to
holders of shares of AMB common stock, be deemed to have received a dividend subject to U.S.
federal income tax as a result of an adjustment or the nonoccurrence of an adjustment to the
exchange rate. For a discussion of the U.S. federal income tax treatment of an adjustment to the
exchange rate, see “Material United States Federal Income Tax Consequences.”
Adjustment to Shares Delivered Upon Exchange Upon Fundamental Change
If a fundamental change (as defined below) occurs at any time, and if you elect to exchange
your AMB LP 3.250% 2015 Exchangeable Notes at any time on or after the 30th scheduled trading day
prior to the anticipated effective date of such fundamental change until the related fundamental
change repurchase date, the exchange rate will be increased by an additional number of shares of
AMB common stock (the “additional shares”) as described below (subject to AMB LP’s right to satisfy
all or any part of its exchange obligations in cash as described under “— Payment Upon Exchange of
the AMB LP 3.250% 2015 Exchangeable Notes”). AMB LP will notify holders of the occurrence of any
such fundamental change and issue a press release no later than 30 scheduled trading days prior to
the anticipated effective date of such transaction. AMB LP will settle exchanges of AMB LP 3.250%
2015 Exchangeable Notes as described herein.
A “fundamental change” means a change of control or a termination of trading.
A “change of control” shall be deemed to occur upon the consummation of any transaction or
event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection with which more than
50% of the shares of AMB common stock are exchanged for, exchanged into, acquired for or
constitutes solely the right to receive, consideration which is not at least 90% common stock (or
American Depositary Shares representing common shares) that is:
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listed on, or immediately after consummation of such transaction or event will be
listed on, a United States national securities exchange; or
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•
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approved, or immediately after the transaction or event will be approved, for
listing or quotation on any United States system of automated dissemination of
quotations of securities prices.
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A “termination of trading” shall be deemed to occur if shares of AMB common stock, or any
shares of common stock (or American Depositary Receipts in respect of common shares) into which the
AMB LP 3.250% 2015 Exchangeable Notes are exchangeable pursuant to the terms of the new AMB LP
Indenture, are not listed for trading on any of the NYSE, the NASDAQ Global Market or the NASDAQ
Global Select Market (or any of their respective successors).
The term fundamental change is limited to specified transactions and may not include other
events that might adversely affect AMB LP’s financial condition. In addition, the requirement that
AMB LP offers to repurchase the AMB LP 3.250% 2015 Exchangeable Notes upon a fundamental change may
not protect holders in the event of a highly leveraged transaction, reorganization, merger or
similar transaction involving AMB LP.
The number of additional shares by which the exchange rate will be increased for the AMB LP
3.250% 2015 Exchangeable Notes will be determined by reference to the tables below, based on the
date on which the fundamental change occurs or becomes effective (the “effective date”) and the
price (the “share price”) paid per share of AMB common stock in the fundamental change. If holders
of shares of AMB common stock receive only cash in the fundamental change, the share price will be
the cash amount paid per share. Otherwise, the share price will be the average of the last reported
sale prices per share of AMB common stock over the five trading-day period ending on the trading
day preceding the effective date of the fundamental change.
256
The share prices set forth in the first row of the table below (i.e., column headers) will be
adjusted as of any date on which the exchange rate of the AMB LP 3.250% 2015 Exchangeable Notes is
otherwise adjusted. The adjusted share prices will equal the share prices applicable immediately
prior to such adjustment, multiplied by a fraction, the numerator of which is the exchange rate
immediately prior to the adjustment giving rise to the share price adjustment and the denominator
of which is the exchange rate as so adjusted. The number of additional shares will be adjusted in
the same manner as the exchange rate as set forth under “— Exchange Rate Adjustments of the AMB LP
3.250% 2015 Exchangeable Notes.”
The following table sets forth the share price and the number of additional shares by which
the exchange rates per $1,000 principal amount of AMB LP 3.250% 2015 Exchangeable Notes will be
increased.
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Share Price
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Effective Date
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$30.02
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$33.60
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$39.20
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$44.80
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$50.40
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$56.00
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$61.60
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$67.20
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$72.80
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$78.41
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$84.01
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$89.61
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March 15, 2012
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7.4890
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5.5791
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3.2283
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1.8584
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1.0561
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0.5852
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0.3098
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0.1507
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0.0624
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0.0177
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0.0000
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0.0000
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March 15, 2013
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7.4890
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5.2539
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2.8142
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1.4675
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0.7374
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0.3488
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0.1475
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0.0494
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0.0078
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0.0000
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0.0000
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0.0000
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March 15, 2014
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7.4890
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4.6911
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2.0996
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0.8440
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0.2940
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0.0788
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0.0092
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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March 15, 2015
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7.4890
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3.9356
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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0.0000
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The exact share prices and effective dates may not be set forth in the table above, in
which case:
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•
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If the share price is between two share price amounts in the table or the effective
date is between two effective dates in the table, the number of additional shares will
be determined by a straight-line interpolation between the number of additional shares
set forth for the higher and lower share price amounts and the two dates, as
applicable, based on a 365-day year.
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•
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If the share price is greater than $89.61 per share (subject to adjustment), the
exchange rate will not be adjusted.
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•
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If the share price is less than $30.02 per share (subject to adjustment), the
exchange rate will not be adjusted.
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Notwithstanding the foregoing, in no event will the total number of shares of AMB common stock
deliverable upon exchange exceed 33.3134 per $1,000 principal amount of AMB LP 3.250% 2015
Exchangeable Notes, subject to adjustments in the same manner as the exchange rate as set forth
under sections (1) through (3) of “— Exchange Rate Adjustments of the AMB LP 3.250% 2015
Exchangeable Notes.”
AMB LP’s obligation to increase the exchange rate as described above could be considered a
penalty, in which case the enforceability thereof would be subject to general principles of
economic remedies.
Merger, Consolidation or Sale
AMB LP may consolidate with or merge with or into another entity, or sell, lease or convey all
or substantially all of its assets to another entity, provided that the following three conditions
are met:
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(1)
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After the transaction, AMB LP is, or a person organized and existing under the
laws of the United States or one of the fifty states is, the continuing entity. If the
continuing entity is an entity other than AMB LP, that entity must also assume AMB LP’s
payment obligations under the new AMB LP Indenture, as well as the due and punctual
performance and observance of all of the covenants contained in the new AMB LP
Indenture;
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(2)
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After giving effect to the transaction and treating any indebtedness which
became an obligation of AMB LP or any of AMB LP’s subsidiaries as a result of the
transaction as having been incurred by AMB LP or such subsidiary at the time of such
transaction, an event of default (or an event which, with notice or lapse of time or
both, would become an event of default) has not occurred under the new
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257
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AMB LP Indenture. Additionally, the transaction may not cause an event which, after
notice or a lapse of time, or both, would become an event of default; and
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(3)
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The continuing entity delivers an officers’ certificate and legal opinion
covering (1) and (2) above.
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The new AMB LP Indenture provides that AMB, as guarantor of a the AMB LP 3.250% 2015
Exchangeable Notes, and any other guarantor, will not, in any transaction or series of
transactions, consolidate with, or sell, lease, assign, transfer or otherwise convey all or
substantially all of its assets to, or merge with or into any other person unless:
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•
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either such guarantor is the continuing person or the successor person (if other
than such guarantor) is a corporation, partnership, limited liability company or other
entity organized and existing under the laws of the United States of America or a State
of the United States of America or the District of Columbia and expressly assumes such
guarantor’s obligations with respect to the AMB LP 3.250% 2015 Exchangeable Notes and
the observance of all of the covenants and conditions contained in the new AMB LP
Indenture and its guarantee;
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•
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immediately after giving effect to the transaction, no event of default, and no
event which, after notice or lapse of time, or both, would become an event of default,
shall have occurred and shall be continuing; and
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•
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such guarantor delivers to the Trustee an officers’ certificate and legal opinion
covering compliance with these conditions.
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In the event that such guarantor is not the continuing entity, then, for purposes of the
second bullet point above, the successor entity will be deemed to be such guarantor.
Any consolidation, merger, sale, lease, assignment, transfer or conveyance permitted above is
also subject to the condition precedent that the Trustee receive an officers’ certificate and
legal opinion to the effect that any such consolidation, merger, sale, lease, assignment, transfer
or conveyance, and the assumption by any successor corporation, complies with the provisions of
the new AMB LP Indenture and that all conditions precedent provided for in the new AMB LP
Indenture relating to such transaction have been complied with.
Covenants
This section describes covenants AMB LP makes in the new AMB LP Indenture, for the benefit of
the holders of the AMB LP 3.250% 2015 Exchangeable Notes.
Existence.
Except as permitted under “— Merger, Consolidation or Sale”, AMB LP will do or
cause to be done all things necessary to preserve and keep in full force and effect the existence,
rights, both charter and statutory, and franchises of AMB LP and its subsidiaries; provided,
however, that AMB LP will not be required to preserve any right or franchise if AMB LP determines
that the preservation of the right or franchise is no longer desirable in the conduct of AMB LP’s
business and that the loss of the right or franchise is not disadvantageous in any material respect
to the holders of the AMB LP 3.250% 2015 Exchangeable Notes.
Payment of taxes and other claims
. AMB LP will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon AMB LP or any subsidiary or upon its income, profits or property or
any subsidiary and all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon AMB LP’s property or any subsidiary; provided, however, that AMB LP will not
be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good faith by appropriate
proceedings.
Provision of financial information
. Whether or not AMB LP or AMB are subject to Section 13 or
15(d) of the Exchange Act, AMB LP and AMB will, to the extent permitted under the Exchange Act,
file with the SEC the
258
annual reports, quarterly reports and other documents which AMB LP and AMB would have been
required to file with the SEC pursuant to such Section 13 or 15(d) (the “Financial Statements”) if
AMB LP and AMB were so subject, such documents to be filed with the SEC on or prior to the
respective dates (the “Required Filing Dates”) by which AMB LP and AMB would have been required so
to file such documents if AMB LP and AMB were so subject.
AMB LP and AMB will also in any event (x) within 15 days of each Required Filing Date (i)
transmit by mail or electronic transmittal to all holders, as their names and addresses appear in
the security register, without cost to such Holders, copies of the annual reports and quarterly
reports which AMB LP and AMB are required to file or would have been required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act if AMB LP and AMB were subject to such
sections, and (ii) file with the Trustee copies of annual reports, quarterly reports and other
documents which AMB LP and AMB would have been required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act if AMB LP and AMB were subject to such sections and (y) if filing such
documents by AMB LP or AMB with the SEC is not permitted under the Exchange Act, promptly upon
written request and payment of the reasonable cost of duplication and delivery, supply copies of
such documents to any prospective holder.
Events of Default, Notice and Waiver
The new AMB LP Indenture provides that the following events are events of default with respect
to the AMB LP 3.250% 2015 Exchangeable Notes issued pursuant to it:
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(1)
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default in the payment of any installment of interest or additional amounts
payable on any AMB LP 3.250% 2015 Exchangeable Notes which continues for 30 days;
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(2)
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default in the payment of the principal or premium or make-whole amount, if
any, on any AMB LP 3.250% 2015 Exchangeable Notes at its maturity or redemption date;
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(3)
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default in the performance of any other of AMB LP’s covenants contained in the
new AMB LP Indenture, other than a covenant in the new AMB LP Indenture solely for the
benefit of another series of AMB LP Notes issued under the new AMB LP Indenture, which
continues for 60 days after written notice as provided in the new AMB LP Indenture;
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(4)
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default in the payment of an aggregate principal amount exceeding $50,000,000
under any bond, note or other evidence of indebtedness or any mortgage, indenture or
other instrument under which such indebtedness is issued or by which such indebtedness
is secured (or any such indebtedness of any of AMB LP’s subsidiaries, which AMB LP has
guaranteed), such default having occurred after the expiration of any applicable grace
period and having resulted in the acceleration of the maturity of such indebtedness,
but only if such indebtedness is not discharged or such acceleration is not rescinded
or annulled within ten days after written notice as provided in the new AMB LP
Indenture;
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(5)
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the entry by a court of competent jurisdiction of final judgments, orders or
decrees against AMB LP or any of AMB LP’s subsidiaries in an aggregate amount,
excluding amounts fully covered by insurance, in excess of $50,000,000 and such
judgments, orders or decrees remain undischarged, unstayed and unsatisfied in an
aggregate amount, excluding amounts fully covered by insurance, in excess of
$50,000,000 for a period of 60 consecutive days;
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(6)
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events of bankruptcy, insolvency or reorganization, or court appointment of a
receiver, liquidator or trustee for AMB LP or AMB or any significant subsidiary or for
all or substantially all of AMB LP’s or its significant subsidiary’s property;
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(7)
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failure by AMB LP to comply with its obligation to exchange the AMB LP 3.250%
2015 Exchangeable Notes into cash, shares of AMB common stock or a combination thereof,
as applicable, upon exercise of a holder’s exchange right, and such failure continues
for a period of ten days; and
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259
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(8)
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failure by AMB LP to issue a fundamental change notice when due, and such
failure continues for a period of two days.
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The term significant subsidiary means each of AMB LP’s significant subsidiaries, as defined in
Regulation S-X promulgated under the Securities Act.
If an event of default under the new AMB LP Indenture with respect to the AMB LP 3.250% 2015
Exchangeable Notes occurs and is continuing, then in every such case, unless the principal of the
AMB LP 3.250% 2015 Exchangeable Notes shall already have become due and payable, the Trustee or the
holders of not less than 25% in principal amount of the AMB LP 3.250% 2015 Exchangeable Notes may
declare the principal and the make-whole amount on the AMB LP 3.250% 2015 Exchangeable Notes to be
due and payable immediately by written notice to AMB LP that payment of the AMB LP 3.250% 2015
Exchangeable Notes is due, and to the Trustee if given by the holders. However, at any time after
such a declaration of acceleration with respect to the AMB LP 3.250% 2015 Exchangeable Notes has
been made, but before a judgment or decree for payment of the money due has been obtained by the
Trustee, the holders of not less than a majority in principal amount of the AMB LP 3.250% 2015
Exchangeable Notes may rescind and annul such declaration and its consequences if AMB LP shall have
deposited with the Trustee all required payments of the principal of, and premium or make-whole
amount and interest on, the AMB LP 3.250% 2015 Exchangeable Notes, plus fees, expenses,
disbursements and advances of the Trustee and all events of default, other than the nonpayment of
accelerated principal, and the make-whole amount or interest, with respect to AMB LP 3.250% 2015
Exchangeable Notes have been cured or waived as provided in the new AMB LP Indenture. The new AMB
LP Indenture also provides that the holders of not less than a majority in principal amount of the
AMB LP 3.250% 2015 Exchangeable Notes may waive any past default with respect to the AMB LP 3.250%
2015 Exchangeable Notes and its consequences, except a default in the payment of the principal of,
or premium or make-whole amount or interest payable on the AMB LP 3.250% 2015 Exchangeable Notes or
in respect of a covenant or provision contained in the new AMB LP Indenture that cannot be modified
or amended without the consent of the holder of each outstanding AMB LP 3.250% 2015 Exchangeable
Note affected by the proposed modification or amendment.
The Trustee is required to give notice to the holders of the AMB LP 3.250% 2015 Exchangeable
Notes within 90 days of a default under the new AMB LP Indenture known to the Trustee, unless the
default has been cured or waived; provided, however, that the Trustee may withhold notice to the
holders of the AMB LP 3.250% 2015 Exchangeable Notes of any default with respect to such AMB LP
3.250% 2015 Exchangeable Notes, except a default in the payment of the principal of, or premium or
make-whole amount, if any, or interest payable on the AMB LP 3.250% 2015 Exchangeable Notes if the
responsible officers of the Trustee consider such withholding to be in the interest of such
holders.
The new AMB LP Indenture provides that no holders of the AMB LP 3.250% 2015 Exchangeable Notes
may institute any proceedings, judicial or otherwise, with respect to the new AMB LP Indenture or
for any remedy which the new AMB LP Indenture provides, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to institute proceedings in
respect of an event of default from the holders of not less than 25% in principal amount of the
outstanding AMB LP 3.250% 2015 Exchangeable Notes, as well as an offer of reasonable indemnity.
This provision will not prevent, however, any holder of the AMB LP 3.250% 2015 Exchangeable Notes
from instituting suit for the enforcement of payment of the principal of, and premium or make-whole
amount, or interest on the AMB LP 3.250% 2015 Exchangeable Notes at the due date of the AMB LP
3.250% 2015 Exchangeable Notes.
Subject to provisions in the new AMB LP Indenture relating to its duties in case of default,
the Trustee is under no obligation to exercise any of its rights or powers under the new AMB LP
Indenture at the request or direction of any holders of any series of AMB LP 3.250% 2015
Exchangeable Notes then outstanding under the new AMB LP Indenture, unless such holders shall have
offered to the Trustee reasonable security or indemnity. The holders of not less than a majority in
principal amount of the AMB LP 3.250% 2015 Exchangeable Notes of a series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or of exercising any trust or power conferred upon the Trustee with respect to that
series. However, the Trustee may refuse to follow any direction which is in conflict with any law
or the new AMB LP Indenture, which may involve the Trustee in personal liability or which may be
unduly prejudicial to the holders of the AMB LP 3.250% 2015 Exchangeable Notes not joining in the
proceeding.
260
Within 120 days after the close of each fiscal year, AMB LP must deliver to the Trustee a
certificate, signed by one of several specified officers, stating whether or not such officer has
knowledge of any default under the new AMB LP Indenture and, if so, specifying each such default
and the nature and status of the default.
Modification of the New AMB LP Indenture
Modifications and amendments of the new AMB LP Indenture may be made with the consent of the
holders of not less than a majority in principal amount of all outstanding debt securities,
including the AMB LP 3.250% 2015 Exchangeable Notes, which are affected by such modification or
amendment; provided, however, that no such modification or amendment may, without the consent of
the holder of each debt security affected by the modification or amendment:
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(1)
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change the stated maturity of the principal of, or premium or make-whole
amounts, if any, or any installment of principal of or interest or additional amounts
payable on, any such debt security;
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(2)
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reduce the principal amount of, or the rate or amount of interest on, or any
premium or make-whole amounts payable on redemption of, or any additional amounts
payable with respect to, any such debt security, or reduce the amount of principal of
an original issue discount security or make-whole amount, if any, that would be due and
payable upon declaration of acceleration of the maturity of the security or would be
provable in bankruptcy, or adversely affect any right of repayment of the holder of any
such debt security;
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(3)
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change the place of payment, or the coin or currency, for payment of principal
of, and premium or make-whole amounts, if any, or interest on, or any additional
amounts payable with respect to, any such debt security;
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(4)
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impair the right to institute suit for the enforcement of any payment on or
with respect to any such debt security;
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(5)
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reduce the above-stated percentage of outstanding debt securities of any
series necessary to modify or amend the new AMB LP Indenture, to waive compliance with
a provisions of the debt security or defaults and consequences under the new AMB LP
Indenture or to reduce the quorum or voting requirements set forth in the new AMB LP
Indenture;
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(6)
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modify any of the provisions relating to modification of the new AMB LP
Indenture or any of the provisions relating to the waiver of past defaults or
covenants, except to increase the required percentage to effect such action or to
provide that other provisions may not be modified or waived without the consent of the
holder of the affected debt security; or
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(7)
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release any guarantor from any of its obligations under its guarantee or the
new AMB LP Indenture, except in accordance with the terms of the new AMB LP Indenture.
|
In addition, without the consent of each holder of an outstanding AMB LP 3.250% 2015
Exchangeable Note affected, no amendment may make any change that adversely affects the exchange
rights of AMB LP 3.250% 2015 Exchangeable Notes, or reduce the fundamental change repurchase price
or redemption price of any AMB LP 3.250% 2015 Exchangeable Note or amend or modify in any manner
adverse to the holders of AMB LP 3.250% 2015 Exchangeable Notes AMB LP’s obligation to make such
payments or the provisions relating to redemption or repurchase of the AMB LP 3.250% 2015
Exchangeable Notes, whether through an amendment or waiver of provisions in the covenants,
definitions or otherwise.
The holders of not less than a majority in principal amount of outstanding debt securities of
any series have the right to waive AMB LP’s compliance with covenants in the new AMB LP Indenture
applicable to such series of debt securities other than those covenants which require the consent
of each affected holder of debt securities with respect to modifications or amendments to such
covenant.
261
Modifications and amendments of the new AMB LP Indenture may be made by AMB LP and the Trustee
without the consent of any holder of debt securities for any of the following purposes:
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(1)
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to evidence the succession of another person to AMB LP as obligor or any
guarantor under the new AMB LP Indenture;
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(2)
|
|
to add to AMB LP’s or any guarantor’s covenants for the benefit of the
holders of all or any series of debt securities or to surrender any right or power
conferred upon AMB LP or any guarantor in the new AMB LP Indenture;
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(3)
|
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to add events of default for the benefit of the holders of all or any series
of debt securities;
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(4)
|
|
to add to or change any of the provisions of the new AMB LP Indenture to such
extent as shall be necessary to permit or facilitate the issuance of debt securities in
bearer form, registrable or not registrable as to principal, and with or without
interest coupons, or to permit or facilitate the issuance of securities in
uncertificated form;
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(5)
|
|
to add to, change or eliminate any of the provisions of the new AMB LP
Indenture in respect of one or more series of securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any security of any
series created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (B) modify the rights of the holder of any such
security with respect to such provision or (ii) shall become effective only when there
is no such security outstanding;
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(6)
|
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to secure debt securities or any guarantees;
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(7)
|
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to establish the form or terms of debt securities of any series;
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(8)
|
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to provide for the acceptance of appointment by a successor trustee or
facilitate the administration of the trust under the new AMB LP Indenture by more than
one trustee;
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(9)
|
|
to cure any ambiguity, defect or inconsistency in the new AMB LP Indenture or
to make any other changes, provided that in each case, the action shall not adversely
affect the interests of holders of debt securities or related guarantees of any series
in any material respect;
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(10)
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to close the new AMB LP Indenture with respect to the authentication and
delivery of additional series of debt securities or any guarantees or to qualify, or
maintain qualification of, the new AMB LP Indenture under the Trust Indenture Act; or
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(11)
|
|
to supplement any of the provisions of the new AMB LP Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of such debt
securities, provided that the action shall not adversely affect the interests of the
holders of the debt securities or related guarantees of any series in any material
respect.
|
The new AMB LP Indenture provides that in determining whether the holders of the requisite
principal amount of outstanding debt securities of a series have given any request, demand,
authorization, direction, notice, consent or waiver under the new AMB LP Indenture or whether a
quorum is present at a meeting of holders of debt securities:
|
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(1)
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the principal amount of an original issue discount security that will be
deemed to be outstanding shall be the amount of the principal of the security that
would be due and payable as of the date of the determination upon declaration of
acceleration of the maturity of the debt security;
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(2)
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the principal amount of a debt security denominated in a foreign currency
that will be deemed outstanding shall be the United States dollar equivalent,
determined on the issue date for the debt
|
262
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security, of the principal amount, or, in the case of an original issue discount
security, the United States dollar equivalent on the issue date of the debt security of
the amount determined as provided in (1) above;
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(3)
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the principal amount of an indexed security that shall be deemed outstanding
will be the principal face amount of the indexed security at original issuance, unless
otherwise provided with respect to the indexed security pursuant to Section 301 of the
new AMB LP Indenture; and
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(4)
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debt securities owned by AMB LP or any other obligor upon the debt securities
or any of AMB LP’s affiliates or of the other obligor will be disregarded.
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The new AMB LP Indenture contains provisions for convening meetings of the holders debt
securities of a series. A meeting may be called at any time by the Trustee, and also, upon request,
by AMB LP or the holders of at least 10% in principal amount of the outstanding debt securities of
that series, in any such case upon notice given as provided in the new AMB LP Indenture.
Except for any consent that must be given by the holder of each debt security affected by
modifications and amendments of the new AMB LP Indenture, any resolution presented at a meeting or
at an adjourned meeting duly reconvened, at which a quorum is present, may be adopted by the
affirmative vote of the holders of a majority in principal amount of the outstanding debt
securities of that series; provided, however, that, except as referred to above, any resolution
with respect to any request, demand, authorization, direction, notice, consent, waiver or other
action that may be made, given or taken by the holders of a specified percentage, which is less
than a majority, in principal amount of the outstanding debt securities of a series may be adopted
at a meeting or adjourned meeting duly reconvened at which a quorum is present by the affirmative
vote of the holders of the specified percentage in principal amount of the outstanding debt
securities of that series. Any resolution passed or decision taken at any meeting of holders of
debt securities of any series duly held in accordance with the new AMB LP Indenture will be binding
on all holders of debt securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding debt securities of a series; provided, however, that if any
action is to be taken at the meeting with respect to a consent or waiver which may be given by the
holders of not less than a specified percentage in principal amount of the outstanding debt
securities of a series, the persons holding or representing the specified percentage in principal
amount of the outstanding debt securities of that series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a meeting of holders
of debt securities of any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the new AMB LP Indenture expressly provides may be
made, given or taken by the holders of a specified percentage in principal amount of all
outstanding debt securities affected by the action, or of the holders of that series and one or
more additional series:
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(1)
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there shall be no minimum quorum requirement for the meeting; and
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(2)
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the principal amount of the outstanding debt securities of that series that
vote in favor of the request, demand, authorization, direction, notice, consent, waiver
or other action will be taken into account in determining whether the request, demand,
authorization, direction, notice, consent, waiver or other action has been made, given
or taken under the new AMB LP Indenture.
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Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by the new AMB LP Indenture to be given or taken by a specified percentage in principal
amount of the holders of any or all series of debt securities may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by the specified percentage of
holders in person or by agent duly appointed in writing; and, except as otherwise expressly
provided in the new AMB LP Indenture, the action will become effective when the instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any agent will be sufficient for any purpose of the new AMB LP Indenture and, subject to
the new AMB LP Indenture provisions relating to the appointment of any such agent, conclusive in
favor of the Trustee and AMB LP, if made in the manner specified above.
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Discharge
AMB LP may discharge various obligations to holders of AMB LP 3.250% 2015 Exchangeable Notes
that have not already been delivered to the Trustee for cancellation and that either have become
due and payable or will become due and payable within one year, or that are scheduled for
redemption within one year. The discharge will be completed by irrevocably depositing with the
Trustee the funds needed to pay the principal, any make-whole amounts, interest and additional
amounts payable to the date of deposit or to the date of maturity, as the case may be.
