Exhibit 99.2
BOSTON PROPERTIES LIMITED PARTNERSHIP
CERTIFICATE OF DESIGNATIONS
ESTABLISHING AND FIXING THE RIGHTS, LIMITATIONS AND
PREFERENCES OF A SERIES OF PREFERRED UNITS
Reference is made to the Second Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") of Boston Properties Limited
Partnership, a Delaware limited partnership (the "Partnership"), of which this
Certificate of Designations (this "Certificate") shall become a part.
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the main part of the Partnership Agreement. Section references are
(unless otherwise specified) references to sections in this Certificate.
WHEREAS, Section 14.1.B(3) of the main part of the Partnership Agreement
permits the General Partner, without the consent of the Limited Partners, to
amend the Partnership Agreement for the purpose of setting forth and reflecting
in the Partnership Agreement the designations, rights, powers, duties, and
preferences of holders of any additional Partnership Interests issued pursuant
to Section 4.2.A of the main part of the Partnership Agreement; and
WHEREAS, the General Partner desires by this Certificate to so amend the
Partnership Agreement as of this 30th day of June, 1998.
NOW, THEREFORE, the General Partner has set forth in this Certificate the
following description of the preferences and other rights, voting powers,
restrictions, limitations as to distributions, qualifications and terms and
conditions of conversion and redemption of a class and series of Partnership
Interest to be represented by Partnership Units which shall be referred to as
"Series One Preferred Units":
1. Designation and Number. A series of Preferred Units, designated the
"Series One Preferred Units," is hereby established.
2. Definitions. For purposes of this Certificate of Designations, the
following terms shall have the meanings indicated:
"Constituent Person" shall have the meaning set forth in paragraph (e) of
Section 6 hereof.
"Contribution Agreement" means that certain Contribution and Conveyance
Agreement dated as of June 30, 1998 by and among the Xxxxxx Parties, as named
therein, on the one hand, and the Company and the Partnership, on the other hand
(as may be amended, modified or supplemented from time to time).
"Conversion Price" shall mean the conversion price per Common Unit for
which the Series One Preferred Units are convertible, as such Conversion Price
may be adjusted pursuant to Section 6 hereof. The initial conversion price shall
be $38.25 (equivalent to a conversion rate of 0.88889 Common Units for each
Series One Preferred Unit).
"Conversion Date" shall have the meaning set forth in Section 6(b) hereof.
"Current Market Price" of a REIT Share or of a publicly traded security of
any other issuer for any day shall mean the last reported sales price, regular
way, on such day, or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day, regular way, in either case
as reported on the New York Stock Exchange ("NYSE") or, if such security is not
listed or admitted for trading on the NYSE, on the principal national securities
exchange on which such security is listed or admitted for trading or, if not
listed or admitted for trading on any national securities exchange, on the
Nasdaq National Market or, if such security is not quoted on such Nasdaq
National Market, the average of the closing bid and asked prices on such day in
the over-the-counter market as reported by Nasdaq or, if bid and asked prices
for such security on such day shall not have been reported through Nasdaq, the
average of the bid and asked prices on such day as furnished by any NYSE member
firm regularly making a market in such security selected for such purpose by the
Chief Executive Officer of the Partnership or the General Partner. "Current
Market Price" of a Common Unit as of any day means the Current Market Price of a
REIT Share multiplied by the Conversion Factor.
"Default Event" means that there is in existence a material, uncured breach
by the Company or the Partnership with respect to its obligations under this
Certificate of Designations, under the Contribution Agreement, or under the
related Registration Rights and Lock-Up Agreement, and the Company has received
written notice of such breach.
"Distribution Payment Date" shall mean the fifteenth day of February, May,
August and November, in each year, commencing on November 16, 1998; provided,
however, that if any Distribution Payment Date falls on any day other than a
Business Day, the distribution payment due on such Distribution Payment Date
shall be paid on the first Business Day immediately following such Distribution
Payment Date.
"Distribution Periods" shall mean quarterly distribution periods from and
after a Distribution Payment Date and to and excluding the next succeeding
Distribution Payment Date (other than the initial Distribution Period, which
shall commence on July 1, 1998 and end on and exclude November 16, 1998).
"Fair Market Value" shall mean the average of the daily Current Market
Prices per Common Unit during the five (5) consecutive Trading Days selected by
the Partnership commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. The
term "'ex' date," when used with respect to any issuance or
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distribution, means the first day on which REIT Shares trade regular way,
without the right to receive such issuance or distribution, on the exchange or
in the market, as the case may be, used to determine that day's Current Market
Price.
"Issue Date" shall mean, with respect to a Series One Preferred Unit, the
first date on which such Series One Preferred Unit was issued and sold.
"Junior Units" shall mean the Common Units and any other class or series of
Partnership Units constituting junior units within the meaning set forth in
paragraph (c) of Section 8 hereof.
"Liquidation Preference" shall have the meaning set forth in paragraph (a)
of Section 4 hereof.
"Non-Electing Share" shall have the meaning set forth in paragraph (e) of
Section 6 hereof.
"Parity Units" shall have the meaning set forth in paragraph (b) of Section
8 hereof.
"Redemption Date" shall have the meaning set forth in paragraph (b) of
Section 5 hereof.
"Redemption Notice" shall have the meaning set forth in Section 5(b).
