SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
NOVEMBER 12, 1998
BOSTON PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-13087 04-2473675 (State or other jurisdiction (Commission File (I.R.S. Employer of incorporation) Number) Identification No.) |
8 ARLINGTON STREET
BOSTON, MASSACHUSETTS 02116
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(617) 859-2600
ITEM 2. ACQUISITION OF ASSETS.
On November 12, 1998, Boston Properties, Inc. (the "Company") completed the first phase of a two-phase acquisition of all of the direct and indirect interests in a portfolio of Class A office and retail space known collectively as the "Embarcadero Center" (the "Embarcadero Acquisition"). The Company anticipates that the second phase will be completed during the first quarter of 1999, although no assurance can be given in this regard.
The Embarcadero Center is situated on 8.4 acres of waterfront property in San Francisco's financial district and consists of an aggregate of 3.66 million square feet of net rentable office space, 354,000 square feet of retail space and 2,090 underground parking spaces. The Embarcadero Center consists of six buildings: 1 Embarcadero Center ("EC1"), 2 Embarcadero Center ("EC2"), 3 Embarcadero Center ("EC3") and 4 Embarcadero Center ("EC4"), Embarcadero Center West Tower (the "Tower") and the Old Federal Reserve Building. EC1, EC2, EC3 and EC4 are collectively referred to herein as the "EC Buildings" and each EC Building, the Tower and The Old Federal Reserve Building is referred to herein as a "Property." The Company is acquiring the Embarcadero Center from (i) certain parties who are affiliated with, or who had co-invested in the Embarcadero Center with, David Rockefeller and Associates (collectively, "Rockefeller"); and (ii) The Prudential Insurance Company of America and certain of its affiliates (collectively, "Prudential"), for approximately $1.233 billion (including certain closing costs). This amount may vary due to post-closing prorations and adjustments that are customary in similar transactions as well as additional closing and refinancing costs.
As a result of the closing of the first phase of the Embarcadero Acquisition (the "Initial Closing"), (i) the Company acquired all of the interests in the Old Federal Reserve Building for an aggregate consideration of approximately $39 million (including assumed debt); (ii) the Company acquired all of the interests in the Tower for an aggregate consideration of approximately $142 million (including assumed debt and the issuance of preferred units of limited partnership interest ("Preferred Units") in Boston Properties Limited Partnership, the operating partnership subsidiary of the Company (the "Operating Partnership")); and (iii) the Company, through its affiliates, acquired controlling, managing general partnership interests in the four general partnerships (the "EC Partnerships") that own the EC Buildings for an aggregate consideration of approximately $300 million financed through the issuance of Preferred Units. After the acquisition of interests in the EC Partnerships, (i) the Company, through affiliates, owns approximately a 49.98% indirect interest in EC1, EC3 and EC4 and approximately a 40.00% indirect interest in EC2, (ii) the EC Partnerships, in the aggregate, have approximately $420 million in non- property assets (consisting of investment grade securities rated A+ by Standard & Poor's Corporation and A+ by Fitch IBCA, Inc.) and (iii) the EC Partnerships have aggregate indebtedness of approximately $1,050 million, consisting of unsecured indebtedness of approximately $420 million and indebtedness of $630 million
secured by mortgages on the EC Buildings. Prudential is a non-managing general partner of each of the EC Partnerships.
Pursuant to certain redemption agreements entered into at the time of the Initial Closing, Prudential and the Company each has the right to cause the entire interest of Prudential in each of the EC Partnerships to be redeemed in full in consideration of (i) a distribution by the EC Partnership to Prudential of certain partnership assets that are not related to the Embarcadero Buildings and that are owned by such EC Partnership and (ii) the assumption by Prudential of certain indebtedness of such EC Partnership. A full redemption of Prudential from all four EC Partnerships (which would constitute the "second phase" of the Embarcadero Acquisition) would require the distribution to Prudential of non- property partnership assets subject to debt having a net value of approximately $328 million. While there can be no assurance as to when or if Prudential's interests in the EC Partnerships will be redeemed, the Company expects that the redemptions will occur during the first quarter of 1999. Following these redemptions, the Company, through its affiliates, would own all of the interests in the EC Buildings.
Upon the Initial Closing, (i) the Company issued approximately $316 million
of Preferred Units, (ii) the Tower was secured by $100 million of indebtedness,
(iii) the Embarcadero Buildings were secured by $630 million of indebtedness
(together with the secured financing on the Tower, the "Secured Financing") and
(iv) the Embarcadero Partnerships had approximately $420 million of financing
not secured by the Properties (the "Unsecured Financing"). Of the $730 million
of Secured Financing, approximately $503 million was used to refinance existing
mortgages encumbering the Properties and approximately $227 million represented
excess financing proceeds ("Excess Financing Proceeds") that were lent by the
Embarcadero Partnerships to the Operating Partnership and used by the Operating
Partnership to support working capital and repay amounts outstanding under its
line of credit with BankBoston, N.A. (the "Line of Credit") (approximately $145
million) and to meet cash requirements in connection with the Initial Closing
(approximately $83 million). At the completion of the second phase of the
acquisition, $92 million of the Unsecured Financing will be assumed by
Prudential and the remaining Unsecured Financing will be repaid in part and
refinanced in part as a result of (i) the issuance of $100 million of preferred
stock that is expected to be sold to Prudential, as discussed below, and (ii) a
draw by the Company and the EC Partnerships (as co-borrowers) of approximately
$232 million on the Line of Credit (the proceeds of the stock sale and a portion
of the line draw will be used by the Company to repay the Excess Financing
Proceeds to the Embarcadero Partnerships).
Upon the closing of both phases of the Embarcadero Acquisition, the Company
expects that the transaction (including certain closing costs) will have been
financed as follows: (i) the incurrence of $730 million of Secured Financing
having a weighted average maturity of approximately 8.85 years and a weighted
average fixed interest rate of approximately 6.63%; (ii) the incurrence of
approximately $87 million of unsecured financing under the Company's Line of
Credit; (iii) the issuance of Series Two Preferred Units of the Operating
Partnership,
having an aggregate liquidation preference of approximately $306 million; (iv) the issuance of Series Three Preferred Units of the Operating Partnership having an aggregate liquidation preference of approximately $10 million; and (v) the issuance of $100 million of the Company's Series A Convertible Redeemable Preferred Stock (the "Preferred Stock"). Certain of these amounts may vary due to post-closing prorations and adjustments that are customary in similar transactions and additional closing and refinancing expenses. The terms of the Series Two Preferred Units and the Series Three Preferred Units (collectively, the "Preferred Units") and the Preferred Stock are described below.
The sources for the Secured Financing were as follows: $320 million pursuant to a first deed of trust loan with New York Life Insurance Company, The Equitable Life Assurance Society of the United States and Teachers Assurance and Annuity Association of America, secured by EC1, EC2 and The Old Federal Reserve Building; $150 million pursuant to a first deed of trust loan with Connecticut General Life Insurance Company secured by EC3; $160 million pursuant to a first deed of trust loan by Northwestern Mutual Life Insurance Company secured by EC4; and $100 million pursuant to a first deed of trust with Connecticut General Life Insurance Company and Massachusetts Mutual Life Insurance Company secured by the Tower. The source for the Unsecured Financing was as follows: $92 million pursuant to a 90-day term loan from The Chase Manhattan Bank and $328 million pursuant to a 90-day Term Loan Agreement with BankBoston, N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Keybank National Association, and Citizens Bank.
The Preferred Stock will be issued pursuant to a Stock Purchase Agreement, dated September 28, 1998, between the Company and Prudential (the "Stock Purchase Agreement"). The Stock Purchase Agreement provides that the sale of the Preferred Stock to Prudential will occur no later than the 90th day after the Initial Closing.
The Preferred Units and the Preferred Stock (collectively, the "Preferred Securities") have similar economic terms. On and after December 31, 2002 (the "Conversion Date"), the Preferred Securities will be convertible, at the holder's election, into common stock of the Company (in the case of the Preferred Stock) or common units of the Operating Partnership (in the case of the Preferred Units) at a conversion price of $38.10 per common share or unit (the "Conversion Price").
Dividends or distributions on the Preferred Securities (the "Ordinary Preferred Dividend") will be payable quarterly and will accrue at a rate of 5.0% per annum through March 31, 1999; 5.5% through December 31, 1999; 5.625% through December 31, 2000; 6.0% through December 31, 2001; 6.5% through December 31, 2002; 7.0% until May 12, 2009; and 6.0% thereafter. However, if at any time the quarterly dividends or distributions on
the common securities into which a Preferred Security may be converted (the "Ratchet Dividend") are greater than the Ordinary Preferred Dividend due on such Preferred Security, then each Preferred Security will receive, in respect of that quarter, the Ratchet Dividend rather than the lower Ordinary Preferred Dividend.
The terms of the Preferred Securities provide that they may be redeemed for cash in six annual tranches, beginning on May 12, 2009, at the election of the Company or the holders. In lieu of its right to require an annual redemption of Preferred Securities, the Company may elect to convert a tranche of Preferred Securities into common stock (in the case of the Preferred Stock) or common units (in the case of Preferred Units), provided that at the time of such forced conversion the weighted average of the closing price of the Company's common stock during the preceding ten day period exceeds 110% of the Conversion Price.
Upon the consummation of the Initial Closing, Richard E. Salomon was appointed to the Board of Directors. Mr. Salomon, who advised Rockefeller in connection with the transactions described in this report, is President of Spears, Benzak, Salomon & Farrell, an investment advisory firm.
This report contains forward-looking statements within the meaning of the Federal securities laws. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy. Agreements that the Company enters into (including with respect to the "second phase" of the transaction described in this report) may be terminated or abandoned for a variety of reasons, including a failure by the Company or another party to an agreement to fulfill all conditions required for consummation of the agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Assets Acquired:
Financial statements for the Embarcadero Center will be filed by amendment as soon as practicable, but not later than January 26, 1999.
(b) Pro Forma Financial Information:
Pro forma financial information will be filed by amendment as soon as practicable, but not later than January 26, 1999.
(c) Exhibits
99.1 Purchase and Sale Agreement, dated as of November 12, 1998, by and between Two Embarcadero Center West and BP OFR LLC.
99.2 Contribution Agreement, dated as November 12, 1998, by and among the Company, the Operating Partnership, Embarcadero Center Investors Partnership ("ECIP") and the partners in ECIP listed on Exhibit A thereto.
99.3 Contribution Agreement, dated as of November 12, 1998, by and among the Company, the Operating Partnership, Three Embarcadero Center West ("Three ECW") and the partners in Three ECW listed on Exhibit A thereto.
99.4 Three ECW Redemption Agreement, dated as of November 12, 1998, by and among Three ECW, the Operating Partnership, BP EC West LLC, Prudential, PIC Realty Corporation ("PIC") and Prudential Realty Securities II, Inc. ("PRS II").
99.5 Three ECW Property Contribution Agreement, dated as of November 12, 1998, by and among Three ECW, Prudential, PIC, PRS II, the Operating Partnership, the Company and BP EC West LLC.
99.6 Registration Rights and Lock-Up Agreement, dated November 12, 1998, by and among the Company, the Operating Partnership and the Holders named therein.
99.7 Third Amended and Restated Partnership Agreement of One Embarcadero Center Venture, dated as of November 12, 1998, by and between Boston Properties LLC ("BPLLC"), as managing general partner, BP EC1 Holdings LLC ("BP EC1 LLC"), as non-managing general partner, and PIC, as non- managing general partner.
99.8 Third Amended and Restated Partnership Agreement of Embarcadero Center Associates, dated as of November 12, 1998, by and between BPLLC, as managing general partner, BP EC2 Holdings LLC ("BP EC2 LLC"), as non- managing general partner, and PIC, as non-managing general partner.
99.9 Second Amended and Restated Partnership Agreement of Three Embarcadero Center Venture, dated as of November 12, 1998, by and between BPLLC, as managing general partner, BP EC3 Holdings LLC ("BP EC3 LLC"), as non-managing general partner, and Prudential, as non-managing general partner.
99.10 Second Amended and Restated Partnership Agreement of Four Embarcadero Center Venture, dated as of November 12, 1998, by and between BPLLC, as managing general partner, BP EC4 Holdings LLC ("BP EC4 LLC"), as non-managing general partner, and Prudential, as non- managing general partner. 99.11 Note Purchase Agreement, dated as of November 12, 1998, by and between Prudential Realty Securities, Inc. ("PRS") and One Embarcadero Center Venture. 99.12 Note Purchase Agreement, dated as of November 12, 1998, by and between PRS and Embarcadero Center Associates. 99.13 Note Purchase Agreement, dated as of November 12, 1998, by and between PRS and Three Embarcadero Center Venture. 99.14 Note Purchase Agreement, dated as of November 12, 1998, by and between PRS and Four Embarcadero Center Venture. 99.15 Redemption Agreement, dated as of November 12, 1998, by and among One Embarcadero Center Venture, BPLLC, BP EC1 LLC and PIC. 99.16 Redemption Agreement, dated as of November 12, 1998, by and among Embarcadero Center Associates, BPLLC, BP EC2 LLC and PIC. 99.17 Redemption Agreement, dated as of November 12, 1998, by and among Three Embarcadero Center Venture, BPLLC, BP EC3 LLC and Prudential. 99.18 Redemption Agreement, dated as of November 12, 1998, by and among Four Embarcadero Center Venture, BPLLC, BP EC4 LLC and Prudential. 99.19 Option and Put Agreement, dated as of November 12, 1998, by and between One Embarcadero Center Venture and Prudential. 99.20 Option and Put Agreement, dated as of November 12, 1998, by and between Embarcadero Center Associates and Prudential. 99.21 Option and Put Agreement, dated as of November 12, 1998, by and between Three Embarcadero Center Venture and Prudential. 99.22 Option and Put Agreement, dated as of November 12, 1998, by and between Four Embarcadero Center Venture and Prudential. 99.23 Stock Purchase Agreement, dated as of September 28, 1998, by and between the Company and Prudential. 7 |
99.24 Certificate of Designations for the Series Two Preferred Units, dated November 12, 1998. 99.25 Certificate of Designations for the Series Three Preferred Units, dated November 12, 1998. 99.26 Form of Certificate of Designations for the Series A Preferred Stock. |
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 24, 1998
BOSTON PROPERTIES, INC.
By: /s/ William J. Wedge _________________________________ William J. Wedge Senior Vice President |
EXHIBIT 99.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made and entered into as of this 12th day of November, 1998, by and between TWO EMBARCADERO CENTER WEST, a California limited partnership ("SELLER"), and BP OFR LLC, a Delaware limited liability company ("BUYER"). This Agreement is hereby executed, and the transactions described herein are being consummated concurrently herewith, pursuant to (and in accordance with) that certain Master Transaction Agreement dated as of September 28, 1998, by and among The Prudential Insurance Company of America ("PRUDENTIAL"), PIC Realty Corporation, certain Persons listed on Exhibit A thereto, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P., Boston Properties Limited Partnership and Boston Properties, Inc. (the "TRANSACTION AGREEMENT"). All initially capitalized terms used herein without definition shall have the meanings given such terms in the Transaction Agreement.
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto do hereby agree as follows:
ARTICLE 1 - SALE OF PROPERTY
Seller is concurrently herewith selling, transferring and assigning, and Buyer is concurrently herewith purchasing, accepting and assuming, subject to the terms and conditions stated herein, all of Seller's right, title and interest in and to the following (herein collectively called the "PROPERTY"):
inadvertent disclosure shall not constitute a waiver of any privilege)) relating to the Real Property (herein collectively called the "PERSONAL PROPERTY"); and
ARTICLE 2 - PURCHASE PRICE
ARTICLE 3 - TITLE MATTERS
ARTICLE 4 - BUYER'S DUE DILIGENCE/CONDITION OF THE
PROPERTY/INDEMNITIES
REGARDING ANY MATTER WHICH MAY BE KNOWN TO SELLER OR ANY SELLER PARTIES.
(ii) NOTWITHSTANDING THE FOREGOING, THE TERM "BUYER-COVERED CLAIMS" SHALL EXCLUDE, AND BUYER SHALL NOT ASSUME, ANY AND ALL OBLIGATIONS AND LIABILITIES ("EXCLUDED LIABILITIES") ARISING FROM OR IN CONNECTION WITH
THE USE, OWNERSHIP OR OPERATION OF THE PROPERTY ACCRUING PRIOR TO THE CLOSING DATE OTHER THAN (A) OBLIGATIONS AND LIABILITIES ASSUMED IN WRITING BY BUYER IN CONNECTION WITH THE LEASES AND/OR CONTRACTS AND ALL OTHER OBLIGATIONS AND LIABILITIES THAT THE BUYER EXPRESSLY ASSUMES IN WRITING AT OR PRIOR TO THE CLOSING, (B) OBLIGATIONS AND LIABILITIES FOR WHICH BUYER HAS RECEIVED A PRORATION CREDIT PURSUANT TO EXHIBIT V OF THE MASTER TRANSACTION AGREEMENT, AND (C) OBLIGATIONS AND LIABILITIES RELATING IN ANY WAY TO THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE PROPERTY OTHER THAN ANY CLAIMS MADE BY, OR CAUSES OF ACTION BROUGHT BY, ANY THIRD PARTY UNRELATED TO BUYER OR ANY OF ITS AFFILIATES WHERE THE INJURY OR DAMAGE GIVING RISE TO SUCH CLAIM OR CAUSE OF ACTION AROSE OR OCCURRED DURING THE PERIOD PRIOR TO THE CLOSING DATE.
(iii) BUYER PARTIES EACH HEREBY GENERALLY AND FULLY RELEASE SELLER PARTIES FROM ANY AND ALL STATEMENTS OR OPINIONS HERETOFORE MADE, OR INFORMATION FURNISHED IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, BY THE SELLER PARTIES TO ANY OF THE BUYER PARTIES, EXCEPT FOR SELLER'S WARRANTIES; AND FROM ANY AND ALL BUYER-COVERED CLAIMS, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED.
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
(iv) NOTWITHSTANDING THE FOREGOING, SELLER SHALL BE SOLELY LIABLE FOR, AND SHALL INDEMNIFY, DEFEND, PROTECT AND HOLD HARMLESS BUYER OR THE PROPERTY FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) AT LAW OR IN EQUITY, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, RELATING TO BODILY INJURY, DEATH, PROPERTY DAMAGE, ECONOMIC LOSS, OR OTHER DAMAGES SUFFERED BY BUYER OR THE PROPERTY ARISING OUT OF OR RELATING TO THE EXCLUDED LIABILITIES.
ARTICLE 5 - PRORATIONS, APPORTIONMENTS AND CREDITS;
CLOSING COSTS
to correct such error upon receipt of proof of such error in accordance with the terms and provisions of Exhibit V of the Transaction Agreement, but only if the claim is made within the time periods provided in said Exhibit V.
ARTICLE 6 - CLOSING
6.4.2 Assignment of Leases. The Assignment of Leases executed by -------------------- Buyer. 6.4.3 Assignment of Equipment Leases and Service Contracts. The ---------------------------------------------------- |
Assignment of Contracts executed by Buyer.
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF SELLER
7.3.1 The execution and delivery of this Agreement and the other documents to be executed by Seller in connection herewith, and the consummation of the transactions described herein or therein do not require, to the knowledge of Seller, the consent or approval of any governmental authority, nor, to Seller's knowledge, does the execution and delivery of this Agreement and the other documents to be executed by Seller in connection herewith violate, in any way material to the transactions described herein or therein, any contract or agreement to which Seller is a party (other than the Existing Mortgage Loan Documents, ECW Swap Notes and Three ECW I/P Loans) or any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to Seller, and this Agreement and all documents to be executed by Seller in connection with the transactions described herein constitute the legal, valid and binding obligations of Seller. To Seller's knowledge, other than the Existing Mortgage Loan Documents, the documents executed in connection with the ECW Swap Notes and the documents executed in connection with the Three ECW I/P Loans, Seller is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by Seller in accordance with the terms and provisions of this Agreement will be a default or an event of acceleration, or grounds for termination, and whereby such default, acceleration or termination will have a material adverse effect on the timely performance by Seller of its obligations under this Agreement and the other documents to be executed by Seller in connection herewith, nor does the execution of this Agreement or the other documents to be executed by Seller in connection herewith, or the consummation of the transactions contemplated hereby and thereby, violate the partnership agreement of Seller or constitute a breach thereunder.
7.3.2 Seller has no employees. 7.3.3 To Seller's knowledge, except as listed on Schedule A, Seller ---------- |
has not received any written notice of pending or threatened litigation, judgment, arbitration, investigation or proceeding against Seller or the Real Property that, if determined adversely, would have a material adverse effect on the operation, use or value of the Real Property or on the Buyer's ability to obtain any financing necessary to close the transactions contemplated by this Agreement, nor has Seller received any explicit oral notice of any such threatened litigation, judgment, arbitration, investigation or proceeding.
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES OF BUYER
investigation by Seller. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. Representations and warranties of Buyer are made as of the date of this Agreement.
ARTICLE 9 - COVENANTS
ARTICLE 10 - BREACH; DEFAULT; LIABILITY LIMITS
ARTICLE 11 - INTENTIONALLY OMITTED
ARTICLE 12 - MISCELLANEOUS
(i) Agent is hereby designated as the "Reporting Person" (as defined in the Reporting Requirements) for the transactions. Escrow Agent shall perform all duties that are required by the Reporting Requirements to be performed by the Reporting Person for the transactions.
(ii) Seller and Buyer shall furnish to Agent, in a timely manner, any information requested by Escrow Agent and necessary for Agent to perform its duties as Reporting Person for the transactions.
(ii) Agent hereby requests Seller to furnish to Agent Seller's correct taxpayer identification number. Seller acknowledges that any failure by Seller to provide Agent with Seller's correct taxpayer identification number may subject Seller to civil or criminal penalties imposed by law. Accordingly, Seller hereby certifies to Agent, under penalties of perjury, that Seller's correct taxpayer identification number is 94-2919280.
(iv) Each of the parties hereto shall retain this Agreement for a period of four (4) years following the calendar year during which Closing occurs.
BP OFR LLC
c/o Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile: (617) 421-1555
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile: (617) 574-4112
Prudential Realty Group
8 Campus Drive
4th Floor - Arbor Circle South
Parsippany, New Jersey 07054
Attention: John R. Triece
Facsimile: (201) 683-1797
Fedmark Corporation 30 Rockefeller Plaza, Room 5600 New York, New York 10112 Attention: Richard E. Salomon Facsimile: (212) 424-1806
The Prudential Insurance Company
of America
c/o Prudential Capital Group
4 Embarcadero Center
Suite 2700
San Francisco, California 94111
Attention: Harry Mixon, Esq.
Facsimile: (415) 956-2197
Pacific Property Service, L.P.
Suite 2600
Four Embarcadero Center
San Francisco, California 94111
Attention: Chief Financial Officer
Facsimile: (415) 956-7134
O'Melveny & Myers LLP Embarcadero Center West 275 Battery Street San Francisco, California 94111 Attention: Stephen A. Cowan, Esq.
Facsimile: (415) 984-8701
Willkie Farr & Gallagher 787 Seventh Avenue New York, New York 10019-6099 Attention: Bruce M. Montgomerie, Esq.
Facsimile: (212) 728-8111
future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly executed on its behalf on the day and year first above written.
"SELLER"
TWO EMBARCADERO CENTER WEST,
a California limited partnership
By: FEDMARK CORPORATION,
a Delaware corporation,
General Partner
By: /s/ [Signature Illegible] ------------------------------ Name: ___________________________ Title: __________________________ |
By: THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation,
General Partner
By: /s/ Gary L. Frazier ------------------------------ Name: ___________________________ Title: __________________________ |
[SIGNATURES CONTINUED ON NEXT PAGE]
"BUYER"
BP OFR LLC,
a Delaware limited liability company
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, its sole member
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
its general partner
By: /s/ Thomas J. O'Connor ------------------------------ Name: Thomas J. O'Connor Title: Vice President |
FIRST AMERICAN TITLE
INSURANCE COMPANY
By: /s/ J. C. Calder ----------------------------------------- Name: J.C. Calder Its: Vice President Date: November 12, 1998 |
Exhibit 99.2
Execution Copy
CONTRIBUTION AGREEMENT
BY AND AMONG
BOSTON PROPERTIES, INC;
BOSTON PROPERTIES LIMITED PARTNERSHIP;
EMBARCADERO CENTER INVESTORS PARTNERSHIP; AND
THOSE PERSONS LISTED ON EXHIBIT A ATTACHED HERETO
TABLE OF CONTENTS ARTICLE I Section 1.1 Definitions ..................................................2 ARTICLE II Section 2.1 Contribution .................................................4 ARTICLE III DUE DILIGENCE/CONDITION OF EC/ECA BUILDINGS ................................5 Section 3.1 Transferee Parties' Inspections and Due Diligence ............5 Section 3.2 Property Sold "As Is .........................................6 ARTICLE IV REPRESENTATIONS AND WARRANTIES AS TO THE PROPERTY, THE EC/ECA VENTURES AND THE EC/ECA BUILDINGS .........................................10 Section 4.1 General Statement............................................10 Section 4.2 Attribution .................................................10 Section 4.3 Representations and Warranties Re: ECIP Business and EC/ECA Buildings .......................................11 Section 4.4 Qualifications to Representations and Warranties ............13 Section 4.5 Due Formation, Etc ARTICLE V REPRESENTATIONS AND WARRANTIES AS TO ECIP PARTNERS ........................14 Section 5.1 General Statement ...........................................14 Section 5.2 Attribution .................................................14 Section 5.3 Due Organization; Authorization; Other Matters ..............14 Section 5.4 Securities Laws .............................................16 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY ..........................16 Section 6.1 General Statement ...........................................16 Section 6.2 Attribution .................................................16 Section 6.3 Representations and Warranties Re: Public Company Business and Operations ....................................17 Section 6.4 Due Organization, Etc. of Public Company.....................19 ARTICLE VII REPRESENTATIONS AND WARRANTIES OF INVESTOR ................................20 Section 7.1 General Statement ...........................................20 i |
Section 7.2 Attribution .................................................20 Section 7.3 Representations and Warranties Re: Investor Business and Operations ....................................20 Section 7.4 Due Formation, Etc. of Investor .............................21 ARTICLE VIII LIMITATIONS ...............................................................22 Section 8.1 Limitations .................................................22 ARTICLE IX COVENANTS .................................................................23 Section 9.1 Confidentiality .............................................23 Section 9.2 Public Statements ...........................................24 Section 9.3 Survival ....................................................24 ARTICLE X CLOSING ...................................................................25 Section 10.1 Closing Deliveries .........................................25 Section 10.2 ECIP Contribution Value; Allocations .......................26 Section 10.3 Apportionment Credit .......................................27 Section 10.4 Delayed Adjustment .........................................27 Section 10.5 Survivability ..............................................28 Section 10.6 Closing Costs ..............................................28 ARTICLE XI BREACH, DEFAULT, LIABILITY LIMITS .........................................28 11.1 Rights of Investor and Public Company ..............................28 11.2 Rights of ECIP and ECIP Partners ...................................30 ARTICLE XII MISCELLANEOUS Section 12.1 Expenses ...................................................30 Section 12.2 Amendment ..................................................30 Section 12.3 Notices ....................................................31 Section 12.4 Waivers ....................................................32 Section 12.5 Counterparts ...............................................32 Section 12.6 Interpretation .............................................32 Section 12.7 Governing Law ..............................................32 Section 12.8 Assignment .................................................32 Section 12.9 No Third Party Beneficiaries ...............................32 Section 12.10 Further Assurances .........................................32 ii |
Section 12.11 Severability ...............................................32 Section 12.12 Remedies Cumulative ........................................33 Section 12.13 Entire Understanding .......................................33 Section 12.14 Consent to Jurisdiction and Service of Process .............33 Section 12.15 Waiver of Jury Trial .......................................33 Exhibit A - List of ECIP Partners (See Exhibit A to Exhibit F hereto) Exhibit B - Investor Agreement (Certificate of Designation for Preferred Units) Exhibit C - Registration Rights Agreement Exhibit D - Title Commitment Exhibit E - Tax Reporting Agreement Exhibit F - Assignment of Partnership Interest Exhibit G - Existing Mortgages Exhibit H - ECIP Lease Schedule 4.3(e) - Schedule 4.3(f) - Schedule 4.3(g) - Schedule 4.3(h) Schedule 4.3 (i) Schedule 4.3(j) - Schedule 4.3(k) - Schedule 4.3(l) - Schedule 4.4 - Schedule 6.3(e) - Schedule 6.3(g) - Schedule 10.1(b)(ix) - Representation Letter iii |
Exhibit I Ownership Limit Certificate |
CONTRIBUTION AGREEMENT
WHEREAS, this Agreement is hereby executed, and the transactions described herein are being consummated concurrently with certain other transactions, pursuant to (and in accordance with) that certain Master Transaction Agreement dated as of September 28, 1998, by and among The Prudential Insurance Company of America, PIC Realty Corporation, certain persons listed on Exhibit A attached thereto, ECIP, Fedmark Corporation, Pacific Property Services, L.P., Investor and Public Company (the "TRANSACTION AGREEMENT") (all initially capitalized terms used herein without definition shall have the meanings given such terms in the Transaction Agreement);
WHEREAS, the ECIP Partners own, collectively, all of the interests in ECIP, ECIP is a partner in each of the Existing EC/ECA Ventures, and the ECIP Partners desire to contribute to Investor their respective partnership interests in ECIP and thereby their indirect interests in and to each such Existing EC/ECA Venture solely in exchange for Investor Preferred Units (as defined below), all on the terms and conditions described herein;
WHEREAS, concurrently with the consummation of the transactions contemplated by this Agreement, Public Company and ECIP are executing a Registration Rights Agreement substantially in the form attached hereto as
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
"BUSINESS DAY" means any day of the year other than Saturday, Sunday or any other day on which banks located in Boston, Massachusetts are authorized to close for business.
"ECIP" has the meaning given such term in the Introductory Paragraph.
"ECIP LEASE" means that certain lease between Four Embarcadero Center Venture, as landlord, and ECIP, as tenant, attached as Exhibit H and subject to the sublease and subsubleases attached to Exhibit H.
"ECIP PARTNERS" has the meaning given such term in the Introductory Paragraph.
"EC/ECA VENTURE PARTNERSHIP AGREEMENTS" means the partnership agreements of the respective EC/ECA Ventures, as amended, modified or supplemented.
"EXISTING MORTGAGES" means those certain mortgages described on Exhibit G annexed hereto.
"FOUR EC EXISTING DEBT BALANCE" shall mean the total unpaid balance (including all principal and accrued and unpaid interest) of all Existing Mortgages secured by Four EC on the Closing Date.
"HAZARDOUS MATERIALS" means any substance, chemical, waste or material that is or becomes regulated by any federal, state or local governmental authority because of its toxicity, infectiousness, radioactivity, explosiveness, ignitability, corrosiveness or reactivity, including, without limitation, asbestos or any substance containing more than O.1 percent asbestos, the group of compounds known as polychlorinated byphenyls, flammable explosives, oil, petroleum or other refined petroleum product.
"INVESTOR" has the meaning given such term in the Introductory Paragraph.
"INVESTOR AGREEMENT" has the meaning given such term in the preamble.
"INVESTOR PREFERRED UNITS" means the Series Two Preferred Units as set forth in the Investor Agreement.
"ONE EC EXISTING DEBT BALANCE" shall mean the total unpaid balance (including all principal and accrued and unpaid interest) of all Existing Mortgages secured by One EC on the Closing Date.
"PERMITTED EXCEPTIONS" means the Permitted Exceptions as defined in the Transaction Agreement pertain to the Buildings in which ECIP has an indirect interest.
"PROPERTY" means the ECIP Partners' partnership interests in ECIP as reflected in the ECIP Partnership Agreement as of the date of the Transaction Agreement, which Property constitutes all outstanding partnership interests in ECIP.
"PUBLIC COMPANY" has the meaning given such term in the Introductory Paragraph.
"REGISTRATION RIGHTS AGREEMENT" has the meaning given such term in the preamble.
"SECURITIES" means, as applicable, the Shares, and the Investor Preferred Units that may be issued pursuant to the Investor Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of the Public Company's common stock, $0.01 par value per share.
"TAX RETURN" means any return, report or other document or information required to be supplied to a taxing authority in connection with Taxes.
"TAXES" means all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, excise, property, sales, withholding, social security, occupation, use, service, license, payroll, franchise, transfer and recording taxes, fees and charges, imposed by the United States, or any state, local or foreign government or subdivision or agency thereof, whether computed on a separate, consolidated, unitary, combined or any other basis; and such terms shall include any interest, fines, penalties or additional amounts attributable to or imposed on or with respect to any such taxes, charges, fees, levies or other assessments.
"THREE EC EXISTING DEBT BALANCE" shall mean the total unpaid balance (including all principal and accrued and unpaid interest) of all Existing Mortgages secured by Three EC on the Closing Date.
"TRANSACTION AGREEMENT" has the meaning given such term in the preamble.
"TWO EC EXISTING DEBT BALANCE" shall mean the total unpaid balance (including all principal and accrued and unpaid interest) of all Existing Mortgages secured by Two EC on the Closing Date.
ARTICLE II
ARTICLE III
FITNESS OF ANY PORTION OF THE PROPERTY OR EC/ECA BUILDINGS FOR A PARTICULAR
PURPOSE; (2) THE PHYSICAL CONDITION OF THE EC/ECA BUILDINGS OR THE
CONDITION OR SAFETY OF THE EC/ECA BUILDINGS OR ANY IMPROVEMENTS THEREON;
(3) THE PRESENCE OR ABSENCE, LOCATION OR SCOPE OF ANY HAZARDOUS MATERIALS
IN, AT, OR UNDER THE EC/ECA BUILDINGS; (4) THE ACCURACY OF ANY STATEMENTS,
CALCULATIONS OR CONDITIONS STATED OR SET FORTH IN ECIP'S OR PPS'S BOOKS AND
RECORDS CONCERNING THE PROPERTY AND/OR THE EC/ECA BUILDINGS OR SET FORTH IN
ANY OF THE ECIP PARTNERS' OFFERING MATERIALS WITH RESPECT TO THE PROPERTY,
ECIP AND/OR THE EC/ECA BUILDINGS; (5) THE DIMENSIONS OF THE EC/ECA
BUILDINGS OR THE ACCURACY OF ANY FLOOR PLANS, SQUARE FOOTAGE, LEASE
ABSTRACTS, SKETCHES, REVENUE OR EXPENSE PROJECTIONS RELATED TO THE EC/ECA
BUILDINGS; (6) THE OPERATING PERFORMANCE, THE INCOME AND EXPENSES OF THE
PROPERTY AND/OR EC/ECA BUILDINGS OR THE ECONOMIC STATUS OF THE PROPERTY
AND/OR EC/ECA BUILDINGS; (7) THE ABILITY OF INVESTOR AND PUBLIC COMPANY TO
OBTAIN ANY AND ALL NECESSARY GOVERNMENTAL APPROVALS OR PERMITS FOR THE
INTENDED USE AND DEVELOPMENT OF THE EC/ECA BUILDINGS; AND (8) THE LEASING
STATUS OF THE EC/ECA BUILDINGS OR THE INTENTIONS OF ANY PERSONS WITH
RESPECT TO THE NEGOTIATION AND/OR EXECUTION OF ANY LEASE FOR ANY PORTION OF
THE EC/ECA BUILDINGS. INVESTOR AND PUBLIC COMPANY EACH FURTHER ACKNOWLEDGES
AND AGREES THAT, EXCEPT FOR THE ECIP WARRANTIES, THE ECIP PARTIES ARE UNDER
NO DUTY TO MAKE ANY AFFIRMATIVE DISCLOSURES OR INQUIRY REGARDING ANY MATTER
WHICH MAY BE KNOWN TO ANY OF THE ECIP PARTIES.
(i) INVESTOR AND PUBLIC COMPANY EACH HEREBY ASSUMES ALL
RISKS WITH RESPECT TO THE PROPERTY (AND ITS RESULTING INTEREST IN THE
EC/ECA BUILDINGS), KNOWN AND UNKNOWN, SUSPECTED AND UNSUSPECTED,
EXCEPTING ONLY THE EXCLUDED LIABILITIES (AS DEFINED IN SECTION 3.2 (b)
(ii) BELOW). EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION
3.2(b)(ii) BELOW WITH RESPECT TO EXCLUDED LIABILITIES AND SECTION
3.2(b)(iii) BELOW WITH RESPECT TO THE ECIP PARTIES' WARRANTIES,
INVESTOR, PUBLIC COMPANY AND THEIR AGENTS, EMPLOYEES, AFFILIATES,
SUCCESSORS AND ASSIGNS (COLLECTIVELY, "TRANSFEREE PARTIES"), SHALL BE
SOLELY LIABLE FOR, AND SHALL INDEMNIFY, DEFEND, PROTECT AND HOLD
HARMLESS THE ECIP PARTIES FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF
ACTION, LOSSES, LIABILITIES, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) AT LAW OR IN EQUITY,
KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, RELATING TO BODILY INJURY,
DEATH, PROPERTY DAMAGE, ECONOMIC LOSS, OR OTHER DAMAGES SUFFERED BY
ANY OF THE ECIP PARTIES ARISING OUT OF OR RELATING TO THE PROPERTY
AND/OR THE EC/ECA BUILDINGS , INCLUDING, WITHOUT LIMITATION, THE
PHYSICAL, ENVIRONMENTAL, ECONOMIC, LEGAL OR OTHER CONDITION OF ANY OF
THE EC/ECA BUILDINGS, INCLUDING, WITHOUT LIMITATION, ANY SUCH CLAIMS
OR LIABILITIES RELATING TO THE PRESENCE, DISCOVERY OR REMOVAL OF ANY
HAZARDOUS MATERIALS IN, AT, ABOUT OR UNDER ANY OF THE EC/ECA
BUILDINGS, OR FOR, CONNECTED WITH OR ARISING AFTER THE DATE HEREOF OUT
OF ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON CERCLA
(COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT
OF 1980, 42 U.S.C. (S)(S)9601 ET SEQ., AS AMENDED BY SARA [SUPERFUND
AMENDMENT AND REAUTHORIZATION ACT OF 1986] AND AS MAY BE FURTHER
AMENDED FROM TIME TO TIME), THE RESOURCE CONSERVATION AND RECOVERY ACT
OF 1976, 42 U.S.C. (S)(S)6901 ET SEQ., OR ANY RELATED CLAIMS OR CAUSES
OF ACTION OR ANY OTHER FEDERAL OR STATE BASED STATUTORY OR REGULATORY
CAUSES OF ACTION FOR ENVIRONMENTAL CONTAMINATION AT, IN OR UNDER ANY
OF THE EC/ECA BUILDINGS (HEREINAFTER "TRANSFEREE PARTY-COVERED
CLAIMS").
(ii) NOTWITHSTANDING THE FOREGOING, THE TERM "TRANSFEREE PARTY-COVERED CLAIMS" SHALL EXCLUDE, AND NEITHER INVESTOR NOR THE PUBLIC COMPANY SHALL ASSUME, ANY AND ALL OBLIGATIONS AND LIABILITIES ("EXCLUDED LIABILITIES") ARISING FROM OR IN CONNECTION WITH THE USE, OWNERSHIP OR OPERATION OF ECIP, THE PROPERTY, THE EC/ECA VENTURES AND/OR EC/ECA BUILDINGS ACCRUING ON OR PRIOR TO THE CLOSING DATE OTHER THAN (A) OBLIGATIONS AND LIABILITIES ASSUMED IN WRITING BY INVESTOR AND PUBLIC COMPANY IN CONNECTION WITH THE LEASES AND/OR CONTRACTS AND ALL OTHER OBLIGATIONS AND LIABILITIES THAT THE INVESTOR EXPRESSLY ASSUMES IN WRITING (OTHER THAN BY WAY OF ACCEPTING THE ASSIGNMENT OF THE PROPERTY) AT OR PRIOR TO THE CLOSING, (B) OBLIGATIONS AND LIABILITIES FOR WHICH INVESTOR HAS RECEIVED A PRORATION CREDIT PURSUANT TO EXHIBIT V OF THE TRANSACTION AGREEMENT, AND (C) OBLIGATIONS AND LIABILITIES RELATING IN ANY WAY TO THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE EC/ECA BUILDINGS OTHER THAN ANY CLAIMS MADE BY ,OR CAUSES OF ACTION BROUGHT BY, ANY THIRD PARTY UNRELATED TO INVESTOR
OR PUBLIC COMPANY OR ANY OF THEIR AFFILIATES WHERE THE INJURY OR DAMAGE GIVING RISE TO SUCH CLAIM OR CAUSE OF ACTION AROSE OR OCCURRED DURING THE PERIOD PRIOR TO THE CLOSING DATE.
ii(ii) TRANSFEREE PARTIES EACH HEREBY GENERALLY AND FULLY RELEASE THE ECIP PARTIES FROM ANY AND ALL STATEMENTS OR OPINIONS HERETOFORE MADE, OR INFORMATION FURNISHED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, BY THE ECIP PARTIES TO ANY OF THE TRANSFEREE PARTIES, EXCEPT FOR THE ECIP WARRANTIES; AND FROM ANY AND ALL TRANSFEREE PARTY-COVERED CLAIMS, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED.
WITH RESPECT TO THE RELEASES AND WAIVERS CONTAINED IN THIS
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
(iv) NOTWITHSTANDING THE FOREGOING, THE ECIP PARTNERS SHALL BE SOLELY LIABLE FOR, AND SHALL INDEMNIFY, DEFEND (AND CONTROL THE RESOLUTION OF ),
PROTECT AND HOLD HARMLESS INVESTOR AND PUBLIC COMPANY FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEY'S FEES) AT LAW OR IN EQUITY, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, RELATING TO BODILY INJURY, DEATH, PROPERTY DAMAGE, ECONOMIC LOSS, OR OTHER DAMAGES SUFFERED BY ECIP OR THE PROPERTY OR THE EC/ECA VENTURES OR THE EC/ECA BUILDINGS ARISING OUT OF OR RELATING TO THE EXCLUDED LIABILITIES.
ARTICLE IV
(A) The execution and delivery of this Agreement and the other documents to be executed by ECIP in connection herewith, and the consummation of the transactions described in this Agreement and such documents do not require, to the knowledge of ECIP, the consent or approval of any governmental authority, nor to ECIP's knowledge does the execution and delivery of this Agreement and the other documents to be executed by ECIP in connection herewith violate, in any way material to the transactions described herein, any contract or agreement to which ECIP is a party or (to the knowledge of ECIP) any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to ECIP, any EC/ECA Venture or any of the EC/ECA Buildings and this Agreement and all documents to be executed by ECIP in connection with the transactions described herein constitute the legal, valid and binding obligations of ECIP. The Property (consisting of the partnership interests in ECIP of all of the ECIP Partners) constitutes all of the outstanding partnership interests in ECIP, and ECIP has no obligation or commitment of any kind or nature to issue any additional partnership interests.
(B) ECIP has full and, except for the Transaction Documents and the Existing Mortgages, unencumbered title to the interests in the EC/ECA Ventures as indicated in the EC/ECA Venture Partnership Agreements as in effect on the date of the Transaction Agreement and has no other assets other than the ECIP Lease and related subleases annexed as Exhibit H and the "Embarcadero Center" trademark; ECIP has no liabilities other than those incident to or arising out of or in connection with the EC/ECA Ventures, the EC/ECA Buildings, the Transaction Documents and the Existing Mortgages.
(C) To ECIP's knowledge, neither ECIP nor any EC/ECA Venture is a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage (other than the Existing Mortgages), debenture, note or other instrument under the terms of which performance by ECIP or the ECIP Partners in accordance with the terms and provisions of this Agreement will be a default or an event of acceleration, or grounds for termination, and whereby such default, acceleration or termination would reasonably be expected to have a material adverse effect on the timely performance by ECIP or the ECIP Partners of their obligations under this Agreement and the other documents to be executed by ECIP or the ECIP Partners in connection herewith,
nor does the execution of this Agreement or the other documents to be executed by ECIP in connection herewith, or the consummation of the transactions contemplated hereby and thereby, violate the partnership agreements of ECIP or any EC/ECA Venture or constitute a breach thereunder.
(D) Neither ECIP nor the EC/ECA Ventures have any employees.
default of any of the representations and warranties hereunder as a result of the presence or existence of ACM within One EC, Two EC or Four EC (with respect only to the Four EC Hyatt Retail Space).
ARTICLE V
(A) Such ECIP Partner is, if it is other than an individual, duly organized or formed, is validly existing and is in good standing under the laws of its jurisdiction of organization, and is qualified to do business and in good standing in all jurisdictions where such qualification is necessary to carry on its business as now conducted, except where the failure to so qualify would not have a material adverse effect on the ability of such ECIP Partner to perform its obligations under this Agreement.
(B) Such ECIP Partner has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.
(C) Such ECIP Partner has, and will contribute to Investor at the Closing, full, unencumbered title to all of its interest in ECIP. Such ECIP Partner's percentage interest in ECIP as of the date is set forth in the Assignment of ECIP Partnership Interests being delivered concurrently herewith. Such ECIP Partner owns beneficially and of record, free and clear of any claim, lien, pledge, voting agreement, option, charge, security interest, mortgage, deed of trust, encumbrance, rights of assignment, purchase or other restrictions or rights of any kind, nature or description (collectively, "Encumbrances"), and has full power and authority to convey free and clear of any Encumbrances, its interest in ECIP and, upon delivery of the Assignment attached hereto, the Investor or its designee will acquire good and valid title to such interest in ECIP, free and clear of any Encumbrance other than as may have been created under this agreement. Such ECIP Interest has been validly issued.
(D) The execution, delivery and performance by such ECIP Partner of this Agreement has been duly and validly approved by all necessary partnership, corporate or other applicable action and no other actions or proceedings on the part of such ECIP Partner or its shareholders, partners or other ECIP Partners, are necessary to authorize this Agreement and the transactions contemplated hereby and thereby. No consent, waiver, approval, or authorization of, or filing, registration, or qualification with, or notice to, any governmental instrumentality or any other Person (including, without limitation, the other ECIP Partners) is required to be made, obtained, or given in connection with the execution, delivery, and performance of this Agreement by such ECIP Partner, except where the failure to do so would not have a material adverse effect on such execution, delivery or performance. This Agreement constitutes, and any other documents to be executed by such ECIP Partner pursuant to this Agreement when executed will constitute, legal, valid and binding obligations of such ECIP Partner, enforceable against such ECIP Partner in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies.
(E) The execution and delivery of this Agreement, and the performance by such ECIP Partner under this Agreement, do not and will not conflict with or result in a breach of (with or without the passage of time or notice or both) the terms of any of such ECIP Partner's constituent documents (if any), any judgment, order
or decree of any governmental authority binding on such ECIP Partner, and, to such ECIP Partner's knowledge, do not breach or violate any applicable law, rule or regulation of any governmental authority. Except as may be provided in the Existing Mortgages, the execution, delivery and performance by such ECIP Partner under this Agreement will not result in a breach or violation of (with or without the passage of time or notice or both) the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, the partnership agreement of ECIP, any of the EC/ECA Venture Partnership Agreements, or any other agreement or instrument to which such ECIP Partner is a party or by which such ECIP Partner is bound.
(F) Such ECIP Partner, if other than an individual, is organized and, to such ECIP Partner's knowledge, has conducted its business in accordance with all applicable laws, to the extent applicable, the failure or the violation of which could reasonably be expected to have a material adverse effect on the ability of such ECIP Partner, in its individual capacity, to execute, deliver or perform under this Agreement or to consummate the transactions contemplated hereby.
ARTICLE VI
(A) Public Company is organized and, to Public Company's knowledge, has conducted its business in accordance with applicable laws, to the extent applicable, the failure or the violation of which would reasonably be expected to have a material adverse effect on the results of operations of the Public Company.
(B) There are no actions, suits or proceedings pending and, to Public Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or others, which would reasonably be expected to either (i) question the validity of this Agreement or the consummation of the transactions contemplated hereby, the issuance of the Shares (including the Shares that may be issued in lieu of redemption of Investor Preferred Units), any other agreements contemplated hereby or any actions taken pursuant to any of the foregoing or (ii) result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, management or business prospects of Public Company. As of the date hereof, there is no action or suit against Public Company pending or threatened by any Person which would reasonably be expected to have a material and adverse effect on Public Company.
(C) The Public Company has filed with the Securities and Exchange Commission (the "Commission") all reports required by the Exchange Act to be filed by the Company (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the "SEC Documents"). As of their respective filing dates (or if amended, revised or superseded by a subsequent filing with the Commission, then on the date of such subsequent filing), the SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and none of the SEC Documents (including any and all financial statements included therein) as of such dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The consolidated financial statements of Public Company included in all SEC Documents, including any amendments thereto, comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto. Since most recently filed SEC Document, there has not occurred or arisen any change in or event affecting Public Company that has had or would reasonably be expected to have a material adverse effect on the results of operations of Public Company.
(D) No proceeding or other action has been commenced or undertaken relating to the dissolution or merger of Public Company and none is presently contemplated except that this representation shall not apply to any merger of another entity with and into Public Company that meets the criteria of Section 251(f) of the Delaware General Corporation Law for consummating a merger without a vote of stockholders.
(E) As of the date of this Agreement, the authorized capital securities of Public Company consists of Preferred Stock, $.01 par value, 50,000,000 Shares authorized, none issued or outstanding, Excess Stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding, and 250,000,000 Shares of common stock, $0.01 par value per share, of which 63,526,785 Shares are currently issued and outstanding. Except as contemplated pursuant to this Agreement, and except for (i) any Shares that may be issued in lieu of redemption of outstanding units of limited partnership in Investor and (ii) any Shares or units of limited partnership in Investor which may be issued in accordance with agreements that have been described in or filed with the SEC Filings or otherwise disclosed on Schedule 6.3(e), there are no securities convertible or exchangeable for Shares or any rights or options to subscribe for or purchase any Shares or securities convertible or exchangeable for Shares. All of the outstanding Shares have been duly and validly authorized and issued and are fully paid and non-assessable. All of the outstanding Shares have been issued in compliance with all applicable federal and state securities laws.
(F) The Shares (including the Shares issuable upon exchange of Investor Preferred Units) issuable hereunder, when issued in accordance with the provisions of this Agreement and the Investor Agreement, will be duly and validly authorized and issued and will be fully paid and non- assessable. Neither Public Company, Investor nor any person acting on their behalf has taken or will take any action which would subject the issuance of the Investor Preferred Units to the ECIP Partners to the registration requirements of Section 5 of the Securities Act.
(H) Public Company has duly and timely filed with the appropriate governmental authorities all Tax Returns required to be filed by it for all periods ending on or prior to the Closing Date, except to the extent of any Tax Return for which an extension of time for filing has been properly filed. Each such Tax Return is true and correct in all material respects. All Taxes owed by Public Company have been paid (whether or not shown on a Tax Return). All Taxes which Public Company is required by law to withhold or collect, including, without limitation, Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper governmental authorities or are held in separate bank accounts for such purpose. There are no liens for Taxes upon the assets of Public Company except for statutory liens for Taxes not yet due.
(I) Public Company has not filed for an extension of a statute of limitations with respect to any Taxes and no governmental authorities have requested an extension of the statute of limitations with respect to any Taxes. Public Company is not a party to any pending action or any formal or informal proceeding by any taxing authority for a deficiency, assessment or collection of Taxes, and no claim of any deficiency, assessment or collection of Taxes has been asserted or, to the knowledge of Public Company, threatened against it, including claims by any taxing authority in a jurisdiction where Public Company does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.
(J) Public Company is organized and has operated from its commencement through the date hereof in such a manner so as to qualify for taxation as a real estate investment trust under the Code, and Public Company intends to operate in such a manner so as to qualify and to continue to so qualify as a real estate investment trust.
(K) Public Company does not hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101.
(a) Public Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is (or prior to the Closing will be) duly qualified and in good standing as a foreign corporation under the laws of the State of California, and has all necessary power, corporate and otherwise, to execute and deliver this Agreement and all other documents and instruments to be executed and delivered by Public Company in connection herewith and to perform all its obligations hereunder and thereunder. This Agreement has been duly authorized by all requisite corporate action on the part of Public Company. The execution and delivery of this Agreement and the other documents and
instruments to be executed and delivered by Public Company in connection with the transactions described herein, and the consummation of the transactions contemplated hereby and thereby, do not require the consent or approval of the shareholders of Public Company or, to the knowledge of Public Company, the consent or approval of any governmental authority, nor, to the knowledge of Public Company, does the execution and delivery of this Agreement violate, in any way material to the transactions contemplated hereby, any contract or agreement to which Public Company is a party or any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to Public Company, and this Agreement and all documents and other instruments to be executed and delivered by Public Company in connection herewith constitute the legal, valid and binding obligations of Public Company.
(b) Public Company is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by Public Company according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Public Company, according to the terms of this Agreement, may be prohibited, prevented or delayed.
ARTICLE VII
(A) Investor is organized and, to Investor's knowledge, has conducted its business in accordance with all applicable laws, to the extent applicable, the failure or the violation of which would reasonably be expected to have a material adverse effect on the results of operations of Investor.
(B) There are no actions, suits or proceedings pending and, to Investor's knowledge, no such proceedings are threatened or contemplated by governmental authorities or by others, which would reasonably be expected to either (i) question the validity of this Agreement or the consummation of the transactions contemplated hereby or the issuance of the Investor Preferred Units contemplated hereby, any other agreements contemplated hereby or any actions taken pursuant to any of the foregoing or (ii) result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, management or business prospects of Investor. As of the date hereof, there is no material action or suit against Investor pending or threatened by any Person.
(C) No proceeding or other action has been commenced or undertaken relating to the dissolution or merger of Investor (except in connection with an acquisition of property for Units in which Investor is the surviving party in the merger) and none is presently contemplated.
(D) Investor has duly and timely filed with the appropriate governmental authorities all Tax Returns required to be filed by it for all periods ending on or prior to the Closing Date, except to the extent of any Tax Return for which an extension of time for filing has been properly filed. Each such Tax Return is true and correct in all material respects. All Taxes owed by Investor have been paid (whether or not shown on a Tax Return). All Taxes which Investor is required by law to withhold or collect, including, without limitation, Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper governmental authorities or are held in separate bank accounts for such purpose. There are no liens for Taxes upon the assets of Investor except for statutory liens for Taxes not yet due.
(E) Investor has not filed for an extension of a statute of limitations with respect to any Taxes and no governmental authorities have requested an extension of the statute of limitations with respect to any Taxes. Investor is not a party to any pending action or any formal or informal proceeding by any taxing authority for a deficiency, assessment or collection of Taxes, and no claim of any deficiency, assessment or collection of Taxes has been asserted or, to the knowledge of Investor, threatened against it, including claims by any taxing authority in a jurisdiction where Investor does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.
(F) Investor is not, and will not become, a "publicly traded partnership" within the meaning of Section 7704 of the Code.
(G) Investor does not hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101.
will be) duly qualified and in good standing as a foreign limited partnership under the laws of the State of California, and has all necessary power, partnership and otherwise, to execute and deliver this Agreement and all other documents and instruments to be executed and delivered by Investor in connection herewith and to perform all its obligations hereunder and thereunder. This Agreement has been duly authorized by all requisite partnership action on the part of Investor. The execution and delivery of this Agreement and the other documents and instruments to be executed and delivered by Investor in connection with the transactions described herein, and the consummation of the transactions contemplated hereby and thereby, do not require the consent or approval of the partners of Investor or, to the knowledge of Investor, the consent or approval of any governmental authority, nor, to the knowledge of Investor, does the execution and delivery of this Agreement violate, in any way material to the transactions contemplated hereby, any contract or agreement to which Investor is a party or any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to Investor, and this Agreement and all documents and other instruments to be executed and delivered by Investor in connection herewith constitute the legal, valid and binding obligations of Investor. Investor is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by Investor according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Investor, according to the terms of this Agreement, may be prohibited, prevented or delayed.
ARTICLE VIII
ARTICLE IX
COVENANTS
(A) As used herein, "CONFIDENTIAL MATERIAL" means, with respect to any party hereto (the "PROVIDING PARTY"), all information, whether oral, written or otherwise, furnished to another party hereto (the "RECEIVING PARTY") or the Receiving Party's directors, officers, partners, Affiliates, employees or agents, or their respective representatives (collectively, "REPRESENTATIVES"), by the Providing Party and all reports, analyses, compilations, studies and other material prepared by the Receiving Party or its Representatives (in whatever form maintained, whether documentary, computer storage or otherwise) containing, reflecting or based upon, in whole or in part, any such information. The term "CONFIDENTIAL MATERIAL" does not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party, its Representatives or anyone to whom the Receiving Party or any of its Representatives transmit any Confidential Material in violation of this Agreement or (ii) is or becomes known or available to the Receiving Party on a nonconfidential basis from a source (other than the Providing Party or one of its Representatives) who is not, to the knowledge of the Receiving Party, prohibited from transmitting the information to the Receiving Party or its Representatives by a contractual, legal, fiduciary or other obligation.
(C) In the event that the Receiving Party, its Representatives or anyone to whom the Receiving Party or its Representatives supply the Confidential Material are requested (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, any informal or formal investigation by any government or governmental agency or authority or otherwise in connection with legal process) to disclose any Confidential Material, the Receiving Party agrees (i) to immediately notify the Providing Party of the existence, terms and circumstances surrounding such a request, (ii) to consult with the Providing Party on the advisability of taking legally available steps to resist or narrow such request, and (iii) if disclosure of such information is required, to furnish only that portion of the Confidential Material which, in the opinion of the Receiving Party's counsel, the Receiving Party is legally compelled to disclose and to cooperate with any action by the Providing Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Material (it being agreed that the Providing Party shall reimburse the Receiving Party for all reasonable out- of-pocket expenses incurred by the Receiving Party in connection with such cooperation).
(D) In the event of the termination of this Agreement in accordance with its terms, promptly upon request from the Providing Party, the Receiving Party shall, except to the extent prohibited by applicable laws, regulations or legal process, redeliver to the Providing Party or destroy all tangible Confidential Material and will not retain any copies, extracts or other reproductions thereof in whole or in part. Any such destruction shall be certified in writing to the Providing Party by an authorized officer of the Receiving Party supervising the same.
ARTICLE X
(i) Evidence of the organization, existence and authority of ECIP to enter into this Agreement and to consummate the transactions contemplated hereby and thereby (together with an incumbency and signature certificate regarding the officer(s) signing on Rockmark Corporation's behalf);
(iii) A Foreign Investment in Real Property Tax Act affidavit executed by each ECIP Partner (it being understood that if any ECIP Partner shall fail to provide the necessary affidavit and/or documentation, Public Company may proceed with withholding provision as provided by law);
(v) Evidence of the organization (if other than an individual), existence (if other than an individual) and authority of each ECIP Partner to enter into this Agreement and to consummate the transactions contemplated hereby, certified by an appropriate officer or partners (if other than an individual) (together with an incumbency and signature certificate regarding the Person signing);
(vi) The Investor Agreement executed by each ECIP Partner;
(vii) The Registration Rights Agreement executed by each ECIP Partner;
(viii) Additional documents, to the extent consistent with the provisions of this Agreement, that Investor, Public Company or the Title Company may reasonably request for the consummation of the transactions contemplated by this Agreement.
(ix) a Representation Letter in the form attached hereto as Schedule 10.1(b)(ix) executed by each ECIP Partner (of his or her duly authorized attorney-in-fact
as evidenced by a copy of the relevant power of attorney attached thereto) indicating thereon that such ECIP Partner is an "accredited investor."
(i) Evidence of the organization, existence and authority of Public Company and Investor to enter into this Agreement and to consummate the transactions contemplated hereby, certified by an appropriate officer of Public Company or Investor, as appropriate (together with an incumbency and signature certificate regarding the officer(s) signing on their behalf);
(ii) The Registration Rights Agreement executed by Public Company;
(v) Public Company and Investor shall deliver any additional documents, to the extent consistent with the provisions of this Agreement, that the other parties or the Title Company may reasonably request for the consummation of the transactions contemplated by this Agreement.
(vi) Public Company shall deliver evidence reasonably satisfactory to Rockmark Corporation that Richard E. Salomon has been duly elected or appointed as a member of Public Company's Board of Directors.
(vii) A certificate dated as of the date hereof (in the form attached hereto as Exhibit I) signed by the Secretary of the Public Company certifying that certain resolutions relating to the exclusion of Investor Preferred Units from the "Ownership Limit" set forth in the Public Company's charter were duly adopted by the Board of Directors of the Public Company prior to the date hereof.
ARTICLE XI
(A) In the event of any claim, suit or other action against any of the ECIP Partners pertaining to (a) this Agreement, any of the documents executed in connection herewith or any of the transactions contemplated hereby or thereby (including, without limitation, any and all indemnification obligations of any of the ECIP Partners hereunder or thereunder) or (b) a breach by any of the ECIP Partners of any of the terms or provisions of this Agreement or of any of the documents executed by the ECIP Partners in connection with the matters contemplated in this Agreement (including, without limitation, the breach of any representation or warranty of the ECIP Partners set forth herein or therein), Investor's and Public Company's sole remedy shall be an action for monetary damages;
(B) Except as provided in the last sentence of paragraph (b), Investor's and Public Company's sole recourse against the ECIP Partners, individually and/or as a group, for liability assumed by, and for any indemnity of or breach of representation or warranty made by any of the ECIP Partners shall be limited to the recovery by Investor and/or Public Company of Investor Preferred Units (and any Securities received in exchange therefor or upon conversion thereof) issued to such ECIP Partner (severally in the ratio of each such ECIP Partner's proportionate partnership interest in ECIP on the Closing to the extent provided in
ARTICLE XII
(A) If to Public Company or Investor, addressed as follows:
Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile: 617-421-1555
Telephone: 617-859-2600
with a copy to
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile: 617-574-4112
Telephone: 617-482-1776
(B) If to ECIP or the ECIP Partners, addressed as follows:
Rockmark Corporation
30 Rockefeller Plaza, Room 5600
New York, New York 10112
Attention: Richard E. Salomon
Facsimile: (212) 424-1806
Telephone (212) 903-1204
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attention: Bruce M. Montgomerie
Facsimile: (212) 728-8111
Telephone (212) 728-8248
or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.
shall not be affected thereby, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
BOSTON PROPERTIES, INC.,
a Delaware corporation
By: /s/ Thomas J. O'Connor ---------------------------------------- Name: Thomas J. O'Connor Title: Vice President |
BOSTON PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
its general partner
By: /s/ Thomas J. O'Connor ---------------------------------------- By: /s/ William J. Wedge ---------------------------------------- Name: William J. Wedge Title: Senior Vice President |
EMBARCADERO CENTER INVESTORS PARTNERSHIP,
a California limited partnership
By: ROCKMARK CORPORATION,
its General Partner
By: /s/ Richard E. Salomon ---------------------------------------- Name: Richard E. Salomon Title: President |
Louis R. Benzak
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
John R. H. Blum
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
JAMES R. BRONKEMA TRUST
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
Vincent deP. Farrell, Jr.
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
Leslie H. Larsen
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
Bruce M. Montgomerie
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
Bill F. Osborne
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
EC HOLDINGS, INC.
By: /s/ [Signature Illegible] ------------------------------------------- Name: Title: |
PORTMAN FAMILY TRUST
By: /s/ John C. Portman III ---------------------------------------- Name: Title: By: /s/ John C. Portman, Jr. ---------------------------------------- Name: Title: By: /s/ Joan N. Portman ---------------------------------------- Name: Title: |
William F. Pounds
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
David Rockefeller
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
DR & DESCENDANTS PARTNERSHIP
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
ESTATE OF RICHARD B. SALOMON
By: /s/ Richard E. Salomon ---------------------------------------- Name: Richard E. Salomon Title: Executor /s/ Richard E. Salomon ------------------------------------------- Richard E. Salomon |
SALOMON 1968 TRUST
By: /s/ Richard E. Salomon ---------------------------------------- Name: Richard E. Salomon Title: Trustee |
SALOMON 1969 TRUST
By: /s/ Richard E. Salomon ---------------------------------------- Name: Richard E. Salomon Title: Trustee |
William G. Spears
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
George M. Topliff
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
WINROCK INTERNATIONAL INSTITUTE FOR AGRICULTURAL
DEVELOPMENT
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
WRTEC, INC.
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
John O. Wolcott
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Richard E. Salomon Title: President |
Exhibit 99.3 Execution Copy
CONTRIBUTION AGREEMENT
BY AND AMONG
BOSTON PROPERTIES, INC;
BOSTON PROPERTIES LIMITED PARTNERSHIP;
THREE EMBARCADERO CENTER WEST; AND
THOSE PERSONS (OTHER THAN PRUDENTIAL)
LISTED ON EXHIBIT A ATTACHED HERETO
TABLE OF CONTENTS ARTICLE I Section 1.1. Definitions................................................ 2 ARTICLE II Section 2.1 Contribution................................................ 4 ARTICLE III DUE DILIGENCE/CONDITION OF 3ECW BUILDING................................. 4 Section 3.1 Transferee Parties' Inspections and Due Diligence........... 4 Section 3.2 Property Sold "As Is........................................ 5 ARTICLE IV REPRESENTATIONS AND WARRANTIES AS TO THE PROPERTY AND THE 3ECW BUILDING........................................................ 9 Section 4.1 General Statement.......................................... 9 Section 4.2 Attribution................................................ 10 Section 4.3 Representations and Warranties Re: 3ECW Business and 3ECW Building........................ 10 Section 4.4 Qualifications to Representations and Warranties........... 12 Section 4.5 Due Formation, Etc......................................... 12 ARTICLE V REPRESENTATIONS AND WARRANTIES AS TO 3ECW PARTNERS...................... 13 Section 5.1 General Statement.......................................... 13 Section 5.2 Attribution................................................ 13 Section 5.3 Due Organization; Authorization; Other Matters............. 13 Section 5.4 Securities Laws............................................ 14 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY........................ 15 Section 6.1 General Statement.......................................... 15 Section 6.2 Attribution................................................ 15 Section 6.3 Representations and Warranties Re: Public Company Business and Operations................. 15 Section 6.4 Due Organization, Etc. of Public Company................... 18 i |
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF INVESTOR.............................. 18 Section 7.1 General Statement.......................................... 18 Section 7.2 Attribution................................................ 18 Section 7.3 Representations and Warranties Re: Investor Business and Operations....................... 19 Section 7.4 Due Formation, Etc. of Investor............................ 20 ARTICLE VIII LIMITATIONS............................................................. 20 Section 8.1 Limitations................................................ 20 ARTICLE IX COVENANTS............................................................... 21 Section 9.1 Confidentiality............................................ 21 Section 9.2 Public Statements.......................................... 22 Section 9.3 Survival................................................... 22 ARTICLE X CLOSING................................................................. 23 Section 10.1 Closing Deliveries........................................ 23 Section 10.2 3ECW Contribution Value; Allocations...................... 24 Section 10.3 Apportionment Credit...................................... 24 Section 10.4 Delayed Adjustment........................................ 25 Section 10.5 Survivability............................................. 25 Section 10.6 Closing Costs............................................. 25 ARTICLE XI BREACH, DEFAULT, LIABILITY LIMITS....................................... 25 Section 11.1 Rights of Investor and Public Company..................... 25 Section 11.2 Rights of 3ECW and 3ECW Partners.......................... 27 ARTICLE XII MISCELLANEOUS........................................................... 27 Section 12.1 Expenses................................................. 28 Section 12.2 Amendment................................................ 28 Section 12.3 Notices.................................................. 28 Section 12.4 Waivers.................................................. 29 Section 12.5 Counterparts............................................. 29 Section 12.6 Interpretation........................................... 29 Section 12.7 Governing Law............................................ 29 Section 12.8 Assignment............................................... 29 Section 12.9 No Third Party Beneficiaries............................. 29 ii |
Section 12.10 Further Assurances....................................... 30 Section 12.11 Severability............................................. 30 Section 12.12 Remedies Cumulative...................................... 30 Section 12.13 Entire Understanding..................................... 30 Section 12.14 Consent to Jurisdiction and Service of Process........... 30 Section 12.15 Waiver of Jury Trial..................................... 30 Exhibit A - List of 3ECW Partners Exhibit B - Investor Agreement Exhibit C - Registration Rights Agreement Exhibit D - Title Commitment Exhibit E - Tax Reporting Agreement Exhibit F - Assignment of Partnership Interest Exhibit G - Existing Mortgages |
CONTRIBUTION AGREEMENT
WHEREAS, this Agreement is hereby executed, and the transactions described herein are being consummated concurrently with certain other transactions, pursuant to (and in accordance with) that certain Master Transaction Agreement dated as of September 28, 1998, by and among The Prudential Insurance Company of America, PIC Realty Corporation, certain persons listed on Exhibit A attached thereto, ECIP, 3ECW, Fedmark Corporation, Pacific Property Services, L.P., Investor and Public Company (the "TRANSACTION AGREEMENT") (all initially capitalized terms used herein without definition shall have the meanings given such terms in the Transaction Agreement);
WHEREAS, the 3ECW Partners own, collectively, all of the interests in 3ECW (other than those owned by Prudential) listed on Exhibit A attached hereto , and the 3ECW Partners desire to contribute to Investor their respective partnership interests in 3ECW as listed on Exhibit A solely in exchange for Investor Preferred Units (as defined below), all on the terms and conditions described herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
"BUILDING MAXIMUM LIABILITY AMOUNT" has the meaning set forth in
"BUSINESS DAY" means any day of the year other than Saturday, Sunday or any other day on which banks located in Boston, Massachusetts are authorized to close for business.
