EXHIBIT 99.25
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 12th day of November, 1998 (the "Closing
Date").
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 Three Preferred Units":
(1) Designation and Number. A series of Preferred Units, designated the
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"Series Three Preferred Units," is hereby established.
(2) Definitions. For purposes of this Certificate of Designations, the
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following terms shall have the meanings indicated:
"Cash Business Combination" means a Transaction in which the fair market
value of the aggregate consideration into which the outstanding Common
Units are or will be exchanged or converted, or which holders of such Units
will be entitled to receive, consists of 40% or less voting common equity.
In determining whether a Transaction is a Cash Business Combination, the
following will apply: (a) if elections for the type of consideration may be
made by the holders of Common Units, it will be assumed that all holders of
Common Units elect or will elect consideration other than voting common
equity, (b) the determination shall be made in good faith by the General
Partner, based on the fair market values of the consideration to be issued
in the Transaction as of the date the definitive merger or other agreement
relating thereto is entered into, and (c) if
any of the consideration to be issued in the Transaction is a publicly
traded security, the fair market value of that security shall be the
Current Market Price of such security as of the date the definitive merger
or other agreement relating thereto is entered into.
"Closing Date" shall have the meaning set forth in the recitals above.
"Conversion Price" shall mean the conversion price per Common Unit for
which the Series Three Preferred Units are convertible, as such Conversion
Price may be adjusted pursuant to Section 7 hereof. The initial Conversion
Price shall be an amount equal to $38.10 per REIT Share.
"Conversion Date" shall have the meaning set forth in paragraph (d) of
Section 7 hereof.
"Conversion Period" shall have the meaning set forth in paragraph (a) of
Section 7 hereof.
"Conversion Right" shall have the meaning set forth in paragraph (a) of
Section 7 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, as such term is
defined in the main part of the Partnership Agreement.
"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.
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"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 the day after the Closing Date 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 ten (10) 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 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.
"Forced Conversion" has the meaning set forth in Section 7(b) hereof.
"Forced Conversion Amount" shall mean the number of Series Three Preferred
Units which the General Partner may require to be converted as provided in
paragraph 7(b);
"Forced Conversion Option" shall have the meaning set forth in paragraph
(b) of Section 7 hereof.
"Issue Date" shall mean, with respect to a Series Three Preferred Unit, the
day after the Closing Date.
"Junior Preferred Units" shall mean any class or series of Partnership
Units the holders of which are entitled to the receipt of distributions or
of amounts distributable upon liquidation, dissolution or winding up, as
the case may be, junior in priority to the holders of the Series Three
Preferred Units, but senior in priority to the holders of Common Units.
"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 (a) of Section 9 hereof.
"Liquidation Preference" shall have the meaning set forth in paragraph (a)
of Section 4 hereof.
"Option Strike Date" shall have the meaning set forth in paragraph (a) of
Section 5 hereof.
"Parity Units" shall have the meaning set forth in paragraph (b) of
Section 9 hereof.
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"Preferred Rate" shall mean, at any given time, the rate per annum as to
which distributions accrue on each Series Three Preferred Unit, based on
the Liquidation Preference, for purposes of determining the Stated
Quarterly Distribution in effect at such time, as set forth in the
following schedule:
Time Period Preferred Rate
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November 12, 1998 to March 31, 1999 5.0%
April 1, 1999 to December 31, 1999 5.5%
January 1, 2000 to December 31, 2000 5.625%
January 1, 2001 to December 31, 2001 6.0%
January 1, 2002 to December 31, 2002 6.5%
January 1, 2003 to May 12, 2009 7.0%
May 13, 2009 and thereafter 6.0%
"Ratchet Distribution" shall mean for each Distribution Payment Date a
distribution payable, if applicable, per Series Three Preferred Unit in
respect of the Distribution Period ending on such Distribution Payment
Date. The Ratchet Distribution for each Distribution Period shall be equal
to the distribution which would have been paid in respect of such Series
Three Preferred Unit had (i) such Series Three Preferred Unit been
converted into (x) a number of Common Units determined by dividing the
Liquidation Preference by the Conversion Price in effect on such
Distribution Payment Date and any (y) Other Securities (as defined below)
issuable upon such conversion and (ii) there had been paid in respect of
each such Common Unit and Other Securities (including any fractional
portion thereof to the fourth decimal) a distribution (the "Regular
Distribution") equal to the regular, quarterly cash distribution paid to
holders of record of Common Units and Other Securities on that record date
(the "Reference Record Date") which is closest to the end of the calendar
quarter preceding such Distribution Payment Date. For purposes of
determining the Ratchet Distribution, in the event that a special cash
distribution was paid to holders of Common Units and Other Securities on
the Reference Record Date or at any time prior to the Reference Record Date
and after the last record date for regular, quarterly cash distributions,
then in such event the Ratchet Distribution shall include, in addition to
the Regular Distribution paid in respect of the Reference Record Date, the
amount of such special cash distribution paid in respect of each Common
Unit or Other Security (for clarity, it is noted that the effect of this
sentence is to assure that in calculating the Ratchet Distribution the
holders of Series Three Preferred Units will benefit from any cash
distributions paid in respect of Common Units and Other Securities even if
such cash distributions might not be characterized as "regular, quarterly
cash distributions"). In the event that a Series Three Preferred Unit is
outstanding for only a portion of a Distribution Period, then the Ratchet
Distribution with respect to such Series Three Preferred Unit and such
Distribution Period shall be determined as provided in the preceding
sentence but shall then be adjusted by multiplying such amount by a
fraction, the numerator of which equals the number of days such Series
Three Preferred Unit had been outstanding during such period and the
denominator of which shall equal the total number of days during such
Distribution Period. As used herein, the term "Other
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Security" means any security in addition to Common Units (including
Junior Preferred Units) which may be issuable to a holder of Series Three
Preferred Units upon conversion of a Series Three Preferred Unit.