"Securities" shall have the meaning set forth in paragraph (d)(iii) of
Section 6 hereof.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Partnership in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of a distribution by the General Partner, the allocation of funds to
be so paid on any series or class of Partnership Units; provided, however, that
if any funds for any class or series of Junior Units or Parity Units are placed
in a separate account of the Partnership or delivered to a disbursing, paying or
other similar agent, then "set apart for payment" with respect to the Series One
Preferred Units shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Source Agreements" shall mean (i) the Contribution Agreement, (ii) the
Contribution Agreement by and among 206 Associates Limited Partnership, a New
Jersey limited partnership, and Carnegie 510 Associates, L.L.C., a Delaware
limited liability company, on the one hand, and the Company and the Partnership,
on the other hand (as may be amended, modified or supplemented from time to
time), (iii) any agreement related thereto or contemplated therein and (iv) any
agreement entered into with one or more Xxxxxx Parties (as defined therein) or
their successors-in-interest contemporaneously therewith or as an amendment or
modification (or which has such effect) to any of the foregoing.
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"Trading Day" shall mean any day on which the securities in question are
traded on the New York Stock Exchange ("NYSE"), or if such securities are not
listed or admitted for trading on the NYSE, on the principal national securities
exchange on which such securities are listed or admitted, or if not listed or
admitted for trading on any national securities exchange, on the Nasdaq National
Market, or if such securities are not quoted on such Nasdaq National Market, in
the applicable securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in paragraph (e) of Section
6 hereof.
"20-Day Value" means, as of any date, the Value as of such date (with such
date serving as the "Valuation Date"), except that in determining the 20-Day
Value a period of twenty (20) consecutive Trading Days immediately preceding the
date on which such 20-Day Value is determined shall be used (rather than a
period of ten (10) consecutive Trading Days immediately preceding the Valuation
Date).
3. Distributions.
(a) The holders of Series One Preferred Units shall be entitled to
receive, when, as and if authorized and declared by the General Partner out of
assets legally available for that purpose, distributions payable in cash at the
rate per annum of $2.465 per Series One Preferred Unit (the "Annual Distribution
Rate") (equal to a distribution rate of 7.25% per annum on the Liquidation
Preference per Series One Preferred Unit of $34.00). Such distributions shall,
with respect to each Series One Preferred Unit, be cumulative from and including
its Issue Date, whether or not in any Distribution Period or Periods there shall
be assets of the Partnership legally available for the payment of such
distributions, and shall be payable quarterly, when, as and if authorized and
declared by the General Partner, in arrears on Distribution Payment Dates,
commencing on the first Distribution Payment Date after the Issue Date of such
Series One Preferred Unit. Distributions are cumulative from the most recent
Distribution Payment Date to which distributions have been paid, whether or not
in any Distribution Period or Periods there shall be assets legally available
therefor. Each such distribution shall be payable in arrears to the holders of
record of the Series One Preferred Units, as they appear on the records of the
Partnership at the close of business on such record dates, not more than 30 days
preceding the applicable Distribution Payment Date (the "Distribution Payment
Record Date") (or, in the case of a Distribution Payment Record Date that
coincides with a record date for payment of distributions on Common Units, not
more than 60 days preceding the applicable Distribution Payment Date), as shall
be fixed by the General Partner. Accrued and unpaid distributions for any past
Distribution Periods may be authorized and declared and paid at any time,
without reference to any regular Distribution Payment Date, to holders of record
on such date, not exceeding 45 days preceding the payment date thereof (or, in
the case of a record date that coincides with a record date for payment of
distributions on Common Units, not more than 60 days preceding the applicable
payment date thereof), as may be fixed by the General Partner.
(b) The amount of distributions payable for each full Distribution Period
for the Series One Preferred Units shall be $0.61625, which is equal to the
Annual Distribution Rate
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divided by four. Notwithstanding any other provision hereof, the amount of
distributions payable on a Distribution Payment Date with respect to a Series
One Preferred Unit which is issued in the middle of the related Distribution
Period and therefore was outstanding for less than a full Distribution Period
shall be, with respect to that Distribution Period, prorated by multiplying the
amount otherwise payable for that Distribution Period by a fraction, the
numerator of which equals the number of days such Series One Preferred Unit was
outstanding during such Distribution Period and the denominator of which equals
the total number of days in such Distribution Period. Holders of Series One
Preferred Units shall not be entitled to any distributions, whether payable in
cash, property or stock, in excess of cumulative distributions, as herein
provided, on the Series One Preferred Units. No interest, or sum of money in
lieu of interest, shall be payable in respect of any distribution payment or
payments on the Series One Preferred Units that may be in arrears. The first
Distribution Period with respect to the first Series One Preferred Units issued
shall be for the extended period from July 1, 1998 to the first Distribution
Payment Date of (and excluding) November 16, 1998, and the distribution payable
in respect of such Distribution Period shall equal the annual Distribution Rate
of $2.465 multiplied by a fraction, the numerator of which equals the number of
days in such Distribution Period and the denominator of which equals 365.
(c) So long as any Series One Preferred Units are outstanding, no
distributions, except as described in the immediately following sentence, shall
be authorized and declared or paid or set apart for payment on any series or
class or classes of Parity Units for any period nor shall any Parity Units be
redeemed, purchased or otherwise acquired for any consideration or any monies to
be paid to or made available for a sinking fund for the redemption of any Parity
Units, directly or indirectly (except by conversion into or exchange for Parity
Units or Junior Units), unless full cumulative distributions have been or
contemporaneously are authorized and declared and paid or authorized and
declared and a sum sufficient for the payment thereof set apart for such payment
on the Series One Preferred Units for all Distribution Periods terminating on or
prior to the distribution payment date on (or date of purchase, redemption or
other acquisition of) such class or series of Parity Units. When distributions
are not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all distributions authorized and declared upon Series One Preferred
Units and all distributions authorized and declared upon any other series or
class or classes of Parity Units shall be authorized and declared ratably in
proportion to the respective amounts of distributions accumulated and unpaid on
the Series One Preferred Units and such Parity Units.