"3ECW" has the meaning given such term in the Introductory Paragraph.
"3ECW BUILDING" means the building commonly known as Embarcadero Center West, having an address at 275 Battery Street, San Francisco, California.
"3ECW EXISTING DEBT BALANCE" shall mean the total unpaid balance (including all principal and accrued and unpaid interest) of all Existing Mortgages secured by 3ECW on the Closing Date and the Three ECW Swap Notes and the Three ECW I/P Loans.
"3ECW PARTIES" " has the meaning given such term in the Introductory Paragraph.
"EXISTING MORTGAGES" means those certain mortgages described on Exhibit G annexed hereto.
"HAZARDOUS MATERIALS" means any substance, chemical, waste or material that is or becomes regulated by any federal, state or local governmental authority because of its toxicity, infectiousness, radioactivity, explosiveness, ignitability, corrosiveness or reactivity, including, without limitation, asbestos or any substance containing more than O.1 percent asbestos, the group of compounds known as polychlorinated byphenyls, flammable explosives, oil, petroleum or other refined petroleum product.
"INVESTOR" has the meaning given such term in the Introductory Paragraph.
"INVESTOR AGREEMENT" has the meaning given such term in the preamble.
"INVESTOR PREFERRED UNITS" means the Series Two Preferred Units as set forth in the Investor Agreement.
"PERMITTED EXCEPTIONS" means the Permitted Exceptions as defined in the Transaction Agreement pertain to the Building owned by 3ECW.
"PROPERTY" means the 3ECW Partners' partnership interests in 3ECW as reflected in the 3ECW Partnership Agreement as of the date of the Transaction Agreement.
"PUBLIC COMPANY" has the meaning given such term in the Introductory Paragraph.
"PUBLIC COMPANY KNOWLEDGE PARTIES" has the meaning set forth in
"REGISTRATION RIGHTS AGREEMENT" has the meaning given such term in the preamble.
"SECURITIES" means, as applicable, the Shares, and the Investor Preferred Units that may be issued pursuant to the Investor Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of the Public Company's common stock, $0.01 par value per share.
"TAX RETURN" means any return, report or other document or information required to be supplied to a taxing authority in connection with Taxes.
"TAXES" means all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, excise, property, sales, withholding, social security, occupation, use, service, license, payroll, franchise, transfer and recording taxes, fees and charges, imposed by the United States, or any state, local or foreign government or subdivision or agency thereof, whether computed on a separate, consolidated, unitary, combined or any other basis; and such terms shall include any interest, fines, penalties or additional amounts attributable to or imposed on or with respect to any such taxes, charges, fees, levies or other assessments.
"TRANSACTION AGREEMENT" has the meaning given such term in the preamble.
ARTICLE III
has had an opportunity to conduct a thorough review, investigation, and inspection of the physical (including, without limitation, the seismic load bearing capabilities), environmental, economic, and legal conditions of the 3ECW Building, the laws, regulations, covenants, conditions, and restrictions affecting or governing the use or operation of 3ECW, the 3ECW Building, or the Property, the rentable square footage of the 3ECW Building, and all other matters which a prudent buyer of partnership interests in a partnership that owns directly or indirectly commercial real property should review, inspect or investigate in the course of a due diligence review, and Investor and Public Company has each approved the condition of 3ECW, the 3ECW Building, and the Property and the results of such review, inspection and investigation.
(i) INVESTOR AND PUBLIC COMPANY EACH HEREBY ASSUMES ALL
RISKS WITH RESPECT TO THE PROPERTY (AND ITS RESULTING INTEREST IN THE
3ECW BUILDING), KNOWN AND UNKNOWN, SUSPECTED AND UNSUSPECTED,
EXCEPTING ONLY THE EXCLUDED LIABILITIES (AS DEFINED IN SECTION 3.2 (b)
(ii) BELOW). EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION
3.2(b)(ii) BELOW WITH RESPECT TO EXCLUDED LIABILITIES AND SECTION
3.2(b)(iii) BELOW WITH RESPECT TO THE 3ECW PARTIES' WARRANTIES,
INVESTOR, PUBLIC COMPANY AND THEIR AGENTS, EMPLOYEES, AFFILIATES,
SUCCESSORS AND ASSIGNS (COLLECTIVELY, "TRANSFEREE PARTIES"), SHALL BE
SOLELY LIABLE FOR, AND SHALL INDEMNIFY, DEFEND, PROTECT AND HOLD
HARMLESS THE 3ECW PARTIES FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF
ACTION, LOSSES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) AT LAW OR IN EQUITY, KNOWN OR UNKNOWN, SUSPECTED OR
UNSUSPECTED, RELATING TO BODILY INJURY, DEATH, PROPERTY DAMAGE,
ECONOMIC LOSS, OR OTHER DAMAGES SUFFERED BY ANY OF THE 3ECW PARTIES
ARISING OUT OF OR RELATING TO THE PROPERTY AND/OR THE 3ECW BUILDING ,
INCLUDING, WITHOUT LIMITATION, THE PHYSICAL, ENVIRONMENTAL, ECONOMIC,
LEGAL OR OTHER CONDITION OF THE 3ECW BUILDING, INCLUDING, WITHOUT
LIMITATION, ANY SUCH CLAIMS OR LIABILITIES RELATING TO THE PRESENCE,
DISCOVERY OR REMOVAL OF ANY HAZARDOUS MATERIALS IN, AT, ABOUT OR UNDER
THE 3ECW BUILDING, OR FOR, CONNECTED WITH OR ARISING AFTER THE DATE
HEREOF OUT OF ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON CERCLA
(COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT
OF 1980, 42 U.S.C. (S)(S)9601 ET SEQ., AS AMENDED BY SARA [SUPERFUND
AMENDMENT AND REAUTHORIZATION ACT OF 1986] AND AS MAY BE FURTHER
AMENDED FROM TIME TO TIME), THE RESOURCE CONSERVATION AND RECOVERY ACT
OF 1976, 42 U.S.C. (S)(S)6901 ET SEQ., OR ANY RELATED CLAIMS OR CAUSES
OF ACTION OR ANY OTHER FEDERAL OR STATE BASED STATUTORY OR REGULATORY
CAUSES OF ACTION FOR ENVIRONMENTAL CONTAMINATION AT, IN OR UNDER THE
3ECW BUILDING (HEREINAFTER "TRANSFEREE PARTY-COVERED CLAIMS").
(ii) NOTWITHSTANDING THE FOREGOING, THE TERM "TRANSFEREE PARTY COVERED CLAIMS' SHALL EXCLUDE, AND INVESTOR SHALL NOT ASSUME, ANY AND ALL OBLIGATIONS
AND LIABILITIES ("EXCLUDED LIABILITIES') ARISING FROM OR IN CONNECTION WITH THE USE, OWNERSHIP OR OPERATION OF THE PROPERTY AND/OR 3ECW BUILDING ACCRUING PRIOR TO THE CLOSING DATE OTHER THAN (A) OBLIGATIONS AND LIABILITIES ASSUMED IN WRITING BY INVESTOR AND PUBLIC COMPANY IN CONNECTION WITH THE LEASES AND/OR CONTRACTS AND ALL OTHER OBLIGATIONS AND LIABILITIES THAT THE INVESTOR EXPRESSLY ASSUMES IN WRITING AT OR PRIOR TO THE CLOSING, (B) OBLIGATIONS AND LIABILITIES FOR WHICH INVESTOR HAS RECEIVED A PRORATION CREDIT PURSUANT TO EXHIBIT V OF THE TRANSACTION AGREEMENT, AND (C) OBLIGATIONS AND LIABILITIES RELATING IN ANY WAY TO THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE 3ECW BUILDING OTHER THAN ANY CLAIMS MADE BY ,OR CAUSES OF ACTION BROUGHT BY, ANY THIRD PARTY UNRELATED TO INVESTOR OR PUBLIC COMPANY OR ANY OF THEIR AFFILIATES WHERE THE INJURY OR DAMAGE GIVING RISE TO SUCH CLAIM OR CAUSE OF ACTION AROSE OR OCCURRED DURING THE PERIOD PRIOR TO THE CLOSING DATE.
(ii) TRANSFEREE PARTIES EACH HEREBY GENERALLY AND FULLY RELEASE THE 3ECW PARTIES FROM ANY AND ALL STATEMENTS OR OPINIONS HERETOFORE MADE, OR INFORMATION FURNISHED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, BY THE 3ECW PARTIES TO ANY OF THE TRANSFEREE PARTIES, EXCEPT FOR THE 3ECW PARTNERS' WARRANTIES; AND FROM ANY AND ALL TRANSFEREE PARTY-COVERED CLAIMS, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED.
WITH RESPECT TO THE RELEASES AND WAIVERS CONTAINED IN THIS
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
INVESTOR AND PUBLIC COMPANY HAS EACH BEEN ADVISED BY ITS
LEGAL COUNSEL AND UNDERSTANDS THE SIGNIFICANCE OF THIS WAIVER OF
SECTION 1542 RELATING TO UNKNOWN, UNSUSPECTED AND CONCEALED CLAIMS.
BY ITS
(iv) NOTWITHSTANDING THE FOREGOING, THE 3ECW PARTNERS SHALL BE SOLELY LIABLE FOR, AND SHALL INDEMNIFY, DEFEND (AND CONTROL THE RESOLUTION OF ), PROTECT AND HOLD HARMLESS INVESTOR AND PUBLIC COMPANY FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEY'S FEES) AT LAW OR IN EQUITY, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, RELATING TO BODILY INJURY, DEATH, PROPERTY DAMAGE, ECONOMIC LOSS, OR OTHER DAMAGES SUFFERED BY 3ECW OR THE PROPERTY ARISING OUT OF OR RELATING TO THE EXCLUDED LIABILITIES.
ARTICLE IV
(A) The execution and delivery of this Agreement and the other documents to be executed by 3ECW in connection herewith, and the consummation of the transactions described in this Agreement and such documents do not require, to the knowledge of 3ECW, the consent or approval of any governmental authority, nor to 3ECW's knowledge does the execution and delivery of this Agreement and the other documents to be executed by 3ECW in connection herewith violate, in any way material to the transactions described herein, any contract or agreement to which 3ECW is a party or (to the knowledge of 3ECW) any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to 3ECW, and this Agreement and all documents to be executed by 3ECW in connection with the transactions described herein constitute the legal, valid and binding obligations of 3ECW.
(B) To 3ECW's knowledge, 3ECW is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage (other than the Existing Mortgages), debenture, note or other instrument under the terms of which performance by 3ECW in accordance with the terms and provisions of this Agreement will be a default or an event of acceleration, or grounds for termination, and whereby such default, acceleration or termination would reasonably be expected to have a material adverse effect on the timely performance by 3ECW under this Agreement and the other documents to be executed by 3ECW in connection herewith, nor does
the execution of this Agreement or the other documents to be executed by 3ECW in connection herewith, or the consummation of the transactions contemplated hereby and thereby, violate the partnership agreement of 3ECW or constitute a breach thereunder.
(C) 3ECW has no employees.
ARTICLE V
(A) Such 3ECW Partner is, if it is other than an individual, duly organized or formed, is validly existing and is in good standing under the laws of its jurisdiction of organization, and is qualified to do business and in good standing in all jurisdictions where such qualification is necessary to carry on its business as now conducted, except where the failure to so qualify would not have a material adverse effect on the ability of such 3ECW Partner to perform its obligations under this Agreement.
(B) Such 3ECW Partner has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.
(C) Such 3ECW Partner has, and will contribute to Investor at the Closing, full, unencumbered title to its interest in 3ECW delivered concurrently herewith.
(D) The execution, delivery and performance by such 3ECW Partner of this Agreement has been duly and validly approved by all necessary partnership, corporate or other applicable action and no other actions or proceedings on the part of such 3ECW Partner or its shareholders, partners or other 3ECW Partners, are necessary to authorize this Agreement and the transactions contemplated hereby and thereby. No consent, waiver, approval, or authorization of, or filing, registration, or qualification with, or notice to, any governmental instrumentality or any other Person (including, without limitation, the other 3ECW Partners) is required to be made, obtained, or given in connection with the execution, delivery, and performance of this Agreement by such
3ECW Partner, except where the failure to do so would not have a material adverse effect on such execution, delivery or performance. This Agreement constitutes, and any other documents to be executed by such 3ECW Partner pursuant to this Agreement when executed will constitute, legal, valid and binding obligations of such 3ECW Partner, enforceable against such 3ECW Partner in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies.
(E) The execution and delivery of this Agreement, and the performance by such 3ECW Partner under this Agreement, do not and will not conflict with or result in a breach of (with or without the passage of time or notice or both) the terms of any of such 3ECW Partner's constituent documents (if any), any judgment, order or decree of any governmental authority binding on such 3ECW Partner, and, to such 3ECW Partner's knowledge, do not breach or violate any applicable law, rule or regulation of any governmental authority. Except as may be provided in the Existing Mortgages, the execution, delivery and performance by such 3ECW Partner under this Agreement will not result in a breach or violation of (with or without the passage of time or notice or both) the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, the partnership agreement of 3ECW or any other agreement or instrument to which such 3ECW Partners is a party or by which such 3ECW Partner is bound.
(F) Such 3ECW Partner, if other than an individual, is organized and, to such 3ECW Partner's knowledge, has conducted its business in accordance with all applicable laws, to the extent applicable, the failure or the violation of which could reasonably be expected to have a material adverse effect on the ability of such 3ECW Partner, in its individual capacity, to execute, deliver or perform under this Agreement or to consummate the transactions contemplated hereby.
Investor Preferred Units (and the Shares that may be issued in lieu of redemption thereof). The Securities shall, if represented by certificates, contain a prominent legend with respect to the foregoing restrictions. Such 3ECW Partner represents and warrants that he, she or it is an "accredited investor" as such term is defined in Rule 501 under the Securities Act.
ARTICLE VI
(A) Public Company is organized and, to Public Company's knowledge, has conducted its business in accordance with applicable laws, to the extent applicable, the failure or the violation of which could reasonably be expected to have a material adverse effect on the results of operations of the Public Company.
(B) There are no actions, suits or proceedings pending and, to Public Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or others, which would reasonably be expected to either (i) question the validity of this Agreement or the consummation of the transactions contemplated hereby, the issuance of the Shares (including the Shares that may be issued in lieu of redemption of Investor Preferred Units), any other agreements contemplated hereby or any actions taken pursuant to any of the foregoing or (ii) result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, management or business prospects of Public Company. As of the date hereof, there is no action or suit against Public Company pending or threatened by any Person which would reasonably be expected to have a material and adverse effect on Public Company.
(C) The Public Company has filed with the Securities and Exchange Commission (the "Commission") all reports required by the Exchange Act to be filed by the Company (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the "SEC Documents"). As of their respective filing dates (or if amended, revised or superseded by a subsequent filing with the Commission, then on the date of such subsequent filing), the SEC Documents complied in all material respects with the requirements of the Securities Act or the exchange Act, as the case may be, and none of the SEC Documents (including any and all financial statements included therein) as of such dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The consolidated financial statements of Public Company included in all SEC Documents, including any amendments thereto, comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto. Since the most recently filed SEC Document, there has not occurred or arisen any change in or event affecting Public Company that has had or would reasonably be expected to have a material adverse effect on the results of operations of Public Company.
(D) No proceeding or other action has been commenced or undertaken relating to the dissolution or merger of Public Company and none is presently contemplated except that this representation shall not apply to any merger of another entity with and into Public Company that meets the criteria of Section 251(f) of the Delaware General Corporation Law for consummating a merger without a vote of stockholders.
(E) As of the date of this Agreement, the authorized capital securities of Public Company consists of Preferred Stock, $.01 par value, 50,000,000 Shares authorized, none issued or outstanding, Excess Stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding, and 250,000,000 Shares of common stock, $0.01 par value per share, of which 63,526,785 Shares are currently issued and outstanding. Except as contemplated pursuant to this Agreement, and except for (i) any Shares that may be issued in lieu of redemption of outstanding units of limited partnership in Investor and (ii) any Shares or units of limited partnership in Investor which may be issued in accordance with agreements that have been described in or filed with the SEC Filings or otherwise disclosed on Schedule 6.3(e), there are no securities convertible or exchangeable for Shares or any rights or options to subscribe for or purchase any Shares or securities convertible or exchangeable for Shares. All of the outstanding Shares have been duly and validly authorized and issued and are fully paid and non-assessable. All of the outstanding Shares have been issued in compliance with all applicable federal and state securities laws.
(F) The Shares (including the Shares issuable upon exchange of Investor Preferred Units) issuable hereunder, when issued in accordance with the provisions of this Agreement and the Investor Agreement, will be duly and validly
authorized and issued and will be fully paid and non-assessable. Neither
Public Company, Investor nor any person acting on their behalf has taken or
will take any action which would subject the issuance of the Investor
Preferred Units to the 3ECW Partners to the registration requirements of
Section 5 of the Securities Act.
(H) Public Company has duly and timely filed with the appropriate governmental authorities all Tax Returns required to be filed by it for all periods ending on or prior to the Closing Date, except to the extent of any Tax Return for which an extension of time for filing has been properly filed. Each such Tax Return is true and correct in all material respects. All Taxes owed by Public Company have been paid (whether or not shown on a Tax Return). All Taxes which Public Company is required by law to withhold or collect, including, without limitation, Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper governmental authorities or are held in separate bank accounts for such purpose. There are no liens for Taxes upon the assets of Public Company except for statutory liens for Taxes not yet due.
(I) Public Company has not filed for an extension of a statute of limitations with respect to any Taxes and no governmental authorities have requested an extension of the statute of limitations with respect to any Taxes. Public Company is not a party to any pending action or any formal or informal proceeding by any taxing authority for a deficiency, assessment or collection of Taxes, and no claim of any deficiency, assessment or collection of Taxes has been asserted or, to the knowledge of Public Company, threatened against it, including claims by any taxing authority in a jurisdiction where Public Company does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.
(J) Public Company is organized and has operated from its commencement through the date hereof in such a manner so as to qualify for taxation as a real estate investment trust under the Code, and Public Company intends to operate in such a manner so as to qualify and to continue to so qualify as a real estate investment trust.
(K) Public Company does not hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101.
(A) Public Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is (or prior to the Closing will be) duly qualified and in good standing as a foreign corporation under the laws of the State of California, and has all necessary power, corporate and otherwise, to execute and deliver this Agreement and all other documents and instruments to be executed and delivered by Public Company in connection herewith and to perform all its obligations hereunder and thereunder. This Agreement has been duly authorized by all requisite corporate action on the part of Public Company. The execution and delivery of this Agreement and the other documents and instruments to be executed and delivered by Public Company in connection with the transactions described herein, and the consummation of the transactions contemplated hereby and thereby, do not require the consent or approval of the shareholders of Public Company or, to the knowledge of Public Company, the consent or approval of any governmental authority, nor, to the knowledge of Public Company, does the execution and delivery of this Agreement violate, in any way material to the transactions contemplated hereby, any contract or agreement to which Public Company is a party or any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to Public Company, and this Agreement and all documents and other instruments to be executed and delivered by Public Company in connection herewith constitute the legal, valid and binding obligations of Public Company.
(B) Public Company is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by Public Company according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Public Company, according to the terms of this Agreement, may be prohibited, prevented or delayed.
ARTICLE VII
(A) Investor is organized and, to Investor's knowledge, has conducted its business in accordance with all applicable laws, to the extent applicable, the failure or the violation of which would reasonably be expected to have a material adverse effect on the results of operations of Investor.
(B) There are no actions, suits or proceedings pending and, to Investor's knowledge, no such proceedings are threatened or contemplated by governmental authorities or by others, which would reasonably be expected to either (i) question the validity of this Agreement or the consummation of the transactions contemplated hereby or the issuance of the Investor Preferred Units contemplated hereby, any other agreements contemplated hereby or any actions taken pursuant to any of the foregoing or (ii) result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, management or business prospects of Investor. As of the date hereof, there is no material action or suit against Investor pending or threatened by any Person.
(C) No proceeding or other action has been commenced or undertaken relating to the dissolution or merger of Investor (except in connection with an acquisition of property for Units in which Investor is the surviving party in the merger) and none is presently contemplated.
(D) Investor has duly and timely filed with the appropriate governmental authorities all Tax Returns required to be filed by it for all periods ending on or prior to the Closing Date, except to the extent of any Tax Return for which an extension of time for filing has been properly filed. Each such Tax Return is true and correct in all material respects. All Taxes owed by Investor have been paid (whether or not shown on a Tax Return). All Taxes which Investor is required by law to withhold or collect, including, without limitation, Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper governmental authorities or are held in separate bank accounts for such purpose. There are no liens for Taxes upon the assets of Investor except for statutory liens for Taxes not yet due.
(E) Investor has not filed for an extension of a statute of limitations with respect to any Taxes and no governmental authorities have requested an extension of the statute of limitations with respect to any Taxes. Investor is not a party to any pending action or any formal or informal proceeding by any taxing authority for a deficiency, assessment or collection of Taxes, and no claim of any deficiency, assessment or collection of Taxes has been asserted or, to the knowledge of Investor, threatened against
it, including claims by any taxing authority in a jurisdiction where Investor does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.
(F) Investor is not, and will not become, a "publicly traded partnership" within the meaning of Section 7704 of the Code.
(G) Investor does not hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101.
ARTICLE VIII
ARTICLE IX
COVENANTS
(A) As used herein, "CONFIDENTIAL MATERIAL" means, with respect to any party hereto (the "PROVIDING PARTY"), all information, whether oral, written or otherwise, furnished to another party hereto (the "RECEIVING PARTY") or the Receiving Party's directors, officers, partners, Affiliates, employees or agents, or their respective representatives (collectively, "REPRESENTATIVES"), by the Providing Party and all reports, analyses, compilations, studies and other material prepared by the Receiving Party or its Representatives (in whatever form maintained, whether documentary, computer storage or otherwise) containing, reflecting or based upon, in whole or in part, any such information. The term "CONFIDENTIAL MATERIAL" does not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party, its Representatives or anyone to whom the Receiving Party or any of its Representatives transmit any Confidential Material in violation of this Agreement or (ii) is or becomes known or available to the Receiving Party on a nonconfidential basis from a source (other than the Providing Party or one of its Representatives) who is not, to the knowledge of the Receiving Party, prohibited from transmitting the information to the Receiving Party or its Representatives by a contractual, legal, fiduciary or other obligation.
respective representatives, provided that, prior to disclosing such information to such Persons, as the case may be, it advises such Persons of the confidential nature of such Confidential Information and causes to be affixed to such Confidential Information and requires that such Information be used only for the purposes specified by the parties hereto in connection with the transaction contemplated by this Agreement and/or the Transaction Agreement. In any event, the Receiving Party will be responsible for any actions by its Representatives (and any other Person to whom such Confidential Material is conveyed in accordance with the provisions hereof) which are not in accordance with the provisions hereof.
(C) In the event that the Receiving Party, its Representatives or anyone to whom the Receiving Party or its Representatives supply the Confidential Material are requested (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, any informal or formal investigation by any government or governmental agency or authority or otherwise in connection with legal process) to disclose any Confidential Material, the Receiving Party agrees (i) to immediately notify the Providing Party of the existence, terms and circumstances surrounding such a request, (ii) to consult with the Providing Party on the advisability of taking legally available steps to resist or narrow such request, and (iii) if disclosure of such information is required, to furnish only that portion of the Confidential Material which, in the opinion of the Receiving Party's counsel, the Receiving Party is legally compelled to disclose and to cooperate with any action by the Providing Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Material (it being agreed that the Providing Party shall reimburse the Receiving Party for all reasonable out- of-pocket expenses incurred by the Receiving Party in connection with such cooperation).
(D) In the event of the termination of this Agreement in accordance with its terms, promptly upon request from the Providing Party, the Receiving Party shall, except to the extent prohibited by applicable laws, regulations or legal process, redeliver to the Providing Party or destroy all tangible Confidential Material and will not retain any copies, extracts or other reproductions thereof in whole or in part. Any such destruction shall be certified in writing to the Providing Party by an authorized officer of the Receiving Party supervising the same.
ARTICLE X
(ii) A Foreign Investment in Real Property Tax Act affidavit executed by each 3ECW Partner (it being understood that if any 3ECW Partner shall fail to provide the necessary affidavit and/or documentation, Public Company may proceed with withholding provision as provided by law);
(iv) Evidence of the organization (if other than an individual), existence (if other than an individual) and authority of each 3ECW Partner to enter into this Agreement and to consummate the transactions contemplated hereby, certified by an appropriate officer or partners (if other than an individual) (together with an incumbency and signature certificate regarding the Person signing);
(v) The Investor Agreement executed by each 3ECW Partner;
(vi) The Registration Rights Agreement executed by each 3ECW Partner;
(vii) Additional documents, to the extent consistent with the provisions of this Agreement, that Investor, Public Company or the Title Company may reasonably request for the consummation of the transactions contemplated by this Agreement.
(viii) a Representation Letter in the form attached hereto as Schedule 10.1(b)(ix) executed by each 3ECW Partner (of his or her duly authorized attorney-in-fact as evidenced by a copy of the relevant power of attorney attached thereto) indicating thereon that such 3ECW Partner is an "accredited investor."
(i) Evidence of the organization, existence and authority of Public Company and Investor to enter into this Agreement and to consummate the transactions contemplated hereby, certified by an appropriate officer of Public Company or Investor, as appropriate (together with an incumbency and signature certificate regarding the officer(s) signing on their behalf);
(ii) The Registration Rights Agreement executed by Public Company;
(v) Public Company and Investor shall deliver any additional documents, to the extent consistent with the provisions of this Agreement, that the other parties or the Title Company may reasonably request for the consummation of the transactions contemplated by this Agreement.
(vi) Public Company shall deliver evidence reasonably satisfactory to Rockmark Corporation that Richard E. Salomon has been duly elected or appointed as a member of Public Company's Board of Directors.
ARTICLE XI
(A) In the event of any claim, suit or other action against any of the 3ECW Partners pertaining to (a) this Agreement, any of the documents executed in connection herewith or any of the transactions contemplated hereby or thereby (including, without limitation, any and all indemnification obligations of any of the 3ECW Partners hereunder or thereunder) or (b) a breach by any of the 3ECW Partners of any of the terms or provisions of this Agreement or of any of the documents executed by the 3ECW Partners in connection with the matters contemplated in this Agreement (including, without limitation, the breach of any representation or warranty of the 3ECW Partners set forth herein or therein), Investor's and Public Company's sole remedy shall be an action for monetary damages;
(B) Except as provided in the last sentence of paragraph (b), Investor's and Public Company's sole recourse against the 3ECW Partners, individually and/or as a group, for liability assumed by, and for any indemnity of or breach of representation or warranty made by any of the 3ECW Partners shall be limited to the recovery by Investor
(C) Investor shall promptly give Rockmark Corporation, as representative of the 3ECW Partners, notice of any claim made by any third party which would reasonably be expected to result in liability of the 3ECW Partners in respect of a breach of a representation made by them in this Agreement or otherwise and shall give the 3ECW Partners, acting through Rockmark Corporation as their attorney in fact, the opportunity to cure any alleged claim and to defend against and settle all such claims at their sole cost. The failure to give such notice, however, shall not relieve any 3ECW Partners of any liabilities hereunder to the extent that it is not materially prejudiced as a result thereof.
ARTICLE XII
(A) If to Public Company or Investor, addressed as follows:
Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel Facsimile: 617-421-1555 Telephone: 617-859-2600
with a copy to
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile: 617-574-4112
Telephone: 617-482-1776
(B) If to 3ECW or the 3ECW Partners, addressed as follows:
Fedmark Corporation
30 Rockefeller Plaza, Room 5600
New York, New York 10112
Attention: Richard E. Salomon Telephone: (212) 903-1204 Facsimile: (212) 424-1806
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attention: Bruce M. Montgomerie Telephone: (212) 728-8248 Facsimile: (212) 728-8111
or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.
already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
BOSTON PROPERTIES, INC.,
a Delaware corporation
By: /s/ Thomas J. O'Connor ------------------------------------- Name: Thomas J. O'Connor Title: Vice President |
BOSTON PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
its general partner
By: /s/ Thomas J. O'Connor ------------------------------------- By: /s/ William S. Wedge ------------------------------------- Name: William S. Wedge Title: Senior Vice President |
THREE EMBARCADERO CENTER WEST
By: FEDMARK CORPORATION,
its General Partner
By: /s/ Richard E. Salomon ------------------------------------- Name: Richard E. Salomon Title: President |
FEDMARK CORPORATION
By: /s/ Richard E. Salomon ------------------------------------- Name: Richard E. Salomon Title: President |
ECW INVESTOR ASSOCIATES
By: Rockmark Corporation, attorney-in-fact
By: /s/ Richard E. Salomon ------------------------------------- Name: Richard E. Salomon Title: President |
EC HOLIDNGS, INC.
By: /s/ [Signature Illegible] ------------------------------------- Name: Richard E. Salomon Title: President |
REALROCK I
By: Rockmark Corporation, attorney-in-fact
By: /s/ Richard E. Salomon ------------------------------------- Name: Richard E. Salomon Title: President |
David Rockefeller
By: Rockmark Corporation, attorney-in-fact
By: /s/ Richard E. Salomon ------------------------------------- Name: Richard E. Salomon Title: President |
DR. & DESCENDANTS PARTNERSHIP
By: Rockmark Corporation, attorney-in-fact
By: /s/ Richard E. Salomon ------------------------------------- Name: Richard E. Salomon Title: President |
One Embarcadero Center Venture
By: PIC REALTY CORPORATION,
a Delaware corporation
By: /s/ Gary L. Frazier ----------------------------------- Name: ----------------------------------- Title: ----------------------------------- |
EMBARCADERO CENTER INVESTORS PARTNERSHIP,
a California limited partnership
By: ROCKMARK CORPORATION,
a Delaware corporation,
its Managing General Partner
By: /s/ Richard E. Salomon ----------------------------------- Name: Richard E. Salomon Title: President |
Three Embarcadero Center Venture
By: THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA,
a New Jersey corporation
By: /s/ Gary L. Frazier ----------------------------------- Name: ----------------------------------- Title: ----------------------------------- |
EMBARCADERO CENTER INVESTORS PARTNERSHIP,
a California limited partnership
By: ROCKMARK CORPORATION,
a Delaware corporation,
its Managing General Partner
By: /s/ Richard E. Salomon ---------------------------------- Name: Richard E. Salomon Title: President |
Four Embarcadero Center Venture
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: /s/ Gary L. Frazier ---------------------------------- Name: ---------------------------------- Title: ---------------------------------- |
EMBARCADERO CENTER INVESTORS PARTNERSHIP,
a California limited partnership
By: ROCKMARK CORPORATION,
a Delaware corporation,
its Managing General Partner
By: /s/ Richard E. Salomon ---------------------------------- Name: Richard E. Salomon Title: President |
ECW CLAYMARK INVESTORS
By: Rockmark Corporation, attorney-in-fact
Name: Richard E. Salomon
Title: President
WR TRUST
By: Rockmark Corporation, attorney-in-fact
Name: Richard E. Salomon
Title: President
PORTMAN FAMILY TRUST
By: /s/ John C. Portman III ---------------------------- Name: Title: By: /s/ John C. Portman, Jr. ---------------------------- By: /s/ Joan N. Portman ---------------------------- |
EXHIBIT 99.4
THREE ECW REDEMPTION AGREEMENT
THIS THREE ECW REDEMPTION AGREEMENT (this "AGREEMENT") is made and entered into as of this 12th day of November, 1998, by and among THREE EMBARCADERO CENTER WEST, a California limited partnership (the "PARTNERSHIP"), BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership ("INVESTOR"), BP EC WEST LLC, a Delaware limited liability company ("BPECW LLC"), THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL"), PIC REALTY CORPORATION, a Delaware corporation ("PIC"), and PRUDENTIAL REALTY SECURITIES II, INC., a Delaware corporation ("PRS"). Prudential, PIC and PRS shall sometimes hereinafter be collectively referred to as the "PRUDENTIAL PARTNERS".
A. Pursuant to that certain Master Transaction Agreement dated as of September 28, 1998, by and among Investor, Boston Properties, Inc., Prudential, PIC, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P. and those Persons listed on Exhibit A-1 attached thereto (the "MASTER TRANSACTION AGREEMENT"), and immediately prior to the execution of this Agreement, the ECW Rockefeller Parties contributed their respective partnership interests in and to the Partnership to BPECW LLC, as Investor's designee for receiving title to the interests of the Rockefeller Parties, in exchange for OP Units, such ECW Rockefeller Parties withdrew as partners from the Partnership, and BPECW LLC was admitted as a general and limited partner of the Partnership. All initially capitalized terms used herein without definition shall have the respective meanings given such terms in the Master Transaction Agreement.
C. The Partnership is currently governed by those certain Second Amended and Restated Articles of Limited Partnership of Three Embarcadero Center West dated as of January 9, 1989, by and among Fedmark, Prudential and those parties listed on Exhibit A thereto (as amended, modified or supplemented, the "PARTNERSHIP AGREEMENT").
D. The Existing Partners desire to enter into this Agreement whereby BPECW LLC's entire 1% general partnership interest and 36.9167% limited partnership interest in and to
the Partnership (including all right, title and interest of BPECW LLC in and to the Partnership to the extent relating to such percentage interests) (collectively, the "BPECW LLC INTEREST") will be redeemed by the Partnership in exchange for an undivided 37.9167% tenancy-in-common interest in and to the Property (defined below) on the terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
"BPECW LLC" shall have the meaning given such term in the Introductory Paragraph.
"INVESTOR" shall have the meaning given such term in the Introductory Paragraph.
"PARTNERSHIP" shall have the meaning given such term in the Introductory Paragraph.
"PRUDENTIAL" shall have the meaning given such term in the Introductory Paragraph.
"PRUDENTIAL PARTNERS" shall have the meaning given such term in the Introductory Paragraph.
"PIC" shall have the meaning given such term in the Introductory Paragraph.
"PRS" shall have the meaning given such term in the Introductory Paragraph.
ARTICLE 2
ARTICLE 3
ARTICLE 4
4.2.1 The execution and delivery of this Agreement and the other documents to be executed by the Partnership and/or the Prudential Partners in connection herewith, and the consummation of the transactions described in this Agreement and such documents do not require, to the knowledge of the Prudential Partners, the consent or approval of any governmental authority, nor to the Prudential Partners' knowledge does the execution and delivery of this Agreement and the other documents to be executed by the Partnership and/or the Prudential Partners in connection herewith violate, in any way material to the transactions described herein, any contract or agreement to which the Partnership or any such Prudential Partner is a party or (to the knowledge of the Prudential Partners) any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to the Partnership or any Prudential Partner, and this Agreement and all documents to be executed by the Partnership and/or any Prudential Partner in connection
with the transactions described herein constitute the legal, valid and binding obligations of such Person. To the knowledge of the Prudential Partners, none of the Partnership or any Prudential Partner is a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage (other than with respect to the Existing Mortgage Loans, ECW Swap Notes and Three ECW I/P Loans), debenture, note or other instrument under the terms of which performance by such Person in accordance with the terms and provisions of this Agreement will be a default or an event of acceleration, or grounds for termination, and whereby such default, acceleration or termination would reasonably be expected to have a material adverse effect on the timely performance by the Partnership or the Prudential Partners of their respective obligations under this Agreement and the other documents to be executed by any such Person in connection herewith, nor does the execution of this Agreement or the other documents to be executed by the Partnership in connection herewith, or the consummation of the transactions contemplated hereby and thereby, violate the Partnership Agreement or constitute a breach thereunder.
4.2.2 The Partnership is a limited partnership duly formed and existing under the laws of the State of California and is not insolvent, and has all necessary power and authority to execute and deliver this Agreement and all documents executed by it in connection herewith and to perform all its obligations hereunder and thereunder. This Agreement has been duly authorized by all requisite partnership action on the part of the Partnership. The Partnership is not a Person other than a United States Person within the meaning of the Code and the transactions contemplated herein are not subject to the withholding provisions of section 3406 or subchapter A of Chapter 3 of the Code.
ARTICLE 5
all its obligations hereunder and thereunder, (ii) this Agreement has been duly authorized by all requisite partnership action on the part of Investor, (iii) the execution and delivery of this Agreement and the other documents and instruments to be executed and delivered by Investor in connection with the transactions described herein, and the consummation of the transactions contemplated hereby and thereby, do not require the consent or approval of the partners of Investor or, to the knowledge of Investor, the consent or approval of any governmental authority, nor, to the knowledge of Investor, does the execution and delivery of this Agreement violate, in any way material to the transactions contemplated hereby, any contract or agreement to which Investor is a party or any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to Investor, (iv) this Agreement and all documents and other instruments to be executed and delivered by Investor in connection herewith constitute the legal, valid and binding obligations of Investor, (v) Investor is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by Investor according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Investor, according to the terms of this Agreement, may be prohibited, prevented or delayed, and (vi) BPECW LLC is a limited liability company duly organized and existing under the laws of the State of Delaware and Investor is the sole member of BPECW LLC.
ARTICLE 6
ARTICLE 7
ARTICLE 8
ARTICLE 9
9.4 If to BPECW LLC or Investor, addressed as follows:
Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile: 617-421-1555
with a copy to:
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile: 617-574-4112
9.4 If to the Partnership or the Prudential Partners, addressed as follows:
Prudential Realty Group
8 Campus Drive
4th Floor - Arbor Circle South
Parsippany, New Jersey 07054
Attention: John R. Triece
Facsimile: (201) 683-1797
with a copy to:
The Prudential Insurance Company
of America
c/o Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, California 94111
Attention: Harry Mixon, Esq.
Facsimile: (415) 956-2197
and a copy to:
O'Melveny & Myers LLP
Embarcadero Center West
275 Battery Street
San Francisco, California 94111
Attention: Stephen A. Cowan, Esq.
Facsimile: (415) 984-8701
or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.
common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
PARTNERSHIP: THREE EMBARCADERO CENTER WEST,
a California limited partnership
By: THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation,
its General Partner
By: /s/ Gary L. Frazier -------------------------------------------------- Name: _______________________________ Title: ________________________________ |
BPECW LLC: BP EC WEST LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, its sole Member By: BOSTON PROPERTIES, INC., a Delaware corporation, its General Partner By: /s/ Thomas J. O'Connor -------------------------------------- Name: Thomas J. O'Connor Title: Vice President |
INVESTOR: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership By: BOSTON PROPERTIES, INC., a Delaware corporation, its General Partner By: /s/ Thomas J. O'Connor ------------------------------------------------ Name: Thomas J. O'Connor Title: Vice President |
PRUDENTIAL: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: /s/ Gary L. Frazier ------------------------------------------------ Name: _____________________________________________ Title: ____________________________________________ |
PIC: PIC REALTY CORPORATION,
a Delaware corporation
By: /s/ Gary L. Frazier ------------------------------------------------ Name: _____________________________________________ Title: ____________________________________________ |
PRS: PRUDENTIAL REALTY SECURITIES II, INC.,
a Delaware corporation
By: /s/ Duane H. Tucker, Jr. ------------------------------------------------ Name: Duane H. Tucker, Jr. Title: President |
SCHEDULE A
Prudential 1%
BPECW LLC 1%
LIMITED PARTNERSHIP INTERESTS ----------------------------- PIC 1% PRS 1% Prudential 59.0833% BPECW LLC 36.9167% |
EXHIBIT 99.5
THREE ECW
PROPERTY CONTRIBUTION AGREEMENT
THIS THREE ECW PROPERTY CONTRIBUTION AGREEMENT (this "AGREEMENT") is made and entered into as of this 12th day of November, 1998, by and among THREE EMBARCADERO CENTER WEST, a California limited partnership (the "PARTNERSHIP"), THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL"), PIC REALTY CORPORATION, a Delaware corporation ("PIC"), PRUDENTIAL REALTY SECURITIES II, INC., a Delaware corporation ("PRS"), BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership ("INVESTOR"), BOSTON PROPERTIES, INC., a Delaware corporation ("PUBLIC COMPANY"), and BP EC WEST LLC, a Delaware limited liability company ("BPECW LLC").
A. Pursuant to that certain Master Transaction Agreement dated as of September 28, 1998, by and among Investor, Public Company, Prudential, PIC, Fedmark Corporation ("FEDMARK"), Embarcadero Center Investors Partnership, Pacific Property Services, L.P. and those Persons listed on Exhibit A-1 attached thereto (the "MASTER TRANSACTION AGREEMENT"), the parties hereto have entered into a series of transactions whereby BPECW LLC has received an undivided 37.9167% tenancy-in-common interest in and to the Property (defined below) in liquidation of its interest in and to the Partnership. All initially capitalized terms used herein without definition shall have the respective meanings given such terms in the Master Transaction Agreement.
B. The Partnership is currently governed by those certain Second Amended and Restated Articles of Limited Partnership of Three Embarcadero Center West dated as of January 9, 1989 (as amended, modified or supplemented, the "PARTNERSHIP AGREEMENT").
C. The parties hereto desire to enter into this Agreement whereby the Partnership will transfer its entire undivided 62.0833% tenancy-in-common interest in and to the Property to BPECW LLC as a contribution to Investor, and Investor shall issue to the Partnership in consideration of such contribution Investor's Preferred Units (as defined below), all upon the terms and conditions of this Agreement below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
"INVESTOR" shall have the meaning given such term in the Introductory Paragraph.
"INVESTOR COMMON UNITS" shall mean the Common Units as set forth in the Investor Agreement.
"INVESTOR PREFERRED UNITS" shall mean the Series Three Preferred Units as set forth in the Investor Agreement.
"PARTNER" shall mean any partner of the Partnership as of the effective time of this Agreement.
"PARTNERSHIP" shall have the meaning given such term in the Introductory Paragraph.
"PRUDENTIAL" shall have the meaning given such term in the Introductory Paragraph.
"PUBLIC COMPANY" shall have the meaning given such term in the Introductory Paragraph.
"SECURITIES" shall mean, as applicable, the Shares, the Investor Common Units and the Investor Preferred Units that may be issued pursuant to the Investor Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHARES" shall mean the shares of the Public Company's common stock, $0.01 par value per share.
"TAX RETURN" shall mean any return, report or other document or information required to be supplied to a taxing authority in connection with Taxes.
"TAXES" shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, excise, property, sales, withholding, social security, occupation, use, service, license, payroll, franchise, transfer, recording taxes, fees and charges, imposed by the United States, or any state, local or foreign government or subdivision or agency thereof, whether computed on a separate, consolidated, unitary, combined or any other basis; and such terms shall include any interest, fines, penalties or additional amounts attributable to or imposed on or with respect to any such taxes, charges, fees, levies or other assessments.
ARTICLE 2
appraisals, budgets, the Partnership's strategic plans for the Property, marketing information, submissions relating to the Partnership's obtaining of corporate authorization, or other information in the possession or control of the Partnership or PPS which is privileged (provided that inadvertent disclosure shall not constitute a waiver of any privilege), relating to the Real Property, and all accounts receivable, accounts payable, cash, deposit accounts and money held by the Partnership as of the Closing Date (herein collectively called the "PERSONAL PROPERTY"); and
ARTICLE 3
ARTICLE 4
Public Company or any of their agents, contractors, or representatives, committed on or about the Property in the course of any such Person's due diligence reviews, inspections and investigations, including, without limitation, claims, demands, causes of action, losses, damages and liabilities on the part of the tenants and lessees alleging breach of a Lease as a result of any such Person's acts or omissions.
PROPERTY OR THE INCOME POTENTIAL, USES, OR MERCHANTABILITY OR FITNESS OF ANY
PORTION OF THE PROPERTY FOR A PARTICULAR PURPOSE; (2) THE PHYSICAL CONDITION OR
SAFETY OF THE PROPERTY OR ANY IMPROVEMENTS THEREON; (3) THE PRESENCE OR ABSENCE,
LOCATION OR SCOPE OF ANY HAZARDOUS MATERIALS IN, AT, OR UNDER THE PROPERTY; (4)
THE ACCURACY OF ANY STATEMENTS, CALCULATIONS OR CONDITIONS STATED OR SET FORTH
IN THE PARTNERSHIP'S OR PPS's BOOKS AND RECORDS CONCERNING THE PROPERTY OR SET
FORTH IN ANY OF THE PARTNERSHIP PARTIES' OFFERING MATERIALS WITH RESPECT TO THE
PROPERTY PRIOR TO THE DATE HEREOF; (5) THE DIMENSIONS OF THE PROPERTY OR THE
ACCURACY OF ANY FLOOR PLANS, SQUARE FOOTAGE, LEASE ABSTRACTS, SKETCHES, REVENUE
OR EXPENSE PROJECTIONS RELATED TO THE PROPERTY; (6) THE OPERATING PERFORMANCE,
THE INCOME AND EXPENSES OF THE PROPERTY OR THE ECONOMIC STATUS OF THE PROPERTY;
(7) THE ABILITY OF BPECW LLC, INVESTOR AND PUBLIC COMPANY TO OBTAIN ANY AND ALL
NECESSARY GOVERNMENTAL APPROVALS OR PERMITS FOR THE INTENDED USE AND DEVELOPMENT
OF THE PROPERTY; AND (8) THE LEASING STATUS OF THE PROPERTY OR THE INTENTIONS OF
ANY PERSONS WITH RESPECT TO THE NEGOTIATION AND/OR EXECUTION OF ANY LEASE FOR
ANY PORTION OF THE PROPERTY. BPECW LLC, INVESTOR AND PUBLIC COMPANY EACH FURTHER
ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE PARTNERSHIP WARRANTIES, THE
PARTNERSHIP PARTIES ARE UNDER NO DUTY TO MAKE ANY AFFIRMATIVE DISCLOSURES OR
INQUIRY REGARDING ANY MATTER WHICH MAY BE KNOWN TO ANY OF THE PARTNERSHIP
PARTIES.
INJURY, DEATH, PROPERTY DAMAGE, ECONOMIC LOSS, OR OTHER DAMAGES SUFFERED BY ANY OF THE PARTNERSHIP PARTIES ARISING OUT OF OR RELATING TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE PHYSICAL, ENVIRONMENTAL, ECONOMIC, LEGAL OR OTHER CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY SUCH CLAIMS OR LIABILITIES RELATING TO THE PRESENCE, DISCOVERY OR REMOVAL OF ANY HAZARDOUS MATERIALS IN, AT, ABOUT OR UNDER THE PROPERTY, OR FOR, CONNECTED WITH OR ARISING OUT OF ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON CERCLA (COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT OF 1980, 42 U.S.C. (S)(S)9601 ET SEQ., AS AMENDED BY SARA [SUPERFUND AMENDMENT AND REAUTHORIZATION ACT OF 1986] AND AS MAY BE FURTHER AMENDED FROM TIME TO TIME), THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976, 42 U.S.C. (S)(S)6901 ET SEQ., OR ANY RELATED CLAIMS OR CAUSES OF ACTION OR ANY OTHER FEDERAL OR STATE BASED STATUTORY OR REGULATORY CAUSES OF ACTION FOR ENVIRONMENTAL CONTAMINATION AT, IN OR UNDER THE PROPERTY (HEREINAFTER "INVESTOR-COVERED CLAIMS").
(b) NOTWITHSTANDING THE FOREGOING, THE TERM "INVESTOR-COVERED
CLAIMS" SHALL EXCLUDE, AND NONE OF BPECW LLC, INVESTOR OR THE PUBLIC
COMPANY SHALL ASSUME, THE FOLLOWING (COLLECTIVELY, "EXCLUDED
LIABILITIES"): (x) ANY AND ALL LIABILITIES AND OBLIGATIONS OF THE
PARTNERSHIP TO THE EXTENT THAT SUCH LIABILITIES AND OBLIGATIONS DO NOT
ARISE FROM OR RELATE TO THE USE, OWNERSHIP OR OPERATION OF THE
PROPERTY, AND (y) ANY AND ALL OBLIGATIONS AND LIABILITIES ARISING FROM
OR IN CONNECTION WITH THE USE, OWNERSHIP OR OPERATION OF THE PROPERTY
ACCRUING PRIOR TO THE DATE HEREOF OTHER THAN (i) OBLIGATIONS AND
LIABILITIES ASSUMED IN WRITING BY BPECW LLC IN CONNECTION WITH THE
LEASES AND/OR CONTRACTS AND ALL OTHER OBLIGATIONS AND LIABILITIES THAT
BPECW LLC EXPRESSLY ASSUMES IN WRITING AT OR PRIOR TO THE CLOSING,
(ii) OBLIGATIONS AND LIABILITIES FOR WHICH BPECW LLC OR INVESTOR HAS
RECEIVED A PRORATION CREDIT PURSUANT TO EXHIBIT V OF THE MASTER
TRANSACTION AGREEMENT, AND (iii) OBLIGATIONS AND LIABILITIES RELATING
IN ANY WAY TO THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE PROPERTY
OTHER THAN ANY CLAIMS MADE BY, OR CAUSES OF ACTION BROUGHT BY, ANY
THIRD PARTY UNRELATED TO BPECW LLC, INVESTOR OR ANY OF THEIR
AFFILIATES WHERE THE INJURY OR
DAMAGE GIVING RISE TO SUCH CLAIM OR CAUSE OF ACTION AROSE OR OCCURRED
DURING THE PERIOD PRIOR TO THE DATE HEREOF.
(c) TRANSFEREE PARTIES EACH HEREBY GENERALLY AND FULLY RELEASE THE PARTNERSHIP PARTIES FROM ANY AND ALL STATEMENTS OR OPINIONS HERETOFORE MADE, OR INFORMATION FURNISHED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, BY THE PARTNERSHIP PARTIES TO ANY OF THE TRANSFEREE PARTIES, EXCEPT FOR THE PARTNERSHIP WARRANTIES; AND FROM ANY AND ALL INVESTOR-COVERED CLAIMS, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED.
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
(d) NOTWITHSTANDING THE FOREGOING, THE PARTNERSHIP SHALL BE SOLELY LIABLE FOR, AND SHALL INDEMNIFY, DEFEND (AND CONTROL THE RESOLUTION OF), PROTECT AND HOLD HARMLESS TRANSFEREE PARTIES FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) AT LAW OR IN EQUITY, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, RELATING TO BODILY INJURY, DEATH, PROPERTY DAMAGE, ECONOMIC LOSS, OR OTHER DAMAGES SUFFERED BY ANY TRANSFEREE PARTIES ARISING OUT OF OR RELATING TO THE EXCLUDED LIABILITIES.
ARTICLE 5
5.3.1 The execution and delivery of this Agreement and the other documents to be executed by the Partnership or any Partner in connection herewith, and the consummation of the transactions described in this Agreement and such documents do not require, to the knowledge of the Partnership, the consent or approval of any governmental authority, nor to the Partnership's knowledge does the execution and delivery of this Agreement and the other documents to be executed by the Partnership or any Partner in connection herewith violate, in any way material to the transactions described herein, any contract or agreement to which the Partnership or any Partner is a party or (to the knowledge of the Partnership) any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to the Partnership, any Partner or the Property, and this Agreement and all documents to be executed by the Partnership or any Partner in connection with the transactions described herein constitute the legal, valid and binding obligations of the Partnership and each such Partner.
To the Partnership's knowledge, the Partnership and the Partners are not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage (other than with respect to the Existing Mortgage Loans, ECW Swap Notes made by Three ECW and Three ECW I/P Loans), debenture, note or other instrument under the terms of which performance by the Partnership or any such Partner in accordance with the terms and provisions of this Agreement will be a default or an event of acceleration, or grounds for termination, and whereby such default, acceleration or termination would reasonably be expected to have a material adverse effect on the timely performance by the Partnership or any such Partner of its obligations under this Agreement and the other documents to be executed by the Partnership or such Partner in connection
herewith, nor does the execution of this Agreement or the other documents to be executed by the Partnership or any such Partner in connection herewith, or the consummation of the transactions contemplated hereby and thereby, violate the partnership agreement of the Partnership or constitute a breach thereunder.
5.3.2 The Partnership has no employees. 5.3.3 To the Partnership's knowledge, except as listed on Exhibit D, --------- |
the Partnership has not received any written notice of pending or threatened litigation, judgment, arbitration, investigation or proceeding against the Property that, if determined adversely, would reasonably be expected to have a material adverse effect on the operation, use or value of the Property or on BPECW LLC's or Investor's ability to obtain any financing necessary to close the transactions contemplated by this Agreement, nor has the Partnership received any explicit oral notice of any such threatened litigation, judgment, arbitration, investigation or proceeding.
and authority to execute and deliver this Agreement and all documents executed by it in connection herewith and to perform all its obligations hereunder and thereunder. This Agreement has been duly authorized by all requisite partnership action on the part of the Partnership. The Partnership is not a Person other than a United States Person within the meaning of the Code and the transactions contemplated herein are not subject to the withholding provisions of section 3406 or subchapter A of Chapter 3 of the Code. The Partnership conducts business in accordance with all statutes, laws, rules and regulations applicable to it, and does not violate or fail to comply with, any statutes, laws, rules or regulations applicable to it that would have a material adverse effect on the business or operations of the Partnership or the Property or on the Investor's ability to obtain any financing necessary to close the transactions contemplated hereby or by the Master Transaction Agreement.
ARTICLE 6
6.3.1 Public Company is organized and, to Public Company's knowledge, has conducted its business in accordance with applicable laws, to the extent applicable, the failure or the violation of which would reasonably be expected to have a material adverse effect on the results of operations of the Public Company.
6.3.2 There are no actions, suits or proceedings pending and, to Public Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or others, which would reasonably be expected to either (i) question the validity of this Agreement or the consummation of the transactions contemplated hereby, the issuance of the Shares that may be issued in lieu of redemption of Investor Common Units that may be issued upon conversion of Investor Preferred Units, any other agreements contemplated hereby or any actions taken pursuant to any of the foregoing or (ii) result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, management or business prospects of Public Company. As of the date hereof, there is no action or suit against Public Company pending or threatened by any Person which would reasonably be expected to have a material adverse effect on Public Company.
6.3.3 The Public Company has filed with the Securities and Exchange Commission (the "COMMISSION") all reports required by the Exchange Act to be filed by the Company (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the "SEC DOCUMENTS"). As of their respective filing dates (or if amended, revised or superseded by a subsequent filing with the Commission, then on the date of such subsequent filing), the SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and none of the SEC Documents (including any and all financial statements included therein) as of such dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The consolidated financial statements of Public Company included in all SEC Documents, including any amendments thereto, comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto. Since the most recently filed SEC Document, there has not occurred or arisen any change in or event affecting Public Company that has had or would reasonably be expected to have a material adverse effect on the results of operations of Public Company.
6.3.4 No proceeding or other action has been commenced or undertaken relating to the dissolution or merger of Public Company and none is presently contemplated except that this representation shall not apply to any merger of another entity with and into Public Company that meets the criteria of Section 251(f) of the Delaware General Corporation Law for consummating a merger without a vote of stockholders.
6.3.6 The Shares that may be issued in lieu of redemption of Investor Common Units that may be issued upon conversion of Preferred Units issuable hereunder, when issued in accordance with the provisions of this Agreement and the Investor Agreement, will be duly and validly authorized and issued and will be fully paid and non-assessable. Neither Public Company, Investor nor any Person acting on their behalf has taken or will take any action which would subject the issuance of the Investor Preferred Units to the Partnership to the registration requirements of Section 5 of the Securities Act.
6.3.8 Public Company has duly and timely filed with the appropriate governmental authorities all Tax Returns required to be filed by it for all periods ending on or prior to the Closing Date, except to the extent of any Tax Return for which an extension of time for filing has been properly filed. Each such Tax Return is true and correct in all material respects. All Taxes owed by Public Company have been paid (whether or not shown on a Tax Return). All Taxes which Public Company is required by law to withhold or collect, including, without limitation, Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper governmental authorities or are held in separate bank accounts for such purpose. There are no liens for Taxes upon the assets of Public Company except for statutory liens for Taxes not yet due.
6.3.9 Public Company has not filed for an extension of a statute of limitations with respect to any Taxes and no governmental authorities have requested an extension of the statute of limitations with respect to any Taxes. Public Company is not a party to any pending action or any formal or informal proceeding by any taxing authority for a deficiency, assessment or collection of Taxes, and no claim of any deficiency, assessment or collection of Taxes has been asserted or, to the knowledge of Public Company, threatened against it, including claims by any taxing authority in a jurisdiction where Public Company does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.
6.3.10 Public Company is organized and has operated from its commencement through the date hereof in such a manner so as to qualify for taxation as a real estate investment trust under the Code, and Public Company intends to operate in such a manner so as to qualify and to continue to so qualify as a real estate investment trust.
6.3.11 Public Company does not hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101.
6.4.1 Public Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is (or prior to the Closing will be) duly qualified and in good standing as a foreign corporation under the laws of the State of California, and has all necessary power, corporate and otherwise, to execute and deliver this Agreement and all other documents and instruments to be executed and delivered by Public Company in connection herewith and to perform all its obligations hereunder and thereunder. This Agreement has been duly authorized by all requisite corporate action on the part of Public Company. The execution and delivery of this Agreement and the other documents and instruments to be executed and delivered by Public Company in connection with the transactions described herein, and the consummation of the transactions contemplated hereby and thereby, do not require the consent or approval of the shareholders of Public Company or, to the knowledge of Public Company, the consent or approval of any governmental authority, nor, to the knowledge of Public Company, does the execution and delivery of this Agreement violate, in any way material to the transactions contemplated hereby, any contract or agreement to which Public Company is a party or any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to Public Company, and this Agreement and all documents and other instruments to be executed and delivered by Public Company in connection herewith constitute the legal, valid and binding obligations of Public Company.
6.4.2 Public Company is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by Public Company according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Public Company, according to the terms of this Agreement, may be prohibited, prevented or delayed.
ARTICLE 7
7.3.1 Investor is organized and, to Investor's knowledge, has conducted its business in accordance with all applicable laws, to the extent applicable, the failure or the violation of which would reasonably be expected to have a material adverse effect on the results of operations of Investor.
7.3.2 There are no actions, suits or proceedings pending and, to Investor's knowledge, no such proceedings are threatened or contemplated by governmental authorities or by others, which would reasonably be expected to either (i) question the validity of this Agreement or the consummation of the transactions contemplated hereby or the issuance of the Investor Preferred Units contemplated hereby, any other agreements contemplated hereby or any actions taken pursuant to any of the foregoing or (ii) result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, management or business prospects of Investor. As of the date hereof, there is no material action or suit against Investor pending or threatened by any Person.
7.3.3 No proceeding or other action has been commenced or undertaken relating to the dissolution or merger of Investor (except in connection with an acquisition of property for units in Investor in which Investor is the surviving party in the merger) and none is presently contemplated.
7.3.4 Investor has duly and timely filed with the appropriate governmental authorities all Tax Returns required to be filed by it for all periods ending on or prior to the Closing Date, except to the extent of any Tax Return for which an extension of time for filing has been properly filed. Each such Tax Return is true and correct in all material respects. All Taxes owed by Investor have been paid (whether or not shown on a Tax Return). All Taxes which Investor is required by law to withhold or collect, including, without limitation, Taxes required to have been withheld in connection with amounts paid
or owing to any employee, independent contractor, creditor, partner, or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper governmental authorities or are held in separate bank accounts for such purpose. There are no liens for Taxes upon the assets of Investor except for statutory liens for Taxes not yet due.
7.3.5 Investor has not filed for an extension of a statute of limitations with respect to any Taxes and no governmental authorities have requested an extension of the statute of limitations with respect to any Taxes. Investor is not a party to any pending action or any formal or informal proceeding by any taxing authority for a deficiency, assessment or collection of Taxes, and no claim of any deficiency, assessment or collection of Taxes has been asserted or, to the knowledge of Investor, threatened against it, including claims by any taxing authority in a jurisdiction where Investor does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.
7.3.6 Investor is not, and will not become, a "publicly traded partnership" within the meaning of Section 7704 of the Code.
7.3.7 Investor does not hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101.
7.3.8 Investor is the sole member of BPECW LLC and has directed the Partnership to transfer the Property to BPECW LLC as a contribution to Investor in exchange for the Investor Preferred Units.
instrument under the terms of which performance by Investor according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Investor, according to the terms of this Agreement, may be prohibited, prevented or delayed.
7.5.1 BPECW LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, is (or prior to the Closing will be) duly qualified and in good standing as a foreign limited liability company under the laws of the State of California, and has all necessary power, corporate and otherwise, to execute and deliver this Agreement and all other documents and instruments to be executed and delivered by BPECW LLC in connection herewith and to perform all its obligations hereunder and thereunder. This Agreement has been duly authorized by all requisite action on the part of BPECW LLC's member. The execution and delivery of this Agreement and the other documents and instruments to be executed and delivered by BPECW LLC in connection with the transactions described herein, and the consummation of the transactions contemplated hereby and thereby, do not require the consent or approval of the member of BPECW LLC or, to the knowledge of BPECW LLC, the consent or approval of any governmental authority, nor, to the knowledge of BPECW LLC, does the execution and delivery of this Agreement violate, in any way material to the transactions contemplated hereby, any contract or agreement to which BPECW LLC is a party or any governmental or judicial order, judgment, decree, statute, law, rule or regulation applicable to BPECW LLC, and this Agreement and all documents and other instruments to be executed and delivered by BPECW LLC in connection herewith constitute the legal, valid and binding obligations of BPECW LLC.
7.5.2 BPECW LLC is not a party to, or bound by, any unexpired, undischarged or unsatisfied contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by BPECW LLC according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by BPECW LLC, according to the terms of this Agreement, may be prohibited, prevented or delayed.
7.5.3 Investor is the sole member of BPECW LLC.
ARTICLE 8
ARTICLE 9
9.1.1 As used herein, "CONFIDENTIAL MATERIAL" means, with respect to any party hereto (the "PROVIDING PARTY"), all information, whether oral, written or otherwise, furnished to another party hereto (the "RECEIVING PARTY") or the Receiving Party's directors, officers, partners, Affiliates, employees or agents, or their respective representatives (collectively, "REPRESENTATIVES"), by the Providing Party and all reports, analyses, compilations, studies and other material prepared by the Receiving Party or its Representatives (in whatever form maintained, whether documentary, computer storage or otherwise) containing, reflecting or based upon, in whole or in part, any such information. The term "CONFIDENTIAL MATERIAL" does not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party, its Representatives or anyone to whom the Receiving Party or any of its Representatives transmit any Confidential Material in violation of this Agreement or (ii) is or becomes known or available to the Receiving Party on a nonconfidential basis from a source (other than the Providing Party or one of its Representatives) who is not, to the knowledge of the Receiving Party, prohibited from transmitting the information to the Receiving Party or its Representatives by a contractual, legal, fiduciary or other obligation.
9.1.3 In the event that the Receiving Party, its Representatives or anyone to whom the Receiving Party or its Representatives supply the Confidential Material are requested (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, any informal or formal investigation by any government or governmental agency or authority or otherwise in connection with legal process) to disclose any Confidential Material, the Receiving Party agrees (i) to immediately notify the Providing Party of the existence, terms and circumstances surrounding such a request, (ii) to consult with the Providing Party on the advisability of taking legally available steps to resist or narrow such request, and (iii) if disclosure of such information is required, to furnish only that portion of the Confidential Material which, in the opinion of the Receiving Party's counsel, the Receiving Party is legally compelled to disclose and to cooperate with any action by the Providing Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Material (it being agreed that the Providing Party shall reimburse the Receiving Party for all reasonable out-of-pocket expenses incurred by the Receiving Party in connection with such cooperation).
9.1.4 In the event of the termination of this Agreement in accordance with its terms, promptly upon request from the Providing Party, the Receiving Party shall, except to the extent prohibited by applicable laws, regulations or legal process, redeliver to the Providing Party or destroy all tangible Confidential Material and will not retain any copies, extracts or other reproductions thereof in whole or in part. Any such destruction shall be certified in writing to the Providing Party by an authorized officer of the Receiving Party supervising the same.
ARTICLE 10
--------------- ------ 10.1.2 Closing Deliveries of the Partnership. On the date hereof, ------------------------------------- |
the Partnership is hereby concurrently delivering to BPECW LLC, Investor and/or the Public Company, or causing to be delivered to the Escrow Agent, the following:
ARTICLE 11
11.1.3 Investor shall promptly give the Partnership notice of any claim made by any third party which would reasonably be expected to result in liability of the Partnership or any Partner in respect of a breach of a representation made by the Partnership in this Agreement or otherwise and shall give the Partnership and its Partners the opportunity to cure any alleged claim and to defend against and settle all such claims at their sole cost. The failure to give such notice, however, shall not relieve the Partnership of any liabilities hereunder to the extent that it is not materially prejudiced as a result thereof.
ARTICLE 12
12.4.1 If to BPECW LLC, Public Company or Investor, addressed as follows:
Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile: 617-421-1555
Telephone: 617-859-2600
with a copy to:
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile: 617-574-4112
Telephone: 617-482-1776
12.4.2 If to the Partnership, addressed as follows:
Prudential Realty Group
8 Campus Drive
4th Floor - Arbor Circle South
Parsippany, New Jersey 07054
Attention: John R. Triece
Facsimile: (201) 683-1797
with a copy to:
The Prudential Insurance Company
of America
c/o Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, California 94111
Attention: Harry Mixon, Esq.