"Redemption Notice" shall have the meaning set forth in paragraph (b) of
Section 5 hereof.
"Redemption Right" shall have the meaning set forth in paragraph (a) of
Section 5 hereof.
"Securities" shall have the meaning set forth in paragraph (g)(iii) of
Section 7 hereof.
"Source Agreements" shall mean that certain Master Transaction Agreement
dated September 28, 1998 by and among the General Partner, the Partnership
and, among others, the holders of the Series Three Preferred Units
designated hereby, and each of the other agreements contemplated therein.
"Stated Quarterly Distribution" shall mean for each Distribution Payment
Date a distribution payable, if applicable, per each Series Three Preferred
Unit in respect of the Distribution Period ending on such Distribution
Payment Date. The Stated Quarterly Distribution for each Distribution
Period shall equal the sum of the following products for each day in such
Distribution Period on which the Series Three Preferred Unit is
outstanding: (i) the Preferred Rate in effect on such day divided by 365,
multiplied by (ii) the Liquidation Preference.
"Target Amount" shall mean that number of Series Three Preferred Units
having a Liquidation Preference equal to one-sixth of the aggregate
Liquidation Preference of the Series Three Preferred Units issued under the
Source Agreements.
"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 (h) of
Section 7 hereof.
(3) Distributions.
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(a) The holders of Series Three Preferred Units shall be entitled to
receive, in respect of each Distribution Payment Date, when, as
and if authorized and declared by the General Partner out of
assets legally available for
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that purpose, cumulative preferential distributions payable in
cash in an amount per Series Three Preferred Unit equal to the
greater of (i) the Stated Quarterly Distribution for such
Distribution Payment Date or (ii) the Ratchet Distribution for
such Distribution Payment Date. Such distributions shall, with
respect to each Series Three Preferred Unit, be cumulative from
and including its Issue Date, whether or not in, or with respect
to, any Distribution Period or Periods (i) such distributions are
declared, (ii) the Partnership is contractually prohibited from
paying such distributions or (iii) 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 Three Preferred
Units. Distributions are cumulative from the most recent
Distribution Payment Date to which distributions have been paid,
whether or not, or with respect to, in any Distribution Period or
Periods (i) such distributions are declared, (ii) the Partnership
is contractually prohibited from paying such distributions or
(iii) there shall be assets legally available therefor. Each such
distribution shall be payable in arrears to the holders of record
of the Series Three 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; provided, however, that
with respect to the first Distribution Period, the Distribution
Payment Record Date for such period will be on or after the Issue
Date. Accrued and unpaid distributions for any past Distribution
Periods and any additional amounts as provided in subsection (f)
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 first Distribution Period with respect to the first Series
Three Preferred Units issued shall be for the period from on and
after the Closing Date to the first Distribution Payment Date of
(and excluding) November 16, 1998.
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(c) So long as any Series Three Preferred Units are outstanding, no
distributions (whether in cash or in kind or upon liquidation of
the Partnership), except as described in the immediately following
sentence, shall be authorized and declared or paid 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 moneys 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, including,
if applicable, the further preferential distribution provided in
subsection (f), have been or contemporaneously are authorized and
declared and paid on the Series Three 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 upon the Series Three Preferred
Units and any other class or classes of Parity Units, all
distributions authorized upon the Series Three Preferred Units and
any other 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 Three Preferred
Units and such Parity Units (which shall not include any accrual
in respect of unpaid distributions for prior distribution periods
if such Parity Units do not have a cumulative distribution).
(d) So long as any Series Three 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 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 General Partner 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 (except
by conversion into or exchange for Junior Units), unless in each
case (i) the full cumulative distributions on all outstanding
Series Three Preferred Units, including, if applicable, the
further preferential distribution provided in subsection (f), and
any other Parity Units of the Partnership shall have been paid for
all past Distribution Periods with respect to the Series Three
Preferred Units and all past distribution periods with respect to
such Parity Units and (ii) sufficient funds shall have been paid
for or irrevocably set aside and designated for payment of the
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distribution due for the current Distribution Period with respect
to the Series Three Preferred Units.
(e) Without limiting the other provisions hereof, no distributions on
Series Three 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 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 or payment or provides that such declaration or
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 distributions on the
Series Three 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 Three
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 Three Preferred Units will accumulate as of the
Distribution Payment Date on which they first become payable and a
further preferential distribution at the per annum rate then
applicable for the period or periods specified in subsection (a)
above shall accrue during the period of accumulation and be
distributed in respect of such unpaid distributions until the
amount thereof and the further preferential amount thereon shall
have been distributed in full.
(g) Upon liquidation, dissolution or winding up of the Partnership, no
distributions shall be made to any series or class or classes of
Junior Units until after payment shall have been made in full to
the holders of the Series Three Preferred Units, as provided in
Section 4(a).
(h) Any distribution made on the Series Three Preferred Units shall
first be credited against the further preferential distribution
provided in subsection (f) above and then against the earliest
accrued but unpaid distribution due with respect to such Series
Three Preferred Units which remains payable. Other than
liquidating distributions described in Section 4, the Series Three
Preferred Units shall be entitled only to the distributions on the
Series Three Preferred Units as described in this Section 3.
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(4) Liquidation Preference.