Registration and Transfer
Subject to limitations imposed upon AMB LP 3.250% 2015 Exchangeable Notes issued in book-entry
form, the AMB LP 3.250% 2015 Exchangeable Notes of any series will be exchangeable for other AMB LP
3.250% 2015 Exchangeable Notes of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of the AMB LP 3.250% 2015 Exchangeable
Notes at the corporate trust office of the Trustee referred to above. In addition, subject to the
limitations imposed upon AMB LP 3.250% 2015 Exchangeable Notes issued in book-entry form, the AMB
LP 3.250% 2015 Exchangeable Notes may be surrendered for exchange or registration of transfer of
the security at the corporate trust office of the Trustee referred to above. Every AMB LP 3.250%
2015 Exchangeable Note surrendered for registration of transfer or exchange will be duly endorsed
or accompanied by a written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of the AMB LP 3.250% 2015 Exchangeable Notes, but AMB LP may
require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. AMB LP may at any time designate a transfer agent, in addition to the
Trustee, with respect to any series of AMB LP 3.250% 2015 Exchangeable Notes. If AMB LP has
designated such a transfer agent or transfer agents, AMB LP may at any time rescind the designation
of any such transfer agent or approve a change in the location at which any such transfer agent
acts, except that AMB LP will be required to maintain a transfer agent in each place of payment for
the series.
Neither AMB LP nor the Trustee will be required to:
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issue, register the transfer of or exchange AMB LP 3.250% 2015 Exchangeable
Notes during a period beginning at the opening of business 15 days before any selection
of AMB LP 3.250% 2015 Exchangeable Notes to be redeemed and ending at the close of
business on the day of mailing of the relevant notice of redemption;
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(2)
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register the transfer of or exchange any AMB LP 3.250% 2015 Exchangeable Note,
or portion of security, called for redemption, except the unredeemed portion of any AMB
LP 3.250% 2015 Exchangeable Note being redeemed in part; or
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(3)
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issue, register the transfer of or exchange any AMB LP 3.250% 2015
Exchangeable Note which has been surrendered for repayment at the option of the holder,
except the portion, if any, of such AMB LP 3.250% 2015 Exchangeable Note not to be so
repaid.
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Global Securities
DTC, New York, New York, will act as securities depository for the AMB LP 3.250% 2015
Exchangeable Notes. The AMB LP 3.250% 2015 Exchangeable Notes will be issued as fully registered
securities registered in the name of Cede & Co., which is DTC’s nominee. Fully registered global
notes, without interest coupons, will be issued with respect to the AMB LP 3.250% 2015 Exchangeable
Notes.
Redemption notices will be sent to DTC. If less than all of the AMB LP 3.250% 2015
Exchangeable Notes within a series are being redeemed, DTC’s practice is to determine by lot the
amount of the interest of each direct participant in the series to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the AMB LP 3.250% 2015
Exchangeable Notes. Under its usual procedures, DTC mails an omnibus proxy to AMB LP as soon as
possible after the record
264
date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those direct
participants to whose accounts the notes are credited on the record date, which are identified in a
listing attached to the omnibus proxy.
AMB LP may, at any time, decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, certificates representing the
AMB LP 3.250% 2015 Exchangeable Notes will be printed and delivered.
You may hold your beneficial interests in the global securities directly through DTC if you
have an account at DTC, or indirectly through organizations that have accounts at DTC.
What is a global security?
A global security is a special type of indirectly held security in
the form of a certificate held by a depository for the investors in a particular issue of
securities. The AMB LP 3.250% 2015 Exchangeable Notes will be issued in the form of global
securities, and the ultimate beneficial owners can only be indirect holders. AMB LP does this by
requiring that the global securities be registered in the name of a financial institution AMB LP
selects and by requiring that the AMB LP 3.250% 2015 Exchangeable Notes included in the global
securities not be transferred to the name of any other direct holder unless the special
circumstances described below occur. The financial institution that acts as the sole direct holder
of the global securities is called the “Depository.” Any person wishing to own an AMB LP 3.250%
2015 Exchangeable Note must do so indirectly by virtue of an account with a broker, bank or other
financial institution that in turn has an account with the Depository.
Except as described below, each global security may be transferred, in whole and not in part,
only to DTC, to another nominee of DTC or to a successor of DTC or its nominee. Beneficial
interests in global securities will be represented, and transfers of such beneficial interests will
be made, through accounts of financial institutions acting on behalf of beneficial owners either
directly as account holders, or indirectly through account holders, at DTC.
Special investor considerations for global securities
. As an indirect holder, an investor’s
rights relating to global securities will be governed by the account rules of the investor’s
financial institution and of the Depository, DTC, as well as general laws relating to securities
transfers. AMB LP does not recognize this type of investor as a holder of AMB LP 3.250% 2015
Exchangeable Notes and instead deals only with DTC, the Depository that holds global securities.
An investor in global securities should be aware that because the AMB LP 3.250% 2015
Exchangeable Notes are issued only in the form of global securities:
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The investor cannot get AMB LP 3.250% 2015 Exchangeable Notes registered in his or
her own name.
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The investor cannot receive physical certificates for his or her interest in the AMB
LP 3.250% 2015 Exchangeable Notes.
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The investor will be a “street name” holder and must look to his or her own bank or
broker for payments on the AMB LP 3.250% 2015 Exchangeable Notes and protection of his
or her legal rights relating to the AMB LP 3.250% 2015 Exchangeable Notes.
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The investor may not be able to sell interests in the AMB LP 3.250% 2015
Exchangeable Notes to some insurance companies and other institutions that are required
by law to own their securities in the form of physical certificates.
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DTC’s policies will govern payments, transfers, exchanges and other matters relating
to the investor’s interest in the global notes. AMB LP and the Trustee have no
responsibility for any aspect of DTC’s actions or for its records of ownership
interests in the global securities. AMB LP and the Trustee also do not supervise DTC in
any way.
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Exchanges among the global securities
. Any beneficial interest in one of the global securities
that is transferred to a person who takes delivery in the form of an interest in another global
security will, upon transfer, cease to be an interest in such global note and become an interest in
the other global security and, accordingly, will
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thereafter be subject to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other global security for as long as it remains such an interest.
Certain book-entry procedures for the global securities.
The descriptions of the operations
and procedures of DTC, Euroclear and Clearstream set forth below are provided solely as a matter of
convenience. These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither AMB LP nor the
dealer managers take any responsibility for these operations or procedures, and investors are urged
to contact the relevant system or its participants directly to discuss these matters.
Beneficial interests in the global securities will be represented through book-entry accounts
of financial institutions acting on behalf of beneficial owners as direct and indirect participants
in DTC. Investors may elect to hold interests in the global securities through DTC either directly
if they are participants in DTC or indirectly through organizations that are participants in DTC.
Clearstream
. Clearstream is incorporated under the laws of the Grand Duchy of Luxembourg as a
professional depositary. Clearstream holds securities for its participating organizations
(“Clearstream Participants”) and facilitates the clearance and settlement of securities
transactions between Clearstream Participants through electronic book-entry changes in accounts of
Clearstream Participants, thereby eliminating the need for physical movement of certificates.
Clearstream provides Clearstream Participants with, among other things, services for safekeeping,
administration, clearance and establishment of internationally traded securities and securities
lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a
professional depositary, Clearstream is subject to regulation by the Luxembourg Monetary Institute.
Clearstream Participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations, and may include the dealer mangers. Indirect access to Clearstream is
also available to others, such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Clearstream Participant either directly or indirectly.
Distributions with respect to AMB LP 3.250% 2015 Exchangeable Notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its
rules and procedures to the extent received by a United States depositary for Clearstream.
Euroclear
. Euroclear was created in 1968 to hold securities for participants of Euroclear
(“Euroclear Participants”) and to clear and settle transactions between Euroclear Participants
through simultaneous electronic book-entry delivery against payment, thereby eliminating the need
for physical movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including securities lending and
borrowing and interfaces with domestic markets in several markets in several countries. Euroclear
is operated by Euroclear Bank S.A./N.V. (the “Euroclear Operator”), under contract with Euroclear
Clearance Systems S.C., a Belgian cooperative corporation (the “Cooperative”). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear
cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and other professional
financial intermediaries and may include the dealer managers. Indirect access to Euroclear is also
available to other firms that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is regulated and examined by the Belgian Banking Commission.
DTC
. DTC has advised AMB LP that it is:
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(1)
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a limited-purpose trust company organized under the New York State Banking Law;
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(2)
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a “banking organization” within the meaning of the New York State Banking Law;
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(3)
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a member of the Federal Reserve System;
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(4)
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a “clearing corporation” within the meaning of the New York Uniform
Commercial Code, as amended; and
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(5)
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a “clearing agency” registered pursuant to Section 17A of the Exchange Act.
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DTC was created to hold securities for its participants and facilitates the clearance and
settlement of securities transactions between participants through electronic book-entry changes to
the accounts of its participants, thereby eliminating the need for physical transfer and delivery
of certificates. DTC’s participants include securities brokers and dealers, banks and trust
companies, clearing corporations and certain other organizations. Indirect access to DTC’s system
is also available to other entities such as banks, brokers, dealers and trust companies
(collectively, the “Indirect Participants”) that clear through or maintain a custodial relationship
with a participant, either directly or indirectly. Investors who are not participants may
beneficially own securities held by or on behalf of DTC only through participants or Indirect
Participants.
AMB LP expects that pursuant to procedures established by DTC (1) upon deposit of each global
security, DTC will credit the accounts of participants with an interest in the global security and
(2) ownership of the AMB LP 3.250% 2015 Exchangeable Notes will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by DTC (with respect to the
interests of participants) and the records of participants and the Indirect Participants (with
respect to the interests of persons other than participants).
The laws of some jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Accordingly, the ability to transfer interests in
the AMB LP 3.250% 2015 Exchangeable Notes represented by a global security to such persons may be
limited. In addition, because DTC can act only on behalf of its participants, who in turn act on
behalf of persons who hold interests through participants, the ability of a person having an
interest in AMB LP 3.250% 2015 Exchangeable Notes represented by a global security to pledge or
transfer such interest to persons or entities that do not participate in DTC’s system, or to
otherwise take actions in respect of such interest, may be affected by the lack of a physical
definitive security in respect of such interest.
So long as DTC or its nominee is the registered owner of a global security, DTC or such
nominee, as the case may be, will be considered the sole owner or holder of the AMB LP 3.250% 2015
Exchangeable Notes represented by the global note for all purposes under the new AMB LP Indenture.
Owners of beneficial interests in a global security will not be entitled to have AMB LP 3.250% 2015
Exchangeable Notes represented by such global security registered in their names, will not receive
or be entitled to receive physical delivery of certificated notes, and will not be considered the
owners or holders thereof under the new AMB LP Indenture for any purpose, including with respect to
the giving of any direction, instruction or approval to the Trustee thereunder. Accordingly, each
holder owning a beneficial interest in a global security must rely on the procedures of DTC and, if
such holder is not a participant or an Indirect Participant, on the procedures of the participant
through which such holder owns its interest, to exercise any rights of a holder of AMB LP 3.250%
2015 Exchangeable Notes under the new AMB LP Indenture or such global security. AMB LP understands
that under existing industry practice, in the event that AMB LP requests any action of holders of
AMB LP 3.250% 2015 Exchangeable Notes, or a holder that is an owner of a beneficial interest in a
global security desires to take any action that DTC, as the holder of such global security, is
entitled to take, DTC would authorize the participants to take such action and the participants
would authorize holders owning through such participants to take such action or would otherwise act
upon the instruction of such holders. Neither AMB LP nor the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on account of AMB LP 3.250%
2015 Exchangeable Notes by DTC, or for maintaining, supervising or reviewing any records of DTC
relating to such AMB LP 3.250% 2015 Exchangeable Notes.
Payments with respect to the principal of, and premium, if any, additional interest, if any,
and interest on, any AMB LP 3.250% 2015 Exchangeable Notes represented by a global security
registered in the name of DTC or its nominee on the applicable record date will be payable by the
Trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of
the global note representing such AMB LP 3.250% 2015 Exchangeable Notes under the new AMB LP
Indenture. Under the terms of the new AMB LP Indenture, AMB LP and the Trustee may treat the
persons in whose names the AMB LP 3.250% 2015 Exchangeable Notes, including the global securities,
are registered as the owners thereof for the purpose of receiving payment thereon and for any and
all
267
other purposes whatsoever. Accordingly, neither AMB LP nor the Trustee has or will have any
responsibility or liability for the payment of such amounts to owners of beneficial interests in a
global security (including principal, premium, if any, additional interest, if any, and interest).
Payments by the participants and the Indirect Participants to the owners of beneficial interests in
a global security will be governed by standing instructions and customary industry practice and
will be the responsibility of the participants or the Indirect Participants and DTC.
Transfers between participants in DTC will be effected in accordance with DTC’s procedures,
and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream
will be effected in the ordinary way in accordance with their respective rules and operating
procedures. Subject to compliance with the transfer restrictions applicable to the AMB LP 3.250%
2015 Exchangeable Notes, cross-market transfers between the participants in DTC, on the one hand,
and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in
accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its
respective depositary; however, such cross-market transactions will require delivery of
instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines (Brussels, Belgium
time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets
its settlement requirements, deliver instructions to DTC to take action to effect final settlement
on its behalf by delivering or receiving interests in the relevant global securities in DTC, and
making or receiving payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions
directly to the depositaries for Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or Clearstream
participant purchasing an interest in a global security from a participant in DTC will be credited,
and any such crediting will be reported to the relevant Euroclear or Clearstream participant,
during the securities settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or
Clearstream as a result of sales of interests in a global security by or through a Euroclear or
Clearstream participant to a participant in DTC will be received with value on the settlement date
of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the
business day for Euroclear or Clearstream following DTC’s settlement date.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate
transfers of interests in global securities among participants in DTC, Euroclear and Clearstream,
they are under no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. Neither AMB LP nor the Trustee will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their respective
participants or indirect participants of their respective obligations under the rules and
procedures governing their operations.
Links have been established among DTC, Clearstream and Euroclear to facilitate the initial
issuance of the AMB LP 3.250% 2015 Exchangeable Notes sold outside of the United States and
cross-market transfers of the notes associated with secondary market trading. Although DTC,
Clearstream and Euroclear have agreed to the procedures provided below in order to facilitate
transfers, they are under no obligation to perform these procedures, and these procedures may be
modified or discontinued at any time.
Clearstream and Euroclear will record the ownership interests of their participants in much
the same way as DTC, and DTC will record the total ownership of each of the United States agents of
Clearstream and Euroclear, as participants in DTC. When AMB LP 3.250% 2015 Exchangeable Notes are
to be transferred from the account of a DTC participant to the account of a Clearstream participant
or a Euroclear participant, the purchaser must send instructions to Clearstream or Euroclear
through a participant at least one day prior to settlement. Clearstream or Euroclear, as the case
may be, will instruct its United States agent to receive AMB LP 3.250% 2015 Exchangeable Notes
against payment. After settlement, Clearstream or Euroclear will credit its participant’s account.
Credit for the notes will appear on the next day (European time).
Because settlement is taking place during New York business hours, DTC participants will be
able to employ their usual procedures for sending AMB LP 3.250% 2015 Exchangeable Notes to the
relevant United States agent acting for the benefit of Clearstream or Euroclear participants. The
sale proceeds will be available to the DTC seller on the settlement date. As a result, to the DTC
participant, a cross-market transaction will settle no
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differently than a trade between two DTC participants. When a Clearstream or Euroclear participant wishes
to transfer AMB LP 3.250% 2015 Exchangeable Notes to a DTC participant, the seller will be required
to send instructions to Clearstream or Euroclear through a participant at least one business day
prior to settlement. In these cases, Clearstream or Euroclear will instruct its United States agent
to transfer these AMB LP 3.250% 2015 Exchangeable Notes against payment for them. The payment will
then be reflected in the account of the Clearstream or Euroclear participant the following day,
with the proceeds back valued to the value date, which would be the preceding day, when settlement
occurs in New York, if settlement is not completed on the intended value date, that is, the trade
fails, proceeds credited to the Clearstream or Euroclear participant’s account will instead be
valued as of the actual settlement date.
You should be aware that you will only be able to make and receive deliveries, payments and
other communications involving the AMB LP 3.250% 2015 Exchangeable Notes through Clearstream and
Euroclear on the days when those clearing systems are open for business. Those systems may not be
open for business on days when banks, brokers and other institutions are open for business in the
United States. In addition, because of time zone differences there may be problems with completing
transactions involving Clearstream and Euroclear on the same business day as in the United States.
Definitive securities.
A global security is exchangeable for definitive securities in
registered certificated form (“Certificated Securities”) if:
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DTC (a) notifies the issuer that it is unwilling or unable to continue as
depositary for the global securities or (b) has ceased to be a clearing agency
registered under the Exchange Act, and in each case the issuer fails to appoint a
successor depositary;
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(2)
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the issuer, at its option, notifies the Trustee in writing that it elects to
cause the issuance of the Certificated Securities; or
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(3)
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there shall have occurred and be continuing a default or event of default
with respect to the AMB LP 3.250% 2015 Exchangeable Notes.
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In all cases, Certificated Securities delivered in exchange for any global security or
beneficial interests in global securities will be registered in the names, and issued in any
approved denominations, requested by or on behalf of DTC (in accordance with its customary
procedures).
Settlement and Payment
Transfers between participants in DTC will be effected in the ordinary way in accordance with
DTC rules and will be settled in same-day funds. All payments of principal and interest will be
made by AMB LP in immediately available funds or the equivalent, so long as DTC continues to make
its Same-Day Funds Settlement System available to it.
No Personal Liability
Except as provided in the new AMB LP Indenture, no past, present or future trustee, officer,
employee, stockholder or partner of AMB LP or AMB or any successor to AMB LP or AMB will have any
liability for any of AMB LP’s or AMB’s obligations under the AMB LP 3.250% 2015 Exchangeable Notes
or the new AMB LP Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of AMB LP 3.250% 2015 Exchangeable Notes by accepting
the AMB LP 3.250% 2015 Exchangeable Notes waives and releases all such liability. The waiver and
release are part of the consideration for the issue of AMB LP 3.250% 2015 Exchangeable Notes.
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Trustee
U.S. Bank National Association will be the trustee, registrar, exchange agent, bid
solicitation agent and paying agent. Under the new AMB LP Indenture, the Trustee may resign or be
removed with respect to the AMB LP 3.250% 2015 Exchangeable Notes, and a successor trustee may be
appointed to act with respect to the AMB LP 3.250% 2015 Exchangeable Notes. If an event of default
occurs and is continuing, the Trustee will be required to use the degree of care and skill of a
prudent man in the conduct of his own affairs. The Trustee will become obligated to exercise any
of its powers under the new AMB LP Indenture at the request of any of the holders of any AMB LP
3.250% 2015 Exchangeable Notes only after those holders have offered the Trustee indemnity
satisfactory to it. If the Trustee becomes one of a creditor of AMB LP or AMB, it will be subject
to limitations on its rights to obtain payment of claims or to realize on some property received
for any such claim, as security or otherwise. The Trustee is permitted to engage in other
transactions with AMB LP and AMB. If, however, it acquires any conflicting interest, it must
eliminate that conflict or resign.
The new AMB LP Indenture provides that there may be more than one trustee, each with respect
to one or more series of debt securities. Any trustee under the new AMB LP Indenture may resign or
be removed with respect to one or more series of debt securities, and a successor trustee may be
appointed to act with respect to the series. In the event that two or more persons are acting as
trustee with respect to different series of debt securities, each such trustee will be a trustee of
a trust under the new AMB LP Indenture separate and apart from the trust administered by any other
trustee. Except as otherwise indicated in this prospectus, any action described in this prospectus
to be taken by the trustee may be taken by each such trustee with respect to, and only with respect
to, the one or more series of debt securities for which it is trustee under the new AMB LP
Indenture.
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DESCRIPTION OF AMB CAPITAL STOCK
The following summary of the terms of AMB capital stock is not complete and is qualified by
reference to the AMB charter, including any articles supplementary for AMB preferred stock, and the
AMB bylaws. You should read these documents for complete information on AMB capital stock. The AMB
charter, including any articles supplementary for AMB preferred stock, and the AMB bylaws are
exhibits to the registration statement of which this prospectus is a part. AMB files instruments
that define the rights of holders of its capital stock as exhibits to its annual reports on Form
10-K and quarterly reports on Form 10-Q filed with the SEC. Also, from time to time AMB might file
an amendment to these documents or a new instrument that defines the rights of holders of its
capital stock as an exhibit to a current report on Form 8-K filed with the SEC. See “Where You Can
Find More Information.”
The description of capital stock in this section applies to the capital stock of the combined
company after the Merger.
Shares Authorized
AMB is currently authorized under its charter to issue an aggregate of 600 million shares of
capital stock, consisting of 500 million shares of common stock, $0.01 par value per share, and 100
million shares of preferred stock, $0.01 par value per share, of which 2,300,000 shares are
classified as Series L Cumulative Redeemable Preferred Stock (“AMB Series L preferred stock”),
2,300,000 shares are classified as Series M Cumulative Redeemable Preferred Stock (“AMB Series M
preferred stock”), 3,000,000 shares are classified as Series O Cumulative Redeemable Preferred
Stock (“AMB Series O preferred stock”) and 2,000,000 shares are classified as Series P Cumulative
Redeemable Preferred Stock (“AMB Series P preferred stock”).
Shares Outstanding
As
of May 2, 2011, there were:
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169,576,043 outstanding shares of AMB common stock;
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2,000,000 outstanding shares of AMB Series L preferred stock;
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2,300,000 outstanding shares of AMB Series M preferred stock;
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3,000,000 outstanding shares of AMB Series O preferred stock; and
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2,000,000 outstanding shares of AMB Series P preferred stock.
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All outstanding shares of AMB common stock are fully paid and non-assessable. Following the
Merger, it is expected that there will be:
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approximately 424,244,115 outstanding shares of AMB common stock;
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2,000,000 outstanding shares of the AMB Series L preferred stock;
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2,300,000 outstanding shares of AMB Series M preferred stock;
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3,000,000 outstanding shares of AMB Series O preferred stock;
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2,000,000 outstanding shares of AMB Series P preferred stock;
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2,000,000 outstanding shares of AMB Series Q preferred stock;
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5,000,000 outstanding shares of AMB Series R preferred stock; and
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5,000,000 outstanding shares of AMB Series S preferred stock.
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AMB Common Stock
Preemptive Rights
AMB common stock has no preemptive rights.
Dividend Rights
Subject to preferences that may be applicable to any outstanding preferred stock, the holders
of AMB common stock are entitled to dividends when, as and if authorized by the AMB board of
directors and declared by AMB out of funds legally available for that purpose.
Voting Rights
Holders of AMB common stock are entitled to one vote per share on each matter submitted for
their vote at any meeting of AMB stockholders for each share of AMB common stock held as of the
record date for the meeting. Holders of AMB common stock are not permitted to cumulate their votes
for the election of directors. The AMB board of directors is not classified.
Liquidation Preference
In the event that AMB is liquidated, dissolved or wound up, the holders of AMB common stock
will be entitled to a pro rata share in any distribution to AMB stockholders, but only after
satisfaction of all of the liabilities of AMB and of the prior rights of any outstanding class or
series of AMB stock.
Sinking Fund
AMB common stock does not have the benefit of any retirement or sinking fund.
Listing
AMB common stock is traded on the NYSE under the symbol “AMB.” Following completion of the
Topco merger, the shares of common stock of the combined company will be traded on the NYSE under
the symbol “PLD.”
Ownership Limitation
To help AMB maintain its qualification as a REIT, among other purposes, the AMB charter
provides that, subject to certain exceptions, no holder may own (including beneficial or
constructive ownership) in excess of 9.8% (by value or number of shares, whichever is more
restrictive) of AMB’s common stock. The AMB board of directors may waive the ownership limits under
certain circumstances. The AMB charter provides that shares of common stock acquired or held in
excess of the ownership limit will be transferred to a trust for the benefit of a designated
charitable beneficiary, and that any person who acquires shares of AMB common stock in violation of
the ownership limit will not be entitled to any dividends on the shares or be entitled to vote the
shares or receive any proceeds from the subsequent sale of the shares in excess of the lesser of
the price paid for the shares or the amount realized from the sale. A transfer of shares in
violation of the limit may be void under certain circumstances.
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New AMB Preferred Stock to be Issued in Connection with the Topco Merger
Upon completion of the Merger, (i) each outstanding ProLogis Series C preferred share will be
converted into one share of AMB Series Q preferred stock, (ii) each outstanding ProLogis Series F
preferred share will be converted into one share of AMB Series R preferred stock and (iii) each
outstanding ProLogis Series G preferred share will be converted into one share of AMB Series S
preferred stock. The “new AMB preferred stock” is collectively the AMB Series Q preferred stock,
the AMB Series R preferred stock and the AMB Series S preferred stock. The following is a summary
of the material rights of holders of the new AMB preferred stock to be issued to holders of
ProLogis preferred shares. The instruments that define the rights of the existing ProLogis
preferred shares, including the ProLogis amended and restated Declaration of Trust and any articles
supplementary to the ProLogis preferred stock, are filed as exhibits to the ProLogis Annual Report
on Form 10-K for the year ended December 31, 2010, filed on February 28, 2011, as amended by the
Annual Report on Form 10-K/A filed on March 28, 2011. The instruments that define the rights of
the existing AMB preferred stock and forms of the instruments that define the rights of the new AMB
preferred stock, including the AMB charter, the articles supplementary to the existing AMB
preferred stock and forms of the articles supplementary to the new AMB preferred stock, are filed
as exhibits to the registration statement of which this prospectus is a part.
Rank
With respect to distribution upon liquidation or dissolution, each series of the new AMB
preferred stock will rank on a parity with each other and with each existing series of AMB
preferred stock and will rank senior to AMB common stock.
Dividends
Series Q preferred stock.
Holders of shares of AMB Series Q preferred stock will be entitled
to receive cumulative preferential cash dividends when, as and if authorized by the AMB board of
directors and declared by AMB from funds legally available for such purpose, at a rate per annum of
8.54% on a stated liquidation preference of $50 per share. Dividends are payable the last calendar
day of March, June, September and December or, if such date is not a business day, on the business
day immediately following thereafter. Dividend periods commence on January 1, April 1, July 1 and
October 1 of each year and end on and include the day preceding the first day of the next
succeeding dividend period.