Facsimile: (415) 956-2197
and a copy to:
O'Melveny & Myers LLP
Embarcadero Center West
275 Battery Street
San Francisco, California 94111
Attention: Stephen A. Cowan, Esq.
Facsimile: (415) 984-8701
or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.
TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY HERETO ACCEPTS FOR ITSELF, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Each party hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to any other party hereto, at its address provided in this Agreement, such service being hereby acknowledged by each party to be sufficient for personal jurisdiction in any action against such party in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
PARTNERSHIP: THREE EMBARCADERO CENTER WEST,
a California limited partnership
By: THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation,
its General Partner
By: /s/ Gary L. Frazier ---------------------------------- Name: _______________________________ Title: ______________________________ |
BPECW LLC: BP EC WEST LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, its sole Member By: BOSTON PROPERTIES, INC., a Delaware corporation, its General Partner By: /s/ Thomas J. O'Connor ----------------------------- Name: Thomas J. O'Connor Title: Vice President |
INVESTOR: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership By: BOSTON PROPERTIES, INC., a Delaware corporation, its General Partner By: /s/ Thomas J. O'Connor ------------------------------------ Name: Thomas J. O'Connor Title: Vice President |
PUBLIC COMPANY: BOSTON PROPERTIES, INC.,
a Delaware corporation
By: /s/ William J. Wedge ---------------------------------- Name: William J. Wedge Title: Senior Vice President PRUDENTIAL: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation By: /s/ Gary L. Frazier ----------------------------------------- Name: ______________________________________ Title: _____________________________________ PIC: PIC REALTY CORPORATION, a Delaware corporation By: /s/ Gary L. Frazier ----------------------------------------- Name: ______________________________________ Title: _____________________________________ PRS: PRUDENTIAL REALTY SECURITIES II, INC., a Delaware corporation By: /s/ Duane H. Tucker, Jr. ----------------------------------------- Name: Duane H. Tucker, Jr. Title: President |
EXHIBIT 99.6
[Embarcadero Portfolio Registration Rights Agreement]
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
BY AND AMONG
BOSTON PROPERTIES, INC., BOSTON PROPERTIES LIMITED PARTNERSHIP
AND THE
HOLDERS NAMED HEREIN
November 12, 1998
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
WHEREAS, the Preferred Units are being issued to the Holders in a private placement transaction and accordingly constitute restricted securities;
WHEREAS, it is a condition precedent under the Contribution Agreements that each of the Company, the Partnership and the Holders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and agreements set forth herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
As used in this Agreement, the following capitalized terms shall have the following meanings (such definitions to be equally applicable to both the singular and plural forms of the terms defined):
sell, grant of an option to sell (unless the optionee cannot exercise such option until after the expiration of the Lock-Up Period) or other disposition.
and other documents relating to the performance of and compliance with this Agreement; (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Shares on any securities exchange or exchanges pursuant to Section 5 hereof; and (v) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company. Registration Expenses shall specifically exclude underwriting discounts and commissions relating to the sale or disposition of Registrable Shares by a selling Holder, the fees and disbursements of counsel representing a selling Holder, and transfer taxes, if any, relating to the sale or disposition of Registrable Shares by a selling Holder, all of which shall be borne by such Holder in all cases.
-------- ------- (i) Dispose of Units to a Permitted Distributee; (ii) Dispose of Units to another Holder; |
(iii) Dispose of Units on his or her death to such Holder's estate, executor, administrator or personal representative or to such Holder's beneficiaries pursuant to a devise or bequest or by laws of descent and distribution; and
Following the expiration of the Lock-Up Period, the only contractual restrictions on the Disposition of Units shall be those set forth herein and in the Limited Partnership Agreement and the Company's Certificate of Incorporation.
(a-1) Notwithstanding the foregoing, in the event the Conversion Date with respect to a Holder's Preferred Units accelerates due to the consummation of a "Cash Business Combination" (as defined in the relevant Preferred Units' Certificate of Designations), (i) the Company's obligations under Section 3A(b) below shall become immediately effective with respect to such Holder (provided, however, that the Company must file the Resale Registration Statement (as defined below) within forty-five (45) days of the consummation of such transaction) and (ii) the Company's obligations under Section 3A(a) above shall terminate with respect to such Holder.
date of such request by such Holder a Registration Statement under Rule 415 under the Securities Act relating to the sale by the Holder of all of the Registrable Shares held by such Holder in accordance with the terms hereof, and shall use reasonable best efforts to cause such Registration Statement to be declared effective by the SEC as soon as practicable thereafter. The Company may, in its sole discretion, elect to file the Registration Statement before receipt of notice from any Holder. The Company agrees to use reasonable efforts to keep the Registration Statement continuously effective, after its date of effectiveness, until the date on which such Holder no longer holds any Registrable Shares.
At any time when a Prospectus relating to the Registration Statement is required to be delivered under the Securities Act by a Holder to a transferee, the Company shall immediately notify each Holder of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. In such event, the Company shall promptly prepare and furnish to each applicable Holder a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of Registrable Shares, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company will, if necessary, amend the Registration Statement of which such Prospectus is a part to reflect such amendment or supplement.
omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, if and to the extent that such statement or omission occurs from reliance upon and in conformity with written information regarding such Holder, its plan of distribution or its ownership interests, which was furnished to the Company by such Holder expressly for use therein unless such statement or omission was corrected in writing to the Company not less than three (3) business days prior to the date of the final prospectus (as supplemented or amended, as the case may be) or (ii) the failure by the Holder to deliver or cause to be delivered the Prospectus contained in such Registration Statement (as amended or supplemented, if applicable) furnished by the Company to the Holder to any purchaser of the shares covered by such Registration Statement from the Holder through no fault of the Company. Notwithstanding the provisions of this Section 7, no Holder shall be required to pay as indemnification hereunder any amount in excess of the gross proceeds from the sale of Shares by such Holder which gave rise to the incurrence of such indemnification.
professional conduct, then, in any such case, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties reasonably shall have concluded, based on the advice of counsel, that there may be legal defenses available to such party or parties which are not available to the other indemnified parties or to the extent representation of all indemnified parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct) and the indemnifying party shall be liable for any expenses therefor. No indemnifying party shall, without the written consent of the indemnified party (which shall not be unreasonably withheld), effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or (to the knowledge of the indemnifying party) threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(a) The Company shall promptly notify each Holder of, and confirm in writing, the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement with respect to such Holder's Registrable Shares or the initiation of any proceedings for that purpose. The Company shall use its best efforts to obtain the withdrawal of any order suspending the effectiveness of such a Registration Statement at the earliest possible moment.
Registration Statement, but such suspension shall continue only for so long as
such event or its effect is continuing. The Company shall promptly notify the
Holders of the existence and, in the case of circumstances referred to in clause
(i) of this Section 9(b), nature of any Suspension Event, and shall promptly
notify the Holders upon the expiration of such Suspension Event.
(d) Notwithstanding anything to the contrary in this Agreement, in no event shall Suspension Events be permitted to take effect more than twice in any twelve-month period and in no event shall Suspension Events and Company Sale Periods be permitted to take effect for more than an aggregate of one hundred twenty (120) days in any twelve-month period.
Notwithstanding the provisions of this Section 12, no Holder shall be required to contribute any amount in excess of the amount by which the gross proceeds from the sale of Shares exceeds the amount of any damages that the Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation.
If to the Company: Boston Properties, Inc. 8 Arlington Street Boston, MA 02116 Attn: Chief Financial Officer Telecopy: (617) 536-4233 with a copy to: Goodwin, Procter & Hoar LLP Exchange Place Boston, MA 02109 Attn: Edward M. Schulman, Esq. Telecopy: (617) 523-1231 If to the Holders: As listed on the applicable Holder Signature (other than Holders of Page Series Three Preferred Units) with a copy to: Willkie Farr & Gallagher 787 Seventh Avenue New York, NY 10019 Attn: Bruce M. Montgomerie, Esq. Telecopy: (212) 728-8111 If to Holders of Series Three Preferred Units: As listed on the applicable Holder Signature Page with a copy to: O'Melveny & Myers LLP Embarcadero Center West 275 Battery Street San Francisco, CA 94111 Attn: Stephen A. Cowan, Esq. Telecopy: (415) 984-8701 |
In addition to the manner of notice permitted above, notices given pursuant to Sections 9 and 10 hereof may be effected telephonically and confirmed in writing thereafter in the manner described above.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
BOSTON PROPERTIES, INC.
By: /s/ William J. Wedge ------------------------------------ Name: William J. Wedge Title: Senior Vice President |
BOSTON PROPERTIES LIMITED
PARTNERSHIP
By: Boston Properties, Inc.,
its general partner
By: /s/ William J. Wedge ---------------------------------- Name: William J. Wedge Title: Senior Vice President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
THREE EMBARCADERO CENTER WEST,
a California limited partnership
By: THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey
corporation, General Partner
By: /s/ Gary L. Frazier ------------------------------------- Name: Gary L. Frazier Title: Vice President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Rockmark Corporation
/s/ Richard E. Salomon -------------------------------------------- By: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Louis R. Benzak
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
John R. H. Blum
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
James R. Bronkema Trust
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Vincent deP. Farrell
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Leslie H. Larsen
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Bruce M. Montgomerie
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Bill F. Osborne
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
William F. Pounds
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
David Rockefeller
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
DR & Descendants Partnership
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Estate of Richard B. Salomon
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon ------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Salomon 1968 Trust
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Salomon 1969 Trust
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
William G. Spears
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
George M. Topliff
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Mr. Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
John O. Wolcott
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Fedmark Corporation
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
ECW Investor Associates
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Realrock I
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
ECW Claymark, Investors
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
WR Trust
By: Rockmark Corporation, attorney-in-fact
/s/ Richard E. Salomon -------------------------------------------- Name: Richard E. Salomon, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
EC Holdings, Inc.
[Signature Illegible]
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Portman Family Trust
By: /s/ John C. Portman, Jr. ----------------------------------------- By: /s/ Joan N. Portman ----------------------------------------- By: /s/ John C. Portman III ----------------------------------------- |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
WRTEC, Inc.
By: /s/ Marion Burton ------------------------------- Name: Marion Burton, President |
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Winrock International Institute for Agricultural Development
By: /s/ Byron T. Edwards --------------------------------- Name: Byron T. Edwards, Presedent & CEO |
SCHEDULE A
SERIES TWO PREFERRED UNITS
Rockmark Corporation
Louis R. Benzak
John R.H. Blum
James R. Bronkema Trust
Vincent deP. Farrell, Jr.
Leslie H. Larsen
Bruce M. Montgomerie
Bill F. Osborne
EC HOLDINGS, INC.
Portman Family Trust
William F. Pounds
David Rockefeller
DR & Descendants Partnership
Estate of Richard B. Salomon
Richard E. Salomon
Salomon 1968 Trust
Salomon 1969 Trust
William G. Spears
George M. Topliff
Winrock International Institute for Agricultural Development
WRTEC, INC.
John O. Wolcott
Fedmark Corporation
ECW Investor Associates
Realrock I
ECW Claymark Investors
WR Trust
SERIES THREE PREFERRED UNITS
One Embarcadero Center Venture
Three Embarcadero Center Venture
Four Embarcadero Center Venture
Three Embarcadero Center West
EXHIBIT 99.7
THIRD AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
ONE EMBARCADERO CENTER VENTURE
TABLE OF CONTENTS
Page ---- ARTICLE 1 - THE PARTNERSHIP................................................................................... 2 SECTION 1.1 Continuation of the Partnership...................................................... 2 SECTION 1.2 Partnership Name..................................................................... 3 SECTION 1.3 Place of Business.................................................................... 3 SECTION 1.4 General Partnership.................................................................. 3 SECTION 1.5 Term of Partnership.................................................................. 3 SECTION 1.6 Purposes of the Partnership.......................................................... 3 SECTION 1.7 Definitions.......................................................................... 4 ARTICLE 2 - CAPITALIZATION.................................................................................... 7 SECTION 2.1 Partners' Percentage Interests....................................................... 7 SECTION 2.2 Additional Capital Contributions; Limitations on Future Capital Contributions; Obligation of Managing Partner to Purchase BP Notes.................................................................... 7 SECTION 2.3 Admission of Additional Partners..................................................... 8 SECTION 2.4 Return of Capital Accounts and Redemption of Partnership Interests............................................................................ 8 SECTION 2.5 Investment Loan, Equity Redemption Loan, Prudential Guarantied Loan, Existing Loans and Replacement Loans................................ 8 ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES................................................................. 9 SECTION 3.1 Capital Accounts and Allocations of Profit and Loss.................................. 9 ARTICLE 4 - DISTRIBUTIONS..................................................................................... 11 SECTION 4.1 Distributions........................................................................ 11 SECTION 4.2 Amounts Withheld..................................................................... 11 ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP..................................................................... 11 SECTION 5.1 Management........................................................................... 11 SECTION 5.2 Rights to Delegate and Employ........................................................ 11 SECTION 5.3 Enumeration of Specific Rights and Powers............................................ 12 SECTION 5.4 Limitations on Managing General Partner's Authority.................................. 13 SECTION 5.5 Filing of Returns and Other Writings................................................. 14 SECTION 5.6 Other Permissible Activities......................................................... 15 |
Page ---- SECTION 5.7 Contracts with Affiliates; Borrowing from Partners................................... 15 SECTION 5.8 Indemnification...................................................................... 15 SECTION 5.9 Liability of the Managing General Partner............................................ 17 SECTION 5.10 Other Matters Concerning the Managing General Partner................................ 18 ARTICLE 6 - ACCOUNTING........................................................................................ 18 SECTION 6.1 Fiscal Year and Tax Accounting Method................................................ 18 SECTION 6.2 Books, Records, and Tax Reports...................................................... 19 SECTION 6.3 Accounting Practice.................................................................. 19 SECTION 6.4 Accountants.......................................................................... 19 SECTION 6.5 Bank Accounts........................................................................ 19 ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING........................................................ 19 SECTION 7.1 Contributions by Non-Managing General Partners....................................... 19 SECTION 7.2 Corporate Authority.................................................................. 19 SECTION 7.3 Role of Non-Managing General Partners................................................ 19 SECTION 7.4 Rights and Obligations Under the Act................................................. 20 SECTION 7.5 Redemption Rights.................................................................... 20 ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND........................................................ 20 SECTION 8.1 Non-Managing General Partners........................................................ 20 SECTION 8.2 Managing General Partner............................................................. 20 SECTION 8.3 Transfer of Partnership Interests.................................................... 20 SECTION 8.4 Substituted Non-Managing General Partners............................................ 21 SECTION 8.5 Assignees............................................................................ 22 ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION.......................................................... 22 SECTION 9.1 Dissolution.......................................................................... 22 SECTION 9.2 Liquidation.......................................................................... 22 ARTICLE 10 - MISCELLANEOUS.................................................................................... 24 SECTION 10.1 Redemption Agreement................................................................. 24 SECTION 10.2 Notice............................................................................... 24 SECTION 10.3 Further Assurances................................................................... 24 SECTION 10.4 Agreement in Counterparts............................................................ 24 SECTION 10.5 Construction......................................................................... 24 |
Page ---- SECTION 10.6 Governing Law........................................................................ 24 SECTION 10.7 Amendments........................................................................... 24 SECTION 10.8 Pronouns............................................................................. 24 SECTION 10.9 Successors in Interest............................................................... 25 SECTION 10.10 Headings............................................................................. 25 SECTION 10.11 Consent to Jurisdiction and Service of Process....................................... 25 SECTION 10.12 Waiver of Jury Trial................................................................. 25 |
SCHEDULES AND EXHIBITS
Schedule A Partners and Percentage Interests Exhibit A Legal Description of Property Exhibit B Approved Terms and Conditions of Loans from Managing General Partner Exhibit C Description of Equity Redemption Loan Exhibit D Description of Prudential Guarantied Loan Exhibit E Description of Business Interruption and General Liability Insurance Exhibit F Description of Financing Plan for the Partnership Exhibit G Form of Special BP Loan Note |
THIRD AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
ONE EMBARCADERO CENTER VENTURE
RECITALS:
E. To reflect the transfers, successions, admissions and withdrawals recited above, to provide for the continuation of the Partnership as a California general partnership under the Act, and to provide for the revised terms and conditions under which the Partnership will continue in existence and be governed, the parties wish to amend and restate the Prior Partnership Agreement in its entirety, as provided herein.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 - THE PARTNERSHIP
The name of the Partnership shall continue to be "ONE EMBARCADERO CENTER VENTURE." All business of the Partnership shall be conducted under such name or under such variations thereof as the Managing General Partner deems necessary or appropriate to comply with the requirements of law in any applicable jurisdiction in which the Partnership may do business.
The principal place of business of the Partnership shall be c/o Boston Properties, Inc., Four Embarcadero Center, Suite 2600, San Francisco, California 94111, or at such other place or places as the Managing General Partner may designate.
The Partnership shall be a general partnership, governed by the Act. The interests of the Partners in the Partnership shall be personal property for all purposes. All real and other property owned by the Partnership shall be deemed owned by the Partnership, as a partnership, and no Partner, individually, shall have any ownership of such property.
The term of the Partnership shall continue until 12:00 noon on December 31, 2050, unless sooner terminated in accordance with the terms and conditions of this Agreement, or by applicable law.
The purpose of the Partnership shall be:
(a) to own, manage, develop, improve, renovate, rehabilitate, operate, hold for investment, lease, encumber, mortgage, pledge, assign, exchange, sell and/or otherwise deal with the Property;
(b) to retain managing agents and consultants therefor, and to do all things necessary or useful in connection with any of the foregoing;
(c) in addition to, and in furtherance of these purposes and powers,
the Partnership shall have the power (i) to borrow money and
issue evidences of indebtedness and to secure same by mortgage,
pledge or other lien (including, without limitation, obtaining
the Equity Redemption Loan and Prudential Guarantied Loan), and
(ii) to guarantee the obligations of any other Person when done
in furtherance of the Partnership's business, including any
indebtedness of such Person, and to secure such guarantee
obligations by mortgage, pledge or other lien on any asset of the
Partnership;
(d) to make and service the Investment Loan as contemplated herein;
(e) subject to the express terms, provisions and restrictions of this Agreement, to engage in and consummate the transactions described in the Master Transaction Agreement;
(f) to enter into the Redemption Agreement and consummate the transactions described therein; and
(g) to enter into, perform and carry out contracts of any kind necessary to, or in connection with, or incidental to the accomplishment of any of the foregoing purposes; and
(h) to use the Excess Mortgage Loan Proceeds to make the Special BP Loan.
The Partnership shall not engage in any other business. It is further agreed that the Partnership shall at all times adhere to at least the level of quality in the maintenance and operation of the Property as a first class office and retail complex as maintained by the Partnership during the twelve (12) month period preceding the date hereof.
In addition to the capitalized terms defined in the recitals and elsewhere herein, the following terms shall have the following meanings:
time (or any corresponding provisions of succeeding law). "Equity Redemption Loan" shall mean a loan to the Partnership governed by ---------------------- |
the terms of this Agreement. "Non-Managing General Partners" means all such Persons, if there is more than one. If at any time there is more than one Non- Managing General Partner, then all references herein to the Non-Managing General Partner shall, unless the context requires otherwise, be deemed to refer to the Non-Managing General Partners.
ARTICLE 2 - CAPITALIZATION
(a) No Partner shall, except as otherwise required by the Act, other applicable law or this Agreement, be required to make any further Capital Contributions to the Partnership, and so long as PIC or any Affiliate of PIC is a Partner, no Capital Contributions shall be made to the Partnership without the prior written consent of PIC.
(b) At no time prior to the second anniversary of the Redemption Distribution shall the Managing General Partner call or accept Capital Contributions from any Partner for the purpose of repaying the Equity Redemption Loan or any debt replacing or refinancing the Equity Redemption Loan, and during such period no Capital Contributions made after the date hereof shall be used in such manner.
(c) To the extent that it is necessary or desirable for the Partnership, in the sole discretion of the Managing General Partner, to raise cash for the purpose of funding working capital, capital expenditures, leasing commissions, tenant improvements or other expenditures relating to the Property at a time when the Partnership is unable to raise such cash through the receipt of Capital Contributions because of the prohibition set forth in Section 2.2(a), the Managing General Partner agrees that it (or an Affiliate of the Managing General Partner) will lend funds to the Partnership for such purposes by purchasing BP Notes from the Partnership.
The Managing General Partner shall have the right, from time to time, provided it obtains the consent of the Non-Managing General Partners, to admit additional Non-Managing General Partners to the Partnership.
Upon the admission of any new Non-Managing General Partner, an amendment of this Agreement, reflecting such change, shall be signed by the Managing General Partner and the additional Non-Managing General Partner, and an amendment to the Certificate, reflecting such change, to the extent required or appropriate under applicable law, shall be signed by all Partners either individually or by the Managing General Partner on their behalf and filed with the Secretary of State of the State of California.
Except as otherwise provided in this Agreement or as set forth in the Redemption Agreement, (i) no Partner shall have the right to demand and withdraw a return of its Capital Account, and (ii) no Partner shall have the right to receive property other than cash upon a distribution to the Partners, redemption of any Partner's interest or liquidation of the Partnership.
No Partner shall receive any interest, salary, or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Partnership or otherwise in its capacity as Partner, except (i) interest received, if any, on BP Notes or (ii) as otherwise provided in this Agreement.
(a) The Partnership is hereby authorized to, and shall, make the Investment Loan to Investment Loan Borrower and acquire the Investment Notes on the date hereof.
(b) The Partnership is hereby authorized to, and shall, borrow the Equity Redemption Loan and Prudential Guarantied Loan on the date hereof and shall thereafter perform its obligations in respect thereof subject to the terms and limitations of this Agreement. The proceeds of the Equity Redemption Loan and Prudential Guarantied Loan shall be applied to make the Investment Loan and acquire the Investment Notes on the date hereof.
(c) In accordance with Section 2.2(b), the Partnership shall not, at any time prior to the second anniversary of the Redemption Date, use Capital Contributions made after the date hereof for the purpose of repaying the Equity Redemption Loan or any debt replacing the Equity Redemption Loan.
(e) Notwithstanding anything to the contrary provided in this Agreement, all costs, fees and expenses incurred in connection with the consummation of the Equity Redemption Loan and Prudential Guarantied Loan shall be paid by the Partnership and borne by the Partners (and reflected in the Partnership's books as follows):
(ii) All other Approved Loan Costs shall be paid by the Partnership as current expenses and borne by each Partner in accordance with its Percentage Interest on the date hereof;
(iii) Any other costs and expenses incurred by the Partnership with respect to the Equity Redemption Loan shall be paid by the BP Partners; and
(iv) Any other costs and expenses incurred by the Partnership with respect to the Prudential Guarantied Loan shall be paid by PIC.
ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES
AND MAINTENANCE OF CAPITAL ACCOUNTS
Code Section 704(c) applies to partnership property, the Capital Accounts of the Partners shall be adjusted in accordance with Regulations Section 1.704- 1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain and loss, as computed for book purposes, with respect to such property. The Partners' distributive shares of depreciation, depletion, amortization and gain or loss, as computed for tax purposes, with respect to such property shall be determined so as to take account of the variation between the adjusted tax basis and book value of such property in the same manner as under Code Section 704(c), and the amount of upward and/or downward adjustments to the book value of the Partnership property shall be treated as income, gain, deduction and/or loss for purposes of applying the allocation provisions of this Article 3. In the event that Code Section 704(c) applies to Partnership property, the Capital Accounts of the Partners shall be adjusted in accordance with Regulations Section 1.704- 1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain and loss, as computed for book purposes, with respect to such property. The amount of all distributions to Partners shall be determined pursuant to Section 4.1 hereof. Notwithstanding any provision contained herein to the contrary, no Partner shall be required to restore any negative balance in its Capital Account.
Section 704(c) allocations," caused by the transfers contemplated by the Master Transaction Agreement, the Partnership will use the "traditional method without curative allocations."
(d) The tax returns for the Partnership for the 1998 calendar year shall be prepared using the interim closing of the books method.
ARTICLE 4 - DISTRIBUTIONS
(a) Except as provided in Section 4.1(b) or Section 7.5, and subject to the needs of the Partnership to accumulate reserves, which prior to the Redemption Distribution shall be determined in the sole discretion of the Managing General Partner, distributions to the Partners shall be made in proportion to the Partners' Percentage Interests. Distributions shall be made from time to time at the discretion of the Managing General Partner.
(b) Notwithstanding anything to the contrary provided in this Agreement, all payments in respect of title insurance received by the Partnership the amount of which was affected by the non-imputation endorsement to the Partnership's title insurance policy issued as of the date hereof with respect to the Property will be distributed only to the BP Partners in proportion to their respective Percentage Interests.
All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution to the Partnership, the Managing General Partner or the Non-Managing General Partners shall be treated as amounts distributed to the Managing General Partner or Non-Managing General Partners pursuant to this Article for all purposes under this Agreement. The Managing General Partner may allocate any such amounts among the Partners in any manner that is in accordance with applicable law.
ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP
The management powers over the business and affairs of the Partnership are and shall be exclusively vested in the Managing General Partner, who shall be subject to the provisions of this Agreement and to applicable law, and, subject to the consent rights set forth in Section 5.4 hereof, no Non-Managing General Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership.
The Managing General Partner shall devote such time and effort to the Partnership as it deems necessary and may retain agents as reasonably required or desirable to assist it. The Managing General Partner shall review the status and condition of the Property and shall supervise the activities of any agents engaged by it. The Managing General Partner may delegate any of its powers, rights and obligations hereunder, and, in furtherance of any such delegation, may appoint, employ, contract or otherwise deal with any Person (including Affiliates, but only so long as such employment, contract or other deal is not less favorable to the Partnership than would be an arms-length transaction on market terms) for the transaction of the business of the Partnership, which Persons may, under the supervision of the Managing General Partner, perform any acts or services for the Partnership as the Managing General Partner may approve.
Subject to Section 5.4, the Managing General Partner shall have all the rights and powers which may be possessed by a general partner in a partnership formed under the Act, which are otherwise conferred by law or which are necessary, advisable or convenient to the discharge of duties under this Agreement and to the management, direction and control of the business and affairs of the Partnership, exercisable without the consent of the Non-Managing General Partners (except as herein expressly provided), including the following rights and powers:
(a) to conduct the tax, financial and business affairs of the Partnership;
(b) to take all action necessary to acquire, purchase, renovate, rehabilitate, hold, own, improve, operate, encumber, mortgage, pledge, assign, exchange, or to sign notes or guarantee payment of any loans relating to the purposes of the Partnership;
(c) to manage, repair, insure, service, promote, advertise, lease, sublease, and create or release interests in the Partnership property;
(d) to timely pay out of Partnership funds such expenses as are necessary to carry out the intentions and purposes of the Partnership including real estate taxes and debt service payments to the extent there is sufficient gross cash proceeds.
(e) to sell and/or otherwise dispose of all or any portion of the Property;
(f) to make appropriate elections permitted under any applicable tax law, provided that such elections will not, in the opinion of counsel or the accountants for the Partnership, be disadvantageous to a majority in interest of the Non-Managing General Partners;
(g) to change the principal office of the Partnership to other places subject to the notice provision herein provided;
(h) to employ agents, attorneys, public accountants (which shall be, in all events, a "Big Five" accounting firm), and depositories and to grant powers of attorney;
(i) to employ persons necessary and appropriate in the operation and management of the Partnership and the Property, including, but not limited to, supervisory managing agents, insurance brokers, real estate brokers, and loan brokers, on such terms and for such compensation which does not exceed generally prevailing market rates, all to act under the supervision of the Managing General Partner, and the Managing General Partner on behalf of the Partnership is hereby authorized to enter into an agreement with any Managing General Partner in their individual capacities or a corporation or other entity affiliated with any Managing General Partner for the performance of such services to the Partnership except as otherwise provided for in this Agreement;
(m) to lend money to any BP Partner or any Affiliate of any BP Partner pursuant to a Special BP Loan.
(a) Notwithstanding anything in this Agreement to the contrary, for so long as PIC is a Partner, the Managing General Partner shall not have the power or authority to, and shall not, cause the Partnership to take any of the following actions, without the consent of PIC, which consent shall not be unreasonably withheld:
(i) other than in the ordinary course of business, cause any closing of a material portion of the Property for renovations (other than repairs necessitated as a result of a fire or other casualty);
(iii) take any action or make any decision involving credit, management or servicing decisions relating to the Investment Notes other than making an election to accelerate the Investment Notes upon the occurrence of (and during the continuance of) an Event of Default or taking any action or decision relating to the Redemption Distribution;
(iv) make a loan to or guarantee the indebtedness of any Person other than (A) loans to tenants of the Property for tenant improvements or (B) a Special BP Loan;
(v) cause or permit the sale of (A) all or any material portion of the Property, except leases, concessionaire agreements and space licenses entered into in the ordinary course of business of the Property, or (B) except in connection with the Redemption Distribution, the Investment Notes or any portion thereof or interest therein;
(vi) cause the Partnership to (A) obtain any borrowing, (B) issue evidences of indebtedness, or (C) guaranty the obligations of any Person, if such borrowing, issuance or guaranty provides for recourse to PIC (other than the Prudential Guarantied Loan or the Equity Redemption Loan or any Replacement Debt (as defined in Exhibit F);
(vii) amend this Agreement if such amendment affects or could affect (A) the receipt, amount or timing of any distributions to PIC, or (B) PIC's rights or obligations under this Agreement or the Redemption Agreement;
(viii) cause the dissolution of the Partnership, or cause the Partnership to file or otherwise commence a voluntary bankruptcy case, or consent to the commencement of an involuntary bankruptcy case, under the United States Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case, or consent to the
appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of the Property;
(x) assign, relinquish, settle, compromise, waive or impair any of the Partnership's rights under or with respect to, or amend, terminate, extend the term of (or time for payments due, or performance to be rendered, to the Partnership under) or otherwise modify any instrument or agreement under which the Partnership has rights and to which the Managing General Partner or any of its Related Parties is a party; or
(xi) engage in any activity without a good faith business purpose therefor and with the intent of manipulating the "Operating Profits" or "Operating Losses" of the Partnership described in the Redemption Agreement in a manner intended to materially adversely affect, to the benefit of the other Partners, the amounts that PIC would be entitled to receive under this Agreement or the Redemption Agreement.
The Managing General Partner shall be the Tax Matters Partner and is also specifically authorized to and shall cause the preparation and timely filing of all Partnership tax returns and shall, on behalf of the Partnership, subject to the terms and provisions of the Redemption Agreement, make such tax elections for the Partnership as it, after consultation with the Partnership's accountants, shall determine to be in the best interests of the Partners. In addition, the Managing General Partner shall timely file all other forms, documents or other writings with respect to the business and operation of the Partnership which shall be required by any governmental agency or authority having jurisdiction to require such forms, documents or other writings, and shall transmit to each Partner any form or document required to be transmitted by any such governmental agency.
Nothing herein contained shall be deemed to prevent any Partner or any shareholder or affiliate thereof from engaging in other activities for profit, whether in the real estate business or otherwise. The Managing General Partner (or any shareholder or affiliate thereof), or any Partner, may, in the future, organize and manage joint ventures, additional limited partnerships or other business entities for the acquisition, management and sale of real estate. Neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Partner or any affiliate from engaging in such activities, or require any Partner to permit the Partnership or any Partner to participate in any such activities and, as a material part of the consideration for each Partner's execution hereof, each Partner, for the benefit of the other Partners, hereby waives, relinquishes and renounces any such right or claim of participation.
(a) To the fullest extent permitted by California law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement,
in which such Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith, was the result of active and deliberate
dishonesty, or was the result of a breach of this Agreement by such Indemnitee
(or by the Partner of which such Indemnitee is a director or officer); or (ii)
the Indemnitee actually received an improper personal benefit in money, property
or services, or in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty (except a guaranty by a Partner of
nonrecourse indebtedness of the Partnership or as otherwise provided in any such
loan guaranty) or otherwise for any indebtedness of the Partnership, and the
Managing General Partner is hereby authorized and empowered, on behalf of the
Partnership, to enter into one or more indemnity agreements consistent with the
provisions of this Section 5.8 in favor of any Indemnitee having or potentially
having liability for any such indebtedness. The termination of any proceeding
by conviction of an Indemnitee or upon a plea of nolo contendere or its
equivalent by an Indemnitee, or an entry of an order of probation against an
Indemnitee prior to judgment, creates a rebuttable presumption that such
Indemnitee acted in a manner contrary to that specified in this Section 5.8(a).
Any indemnification pursuant to this Section 5.8 shall be made only out of the
assets of the Partnership and shall not impose any personal liability on any
Partner, and neither the Managing General Partner nor any Non-Managing General
Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its obligations under this Section 5.8.
(c) Subject to the procedures set forth in Section 5.8(b), reasonable expenses incurred by an Indemnitee who is a party to a proceeding in a matter for which the Indemnitee has undertaken the defense pursuant to the provisions of this Section 5.8 (other than as a result of the rejection or dispute by the Managing General Partner of a claim for indemnification under Section 5.8(b)) shall be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 5.8(a) has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.
(d) The indemnification provided by this Section 5.8 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under this
Agreement or any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified.
(e) The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the Managing General Partner shall determine in its reasonable discretion, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership's activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
(f) In no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 5.8 solely because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 5.8 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 5.8 or any provision hereof shall be prospective only and shall not in any way affect the Partnership's liability to any Indemnitee under this Section 5.8, as in effect immediately prior to such amendment, modification, or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) Notwithstanding anything to the contrary set forth in this Agreement, except as otherwise expressly provided in this Agreement, the Managing General Partner and its officers and directors shall not be liable for monetary damages to the Partnership, any Partners or any Assignees for losses sustained or liabilities incurred as a result of reasonable errors in judgment or of any act or omission if the Managing General Partner acted in good faith; provided, however, that the Managing General Partner shall be liable to the Partnership and Partners for its material breaches of this Agreement.
(b) Subject to its obligations and duties as Managing General Partner
set forth in Section 5.3 hereof, and subject to the limitations set forth in
Section 5.4 hereof, the Managing General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The Managing General
Partner shall not be responsible for any misconduct or negligence on the part
of any such agent appointed by the Managing General Partner in good faith, except as otherwise expressly provided herein.
(c) Any amendment, modification or repeal of this Section 5.9 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Managing General Partner's liability (and that of its officers and directors) to the Partnership and the Non-Managing General Partners under this Section 5.9 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) The Managing General Partner may rely and shall be protected in acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.
(b) The Managing General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such Managing General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
(c) The Managing General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and duly appointed attorneys-in-fact. Each such attorney shall, to the extent provided by the Managing General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the Managing General Partner hereunder.
ARTICLE 6 - ACCOUNTING
The Partnership shall operate on the basis of a calendar year, and shall report its operations for tax and all other purposes in accordance with those methods the Managing General Partner and the Partnership's accountant deem advisable.
The Partnership shall maintain full and accurate books at its principal office which all Partners shall have the right to inspect and examine during business hours upon reasonable written notice to the Managing General Partner. The Managing General Partner shall keep or cause such books to be kept and shall fully and accurately enter all transactions of the Partnership therein. Such books shall be closed and balanced at the end of each calendar year. On or before March 31 of each year, the Managing General Partner will furnish the Non- Managing General Partners with a balance sheet and a statement of income and expenses of the Partners for the prior calendar year and a report on Treasury Form K-1 containing information relating to the Partnership to be used in preparing a Non-Managing General Partner's personal federal income tax return.
The books of account of the Partnership shall be kept in accordance with good and accepted bookkeeping and accounting practices for similar properties, provided that all methods of accounting and of treating particular transactions shall be in accordance with the methods of accounting employed for Federal income tax purposes. The determinations of the Managing General Partner with respect to the treatment of any items or its allocation for federal, state or local tax purposes shall be binding upon all the Partners so long as such determination shall not be inconsistent with any express term hereof or of the Redemption Agreement.
The Partnership's certified public accountant shall be designated by the Managing General Partner, subject to the terms and provisions of Section 5.3(h).
The Managing General Partner shall, on behalf of the Partnership, open and maintain a bank account or accounts in a bank or other financial institution of its choosing in which shall be deposited all of the capital, cash receipts and other funds of the Partnership.
ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING
GENERAL PARTNERS
Except as provided herein, the Non-Managing General Partners shall not be obligated to make a contribution of any sort whatsoever to the capital of the Partnership, or to provide a loan.
Each Partner hereby represents and covenants that its execution of this Agreement has been duly authorized by proper corporate action or otherwise.
Except as otherwise provided in this Agreement, no Non-Managing General Partner shall take part in, or interfere in any manner with, the conduct or control of the business of the Partnership, or shall have any right or authority to act for or bind the Partnership.
In addition to the foregoing rights (including any limitations thereof) and obligations, the Non-Managing General Partners shall each have those rights and obligations conferred or imposed upon partners of a general partnership under applicable law, to the extent not inconsistent with the terms hereof.
Except as specifically provided in the Redemption Agreement, no Partner shall have the right to withdraw from the Partnership or have its interest in the Partnership redeemed by the Partnership.
ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND
TRANSFER OF PARTNERSHIP INTEREST
The Managing General Partner may not Transfer its interest in the Partnership or withdraw from the Partnership without the consent of the Non- Managing General Partners.
(a) Subject to the provisions of this Article 8, a Non-Managing General Partner may transfer its interest in the Partnership with the consent of the Managing General Partner, which consent may be withheld by the Managing General Partner in its sole and absolute
discretion. Nothing in this Agreement shall be deemed to preclude the purchase by the Managing General Partner of any Non-Managing General Partnership interest and the admission of a Managing General Partner as a Non-Managing General Partner in connection therewith.
(b) If the interest, or any part thereof, of a Partner in the Partnership is disposed of pursuant to this Section, such Partner shall nevertheless be entitled to a portion of the income, gain, loss, deduction and credit allocated to such interest or part thereof in accordance with the provisions of this agreement for the fiscal year of the Partnership in which such disposition occurs, based upon the number of months during such year that such Partner owned such interest or part thereof. Any predecessor or successor of such Partner in respect of such interest or part thereof shall share in such profits and losses for the fiscal year in which such disposition occurs and the Partnership shall be bound by such allocation, provided the same shall be deemed reasonable by the Partnership's accountants, upon being furnished with timely written notice of same. Distributions of cash or other property shall be made only to such persons who are Partners on the date of distribution.
(c) Without limiting the foregoing, the Managing General Partner may prohibit any transfer by a Non-Managing General Partner of its interest in the Partnership if, in the opinion of legal counsel to the Partnership, such transfer would require filing of a registration statement under the Securities Act of 1933 or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or interests in the Partnership, or would cause a termination of the Partnership under Section 708 of the Code.
(d) Without limiting the foregoing, no transfer by a Non-Managing
General Partner of its interests in the Partnership may be made to any Person if
(i) in the opinion of legal counsel for the Partnership, it would result in the
Partnership being treated as an association taxable as a corporation; (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code; (iii) such transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(c) of the Code); (iv) such transfer would,
in the opinion of legal counsel for the Partnership, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan
pursuant to Department of Labor Regulations Section 2510.2-101; or (v) such
transfer would subject the Partnership to be regulated under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
Retirement Income Security Act of 1974, each as amended, or would violate any
loan documents to which the Partnership is a party.
(e) The transfer of a Partnership interest shall not constitute, or result in, a dissolution of the Partnership.
(a) No Non-Managing General Partner shall have the right to substitute
a transferee as a Non-Managing General Partner in his place. The Managing
General Partner shall, however, have the right to consent to the admission of a
transferee of the interest of a Non-Managing General Partner pursuant to this
Section 8.4 as a Substituted Non-Managing General Partner, which consent may be
given or withheld by the Managing General Partner in its sole and absolute
discretion. The Managing General Partner's failure or refusal to permit a
transferee of any such interests to become a Substituted Non-Managing General
Partner shall not give rise to any cause of action against the Partnership or
any Partner.
(b) A transferee who has been admitted as a Substituted Non-Managing General Partner in accordance with this Article 8 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Non-Managing General Partner under this Agreement.
If the Managing General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee as a Substituted Non- Managing General Partner, as described in Section 8.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be deemed to have had assigned to it, and shall be entitled to receive distributions from the Partnership and the share of net income, net losses, and any other items, gain, loss deduction and credit of the Partnership attributable to the interest in the Partnership assigned to such transferee, but except as otherwise provided herein shall not be deemed to be a holder of an interest in the Partnership for any other purpose under this Agreement, and shall not be entitled to vote in any matter presented to the Non-Managing General Partners for a vote (such interest in the Partnership being deemed to have been voted on such matter in the same proportion as all other interests held by Non-Managing General Partners are voted). In the event any such transferee desires to make a further assignment of any such interest in the Partnership, such transferee shall be subject to all of the provisions of this Article 8 to the same extent and in the same manner as any Non-Managing General Partner desiring to make such an assignment.
ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION
(a) Except as herein otherwise expressly provided, the Partnership shall be dissolved upon the occurrence of any of the following events:
(1) agreement by all of the Partners to dissolve the Partnership;
(2) expiration of the term provided in Section 1.5 hereof;
(3) sale or taking by eminent domain or other lawful government action resulting in transfer of title of substantially all of the Partnership's assets; or
(4) any other event which, under applicable law, results in the dissolution of the Partnership.
(b) Dissolution shall be effective on the date of the event giving
rise to the dissolution, but the Partnership shall not terminate until the
assets thereof have been distributed in accordance with the provisions of
Section 9.2 hereof.
(a) If the Partnership shall be dissolved by reason of the occurrence of any of the circumstances described in Section 9.1, no further business shall be conducted by the Partnership except for taking of such action as shall be necessary for the winding up of its affairs and distribution of its assets to the Partners pursuant to the provisions of this Article 9. Upon such dissolution, the Managing General Partner shall act as liquidator or, if it is unable or unwilling to so act, it shall appoint one or more liquidators, who shall have full authority to wind up the affairs of the Partnership and to make final distribution as provided herein.
Upon such dissolution of the Partnership, the liquidator(s) shall determine which, if any, Partnership properties and assets should be distributed in kind, and dispose of all other Partnership properties and assets at the best cash price obtainable therefor and distribute the proceeds as follows:
(1) First, to the payment and discharge of all of the Partnership's debts and liabilities to creditors other than the Partners;
(2) Second, to the payment and discharge of all of the Partnership's debts and liabilities to Partners in their capacities as creditors of the Partnership;
(3) The balance, if any, to the Partners in accordance with the provisions of Article 4.
(b) Notwithstanding the foregoing, if any Partner shall be indebted to the Partnership, then, until payment of such indebtedness by said Partner, the liquidator(s) shall retain such Partner's distributive share of the Partnership properties and assets and, after applying the cost of operation of such properties and assets during the period of such liquidation against the income therefrom, the balance of such income shall be applied in liquidation of such indebtedness. However, if at the expiration of six (6) months after notice of such outstanding indebtedness has been given to such Partner and such amount has not been paid or otherwise liquidated in full, the liquidator(s) may sell the assets allocable to such Partner at public or private sale at the best price immediately obtainable, such best price to be determined in the sole judgement of the liquidator(s). So much of the proceeds of such sale as shall be necessary to liquidate such indebtedness shall then be so applied, and the balance of such proceeds, if any, shall be distributed to such Partner. Any gain or loss realized for Federal income tax purposes upon the disposition of such assets shall, to the extent permitted by law, be allocated to such Partner, and to the extent not so permitted, to the Partners.
Thereafter, the liquidator(s) shall comply with all requirements of the Act, or other applicable law, pertaining to the winding up of a limited partnership, at which time the Partnership shall stand terminated.
(c) In the event the Managing General Partner's interest in the
Partnership is "liquidated" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g) (including, without limitation, upon the liquidation of the
Partnership) and the Managing General Partner's Capital Account has a deficit
balance after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs,
the Managing General Partner shall contribute to the capital of the Partnership
the amount necessary to restore such deficit balance to zero in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(3).
ARTICLE 10 - MISCELLANEOUS
This Agreement and the Partners hereto are subject to the terms and provisions of the Redemption Agreement. If, and to the extent that, any terms or provisions of this Agreement are inconsistent with any terms and provisions of the Redemption Agreement, the terms and provisions of the Redemption Agreement shall govern and control.
All notices, demands, consents, options, elections, or other communications hereunder shall be in writing and shall be deemed to have been exercised, made or given upon delivery if delivered by hand or by courier service and three (3) business days after being deposited in the United States mail and sent by certified or registered mail, return receipt requested, postage prepaid. Any notice required to be sent to any Partner shall be sent to the addresses specified on
Each of the Partners will hereafter execute and deliver such further instruments, and do such further acts as may be required to carry out the intent and purposes of this Agreement.
This Agreement may be executed in one or more counterparts and all such counterparts shall constitute one agreement binding on all the parties, notwithstanding that all the parties are not signatories to the original or the several counterparts.
None of the provisions of this Agreement shall be for the benefit or enforceable by the creditors of the Partnership.
This Agreement shall, except as herein otherwise expressly provided, be governed and construed in accordance with the laws of the State of California.
This Agreement may be amended only by a written amendment signed by all of the Partners.
Any pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the undersigned may require.
Except as otherwise provided herein, all provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective heirs, executors, administrators, personal representatives, successors and permitted assigns of any of the parties to this Agreement. However, nothing in this Agreement, whether expressed or implied, is intended to confer upon any entity, other than specifically provided, any rights or benefits under or by reason of this Agreement.
The headings contained at the beginning of each Article and Section are for purposes of convenience only and are not intended to limit, expand or define the content thereof.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY HERETO ACCEPTS FOR ITSELF, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Each party hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to any party hereto, at its address provided in this Agreement, such service being hereby acknowledged by each party to be sufficient for personal jurisdiction in any action against such party in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including, without limitation, contract claims, tort claims, beach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
WITNESS: MANAGING GENERAL PARTNER: ------------------------ BOSTON PROPERTIES LLC By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Bradley A. Jacobson By: /s/ Thomas J. O'Connor ---------------------------- ------------------------------ Name: Thomas J. O'Connor Title: Vice President WITNESS: NON-MANAGING GENERAL PARTNERS: ----------------------------- BP EC1 HOLDINGS LLC By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Bradley A. Jacobson By: /s/ Thomas J. O'Connor ---------------------------- ------------------------------ Name: Thomas J. O'Connor Title: Vice President WITNESS: PIC REALTY CORPORATION /s/ Bradley A. Jacobson By: /s/ Gary L. Frazier ---------------------------- -------------------------------------- Name: Gary L. Frazier Title: Vice President 29 |
SCHEDULE A ---------- |
ATTACHED TO AMENDED AND RESTATED
PARTNERSHIP AGREEMENT OF
ONE EMBARCADERO CENTER VENTURE
Managing General Partner ------------------------ Name and Address Percentage Interest ---------------- ------------------- Boston Properties LLC 0.499830% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 Non-Managing Partners --------------------- Name and Address Percentage Interest ---------------- ------------------- BP EC1 Holdings LLC 49.483214% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 PIC Realty Corporation 50.016956% c/o Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attention: John R. Triece Facsimile: (201) 683-1797 |
with copies to:
Prudential Insurance Company of America O'Melveny & Myers 4 Embarcadero Center, Suite 2700 Embarcadero Center West San Francisco, CA 94111 275 Battery Street Attention: Harry Mixon San Francisco, CA 94111 Facsimile: (415) 956-2197 Attention: Stephen A. Cowan Facsimile: (415) 984-8701 |
[INTENTIONALLY OMITTED]
Approved Terms and Conditions of Loans from Managing General Partner
Exhibit A [FORM OF BP NOTE] --------- DELAYED DEMAND NOTE ------------------- $_____________________ San Francisco, California _____________, 19__ |
The outstanding balance of principal due hereunder may be prepaid in full at any time, or from time to time in part in multiples of One Thousand Dollars ($1,000.00) without any prepayment premium.
The Maker agrees to pay all charges of the holder hereof in connection with the collection and enforcement of this Note, including reasonable attorneys' fees and disbursements.
The Maker hereby waives presentment, demand, notice, protest and all other suretyship defenses generally and agrees that any renewal, extension or postponement of the time of payment or any other indulgence, may be effected without notice to and without releasing the Maker from any liability hereunder.
This Note shall have the effect of an instrument under seal.
ONE EMBARCADERO CENTER VENTURE
By: Boston Properties LLC, its managing general
partner
By: Boston Properties Limited Partnership,
its managing member
By: Boston Properties, Inc., its
general partner
By:__________________________
Name:
Title:
The "Equity Redemption Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $74,200,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among BankBoston, N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank National Association, Citizens Bank and other banks which may become parties thereto as the lenders thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $328,143,000. The $74,200,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
The "Prudential Guarantied Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $14,000,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among The Chase Manhattan Bank as lender thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $92,000,000. The $14,000,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
Description of Business Interruption and General Liability Insurance
Business Interruption Insurance $145,000,000 Commercial General Liability $ 2,000,000 Umbrella Liability Program $200,000,000 |
Description of Financing Plan for One Embarcadero Center Venture
The Equity Redemption Loan will, upon the earlier of the redemption of PIC Realty Corporation from the Partnership or the 90th day after the date of execution of this Agreement, be repaid through (i) a draw on the Credit Agreement by the Partnership of approximately $6,600,000 and (ii) cash of the Partnership in an amount equal to approximately $67,600,500, which cash will represent proceeds from the repayment of the Special BP Loan. As a result of the draw under the Credit Agreement, the Partnership will be a primary obligor with respect to approximately $6,600,000 of indebtedness under the Credit Agreement.
In the event that the interest of PIC Realty Corporation in the Partnership is not redeemed by February 10, 1999, or in the event that the Partnership is not, by such date, released in full from all obligations with respect to the Prudential Guarantied Loan and related obligations, then either (i) Prudential shall continue to guaranty the Prudential Guarantied Loan until such redemption, assumption and release occurs or (ii) if the Partnership repays and refinances the Prudential Guarantied Loan by obtaining any replacement debt ("Replacement Debt"), Prudential shall guarantee the lenders thereof of the punctual payment in full and all other obligations of such Replacement Debt.
borrowers, the Partnership will be the primary obligor on $160 million.
EXHIBIT 99.8
THIRD AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
EMBARCADERO CENTER ASSOCIATES
TABLE OF CONTENTS
Page ---- ARTICLE 1 - THE PARTNERSHIP........................................................................... 3 SECTION 1.1 Continuation of the Partnership................................................ 3 SECTION 1.2 Partnership Name............................................................... 3 SECTION 1.3 Place of Business.............................................................. 3 SECTION 1.4 General Partnership............................................................ 3 SECTION 1.5 Term of Partnership............................................................ 3 SECTION 1.6 Purposes of the Partnership.................................................... 3 SECTION 1.7 Definitions.................................................................... 4 ARTICLE 2 - CAPITALIZATION............................................................................ 8 SECTION 2.1 Partners' Percentage Interests................................................. 8 SECTION 2.2 Additional Capital Contributions; Limitations on Future Capital Contributions; Obligation of Managing Partner to Purchase BP Notes............. 8 SECTION 2.3 Admission of Additional Partners............................................... 8 SECTION 2.4 Return of Capital Accounts and Redemption of Partnership Interests. 9 SECTION 2.5 Investment Loan, Equity Redemption Loan, Prudential Guarantied Loan, Existing Loans and Replacement Loans........................................... 9 ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES......................................................... 10 SECTION 3.1 Capital Accounts and Allocations of Profit and Loss............................ 10 ARTICLE 4 - DISTRIBUTIONS............................................................................. 12 SECTION 4.1 Distributions.................................................................. 12 SECTION 4.2 Amounts Withheld............................................................... 12 ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP............................................................. 12 SECTION 5.1 Management..................................................................... 12 SECTION 5.2 Rights to Delegate and Employ.................................................. 13 SECTION 5.3 Enumeration of Specific Rights and Powers...................................... 13 SECTION 5.4 Limitations on Managing General Partner's Authority............................ 15 SECTION 5.5 Filing of Returns and Other Writings........................................... 16 SECTION 5.6 Other Permissible Activities................................................... 16 SECTION 5.7 Contracts with Affiliates; Borrowing from Partners............................. 17 SECTION 5.8 Indemnification................................................................ 17 SECTION 5.9 Liability of the Managing General Partner...................................... 19 SECTION 5.10 Other Matters Concerning the Managing General Partner.......................... 20 ARTICLE 6 - ACCOUNTING................................................................................ 20 SECTION 6.1 Fiscal Year and Tax Accounting Method.......................................... 20 |
Page ---- SECTION 6.2 Books, Records, and Tax Reports..................................... 21 SECTION 6.3 Accounting Practice................................................. 21 SECTION 6.4 Accountants......................................................... 21 SECTION 6.5 Bank Accounts....................................................... 21 ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING.................................... 21 SECTION 7.1 Contributions by Non-Managing General Partners...................... 21 SECTION 7.2 Corporate Authority................................................. 21 SECTION 7.3 Role of Non-Managing General Partners............................... 22 SECTION 7.4 Rights and Obligations Under the Act................................ 22 SECTION 7.5 Redemption Rights................................................... 22 ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND..................................... 22 SECTION 8.1 Non-Managing General Partners....................................... 22 SECTION 8.2 Managing General Partner............................................ 22 SECTION 8.3 Transfer of Partnership Interests................................... 22 SECTION 8.4 Substituted Non-Managing General Partners........................... 23 SECTION 8.5 Assignees........................................................... 24 ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION....................................... 25 SECTION 9.1 Dissolution......................................................... 25 SECTION 9.2 Liquidation......................................................... 25 ARTICLE 10 - MISCELLANEOUS................................................................. 26 SECTION 10.1 Redemption Agreement................................................ 26 SECTION 10.2 Notice.............................................................. 26 SECTION 10.3 Further Assurances.................................................. 27 SECTION 10.4 Agreement in Counterparts........................................... 27 SECTION 10.5 Construction........................................................ 27 SECTION 10.6 Governing Law....................................................... 27 SECTION 10.7 Amendments.......................................................... 27 SECTION 10.8 Pronouns............................................................ 27 SECTION 10.9 Successors in Interest.............................................. 27 SECTION 10.10 Headings............................................................ 27 SECTION 10.11 Consent to Jurisdiction and Service of Process...................... 28 SECTION 10.12 Waiver of Jury Trial................................................ 28 |
Schedules and Exhibits
Schedule A Partners and Percentage Interests Exhibit A Legal Description of Property Exhibit B Approved Terms and Conditions of Loans from Managing General Partner Exhibit C Description of Equity Redemption Loan Exhibit D Description of Prudential Guarantied Loan Exhibit E Description of Business Interruption and General Liability Insurance Exhibit F Description of Financing Plan for the Partnership Exhibit G Form of Special BP Loan Note |
THIRD AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
EMBARCADERO CENTER ASSOCIATES
RECITALS:
C. On October 31, 1998, all of the outstanding partnership interests in the Partnership were held by PIC, with a 60.0% partnership interest, and Embarcadero Center Investors Partnership, a California limited partnership
E. To reflect the transfers, successions, admissions and withdrawals recited above, to provide for the continuation of the Partnership as a California general partnership under the Act, and to provide for the revised terms and conditions under which the Partnership will continue in existence and be governed, the parties wish to amend and restate the Prior Partnership Agreement in its entirety, as provided herein.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 - THE PARTNERSHIP
The name of the Partnership shall continue to be "EMBARCADERO CENTER ASSOCIATES." All business of the Partnership shall be conducted under such name or under such variations thereof as the Managing General Partner deems necessary or appropriate to comply with the requirements of law in any applicable jurisdiction in which the Partnership may do business.
The principal place of business of the Partnership shall be c/o Boston Properties, Inc., Four Embarcadero Center, Suite 2600, San Francisco, California 94111, or at such other place or places as the Managing General Partner may designate.
The Partnership shall be a general partnership, governed by the Act. The interests of the Partners in the Partnership shall be personal property for all purposes. All real and other property owned by the Partnership shall be deemed owned by the Partnership, as a partnership, and no Partner, individually, shall have any ownership of such property.
The term of the Partnership shall continue until 12:00 noon on December 31, 2050, unless sooner terminated in accordance with the terms and conditions of this Agreement, or by applicable law.
The purpose of the Partnership shall be:
(a) to own, manage, develop, improve, renovate, rehabilitate, operate, hold for investment, lease, encumber, mortgage, pledge, assign, exchange, sell and/or otherwise deal with the Property;
(b) to retain managing agents and consultants therefor, and to do all things necessary or useful in connection with any of the foregoing;
(c) in addition to, and in furtherance of these purposes and powers,
the Partnership shall have the power (i) to borrow money and
issue evidences of indebtedness and to secure same by mortgage,
pledge or other lien (including, without limitation, obtaining
the Equity Redemption Loan and Prudential Guarantied Loan), and
(ii) to guarantee the obligations of any other Person when done
in furtherance of the Partnership's business, including any
indebtedness of such Person, and to secure such guarantee
obligations by mortgage, pledge or other lien on any asset of the
Partnership;
(d) to make and service the Investment Loan as contemplated herein;
(e) subject to the express terms, provisions and restrictions of this Agreement, to engage in and consummate the transactions described in the Master Transaction Agreement;
(f) to enter into the Redemption Agreement and consummate the transactions described therein; and
(g) to enter into, perform and carry out contracts of any kind necessary to, or in connection with, or incidental to the accomplishment of any of the foregoing purposes; and
(h) to use the Excess Mortgage Loan Proceeds to make the Special BP Loan.
The Partnership shall not engage in any other business. It is further agreed that the Partnership shall at all times adhere to at least the level of quality in the maintenance and operation of the Property as a first class office and retail complex as maintained by the Partnership during the twelve (12) month period preceding the date hereof.
In addition to the capitalized terms defined in the recitals and elsewhere herein, the following terms shall have the following meanings:
who may become a Non-Managing General Partner pursuant to the terms of this Agreement, in each such case until such Person has ceased to be a Non-Managing General Partner pursuant to the terms of this Agreement. "Non-Managing General Partners" means all such Persons, if there is more than one. If at any time there is more than one Non-Managing General Partner, then all references herein to the Non-Managing General Partner shall, unless the context requires otherwise, be deemed to refer to the Non-Managing General Partners.
ARTICLE 2 - CAPITALIZATION
(a) No Partner shall, except as otherwise required by the Act, other applicable law or this Agreement, be required to make any further Capital Contributions to the Partnership, and so long as PIC or any Affiliate of PIC is a Partner, no Capital Contributions shall be made to the Partnership without the prior written consent of PIC.
(b) At no time prior to the second anniversary of the Redemption Distribution shall the Managing General Partner call or accept Capital Contributions from any Partner for the purpose of repaying the Equity Redemption Loan or any debt replacing or refinancing the Equity Redemption Loan, and during such period no Capital Contributions made after the date hereof shall be used in such manner.
(c) To the extent that it is necessary or desirable for the Partnership, in the sole discretion of the Managing General Partner, to raise cash for the purpose of funding working capital, capital expenditures, leasing commissions, tenant improvements or other expenditures relating to the Property at a time when the Partnership is unable to raise such cash through the receipt of Capital Contributions because of the prohibition set forth in Section 2.2(a), the Managing General Partner agrees that it (or an Affiliate of the Managing General Partner) will lend funds to the Partnership for such purposes by purchasing BP Notes from the Partnership.
The Managing General Partner shall have the right, from time to time, provided it obtains the consent of the Non-Managing General Partners, to admit additional Non-Managing General Partners to the Partnership.
Upon the admission of any new Non-Managing General Partner, an amendment of this Agreement, reflecting such change, shall be signed by the Managing General Partner and the additional Non-Managing General Partner, and an amendment to the Certificate, reflecting such change, to the extent required or appropriate under applicable law, shall be signed by all Partners
either individually or by the Managing General Partner on their behalf and filed with the Secretary of State of the State of California.
Except as otherwise provided in this Agreement or as set forth in the Redemption Agreement, (i) no Partner shall have the right to demand and withdraw a return of its Capital Account, and (ii) no Partner shall have the right to receive property other than cash upon a distribution to the Partners, redemption of any Partner's interest or liquidation of the Partnership.
No Partner shall receive any interest, salary, or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Partnership or otherwise in its capacity as Partner, except (i) interest received, if any, on BP Notes or (ii) as otherwise provided in this Agreement.
(a) The Partnership is hereby authorized to, and shall, make the Investment Loan to Investment Loan Borrower and acquire the Investment Notes on the date hereof.
(b) The Partnership is hereby authorized to, and shall, borrow the Equity Redemption Loan and Prudential Guarantied Loan on the date hereof and shall thereafter perform its obligations in respect thereof subject to the terms and limitations of this Agreement. The proceeds of the Equity Redemption Loan and Prudential Guarantied Loan shall be applied to make the Investment Loan and acquire the Investment Notes on the date hereof.
(c) In accordance with Section 2.2(b), the Partnership shall not, at any time prior to the second anniversary of the Redemption Date, use Capital Contributions made after the date hereof for the purpose of repaying the Equity Redemption Loan or any debt replacing the Equity Redemption Loan.
(e) Notwithstanding anything to the contrary provided in this Agreement, all costs, fees and expenses incurred in connection with the consummation of the Equity
Redemption Loan and Prudential Guarantied Loan shall be paid by the Partnership and borne by the Partners (and reflected in the Partnership's books as follows):
(ii) All other Approved Loan Costs shall be paid by the Partnership as current expenses and borne by each Partner in accordance with its Percentage Interest on the date hereof;
(iii) Any other costs and expenses incurred by the Partnership with respect to the Equity Redemption Loan shall be paid by the BP Partners; and
(iv) Any other costs and expenses incurred by the Partnership with respect to the Prudential Guarantied Loan shall be paid by PIC.
ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES
AND MAINTENANCE OF CAPITAL ACCOUNTS
be determined so as to take account of the variation between the adjusted tax
basis and book value of such property in the same manner as under Code Section
704(c), and the amount of upward and/or downward adjustments to the book value
of the Partnership property shall be treated as income, gain, deduction and/or
loss for purposes of applying the allocation provisions of this Article 3. In
the event that Code Section 704(c) applies to Partnership property, the Capital
Accounts of the Partners shall be adjusted in accordance with Regulations
Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion,
amortization and gain and loss, as computed for book purposes, with respect to
such property. The amount of all distributions to Partners shall be determined
pursuant to Section 4.1 hereof. Notwithstanding any provision contained herein
to the contrary, no Partner shall be required to restore any negative balance in
its Capital Account.
(d) The tax returns for the Partnership for the 1998 calendar year shall be prepared using the interim closing of the books method.
ARTICLE 4 - DISTRIBUTIONS
(a) Except as provided in Section 4.1(b) or Section 7.5, and subject to the needs of the Partnership to accumulate reserves, which prior to the Redemption Distribution shall be determined in the sole discretion of the Managing General Partner, distributions to the Partners shall be made in proportion to the Partners' Percentage Interests. Distributions shall be made from time to time at the discretion of the Managing General Partner.
(b) Notwithstanding anything to the contrary provided in this Agreement, all payments in respect of title insurance received by the Partnership the amount of which was affected by the non-imputation endorsement to the Partnership's title insurance policy issued as of the date hereof with respect to the Property will be distributed only to the BP Partners in proportion to their respective Percentage Interests.
All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution to the Partnership, the Managing General Partner or the Non-Managing General Partners shall be treated as amounts distributed to the Managing General Partner or Non-Managing General Partners pursuant to this Article for all purposes under this Agreement. The Managing General Partner may allocate any such amounts among the Partners in any manner that is in accordance with applicable law.
ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP
The management powers over the business and affairs of the Partnership are and shall be exclusively vested in the Managing General Partner, who shall be subject to the provisions of this Agreement and to applicable law, and, subject to the consent rights set forth in Section 5.4 hereof, no Non-Managing General Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership.
The Managing General Partner shall devote such time and effort to the Partnership as it deems necessary and may retain agents as reasonably required or desirable to assist it. The Managing General Partner shall review the status and condition of the Property and shall supervise the activities of any agents engaged by it. The Managing General Partner may delegate any of its powers, rights and obligations hereunder, and, in furtherance of any such delegation, may appoint, employ, contract or otherwise deal with any Person (including Affiliates, but only so long as such employment, contract or other deal is not less favorable to the Partnership than would be an arms-length transaction on market terms) for the transaction of the business of the Partnership, which Persons may, under the supervision of the Managing General Partner, perform any acts or services for the Partnership as the Managing General Partner may approve.
Subject to Section 5.4, the Managing General Partner shall have all the rights and powers which may be possessed by a general partner in a partnership formed under the Act, which are otherwise conferred by law or which are necessary, advisable or convenient to the discharge of duties under this Agreement and to the management, direction and control of the business and affairs of the Partnership, exercisable without the consent of the Non-Managing General Partners (except as herein expressly provided), including the following rights and powers:
(a) to conduct the tax, financial and business affairs of the Partnership;
(b) to take all action necessary to acquire, purchase, renovate, rehabilitate, hold, own, improve, operate, encumber, mortgage, pledge, assign, exchange, or to sign notes or guarantee payment of any loans relating to the purposes of the Partnership;
(c) to manage, repair, insure, service, promote, advertise, lease, sublease, and create or release interests in the Partnership property;
(d) to timely pay out of Partnership funds such expenses as are necessary to carry out the intentions and purposes of the Partnership including real estate taxes and debt service payments to the extent there is sufficient gross cash proceeds.
(e) to sell and/or otherwise dispose of all or any portion of the Property;
(f) to make appropriate elections permitted under any applicable tax law, provided that such elections will not, in the opinion of counsel or the accountants for the Partnership, be disadvantageous to a majority in interest of the Non-Managing General Partners;
(g) to change the principal office of the Partnership to other places subject to the notice provision herein provided;
(h) to employ agents, attorneys, public accountants (which shall be, in all events, a "Big Five" accounting firm), and depositories and to grant powers of attorney;
(i) to employ persons necessary and appropriate in the operation and management of the Partnership and the Property, including, but not limited to, supervisory managing agents, insurance brokers, real estate brokers, and loan brokers, on such terms and for such compensation which does not exceed generally prevailing market rates, all to act under the supervision of the Managing General Partner, and the Managing General Partner on behalf of the Partnership is hereby authorized to enter into an agreement with any Managing General Partner in their individual capacities or a corporation or other entity affiliated with any Managing General Partner for the performance of such services to the Partnership except as otherwise provided for in this Agreement;
(m) to lend money to any BP Partner or any Affiliate of any BP Partner pursuant to a Special BP Loan.