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(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 the holders of Junior Units, the
holders of the Series Three Preferred Units shall be entitled to
receive Fifty Dollars ($50.00) per Series Three Preferred Unit
(the "Liquidation Preference") or, if greater, the amount which
each holder would receive in respect of the Common Units and Other
Securities and property it would receive upon conversion of its
Series Three Preferred Units if all Series Three Preferred Units
were converted pursuant to Section 7 immediately prior to the
distribution of liquidation proceeds under the Partnership
Agreement, plus an amount equal to all distributions (whether or
not earned or declared) accrued and unpaid thereon pursuant to
Section 3 to the date of final distribution to such holder; but
such holders of Series Three 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
Three 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 Three
Preferred Units and any such other Parity Units ratably in
accordance with the respective amounts that would be payable on
such Series Three Preferred Units and any such other Parity Units
if all amounts payable thereon were paid in full.
(b) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the
holders of the Series Three 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 Three 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, trust or entity or of any other
corporation, partnership, trust or entity with or into the
Partnership, or an exchange of Units or partnership interests, or
the sale, lease or conveyance of all
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or substantially all of the property or business of the
Partnership (unless the net proceeds of any of the foregoing
transactions shall be distributed to the holders of Units rather
than reinvested), shall not be deemed to constitute a liquidation,
dissolution or winding up of the Partnership.
(5) Redemption.
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(a) Subject to adjustment as provided in this Section 5, on each of
May 12, 2009; May 12, 2010; May 12, 2011; May 14, 2012; May 14,
2013; and May 12, 2014 (each an "Option Strike Date") (i) each of
the Series Three Preferred Unit holders, upon giving prior written
notice as provided below, shall have the right (the "Redemption
Right") to require that the Partnership redeem for cash, at a
redemption price of $50 per Series Three Preferred Unit, Series
Three Preferred Units held by such holder; provided that the
maximum number of Series Three Preferred Units that may be
required to be redeemed from all such holders is equal to the
Target Amount; provided, further, that a holder may not exercise
the Redemption Right for less than one thousand (1,000) Series
Three Preferred Units or, if such holder holds less than one
thousand Series Three Preferred Units, all of the Series Three
Preferred Units held by such holder; and (ii) the General Partner,
upon giving prior written notice as provided below, shall have the
Redemption Right to require the redemption for cash, at a
redemption price of $50 per Series Three Preferred Unit, of a
number of Series Three Preferred Units equal to, but not in excess
of, the Target Amount (in the aggregate from all holders);
provided, however, that the General Partner may not require the
redemption by the Partnership on any Option Strike Date of more
than the lesser of (A) the Target Amount in respect of such Option
Strike Date or (B) such number of Series Three Preferred Units as
shall have an aggregate Liquidation Preference equal to the excess
of (i) the aggregate Liquidation Preference of the sum of the
Target Amounts for all prior Option Strike Dates and the currently
applicable Option Strike Date over (ii) the aggregate Liquidation
Preference of all Series Three Preferred Units previously
converted (including Forced Conversions), noticed for conversion
on such Option Strike Date, previously redeemed, and noticed for
redemption on such Option Strike Date.
The exercise of a Redemption Right on any Option Strike Date
shall not be cumulative (i.e., the Target Amount with respect to
any Option Strike Date is the maximum number of Series Three
Preferred Units subject to mandatory redemption by either the
Partnership or the holders of Series Three Preferred Units on each
Option Strike Date); any Series Three Preferred Units that are not
converted pursuant to Section 7 or redeemed
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pursuant to this Section 5 on or before May 12, 2014 shall remain
outstanding and shall have all of the rights and preferences set
forth in this Certificate except that the provisions of this
Section 5 shall not apply to any Series Three Preferred Units
outstanding after such date.
(b) In order to exercise its Redemption Right, a holder of Series
Three Preferred Units shall deliver a notice (a "Redemption
Notice," such term to also include the notice required to be
delivered by the General Partner upon exercise of its Redemption
Right) in the form attached hereto as Exhibit B to the Partnership
(with a copy to the General Partner) not less than 40 nor more
than 70 days prior to an Option Strike Date. If a holder of Series
Three Preferred Units who has delivered a Redemption Notice
pursuant to this Section 5 converts the Units tendered for
redemption prior to the redemption date, the Redemption Notice
shall be deemed revoked. The General Partner may exercise its
Redemption Right by delivering in writing a Redemption Notice,
containing the information provided in subsection (e), to each
holder of record of Series Three Preferred Units, not less than 30
nor more than 70 days prior to an Option Strike Date.
If, pursuant to the exercise of a Redemption Right by holders of
the Series Three Preferred Units, with such redemption to be
effective on an Option Strike Date, holders tender for redemption
a number of Series Three Preferred Units having an aggregate
Liquidation Preference greater than the Target Amount, the
Partnership may redeem all such Units tendered for redemption or a
lesser number of Units, as the General Partner determines in its
sole discretion, but not less than the Target Amount; provided,
however, that if the Partnership does not redeem all Series Three
Preferred Units so tendered for redemption, the Partnership shall
redeem Units ratably from each tendering holder in proportion to
the respective number of Units tendered. If the holders have
tendered for redemption a number of Series Three Preferred Units
less than the Target Amount and the General Partner delivers a
Redemption Notice to redeem a number of Series Three Preferred
Units greater than the number of Units tendered for redemption by
the holders, the Partnership shall first redeem the Series Three
Preferred Units of those holders exercising their Redemption Right
pursuant to this Section 5 and shall then redeem, on a pro rata
basis, Series Three Preferred Units from all holders who hold
Units after giving effect to such redemption; provided, however,
that in such case, (i) the General Partner shall deliver a
separate notice at least 30 days prior to the Option Strike Date,
containing the information provided in subsection (e), to all
holders of the Series Three Preferred Units to be so redeemed
indicating
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the number of Units to be so redeemed, and (ii) the total number
of Units to be redeemed (upon notice by the General Partner and
the holders, collectively) shall not exceed the Target Amount.