Series R preferred stock.
Holders of shares of AMB Series R preferred stock will be entitled
to receive cumulative preferential cash dividends when, as and if authorized by the AMB board of
directors and declared by AMB from funds legally available for such purpose, at a rate per annum of
6.75% on a stated liquidation preference of $25 per share. Dividends are payable the last calendar
day of March, June, September and December or, if such date is not a business day, on the business
day immediately following thereafter. Dividend periods commence on January 1, April 1, July 1 and
October 1 of each year and end on and include the day preceding the first day of the next
succeeding dividend period.
Series S preferred stock.
Holders of shares of AMB Series S preferred stock will be entitled
to receive cumulative preferential cash dividends when, as and if authorized by the AMB board of
directors and declared by AMB from funds legally available for such purpose, at a rate per annum of
6.75% on a stated liquidation preference of $25 per share. Dividends are payable the last calendar
day of March, June, September and December or, if such date is not a business day, on the business
day immediately following thereafter. Dividend periods commence on January 1, April 1, July 1 and
October 1 of each year and end on and include the day preceding the first day of the next
succeeding dividend period.
Redemption
Shares of AMB Series R preferred stock and AMB Series S preferred stock are fully redeemable
at the option of AMB, at a redemption price of $25 per share plus all accrued and unpaid dividends,
if any, without interest. Shares of AMB Series Q preferred stock become fully redeemable on
November 13, 2026, at the option of AMB, at a redemption price of $50 per share plus all accrued
and unpaid dividends, if any, without interest. If full
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cumulative dividends on a series of new AMB preferred stock or any other series on parity therewith
have not been paid or declared and set apart for payment, AMB cannot redeem, purchase or acquire
shares of any series of new AMB preferred stock other than pursuant to a purchase or exchange offer
made on the same terms to all holders of such series or pursuant to a redemption made as a result
of a holder owning shares in excess of the ownership limitations described below under “—
Ownership Limitation.”
Preemptive Rights
The new AMB preferred stock will have no preemptive rights.
Voting Rights
Holders of the new AMB preferred stock will have no voting rights, except as described below
or as provided by applicable law.
If and when dividends payable on any series of the new AMB preferred stock or on any series of
parity stock have not been declared and paid for six quarterly dividend periods (whether or not
consecutive), the number of members of the AMB board of directors will be increased by two and the
holders of such series and of any series of parity stock will be entitled to elect two directors to
fill such positions, voting together as a single class, until such dividends are paid or declared
and set aside for payment.
With respect to each series of the new AMB preferred stock, unless provision is made for the
redemption of all shares of the applicable series of new AMB preferred stock, the affirmative vote
of at least two-thirds of the votes entitled to be cast by holders of such series of preferred
stock and holders of any series of parity stock, voting together as a single class, will be
required for certain actions described below:
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Amendment of charter.
Any amendment, alteration or repeal of any of the
provisions of the AMB charter or the instrument setting forth the terms of such series
of new AMB preferred stock that materially and adversely affects the voting powers,
rights or preferences of the holders of the applicable series of new AMB preferred
stock or such AMB preferred stock; provided, that the authorization or creation of, or
the increase in the number of authorized shares of, any equity securities that rank
junior to or on a parity with such series of new AMB preferred stock will not be deemed
to materially adversely affect the voting powers, rights or preferences of the holders
of the applicable series of new AMB preferred stock; provided, further, that if any
such amendment, alteration or repeal would materially and adversely affect any voting
powers, rights or preferences of the applicable series of new AMB preferred stock (or
another series of parity stock entitled to vote thereon) that are not enjoyed by some
or all of the other series otherwise entitled to vote on such matter, the voting
standard will be the affirmative vote of at least two-thirds of the votes entitled to
be cast by the holders of all series similarly affected;
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Share exchange.
A share exchange that affects the applicable series of
new AMB preferred stock, a consolidation with or merger of AMB into another entity, or
a consolidation with or merger of another entity into AMB, unless in each case each
share of the applicable series of new AMB preferred stock will either remain
outstanding without a material and adverse change to its terms or rights, or will be
converted into or exchanged for preferred shares of the surviving entity having
preferences, rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption thereof identical
to that of a share of the applicable series of new AMB preferred stock; or
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Creation of senior stock.
The authorization or creation of, or the
increase in the authorized amount of, any shares of any class or any security
convertible into shares of any class ranking senior to the applicable series of new AMB
preferred stock in the distribution of assets on any liquidation, dissolution or
winding-up of AMB or in the payment of dividends.
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When holders of shares of any series of new AMB preferred stock have a vote, they have one
vote per share. When holders of shares of AMB Series Q preferred stock are entitled to vote on a
matter together with any other series of AMB preferred stock, holders of AMB Series Q preferred
stock and such other series have one vote per $50 of stated liquidation preference. When holders of
shares of AMB Series R preferred stock or Series S preferred stock are entitled to vote on a matter
together with any other series of AMB preferred stock, holders of AMB Series R preferred stock, AMB
Series S preferred stock and such other series have one vote per $25 of stated liquidation
preference.
Liquidation Preference
Series Q preferred stock.
Upon the voluntary or involuntary liquidation, dissolution or
winding-up of AMB, holders of shares of AMB Series Q preferred stock are entitled to receive, out
of the assets of AMB that are available for distribution to stockholders, before any distribution
is made to holders of common stock or other equity securities designated as ranking junior to the
AMB Series Q preferred stock with respect to liquidation, a liquidation distribution in the amount
of $50 per share, plus any accrued and unpaid dividends, if any. Distributions will be made pro
rata as to the AMB Series Q preferred stock and any other equity securities designated as ranking
on a parity with the AMB Series Q preferred stock with respect to the payment of dividends and
distributions of assets upon any liquidation, dissolution, distribution or winding-up of AMB and
only to the extent of the assets of AMB, if any, that are available after satisfaction of all
liabilities to creditors.
Series R preferred stock.
Upon the voluntary or involuntary liquidation, dissolution or
winding-up of AMB, holders of shares of AMB Series R preferred stock are entitled to receive, out
of the assets of AMB that are available for distribution to stockholders, before any distribution
is made to holders of common stock or other equity securities designated as ranking junior to the
AMB Series R preferred stock with respect to liquidation, a liquidation distribution in the amount
of $25 per share, plus any accrued and unpaid dividends, if any. Distributions will be made pro
rata as to the AMB Series R preferred stock and any other equity securities designated as ranking
on a parity with the AMB Series R preferred stock with respect to the payment of dividends and
distributions of assets upon any liquidation, dissolution, distribution or winding-up of AMB and
only to the extent of the AMB assets of AMB, if any, that are available after satisfaction of all
liabilities to creditors.
Series S preferred stock.
Upon the voluntary or involuntary liquidation, dissolution or
winding-up of AMB, holders of shares of AMB Series S preferred stock are entitled to receive, out
of the assets of AMB that are available for distribution to stockholders, before any distribution
is made to holders of common stock or other equity securities designated as ranking junior to the
AMB Series S preferred stock with respect to liquidation, a liquidation distribution in the amount
of $25 per share, plus any accrued and unpaid dividends, if any. Distributions will be made pro
rata as to the AMB Series S preferred stock and any other equity securities designated as ranking
on a parity with the AMB Series S preferred stock with respect to the payment of dividends and
distributions of assets upon any liquidation, dissolution, distribution or winding-up of AMB and
only to the extent of the assets of AMB, if any, that are available after satisfaction of all
liabilities to creditors.
Sinking Fund
The new AMB preferred stock will not have the benefit of any retirement or sinking fund.
Listing
The shares of AMB Series R preferred stock and AMB Series S preferred stock issuable in
connection with the Topco merger will be listed on the NYSE. The shares of AMB Series Q preferred
stock issuable in connection with the Topco merger will not be listed on any securities exchange.
Ownership Limitation
Subject to certain exceptions, no holder of any series of the new AMB preferred stock will be
permitted to own in excess of (i) 25% of such series or (ii) 9.8% of the authorized and issued
capital stock of AMB (by value or number of shares, whichever is more restrictive), including the
new AMB preferred stock and all other AMB capital
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stock. The AMB board of directors may waive the 9.8% ownership limit under certain circumstances
and may waive the 25% limit in its discretion. The consequences of exceeding any of the ownership
limits will be set out in the instruments designating the rights of each series of new AMB
preferred stock, and will include the sale, transfer, and/or redemption of the applicable holder’s
AMB stock.
Anti-takeover Provisions in the AMB Charter and Bylaws
Certain provisions of the charter of AMB could make it less likely that AMB management would
be changed or someone would acquire voting control of AMB without the consent of its board of
directors. These provisions could delay, deter or prevent tender offers or takeover attempts that
AMB stockholders might believe are in their best interests, including tender offers or takeover
attempts that could allow AMB stockholders to receive premiums over the market price of their
common stock.
Restrictions on Ownership and Transfer
For AMB to maintain its qualification as a REIT, not more than 50% of its outstanding stock
may be owned, actually or constructively, by five or fewer individuals during the last half of a
taxable year after the first taxable year for which a REIT election is made. Furthermore, the stock
must be held by a minimum of 100 persons for at least 335 days of a 12-month taxable year (or a
proportionate part of a short tax year). In addition, if AMB, or an owner of 10% or more of the
parent company’s stock, actually or constructively owns 10% or more of one of the tenants of AMB
(or a tenant of any partnership in which the company is a partner), then the rent received by AMB
(either directly or through any such partnership) from that customer will not be qualifying income
for purposes of the REIT gross income tests of the Code.
In addition to the ownership limitations in the new AMB preferred stock described above, to
help AMB maintain its qualification as a REIT, among other purposes, AMB prohibits the ownership,
actually or by virtue of the constructive ownership provisions of the Code, by any single person,
of more than the ownership limit of 9.8% (by value or number of shares, whichever is more
restrictive) of the issued and outstanding shares of each of AMB’s common stock and existing
preferred stock (unless such limitations are waived by the board of directors in accordance with
the instruments designating the rights of such stock). The AMB charter provides that shares
acquired or held in violation of this ownership limit will be transferred to a trust for the
benefit of a designated charitable beneficiary. The AMB charter further provides that any person
who acquires shares in violation of the ownership limit will not be entitled to any dividends on
the shares or be entitled to vote the shares or receive any proceeds from the subsequent sale of
the shares in excess of the lesser of the price paid for the shares or the amount realized from the
sale. A transfer of shares in violation of the above limits may be void under certain
circumstances. The ownership limit may have the effect of delaying, deferring or preventing a
change in control and, therefore, could adversely affect the parent company’s stockholders’ ability
to realize a premium over the then-prevailing market price for the shares of the parent company’s
common stock in connection with such transaction.
Preferred Stock
At any time, without stockholder approval, the AMB board of directors can issue one or more
new series of preferred stock. In some cases, the issuance of preferred stock could discourage or
make more difficult attempts to take control of AMB through a merger, tender offer, proxy context
or otherwise. Preferred stock with special voting rights or other features issued to persons
favoring AMB management could stop a takeover by preventing the person trying to take control of
AMB from acquiring enough voting shares to take control.
Stockholders’ Rights Plan
Although AMB does not have a stockholders’ rights plan as of the date of this document, under
Maryland law, the AMB board of directors can adopt a rights plan without stockholder approval. If
adopted, a rights plan could operate to cause substantial dilution to a person or group that
attempts to acquire AMB on terms not approved by the AMB board of directors.
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Extraordinary Actions
Currently, the affirmative vote of stockholders entitled to cast at least two-thirds of the
votes entitled to be cast on the matter is required to amend the AMB charter or approve certain
other extraordinary actions, such as mergers, which could discourage or make more difficult
attempts to take control of AMB through a merger, tender offer, proxy context or otherwise. If the
charter amendment is approved by AMB stockholders, after the effective time of the Topco merger,
the affirmative vote of stockholders entitled to cast at least a majority of the votes entitled to
be cast on the matter will be required to amend the AMB charter, which will be the charter of the
combined company, or approve such other extraordinary actions, except as specifically provided in
the AMB charter.
Control Share Acquisition Statute
Maryland has a statute that generally provides that holders of control shares of a Maryland
corporation acquired in a control share acquisition have no voting rights except to the extent
approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by
the acquiror, by officers or by employees who are directors of the corporation are excluded from
shares entitled to vote on the matter. Control shares are voting shares of stock which, if
aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror
is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable
proxy), would entitle the acquiror to exercise voting power in electing directors within one of the
following ranges of voting power: (i) one- tenth or more but less than one-third; (ii) one-third or
more but less than a majority; or (iii) a majority or more of all voting power. Control shares do
not include shares the acquiring person is then entitled to vote as a result of having previously
obtained stockholder approval. A control share acquisition means the acquisition of issued and
outstanding control shares, subject to certain exceptions. AMB has opted out of this statute, which
could make it easier for stockholders to take control of AMB through a merger, tender offer, proxy
context or otherwise.
Business Combination Act
Maryland has a statute that provides, generally, that “business combinations” between a
Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are
prohibited for five years after the most recent date on which the interested stockholder becomes an
interested stockholder. These business combinations include a merger, consolidation, share
exchange, or, in circumstances specified in the statute, an asset transfer or issuance or
reclassification of equity securities. Subject to certain exceptions, an interested stockholder is
defined as: (i) any person who beneficially owns ten percent or more of the voting power of the
corporation’s outstanding voting stock; or (ii) an affiliate or associate of the corporation who,
at any time within the two-year period prior to the date in question, was the beneficial owner of
ten percent or more of the voting power of the then outstanding stock of the corporation. A person
is not an interested stockholder under the statute if the board of directors approved in advance
the transaction by which he otherwise would have become an interested stockholder. However, in
approving a transaction, the board of directors may provide that its approval is subject to
compliance, at or after the time of approval, with any terms and conditions determined by the
board. After the five-year prohibition, any business combination between the corporation and the
interested stockholder that does not meet certain fair price requirements generally must be (1)
recommended by the board of directors, (2) approved by the affirmative vote of at least 80% of the
votes of entitled to be cast by the holders of outstanding voting stock and (3) approved by
two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other
than shares held by the interested stockholder with whom or with whose affiliate the business
combination is to be effected or held by an affiliate or associate of the interested stockholder.
AMB has opted out of the Maryland Business Combination Act, which could make it easier for
stockholders to take control of AMB through a merger, tender offer, proxy context or otherwise.
Subtitle 8
Subtitle 8 of Title 3 of MGCL permits a Maryland corporation with a class of equity securities
registered under the Exchange Act and at least three independent directors to elect to be subject,
by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding
any contrary provision in the charter or bylaws, to any or all of five provisions: (1) a classified
board; (2) a two-thirds vote requirement for removing a director; (3) a requirement that the number
of directors be fixed only by vote of the directors; (4) a requirement that a vacancy on
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the board be filled only by the remaining directors and for the remainder of the full term of the
class of directors in which the vacancy occurred; and (5) a majority requirement for the calling of
a special meeting of stockholders.
The AMB charter currently requires a two-thirds vote for the removal of any director from its
board of directors. The charter amendment would not affect this requirement. See “Comparison of
Rights of AMB Stockholders and ProLogis Shareholders — Removal of Directors.”
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the material U.S. federal income tax consequences relating to the
exchange offers and consent solicitations and the ownership of AMB LP Notes and AMB common stock is
for general information only. This discussion only addresses tax considerations relevant to
holders that hold ProLogis Notes, and will hold AMB LP Notes or the AMB common stock for which the
AMB LP Exchangeable Notes may be exchanged, as capital assets within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the “Code”).
This discussion does not purport to address all tax considerations that may be important to a
particular holder in light of the holder’s circumstances, or to certain categories of investors
that may be subject to special rules, such as:
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dealers or traders in securities or currencies;
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REITs or regulated investment companies;
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U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
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persons holding notes as part of a hedge, straddle, conversion, constructive sale,
or other “synthetic security” or integrated transaction;
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U.S. expatriates and certain former citizens or long-term residents of the United
States;
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banks and other financial institutions;
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holders subject to the alternative minimum tax;
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insurance companies; and
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entities that are tax-exempt for U.S. federal income tax purposes.
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This discussion does not address all of the aspects of U.S. federal income taxation that may
be relevant to you in light of your particular investment or other circumstances. If a partnership
or other entity or arrangement treated as a partnership for U.S. federal income tax purposes holds
ProLogis Notes or will hold AMB LP Notes or the AMB common stock for which the AMB LP Exchangeable
Notes may be exchanged as a result of any of the exchange offers, the tax treatment of a partner
will generally depend on the status of the partner and on the activities of the partnership.
Partners of partnerships holding notes are urged to consult their tax advisors. This discussion is
limited to holders of AMB LP Notes who acquire these securities in connection with the exchange
offers. In addition, this discussion does not address any state, local or foreign income or other
tax consequences.
This discussion is based on U.S. federal income tax law, including the provisions of the Code,
Treasury Regulations, administrative rulings and judicial authority, all as in effect as of the
date of this document. Subsequent developments in U.S. federal income tax law, including changes
in law or differing interpretations, which may be applied retroactively, could have a material
effect on the U.S. federal income tax consequences of owning and disposing of notes as described in
this discussion. The Internal Revenue Service, or IRS, may challenge one or more of the tax
results described in this discussion, and AMB LP has not obtained, nor does AMB LP intend to
obtain, a ruling from the IRS with respect to the U.S. federal income tax consequences of the
exchange offers and consent solicitations and of the ownership and disposition of AMB LP Notes or
the AMB common stock for which the AMB LP Exchangeable Notes may be exchanged.
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For purposes of this discussion, you are a U.S. holder if you are a beneficial owner of
ProLogis Notes or AMB LP Notes received upon the exchange of ProLogis Notes pursuant to any of the
exchange offers or the AMB common stock for which the AMB LP Exchangeable Notes may be exchanged
that is, for U.S. federal income tax law purposes:
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an individual who is a U.S. citizen or U.S. resident alien,
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a corporation, or other entity taxable as a corporation for U.S. federal income tax
purposes, created or organized in or under the laws of the United States, any state
thereof or the District of Columbia,
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an estate the income of which is subject to U.S. federal income taxation regardless
of its source, or
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a trust if a U.S. court can exercise primary supervision over the trust’s
administration and one or more United States persons are authorized to control all
substantial decisions of the trust or that has a valid election in effect under
applicable Treasury Regulations to be treated as a U.S. person.
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You generally are a non-U.S. holder for purposes of this discussion if you are a beneficial
owner (other than a partnership or entity or arrangement treated as a partnership for U.S. federal
income tax purposes) of ProLogis Notes or AMB LP Notes received upon the exchange of ProLogis Notes
pursuant to any of the exchange offers or the AMB common stock for which the AMB LP Exchangeable
Notes may be exchanged that is not a U.S. holder, as described above.
Holders are urged to consult their own tax advisors regarding the particular U.S. federal,
state and local and foreign income and other tax consequences of the exchange offers and consent
solicitations and of owning and disposing of AMB LP Notes or the AMB common stock for which the AMB
LP Exchangeable Notes may be exchanged that may be applicable in their particular circumstances.
U.S. Federal Income Tax Considerations Relating to the Exchange Offers
Holders of ProLogis Notes Validly Tendering (and not Validly Withdrawing) Prior to the Early
Consent Date
Exchange Offers
Under general principles of tax law, the modification of a debt instrument creates a deemed
exchange upon which gain or loss is realized if the modified debt instrument differs materially
either in kind or in extent from the original debt instrument. Under the Treasury Regulations, the
modification of a debt instrument is a “significant” modification (i.e., a modification upon which
gain or loss is realized) if, based on all the facts and circumstances and taking into account all
modifications of the debt instrument collectively (other than certain enumerated types of
modifications), the legal rights or obligations that are altered and the degree to which they are
altered are “economically significant.” For example, the Treasury Regulations that govern the
determination of whether a modification is a significant modification provide that a change in the
obligor of a recourse debt instrument is treated as a significant modification unless certain
exceptions apply. Based upon the aforementioned rules, while it is not entirely clear, AMB LP
believes that the modifications to the ProLogis Notes resulting from the Proposed Amendments and
the exchange of the ProLogis Notes that are validly tendered (and not validly withdrawn) prior to
the Early Consent Date for AMB LP Notes will not constitute a significant modification of such
ProLogis Notes. Therefore, although the IRS could take a contrary position, AMB LP intends to take
the position that there is no taxable exchange for U.S. federal income tax purposes resulting from
the Proposed Amendments and the exchange of the ProLogis Notes that are validly tendered (and not
validly withdrawn) prior to the Early Consent Date for AMB LP Notes. If, consistent with the
position that the Proposed Amendments and the exchange of the ProLogis Notes that are validly
tendered (and not validly withdrawn) prior to the Early Consent Date for AMB LP Notes does not
constitute a significant modification of such ProLogis Notes, then each series of AMB LP Notes
received in such an exchange will be treated as a continuation of the corresponding series of
ProLogis Notes. In that case, in general, if you exchange ProLogis Notes that are validly tendered
(and not validly withdrawn) prior to the Early Consent Date for the AMB LP Notes pursuant to this
prospectus, you will not be deemed to have a taxable exchange for U.S.
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federal income tax purposes, and you will have the same adjusted tax basis and holding period
in the AMB LP Notes as you had in the ProLogis Notes immediately before the exchange.
If, contrary to this conclusion, the exchange offers with respect to the ProLogis Notes that
are validly tendered (and not validly withdrawn) prior to the Early Consent Date constitute a
significant modification under the Treasury Regulations, then the exchange of such ProLogis Notes
for AMB LP Notes would be treated as a taxable exchange for U.S. federal income tax purposes (the
consequences of such treatment are described below under the headings “— U.S. Holders of ProLogis
Notes Validly Tendering (and not Validly Withdrawing) After the Early Consent Date” and “—
Non-U.S. Holders of ProLogis Notes Validly Tendering (and not Validly Withdrawing) After the Early
Consent Date”). Holders are urged to consult their own tax advisors regarding the particular tax
treatment of the exchange offer and whether it will result in a taxable exchange.
Holders of ProLogis Convertible Notes that exchange such notes for AMB LP Exchangeable Notes
should note that unlike the ProLogis Convertible Notes that are (prior to the Topco merger)
generally convertible into ProLogis common shares on a tax-free basis, an exchange of the AMB LP
Exchangeable Notes for AMB common stock (or cash or a combination of AMB common stock and cash)
generally will be a taxable exchange. This result occurs regardless of the solicitation of consents
and exchange offers set forth in this prospectus (i.e., the result is the same if you continue to
hold your ProLogis Convertible Notes and do not tender). See the description of the Twelfth
Supplemental Indenture in this prospectus under “The Proposed Amendments”.
Consent Fees
Although the correct treatment is not entirely clear under current U.S. federal income tax
law, AMB LP intends to treat the Non-Convertible Notes Consent Fee and Convertible Notes Consent
Fee received by a holder of ProLogis Notes that are validly tendered (and not validly withdrawn)
prior to the Early Consent Date as a separate fee paid for consenting to the Proposed Amendments
and not as a payment on the ProLogis Notes. Accordingly, a U.S. holder who receives a
Non-Convertible Notes Consent Fee or Convertible Notes Consent Fee under such circumstances,
generally will recognize ordinary income, subject to ordinary income tax rates, as a result of such
payment. Further, AMB LP therefore intends to withhold on such payments to non-U.S. holders for
U.S. federal income tax at a rate of 30 percent, unless a reduction or exemption applies under a
U.S. income tax treaty and proper certification is provided (generally on IRS Form W-8BEN) or the
non-U.S. holder provides a properly executed IRS Form W-8ECI claiming that the fee is effectively
connected with the conduct of a trade or business in the United States. However, it is possible
that the Non-Convertible Notes Consent Fee or Convertible Notes Consent Fee, if applicable, could
be considered an additional payment under the ProLogis Notes by the IRS or a court. You are urged
to consult your own tax advisors as to the proper treatment of the Non-Convertible Notes Consent
Fee and Convertible Notes Consent Fee.
U.S. Holders of ProLogis Notes Validly Tendering (and not Validly Withdrawing) After the
Early Consent Date
Exchange Offers
As described above, under general principles of tax law, the modification of a debt instrument
creates a deemed exchange upon which gain or loss is realized if the modified debt instrument
differs materially either in kind or in extent from the original debt instrument. A modification
to the yield of a debt instrument will be a significant modification if the yield varies from the
annual yield of the unmodified instrument by more than the greater of: (i) 1/4 of 1% or (ii) 5% of
the annual yield of the unmodified instrument (a “Significant Change in Yield”). AMB LP believes
that the exchange of ProLogis Notes that are validly tendered (and not validly withdrawn) after the
Early Consent Date for AMB LP Notes with a principal amount equal to 97% of the principal amount of
such ProLogis Notes will result in a Significant Change in Yield that is a significant modification
under the Treasury Regulations. The preceding sentence does not apply to the ProLogis 2.250% 2037
Convertible Notes, the ProLogis 1.875% 2037 Convertible Notes and the ProLogis 2.625% 2038
Convertible Notes, as to which AMB LP believes the exchange of such notes for AMB LP Notes with a
principal amount equal to 97% of the principal amount of such notes will not result in a
Significant Change in Yield. Therefore, holders of such notes who validly tender (and do not
validly withdraw) such notes after the Early Consent Date should refer to “— Holders of ProLogis
Notes Validly Tendering (and not Validly Withdrawing) Prior to the Early Consent
Date — Exchange
Offers” above (except that to the extent
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any holders of such notes receive any cash in the exchange attributable to accrued and unpaid
interest on the ProLogis Notes, such receipt will be ordinary income). Holders of ProLogis Notes
that have a Significant Change in Yield as a result of being validly tendered (and not validly
withdrawn) after the Early Consent Date should generally recognize gain or loss equal to the
difference between (i) the sum of the issue price, as defined below, of the AMB LP Notes received
in exchange for such ProLogis Notes and the amount of any cash treated as exchange consideration
received and (ii) the holder’s adjusted tax basis in such ProLogis Notes. This gain or loss will
generally be capital gain or loss except for gain attributable to accrued but unrecognized market
discount, if any, which will be ordinary income. In addition, such holders will recognize ordinary
interest income on the amount of accrued and unpaid interest on such ProLogis Notes which the
holder has not previously included in income, although such amount will not be again included in
income when actually paid. The deductibility of capital losses is subject to limitations. A
holder’s initial tax basis in an AMB LP Note received in exchange for ProLogis Notes that have a
Significant Change in Yield will generally equal such AMB LP Note’s issue price (as defined below).