(d) So long as any Series One Preferred Units are outstanding, no
distributions (other than distributions paid solely in Junior Units, or options,
warrants or rights to subscribe for or purchase Junior Units) shall be
authorized and declared or paid or set apart for payment or other distribution
authorized and declared or made upon Junior Units for any period, nor shall any
Junior Units be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Units made for purposes of
and in compliance with requirements of employee incentive or employee benefit
plans of the Partnership or the Company or any of their subsidiaries), for any
consideration (or any moneys to be paid to or made available for a sinking fund
for the redemption of any Junior Units) by the Partnership, directly or
indirectly
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(except by conversion into or exchange for Junior Units), unless in each case
(i) the full cumulative distributions on all outstanding Series One Preferred
Units and any other Parity Units of the Partnership shall have been paid or set
apart for payment for all past Distribution Periods with respect to the Series
One Preferred Units and all past distribution periods with respect to such
Parity Units and (ii) sufficient funds shall have ben paid or set apart for the
payment of the distribution for the current Distribution Period with respect to
the Series One Preferred Units.
(e) Without limiting the other provisions hereof, no distributions on
Series One Preferred Units (other than liquidating distributions made in
accordance with Section 13.2 of the main part of the Partnership Agreement and
Section 4 hereof) shall be paid or set apart for payment by the Partnership at
such time as the terms and provisions of any agreement of the Partnership or its
affiliates or subsidiaries, relating to bona fide indebtedness for borrowed
money, prohibits such declaration, payment or setting apart for payment or
provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law (and such failure to pay or set
apart for payment distributions on the Series One Preferred Units shall prohibit
other distributions by the Partnership as described in Sections 3(c) and (d)).
(f) Notwithstanding the foregoing, distributions on the Series One
Preferred Units shall accrue whether or not the terms and provisions set forth
in Section 3(e) hereof at any time prohibit the current payment of
distributions, whether or not the Partnership has earnings, whether or not there
are funds legally available for the payment of such distributions and whether or
not such distributions are declared. Accrued but unpaid distributions on the
Series One Preferred Units will accumulate as of the Distribution Payment Date
on which they first become payable.
(g) Any distribution made on Series One Preferred Units shall first be
credited against the earliest accumulated but unpaid distribution due with
respect to such Units which remains payable. Holders of the Series One
Preferred Units shall not be entitled to any distribution (other than in
connection with the payment of the liquidation preference in the event of
liquidation), whether payable in cash, property or securities, in excess of full
cumulative distributions on the Series One Preferred Units as described above.
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Partnership, whether voluntary or involuntary, before any payment or
distribution of the assets of the Partnership (whether capital or surplus) shall
be made to or set apart for the holders of Junior Units, the holders of Series
One Preferred Units shall be entitled to receive Thirty-four Dollars ($34.00)
per Series One Preferred Unit (the "Liquidation Preference") plus an amount
equal to all distributions (whether or not earned or declared) accrued and
unpaid thereon to the date of final distribution to such holder; but such
holders of Series One Preferred Units shall not be entitled to any further
payment. If, upon any such liquidation, dissolution or winding up of the
Partnership, the assets of the Partnership, or proceeds thereof, distributable
among the holders of Series One
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Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other Parity Units, then such assets,
or the proceeds thereof, shall be distributed among the holders of such Series
One Preferred Units and any such other Parity Units ratably in accordance with
the respective amounts that would be payable on such Series One Preferred Units
and any such other Parity Units if all amounts payable thereon were paid in
full.
(b) Subject to the rights of the holders of Units of any series or
class or classes of Units ranking on a parity with or senior to the Series One
Preferred Units upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of the Series One Preferred Units and
Parity Units, as provided in this Section 4, any series or class or classes of
Junior Units shall, subject to any respective terms and provisions applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed.
(c) After payment of the full amount of the liquidating distributions
to which they are entitled pursuant to Sections 4(a) and (b), the holders of
Series One Preferred Units will have no right or claim to any of the remaining
assets of the Partnership.
(d) The consolidation or merger of the Partnership with or into any
other corporation, partnership or entity or of any other corporation,
partnership or entity with or into the Partnership, or an exchange of Units or
partnership interests, or the sale, lease or conveyance of all or substantially
all of the property or business of the Partnership, shall not be deemed to
constitute a liquidation, dissolution or winding up of the Partnership.
5. Redemption at the Option of the Partnership.
(a) On and after June 30, 2003, the Partnership, at its option, may
cause the Series One Preferred Units, in whole or in part, to be redeemed and
converted from time to time into Common Units, subject to the provisions
described below.
(b) The Series One Preferred Units may be redeemed, in whole or in
part, at the option of the Partnership, from time to time after June 30, 2003,
provided, that, (i) the 20-Day Value of a REIT Share on the date of commencement
of delivery of a Redemption Notice equals or exceeds $42.08 (appropriately
adjusted in the case of any stock split, stock dividend, or reverse stock split
or combination with respect to REIT Shares, and appropriately adjusted in the
case of any other event applicable to REIT Shares that is analogous to the
events described in Section 6(d), in each case applying the principles set forth
in Section 6(d) to determine such adjustment as reasonably determined in good
faith by the General Partner, such determination to be conclusive) and (ii) a
Default Event is not in existence. In order to exercise its redemption option,
the Partnership shall deliver a notice (a "Redemption Notice"), containing the
information provided in Section 5(e), to each holder of record of Series One
Preferred Units. The date on which the Series One Preferred Units to be
converted into Common Units shall occur (the "Redemption Date") (which may not
be before June 30, 2003) shall be selected by the Partnership, shall be
specified in the Redemption Notice and shall be
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not less than fifteen (15) days or more than sixty (60) days after notice is
given under Section 9.