If the General Partner delivers a Redemption Notice to the
holders of the Series Three Preferred Units, the holders shall
have the right, subject to Section 7(a), to convert their Series
Three Preferred Units into Common Units, pursuant to Section 7, on
or before the Option Strike Date. To the extent that such Series
Three Preferred Units are so converted, the right of the General
Partner to require the redemption of Series Three Preferred Units
shall be reduced by the aggregate Liquidation Preference of the
Series Three Preferred Units so converted (and the reduction in
the number of Series Three Preferred Units to be redeemed from
each holder shall be allocated first to the holders who so elected
to convert their Units and second pro rata among all other
holders).
Within two Business Days of a redemption of Series Three
Preferred Units, the Partnership shall pay the redemption price by
certified check to or on the order of those holders whose Series
Three Preferred Units have been redeemed.
(c) Immediately prior to any redemption of Series Three Preferred
Units and as a condition to such redemption, the Partnership shall
pay, in cash, all accumulated and unpaid distributions, including
the further preferential distribution provided in Section 3(f),
through the Option Strike Date in respect of all Series Three
Preferred Units, including those Series Three Preferred Units to
be redeemed. Unless full cumulative distributions on all Series
Three Preferred Units have been paid, the Partnership may not
require the Series Three Preferred Units to be redeemed.
(d) The Assignee of any Limited Partner pursuant to Section 11 of the
main part of the Partnership Agreement may exercise the rights of
such Limited Partner pursuant to this Section 5, and such Limited
Partner shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by the
Assignee. In connection with any exercise of such rights by an
Assignee of a Limited Partner, the cash amount shall be paid by
the Partnership directly to such Assignee and not to such Limited
Partner.
(e) A Redemption Notice shall be provided in the manner provided in
Section 12. Any defect in a Redemption Notice or in the mailing
thereof to any particular holder, the Partnership or the General
Partner 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
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mailed in the manner herein provided shall be conclusively
presumed to have been duly given on the date of deemed delivery
provided in Section 12, whether or not the holder receives the
notice. Each of the General Partner's Redemption Notices shall
state, as appropriate: (1) the Option Strike Date; (2) the number
of Series Three Preferred Units to be redeemed in the aggregate
from all holders and, if fewer than all the Series Three Preferred
Units held by such holder are to be redeemed, the number of such
Series Three Preferred Units to be redeemed from such holder; and
(3) that distributions on the Series Three Preferred Units to be
redeemed shall cease to accrue on such Option Strike Date except
as otherwise provided herein. Notice having been delivered as
aforesaid, from and after the Option Strike Date (unless the
Partnership shall fail to pay the redemption price on the date
required), (i) except as otherwise provided herein, distributions
on the Series Three 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 Three Preferred Units of the Partnership shall cease
(except the right to receive the redemption price and the amounts
required to be paid under subsection (c)).
After the redemption of Series Three 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 Series Three Preferred Units held
by such person immediately after such redemption. The Partnership
shall also advise each holder as to the number of Series Three
Preferred Units redeemed and the number of Series Three Preferred
Units which remain outstanding.
(f) Each Series Three Preferred Unit holder covenants and agrees with
the Partnership that all Series Three Preferred Units delivered
for redemption pursuant to this Section 5 shall be delivered to
the Partnership free and clear of all liens, and, notwithstanding
anything contained herein to the contrary, the Partnership shall
not be under any obligation to acquire Series Three Preferred
Units which are subject to any liens.
(6) The rights of each Series Three Preferred Unit holder pursuant to this
Certificate arise solely from its ownership as a Limited Partner of
Partnership Interests in the Partnership and not from it being a
creditor of the Partnership and none of such rights with respect to
any required redemption shall constitute a "claim" as such term is
defined in Section 101 of the United States Bankruptcy Code as in
effect as of the date of this Certificate; provided, however, that any
rights in respect of such Series Three Preferred Units shall
constitute equity interests of each Partner hereunder, it being agreed
and understood that no
13
Partner is waiving any equity interest it has in the Partnership or
any rights to assert any such interests in any bankruptcy proceeding
or otherwise.
(7) Conversion. Holders of the Series Three Preferred Units shall have
----------
the right (the "Conversion Right") to convert all or a portion of such
Units into Common Units (provided, however, that a holder may not
exercise the Conversion Right for less than one thousand (1,000)
Series Three Preferred Units or, if such holder holds less than one
thousand Series Three Preferred Units, all of the Series Three
Preferred Units held by such holder), and the General Partner shall
have the right on each Option Strike Date to cause a conversion of
Series Three Preferred Units into Common Units, subject, in each case,
to the following conditions and procedures:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of Series Three Preferred Units shall have
the right, at his or her option, at any time and from time to
time during the period on or after the earlier of (i) December
31, 2002 and (ii) the effective time of a Cash Business
Combination (the period beginning on and after the earlier of
such dates, the "Conversion Period"), 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
Three Preferred Units by the Conversion Price as in effect as of
such time (i.e. after adjustment as described in subsection (g))
by delivering a Conversion Notice in the form attached hereto as
Exhibit A within the time period specified in paragraph (d) below
and in the manner provided in Section 12; provided, however, that
the right to deliver a conversion notice with respect to Series
Three Preferred Units called or tendered for redemption pursuant
to Section 5 hereof shall terminate on that day which is the
fifth business day prior to the applicable Option Strike Date on
which such Units are to be redeemed, unless the Partnership shall
default in making any cash payment required upon a redemption on
such date as provided in Section 5 hereof. A conversion of Series
Three Preferred Units specified in the Conversion Notice shall
occur automatically at the close of business on the applicable
Conversion Date without any action on the part of the holders of
Series Three Preferred Units, and immediately after the close of
business on the Conversion Date the holders of Series Three
Preferred Units who had all or a portion of their Series Three
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.