The holding period for such AMB LP Notes will begin the day after the exchange.
Consent Fees
A U.S. holder who validly tenders ProLogis Notes prior to the Early Consent Date, withdraws
the tender after the Early Consent Date, and re-tenders after the Early Consent Date (but on or
prior to the Expiration Date), will receive the Non-Convertible Notes Consent Fee or Convertible
Notes Consent Fee, as applicable. Although the correct treatment is not entirely clear under
current U.S. federal income tax law, AMB LP intends to treat the Non-Convertible Notes Consent Fee
and Convertible Notes Consent Fee received by such holders as part of the total consideration
received from the exchange of ProLogis Notes for AMB LP Notes, and, therefore, the amount realized
by the exchanging U.S. holder in the exchange of the ProLogis Notes and would be taken into account
in computing the exchanging U.S. holder’s taxable gain or loss described above. If the
Non-Convertible Notes Consent Fee and Convertible Notes Consent Fee are not treated as additional
consideration for the relevant ProLogis Notes, it is possible that the Non-Convertible Notes
Consent Fee and Convertible Notes Consent Fee may be treated as interest or a separate fee that
would be subject to tax as ordinary income. The two preceding sentences do not apply to the
Convertible Notes Consent Fee received by U.S. holders of the ProLogis 2.250% 2037 Convertible
Notes, the ProLogis 1.875% 2037 Convertible Notes or the ProLogis 2.625% 2038 Convertible Notes.
AMB LP intends to treat the Convertible Notes Consent Fee received by a U.S. holder of such of
notes who validly tenders such notes prior to the Early Consent Date, withdraws the tender after
the Early Consent Date, and re-tenders after the Early Consent Date (but on or prior to the
Expiration Date) as a separate fee paid for consenting to the Proposed Amendments and not as a
payment on the ProLogis Notes (see “— Holders of ProLogis Notes Validly Tendering (and not Validly
Withdrawing) Prior to the Early Consent Date — Consent Fees” above). You are urged to consult
your own tax advisors as to the proper treatment of the Non-Convertible Notes Consent Fee and
Convertible Notes Consent Fee.
Non-U.S. Holders of ProLogis Notes Validly Tendering (and not Validly Withdrawing) After the
Early Consent Date
Exchange Offers
You generally will not be subject to U.S. federal income tax or withholding of such tax on any
gain recognized on the exchange of ProLogis Notes that are validly tendered (and not validly
withdrawn) after the Early Consent Date for AMB LP Notes with a principal amount equal to 97% of
the principal amount of such ProLogis Notes unless:
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you are an individual present in the United States for 183 days or more in the year
of such exchange and specific other conditions are met,
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the gain from the exchange is effectively connected with your conduct of a U.S.
trade or business and, if a U.S. income tax treaty applies, is generally attributable
to a U.S. “permanent establishment” you maintain, or
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you exchange a ProLogis Convertible Note and such ProLogis Convertible Note
constitutes a “U.S. real property interest” (“USRPI”) within the meaning of FIRPTA.
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However, to the extent that cash or other property treated as exchange consideration
represents interest on a ProLogis Note accruing from the most recent interest payment date,
withholding will be required unless you have established an exemption from U.S. withholding tax, as
discussed below. If you are a non-U.S. holder described in the first bullet point above, you will
be subject to a flat 30% U.S. federal income tax on the gain derived from the exchange, which may
be offset by U.S. source capital losses. If you are a non-U.S. holder described in the second
bullet point above, you generally will be subject to U.S. federal income tax in the same manner as
a U.S. holder.
Whether a ProLogis Convertible Note constitutes a USRPI will depend on the status of ProLogis
and AMB, as described in this paragraph. ProLogis and AMB each currently anticipate that it
constitutes a “domestically-controlled qualified investment entity” (defined generally as a REIT in
which at all times during a specified testing period less than 50% in value of the shares of its
stock was held directly or indirectly by foreign persons), in which case gain recognized by a
non-U.S. holder from the exchange of ProLogis Convertible Notes for AMB LP Exchangeable Notes may
not be taxable under FIRPTA. However, because shares of AMB common stock and ProLogis common shares
are publicly traded, there can be no assurance AMB or ProLogis qualify as a domestically-controlled
qualified investment entity. Although the application of the above exception from FIRPTA to the
ProLogis Convertible Notes is not entirely clear, based on the law, facts and circumstances as they
currently exist, ProLogis and AMB intend to take the position that the ProLogis Convertible Notes
will not constitute USRPIs as of the time of the exchange for AMB LP Exchangeable Notes.
Accordingly, AMB does not intend to withhold U.S. federal income tax from any amounts payable to
non-U.S. holders (including in the form of AMB LP Exchangeable Notes) on the exchange of ProLogis
Convertible Notes for AMB LP Exchangeable Notes. However, it is possible that the IRS could
disagree with AMB’s position, in which case a non-U.S. holder would be liable for U.S. federal
income tax under FIRPTA upon the exchange, and could be liable for interest and penalties if such
non-U.S. holder fails to timely file a U.S. federal income tax return and pay such tax when due.
You are urged to consult your tax advisor as to whether the exchange of a ProLogis Convertible
Note for an AMB LP Exchangeable Note is exempt from U.S. federal income tax under FIRPTA.
Consent Fees
A non-U.S. holder who validly tenders ProLogis Notes prior to the Early Consent Date,
withdraws the tender after the Early Consent Date, and re-tenders after the Early Consent Date (but
on or prior to the Expiration Date), will receive the Non-Convertible Notes Consent Fee or
Convertible Notes Consent Fee, as applicable. As discussed above, under current U.S. federal
income tax law it is not entirely clear whether the Non-Convertible Notes Consent Fee and
Convertible Notes Consent Fee should be included as part of the amount realized from the exchange
of ProLogis Notes for AMB LP Notes or as interest or a separate fee. If the Non-Convertible Notes
Consent Fee and Convertible Notes Consent Fee are treated as interest or as a separate fee, a
non-U.S. holder receiving such fees could be subject to U.S. federal withholding tax. AMB LP
intends to treat any Non-Convertible Notes Consent Fee or Convertible Notes Consent Fee received by
a non-U.S. holder who validly tenders ProLogis Notes prior to the Early Consent Date, withdraws the
tender after the Early Consent Date, and re-tenders after the Early Consent Date (but on or prior
to the Expiration Date) as part of the total consideration received from the exchange of ProLogis
Notes for AMB LP Notes, and, therefore, the amount of such payments will be taxable as described
above under “— Non-U.S. Holders of ProLogis Notes Validly Tendering (and not Validly Withdrawing)
After the Early Consent Date — Exchange Offers”. The preceding sentence does not apply to the
Convertible Notes Consent Fee received by non-U.S. holders of the ProLogis 2.250% 2037 Convertible
Notes, the ProLogis 1.875% 2037 Convertible Notes or the ProLogis 2.625% 2038 Convertible Notes.
AMB LP intends to treat the Convertible Notes Consent Fee received by a non-U.S. holder of such of
notes who validly tenders such notes prior to the Early Consent Date, withdraws the tender after
the Early Consent Date, and re-tenders after the Early Consent Date (but on or prior to the
Expiration Date) as a separate fee paid for consenting to the Proposed Amendments and not as a
payment on the ProLogis Notes (see “— Holders of ProLogis Notes Validly Tendering (and not Validly
Withdrawing) Prior to the Early Consent Date — Consent Fees” above). You are urged to consult
your own tax advisors as to the proper treatment of the Non-Convertible Notes Consent Fee and
Convertible Notes Consent Fee.
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U.S. Federal Income Tax Considerations Relating to the AMB LP Notes
U.S. Holders
Taxation of Interest, Discount and Premium on AMB LP Notes
Generally, stated interest on the AMB LP Notes will be taxed as ordinary interest income at
the time it is paid or at the time it accrues in accordance with your method of accounting for U.S.
federal income tax purposes. Special rules governing the treatment of discount and premium
described below apply to the exchange offers.
If the stated redemption price at maturity amount of any AMB LP Note exceeds the issue price
(as defined below) of the note by more than a
de minimis
amount (which is generally 1/4 of one
percent of the principal amount multiplied by the number of complete years to maturity), the excess
will constitute original issue discount for U.S. federal income tax purposes. Each holder of an
AMB LP Note that is issued with original issue discount would be required to include the discount
in ordinary income as interest for U.S. federal income tax purposes as it accrues in accordance
with a constant yield method based upon a compounding of interest, before receiving cash to which
that interest income is attributable. Your tax basis in the AMB LP Notes will be increased by the
amount of original issue discount includible in your gross income as it accrues.
If the AMB LP Notes are received in exchange for ProLogis Notes validly tendered (and not
validly withdrawn) before the Early Consent Date, the issue price of the AMB LP Notes will equal
the issue price of your ProLogis Notes exchanged, and therefore such AMB LP Notes will not have
original issue discount as a result of the exchange.
If the AMB LP Notes received in exchange for ProLogis Notes validly tendered (and not validly
withdrawn) after the Early Consent Date will be publicly traded, within the meaning of the
applicable Treasury Regulations, or such AMB LP Notes will not be publicly traded but the
applicable ProLogis Notes are publicly traded, the issue price of such AMB LP Notes will be the
fair market value of such publicly traded notes excluding the amount of pre-issuance accrued
interest on such AMB LP Notes. If neither the AMB LP Notes received in exchange for ProLogis Notes
validly tendered (and not validly withdrawn) after the Early Consent Date nor the applicable
ProLogis Notes are publicly traded, the issue price of such AMB LP Notes will equal their principal
amount.
Because AMB LP intends to determine the issue price of the AMB LP Notes received in exchange
for ProLogis Notes validly tendered (and not validly withdrawn) after the Early Consent Date by
reference to the fair market value of either the applicable ProLogis Notes or such AMB LP Notes on
the exchange date if the requisite public trading exists (with respect to the AMB LP Notes, at any
time during the 60-day period ending 30 days after their issue date), AMB LP cannot know before the
exchange date whether the AMB LP Notes will have original issue discount. Similarly, AMB LP cannot
know whether the requisite public trading will exist with respect to any particular ProLogis Notes
or AMB LP Notes during the relevant 60-day period. However, it is expected (although there can be
no assurance) that the requisite public trading will exist during the relevant 60-day period with
respect to all the AMB LP Notes except the following notes: the AMB LP 7.810% 2015 Notes, the AMB
LP 9.340% 2015 Notes, the AMB LP 8.650% 2016 Notes and the AMB LP 7.625% 2017 Notes. You are urged
to consult your own tax advisors as to whether your AMB LP Notes will be considered to be publicly
traded for this purpose and the proper determination of the issue price of your AMB LP Notes.
AMB LP does not intend to treat the possibility of payment of additional amounts described in
“Description of the AMB LP Non-Exchangeable Notes — Optional Redemption,” “Description of the AMB
LP Contingent Exchangeable Notes — Optional Redemption” and “Description of the AMB LP 3.250% 2015
Notes — Optional Redemption” as (i) affecting the determination of the yield to maturity of the
AMB LP Notes or giving rise to, or increasing, any accrual of original issue discount or (ii)
resulting in the AMB LP Notes being treated as contingent payment debt instruments under the
applicable Treasury Regulations. However, additional income will be recognized if any such
additional payment is made. It is possible that the IRS may take a different position, in which
case the timing, character and amount of income attributable to the AMB LP Notes may be different.
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If your tax basis in an AMB LP Note received in exchange for ProLogis Notes validly tendered
(and not validly withdrawn) after the Early Consent Date immediately after the exchange exceeds its
face amount, you will be considered to have acquired the AMB LP Note with “amortizable bond
premium” equal in amount to that excess. You may elect to amortize the premium by offsetting
against the interest otherwise required to be included in income in respect of the AMB LP Note
during any taxable year the allocable portion of such premium, determined under the constant yield
method over the remaining term. In that case, your basis in the AMB LP Note will be reduced by the
amount of bond premium offset against interest. An election to amortize bond premium will apply to
all taxable debt obligations that you then own and thereafter acquire and may be revoked only with
the consent of the IRS.
The rules concerning original issue discount and amortizable bond premium are complex, and you
are urged to consult your own tax advisor to determine how, and to what extent, any discount or
premium will be included in your income or amortized and as to the desirability, mechanics and
consequences of making any elections in connection therewith in connection with your particular
circumstances.
Sale, Exchange or Other Disposition of AMB LP Notes
When you sell or otherwise dispose of an AMB LP Note (including a retirement or redemption) in
a taxable transaction (including an exchange of AMB LP Exchangeable Notes for AMB common stock),
you generally will recognize taxable gain or loss equal to the difference, if any, between:
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the cash and the fair market value of any property (including AMB common stock)
received, less any amount attributable to accrued interest, which to the extent you
have not previously included the accrued interest in income, will be taxable in the
manner described under “— U.S. Holders — Taxation of Interest, Discount and Premium
on AMB LP Notes”; and
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your adjusted tax basis in an AMB LP Note.
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Your adjusted tax basis in an AMB LP Note will generally equal its issue price, increased by
any original issue discount included in your income with respect to the note and decreased by the
amount of any payment other than stated interest with respect to the note and by the amount of any
amortized bond premium. Gain or loss realized on the sale or other disposition of an AMB LP Note
will generally be capital gain or loss and will be long-term capital gain or loss if the note is
held for more than one year. You are urged to consult your own tax advisors regarding the
treatment of capital gains, which may be taxed at lower rates than ordinary income for taxpayers
who are not corporations, and losses, the deductibility of which is subject to limitations.
Upon the exchange of AMB LP Exchangeable Notes for AMB common stock, you will have a tax basis
in the AMB common stock received equal to the fair market value of such AMB common stock at the
time of the exchange. Your holding period for the AMB common stock received upon an exchange of AMB
LP Exchangeable Notes will begin on the date immediately following the date of such exchange.
Constructive Dividends
The exchange rate of the AMB LP Exchangeable Notes will be adjusted in certain circumstances.
Although it is not clear how or to what extent Section 305 of the Code and the applicable Treasury
Regulations would apply to the AMB LP Exchangeable Notes because the AMB LP Exchangeable Notes are
issued by AMB LP, rather than AMB, it is possible that the IRS would seek to apply Section 305 to
the notes. If Section 305 were applicable, under Section 305(c) of the Code, adjustments (or
failures to make adjustments) that have the effect of increasing your proportionate interest in
AMB’s assets or earnings may in some circumstances result in a deemed distribution to you.
Adjustments to the exchange rate made pursuant to a bona fide reasonable adjustment formula that
has the effect of preventing the dilution of the interest of the holders of the AMB LP Exchangeable
Notes, however, will generally not be considered to result in a deemed distribution to you. Certain
of the possible exchange rate adjustments provided in the AMB LP Exchangeable Notes (including,
without limitation, adjustments in respect of taxable dividends to holders of AMB common stock)
will not qualify as being pursuant to a bona fide reasonable adjustment formula. If such
adjustments are made, you may be deemed to have received a distribution, even though
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you have not received any cash or property as a result of such adjustments. Any deemed
distributions will be taxable as a dividend, return of capital or capital gain in accordance with
the earnings and profits rules under the Code. It is possible that any such deemed distribution
under Code Section 305(c) may be treated as a non-pro-rata distribution (i.e., a preferential
dividend) for purposes of the REIT distribution requirements, which could affect the amount of
distributions that are treated as made by AMB for purposes of the REIT distribution requirements.
Even if an adjustment to the exchange rate were not to result in a taxable constructive
distribution to you under Section 305 because the AMB LP Exchangeable Notes are issued by AMB LP
rather than AMB, it is possible that the IRS could assert that, under principles similar to those
of Section 305, you should recognize taxable income, which might be considered interest or other
ordinary income, and you should include such interest or other income in your taxable income upon
the adjustment to the exchange rate or, alternatively, accrue such income prior to the adjustment.
If the IRS successfully asserted that an adjustment to the exchange rate is treated as interest
income, then unless such interest income is considered to be payable on account of a contingency
that is, as of the issue date, either remote or incidental, AMB LP Exchangeable Notes could be
treated as “contingent payment debt instruments.” If AMB LP Exchangeable Notes were treated as
contingent payment debt instruments, then AMB LP Exchangeable Notes would be treated as issued with
original issue discount, and holders would be required to accrue interest income at a significantly
higher rate (which would generally be based on AMB LP’s borrowing rate for non-contingent,
non-exchangeable debt with otherwise similar terms) rather than the stated interest rate on AMB LP
Exchangeable Notes. Furthermore, you would generally be required to treat any gain recognized on a
disposition of the notes as ordinary income rather than as capital gain. You are particularly urged
to consult your own tax advisors regarding the possible treatment of AMB LP Exchangeable Notes as
contingent payment debt instruments.
Non-U.S. Holders
Taxation of Interest
Under current U.S. federal income tax laws, and subject to the discussion below, U.S. federal
income and withholding tax will not apply to payments of interest on the AMB LP Notes if such
interest is not effectively connected with your conduct of a trade or business in the United
States, you properly certify as to your foreign status as described below and:
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you do not actually or constructively own 10% or more of AMB LP’s capital or profits
interests,
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you are not a controlled foreign corporation that is related to AMB LP within the
meaning of the Code and
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you are not a bank receiving interest on an extension of credit made in the ordinary
course of your trade or business.
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Payments made to a non-U.S. holder which are attributable to original issue discount will
generally be treated in the same manner as payments of interest.
The exemption from withholding and several of the special rules for non-U.S. holders described
below generally apply only if you appropriately certify as to your foreign status. You can
generally meet this certification requirement by providing a properly executed IRS Form W-8BEN to
AMB LP or its paying agent. If you hold the notes through a financial institution or other agent
acting on your behalf, you may be required to provide appropriate certifications to the agent.
Your agent will then generally be required to provide appropriate certifications to AMB LP or its
paying agent, either directly or through other intermediaries. Special rules apply to foreign
partnerships, estates and trusts, and, in certain circumstances, certifications as to foreign
status of partners, trust owners or beneficiaries may have to be provided to AMB LP or its paying
agent. In addition, special rules apply to qualified intermediaries that enter into withholding
agreements with the IRS.
If you cannot satisfy the requirements described above, payments of interest made to you
generally will be subject to U.S. federal withholding tax at a rate of 30%, unless you provide to
AMB LP or its paying agent a properly executed IRS Form W-8BEN claiming an exemption from or a
reduction of withholding under the benefit
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of a U.S. income tax treaty or you provide a properly executed IRS Form W-8ECI claiming that
the payments of interest are effectively connected with your conduct of a trade or business in the
United States.
Sale, Exchange or Other Disposition of AMB LP Notes
Subject to the discussion below concerning backup withholding, you will generally not be
subject to U.S. federal income tax on any gain recognized on a sale, exchange, redemption or
repayment of an AMB LP Note (other than any amount representing accrued but unpaid interest, which
will be treated as such) unless (1) the gain is effectively connected with your conduct of a U.S.
trade or business income, and, if a U.S. income tax treaty applies, is generally attributable to a
U.S. “permanent establishment” you maintain (in which case the branch profits tax may also apply to
a corporate non-U.S. holder), (2) you are an individual who is present in the United States for 183
or more days in the taxable year of the disposition and certain other requirements are met or (3)
you dispose of an AMB LP Exchangeable Note and such AMB LP Exchangeable Note constitutes a USRPI
within the meaning of FIRPTA. Special rules may apply to AMB LP Notes redeemed in part.
AMB currently anticipates that it constitutes a “domestically-controlled qualified investment
entity” (defined generally as a REIT in which at all times during a specified testing period less
than 50% in value of the shares was held directly or indirectly by foreign persons), in which case
gain recognized by you may not be taxable under FIRPTA. However, because shares of AMB common stock
are publicly traded, there can be no assurance that AMB has or will retain that status. Even if AMB
does not qualify as a domestically-controlled qualified investment entity at the time you dispose
of the AMB LP Exchangeable Notes, gain arising from such disposition still generally would not be
subject to FIRPTA tax if any class of AMB capital stock is considered regularly traded under
applicable Treasury Regulations on an established securities market, such as the New York Stock
Exchange, and if the AMB LP Exchangeable Notes are not regularly traded, on the date the AMB LP
Exchangeable Notes were acquired by you, you did not own, actually or constructively, AMB LP
Exchangeable Notes with a fair market value greater than the fair market value on that date of 5%
of the regularly traded class of AMB capital stock with the lowest fair market value. If the gain
on the sale of the AMB LP Exchangeable Notes were to be subject to taxation under FIRPTA, you would
generally be subject to the same treatment as U.S. holders with respect to the gain. Further, a
withholding of tax at a rate of 10% of the gross amount payable would apply, although any
withholding tax withheld pursuant to these rules would be creditable against your U.S. federal
income tax liability.
Although the application of the above exceptions from FIRPTA to the AMB LP Exchangeable Notes
is not entirely clear, based on the law, facts and circumstances as they currently exist, AMB LP
currently expects that the AMB LP Exchangeable Notes will not constitute USRPIs as of the time of
any sale, exchange or redemption of AMB LP Exchangeable Notes, although there can be no assurances
in this regard. Accordingly, AMB currently does not intend to withhold U.S. federal income tax from
any amounts payable to you upon the redemption, repurchase or exchange by us of an AMB LP
Exchangeable Note (including an exchange of an AMB LP Exchangeable Note for any AMB common stock).
However, it is possible that the IRS could disagree with AMB’s position, in which case you would
be liable for U.S. federal income tax under FIRPTA upon any such sale, exchange or redemption, and
could be liable for interest and penalties if you fail to timely file a U.S. federal income tax
return and pay such tax when due. If none of the conditions described above applies, AMB LP intends
to withhold 10% of any amounts payable to you on the redemption, repurchase or exchange by us of an
AMB LP Exchangeable Note. Third party purchasers may not agree with the position that AMB LP
intends to take regarding the applicability to the AMB LP Exchangeable Notes of the exceptions to
FIRPTA described above and may withhold U.S. federal income tax from payments to you upon a sale or
disposition of an AMB LP Exchangeable Note. Further, any other sale or disposition of an AMB LP
Exchangeable Note may be subject to withholding of U.S. federal income tax. Amounts withheld on
any such sale, exchange or other taxable disposition of an AMB LP Exchangeable Note may not satisfy
your entire tax liability, and you would remain liable for the timely payment of any remaining tax
liability.
If a sale, redemption, repurchase or exchange of an AMB LP Exchangeable Note is exempt from
U.S. federal income tax, any amounts withheld from payments to you may be refunded or credited
against your U.S. federal income tax liability, provided that the required information is provided
to the IRS on a timely basis.
You are urged to consult your tax advisor as to whether the sale, redemption, repurchase or
exchange of a AMB LP Exchangeable Note for AMB common stock is exempt from U.S. federal income tax
under FIRPTA.
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Adjustments to Exchange Rate
The exchange rates on the AMB LP Exchangeable Notes are subject to adjustment in certain
circumstances. Any such adjustment could, in certain circumstances, give rise to a deemed
distribution to non-U.S. holders of the AMB LP Exchangeable Notes. See “— U.S. Holders —
Constructive Dividends” above.
Until such time as judicial, legislative, or regulatory guidance becomes available that would,
in AMB’s reasonable determination, permit us to treat such deemed distributions as other than
deemed dividend distributions treated as ordinary income, AMB in general intends to withhold on
such distributions at a 30% rate (or lower applicable treaty rate), to the extent such dividends
are made out of its current or accumulated earnings and profits. A non-U.S. holder who is subject
to withholding tax under such circumstances is particularly urged to consult its own tax advisor as
to whether it can obtain a refund for all or a portion of the withholding tax.
Backup Withholding and Information Reporting
U.S. Holders
Interest payments (including original issue discount) made on, or the proceeds of the sale or
other disposition of, ProLogis Notes or AMB LP Notes will be subject to information reporting.
Additionally, the receipt of these payments will be subject to backup withholding of U.S. federal
income tax if the recipient of those payments fails to supply an accurate taxpayer identification
number or otherwise fails to establish an exemption or comply with applicable U.S. information
reporting or certification requirements. Any amount withheld from a payment to a U.S. holder under
the backup withholding rules is allowable as a credit against the U.S. holder’s U.S. federal income
tax, provided that the required information is furnished to the IRS.
Non-U.S. Holders
Payments to you of interest (including original issue discount) on a note, and amounts
withheld from such payments, if any, generally will be required to be reported to the IRS and to
you.
Backup withholding of U.S. federal income tax generally will not apply to payments of interest
(including original issue discount) on a note to you if the statement described above in “— U.S.
Federal Income Tax Considerations Relating to the AMB LP Notes — Non-U.S.
Holders — Taxation
of
Interest” is duly provided by you or you otherwise establish an exemption, provided that AMB LP
does not have actual knowledge or reason to know that you are a U.S. person.
Payment of the proceeds of a sale of a note effected by the U.S. office of a U.S. or foreign
broker will be subject to information reporting requirements and backup withholding unless you
properly certify under penalties of perjury as to your foreign status and certain other conditions
are met or you otherwise establish an exemption. Information reporting requirements and backup
withholding generally will not apply to any payment of the proceeds of the sale of a note effected
outside the United States by a foreign office of a broker. However, unless such a broker has
documentary evidence in its records that you are a non-U.S. holder and certain other conditions are
met, or you otherwise establish an exemption, information reporting will apply to a payment of the
proceeds of the sale of a note effected outside the United States by such a broker if it is a:
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foreign person that derives 50% or more of its gross income for certain periods from
the conduct of trade or business in the United States,
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controlled foreign corporation for U.S. federal income tax purposes or
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foreign partnership that, at any time during its taxable year, has more than 50% of
its income or capital interests owned by United States persons or is engaged in the
conduct of a U.S. trade or business.
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Any amount withheld under the backup withholding rules may be credited against your U.S.
federal income tax liability, if any, and any excess may be refundable if the proper information is
timely provided to the IRS.