(c) Upon redemption of Series One Preferred Units by the Partnership
on the Redemption Date, each Series One Preferred Unit so redeemed shall be
converted into a number of Common Units equal to the Liquidation Preference of a
Series One Preferred Unit divided by the Conversion Price as of the opening of
business on the Redemption Date. A conversion of Series One Preferred Units
shall occur automatically after the close of business on the applicable
Redemption Date without any action on the part of the holders of Series One
Preferred Units, and immediately after the close of business on the Redemption
Date the holders of Series One Preferred Units who had all or a portion of their
Series One Preferred Units converted shall be credited on the books and records
of the Partnership with the issuance as of the opening of business on the next
day of the Common Units issuable upon such conversion.
Upon any redemption of Series One Preferred Units, the Partnership shall
pay any accumulated and unpaid distributions in cash in arrears for any
Distribution Period ending on or prior to the Redemption Date. If the Redemption
Date falls after a Distribution Payment Record Date and prior to the
corresponding Distribution Payment Date, then each holder of Series One
Preferred Units at the close of business on such Distribution Payment Record
Date shall be entitled to the distribution payable on such Series One Preferred
Units on the corresponding Distribution Payment Date notwithstanding the
redemption of such Series One Preferred Units before such Distribution Payment
Date. Except as set forth in the prior sentence, (i) no accrued but
unaccumulated distribution on the Series One Preferred Units shall be paid on
converted Units, including in respect of the Distribution Period in which such
conversion occurs and (ii) a Series One Preferred Unitholder shall have no
right, with respect to any Series One Preferred Units converted, to receive any
distributions paid in respect of such Series One Preferred Units after the
Redemption Date. Distributions on Common Units issued upon such redemption and
conversion of Series One Preferred Units shall only be paid with respect to
record dates occurring after the date on which the conversion of the related
Series One Preferred Units occurred.
(d) If full cumulative distributions on the Series One Preferred Units
and any other series or class or classes of Parity Units of the Partnership have
not been paid or declared and set apart for payment, the Series One Preferred
Units may not be redeemed in part and the Partnership may only purchase, redeem
or otherwise acquire Series One Preferred Units (if the holder thereof consents
thereto) or any Parity Units, in either case in exchange for Junior Units.
(e) A Redemption Notice shall be provided in the manner provided in
Section 9. Any defect in a Redemption Notice or in the mailing thereof, to any
particular holder, shall not affect the sufficiency of the notice or the
validity of the proceedings for redemption with respect to the other holders.
Any notice that was mailed in the manner herein provided shall be conclusively
presumed to have been duly given on the date of deemed
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delivery provided in Section 9, whether or not the holder receives the notice.
Each such mailed notice shall state, as appropriate: (1) the Redemption Date;
(2) the number of Series One Preferred Units to be redeemed in the aggregate
and, if fewer than all the Series One Preferred Units held by such holder are to
be redeemed, the number of such Series One Preferred Units to be redeemed from
such holder; (3) the number of Common Units to be issued with respect to each
Series One Preferred Unit; (4) the then-current Conversion Price; and (5) that
distributions on the Series One Preferred Units to be redeemed shall cease to
accrue on such Redemption Date except as otherwise provided herein. Notice
having been delivered as aforesaid, from and after the Redemption Date (unless
the Partnership shall fail to issue the appropriate number of Common Units), (i)
except as otherwise provided herein, distributions on the Series One Preferred
Units so called for redemption shall cease to accrue, (ii) said Units shall no
longer be deemed to be outstanding, and all rights of the holders thereof as
holders of Series One Preferred Units of the Partnership shall cease (except the
rights to receive the Common Units, the accumulated and unpaid distribution in
cash under Section 5(c), cash in lieu of fractional Units upon such redemption,
and the right to receive, if applicable in accordance with Section 5(c), a
distribution in respect of a Distribution Payment Record Date that occurred
prior to the Redemption Date and for which the Distribution Payment Date is
after the Redemption Date, in each case without interest thereon).
(f) If fewer than all of the outstanding Series One Preferred Units
are to be redeemed, the Series One Preferred Units to be redeemed shall be
selected by the Partnership from the outstanding Series One Preferred Units not
previously called for redemption by lot or pro rata (as nearly as may be) or by
any other method determined by the Partnership in its sole discretion to be
equitable.
(g) No fractional Common Units shall be issued upon redemption of a
Series One Preferred Unit. Instead of any fractional interest in a Common Unit
that would otherwise be deliverable upon the redemption of a Series One
Preferred Unit, the Partnership shall pay to the holder of such Series One
Preferred Unit an amount in cash (computed to the nearest cent) based upon the
Current Market Price of a Common Unit on the Trading Day immediately preceding
the Redemption Date. If more than one Series One Preferred Unit shall be
redeemed at one time from the same holder, the number of full Common Units
issuable upon redemption thereof shall be computed on the basis of the aggregate
number of Series One Preferred Units so redeemed.
(h) The Partnership covenants that any Common Units issued upon
redemption of the Series One Preferred Units shall be validly issued, fully paid
and non-assessable.
(i) After the redemption of Series One Preferred Units as aforesaid,
the Partnership shall deliver to such holder, upon his written request, a
certificate of the General Partner certifying the number of Common Units and
Preferred Units held by such person immediately after such conversion.