14
(b) If, as of an applicable Option Strike Date, the Target Amount for
such Option Strike Date has not been redeemed and/or converted
(or noticed for conversion and/or redemption on such Option
Strike Date) as a result of Series Three Preferred Unit holders
and/or the General Partner exercising Redemption Rights pursuant
to Section 5 and/or such holders exercising their conversion
rights pursuant to this Section 7, the Partnership, at the
election of the General Partner and subject to and upon
compliance with the provisions of this Section 7, may convert (a
"Forced Conversion") not more than the lesser of (A) the Target
Amount in respect of such Option Strike Date or (B) such number
of Series Three Preferred Units as shall have an aggregate
Liquidation Preference equal to the excess of (i) the aggregate
Liquidation Preference of the sum of the Target Amounts for all
prior Option Strike Dates and the currently applicable Option
Strike Date over (ii) the aggregate Liquidation Preference of all
Series Three Preferred Units previously converted, noticed for
conversion by the holders on such Option Strike Date, previously
redeemed, and noticed for redemption on such Option Strike Date
(the "Forced Conversion Amount") of Series Three Preferred Units
into a number of Common Units determined in accordance with the
Conversion Price in effect on such date as determined in
accordance with subsection (a) by transmitting for delivery a
Conversion Notice, in the manner prescribed in Section 12 within
one business day after the applicable Option Strike Date, to the
holders of the Series Three Preferred Units which are to be so
converted (the "Forced Conversion Option") ratably in proportion
to the Series Three Preferred Units then outstanding from the
holders thereof (after giving effect to the redemptions and
conversions otherwise noticed to occur on such Option Strike
Date); provided, further, however, that such Forced Conversion
Option may only be exercised by the Partnership if the value of
the REIT Shares, calculated on their weighted average closing
price during the 10 Trading Days prior to the second Trading Day
preceding the exercise of the Forced Conversion Option, is equal
to or greater than 110% of the Conversion Price.
(c) Immediately prior to any conversion of Series Three Preferred
Units, the Partnership shall pay, in cash, all accumulated and
unpaid distributions including the further preferential
distributions provided in Section 3(f) through the Conversion
Date on all Series Three Preferred Units. A holder of Series
Three Preferred Units shall have no right with respect to any
Series Three Preferred Units so converted to receive any
distributions paid after the Conversion Date with respect to such
Series Three Preferred Units and his interest in the Partnership
as to such converted Units shall be terminated; provided,
however, that in the event the Partnership is legally or
contractually prohibited from paying, or
15
fails for any other reason to pay, such accumulated and unpaid
distributions prior to any conversion and such holder elects to
continue with and permit such conversion after notice from the
Partnership of such inability or failure, such holder shall still
be entitled to receive all such accumulated and unpaid
distributions, if any, that remain unpaid after such conversion,
as well as a further preferential distribution on such unpaid
distributions as provided in Section 3(f), which distributions
shall be paid by the Partnership as soon as it is legally and
contractually permitted to do so.
(d) After the conversion of Series Three 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 shall not be
earlier than 5 days after mailing of the Conversion Notice nor
later than sixty (60) days after such date) or upon the Option
Strike Date in the case of a Forced Conversion pursuant to
Section 7(b) and the Series Three 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 in
accordance with 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) as determined in
accordance with subsection (a).
(e) No fractions of Common Units shall be issued upon conversion of
the Series Three Preferred Units. Instead of any fractional
interest in a Common Unit that would otherwise be deliverable
upon the conversion of a Series Three Preferred Unit, the
Partnership shall pay to the holder of such Series Three
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 Three 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 Three Preferred Units so surrendered.
(f) The Assignee of any Limited Partner pursuant to Section 11 of the
main part of the Partnership Agreement may exercise the rights
of such
16
Limited Partner pursuant to this Section 7, and such Limited
Partner shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by the
Assignee.
(g) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Partnership shall after the Issue Date (A) pay or
make a distribution to holders of its Common Units in Common
Units, (B) subdivide its outstanding Common Units into a
greater number of Common Units, (C) combine its outstanding
Common Units into a smaller number of Common Units or (D)
issue any Common 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 Common Unit holders 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 Three
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 Three 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 subsection (g)(i) shall become effective
immediately after the opening of business on the day next
following the record date in the case of a distribution and
shall become effective immediately after the opening of
business on the day next following the effective date in the
case of a subdivision, combination, or reclassification and
automatically without any further required action of the
Partnership or the Series Three Preferred Unit holders.
(ii) If the Partnership shall issue after the Issue Date rights,
options or warrants to all holders of Common Units entitling
them to subscribe for or purchase Common Units (or
securities convertible into or exchangeable for Common
Units) at a price per Common Unit less than the Fair Market
Value per Common Unit on the record date for the
determination of Common Unit holders 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
effect
17
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 Common Units that the aggregate proceeds
to the Partnership from the 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 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 (l) 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.