(a) Notwithstanding anything in this Agreement to the contrary, for so long as PIC is a Partner, the Managing General Partner shall not have the power or authority to, and shall not, cause the Partnership to take any of the following actions, without the consent of PIC, which consent shall not be unreasonably withheld:
(i) other than in the ordinary course of business, cause any closing of a material portion of the Property for renovations (other than repairs necessitated as a result of a fire or other casualty);
(iii) take any action or make any decision involving credit, management or servicing decisions relating to the Investment Notes other than making an election to accelerate the Investment Notes upon the occurrence of (and during the continuance of) an Event of Default or taking any action or decision relating to the Redemption Distribution;
(iv) make a loan to or guarantee the indebtedness of any Person other than (A) loans to tenants of the Property for tenant improvements or (B) a Special BP Loan;
(v) cause or permit the sale of (A) all or any material portion of the Property, except leases, concessionaire agreements and space licenses entered into in the ordinary course of business of the Property, or (B) except in connection with the Redemption Distribution, the Investment Notes or any portion thereof or interest therein;
(vi) cause the Partnership to (A) obtain any borrowing, (B) issue evidences of indebtedness, or (C) guaranty the obligations of any Person, if such borrowing, issuance or guaranty provides for recourse to PIC (other than the Prudential Guarantied Loan or the Equity Redemption Loan or any Replacement Debt (as defined in Exhibit F);
(vii) amend this Agreement if such amendment affects or could affect (A) the receipt, amount or timing of any distributions to PIC, or (B) PIC's rights or obligations under this Agreement or the Redemption Agreement;
(viii) cause the dissolution of the Partnership, or cause the Partnership to file or otherwise commence a voluntary bankruptcy case, or consent to the commencement of an involuntary bankruptcy case, under the United States Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case, or consent to the
appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of the Property;
(x) assign, relinquish, settle, compromise, waive or impair any of the Partnership's rights under or with respect to, or amend, terminate, extend the term of (or time for payments due, or performance to be rendered, to the Partnership under) or otherwise modify any instrument or agreement under which the Partnership has rights and to which the Managing General Partner or any of its Related Parties is a party; or
(xi) engage in any activity without a good faith business purpose therefor and with the intent of manipulating the "Operating Profits" or "Operating Losses" of the Partnership described in the Redemption Agreement in a manner intended to materially adversely affect, to the benefit of the other Partners, the amounts that PIC would be entitled to receive under this Agreement or the Redemption Agreement.
The Managing General Partner shall be the Tax Matters Partner and is also specifically authorized to and shall cause the preparation and timely filing of all Partnership tax returns and shall, on behalf of the Partnership, subject to the terms and provisions of the Redemption Agreement, make such tax elections for the Partnership as it, after consultation with the Partnership's accountants, shall determine to be in the best interests of the Partners. In addition, the Managing General Partner shall timely file all other forms, documents or other writings with respect to the business and operation of the Partnership which shall be required by any governmental agency or authority having jurisdiction to require such forms, documents or other writings, and shall transmit to each Partner any form or document required to be transmitted by any such governmental agency.
Nothing herein contained shall be deemed to prevent any Partner or any shareholder or affiliate thereof from engaging in other activities for profit, whether in the real estate business or otherwise. The Managing General Partner (or any shareholder or affiliate thereof), or any Partner, may, in the future, organize and manage joint ventures, additional limited partnerships or other business entities for the acquisition, management and sale of real estate. Neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Partner or any affiliate from engaging in such activities, or require any Partner to permit the Partnership or any Partner to participate in any such activities and, as a material part of the consideration for each Partner's execution hereof, each Partner, for the benefit of the other Partners, hereby waives, relinquishes and renounces any such right or claim of participation.
(a) To the fullest extent permitted by California law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement,
in which such Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith, was the result of active and deliberate
dishonesty, or was the result of a breach of this Agreement by such Indemnitee
(or by the Partner of which such Indemnitee is a director or officer); or (ii)
the Indemnitee actually received an improper personal benefit in money, property
or services, or in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty (except a guaranty by a Partner of
nonrecourse indebtedness of the Partnership or as otherwise provided in any such
loan guaranty) or otherwise for any indebtedness of the Partnership, and the
Managing General Partner is hereby authorized and empowered, on behalf of the
Partnership, to enter into one or more indemnity agreements consistent with the
provisions of this Section 5.8 in favor of any Indemnitee having or potentially
having liability for any such indebtedness. The termination of any proceeding
by conviction of an Indemnitee or upon a plea of nolo contendere or its
equivalent by an Indemnitee, or an entry of an order of probation against an
Indemnitee prior to judgment, creates a rebuttable presumption that such
Indemnitee acted in a manner contrary to that specified in this Section 5.8(a).
Any indemnification pursuant to this Section 5.8 shall be made only out of the
assets of the Partnership and shall not impose any personal liability on any
Partner, and neither the Managing General Partner nor any Non-Managing General
Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its obligations under this Section 5.8.
(c) Subject to the procedures set forth in Section 5.8(b), reasonable expenses incurred by an Indemnitee who is a party to a proceeding in a matter for which the Indemnitee has undertaken the defense pursuant to the provisions of this Section 5.8 (other than as a result of the rejection or dispute by the Managing General Partner of a claim for indemnification under Section 5.8(b)) shall be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 5.8(a) has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.
(d) The indemnification provided by this Section 5.8 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under this
Agreement or any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified.
(e) The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the Managing General Partner shall determine in its reasonable discretion, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership's activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
(f) In no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 5.8 solely because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 5.8 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 5.8 or any provision hereof shall be prospective only and shall not in any way affect the Partnership's liability to any Indemnitee under this Section 5.8, as in effect immediately prior to such amendment, modification, or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) Notwithstanding anything to the contrary set forth in this Agreement, except as otherwise expressly provided in this Agreement, the Managing General Partner and its officers and directors shall not be liable for monetary damages to the Partnership, any Partners or any Assignees for losses sustained or liabilities incurred as a result of reasonable errors in judgment or of any act or omission if the Managing General Partner acted in good faith; provided, however, that the Managing General Partner shall be liable to the Partnership and Partners for its material breaches of this Agreement.
(b) Subject to its obligations and duties as Managing General Partner
set forth in Section 5.3 hereof, and subject to the limitations set forth in
Section 5.4 hereof, the Managing General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The Managing General
Partner shall not be responsible for any misconduct or negligence on the part
of any such agent appointed by the Managing General Partner in good faith, except as otherwise expressly provided herein.
(c) Any amendment, modification or repeal of this Section 5.9 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Managing General Partner's liability (and that of its officers and directors) to the Partnership and the Non-Managing General Partners under this Section 5.9 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) The Managing General Partner may rely and shall be protected in acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.
(b) The Managing General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such Managing General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
(c) The Managing General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and duly appointed attorneys-in-fact. Each such attorney shall, to the extent provided by the Managing General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the Managing General Partner hereunder.
ARTICLE 6 - ACCOUNTING
The Partnership shall operate on the basis of a calendar year, and shall report its operations for tax and all other purposes in accordance with those methods the Managing General Partner and the Partnership's accountant deem advisable.
The Partnership shall maintain full and accurate books at its principal office which all Partners shall have the right to inspect and examine during business hours upon reasonable written notice to the Managing General Partner. The Managing General Partner shall keep or cause such books to be kept and shall fully and accurately enter all transactions of the Partnership therein. Such books shall be closed and balanced at the end of each calendar year. On or before March 31 of each year, the Managing General Partner will furnish the Non- Managing General Partners with a balance sheet and a statement of income and expenses of the Partners for the prior calendar year and a report on Treasury Form K-1 containing information relating to the Partnership to be used in preparing a Non-Managing General Partner's personal federal income tax return.
The books of account of the Partnership shall be kept in accordance with good and accepted bookkeeping and accounting practices for similar properties, provided that all methods of accounting and of treating particular transactions shall be in accordance with the methods of accounting employed for Federal income tax purposes. The determinations of the Managing General Partner with respect to the treatment of any items or its allocation for federal, state or local tax purposes shall be binding upon all the Partners so long as such determination shall not be inconsistent with any express term hereof or of the Redemption Agreement.
The Partnership's certified public accountant shall be designated by the Managing General Partner, subject to the terms and provisions of Section 5.3(h).
The Managing General Partner shall, on behalf of the Partnership, open and maintain a bank account or accounts in a bank or other financial institution of its choosing in which shall be deposited all of the capital, cash receipts and other funds of the Partnership.
ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING
GENERAL PARTNERS
Except as provided herein, the Non-Managing General Partners shall not be obligated to make a contribution of any sort whatsoever to the capital of the Partnership, or to provide a loan.
Each Partner hereby represents and covenants that its execution of this Agreement has been duly authorized by proper corporate action or otherwise.
Except as otherwise provided in this Agreement, no Non-Managing General Partner shall take part in, or interfere in any manner with, the conduct or control of the business of the Partnership, or shall have any right or authority to act for or bind the Partnership.
In addition to the foregoing rights (including any limitations thereof) and obligations, the Non-Managing General Partners shall each have those rights and obligations conferred or imposed upon partners of a general partnership under applicable law, to the extent not inconsistent with the terms hereof.
Except as specifically provided in the Redemption Agreement, no Partner shall have the right to withdraw from the Partnership or have its interest in the Partnership redeemed by the Partnership.
ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND
TRANSFER OF PARTNERSHIP INTEREST
The Managing General Partner may not Transfer its interest in the Partnership or withdraw from the Partnership without the consent of the Non- Managing General Partners.
(a) Subject to the provisions of this Article 8, a Non-Managing General Partner may transfer its interest in the Partnership with the consent of the Managing General Partner, which consent may be withheld by the Managing General Partner in its sole and absolute discretion. Nothing in this Agreement shall be deemed to preclude the purchase by the Managing General Partner of any Non-Managing General Partnership interest and the admission of a Managing General Partner as a Non-Managing General Partner in connection therewith.
(b) If the interest, or any part thereof, of a Partner in the Partnership is disposed of pursuant to this Section, such Partner shall nevertheless be entitled to a portion of the income, gain, loss, deduction and credit allocated to such interest or part thereof in accordance with the provisions of this agreement for the fiscal year of the Partnership in which such disposition occurs, based upon the number of months during such year that such Partner owned such interest or part thereof. Any predecessor or successor of such Partner in respect of such interest or part thereof shall share in such profits and losses for the fiscal year in which such disposition occurs and the Partnership shall be bound by such allocation, provided the same shall be deemed reasonable by the Partnership's accountants, upon being furnished with timely written notice of same. Distributions of cash or other property shall be made only to such persons who are Partners on the date of distribution.
(c) Without limiting the foregoing, the Managing General Partner may prohibit any transfer by a Non-Managing General Partner of its interest in the Partnership if, in the opinion of legal counsel to the Partnership, such transfer would require filing of a registration statement under the Securities Act of 1933 or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or interests in the Partnership, or would cause a termination of the Partnership under Section 708 of the Code.
(d) Without limiting the foregoing, no transfer by a Non-Managing
General Partner of its interests in the Partnership may be made to any Person if
(i) in the opinion of legal counsel for the Partnership, it would result in the
Partnership being treated as an association taxable as a corporation; (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code; (iii) such transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(c) of the Code); (iv) such transfer would,
in the opinion of legal counsel for the Partnership, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan
pursuant to Department of Labor Regulations Section 2510.2-101; or (v) such
transfer would subject the Partnership to be regulated under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
Retirement Income Security Act of 1974, each as amended, or would violate any
loan documents to which the Partnership is a party.
(e) The transfer of a Partnership interest shall not constitute, or result in, a dissolution of the Partnership.
(a) No Non-Managing General Partner shall have the right to substitute a transferee as a Non-Managing General Partner in his place. The Managing General Partner shall, however, have the right to consent to the admission of a transferee of the interest of a Non-Managing General Partner pursuant to this Section 8.4 as a Substituted Non-Managing General Partner, which consent may be given or withheld by the Managing General Partner in its sole and absolute discretion. The Managing General Partner's failure or refusal to permit a transferee of any such interests to become a Substituted Non- Managing General Partner shall not give rise to any cause of action against the Partnership or any Partner.
(b) A transferee who has been admitted as a Substituted Non-Managing General Partner in accordance with this Article 8 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Non-Managing General Partner under this Agreement.
If the Managing General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee as a Substituted Non- Managing General Partner, as described in Section 8.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be deemed to have had assigned to it, and shall be entitled to receive distributions from the Partnership and the share of net income, net losses, and any other items, gain, loss deduction and credit of the Partnership attributable to the interest in the Partnership assigned to such transferee, but except as otherwise provided herein shall not be deemed to be a holder of an interest in the Partnership for any other purpose under this Agreement, and shall not be entitled to vote in any matter presented to the Non-Managing General Partners for a vote (such interest in the Partnership being deemed to have been voted on such matter in the same proportion as all other interests held by Non-Managing General Partners are voted). In the event any such transferee desires to make a further assignment of any such interest in the Partnership, such transferee shall be subject to all of the provisions of this Article 8 to the same extent and in the same manner as any Non-Managing General Partner desiring to make such an assignment.
ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION
(a) Except as herein otherwise expressly provided, the Partnership shall be dissolved upon the occurrence of any of the following events:
(1) agreement by all of the Partners to dissolve the Partnership;
(2) expiration of the term provided in Section 1.5 hereof;
(3) sale or taking by eminent domain or other lawful government action resulting in transfer of title of substantially all of the Partnership's assets; or
(4) any other event which, under applicable law, results in the dissolution of the Partnership.
(b) Dissolution shall be effective on the date of the event giving
rise to the dissolution, but the Partnership shall not terminate until the
assets thereof have been distributed in accordance with the provisions of
Section 9.2 hereof.
(a) If the Partnership shall be dissolved by reason of the occurrence of any of the circumstances described in Section 9.1, no further business shall be conducted by the Partnership except for taking of such action as shall be necessary for the winding up of its affairs and distribution of its assets to the Partners pursuant to the provisions of this Article 9. Upon such dissolution, the Managing General Partner shall act as liquidator or, if it is unable or unwilling to so act, it shall appoint one or more liquidators, who shall have full authority to wind up the affairs of the Partnership and to make final distribution as provided herein.
Upon such dissolution of the Partnership, the liquidator(s) shall determine which, if any, Partnership properties and assets should be distributed in kind, and dispose of all other Partnership properties and assets at the best cash price obtainable therefor and distribute the proceeds as follows:
(1) First, to the payment and discharge of all of the Partnership's debts and liabilities to creditors other than the Partners;
(2) Second, to the payment and discharge of all of the Partnership's debts and liabilities to Partners in their capacities as creditors of the Partnership;
(3) The balance, if any, to the Partners in accordance with the provisions of Article 4.
(b) Notwithstanding the foregoing, if any Partner shall be indebted to the Partnership, then, until payment of such indebtedness by said Partner, the liquidator(s) shall retain such Partner's distributive share of the Partnership properties and assets and, after applying the cost of operation of such properties and assets during the period of such liquidation against the income therefrom, the balance of such income shall be applied in liquidation of such indebtedness. However, if at the expiration of six (6) months after notice of such outstanding indebtedness has been given to such Partner and such amount has not been paid or otherwise liquidated in full, the liquidator(s) may sell the assets allocable to such Partner at public or private sale at the best price immediately obtainable, such best price to be determined in the sole judgement of the liquidator(s). So much of the proceeds of such sale as shall be necessary to liquidate such indebtedness shall then be so applied, and the balance of such proceeds, if any, shall be distributed to such Partner. Any gain or loss realized for Federal income tax purposes upon the disposition of such assets shall, to the extent permitted by law, be allocated to such Partner, and to the extent not so permitted, to the Partners.
Thereafter, the liquidator(s) shall comply with all requirements of the Act, or other applicable law, pertaining to the winding up of a limited partnership, at which time the Partnership shall stand terminated.
(c) In the event the Managing General Partner's interest in the
Partnership is "liquidated" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g) (including, without limitation, upon the liquidation of the
Partnership) and the Managing General Partner's Capital Account has a deficit
balance after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs,
the Managing General Partner shall contribute to the capital of the Partnership
the amount necessary to restore such deficit balance to zero in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(3).
ARTICLE 10 - MISCELLANEOUS
This Agreement and the Partners hereto are subject to the terms and provisions of the Redemption Agreement. If, and to the extent that, any terms or provisions of this Agreement are inconsistent with any terms and provisions of the Redemption Agreement, the terms and provisions of the Redemption Agreement shall govern and control.
All notices, demands, consents, options, elections, or other communications hereunder shall be in writing and shall be deemed to have been exercised, made or given upon delivery if delivered by hand or by courier service and three (3) business days after being deposited in the United States mail and sent by certified or registered mail, return receipt requested, postage prepaid. Any notice required to be sent to any Partner shall be sent to the addresses specified on
Each of the Partners will hereafter execute and deliver such further instruments, and do such further acts as may be required to carry out the intent and purposes of this Agreement.
This Agreement may be executed in one or more counterparts and all such counterparts shall constitute one agreement binding on all the parties, notwithstanding that all the parties are not signatories to the original or the several counterparts.
None of the provisions of this Agreement shall be for the benefit or enforceable by the creditors of the Partnership.
This Agreement shall, except as herein otherwise expressly provided, be governed and construed in accordance with the laws of the State of California.
This Agreement may be amended only by a written amendment signed by all of the Partners.
Any pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the undersigned may require.
Except as otherwise provided herein, all provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective heirs, executors, administrators, personal representatives, successors and permitted assigns of any of the parties to this Agreement. However, nothing in this Agreement, whether expressed or implied, is intended to confer upon any entity, other than specifically provided, any rights or benefits under or by reason of this Agreement.
The headings contained at the beginning of each Article and Section are for purposes of convenience only and are not intended to limit, expand or define the content thereof.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY HERETO ACCEPTS FOR ITSELF, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Each party hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to any party hereto, at its address provided in this Agreement, such service being hereby acknowledged by each party to be sufficient for personal jurisdiction in any action against such party in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including, without limitation, contract claims, tort claims, beach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
BOSTON PROPERTIES LLC
By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Bradley A. Jacobson By: /s/ Thomas J. O'Connor -------------------------- --------------------------------- Name: Thomas J. O'Connor Title: Vice President |
BP EC2 HOLDINGS LLC
By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Bradley A. Jacobson By: /s/ Thomas J. O'Connor -------------------------- --------------------------------- Name: Thomas J. O'Connor Title: Vice President WITNESS: PIC REALTY CORPORATION /s/ Bradley A. Jacobson By: /s/ Gary L. Frazier -------------------------- ------------------------------------------ Name: Gary L. Frazier Title: Vice President 29 |
SCHEDULE A ---------- |
ATTACHED TO AMENDED AND RESTATED
PARTNERSHIP AGREEMENT OF
EMBARCADERO CENTER ASSOCIATES
Managing General Partner ------------------------ Name and Address Percentage Interest ---------------- ------------------- Boston Properties LLC 0.4% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 Non-Managing Partners --------------------- Name and Address Percentage Interest ---------------- ------------------- BP EC2 Holdings LLC 39.6% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 PIC Realty Corporation 60.0% c/o Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attention: John R. Triece Facsimile: (201) 683-1797 |
with copies to:
Prudential Insurance Company of America O'Melveny & Myers 4 Embarcadero Center, Suite 2700 Embarcadero Center West San Francisco, CA 94111 275 Battery Street Attention: Harry Mixon San Francisco, CA 94111 Facsimile: (415) 956-2197 Attention: Stephen A. Cowan Facsimile: (415) 984-8701 |
[INTENTIONALLY OMITTED]
Approved Terms and Conditions of Loans from Managing General Partner
Exhibit A [FORM OF BP NOTE] --------- DELAYED DEMAND NOTE ------------------- $____________________ San Francisco, California _____________, 19__ |
The outstanding balance of principal due hereunder may be prepaid in full at any time, or from time to time in part in multiples of One Thousand Dollars ($1,000.00) without any prepayment premium.
The Maker agrees to pay all charges of the holder hereof in connection with the collection and enforcement of this Note, including reasonable attorneys' fees and disbursements.
The Maker hereby waives presentment, demand, notice, protest and all other suretyship defenses generally and agrees that any renewal, extension or postponement of the time of payment or any other indulgence, may be effected without notice to and without releasing the Maker from any liability hereunder.
This Note shall have the effect of an instrument under seal.
EMBARCADERO CENTER ASSOCIATES
By: Boston Properties LLC, its managing general
partner
By: Boston Properties Limited Partnership,
its managing member
By: Boston Properties, Inc., its
general partner
By:________________________
Name:
Title:
The "Equity Redemption Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $95,927,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among BankBoston, N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank National Association, Citizens Bank and other banks which may become parties thereto as the lenders thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $328,143,000. The $95,927,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
The "Prudential Guarantied Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $16,000,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among The Chase Manhattan Bank as lender thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $92,000,000. The $16,000,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
Description of Business Interruption and General Liability Insurance
Business Interruption Insurance $145,000,000 Commercial General Liability $ 2,000,000 Umbrella Liability Program $200,000,000 |
Description of Financing Plan for Embarcadero Center Associates
The Equity Redemption Loan will, upon the earlier of the redemption of PIC Realty Corporation from the Partnership or the 90th day after the date of execution of this Agreement, be repaid through (i) a draw on the Credit Agreement by the Partnership of approximately $19,700,000 and (ii) cash of the Partnership in an amount equal to approximately $76,300,000, which cash will represent proceeds from the repayment of the Special BP Loan. As a result of the draw under the Credit Agreement, the Partnership will be a primary obligor with respect to approximately $19,700,000 of indebtedness under the Credit Agreement.
In the event that the interest of PIC Realty Corporation in the Partnership is not redeemed by February 10, 1999, or in the event that the Partnership is not, by such date, released in full from all obligations with respect to the Prudential Guarantied Loan and related obligations, then either (i) Prudential shall continue to guaranty the Prudential Guarantied Loan until such redemption, assumption and release occurs or (ii) if the Partnership repays and refinances the Prudential Guarantied Loan by obtaining any replacement debt ("Replacement Debt"), Prudential shall guarantee the lenders thereof of the punctual payment in full and all other obligations of such Replacement Debt.
borrowers, the Partnership will be the primary obligor on $160 million.
EXHIBIT 99.9
SECOND AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
THREE EMBARCADERO CENTER VENTURE
TABLE OF CONTENTS
Page ---- ARTICLE 1 - THE PARTNERSHIP.................................................................................... 3 SECTION 1.1 Continuation of the Partnership....................................................... 3 SECTION 1.2 Partnership Name...................................................................... 3 SECTION 1.3 Place of Business..................................................................... 3 SECTION 1.4 General Partnership................................................................... 3 SECTION 1.5 Term of Partnership................................................................... 3 SECTION 1.6 Purposes of the Partnership........................................................... 3 SECTION 1.7 Definitions........................................................................... 4 ARTICLE 2 - CAPITALIZATION..................................................................................... 8 SECTION 2.1 Partners' Percentage Interests........................................................ 8 SECTION 2.2 Additional Capital Contributions; Limitations on Future Capital Contributions; Obligation of Managing Partner to Purchase BP Notes.......................................... 8 SECTION 2.3 Admission of Additional Partners...................................................... 8 SECTION 2.4 Return of Capital Accounts and Redemption of Partnership Interests.................... 9 SECTION 2.5 Investment Loan, Equity Redemption Loan, Prudential Guarantied Loan, Existing Loans and Replacement Loans.................................................................. 9 ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES.................................................................. 10 SECTION 3.1 Capital Accounts and Allocations of Profit and Loss................................... 10 ARTICLE 4 - DISTRIBUTIONS...................................................................................... 12 SECTION 4.1 Distributions......................................................................... 12 SECTION 4.2 Amounts Withheld...................................................................... 12 ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP...................................................................... 12 SECTION 5.1 Management............................................................................ 12 SECTION 5.2 Rights to Delegate and Employ......................................................... 13 SECTION 5.3 Enumeration of Specific Rights and Powers............................................. 13 SECTION 5.4 Limitations on Managing General Partner's Authority................................... 15 SECTION 5.5 Filing of Returns and Other Writings.................................................. 16 SECTION 5.6 Other Permissible Activities.......................................................... 16 SECTION 5.7 Contracts with Affiliates; Borrowing from Partners.................................... 17 SECTION 5.8 Indemnification....................................................................... 17 SECTION 5.9 Liability of the Managing General Partner............................................. 19 SECTION 5.10 Other Matters Concerning the Managing General Partner................................. 20 ARTICLE 6 - ACCOUNTING......................................................................................... 20 SECTION 6.1 Fiscal Year and Tax Accounting Method................................................. 20 |
Page ---- SECTION 6.2 Books, Records, and Tax Reports.................................................... 21 SECTION 6.3 Accounting Practice................................................................ 21 SECTION 6.4 Accountants........................................................................ 21 SECTION 6.5 Bank Accounts...................................................................... 21 ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING..................................................... 21 SECTION 7.1 Contributions by Non-Managing General Partners..................................... 21 SECTION 7.2 Corporate Authority................................................................ 21 SECTION 7.3 Role of Non-Managing General Partners.............................................. 22 SECTION 7.4 Rights and Obligations Under the Act............................................... 22 SECTION 7.5 Redemption Rights.................................................................. 22 ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND...................................................... 22 SECTION 8.1 Non-Managing General Partners...................................................... 22 SECTION 8.2 Managing General Partner........................................................... 22 SECTION 8.3 Transfer of Partnership Interests.................................................. 22 SECTION 8.4 Substituted Non-Managing General Partners.......................................... 24 SECTION 8.5 Assignees.......................................................................... 24 ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION........................................................ 25 SECTION 9.1 Dissolution........................................................................ 25 SECTION 9.2 Liquidation........................................................................ 25 ARTICLE 10 - MISCELLANEOUS.................................................................................. 26 SECTION 10.1 Redemption Agreement............................................................... 26 SECTION 10.2 Notice............................................................................. 26 SECTION 10.3 Further Assurances................................................................. 27 SECTION 10.4 Agreement in Counterparts.......................................................... 27 SECTION 10.5 Construction....................................................................... 27 SECTION 10.6 Governing Law...................................................................... 27 SECTION 10.7 Amendments......................................................................... 27 SECTION 10.8 Pronouns........................................................................... 27 SECTION 10.9 Successors in Interest............................................................. 27 SECTION 10.10 Headings........................................................................... 28 SECTION 10.11 Consent to Jurisdiction and Service of Process..................................... 28 SECTION 10.12 Waiver of Jury Trial............................................................... 28 |
SCHEDULES AND EXHIBITS
Schedule A Partners and Percentage Interests Exhibit A Legal Description of Property Exhibit B Approved Terms and Conditions of Loans from Managing General Partner Exhibit C Description of Equity Redemption Loan Exhibit D Description of Prudential Guarantied Loan Exhibit E Description of Business Interruption and General Liability Insurance Exhibit F Description of Financing Plan for the Partnership Exhibit G Form of Special BP Loan Note |
SECOND AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
THREE EMBARCADERO CENTER VENTURE
RECITALS:
E. To reflect the transfers, successions, admissions and withdrawals recited above, to provide for the continuation of the Partnership as a California general partnership under the Act, and to provide for the revised terms and conditions under which the Partnership will continue in existence and be governed, the parties wish to amend and restate the Prior Partnership Agreement in its entirety, as provided herein.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 - THE PARTNERSHIP
The name of the Partnership shall continue to be "THREE EMBARCADERO CENTER VENTURE." All business of the Partnership shall be conducted under such name or under such variations thereof as the Managing General Partner deems necessary or appropriate to comply with the requirements of law in any applicable jurisdiction in which the Partnership may do business.
The principal place of business of the Partnership shall be c/o Boston Properties, Inc., Four Embarcadero Center, Suite 2600, San Francisco, California 94111, or at such other place or places as the Managing General Partner may designate.
The Partnership shall be a general partnership, governed by the Act. The interests of the Partners in the Partnership shall be personal property for all purposes. All real and other property owned by the Partnership shall be deemed owned by the Partnership, as a partnership, and no Partner, individually, shall have any ownership of such property.
The term of the Partnership shall continue until 12:00 noon on December 31, 2050, unless sooner terminated in accordance with the terms and conditions of this Agreement, or by applicable law.
The purpose of the Partnership shall be:
(a) to own, manage, develop, improve, renovate, rehabilitate, operate, hold for investment, lease, encumber, mortgage, pledge, assign, exchange, sell and/or otherwise deal with the Property;
(b) to retain managing agents and consultants therefor, and to do all things necessary or useful in connection with any of the foregoing;
(c) in addition to, and in furtherance of these purposes and powers,
the Partnership shall have the power (i) to borrow money and
issue evidences of indebtedness and to secure same by mortgage,
pledge or other lien (including, without limitation, obtaining
the Equity Redemption Loan and Prudential Guarantied Loan), and
(ii) to guarantee the obligations of any other Person when done
in furtherance of the Partnership's business, including any
indebtedness of such Person, and to secure such guarantee
obligations by mortgage, pledge or other lien on any asset of the
Partnership;
(d) to make and service the Investment Loan as contemplated herein;
(e) subject to the express terms, provisions and restrictions of this Agreement, to engage in and consummate the transactions described in the Master Transaction Agreement;
(f) to enter into the Redemption Agreement and consummate the transactions described therein; and
(g) to enter into, perform and carry out contracts of any kind necessary to, or in connection with, or incidental to the accomplishment of any of the foregoing purposes; and
(h) to use the Excess Mortgage Loan Proceeds to make the Special BP Loan.
The Partnership shall not engage in any other business. It is further agreed that the Partnership shall at all times adhere to at least the level of quality in the maintenance and operation of the Property as a first class office and retail complex as maintained by the Partnership during the twelve (12) month period preceding the date hereof.
In addition to the capitalized terms defined in the recitals and elsewhere herein, the following terms shall have the following meanings:
corporation, and any other Person who may become a Non-Managing General Partner pursuant to the terms of this Agreement, in each such case until such Person has ceased to be a Non-Managing General Partner pursuant to the terms of this Agreement. "Non-Managing General Partners" means all such Persons, if there is more than one. If at any time there is more than one Non-Managing General Partner, then all references herein to the Non-Managing General Partner shall, unless the context requires otherwise, be deemed to refer to the Non-Managing General Partners.
ARTICLE 2 - CAPITALIZATION
(a) No Partner shall, except as otherwise required by the Act, other applicable law or this Agreement, be required to make any further Capital Contributions to the Partnership, and so long as Prudential or any Affiliate of Prudential is a Partner, no Capital Contributions shall be made to the Partnership without the prior written consent of Prudential.
(b) At no time prior to the second anniversary of the Redemption Distribution shall the Managing General Partner call or accept Capital Contributions from any Partner for the purpose of repaying the Equity Redemption Loan or any debt replacing or refinancing the Equity Redemption Loan, and during such period no Capital Contributions made after the date hereof shall be used in such manner.
(c) To the extent that it is necessary or desirable for the Partnership, in the sole discretion of the Managing General Partner, to raise cash for the purpose of funding working capital, capital expenditures, leasing commissions, tenant improvements or other expenditures relating to the Property at a time when the Partnership is unable to raise such cash through the receipt of Capital Contributions because of the prohibition set forth in Section 2.2(a), the Managing General Partner agrees that it (or an Affiliate of the Managing General Partner) will lend funds to the Partnership for such purposes by purchasing BP Notes from the Partnership.
The Managing General Partner shall have the right, from time to time, provided it obtains the consent of the Non-Managing General Partners, to admit additional Non-Managing General Partners to the Partnership.
Upon the admission of any new Non-Managing General Partner, an amendment of this Agreement, reflecting such change, shall be signed by the Managing General Partner and the additional Non-Managing General Partner, and an amendment to the Certificate, reflecting such change, to the extent required or appropriate under applicable law, shall be signed by all Partners
either individually or by the Managing General Partner on their behalf and filed with the Secretary of State of the State of California.
Except as otherwise provided in this Agreement or as set forth in the Redemption Agreement, (i) no Partner shall have the right to demand and withdraw a return of its Capital Account, and (ii) no Partner shall have the right to receive property other than cash upon a distribution to the Partners, redemption of any Partner's interest or liquidation of the Partnership.
No Partner shall receive any interest, salary, or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Partnership or otherwise in its capacity as Partner, except (i) interest received, if any, on BP Notes or (ii) as otherwise provided in this Agreement.
(a) The Partnership is hereby authorized to, and shall, make the Investment Loan to Investment Loan Borrower and acquire the Investment Notes on the date hereof.
(b) The Partnership is hereby authorized to, and shall, borrow the Equity Redemption Loan and Prudential Guarantied Loan on the date hereof and shall thereafter perform its obligations in respect thereof subject to the terms and limitations of this Agreement. The proceeds of the Equity Redemption Loan and Prudential Guarantied Loan shall be applied to make the Investment Loan and acquire the Investment Notes on the date hereof.
(c) In accordance with Section 2.2(b), the Partnership shall not, at any time prior to the second anniversary of the Redemption Date, use Capital Contributions made after the date hereof for the purpose of repaying the Equity Redemption Loan or any debt replacing the Equity Redemption Loan.
(e) Notwithstanding anything to the contrary provided in this Agreement, all costs, fees and expenses incurred in connection with the consummation of the Equity
Redemption Loan and Prudential Guarantied Loan shall be paid by the Partnership and borne by the Partners (and reflected in the Partnership's books as follows):
(ii) All other Approved Loan Costs shall be paid by the Partnership as current expenses and borne by each Partner in accordance with its Percentage Interest on the date hereof;
(iii) Any other costs and expenses incurred by the Partnership with respect to the Equity Redemption Loan shall be paid by the BP Partners; and
(iv) Any other costs and expenses incurred by the Partnership with respect to the Prudential Guarantied Loan shall be paid by Prudential.
ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES
AND MAINTENANCE OF CAPITAL ACCOUNTS
be determined so as to take account of the variation between the adjusted tax
basis and book value of such property in the same manner as under Code Section
704(c), and the amount of upward and/or downward adjustments to the book value
of the Partnership property shall be treated as income, gain, deduction and/or
loss for purposes of applying the allocation provisions of this Article 3. In
the event that Code Section 704(c) applies to Partnership property, the Capital
Accounts of the Partners shall be adjusted in accordance with Regulations
Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion,
amortization and gain and loss, as computed for book purposes, with respect to
such property. The amount of all distributions to Partners shall be determined
pursuant to Section 4.1 hereof. Notwithstanding any provision contained herein
to the contrary, no Partner shall be required to restore any negative balance in
its Capital Account.
(d) The tax returns for the Partnership for the 1998 calendar year shall be prepared using the interim closing of the books method.
ARTICLE 4 - DISTRIBUTIONS
(a) Except as provided in Section 4.1(b) or Section 7.5, and subject to the needs of the Partnership to accumulate reserves, which prior to the Redemption Distribution shall be determined in the sole discretion of the Managing General Partner, distributions to the Partners shall be made in proportion to the Partners' Percentage Interests. Distributions shall be made from time to time at the discretion of the Managing General Partner.
(b) Notwithstanding anything to the contrary provided in this Agreement, all payments in respect of title insurance received by the Partnership the amount of which was affected by the non-imputation endorsement to the Partnership's title insurance policy issued as of the date hereof with respect to the Property will be distributed only to the BP Partners in proportion to their respective Percentage Interests.
All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution to the Partnership, the Managing General Partner or the Non-Managing General Partners shall be treated as amounts distributed to the Managing General Partner or Non-Managing General Partners pursuant to this Article for all purposes under this Agreement. The Managing General Partner may allocate any such amounts among the Partners in any manner that is in accordance with applicable law.
ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP
The management powers over the business and affairs of the Partnership are and shall be exclusively vested in the Managing General Partner, who shall be subject to the provisions of this Agreement and to applicable law, and, subject to the consent rights set forth in Section 5.4 hereof, no Non-Managing General Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership.
The Managing General Partner shall devote such time and effort to the Partnership as it deems necessary and may retain agents as reasonably required or desirable to assist it. The Managing General Partner shall review the status and condition of the Property and shall supervise the activities of any agents engaged by it. The Managing General Partner may delegate any of its powers, rights and obligations hereunder, and, in furtherance of any such delegation, may appoint, employ, contract or otherwise deal with any Person (including Affiliates, but only so long as such employment, contract or other deal is not less favorable to the Partnership than would be an arms-length transaction on market terms) for the transaction of the business of the Partnership, which Persons may, under the supervision of the Managing General Partner, perform any acts or services for the Partnership as the Managing General Partner may approve.
Subject to Section 5.4, the Managing General Partner shall have all the rights and powers which may be possessed by a general partner in a partnership formed under the Act, which are otherwise conferred by law or which are necessary, advisable or convenient to the discharge of duties under this Agreement and to the management, direction and control of the business and affairs of the Partnership, exercisable without the consent of the Non-Managing General Partners (except as herein expressly provided), including the following rights and powers:
(a) to conduct the tax, financial and business affairs of the Partnership;
(b) to take all action necessary to acquire, purchase, renovate, rehabilitate, hold, own, improve, operate, encumber, mortgage, pledge, assign, exchange, or to sign notes or guarantee payment of any loans relating to the purposes of the Partnership;
(c) to manage, repair, insure, service, promote, advertise, lease, sublease, and create or release interests in the Partnership property;
(d) to timely pay out of Partnership funds such expenses as are necessary to carry out the intentions and purposes of the Partnership including real estate taxes and debt service payments to the extent there is sufficient gross cash proceeds.
(e) to sell and/or otherwise dispose of all or any portion of the Property;
(f) to make appropriate elections permitted under any applicable tax law, provided that such elections will not, in the opinion of counsel or the accountants for the Partnership, be disadvantageous to a majority in interest of the Non-Managing General Partners;
(g) to change the principal office of the Partnership to other places subject to the notice provision herein provided;
(h) to employ agents, attorneys, public accountants (which shall be, in all events, a "Big Five" accounting firm), and depositories and to grant powers of attorney;
(i) to employ persons necessary and appropriate in the operation and management of the Partnership and the Property, including, but not limited to, supervisory managing agents, insurance brokers, real estate brokers, and loan brokers, on such terms and for such compensation which does not exceed generally prevailing market rates, all to act under the supervision of the Managing General Partner, and the Managing General Partner on behalf of the Partnership is hereby authorized to enter into an agreement with any Managing General Partner in their individual capacities or a corporation or other entity affiliated with any Managing General Partner for the performance of such services to the Partnership except as otherwise provided for in this Agreement;
(m) to lend money to any BP Partner or any Affiliate of any BP Partner pursuant to a Special BP Loan.
(a) Notwithstanding anything in this Agreement to the contrary, for so long as Prudential is a Partner, the Managing General Partner shall not have the power or authority to, and shall not, cause the Partnership to take any of the following actions, without the consent of Prudential, which consent shall not be unreasonably withheld:
(i) other than in the ordinary course of business, cause any closing of a material portion of the Property for renovations (other than repairs necessitated as a result of a fire or other casualty);
(iii) take any action or make any decision involving credit, management or servicing decisions relating to the Investment Notes other than making an election to accelerate the Investment Notes upon the occurrence of (and during the continuance of) an Event of Default or taking any action or decision relating to the Redemption Distribution;
(iv) make a loan to or guarantee the indebtedness of any Person other than (A) loans to tenants of the Property for tenant improvements or (B) a Special BP Loan;
(v) cause or permit the sale of (A) all or any material portion of the Property, except leases, concessionaire agreements and space licenses entered into in the ordinary course of business of the Property, or (B) except in connection with the Redemption Distribution, the Investment Notes or any portion thereof or interest therein;
(vi) cause the Partnership to (A) obtain any borrowing, (B) issue evidences of indebtedness, or (C) guaranty the obligations of any Person, if such borrowing, issuance or guaranty provides for recourse to Prudential (other than the Prudential Guarantied Loan or the Equity Redemption Loan or any Replacement Debt (as defined in Exhibit F);
(vii) amend this Agreement if such amendment affects or could affect (A) the receipt, amount or timing of any distributions to Prudential, or (B) Prudential's rights or obligations under this Agreement or the Redemption Agreement;
(viii) cause the dissolution of the Partnership, or cause the Partnership to file or otherwise commence a voluntary bankruptcy case, or consent to the commencement of an involuntary bankruptcy case, under the United States Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case, or consent to the
appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of the Property;
(x) assign, relinquish, settle, compromise, waive or impair any of the Partnership's rights under or with respect to, or amend, terminate, extend the term of (or time for payments due, or performance to be rendered, to the Partnership under) or otherwise modify any instrument or agreement under which the Partnership has rights and to which the Managing General Partner or any of its Related Parties is a party; or
(xi) engage in any activity without a good faith business purpose therefor and with the intent of manipulating the "Operating Profits" or "Operating Losses" of the Partnership described in the Redemption Agreement in a manner intended to materially adversely affect, to the benefit of the other Partners, the amounts that Prudential would be entitled to receive under this Agreement or the Redemption Agreement.
The Managing General Partner shall be the Tax Matters Partner and is also specifically authorized to and shall cause the preparation and timely filing of all Partnership tax returns and shall, on behalf of the Partnership, subject to the terms and provisions of the Redemption Agreement, make such tax elections for the Partnership as it, after consultation with the Partnership's accountants, shall determine to be in the best interests of the Partners. In addition, the Managing General Partner shall timely file all other forms, documents or other writings with respect to the business and operation of the Partnership which shall be required by any governmental agency or authority having jurisdiction to require such forms, documents or other writings, and shall transmit to each Partner any form or document required to be transmitted by any such governmental agency.
Nothing herein contained shall be deemed to prevent any Partner or any shareholder or affiliate thereof from engaging in other activities for profit, whether in the real estate business or otherwise. The Managing General Partner (or any shareholder or affiliate thereof), or any Partner, may, in the future, organize and manage joint ventures, additional limited partnerships or other business entities for the acquisition, management and sale of real estate. Neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Partner or any affiliate from engaging in such activities, or require any Partner to permit the Partnership or any Partner to participate in any such activities and, as a material part of the consideration for each Partner's
execution hereof, each Partner, for the benefit of the other Partners, hereby waives, relinquishes and renounces any such right or claim of participation.
(a) To the fullest extent permitted by California law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement,
in which such Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith, was the result of active and deliberate
dishonesty, or was the result of a breach of this Agreement by such Indemnitee
(or by the Partner of which such Indemnitee is a director or officer); or (ii)
the Indemnitee actually received an improper personal benefit in money, property
or services, or in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty (except a guaranty by a Partner of
nonrecourse indebtedness of the Partnership or as otherwise provided in any such
loan guaranty) or otherwise for any indebtedness of the Partnership, and the
Managing General Partner is hereby authorized and empowered, on behalf of the
Partnership, to enter into one or more indemnity agreements consistent with the
provisions of this Section 5.8 in favor of any Indemnitee having or potentially
having liability for any such indebtedness. The termination of any proceeding
by conviction of an Indemnitee or upon a plea of nolo contendere or its
equivalent by an Indemnitee, or an entry of an order of probation against an
Indemnitee prior to judgment, creates a rebuttable presumption that such
Indemnitee acted in a manner
contrary to that specified in this Section 5.8(a). Any indemnification pursuant to this Section 5.8 shall be made only out of the assets of the Partnership and shall not impose any personal liability on any Partner, and neither the Managing General Partner nor any Non-Managing General Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its obligations under this Section 5.8.
(c) Subject to the procedures set forth in Section 5.8(b), reasonable expenses incurred by an Indemnitee who is a party to a proceeding in a matter for which the Indemnitee has undertaken the defense pursuant to the provisions of this Section 5.8 (other than as a result of the rejection or dispute by the Managing General Partner of a claim for indemnification under Section 5.8(b)) shall be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 5.8(a) has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.
(d) The indemnification provided by this Section 5.8 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under this Agreement or any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified.
(e) The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the Managing General Partner shall determine in its reasonable discretion, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership's activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
(f) In no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 5.8 solely because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 5.8 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 5.8 or any provision hereof shall be prospective only and shall not in any way affect the Partnership's liability to any Indemnitee under this Section 5.8, as in effect immediately prior to such amendment, modification, or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) Notwithstanding anything to the contrary set forth in this Agreement, except as otherwise expressly provided in this Agreement, the Managing General Partner and its officers and directors shall not be liable for monetary damages to the Partnership, any Partners or any Assignees for losses sustained or liabilities incurred as a result of reasonable errors in judgment or of any act or omission if the Managing General Partner acted in good faith; provided, however, that the Managing General Partner shall be liable to the Partnership and Partners for its material breaches of this Agreement.
(b) Subject to its obligations and duties as Managing General Partner
set forth in Section 5.3 hereof, and subject to the limitations set forth in
Section 5.4 hereof, the Managing General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The
Managing General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the Managing General Partner in good faith, except as otherwise expressly provided herein.
(c) Any amendment, modification or repeal of this Section 5.9 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Managing General Partner's liability (and that of its officers and directors) to the Partnership and the Non-Managing General Partners under this Section 5.9 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) The Managing General Partner may rely and shall be protected in acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.
(b) The Managing General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such Managing General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
(c) The Managing General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and duly appointed attorneys-in-fact. Each such attorney shall, to the extent provided by the Managing General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the Managing General Partner hereunder.
ARTICLE 6 - ACCOUNTING
The Partnership shall operate on the basis of a calendar year, and shall report its operations for tax and all other purposes in accordance with those methods the Managing General Partner and the Partnership's accountant deem advisable.
The Partnership shall maintain full and accurate books at its principal office which all Partners shall have the right to inspect and examine during business hours upon reasonable written notice to the Managing General Partner. The Managing General Partner shall keep or cause such books to be kept and shall fully and accurately enter all transactions of the Partnership therein. Such books shall be closed and balanced at the end of each calendar year. On or before March 31 of each year, the Managing General Partner will furnish the Non- Managing General Partners with a balance sheet and a statement of income and expenses of the Partners for the prior calendar year and a report on Treasury Form K-1 containing information relating to the Partnership to be used in preparing a Non-Managing General Partner's personal federal income tax return.
The books of account of the Partnership shall be kept in accordance with good and accepted bookkeeping and accounting practices for similar properties, provided that all methods of accounting and of treating particular transactions shall be in accordance with the methods of accounting employed for Federal income tax purposes. The determinations of the Managing General Partner with respect to the treatment of any items or its allocation for federal, state or local tax purposes shall be binding upon all the Partners so long as such determination shall not be inconsistent with any express term hereof or of the Redemption Agreement.
The Partnership's certified public accountant shall be designated by the Managing General Partner, subject to the terms and provisions of Section 5.3(h).
The Managing General Partner shall, on behalf of the Partnership, open and maintain a bank account or accounts in a bank or other financial institution of its choosing in which shall be deposited all of the capital, cash receipts and other funds of the Partnership.
ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING
GENERAL PARTNERS
Except as provided herein, the Non-Managing General Partners shall not be obligated to make a contribution of any sort whatsoever to the capital of the Partnership, or to provide a loan.
Each Partner hereby represents and covenants that its execution of this Agreement has been duly authorized by proper corporate action or otherwise.
Except as otherwise provided in this Agreement, no Non-Managing General Partner shall take part in, or interfere in any manner with, the conduct or control of the business of the Partnership, or shall have any right or authority to act for or bind the Partnership.
In addition to the foregoing rights (including any limitations thereof) and obligations, the Non-Managing General Partners shall each have those rights and obligations conferred or imposed upon partners of a general partnership under applicable law, to the extent not inconsistent with the terms hereof.
Except as specifically provided in the Redemption Agreement, no Partner shall have the right to withdraw from the Partnership or have its interest in the Partnership redeemed by the Partnership.
ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND
TRANSFER OF PARTNERSHIP INTEREST
The Managing General Partner may not Transfer its interest in the Partnership or withdraw from the Partnership without the consent of the Non- Managing General Partners.
(a) Subject to the provisions of this Article 8, a Non-Managing General Partner may transfer its interest in the Partnership with the consent of the Managing General Partner, which consent may be withheld by the Managing General Partner in its sole and absolute
discretion. Nothing in this Agreement shall be deemed to preclude the purchase by the Managing General Partner of any Non-Managing General Partnership interest and the admission of a Managing General Partner as a Non-Managing General Partner in connection therewith.
(b) If the interest, or any part thereof, of a Partner in the Partnership is disposed of pursuant to this Section, such Partner shall nevertheless be entitled to a portion of the income, gain, loss, deduction and credit allocated to such interest or part thereof in accordance with the provisions of this agreement for the fiscal year of the Partnership in which such disposition occurs, based upon the number of months during such year that such Partner owned such interest or part thereof. Any predecessor or successor of such Partner in respect of such interest or part thereof shall share in such profits and losses for the fiscal year in which such disposition occurs and the Partnership shall be bound by such allocation, provided the same shall be deemed reasonable by the Partnership's accountants, upon being furnished with timely written notice of same. Distributions of cash or other property shall be made only to such persons who are Partners on the date of distribution.
(c) Without limiting the foregoing, the Managing General Partner may prohibit any transfer by a Non-Managing General Partner of its interest in the Partnership if, in the opinion of legal counsel to the Partnership, such transfer would require filing of a registration statement under the Securities Act of 1933 or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or interests in the Partnership, or would cause a termination of the Partnership under Section 708 of the Code.
(d) Without limiting the foregoing, no transfer by a Non-Managing
General Partner of its interests in the Partnership may be made to any Person if
(i) in the opinion of legal counsel for the Partnership, it would result in the
Partnership being treated as an association taxable as a corporation; (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code; (iii) such transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(c) of the Code); (iv) such transfer would,
in the opinion of legal counsel for the Partnership, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan
pursuant to Department of Labor Regulations Section 2510.2-101; or (v) such
transfer would subject the Partnership to be regulated under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
Retirement Income Security Act of 1974, each as amended, or would violate any
loan documents to which the Partnership is a party.
(e) The transfer of a Partnership interest shall not constitute, or result in, a dissolution of the Partnership.
(a) No Non-Managing General Partner shall have the right to substitute
a transferee as a Non-Managing General Partner in his place. The Managing
General Partner shall, however, have the right to consent to the admission of a
transferee of the interest of a Non-Managing General Partner pursuant to this
Section 8.4 as a Substituted Non-Managing General Partner, which consent may be
given or withheld by the Managing General Partner in its sole and absolute
discretion. The Managing General Partner's failure or refusal to permit a
transferee of any such interests to become a Substituted Non-Managing General
Partner shall not give rise to any cause of action against the Partnership or
any Partner.
(b) A transferee who has been admitted as a Substituted Non-Managing General Partner in accordance with this Article 8 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Non-Managing General Partner under this Agreement.
If the Managing General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee as a Substituted Non- Managing General Partner, as described in Section 8.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be deemed to have had assigned to it, and shall be entitled to receive distributions from the Partnership and the share of net income, net losses, and any other items, gain, loss deduction and credit of the Partnership attributable to the interest in the Partnership assigned to such transferee, but except as otherwise provided herein shall not be deemed to be a holder of an interest in the Partnership for any other purpose under this Agreement, and shall not be entitled to vote in any matter presented to the Non-Managing General Partners for a vote (such interest in the Partnership being deemed to have been voted on such matter in the same proportion as all other interests held by Non-Managing General Partners are voted). In the event any such transferee desires to make a further assignment of any such interest in the Partnership, such transferee shall be subject to all of the provisions of this Article 8 to the same extent and in the same manner as any Non-Managing General Partner desiring to make such an assignment.
ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION
(a) Except as herein otherwise expressly provided, the Partnership shall be dissolved upon the occurrence of any of the following events:
(1) agreement by all of the Partners to dissolve the Partnership;
(2) expiration of the term provided in Section 1.5 hereof;
(3) sale or taking by eminent domain or other lawful government action resulting in transfer of title of substantially all of the Partnership's assets; or
(4) any other event which, under applicable law, results in the dissolution of the Partnership.
(b) Dissolution shall be effective on the date of the event giving
rise to the dissolution, but the Partnership shall not terminate until the
assets thereof have been distributed in accordance with the provisions of
Section 9.2 hereof.
(a) If the Partnership shall be dissolved by reason of the occurrence of any of the circumstances described in Section 9.1, no further business shall be conducted by the Partnership except for taking of such action as shall be necessary for the winding up of its affairs and distribution of its assets to the Partners pursuant to the provisions of this Article 9. Upon such dissolution, the Managing General Partner shall act as liquidator or, if it is unable or unwilling to so act, it shall appoint one or more liquidators, who shall have full authority to wind up the affairs of the Partnership and to make final distribution as provided herein.
Upon such dissolution of the Partnership, the liquidator(s) shall determine which, if any, Partnership properties and assets should be distributed in kind, and dispose of all other Partnership properties and assets at the best cash price obtainable therefor and distribute the proceeds as follows:
(1) First, to the payment and discharge of all of the Partnership's debts and liabilities to creditors other than the Partners;
(2) Second, to the payment and discharge of all of the Partnership's debts and liabilities to Partners in their capacities as creditors of the Partnership;
(3) The balance, if any, to the Partners in accordance with the provisions of Article 4.
(b) Notwithstanding the foregoing, if any Partner shall be indebted to the Partnership, then, until payment of such indebtedness by said Partner, the liquidator(s) shall retain such Partner's distributive share of the Partnership properties and assets and, after applying the cost of operation of such properties and assets during the period of such liquidation against the income therefrom, the balance of such income shall be applied in liquidation of such indebtedness. However, if at the expiration of six (6) months after notice of such outstanding indebtedness has been given to such Partner and such amount has not been paid or otherwise liquidated in full, the liquidator(s) may sell the assets allocable to such Partner at public or private sale at the best price immediately obtainable, such best price to be determined in the sole judgement of the liquidator(s). So much of the proceeds of such sale as shall be necessary to liquidate such indebtedness shall then be so applied, and the balance of such proceeds, if any, shall be distributed to such Partner. Any gain or loss realized for Federal income tax purposes upon the disposition of such assets shall, to the extent permitted by law, be allocated to such Partner, and to the extent not so permitted, to the Partners.
Thereafter, the liquidator(s) shall comply with all requirements of the Act, or other applicable law, pertaining to the winding up of a limited partnership, at which time the Partnership shall stand terminated.
(c) In the event the Managing General Partner's interest in the
Partnership is "liquidated" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g) (including, without limitation, upon the liquidation of the
Partnership) and the Managing General Partner's Capital Account has a deficit
balance after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs,
the Managing General Partner shall contribute to the capital of the Partnership
the amount necessary to restore such deficit balance to zero in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(3).
ARTICLE 10 - MISCELLANEOUS
This Agreement and the Partners hereto are subject to the terms and provisions of the Redemption Agreement. If, and to the extent that, any terms or provisions of this Agreement are inconsistent with any terms and provisions of the Redemption Agreement, the terms and provisions of the Redemption Agreement shall govern and control.
All notices, demands, consents, options, elections, or other communications hereunder shall be in writing and shall be deemed to have been exercised, made or given upon delivery if delivered by hand or by courier service and three (3) business days after being deposited in the United States mail and sent by certified or registered mail, return receipt requested, postage prepaid. Any notice required to be sent to any Partner shall be sent to the addresses specified on
Each of the Partners will hereafter execute and deliver such further instruments, and do such further acts as may be required to carry out the intent and purposes of this Agreement.
This Agreement may be executed in one or more counterparts and all such counterparts shall constitute one agreement binding on all the parties, notwithstanding that all the parties are not signatories to the original or the several counterparts.
None of the provisions of this Agreement shall be for the benefit or enforceable by the creditors of the Partnership.
This Agreement shall, except as herein otherwise expressly provided, be governed and construed in accordance with the laws of the State of California.
This Agreement may be amended only by a written amendment signed by all of the Partners.
Any pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the undersigned may require.
Except as otherwise provided herein, all provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective heirs, executors, administrators, personal representatives, successors and permitted assigns of any of the parties to this Agreement. However, nothing in this Agreement, whether expressed or implied, is intended to confer upon any entity, other than specifically provided, any rights or benefits under or by reason of this Agreement.
The headings contained at the beginning of each Article and Section are for purposes of convenience only and are not intended to limit, expand or define the content thereof.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY HERETO ACCEPTS FOR ITSELF, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Each party hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to any party hereto, at its address provided in this Agreement, such service being hereby acknowledged by each party to be sufficient for personal jurisdiction in any action against such party in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including, without limitation, contract claims, tort claims, beach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
BOSTON PROPERTIES LLC
By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Frank D. Burt By: /s/ Thomas J. O'Connor -------------------------------- ------------------------------- Name: Thomas J. O'Connor Title: Vice President |
BP EC3 HOLDINGS LLC
By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Frank D. Burt By: /s/ Thomas J. O'Connor --------------------------------- ------------------------------- Name: Thomas J. O'Connor Title: Vice President WITNESS: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA /s/ Frank D. Burt By: /s/ Gary L. Frazier --------------------------------- ------------------------------ Name: Gary L. Frazier Title: Vice President 29 |
SCHEDULE A ---------- ATTACHED TO AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF THREE EMBARCADERO CENTER VENTURE Managing General Partner ------------------------ Name and Address Percentage Interest ---------------- ------------------- Boston Properties LLC 0.499747% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 Non-Managing Partners --------------------- Name and Address Percentage Interest ---------------- ------------------- BP EC3 Holdings LLC 49.474990% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 The Prudential Insurance Company 50.025263% of America c/o Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attention: John R. Triece Facsimile: (201) 683-1797 with copies to: Prudential Insurance Company of America O'Melveny & Myers 4 Embarcadero Center, Suite 2700 Embarcadero Center West San Francisco, CA 94111 275 Battery Street Attention: Harry Mixon San Francisco, CA 94111 Facsimile: (415) 956-2197 Attention: Stephen A. Cowan Facsimile: (415) 984-8701 |
[INTENTIONALLY OMITTED]
Approved Terms and Conditions of Loans from Managing General Partner
Exhibit A [FORM OF BP NOTE] --------- DELAYED DEMAND NOTE ------------------- $____________________ San Francisco, California _____________, 19__ |
The outstanding balance of principal due hereunder may be prepaid in full at any time, or from time to time in part in multiples of One Thousand Dollars ($1,000.00) without any prepayment premium.
The Maker agrees to pay all charges of the holder hereof in connection with the collection and enforcement of this Note, including reasonable attorneys' fees and disbursements.
The Maker hereby waives presentment, demand, notice, protest and all other suretyship defenses generally and agrees that any renewal, extension or postponement of the time of payment or any other indulgence, may be effected without notice to and without releasing the Maker from any liability hereunder.
This Note shall have the effect of an instrument under seal.
THREE EMBARCADERO CENTER VENTURE
By: Boston Properties LLC, its managing general
partner
By: Boston Properties Limited Partnership,
its managing member
By: Boston Properties, Inc., its
general partner
By:________________________
Name:
Title:
The "Equity Redemption Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $65,897,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among BankBoston, N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank National Association, Citizens Bank and other banks which may become parties thereto as the lenders thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $328,143,000. The $65,897,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
The "Prudential Guarantied Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $11,000,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among The Chase Manhattan Bank as lender thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $92,000,000. The $11,000,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
Description of Business Interruption and General Liability Insurance
Business Interruption Insurance $145,000,000 Commercial General Liability $ 2,000,000 Umbrella Liability Program $200,000,000 |
Description of Financing Plan for Three Embarcadero Center Venture
The Equity Redemption Loan will, upon the earlier of the redemption of The Prudential Insurance Company of America from the Partnership or the 90th day after the date of execution of this Agreement, be repaid through (i) a draw on the Credit Agreement by the Partnership of approximately $8,826,000 and (ii) cash of the Partnership in an amount equal to approximately $57,100,000, which cash will represent proceeds from the repayment of the Special BP Loan. As a result of the draw under the Credit Agreement, the Partnership will be a primary obligor with respect to approximately $8,826,000 of indebtedness under the Credit Agreement.
In the event that the interest of The Prudential Insurance Company of America in the Partnership is not redeemed by February 10, 1999, or in the event that the Partnership is not, by such date, released in full from all obligations with respect to the Prudential Guarantied Loan and related obligations, then either (i) Prudential shall continue to guaranty the Prudential Guarantied Loan until such redemption, assumption and release occurs or (ii) if the Partnership repays and refinances the Prudential Guarantied Loan by obtaining any replacement debt ("Replacement Debt"), Prudential shall guarantee the lenders thereof of the punctual payment in full and all other obligations of such Replacement Debt.
Connecticut General Life Insurance Company.
EXHIBIT 99.10
SECOND AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
FOUR EMBARCADERO CENTER VENTURE
TABLE OF CONTENTS
Page ---- ARTICLE 1 - THE PARTNERSHIP......................................................................................... 3 SECTION 1.1 Continuation of the Partnership................................................................. 3 SECTION 1.2 Partnership Name................................................................................ 3 SECTION 1.3 Place of Business............................................................................... 3 SECTION 1.4 General Partnership............................................................................. 3 SECTION 1.5 Term of Partnership............................................................................. 3 SECTION 1.6 Purposes of the Partnership..................................................................... 3 SECTION 1.7 Definitions..................................................................................... 4 ARTICLE 2 - CAPITALIZATION.......................................................................................... 8 SECTION 2.1 Partners' Percentage Interests.................................................................. 8 SECTION 2.2 Additional Capital Contributions; Limitations on Future Capital Contributions; Obligation of Managing Partner to Purchase BP Notes....................................................... 8 SECTION 2.3 Admission of Additional Partners................................................................ 8 SECTION 2.4 Return of Capital Accounts and Redemption of Partnership Interests.............................. 9 SECTION 2.5 Investment Loan, Equity Redemption Loan, Prudential Guarantied Loan, Existing Loans and Replacement Loans............................................................................... 9 ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES....................................................................... 10 SECTION 3.1 Capital Accounts and Allocations of Profit and Loss............................................. 10 ARTICLE 4 - DISTRIBUTIONS........................................................................................... 12 SECTION 4.1 Distributions................................................................................... 12 SECTION 4.2 Amounts Withheld................................................................................ 12 ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP........................................................................... 12 SECTION 5.1 Management...................................................................................... 12 SECTION 5.2 Rights to Delegate and Employ................................................................... 13 SECTION 5.3 Enumeration of Specific Rights and Powers....................................................... 13 SECTION 5.4 Limitations on Managing General Partner's Authority............................................. 15 SECTION 5.5 Filing of Returns and Other Writings............................................................ 16 SECTION 5.6 Other Permissible Activities.................................................................... 16 SECTION 5.7 Contracts with Affiliates; Borrowing from Partners.............................................. 17 SECTION 5.8 Indemnification................................................................................. 17 SECTION 5.9 Liability of the Managing General Partner....................................................... 19 SECTION 5.10 Other Matters Concerning the Managing General Partner........................................... 20 ARTICLE 6 - ACCOUNTING.............................................................................................. 20 SECTION 6.1 Fiscal Year and Tax Accounting Method........................................................... 20 |
Page ---- SECTION 6.2 Books, Records, and Tax Reports................................................................. 21 SECTION 6.3 Accounting Practice............................................................................. 21 SECTION 6.4 Accountants..................................................................................... 21 SECTION 6.5 Bank Accounts................................................................................... 21 ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING............................................................. 21 SECTION 7.1 Contributions by Non-Managing General Partners.................................................. 21 SECTION 7.2 Corporate Authority............................................................................. 21 SECTION 7.3 Role of Non-Managing General Partners........................................................... 22 SECTION 7.4 Rights and Obligations Under the Act............................................................ 22 SECTION 7.5 Redemption Rights............................................................................... 22 ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND.............................................................. 22 SECTION 8.1 Non-Managing General Partners................................................................... 22 SECTION 8.2 Managing General Partner........................................................................ 22 SECTION 8.3 Transfer of Partnership Interests............................................................... 22 SECTION 8.4 Substituted Non-Managing General Partners....................................................... 23 SECTION 8.5 Assignees....................................................................................... 24 ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION................................................................ 25 SECTION 9.1 Dissolution..................................................................................... 25 SECTION 9.2 Liquidation..................................................................................... 25 ARTICLE 10 - MISCELLANEOUS.......................................................................................... 26 SECTION 10.1 Redemption Agreement............................................................................ 26 SECTION 10.2 Notice.......................................................................................... 26 SECTION 10.3 Further Assurances.............................................................................. 27 SECTION 10.4 Agreement in Counterparts....................................................................... 27 SECTION 10.5 Construction.................................................................................... 27 SECTION 10.6 Governing Law................................................................................... 27 SECTION 10.7 Amendments...................................................................................... 27 SECTION 10.8 Pronouns........................................................................................ 27 SECTION 10.9 Successors in Interest.......................................................................... 27 SECTION 10.10 Headings........................................................................................ 27 SECTION 10.11 Consent to Jurisdiction and Service of Process.................................................. 28 SECTION 10.12 Waiver of Jury Trial............................................................................ 28 |
SCHEDULES AND EXHIBITS
Schedule A Partners and Percentage Interests Exhibit A Legal Description of Property Exhibit B Approved Terms and Conditions of Loans from Managing General Partner Exhibit C Description of Equity Redemption Loan Exhibit D Description of Prudential Guarantied Loan Exhibit E Description of Business Interruption and General Liability Insurance Exhibit F Description of Financing Plan for the Partnership Exhibit G Form of Special BP Loan Note |
SECOND AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
FOUR EMBARCADERO CENTER VENTURE
RECITALS:
E. To reflect the transfers, successions, admissions and withdrawals recited above, to provide for the continuation of the Partnership as a California general partnership under the Act, and to provide for the revised terms and conditions under which the Partnership will continue in existence and be governed, the parties wish to amend and restate the Prior Partnership Agreement in its entirety, as provided herein.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 - THE PARTNERSHIP
The name of the Partnership shall continue to be "FOUR EMBARCADERO CENTER VENTURE." All business of the Partnership shall be conducted under such name or under such variations thereof as the Managing General Partner deems necessary or appropriate to comply with the requirements of law in any applicable jurisdiction in which the Partnership may do business.
The principal place of business of the Partnership shall be c/o Boston Properties, Inc., Four Embarcadero Center, Suite 2600, San Francisco, California 94111, or at such other place or places as the Managing General Partner may designate.
The Partnership shall be a general partnership, governed by the Act. The interests of the Partners in the Partnership shall be personal property for all purposes. All real and other property owned by the Partnership shall be deemed owned by the Partnership, as a partnership, and no Partner, individually, shall have any ownership of such property.
The term of the Partnership shall continue until 12:00 noon on December 31, 2050, unless sooner terminated in accordance with the terms and conditions of this Agreement, or by applicable law.
The purpose of the Partnership shall be:
(a) to own, manage, develop, improve, renovate, rehabilitate, operate, hold for investment, lease, encumber, mortgage, pledge, assign, exchange, sell and/or otherwise deal with the Property;
(b) to retain managing agents and consultants therefor, and to do all things necessary or useful in connection with any of the foregoing;
(c) in addition to, and in furtherance of these purposes and powers,
the Partnership shall have the power (i) to borrow money and
issue evidences of indebtedness and to secure same by mortgage,
pledge or other lien (including, without limitation, obtaining
the Equity Redemption Loan and Prudential Guarantied Loan), and
(ii) to guarantee the obligations of any other Person when done
in furtherance of the Partnership's business, including any
indebtedness of such Person, and to secure such guarantee
obligations by mortgage, pledge or other lien on any asset of the
Partnership;
(d) to make and service the Investment Loan as contemplated herein;
(e) subject to the express terms, provisions and restrictions of this Agreement, to engage in and consummate the transactions described in the Master Transaction Agreement;
(f) to enter into the Redemption Agreement and consummate the transactions described therein; and
(g) to enter into, perform and carry out contracts of any kind necessary to, or in connection with, or incidental to the accomplishment of any of the foregoing purposes; and
(h) to use the Excess Mortgage Loan Proceeds to make the Special BP Loan.
The Partnership shall not engage in any other business. It is further agreed that the Partnership shall at all times adhere to at least the level of quality in the maintenance and operation of the Property as a first class office and retail complex as maintained by the Partnership during the twelve (12) month period preceding the date hereof.
In addition to the capitalized terms defined in the recitals and elsewhere herein, the following terms shall have the following meanings:
corporation, and any other Person who may become a Non-Managing General Partner pursuant to the terms of this Agreement, in each such case until such Person has ceased to be a Non-Managing General Partner pursuant to the terms of this Agreement. "Non-Managing General Partners" means all such Persons, if there is more than one. If at any time there is more than one Non-Managing General Partner, then all references herein to the Non-Managing General Partner shall, unless the context requires otherwise, be deemed to refer to the Non-Managing General Partners.