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6. Conversion.
Holders of Series One Preferred Units shall have the right to convert all
or a portion of such units into Common Units, as follows:
(a) Subject to and upon compliance with the provisions of this Section 6,
a holder of Series One Preferred Units shall have the right, at his or her
option, at any time to convert such units into the number of fully paid and non-
assessable Common Units obtained by dividing the aggregate Liquidation
Preference of such Series One Preferred Units by the Conversion Price (as in
effect at the time and on the date provided for in the last paragraph of
paragraph (b) of this Section 6) by delivering an irrevocable Conversion Notice
in the form attached hereto as Exhibit A and in the manner provided in Section
9; provided, however, that the right to convert Series One Preferred Units
called for redemption pursuant to Section 5 hereof shall terminate at the close
of business on the Redemption Date fixed for such redemption, unless the
Partnership shall default in issuing the Common Units and making any cash
payment required upon such redemption under Section 5 hereof. A conversion of
Series One Preferred Units shall occur automatically after the close of business
on the applicable Conversion Date without any action on the part of the holders
of Series One Preferred Units, and immediately after the close of business on
the Conversion Date the holders of Series One Preferred Units who had all or a
portion of their Series One Preferred Units converted shall be credited on the
books and records of the Partnership with the issuance as of the opening of
business on the next day of the Common Units issuable upon such conversion.
(b) Holders of Series One Preferred Units at the close of business on a
Distribution Payment Record Date shall be entitled to receive the distribution
payable on such Series One Preferred Units on the corresponding Distribution
Payment Date notwithstanding the conversion thereof following such Distribution
Payment Record Date and prior to such Distribution Payment Date. Except as set
forth in the prior sentence and in Section 5, (i) no accrued but unaccumulated
distribution on the Series One Preferred Units shall be paid on converted Units,
including in respect of the Distribution Period in which such conversion occurs
and (ii) a Series One Preferred Unitholder shall have no right, with respect to
any Series One Preferred Units converted, to receive any distributions paid in
respect of such Series One Preferred Units after the Conversion Date.
Distributions on Common Units issued upon conversion of Series One Preferred
Units shall only be paid with respect to record dates occurring after the date
on which the conversion of the related Series One Preferred Units occurred.
After the conversion of Series One Preferred Units as aforesaid, the
Partnership shall deliver to such holder, upon his written request, a
certificate of the General Partner certifying the number of Common Units and
Preferred Units held by such person immediately after such conversion.
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date (the "Conversion Date") specified in the
Conversion Notice (which
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shall not be earlier than 15 days after mailing of the Conversion Notice to the
Partnership nor later than sixty (60) days after such date) and the Series One
Preferred Units so presented for conversion shall be deemed converted into
Common Units at the close of business on such date, and such conversion shall be
at the Conversion Price in effect on such date (unless such day is not a
Business Day, in which event such conversion shall be deemed to have become
effective at the close of business on the next succeeding Business Day).
(c) No fractions of Common Units shall be issued upon conversion of the
Series One Preferred Units. Instead of any fractional interest in a Common Unit
that would otherwise be deliverable upon the conversion of a Series One
Preferred Unit, the Partnership shall pay to the holder of such Series One
Preferred Unit an amount in cash based upon the Current Market Price of Common
Units on the Trading Day immediately preceding the date of conversion. If more
than one Series One Preferred Unit shall be surrendered for conversion at one
time by the same holder, the number of full Common Units issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
Series One Preferred Units so surrendered.
(d) The Conversion Price shall be adjusted from time to time as follows:
(i) If the Partnership shall after June 30, 1998 (A) make a
distribution on its Common Units in Common Units, (B) subdivide its outstanding
Common Units into a greater number of units, (C) combine its outstanding Common
Units into a smaller number of units or (D) issue any Units by reclassification
of its Common Units, the Conversion Price in effect at the opening of business
on the day following the date fixed for the determination of unitholders
entitled to receive such distribution or at the opening of business on the day
following the day on which such subdivision, combination or reclassification
becomes effective, as the case may be, shall be adjusted so that the holder of
any Series One Preferred Unit thereafter surrendered for conversion shall be
entitled to receive the number of Common Units that such holder would have owned
or have been entitled to receive after the happening of any of the events
described above had such Series One Preferred Units been converted immediately
prior to the record date in the case of a distribution or the effective date in
the case of a subdivision, combination or reclassification. An adjustment made
pursuant to this subparagraph (i) shall become effective immediately upon the
opening of business on the day next following the record date (subject to
paragraph (h) below) in the case of a distribution and shall become effective
immediately upon the opening of business on the day next following the effective
date in the case of a subdivision, combination or reclassification.
(ii) If the Partnership shall issue after June 30, 1998 rights,
options or warrants to all holders of Common Units entitling them (for a period
expiring within 45 days after the record date mentioned below) to subscribe for
or purchase Common Units at a price per Unit less than the Fair Market Value per
Common Unit on the record date for the determination of Unitholders entitled to
receive such rights, options or warrants, then the Conversion Price in effect at
the opening of business on the day next following such record date shall be
adjusted to equal the price determined by multiplying (I) the Conversion Price
in
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effect immediately prior to the opening of business on the day following the
record date fixed for such determination by (II) a fraction, the numerator of
which shall be the sum of (A) the number of Common Units outstanding on the
close of business on the record date fixed for such determination and (B) the
number of Units that the aggregate proceeds to the Partnership from the issuance
and exercise of such rights, options or warrants for Common Units would purchase
at such Fair Market Value, and the denominator of which shall be the sum of (A)
the number of Common Units outstanding on the close of business on the record
date fixed for such determination and (B) the number of additional Common Units
offered for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall become effective immediately upon the opening of
business on the day next following such record date (subject to paragraph (h)
below). In determining whether any rights, options or warrants entitle the
holders of Common Units to subscribe for or purchase Common Units at less than
such Fair Market Value, there shall be taken into account any consideration
received by the Partnership upon issuance and upon exercise of such rights,
options or warrants, the value of such consideration, if other than cash, to be
determined in good faith by the General Partner, such determination to be
conclusive.