(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) 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 to
subscribe for or purchase Common Units or securities
convertible into or exchangeable for Common Units, which
rights and warrants and convertible or exchangeable
securities 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 Unit holders
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
18
date mentioned below less the then fair market value (as
determined by the General Partner in good faith) 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 the record date for the determination of Unit
holders entitled to receive such distribution (subject to
paragraph (l) below). 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 Unit holders 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 Three Preferred Unit after such
determination date, shall not require an adjustment of the
Conversion Price pursuant to this subparagraph (iii);
provided that on the date, if any, on which a person
converting a Series Three 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
Unit holders entitled to receive such distribution" and "the
record date" within the meaning of the two preceding
sentences).
(iv) Notwithstanding the foregoing, no adjustment shall be made
pursuant to the preceding clauses (ii) and (iii) that would
result in any increase in the Conversion Price. 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 subsection
(g)(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 7 (other than this subsection (g)(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
7, the Partnership shall not be required to make any
adjustment of the Conversion Price for the issuance of any
Common Units pursuant
19
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 General
Partner in respect of a capital contribution by it resulting
from an analogous sale of its securities). All calculations
under this Section 7 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 (g) to the contrary
notwithstanding, the Partnership shall be entitled, to the
extent permitted by law, to make such adjustments in the
Conversion Price (but without adversely affecting the
economic value of a Series Three Preferred Unit), in
addition to those required by this paragraph (g), as it in
its discretion shall determine to be advisable in order that
any Series Three Preferred Unit distributions, subdivision
of Series Three Preferred Units, reclassification or
combination of Series Three Preferred 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 the
holders of the Series Three Preferred Units shall not be
taxable.
(h) If the Partnership or the General Partner 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
(g)(i) of this Section 7 applies) (each of the foregoing being
referred to herein as a "Transaction"), in each case as a result
of which Common Units shall be exchanged for or converted into
the right, or the holders of such Units shall otherwise be
entitled, to receive securities or other property (including cash
or any combination thereof), each Series Three Preferred Unit
shall upon the commencement of the Conversion Period be
convertible into the kind and amount of Units or securities and
other property (including cash or any combination thereof) (the
"Per Series Three Preferred Unit Merger Consideration")
receivable upon the consummation of such Transaction by a holder
of that number of Common Units into which one Series Three
Preferred Unit was convertible immediately prior to such
Transaction (unless, in connection with such Transaction, the
Series Three Preferred Units had been converted into the right to
receive such consideration (and thus, are no longer
outstanding)), assuming such holder of Common Units is not a
Person with which the Partnership consolidated or into which the
20
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.
In the event that holders of Common Units have the opportunity to
elect the form or type of consideration to be received upon
consummation of the Transaction, prior to such transaction the
General Partner shall give prompt written notice to each Series
Three Preferred Unit holder of such election, and each Series
Three Preferred Unit holder shall also have the right to elect,
by written notice to the General Partner, the form or type of
consideration to be received upon conversion of each Series Three
Preferred Unit held by such holder following consummation of such
Transaction, and after such election the consideration thereby
elected shall be the "Per Series Three Preferred Unit Merger
Consideration" for each Series Three Preferred Unit held by such
holder or any transferee thereof. If a holder of Series Three
Preferred Units fails to make such an election, such holder (and
any of its transferees) shall receive upon conversion of each
Series Three Preferred Unit held by such holder (or by any of its
transferees) the same Per Series Three Preferred Unit Merger
Consideration that a holder of that number of Common Units into
which one Series Three Preferred Unit was convertible immediately
prior to such Transaction would receive if such Common Unit
holder failed to make such an election.
The Partnership shall not be a party to any Transaction
unless the terms of such Transaction are consistent with the
provisions of this paragraph (h), 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 Three Preferred Units that will contain provisions
enabling the holders of the Series Three Preferred Units that
remain outstanding after such Transaction to convert their Series
Three Preferred Units into the consideration provided for herein
and that shall preserve the distribution preference, conversion,
redemption, and other rights set forth in this Certificate.
(i) 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); or
21
(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 (g)(i) of this
Section 7 applies) or any consolidation or merger to which
the Partnership is a party and for which approval of any
Unit holders 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 Unit holders of the
Partnership is required; or
(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 Three 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 7.
(j) In the event that a Cash Business Combination is to be
consummated or proposed to the holders of Common Units, the
notice referred to in subparagraph (i)(iii) above shall specify
such fact and such notice shall be mailed to the holders of the
Series Three Preferred Units simultaneously with the mailing of
notice to holders of Common Units of the holding of a meeting or
written consent or making of elections with respect to the Cash
Business Combination. In such event, the holders of
22
Series Three Preferred Units shall be permitted to tender their
Series Three Preferred Units for conversion, in accordance with
Section 7 hereof, and may condition such tender upon the
consummation of such Cash Business Combination. Any such
conversion of Series Three Preferred Units shall happen
simultaneously with the consummation of the Cash Business
Combination such that holders of Series Three Preferred Units
receive, at the consummation of the Cash Business Combination,
the consideration described in Section 7(h).
(k) Whenever the Conversion Price is adjusted as herein provided, the
Partnership shall promptly file in the books and records of the
Partnership and provide to each holder 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 Three Preferred Unit at such holder's
last address as shown on the records of the Partnership.
(l) In any case in which paragraph (g) of this Section 7 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 Three 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.
(m) 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 7. If any action would require adjustment of the
Conversion Price pursuant to more than one paragraph of this
Section 7, only one adjustment shall be made, and such adjustment
shall be the amount of adjustment that has the highest absolute
value; provided, however, that multiple actions taken at or about
the same time shall be subject to separate adjustments.