Holders Not Exchanging in the Exchange Offers
As described above, under general principles of tax law, the modification of a debt instrument
creates a deemed exchange upon which gain or loss is realized if the modified debt instrument
differs materially either in kind or in extent from the original debt instrument. Under the
Treasury Regulations, the modification of a debt instrument is a “significant” modification (i.e.,
a modification upon which gain or loss is realized) if, based on all the facts and circumstances
and taking into account all modifications of the debt instrument collectively, the legal rights or
obligations that are altered and the degree to which they are altered are “economically
significant.” Whether holders that do not exchange their ProLogis Notes in the appropriate exchange
offers are treated as exchanging, for U.S. federal income tax purposes, their ProLogis Notes for
new ProLogis Notes as a result of the adoption of the proposed modifications to the ProLogis Notes
(see “the Proposed Amendments”) depends on whether these transactions result in a “significant”
modification of the existing ProLogis Notes. The Treasury Regulations also provide that a
modification of a debt instrument that adds, deletes or alters customary accounting or financial
covenants is not a significant modification. The Treasury Regulations do not, however, define
“customary accounting or financial covenants.” In the case of the adoption of the Proposed
Amendments, although the issue is not free from doubt, AMB LP intends to treat the adoption of such
amendments as not constituting a significant modification of the terms of the ProLogis Notes for
U.S. federal income tax purposes, in which case a U.S. holder would not recognize any gain or loss
and such U.S. holder should continue to have the same tax basis and holding period with respect to
such notes as it had before the adoption of the Proposed Amendments.
If the adoption of the Proposed Amendments were treated as a significant modification of the
terms of the ProLogis Notes, however, a non-exchanging U.S. holder of such notes would be treated,
for U.S. federal income tax purposes, as having exchanged its ProLogis Notes for new ProLogis
Notes. In that event, a non-exchanging U.S. holder would recognize capital gain or loss in an
amount equal to the difference between the U.S. holder’s adjusted tax basis in the ProLogis Notes
and the issue price of the new ProLogis Notes deemed received in exchange therefor, provided that
any such gain attributable to accrued but unrecognized market discount would be subject to tax as
ordinary income. The deductibility of capital losses is subject to limitations. In addition, a
non-exchanging U.S. holder would recognize ordinary interest income on the amount of accrued and
unpaid interest on such ProLogis Notes that such holder has not previously included in income,
although such amount will not be again included in income when actually paid. The non-exchanging
U.S. holder’s holding period in such new ProLogis Notes would begin the day after the effective
date of the Proposed Amendments, and the non-exchanging U.S. holder’s basis in the new ProLogis
Notes would generally equal their issue price.
A non-U.S. holder who does not exchange the ProLogis Notes in the exchange offers will be
subject to the same rules as those discussed above with respect to non-exchanging U.S. holders for
purposes of determining whether the Proposed Amendments give rise to a deemed exchange. In the
event that such Proposed Amendments are considered to result in a deemed taxable exchange, a
non-U.S. holder will generally be taxed on any gain realized on the exchange only under the
circumstances described above under “— Non-U.S. Holders of ProLogis Notes Validly Tendering (and
not Validly Withdrawing) After the Early Consent Date — Exchange Offers.”
U.S. holders not exchanging their ProLogis Convertible Notes for AMB LP Exchangeable Notes
should note that pursuant to the Twelfth Supplemental Indenture, the ProLogis Convertible Notes
will no longer be convertible into ProLogis common shares but rather will be exchangeable into AMB
common stock (or cash or a combination of AMB common stock and cash), as further described in this
prospectus under “The Proposed Amendments.” You would generally not have been subject to taxable
gain or loss on a conversion of the ProLogis Convertible Notes into ProLogis common shares;
however, an exchange of your ProLogis Convertible Notes for AMB common stock will generally result
in taxable gain or loss to you. For non-U.S. holders not exchanging their ProLogis Convertible
Notes, the discussion above in “— U.S. Federal Income Tax Considerations Relating to the AMB LP
Notes — Non-U.S. Holders — Sale, Exchange or Other Disposition of AMB LP Notes” generally applies
to you in the event you exchange your ProLogis Convertible Notes for AMB common stock.
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Holders are urged to consult their tax advisors as to the amount, timing and character of any
income, gain or loss that would be recognized for U.S. federal income tax purposes in the case of a
deemed exchange and the possibility of the new ProLogis Notes being treated as issued with original
issue discount or premium.
Consent Fees
AMB LP intends to treat the Non-Convertible Notes Consent Fee and Convertible Notes Consent
Fee paid to a holder who validly tenders ProLogis Notes prior to the Early Consent Date and
withdraws such tender after the Early Consent Date as a separate fee paid for consenting to the
Proposed Amendments and not as a payment on the ProLogis Notes. Accordingly, a U.S. holder who
receives a Non-Convertible Notes Consent Fee or Convertible Notes Consent Fee under such
circumstances, generally will recognize ordinary income, subject to ordinary income tax rates, as a
result of such payment. Further, AMB LP therefore intends to withhold on such payments to non-U.S.
holders for U.S. federal income tax at a rate of 30 percent, unless a reduction or exemption
applies under a U.S. income tax treaty and proper certification is provided (generally on IRS Form
W-8BEN) or the non-U.S. holder provides a properly executed IRS Form W-8ECI claiming that the fee
is effectively connected with the conduct of a trade or business in the United States. However, it
is possible that the Non-Convertible Notes Consent Fee or Convertible Notes Consent Fee, if
applicable, could be considered an additional payment under the ProLogis Notes by the IRS or a
court.
U.S. Federal Income Tax Considerations Relating to Ownership of AMB Common Stock
This section summarizes the material U.S. federal income tax consequences generally resulting
from the ownership of AMB common stock upon an exchange of AMB LP Exchangeable Notes for AMB common
stock.
AMB intends to operate in a manner that satisfies the requirements for qualification and
taxation as a REIT under the applicable provisions of the Code and Treasury Regulations. No
assurance can be given, however, that such requirements will be met. The sections of the Code and
the corresponding Treasury Regulations that relate to the qualification and taxation as a REIT are
highly technical and complex. Holders of AMB common stock are urged to consult their own tax
advisors regarding the specific tax consequences of their ownership of the AMB common stock and of
AMB’s election to be taxed as a REIT. Specifically, holders of AMB common stock should consult
their own tax advisors regarding the federal, state, local, foreign and other tax consequences of
such ownership and election, and regarding potential changes in applicable tax laws.
AMB’s Qualification as a REIT
General
AMB elected to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with
the taxable year of AMB ended December 31, 1997. AMB believes that it has been organized and has
operated in a manner that allows it to qualify for taxation as a REIT under the Code commencing
with AMB’s taxable year ended December 31, 1997, and it is intended that AMB will continue to be
organized and operated in this manner. However, AMB’s qualification and taxation as a REIT depend
upon AMB’s ability to meet the various qualification tests imposed under the Code, including
through actual annual operating results, asset composition, distribution levels and diversity of
stock ownership, the results of which have not been and will not be reviewed by AMB’s tax counsel.
Accordingly, the actual results of AMB’s operations during any particular taxable year may not
satisfy those requirements, and no assurance can be given that AMB has operated or that AMB will
continue to operate in a manner so as to qualify or remain qualified as a REIT. See “— Failure to
Qualify.”
Provided AMB qualifies for taxation as a REIT, AMB generally will not be required to pay U.S.
federal corporate income taxes on its net income that is currently distributed to the stockholders.
This treatment substantially eliminates the “double taxation” that ordinarily results from
investment in a C corporation. Double taxation means taxation once at the corporate level when
income is earned and once again at the stockholder level when that income is distributed. AMB will,
however, be required to pay U.S. federal income tax as follows:
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First, AMB will be required to pay tax at regular corporate rates on any
undistributed “REIT taxable income,” including undistributed net capital gains.
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Second, AMB may be required to pay the “alternative minimum tax” on items of tax
preference under some circumstances.
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Third, if AMB has (1) net income from the sale or other disposition of “foreclosure
property” held primarily for sale to customers in the ordinary course of business or
(2) other nonqualifying income from foreclosure property, AMB will be required to pay
tax at the highest corporate rate on this income. Foreclosure property is generally
property acquired through foreclosure or after a default on a loan secured by the
property or a lease of the property.
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Fourth, AMB will be required to pay a 100% tax on any net income from prohibited
transactions. Prohibited transactions are, in general, sales or other taxable
dispositions of property, other than foreclosure property, held primarily for sale to
customers in the ordinary course of business.
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Fifth, if AMB fails to satisfy the 75% gross income test or the 95% gross income
test, as described below, but has otherwise maintained its qualification as a REIT
because certain other requirements are met, AMB will be required to pay a tax equal to
(1) the greater of (A) the amount by which 75% of AMB’s gross income exceeds the amount
qualifying under the 75% gross income test, and (B) the amount by which 95% of AMB’s
gross income exceeds the amount qualifying under the 95% gross income test, multiplied
by (2) a fraction intended to reflect the profitability of AMB.
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Sixth, if AMB fails to satisfy any of the REIT asset tests (other than a
de minimis
failure of the 5% or 10% asset tests), as described below, provided such failure is due
to reasonable cause and not due to willful neglect, and nonetheless maintains its REIT
qualification because of specified cure provisions, AMB will be required to pay a tax
equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net
income generated by the nonqualifying assets that caused AMB to fail such test.
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Seventh, if AMB fails to satisfy any provision of the Code that would result in its
failure to qualify as a REIT (other than a violation of the REIT gross income tests or
certain violations of the asset tests described below) and the violation is due to
reasonable cause and not due to willful neglect, AMB may retain its REIT qualification
but will be required to pay a penalty of $50,000 for each such failure.
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Eighth, AMB will be required to pay a 4% excise tax to the extent AMB fails to
distribute during each calendar year at least the sum of (1) 85% of AMB’s REIT ordinary
income for the year, (2) 95% of its REIT capital gain net income for the year (other
than capital gain AMB elects to retain and pay tax on) and (3) any undistributed
taxable income from prior periods.
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Ninth, if AMB acquires any asset from a corporation that is or has been a C
corporation in a transaction in which the basis of the asset in the hands of AMB is
determined by reference to the basis of the asset in the hands of the C corporation,
and AMB subsequently recognizes gain on the disposition of the asset during the
ten-year period (five-year period for gains recognized in 2011) beginning on the date
on which AMB acquired the asset, then AMB will be required to pay tax at the highest
regular corporate tax rate on this gain to the extent of the excess of (1) the fair
market value of the asset over (2) AMB’s adjusted basis in the asset, in each case
determined as of the date on which AMB acquired the asset. The results described in
this paragraph with respect to the recognition of gain assume that the necessary
parties make or refrain from making the appropriate elections under the applicable
Treasury Regulations then in effect.
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Tenth, AMB will be required to pay a 100% tax on any “redetermined rents,”
“redetermined deductions” or “excess interest.” In general, redetermined rents are
rents from real property that are overstated as a result of services furnished by a
“taxable REIT subsidiary” of AMB to any of its tenants. See “— Requirements for
Qualification as a REIT — Ownership of Interests in Taxable REIT Subsidiaries.”
Redetermined deductions and excess interest generally represent amounts that are
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deducted by a taxable REIT subsidiary for amounts paid to AMB that are in excess of the
amounts that would have been deducted based on arm’s length negotiations. See “—
Requirements for Qualification as a REIT — Redetermined Rents, Redetermined Deductions,
and Excess Interest.”
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Requirements for Qualification as a REIT
The Code defines a REIT as a corporation, trust or association:
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that is managed by one or more trustees or directors;
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2.
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that issues transferable shares or transferable certificates to evidence its
beneficial ownership;
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3.
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that would be taxable as a domestic corporation, but for Sections 856 through
860 of the Code;
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4.
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that is not a financial institution or an insurance company within the meaning
of certain provisions of the Code;
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5.
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that is beneficially owned by 100 or more persons;
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6.
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not more than 50% in value of the outstanding stock of which is owned, actually
or constructively, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of each taxable year; and
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7.
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that meets other tests, described below, regarding the nature of its income and
assets and the amount of its distributions.
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The Code provides that conditions (1) through (4), inclusive, must be met during the entire
taxable year and that condition (5) must be met during at least 335 days of a taxable year of
twelve months, or during a proportionate part of a taxable year of less than twelve months.
Conditions (5) and (6) above do not apply until after the first taxable year for which an election
is made to be taxed as a REIT.
For purposes of condition (6), specified tax-exempt entities are treated as individuals,
except that a “look- through” exception applies with respect to pension funds.
AMB believes that it has been organized, has operated and has issued sufficient shares of
capital stock with sufficient diversity of ownership to allow it to satisfy conditions (1) through
(7), inclusive during the relevant time periods. In addition, AMB’s charter provides restrictions
on the ownership and transfer of AMB’s capital stock intended to assist AMB in continuing to
satisfy the share ownership requirements described in conditions (5) and (6) above. These stock
ownership and transfer restrictions may not ensure that AMB will, in all cases, be able to satisfy
the share ownership requirements described in conditions (5) and (6) above. If AMB fails to satisfy
these share ownership requirements, except as provided in the next sentence, AMB’s status as a REIT
will terminate. If, however, AMB complies with the rules contained in applicable Treasury
Regulations that require AMB to ascertain the actual ownership of its stock and AMB does not know,
or would not have known through the exercise of reasonable diligence, that it failed to meet the
requirement described in condition (6) above, AMB will be treated as having met this requirement.
See “— Failure to Qualify.”
In addition, AMB may not maintain its status as a REIT unless the taxable year is the calendar
year. AMB has and will continue to have a calendar taxable year.
Ownership of a Partnership Interest.
AMB will own and operate one or more properties through
partnerships and limited liability companies treated as partnerships for U.S. federal income tax
purposes. Treasury Regulations provide that if AMB is a partner in a partnership, AMB will be
deemed to own its proportionate share of the assets of the partnership based on AMB’s interest in
the partnership’s capital, subject to special rules relating to the 10% asset test described below.
AMB also will be deemed to be entitled to its proportionate share of the income of the partnership.
The character of the assets and gross income of the partnership retains the same character in the
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hands of AMB for purposes of Section 856 of the Code, including satisfying the gross income
tests and the asset tests. In addition, for these purposes, the assets and items of income of any
partnership in which AMB directly or indirectly owns an interest include such partnership’s share
of assets and items of income of any partnership in which it owns an interest. Thus, AMB’s
proportionate share of the assets and items of income of the operating partnership, including the
operating partnership’s share of these items for any partnership in which the operating partnership
owns an interest, are treated as the assets and items of income of AMB for purposes of applying the
requirements described in this discussion, including the income and asset tests described below.
Included below under “— Tax Aspects of the Operating Partnership, the Subsidiary Partnerships and
the Limited Liability Companies” is a brief summary of the rules governing the U.S. federal income
taxation of partnerships.
AMB will have direct control of the operating partnership and indirect control of some of the
subsidiary partnerships of AMB, and intends to continue to operate them in a manner consistent with
the requirements for qualification as a REIT. However, AMB will be a limited partner in certain
partnerships. If a partnership in which AMB owns an interest takes or expects to take actions that
could jeopardize the status of AMB as a REIT or require AMB to pay tax, AMB may be forced to
dispose of its interest in such entity. In addition, it is possible that a partnership could take
an action that could cause AMB to fail a REIT income or asset test, and that AMB would not become
aware of such action in time to dispose of its interest in the partnership or take other corrective
action on a timely basis. In that case, AMB could fail to qualify as a REIT unless it were entitled
to relief, as described below. See “— Failure to Qualify.” The treatment described in this
paragraph also applies with respect to the ownership of AMB of interests in limited liability
companies or other entities or arrangements that are treated as partnerships for U.S. federal
income tax purposes.
Ownership of Interests in Qualified REIT Subsidiaries.
AMB owns 100% of the stock of a number
of corporate subsidiaries that AMB believes will be treated as qualified REIT subsidiaries under
the Code, and AMB may acquire additional qualified REIT subsidiaries in the future. A corporation
will qualify as a qualified REIT subsidiary if AMB owns 100% of its stock and it is not a “taxable
REIT subsidiary,” as described below. A qualified REIT subsidiary is not treated as a separate
corporation for U.S. federal income tax purposes. All assets, liabilities and items of income,
deduction and credit of a qualified REIT subsidiary are treated as the assets, liabilities and such
items (as the case may be) of AMB for all purposes under the Code, including the REIT qualification
tests. For this reason, references in this discussion to AMB’s income and assets include the income
and assets of any qualified REIT subsidiary AMB owns. A qualified REIT subsidiary is not required
to pay U.S. federal income tax, and AMB’s ownership of the stock of a qualified REIT subsidiary
will not violate the restrictions on ownership of securities, as described below under “— Asset
Tests.”
Ownership of Interests in Taxable REIT Subsidiaries.
The taxable REIT subsidiaries of AMB will
be corporations other than REITs and qualified REIT subsidiaries in which AMB directly or
indirectly holds stock, and that have made a joint election with AMB to be treated as taxable REIT
subsidiaries. A taxable REIT subsidiary also includes any corporation other than a REIT with
respect to which one of the taxable REIT subsidiaries of AMB owns more than 35% of the total voting
power or value of the outstanding securities of such corporation. Other than some activities
relating to lodging and health care facilities, a taxable REIT subsidiary may generally engage in
any business, including the provision of customary or non-customary services to tenants of its
parent REIT. A taxable REIT subsidiary is subject to U.S. federal income tax as a regular C
corporation. In addition, the taxable REIT subsidiaries of AMB may be prevented from deducting
interest on debt funded directly or indirectly by AMB if certain tests regarding the taxable REIT
subsidiary’s debt to equity ratio and interest expense are not satisfied. AMB will hold an interest
in a number of taxable REIT subsidiaries, and may acquire securities in one or more additional
taxable REIT subsidiaries in the future. AMB’s ownership of securities of taxable REIT subsidiaries
will not be subject to the 5% or 10% asset tests described below under “— Asset Tests.”
Affiliated REIT.
AMB owns, and following the Merger, AMB will continue to own an interest in
certain corporate subsidiaries which have elected to be taxed as REITs. Provided each of these
subsidiary REITs qualifies as a REIT, AMB’s interest in each subsidiary REIT will be treated as a
qualifying real estate asset for purposes of the REIT asset tests and any dividend income or gains
derived by us from each such subsidiary REIT will generally be treated as income that qualifies for
purposes of the REIT gross income tests. To qualify as a REIT, each subsidiary REIT must
independently satisfy the various REIT qualification requirements described in this summary. If a
subsidiary REIT were to fail to qualify as a REIT, and certain relief provisions did not apply,
such subsidiary REIT would be treated as a taxable C-corporation and its income would be subject to
federal income tax. In
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addition, a failure of a subsidiary REIT to qualify as a REIT could have an adverse effect on
AMB’s ability to comply with the REIT income and asset tests, and thus could impair AMB’s ability
to qualify as a REIT. In addition, one subsidiary REIT, Palmtree Acquisition Corporation, is the
successor of Catellus Development Corporation, which was a C corporation that elected to be treated
as a REIT effective January 1, 2004 and is therefore subject to the built-in gain rules discussed
above. Therefore, Palmtree Acquisition Corporation could be subject to a corporate level tax at the
highest regular corporate rate (currently 35%) on any gain recognized within ten years (reduced to
five years for gain recognized in 2011) of Catellus Development Corporation’s conversion to a REIT
from the sale of any assets that Catellus Development Corporation held at the effective time of its
election to be a REIT, but only to the extent of the built-in gain based on the fair market value
of those assets as of the effective date of the REIT election. Palmtree Acquisition Corporation is
not currently expected to dispose of any assets if such disposition would result in the imposition
of a material tax liability unless such disposition can be effected through a tax-deferred exchange
of the property. However, certain assets are subject to third party purchase options that may
require Palmtree Acquisition Corporation to sell such assets, and those assets may carry deferred
tax liabilities that would be triggered on such sales.
Income Tests.
AMB must satisfy two gross income requirements annually to maintain its
qualification as a REIT. First, in each taxable year, AMB must derive directly or indirectly at
least 75% of its gross income (excluding gross income from prohibited transactions, from certain
hedging transactions entered into after July 30, 2008 and from certain foreign currency gains
recognized after July 30, 2008) from investments relating to real property or mortgages on real
property, including “rents from real property” and, in certain circumstances, interest, or from
certain types of temporary investments. Second, in each taxable year, AMB must derive at least 95%
of its gross income (excluding gross income from prohibited transactions, from certain hedges of
indebtedness, from certain other hedges entered into after July 30, 2008 and from certain foreign
currency gains recognized after July 30, 2008) from (i) these real property investments, (ii)
dividends, interest and gain from the sale or disposition of stock or securities, or (iii) any
combination of the foregoing. For these purposes, the term “interest” generally does not include
any amount received or accrued, directly or indirectly, if the determination of all or some of the
amount depends in any way on the income or profits of any person. However, an amount received or
accrued generally will not be excluded from the term “interest” solely by reason of being based on
a fixed percentage or percentages of receipts or sales.
Rents AMB receives from a tenant will qualify as “rents from real property” for the purpose of
satisfying the gross income requirements described above only if all of the following conditions
are met:
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the amount of rent must not be based in whole or in part on the income or profits of
any person. However, an amount AMB receives or accrues generally will not be excluded
from the term “rents from real property” solely because it is based on a fixed
percentage or percentages of receipts or sales;
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AMB, or an actual or constructive owner of 10% or more of the stock of AMB, must not
actually or constructively own 10% or more of the interests in the assets or net
profits of the tenant or, if the tenant is a corporation, 10% or more of the total
combined voting power of all classes of stock entitled to vote or 10% or more of the
total value of all classes of stock of the tenant. Rents received from such a tenant
that is also a taxable REIT subsidiary, however, will not be excluded from the
definition of “rents from real property” as a result of this condition if at least 90%
of the space at the property to which the rents relate is leased to third parties, and
the rents paid by the taxable REIT subsidiary are substantially comparable to rents
paid by other tenants for comparable space. Whether rents paid by a taxable REIT
subsidiary are substantially comparable to rents paid by other tenants is determined at
the time the lease with the taxable REIT subsidiary is entered into, extended and
modified, if such modification increases the rents due under such lease.
Notwithstanding the foregoing, however, if a lease with a “controlled taxable REIT
subsidiary” is modified and such modification results in an increase in the rents
payable by such taxable REIT subsidiary, any such increase will not qualify as “rents
from real property.” For purposes of this rule, a “controlled taxable REIT subsidiary”
is a taxable REIT subsidiary in which AMB owns stock possessing more than 50% of the
voting power or more than 50% of the total value;
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rent attributable to personal property leased in connection with a lease of real
property must not be greater than 15% of the total rent received under the lease. If
this requirement is not met, then the portion of the rent attributable to personal
property will not qualify as “rents from real property;” and
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AMB generally must not operate or manage its property or furnish or render services
to its tenants, subject to a 1%
de minimis
exception, other than customary services
through an independent contractor from whom AMB derives no revenue. AMB may, however,
directly perform certain services that are “usually or customarily rendered” in
connection with the rental of space for occupancy only and are not otherwise considered
“rendered to the occupant” of the property. Examples of such services include the
provision of light, heat, or other utilities, trash removal and general maintenance of
common areas. In addition, AMB may employ a taxable REIT subsidiary, which may be
wholly or partially owned by AMB, to provide both customary and non- customary services
to the tenants of AMB without causing the rent AMB received from those tenants to fail
to qualify as “rents from real property.” Any amounts AMB receives from a taxable REIT
subsidiary with respect to its provision of non-customary services will, however, be
nonqualifying income under the 75% gross income test and, except to the extent received
through the payment of dividends, the 95% gross income test.
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AMB generally does not intend to, and as the general partner of the operating partnership does
not intend to permit the operating partnership to, take actions AMB believes will cause AMB to fail
to satisfy any of the rental conditions described above. However, AMB may intentionally have taken
and may intentionally continue to take actions that fail to satisfy these conditions to the extent
the failure will not, based on the advice of tax counsel, jeopardize its tax status as a REIT. In
addition, with respect to the limitation on the rental of personal property, AMB will not obtain
appraisals of the real property and personal property leased to tenants. Accordingly, there can be
no assurance that the IRS will agree with the determinations of value of AMB.
From time to time, AMB may enter into hedging transactions with respect to one or more of its
assets or liabilities. The hedging activities of AMB may include entering into interest rate swaps,
caps and floors, options to purchase these items, and futures and forward contracts. Income from a
hedging transaction, including gain from the sale or disposition of such a transaction, that is
clearly and timely identified as a hedging transaction as specified in the Code will not constitute
gross income and thus will be exempt from the 95% gross income test to the extent such a hedging
transaction is entered into on or after January 1, 2005, and will not constitute gross income and
thus will be exempt from the 75% gross income test to the extent such hedging transaction is
entered into after July 30, 2008. Income and gain from a hedging transaction, including gain from
the sale or disposition of such a transaction, entered into on or prior to July 30, 2008 will be
treated as nonqualifying income for purposes of the 75% gross income test. Income and gain from a
hedging transaction, including gain from the sale or disposition of such a transaction, entered
into prior to January 1, 2005 will be qualifying income for purposes of the 95% gross income test.
The term “hedging transaction,” as used above, generally means any transaction AMB enters into in
the normal course of the business of AMB primarily to manage risk of (i) interest rate changes or
fluctuations with respect to borrowings made or to be made by AMB to acquire or carry real estate
assets and (ii) for hedging transactions entered into after July 30, 2008, currency fluctuations
with respect to an item of qualifying income under the 75% or 95% gross income test (or any
property which generates such income or gain). To the extent that AMB does not properly identify
such transactions as hedges or hedges with other types of financial instruments, or hedges other
types of indebtedness, the income from those transactions is not likely to be treated as qualifying
income for purposes of the gross income tests. It is intended that AMB will structure any hedging
transactions in a manner that does not jeopardize the status of AMB as a REIT.
AMB will hold investments in certain entities located outside the United States, and from time
to time AMB may acquire additional properties outside of the United States, through a taxable REIT
subsidiary or otherwise. These acquisitions could cause AMB to incur foreign currency gains or
losses. Prior to July 30, 2008, the characterization of any such foreign currency gains for
purposes of the REIT gross income tests was unclear, although the IRS had indicated that REITs may
apply the principles of proposed Treasury Regulations to determine whether such foreign currency
gain constitutes qualifying income under the REIT income tests. As a result, AMB anticipated that
any foreign currency gain AMB recognized relating to rents AMB receives from any property located
outside of the United States were qualifying income for purposes of the 75% and 95% gross income
tests. Any foreign currency gains recognized after July 30, 2008 to the extent attributable to
specified items of qualifying
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income or gain, or specified qualifying assets, however, generally will not constitute gross
income for purposes of the 75% and 95% gross income tests, and will be exempt from these tests.