ARTICLE 2 - CAPITALIZATION
(a) No Partner shall, except as otherwise required by the Act, other applicable law or this Agreement, be required to make any further Capital Contributions to the Partnership, and so long as Prudential or any Affiliate of Prudential is a Partner, no Capital Contributions shall be made to the Partnership without the prior written consent of Prudential.
(b) At no time prior to the second anniversary of the Redemption Distribution shall the Managing General Partner call or accept Capital Contributions from any Partner for the purpose of repaying the Equity Redemption Loan or any debt replacing or refinancing the Equity Redemption Loan, and during such period no Capital Contributions made after the date hereof shall be used in such manner.
(c) To the extent that it is necessary or desirable for the Partnership, in the sole discretion of the Managing General Partner, to raise cash for the purpose of funding working capital, capital expenditures, leasing commissions, tenant improvements or other expenditures relating to the Property at a time when the Partnership is unable to raise such cash through the receipt of Capital Contributions because of the prohibition set forth in Section 2.2(a), the Managing General Partner agrees that it (or an Affiliate of the Managing General Partner) will lend funds to the Partnership for such purposes by purchasing BP Notes from the Partnership.
The Managing General Partner shall have the right, from time to time, provided it obtains the consent of the Non-Managing General Partners, to admit additional Non-Managing General Partners to the Partnership.
Upon the admission of any new Non-Managing General Partner, an amendment of this Agreement, reflecting such change, shall be signed by the Managing General Partner and the additional Non-Managing General Partner, and an amendment to the Certificate, reflecting such change, to the extent required or appropriate under applicable law, shall be signed by all Partners
either individually or by the Managing General Partner on their behalf and filed with the Secretary of State of the State of California.
Except as otherwise provided in this Agreement or as set forth in the Redemption Agreement, (i) no Partner shall have the right to demand and withdraw a return of its Capital Account, and (ii) no Partner shall have the right to receive property other than cash upon a distribution to the Partners, redemption of any Partner's interest or liquidation of the Partnership.
No Partner shall receive any interest, salary, or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Partnership or otherwise in its capacity as Partner, except (i) interest received, if any, on BP Notes or (ii) as otherwise provided in this Agreement.
(a) The Partnership is hereby authorized to, and shall, make the Investment Loan to Investment Loan Borrower and acquire the Investment Notes on the date hereof.
(b) The Partnership is hereby authorized to, and shall, borrow the Equity Redemption Loan and Prudential Guarantied Loan on the date hereof and shall thereafter perform its obligations in respect thereof subject to the terms and limitations of this Agreement. The proceeds of the Equity Redemption Loan and Prudential Guarantied Loan shall be applied to make the Investment Loan and acquire the Investment Notes on the date hereof.
(c) In accordance with Section 2.2(b), the Partnership shall not, at any time prior to the second anniversary of the Redemption Date, use Capital Contributions made after the date hereof for the purpose of repaying the Equity Redemption Loan or any debt replacing the Equity Redemption Loan.
(e) Notwithstanding anything to the contrary provided in this Agreement, all costs, fees and expenses incurred in connection with the consummation of the Equity
Redemption Loan and Prudential Guarantied Loan shall be paid by the Partnership and borne by the Partners (and reflected in the Partnership's books as follows):
(ii) All other Approved Loan Costs shall be paid by the Partnership as current expenses and borne by each Partner in accordance with its Percentage Interest on the date hereof;
(iii) Any other costs and expenses incurred by the Partnership with respect to the Equity Redemption Loan shall be paid by the BP Partners; and
(iv) Any other costs and expenses incurred by the Partnership with respect to the Prudential Guarantied Loan shall be paid by Prudential.
ARTICLE 3 - ALLOCATIONS OF PROFITS AND LOSSES
AND MAINTENANCE OF CAPITAL ACCOUNTS
be determined so as to take account of the variation between the adjusted tax
basis and book value of such property in the same manner as under Code Section
704(c), and the amount of upward and/or downward adjustments to the book value
of the Partnership property shall be treated as income, gain, deduction and/or
loss for purposes of applying the allocation provisions of this Article 3. In
the event that Code Section 704(c) applies to Partnership property, the Capital
Accounts of the Partners shall be adjusted in accordance with Regulations
Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion,
amortization and gain and loss, as computed for book purposes, with respect to
such property. The amount of all distributions to Partners shall be determined
pursuant to Section 4.1 hereof. Notwithstanding any provision contained herein
to the contrary, no Partner shall be required to restore any negative balance in
its Capital Account.
(d) The tax returns for the Partnership for the 1998 calendar year shall be prepared using the interim closing of the books method.
ARTICLE 4 - DISTRIBUTIONS
(a) Except as provided in Section 4.1(b) or Section 7.5, and subject to the needs of the Partnership to accumulate reserves, which prior to the Redemption Distribution shall be determined in the sole discretion of the Managing General Partner, distributions to the Partners shall be made in proportion to the Partners' Percentage Interests. Distributions shall be made from time to time at the discretion of the Managing General Partner.
(b) Notwithstanding anything to the contrary provided in this Agreement, all payments in respect of title insurance received by the Partnership the amount of which was affected by the non-imputation endorsement to the Partnership's title insurance policy issued as of the date hereof with respect to the Property will be distributed only to the BP Partners in proportion to their respective Percentage Interests.
All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution to the Partnership, the Managing General Partner or the Non-Managing General Partners shall be treated as amounts distributed to the Managing General Partner or Non-Managing General Partners pursuant to this Article for all purposes under this Agreement. The Managing General Partner may allocate any such amounts among the Partners in any manner that is in accordance with applicable law.
ARTICLE 5 - MANAGEMENT OF THE PARTNERSHIP
The management powers over the business and affairs of the Partnership are and shall be exclusively vested in the Managing General Partner, who shall be subject to the provisions of this Agreement and to applicable law, and, subject to the consent rights set forth in Section 5.4 hereof, no Non-Managing General Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership.
The Managing General Partner shall devote such time and effort to the Partnership as it deems necessary and may retain agents as reasonably required or desirable to assist it. The Managing General Partner shall review the status and condition of the Property and shall supervise the activities of any agents engaged by it. The Managing General Partner may delegate any of its powers, rights and obligations hereunder, and, in furtherance of any such delegation, may appoint, employ, contract or otherwise deal with any Person (including Affiliates, but only so long as such employment, contract or other deal is not less favorable to the Partnership than would be an arms-length transaction on market terms) for the transaction of the business of the Partnership, which Persons may, under the supervision of the Managing General Partner, perform any acts or services for the Partnership as the Managing General Partner may approve.
Subject to Section 5.4, the Managing General Partner shall have all the rights and powers which may be possessed by a general partner in a partnership formed under the Act, which are otherwise conferred by law or which are necessary, advisable or convenient to the discharge of duties under this Agreement and to the management, direction and control of the business and affairs of the Partnership, exercisable without the consent of the Non-Managing General Partners (except as herein expressly provided), including the following rights and powers:
(a) to conduct the tax, financial and business affairs of the Partnership;
(b) to take all action necessary to acquire, purchase, renovate, rehabilitate, hold, own, improve, operate, encumber, mortgage, pledge, assign, exchange, or to sign notes or guarantee payment of any loans relating to the purposes of the Partnership;
(c) to manage, repair, insure, service, promote, advertise, lease, sublease, and create or release interests in the Partnership property;
(d) to timely pay out of Partnership funds such expenses as are necessary to carry out the intentions and purposes of the Partnership including real estate taxes and debt service payments to the extent there is sufficient gross cash proceeds.
(e) to sell and/or otherwise dispose of all or any portion of the Property;
(f) to make appropriate elections permitted under any applicable tax law, provided that such elections will not, in the opinion of counsel or the accountants for the Partnership, be disadvantageous to a majority in interest of the Non-Managing General Partners;
(g) to change the principal office of the Partnership to other places subject to the notice provision herein provided;
(h) to employ agents, attorneys, public accountants (which shall be, in all events, a "Big Five" accounting firm), and depositories and to grant powers of attorney;
(i) to employ persons necessary and appropriate in the operation and management of the Partnership and the Property, including, but not limited to, supervisory managing agents, insurance brokers, real estate brokers, and loan brokers, on such terms and for such compensation which does not exceed generally prevailing market rates, all to act under the supervision of the Managing General Partner, and the Managing General Partner on behalf of the Partnership is hereby authorized to enter into an agreement with any Managing General Partner in their individual capacities or a corporation or other entity affiliated with any Managing General Partner for the performance of such services to the Partnership except as otherwise provided for in this Agreement;
(m) to lend money to any BP Partner or any Affiliate of any BP Partner pursuant to a Special BP Loan.
(a) Notwithstanding anything in this Agreement to the contrary, for so long as Prudential is a Partner, the Managing General Partner shall not have the power or authority to, and shall not, cause the Partnership to take any of the following actions, without the consent of Prudential, which consent shall not be unreasonably withheld:
(i) other than in the ordinary course of business, cause any closing of a material portion of the Property for renovations (other than repairs necessitated as a result of a fire or other casualty);
(iii) take any action or make any decision involving credit, management or servicing decisions relating to the Investment Notes other than making an election to accelerate the Investment Notes upon the occurrence of (and during the continuance of) an Event of Default or taking any action or decision relating to the Redemption Distribution;
(iv) make a loan to or guarantee the indebtedness of any Person other than (A) loans to tenants of the Property for tenant improvements or (B) a Special BP Loan;
(v) cause or permit the sale of (A) all or any material portion of the Property, except leases, concessionaire agreements and space licenses entered into in the ordinary course of business of the Property, or (B) except in connection with the Redemption Distribution, the Investment Notes or any portion thereof or interest therein;
(vii) amend this Agreement if such amendment affects or could affect (A) the receipt, amount or timing of any distributions to Prudential, or (B) Prudential's rights or obligations under this Agreement or the Redemption Agreement;
(viii) cause the dissolution of the Partnership, or cause the Partnership to file or otherwise commence a voluntary bankruptcy case, or consent to the commencement of an involuntary bankruptcy case, under the United States Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case, or consent to the
appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of the Property;
(x) assign, relinquish, settle, compromise, waive or impair any of the Partnership's rights under or with respect to, or amend, terminate, extend the term of (or time for payments due, or performance to be rendered, to the Partnership under) or otherwise modify any instrument or agreement under which the Partnership has rights and to which the Managing General Partner or any of its Related Parties is a party; or
(xi) engage in any activity without a good faith business purpose therefor and with the intent of manipulating the "Operating Profits" or "Operating Losses" of the Partnership described in the Redemption Agreement in a manner intended to materially adversely affect, to the benefit of the other Partners, the amounts that Prudential would be entitled to receive under this Agreement or the Redemption Agreement.
The Managing General Partner shall be the Tax Matters Partner and is also specifically authorized to and shall cause the preparation and timely filing of all Partnership tax returns and shall, on behalf of the Partnership, subject to the terms and provisions of the Redemption Agreement, make such tax elections for the Partnership as it, after consultation with the Partnership's accountants, shall determine to be in the best interests of the Partners. In addition, the Managing General Partner shall timely file all other forms, documents or other writings with respect to the business and operation of the Partnership which shall be required by any governmental agency or authority having jurisdiction to require such forms, documents or other writings, and shall transmit to each Partner any form or document required to be transmitted by any such governmental agency.
Nothing herein contained shall be deemed to prevent any Partner or any shareholder or affiliate thereof from engaging in other activities for profit, whether in the real estate business or otherwise. The Managing General Partner (or any shareholder or affiliate thereof), or any Partner, may, in the future, organize and manage joint ventures, additional limited partnerships or other business entities for the acquisition, management and sale of real estate. Neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Partner or any affiliate from engaging in such activities, or require any Partner to permit the Partnership or any Partner to participate in any such activities and, as a material part of the consideration for each Partner's
execution hereof, each Partner, for the benefit of the other Partners, hereby waives, relinquishes and renounces any such right or claim of participation.
(a) To the fullest extent permitted by California law, the
Partnership shall indemnify each Indemnitee from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including, without
limitation, attorneys fees and other legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement,
in which such Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith, was the result of active and deliberate
dishonesty, or was the result of a breach of this Agreement by such Indemnitee
(or by the Partner of which such Indemnitee is a director or officer); or (ii)
the Indemnitee actually received an improper personal benefit in money, property
or services, or in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty (except a guaranty by a Partner of
nonrecourse indebtedness of the Partnership or as otherwise provided in any such
loan guaranty) or otherwise for any indebtedness of the Partnership, and the
Managing General Partner is hereby authorized and empowered, on behalf of the
Partnership, to enter into one or more indemnity agreements consistent with the
provisions of this Section 5.8 in favor of any Indemnitee having or potentially
having liability for any such indebtedness. The termination of any proceeding by
conviction of an Indemnitee or upon a plea of nolo contendere or its equivalent
by an Indemnitee, or an entry of an order of probation against an Indemnitee
prior to judgment, creates a rebuttable presumption that such Indemnitee acted
in a manner
contrary to that specified in this Section 5.8(a). Any indemnification pursuant to this Section 5.8 shall be made only out of the assets of the Partnership and shall not impose any personal liability on any Partner, and neither the Managing General Partner nor any Non-Managing General Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its obligations under this Section 5.8.
(c) Subject to the procedures set forth in Section 5.8(b), reasonable expenses incurred by an Indemnitee who is a party to a proceeding in a matter for which the Indemnitee has undertaken the defense pursuant to the provisions of this Section 5.8 (other than as a result of the rejection or dispute by the Managing General Partner of a claim for indemnification under Section 5.8(b)) shall be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 5.8(a) has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.
(d) The indemnification provided by this Section 5.8 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under this Agreement or any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified.
(e) The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the Managing General Partner shall determine in its reasonable discretion, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership's activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
(f) In no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 5.8 solely because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 5.8 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 5.8 or any provision hereof shall be prospective only and shall not in any way affect the Partnership's liability to any Indemnitee under this Section 5.8, as in effect immediately prior to such amendment, modification, or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) Notwithstanding anything to the contrary set forth in this Agreement, except as otherwise expressly provided in this Agreement, the Managing General Partner and its officers and directors shall not be liable for monetary damages to the Partnership, any Partners or any Assignees for losses sustained or liabilities incurred as a result of reasonable errors in judgment or of any act or omission if the Managing General Partner acted in good faith; provided, however, that the Managing General Partner shall be liable to the Partnership and Partners for its material breaches of this Agreement.
(b) Subject to its obligations and duties as Managing General Partner
set forth in Section 5.3 hereof, and subject to the limitations set forth in
Section 5.4 hereof, the Managing General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The
Managing General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the Managing General Partner in good faith, except as otherwise expressly provided herein.
(c) Any amendment, modification or repeal of this Section 5.9 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Managing General Partner's liability (and that of its officers and directors) to the Partnership and the Non-Managing General Partners under this Section 5.9 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(a) The Managing General Partner may rely and shall be protected in acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.
(b) The Managing General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such Managing General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
(c) The Managing General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and duly appointed attorneys-in-fact. Each such attorney shall, to the extent provided by the Managing General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the Managing General Partner hereunder.
ARTICLE 6 - ACCOUNTING
The Partnership shall operate on the basis of a calendar year, and shall report its operations for tax and all other purposes in accordance with those methods the Managing General Partner and the Partnership's accountant deem advisable.
The Partnership shall maintain full and accurate books at its principal office which all Partners shall have the right to inspect and examine during business hours upon reasonable written notice to the Managing General Partner. The Managing General Partner shall keep or cause such books to be kept and shall fully and accurately enter all transactions of the Partnership therein. Such books shall be closed and balanced at the end of each calendar year. On or before March 31 of each year, the Managing General Partner will furnish the Non- Managing General Partners with a balance sheet and a statement of income and expenses of the Partners for the prior calendar year and a report on Treasury Form K-1 containing information relating to the Partnership to be used in preparing a Non-Managing General Partner's personal federal income tax return.
The books of account of the Partnership shall be kept in accordance with good and accepted bookkeeping and accounting practices for similar properties, provided that all methods of accounting and of treating particular transactions shall be in accordance with the methods of accounting employed for Federal income tax purposes. The determinations of the Managing General Partner with respect to the treatment of any items or its allocation for federal, state or local tax purposes shall be binding upon all the Partners so long as such determination shall not be inconsistent with any express term hereof or of the Redemption Agreement.
The Partnership's certified public accountant shall be designated by the Managing General Partner, subject to the terms and provisions of Section 5.3(h).
The Managing General Partner shall, on behalf of the Partnership, open and maintain a bank account or accounts in a bank or other financial institution of its choosing in which shall be deposited all of the capital, cash receipts and other funds of the Partnership.
ARTICLE 7 - RIGHTS AND OBLIGATIONS OF THE NON-MANAGING
GENERAL PARTNERS
Except as provided herein, the Non-Managing General Partners shall not be obligated to make a contribution of any sort whatsoever to the capital of the Partnership, or to provide a loan.
Each Partner hereby represents and covenants that its execution of this Agreement has been duly authorized by proper corporate action or otherwise.
In addition to the foregoing rights (including any limitations thereof) and obligations, the Non-Managing General Partners shall each have those rights and obligations conferred or imposed upon partners of a general partnership under applicable law, to the extent not inconsistent with the terms hereof.
Except as specifically provided in the Redemption Agreement, no Partner shall have the right to withdraw from the Partnership or have its interest in the Partnership redeemed by the Partnership.
ARTICLE 8 - WITHDRAWAL AND REPLACEMENT OF PARTNERS AND
TRANSFER OF PARTNERSHIP INTEREST
The Managing General Partner may not Transfer its interest in the Partnership or withdraw from the Partnership without the consent of the Non- Managing General Partners.
(a) Subject to the provisions of this Article 8, a Non-Managing General Partner may transfer its interest in the Partnership with the consent of the Managing General Partner, which consent may be withheld by the Managing General Partner in its sole and absolute
discretion. Nothing in this Agreement shall be deemed to preclude the purchase by the Managing General Partner of any Non-Managing General Partnership interest and the admission of a Managing General Partner as a Non-Managing General Partner in connection therewith.
(b) If the interest, or any part thereof, of a Partner in the Partnership is disposed of pursuant to this Section, such Partner shall nevertheless be entitled to a portion of the income, gain, loss, deduction and credit allocated to such interest or part thereof in accordance with the provisions of this agreement for the fiscal year of the Partnership in which such disposition occurs, based upon the number of months during such year that such Partner owned such interest or part thereof. Any predecessor or successor of such Partner in respect of such interest or part thereof shall share in such profits and losses for the fiscal year in which such disposition occurs and the Partnership shall be bound by such allocation, provided the same shall be deemed reasonable by the Partnership's accountants, upon being furnished with timely written notice of same. Distributions of cash or other property shall be made only to such persons who are Partners on the date of distribution.
(c) Without limiting the foregoing, the Managing General Partner may prohibit any transfer by a Non-Managing General Partner of its interest in the Partnership if, in the opinion of legal counsel to the Partnership, such transfer would require filing of a registration statement under the Securities Act of 1933 or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or interests in the Partnership, or would cause a termination of the Partnership under Section 708 of the Code.
(d) Without limiting the foregoing, no transfer by a Non-Managing
General Partner of its interests in the Partnership may be made to any Person if
(i) in the opinion of legal counsel for the Partnership, it would result in the
Partnership being treated as an association taxable as a corporation; (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code; (iii) such transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(c) of the Code); (iv) such transfer would,
in the opinion of legal counsel for the Partnership, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan
pursuant to Department of Labor Regulations Section 2510.2-101; or (v) such
transfer would subject the Partnership to be regulated under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
Retirement Income Security Act of 1974, each as amended, or would violate any
loan documents to which the Partnership is a party.
(e) The transfer of a Partnership interest shall not constitute, or result in, a dissolution of the Partnership.
(a) No Non-Managing General Partner shall have the right to substitute a transferee as a Non-Managing General Partner in his place. The Managing General Partner shall, however, have the right to consent to the admission of a transferee of the interest of a Non-Managing General Partner pursuant to this Section 8.4 as a Substituted Non-Managing General Partner, which consent may be given or withheld by the Managing General Partner in its sole and absolute discretion. The Managing General Partner's failure or refusal to permit a transferee of any such interests to become a Substituted Non- Managing General Partner shall not give rise to any cause of action against the Partnership or any Partner.
(b) A transferee who has been admitted as a Substituted Non-Managing General Partner in accordance with this Article 8 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Non-Managing General Partner under this Agreement.
If the Managing General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee as a Substituted Non- Managing General Partner, as described in Section 8.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be deemed to have had assigned to it, and shall be entitled to receive distributions from the Partnership and the share of net income, net losses, and any other items, gain, loss deduction and credit of the Partnership attributable to the interest in the Partnership assigned to such transferee, but except as otherwise provided herein shall not be deemed to be a holder of an interest in the Partnership for any other purpose under this Agreement, and shall not be entitled to vote in any matter presented to the Non-Managing General Partners for a vote (such interest in the Partnership being deemed to have been voted on such matter in the same proportion as all other interests held by Non-Managing General Partners are voted). In the event any such transferee desires to make a further assignment of any such interest in the Partnership, such transferee shall be subject to all of the provisions of this Article 8 to the same extent and in the same manner as any Non-Managing General Partner desiring to make such an assignment.
ARTICLE 9 - DISSOLUTION, LIQUIDATION AND TERMINATION
(a) Except as herein otherwise expressly provided, the Partnership shall be dissolved upon the occurrence of any of the following events:
(1) agreement by all of the Partners to dissolve the Partnership;
(2) expiration of the term provided in Section 1.5 hereof;
(3) sale or taking by eminent domain or other lawful government action resulting in transfer of title of substantially all of the Partnership's assets; or
(4) any other event which, under applicable law, results in the dissolution of the Partnership.
(b) Dissolution shall be effective on the date of the event giving
rise to the dissolution, but the Partnership shall not terminate until the
assets thereof have been distributed in accordance with the provisions of
Section 9.2 hereof.
(a) If the Partnership shall be dissolved by reason of the occurrence of any of the circumstances described in Section 9.1, no further business shall be conducted by the Partnership except for taking of such action as shall be necessary for the winding up of its affairs and distribution of its assets to the Partners pursuant to the provisions of this Article 9. Upon such dissolution, the Managing General Partner shall act as liquidator or, if it is unable or unwilling to so act, it shall appoint one or more liquidators, who shall have full authority to wind up the affairs of the Partnership and to make final distribution as provided herein.
Upon such dissolution of the Partnership, the liquidator(s) shall determine which, if any, Partnership properties and assets should be distributed in kind, and dispose of all other Partnership properties and assets at the best cash price obtainable therefor and distribute the proceeds as follows:
(1) First, to the payment and discharge of all of the Partnership's debts and liabilities to creditors other than the Partners;
(2) Second, to the payment and discharge of all of the Partnership's debts and liabilities to Partners in their capacities as creditors of the Partnership;
(3) The balance, if any, to the Partners in accordance with the provisions of Article 4.
(b) Notwithstanding the foregoing, if any Partner shall be indebted to the Partnership, then, until payment of such indebtedness by said Partner, the liquidator(s) shall retain such Partner's distributive share of the Partnership properties and assets and, after applying the cost of operation of such properties and assets during the period of such liquidation against the income therefrom, the balance of such income shall be applied in liquidation of such indebtedness. However, if at the expiration of six (6) months after notice of such outstanding indebtedness has been given to such Partner and such amount has not been paid or otherwise liquidated in full, the liquidator(s) may sell the assets allocable to such Partner at public or private sale at the best price immediately obtainable, such best price to be determined in the sole judgement of the liquidator(s). So much of the proceeds of such sale as shall be necessary to liquidate such indebtedness shall then be so applied, and the balance of such proceeds, if any, shall be distributed to such Partner. Any gain or loss realized for Federal income tax purposes upon the disposition of such assets shall, to the extent permitted by law, be allocated to such Partner, and to the extent not so permitted, to the Partners.
Thereafter, the liquidator(s) shall comply with all requirements of the Act, or other applicable law, pertaining to the winding up of a limited partnership, at which time the Partnership shall stand terminated.
(c) In the event the Managing General Partner's interest in the
Partnership is "liquidated" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g) (including, without limitation, upon the liquidation of the
Partnership) and the Managing General Partner's Capital Account has a deficit
balance after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs,
the Managing General Partner shall contribute to the capital of the Partnership
the amount necessary to restore such deficit balance to zero in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(3).
ARTICLE 10 - MISCELLANEOUS
This Agreement and the Partners hereto are subject to the terms and provisions of the Redemption Agreement. If, and to the extent that, any terms or provisions of this Agreement are inconsistent with any terms and provisions of the Redemption Agreement, the terms and provisions of the Redemption Agreement shall govern and control.
All notices, demands, consents, options, elections, or other communications hereunder shall be in writing and shall be deemed to have been exercised, made or given upon delivery if delivered by hand or by courier service and three (3) business days after being deposited in the United States mail and sent by certified or registered mail, return receipt requested, postage prepaid. Any notice required to be sent to any Partner shall be sent to the addresses specified on
Each of the Partners will hereafter execute and deliver such further instruments, and do such further acts as may be required to carry out the intent and purposes of this Agreement.
This Agreement may be executed in one or more counterparts and all such counterparts shall constitute one agreement binding on all the parties, notwithstanding that all the parties are not signatories to the original or the several counterparts.
None of the provisions of this Agreement shall be for the benefit or enforceable by the creditors of the Partnership.
This Agreement shall, except as herein otherwise expressly provided, be governed and construed in accordance with the laws of the State of California.
This Agreement may be amended only by a written amendment signed by all of the Partners.
Any pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the undersigned may require.
Except as otherwise provided herein, all provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective heirs, executors, administrators, personal representatives, successors and permitted assigns of any of the parties to this Agreement. However, nothing in this Agreement, whether expressed or implied, is intended to confer upon any entity, other than specifically provided, any rights or benefits under or by reason of this Agreement.
The headings contained at the beginning of each Article and Section are for purposes of convenience only and are not intended to limit, expand or define the content thereof.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY HERETO ACCEPTS FOR ITSELF, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Each party hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to any party hereto, at its address provided in this Agreement, such service being hereby acknowledged by each party to be sufficient for personal jurisdiction in any action against such party in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including, without limitation, contract claims, tort claims, beach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
WITNESS: MANAGING GENERAL PARTNER: ------------------------ BOSTON PROPERTIES LLC By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Eli Rubenstein By: /s/ Thomas J. O'Connor ------------------------ ------------------------- Name: Thomas J. O'Connor Title: Vice President WITNESS: NON-MANAGING GENERAL PARTNERS: ----------------------------- BP EC4 HOLDINGS LLC By: Boston Properties Limited Partnership, Managing Member By: Boston Properties, Inc., General Partner /s/ Eli Rubenstein By: /s/ Thomas J. O'Connor ------------------------ ------------------------- Name: Thomas J. O'Connor Title: Vice President WITNESS: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA /s/ Eli Rubenstein By: /s/ Gary L. Frazier ------------------------ ------------------------- Name: Gary L. Frazier Title: Vice President 29 |
SCHEDULE A ---------- ATTACHED TO AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF FOUR EMBARCADERO CENTER VENTURE Managing General Partner ------------------------ Name and Address Percentage Interest ---------------- ------------------- Boston Properties LLC 0.499798% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 Non-Managing Partners --------------------- Name and Address Percentage Interest ---------------- ------------------- BP EC4 Holdings LLC 49.479944% c/o Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 The Prudential Insurance Company 50.020258 of America c/o Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attention: John R. Triece Facsimile: (201) 683-1797 with copies to: Prudential Insurance Company of America O'Melveny & Myers 4 Embarcadero Center, Suite 2700 Embarcadero Center West San Francisco, CA 94111 275 Battery Street Attention: Harry Mixon San Francisco, CA 94111 Facsimile: (415) 956-2197 Attention: Stephen A. Cowan Facsimile: (415) 984-8701 |
[INTENTIONALLY OMITTED]
Approved Terms and Conditions of Loans from Managing General Partner
Exhibit A [FORM OF BP NOTE] --------- DELAYED DEMAND NOTE ------------------- $_____________________ San Francisco, California _____________, 19__ |
The outstanding balance of principal due hereunder may be prepaid in full at any time, or from time to time in part in multiples of One Thousand Dollars ($1,000.00) without any prepayment premium.
The Maker agrees to pay all charges of the holder hereof in connection with the collection and enforcement of this Note, including reasonable attorneys' fees and disbursements.
The Maker hereby waives presentment, demand, notice, protest and all other suretyship defenses generally and agrees that any renewal, extension or postponement of the time of payment or any other indulgence, may be effected without notice to and without releasing the Maker from any liability hereunder.
This Note shall have the effect of an instrument under seal.
FOUR EMBARCADERO CENTER VENTURE
By: Boston Properties LLC, its managing general
partner
By: Boston Properties Limited Partnership,
its managing member
By: Boston Properties, Inc., its
general partner
By:________________________
Name:
Title:
The "Equity Redemption Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $92,119,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among BankBoston, N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank National Association, Citizens Bank and other banks which may become parties thereto as the lenders thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $328,143,000. The $92,119,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
The "Prudential Guarantied Loan" shall mean that certain loan to the Partnership in the aggregate principal amount of $51,000,000, which loan is made pursuant to a certain Term Loan Agreement dated as of November 12, 1998 by and among The Chase Manhattan Bank as lender thereunder, and One Embarcadero Center Venture, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture, collectively as the borrowers thereunder, which Term Loan Agreement provides for loans to the borrowers in the aggregate principal amount of $92,000,000. The $51,000,000 loan to the Partnership under such Term Loan Agreement is evidenced by a promissory note of the Partnership in the form provided in such Term Loan Agreement.
Description of Business Interruption and General Liability Insurance
Business Interruption Insurance $145,000,000 Commercial General Liability $ 2,000,000 Umbrella Liability Program $200,000,000 |
Description of Financing Plan for Four Embarcadero Center Venture
The Equity Redemption Loan will, upon the earlier of the redemption of The Prudential Insurance Company of America from the Partnership or the 90th day after the date of execution of this Agreement, be repaid through (i) a draw on the Credit Agreement by the Partnership of approximately $66,000,000 and (ii) cash of the Partnership in an amount equal to approximately $26,600,000, which cash will represent proceeds from the repayment of the Special BP Loan. As a result of the draw under the Credit Agreement, the Partnership will be a primary obligor with respect to approximately $66,000,000 of indebtedness under the Credit Agreement.
In the event that the interest of The Prudential Insurance Company of America in the Partnership is not redeemed by February 10, 1999, or in the event that the Partnership is not, by such date, released in full from all obligations with respect to the Prudential Guarantied Loan and related obligations, then either (i) Prudential shall continue to guaranty the Prudential Guarantied Loan until such redemption, assumption and release occurs or (ii) if the Partnership repays and refinances the Prudential Guarantied Loan by obtaining any replacement debt ("Replacement Debt"), Prudential shall guarantee the lenders thereof of the punctual payment in full and all other obligations of such Replacement Debt.
principal amount of $160 million.
EXHIBIT 99.11
PRUDENTIAL REALTY SECURITIES, INC.
8 CAMPUS DRIVE
PARSIPPANY, NEW JERSEY 07054
As of November 12, 1998
ONE EMBARCADERO CENTER VENTURE
C/O BOSTON PROPERTIES, INC.
8 ARLINGTON STREET
BOSTON, MASSACHUSETTS 02116-3495
ATTN: GENERAL COUNCIL
Ladies and Gentlemen:
The undersigned, PRUDENTIAL REALTY SECURITIES, INC. (herein called the "COMPANY"), hereby agrees with you as follows:
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to you and, subject to the terms and conditions herein set forth, you agree to purchase from the Company, Notes in the aggregate principal amount of $88,200,000 at 100% of such aggregate principal amount. The Company will deliver to you, at the offices of O'Melveny
& Myers LLP at 275 Battery Street, Suite 2600, San Francisco, California, (or such other location to be determined by mutual agreement between the Company and you) one or more Notes registered in your name, evidencing the aggregate principal amount of Notes to be purchased by you and in the denomination or denominations specified in the Purchaser Schedule attached hereto, against payment of the purchase price thereof by transfer of immediately available funds for credit to the Company's account #890-0305-525 at The Bank of New York, New York, New York, ABA No. 021-000-018 on the date of closing, which shall be November 12, 1998 or any other date on or before November 13, 1998 upon which the Company and you may mutually agree (herein called the "CLOSING" or the "DATE OF CLOSING").
3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the Notes to be purchased by you hereunder is subject to the satisfaction, on or before the date of closing, of the following conditions:
3A. EXECUTION AND DELIVERY OF DOCUMENTS. The Company shall have delivered, or cause to be delivered, to you duly executed, original or certified copies of the following documents, each to be dated the date of closing unless otherwise indicated:
(iii) the Certificate of Incorporation of the Company certified as of a date within 10 Business Days of closing by the Secretary of State of Delaware.
(iv) the Bylaws of the Company certified by the Secretary of the Company.
(v) an incumbency certificate signed by the Secretary or an Assistant Secretary of the Company certifying as to the names, titles and true signatures of the officers of the Company authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder.
(vi) a certificate of the Secretary or an Assistant Secretary of the Company (A) attaching resolutions of the Board of Directors of the Company evidencing approval of the transactions contemplated by this Agreement and the issuance of the Notes and the execution, delivery and performance thereof, and authorizing certain officers to execute and deliver the same, and certifying that such resolutions were duly and validly adopted at a meeting duly noticed and held and such resolutions have not since been amended, revoked or rescinded, (B) certifying that no dissolution or liquidation proceedings as to the Company have been commenced or are
(viii) a corporate good standing certificate as to the Company from the State of New Jersey.
(xi) additional documents or certificates with respect to such legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by you.
3B. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment for the Notes to be purchased by you on the date of closing on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation T, U or X of the Board of Governors of the Federal Reserve System) and shall not subject you to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and you shall have received such certificates or other evidence as you may request to establish compliance with this condition.
3C. PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to you, and you shall have received all such counterpart originals or certified or other copies of such documents as you may reasonably request.
3D. RATING. The Company shall have obtained a rating of the Notes, as of a date not more than 30 days prior to the closing hereof, of A or better from S&P and the equivalent rating from Fitch and shall provide written evidence of the same.
3E. PHASE ONE TRANSACTIONS. Phase One of the transactions shall have been completed or shall be consummated concurrently with the consummation of the transactions described herein.
3F. EQUITY REDEMPTION AND PRUDENTIAL GUARANTIED LOANS. You shall have obtained the Prudential Guarantied Loan and Equity Redemption Loan or the closing of such loans shall occur concurrently with the closing of the transactions contemplated herein; and the lenders of the Prudential Guarantied Loan and Equity Redemption Loan shall have made available to you in full the proceeds of the Prudential Guarantied Loan and Equity Redemption Loan.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver to each Significant Holder in duplicate:
(i) as soon as practicable and in any event within 60 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, statements of income, cash flows and shareholders' equity of the Company for the period from the beginning of the current year to the end of such quarterly period, and a balance sheet of the Company as at the end of such quarterly period, setting forth in comparative form statements of income and cash flows for the corresponding period in the preceding year, all in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 120 days after the end of each fiscal year, statements of income, cash flows and shareholders' equity of the Company for such year, and a balance sheet of the Company as at the end of such year, all prepared in accordance with GAAP, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual
audit, all in reasonable detail and satisfactory in form to the Required Holder(s)' and reported on by a Big Five Accounting Firm selected by the Company whose report shall be without limitation as to the scope of the audit and reasonably satisfactory in substance to the Required Holder(s) and shall be certified by such Big Five Accounting Firm to its knowledge with its unqualified opinion;
(iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its stockholders;
(iv) promptly upon receipt thereof, a copy of each other report or management letter submitted to the Company by its independent public accountants in connection with any annual, interim or special audit made by them of the books of the Company;
(v) such other financial data and other information as the Company regularly provides to its other lenders, other holders of Debt or other creditors; and
(vi) with reasonable promptness, such other information and documents as such Significant Holder may reasonably request.
The Company also covenants that promptly after any Responsible Officer obtains knowledge of an Event of Default or Default, it will deliver to each Significant Holder an Officer's Certificate specifying the nature and period of existence thereof and what action the Company has taken, is taking or proposes to take with respect thereto.
5B. INSPECTION OF BOOKS AND RECORDS. The Company covenants that it will permit any Person designated by any Significant Holder in writing, at such Significant Holder's expense, to visit the Company's place of business to examine the corporate books and financial records of the Company and make copies thereof or extracts therefrom and to
5D. COMPLIANCE WITH LAWS. The Company covenants that it and all of its properties and facilities will comply at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, including those relating to protection of the environment except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
5E. PAYMENT OF TAXES. The Company covenants that it will file or cause to be filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and will pay all taxes as shown on such returns and on all assessments received by it to the extent that such taxes become due, except such taxes as are subject to a Good Faith Contest.
5F. ENFORCEMENT OF MORTGAGE PROVISIONS. The Company covenants that it shall require any Commercial Mortgage Loans originated or acquired by it to contain covenants to the effect that (1) the mortgagor shall obtain and maintain at all times appropriate insurance coverage with respect to the mortgaged property and (2) the mortgagor shall promptly pay and discharge any indebtedness or lawful claims against the mortgaged property which if unpaid would constitute a Lien on such property. The Company further covenants and agrees that it will use commercially reasonable efforts to enforce such covenants.
6. NEGATIVE COVENANTS. So long as any Note or amount owing under this Agreement shall remain unpaid, the Company covenants that:
6A(1). DEBT SERVICE COVERAGE RATIO. The Company will not, at any time, permit the Debt Service Coverage Ratio to be less than 1.4 to 1.
6A(2). DEBT TO TOTAL ASSETS RATIO. The Company will not permit the ratio of (i) Debt to (ii) the sum of Total Assets plus the cumulative depreciation of any real property assets of the Company to exceed .70 to 1.
6B. RESTRICTED PAYMENTS. The Company covenants that it will not make, pay or declare, or commit to make, pay or declare, any Restricted Payment unless, after giving effect thereto, (i) the aggregate amount of all Restricted Payments made during the twelve month period commencing on the date hereof and expiring on the one (1) year anniversary of the date hereof, and including all previously made Restricted Payments, does not exceed 100% of the lesser of (A) Net Income and (B) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters during such time period on a cumulative basis, and (ii) the aggregate amount of all Restricted Payments made during any fiscal quarter after the expiration of such twelve (12) month period, and including all previously made Restricted Payments, does not exceed 105% of the lesser of (C) Net Income and (D) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters on a cumulative basis, and (iii) no Default or Event of Default exists or would exist after giving effect to such Restricted Payment.
6C. LIENS, DEBT, AND OTHER RESTRICTIONS. The Company will not:
(i) Liens for taxes, assessments or other governmental levies or charges not yet due or which are subject to a Good Faith Contest;
(ii) statutory Liens of landlords and Liens of carriers, contractors, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or which are subject to a Good Faith Contest;
credit, and (2) do not in the aggregate materially detract from the value of the property or assets so encumbered or materially impair the use thereof in the operation of its business;
(v) Liens now or hereafter required by this Agreement;
(vii) leases, subleases, licenses and sublicenses granted to third parties not interfering in any material respect with the business of the Company;
(viii) minor survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to use of real property, that are necessary for the conduct of the operations of the Company or that customarily exist on properties of corporations engaged in similar businesses and are similarly situated and that do not in any event materially impair their use in the operations of the Company;
(xi) any Lien renewing, extending or refunding any Lien permitted by
(i) the Notes;
(iii) additional Funded Debt of the Company in an amount, which when added to all other Funded Debt of the Company then outstanding (but excluding the Funded Debt evidenced by the Notes and the Other EC Notes), does not exceed $1,000,000,000 at any one time outstanding.
(i) obligations backed by the full faith and credit of the United States Government (whether issued by the United States Government or an agency thereof), and obligations guaranteed by the United States Government, in each case which mature within one year from the date acquired;
(ii) demand and time deposits with, Eurodollar deposits with or certificates of deposit issued by any commercial bank or trust company (1) organized under the laws of the United States or any of its states or having branch offices therein, (2) having equity capital in excess of $100,000,000 and (3) which issues either (x) senior debt securities rated A or better by S&P, A or better by Moody's or (y) commercial paper rated A-2 or better by S&P or Prime-2 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) ("RATED BANKS"), in each case payable in the United States in United States dollars and in each case which mature within one year from the date acquired;
(iii) marketable commercial paper and loan participations rated A-1 or better by S&P or P-1 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) and maturing not more than 270 days from the date acquired;
(iv) bonds, debentures, notes or similar debt instruments issued by a state or municipality given a "AA" rating or better by S&P or an equivalent rating by another nationally recognized credit rating agency and maturing not more than one year from the date acquired;
(viii) bonds, debentures, notes or similar debt instruments issued by a corporation organized and existing under the laws of any state of the United States of America or the District of Columbia and having a long term credit rating of BBB-or better from S&P or Baa3 or better from Moody's; and
6C(4). MERGER AND CONSOLIDATION. Merge or consolidate with any other Person, except that the Company may consolidate or merge with any other corporation if (A) the Company shall be the continuing or surviving corporation and (B) no Default or Event of Default exists or would exist after giving effect to such merger or consolidation.
6C(5). TRANSFER OF ASSETS. Transfer, or agree or otherwise commit to Transfer, a substantial portion of its assets.
6C(6) ISSUANCE OF ADDITIONAL UNSECURED NOTES. Issue any unsecured notes of the Company which are rated lower than the rating of the Notes on the date hereof.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal of or Yield-Maintenance Amount payable with respect to any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note for more than 10 days after the date due; or
(iii) the Company defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other Debt (other than secured Debt which is non-recourse to the Company) beyond any period of grace provided with respect thereto, or the Company fails to perform or observe any other agreement, term or condition contained in any agreement under which any such Debt is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such (or a trustee on behalf of such holder or holders) to cause, such Debt to become due (or to be repurchased by the Company) prior to any stated maturity, provided that the aggregate amount of all Debt as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration (or resale to the Company) shall occur and be continuing exceeds an amount equal to the lesser of (x) $10,000,000 and (y) 5% of the net assets of the Company as reflected on its most recent balance sheet at the time of determination; or
(iv) any representation or warranty made by or on behalf of the Company or any of its officers herein or in any other writing furnished in connection with or pursuant to this Agreement or the transactions contemplated hereby shall be false in any material respect on the date as of which made; or
(vi) the Company fails to perform or observe any other agreement, term or condition contained herein and such failure shall not be remedied within 30 days after the Company receives written notice of such default from any holder of a Note; or
(vii) the Company makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law,
whether now or hereafter in effect (herein called the "BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of the Company, or of any substantial part of the assets of the Company, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings relating to the Company under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings are commenced, against the Company and the Company by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any proceedings decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xii) one or more final judgments in an aggregate amount in excess of $10,000,000 is rendered against the Company and, within 60 days after entry thereof, a solvent insurance carrier or carriers have not confirmed in writing that each such judgment is fully insured or any such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, any such judgment is not discharged;
The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of the Yield-Maintenance Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the Notes shall have been declared immediately due and payable pursuant to
7D. OTHER REMEDIES. If any Event of Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted
in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants and warrants as follows:
8A. ORGANIZATION. The Company is a corporation duly organized and existing in good standing under the laws of the State of Delaware, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof. The Company has no Subsidiaries.
8B. FINANCIAL STATEMENTS. The Company has furnished you with the unaudited financial statements, certified by a principal financial officer of the Company: a balance sheet of the Company as of June 30, 1998 and statements of income, stockholders' equity and cash flows for the six-month period ended on such date, prepared by the Company. To the Company's knowledge, such financial statements are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with GAAP consistently followed throughout the periods involved and show all liabilities, direct and contingent, of the Company required to be shown in accordance with such principles. To the Company's knowledge, the balance sheets fairly present the condition of the Company as at the dates thereof, and the statements of income, stockholders' equity and cash flows fairly present the results of the operations of the Company and its cash flows for the periods indicated. To the knowledge of the Company, there has been no material adverse change in the business, condition (financial or otherwise) or operations of the Company since June 30, 1998.
8C. ACTIONS PENDING. There is no action, suit, investigation or pro ceeding pending or, to the knowledge of the Company, threatened against the Company, or any properties or rights of the Company, by or before any court, arbitrator or administrative or governmental body which (i) might result in a Material Adverse Effect or (ii) purports to affect the validity or enforceability of this Agreement, any Note issued hereunder or the transactions contemplated hereby.
8D. TAXES. The Company has filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be
filed, and has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are subject to a Good Faith Contest.
8F. OFFERING OF NOTES. Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company for sale to, or solicited any offers to buy the Notes or any similar security of the Company from, or otherwise approached or negotiated with respect thereto with, any Person other than Institutional Investors, and neither the Company nor any agent acting on its behalf has taken or will take any action which would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.
8G. USE OF PROCEEDS. The Company does not own or have any present intention of acquiring any "margin stock" as defined in Regulation U (12 CFR Part 207) of the Board of Governors of the Federal Reserve System (herein called "MARGIN STOCK"). The proceeds of sale of the Notes will be used to purchase Commercial Mortgage Loans and/or marketable debt securities, including, but not limited to, ABS. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock or for the purpose of maintaining, reducing or retiring any Indebtedness which was originally incurred to purchase or carry any stock that is currently a margin stock or for any other purpose which might constitute this transaction a "purpose credit" within the meaning of such Regulation U. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or the Notes to violate Regulation U, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as in effect now or as the same may hereafter be in effect.
8H. ERISA. The Company has no retirement or employee benefit plans subject to ERISA.
8I. GOVERNMENTAL CONSENT. No circumstance in connection with the offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body in connection with the execution and delivery of this Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or of the Notes, if the failure to obtain any such consent would have a Material Adverse Effect.
8J. COMPLIANCE WITH LAWS. The Company and all of its properties and facilities have complied at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
8K. INVESTMENT COMPANY STATUS. Neither the Company nor any Subsidiary is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or an "investment adviser" within the meaning of the Investment Advisers Act of 1940, as amended.
8L. DUE AUTHORIZATION, ETC. This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
8M. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company which materially adversely affects or in the future may (so far as the Company can now foresee) materially adversely affect the business, property or assets, or financial condition of the
Company and which has not been set forth in this Agreement or in the other docu ments, certificates and written statements furnished to you and Boston Properties Limited Partnership, a Delaware limited partnership by or on behalf of the Company prior to the date hereof in connection with the transactions contemplated hereby.
8N. INVESTMENTS. All mortgage loans owned by the Company as of the date of this Agreement are Commercial Mortgage Loans which are not in default beyond any applicable cure periods pursuant to the terms thereof, and the Company has not extended any of the cure periods provided in the loan documents governing, evidencing and securing such Commercial Mortgage Loans and originally executed in connection therewith beyond the applicable cure periods provided in such loan documents.
9. REPRESENTATIONS OF THE PURCHASER. You represent that you are not acquiring the Notes to be purchased by you hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of your property shall at all times be and remain within your control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.
10A. YIELD-MAINTENANCE TERMS.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (as converted to reflect the periodic basis on which interest on the Notes is payable, if interest is payable other than on a semi-annual basis) equal to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called
Princi pal of any Note, the offered-side yield to maturity, as of 10:00
a.m. (New York City time) on the Business Day next preceding the Settlement
Date with respect to such Called Principal, of the U.S. Treasury security
that was used to determine the then Treasury of such Investment Note.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one- twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one-twelfth year) which will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date through and including the Rate Reset Date (assuming that the entire principal balance and all accrued interest as of such Rate Reset Date will be repaid on such Rate Reset Date), if the Settlement Date precedes such Rate Reset Date, or alternatively, the Maturity Date if the Settlement Date occurs after the Rate Reset Date.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) to the extent paid on the Settlement Date with the Called Principal, interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield- Maintenance Amount shall in no event be less than zero.
10B. OTHER TERMS.
"ABS" shall mean mortgage, or other asset backed securities.
"AFFILIATE" shall mean any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the Company. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.
"BIG FIVE ACCOUNTING FIRM" shall mean any of Arthur Andersen, Deloitte & Touche, KPMG Peat Marwick, PricewaterhouseCoopers and Ernst & Young.
"BP PARTY" shall mean Boston Properties Limited Partnership, a Delaware limited partnership, and any Affiliate thereof, and shall also include, in all events, One Embarcadero Center Venture, a California general partnership.
"CASH FLOW" shall mean, in respect of any period, the sum of (a) Net Income for such period and (b) the amount of all depreciation and amortization allowances and other non-cash expenses of the Company but only to the extent deducted in the determination of Net Income for such period.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CURRENT DEBT" shall mean, with respect to the Company, all Indebtedness for borrowed money which by its terms or by the terms of any instrument or agreement relating thereto matures on demand or within one year from the date of the creation thereof and is not directly or indirectly renewable or extendible at the option of the debtor to a date more than one year from the date of the creation thereof, provided that Indebtedness for borrowed money outstanding under a revolving credit or similar agreement which obligates the lender or lenders to extend credit over a period of more than one year shall constitute Funded Debt and not Current Debt, even though such Indebtedness by its terms matures on demand or within one year from the date of the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DEBT SERVICE" shall mean, with respect to any period, the sum of the following: (a) Interest Charges for such period, and (b) all payments of principal in respect of Debt of the Company paid or payable during such period.
"DEBT SERVICE COVERAGE RATIO" shall mean, at any time of determination, the ratio of (a) Cash Flow for the most recent fiscal quarter to (b) Debt Service for such fiscal quarter.
"DUFF & PHELPS" shall mean Duff & Phelps Corporation.
"ENVIRONMENTAL LAWS" shall mean all laws relating to pollution,
the release or other discharge, handling, disposition or treatment of
Hazardous Materials and other substances or the protection of the
environment or of employee health and safety, including, without
limitation, CERCLA, the Hazardous Material Transportation Act (49 U.S.C.
Section 1801 et. seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 7401 et. seq.), the Clean Air Act (42 U.S.C. Section 401 et.
seq.), the Toxic Substances Control Act (15 U.S.C. Section 651 et. seq.)
and the Emergency Planning and Community Right-To-Know Act (42 U.S.C.
Section 11001 et. seq.), each as the same may be amended and supplemented.
"EQUITY REDEMPTION LOAN" shall mean that certain loan in the aggregate principal amount of $328,143,000 by Bankboston. N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner
Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank National Association and Citizens Bank (and the other banks which may become parties to the Term Loan Agreement described immediately below) to you, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FITCH" shall mean Fitch IVCA, Inc.
"FUNDED DEBT" shall mean, with respect to any Person, all Indebtedness of such Person which by its terms or by the terms of any instrument or agreement relating thereto matures, or which is otherwise payable or unpaid, more than one year from, or is directly or indirectly renewable or extendible at the option of the debtor to a date more than one year (including an option of the debtor under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year) from, the date of the creation thereof, including current maturities of long-term debt that appear as current liabilities in accordance with GAAP.
"GOOD FAITH CONTEST" shall mean, with respect to any tax, assessment, Lien, obligation, claim, liability, judgment, injunction, award, decree, order, law, regulation, statute or similar item, any challenge or contest thereof by appropriate proceedings timely initiated in good faith by the Company for which adequate reserves therefor have been taken in accordance with GAAP.
"GUARANTEE" shall mean, with respect to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any indebtedness, lease, dividend or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including, without limitation, any such obligation in effect guaranteed by such Person through any agreement (contingent or otherwise) to
(i) purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise);
(ii) maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation; or
(iii) pay the purchase price for goods or services regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose, intent or effect of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof.
The amount of any Guarantee shall be equal to the outstanding principal amount of the obligation guaranteed or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited.
"HAZARDOUS MATERIALS" shall mean (i) any material or substance defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous material", "toxic substances" or any other formulations intended to define, list or classify substances by reason of their deleterious properties, (ii) any oil, petroleum or petroleum derived substance, (iii) any flammable substances or explosives, (iv) any radioactive materials, (v) asbestos in any form, (vi) electrical equipment that contains any oil or dielectric fluid containing levels or polychlorinated biphenyls in excess of 50 parts per million, (vii) pesticides or (viii) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental agency or authority or which may or could pose a hazard to the health and safety of persons in the vicinity thereof.
"INCLUDING" shall mean, unless the context clearly requires otherwise, "including without limitation".
"INSTITUTIONAL INVESTOR" shall mean any insurance company, commercial, investment or merchant bank, finance company, mutual fund, registered money or asset manager, savings and loan association, credit union, registered investment advisor, pension fund, investment company, licensed broker-dealer, "qualified institutional buyer" (as such term is defined under Rule 144A promulgated under the Securities Act, or any successor law, rule or regulation) or "accredited investor" (as such term is defined under Regulation D promulgated under the Securities Act, or any successor law, rule or regulation).
"INTANGIBLES" shall mean, without duplication, all Intellectual Property and operating agreements, treasury stock, deferred or capitalized research and development costs, goodwill (including any amounts, however designated, representing the cost of acquisition of business and investments in excess of the book value thereof), unamortized debt discount and expense, any write-up of asset value after June 30, 1997 and any other amounts reflected in contra-equity accounts, and any other assets treated as intangible assets under GAAP.
"INTELLECTUAL PROPERTY" shall mean all patents, trademarks, service marks, trade names, copyrights, brand names, mechanical or technical processes and paradigms, know-how, and similar intellectual property and applications, licenses and similar rights in respect of the same.
"INTEREST CHARGES" shall mean, with respect to any period, the
sum (without duplication) of the following: (a) all interest in respect of
Debt of the Company deducted in determining Net Income for such period, and
(b) all debt discount and expense amortized or required to be amortized in
the determination of Net Income for such period.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance, minimum or compensating deposit arrangement, lien (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation.
"MATERIAL ADVERSE EFFECT" shall mean (i) a material adverse effect on the business, assets, liabilities, operations, prospects or condition, financial or otherwise, of the Company, (ii) material impairment of the Company to perform any of its obligations under the Agreement and the Notes or (iii) material impairment of the validity or enforceability or the rights of, or the benefits available to, the holders of the Notes under this Agreement or the Notes.
"MOODY'S" shall mean Moody's Investors Services, Inc., including the NCO/Moody's Commercial Division, or any successor Person.
"NET INCOME" shall mean, as to any period, consolidated gross revenues of the Company less all operating and non-operating expenses of the Company for such period, including all charges of a proper character (including current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), but not including in gross revenues the following:
(i) any gains (net of expenses and taxes applicable thereto) in excess of losses resulting from the Transfer of capital assets (i.e., assets other than current assets);
(ii) any gains resulting from the write-up of assets;
(iii) any equity of the Company in the undistributed earnings (but not losses) of any corporation which is not a Subsidiary;
(iv) any earnings or losses of any Person acquired by the Company through purchase, merger, consolidation or otherwise for any fiscal period prior to the fiscal period in which the acquisition occurs:
(v) gains or losses from the acquisition of securities or the retirement or extinguishment of Debt;
(vi) gains on collections from insurance policies or settlements;
(vii) any income or gain during such period from any change in accounting principles, from any discontinued operations or the disposition thereof, from any extraordinary items or from any prior period adjustment;
(viii) in the case of a successor to the Company by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets.
If the preceding calculation results in a number less than zero, such amount shall be considered a net loss.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the Company by its President, one of its Vice Presidents or its Treasurer.
"OTHER EC NOTES" shall mean those certain senior promissory notes of the Company issued by the Company on the date hereof to (a) Embarcadero Center Associates in the aggregate principal amount of $111,927,000 (b) Three Embarcadero Center Venture in the aggregate principal amount of $76,897,000 and
(c) Four Embarcadero Center Venture in the aggregate principal amount of $143,119,000.
"PERSON" shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organ ization and a government or any department or agency thereof.
"PHASE ONE" shall mean the closing and consummation of the transactions described in that certain Master Transaction Agreement dated as of September 28, 1998, by and among Prudential, PIC Realty Corporation, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P., the Persons listed on Exhibit A-1 attached thereto, Boston Properties Limited Partnership and Boston Properties, Inc., which are to be consummated on the "Closing Date" (as defined in such Master Transaction Agreement).
"PRUDENTIAL" shall mean The Prudential Insurance Company of America, a New Jersey mutual insurance company.
"PRUDENTIAL GUARANTIED LOAN" shall mean that certain loan in the aggregate principal amount of $92,000,000 by The Chase Manhattan Bank and/or any of its subsidiaries or affiliates (the "BANK") to you, Embarcadero Center Associates, Three Embarcadero Center Venture and Four Embarcadero Center Venture pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"RATE RESET DATE", with respect to any Note, shall have the meaning set forth in such Note.
"RELEASE" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata, in violation of applicable law or prudent business practice.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51% of the aggregate principal amount of the Notes from time to time outstanding,
but shall include, in any event, the BP Parties so long as any BP Party holds a direct or indirect interest in any Note.
"RESET TREASURY" shall mean the yield to maturity implied by (i)
the yields reported, as of 10:00am (New York City time) on the Business Day
next preceding the Rate Reset Date for any Note, on the display designated
as "Page 678" on the Telerate Access Service, for actively traded U.S.
Treasury securities having a maturity equal to the earlier to occur of the
next Rate Reset Date provided for in such Note (if any) and the Maturity
Date of such Note, or if such yields shall not be reported as of such time
or the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for
which such yields shall have been so reported as of the Business Day next
preceding the Rate Reset Date in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the earlier to
occur of the next Rate Reset Date provided for in such Note (if any) or the
Maturity Date of such Note. Such implied yields shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities.
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief operating officer, chief financial officer or chief accounting officer of the Company or any other officer of the Company involved principally in its financial administration or its controllership function.
"RESTRICTED INVESTMENT" shall mean any Investment other than a Permitted Investment.
"RESTRICTED PAYMENTS" shall mean any of the following (provided that, notwithstanding anything to the contrary stated below, the term "Restricted Payments" does not include any distribution of capital gains by the Company to its shareholders):
(i) any dividend on any class of the Company's capital stock at any time after the date hereof;
(ii) any other distribution on account of any class of the Company's capital stock;
(iii) any redemption, purchase or other acquisition, direct or indirect, of any shares of the Company's capital stock;
(iv) any unscheduled payment of principal of, or retirement, redemption, purchase or other acquisition of, any subordinated debt,
including subordinated debt that is convertible into equity of the Company;
(v) any Restricted Investment;
"S&P" shall mean Standard and Poor's Corporation, or any successor Person.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDER" shall mean and include any Person who owns, beneficially or of record, directly or indirectly, at any time during any year with respect to which a computation is being made 5% or more of the outstanding voting stock of the Company.
"SIGNIFICANT HOLDER" shall mean (i) any BP Party, so long as any BP Party shall hold (or be committed under this Agreement to purchase) any Note, or (ii) any other holder of at least 5% of the aggregate principal amount of the Notes from time to time outstanding.
"SUBSIDIARY" shall mean any corporation or other entity at least 51% of the total combined voting power of all classes of Voting Stock or similar securities of which shall, at the time as of which any determination is being made, be owned by the Company either directly or through Subsidiaries.
"TOTAL ASSETS" shall mean, as at any time of determination, the total assets of a Person recorded on a balance sheet of such Person prepared in accordance with GAAP.
"TRANSFER" shall mean, with respect to any item, the sale, exchange, conveyance, lease, transfer or other disposition of such item.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any part of any Note purchased by you under this Agreement.
"TREASURY" shall mean, for any Note, the Initial Treasury or the then Reset Treasury, as the case may be, upon which the Margin under such Note is added to obtain the interest rate of such Note.
"VOTING STOCK" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency), and, with respect to any other entity, any similar security of such entity.
11. MISCELLANEOUS.
11B. EXPENSES. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save you and any Transferee harmless against liability for the payment of, all reasonable out-of-pocket costs and expenses arising in connection with such transactions, including:
(i) (A) all stamp and documentary taxes and similar charges and (B) costs of obtaining a private placement number for the Notes in each case as a result of the execution and delivery of this Agreement or the issuance of the Notes;
(ii) document production and duplication charges and the reasonable fees and expenses of any special counsel engaged by you or such Transferee in connection with this Agreement and the transactions contemplated hereby;
(iii) the costs and expenses, including reasonable attorneys' fees, incurred by you or such Transferee in enforcing any rights under this Agreement or the Notes; and
(iv) any judgment, liability, claim, order, decree, cost, fee, expense, action or obligation resulting directly from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company;
hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein and in the Notes, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes are issuable as registered notes without coupons in denominations of at least $1,000,000, except as may be necessary to (i) reflect any principal amount not evenly divisible by $1,000,000 or (ii) enable the registration of transfer by a holder of its entire holding of Notes. The Company shall keep at its principal office a register in which the Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of such transferee or transferees. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's indemnity agreement (which shall be unsecured if such holder is an Institutional Investor whose senior debt securities are rated BBB- or Baa3 or better by S&P or Moody's, respectively, and, otherwise, which shall be unsecured unless the Company requests in writing that such indemnity agreement be secured), or in the case of any such mutilation upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.
11E. TRANSFER OF NOTES; PERSONS DEEMED OWNERS. Subject to the next succeeding sentence, you may transfer any Note or portion thereof in your sole discretion; provided, however, that any Transferee shall be an Institutional Investor.
Prior to due presentment for registration of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of, interest on and any Yield-Maintenance Amount payable with respect to such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of you or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings between you and the Company relating to the subject matter hereof, and the Company shall not be affected by notice to the contrary. No provision of this Agreement shall be interpreted for or against any party because that party or its legal representative drafted the provision.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this Agreement contained by or on behalf of either of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not.
11H. NOTICES. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to you, addressed to you at the address specified for such communications in the Purchaser Schedule attached hereto, or at such other address as you shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Company in writing or, if any such other holder shall not have so specified an address to the Company, then addressed to such other holder in care of the last holder of such Note which shall have so specified an address to the Company, and (iii) if to the Company, addressed to it at Prudential Realty Group, 8 Campus Drive, 4th Floor, Arbor Circle South, Parsippany, New Jersey 07054, Attention: John Triece, or at such other address as the Company shall have specified to the holder of each Note in writing; provided, however, that any such communication to the Company may also, at the option of the holder of any Note, be delivered by any other means either to the Company at its address specified above or to any officer of the Company.
11I. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest
on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day.
11J. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to you or to the Required Holder(s), the determination of such satisfaction shall be made by you or the Required Holder(s), as the case may be, in the reasonable judgment of the Person or Persons making such determination.
11K. INDEMNIFICATION. The Company hereby agrees to indemnify you and your directors, officers, employees and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages and expenses arising out of or by reason of any investigation or litigation or other proceeding relating to this Agreement, the Notes or the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified).
11L. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York.
11M. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11N. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
11O. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.
If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this letter and return the same to the Company, whereupon this letter shall become a binding agreement between the Company and you.
Very truly yours,
PRUDENTIAL REALTY
SECURITIES, INC.
By: /s/ Paul D. Egan ------------------------ Name: Paul D. Egan Title: Vice President By:________________________ Name:______________________ Title:_____________________ |
The forgoing Agreement is
hereby accepted as of the
date first above written:
ONE EMBARCADERO CENTER VENTURE, a
California General Partnership
By: BOSTON PROPERTIES LLC, as
Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, as Manager
By: BOSTON PROPERTIES, INC.,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------------- Name: Thomas J. O'Connor Title: Vice President |
EXHIBIT A
[FORM OF NOTES]
PRUDENTIAL REALTY SECURITIES, INC.
SENIOR NOTE DUE __________, 200_
No. _____ [Date] $________
FOR VALUE RECEIVED, the undersigned, PRUDENTIAL REALTY SECURITIES, INC.
(the "COMPANY"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to ONE EMBARCADERO CENTER VENTURE, a
California general partnership, or registered assigns, the principal sum of
___________________________ DOLLARS ($______________) on _____________, ____
(the "Maturity Date"), with interest (computed on the basis of a 360-day year
comprised of 12 30-day months) on the unpaid balance thereof at the rate of
____% per annum from the date hereof through and including _______, ___ (the
"RATE RESET DATE") and thereafter through and including the Maturity Date, at a
rate of interest per annum equal to the sum of (i) ________ basis points, and
(ii) the Reset Treasury, as defined in the Note Agreement. All such interest
shall be payable semiannually on the 15/th/ day of June and December in each
year, commencing with the first such date next succeeding the date hereof, until
the principal hereof shall have become due and payable, and shall be payable on
any overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Yield-Maintenance Amount (as
defined in the Note Agreement), payable semiannually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the lesser of (a) the maximum rate permitted by applicable
law and (b) 2.0% over the interest rate then in effect under this Note in
accordance with the foregoing terms and provisions.
Payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to this Note are to be made in immediately available funds, in lawful money of the United States of America, by wire transfer to [_______] at [NAME OF BANK] in [New York City], ABA #________, Account # __________, or to such other account or place as the registered holder hereof shall designate to the Company in writing.
This Note is one of a series of Senior Notes (the "NOTES") issued pursuant to a Note Agreement, dated as of November 12, 1998 (the "NOTE AGREEMENT"), between the Company and One Embarcadero Center Venture and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Note Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company shall not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Note Agreement.
If an Event of Default, as defined in the Note Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Note Agreement.
The Company and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor or default, notice of intent to accelerate, notice of acceleration (to the extent set forth in the Note Agreement), protest and diligence in collecting.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
PRUDENTIAL REALTY SECURITIES, INC.
By_________________________
[Vice] President
By_________________________
Treasurer
EXHIBIT C
INVESTMENT GUIDELINES
1. Invest only in investment grade fixed income assets that:
a) are current in payment and not in default (subject to cure periods):
b) minimally provide for interest payments which are (i) monthly in the case of "non securities" investments (i.e., whole mortgage loans) or (ii) semi-annually in the case of "securities" investments (i.e. ABS):
c) have a maturity date which is at least thirty months beyond the asset purchase date:
d) include prepayment premiums providing for yield maintenance or the substantial equivalent: and
e) on an individual basis, do not exceed 7% of the total portfolio:
2. Make more than 80% of all investment in assets directly secured by first mortgages. In addition: (a) no such assets may have a "loan to value" ratio which exceeds 80%, and at least 90% of such assets shall have a "loan to value" ratio which is 75% or less and (b) the overall portfolio of such assets shall be
geographically diverse.
EXHIBIT 99.12
PRUDENTIAL REALTY SECURITIES, INC.
8 CAMPUS DRIVE
PARSIPPANY, NEW JERSEY 07054
As of November 12, 1998
EMBARCADERO CENTER ASSOCIATES
C/O BOSTON PROPERTIES, INC.
8 ARLINGTON STREET
BOSTON, MASSACHUSETTS 02116-3495
ATTN: GENERAL COUNCIL
Ladies and Gentlemen:
The undersigned, PRUDENTIAL REALTY SECURITIES, INC. (herein called the "COMPANY"), hereby agrees with you as follows:
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to you and, subject to the terms and conditions herein set forth, you agree to purchase from the Company, Notes in the aggregate principal amount of $111,927,000 at 100% of such
aggregate principal amount. The Company will deliver to you, at the offices of O'Melveny & Myers LLP at 275 Battery Street, Suite 2600, San Francisco, California, (or such other location to be determined by mutual agreement between the Company and you) one or more Notes registered in your name, evidencing the aggregate principal amount of Notes to be purchased by you and in the denomination or denominations specified in the Purchaser Schedule attached hereto, against payment of the purchase price thereof by transfer of immediately available funds for credit to the Company's account #890-0305-525 at The Bank of New York, New York, New York, ABA No. 021-000-018 on the date of closing, which shall be November 12, 1998 or any other date on or before November 13, 1998 upon which the Company and you may mutually agree (herein called the "CLOSING" or the "DATE OF CLOSING").