23
(n) If the Partnership shall take any action affecting the Common
Units, other than action described in this Section 7, that in the
opinion of the General Partner would materially adversely affect
the conversion rights of the holders of the Series Three
Preferred Units, the Conversion Price for the Series Three
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.
(8) Voting Rights.
-------------
(a) Holders of the Series Three 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 Three Preferred Units remain outstanding,
the Partnership shall not, without the affirmative vote of the
holders of at least a majority of the Series Three 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, increase the number of authorized Series Three
Preferred Units or create any additional class or series of
Preferred Units, whether by merger, consolidation or otherwise,
so as to materially and adversely affect any right, preference,
privilege or voting power of the Series Three Preferred Units or
the holders thereof in their capacity as holders of Series Three
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 Three 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 Three
Preferred Units and without any income, gain or loss
expected to be recognized by the holder upon the exchange
for federal income tax purposes (and with the terms of the
Common Units or such other securities for which the Series
Three Preferred Units (or the substitute security therefor)
are convertible materially the same with respect to rights
to distributions, voting, redemption and conversion), 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
Three Preferred Units.
24
(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 Three Preferred Units with respect to payment of
distributions, redemption rights and 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 Three Preferred Units.
(iii) Any creation or issuance of any series of Preferred Units
(other than an issuance of additional Series Three Preferred
Units, as to which a class vote shall be required; provided
that no class vote shall be required for any issuance of
Series Three Preferred Units in connection with or as
contemplated by any of 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 Three
Preferred Units with respect to payment of distributions,
voting, redemption and 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
Three 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 General Partner in a bona fide
capital raising transaction.
(iv) Any creation or issuance of any class or series of Preferred
Units ranking senior to the Series Three Preferred Units
with respect to the payment of distributions, redemption
rights and the distribution of assets upon liquidation,
dissolution or winding up, to the extent the issuance of
such Units was in compliance with the standard set forth in
Section 9(c) hereof, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or
voting powers of the holders of the Series Three Preferred
Units.
25
(c) In addition to the voting rights granted in paragraph (b)
above, the holders of Series Three Preferred Units shall be
entitled to vote at any time that the Limited Partners are
entitled to vote according to the Partnership Agreement. The
Series Three Preferred Units shall be entitled to vote the
same number of votes as the Common Units into which they may
be converted and shall vote with the Holders of Common Units
as a single class with the Common Units.
(d) 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 Three Preferred Units shall have been
converted and/or redeemed.
(9) Ranking. The Series Three Preferred Units shall be deemed to rank:
-------
(a) Senior to any class or series of Units of the Partnership,
if such class or series shall be Common Units or if the
holders of Series Three 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, including Junior Preferred Units ("Junior
Units");
(b) On a parity with the Series One Preferred Units, the Series
Two Preferred Units and with any other class or series of
Units of the Partnership, if the holders of such other class
or series of Unit and the Series Three 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 only to (I) any indebtedness issued by the
Partnership and (II) senior preferred units issued only to
the General Partner having the same distribution rate, term,
preferences and other material terms (including conversion
rights) as preferred shares of stock (A) issued only for
cash by the General Partner in a public offering, or (B)
issued only for cash or property in an arm's length
transaction (x) to one or more institutional investors who
are (but for the preferred shares so issued) not affiliated
with the Partnership, the General Partner or any Affiliate
(as defined in Section 10) thereof and (y) not in connection
with any other transaction or transactions with any of such
Affiliates and (z) which would be permitted by Section 10 if
such preferred shares were Junior Preferred Units, and (C)
in either case, the entire cash proceeds (net of any arm's
length commissions paid to third parties who are not
Affiliates) of which
26
are contributed by the General Partner to the Partnership
and used by the Partnership solely for (i) the acquisition
of assets to be held in the Partnership's business, (ii)
capital expenditures or maintenance expenses in respect of
assets held by the Partnership, (iii) other ordinary course
expenses of the Partnership, or (iv) repayment of
indebtedness of the Partnership (including indebtedness
convertible into Junior Preferred Units or Common Units),
and (v) none of which proceeds are used (AA) to purchase,
redeem, retire or otherwise acquire directly or indirectly
any Junior Preferred Units or Common Units, or shares of
preferred stock junior to the Series A Preferred Stock of
the General Partner, or common stock of the General Partner,
or options, warrants, rights to purchase or any other
securities convertible into the foregoing (other than debt
repayable pursuant to subclause (iv)) or (BB) to make
distributions or to pay dividends in respect of any
securities described in subclause (AA). Any references to
the term "Affiliate" in this Section 9(c) (including by way
of the cross-reference and incorporation in clause (z) of
the preceding sentence) shall have the meaning given thereto
in the Amended and Restated By-laws of the General Partner
as of the date hereof (except that the 5% threshold referred
to therein shall be deemed for these purposes to be a 10%
threshold).
(10) Junior Preferred Units. The Partnership may, at its option, issue
----------------------
Junior Preferred Units in exchange for arm's length consideration, the
adequacy of such consideration to be determined in good faith by the
Board of Directors of the General Partner; provided, however, that the
Partnership may not, without the consent of holders of a majority of
the Series Three Preferred Units, (i) issue Junior Preferred Units to
any Affiliate (as such term is defined in the Amended and Restated By-
Laws of the General Partner as of the date hereof) of the General
Partner or the Partnership, (ii) distribute Junior Preferred Units to
any holder of Common Units, (iii) issue Junior Preferred Units ratably
to holders of Common Units for cash or any other consideration, or
(iv) issue Junior Preferred Units in exchange for Common Units.