The taxable REIT subsidiaries of AMB may provide certain services in exchange for a fee or
derive other income that would not qualify under the REIT gross income tests. Such fees and other
income do not accrue to AMB, but, to the extent the taxable REIT subsidiaries of AMB pay dividends,
AMB generally will derive its allocable share of such dividend income through the interest of AMB
in the operating partnership. Such dividend income qualifies under the 95%, but not the 75%, REIT
gross income test. The operating partnership may provide certain management or administrative
services to the taxable REIT subsidiaries of AMB. In addition, AMB Capital Partners, LLC conducts
an asset management business and receives fees, which may include incentive fees, in exchange for
the provision of certain services to asset management clients. The fees AMB and AMB Capital
Partners, LLC derive as a result of the provision of such services will be non-qualifying income to
AMB under both the 95% and 75% REIT income tests. The amount of such dividend and fee income will
depend on a number of factors that cannot be determined with certainty, including the level of
services provided by AMB Capital Partners, LLC, the taxable REIT subsidiaries of AMB and the
operating partnership. AMB will monitor the amount of the dividend income from the taxable REIT
subsidiaries of AMB and the fee income described above, and will take actions intended to keep this
income, and any other non-qualifying income, within the limitations of the REIT income tests.
However, there can be no guarantee that such actions will in all cases prevent AMB from violating a
REIT income test.
The aggregate amount of the nonqualifying income of AMB, from all sources, in any taxable year
is not expected to exceed the limit on nonqualifying income under the gross income tests. If AMB
fails to satisfy one or both of the 75% or 95% gross income tests for any taxable year, AMB may
nevertheless qualify as a REIT for the year if AMB is entitled to relief under certain provisions
of the Code. AMB generally may make use of the relief provisions if:
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following the identification by AMB of the failure to meet the 75% or 95% gross
income tests for any taxable year, AMB files a schedule with the IRS setting forth each
item of AMB’s gross income for purposes of the 75% or 95% gross income tests for such
taxable year in accordance with Treasury Regulations to be issued; and
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the failure of AMB to meet these tests was due to reasonable cause and not due to
willful neglect.
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It is not possible, however, to state whether in all circumstances AMB would be entitled to
the benefit of these relief provisions. For example, if AMB fails to satisfy the gross income tests
because non-qualifying income that AMB intentionally accrues or receives exceeds the limits on
non-qualifying income, the IRS could conclude that the failure of AMB to satisfy the tests was not
due to reasonable cause. If these relief provisions do not apply to a particular set of
circumstances, AMB will not qualify as a REIT. As discussed above in “— AMB’s Qualification as a
REIT — General,” even if these relief provisions apply, and AMB retains its status as a REIT, a
tax would be imposed with respect to the non-qualifying income of AMB. AMB may not always be able
to comply with the gross income tests for REIT qualification despite periodic monitoring of its
income.
Prohibited Transaction Income.
Any gain AMB recognizes (including any net foreign currency
gain recognized after July 30, 2008) on the sale of property held as inventory or other property
held primarily for sale to customers in the ordinary course of business, including AMB’s share of
any such gain realized by the qualified REIT subsidiaries of AMB, partnerships or limited liability
companies, will be treated as income from a prohibited transaction that is subject to a 100%
penalty tax. Such prohibited transaction income could also adversely affect the ability of AMB to
satisfy the income tests for qualification as a REIT. Under existing law, whether property is held
as inventory or primarily for sale to customers in the ordinary course of a trade or business is a
question of fact that depends on all the facts and circumstances surrounding the particular
transaction. AMB intends to hold its properties for investment with a view to long-term
appreciation, to engage in the business of acquiring, developing and owning its properties and to
make occasional sales of the properties as are consistent with the investment objectives of AMB.
AMB does not believe that any of its sales were prohibited transactions. However, the IRS may
contend that one or more of these sales is subject to the 100% penalty tax.
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Redetermined Rents, Redetermined Deductions and Excess Interest.
Any redetermined rents,
redetermined deductions or excess interest AMB generates will be subject to a 100% penalty tax. In
general, redetermined rents are rents from real property that are overstated as a result of
services furnished by one of the taxable REIT subsidiaries of AMB to any of the tenants of AMB, and
redetermined deductions and excess interest represent amounts that are deducted by a taxable REIT
subsidiary for amounts paid to AMB that are in excess of the amounts that would have been deducted
based on arm’s length agreements. Rents AMB receives will not constitute redetermined rents if they
qualify under the safe harbor provisions contained in the Code.
It is intended that AMB will deal with its taxable REIT subsidiaries on a commercially
reasonable arm’s length basis, but AMB may not always satisfy the safe harbor provisions described
above. These determinations are inherently factual, and the IRS has broad discretion to assert that
amounts paid between related parties should be reallocated to clearly reflect their respective
incomes. If the IRS successfully made such an assertion, AMB would be required to pay a 100%
penalty tax on the excess of an arm’s length fee for tenant services over the amount actually paid.
Asset Tests.
At the close of each quarter of the taxable year of AMB, AMB must also satisfy
four tests relating to the nature and diversification of the assets of AMB. First, at least 75% of
the value of AMB’s total assets, including assets held by the qualified REIT subsidiaries of AMB
and AMB’s allocable share of the assets held by the partnerships and limited liability companies in
which AMB owns an interest, must be represented by real estate assets, cash, cash items and
government securities. For purposes of this test, the term “real estate assets” generally means
real property (including interests in real property and interests in mortgages on real property)
and shares (or transferable certificates of beneficial interest) in other REITs, as well as any
stock or debt instrument attributable to the investment of the proceeds of a stock offering or a
public offering of debt with a term of at least five years, but only for the one-year period
beginning on the date AMB receives such proceeds.
Second, not more than 25% of the value of AMB’s total assets may be represented by securities,
other than those securities included in the 75% asset test.
Third, of the investments included in the 25% asset class, and except for investments in other
REITs, the qualified REIT subsidiaries of AMB and the taxable REIT subsidiaries of AMB, the value
of any one issuer’s securities may not exceed 5% of the value of AMB’s total assets, and AMB may
not own more than 10% of the total vote or value of the outstanding securities of any one issuer
except, in the case of the 10% value test, securities satisfying the “straight debt” safe-harbor.
Certain types of securities are disregarded as securities solely for purposes of the 10% value
test, including, but not limited to, any loan to an individual or an estate, any obligation to pay
rents from real property and any security issued by a REIT. In addition, solely for purposes of the
10% value test, the determination of AMB’s interest in the assets of a partnership or limited
liability company in which AMB owns an interest will be based on AMB’s proportionate interest in
any securities issued by the partnership or limited liability company, excluding for this purpose
certain securities described in the Code.
Fourth, not more than 25% (20% for taxable years beginning prior to January 1, 2009) of the
value of AMB’s total assets may be represented by the securities of one or more taxable REIT
subsidiaries.
Through the operating partnership, AMB will own an interest in several corporations which have
jointly elected with AMB to be treated as taxable REIT subsidiaries, and therefore will be taxable
REIT subsidiaries of AMB following the Merger. Some of these corporations own the stock of other
corporations, which will also become the taxable REIT subsidiaries of AMB. So long as each of these
corporations qualifies as a taxable REIT subsidiary, AMB will not be subject to the 5% asset test,
the 10% voting securities limitation or the 10% value limitation with respect to AMB’s ownership of
their securities. AMB may acquire securities in other taxable REIT subsidiaries in the future. AMB
believes that the aggregate value of the taxable REIT subsidiaries of AMB has not exceeded and that
the aggregate value of AMB’s taxable REIT subsidiaries will not exceed 25% (or 20% for taxable
years beginning prior to January 1, 2009) of the aggregate value of AMB’s gross assets. Prior to
the election to treat these corporations as taxable REIT subsidiaries, AMB did not own more than
10% of the voting securities of these corporations. In addition, AMB believes that prior to the
election to treat these corporations as taxable REIT subsidiaries of AMB, the value of the pro rata
share of the securities of these corporations held by AMB did not, in any case, exceed 5% of the
total value of the assets of AMB. With respect to each issuer in which AMB currently owns
securities, that does not qualify as a REIT, a qualified REIT subsidiary or a taxable REIT
subsidiary, AMB
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believes that the value of the securities of each issuer does not exceed 5% of the total value
of AMB’s assets and AMB’s ownership of the securities of each issuer complies with the 10% voting
securities limitation and 10% value limitation. No independent appraisals have been obtained to
support these conclusions, and there can be no assurance that the IRS will agree with the
determinations of value of AMB.
The asset tests must be satisfied at the close of each quarter of AMB’s taxable year in which
AMB (directly or through the qualified REIT subsidiaries, partnerships or limited liability
companies of AMB) acquires securities in the applicable issuer, and also at the close of each
quarter of AMB’s taxable year in which AMB increases its ownership of securities of such issuer,
including as a result of increasing AMB’s interest in the operating partnership or other
partnerships and limited liability companies which own such securities, or acquire other assets.
For example, AMB’s indirect ownership of securities of each issuer will increase as a result of
AMB’s capital contributions to the operating partnership or as limited partners exercise their
redemption/exchange rights. After initially meeting the asset tests at the close of any quarter,
AMB will not lose its status as a REIT for failure to satisfy the asset tests at the end of a later
quarter solely by reason of changes in asset values (including, for taxable years beginning on or
after January 1, 2009, a change caused by changes in the foreign currency exchange rate used to
value foreign assets). If AMB fails to satisfy an asset test because AMB acquires securities or
other property during a quarter, AMB may cure this failure by disposing of sufficient
non-qualifying assets within 30 days after the close of that quarter. For this purpose, an increase
in the interests of AMB in the operating partnership or any other partnership or limited liability
company in which AMB directly or indirectly owns an interest will be treated as an acquisition of a
portion of the securities or other property owned by that partnership or limited liability company.
Certain relief provisions may be available to AMB if it discovers a failure to satisfy the
asset tests described above after the 30 day cure period. Under these provisions, AMB will be
deemed to have met the 5% and 10% asset tests if the value of AMB’s nonqualifying assets (1) does
not exceed the lesser of (a) 1% of the total value of AMB’s assets at the end of the applicable
quarter or (b) $10,000,000, and (2) AMB disposes of the nonqualifying assets or otherwise satisfy
such tests within (a) six months after the last day of the quarter in which the failure to satisfy
the asset tests is discovered or (b) the period of time prescribed by Treasury Regulations to be
issued. For violations of any of the asset tests due to reasonable cause and not due to willful
neglect and that are, in the case of the 5% and 10% asset tests, in excess of the de minimis
exception described above, AMB may avoid disqualification as a REIT after the 30 day cure period by
taking steps including (1) the disposition of sufficient nonqualifying assets, or the taking of
other actions, which allow AMB to meet the asset tests within (a) six months after the last day of
the quarter in which the failure to satisfy the asset tests is discovered or (b) the period of time
prescribed by Treasury Regulations to be issued, (2) paying a tax equal to the greater of (a)
$50,000 or (b) the highest corporate tax rate multiplied by the net income generated by the
nonqualifying assets, and (3) disclosing certain information to the IRS.
Although AMB believes that it has satisfied the asset tests and plans to take steps to ensure
that it satisfies such tests for any quarter with respect to which retesting is to occur, there can
be no assurance that AMB’s efforts will always be successful, or will not require a reduction in
the operating partnership’s overall interest in an issuer. If AMB fails to cure any noncompliance
with the asset tests in a timely manner, and the relief provisions described above are not
available, AMB would cease to qualify as a REIT. See “— Failure to Qualify” below.
Annual Distribution Requirements.
To maintain its qualification as a REIT, AMB is required to
distribute dividends, other than capital gain dividends, to its stockholders in an amount at least
equal to the sum of:
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90% of AMB’s “REIT taxable income”; and
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90% of AMB’s after tax net income, if any, from foreclosure property; minus
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the excess of the sum of certain items of AMB’s non-cash income over 5% of “REIT
taxable income” as described below.
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AMB’s “REIT taxable income” is computed without regard to the dividends paid deduction and
AMB’s net capital gain. In addition, for purposes of this test, non-cash income means income
attributable to leveled stepped
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rents, original issue discount on purchase money debt, cancellation of indebtedness or a
like-kind exchange that is later determined to be taxable.
In addition, if AMB disposes of any asset it acquired from a corporation which is or has been
a C corporation in a transaction in which AMB’s basis in the asset is determined by reference to
the basis of the asset in the hands of that C corporation, within the ten-year period (five-year
period for gains recognized in 2011) following the acquisition by AMB of such asset, AMB would be
required to distribute at least 90% of the after-tax gain, if any, AMB recognized on the
disposition of the asset, to the extent that gain does not exceed the excess of (a) the fair market
value of the asset on the date AMB acquired the asset over (b) AMB’s adjusted basis in the asset on
the date AMB acquired the asset.
AMB generally must pay the distributions described above in the taxable year to which they
relate, or in the following taxable year if they are declared during the last three months of the
taxable year, payable to stockholders of record on a specified date during such period and paid
during January of the following year. Such distributions are treated as paid by AMB and received by
AMB stockholders on December 31 of the year in which they are declared. In addition, at the
election of AMB, a distribution will be treated as paid in a taxable year if it is declared before
AMB timely files its tax return for that year and paid on or before the first regular dividend
payment after such declaration, provided such payment is made during the twelve month period
following the close of that year. Except as provided below, these distributions are taxable to AMB
stockholders, other than tax-exempt entities, as discussed below, in the year in which paid. This
is so even though these distributions relate to the prior year for purposes of AMB’s 90%
distribution requirement. The amount distributed must not be preferential. To avoid being
preferential, every stockholder of the class of stock to which a distribution is made must be
treated the same as every other stockholder of that class, and no class of stock may be treated
other than according to its dividend rights as a class. To the extent that AMB does not distribute
all of its net capital gain or distributes at least 90%, but less than 100%, of its “REIT taxable
income,” as adjusted, AMB will be required to pay tax on the undistributed amount at regular
ordinary and capital gain corporate tax rates. AMB believes it has made and intends that it will
continue to make timely distributions sufficient to satisfy these annual distribution requirements.
In this regard, the operating partnership agreement authorizes AMB, as general partner, to take
such steps as may be necessary to cause the operating partnership to distribute to its partners an
amount sufficient to permit AMB to meet these distribution requirements.
It is expected that AMB’s “REIT taxable income” will be less than its cash flow because of
depreciation and other non-cash charges included in computing AMB’s “REIT taxable income.”
Accordingly, it is anticipated that AMB will generally have sufficient cash or liquid assets to
enable it to satisfy the distribution requirements described above. However, from time to time, AMB
may not have sufficient cash or other liquid assets to meet these distribution requirements due to
timing differences between the actual receipt of income and actual payment of deductible expenses,
and the inclusion of income and deduction of expenses in determining AMB’s taxable income. If these
timing differences occur, AMB may be required to borrow funds to pay dividends or pay dividends in
the form of taxable stock dividends in order to meet the distribution requirements.
Recent guidance issued by the IRS extends and clarifies earlier guidance regarding certain
part-stock and part-cash dividends by REITs. Pursuant to this new guidance, certain part-stock and
part-cash dividends distributed by publicly-traded REITs with respect to calendar years 2008
through 2011, and in some cases declared as late as December 31, 2012, will be treated as
distributions for purposes of the REIT distribution requirements. Under the terms of this guidance,
up to 90% of AMB’s distributions could be paid in shares of AMB common stock. If AMB makes such a
distribution, taxable stockholders would be required to include the full amount of the dividend
(i.e., the cash and the stock portion) as ordinary income (subject to limited exceptions), to the
extent of its current and accumulated earnings and profits for U.S. federal income tax purposes, as
described below under the headings “Taxation to Holders of AMB Common Stock — U.S. Holders —
Distributions Generally” and “Taxation to Holders of AMB Common Stock — Non-U.S. Holders —
Distributions Generally.” As a result, holders of AMB common stock could recognize taxable income
in excess of the cash received and may be required to pay tax with respect to such dividends in
excess of the cash received. If a taxable stockholder sells the stock it receives as a dividend,
the sales proceeds may be less than the amount included in income with respect to the dividend,
depending on the market price of the stock at the time of the sale. Furthermore, with respect to
non-U.S. holders of AMB common stock, AMB may be required to withhold U.S. tax with respect to such
dividends, including in respect of all or a portion of such dividend that is payable in stock.
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Under some circumstances, AMB may be able to rectify an inadvertent failure to meet the 90%
distribution requirement for a year by paying “deficiency dividends” to its stockholders in a later
year, which AMB may include in its deduction for dividends paid for the earlier year. Thus, AMB may
be able to avoid being taxed on amounts distributed as deficiency dividends. However, AMB will be
required to pay interest to the IRS based upon the amount of any deduction taken for deficiency
dividends.
Furthermore, AMB will be required to pay a 4% excise tax to the extent it fails to distribute
during each calendar year (or in the case of distributions with declaration and record dates
falling in the last three months of the calendar year, by the end of January immediately following
such year) at least the sum of 85% of AMB’s REIT ordinary income for such year, 95% of AMB’s REIT
capital gain income for the year and any undistributed taxable income from prior periods. Any REIT
taxable income and net capital gain on which this excise tax is imposed for any year is treated as
an amount distributed during that year for purposes of calculating the tax in subsequent years.
Like-Kind Exchanges.
AMB has in the past disposed of properties in transactions intended to
qualify as like- kind exchanges under the Code, and AMB may continue this practice in the future.
Such like-kind exchanges are intended to result in the deferral of gain for U.S. federal income tax
purposes. The failure of any such transaction to qualify as a like-kind exchange could subject AMB
to U.S. federal income tax, possibly including the 100% prohibited transaction tax, depending on
the facts and circumstances surrounding the particular transaction.
Earnings and Profits Distribution Requirement.
A REIT is not permitted to have accumulated
earnings and profits attributable to non-REIT years. A REIT has until the close of its first
taxable year in which it has non-REIT earnings and profits to distribute all such earnings and
profits. The failure of AMB to comply with this rule would require AMB to pay a “deficiency
dividend” to its stockholders, and interest to the IRS, to distribute any remaining earnings and
profits. A failure to make this deficiency dividend distribution would result in the loss of AMB’s
REIT status. See “— Failure to Qualify.”
Failure to Qualify
Specified cure provisions are available to AMB in the event that it violates a provision of
the Code that would result in the failure of AMB to qualify as a REIT. Except with respect to
violations of the REIT income tests and asset tests (for which the cure provisions are described
above), and provided the violation is due to reasonable cause and not due to willful neglect, these
cure provisions generally impose a $50,000 penalty for each violation in lieu of a loss of REIT
status.
If AMB fails to qualify for taxation as a REIT in any taxable year, and the relief provisions
of the Code do not apply, AMB will be required to pay tax, including any applicable alternative
minimum tax, on its taxable income at regular corporate rates. Distributions to stockholders in any
year in which AMB fails to qualify as a REIT will not be deductible by AMB and AMB will not be
required to distribute any amounts to its stockholders. As a result, AMB anticipates that its
failure to qualify as a REIT would reduce the cash available for distribution by AMB to its
stockholders. In addition, if AMB fails to qualify as a REIT, all distributions to its stockholders
will be taxable as ordinary corporate dividends to the extent of AMB’s current and accumulated
earnings and profits. In this event, subject to certain limitations of the Code, corporate
distributees may be eligible for the dividends-received deduction. Unless entitled to relief under
specific statutory provisions, AMB will also be disqualified from taxation as a REIT for the four
taxable years following the year during which AMB lost its qualification. It is not possible to
state whether in all circumstances AMB would be entitled to this statutory relief.
Tax Aspects of the Operating Partnership, the Subsidiary Partnerships and the Limited
Liability Companies
General
Substantially all of AMB’s investments will be held indirectly through the operating
partnership and subsidiary partnerships and limited liability companies. In general, partnerships
and limited liability companies that are classified as partnerships for U.S. federal income tax
purposes are “pass-through” entities which are not required to pay U.S. federal income tax. Rather,
partners or members of such entities are allocated their proportionate shares
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of the items of income, gain, loss, deduction and credit of the entity, and are potentially
required to pay tax on this income, without regard to whether they receive a distribution from the
entity. AMB will include in its income its proportionate share of these partnership and limited
liability company items for purposes of the various REIT income tests and in the computation of
AMB’s REIT taxable income. Moreover, for purposes of the REIT asset tests and subject to special
rules relating to the 10% asset test described above, AMB will include its proportionate share of
assets held by the operating partnership and its subsidiary partnerships and limited liability
companies.
Entity Classification
AMB’s ownership of an interest in its operating partnership involves special tax
considerations, including the possibility that the IRS might challenge the status of the operating
partnership or one or more of the subsidiary partnerships or limited liability companies as
partnerships, as opposed to associations taxable as corporations for U.S. federal income tax
purposes. If the operating partnership or one or more of the subsidiary partnerships or limited
liability companies were treated as an association, they would be taxable as a corporation and
therefore be required to pay an entity-level income tax. In this situation, the character of AMB’s
assets and items of gross income would change and could prevent AMB from satisfying the asset tests
and possibly the income tests. This, in turn, could prevent AMB from qualifying as a REIT. In
addition, a change in the tax status of the operating partnership or one or more of the subsidiary
partnerships or limited liability companies might be treated as a taxable event, in which case, AMB
might incur a tax liability without any related cash distributions.
Treasury Regulations that apply for tax periods beginning on or after January 1, 1997, provide
that a domestic business entity not otherwise organized as a corporation and which has at least two
members may elect to be treated as a partnership for U.S. federal income tax purposes. Unless it
elects otherwise, an eligible entity in existence prior to January 1, 1997, will have the same
classification for U.S. federal income tax purposes that it claimed under the entity classification
Treasury Regulations in effect prior to this date. In addition, an eligible entity which did not
exist, or did not claim a classification, prior to January 1, 1997, will be classified as a
partnership (or disregarded entity) for U.S. federal income tax purposes unless it elects
otherwise. It is believed that the operating partnership and subsidiary partnerships and limited
liability companies will be classified as partnerships (or disregarded entities) for U.S. federal
income tax purposes.
Allocations of Income, Gain, Loss and Deduction
The net proceeds from AMB’s issuance of any preferred stock will be contributed to the
operating partnership in exchange for its preferred limited partnership units. In addition, to the
extent AMB issues preferred stock in exchange for preferred limited partnership units of AMB
Property II, L.P., AMB will contribute substantially all of such units to the operating partnership
in exchange for additional preferred limited partnership units in the operating partnership. In
each case, the operating partnership’s partnership agreement will provide for preferred
distributions of cash and preferred allocations of income to AMB with respect to these newly issued
preferred units. As a consequence, AMB will receive distributions from the operating partnership
that AMB will use to pay dividends on substantially all of the shares of preferred stock that AMB
issues before any of the other partners in the operating partnership (other than a holder of
preferred units, if such units are not then held by us) receive a distribution.
In addition, if necessary, income will be specially allocated to AMB, and losses will be
allocated to the other partners of the operating partnership, in amounts necessary to ensure that
the balance in AMB’s capital account will at all times be equal to or in excess of the amount AMB
is required to pay on the preferred stock then issued by AMB upon liquidation or redemption.
Similar preferred distributions and allocations will be made for the benefit of other holders of
preferred limited partnership units in the operating partnership. Except as provided below, all
remaining items of operating income and loss will be allocated to the holders of common units in
the operating partnership in proportion to the number of units or performance units held by each
such unitholder. All remaining items of gain or loss relating to the disposition of the operating
partnership’s assets upon liquidation will be allocated first to the partners in the amounts
necessary, in general, to equalize the per unit capital accounts of AMB and the limited partners,
with any special allocation of gain to the holders of performance units being offset by a reduction
in the gain allocation to AMB and to unitholders that were performance investors.
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Certain limited partners have agreed to guarantee debt of the operating partnership, either
directly or indirectly under limited circumstances. As a result of these guarantees, and
notwithstanding the foregoing discussion of allocations of income and loss of the operating
partnership to holders of units, such limited partners could under limited circumstances be
allocated a disproportionate amount of gain or loss upon a liquidation of the operating
partnership.
If an allocation of income of a partnership or limited liability company does not comply with
the requirements of Section 704(b) of the Code and the Treasury Regulations thereunder, the item
subject to the allocation will be reallocated according to the partners’ or members’ interests in
the partnership or limited liability company. This reallocation will be determined by taking into
account all of the facts and circumstances relating to the economic arrangement of the partners or
members with respect to such item. The operating partnership’s allocations of taxable income and
loss are intended to comply with the requirements of Section 704(b) of the Code and the Treasury
Regulations thereunder.
Tax Allocations With Respect to the Properties
Under Section 704(c) of the Code, income, gain, loss and deduction attributable to appreciated
or depreciated property that is contributed to a partnership or limited liability company in
exchange for an interest in the partnership or limited liability company must be allocated in a
manner so that the contributing partner or member is charged with the unrealized gain or benefits
from the unrealized loss associated with the property at the time of the contribution. The amount
of the unrealized gain or unrealized loss is generally equal to the difference between the fair
market value and the adjusted tax basis of the contributed property at the time of contribution as
adjusted from time to time. These allocations are solely for U.S. federal income tax purposes, and
do not affect the book capital accounts or other economic or legal arrangements among the partners
or members. The operating partnership was formed by way of contributions of appreciated property,
i.e., property having an adjusted tax basis less than its fair market value at the time of
contribution. Moreover, subsequent to the formation of the operating partnership, additional
appreciated property has been contributed to it in exchange for operating partnership interests.
The operating partnership agreement requires that these allocations be made in a manner consistent
with Section 704(c) of the Code.
Treasury Regulations issued under Section 704(c) of the Code provide partnerships and limited
liability companies with a choice of several methods of accounting for book-tax differences. AMB
and its operating partnership have agreed to use the “traditional method” to account for book-tax
differences for the properties initially contributed to the operating partnership and for some
assets acquired subsequently. Under the “traditional method,” which is the least favorable method
from the perspective of AMB, the carryover basis of contributed interests in the properties in the
hands of AMB’s operating partnership (i) could cause AMB to be allocated lower amounts of
depreciation deductions for tax purposes than would be allocated to AMB if all contributed
properties were to have a tax basis equal to their fair market value at the time of the
contribution and (ii) could cause AMB to be allocated taxable gain in the event of a sale of such
contributed interests or properties in excess of the economic or book income allocated to AMB as a
result of such sale, with a corresponding benefit to the other partners in AMB’s operating
partnership. An allocation described in (ii) above might cause AMB or the other partners to
recognize taxable income in excess of cash proceeds in the event of a sale or other disposition of
property, which might adversely affect the ability of AMB to comply with the REIT distribution
requirements. See “— AMB’s Qualification as a REIT.” To the extent AMB’s depreciation is reduced,
or the gain on sale of AMB is increased, stockholders may recognize additional dividend income
without an increase in distributions. It has not yet been decided what method will be used to
account for book-tax differences for properties to be acquired by the operating partnership in the
future.