(iii) If the Partnership shall distribute to all holders of its
Common Units any Partnership Units (other than Common Units) or evidence of its
indebtedness or assets (excluding cash distributions to the extent that after
giving effect to such distributions the fair market value of the assets of the
Partnership exceed the sum of the liabilities of the Partnership, as determined
in good faith by the General Partner, such determination to be conclusive) or
rights or warrants to subscribe for or purchase any of its securities (excluding
those rights and warrants issued to all holders of Common Units entitling them
for a period expiring within 45 days after the record date referred to in
subparagraph (ii) above to subscribe for or purchase Common Units, which rights
and warrants are referred to in and treated under subparagraph (ii) above) (any
of the foregoing being hereinafter in this subparagraph (iii) called the
"Securities"), then in each case the Conversion Price shall be adjusted so that
it shall equal the price determined by multiplying (I) the Conversion Price in
effect immediately prior to the close of business on the date fixed for the
determination of Unitholders entitled to receive such distribution by (II) a
fraction, the numerator of which shall be the Fair Market Value per Unit of the
Common Units on the record date mentioned below less the then fair market value
(as determined by the General Partner in good faith, such determination to be
conclusive) of the portion of the Units or assets or evidences of indebtedness
so distributed or of such rights or warrants applicable to one Common Unit, and
the denominator of which shall be the Fair Market Value per Unit of the Common
Units on the record date mentioned below. Such adjustment shall become effective
immediately upon the opening of business on the day next following (subject to
paragraph (h) below) the record date for the determination of Unitholders
entitled to receive such distribution. For the purposes of this subparagraph
(iii), the distribution of a Security, which is distributed not only to the
holders of the Common Units on the date fixed for the determination of
Unitholders entitled to such distribution of such Security, but also is required
to be distributed with each Common Unit delivered to a Person converting a
Series One Preferred Unit after such determination date, shall not require an
adjustment of the Conversion Price pursuant to this subparagraph (iii); provided
that on the
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date, if any, on which a person converting a Series One Preferred Unit would no
longer be entitled to receive such Security with a Common Unit (other than as a
result of the termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred, and the Conversion Price shall be
adjusted as provided in this subparagraph (iii) (and such day shall be deemed to
be "the date fixed for the determination of the Unitholders entitled to receive
such distribution" and "the record date" within the meaning of the two preceding
sentences).
(iv) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustments that by reason of this
subparagraph (iv) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance with the provisions
of this Section 6 (other than this subparagraph (iv)) not later than such time
as may be required in order to preserve the tax-free nature of a distribution to
the holders of Common Units. Notwithstanding any other provisions of this
Section 6, the Partnership shall not be required to make any adjustment of the
Conversion Price for the issuance of any Common Units pursuant to any employee
benefit or compensation plan or other plan providing for the reinvestment of
distributions or interest payable on securities of the Partnership and the
investment of additional optional amounts in Common Units under such plan (or
the issuance of any Common Units to the Company in respect of a capital
contribution by it resulting from an analogous sale of its securities). All
calculations under this Section 6 shall be made to the nearest cent with $.005
being rounded upward) or to the nearest one-tenth of a Unit (with .05 of a Unit
being rounded upward), as the case may be. Anything in this paragraph (d) to the
contrary notwithstanding, the Partnership shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in addition
to those required by this paragraph (d), as it in its discretion shall determine
to be advisable in order that any Unit distributions, subdivision of Units,
reclassification or combination of Units, distribution of rights, options or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash distributions) hereafter made by the Partnership to its
Unitholders shall not be taxable.
(e) If the Partnership shall be a party to any transaction (including
without limitation a merger, consolidation, unit exchange, self tender offer for
all or substantially all Common Units, sale of all or substantially all of the
Partnership's assets or recapitalization of the Common Units and excluding any
transaction as to which subparagraph (d)(i) of this Section 6 applies) (each of
the foregoing being referred to herein as a "Transaction"), in each case as a
result of which Common Units shall be converted into the right to receive
securities or other property (including cash or any combination thereof), each
Series One Preferred Unit that is not converted into the right to receive
securities or other property in connection with such Transaction shall
thereafter be convertible into the kind and amount of Units or securities and
other property (including cash or any combination thereof) receivable upon the
consummation of such Transaction by a holder of that number of Common Units into
which one Series One Preferred Unit was convertible immediately prior to such
Transaction,
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assuming such holder of Common Units (i) is not a Person with which the
Partnership consolidated or into which the Partnership merged or which merged
into the Partnership or to which such sale or transfer was made, as the case may
be (a "Constituent Person"), or an affiliate of a Constituent Person and (ii)
failed to exercise his or her rights of the election, if any, as to the kind or
amount of securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of stock, securities and other
property (including cash) receivable upon such Transaction is not the same for
each Common Unit of the Partnership held immediately prior to such Transaction
by other than a Constituent Person or an affiliate thereof and in respect of
which such rights of election by such person shall not have been exercised
("Non-Electing Share"), then for the purpose of this paragraph (e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per Unit by a plurality of the Non-Electing Shares). The
Partnership shall not be a party to any Transaction unless the terms of such
Transaction are consistent with the provisions of this paragraph (e), and it
shall not consent or agree to the occurrence of any Transaction until the
Partnership has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Series One
Preferred Units that will contain provisions enabling the holders of the Series
One Preferred Units that remain outstanding after such Transaction to convert
their Series One Preferred Units into the consideration provided for herein. The
provisions of this paragraph (e) shall similarly apply to successive
Transactions.