Notwithstanding the foregoing, in connection with the General
Partner's issuance of preferred shares of stock, the Partnership may
issue Junior Preferred Units to the General Partner having the same
distribution rate, term, preferences and other material terms as such
preferred shares, provided the issuance of such preferred shares would
not violate this Section 10 if such shares were Junior Preferred Units
and such issuance would comply with the requirements of Section 9 (c)
(II) if they were senior preferred shares (but without giving effect
to the word "institutional" in clause (B)(x) of Section 9(c)(II)).
(11) Allocation of Nonrecourse Debt. The provisions of that certain Tax
------------------------------
Reporting Agreement (including but not limited to paragraphs 3 and 4
thereof) dated the
27
date hereof among the Partnership and such holders are hereby
incorporated herein by reference.
(12) 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 Three Preferred Unit holders shall be sent
to their address of record with the Partnership. Any Series Three
Preferred Unit holder 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 12. Notices to be delivered to the
General Partner shall be addressed to Boston Properties, Inc., Attn:
Chief Financial Officer, 0 Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, or to
such other address as the General Partner may have notified holders in
the manner provided in this Section 12.
(13) Section 8.6.C of Partnership Agreement. The provisions of Section
--------------------------------------
8.6.C of the main part of the Partnership Agreement shall not apply to
Series Three Preferred Units tendered or required to be tendered
pursuant to Section 5, which shall control over any other provision of
the Partnership Agreement. The provisions of Section 8.6.C of the
Partnership Agreement also shall not apply to any Common Units that
may be issued upon a conversion of Series Three Preferred Units
("Conversion Units"). For clarity, it is noted that the effect of this
provision is that the restriction on the Redemption Right set forth in
Section 8.6.C of the main part of the Partnership Agreement shall not
apply to Conversion Units such that if a holder of a Conversion Unit
presents a Conversion Unit for redemption and the delivery of REIT
Shares to such holder is prohibited under the Certificate of
Incorporation of the Company because such delivery would cause such
holder to violate the Ownership Limit, then (i) the Company may not
exercise its rights under Section 8.6.B to acquire such Conversion
Unit for the REIT Shares Amount unless the Company waives or modifies
the Ownership Limit applicable to such holder and (ii) if the Company
does not so waive or modify the Ownership Limit then the Partnership
must pay such holder the applicable Cash Amount to redeem such
holder's Conversion Unit.
(14) In the event this Certificate of Designations is amended or modified
by the parties hereto, the holders of the Series Two Preferred Units
issued by the
28
Partnership and the Series A Preferred Stock issued by the General
Partner in accordance with the Source Agreements shall each have the
right to elect, by vote of a majority-in-interest of such securities,
to adopt amendments or modifications of their respective securities
comparable to the amendments or modifications of this Certificate, and
in the event of any modification or amendment of such securities, the
holders of Series Three Preferred Units shall have the right to elect,
by vote of a majority-in-interest of the Series Three Preferred Units,
to adopt amendments or modifications of this Certificate of
Designations comparable to amendments and modifications of such
securities. The Partnership and the General Partner agree for the
benefit of the holders of Series Three Preferred Units that neither of
them shall permit the amendment or modification of such other
securities without causing this Section 14 to be given full effect,
and the Partnership and the General Partner shall take such action as
is reasonably appropriate or necessary to give full effect to this
Section 14.
29
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
30
Exhibit A to the Certificate of Designations for the
Series Three Preferred Units
NOTICE OF ELECTION BY PARTNER TO CONVERT
SERIES THREE PREFERRED UNITS INTO COMMON UNITS
The undersigned Series Three Preferred Unit holder hereby (i) elects to
convert the number of Series Three 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 Three 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 Three 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 Three 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 Three Preferred Unit holder: ___________________________________
(Please Print: Exact Name as
Registered with Partnership)
Date of this Notice: _____________________________________
Date the Series Three Preferred Units are to be converted: ________________/1/
Number of Series Three Preferred Units to be converted: ______________________
_________________________________________
(Signature of Limited Partner: Sign Exact
Name as Registered with Partnership)
_________________________________________
(Street Address)
_________________________________________
(City) (State) (Zip Code)
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.
31
Exhibit B to the Certificate of Designations for the
Series Three Preferred Units
NOTICE OF ELECTION BY PARTNER TO REDEEM
SERIES THREE PREFERRED UNITS FOR CASH
The undersigned Series Three Preferred Unit holder hereby (i) elects to
redeem the number of Series Three Preferred Units in Boston Properties Limited
Partnership (the "Partnership") set forth below for the redemption price
determined in accordance with the terms of the Second Amended and Restated
Agreement of Limited Partnership of the Partnership and the Certificate of
Designations (the "Certificate") relating to the Series Three Preferred Units
that is a part thereof; and (ii) directs that such redemption price be delivered
by certified check to the address specified below. The undersigned hereby
represents, warrants, and certifies that the undersigned (a) has title to such
Series Three 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 redemption of such Series Three 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
redemption. The undersigned hereby acknowledges that, except as provided in the
Certificate, distributions on the Series Three Preferred Units to be redeemed
shall cease to accrue on the redemption date indicated below.
Name of Series Three Preferred Unit holder: ___________________________________
(Please Print: Exact Name as
Registered with Partnership)
Date of this Notice: _____________________________________
Option Strike Date on which the
Series Three Preferred Units are to be redeemed: ______________________
Number of Series Three Preferred Units to be converted: ______________________
_________________________________________
(Signature of Limited Partner: Sign Exact
Name as Registered with Partnership)
_________________________________________
(Street Address)
_________________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
_________________________________________
Note: Redemptions are subject to reduction and proration as provided in the
Certificate of Designations and the Partnership Agreement in respect of
the Series Three Preferred Units.
32