Any property acquired by the operating partnership in a taxable transaction will initially
have a tax basis equal to its fair market value, and Section 704(c) of the Code will not apply.
Taxation to Holders of AMB Common Stock
U.S. Holders
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Distributions Generally.
Distributions out of AMB’s current or accumulated earnings and
profits, other than capital gain dividends discussed below, will constitute dividends generally
taxable to U.S. holders as ordinary income. As long as AMB qualifies as a REIT, these distributions
will not be eligible for the dividends-received deduction in the case of U.S. holders that are
corporations. For purposes of determining whether distributions to holders of AMB common stock are
out of current or accumulated earnings and profits, AMB’s earnings and profits will be allocated
first to distributions on AMB’s outstanding preferred stock and then to distributions on the
outstanding AMB common stock.
To the extent that AMB makes distributions in excess of its current and accumulated earnings
and profits, these distributions will be treated first as a tax-free return of capital to each U.S.
holder. This treatment will reduce the adjusted tax basis which each U.S. holder has in its shares
of AMB common stock by the amount of the distribution, but not below zero. Distributions in excess
of AMB’s current and accumulated earnings and profits and in excess of a U.S. holder’s adjusted tax
basis in its shares of AMB common stock will be taxable as capital gain, provided that the shares
have been held as capital assets. Such gain will be taxable as long-term capital gain if the shares
have been held for more than one year. Dividends AMB declares in October, November, or December of
any year and payable to a stockholder of record on a specified date in any of these months will be
treated as both paid by AMB and received by the stockholder on December 31 of that year, provided
AMB actually pays the dividend on or before January 31 of the following year. Stockholders may not
include in their own income or on their tax returns any of the net operating losses or capital
losses of AMB.
In addition, certain dividends partially paid in AMB stock and partially paid in cash will be
taxable to the recipient U.S. stockholder to the same extent as if paid in cash. See “Requirements
for Qualification as a REIT —Annual Distribution Requirements” above.
Capital Gain Distributions.
Distributions that AMB properly designates as capital gain
dividends will be taxable to U.S. holders of AMB common stock as gain from the sale or disposition
of a capital asset, to the extent that such gain does not exceed AMB’s actual net capital gain for
the taxable year. If AMB properly designates any portion of a dividend as a capital gain dividend,
then AMB intends to allocate a portion of the total capital gain dividends paid or made available
to holders of all classes of AMB stock for the year to the holders of AMB common stock in
proportion to the amount that AMB’s total dividends, as determined for U.S. federal income tax
purposes, paid or made available to the holders of AMB’s common stock for the year bears to the
total dividends, as determined for U.S. federal income tax purposes, paid or made available to
holders of all classes of AMB stock for the year.
Retention of Net Long-Term Capital Gains.
AMB may elect to retain, rather than distribute as a
capital gain dividend, its net long-term capital gains. If AMB makes this election, AMB would pay
tax on its retained net long-term capital gains. In addition, to the extent AMB designates, a U.S.
holder of AMB common stock generally would:
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include its proportionate share of AMB’s undistributed long-term capital gains in
computing its long-term capital gains in its return for its taxable year in which the
last day of AMB’s taxable year falls;
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be deemed to have paid the capital gains tax imposed on AMB on the designated
amounts included in the U.S. holder’s long-term capital gains;
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receive a credit or refund for the amount of tax deemed paid by it;
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increase the adjusted basis of its stock by the difference between the amount of
includable gains and the tax deemed to have been paid by it; and
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in the case of a U.S. holder of AMB common stock that is a corporation,
appropriately adjust its earnings and profits for the retained capital gains as
required by Treasury Regulations to be prescribed by the IRS.
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Passive Activity Losses and Investment Interest Limitations.
Distributions AMB makes and gains
arising from the sale or exchange by a U.S. holder of AMB common stock will not be treated as
passive activity income. As a result, U.S. holders of AMB common stock generally will not be able
to apply any “passive losses” against this income or gain. A U.S. stockholder may elect to treat
capital gain dividends, capital gains from the disposition of stock and qualified dividend income
as investment income for purposes of computing the investment interest limitation, but in such
case, the stockholder will be taxed at ordinary income rates on such amount. Other distributions
made by AMB, to the extent they do not constitute a return of capital, generally will be treated as
investment income for purposes of computing the investment interest limitation.
Dispositions of AMB Common Stock.
If a U.S. holder of AMB common stock sells or disposes of
its shares of AMB common stock to a person other than AMB, it will recognize gain or loss for U.S.
federal income tax purposes in an amount equal to the difference between the amount of cash and the
fair market value of any property it receives on the sale or other disposition and its adjusted
basis in the shares for tax purposes. This gain or loss, except as provided below, will be
long-term capital gain or loss if it has held the stock for more than one year. In general, if a
U.S. holder recognizes loss upon the sale or other disposition of stock that it has held for six
months or less, the loss recognized will be treated as a long-term capital loss to the extent the
U.S. holder received distributions from AMB which were required to be treated as long-term capital
gains.
Tax Rates.
The maximum tax rate of non-corporate taxpayers for (i) capital gains, including
“capital gain dividends,” has generally been reduced to 15% (although depending on the
characteristics of the assets which produced these gains and on designations which AMB may make,
certain capital gain dividends may be taxed at a 25% rate) and (ii) dividends has generally been
reduced to 15%. In general, dividends payable by REITs are not eligible for the reduced tax rate on
dividends, except to the extent the REIT’s dividends are attributable either to dividends received
from taxable corporations (such as AMB’s taxable REIT subsidiaries), to income that was subject to
tax at the corporate/REIT level (for example, if AMB distributes taxable income that it retained
and paid tax on in the prior taxable year) or to dividends properly designated by AMB as “capital
gain dividends.” After December 31, 2012, absent Congressional action the maximum tax rate of
non-corporate taxpayers on capital gains is scheduled to increase to 20% and the maximum tax rate
of non-corporate taxpayers on dividends is scheduled to increase to 39.6%.
Information Reporting and Backup Withholding.
AMB reports to its U.S. holders and the IRS the
amount of dividends paid during each calendar year, and the amount of any tax withheld. A U.S.
holder of AMB common stock may be subject to backup withholding with respect to dividends paid by
AMB unless the holder is a corporation or is otherwise exempt and, when required, demonstrates this
fact or provides a taxpayer identification number, certifies as to no loss of exemption from backup
withholding, and otherwise complies with the backup withholding rules. A U.S. holder of AMB common
stock that does not provide AMB with its correct taxpayer identification number may also be subject
to penalties imposed by the IRS. Backup withholding is not an additional tax. Any amount paid as
backup withholding will be creditable against the stockholder’s income tax liability.
Tax-Exempt Holder
Except as described below, dividend income from AMB and gain arising upon the sale of shares
generally will not be unrelated business taxable income to a tax-exempt stockholder. This income or
gain will be unrelated business taxable income, however, if the tax-exempt stockholder holds its
shares as “debt financed property” within the meaning of the Code or if the shares are used in a
trade or business of the tax-exempt stockholder. Generally, debt financed property is property, the
acquisition or holding of which was financed through a borrowing by the tax-exempt stockholder.
For tax-exempt stockholders that are social clubs, voluntary employee benefit associations,
supplemental unemployment benefit trusts, or qualified group legal services plans exempt from U.S.
federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) or (c)(20) of the Code,
respectively, income from AMB common stock will constitute unrelated business taxable income unless
the organization is able to properly claim a deduction for amounts set aside or placed in reserve
for specific purposes so as to offset the income generated by its AMB common stock. These
prospective holders should consult their tax advisors concerning these “set aside” and reserve
requirements.
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Notwithstanding the above, however, a portion of the dividends paid by a “pension held REIT”
will be treated as unrelated business taxable income as to some trusts that hold more than 10%, by
value, of the interests of a REIT. A REIT will not be a “pension held REIT” if it is able to
satisfy the “not closely held” requirement without relying on the “look-through” exception with
respect to certain trusts. As a result of limitations on the transfer and ownership of stock
contained in AMB’s charter, AMB does not expect to be classified as a “pension-held REIT,” and as a
result, the tax treatment described in this paragraph should be inapplicable to AMB stockholders.
However, because AMB’s stock will be publicly traded, AMB cannot guarantee that this will always be
the case.
Non-U.S. Holders
The following discussion addresses the rules governing U.S. federal income taxation of the
ownership and disposition of AMB common stock by non-U.S. holders. The rules governing the U.S.
federal income taxation of the ownership and disposition of AMB common stock by non-U.S. holders
are complex, and no attempt is made herein to provide more than a brief summary. Accordingly, the
discussion does not address all aspects of U.S. federal income taxation that may be relevant to a
non-U.S. holder of AMB common stock in light of such stockholder’s particular circumstances and
does not address any state, local or foreign tax consequences. AMB urges non-U.S. holders to
consult their tax advisors to determine the impact of federal, state, local and foreign income tax
laws on the ownership and disposition of shares of AMB common stock, including any reporting
requirements.
Distributions Generally.
Distributions that are neither attributable to gain from the sale or
exchange by AMB of USRPIs nor designated by AMB as capital gain dividends will be treated as
dividends of ordinary income to the extent that they are made out of AMB’s current or accumulated
earnings and profits. Such distributions ordinarily will be subject to withholding of U.S. federal
income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty
unless the distributions are treated as effectively connected with the conduct by the non-U.S.
holder of a U.S. trade or business. Under certain treaties, however, lower withholding rates
generally applicable to dividends do not apply to dividends from a REIT. Certain certification and
disclosure requirements must be satisfied to be exempt from withholding under the effectively
connected income exemption. Dividends that are treated as effectively connected with such a trade
or business will be subject to tax on a net basis at graduated rates, in the same manner as
dividends paid to U.S. holders are subject to tax, and are generally not subject to withholding.
Any such dividends received by a non-U.S. holder of AMB common stock that is a corporation may also
be subject to an additional branch profits tax at a 30% rate or such lower rate as may be specified
by an applicable income tax treaty.
Distributions in excess of AMB’s current and accumulated earnings and profits will not be
taxable to a non-U.S. holder of AMB common stock to the extent that such distributions do not
exceed the non-U.S. holder’s adjusted basis in its AMB common stock, but rather will reduce the
adjusted basis of such stock. To the extent that these distributions exceed a non-U.S. holder’s
adjusted basis in its AMB common stock, they will give rise to gain from the sale or exchange of
such stock. The tax treatment of this gain is described below. Except as otherwise described below,
AMB expects to withhold U.S. federal income tax at the rate of 30% on any distributions made to a
non-U.S. holder of AMB common stock unless:
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a lower treaty rate applies and the non-U.S. holder files with AMB an IRS Form
W-8BEN evidencing eligibility for that reduced treaty rate; or
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the non-U.S. holder files an IRS Form W-8ECI with AMB claiming that the distribution
is income effectively connected with the non-U.S. holder’s U.S. trade or business.
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However, amounts withheld should generally be refundable if it is subsequently determined that
the distribution was, in fact, in excess of AMB’s current and accumulated earnings and profits.
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Capital Gain Dividends and Distributions Attributable to a Sale or Exchange of United States
Real Property Interests.
Distributions to a non-U.S. holder of AMB common stock that AMB properly
designates as capital gain dividends, other than those arising from the disposition of a USRPI,
generally should not be subject to U.S. federal income taxation, unless:
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the ownership of AMB common stock is treated as effectively connected
with the non-U.S. holder’s U.S. trade or business, in which case the non-U.S. holder
will be subject to the same treatment as U.S. holders of AMB common stock with respect
to such gain, except that a non-U.S. holder that is a foreign corporation may also be
subject to the 30% branch profits tax (or such lower rate as may be specified by an
applicable income tax treaty), as discussed above; or
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the non-U.S. holder is a nonresident alien individual who is present in
the United States for 183 days or more during the taxable year and certain other
conditions are met, in which case the nonresident alien individual will be subject to a
30% tax on the individual’s capital gains.
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Pursuant to FIRPTA, distributions to a non-U.S. holder of AMB common stock that are
attributable to gain from the sale or exchange of USRPIs (whether or not designated as capital gain
dividends) will cause the non-U.S. holder to be treated as recognizing such gain as income
effectively connected with a U.S. trade or business. Non-U.S. holders of AMB common stock would
generally be taxed at the same rates applicable to U.S. holders of AMB common stock, subject to a
special alternative minimum tax in the case of nonresident alien individuals. AMB also will be
required to withhold and to remit to the IRS 35% (or less to the extent provided in applicable
Treasury Regulations) of any distribution to a non-U.S. holder of AMB common stock that is
designated as a capital gain dividend, or, if greater, 35% (or less to the extent provided in
applicable Treasury Regulations) of a distribution to the non-U.S. holder of AMB common stock that
could have been designated as a capital gain dividend. The amount withheld is creditable against
the non-U.S. holder’s U.S. federal income tax liability. However, any distribution with respect to
any class of stock which is regularly traded on an established securities market located in the
United States is not subject to FIRPTA, and therefore, not subject to the 35% U.S. withholding tax
described above, if the non-U.S. holder did not own more than 5% of such class of stock at any time
during the one-year period ending on the date of the distribution. Instead, such distributions will
be treated as ordinary dividend distributions.
Retention of Net Capital Gains.
Although the law is not clear on the matter, it appears that
amounts AMB designates as retained capital gains in respect of the capital stock held by U.S.
holders generally should be treated with respect to non-U.S. holders in the same manner as actual
distributions by AMB of capital gain dividends. Under this approach, a non-U.S. holder would be
able to offset as a credit against its U.S. federal income tax liability resulting from its
proportionate share of the tax paid by AMB on such retained capital gains, and to receive from the
IRS a refund to the extent of the non-U.S. holder’s proportionate share of such tax paid by AMB
exceeds its actual U.S. federal income tax liability.
Sale of AMB Common Stock.
Gain recognized by a non-U.S. holder upon the sale or exchange of
AMB common stock generally will not be subject to U.S. federal income taxation unless such stock
constitutes a USRPI. AMB’s common stock will not constitute a USRPI so long as AMB is a
“domestically-controlled qualified investment entity.” A “domestically-controlled qualified
investment entity” includes a REIT in which at all times during a specified testing period less
than 50% in value of its stock is held directly or indirectly by non-U.S. holders. AMB believes,
but cannot guarantee, that AMB has been a “domestically-controlled qualified investment entity,”
but because AMB’s capital stock is, and AMB’s capital stock will be, publicly traded, no assurance
can be given that AMB is or will continue to be a “domestically- controlled qualified investment
entity.”
Notwithstanding the foregoing, gain from the sale or exchange of AMB common stock not
otherwise subject to FIRPTA will be taxable to a non-U.S. holder if either (1) the ownership of AMB
common stock is treated as effectively connected with the non-U.S. holder’s U.S. trade or business
or (2) the non-U.S. holder is a nonresident alien individual who is present in the United States
for 183 days or more during the taxable year and certain other conditions are met. In addition,
even if AMB is a domestically-controlled qualified investment entity, upon disposition of AMB
common stock (subject to the exception applicable to “regularly traded” stock described above), a
non-U.S. holder may be treated as having gain from the sale or exchange of a USRPI if the non-U.S.
holder (1) disposes of AMB common stock within a 30-day period preceding the ex-dividend date of a
distribution, any portion of which, but for the disposition, would have been treated as gain from
the sale or exchange of a USRPI and (2)
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acquires, or enters into a contract or option to acquire, other shares of AMB’s stock within
30 days after such ex-dividend date.
Even if AMB does not qualify as a “domestically-controlled qualified investment entity” at the
time a non-U.S. holder sells or exchanges AMB common stock, gain arising from such a sale or
exchange would not be subject to U.S. federal income taxation under FIRPTA as a sale of a USRPI if:
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AMB common stock is “regularly traded,” as defined by applicable Treasury
Regulations, on an established securities market such as the NYSE; and
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such non-U.S. holder owned, actually and constructively, 5% or less of the
outstanding AMB common stock throughout the five-year period ending on the date of the
sale or exchange.
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If gain on the sale or exchange of AMB common stock were subject to taxation under FIRPTA, the
non-U.S. holder would be subject to regular U.S. federal income tax with respect to such gain in
the same manner as a taxable U.S. holder (subject to any applicable alternative minimum tax and a
special alternative minimum tax in the case of nonresident alien individuals). In addition, if the
sale or exchange of AMB common stock were subject to taxation under FIRPTA, and if shares of AMB
common stock were not “regularly traded” on an established securities market, the purchaser of the
stock would be required to withhold and remit to the IRS 10% of the purchase price.
Information Reporting and Backup Withholding.
Generally, AMB must report annually to the IRS
the amount of dividends paid to a non-U.S. holder of AMB common stock, such holder’s name and
address, and the amount of tax withheld, if any. A similar report is sent to the non-U.S. holder.
Pursuant to tax treaties or other agreements, the IRS may make its reports available to tax
authorities in the non-U.S. holder’s country of residence.
Payments of dividends or of proceeds from the disposition of stock made to a non-U.S. holder
of AMB common stock may be subject to information reporting and backup withholding unless such
holder establishes an exemption, for example, by properly certifying its non-U.S. status on an IRS
Form W-8BEN or another appropriate version of IRS Form W-8. Notwithstanding the foregoing, backup
withholding and information reporting may apply if either AMB has or its paying agent has actual
knowledge, or reason to know, that a non-U.S. holder is a U.S. person.
Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund or credit may be obtained, provided that the required
information is furnished to the IRS.
New Legislation
Recently enacted legislation regarding foreign account tax compliance, effective for payments
made after December 31, 2012, imposes a withholding tax of 30% on certain payments (including
dividends on, and gross proceeds from the disposition of, AMB common stock) made to certain foreign
financial institutions (including in their capacity as agents or custodians for beneficial owners
of AMB common stock) and to certain other foreign entities unless various information reporting and
certain other requirements are satisfied. Holders of AMB common stock should consult with their own
tax advisors regarding the possible implications of this recently enacted legislation on their
ownership of shares of AMB common stock.
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CERTAIN CONSIDERATIONS FOR ERISA AND OTHER U.S. EMPLOYEE BENEFIT PLANS
Subject to the following discussion, the AMB LP Notes may be acquired in the applicable
exchange offers and held by an employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), and entities that are deemed to hold the assets
of such plans (collectively, “ERISA Plans”) or by an individual retirement account or other plan
subject to Section 4975 of the Code (together with ERISA Plans, “Plans”). A fiduciary of an ERISA
Plan must determine that the acquiring and holding of an AMB LP Note is consistent with its
fiduciary duties under ERISA. The fiduciary of a Plan or a non-U.S. plan, governmental plan or
certain church plans subject to laws similar to ERISA and Section 4975 of the Code law must also
determine that its acquisition and holding of AMB LP Notes does not result in a non-exempt
prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the Code or any
similar law.
Representation
By acquiring an AMB LP Note (or interest therein), each acquirer and transferee is deemed to
represent and warrant that either (i) it is not acquiring the AMB LP Note (or interest therein)
with the assets of a Plan or (ii) the acquisition and holding of the AMB LP Note (or interest
therein) will not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code or a violation of any similar law.
The foregoing discussion is general in nature and is not intended to be all inclusive. Due to
the complexity of these rules and the penalties that may be imposed upon persons involved in
nonexempt prohibited transactions, it is particularly important that fiduciaries, or other persons
considering purchasing the AMB LP Notes on behalf of, or with the assets of, any Plan, consult with
their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any
similar law to such investment and whether an exemption would be applicable to the purchase and
holding of the AMB LP Notes.
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LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon for us, including
the validity of the issuance of the notes, by Latham & Watkins LLP, San Francisco, California and
by Tamra D. Browne, Esq., AMB’s General Counsel. Certain legal matters relating to Maryland law
will be passed upon for us by Ballard Spahr LLP, Baltimore, Maryland. Certain tax matters with
respect to the AMB LP Notes offered in the exchange offers will be passed upon by Latham & Watkins
LLP, Los Angeles, California and Mayer Brown LLP, Chicago, Illinois. Certain legal matters in
connection with this offering will be passed upon for the dealer managers by Shearman & Sterling
LLP, New York, New York.
EXPERTS
The financial statements of AMB and management’s assessment of the effectiveness of internal
control over financial reporting (which is included in Management’s Annual Report on Internal
Control over Financial Reporting) incorporated into this prospectus by reference to AMB’s Annual
Report on Form 10-K for the year ended December 31, 2010 have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements and schedule of ProLogis as of December 31, 2010 and
2009, and for each of the years in the three-year period ending December 31, 2010, and management’s
assessment of the effectiveness of internal control over financial reporting as of December 31,
2010, have been incorporated by reference herein and in this prospectus, in reliance upon the
reports of KPMG LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing.
309
INDEX TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
F-1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Introduction
On January 30, 2011, AMB Property Corporation (“AMB”) and ProLogis entered into a definitive
agreement (the “Merger Agreement”) to combine through a merger of equals (the “Merger”). The terms
of the Merger are contained in the Merger Agreement that is described in this prospectus. AMB and
ProLogis encourage you to read the Merger Agreement carefully.
Under the terms of the Merger Agreement, ProLogis shareholders will receive 0.4464 of a newly
issued share of AMB common stock for each ProLogis common share that they own. This exchange ratio
is fixed and will not be adjusted to reflect stock price changes prior to closing. Changes in the
price of AMB common stock prior to the Merger will affect the market value of the merger
consideration that ProLogis shareholders will receive on the closing date of the Merger. On January
30, 2011, the date the Merger Agreement was signed, ProLogis had approximately 570,083,000 common
shares outstanding. Subject to shareholder approvals and the other closing conditions described in
this prospectus, the Merger is expected to be consummated in the second quarter of 2011.
Based on current information, it is expected that former ProLogis shareholders will own
approximately 60%, and current AMB stockholders will own approximately 40%, of the common stock of
the combined company outstanding after consummation of the Merger. After consideration of all
applicable factors pursuant to the business combination accounting rules, the Merger results in a
reverse acquisition in which AMB is considered the “legal acquirer”, because AMB is issuing its
common stock to ProLogis shareholders, and ProLogis is the “accounting acquirer” due to various
factors, including that ProLogis shareholders will hold the largest portion of the voting rights in
the merged entity and ProLogis appointees will represent a majority of the board of directors of
the combined entity.
Pro Forma Information
The following unaudited pro forma condensed consolidated financial statements combine the
historical consolidated financial statements of ProLogis and AMB as if the Merger had previously
occurred on the dates specified below. The accompanying unaudited pro forma condensed consolidated
balance sheet as of December 31, 2010 has been prepared as if the Merger had occurred as of that
date. The accompanying unaudited pro forma condensed consolidated statement of operations for the
year ended December 31, 2010 has been prepared as if the Merger had occurred as of January 1, 2010.
Pro forma adjustments, and the assumptions on which they are based, are described in the
accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are
referred to in this section as the Notes.
The pro forma adjustments and the purchase price allocation as presented are based on
estimates and certain information that is currently available. The total merger consideration and
the assignment of fair values to AMB’s assets and liabilities has not been finalized, is subject to
change and could vary materially from the actual amounts at the time the Merger is completed. The
purchase price allocation will not be finalized until after the Merger is consummated.
The pro forma information has been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission (“SEC”). All significant adjustments necessary to reflect
the effects of the Merger that can be factually supported within the SEC regulations covering the
preparation of pro forma financial statements have been made. The pro forma information is
presented for illustrative purposes only and is not necessarily indicative of the combined
operating results or financial position that would have occurred if such transactions had been
consummated on the dates and in accordance with the assumptions described herein, nor is it
necessarily indicative of future operating results or financial position.
You are urged to read the pro forma information below, together with ProLogis’ and AMB’s
publicly available historical consolidated financial statements and accompanying notes, which are
incorporated by reference elsewhere herein.
F-2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Merger Consideration
The pro forma financial information reflects estimated aggregate consideration of
approximately $6.2 billion for the Merger, as calculated below due to ProLogis being the accounting
acquirer (in millions, except price per share):
|
|
|
|
|
|
|
ProLogis shares and limited partnership units outstanding at
December 31, 2010 (assumed to be 60% of total shares of the
combined company)
|
|
|
570.8
|
|
|
Total shares of the combined company (for accounting purposes)
|
|
|
951.4
|
|
|
|
|
|
|
|
Number of AMB shares to be issued (assumed to be 40% of total
shares of the combined company)
|
|
|
380.6
|
|
|
Multiplied by price of ProLogis common shares on April 25, 2011*
|
|
$
|
16.28
|
|
|
|
|
|
|
|
Estimated aggregate consideration*
|
|
$
|
6,195.5
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
As ProLogis is the accounting acquirer, the calculation of the purchase price for
accounting purposes is based on ProLogis shares. However, under the terms of the Merger
Agreement, ProLogis shareholders will receive 0.4464 of a newly issued share of AMB common
stock for each ProLogis common share that they own. This will result in approximately 424.2
million common shares of the combined company outstanding at the time of the Merger.
|
|
|
|
|
|
The estimated aggregate consideration has been determined based on the closing price of
ProLogis’ common shares on April 25, 2011 of $16.28. An increase or decrease in share price
of $1.00 results in an increase or decrease to the total merger consideration of $381
million. Pursuant to business combination accounting rules, the final aggregate
consideration will be based on the price of ProLogis’ common shares as of the closing date
and, therefore, will be different from the amount shown above.
|
|
|
|
|
|
The above estimated aggregate consideration does not include an estimate for the fair value
of the precombination portion of AMB’s share-based compensation awards, as this amount is
not expected to be material to the total aggregate consideration. In addition, AMB and
ProLogis have not included an adjustment to the pro forma statement of operations to reflect
the change in compensation expense as a result of the estimated fair value of AMB’s
share-based compensation awards attributable to the postcombination period as the impact is
not expected to be material.
|
Transaction Costs
For purposes of the pro forma information, adjustments for estimated transaction and
integration costs for the Merger have been excluded. These aggregate estimated transaction and
integration costs are expected to be approximately $160 million to $180 million and include
estimated costs associated with investment banker advisory fees, legal and accounting fees,
termination and severance costs of both companies, system conversion and other integration costs.