(f) If:
(i) the Partnership shall declare a distribution on the Common Units
(excluding cash distributions to the extent that after giving effect to such
distributions the fair market value of the assets of the Partnership exceed the
sum of the liabilities of the Partnership, as determined in good faith by the
General Partner, such determination to be conclusive); or
(ii) the Partnership shall authorize the granting to the holders of
the Common Units of rights or warrants to subscribe for or purchase any Units of
any class or any other rights or warrants; or
(iii) there shall be any reclassification of the Common Units (other
than an event to which subparagraph (d) (i) of this Section 6 applies) or any
consolidation or merger to which the Partnership is a party and for which
approval of any Unitholders of the Partnership is required, or a unit exchange
involving the conversion or exchange of Common Units into securities or other
property, or a self tender offer by the Partnership for all or substantially all
of its outstanding Common Units, or the sale or transfer of all or substantially
all of the assets of the Partnership as an entirety and for which approval of
any Unitholders of the Partnership is required; or
14
(iv) if there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Partnership;
then the Partnership shall cause to be mailed to the holders of the Series One
Preferred Units at their addresses as shown on the records of the Partnership,
as promptly as possible, but at least 15 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such distribution or granting of rights or warrants,
or, if a record is not to be taken, the date as of which the holders of Common
Units of record to be entitled to such distribution or granting of rights or
warrants are to be determined or (B) the date on which such reclassification,
consolidation, merger, unit exchange, sale, transfer, liquidation, dissolution
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Units of record shall be entitled to exchange
their Common Units for securities or other property, if any, deliverable upon
such reclassification, consolidation, merger, unit exchange, sale, transfer,
liquidation, dissolution or winding up. Failure to give or receive such notice
or any defect therein shall not affect the legality or validity of the
proceedings described in this Section 6.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Partnership shall promptly file in the books and records of the Partnership an
officer's certificate setting forth the Conversion Price after such adjustment
as required by the terms hereof and setting forth a brief statement of the facts
requiring such adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment absent manifest error. Promptly after filing of
such certificate, the Partnership shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and the
effective date such adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Price to the holders of each Series One
Preferred Unit at such holder's last address as shown on the records of the
Partnership.
(h) In any case in which paragraph (d) of this Section 6 provides that an
adjustment shall become effective on the day next following the record date for
an event, the Partnership may defer until the occurrence of such event (A)
issuing to the holder of any Series One Preferred Unit converted after such
record date and before the occurrence of such event the additional Common Units
issuable upon such conversion by reason of the adjustment required by such event
over and above the Common Units issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount of cash in
lieu of any fractional Common Unit.
(i) There shall be no adjustment of the Conversion Price in case of the
issuance of any Units in a reorganization, acquisition or other similar
transaction except as specifically set forth in this Section 6. If any action
would require adjustment of the Conversion Price pursuant to more than one
paragraph of this Section 6, only one adjustment shall be made, and such
adjustment shall be the amount of adjustment that has the highest absolute
value.
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(j) If the Partnership shall take any action affecting the Common Units,
other than action described in this Section 6, that in the opinion of the
General Partner would materially adversely affect the conversion rights of the
holders of the Series One Preferred Units, the Conversion Price for the Series
One Preferred Units may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as the General Partner, in its sole
discretion, may determine to be equitable in the circumstances.
The Partnership further covenants that any Common Units issued upon
conversion of the Series One Preferred Units shall be validly issued, fully paid
and non-assessable.
7. Voting Rights.
(a) Holders of the Series One Preferred Units will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law.
(b) So long as any Series One Preferred Units remain outstanding, the
Partnership shall not, without the affirmative vote of the holders of at least a
majority of the Series One Preferred Units outstanding at the time, given in
person or by proxy, either in writing or at a meeting (voting separately as a
class), amend, alter or repeal the provisions of the Partnership Agreement,
whether by merger, consolidation or otherwise, so as to materially and adversely
affect any right, preference, privilege or voting power of the Series One
Preferred Units or the holders thereof in their capacity as holders of Series
One Preferred Units; but subject, in any event, to the following provisions:
(i) With respect to the occurrence of any merger, consolidation or
other business combination or reorganization, so long as the
Series One Preferred Units remain outstanding with the terms
thereof materially unchanged or, if the Partnership is not the
surviving entity in such transaction, are exchanged for a
security of the surviving entity with terms that are materially
the same with respect to rights to distributions, voting,
redemption and conversion as the Series One Preferred Units (and
with the terms of the Common Units or such other securities for
which the Series One Preferred Units (or the substitute security
therefor) are convertible materially the same with respect to
rights to distributions, voting, redemption and conversion
(including the right to receive the REIT Shares Amount or a
similar amount with respect to a successor of the Company)), the
occurrence of any such event shall not be deemed to materially
and adversely affect such rights, preferences, privileges or
voting powers of the holders of the Series One Preferred Units.
(ii) Any creation or issuance of any Common Units or of any class or
series of Preferred Units, in each case ranking junior to the
Series One Preferred Units with respect to payment of
distributions, redemption rights and the distribution of assets
upon liquidation, dissolution or
16
winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers of
the holders of the Series One Preferred Units.