3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the Notes to be purchased by you hereunder is subject to the satisfaction, on or before the date of closing, of the following conditions:
3A. EXECUTION AND DELIVERY OF DOCUMENTS. The Company shall have delivered, or cause to be delivered, to you duly executed, original or certified copies of the following documents, each to be dated the date of closing unless otherwise indicated:
(iii) the Certificate of Incorporation of the Company certified as of a date within 10 Business Days of closing by the Secretary of State of Delaware.
(iv) the Bylaws of the Company certified by the Secretary of the Company.
(v) an incumbency certificate signed by the Secretary or an Assistant Secretary of the Company certifying as to the names, titles and true signatures of the officers of the Company authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder.
(vi) a certificate of the Secretary or an Assistant Secretary of the Company (A) attaching resolutions of the Board of Directors of the Company evidencing approval of the transactions contemplated by this Agreement and the issuance of the Notes and the execution, delivery and performance thereof, and authorizing certain officers to execute and deliver the same, and certifying that such resolutions were
(viii) a corporate good standing certificate as to the Company from the State of New Jersey.
(xi) additional documents or certificates with respect to such legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by you.
3B. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment for the Notes to be purchased by you on the date of closing on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation T, U or X of the Board of Governors of the Federal Reserve System) and shall not subject you to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and you shall have received such certificates or other evidence as you may request to establish compliance with this condition.
3C. PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to you, and you shall have received all such counterpart originals or certified or other copies of such documents as you may reasonably request.
3D. RATING. The Company shall have obtained a rating of the Notes, as of a date not more than 30 days prior to the closing hereof, of A or better from S&P and the equivalent rating from Fitch and shall provide written evidence of the same.
3E. PHASE ONE TRANSACTIONS. Phase One of the transactions shall have been completed or shall be consummated concurrently with the consummation of the transactions described herein.
3F. EQUITY REDEMPTION AND PRUDENTIAL GUARANTIED LOANS. You shall have obtained the Prudential Guarantied Loan and Equity Redemption Loan or the closing of such loans shall occur concurrently with the closing of the transactions contemplated herein; and the lenders of the Prudential Guarantied Loan and Equity Redemption Loan shall have made available to you in full the proceeds of the Prudential Guarantied Loan and Equity Redemption Loan.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver to each Significant Holder in duplicate:
(i) as soon as practicable and in any event within 60 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, statements of income, cash flows and shareholders' equity of the Company for the period from the beginning of the current year to the end of such quarterly period, and a balance sheet of the Company as at the end of such quarterly period, setting forth in comparative form statements of income and cash flows for the corresponding period in the preceding year, all in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 120 days after the end of each fiscal year, statements of income, cash flows and shareholders' equity of the Company for such year, and a balance sheet of the Company as at the end of such year, all prepared in accordance with GAAP, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, all in reasonable detail and satisfactory in form to the Required Holder(s)' and reported on by a Big Five Accounting Firm selected by the Company whose report shall be without limitation as to the scope of the audit and reasonably satisfactory in substance to the Required Holder(s) and shall be certified by such Big Five Accounting Firm to its knowledge with its unqualified opinion;
(iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its stockholders;
(iv) promptly upon receipt thereof, a copy of each other report or management letter submitted to the Company by its independent public accountants in connection with any annual, interim or special audit made by them of the books of the Company;
(v) such other financial data and other information as the Company regularly provides to its other lenders, other holders of Debt or other creditors; and
(vi) with reasonable promptness, such other information and documents as such Significant Holder may reasonably request.
The Company also covenants that promptly after any Responsible Officer obtains knowledge of an Event of Default or Default, it will deliver to each Significant Holder an
Officer's Certificate specifying the nature and period of existence thereof and what action the Company has taken, is taking or proposes to take with respect thereto.
5D. COMPLIANCE WITH LAWS. The Company covenants that it and all of its properties and facilities will comply at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, including those relating to protection of the environment except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
5E. PAYMENT OF TAXES. The Company covenants that it will file or cause to be filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and will pay all taxes as shown on such returns and on all assessments received by it to the extent that such taxes become due, except such taxes as are subject to a Good Faith Contest.
5F. ENFORCEMENT OF MORTGAGE PROVISIONS. The Company covenants that it shall require any Commercial Mortgage Loans originated or acquired by it to contain covenants to the effect that (1) the mortgagor shall obtain and maintain at all times appropriate insurance coverage with respect to the mortgaged property and (2) the mortgagor shall promptly pay and discharge any indebtedness or lawful claims against the mortgaged property which if unpaid would constitute a Lien on such property. The Company further
covenants and agrees that it will use commercially reasonable efforts to enforce such covenants.
6. NEGATIVE COVENANTS. So long as any Note or amount owing under this Agreement shall remain unpaid, the Company covenants that:
6A(1). DEBT SERVICE COVERAGE RATIO. The Company will not, at any time, permit the Debt Service Coverage Ratio to be less than 1.4 to 1.
6A(2). DEBT TO TOTAL ASSETS RATIO. The Company will not permit the ratio of (i) Debt to (ii) the sum of Total Assets plus the cumulative depreciation of any real property assets of the Company to exceed .70 to 1.
6B. RESTRICTED PAYMENTS. The Company covenants that it will not make, pay or declare, or commit to make, pay or declare, any Restricted Payment unless, after giving effect thereto, (i) the aggregate amount of all Restricted Payments made during the twelve month period commencing on the date hereof and expiring on the one (1) year anniversary of the date hereof, and including all previously made Restricted Payments, does not exceed 100% of the lesser of (A) Net Income and (B) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters during such time period on a cumulative basis, and (ii) the aggregate amount of all Restricted Payments made during any fiscal quarter after the expiration of such twelve (12) month period, and including all previously made Restricted Payments, does not exceed 105% of the lesser of (C) Net Income and (D) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters on a cumulative basis, and (iii) no Default or Event of Default exists or would exist after giving effect to such Restricted Payment.
6C. LIENS, DEBT, AND OTHER RESTRICTIONS. The Company will not:
(i) Liens for taxes, assessments or other governmental levies or charges not yet due or which are subject to a Good Faith Contest;
(ii) statutory Liens of landlords and Liens of carriers, contractors, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or which are subject to a Good Faith Contest;
(v) Liens now or hereafter required by this Agreement;
(vii) leases, subleases, licenses and sublicenses granted to third parties not interfering in any material respect with the business of the Company;
(viii) minor survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to use of real property, that are necessary for the conduct of the operations of the Company or that customarily exist on properties of corporations engaged in similar businesses and are similarly situated and that do not in any event materially impair their use in the operations of the Company;
(xi) any Lien renewing, extending or refunding any Lien permitted by
(i) the Notes;
(iii) additional Funded Debt of the Company in an amount, which when added to all other Funded Debt of the Company then outstanding (but excluding the Funded Debt evidenced by the Notes and the Other EC Notes), does not exceed $1,000,000,000 at any one time outstanding.
(i) obligations backed by the full faith and credit of the United States Government (whether issued by the United States Government or an agency thereof), and obligations guaranteed by the United States Government, in each case which mature within one year from the date acquired;
(ii) demand and time deposits with, Eurodollar deposits with or certificates of deposit issued by any commercial bank or trust company (1) organized under the laws of the United States or any of its states or having branch offices therein, (2) having equity capital in excess of $100,000,000 and (3) which issues either (x) senior debt securities rated A or better by S&P, A or better by Moody's or (y) commercial paper rated A-2 or better by S&P or Prime-2 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) ("RATED BANKS"), in each case payable in the United States in United States dollars and in each case which mature within one year from the date acquired;
(iii) marketable commercial paper and loan participations rated A-1 or better by S&P or P-1 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) and maturing not more than 270 days from the date acquired;
(iv) bonds, debentures, notes or similar debt instruments issued by a state or municipality given a "AA" rating or better by S&P or an equivalent rating by another nationally recognized credit rating agency and maturing not more than one year from the date acquired;
(viii) bonds, debentures, notes or similar debt instruments issued by a corporation organized and existing under the laws of any state of the United States of America or the District of Columbia and having a long term credit rating of BBB-or better from S&P or Baa3 or better from Moody's; and
6C(4). MERGER AND CONSOLIDATION. Merge or consolidate with any other Person, except that the Company may consolidate or merge with any other corporation if (A) the Company shall be the continuing or surviving corporation and (B) no Default or Event of Default exists or would exist after giving effect to such merger or consolidation.
6C(5). TRANSFER OF ASSETS. Transfer, or agree or otherwise commit to Transfer, a substantial portion of its assets.
6C(6) ISSUANCE OF ADDITIONAL UNSECURED NOTES. Issue any unsecured notes of the Company which are rated lower than the rating of the Notes on the date hereof.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal of or Yield-Maintenance Amount payable with respect to any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note for more than 10 days after the date due; or
(iii) the Company defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other Debt (other than secured Debt which is non-recourse to the Company) beyond any period of grace provided with respect thereto, or the Company fails to perform or observe any other agreement, term or condition contained in any agreement under which any such Debt is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such (or a trustee on behalf of such holder or holders) to cause, such Debt to become due (or to be repurchased by the Company) prior to any stated maturity, provided that the aggregate amount of all Debt as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration (or resale to the Company) shall occur and be continuing exceeds an amount equal to the lesser of (x) $10,000,000 and (y) 5% of the net assets of the Company as reflected on its most recent balance sheet at the time of determination; or
(iv) any representation or warranty made by or on behalf of the Company or any of its officers herein or in any other writing furnished in connection with or pursuant to this Agreement or the transactions contemplated hereby shall be false in any material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement contained in paragraph 6; or
(vi) the Company fails to perform or observe any other agreement, term or condition contained herein and such failure shall not be remedied within 30 days after the Company receives written notice of such default from any holder of a Note; or
(vii) the Company makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the "BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of the Company, or of any substantial part of the assets of the Company, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings relating to the Company under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings are commenced, against the Company and the Company by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any proceedings decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xii) one or more final judgments in an aggregate amount in excess of $10,000,000 is rendered against the Company and, within 60 days after entry thereof, a solvent insurance carrier or carriers have not confirmed in writing that each such judgment is fully insured or any such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, any such judgment is not discharged;
The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of the Yield-Maintenance Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
7D. OTHER REMEDIES. If any Event of Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants and warrants as follows:
8A. ORGANIZATION. The Company is a corporation duly organized and existing in good standing under the laws of the State of Delaware, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof. The Company has no Subsidiaries.
8B. FINANCIAL STATEMENTS. The Company has furnished you with the unaudited financial statements, certified by a principal financial officer of the Company: a balance sheet of the Company as of June 30, 1998 and statements of income, stockholders' equity and cash flows for the six-month period ended on such date, prepared by the Company. To the Company's knowledge, such financial statements are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with GAAP consistently followed through out the periods involved and show all liabilities, direct and contingent, of the Company required to be shown in accordance with such principles. To the Company's knowledge, the balance sheets fairly present the condition of the Company as at the dates thereof, and the statements of income, stockholders' equity and cash flows fairly present the results of the operations of the Company and its cash flows for the periods indicated. To the knowledge of the Company, there has been no material adverse change in the business, condition (financial or otherwise) or operations of the Company since June 30, 1998.
8C. ACTIONS PENDING. There is no action, suit, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company, or any properties or rights of the Company, by or before any court, arbitrator or administrative or
governmental body which (i) might result in a Material Adverse Effect or (ii) purports to affect the validity or enforceability of this Agreement, any Note issued hereunder or the transactions contemplated hereby.
8D. TAXES. The Company has filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are subject to a Good Faith Contest.
8F. OFFERING OF NOTES. Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company for sale to, or solicited any offers to buy the Notes or any similar security of the Company from, or otherwise approached or negotiated with respect thereto with, any Person other than Institutional Investors, and neither the Company nor any agent acting on its behalf has taken or will take any action which would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.
8G. USE OF PROCEEDS. The Company does not own or have any present intention of acquiring any "margin stock" as defined in Regulation U (12 CFR Part 207) of the Board of Governors of the Federal Reserve System (herein called "MARGIN STOCK"). The proceeds of sale of the Notes will be used to purchase Commercial Mortgage Loans and/or marketable debt securities, including, but not limited to, ABS. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock or for the purpose of maintaining, reducing or retiring any Indebtedness which was originally incurred to purchase or carry any stock that is currently a margin stock or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of such Regulation U. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or the Notes to violate Regulation U, Regulation T or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as in effect now or as the same may hereafter be in effect.
8H. ERISA. The Company has no retirement or employee benefit plans subject to ERISA.
8I. GOVERNMENTAL CONSENT. No circumstance in connection with the offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body in connection with the execution and delivery of this Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or of the Notes, if the failure to obtain any such consent would have a Material Adverse Effect.
8J. COMPLIANCE WITH LAWS. The Company and all of its properties and facilities have complied at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
8K. INVESTMENT COMPANY STATUS. Neither the Company nor any Subsidiary is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or an "investment adviser" within the meaning of the Investment Advisers Act of 1940, as amended.
8L. DUE AUTHORIZATION, ETC. This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
8M. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company which materially adversely affects or in the future may (so far as the Company can now foresee) materially adversely affect the business, property or assets, or
financial condition of the Company and which has not been set forth in this Agreement or in the other documents, certificates and written statements furnished to you and Boston Properties Limited Partnership, a Delaware limited partnership by or on behalf of the Company prior to the date hereof in connection with the transactions contemplated hereby.
8N. INVESTMENTS. All mortgage loans owned by the Company as of the date of this Agreement are Commercial Mortgage Loans which are not in default beyond any applicable cure periods pursuant to the terms thereof, and the Company has not extended any of the cure periods provided in the loan documents governing, evidencing and securing such Commercial Mortgage Loans and originally executed in connection therewith beyond the applicable cure periods provided in such loan documents.
9. REPRESENTATIONS OF THE PURCHASER. You represent that you are not acquiring the Notes to be purchased by you hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of your property shall at all times be and remain within your control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.
10A. YIELD-MAINTENANCE TERMS.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (as converted to reflect the periodic basis on which interest on the Notes is payable, if interest is payable other than on a semi-annual basis) equal to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal of any Note, the offered-side yield to maturity, as of 10:00 a.m. (New York City time) on the Business Day next preceding the Settlement Date with respect to such Called Principal, of the U.S. Treasury security that was used to determine the then Treasury of such Investment Note.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one- twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one-twelfth year) which will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date through and including the Rate Reset Date (assuming that the entire principal balance and all accrued interest as of such Rate Reset Date will be repaid on such Rate Reset Date), if the Settlement Date precedes such Rate Reset Date, or alternatively, the Maturity Date if the Settlement Date occurs after the Rate Reset Date.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) to the extent paid on the Settlement Date with the Called Principal, interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield-Maintenance Amount shall in no event be less than zero.
10B. OTHER TERMS.
"ABS" shall mean mortgage, or other asset backed securities.
"AFFILIATE" shall mean any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the Company. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.
"BIG FIVE ACCOUNTING FIRM" shall mean any of Arthur Andersen, Deloitte & Touche, KPMG Peat Marwick, PricewaterhouseCoopers and Ernst & Young.
"BP PARTY" shall mean Boston Properties Limited Partnership, a Delaware limited partnership, and any Affiliate thereof, and shall also include, in all events, One Embarcadero Center Venture, a California general partnership.
"CASH FLOW" shall mean, in respect of any period, the sum of (a) Net Income for such period and (b) the amount of all depreciation and amortization allowances and other non-cash expenses of the Company but only to the extent deducted in the determination of Net Income for such period.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CURRENT DEBT" shall mean, with respect to the Company, all Indebtedness for borrowed money which by its terms or by the terms of any instrument or
agreement relating thereto matures on demand or within one year from the date of the creation thereof and is not directly or indirectly renewable or extendible at the option of the debtor to a date more than one year from the date of the creation thereof, provided that Indebtedness for borrowed money outstanding under a revolving credit or similar agreement which obligates the lender or lenders to extend credit over a period of more than one year shall constitute Funded Debt and not Current Debt, even though such Indebtedness by its terms matures on demand or within one year from the date of the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DEBT SERVICE" shall mean, with respect to any period, the sum of the following: (a) Interest Charges for such period, and (b) all payments of principal in respect of Debt of the Company paid or payable during such period.
"DEBT SERVICE COVERAGE RATIO" shall mean, at any time of determination, the ratio of (a) Cash Flow for the most recent fiscal quarter to (b) Debt Service for such fiscal quarter.
"DUFF & PHELPS" shall mean Duff & Phelps Corporation.
"ENVIRONMENTAL LAWS" shall mean all laws relating to pollution, the release or other discharge, handling, disposition or treatment of Hazardous Materials and other substances or the protection of the environment or of employee health and safety, including, without limitation, CERCLA, the Hazardous Material Transportation Act (49 U.S.C. Section 1801 et. seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 7401 et. seq.), the Clean Air Act (42 U.S.C. Section 401 et. seq.), the Toxic Substances Control Act (15 U.S.C. Section 651 et. seq.) and the Emergency Planning and Community Right-To-Know Act (42 U.S.C. Section 11001 et. seq.), each as the same may be amended and supplemented.
"EQUITY REDEMPTION LOAN" shall mean that certain loan in the aggregate principal amount of $328,143,000 by Bankboston. N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank
National Association and Citizens Bank (and the other banks which may become parties to the Term Loan Agreement described immediately below) to you, One Embarcadero Center Venture, Three Embarcadero Center Venture and Four Embarcadero Center Venture pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FITCH" shall mean Fitch IVCA, Inc.
"FUNDED DEBT" shall mean, with respect to any Person, all Indebtedness of such Person which by its terms or by the terms of any instrument or agreement relating thereto matures, or which is otherwise payable or unpaid, more than one year from, or is directly or indirectly renewable or extendible at the option of the debtor to a date more than one year (including an option of the debtor under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year) from, the date of the creation thereof, including current maturities of long-term debt that appear as current liabilities in accordance with GAAP.
"GOOD FAITH CONTEST" shall mean, with respect to any tax, assessment, Lien, obligation, claim, liability, judgment, injunction, award, decree, order, law, regulation, statute or similar item, any challenge or contest thereof by appropriate proceedings timely initiated in good faith by the Company for which adequate reserves therefor have been taken in accordance with GAAP.
"GUARANTEE" shall mean, with respect to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any indebtedness, lease, dividend or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including, without limitation, any such obligation in effect guaranteed by such Person through any agreement (contingent or otherwise) to
(i) purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise);
(ii) maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation; or
(iii) pay the purchase price for goods or services regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose, intent or effect of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof.
The amount of any Guarantee shall be equal to the outstanding principal amount of the obligation guaranteed or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited.
"HAZARDOUS MATERIALS" shall mean (i) any material or substance defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous material", "toxic substances" or any other formulations intended to define, list or classify substances by reason of their deleterious properties, (ii) any oil, petroleum or petroleum derived substance, (iii) any flammable substances or explosives, (iv) any radioactive materials, (v) asbestos in any form, (vi) electrical equipment that contains any oil or dielectric fluid containing levels or polychlorinated biphenyls in excess of 50 parts per million, (vii) pesticides or (viii) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental agency or authority or which may or could pose a hazard to the health and safety of persons in the vicinity thereof.
"INCLUDING" shall mean, unless the context clearly requires otherwise, "including without limitation".
"INITIAL TREASURY" shall mean, for any Note, the yield to maturity implied by (i) the bid-side yields reported, as of 10:00am (New York City time) (or, at your election, at such other time as we may mutually agree) on the Business Day next preceding the date upon which such Note is funded, on the display designated as
"INSTITUTIONAL INVESTOR" shall mean any insurance company, commercial, investment or merchant bank, finance company, mutual fund, registered money or asset manager, savings and loan association, credit union, registered investment advisor, pension fund, investment company, licensed broker- dealer, "qualified institutional buyer" (as such term is defined under Rule 144A promulgated under the Securities Act, or any successor law, rule or regulation) or "accredited investor" (as such term is defined under Regulation D promulgated under the Securities Act, or any successor law, rule or regulation).
"INTANGIBLES" shall mean, without duplication, all Intellectual Property and operating agreements, treasury stock, deferred or capitalized research and development costs, goodwill (including any amounts, however designated, representing the cost of acquisition of business and investments in excess of the book value thereof), unamortized debt discount and expense, any write-up of asset value after June 30, 1997 and any other amounts reflected in contra-equity accounts, and any other assets treated as intangible assets under GAAP.
"INTELLECTUAL PROPERTY" shall mean all patents, trademarks, service marks, trade names, copyrights, brand names, mechanical or technical processes and
paradigms, know-how, and similar intellectual property and applications, licenses and similar rights in respect of the same.
"INTEREST CHARGES" shall mean, with respect to any period, the sum (without duplication) of the following: (a) all interest in respect of Debt of the Company deducted in determining Net Income for such period, and (b) all debt discount and expense amortized or required to be amortized in the determination of Net Income for such period.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance, minimum or compensating deposit arrangement, lien (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation.
"MATERIAL ADVERSE EFFECT" shall mean (i) a material adverse effect on the business, assets, liabilities, operations, prospects or condition, financial or otherwise, of the Company, (ii) material impairment of the Company to perform any of its obligations under the Agreement and the Notes or (iii) material impairment of the validity or enforceability or the rights of, or the benefits available to, the holders of the Notes under this Agreement or the Notes.
"MOODY'S" shall mean Moody's Investors Services, Inc., including the NCO/Moody's Commercial Division, or any successor Person.
"NET INCOME" shall mean, as to any period, consolidated gross revenues of the Company less all operating and non-operating expenses of the Company for such period, including all charges of a proper character (including current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), but not including in gross revenues the following:
(i) any gains (net of expenses and taxes applicable thereto) in excess of losses resulting from the Transfer of capital assets (i.e., assets other than current assets);
(ii) any gains resulting from the write-up of assets;
(iii) any equity of the Company in the undistributed earnings (but not losses) of any corporation which is not a Subsidiary;
(iv) any earnings or losses of any Person acquired by the Company through purchase, merger, consolidation or otherwise for any fiscal period prior to the fiscal period in which the acquisition occurs;
(v) gains or losses from the acquisition of securities or the retirement or extinguishment of Debt;
(vi) gains on collections from insurance policies or settlements;
(vii) any income or gain during such period from any change in accounting principles, from any discontinued operations or the disposition thereof, from any extraordinary items or from any prior period adjustment;
(viii) in the case of a successor to the Company by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets.
If the preceding calculation results in a number less than zero, such amount shall be considered a net loss.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the Company by its President, one of its Vice Presidents or its Treasurer.
"OTHER EC NOTES" shall mean those certain senior promissory notes of the Company issued by the Company on the date hereof to (a) One Embarcadero Center Venture in the aggregate principal amount of $88,200,000 (b) Three Embarcadero Center Venture in the aggregate principal amount of $76,897,000 and (c) Four Embarcadero Center Venture in the aggregate principal amount of $143,119,000.
"PERSON" shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof.
"PHASE ONE" shall mean the closing and consummation of the transactions described in that certain Master Transaction Agreement dated as of September 28, 1998, by and among Prudential, PIC Realty Corporation, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P., the Persons listed on Exhibit A-1 attached thereto, Boston Properties Limited Partnership and Boston Properties, Inc., which are to be consummated on the "Closing Date" (as defined in such Master Transaction Agreement).
"PRUDENTIAL" shall mean The Prudential Insurance Company of America, a New Jersey mutual insurance company.
"PRUDENTIAL GUARANTIED LOAN" shall mean that certain loan in the aggregate principal amount of $92,000,000 by The Chase Manhattan Bank and/or any of its subsidiaries or affiliates (the "BANK") to you, One Embarcadero Center Venture, Three Embarcadero Center Venture and Four Embarcadero Center Venture pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"RATE RESET DATE", with respect to any Note, shall have the meaning set forth in such Note.
"RELEASE" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata, in violation of applicable law or prudent business practice.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51% of the aggregate principal amount of the Notes from time to time outstanding, but shall include, in any event, the BP Parties so long as any BP Party holds a direct or indirect interest in any Note.
"RESET TREASURY" shall mean the yield to maturity implied by (i) the yields reported, as of 10:00am (New York City time) on the Business Day next preceding
the Rate Reset Date for any Note, on the display designated as "Page 678" on the Telerate Access Service, for actively traded U.S. Treasury securities having a maturity equal to the earlier to occur of the next Rate Reset Date provided for in such Note (if any) and the Maturity Date of such Note, or if such yields shall not be reported as of such time or the yields reported as of such time shall not be ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for the latest day for which such yields shall have been so reported as of the Business Day next preceding the Rate Reset Date in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the earlier to occur of the next Rate Reset Date provided for in such Note (if any) or the Maturity Date of such Note. Such implied yields shall be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between yields reported for various maturities.
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief operating officer, chief financial officer or chief accounting officer of the Company or any other officer of the Company involved principally in its financial administration or its controllership function.
"RESTRICTED INVESTMENT" shall mean any Investment other than a Permitted Investment.
"RESTRICTED PAYMENTS" shall mean any of the following (provided that, notwithstanding anything to the contrary stated below, the term "Restricted Payments" does not include any distribution of capital gains by the Company to its shareholders):
(i) any dividend on any class of the Company's capital stock at any time after the date hereof;
(ii) any other distribution on account of any class of the Company's capital stock;
(iii) any redemption, purchase or other acquisition, direct or indirect, of any shares of the Company's capital stock;
(iv) any unscheduled payment of principal of, or retirement, redemption, purchase or other acquisition of, any subordinated debt, including subordinated debt that is convertible into equity of the Company;
(v) any Restricted Investment;
"S&P" shall mean Standard and Poor's Corporation, or any successor Person.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDER" shall mean and include any Person who owns, beneficially or of record, directly or indirectly, at any time during any year with respect to which a computation is being made 5% or more of the outstanding voting stock of the Company.
"SIGNIFICANT HOLDER" shall mean (i) any BP Party, so long as any BP Party shall hold (or be committed under this Agreement to purchase) any Note, or (ii) any other holder of at least 5% of the aggregate principal amount of the Notes from time to time outstanding.
"SUBSIDIARY" shall mean any corporation or other entity at least 51% of the total combined voting power of all classes of Voting Stock or similar securities of which shall, at the time as of which any determination is being made, be owned by the Company either directly or through Subsidiaries.
"TOTAL ASSETS" shall mean, as at any time of determination, the total assets of a Person recorded on a balance sheet of such Person prepared in accordance with GAAP.
"TRANSFER" shall mean, with respect to any item, the sale, exchange, conveyance, lease, transfer or other disposition of such item.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any part of any Note purchased by you under this Agreement.
"TREASURY" shall mean, for any Note, the Initial Treasury or the then Reset Treasury, as the case may be, upon which the Margin under such Note is added to obtain the interest rate of such Note.
"VOTING STOCK" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency), and, with respect to any other entity, any similar security of such entity.
10C. ACCOUNTING AND LEGAL PRINCIPLES, TERMS AND DETERMINATIONS. All references in this Agreement to "GAAP" shall mean generally accepted accounting principles, as in effect in the United States from time to time. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all unaudited financial statements and certificates and reports as to financial matters required to be furnished hereunder shall be
11. MISCELLANEOUS.
11B. EXPENSES. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save you and any Transferee harmless against liability for the payment of, all reasonable out-of- pocket costs and expenses arising in connection with such transactions, including:
(i) (A) all stamp and documentary taxes and similar charges and (B) costs of obtaining a private placement number for the Notes in each case as a result of the execution and delivery of this Agreement or the issuance of the Notes;
(ii) document production and duplication charges and the reasonable fees and expenses of any special counsel engaged by you or such Transferee in connection with this Agreement and the transactions contemplated hereby;
(iii) the costs and expenses, including reasonable attorneys' fees, incurred by you or such Transferee in enforcing any rights under this Agreement or the Notes; and
(iv) any judgment, liability, claim, order, decree, cost, fee, expense, action or obligation resulting directly from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company;
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes are issuable as registered notes without coupons in denominations of at least $1,000,000, except as may be necessary to (i) reflect any principal amount not evenly divisible by $1,000,000 or (ii) enable the registration of transfer by a holder of its entire holding of Notes. The Company shall keep at its principal office a register in which the
Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of such transferee or transferees. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's indemnity agreement (which shall be unsecured if such holder is an Institutional Investor whose senior debt securities are rated BBB- or Baa3 or better by S&P or Moody's, respectively, and, otherwise, which shall be unsecured unless the Company requests in writing that such indemnity agreement be secured), or in the case of any such mutilation upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.
11E. TRANSFER OF NOTES; PERSONS DEEMED OWNERS. Subject to the next succeeding sentence, you may transfer any Note or portion thereof in your sole discretion; provided, however, that any Transferee shall be an Institutional Investor. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of, interest on and any Yield-Maintenance Amount payable with respect to such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of you or any Transferee. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings between you and the Company relating to the subject matter hereof, and the Company shall not be affected by notice to the contrary. No provision of this Agreement shall be interpreted for or against any party because that party or its legal representative drafted the provision.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this Agreement contained by or on behalf of either of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not.
11H. NOTICES. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to you, addressed to you at the address specified for such communications in the Purchaser Schedule attached hereto, or at such other address as you shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Company in writing or, if any such other holder shall not have so specified an address to the Company, then addressed to such other holder in care of the last holder of such Note which shall have so specified an address to the Company, and (iii) if to the Company, addressed to it at Prudential Realty Group, 8 Campus Drive, Parsippany, New Jersey 07054, Attention: John Triece, or at such other address as the Company shall have specified to the holder of each Note in writing; provided, however, that any such communication to the Company may also, at the option of the holder of any Note, be delivered by any other means either to the Company at its address specified above or to any officer of the Company.
11I. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day.
11J. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to you or to the Required Holder(s), the determination of such satisfaction shall be made by you or the Required Holder(s), as the case may be, in the reasonable judgment of the Person or Persons making such determination.
11K. INDEMNIFICATION. The Company hereby agrees to indemnify you and your directors, officers, employees and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages and expenses arising out of or by reason of any investigation or litigation or other proceeding relating to this Agreement, the Notes or the transactions contemplated hereby, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified).
11L. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York.
11M. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11N. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
11O. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.
(Remainder of Page Intentionally Left Blank)
If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this letter and return the same to the Company, whereupon this letter shall become a binding agreement between the Company and you.
Very truly yours,
PRUDENTIAL REALTY
SECURITIES, INC.
By: /s/ Paul D. Egan ------------------------ Name: Paul D. Egan Title: Vice President By:________________________ Name:______________________ Title:_____________________ |
The forgoing Agreement is
hereby accepted as of the
date first above written
EMBARCADERO CENTER ASSOCIATES, a
California General Partnership
By: BOSTON PROPERTIES LLC, as
Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, as Manager
By: BOSTON PROPERTIES, INC.,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
[FORM OF NOTES]
PRUDENTIAL REALTY SECURITIES, INC.
SENIOR NOTE DUE __________, 200_
No. _____ [Date] $________
FOR VALUE RECEIVED, the undersigned, PRUDENTIAL REALTY SECURITIES, INC.
(the "COMPANY"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to EMBARCADERO CENTER ASSOCIATES, a
California general partnership, or registered assigns, the principal sum of
___________________________ DOLLARS ($______________) on _____________, ____
(the "Maturity Date"), with interest (computed on the basis of a 360-day year
comprised of 12 30-day months) on the unpaid balance thereof at the rate of
____% per annum from the date hereof through and including _______, ___ (the
"RATE RESET DATE") and thereafter through and including the Maturity Date, at a
rate of interest per annum equal to the sum of (i) ________ basis points, and
(ii) the Reset Treasury, as defined in the Note Agreement. All such interest
shall be payable semiannually on the 15/th/ day of June and December in each
year, commencing with the first such date next succeeding the date hereof, until
the principal hereof shall have become due and payable, and shall be payable on
any overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Yield-Maintenance Amount (as
defined in the Note Agreement), payable semiannually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the lesser of (a) the maximum rate permitted by applicable
law and (b) 2.0% over the interest rate then in effect under this Note in
accordance with the foregoing terms and provisions.
Payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to this Note are to be made in immediately available funds, in lawful money of the United States of America, by wire transfer to [_______] at [NAME OF BANK] in [New York City], ABA #________, Account # __________, or to such other account or place as the registered holder hereof shall designate to the Company in writing.
This Note is one of a series of Senior Notes (the "NOTES") issued pursuant to a Note Agreement, dated as of November 12, 1998 (the "NOTE AGREEMENT"), between the Company and One Embarcadero Center Venture and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Note Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company -may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company shall not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Note Agreement.
If an Event of Default, as defined in the Note Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Note Agreement.
The Company and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor or default, notice of intent to accelerate, notice of acceleration (to the extent set forth in the Note Agreement), protest and diligence in collecting.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
PRUDENTIAL REALTY SECURITIES, INC.
By_________________________
[Vice] President
By_________________________
Treasurer
INVESTMENT GUIDELINES
1. Invest only in investment grade fixed income assets that:
a) are current in payment and not in default (subject to cure periods):
b) minimally provide for interest payments which are (i) monthly in the case of "non securities" investments (i.e., whole mortgage loans) or (ii) semi-annually in the case of "securities" investments (i.e. ABS):
c) have a maturity date which is at least thirty months beyond the asset purchase date:
d) include prepayment premiums providing for yield maintenance or the substantial equivalent: and
e) on an individual basis, do not exceed 7% of the total portfolio.
2. Make more than 80% of all investment in assets directly secured by first mortgages. In addition: (a) no such assets may have a "loan to value" ratio which exceeds 80%, and at least 90% of such assets shall have a "loan to value" ratio which is 75% or less and (b) the overall portfolio of such assets shall be geographically diverse.
Exhibit 99.13
PRUDENTIAL REALTY SECURITIES, INC.
8 CAMPUS DRIVE
PARSIPPANY, NEW JERSEY 07054
As of November 12, 1998
THREE EMBARCADERO CENTER VENTURE
C/O BOSTON PROPERTIES, INC.
8 ARLINGTON STREET
BOSTON, MASSACHUSETTS 02116-3495
ATTN: GENERAL COUNCIL
Ladies and Gentlemen:
The undersigned, PRUDENTIAL REALTY SECURITIES, INC. (herein called the "COMPANY"), hereby agrees with you as follows:
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to you and, subject to the terms and conditions herein set forth, you agree to purchase from the Company, Notes in the aggregate principal amount of $76,897,000 at 100% of such
aggregate principal amount. The Company will deliver to you, at the offices of O'Melveny & Myers LLP at 275 Battery Street, Suite 2600, San Francisco, California, (or such other location to be determined by mutual agreement between the Company and you) one or more Notes registered in your name, evidencing the aggregate principal amount of Notes to be purchased by you and in the denomination or denominations specified in the Purchaser Schedule attached hereto, against payment of the purchase price thereof by transfer of immediately available funds for credit to the Company's account #890-0305-525 at The Bank of New York, New York, New York, ABA No. 021-000-018 on the date of closing, which shall be November 12, 1998 or any other date on or before November 13, 1998 upon which the Company and you may mutually agree (herein called the "CLOSING" or the "DATE OF CLOSING").
3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the Notes to be purchased by you hereunder is subject to the satisfaction, on or before the date of closing, of the following conditions:
3A. EXECUTION AND DELIVERY OF DOCUMENTS. The Company shall have delivered, or cause to be delivered, to you duly executed, original or certified copies of the following documents, each to be dated the date of closing unless otherwise indicated:
(iii) the Certificate of Incorporation of the Company certified as of a date within 10 Business Days of closing by the Secretary of State of Delaware.
(iv) the Bylaws of the Company certified by the Secretary of the Company.
(v) an incumbency certificate signed by the Secretary or an Assistant Secretary of the Company certifying as to the names, titles and true signatures of the officers of the Company authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder.
(vi) a certificate of the Secretary or Assistant Secretary of the Company (A) attaching resolutions of the Board of Directors of the Company evidencing approval of the transactions contemplated by this Agreement and the issuance of the Notes and the execution, delivery and performance thereof, and authorizing certain officers to execute and deliver the same, and certifying that such resolutions
(viii) a corporate good standing certificate as to the Company from the State of New Jersey.
(xi) additional documents or certificates with respect to such legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by you.
3B. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment for the Notes to be purchased by you on the date of closing on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation T, U or X of the Board of Governors of the Federal Reserve System) and shall not subject you to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and you shall have received such certificates or other evidence as you may request to establish compliance with this condition.
3C. PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to you, and you shall have received all such counterpart originals or certified or other copies of such documents as you may reasonably request.
3D. RATING. The Company shall have obtained a rating of the Notes, as of a date not more than 30 days prior to the closing hereof, of A or better from S&P and the equivalent rating from Fitch and shall provide written evidence of the same.
3E. PHASE ONE TRANSACTIONS. Phase One of the transactions shall have been completed or shall be consummated concurrently with the consummation of the transactions described herein.
3F. EQUITY REDEMPTION AND PRUDENTIAL GUARANTIED LOANS. You shall have obtained the Prudential Guarantied Loan and Equity Redemption Loan or the closing of such loans shall occur concurrently with the closing of the transactions contemplated herein; and the lenders of the Prudential Guarantied Loan and Equity Redemption Loan shall have made available to you in full the proceeds of the Prudential Guarantied Loan and Equity Redemption Loan.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver to each Significant Holder in duplicate:
(i) as soon as practicable and in any event within 60 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, statements of income, cash flows and shareholders' equity of the Company for the period from the beginning of the current year to the end of such quarterly period, and a balance sheet of the Company as at the end of such quarterly period, setting forth in comparative form statements of income and cash flows for the corresponding period in the preceding year, all in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 120 days after the end of each fiscal year, statements of income, cash flows and shareholders' equity of the Company for such year, and a balance sheet of the Company as at the end of such year, all prepared in accordance with GAAP, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, all in reasonable detail and satisfactory in form to the Required Holder(s)' and reported on by a Big Five Accounting Firm selected by the Company whose report shall be without limitation as to the scope of the audit and reasonably satisfactory in substance to the Required Holder(s) and shall be certified by such Big Five Accounting Firm to its knowledge with its unqualified opinion;
(iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its stockholders;
(iv) promptly upon receipt thereof, a copy of each other report or management letter submitted to the Company by its independent public accountants in connection with any annual, interim or special audit made by them of the books of the Company;
(v) such other financial data and other information as the Company regularly provides to its other lenders, other holders of Debt or other creditors; and
(vi) with reasonable promptness, such other information and documents as such Significant Holder may reasonably request.
The Company also covenants that promptly after any Responsible Officer obtains knowledge of an Event of Default or Default, it will deliver to each Significant Holder an Officer's Certificate specifying the nature and period of existence thereof and what action the Company has taken, is taking or proposes to take with respect thereto.
5D. COMPLIANCE WITH LAWS. The Company covenants that it and all of its properties and facilities will comply at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, including those relating to protection of the environment except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
5E. PAYMENT OF TAXES. The Company covenants that it will file or cause to be filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and will pay all taxes as shown on such returns and on all assessments received by it to the extent that such taxes become due, except such taxes as are subject to a Good Faith Contest.
5F. ENFORCEMENT OF MORTGAGE PROVISIONS. The Company covenants that it shall require any Commercial Mortgage Loans originated or acquired by it to contain covenants to the effect that (1) the mortgagor shall obtain and maintain at all times appropriate insurance coverage with respect to the mortgaged property and (2) the mortgagor shall promptly pay and discharge any indebtedness or lawful claims against the mortgaged property which if unpaid would constitute a Lien on such property. The Company further covenants and agrees that it will use commercially reasonable efforts to enforce such covenants.
6. NEGATIVE COVENANTS. So long as any Note or amount owing under this Agreement shall remain unpaid, the Company covenants that:
6A(1). DEBT SERVICE COVERAGE RATIO. The Company will not, at any time, permit the Debt Service Coverage Ratio to be less than 1.4 to 1.
6A(2). DEBT TO TOTAL ASSETS RATIO. The Company will not permit the ratio of (i) Debt to (ii) the sum of Total Assets plus the cumulative depreciation of any real property assets of the Company to exceed .70 to 1.
6B. RESTRICTED PAYMENTS. The Company covenants that it will not make, pay or declare, or commit to make, pay or declare, any Restricted Payment unless, after giving effect thereto, (i) the aggregate amount of all Restricted Payments made during the twelve month period commencing on the date hereof and expiring on the one (1) year anniversary of the date hereof, and including all previously made Restricted Payments, does not exceed 100% of the lesser of (A) Net Income and (B) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters during such time period on a cumulative basis, and (ii) the aggregate amount of all Restricted Payments made during any fiscal quarter after the expiration of such twelve (12) month period, and including all previously made Restricted Payments, does not exceed 105% of the lesser of (C) Net Income and (D) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters on a cumulative basis, and (iii) no Default or Event of Default exists or would exist after giving effect to such Restricted Payment.
6C. LIENS, DEBT, AND OTHER RESTRICTIONS. The Company will not:
(i) Liens for taxes, assessments or other governmental levies or charges not yet due or which are subject to a Good Faith Contest;
(ii) statutory Liens of landlords and Liens of carriers, contractors, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or which are subject to a Good Faith Contest;
such Liens (1) were not incurred or made in connection with the incurrence or maintenance of Indebtedness, the borrowing of money, the obtaining of advances or credit, and (2) do not in the aggregate materially detract from the value of the property or assets so encumbered or materially impair the use thereof in the operation of its business;
(v) Liens now or hereafter required by this Agreement;
(vii) leases, subleases, licenses and sublicenses granted to third parties not interfering in any material respect with the business of the Company;
(viii) minor survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to use of real property, that are necessary for the conduct of the operations of the Company or that customarily exist on properties of corporations engaged in similar businesses and are similarly situated and that do not in any event materially impair their use in the operations of the Company;
(i) the Notes;
(iii) additional Funded Debt of the Company in an amount, which when added to all other Funded Debt of the Company then outstanding (but excluding the Funded Debt evidenced by the Notes and the Other EC Notes), does not exceed $1,000,000,000 at any one time outstanding.
(i) obligations backed by the full faith and credit of the United States Government (whether issued by the United States Government or an agency thereof), and obligations guaranteed by the United States Government, in each case which mature within one year from the date acquired;
(ii) demand and time deposits with, Eurodollar deposits with or certificates of deposit issued by any commercial bank or trust company (1) organized under the laws of the United States or any of its states or having branch offices therein, (2) having equity capital in excess of $100,000,000 and (3) which issues either (x) senior debt securities rated A or better by S&P, A or better by Moody's or (y) commercial paper rated A-2 or better by S&P or Prime-2 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) ("RATED BANKS"), in each case payable in the United States in United States dollars and in each case which mature within one year from the date acquired;
(iii) marketable commercial paper and loan participations rated A-1 or better by S&P or P-1 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) and maturing not more than 270 days from the date acquired;
(iv) bonds, debentures, notes or similar debt instruments issued by a state or municipality given a "AA" rating or better by S&P or an equivalent rating by another nationally recognized credit rating agency and maturing not more than one year from the date acquired;
(viii) bonds, debentures, notes or similar debt instruments issued by a corporation organized and existing under the laws of any state of the United States of America or the District of Columbia and having a long term credit rating of BBB-or better from S&P or Baa3 or better from Moody's; and
6C(4). MERGER AND CONSOLIDATION. Merge or consolidate with any other Person, except that the Company may consolidate or merge with any other corporation if (A) the Company shall be the continuing or surviving corporation and (B) no Default or Event of Default exists or would exist after giving effect to such merger or consolidation.
6C(5). TRANSFER OF ASSETS. Transfer, or agree or otherwise commit to Transfer, a substantial portion of its assets.
6C(6) ISSUANCE OF ADDITIONAL UNSECURED NOTES. Issue any unsecured notes of the Company which are rated lower than the rating of the Notes on the date hereof.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal of or Yield-Maintenance Amount payable with respect to any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note for more than 10 days after the date due; or
(iii) the Company defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other Debt (other than secured Debt which is non-recourse to the Company) beyond any period of grace provided with respect thereto, or the Company fails to perform or observe any other agreement, term or condition contained in any agreement under which any such Debt is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such (or a trustee on behalf of such holder or holders) to cause, such Debt to become due (or to be repurchased by the Company) prior to any stated maturity, provided that the aggregate amount of all Debt as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration (or resale to the Company) shall occur and be continuing exceeds an amount equal to the lesser of (x) $10,000,000 and (y) 5% of the net assets of the Company as reflected on its most recent balance sheet at the time of determination; or
(iv) any representation or warranty made by or on behalf of the Company or any of its officers herein or in any other writing furnished in connection with or pursuant to this Agreement or the transactions contemplated hereby shall be false in any material respect on the date as of which made; or
(vi) the Company fails to perform or observe any other agreement, term or condition contained herein and such failure shall not be remedied within 30 days after the Company receives written notice of such default from any holder of a Note; or
(vii) the Company makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the "BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of the Company, or of any substantial part of the assets of the Company, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings relating to the Company under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings are commenced, against the Company and the Company by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any proceedings decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xii) one or more final judgments in an aggregate amount in excess of $10,000,000 is rendered against the Company and, within 60 days after entry thereof, a solvent insurance carrier or carriers have not confirmed in writing that each such judgment is fully insured or any such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, any such judgment is not discharged;
with respect to any such other event constituting an Event of Default without the consent or approval of the other Holders).
The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of the Yield-Maintenance Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
7D. OTHER REMEDIES. If any Event of Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants and warrants as follows:
8A. ORGANIZATION. The Company is a corporation duly organized and existing in good standing under the laws of the State of Delaware, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof. The Company has no Subsidiaries.
8B. FINANCIAL STATEMENTS. The Company has furnished you with the unaudited financial statements, certified by a principal financial officer of the Company: a balance sheet of the Company as of June 30, 1998 and statements of income, stockholders' equity and cash flows for the six-month period ended on such date, prepared by the Company. To the Company's knowledge, such financial statements are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with GAAP consistently followed through out the periods involved and show all liabilities, direct and contingent, of the Company required to be shown in accordance with such principles. To the Company's knowledge, the balance sheets fairly present the condition of the Company as at the dates thereof, and the statements of income, stockholders' equity and cash flows fairly present the results of the operations of the Company and its cash flows for the periods indicated. To the knowledge of the Company, there has been no material adverse change in the business, condition (finan cial or otherwise) or operations of the Company since June 30, 1998.
8C. ACTIONS PENDING. There is no action, suit, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company, or any properties or rights of the Company, by or before any court, arbitrator or administrative or governmental body which (i) might result in a Material Adverse Effect or (ii) purports to affect the validity or enforceability of this Agreement, any Note issued hereunder or the transactions contemplated hereby.
8D. TAXES. The Company has filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are subject to a Good Faith Contest.
8E. CONFLICTING AGREEMENTS AND OTHER MATTERS. The Company is not a party to any contract or agreement or subject to any charter or other corporate restriction which materially and adversely affects its business, property or assets, or financial condition. Neither the execution nor delivery of this Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor fulfillment of nor compliance with the terms and provisions hereof and of the Notes will materially conflict with, or result in a material breach of the terms, conditions or provisions of, or constitute a default under, or result in any material violation of, or result in the creation of any Lien upon any of the properties or assets of the Company
8F. OFFERING OF NOTES. Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company for sale to, or solicited any offers to buy the Notes or any similar security of the Company from, or otherwise approached or negotiated with respect thereto with, any Person other than Institutional Investors, and neither the Company nor any agent acting on its behalf has taken or will take any action which would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.
8G. USE OF PROCEEDS. The Company does not own or have any present intention of acquiring any "margin stock" as defined in Regulation U (12 CFR Part 207) of the Board of Governors of the Federal Reserve System (herein called "MARGIN STOCK"). The proceeds of sale of the Notes will be used to purchase Commercial Mortgage Loans and/or marketable debt securities, including, but not limited to, ABS. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock or for the purpose of maintaining, reducing or retir ing any Indebtedness which was originally incurred to purchase or carry any stock that is currently a margin stock or for any other purpose which might constitute this transaction a "purpose credit" within the meaning of such Regulation U. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or the Notes to violate Regulation U, Regulation T or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as in effect now or as the same may hereafter be in effect.
8H. ERISA. The Company has no retirement or employee benefit plans subject to ERISA.
8I. GOVERNMENTAL CONSENT. No circumstance in connection with the offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body in connection with the execution and delivery of this Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or of the Notes, if the failure to obtain any such consent would have a Material Adverse Effect.
8J. COMPLIANCE WITH LAWS. The Company and all of its properties and facilities have complied at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
8K. INVESTMENT COMPANY STATUS. Neither the Company nor any Subsidiary is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or an "investment adviser" within the meaning of the Investment Advisers Act of 1940, as amended.
8L. DUE AUTHORIZATION, ETC. This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
8M. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company which materially adversely affects or in the future may (so far as the Company can now foresee) materially adversely affect the business, property or assets, or financial condition of the Company and which has not been set forth in this Agreement or in the other documents, certificates and written statements furnished to you and Boston Properties Limited Partnership, a Delaware limited partnership by or on behalf of the Company prior to the date hereof in connection with the transactions contemplated hereby.
8N. INVESTMENTS. All mortgage loans owned by the Company as of the date of this Agreement are Commercial Mortgage Loans which are not in default beyond any applicable cure periods pursuant to the terms thereof, and the Company has not extended any of the cure periods provided in the loan documents governing, evidencing and securing such Commercial Mortgage Loans and originally executed in connection therewith beyond the applicable cure periods provided in such loan documents.
transport, discharge or store any Hazardous Material in material violation of any material Environmental Laws; (iii) does not own, operate or maintain any underground storage tanks; and (iv) is not aware of any conditions or circumstances associated with its currently or previously owned or leased properties or operations (or those of any tenants of such properties) which may give rise to any liabilities under Environmental Laws which could have a Material Adverse Effect.
9. REPRESENTATIONS OF THE PURCHASER. You represent that you are not acquiring the Notes to be purchased by you hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of your property shall at all times be and remain within your control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.
10A. YIELD-MAINTENANCE TERMS.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (as converted to reflect the periodic basis on which interest on the Notes is payable, if interest is payable other than on a semi-annual basis) equal to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called
Princi pal of any Note, the offered-side yield to maturity, as of 10:00
a.m. (New York City time) on the Business Day next preceding the Settlement
Date with respect to such
Called Principal, of the U.S. Treasury security that was used to determine the then Treasury of such Investment Note.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one- twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one-twelfth year) which will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date through and including the Rate Reset Date (assuming that the entire principal balance and all accrued interest as of such Rate Reset Date will be repaid on such Rate Reset Date), if the Settlement Date precedes such Rate Reset Date, or alternatively, the Maturity Date if the Settlement Date occurs after the Rate Reset Date.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) to the extent paid on the Settlement Date with the Called Principal, interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield- Maintenance Amount shall in no event be less than zero.
10B. OTHER TERMS.
"ABS" shall mean mortgage, or other asset backed securities.
"AFFILIATE" shall mean any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the Company. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.
"BIG FIVE ACCOUNTING FIRM" shall mean any of Arthur Andersen, Deloitte & Touche, KPMG Peat Marwick, PricewaterhouseCoopers and Ernst & Young.
"BP PARTY" shall mean Boston Properties Limited Partnership, a Delaware limited partnership, and any Affiliate thereof, and shall also include, in all events, One Embarcadero Center Venture, a California general partnership.
"CASH FLOW" shall mean, in respect of any period, the sum of (a) Net Income for such period and (b) the amount of all depreciation and amortization allowances and other non-cash expenses of the Company but only to the extent deducted in the determination of Net Income for such period.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CURRENT DEBT" shall mean, with respect to the Company, all Indebtedness for borrowed money which by its terms or by the terms of any instrument or agreement relating thereto matures on demand or within one year from the date of the creation thereof and is not directly or indirectly renewable or extendible at the option of the debtor to a date more than one year from the date of the creation thereof, provided that Indebtedness for borrowed money outstanding under a revolving credit or similar agreement which obligates the lender or lenders to extend credit over a period of more than one year shall constitute Funded Debt and not Current Debt, even though such Indebtedness by its terms matures on demand or within one year from the date of the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DEBT SERVICE" shall mean, with respect to any period, the sum of the following: (a) Interest Charges for such period, and (b) all payments of principal in respect of Debt of the Company paid or payable during such period.
"DEBT SERVICE COVERAGE RATIO" shall mean, at any time of determination, the ratio of (a) Cash Flow for the most recent fiscal quarter to (b) Debt Service for such fiscal quarter.
"DUFF & PHELPS" shall mean Duff & Phelps Corporation.
"ENVIRONMENTAL LAWS" shall mean all laws relating to pollution,
the release or other discharge, handling, disposition or treatment of
Hazardous Materials and other substances or the protection of the
environment or of employee health and safety, including, without
limitation, CERCLA, the Hazardous Material Transportation Act (49 U.S.C.
Section 1801 et. seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 7401 et. seq.), the Clean Air Act (42 U.S.C. Section 401 et.
seq.), the Toxic Substances Control Act (15 U.S.C. Section 651 et. seq.)
and the Emergency Planning and Community Right-To-Know Act (42 U.S.C.
Section 11001 et. seq.), each as the same may be amended and supplemented.
"EQUITY REDEMPTION LOAN" shall mean that certain loan in the aggregate principal amount of $328,143,000 by Bankboston. N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank National Association and Citizens Bank (and other banks which may become parties to the Term Loan Agreement described immediately below) to you, One Embarcadero Center Venture, Embarcadero Center Associates and Four Embarcadero Center Venture pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FITCH" shall mean Fitch IVCA, Inc.
"FUNDED DEBT" shall mean, with respect to any Person, all Indebtedness of such Person which by its terms or by the terms of any instrument or agreement relating thereto matures, or which is otherwise payable or unpaid, more than one year from, or is directly or indirectly renewable or extendible at the option of the debtor to a date more than one year (including an option of the debtor under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year) from, the date of the creation thereof, including current maturities of long-term debt that appear as current liabilities in accordance with GAAP.
"GOOD FAITH CONTEST" shall mean, with respect to any tax, assessment, Lien, obligation, claim, liability, judgment, injunction, award, decree, order, law, regulation, statute or similar item, any challenge or contest thereof by appropriate proceedings timely initiated in good faith by the Company for which adequate reserves therefor have been taken in accordance with GAAP.
"GUARANTEE" shall mean, with respect to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any indebtedness, lease, dividend or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including, without limitation, any such obligation in effect guaranteed by such Person through any agreement (contingent or otherwise) to
(i) purchase,repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise);
(ii) maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation; or
(iii) pay the purchase price for goods or services regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose, intent or effect of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof.
The amount of any Guarantee shall be equal to the outstanding principal amount of the obligation guaranteed or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited.
"HAZARDOUS MATERIALS" shall mean (i) any material or substance defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous material", "toxic substances" or any other formulations intended to define, list or classify substances by reason of their deleterious properties, (ii) any oil, petroleum or petroleum derived substance, (iii) any flammable substances or explosives, (iv) any radioactive materials, (v) asbestos in any form, (vi) electrical equipment that contains any oil or dielectric fluid containing levels or polychlorinated biphenyls in excess of 50 parts per million, (vii) pesticides or (viii)
any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental agency or authority or which may or could pose a hazard to the health and safety of persons in the vicinity thereof.
"INCLUDING" shall mean, unless the context clearly requires otherwise, "including without limitation".
"INSTITUTIONAL INVESTOR" shall mean any insurance company, commercial, investment or merchant bank, finance company, mutual fund, registered money or asset manager, savings and loan association, credit union, registered investment advisor, pension fund, investment company, licensed broker-dealer, "qualified institutional buyer" (as such term is defined under Rule 144A promulgated under the Securities Act, or any successor law, rule or regulation) or "accredited investor" (as such term is defined under Regulation D promulgated under the Securities Act, or any successor law, rule or regulation).
"INTANGIBLES" shall mean, without duplication, all Intellectual Property and operating agreements, treasury stock, deferred or capitalized research and development costs, goodwill (including any amounts, however designated, representing the cost of acquisition of business and investments in excess of the book value thereof), unamortized debt discount and expense, any write-up of asset value after June 30, 1997 and any other amounts reflected in contra-equity accounts, and any other assets treated as intangible assets under GAAP.
"INTELLECTUAL PROPERTY" shall mean all patents, trademarks, service marks, trade names, copyrights, brand names, mechanical or technical processes and paradigms, know-how, and similar intellectual property and applications, licenses and similar rights in respect of the same.
"INTEREST CHARGES" shall mean, with respect to any period, the
sum (without duplication) of the following: (a) all interest in respect of
Debt of the Company deducted in determining Net Income for such period, and
(b) all debt discount and expense amortized or required to be amortized in
the determination of Net Income for such period.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance, minimum or compensating deposit arrangement, lien (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation.
"MATERIAL ADVERSE EFFECT" shall mean (i) a material adverse effect on the business, assets, liabilities, operations, prospects or condition, financial or otherwise, of the Company, (ii) material impairment of the Company to perform any of its obligations under the Agreement and the Notes or (iii) material impairment of the validity or enforceability or the rights of, or the benefits available to, the holders of the Notes under this Agreement or the Notes.
"MOODY'S" shall mean Moody's Investors Services, Inc., including the NCO/Moody's Commercial Division, or any successor Person.
"NET INCOME" shall mean, as to any period, consolidated gross revenues of the Company less all operating and non-operating expenses of the Company for such period, including all charges of a proper character (including current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), but not including in gross revenues the following:
(i) any gains (net of expenses and taxes applicable thereto) in excess of losses resulting from the Transfer of capital assets (i.e., assets other than current assets);
(ii) any gains resulting from the write-up of assets;
(iii) any equity of the Company in the undistributed earnings (but not losses) of any corporation which is not a Subsidiary;
(iv) any earnings or losses of any Person acquired by the Company through purchase, merger, consolidation or otherwise for any fiscal period prior to the fiscal period in which the acquisition occurs;
(v) gains or losses from the acquisition of securities or the retirement or extinguishment of Debt;
(vi) gains on collections from insurance policies or settlements;
(vii) any income or gain during such period from any change in accounting principles, from any discontinued operations or the disposition thereof, from any extraordinary items or from any prior period adjustment;
(viii) in the case of a successor to the Company by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets.
If the preceding calculation results in a number less than zero, such amount shall be considered a net loss.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the Company by its President, one of its Vice Presidents or its Treasurer.
"OTHER EC NOTES" shall mean those certain senior promissory notes
of the Company issued by the Company on the date hereof to (a) One
Embarcadero Center Venture in the aggregate principal amount of $88,200,000
(b) Embarcadero Center Associates in the aggregate principal amount of
$111,927,000 and (c) Four Embarcadero Center Venture in the aggregate
principal amount of $143,119,000.
"PERSON" shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organ ization and a government or any department or agency thereof.
"PHASE ONE" shall mean the closing and consummation of the transactions described in that certain Master Transaction Agreement dated as of September 28, 1998, by and among Prudential, PIC Realty Corporation, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P., the Persons listed on Exhibit A-1 attached thereto, Boston Properties Limited Partnership and Boston Properties, Inc., which are to be consummated on the "Closing Date" (as defined in such Master Transaction Agreement).
"PRUDENTIAL" shall mean The Prudential Insurance Company of America, a New Jersey mutual insurance company.
"PRUDENTIAL GUARANTIED LOAN" shall mean that certain loan in the aggregate principal amount of $92,000,000 by The Chase Manhattan Bank and/or any of its subsidiaries or affiliates (the "BANK") to you, One Embarcadero Center Venture, Embarcadero Center Associates and Four Embarcadero Center Venture pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"RATE RESET DATE", with respect to any Note, shall have the meaning set forth in such Note.
"RELEASE" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata, in violation of applicable law or prudent business practice.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51% of the aggregate principal amount of the Notes from time to time outstanding, but shall include, in any event, the BP Parties so long as any BP Party holds a direct or indirect interest in any Note.
"RESET TREASURY" shall mean the yield to maturity implied by (i)
the yields reported, as of 10:00am (New York City time) on the Business Day
next preceding the Rate Reset Date for any Note, on the display designated
as "Page 678" on the Telerate Access Service, for actively traded U.S.
Treasury securities having a maturity equal to the earlier to occur of the
next Rate Reset Date provided for in such Note (if any) and the Maturity
Date of such Note, or if such yields shall not be reported as of such time
or the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for
which such yields shall have been so reported as of the Business Day next
preceding the Rate Reset Date in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the earlier to
occur of the next Rate Reset Date provided for in such Note (if any) or the
Maturity Date of such Note. Such implied yields shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities.
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief operating officer, chief financial officer or chief accounting officer of the Company
or any other officer of the Company involved principally in its financial administration or its controllership function.
"RESTRICTED INVESTMENT" shall mean any Investment other than a Permitted Investment.
"RESTRICTED PAYMENTS" shall mean any of the following (provided that, notwithstanding anything to the contrary stated below, the term "Restricted Payments" does not include any distribution of capital gains by the Company to its shareholders):
(i) any dividend on any class of the Company's capital stock at any time after the date hereof;
(ii) any other distribution on account of any class of the Company's capital stock;
(iii) any redemption, purchase or other acquisition, direct or indirect, of any shares of the Company's capital stock;
(iv) any unscheduled payment of principal of, or retirement, redemption, purchase or other acquisition of, any subordinated debt, including subordinated debt that is convertible into equity of the Company;
(v) any Restricted Investment;
"S&P" shall mean Standard and Poor's Corporation, or any successor Person.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDER" shall mean and include any Person who owns, beneficially or of record, directly or indirectly, at any time during any year with respect to which a computation is being made 5% or more of the outstanding voting stock of the Company.
"SIGNIFICANT HOLDER" shall mean (i) any BP Party, so long as any BP Party shall hold (or be committed under this Agreement to purchase) any Note, or (ii) any other holder of at least 5% of the aggregate principal amount of the Notes from time to time outstanding.
"SUBSIDIARY" shall mean any corporation or other entity at least 51% of the total combined voting power of all classes of Voting Stock or similar securities
of which shall, at the time as of which any determination is being made, be owned by the Company either directly or through Subsidiaries.
"TOTAL ASSETS" shall mean, as at any time of determination, the total assets of a Person recorded on a balance sheet of such Person prepared in accordance with GAAP.
"TRANSFER" shall mean, with respect to any item, the sale, exchange, conveyance, lease, transfer or other disposition of such item.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any part of any Note purchased by you under this Agreement.
"TREASURY" shall mean, for any Note, the Initial Treasury or the then Reset Treasury, as the case may be, upon which the Margin under such Note is added to obtain the interest rate of such Note.
"VOTING STOCK" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency), and, with respect to any other entity, any similar security of such entity.
11. MISCELLANEOUS.
11A NOTE PAYMENTS. The Company agrees that, so long as you shall hold any Note, it will make payments of principal of, interest on and any Yield- Maintenance Amount
11B. EXPENSES. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save you and any Transferee harmless against liability for the payment of, all reasonable out-of- pocket costs and expenses arising in connection with such transactions, including:
(i) (A) all stamp and documentary taxes and similar charges and (B) costs of obtaining a private placement number for the Notes in each case as a result of the execution and delivery of this Agreement or the issuance of the Notes;
(ii) document production and duplication charges and the reasonable fees and expenses of any special counsel engaged by you or such Transferee in connection with this Agreement and the transactions contemplated hereby;
(iii) the costs and expenses, including reasonable attorneys' fees, incurred by you or such Transferee in enforcing any rights under this Agreement or the Notes; and
(iv) any judgment, liability, claim, order, decree, cost, fee, expense, action or obligation resulting directly from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company;
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes are issuable as registered notes without coupons in denominations of at least $1,000,000, except as may be necessary to (i) reflect any principal amount not evenly divisible by $1,000,000 or (ii) enable the registration of transfer by a holder of its entire holding of Notes. The Company shall keep at its principal office a register in which the Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of such transferee or transferees. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's indemnity agreement (which shall be unsecured if such holder is an Institutional Investor whose senior
debt securities are rated BBB- or Baa3 or better by S&P or Moody's, respectively, and, otherwise, which shall be unsecured unless the Company requests in writing that such indemnity agreement be secured), or in the case of any such mutilation upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.
11E. TRANSFER OF NOTES; PERSONS DEEMED OWNERS. Subject to the next succeeding sentence, you may transfer any Note or portion thereof in your sole discretion; provided, however, that any Transferee shall be an Institutional Investor. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of, interest on and any Yield-Maintenance Amount payable with respect to such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investi gation made at any time by or on behalf of you or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings between you and the Company relating to the subject matter hereof, and the Company shall not be affected by notice to the contrary. No provision of this Agreement shall be interpreted for or against any party because that party or its legal representative drafted the provision.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this Agreement contained by or on behalf of either of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not.
11H. NOTICES. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to you, addressed to you at the address specified for such communications in the Purchaser Schedule attached hereto, or at such other address as you shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Company in writing or, if any such other holder shall not have so specified an address to the Company, then addressed to such other holder in care of the last holder of such Note which shall have so specified an
address to the Company, and (iii) if to the Company, addressed to it at Prudential Realty Group, 8 Campus Drive, Parsippany, New Jersey 07054, Attention: John Triece, or at such other address as the Company shall have specified to the holder of each Note in writing; provided, however, that any such communication to the Company may also, at the option of the holder of any Note, be delivered by any other means either to the Company at its address specified above or to any officer of the Company.
11I. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day.
11J. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to you or to the Required Holder(s), the determination of such satisfaction shall be made by you or the Required Holder(s), as the case may be, in the reasonable judgment of the Person or Persons making such determination.
11K. INDEMNIFICATION. The Company hereby agrees to indemnify you and your directors, officers, employees and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages and expenses arising out of or by reason of any investigation or litigation or other proceeding relating to this Agreement, the Notes or the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified).
11L. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York.
11M. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11N. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
11O. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.
[INTENTIONALLY LEFT BLANK]
If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this letter and return the same to the Company, whereupon this letter shall become a binding agreement between the Company and you.
Very truly yours,
PRUDENTIAL REALTY
SECURITIES, INC.
By: /s/ Paul D. Egan ------------------------- Name: Paul D. Egan Title: Vice President By:________________________ Name:______________________ Title:_____________________ |
The foregoing Agreement is
hereby accepted as of the
date first above written:
THREE EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, as Manager
By: BOSTON PROPERTIES, INC.,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
[FORM OF NOTES]
PRUDENTIAL REALTY SECURITIES, INC.
SENIOR NOTE DUE __________, 200_
No. _____ [Date] $________
FOR VALUE RECEIVED, the undersigned, PRUDENTIAL REALTY SECURITIES, INC.
(the "COMPANY"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to THREE EMBARCADERO CENTER VENTURE, a
California general partnership, or registered assigns, the principal sum of
_____________ ______________ DOLLARS ($______________) on _____________, ____
(the "Maturity Date"), with interest (computed on the basis of a 360-day year
comprised of 12 30-day months) on the unpaid balance thereof at the rate of
____% per annum from the date hereof through and including _______, ___ (the
"RATE RESET DATE") and thereafter through and including the Maturity Date, at a
rate of interest per annum equal to the sum of (i) ________ basis points, and
(ii) the Reset Treasury, as defined in the Note Agreement. All such interest
shall be payable semiannually on the 15/th/ day of June and December in each
year, commencing with the first such date next succeeding the date hereof, until
the principal hereof shall have become due and payable, and shall be payable on
any overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Yield-Maintenance Amount (as
defined in the Note Agreement), payable semiannually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the lesser of (a) the maximum rate permitted by applicable
law and (b) 2.0% over the interest rate then in effect under this Note in
accordance with the foregoing terms and provisions.
Payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to this Note are to be made in immediately available funds, in lawful money of the United States of America, by wire transfer to [_______] at [NAME OF BANK] in [New York City], ABA #________, Account # __________, or to such other account or place as the registered holder hereof shall designate to the Company in writing.
This Note is one of a series of Senior Notes (the "NOTES") issued pursuant to a Note Agreement, dated as of November 12, 1998 (the "NOTE AGREEMENT"), between the Company and One Embarcadero Center Venture and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Note Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.
Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company shall not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Note Agreement.
If an Event of Default, as defined in the Note Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Note Agreement.
The Company and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor or default, notice of intent to accelerate, notice of acceleration (to the extent set forth in the Note Agreement), protest and diligence in collecting.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
PRUDENTIAL REALTY SECURITIES, INC.
By_________________________
[Vice] President
By_________________________
Treasurer
1. Invest only in investment grade fixed income assets that:
a) are current in payment and not in default (subject to cure periods):
b) minimally provide for interest payments which are (i) monthly in the case of "non securities" investments (i.e., whole mortgage loans) or (ii) semi-annually in the case of "securities" investments (i.e. ABS):
c) have a maturity date which is at least thirty months beyond the asset purchase date:
d) include prepayment premiums providing for yield maintenance or the substantial equivalent: and
e) on an individual basis, do not exceed 7% of the total portfolio.
2. Make more than 80% of all investment in assets directly secured by first mortgages. In addition: (a) no such assets may have a "loan to value" ratio which exceeds 80%, and at least 90% of such assets shall have a "loan to value" ratio which is 75% or less and (b) the overall portfolio of such assets shall be geographically diverse.
EXHIBIT 99.14
PRUDENTIAL REALTY SECURITIES, INC.
8 CAMPUS DRIVE
PARSIPPANY, NEW JERSEY 07054
As of November 12, 1998
FOUR EMBARCADERO CENTER VENTURE
C/O BOSTON PROPERTIES, INC.
8 ARLINGTON STREET
BOSTON, MASSACHUSETTS 02116-3495
ATTN: GENERAL COUNCIL
Ladies and Gentlemen:
The undersigned, PRUDENTIAL REALTY SECURITIES, INC. (herein called the "COMPANY"), hereby agrees with you as follows:
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to you and, subject to the terms and conditions herein set forth, you agree to purchase from the Company, Notes in the aggregate principal amount of $143,119,000 at 100% of such
aggregate principal amount. The Company will deliver to you, at the offices of O'Melveny & Myers LLP at 275 Battery Street, Suite 2600, San Francisco, California, (or such other location to be determined by mutual agreement between the Company and you) one or more Notes registered in your name, evidencing the aggregate principal amount of Notes to be purchased by you and in the denomination or denominations specified in the Purchaser Schedule attached hereto, against payment of the purchase price thereof by transfer of immediately available funds for credit to the Company's account #890-0305-525 at The Bank of New York, New York, New York, ABA No. 021-000-018 on the date of closing, which shall be November 12, 1998 or any other date on or before November 13, 1998 upon which the Company and you may mutually agree (herein called the "CLOSING" or the "DATE OF CLOSING").
3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the Notes to be purchased by you hereunder is subject to the satisfaction, on or before the date of closing, of the following conditions:
3A. EXECUTION AND DELIVERY OF DOCUMENTS. The Company shall have delivered, or cause to be delivered, to you duly executed, original or certified copies of the following documents, each to be dated the date of closing unless otherwise indicated:
(iii) the Certificate of Incorporation of the Company certified as of a date within 10 Business Days of closing by the Secretary of State of Delaware.
(iv) the Bylaws of the Company certified by the Secretary of the Company.
(v) an incumbency certificate signed by the Secretary or an Assistant Secretary of the Company certifying as to the names, titles and true signatures of the officers of the Company authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder.
(vi) a certificate of the Secretary or an Assistant Secretary of the Company (A) attaching resolutions of the Board of Directors of the Company evidencing approval of the transactions contemplated by this Agreement and the issuance of the Notes and the execution, delivery and performance thereof, and authorizing certain officers to execute and deliver the same, and certifying that such resolutions were duly and validly adopted at a meeting duly noticed and held and such resolutions
(viii) a corporate good standing certificate as to the Company from the State of New Jersey.
(xi) additional documents or certificates with respect to such legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by you.
3B. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment for the Notes to be purchased by you on the date of closing on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation T, U or X of the Board of Governors of the Federal Reserve System) and shall not subject you to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and you shall have received such certificates or other evidence as you may request to establish compliance with this condition.
3C. PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to you, and you shall have received all such counterpart originals or certified or other copies of such documents as you may reasonably request.
3D. RATING. The Company shall have obtained a rating of the Notes, as of a date not more than 30 days prior to the closing hereof, of A or better from S&P and the equivalent rating from Fitch and shall provide written evidence of the same.
3E. PHASE ONE TRANSACTIONS. Phase One of the transactions shall have been completed or shall be consummated concurrently with the consummation of the transactions described herein.
3F. EQUITY REDEMPTION AND PRUDENTIAL GUARANTIED LOANS. You shall have obtained the Prudential Guarantied Loan and Equity Redemption Loan or the closing of such loans shall occur concurrently with the closing of the transactions contemplated herein; and the lenders of the Prudential Guarantied Loan and Equity Redemption Loan shall have made available to you in full the proceeds of the Prudential Guarantied Loan and Equity Redemption Loan.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver to each Significant Holder in duplicate:
(i) as soon as practicable and in any event within 60 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, statements of income, cash flows and shareholders' equity of the Company for the period from the beginning of the current year to the end of such quarterly period, and a balance sheet of the Company as at the end of such quarterly period, setting forth in comparative form statements of income and cash flows for the corresponding period in the preceding year, all in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 120 days after the end of each fiscal year, statements of income, cash flows and shareholders' equity of the Company for such year, and a balance sheet of the Company as at the end of such year, all prepared in accordance with GAAP, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, all in reasonable detail and satisfactory in form to the Required Holder(s)' and reported on by a Big Five Accounting Firm selected by the Company whose report shall be without limitation as to the scope of the audit and reasonably satisfactory in substance to the Required Holder(s) and shall be certified by such Big Five Accounting Firm to its knowledge with its unqualified opinion;
(iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its stockholders;
(iv) promptly upon receipt thereof, a copy of each other report or management letter submitted to the Company by its independent public accountants in connection with any annual, interim or special audit made by them of the books of the Company;
(v) such other financial data and other information as the Company regularly provides to its other lenders, other holders of Debt or other creditors; and
(vi) with reasonable promptness, such other information and documents as such Significant Holder may reasonably request.
The Company also covenants that promptly after any Responsible Officer obtains knowledge of an Event of Default or Default, it will deliver to each Significant Holder an Officer's Certificate specifying the nature and period of existence thereof and what action the Company has taken, is taking or proposes to take with respect thereto.
5D. COMPLIANCE WITH LAWS. The Company covenants that it and all of its properties and facilities will comply at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, including those relating to protection of the environment except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
5E. PAYMENT OF TAXES. The Company covenants that it will file or cause to be filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and will pay all taxes as shown on such returns and on all assessments received by it to the extent that such taxes become due, except such taxes as are subject to a Good Faith Contest.
5F. ENFORCEMENT OF MORTGAGE PROVISIONS. The Company covenants that it shall require any Commercial Mortgage Loans originated or acquired by it to contain covenants to the effect that (1) the mortgagor shall obtain and maintain at all times appropriate insurance coverage with respect to the mortgaged property and (2) the mortgagor shall promptly pay and discharge any indebtedness or lawful claims against the mortgaged property which if unpaid would constitute a Lien on such property. The Company further covenants and agrees that it will use commercially reasonable efforts to enforce such covenants.
6. NEGATIVE COVENANTS. So long as any Note or amount owing under this Agreement shall remain unpaid, the Company covenants that:
6A(1). DEBT SERVICE COVERAGE RATIO. The Company will not, at any time, permit the Debt Service Coverage Ratio to be less than 1.4 to 1.
6A(2). DEBT TO TOTAL ASSETS RATIO. The Company will not permit the ratio of (i) Debt to (ii) the sum of Total Assets plus the cumulative depreciation of any real property assets of the Company to exceed .70 to 1.
6B. RESTRICTED PAYMENTS. The Company covenants that it will not make, pay or declare, or commit to make, pay or declare, any Restricted Payment unless, after giving effect thereto, (i) the aggregate amount of all Restricted Payments made during the twelve month period commencing on the date hereof and expiring on the one (1) year anniversary of the date hereof, and including all previously made Restricted Payments, does not exceed 100% of the lesser of (A) Net Income and (B) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters during such time period on a cumulative basis, and (ii) the aggregate amount of all Restricted Payments made during any fiscal quarter after the expiration of such twelve (12) month period, and including all previously made Restricted Payments, does not exceed 105% of the lesser of (C) Net Income and (D) Net Income (determined without giving effect to any current income taxes or any change in deferred taxes), in each case, for all such fiscal quarters on a cumulative basis, and (iii) no Default or Event of Default exists or would exist after giving effect to such Restricted Payment.
6C. LIENS, DEBT, AND OTHER RESTRICTIONS. The Company will not:
(i) Liens for taxes, assessments or other governmental levies or charges not yet due or which are subject to a Good Faith Contest;
(ii) statutory Liens of landlords and Liens of carriers, contractors, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or which are subject to a Good Faith Contest;
such Liens (1) were not incurred or made in connection with the incurrence or maintenance of Indebtedness, the borrowing of money, the obtaining of advances or credit, and (2) do not in the aggregate materially detract from the value of the property or assets so encumbered or materially impair the use thereof in the operation of its business;
(v) Liens now or hereafter required by this Agreement;
(vii) leases, subleases, licenses and sublicenses granted to third parties not interfering in any material respect with the business of the Company;
(viii) minor survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to use of real property, that are necessary for the conduct of the operations of the Company or that customarily exist on properties of corporations engaged in similar businesses and are similarly situated and that do not in any event materially impair their use in the operations of the Company;
(i) the Notes;
(iii) additional Funded Debt of the Company in an amount, which when added to all other Funded Debt of the Company then outstanding (but excluding the Funded Debt evidenced by the Notes and the Other EC Notes), does not exceed $1,000,000,000 at any one time outstanding.
(i) obligations backed by the full faith and credit of the United States Government (whether issued by the United States Government or an agency thereof), and obligations guaranteed by the United States Government, in each case which mature within one year from the date acquired;
(ii) demand and time deposits with, Eurodollar deposits with or certificates of deposit issued by any commercial bank or trust company (1) organized under the laws of the United States or any of its states or having branch offices therein, (2) having equity capital in excess of $100,000,000 and (3) which issues either (x) senior debt securities rated A or better by S&P, A or better by Moody's or (y) commercial paper rated A-2 or better by S&P or Prime-2 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) ("RATED BANKS"), in each case payable in the United States in United States dollars and in each case which mature within one year from the date acquired;
(iii) marketable commercial paper and loan participations rated A-1 or better by S&P or P-1 or better by Moody's (or, in either case, an equivalent rating from another nationally recognized credit rating agency) and maturing not more than 270 days from the date acquired;
(iv) bonds, debentures, notes or similar debt instruments issued by a state or municipality given a "AA" rating or better by S&P or an equivalent rating by another nationally recognized credit rating agency and maturing not more than one year from the date acquired;
(viii) bonds, debentures, notes or similar debt instruments issued by a corporation organized and existing under the laws of any state of the United States of America or the District of Columbia and having a long term credit rating of BBB-or better from S&P or Baa3 or better from Moody's; and
6C(4). MERGER AND CONSOLIDATION. Merge or consolidate with any other Person, except that the Company may consolidate or merge with any other corporation if (A) the Company shall be the continuing or surviving corporation and (B) no Default or Event of Default exists or would exist after giving effect to such merger or consolidation.
6C(5). TRANSFER OF ASSETS. Transfer, or agree or otherwise commit to Transfer, a substantial portion of its assets.
6C(6) ISSUANCE OF ADDITIONAL UNSECURED NOTES. Issue any unsecured notes of the Company which are rated lower than the rating of the Notes on the date hereof.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal of or Yield-Maintenance Amount payable with respect to any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note for more than 10 days after the date due; or
(iii) the Company defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other Debt (other than secured Debt which is non-recourse to the Company) beyond any period of grace provided with respect thereto, or the Company fails to perform or observe any other agreement, term or condition contained in any agreement under which any such Debt is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such (or a trustee on behalf of such holder or holders) to cause, such Debt to become due (or to be repurchased by the Company) prior to any stated maturity, provided that the aggregate amount of all Debt as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration (or resale to the Company) shall occur and be continuing exceeds an amount equal to the lesser of (x) $10,000,000 and (y) 5% of the net assets of the Company as reflected on its most recent balance sheet at the time of determination; or
(iv) any representation or warranty made by or on behalf of the Company or any of its officers herein or in any other writing furnished in connection with or pursuant to this Agreement or the transactions contemplated hereby shall be false in any material respect on the date as of which made; or
(vi) the Company fails to perform or observe any other agreement, term or condition contained herein and such failure shall not be remedied within 30 days after the Company receives written notice of such default from any holder of a Note; or
(vii) the Company makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the "BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of the Company, or of any substantial part of the assets of the Company, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings relating to the Company under the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings are commenced, against the Company and the Company by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any proceedings decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than 60 days; or
(xii) one or more final judgments in an aggregate amount in excess of $10,000,000 is rendered against the Company and, within 60 days after entry thereof, a solvent insurance carrier or carriers have not confirmed in writing that each such judgment is fully insured or any such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, any such judgment is not discharged;
respect to any such other event constituting an Event of Default without the consent or approval of the other Holders).
The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of the Yield-Maintenance Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
7D. OTHER REMEDIES. If any Event of Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants and warrants as follows:
8A. ORGANIZATION. The Company is a corporation duly organized and existing in good standing under the laws of the State of Delaware, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof. The Company has no Subsidiaries.
8B. FINANCIAL STATEMENTS. The Company has furnished you with the unaudited financial statements, certified by a principal financial officer of the Company: a balance sheet of the Company as of June 30, 1998 and statements of income, stockholders' equity and cash flows for the six-month period ended on such date, prepared by the Company. To the Company's knowledge, such financial statements are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with GAAP consistently followed throughout the periods involved and show all liabilities, direct and contingent, of the Company required to be shown in accordance with such principles. To the Company's knowledge, the balance sheets fairly present the condition of the Company as at the dates thereof, and the statements of income, stockholders' equity and cash flows fairly present the results of the operations of the Company and its cash flows for the periods indicated. To the knowledge of the Company, there has been no material adverse change in the business, condition (financial or otherwise) or operations of the Company since June 30, 1998.
8C. ACTIONS PENDING. There is no action, suit, investigation or pro ceeding pending or, to the knowledge of the Company, threatened against the Company, or any properties or rights of the Company, by or before any court, arbitrator or administrative or governmental body which (i) might result in a Material Adverse Effect or (ii) purports to affect the validity or enforceability of this Agreement, any Note issued hereunder or the transactions contemplated hereby.
8D. TAXES. The Company has filed all federal, state and other income tax returns which, to the knowledge of the officers of the Company, are required to be filed, and has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are subject to a Good Faith Contest.
8F. OFFERING OF NOTES. Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company for sale to, or solicited any offers to buy the Notes or any similar security of the Company from, or otherwise approached or negotiated with respect thereto with, any Person other than Institutional Investors, and neither the Company nor any agent acting on its behalf has taken or will take any action which would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.
8G. USE OF PROCEEDS. The Company does not own or have any present intention of acquiring any "margin stock" as defined in Regulation U (12 CFR Part 207) of the Board of Governors of the Federal Reserve System (herein called "MARGIN STOCK"). The proceeds of sale of the Notes will be used to purchase Commercial Mortgage Loans and/or marketable debt securities, including, but not limited to, ABS. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock or for the purpose of maintaining, reducing or retiring any Indebtedness which was originally incurred to purchase or carry any stock that is currently a margin stock or for any other purpose which might constitute this transaction a "purpose credit" within the meaning of such Regulation U. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or the Notes to violate Regulation U, Regulation T or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as in effect now or as the same may hereafter be in effect.
8H. ERISA. The Company has no retirement or employee benefit plans subject to ERISA.
8I. GOVERNMENTAL CONSENT. No circumstance in connection with the offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body in connection with the execution and delivery of this Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or of the Notes, if the failure to obtain any such consent would have a Material Adverse Effect.
8J. COMPLIANCE WITH LAWS. The Company and all of its properties and facilities have complied at all times in all material respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, except, in any such case, where failure to comply would not result in a Material Adverse Effect on the business, condition (financial or otherwise) or operations of the Company.
8K. INVESTMENT COMPANY STATUS. Neither the Company nor any Subsidiary is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or an "investment adviser" within the meaning of the Investment Advisers Act of 1940, as amended.
8L. DUE AUTHORIZATION, ETC. This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
8M. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company which materially adversely affects or in the future may (so far as the Company can now foresee) materially adversely affect the business, property or assets, or financial condition of the Company and which has not been set forth in this Agreement or in the other docu ments, certificates and written statements furnished to you and Boston Properties Limited Partnership, a Delaware limited partnership by or on behalf of the Company prior to the date hereof in connection with the transactions contemplated hereby.
8N. INVESTMENTS. All mortgage loans owned by the Company as of the date of this Agreement are Commercial Mortgage Loans which are not in default beyond any applicable cure periods pursuant to the terms thereof, and the Company has not extended any of the cure periods provided in the loan documents governing, evidencing and securing such Commercial Mortgage Loans and originally executed in connection therewith beyond the applicable cure periods provided in such loan documents.
9. REPRESENTATIONS OF THE PURCHASER. You represent that you are not acquiring the Notes to be purchased by you hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of your property shall at all times be and remain within your control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.
10A. YIELD-MAINTENANCE TERMS.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (as converted to reflect the periodic basis on which interest on the Notes is payable, if interest is payable other than on a semi-annual basis) equal to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called
Princi pal of any Note, the offered-side yield to maturity, as of 10:00
a.m. (New York City time) on the Business Day next preceding the Settlement
Date with respect to such Called Principal, of the U.S. Treasury security
that was used to determine the then Treasury of such Investment Note.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one- twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one-twelfth year) which will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date through and including the Rate Reset Date (assuming that the entire principal balance and all accrued interest as of such Rate Reset Date will be repaid on such Rate Reset Date), if the Settlement Date precedes such Rate Reset Date, or alternatively, the Maturity Date if the Settlement Date occurs after the Rate Reset Date.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) to the extent paid on the Settlement Date with the Called Principal, interest accrued thereon as of
(including interest due on) the Settlement Date with respect to such Called Principal. The Yield-Maintenance Amount shall in no event be less than zero.
10B. OTHER TERMS.
"ABS" shall mean mortgage, or other asset backed securities.
"AFFILIATE" shall mean any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the Company. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.
"BIG FIVE ACCOUNTING FIRM" shall mean any of Arthur Andersen, Deloitte & Touche, KPMG Peat Marwick, PricewaterhouseCoopers and Ernst & Young.
"BP PARTY" shall mean Boston Properties Limited Partnership, a Delaware limited partnership, and any Affiliate thereof, and shall also include, in all events, One Embarcadero Center Venture, a California general partnership.
"CASH FLOW" shall mean, in respect of any period, the sum of (a) Net Income for such period and (b) the amount of all depreciation and amortization allowances and other non-cash expenses of the Company but only to the extent deducted in the determination of Net Income for such period.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMERCIAL MORTGAGE LOANS" shall mean commercial mortgage loans made in substantial conformance with (x) standards prevailing in the commercial loan mortgage marketplace and (y) the guidelines contained in
"CURRENT DEBT" shall mean, with respect to the Company, all Indebtedness for borrowed money which by its terms or by the terms of any instrument or agreement relating thereto matures on demand or within one year from the date of the creation thereof and is not directly or indirectly renewable or extendible at the option of the debtor to a date more than one year from the date of
the creation thereof, provided that Indebtedness for borrowed money outstanding under a revolving credit or similar agreement which obligates the lender or lenders to extend credit over a period of more than one year shall constitute Funded Debt and not Current Debt, even though such Indebtedness by its terms matures on demand or within one year from the date of the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DEBT SERVICE" shall mean, with respect to any period, the sum of the following: (a) Interest Charges for such period, and (b) all payments of principal in respect of Debt of the Company paid or payable during such period.
"DEBT SERVICE COVERAGE RATIO" shall mean, at any time of determination, the ratio of (a) Cash Flow for the most recent fiscal quarter to (b) Debt Service for such fiscal quarter.
"DEFAULT" shall mean any of the events specified in paragraph 7A, whether or not any requirement for such event to become an Event of Default has been satisfied.
"DUFF & PHELPS" shall mean Duff & Phelps Corporation.
"ENVIRONMENTAL LAWS" shall mean all laws relating to pollution,
the release or other discharge, handling, disposition or treatment of
Hazardous Materials and other substances or the protection of the
environment or of employee health and safety, including, without
limitation, CERCLA, the Hazardous Material Transportation Act (49 U.S.C.
Section 1801 et. seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 7401 et. seq.), the Clean Air Act (42 U.S.C. Section 401 et.
seq.), the Toxic Substances Control Act (15 U.S.C. Section 651 et. seq.)
and the Emergency Planning and Community Right-To-Know Act (42 U.S.C.
Section 11001 et. seq.), each as the same may be amended and supplemented.
"EQUITY REDEMPTION LOAN" shall mean that certain loan in the aggregate principal amount of $328,143,000 by Bankboston, N.A., The Chase Manhattan Bank, Fleet National Bank, PNC Bank, National Association, Dresdner Bank AG New York Branch and Grand Cayman Branch, The Bank of New York, Key Bank National Association and Citizens Bank (and other banks which may become parties to the Term Loan Agreement described immediately below) to you, One Embarcadero Center Venture, Three Embarcadero Center Venture and
Embarcadero Center Associates pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FITCH" shall mean Fitch IVCA, Inc.
"FUNDED DEBT" shall mean, with respect to any Person, all Indebtedness of such Person which by its terms or by the terms of any instrument or agreement relating thereto matures, or which is otherwise payable or unpaid, more than one year from, or is directly or indirectly renewable or extendible at the option of the debtor to a date more than one year (including an option of the debtor under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year) from, the date of the creation thereof, including current maturities of long-term debt that appear as current liabilities in accordance with GAAP.
"GOOD FAITH CONTEST" shall mean, with respect to any tax, assessment, Lien, obligation, claim, liability, judgment, injunction, award, decree, order, law, regulation, statute or similar item, any challenge or contest thereof by appropriate proceedings timely initiated in good faith by the Company for which adequate reserves therefor have been taken in accordance with GAAP.
"GUARANTEE" shall mean, with respect to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any indebtedness, lease, dividend or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including, without limitation, any such obligation in effect guaranteed by such Person through any agreement (contingent or otherwise) to
(i) purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise);
(ii) maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation; or
(iii) pay the purchase price for goods or services regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose, intent or effect of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof.
The amount of any Guarantee shall be equal to the outstanding principal amount of the obligation guaranteed or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited.
"HAZARDOUS MATERIALS" shall mean (i) any material or substance defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous material", "toxic substances" or any other formulations intended to define, list or classify substances by reason of their deleterious properties, (ii) any oil, petroleum or petroleum derived substance, (iii) any flammable substances or explosives, (iv) any radioactive materials, (v) asbestos in any form, (vi) electrical equipment that contains any oil or dielectric fluid containing levels or polychlorinated biphenyls in excess of 50 parts per million, (vii) pesticides or (viii) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental agency or authority or which may or could pose a hazard to the health and safety of persons in the vicinity thereof.
"INCLUDING" shall mean, unless the context clearly requires otherwise, "including without limitation".
"INITIAL TREASURY" shall mean, for any Note, the yield to maturity implied by (i) the bid-side yields reported, as of 10:00am (New York City time) (or, at your election, at such other time as we may mutually agree) on the Business Day next preceding the date upon which such Note is funded, on the display designated
"INSTITUTIONAL INVESTOR" shall mean any insurance company, commercial, investment or merchant bank, finance company, mutual fund, registered money or asset manager, savings and loan association, credit union, registered investment advisor, pension fund, investment company, licensed broker-dealer, "qualified institutional buyer" (as such term is defined under Rule 144A promulgated under the Securities Act, or any successor law, rule or regulation) or "accredited investor" (as such term is defined under Regulation D promulgated under the Securities Act, or any successor law, rule or regulation).
"INTANGIBLES" shall mean, without duplication, all Intellectual Property and operating agreements, treasury stock, deferred or capitalized research and development costs, goodwill (including any amounts, however designated, representing the cost of acquisition of business and investments in excess of the book value thereof), unamortized debt discount and expense, any write-up of asset value after June 30, 1997 and any other amounts reflected in contra-equity accounts, and any other assets treated as intangible assets under GAAP.
"INTELLECTUAL PROPERTY" shall mean all patents, trademarks, service marks, trade names, copyrights, brand names, mechanical or technical processes and
paradigms, know-how, and similar intellectual property and applications, licenses and similar rights in respect of the same.
"INTEREST CHARGES" shall mean, with respect to any period, the
sum (without duplication) of the following: (a) all interest in respect of
Debt of the Company deducted in determining Net Income for such period, and
(b) all debt discount and expense amortized or required to be amortized in
the determination of Net Income for such period.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance, minimum or compensating deposit arrangement, lien (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation.
"MATERIAL ADVERSE EFFECT" shall mean (i) a material adverse effect on the business, assets, liabilities, operations, prospects or condition, financial or otherwise, of the Company, (ii) material impairment of the Company to perform any of its obligations under the Agreement and the Notes or (iii) material impairment of the validity or enforceability or the rights of, or the benefits available to, the holders of the Notes under this Agreement or the Notes.
"MOODY'S" shall mean Moody's Investors Services, Inc., including the NCO/Moody's Commercial Division, or any successor Person.
"NET INCOME" shall mean, as to any period, consolidated gross revenues of the Company less all operating and non-operating expenses of the Company for such period, including all charges of a proper character (including current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), but not including in gross revenues the following:
(i) any gains (net of expenses and taxes applicable thereto) in excess of losses resulting from the Transfer of capital assets (i.e., assets other than current assets);
(ii) any gains resulting from the write-up of assets;
(iii) any equity of the Company in the undistributed earnings (but not losses) of any corporation which is not a Subsidiary;
(iv) any earnings or losses of any Person acquired by the Company through purchase, merger, consolidation or otherwise for any fiscal period prior to the fiscal period in which the acquisition occurs;
(v) gains or losses from the acquisition of securities or the retirement or extinguishment of Debt;
(vi) gains on collections from insurance policies or settlements;
(vii) any income or gain during such period from any change in accounting principles, from any discontinued operations or the disposition thereof, from any extraordinary items or from any prior period adjustment;
(viii) in the case of a successor to the Company by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets.
If the preceding calculation results in a number less than zero, such amount shall be considered a net loss.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the Company by its President, one of its Vice Presidents or its Treasurer.
"OTHER EC NOTES" shall mean those certain senior promissory notes
of the Company issued by the Company on the date hereof to (a) One
Embarcadero Center Venture in the aggregate principal amount of $88,200,000
(b) Three Embarcadero Center Venture in the aggregate principal amount of
$76,897,000 and (c) Embarcadero Center Associates in the aggregate
principal amount of $111,927,000.
"PERMITTED INVESTMENTS" shall have the meaning set forth in
"PERSON" shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organ ization and a government or any department or agency thereof.
"PHASE ONE" shall mean the closing and consummation of the transactions described in that certain Master Transaction Agreement dated as of September 28, 1998, by and among Prudential, PIC Realty Corporation, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P., the Persons listed on Exhibit A-1 attached thereto, Boston Properties Limited Partnership and Boston Properties, Inc., which are to be consummated on the "Closing Date" (as defined in such Master Transaction Agreement).
"PRUDENTIAL" shall mean The Prudential Insurance Company of America, a New Jersey mutual insurance company.
"PRUDENTIAL GUARANTIED LOAN" shall mean that certain loan in the aggregate principal amount of $92,000,000 by The Chase Manhattan Bank and/or any of its subsidiaries or affiliates (the "BANK") to you, One Embarcadero Center Venture, Three Embarcadero Center Venture and Embarcadero Center Associates pursuant to that certain Term Loan Agreement dated as of November 12, 1998.
"RATE RESET DATE", with respect to any Note, shall have the meaning set forth in such Note.
"RELEASE" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata, in violation of applicable law or prudent business practice.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51% of the aggregate principal amount of the Notes from time to time outstanding, but shall include, in any event, the BP Parties so long as any BP Party holds a direct or indirect interest in any Note.
"RESET TREASURY" shall mean the yield to maturity implied by (i)
the yields reported, as of 10:00am (New York City time) on the Business Day
next preceding the Rate Reset Date for any Note, on the display designated
as "Page 678" on the Telerate Access Service, for actively traded U.S.
Treasury securities having a maturity equal to the earlier to occur of the
next Rate Reset Date provided for in such Note (if any) and the Maturity
Date of such Note, or if such yields shall not be reported as of such time
or the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for
which such yields shall have been so reported as of the Business Day next
preceding the Rate Reset Date in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the earlier to
occur of the next Rate Reset Date provided for in such Note (if any) or the
Maturity Date of such Note. Such implied yields shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities.
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief operating officer, chief financial officer or chief accounting officer of the Company or any other officer of the Company involved principally in its financial administration or its controllership function.
"RESTRICTED INVESTMENT" shall mean any Investment other than a Permitted Investment.
"RESTRICTED PAYMENTS" shall mean any of the following (provided that, notwithstanding anything to the contrary stated below, the term "Restricted Payments" does not include any distribution of capital gains by the Company to its shareholders):
(i) any dividend on any class of the Company's capital stock at any time after the date hereof;
(ii) any other distribution on account of any class of the Company's capital stock;
(iii) any redemption, purchase or other acquisition, direct or indirect, of any shares of the Company's capital stock;
(iv) any unscheduled payment of principal of, or retirement, redemption, purchase or other acquisition of, any subordinated debt, including subordinated debt that is convertible into equity of the Company;
(v) any Restricted Investment;
"S&P" shall mean Standard and Poor's Corporation, or any successor Person.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDER" shall mean and include any Person who owns, beneficially or of record, directly or indirectly, at any time during any year with respect to which a computation is being made 5% or more of the outstanding voting stock of the Company.
"SIGNIFICANT HOLDER" shall mean (i) any BP Party, so long as any BP Party shall hold (or be committed under this Agreement to purchase) any Note, or (ii) any other holder of at least 5% of the aggregate principal amount of the Notes from time to time outstanding.
"SUBSIDIARY" shall mean any corporation or other entity at least 51% of the total combined voting power of all classes of Voting Stock or similar securities of which shall, at the time as of which any determination is being made, be owned by the Company either directly or through Subsidiaries.
"TOTAL ASSETS" shall mean, as at any time of determination, the total assets of a Person recorded on a balance sheet of such Person prepared in accordance with GAAP.
"TRANSFER" shall mean, with respect to any item, the sale, exchange, conveyance, lease, transfer or other disposition of such item.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any part of any Note purchased by you under this Agreement.
"TREASURY" shall mean, for any Note, the Initial Treasury or the then Reset Treasury, as the case may be, upon which the Margin under such Note is added to obtain the interest rate of such Note.
"VOTING STOCK" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency), and, with respect to any other entity, any similar security of such entity.
10C. ACCOUNTING AND LEGAL PRINCIPLES, TERMS AND DETERMINATIONS. All references in this Agreement to "GAAP" shall mean generally accepted accounting principles, as in effect in the United States from time to time. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all
11. MISCELLANEOUS.
11B. EXPENSES. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save you and any Transferee harmless against liability for the payment of, all reasonable out-of-pocket costs and expenses arising in connection with such transactions, including:
(i) (A) all stamp and documentary taxes and similar charges and (B) costs of obtaining a private placement number for the Notes in each case as a result of the execution and delivery of this Agreement or the issuance of the Notes;
(ii) document production and duplication charges and the reasonable fees and expenses of any special counsel engaged by you or such Transferee in connection with this Agreement and the transactions contemplated hereby;
(iii) the costs and expenses, including reasonable attorneys' fees, incurred by you or such Transferee in enforcing any rights under this Agreement or the Notes; and
(iv) any judgment, liability, claim, order, decree, cost, fee, expense, action or obligation resulting directly from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company;
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes are issuable as registered notes without coupons in denominations of at least $1,000,000, except as may be necessary to (i) reflect any principal amount not evenly divisible by $1,000,000 or (ii) enable the registration of transfer by a holder of its entire holding of Notes. The Company shall keep at its principal office a register in which the Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of such transferee or transferees. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's indemnity agreement (which shall be unsecured if such holder is an Institutional Investor whose senior debt securities are rated BBB- or Baa3 or better by S&P or Moody's, respectively, and, otherwise, which shall be unsecured unless the Company requests in writing that such indemnity agreement be secured), or in the case of any such mutilation upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.
11E. TRANSFER OF NOTES; PERSONS DEEMED OWNERS. Subject to the next succeeding sentence, you may transfer any Note or portion thereof in your sole discretion; provided, however, that any Transferee shall be an Institutional Investor. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of, interest on and any Yield-Maintenance Amount payable with respect to such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of you or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings between you and the Company relating to the subject matter hereof, and the Company shall not be affected by notice to the contrary. No provision of this Agreement shall be interpreted for or against any party because that party or its legal representative drafted the provision.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this Agreement contained by or on behalf of either of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not.
11H. NOTICES. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to you, addressed to you at the address specified for such communications in the Purchaser Schedule attached hereto, or at such other address as you shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Company in writing or, if any such other holder shall not have so specified an address to the Company, then addressed to such other holder in care of the last holder of such Note which shall have so specified an address to the Company, and (iii) if to the Company, addressed to it at Prudential Realty Group, 8 Campus Drive, 4th Floor, Arbor Circle South, Parsippany, New Jersey 07054, Attention: John Triece, or at such other address as the Company shall have specified to the holder of each Note in writing; provided, however, that any such communication to the Company may also, at the option of the holder of any Note, be delivered by any other means either to the Company at its address specified above or to any officer of the Company.
11I. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such
extension shall be included in the computation of the interest payable on such Business Day.
11J. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to you or to the Required Holder(s), the determination of such satisfaction shall be made by you or the Required Holder(s), as the case may be, in the reasonable judgment of the Person or Persons making such determination.
11K. INDEMNIFICATION. The Company hereby agrees to indemnify you and your directors, officers, employees and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages and expenses arising out of or by reason of any investigation or litigation or other proceeding relating to this Agreement, the Notes or the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified).
11L. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York.
11M. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11N. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
11O. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.
If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this letter and return the same to the Company, whereupon this letter shall become a binding agreement between the Company and you.
Very truly yours,
PRUDENTIAL REALTY
SECURITIES, INC.
By: /s/ Paul D. Egan ------------------------------------- Name: Paul D. Egan Title: Vice President By:_____________________________________ Name:___________________________________ Title:__________________________________ |
The forgoing Agreement is
hereby accepted as of the
date first above written
FOUR EMBARCADERO CENTER VENTURE,
a California General Partnership
By: BOSTON PROPERTIES LLC,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, as Manager
By: BOSTON PROPERTIES, INC.,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
[FORM OF NOTES]
PRUDENTIAL REALTY SECURITIES, INC.
SENIOR NOTE DUE __________, 200_
No. _____ [Date] $________
FOR VALUE RECEIVED, the undersigned, PRUDENTIAL REALTY SECURITIES, INC.
(the "COMPANY"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to FOUR EMBARCADERO CENTER VENTURE, a
California general partnership, or registered assigns, the principal sum of
___________________________ DOLLARS ($______________) on _____________, ____
(the "Maturity Date"), with interest (computed on the basis of a 360-day year
comprised of 12 30-day months) on the unpaid balance thereof at the rate of
____% per annum from the date hereof through and including _______, ___ (the
"RATE RESET DATE") and thereafter through and including the Maturity Date, at a
rate of interest per annum equal to the sum of (i) ________ basis points, and
(ii) the Reset Treasury, as defined in the Note Agreement. All such interest
shall be payable semiannually on the 15/th/ day of June and December in each
year, commencing with the first such date next succeeding the date hereof, until
the principal hereof shall have become due and payable, and shall be payable on
any overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Yield-Maintenance Amount (as
defined in the Note Agreement), payable semiannually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the lesser of (a) the maximum rate permitted by applicable
law and (b) 2.0% over the interest rate then in effect under this Note in
accordance with the foregoing terms and provisions.
Payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to this Note are to be made in immediately available funds, in lawful money of the United States of America, by wire transfer to [_______] at [NAME OF BANK] in [New York City], ABA #________, Account # __________, or to such other account or place as the registered holder hereof shall designate to the Company in writing.
This Note is one of a series of Senior Notes (the "NOTES") issued pursuant to a Note Agreement, dated as of November 12, 1998 (the "NOTE AGREEMENT"), between the Company and One Embarcadero Center Venture and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Note Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company shall not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Note Agreement.
If an Event of Default, as defined in the Note Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Note Agreement.
The Company and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor or default, notice of intent to accelerate, notice of acceleration (to the extent set forth in the Note Agreement), protest and diligence in collecting.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
PRUDENTIAL REALTY SECURITIES, INC.
By_________________________
[Vice] President
By_________________________
Treasurer
1. Invest only in investment grade fixed income assets that:
a) are current in payment and not in default (subject to cure periods):
b) minimally provide for interest payments which are (i) monthly in the case of "non securities" investments (i.e., whole mortgage loans) or (ii) semi- annually in the case of "securities" investments (i.e., ABS):
c) have a maturity date which is at least thirty months beyond the asset purchase date:
d) include prepayment premiums providing for yield maintenance or the substantial equivalent: and
e) on an individual basis, do not exceed 7% of the total portfolio.
2. Make more than 80% of all investment in assets directly secured by first mortgages. In addition: (a) no such assets may have a "loan to value" ratio which exceeds 80%, and at least 90% of such assets shall have a "loan to value" ratio which is 75% or less and (b) the overall portfolio of such assets shall be geographically diverse.
EXHIBIT 99.15
REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT (this "AGREEMENT") dated as of November 12, 1998, is made and entered into by and among ONE EMBARCADERO CENTER VENTURE, a California general partnership ("PARTNERSHIP"), BOSTON PROPERTIES LLC, a Delaware limited liability company ("BPLLC"), BP EC1 HOLDINGS LLC, a Delaware limited liability company ("HOLDINGS LLC"), and PIC REALTY CORPORATION, a Delaware corporation ("PIC").
A. Pursuant to that certain Master Transaction Agreement dated as of September 28, 1998, by and among Boston Properties Limited Partnership, Boston Properties, Inc., The Prudential Insurance Company of America, PIC, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P. and certain other persons listed on Exhibit A thereto (the "MASTER TRANSACTION AGREEMENT"), BPLLC, Holdings LLC and PIC have become the sole partners of the Partnership, which Partnership is currently governed by that certain Third Amended and Restated Partnership Agreement of One Embarcadero Center Venture of even date herewith (the "PARTNERSHIP AGREEMENT"). All capitalized terms used herein without definition shall have the respective meanings given such terms in the Partnership Agreement.
B. PIC desires to acquire the right to have its entire interest in and to the Partnership (the "PIC INTEREST") redeemed by the Partnership at any time from and after the date hereof in accordance with the terms and provisions of this Agreement below, and BPLLC and Holdings LLC desire to acquire the right to cause the PIC Interest to be redeemed by the Partnership at any time after the date which is ninety (90) days after the date hereof in accordance with the terms and provisions of this Agreement below, all as hereinafter provided.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereby agree as follows:
(D) As used herein, the following terms shall have the following meanings:
"BROKEN LIBOR COST" shall mean the extra payment which the Partnership must make on account of repaying the Equity Redemption Loan on a date other than the end of an
"interest period" because the Redemption Date falls on a date other than the end of an "interest period" (it being acknowledged and agreed by the parties hereto that, if the Redemption Date falls on a date which is the end of an "interest period", there shall be no Broken LIBOR Cost for purposes of this Agreement). The Managing Partner shall, at the request of PIC, provide PIC with a schedule showing the end of all "interest periods" for purposes of timing the Redemption Distribution and PIC may rely on such schedule for purposes of designating a Redemption Date.
"FAIR MARKET VALUE OF THE PIC INTEREST" shall equal, on the Redemption Date, the sum of $75,168,203 (which amount equals PIC's Percentage Interest immediately prior to the Redemption Distribution multiplied by the NMV (defined in the Master Transaction Agreement) of the Property as of the date hereof, adjusted to:
"LEASING COSTS" shall mean any and all (i) tenant improvement allowances, move-in allowances, brokerage commissions, expenses incurred or to be incurred for repairs, improvements, equipment, painting, decorating, partitioning and other items to satisfy the tenant's requirements for the commencement of the applicable lease, (ii) the cost of removal and/or abatement of asbestos or other hazards or toxic substances located in the demised space in violation of law and as required in order to satisfy the tenant's requirements for the commencement of the applicable lease, (iii) rent concessions as stated in the respective lease (and applicable lease documents) relating to the demised space provided the tenant has the right to take possession of such demised space during the period of such rent concessions, (iv) base building modifications required by the applicable lease, and (v) expenses incurred or to be incurred for the purpose of satisfying or terminating the obligations of a tenant to the landlord under another lease.
"NEW LEASING COSTS" shall mean all Leasing Costs incurred by the Partnership in connection with any new Leases executed after the date hereof and prior to the Redemption Date.
"OPERATING ASSETS" shall mean all real property, improvements, leases, licenses, fixtures and tangible and intangible personal property owned by the Partnership on the date hereof other than cash, deposit accounts and money.
date shall be at least five (5) business days after the giving of such Partnership Redemption Notice).
(C) Concurrently with the Redemption Distribution, the Partnership shall assign to PIC, and PIC shall accept and assume, the Prudential Guarantied Loan and all instruments and agreements relating thereto, and PIC shall thereafter be subject to all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date (except that PIC shall also assume and be subject to the obligation to pay all accrued but unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent the same has not yet become due and payable under the Prudential Guarantied Loan Documents); and the lender under such documents shall release the Partnership, in a writing delivered to the Partnership, from all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date and from the obligation to pay any accrued and unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent such interest payment has not yet become due and payable under the Prudential Guarantied Loan Documents.
(E) Within thirty (30) days after the end of the calendar month in which the Redemption Date occurs, the Partnership and PIC shall obtain all necessary and complete information regarding the Operating Profits or Operating Losses of the Partnership accruing from the date hereof through and including the Redemption Date and shall agree upon and make any necessary adjustments to the estimated Operating Profits or Operating Losses of the Partnership which were utilized in calculating the Fair Market Value of the PIC Interest on the Redemption Date. If, after making such adjustments, the actual Operating Profits of the Partnership are greater than the estimated Operating Profits utilized to determine the Fair Market Value of the PIC Interest on the Redemption Date, or the actual Operating Losses are less than the estimated Operating Losses, as the case may be, then the Partnership shall promptly make a cash payment
to PIC equal to the difference. If, after making such adjustments, the actual Operating Profits of the Partnership are less than the estimated Operating Profits utilized to determine the Fair Market Value of the PIC Interest on the Redemption Date, or the actual Operating Losses are greater than the estimated Operating Losses, as the case may be, then PIC shall promptly make a cash payment to the Partnership equal to the difference. In addition to the foregoing, if the Adjusted NEV of the Property has not been determined pursuant to Exhibit V of the Master Transaction Agreement as of the Redemption Date, then promptly following such determination of Adjusted NEV of the Property, if any, pursuant to said Exhibit V, if the Revised NEV of the Property exceeds the NEV of the Property, the Partnership shall pay to PIC, in cash, a sum equal to such difference, and if the NEV of the Property exceeds the Revised NEV of the Property, then PIC shall pay to the Partnership, in cash, a sum equal to such difference.
(A) BPLLC, Holdings LLC, PIC and the Partnership (on behalf of themselves and their respective successors and assigns) each hereby covenants and agrees with each other that, during the period of time from the date hereof through and including the second (2nd) anniversary of the Redemption Date, (i) none of the Equity Redemption Loan obtained by the Partnership on the date hereof pursuant to the terms of the Partnership Agreement or any debt replacing any such Equity Redemption Loan in accordance with the terms and provisions of the Partnership Agreement, shall be repaid by any Capital Contributions made by any Partner of the Partnership, (ii) the Partnership shall at all times maintain and continue its existence as a general partnership under the laws of the State of California and shall not be dissolved, wound-up or terminated during such period of time, and (iii) except as otherwise expressly provided in this Agreement, the Partnership shall not distribute all or any portion of its Operating Assets to any Partner. Each of the afore-mentioned Persons (on behalf of themselves and their Affiliates) hereby covenants not to commit any act in violation of this covenant (or to permit any successor or assign of any such Person to commit any such act).
(A) If the PIC Interest is redeemed as contemplated by this Agreement and the Internal Revenue Service ("IRS") subsequently questions, or determines that it will examine,
investigate or audit any federal income tax returns filed by the Partnership in respect of any taxable year of the Partnership ending in the calendar year in which the Redemption Distribution occurred (the "SUBJECT RETURNS"), then (i) the then Partners of the Partnership shall cause the Partnership to promptly furnish PIC with copies of all written notices received from the IRS, and (ii) PIC shall have the right, at its expense, to represent the Partnership (with professionals of its choice) in dealing with the IRS in connection with any such questions, examination, investigation or audit and in connection with any judicial or administrative proceedings related thereto, in each case only to the extent that they involve any items ("PIC ITEMS") which could have a material impact on PIC, and to make decisions regarding or relating to all PIC Items, except that PIC shall not make any decisions which could materially adversely impact BPLLC and/or Holdings LLC without the prior written consent of BPLLC and Holdings LLC. Each of BPLLC and Holdings LLC agrees (on behalf of itself and its successors and assigns) that neither it nor the Partnership will settle with the IRS with respect to any PIC Item without the prior written consent of PIC, which consent will not be unreasonably withheld.
(C) In accordance with Treasury Regulation Section 1.706-1(c)(ii), for the taxable year of the Partnership in which the Redemption Distribution occurs, PIC's distributive share of the items described in Section 702(a) of the Internal Revenue Code of 1986, as amended, will be determined by reference to an interim closing of the books. In accordance with Treasury Regulation Section 1.751-1(c)(4)(iii), the Partnership, BPLLC, Holdings LLC, and PIC agree that, on the Redemption Date, the fair market value of the Partnership's Section 1245 property (as defined in Section 1245(a)(3) of the Internal Revenue Code of 1986, as amended) is equal to the adjusted tax basis of such property.
then PIC shall have the right, exercisable by written notice to the other Partners of the Partnership, to appoint itself as the sub-managing partner solely for the purpose of making the Redemption Distribution. In such event, PIC shall be solely authorized and empowered, and its sole responsibility shall be, to make the Redemption Distribution on, or as soon as practicable after, the Redemption Date. The Managing Partner shall continue to act as the managing partner under the Partnership Agreement during such time and shall fully and faithfully discharge all obligations and duties of the managing partner under the Partnership Agreement other than those pertaining to the Redemption Distribution (which will be performed and discharged by PIC on behalf of the Partnership). Immediately after the Redemption Distribution shall have been accomplished, PIC shall resign as sub managing partner of the Partnership. Each party hereto further appoints PIC as the attorney-in-fact of the Partnership to prepare, sign, file and record any instruments, agreements or other documents, and to take any other action deemed necessary, useful or desirable by PIC in order to make the Redemption Distribution pursuant to this Agreement in the event that the Managing Partner of the Partnership or the Partnership fails to timely discharge its obligations hereunder within the time periods set forth herein.
BPLLC, Holdings LLC or the Partnership: Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116-3495 10 |
Attn: General Counsel Fax: (617) 421-1555 with a copy to: Goulston & Storrs, P.C. 400 Atlantic Avenue Boston, Massachusetts 02110-3333 Attn: Eli Rubenstein, Esq. Fax: (617) 574-4112 PIC or the Partnership: Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attn: John R. Triece Fax: (201) 683-1797 with a copy to: Prudential Insurance Company of America Four Embarcadero Center Suite 2700 San Francisco, California 94111 Attn: Harry Mixon, Esq. Fax: (415) 956-2197 and a copy to: O'Melveny & Myers LLP Embarcadero Center West 275 Battery Street San Francisco, California 94111 Attn: Stephen A. Cowan, Esq. |
Fax: (415) 984-8701
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date and year first written above.
PARTNERSHIP: ONE EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
BPLLC: BOSTON PROPERTIES LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
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HOLDINGS LLC: BP EC1 HOLDINGS LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, its Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
PIC: PIC REALTY CORPORATION,
a Delaware corporation
By: /s/ Gary L. Frazier --------------------------------- Name: ______________________________ Title: _____________________________ |
EXHIBIT A
The Fair Market Value of each Investment Note shall equal the aggregate Remaining Cash Flow for such Investment Note discounted from each respective scheduled payment due date to the Redemption Date at a discount factor equal to the Discount Rate for such Investment Note. Notwithstanding the foregoing, if on the Determination Date an Investment Loan Borrower Credit Event exists, then the Managing Partner shall appoint an investment banking firm of national recognition (which will be satisfactory to PIC in its reasonable discretion) to determine the change in the Fair Market Value of the Investment Notes for purposes of this Agreement. In the event that an investment banking firm is appointed to determine the change in the Fair Market Value of any Investment Note as of the Determination Date pursuant to the preceding sentence, such investment banking firm shall be instructed to determine the change in the Fair Market Value of such Investment Note based on the following four factors: (i) changes in market interest rates since the date of funding of the Investment Note, (ii) the time period remaining from the Determination Date until the earlier of the next Rate Reset Date of such Investment Note and the maturity of the Investment Note, (iii) the Remaining Cash Flow (as defined below) of the Investment Note, and (iv) changes in the credit quality of the Investment Note since the date of funding thereof. The parties agree that an acceptable investment banking firm would be Goldman Sachs or Merrill Lynch & Company. As used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of the following events: (x) the credit rating of the Investment Notes has been downgraded from the credit rating of the Investment Notes on the date hereof by both of the Rating Agencies, or (y) in the reasonable discretion of the Managing Partner, there has been, as compared to the date hereof, a material diminution or degradation in the value of the assets of the Investment Loan Borrower, or the ability of the Investment Loan Borrower to pay its outstanding obligations, as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Investment Notes is determined and shall occur at noon (New York City time) on the business day immediately prior to the Redemption Date (which Determination Date must be the calendar day immediately preceding the Redemption Date).
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Investment Note, the Margin then in effect (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Investment Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury of such Investment Note. Such offered-side yield to maturity shall be determined on or about noon on the Determination Date and PIC and the Partnership shall cooperate in the determination of such Reinvestment Rate.
EXHIBIT B
THIS CERTIFICATE (this "CERTIFICATE") is made and dated as of ___________, by ONE EMBARCADERO CENTER VENTURE, a California general partnership ("PARTNERSHIP"), for the benefit of PIC REALTY CORPORATION, a Delaware corporation ("PIC").
Pursuant to that certain Redemption Agreement dated as of November 12, 1998 (the "REDEMPTION AGREEMENT"), the Partnership (and its partners other than PIC) and PIC have been granted certain rights to cause PIC's interest in the Partnership to be fully redeemed in exchange for the distribution of all or a portion of the Investment Notes and, if applicable pursuant to the terms and provisions of the Redemption Agreement, cash to PIC. All capitalized terms used herein without definition shall have the respective meanings given such terms in the Redemption Agreement.
Concurrently herewith and on the date hereof, the Partnership is distributing the Investment Notes (or a portion thereof) to PIC in accordance with the applicable terms and provisions of the Redemption Agreement.
With respect to the distribution of such Investment Notes, the Partnership hereby represents and warrants to PIC as of the date hereof as follows:
(a) Subject to the rights of The Prudential Insurance Company of America or a permitted assignee or designee ("OPTIONEE") under that certain Option and Put Agreement dated as of November 12, 1998 (the "OPTION AGREEMENT"), the Partnership is the sole owner of the Investment Notes. Further, the Investment Notes delivered to PIC on the date hereof pursuant to the Redemption Agreement are free and clear of all liens and third party interests of any kind or nature other than the interests and rights of Optionee under the Option Agreement. The Partnership has not amended, modified, terminated or otherwise by written agreement altered the Investment Notes or the Investment Loan Documents except as specifically disclosed to PIC in writing prior to the date hereof and except for the division of any Investment Note pursuant to Section 2(a) of the Redemption Agreement.
(b) The Partnership has not assigned or transferred the Investment Notes or any of the Investment Loan Documents (except to secure the Equity Redemption Loan, which assignment has been or simultaneously herewith is being, released in full in writing), nor are there any agreements to assign or convey any portion of the Investment Notes or such Investment Loan Documents to any Person other than PIC and Optionee (in accordance with the Option Agreement).
(c) The Partnership has all requisite power and authority to execute and deliver all instruments and other documents to be executed and delivered by the Partnership in connection with the distribution of the Investment Notes to PIC on the date hereof and to execute this Certificate.
(d) The Partnership is a duly formed general partnership under the laws of the State of California, and is legally authorized to execute, deliver and perform the Redemption Distribution and this Certificate, and this Certificate is legal, valid and binding on the Partnership enforceable against it in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(e) The execution of this Certificate and the performance of the Redemption Distribution by the Partnership will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which the Partnership is subject, nor violate any agreement or contract to which the Partnership is a party or by which the Partnership is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Partnership of, or compliance by the Partnership with, the Certificate or the consummation of the Redemption Distribution, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties are personal to PIC and no Person other than PIC shall be entitled to bring any action based thereon. Each of the foregoing representations and warranties shall survive the consummation of the Redemption Distribution.
The Partnership hereby acknowledges that the acceptance of the Redemption Distribution and the Investment Notes by PIC was made and will have been made in material reliance by PIC on the aforestated representations and warranties of the Partnership.
IN WITNESS WHEREOF, the Partnership has caused its duly authorized representative to execute this Certificate as of the date first above written.
PARTNERSHIP: ONE EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By:____________________________
Name:__________________________
Title:_________________________
EXHIBIT 99.16
REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT (this "AGREEMENT") dated as of November 12, 1998, is made and entered into by and among EMBARCADERO CENTER ASSOCIATES, a California general partnership ("PARTNERSHIP"), BOSTON PROPERTIES LLC, a Delaware limited liability company ("BPLLC"), BP EC2 HOLDINGS LLC, a Delaware limited liability company ("HOLDINGS LLC"), and PIC REALTY CORPORATION, a Delaware corporation ("PIC").
A. Pursuant to that certain Master Transaction Agreement dated as of September 28, 1998, by and among Boston Properties Limited Partnership, Boston Properties, Inc., The Prudential Insurance Company of America, PIC, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P. and certain other persons listed on Exhibit A thereto (the "MASTER TRANSACTION AGREEMENT"), BPLLC, Holdings LLC and PIC have become the sole partners of the Partnership, which Partnership is currently governed by that certain Third Amended and Restated Partnership Agreement of Embarcadero Center Associates of even date herewith (the "PARTNERSHIP AGREEMENT"). All capitalized terms used herein without definition shall have the respective meanings given such terms in the Partnership Agreement.
B. PIC desires to acquire the right to have its entire interest in and to the Partnership (the "PIC INTEREST") redeemed by the Partnership at any time from and after the date hereof in accordance with the terms and provisions of this Agreement below, and BPLLC and Holdings LLC desire to acquire the right to cause the PIC Interest to be redeemed by the Partnership at any time after the date which is ninety (90) days after the date hereof in accordance with the terms and provisions of this Agreement below, all as hereinafter provided.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereby agree as follows:
(D) As used herein, the following terms shall have the following meanings:
"BROKEN LIBOR COST" shall mean the extra payment which the Partnership must make on account of repaying the Equity Redemption Loan on a date other than the end of an "interest period" because the Redemption Date falls on a date other than the end of an "interest period" (it being acknowledged and agreed by the parties hereto that, if the Redemption Date falls on a date which is the end of an "interest period", there shall be no Broken LIBOR Cost for purposes of this Agreement). The Managing Partner shall, at the request of PIC, provide PIC with a schedule showing the end of all "interest periods" for purposes of timing the Redemption Distribution and PIC may rely on such schedule for purposes of designating a Redemption Date.
"FAIR MARKET VALUE OF THE PIC INTEREST" shall equal, on the Redemption Date, the sum of $96,178,575 (which amount equals PIC's Percentage Interest immediately prior to the Redemption Distribution multiplied by the NMV (defined in the Master Transaction Agreement) of the Property as of the date hereof, adjusted to:
"LEASING COSTS" shall mean any and all (i) tenant improvement allowances, move-in allowances, brokerage commissions, expenses incurred or to be incurred for repairs, improvements, equipment, painting, decorating, partitioning and other items to satisfy the tenant's requirements for the commencement of the applicable lease, (ii) the cost of removal and/or abatement of asbestos or other hazards or toxic substances located in the demised space in violation of law and as required in order to satisfy the tenant's requirements for the commencement of the applicable lease, (iii) rent concessions as stated in the respective lease (and applicable lease documents) relating to the demised space provided the tenant has the right to take possession of such demised space during the period of such rent concessions, (iv) base building modifications required by the applicable lease, and (v) expenses incurred or to be incurred for the purpose of satisfying or terminating the obligations of a tenant to the landlord under another lease.
"NEW LEASING COSTS" shall mean all Leasing Costs incurred by the Partnership in connection with any new Leases executed after the date hereof and prior to the Redemption Date.
"OPERATING ASSETS" shall mean all real property, improvements, leases, licenses, fixtures and tangible and intangible personal property owned by the Partnership on the date hereof other than cash, deposit accounts and money.
"UNREALIZED GAIN" shall mean the excess (if any) of (x) the aggregate Fair Market Value of all Investment Notes (provided that, in calculating the Fair Market Value of the Investment Notes for purposes of determining Unrealized Gain, the accrued and unpaid interest
Note and otherwise having identical terms, so that one of such notes (when taken together with the other Investment Notes distributed to PIC in accordance with the order of priority set forth hereinabove) will have a Fair Market Value equal to the Redemption Amount and such note shall be assigned to PIC by the Partnership. If less than all of the Investment Notes are assigned to PIC in connection with the Redemption Distribution as provided above, the Investment Note(s) retained by the Partnership shall be collectively referred to herein as the "REMAINDER NOTES".
(C) Concurrently with the Redemption Distribution, the Partnership shall assign to PIC, and PIC shall accept and assume, the Prudential Guarantied Loan and all instruments and agreements relating thereto, and PIC shall thereafter be subject to all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date (except that PIC shall also assume and be subject to the obligation to pay all accrued but unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent the same has not yet become due and payable under the Prudential Guarantied Loan Documents); and the lender under such documents shall release the Partnership, in a writing delivered to the Partnership, from all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date and from the obligation to pay any accrued and unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent such interest payment has not yet become due and payable under the Prudential Guarantied Loan Documents.
(E) Within thirty (30) days after the end of the calendar month in which the Redemption Date occurs, the Partnership and PIC shall obtain all necessary and complete information regarding the Operating Profits or Operating Losses of the Partnership accruing from the date hereof through and including the Redemption Date and shall agree upon and make any necessary adjustments to the estimated Operating Profits or Operating Losses of the Partnership which were utilized in calculating the Fair Market Value of the PIC Interest on the Redemption Date. If, after making such adjustments, the actual Operating Profits of the Partnership are greater than the estimated Operating Profits utilized to determine the Fair Market Value of the PIC Interest on the Redemption Date, or the actual Operating Losses are less than the estimated Operating Losses, as the case may be, then the Partnership shall promptly make a cash payment to PIC equal to the difference. If, after making such adjustments, the actual Operating Profits of the Partnership are less than the estimated Operating Profits utilized to determine the Fair Market Value of the PIC Interest on the Redemption Date, or the actual Operating Losses are greater than the estimated Operating Losses, as the case may be, then PIC shall promptly make a cash payment to the Partnership equal to the difference. In addition to the foregoing, if the Adjusted NEV of the Property has not been determined pursuant to Exhibit V of the Master Transaction Agreement
as of the Redemption Date, then promptly following such determination of Adjusted NEV of the Property, if any, pursuant to said Exhibit V, if the Revised NEV of the Property exceeds the NEV of the Property, the Partnership shall pay to PIC, in cash, a sum equal to such difference, and if the NEV of the Property exceeds the Revised NEV of the Property, then PIC shall pay to the Partnership, in cash, a sum equal to such difference.
(A) BPLLC, Holdings LLC, PIC and the Partnership (on behalf of themselves and their respective successors and assigns) each hereby covenants and agrees with each other that, during the period of time from the date hereof through and including the second (2nd) anniversary of the Redemption Date, (i) none of the Equity Redemption Loan obtained by the Partnership on the date hereof pursuant to the terms of the Partnership Agreement or any debt replacing any such Equity Redemption Loan in accordance with the terms and provisions of the Partnership Agreement, shall be repaid by any Capital Contributions made by any Partner of the Partnership, (ii) the Partnership shall at all times maintain and continue its existence as a general partnership under the laws of the State of California and shall not be dissolved, wound-up or terminated during such period of time, and (iii) except as otherwise expressly provided in this Agreement, the Partnership shall not distribute all or any portion of its Operating Assets to any Partner. Each of the afore-mentioned Persons (on behalf of themselves and their Affiliates) hereby covenants not to commit any act in violation of this covenant (or to permit any successor or assign of any such Person to commit any such act).
(A) If the PIC Interest is redeemed as contemplated by this Agreement and the Internal Revenue Service ("IRS") subsequently questions, or determines that it will examine, investigate or audit any federal income tax returns filed by the Partnership in respect of any taxable year of the Partnership ending in the calendar year in which the Redemption Distribution occurred (the "SUBJECT RETURNS"), then (i) the then Partners of the Partnership shall cause the Partnership to promptly furnish PIC with copies of all written notices received from the IRS, and (ii) PIC shall have the right, at its expense, to represent the Partnership (with professionals of its choice) in dealing with the IRS in connection with any such questions, examination, investigation
or audit and in connection with any judicial or administrative proceedings related thereto, in each case only to the extent that they involve any items ("PIC ITEMS") which could have a material impact on PIC, and to make decisions regarding or relating to all PIC Items, except that PIC shall not make any decisions which could materially adversely impact BPLLC and/or Holdings LLC without the prior written consent of BPLLC and Holdings LLC. Each of BPLLC and Holdings LLC agrees (on behalf of itself and its successors and assigns) that neither it nor the Partnership will settle with the IRS with respect to any PIC Item without the prior written consent of PIC, which consent will not be unreasonably withheld.
(C) In accordance with Treasury Regulation Section 1.706-1(c)(ii), for the taxable year of the Partnership in which the Redemption Distribution occurs, PIC's distributive share of the items described in Section 702(a) of the Internal Revenue Code of 1986, as amended, will be determined by reference to an interim closing of the books. In accordance with Treasury Regulation Section 1.751-1(c)(4)(iii), the Partnership, BPLLC, Holdings LLC, and PIC agree that, on the Redemption Date, the fair market value of the Partnership's Section 1245 property (as defined in Section 1245(a)(3) of the Internal Revenue Code of 1986, as amended) is equal to the adjusted tax basis of such property.
and duties of the managing partner under the Partnership Agreement other than those pertaining to the Redemption Distribution (which will be performed and discharged by PIC on behalf of the Partnership). Immediately after the Redemption Distribution shall have been accomplished, PIC shall resign as sub managing partner of the Partnership. Each party hereto further appoints PIC as the attorney-in-fact of the Partnership to prepare, sign, file and record any instruments, agreements or other documents, and to take any other action deemed necessary, useful or desirable by PIC in order to make the Redemption Distribution pursuant to this Agreement in the event that the Managing Partner of the Partnership or the Partnership fails to timely discharge its obligations hereunder within the time periods set forth herein.
BPLLC, Holdings LLC or the Partnership: Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116-3495 Attn: General Counsel Fax: (617) 421-1555 with a copy to: Goulston & Storrs, P.C. 400 Atlantic Avenue Boston, Massachusetts 02110-3333 10 |
Attn: Eli Rubenstein, Esq. Fax: (617) 574-4112 PIC or the Partnership: Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attn: John R. Triece Fax: (201) 683-1797 with a copy to: Prudential Insurance Company of America Four Embarcadero Center Suite 2700 San Francisco, California 94111 Attn: Harry Mixon, Esq. Fax: (415) 956-2197 and a copy to: O'Melveny & Myers LLP Embarcadero Center West 275 Battery Street San Francisco, California 94111 Attn: Stephen A. Cowan, Esq. |
Fax: (415) 984-8701
with full power and authority to bind the party on whose behalf he, she or it is executing this Agreement to the terms hereof.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date and year first written above.
PARTNERSHIP: EMBARCADERO CENTER ASSOCIATES,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
BPLLC: BOSTON PROPERTIES LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
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HOLDINGS LLC: BP EC2 HOLDINGS LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
PIC: PIC REALTY CORPORATION,
a Delaware corporation
By: /s/ Gary L. Frazier ----------------------------------- Name: ________________________________ Title: _______________________________ |
EXHIBIT A
The Fair Market Value of each Investment Note shall equal the aggregate Remaining Cash Flow for such Investment Note discounted from each respective scheduled payment due date to the Redemption Date at a discount factor equal to the Discount Rate for such Investment Note. Notwithstanding the foregoing, if on the Determination Date an Investment Loan Borrower Credit Event exists, then the Managing Partner shall appoint an investment banking firm of national recognition (which will be satisfactory to PIC in its reasonable discretion) to determine the change in the Fair Market Value of the Investment Notes for purposes of this Agreement. In the event that an investment banking firm is appointed to determine the change in the Fair Market Value of any Investment Note as of the Determination Date pursuant to the preceding sentence, such investment banking firm shall be instructed to determine the change in the Fair Market Value of such Investment Note based on the following four factors: (i) changes in market interest rates since the date of funding of the Investment Note, (ii) the time period remaining from the Determination Date until the earlier of the next Rate Reset Date of such Investment Note and the maturity of the Investment Note, (iii) the Remaining Cash Flow (as defined below) of the Investment Note, and (iv) changes in the credit quality of the Investment Note since the date of funding thereof. The parties agree that an acceptable investment banking firm would be Goldman Sachs or Merrill Lynch & Company. As used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of the following events: (x) the credit rating of the Investment Notes has been downgraded from the credit rating of the Investment Notes on the date hereof by both of the Rating Agencies, or (y) in the reasonable discretion of the Managing Partner, there has been, as compared to the date hereof, a material diminution or degradation in the value of the assets of the Investment Loan Borrower, or the ability of the Investment Loan Borrower to pay its outstanding obligations, as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Investment Notes is determined and shall occur at noon (New York City time) on the third business day after the date that the PIC Redemption Notice or Partnership Redemption Notice, as the case may be, is received by the addressee thereof.
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Investment Note, the Margin then in effect (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Investment Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury of such Investment Note. Such offered-side yield to maturity shall be determined on or about noon on the Determination Date and PIC and the Partnership shall cooperate in the determination of such Reinvestment Rate.