These costs will impact the results of operations and will be recognized when incurred. Certain
costs will be recognized pre-merger by both ProLogis and AMB, and the remainder will be recognized
by the combined company after the Merger.
The unaudited condensed consolidated financial statements included herein do not give effect
to any potential cost reductions or other operating efficiencies that AMB and ProLogis expect to
result from the Merger.
F-3
PROLOGIS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 2010
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB
|
|
|
ProLogis,
|
|
|
|
|
ProLogis
|
|
|
AMB
|
|
|
Pro Forma
|
|
|
Historical,
|
|
|
Inc.
|
|
|
|
|
Historical
|
|
|
Historical
(A)
|
|
|
Adjustments
|
|
|
as Adjusted
|
|
|
Pro Forma
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in real estate properties
|
|
$
|
12,879,641
|
|
|
$
|
6,906,176
|
|
|
$
|
1,026,990
|
(B)
|
|
$
|
7,933,166
|
|
|
$
|
20,812,807
|
|
|
Less accumulated depreciation
|
|
|
1,595,678
|
|
|
|
1,268,093
|
|
|
|
(1,268,093
|
)
(C)
|
|
|
—
|
|
|
|
1,595,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment in properties
|
|
|
11,283,963
|
|
|
|
5,638,083
|
|
|
|
2,295,083
|
|
|
|
7,933,166
|
|
|
|
19,217,129
|
|
|
Investments in and advances to unconsolidated
investees
|
|
|
2,024,661
|
|
|
|
907,027
|
|
|
|
452,779
|
(D)
|
|
|
1,359,806
|
|
|
|
3,384,467
|
|
|
Notes receivable backed by real
estate
|
|
|
302,144
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
302,144
|
|
|
Assets held for sale
|
|
|
574,791
|
|
|
|
242,098
|
|
|
|
21,792
|
(E)
|
|
|
263,890
|
|
|
|
838,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investments in real estate
|
|
|
14,185,559
|
|
|
|
6,787,208
|
|
|
|
2,769,654
|
|
|
|
9,556,862
|
|
|
|
23,742,421
|
|
|
Cash and cash equivalents
|
|
|
37,634
|
|
|
|
198,424
|
|
|
|
—
|
|
|
|
198,424
|
|
|
|
236,058
|
|
|
Restricted cash
|
|
|
27,081
|
|
|
|
29,991
|
|
|
|
—
|
|
|
|
29,991
|
|
|
|
57,072
|
|
|
Accounts receivable and other assets
|
|
|
619,633
|
|
|
|
314,963
|
|
|
|
170,718
|
(F)
|
|
|
485,681
|
|
|
|
1,105,314
|
|
|
Goodwill
|
|
|
32,760
|
|
|
|
42,309
|
|
|
|
364,887
|
(G)
|
|
|
407,196
|
|
|
|
439,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
14,902,667
|
|
|
$
|
7,372,895
|
|
|
$
|
3,305,259
|
|
|
$
|
10,678,154
|
|
|
$
|
25,580,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
$
|
6,506,029
|
|
|
$
|
3,331,299
|
|
|
$
|
68,681
|
(H)
|
|
$
|
3,399,980
|
|
|
$
|
9,906,009
|
|
|
Accounts payable, accrued expenses and
other liabilities
|
|
|
856,534
|
|
|
|
339,474
|
|
|
|
152,864
|
(I)
|
|
|
492,338
|
|
|
|
1,348,872
|
|
|
Liabilities related to assets held for sale
|
|
|
19,749
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
7,382,312
|
|
|
|
3,670,773
|
|
|
|
221,545
|
|
|
|
3,892,318
|
|
|
|
11,274,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares
|
|
|
350,000
|
|
|
|
223,412
|
|
|
|
5,612
|
(J)
|
|
|
229,024
|
|
|
|
579,024
|
|
|
Common shares
|
|
|
5,701
|
|
|
|
1,684
|
|
|
|
(3,149
|
)
(K)
|
|
|
(1,465
|
)
|
|
|
4,236
|
|
|
Additional paid-in capital
|
|
|
9,668,404
|
|
|
|
3,071,134
|
|
|
|
2,822,431
|
(K)
|
|
|
5,893,565
|
|
|
|
15,561,969
|
|
|
Accumulated other comprehensive
income (loss)
|
|
|
(3,160
|
)
|
|
|
42,188
|
|
|
|
(42,188
|
)
(K)
|
|
|
—
|
|
|
|
(3,160
|
)
|
|
Distributions in excess of net
earnings
|
|
|
(2,515,722
|
)
|
|
|
(17,695
|
)
|
|
|
17,695
|
(K)
|
|
|
—
|
|
|
|
(2,515,722
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
|
7,505,223
|
|
|
|
3,320,723
|
|
|
|
2,800,401
|
|
|
|
6,121,124
|
(1)
|
|
|
13,626,347
|
|
|
Noncontrolling interests
|
|
|
15,132
|
|
|
|
325,590
|
|
|
|
264,776
|
(L)
|
|
|
590,366
|
|
|
|
605,498
|
|
|
Limited partnership unitholders
|
|
|
—
|
|
|
|
55,809
|
|
|
|
18,537
|
(L)
|
|
|
74,346
|
(1)
|
|
|
74,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
7,520,355
|
|
|
|
3,702,122
|
|
|
|
3,083,714
|
|
|
|
6,785,836
|
|
|
|
14,306,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
14,902,667
|
|
|
$
|
7,372,895
|
|
|
$
|
3,305,259
|
|
|
$
|
10,678,154
|
|
|
$
|
25,580,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-4
PROLOGIS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2010
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMB
|
|
|
|
|
|
|
|
ProLogis
|
|
|
AMB
|
|
|
Pro Forma
|
|
|
Historical,
|
|
|
ProLogis, Inc.
|
|
|
|
|
Historical
|
|
|
Historical
(A)
|
|
|
Adjustments
|
|
|
as Adjusted
|
|
|
Pro Forma
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
$
|
771,308
|
|
|
$
|
602,640
|
|
|
$
|
1,832
|
(M)
|
|
$
|
604,472
|
|
|
$
|
1,375,780
|
|
|
Property management and other fees and incentives
|
|
|
120,326
|
|
|
|
30,860
|
|
|
|
(8,455
|
)
(N)
|
|
|
22,405
|
|
|
|
142,731
|
|
|
Development management and other income
|
|
|
17,521
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
909,155
|
|
|
|
633,500
|
|
|
|
(6,623
|
)
|
|
|
626,877
|
|
|
|
1,536,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental expenses
|
|
|
223,924
|
|
|
|
188,710
|
|
|
|
—
|
(O)
|
|
|
188,710
|
|
|
|
412,634
|
|
|
Investment management expenses
|
|
|
40,659
|
|
|
|
12,074
|
|
|
|
—
|
(O)
|
|
|
12,074
|
|
|
|
52,733
|
|
|
General and administrative
|
|
|
165,981
|
|
|
|
114,390
|
|
|
|
—
|
(O)
|
|
|
114,390
|
|
|
|
280,371
|
|
|
Impairment of real estate properties
|
|
|
736,612
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
736,612
|
|
|
Depreciation and amortization
|
|
|
319,602
|
|
|
|
196,636
|
|
|
|
7,691
|
(P)
|
|
|
204,327
|
|
|
|
523,929
|
|
|
Restructuring charges
|
|
|
—
|
|
|
|
4,874
|
|
|
|
—
|
|
|
|
4,874
|
|
|
|
4,874
|
|
|
Other expenses
|
|
|
16,355
|
|
|
|
3,197
|
|
|
|
—
|
|
|
|
3,197
|
|
|
|
19,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1,503,133
|
|
|
|
519,881
|
|
|
|
7,691
|
|
|
|
527,572
|
|
|
|
2,030,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(593,978
|
)
|
|
|
113,619
|
|
|
|
(14,314
|
)
|
|
|
99,305
|
|
|
|
(494,673
|
)
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from unconsolidated investees, net
|
|
|
23,678
|
|
|
|
17,372
|
|
|
|
(13,470
|
)
(Q)
|
|
|
3,902
|
|
|
|
27,580
|
|
|
Interest income
|
|
|
5,022
|
|
|
|
1,390
|
|
|
|
—
|
|
|
|
1,390
|
|
|
|
6,412
|
|
|
Interest expense
|
|
|
(461,166
|
)
|
|
|
(130,338
|
)
|
|
|
25,002
|
(R)
|
|
|
(105,336
|
)
|
|
|
(566,502
|
)
|
|
Impairment of goodwill and other assets
|
|
|
(412,745
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(412,745
|
)
|
|
Other income (expense), net
|
|
|
10,825
|
|
|
|
(1,891
|
)
|
|
|
—
|
|
|
|
(1,891
|
)
|
|
|
8,934
|
|
|
Net gains on dispositions of investments in real
estate
|
|
|
28,488
|
|
|
|
6,739
|
|
|
|
—
|
|
|
|
6,739
|
|
|
|
35,227
|
|
|
Foreign currency exchange gains (losses), net
|
|
|
(11,081
|
)
|
|
|
4,044
|
|
|
|
—
|
|
|
|
4,044
|
|
|
|
(7,037
|
)
|
|
Gain (loss) on early extinguishment of debt, net
|
|
|
(201,486
|
)
|
|
|
(2,892
|
)
|
|
|
—
|
|
|
|
(2,892
|
)
|
|
|
(204,378
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(1,018,465
|
)
|
|
|
(105,576
|
)
|
|
|
11,532
|
|
|
|
(94,044
|
)
|
|
|
(1,112,509
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
|
(1,612,443
|
)
|
|
|
8,043
|
|
|
|
(2,782
|
)
|
|
|
5,261
|
|
|
|
(1,607,182
|
)
|
|
Current income tax expense (benefit)
|
|
|
21,724
|
|
|
|
(2,928
|
)
|
|
|
—
|
|
|
|
(2,928
|
)
|
|
|
18,796
|
|
|
Deferred income tax expense (benefit)
|
|
|
(52,223
|
)
|
|
|
1,619
|
|
|
|
—
|
|
|
|
1,619
|
|
|
|
(50,604
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income taxes
|
|
|
(30,499
|
)
|
|
|
(1,309
|
)
|
|
|
—
|
|
|
|
(1,309
|
)
|
|
|
(31,808
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations
|
|
|
(1,581,944
|
)
|
|
|
9,352
|
|
|
|
(2,782
|
)
(O)
|
|
|
6,570
|
|
|
|
(1,575,374
|
)
|
|
Net earnings attributable to noncontrolling interests
|
|
|
(43
|
)
|
|
|
(6,078
|
)
|
|
|
1,808
|
(S)
|
|
|
(4,270
|
)
|
|
|
(4,313
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations
attributable to controlling interests
|
|
|
(1,581,987
|
)
|
|
|
3,274
|
|
|
|
(974
|
)
|
|
|
2,300
|
|
|
|
(1,579,687
|
)
|
|
Less preferred share dividends and allocation to
participating securities
|
|
|
25,424
|
|
|
|
16,269
|
|
|
|
—
|
|
|
|
16,269
|
|
|
|
41,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations attributable to
common shares
|
|
$
|
(1,607,411
|
)
|
|
$
|
(12,995
|
)
|
|
$
|
(974
|
)
(O)
|
|
$
|
(13,969
|
)
|
|
$
|
(1,621,380
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding —
Basic
(T)
|
|
|
491,744
|
|
|
|
161,988
|
|
|
|
|
|
|
|
|
|
|
|
416,808
|
|
|
Weighted average common shares outstanding —
Diluted
(T)
|
|
|
491,744
|
|
|
|
161,988
|
|
|
|
|
|
|
|
|
|
|
|
416,808
|
|
|
Net loss from continuing operations per share
attributable to common shares — Basic
(T)
|
|
$
|
(3.27
|
)
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
$
|
(3.89
|
)
|
|
Net loss from continuing operations per share
attributable to common shares —
Diluted
(T)
|
|
$
|
(3.27
|
)
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
$
|
(3.89
|
)
|
F-5
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
(1)
|
|
Basis of Preliminary Purchase Price Allocation
|
|
|
|
|
|
The following preliminary allocation of the AMB purchase price is based on the preliminary
estimate of the fair value of the tangible and intangible assets and liabilities of AMB as
of December 31, 2010. The final determination of the allocation of the purchase price will
be based on the fair value of such assets and liabilities as of the actual consummation date
of the Merger and will be completed after the Merger is consummated. Such final
determination of the purchase price may be significantly different from the preliminary
estimates used in the pro forma financial statements.
|
|
|
|
|
|
The estimated purchase price of AMB of $6.2 billion (as calculated in the manner described
above) is allocated to the assets and liabilities to be assumed based on the following
preliminary basis as of December 31, 2010 (dollar amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Investments in properties
|
|
$
|
7,933,166
|
|
|
|
|
Investments in and advances to unconsolidated investees
|
|
|
1,359,806
|
|
|
|
|
Assets held for sale
|
|
|
263,890
|
|
|
|
|
Cash, accounts receivable and other assets
|
|
|
714,096
|
|
|
|
|
Goodwill
|
|
|
407,196
|
|
|
|
|
Debt
|
|
|
(3,399,980
|
)
|
|
|
|
Accounts payable, accrued expenses and other liabilities
|
|
|
(492,338
|
)
|
|
|
|
Noncontrolling interests
|
|
|
(590,366
|
)
|
|
|
|
|
|
|
|
|
|
|
Total estimated purchase price
|
|
$
|
6,195,470
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Pro Forma Adjustments — determined using foreign currency exchange rates at December 31,
2010, if applicable.
|
|
|
(A)
|
|
The AMB Historical amounts include the reclassification of certain AMB balances
to conform to the ProLogis presentation as described below:
|
|
|
|
|
|
|
Balance Sheet
:
|
|
|
•
|
|
Receivables from affiliates were classified as a component of
Accounts
Receivable and Other Assets
. This balance has been reclassified to
Investments In
and Advances to Unconsolidated Investees
to conform to ProLogis’ presentation.
|
|
|
|
|
Statement of Operations
:
|
|
|
•
|
|
AMB includes only expenses directly related to unconsolidated investees in
Investment Management Expenses
. ProLogis includes the direct expenses associated
with the asset management of the property funds provided by individuals who are
assigned to ProLogis’ investment management segment. ProLogis also allocates the
costs of the property management function to the properties owned by ProLogis
(reported in
Rental Expenses
) and the properties included in the Investment
Management Segment (included in
Investment Management Expenses
) by using the square
feet owned at the beginning of each quarter by the respective portfolios. AMB’s
allocated
Investment Management Expenses
have been reclassified to conform to
ProLogis’ presentation.
|
|
|
|
|
•
|
|
AMB includes
Interest Income
and
Foreign Currency Exchange Gains
(
Losses)
in
Other Income
(
Expense
). ProLogis presents these balances as separate line items
within the same section of the income statement. AMB’s interest income and foreign
currency exchange gains have been reclassified to conform to ProLogis’
presentation.
|
F-6
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
|
|
•
|
|
AMB includes
Current Income Tax Expense
and
Deferred Income Tax Expense
as a
component of
General and Administrative Expenses
. ProLogis presents both current
and deferred income tax expense as separate line items following
Earnings (Loss)
Before Income Taxes
. AMB’s current and deferred income tax balances have been
reclassified to conform to ProLogis’ presentation.
|
|
|
|
|
Balance Sheet Adjustments
|
|
|
(B)
|
|
AMB’s real estate assets have been adjusted to their estimated fair
value as of December 31, 2010. AMB and ProLogis estimated the fair value generally
by applying a capitalization rate to estimated net operating income of a property,
recent third party appraisals or other available market data. AMB and ProLogis
determined the capitalization rates that were appropriate by market based on recent
appraisals, transactions or other market data. The fair value also includes a
portfolio premium that AMB and ProLogis estimate a third party would be willing to
pay for the entire portfolio.
|
|
|
|
|
(C)
|
|
AMB’s historical accumulated depreciation balance is eliminated.
|
|
|
|
|
(D)
|
|
AMB’s investments in joint ventures have been adjusted to their
estimated fair value as of December 31, 2010. The fair values for the investments
were calculated using similar valuation methods as those used for consolidated real
estate assets and debt.
|
|
|
|
|
(E)
|
|
As of December 31, 2010, AMB had ten properties held for sale and eight
properties held for contribution to unconsolidated investees that were classified
as held for sale and carried at the lesser of cost or fair value less costs to
sell. Adjustments to AMB’s historical balances associated with these properties
reflect the real estate assets at their estimated fair value less costs to sell.
|
|
|
|
|
(F)
|
|
Adjustments to AMB’s historical balance of accounts receivable and
other assets are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of deferred financing costs, net
|
|
$
|
(38,079
|
)
|
|
|
|
|
Elimination of straight-line rent receivable
|
|
|
(81,661
|
)
|
|
|
|
|
Adjustment to reflect certain corporate and other assets at fair value
|
|
|
(46,495
|
)
|
|
|
|
|
Recognition of value of acquired in place leases and leases that have
above market rents
|
|
|
215,215
|
|
|
|
|
|
Recognition of value of existing management agreements
|
|
|
121,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
170,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of in place leases was calculated based upon AMB’s and ProLogis’ best
estimate of the costs to obtain tenants, primarily leasing commissions, in each of
the applicable markets. An asset or liability (see note I) was recognized for
acquired leases with favorable or unfavorable rents based on AMB’s and ProLogis’
best estimate of current market rents in each of the applicable markets. The
recognition of value of existing management agreements was calculated by discounting
future expected cash flows under these agreements.
|
|
|
|
|
(G)
|
|
Reflects estimated goodwill from the purchase price allocation of
$407.2 million and the elimination of AMB’s historical goodwill of $42.3 million.
|
|
|
|
|
(H)
|
|
AMB’s debt balances have been adjusted to the estimated fair value as
of December 31, 2010. Fair value was estimated based on contractual future cash
flows discounted using borrowing spreads and market interest rates that would have
been available for the issuance of debt with similar terms and remaining
maturities.
|
F-7
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
|
|
(I)
|
|
Adjustments to AMB’s historical balance of accounts payable, accrued
expenses and other liabilities are as follows (in thousands):
|
|
|
|
|
|
|
|
Elimination of deferred revenue
|
|
$
|
(4,250
|
)
|
|
Elimination of the liability associated with acquired in place
leases that have below market lease rates
|
|
|
(7,440
|
)
|
|
Recognition of a liability associated with acquired in place
leases that have below market lease rates
|
|
|
122,554
|
|
|
Adjustment to deferred tax liabilities as a result of certain
fair market value adjustments
|
|
|
42,000
|
|
|
|
|
|
|
|
|
|
$
|
152,864
|
|
|
|
|
|
|
|
|
(J)
|
|
Fair value adjustment to AMB’s preferred stock based on quoted market
prices as of December 31, 2010.
|
|
|
|
|
(K)
|
|
Adjustments represent the elimination of historical AMB balances and
the issuance of AMB common stock in the Merger.
|
|
|
|
|
(L)
|
|
The adjustment for non-controlling interests in consolidated joint
ventures as of December 31, 2010 is based on the non-controlling interests’ share
in the fair value adjustments described above. The adjustment for the limited
partnership unitholders represents the allocation of the purchase price to the
limited partners based on the number of units outstanding as of December 31, 2010.
|
|
|
|
|
Statement of Operations Adjustments
— The pro forma adjustments to the Statement of
Operations assume that a purchase price allocation done as of January 1, 2010 would have
been equivalent to the amounts (in United States dollars) assigned based on the purchase
price allocation done as of December 31, 2010 and reflected in the Pro Forma Condensed
Consolidated Balance Sheet.
|
|
|
(M)
|
|
Rental income is adjusted to: (i) remove $15.4 million of AMB’s
historical straight-line rent; (ii) recognize $33.1 million of total minimum lease
payments provided under the acquired leases on a straightline basis over the
remaining term from January 1, 2010; (iii) remove $0.9 million of AMB’s historical
amortization of the asset or liability created from previous acquisitions of leases
with favorable or unfavorable rents; and (iv) amortization of the asset or
liability from the acquired leases with favorable or unfavorable rents relative to
estimated market rents, including a reduction of $33.7 million from amortization of
the asset and an increase of $18.7 million from amortization of the liability, both
from January 1, 2010. We amortized the asset or liability from the acquired leases
with favorable or unfavorable rents relative to estimated market rents using the
remaining lease term associated with these leases, which approximated 5 years.
|
|
|
|
|
(N)
|
|
AMB and ProLogis have adjusted management fee income to reflect the
amortization of the intangible asset recognized based on the estimated fair value
of the acquired management contracts. The fair value of the acquired management
contracts was estimated by discounting the expected future cash flows, and the
amortization is calculated based on the estimated remaining term of the related
property fund or joint venture management agreement, which approximated 14 years.
|
|
|
|
|
(O)
|
|
AMB and ProLogis expect that the Merger will create operational and
general and administrative cost savings, including property management costs,
investment management expenses, costs associated with corporate administration and
infrastructure, including duplicative public company costs. There can be no
assurance that AMB and ProLogis will be successful in achieving these anticipated
cost savings. As these adjustments cannot be factually supported, AMB and ProLogis
have not included any estimate of the expected future cost savings.
|
F-8
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
|
|
(P)
|
|
Depreciation and amortization expense is adjusted to: (i) remove $196.6
million of AMB’s historical depreciation and amortization expense; (ii) recognize
real estate depreciation expense of $188.7 million as a result of the adjustment of
AMB real estate assets to estimated fair value as of January 1, 2010; (iii) reflect
amortization expense of $14.3 million on intangible assets recognized related to
the estimated value of in-place leases as of January 1, 2010; and (iv) recognize
depreciation expense of $1.3 million on corporate and other non-real estate assets
based on the estimated fair value as of January 1, 2010. For purposes of this
adjustment, AMB and ProLogis estimated the depreciable and non-depreciable
components and used an estimated average useful life of 25 years for industrial
properties, five years corporate and other assets and the remaining lease term
associated with the in-place leases that approximated five years.
|
|
|
|
|
(Q)
|
|
AMB and ProLogis adjusted AMB’s investment in unconsolidated investees
to fair value. As a result, AMB and ProLogis adjusted the equity in earnings that
AMB recognized from these investees to reflect the impact from the amortization of
these fair value adjustments would have had on AMB’s earnings from these
unconsolidated investees.
|
|
|
|
|
(R)
|
|
As of January 1, 2010, AMB and ProLogis reflected AMB’s debt at fair
value. The adjustment to interest expense includes: (i) removal of AMB’s historical
interest expense of $130.3 million, including amortization of deferred financing
costs; and (ii) recognition of interest expense of $105.3 million based on the
estimated fair value of acquired debt as of January 1, 2010 and net of adjustment
to capitalized interest. The fair value represented a weighted average interest
rate of 4.25% as of December 31, 2010 (see note H).
|
|
|
|
|
(S)
|
|
An adjustment of $1.8 million was made to reflect: (i) the adjustment
to the income allocated to non-controlling interests in the joint ventures that AMB
consolidates; and (ii) the adjustment related to the limited partnership
unitholders ownership percentage of 1.2% in the consolidated results of AMB
Property, L.P. The adjustment was calculated based on AMB’s historical ratio of
Net
Earnings Attributable to Noncontrolling Interests
to
Earnings (Loss) from
Continuing Operations
multiplied by the net impact of the purchase accounting
adjustments to continuing operations.
|
|
|
|
|
(T)
|
|
The calculation of basic and diluted loss from continuing operations
attributable to common shares per share were as follows (in thousands, except per
share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2010
|
|
|
|
|
ProLogis
|
|
|
AMB
|
|
|
ProLogis, Inc.
|
|
|
|
|
Historical
|
|
|
Historical
|
|
|
Pro Forma
|
|
|
Loss from continuing operations
attributable to common shares
|
|
$
|
(1,607,411
|
)
|
|
$
|
(12,995
|
)
|
|
$
|
(1,621,380
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding — Basic and Diluted
|
|
|
491,744
|
|
|
|
161,988
|
|
|
|
416,808
|
(*)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing
operations per common share —
Basic and Diluted
|
|
$
|
(3.27
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(3.89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
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The pro forma weighted average shares outstanding assumes the issuance
of 254,820,000 shares of AMB common stock on January 1, 2010. The shares were
calculated based on the number of ProLogis common shares outstanding as of December
31, 2010 and used the exchange ratio of 0.4464 to calculate the number of shares of
AMB common stock issued in the Merger. Since AMB and ProLogis have a loss from
continuing operations, both basic and diluted weighted average shares outstanding
were the same.
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F-9
AMB Property, L.P.
Unconditionally Guaranteed by AMB Property Corporation
OFFERS TO EXCHANGE
ALL OUTSTANDING NOTES OF PROLOGIS SPECIFIED ABOVE
AND SOLICITATION OF CONSENTS TO AMEND
THE RELATED INDENTURE
PROSPECTUS
The Exchange Agent for the Exchange Offers and the Consent Solicitations is:
Global Bondholder Services Corporation
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By Facsimile (Eligible Institutions Only):
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By Mail or Hand:
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(212) 430-3775
Attention: Corporate Actions
For Information or
Confirmation by Telephone:
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65 Broadway — Suite 723
New York, New York 10006
Attention: Corporate Actions
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(212) 430-3774
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Any questions or requests for assistance may be directed to the Dealer Managers at the
addresses and telephone numbers set forth below. Requests for additional copies of this Prospectus
and the Letter of Transmittal may be directed to the Information Agent. Beneficial owners may also
contact their custodian for assistance concerning the Exchange Offers and the Consent
Solicitations.
The Information Agent for the Exchange Offers and the Consent Solicitations is:
Global Bondholder Services Corporation
65 Broadway — Suite 723
New York, New York 10006
Attn: Corporate Actions
Bank and Brokers Call Collect: (212) 430-3774
All Others, Please Call Toll-Free: (866) 470-3700
The Dealer Managers for the Exchange Offers and the Consent Solicitations are:
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Citigroup Global Markets Inc.
Liability Management Group
390 Greenwich Street, 1st Floor
New York, New York 10013
Toll-Free: (800) 558-3745
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RBS Securities Inc.
Liability Management Group
600 Washington Boulevard
Stamford, CT 06901
Toll-Free: (877) 297-9832
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