(iii) Any creation or issuance of any series of Preferred Units (other
than an issuance of additional Series One Preferred Units, as to
which a class vote shall be required; provided, that no class
vote shall be required for any issuance of Series One Preferred
Units in connection with or as contemplated by the Source
Agreements), or any increase in the amount of authorized Units
of such series, in each case ranking on a parity with the Series
One Preferred Units with respect to payment of distributions,
voting, redemption or the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences,
privileges or voting powers of the holders of the Series One
Preferred Units if such issuance is done (x) in connection with
an issuance of Partnership Units in exchange for non-cash assets
(including, without limitation, (i) securities, partnership
interests, membership interests or other interests in an entity
and (ii) real estate, personal property and intangibles), or to
the Company following the issuance of securities by it for such
non-cash assets and the contribution of such non-cash assets to
the Partnership or (y) in connection with a bona fide capital
raising transaction or to the Company in consideration of a cash
contribution to the Partnership following a sale of preferred
stock by the Company in a bona fide capital raising transaction.
(iv) Any creation or issuance of any series of Preferred Units, or
any increase in the amount of authorized Units of such series,
in each case ranking senior to the Series One Preferred Units
with respect to payment of distributions, voting, redemption or
the distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers of
the holders of the Series One Preferred Units if the issuance of
such senior Preferred Units is in connection with a bona fide
capital raising transaction or to the Company in consideration
of a cash contribution to the Partnership following a sale of
preferred stock by the Company in a bona fide capital raising
transaction.
(c) The foregoing voting provisions will not apply if, at or prior to the
time when the act, with respect to which such vote would otherwise be required,
will be effected, all outstanding Series One Preferred Units shall have been
converted and/or redeemed.
8. Ranking.
17
Any class or series of Units of the Partnership shall be deemed to rank:
(a) Senior to the Series One Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled (expressly
in accordance with their terms) to the receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of Series One Preferred Units;
(b) on a parity with the Series One Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution
or winding up, whether or not the distribution rates, distribution payment dates
or redemption or liquidation prices per Unit thereof be different from those of
the Series One Preferred Units, if the holders of such class or series of Unit
and the Series One Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per Unit or liquidation preferences, without preference or
priority one over the other ("Parity Units"); and
(c) junior to the Series One Preferred Units, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up, if such class or series shall be Common Units or if the holders
of Series One Preferred Units shall be entitled to receipt of distributions or
of amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Units of such class or
series ("Junior Units").
9. Notices. All notices, demand, requests or other communications which
may be or are required to be given, served or sent hereunder will be in writing
and delivered by certified U.S. mail, return receipt required, with postage
prepaid, or by nationally recognized overnight courier service that provides
tracking and proof of receipt. Notices shall be deemed delivered upon the
earlier of (i) delivery, (ii) refusal of delivery by addressee, (iii) two
Business Days after deposit in the U.S. Mails in the case of certified U.S.
mail, or (iv) one Business Day after deposit with a nationally recognized
overnight courier. Notices to Series One Preferred Unitholders shall be sent to
their address of record with the Partnership. Any Series One Preferred
Unitholder may change its address of record by written notice as given as
aforesaid. Notices delivered to the Partnership shall be addressed to Boston
Properties Limited Partnership, Attn.: Chief Financial Officer, 0 Xxxxxxxxx
Xxxxxx, Xxxxxx, XX 00000 or to such other address as the Partnership may have
notified holders in the manner provided in this Section 9.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Boston Properties, Inc., as General Partner of the
Partnership, has caused this Certificate of Designations to become effective,
and the Partnership Agreement is hereby amended by giving effect to the terms
set forth herein.
BOSTON PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Date: June 30, 1998
19
Exhibit A to the Certificate of Designations for the Series One Preferred Units
Notice of Election by Partner to Convert
Series One Preferred Units into Common Units
The undersigned Series One Preferred Unitholder hereby irrevocably (i)
elects to convert the number of Series One Preferred Units in Boston Properties
Limited Partnership (the "Partnership") set forth below into Common Units in
accordance with the terms of the Second Amended and Restated Agreement of
Limited Partnership of the Partnership and the Certificate of Designations
relating to the Series One Preferred Units that is a part thereof; and (ii)
directs that any cash in lieu of fractional Common Units that may be deliverable
upon such conversion be delivered to the address specified below. The
undersigned hereby represents, warrants, and certifies that the undersigned (a)
has title to such Series One Preferred Units, free and clear of the rights or
interests of any other person or entity other than the Partnership; (b) has the
full right, power, and authority to cause the conversion of such Series One
Preferred Units as provided herein; and (c) has obtained the consent or approval
of all persons or entities, if any, having the right to consent or approve such
conversion.
Name of Series One Preferred Unitholder:________________________________________
(Please Print: Exact Name as Registered with
Partnership)
Date of this Notice:_________________________
Date the Series One Preferred Units are to be converted:________________/1/
Number of Series One Preferred Units to be Converted:_________________
_____________________________________________
(Signature of Limited Partner: Sign Exact
Name as Registered with Partnership)
_____________________________________________
(Street Address)
_____________________________________________
(City) (State) (ZipCode)
Signature Guaranteed by:
_____________________________________________
________________________
/1/ Not earlier than 15 days nor later than 60 days after the date this
Notice is deposited in the U.S. mails (certified mail, postage prepaid, return
receipt requested) or deposited with a nationally recognized overnight courier
guaranteeing next business day delivery.
20