"REMAINING CASH FLOW" shall mean, for any Investment Note, the aggregate amount of all accrued and unpaid interest, principal and other payments under such Investment Note on the Redemption Date and all principal, interest and other payments that will become due and owing under such Investment Note from time to time from and after the Redemption Date through (x) the next Rate Reset Date of such Investment Note (the "NEXT RESET DATE"), if the Fair Market Value is determined prior to such Rate Reset Date, or (y) the maturity of such Investment Note (including, without limitation, any balloon or other principal payments due and owing on said maturity date), if the Fair Market Value is determined after all Rate Reset Dates provided in such Investment Note, as each such payment would become due and payable pursuant to the terms of the applicable Investment Note and the Investment Loan Documents (but assuming, if
EXHIBIT B
THIS CERTIFICATE (this "CERTIFICATE") is made and dated as of ____________, 1998 by EMBARCADERO CENTER ASSOCIATES, a California general partnership ("PARTNERSHIP"), for the benefit of PIC REALTY CORPORATION, a Delaware corporation ("PIC").
Pursuant to that certain Redemption Agreement dated as of November 12, 1998 (the "REDEMPTION AGREEMENT"), the Partnership (and its partners other than PIC) and PIC have been granted certain rights to cause PIC's interest in the Partnership to be fully redeemed in exchange for the distribution of all or a portion of the Investment Notes and, if applicable pursuant to the terms and provisions of the Redemption Agreement, cash to PIC. All capitalized terms used herein without definition shall have the respective meanings given such terms in the Redemption Agreement.
Concurrently herewith and on the date hereof, the Partnership is distributing the Investment Notes (or a portion thereof) to PIC in accordance with the applicable terms and provisions of the Redemption Agreement.
With respect to the distribution of such Investment Notes, the Partnership hereby represents and warrants to PIC as of the date hereof as follows:
(a) Subject to the rights of The Prudential Insurance Company of America or a permitted assignee or designee ("OPTIONEE") under that certain Option and Put Agreement dated as of November 12, 1998 (the "OPTION AGREEMENT"), the Partnership is the sole owner of the Investment Notes. Further, the Investment Notes delivered to PIC on the date hereof pursuant to the Redemption Agreement are free and clear of all liens and third party interests of any kind or nature other than the interests and rights of Optionee under the Option Agreement. The Partnership has not amended, modified, terminated or otherwise by written agreement altered the Investment Notes or the Investment Loan Documents except as specifically disclosed to PIC in writing prior to the date hereof and except for the division of any Investment Note pursuant to Section 2(a) of the Redemption Agreement.
(b) The Partnership has not assigned or transferred the Investment Notes or any of the Investment Loan Documents (except to secure the Equity Redemption Loan, which assignment has been or simultaneously herewith is being, released in full in writing), nor are there any agreements to assign or convey any portion of the Investment Notes or such Investment Loan Documents to any Person other than PIC and Optionee (in accordance with the Option Agreement).
(c) The Partnership has all requisite power and authority to execute and deliver all instruments and other documents to be executed and delivered by the Partnership in connection with the distribution of the Investment Notes to PIC on the date hereof and to execute this Certificate.
(d) The Partnership is a duly formed general partnership under the laws of the State of California, and is legally authorized to execute, deliver and perform the Redemption Distribution and this Certificate, and this Certificate is legal, valid and binding on the Partnership enforceable against it in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(e) The execution of this Certificate and the performance of the Redemption Distribution by the Partnership will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which the Partnership is subject, nor violate any agreement or contract to which the Partnership is a party or by which the Partnership is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Partnership of, or compliance by the Partnership with, the Certificate or the consummation of the Redemption Distribution, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties are personal to PIC and no Person other than PIC shall be entitled to bring any action based thereon. Each of the foregoing representations and warranties shall survive the consummation of the Redemption Distribution.
The Partnership hereby acknowledges that the acceptance of the Redemption Distribution and the Investment Notes by PIC was made and will have been made in material reliance by PIC on the aforestated representations and warranties of the Partnership.
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IN WITNESS WHEREOF, the Partnership has caused its duly authorized representative to execute this Certificate as of the date first above written.
PARTNERSHIP: EMBARCADERO CENTER ASSOCIATES,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By:__________________________
Name:________________________
Title:_______________________
EXHIBIT 99.17
REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT (this "AGREEMENT") dated as of November 12, 1998, is made and entered into by and among THREE EMBARCADERO CENTER VENTURE, a California general partnership ("PARTNERSHIP"), BOSTON PROPERTIES LLC, a Delaware limited liability company ("BPLLC"), BP EC3 HOLDINGS LLC, a Delaware limited liability company ("HOLDINGS LLC"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL").
A. Pursuant to that certain Master Transaction Agreement dated as of September 28, 1998, by and among Boston Properties Limited Partnership, Boston Properties, Inc., PIC Realty Corporation, a Delaware corporation, Prudential, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P. and certain other persons listed on Exhibit A thereto (the "MASTER TRANSACTION AGREEMENT"), BPLLC, Holdings LLC and Prudential have become the sole partners of the Partnership, which Partnership is currently governed by that certain Second Amended and Restated Partnership Agreement of Three Embarcadero Center Venture of even date herewith (the "PARTNERSHIP AGREEMENT"). All capitalized terms used herein without definition shall have the respective meanings given such terms in the Partnership Agreement.
B. Prudential desires to acquire the right to have its entire interest in and to the Partnership (the "PRUDENTIAL INTEREST") redeemed by the Partnership at any time from and after the date hereof in accordance with the terms and provisions of this Agreement below, and BPLLC and Holdings LLC desire to acquire the right to cause the Prudential Interest to be redeemed by the Partnership at any time after the date which is ninety (90) days after the date hereof in accordance with the terms and provisions of this Agreement below, all as hereinafter provided.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereby agree as follows:
(D) As used herein, the following terms shall have the following meanings:
"BROKEN LIBOR COST" shall mean the extra payment which the Partnership must make on account of repaying the Equity Redemption Loan on a date other than the end of an "interest period" because the Redemption Date falls on a date other than the end of an "interest period" (it being acknowledged and agreed by the parties hereto that, if the Redemption Date falls on a date which is the end of an "interest period", there shall be no Broken LIBOR Cost for purposes of this Agreement). The Managing Partner shall, at the request of Prudential, provide Prudential with a schedule showing the end of all "interest periods" for purposes of timing the Redemption Distribution and Prudential may rely on such schedule for purposes of designating a Redemption Date.
"FAIR MARKET VALUE OF THE PRUDENTIAL INTEREST" shall equal, on the Redemption Date, the sum of $66,688,976 (which amount equals Prudential's Percentage Interest immediately prior to the Redemption Distribution multiplied by the NMV (defined in the Master Transaction Agreement) of the Property as of the date hereof, adjusted to:
Guarantied Loan will be assumed by Prudential in connection with the Redemption Distribution);
"LEASING COSTS" shall mean any and all (i) tenant improvement allowances, move-in allowances, brokerage commissions, expenses incurred or to be incurred for repairs, improvements, equipment, painting, decorating, partitioning and other items to satisfy the tenant's requirements for the commencement of the applicable lease, (ii) the cost of removal and/or abatement of asbestos or other hazards or toxic substances located in the demised space in violation of law and as required in order to satisfy the tenant's requirements for the commencement of the applicable lease, (iii) rent concessions as stated in the respective lease (and applicable lease documents) relating to the demised space provided the tenant has the right to take possession of such demised space during the period of such rent concessions, (iv) base building
modifications required by the applicable lease, and (v) expenses incurred or to be incurred for the purpose of satisfying or terminating the obligations of a tenant to the landlord under another lease.
"NEW LEASING COSTS" shall mean all Leasing Costs incurred by the Partnership in connection with any new Leases executed after the date hereof and prior to the Redemption Date.
"OPERATING ASSETS" shall mean all real property, improvements, leases, licenses, fixtures and tangible and intangible personal property owned by the Partnership on the date hereof other than cash, deposit accounts and money.
"REDEMPTION DATE" shall mean the earlier of (x) the date specified in a Prudential Redemption Notice given by Prudential to the Managing Partner
(C) Concurrently with the Redemption Distribution, the Partnership shall assign to Prudential, and Prudential shall accept and assume, the Prudential Guarantied Loan and all instruments and agreements relating thereto, and Prudential shall thereafter be subject to all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date (except that Prudential shall also assume and be subject to the obligation to pay all accrued but unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent the same has not yet become due and payable under the Prudential Guarantied Loan Documents); and the lender under such documents shall release the Partnership, in a writing delivered to the Partnership, from all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date and from the obligation to pay any accrued and unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent such interest payment has not yet become due and payable under the Prudential Guarantied Loan Documents.
(E) Within thirty (30) days after the end of the calendar month in which the Redemption Date occurs, the Partnership and Prudential shall obtain all necessary and complete information regarding the Operating Profits or Operating Losses of the Partnership accruing from
the date hereof through and including the Redemption Date and shall agree upon and make any necessary adjustments to the estimated Operating Profits or Operating Losses of the Partnership which were utilized in calculating the Fair Market Value of the Prudential Interest on the Redemption Date. If, after making such adjustments, the actual Operating Profits of the Partnership are greater than the estimated Operating Profits utilized to determine the Fair Market Value of the Prudential Interest on the Redemption Date, or the actual Operating Losses are less than the estimated Operating Losses, as the case may be, then the Partnership shall promptly make a cash payment to Prudential equal to the difference. If, after making such adjustments, the actual Operating Profits of the Partnership are less than the estimated Operating Profits utilized to determine the Fair Market Value of the Prudential Interest on the Redemption Date, or the actual Operating Losses are greater than the estimated Operating Losses, as the case may be, then Prudential shall promptly make a cash payment to the Partnership equal to the difference. In addition to the foregoing, if the Adjusted NEV of the Property has not been determined pursuant to Exhibit V of the Master Transaction Agreement as of the Redemption Date, then promptly following such determination of Adjusted NEV of the Property, if any, pursuant to said Exhibit V, if the Revised NEV of the Property exceeds the NEV of the Property, the Partnership shall pay to Prudential, in cash, a sum equal to such difference, and if the NEV of the Property exceeds the Revised NEV of the Property, then Prudential shall pay to the Partnership, in cash, a sum equal to such difference.
(A) BPLLC, Holdings LLC, Prudential and the Partnership (on behalf of themselves and their respective successors and assigns) each hereby covenants and agrees with each other that, during the period of time from the date hereof through and including the second (2nd) anniversary of the Redemption Date, (i) none of the Equity Redemption Loan obtained by the Partnership on the date hereof pursuant to the terms of the Partnership Agreement or any debt replacing any such Equity Redemption Loan in accordance with the terms and provisions of the Partnership Agreement, shall be repaid by any Capital Contributions made by any Partner of the Partnership, (ii) the Partnership shall at all times maintain and continue its existence as a general partnership under the laws of the State of California and shall not be dissolved, wound-up or terminated during such period of time, and (iii) except as otherwise expressly provided in this Agreement, the Partnership shall not distribute all or any portion of its Operating Assets to any Partner. Each of the afore-mentioned Persons (on behalf of themselves and their Affiliates) hereby covenants not to commit any act in violation of this covenant (or to permit any successor or assign of any such Person to commit any such act).
or nature (including, without limitation, reasonable attorneys' fees and expenses and any adverse income tax consequences, including, but not limited to, any interest and penalties) arising out of or in any way resulting from or directly relating to such breach.
(A) If the Prudential Interest is redeemed as contemplated by this Agreement and the Internal Revenue Service ("IRS") subsequently questions, or determines that it will examine, investigate or audit any federal income tax returns filed by the Partnership in respect of any taxable year of the Partnership ending in the calendar year in which the Redemption Distribution occurred (the "SUBJECT RETURNS"), then (i) the then Partners of the Partnership shall cause the Partnership to promptly furnish Prudential with copies of all written notices received from the IRS, and (ii) Prudential shall have the right, at its expense, to represent the Partnership (with professionals of its choice) in dealing with the IRS in connection with any such questions, examination, investigation or audit and in connection with any judicial or administrative proceedings related thereto, in each case only to the extent that they involve any items ("PRUDENTIAL ITEMS") which could have a material impact on Prudential, and to make decisions regarding or relating to all Prudential Items, except that Prudential shall not make any decisions which could materially adversely impact BPLLC and/or Holdings LLC without the prior written consent of BPLLC and Holdings LLC. Each of BPLLC and Holdings LLC agrees (on behalf of itself and its successors and assigns) that neither it nor the Partnership will settle with the IRS with respect to any Prudential Item without the prior written consent of Prudential, which consent will not be unreasonably withheld.
(C) In accordance with Treasury Regulation Section 1.706-1(c)(ii), for the taxable year of the Partnership in which the Redemption Distribution occurs, Prudential's
distributive share of the items described in Section 702(a) of the Internal
Revenue Code of 1986, as amended, will be determined by reference to an interim
closing of the books. In accordance with Treasury Regulation Section 1.751-
1(c)(4)(iii), the Partnership, BPLLC, Holdings LLC, and Prudential agree that,
on the Redemption Date, the fair market value of the Partnership's Section 1245
property (as defined in Section 1245(a)(3) of the Internal Revenue Code of 1986,
as amended) is equal to the adjusted tax basis of such property.
other party hereto must be in writing and sent by (i) first class U.S. certified or registered mail, return receipt requested, with postage prepaid, (ii) telecopy or facsimile (with a copy sent by first class U.S. certified or registered mail, return receipt requested, with postage prepaid), or (iii) express mail or a nationally recognized courier (for next business day delivery). For purposes of this Agreement, the addresses of the parties hereto shall be as provided below:
BPLLC, Holdings LLC or the Partnership: Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116-3495 Attn: General Counsel Fax: (617) 421-1555 with a copy to: Goulston & Storrs, P.C. 400 Atlantic Avenue Boston, Massachusetts 02110-3333 Attn: Eli Rubenstein, Esq. Fax: (617) 574-4112 Prudential or the Partnership: Prudential Insurance Company of America Four Embarcadero Center Suite 2700 San Francisco, California 94111 Attn: Harry Mixon, Esq. Fax: (415) 956-2197 with a copy to: Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attn: John R. Triece Fax: (201) 683-1797 and a copy to: O'Melveny & Myers LLP Embarcadero Center West 275 Battery Street San Francisco, California 94111 Attn: Stephen A. Cowan, Esq. |
Fax: (415) 984-8701
Notwithstanding the foregoing, any party may designate another addressee or change its address for notices and other communications hereunder by a notice given to the other parties in the
THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including, without limitation, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that is has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date and year first written above.
PARTNERSHIP: THREE EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
BPLLC: BOSTON PROPERTIES LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
[SIGNATURES CONTINUED ON NEXT PAGE]
HOLDINGS LLC: BP EC3 HOLDINGS LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
PRUDENTIAL: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: /s/ Gary L. Frazier ----------------------------------- Name:_________________________________ Title:________________________________ |
EXHIBIT A
The Fair Market Value of each Investment Note shall equal the aggregate
Remaining Cash Flow for such Investment Note discounted from each respective
scheduled payment due date to the Redemption Date at a discount factor equal to
the Discount Rate for such Investment Note. Notwithstanding the foregoing, if on
the Determination Date an Investment Loan Borrower Credit Event exists, then the
Managing Partner shall appoint an investment banking firm of national
recognition (which will be satisfactory to Prudential in its reasonable
discretion) to determine the change in the Fair Market Value of the Investment
Notes for purposes of this Agreement. In the event that an investment banking
firm is appointed to determine the change in the Fair Market Value of any
Investment Note as of the Determination Date pursuant to the preceding sentence,
such investment banking firm shall be instructed to determine the change in the
Fair Market Value of such Investment Note based on the following four factors:
(i) changes in market interest rates since the date of funding of the Investment
Note, (ii) the time period remaining from the Determination Date until the
earlier of the next Rate Reset Date of such Investment Note and the maturity of
the Investment Note, (iii) the Remaining Cash Flow (as defined below) of the
Investment Note, and (iv) changes in the credit quality of the Investment Note
since the date of funding thereof. The parties agree that an acceptable
investment banking firm would be Goldman Sachs or Merrill Lynch & Company. As
used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of
the following events: (x) the credit rating of the Investment Notes has been
downgraded from the credit rating of the Investment Notes on the date hereof by
both of the Rating Agencies, or (y) in the reasonable discretion of the Managing
Partner, there has been, as compared to the date hereof, a material diminution
or degradation in the value of the assets of the Investment Loan Borrower, or
the ability of the Investment Loan Borrower to pay its outstanding obligations,
as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Investment Notes is determined and shall occur at noon (New York City time) on the third business day after the date that the Prudential Redemption Notice or Partnership Redemption Notice, as the case may be, is received by the addressee thereof.
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Investment Note, the Margin then in effect (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Investment Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury of such Investment Note. Such offered-side yield to maturity shall be determined on or about noon on the Determination Date and Prudential and the Partnership shall cooperate in the determination of such Reinvestment Rate.
"REMAINING CASH FLOW" shall mean, for any Investment Note, the aggregate amount of all accrued and unpaid interest, principal and other payments under such Investment Note on the Redemption Date and all principal, interest and other payments that will become due and owing under such Investment Note from time to time from and after the Redemption Date through (x) the next Rate Reset Date of such Investment Note (the "NEXT RESET DATE"), if the Fair Market Value is determined prior to such Rate Reset Date, or (y) the maturity of such Investment Note (including, without limitation, any balloon or other principal payments due and owing on said maturity date), if the Fair Market Value is determined after all Rate Reset Dates provided in such Investment Note, as each such payment would become due and payable pursuant to the terms of the applicable Investment Note and the Investment Loan Documents (but assuming, if
EXHIBIT B
THIS CERTIFICATE (this "CERTIFICATE") is made and dated as of ____________, by THREE EMBARCADERO CENTER VENTURE, a California general partnership ("PARTNERSHIP"), for the benefit of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("").
Pursuant to that certain Redemption Agreement dated as of November 12, 1998 (the "REDEMPTION AGREEMENT"), the Partnership (and its partners other than ) and Prudential have been granted certain rights to cause Prudential's interest in the Partnership to be fully redeemed in exchange for the distribution of all or a portion of the Investment Notes and, if applicable pursuant to the terms and provisions of the Redemption Agreement, cash to Prudential. All capitalized terms used herein without definition shall have the respective meanings given such terms in the Redemption Agreement.
Concurrently herewith and on the date hereof, the Partnership is distributing the Investment Notes (or a portion thereof) to Prudential in accordance with the applicable terms and provisions of the Redemption Agreement.
With respect to the distribution of such Investment Notes, the Partnership hereby represents and warrants to Prudential as of the date hereof as follows:
(a) Subject to the rights of The Prudential Insurance Company of America or a permitted assignee or designee ("OPTIONEE") under that certain Option and Put Agreement dated as of November 12, 1998 (the "OPTION AGREEMENT"), the Partnership is the sole owner of the Investment Notes. Further, the Investment Notes delivered to Prudential on the date hereof pursuant to the Redemption Agreement are free and clear of all liens and third party interests of any kind or nature other than the interests and rights of Optionee under the Option Agreement. The Partnership has not amended, modified, terminated or otherwise by written agreement altered the Investment Notes or the Investment Loan Documents except as specifically disclosed to Prudential in writing prior to the date hereof and except for the division of any Investment Note pursuant to Section 2(a) of the Redemption Agreement.
(b) The Partnership has not assigned or transferred the Investment Notes or any of the Investment Loan Documents (except to secure the Equity Redemption Loan, which assignment has been or simultaneously herewith is being, released in full in writing), nor are there any agreements to assign or convey any portion of the Investment Notes or such Investment Loan Documents to any Person other than Prudential and Optionee (in accordance with the Option Agreement).
(c) The Partnership has all requisite power and authority to execute and deliver all instruments and other documents to be executed and delivered by the Partnership in connection with the distribution of the Investment Notes to Prudential on the date hereof and to execute this Certificate.
(d) The Partnership is a duly formed general partnership under the laws of the State of California, and is legally authorized to execute, deliver and perform the Redemption Distribution and this Certificate, and this Certificate is legal, valid and binding on the Partnership enforceable against it in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(e) The execution of this Certificate and the performance of the Redemption Distribution by the Partnership will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which the Partnership is subject, nor violate any agreement or contract to which the Partnership is a party or by which the Partnership is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Partnership of, or compliance by the Partnership with, the Certificate or the consummation of the Redemption Distribution, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties are personal to Prudential and no Person other than Prudential shall be entitled to bring any action based thereon. Each of the foregoing representations and warranties shall survive the consummation of the Redemption Distribution.
The Partnership hereby acknowledges that the acceptance of the Redemption Distribution and the Investment Notes by Prudential was made and will have been made in material reliance by Prudential on the aforestated representations and warranties of the Partnership.
IN WITNESS WHEREOF, the Partnership has caused its duly authorized representative to execute this Certificate as of the date first above written.
PARTNERSHIP: THREE EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By:__________________________
Name:________________________
Title:_______________________
EXHIBIT 99.18
REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT (this "AGREEMENT") dated as of November 12, 1998, is made and entered into by and among FOUR EMBARCADERO CENTER VENTURE, a California general partnership ("PARTNERSHIP"), BOSTON PROPERTIES LLC, a Delaware limited liability company ("BPLLC"), BP EC4 HOLDINGS LLC, a Delaware limited liability company ("HOLDINGS LLC"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL").
A. Pursuant to that certain Master Transaction Agreement dated as of September 28, 1998, by and among Boston Properties Limited Partnership, Boston Properties, Inc., Prudential, PIC Realty Corporation, a Delaware corporation, Fedmark Corporation, Embarcadero Center Investors Partnership, Pacific Property Services, L.P. and certain other persons listed on Exhibit A thereto (the "MASTER TRANSACTION AGREEMENT"), BPLLC, Holdings LLC and Prudential have become the sole partners of the Partnership, which Partnership is currently governed by that certain Second Amended and Restated Partnership Agreement of Four Embarcadero Center Venture of even date herewith (the "PARTNERSHIP AGREEMENT"). All capitalized terms used herein without definition shall have the respective meanings given such terms in the Partnership Agreement.
B. Prudential desires to acquire the right to have its entire interest in and to the Partnership (the "PRUDENTIAL INTEREST") redeemed by the Partnership at any time from and after the date hereof in accordance with the terms and provisions of this Agreement below, and BPLLC and Holdings LLC desire to acquire the right to cause the Prudential Interest to be redeemed by the Partnership at any time after the date which is ninety (90) days after the date hereof in accordance with the terms and provisions of this Agreement below, all as hereinafter provided.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereby agree as follows:
(D) As used herein, the following terms shall have the following meanings:
"BROKEN LIBOR COST" shall mean the extra payment which the Partnership must make on account of repaying the Equity Redemption Loan on a date other than the end of an "interest period" because the Redemption Date falls on a date other than the end of an "interest period" (it being acknowledged and agreed by the parties hereto that, if the Redemption Date falls on a date which is the end of an "interest period", there shall be no Broken LIBOR Cost for purposes of this Agreement). The Managing Partner shall, at the request of Prudential, provide Prudential with a schedule showing the end of all "interest periods" for purposes of timing the Redemption Distribution and Prudential may rely on such schedule for purposes of designating a Redemption Date.
"FAIR MARKET VALUE OF THE PRUDENTIAL INTEREST" shall equal, on the Redemption Date, the sum of $93,840,807 (which amount equals Prudential's Percentage Interest immediately prior to the Redemption Distribution multiplied by the NMV (defined in the Master Transaction Agreement) of the Property as of the date hereof, adjusted to:
Guarantied Loan will be assumed by Prudential in connection with the Redemption Distribution);
"LEASING COSTS" shall mean any and all (i) tenant improvement allowances, move-in allowances, brokerage commissions, expenses incurred or to be incurred for repairs, improvements, equipment, painting, decorating, partitioning and other items to satisfy the tenant's requirements for the commencement of the applicable lease, (ii) the cost of removal and/or abatement of asbestos or other hazards or toxic substances located in the demised space in violation of law and as required in order to satisfy the tenant's requirements for the commencement of the applicable lease, (iii) rent concessions as stated in the respective lease (and applicable lease documents) relating to the demised space provided the tenant has the right to take possession of such demised space during the period of such rent concessions, (iv) base building
modifications required by the applicable lease, and (v) expenses incurred or to be incurred for the purpose of satisfying or terminating the obligations of a tenant to the landlord under another lease.
"NEW LEASING COSTS" shall mean all Leasing Costs incurred by the Partnership in connection with any new Leases executed after the date hereof and prior to the Redemption Date.
"OPERATING ASSETS" shall mean all real property, improvements, leases, licenses, fixtures and tangible and intangible personal property owned by the Partnership on the date hereof other than cash, deposit accounts and money.
(C) Concurrently with the Redemption Distribution, the Partnership shall assign to Prudential, and Prudential shall accept and assume, the Prudential Guarantied Loan and all instruments and agreements relating thereto, and Prudential shall thereafter be subject to all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date (except that Prudential shall also assume and be subject to the obligation to pay all accrued but unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent the same has not yet become due and payable under the Prudential Guarantied Loan Documents); and the lender under such documents shall release the Partnership, in a writing delivered to the Partnership, from all claims, rights, obligations and liabilities thereunder accruing from and after the Redemption Date and from the obligation to pay any accrued and unpaid interest under such Prudential Guarantied Loan as of and including the Redemption Date to the extent such interest payment has not yet become due and payable under the Prudential Guarantied Loan Documents.
(E) Within thirty (30) days after the end of the calendar month in which the Redemption Date occurs, the Partnership and Prudential shall obtain all necessary and complete information regarding the Operating Profits or Operating Losses of the Partnership accruing from
the date hereof through and including the Redemption Date and shall agree upon and make any necessary adjustments to the estimated Operating Profits or Operating Losses of the Partnership which were utilized in calculating the Fair Market Value of the Prudential Interest on the Redemption Date. If, after making such adjustments, the actual Operating Profits of the Partnership are greater than the estimated Operating Profits utilized to determine the Fair Market Value of the Prudential Interest on the Redemption Date, or the actual Operating Losses are less than the estimated Operating Losses, as the case may be, then the Partnership shall promptly make a cash payment to Prudential equal to the difference. If, after making such adjustments, the actual Operating Profits of the Partnership are less than the estimated Operating Profits utilized to determine the Fair Market Value of the Prudential Interest on the Redemption Date, or the actual Operating Losses are greater than the estimated Operating Losses, as the case may be, then Prudential shall promptly make a cash payment to the Partnership equal to the difference. In addition to the foregoing, if the Adjusted NEV of the Property has not been determined pursuant to Exhibit V of the Master Transaction Agreement as of the Redemption Date, then promptly following such determination of Adjusted NEV of the Property, if any, pursuant to said Exhibit V, if the Revised NEV of the Property exceeds the NEV of the Property, the Partnership shall pay to Prudential, in cash, a sum equal to such difference, and if the NEV of the Property exceeds the Revised NEV of the Property, then Prudential shall pay to the Partnership, in cash, a sum equal to such difference.
(A) BPLLC, Holdings LLC, Prudential and the Partnership (on behalf of themselves and their respective successors and assigns) each hereby covenants and agrees with each other that, during the period of time from the date hereof through and including the second (2nd) anniversary of the Redemption Date, (i) none of the Equity Redemption Loan obtained by the Partnership on the date hereof pursuant to the terms of the Partnership Agreement or any debt replacing any such Equity Redemption Loan in accordance with the terms and provisions of the Partnership Agreement, shall be repaid by any Capital Contributions made by any Partner of the Partnership, (ii) the Partnership shall at all times maintain and continue its existence as a general partnership under the laws of the State of California and shall not be dissolved, wound-up or terminated during such period of time, and (iii) except as otherwise expressly provided in this Agreement, the Partnership shall not distribute all or any portion of its Operating Assets to any Partner. Each of the afore-mentioned Persons (on behalf of themselves and their Affiliates) hereby covenants not to commit any act in violation of this covenant (or to permit any successor or assign of any such Person to commit any such act).
or nature (including, without limitation, reasonable attorneys' fees and expenses and any adverse income tax consequences, including, but not limited to, any interest and penalties) arising out of or in any way resulting from or directly relating to such breach.
(A) If the Prudential Interest is redeemed as contemplated by this Agreement and the Internal Revenue Service ("IRS") subsequently questions, or determines that it will examine, investigate or audit any federal income tax returns filed by the Partnership in respect of any taxable year of the Partnership ending in the calendar year in which the Redemption Distribution occurred (the "SUBJECT RETURNS"), then (i) the then Partners of the Partnership shall cause the Partnership to promptly furnish Prudential with copies of all written notices received from the IRS, and (ii) Prudential shall have the right, at its expense, to represent the Partnership (with professionals of its choice) in dealing with the IRS in connection with any such questions, examination, investigation or audit and in connection with any judicial or administrative proceedings related thereto, in each case only to the extent that they involve any items ("PRUDENTIAL ITEMS") which could have a material impact on Prudential, and to make decisions regarding or relating to all Prudential Items, except that Prudential shall not make any decisions which could materially adversely impact BPLLC and/or Holdings LLC without the prior written consent of BPLLC and Holdings LLC. Each of BPLLC and Holdings LLC agrees (on behalf of itself and its successors and assigns) that neither it nor the Partnership will settle with the IRS with respect to any Prudential Item without the prior written consent of Prudential, which consent will not be unreasonably withheld.
(C) In accordance with Treasury Regulation Section 1.706-1(c)(ii), for the taxable year of the Partnership in which the Redemption Distribution occurs, Prudential's
distributive share of the items described in Section 702(a) of the Internal
Revenue Code of 1986, as amended, will be determined by reference to an interim
closing of the books. In accordance with Treasury Regulation Section 1.751-
1(c)(4)(iii), the Partnership, BPLLC, Holdings LLC, and Prudential agree that,
on the Redemption Date, the fair market value of the Partnership's Section 1245
property (as defined in Section 1245(a)(3) of the Internal Revenue Code of 1986,
as amended) is equal to the adjusted tax basis of such property.
other party hereto must be in writing and sent by (i) first class U.S. certified or registered mail, return receipt requested, with postage prepaid, (ii) telecopy or facsimile (with a copy sent by first class U.S. certified or registered mail, return receipt requested, with postage prepaid), or (iii) express mail or a nationally recognized courier (for next business day delivery). For purposes of this Agreement, the addresses of the parties hereto shall be as provided below:
BPLLC, Holdings LLC or the Partnership: Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116-3495 Attn: General Counsel Fax: (617) 421-1555 with a copy to: Goulston & Storrs, P.C. 400 Atlantic Avenue Boston, Massachusetts 02110-3333 Attn: Eli Rubenstein, Esq. Fax: (617) 574-4112 Prudential or the Partnership: Prudential Insurance Company of America Four Embarcadero Center Suite 2700 San Francisco, California 94111 Attn: Harry Mixon, Esq. Fax: (415) 956-2197 with a copy to: Prudential Realty Group 8 Campus Drive 4th Floor - Arbor Circle South Parsippany, New Jersey 07054 Attn: John R. Triece Fax: (201) 683-1797 and a copy to: O'Melveny & Myers LLP Embarcadero Center West 275 Battery Street San Francisco, California 94111 Attn: Stephen A. Cowan, Esq. |
Fax: (415) 984-8701
Notwithstanding the foregoing, any party may designate another addressee or change its address for notices and other communications hereunder by a notice given to the other parties in the
THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including, without limitation, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each shall continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that is has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date and year first written above.
PARTNERSHIP: FOUR EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
BPLLC: BOSTON PROPERTIES LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
[SIGNATURES CONTINUED ON NEXT PAGE]
HOLDINGS LLC: BP EC4 HOLDINGS LLC, a Delaware limited liability company By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Manager By: BOSTON PROPERTIES, INC., a Delaware corporation, as General Partner By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
PRUDENTIAL: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: /s/ Gary L. Frazier ------------------------- Name:_______________________ Title:______________________ |
EXHIBIT A
The Fair Market Value of each Investment Note shall equal the aggregate
Remaining Cash Flow for such Investment Note discounted from each respective
scheduled payment due date to the Redemption Date at a discount factor equal to
the Discount Rate for such Investment Note. Notwithstanding the foregoing, if on
the Determination Date an Investment Loan Borrower Credit Event exists, then the
Managing Partner shall appoint an investment banking firm of national
recognition (which will be satisfactory to Prudential in its reasonable
discretion) to determine the change in the Fair Market Value of the Investment
Notes for purposes of this Agreement. In the event that an investment banking
firm is appointed to determine the change in the Fair Market Value of any
Investment Note as of the Determination Date pursuant to the preceding sentence,
such investment banking firm shall be instructed to determine the change in the
Fair Market Value of such Investment Note based on the following four factors:
(i) changes in market interest rates since the date of funding of the Investment
Note, (ii) the time period remaining from the Determination Date until the
earlier of the next Rate Reset Date of such Investment Note and the maturity of
the Investment Note, (iii) the Remaining Cash Flow (as defined below) of the
Investment Note, and (iv) changes in the credit quality of the Investment Note
since the date of funding thereof. The parties agree that an acceptable
investment banking firm would be Goldman Sachs or Merrill Lynch & Company. As
used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of
the following events: (x) the credit rating of the Investment Notes has been
downgraded from the credit rating of the Investment Notes on the date hereof by
both of the Rating Agencies, or (y) in the reasonable discretion of the Managing
Partner, there has been, as compared to the date hereof, a material diminution
or degradation in the value of the assets of the Investment Loan Borrower, or
the ability of the Investment Loan Borrower to pay its outstanding obligations,
as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Investment Notes is determined and shall occur at noon (New York City time) on the third business day after the date that the Prudential Redemption Notice or Partnership Redemption Notice, as the case may be, is received by the addressee thereof.
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Investment Note, the Margin then in effect (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Investment Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury of such Investment Note. Such offered-side yield to maturity shall be determined on or about noon on the Determination Date and Prudential and the Partnership shall cooperate in the determination of such Reinvestment Rate.
EXHIBIT B
THIS CERTIFICATE (this "CERTIFICATE") is made and dated as of ______________, 1998 by FOUR EMBARCADERO CENTER VENTURE, a California general partnership ("PARTNERSHIP"), for the benefit of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL").
Pursuant to that certain Redemption Agreement dated as of November 12, 1998 (the "REDEMPTION AGREEMENT"), the Partnership (and its partners other than Prudential) and Prudential have been granted certain rights to cause Prudential's interest in the Partnership to be fully redeemed in exchange for the distribution of all or a portion of the Investment Notes and, if applicable pursuant to the terms and provisions of the Redemption Agreement, cash to Prudential. All capitalized terms used herein without definition shall have the respective meanings given such terms in the Redemption Agreement.
Concurrently herewith and on the date hereof, the Partnership is distributing the Investment Notes (or a portion thereof) to Prudential in accordance with the applicable terms and provisions of the Redemption Agreement.
With respect to the distribution of such Investment Notes, the Partnership hereby represents and warrants to Prudential as of the date hereof as follows:
(a) Subject to the rights of The Prudential Insurance Company of America or a permitted assignee or designee ("OPTIONEE") under that certain Option and Put Agreement dated as of November 12, 1998 (the "OPTION AGREEMENT"), the Partnership is the sole owner of the Investment Notes. Further, the Investment Notes delivered to Prudential on the date hereof pursuant to the Redemption Agreement are free and clear of all liens and third party interests of any kind or nature other than the interests and rights of Optionee under the Option Agreement. The Partnership has not amended, modified, terminated or otherwise by written agreement altered the Investment Notes or the Investment Loan Documents except as specifically disclosed to Prudential in writing prior to the date hereof and except for the division of any Investment Note pursuant to Section 2(a) of the Redemption Agreement.
(b) The Partnership has not assigned or transferred the Investment Notes or any of the Investment Loan Documents (except to secure the Equity Redemption Loan, which assignment has been or simultaneously herewith is being, released in full in writing), nor are there any agreements to assign or convey any portion of the Investment Notes or such Investment Loan Documents to any Person other than Prudential and Optionee (in accordance with the Option Agreement).
(c) The Partnership has all requisite power and authority to execute and deliver all instruments and other documents to be executed and delivered by the Partnership in connection with the distribution of the Investment Notes to Prudential on the date hereof and to execute this Certificate.
(d) The Partnership is a duly formed general partnership under the laws of the State of California, and is legally authorized to execute, deliver and perform the Redemption Distribution and this Certificate, and this Certificate is legal, valid and binding on the Partnership enforceable against it in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(e) The execution of this Certificate and the performance of the Redemption Distribution by the Partnership will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which the Partnership is subject, nor violate any agreement or contract to which the Partnership is a party or by which the Partnership is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Partnership of, or compliance by the Partnership with, the Certificate or the consummation of the Redemption Distribution, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties are personal to Prudential and no Person other than Prudential shall be entitled to bring any action based thereon. Each of the foregoing representations and warranties shall survive the consummation of the Redemption Distribution.
The Partnership hereby acknowledges that the acceptance of the Redemption Distribution and the Investment Notes by Prudential was made and will have been made in material reliance by Prudential on the aforestated representations and warranties of the Partnership.
IN WITNESS WHEREOF, the Partnership has caused its duly authorized representative to execute this Certificate as of the date first above written.
PARTNERSHIP: FOUR EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By:________________________
Name:______________________
Title:_____________________
EXHIBIT 99.19
OPTION AND PUT AGREEMENT
THIS OPTION AND PUT AGREEMENT (this "AGREEMENT") is entered into as of November 12, 1998, by and between ONE EMBARCADERO CENTER VENTURE, a California general partnership ("OPTIONOR"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL" and together with any permitted assignee or designee hereunder hereinafter sometimes referred to as "OPTIONEE").
B. Pursuant to that certain Redemption Agreement of even date herewith, by and among Optionor, PIC Realty Corporation ("PIC"), Boston Properties LLC and BP EC1 Holdings LLC (the "REDEMPTION AGREEMENT"), the Investment Notes (or certain of the Investment Notes or portions thereof as provided in accordance with the terms and provisions of the Redemption Agreement) may be distributed (together with cash, if necessary pursuant to the Redemption Agreement) to PIC in full redemption of its partnership interest in Optionor. The date on which such Investment Notes (or portions thereof) are distributed to PIC and PIC's partnership interest in the Optionor is fully redeemed (such that PIC is no longer a partner or constituent of Optionor) pursuant to the Redemption Agreement shall be referred to in this Agreement as the "REDEMPTION DATE".
C. Pursuant to certain terms, provisions and conditions of the Redemption Agreement, less than the entire principal face amount of all Investment Notes may be distributed to PIC on the Redemption Date. In such event, the Optionor may retain, as payee, a portion of the aggregate principal amount of all Investment Notes (the "REMAINDER") after the Redemption Date, which Remainder will be evidenced by one or more of the Investment Notes that are retained by Optionor pursuant to the Redemption Agreement and, if applicable pursuant to the terms and provisions of the Redemption Agreement and the Investment Loan Note Purchase Agreement, a new promissory note issued by the Investment Loan Borrower in accordance with Section 2 of the Redemption Agreement, all of which notes shall have an aggregate principal amount equal to the Remainder (collectively, the "REMAINDER NOTES"). All documents and instruments evidencing, securing or relating to the Investment Notes or Remainder Notes (including, without limitation,
the Investment Loan Note Purchase Agreement) shall be herein referred to as the
"INVESTMENT LOAN DOCUMENTS".
D. Optionee desires to acquire an option to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionor is willing to grant such option, and Optionor desires to acquire a put right to cause Optionee to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionee is willing to grant such put right to Optionor, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the benefits accruing to the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Optionor and Optionee, Optionor and Optionee hereby agree as follows:
--------- ------- 4(a) below). ---- 2. PUT. --- |
(II) On or before the Closing Date, Optionee shall deliver to Optionor, (A) in immediately available funds the Purchase Price (less the Option Fee) and such additional amounts as may be required to satisfy Optionee's share of any Closing costs; and (B) counterpart originals of the Assignment, executed by Optionee.
(III) All reasonable Closing and escrow fees and costs incurred in connection with the transactions described in this Agreement shall be paid fifty percent (50%) by Optionor and fifty percent (50%) by Optionee; provided that, each party hereto shall bear the expense of its own counsel.
-------- ---- 5. OPTIONOR'S REPRESENTATIONS AND WARRANTIES. Optionor hereby ----------------------------------------- |
represents and warrants to Optionee as of the date hereof and as of the Closing Date as follows:
(B) As of the date hereof, Optionor has not assigned or transferred the Investment Notes or any of the other Investment Loan Documents (except for any pledge of the Investment Notes securing the Equity Redemption Loan), nor are there any agreements to assign or convey any portion of such Investment Loan Documents to any person other than Optionee and PIC in accordance with this Agreement and the Redemption Agreement, respectively. On the Closing Date, Optionor shall not have assigned or transferred the Remainder Notes or any of the other Investment Loan Documents (except for such portion of the Investment Notes transferred to PIC in accordance with the Redemption Agreement), nor shall there be any agreements to assign or convey the Remainder Notes or any portion of such Investment Loan Documents to any person other than Optionee (except with respect to PIC's rights under the Redemption Agreement).
(C) To Optionor's knowledge, Optionor has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents to be executed and delivered to Optionee in connection with the transactions described herein.
(D) To Optionor's knowledge, Optionor is a duly formed general partnership under the laws of the State of California, and this Agreement, and all the instruments and documents to be executed and delivered by Optionor in connection herewith, are legal, valid and binding obligations of Optionor enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(E) To Optionor's knowledge, the execution of this Agreement and the performance of Optionor's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which Optionor is subject, nor violate any agreement or contract to which Optionor is a party or by which Optionor is bound. To Optionor's knowledge, no consent, approval, authorization or
order of any court or governmental agency or body is required for the execution, delivery and performance by Optionor of, or compliance by Optionor with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
(A) Optionee is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Optionee has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents executed and delivered by Optionee in connection with the transactions contemplated herein. This Agreement, and all the instruments and documents to be executed and delivered by Optionee in connection herewith, are legal, valid and binding obligations of Optionee enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(B) The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of Optionee and does not require any consent or approval of any party that has not been obtained.
(C) The execution of this Agreement and the performance of Optionee's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which Optionee is subject, nor violate any agreement or contract to which Optionee is a party or by which Optionee is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Optionee of, or compliance by Optionee with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
(D) Optionee has made, and will make, prior to the Closing, such examination, review and investigation of the facts and circumstances as necessary to evaluate the Remainder Notes. Optionee further acknowledges that in acquiring the Remainder Notes, Optionee is assuming the risk of full or partial loss which is inherent with the credit, collateral and collectibility risks associated with the quality and character of the loan evidenced by the Remainder Notes.
(E) Optionee is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended. The Remainder Notes will be acquired by Optionee for its own account for investment only and not with a view to, or with any intention of, a distribution or resale thereof, in whole or in part.
(F) Optionee has not relied upon any representations, warranties or statements of any kind made by, or on behalf of, Optionor, except as specifically set forth in this Agreement. Optionee acknowledges that, except for the express representations and warranties by Optionor set forth in, or to be made in instruments delivered pursuant to, this Agreement, Optionor negates and disclaims all representations, warranties and statements of every kind or type (express or implied) and, except for the Optionor's representations and warranties set forth herein, the Remainder Notes are being acquired "as is" with no recourse to Optionor for any default thereunder or diminution in value with respect thereto.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
EMBARCADERO CENTER INVESTORS PARTNERSHIP, PACIFIC PROPERTY SERVICES, L.P., BOSTON PROPERTIES LIMITED PARTNERSHIP AND BOSTON PROPERTIES, INC. AND ALL TRANSACTION DOCUMENTS DESCRIBED THEREIN (COLLECTIVELY, THE "TRANSACTION DOCUMENTS") REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. The parties make no representations or warranties to each other, except as specifically contained in this Agreement or in the accompanying exhibits or the certificates or other closing documents delivered according to this Agreement or in the other Transaction Documents. All prior agreements and understanding between the parties hereto with respect to the transactions contemplated hereby, whether verbal or in writing, are superseded by, and are deemed to have been merged into, this Agreement and all other Transaction Documents. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or in behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach.
All notices and other communications to Optionor shall be given to it at:
c/o Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile No.: (617) 421-1555
with a copy to:
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile No.: (617) 574-4112
All notices and other communications to Optionee shall be given to it at:
The Prudential Insurance Company of America
Prudential Realty Group
8 Campus Drive, 4th Floor
Arbor Circle South
Parsippany, New Jersey 07054
Attention: John R. Triece
Facsimile No.: (201) 734-1472
with a copy to:
The Prudential Insurance Company of America
Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, California 94111
Attention: Harry N. Mixon, Esq.
Facsimile No.: (415) 956-2197
and a copy to:
O'Melveny & Myers LLP
Embarcadero Center West
275 Battery Street
Suite 2600
San Francisco, California 94111
Attention: Stephen A. Cowan, Esq.
Facsimile No.: (415) 984-8701
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the date first above written.
"OPTIONOR"
ONE EMBARCADERO CENTER VENTURE, a
California General Partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES,
INC., a Delaware corporation,
as General Partner
By: /s/ Thomas J. O'Connor ----------------------- Name: Thomas J. O'Connor Title: Vice President |
"OPTIONEE"
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation
By: /s/ Gary L. Frazier ---------------------------------- Name: ________________________________ Title: _______________________________ |
JOINDER
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: /s/ Paul D. Egan ---------------------------------------------- Name: Paul D. Egan Title: Vice President |
EXHIBIT A
EXHIBIT B
The Fair Market Value of the Remainder Notes shall equal the aggregate Remaining Cash Flow for all Remainder Notes discounted from each respective scheduled payment due date to the Closing Date at a discount factor equal to the Discount Rate for each such Remainder Note. Notwithstanding the foregoing, if on the Determination Date an Investment Loan Borrower Credit Event exists, then Optionor shall appoint an investment banking firm of national recognition (which will be satisfactory to Optionee in its reasonable discretion) to determine the change in the Fair Market Value of the Remainder Notes for purposes of this Agreement. In the event that an investment banking firm is appointed to determine the change in the Fair Market Value of any Remainder Note as of the Determination Date pursuant to the preceding sentence, such investment banking firm shall be instructed to determine the change in the Fair Market Value of such Remainder Note based on the following four factors: (i) changes in market interest rates since the date of funding of the Remainder Note, (ii) the time period remaining from the Determination Date until the earlier of the next Rate Reset Date of such Remainder Note and the maturity of the Remainder Note, (iii) the Remaining Cash Flow (as defined below) of the Remainder Note, and (iv) changes in the credit quality of the Remainder Note since the date of funding thereof. The parties agree that an acceptable investment banking firm would be Goldman Sachs or Merrill Lynch. As used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of the following events: (x) the credit rating of the Remainder Notes has been downgraded from the credit rating of the Remainder Notes on the date hereof by both of the Rating Agencies, or (y) in the reasonable discretion of the managing general partner of Optionor, there has been, as compared to the date hereof, a material diminution or degradation in the value of the assets of the Investment Loan Borrower or the ability of the Investment Loan Borrower to pay its outstanding obligations as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Remainder Notes is determined and shall occur at 10:00 a.m. (New York City time) on the date that the Option Election Notice or Put Election Notice, as the case may be, is received by the addressee thereof.
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Remainder Note, the Margin (as defined in the Investment Loan Note Purchase Agreement) of such Remainder Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Remainder Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
EXHIBIT C
Date of Note: ____________________
Maker: Prudential Realty Securities, Inc.
Face Amount: $__________________
PAY TO THE ORDER OF __________________________________, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EXCEPT AS SPECIFICALLY PROVIDED IN THAT CERTAIN OPTION AND PUT AGREEMENT DATED AS OF NOVEMBER ___, 1998, BY AND AMONG ONE EMBARCADERO CENTER VENTURE, AS OPTIONOR, AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, AS OPTIONEE.
Dated: ______________, 199__
ONE EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
its Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.
a Delaware Corporation,
as General Partner
By: _________________________________
Name: _________________________________
Title:_________________________________
EXHIBIT D
ASSIGNMENT AND ASSUMPTION
OF LOAN
Assignee hereby accepts the foregoing assignment and agrees to assume, pay, perform and discharge, as and when due, all of the agreements, obligations and liabilities of Assignor under or arising from or out of the Remainder Notes and the Investment Loan Documents (but only to the extent relating to the Remainder Notes) to be paid, performed or discharged on and after the date hereof and agrees to be bound by all of the terms and conditions of the Investment Loan Documents to be performed on and after the date hereof (but only to the extent relating to the Remainder Notes) (all such items, collectively, the "POST-CLOSING OBLIGATIONS").
This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee, and their respective successors and assigns.
"ASSIGNOR"
ONE EMBARCADERO CENTER VENTURE, a
California General Partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By:_______________________
Name:_____________________
Title:____________________
"ASSIGNEE"
[INSERT ASSIGNEE SIGNATURE BLOCK]
The undersigned, as maker of the Remainder Notes, hereby agrees to release the Assignor from all Post-Closing Obligations and shall look only to Assignee for satisfaction of the same.
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
EXHIBIT 99.20
OPTION AND PUT AGREEMENT
THIS OPTION AND PUT AGREEMENT (this "AGREEMENT") is entered into as of November 12, 1998, by and between EMBARCADERO CENTER ASSOCIATES, a California general partnership ("OPTIONOR"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL" and together with any permitted assignee or designee hereunder hereinafter sometimes referred to as "OPTIONEE").
B. Pursuant to that certain Redemption Agreement of even date herewith, by and among Optionor, PIC Realty Corporation ("PIC"), Boston Properties LLC and BP EC2 Holdings LLC (the "REDEMPTION AGREEMENT"), the Investment Notes (or certain of the Investment Notes or portions thereof as provided in accordance with the terms and provisions of the Redemption Agreement) may be distributed (together with cash, if necessary pursuant to the Redemption Agreement) to PIC in full redemption of its partnership interest in Optionor. The date on which such Investment Notes (or portions thereof) are distributed to PIC and PIC's partnership interest in the Optionor is fully redeemed (such that PIC is no longer a partner or constituent of Optionor) pursuant to the Redemption Agreement shall be referred to in this Agreement as the "REDEMPTION DATE".
C. Pursuant to certain terms, provisions and conditions of the Redemption Agreement, less than the entire principal face amount of all Investment Notes may be distributed to PIC on the Redemption Date. In such event, the Optionor may retain, as payee, a portion of the aggregate principal amount of all Investment Notes (the "REMAINDER") after the Redemption Date, which Remainder will be evidenced by one or more of the Investment Notes that are retained by Optionor pursuant to the Redemption Agreement and, if applicable pursuant to the terms and provisions of the Redemption Agreement and the Investment Loan Note Purchase Agreement, a new promissory note issued by the Investment Loan Borrower in accordance with Section 2 of the Redemption Agreement, all of which notes shall have an aggregate principal amount equal to the Remainder (collectively, the "REMAINDER NOTES"). All documents and instruments evidencing, securing or relating to the Investment Notes or Remainder Notes (including, without limitation,
the Investment Loan Note Purchase Agreement) shall be herein referred to as the
"INVESTMENT LOAN DOCUMENTS".
D. Optionee desires to acquire an option to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionor is willing to grant such option, and Optionor desires to acquire a put right to cause Optionee to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionee is willing to grant such put right to Optionor, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the benefits accruing to the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Optionor and Optionee, Optionor and Optionee hereby agree as follows:
--------- ------- 4(a) below). ---- 2. PUT. --- |
(II) On or before the Closing Date, Optionee shall deliver to Optionor, (A) in immediately available funds the Purchase Price (less the Option Fee) and such additional amounts as may be required to satisfy Optionee's share of any Closing costs; and (B) counterpart originals of the Assignment, executed by Optionee.
(III) All reasonable Closing and escrow fees and costs incurred in connection with the transactions described in this Agreement shall be paid fifty percent (50%) by Optionor and fifty percent (50%) by Optionee; provided that, each party hereto shall bear the expense of its own counsel.
-------- ---- 5. OPTIONOR'S REPRESENTATIONS AND WARRANTIES. Optionor hereby ----------------------------------------- |
represents and warrants to Optionee as of the date hereof and as of the Closing Date as follows:
(B) As of the date hereof, Optionor has not assigned or transferred the Investment Notes or any of the other Investment Loan Documents (except for any pledge of the Investment Notes securing the Equity Redemption Loan), nor are there any agreements to assign or convey any portion of such Investment Loan Documents to any person other than Optionee and PIC in accordance with this Agreement and the Redemption Agreement, respectively. On the Closing Date, Optionor shall not have assigned or transferred the Remainder Notes or any of the other Investment Loan Documents (except for such portion of the Investment Notes transferred to PIC in accordance with the Redemption Agreement), nor shall there be any agreements to assign or convey the Remainder Notes or any portion of such Investment Loan Documents to any person other than Optionee (except with respect to PIC's rights under the Redemption Agreement).
(C) To Optionor's knowledge, Optionor has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents to be executed and delivered to Optionee in connection with the transactions described herein.
(D) To Optionor's knowledge, Optionor is a duly formed general partnership under the laws of the State of California, and this Agreement, and all the instruments and documents to be executed and delivered by Optionor in connection herewith, are legal, valid and binding obligations of Optionor enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(E) To Optionor's knowledge, the execution of this Agreement and the performance of Optionor's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which Optionor is subject, nor violate any agreement or contract to which Optionor is a party or by which Optionor is bound. To Optionor's knowledge, no consent, approval, authorization or
order of any court or governmental agency or body is required for the execution, delivery and performance by Optionor of, or compliance by Optionor with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
(A) Optionee is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Optionee has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents executed and delivered by Optionee in connection with the transactions contemplated herein. This Agreement, and all the instruments and documents to be executed and delivered by Optionee in connection herewith, are legal, valid and binding obligations of Optionee enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(B) The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of Optionee and does not require any consent or approval of any party that has not been obtained.
(C) The execution of this Agreement and the performance of Optionee's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which Optionee is subject, nor violate any agreement or contract to which Optionee is a party or by which Optionee is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Optionee of, or compliance by Optionee with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
(D) Optionee has made, and will make, prior to the Closing, such examination, review and investigation of the facts and circumstances as necessary to evaluate the Remainder Notes. Optionee further acknowledges that in acquiring the Remainder Notes, Optionee is assuming the risk of full or partial loss which is inherent with the credit, collateral and collectibility risks associated with the quality and character of the loan evidenced by the Remainder Notes.
(E) Optionee is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended. The Remainder Notes will be acquired by Optionee for its own account for investment only and not with a view to, or with any intention of, a distribution or resale thereof, in whole or in part.
(F) Optionee has not relied upon any representations, warranties or statements of any kind made by, or on behalf of, Optionor, except as specifically set forth in this Agreement. Optionee acknowledges that, except for the express representations and warranties by Optionor set forth in, or to be made in instruments delivered pursuant to, this Agreement, Optionor negates and disclaims all representations, warranties and statements of every kind or type (express or implied) and, except for the Optionor's representations and warranties set forth herein, the Remainder Notes are being acquired "as is" with no recourse to Optionor for any default thereunder or diminution in value with respect thereto.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
EMBARCADERO CENTER INVESTORS PARTNERSHIP, PACIFIC PROPERTY SERVICES, L.P., BOSTON PROPERTIES LIMITED PARTNERSHIP AND BOSTON PROPERTIES, INC. AND ALL TRANSACTION DOCUMENTS DESCRIBED THEREIN (COLLECTIVELY, THE "TRANSACTION DOCUMENTS") REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. The parties make no representations or warranties to each other, except as specifically contained in this Agreement or in the accompanying exhibits or the certificates or other closing documents delivered according to this Agreement or in the other Transaction Documents. All prior agreements and understanding between the parties hereto with respect to the transactions contemplated hereby, whether verbal or in writing, are superseded by, and are deemed to have been merged into, this Agreement and all other Transaction Documents. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or in behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach.
All notices and other communications to Optionor shall be given to it at:
c/o Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile No.: (617) 421-1555
with a copy to:
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile No.: (617) 574-4112
All notices and other communications to Optionee shall be given to it at:
The Prudential Insurance Company of America
Prudential Realty Group
8 Campus Drive, 4th Floor
Arbor Circle South
Parsippany, New Jersey 07054
Attention: John R. Triece
Facsimile No.: (201) 734-1472
with a copy to:
The Prudential Insurance Company of America
Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, California 94111
Attention: Harry N. Mixon, Esq.
Facsimile No.: (415) 956-2197
and a copy to:
O'Melveny & Myers LLP
Embarcadero Center West
275 Battery Street
Suite 2600
San Francisco, California 94111
Attention: Stephen A. Cowan, Esq.
Facsimile No.: (415) 984-8701
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the date first above written.
"OPTIONOR"
EMBARCADERO CENTER ASSOCIATES,
a California General Partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES,
INC., a Delaware corporation,
its General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
"OPTIONEE"
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: /s/ Gary L. Frazier ------------------------------------- Name: __________________________________ Title: _________________________________ |
JOINDER
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: /s/ Paul D. Egan -------------------------------- Name: Paul D. Egan Title: Vice President |
EXHIBIT A
EXHIBIT B
The Fair Market Value of the Remainder Notes shall equal the aggregate Remaining Cash Flow for all Remainder Notes discounted from each respective scheduled payment due date to the Closing Date at a discount factor equal to the Discount Rate for each such Remainder Note. Notwithstanding the foregoing, if on the Determination Date an Investment Loan Borrower Credit Event exists, then Optionor shall appoint an investment banking firm of national recognition (which will be satisfactory to Optionee in its reasonable discretion) to determine the change in the Fair Market Value of the Remainder Notes for purposes of this Agreement. In the event that an investment banking firm is appointed to determine the change in the Fair Market Value of any Remainder Note as of the Determination Date pursuant to the preceding sentence, such investment banking firm shall be instructed to determine the change in the Fair Market Value of such Remainder Note based on the following four factors: (i) changes in market interest rates since the date of funding of the Remainder Note, (ii) the time period remaining from the Determination Date until the earlier of the next Rate Reset Date of such Remainder Note and the maturity of the Remainder Note, (iii) the Remaining Cash Flow (as defined below) of the Remainder Note, and (iv) changes in the credit quality of the Remainder Note since the date of funding thereof. The parties agree that an acceptable investment banking firm would be Goldman Sachs or Merrill Lynch. As used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of the following events: (x) the credit rating of the Remainder Notes has been downgraded from the credit rating of the Remainder Notes on the date hereof by both of the Rating Agencies, or (y) in the reasonable discretion of the managing general partner of Optionor, there has been, as compared to the date hereof, a material diminution or degradation in the value of the assets of the Investment Loan Borrower or the ability of the Investment Loan Borrower to pay its outstanding obligations as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Remainder Notes is determined and shall occur at 10:00 a.m. (New York City time) on the date that the Option Election Notice or Put Election Notice, as the case may be, is received by the addressee thereof.
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Remainder Note, the Margin (as defined in the Investment Loan Note Purchase Agreement) of such Remainder Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Remainder Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
EXHIBIT C
Date of Note: __________________________ Maker: Prudential Realty Securities, Inc. Face Amount: $___________________________
PAY TO THE ORDER OF __________________________________, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EXCEPT AS SPECIFICALLY PROVIDED IN THAT CERTAIN OPTION AND PUT AGREEMENT DATED AS OF NOVEMBER ___ 1998, BY AND AMONG EMBARCADERO CENTER ASSOCIATES, AS OPTIONOR, AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, AS OPTIONEE.
Dated: ______________, 199__
EMBARCADERO CENTER ASSOCIATES,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.
a Delaware Corporation,
as General Partner
By: __________________________________
Name: _________________________________
Title: ______________________________
EXHIBIT D
ASSIGNMENT AND ASSUMPTION
OF LOAN
Assignee hereby accepts the foregoing assignment and agrees to assume, pay, perform and discharge, as and when due, all of the agreements, obligations and liabilities of Assignor under or arising from or out of the Remainder Notes and the Investment Loan Documents (but only to the extent relating to the Remainder Notes) to be paid, performed or discharged on and after the date hereof and agrees to be bound by all of the terms and conditions of the Investment Loan Documents to be performed on and after the date hereof (but only to the extent relating to the Remainder Notes) (all such items, collectively, the "POST-CLOSING OBLIGATIONS").
This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee, and their respective successors and assigns.
"ASSIGNOR"
EMBARCADERO CENTER ASSOCIATES,
a California General Partnership
By: BOSTON PROPERTIES, LLC,
a Delaware limited liability company,
its Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By:___________________________
Name:_________________________
Title:________________________
"ASSIGNEE"
[INSERT SIGNATURE BLOCK]
The undersigned, as maker of the Remainder Notes, hereby agrees to release the Assignor from all Post-Closing Obligations and shall look only to Assignee for satisfaction of the same.
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
Exhibit 99.21
OPTION AND PUT AGREEMENT
THIS OPTION AND PUT AGREEMENT (this "AGREEMENT") is entered into as of November 12, 1998, by and between THREE EMBARCADERO CENTER VENTURE, a California general partnership ("OPTIONOR"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL" and together with any permitted assignee or designee hereunder hereinafter sometimes referred to as "OPTIONEE").
B. Pursuant to that certain Redemption Agreement of even date herewith, by and among Optionor, Prudential, Boston Properties LLC and BP EC3 Holdings LLC (the "REDEMPTION AGREEMENT"), the Investment Notes (or certain of the Investment Notes or portions thereof as provided in accordance with the terms and provisions of the Redemption Agreement) may be distributed (together with cash, if necessary pursuant to the Redemption Agreement) to Prudential in full redemption of its partnership interest in Optionor. The date on which such Investment Notes (or portions thereof) are distributed to Prudential and Prudential's partnership interest in the Optionor is fully redeemed (such that Prudential is no longer a partner or constituent of Optionor) pursuant to the Redemption Agreement shall be referred to in this Agreement as the "REDEMPTION DATE".
C. Pursuant to certain terms, provisions and conditions of the Redemption Agreement, less than the entire principal face amount of all Investment Notes may be distributed to Prudential on the Redemption Date. In such event, the Optionor may retain, as payee, a portion of the aggregate principal amount of all Investment Notes (the "REMAINDER") after the Redemption Date, which Remainder will be evidenced by one or more of the Investment Notes that are retained by Optionor pursuant to the Redemption Agreement and, if applicable pursuant to the terms and provisions of the Redemption Agreement and the Investment Loan Note Purchase Agreement, a new promissory note issued by the Investment Loan Borrower in accordance with Section 2 of the Redemption Agreement, all of which notes shall have an aggregate principal amount equal to the Remainder (collectively, the "REMAINDER NOTES"). All documents and instruments evidencing, securing or relating to the Investment Notes or Remainder Notes (including, without limitation,
the Investment Loan Note Purchase Agreement) shall be herein referred to as the
"INVESTMENT LOAN DOCUMENTS".
D. Optionee desires to acquire an option to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionor is willing to grant such option, and Optionor desires to acquire a put right to cause Optionee to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionee is willing to grant such put right to Optionor, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the benefits accruing to the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Optionor and Optionee, Optionor and Optionee hereby agree as follows:
--------- ------- 4(a) below). ---- 2. PUT. --- |
(II) On or before the Closing Date, Optionee shall deliver to Optionor, (A) in immediately available funds the Purchase Price (less the Option Fee) and such additional amounts as may be required to satisfy Optionee's share of any Closing costs; and (B) counterpart originals of the Assignment, executed by Optionee.
(III) All reasonable Closing and escrow fees and costs incurred in connection with the transactions described in this Agreement shall be paid fifty percent (50%) by Optionor and fifty percent (50%) by Optionee; provided that, each party hereto shall bear the expense of its own counsel.
-------- ---- 5. OPTIONOR'S REPRESENTATIONS AND WARRANTIES. Optionor hereby ----------------------------------------- |
represents and warrants to Optionee as of the date hereof and as of the Closing Date as follows:
(B) As of the date hereof, Optionor has not assigned or transferred the Investment Notes or any of the other Investment Loan Documents (except for any pledge of the Investment Notes securing the Equity Redemption Loan), nor are there any agreements to assign or convey any portion of such Investment Loan Documents to any person other than Optionee and Prudential in accordance with this Agreement and the Redemption Agreement, respectively. On the Closing Date, Optionor shall not have assigned or transferred the Remainder Notes or any of the other Investment Loan Documents (except for such portion of the Investment Notes transferred to Prudential in accordance with the Redemption Agreement), nor shall there be any agreements to assign or convey the Remainder Notes or any portion of such Investment Loan Documents to any person other than Optionee (except with respect to Prudential's rights under the Redemption Agreement).
(C) To Optionor's knowledge, Optionor has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents to be executed and delivered to Optionee in connection with the transactions described herein.
(D) To Optionor's knowledge, Optionor is a duly formed general partnership under the laws of the State of California, and this Agreement, and all the instruments and documents to be executed and delivered by Optionor in connection herewith, are legal, valid and binding obligations of Optionor enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(E) To Optionor's knowledge, the execution of this Agreement and the performance of Optionor's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to
which Optionor is subject, nor violate any agreement or contract to which Optionor is a party or by which Optionor is bound. To Optionor's knowledge, no consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Optionor of, or compliance by Optionor with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
(A) Optionee is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Optionee has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents executed and delivered by Optionee in connection with the transactions contemplated herein. This Agreement, and all the instruments and documents to be executed and delivered by Optionee in connection herewith, are legal, valid and binding obligations of Optionee enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(B) The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of Optionee and does not require any consent or approval of any party that has not been obtained.
(C) The execution of this Agreement and the performance of Optionee's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which Optionee is subject, nor violate any agreement or contract to which Optionee is a party or by which Optionee is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Optionee of, or compliance by Optionee with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
(D) Optionee has made, and will make, prior to the Closing, such examination, review and investigation of the facts and circumstances as necessary to evaluate the Remainder Notes. Optionee further acknowledges that in acquiring the Remainder Notes, Optionee is assuming the risk of full or partial loss which is inherent with the credit, collateral and collectibility risks associated with the quality and character of the loan evidenced by the Remainder Notes.
(E) Optionee is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended. The Remainder Notes will be acquired by Optionee for its own account for investment only and not with a view to, or with any intention of, a distribution or resale thereof, in whole or in part.
(F) Optionee has not relied upon any representations, warranties or statements of any kind made by, or on behalf of, Optionor, except as specifically set forth in this Agreement. Optionee acknowledges that, except for the express representations and warranties by Optionor set forth in, or to be made in instruments delivered pursuant to, this Agreement, Optionor negates and disclaims all representations, warranties and statements of every kind or type (express or implied) and, except for the Optionor's representations and warranties set forth herein, the Remainder Notes are being acquired "as is" with no recourse to Optionor for any default thereunder or diminution in value with respect thereto.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
FEDMARK CORPORATION, EMBARCADERO CENTER INVESTORS PARTNERSHIP, PACIFIC PROPERTY SERVICES, L.P., BOSTON PROPERTIES LIMITED PARTNERSHIP AND BOSTON PROPERTIES, INC. AND ALL TRANSACTION DOCUMENTS DESCRIBED THEREIN (COLLECTIVELY, THE "TRANSACTION DOCUMENTS") REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. The parties make no representations or warranties to each other, except as specifically contained in this Agreement or in the accompanying exhibits or the certificates or other closing documents delivered according to this Agreement or in the other Transaction Documents. All prior agreements and understanding between the parties hereto with respect to the transactions contemplated hereby, whether verbal or in writing, are superseded by, and are deemed to have been merged into, this Agreement and all other Transaction Documents. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or in behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach.
All notices and other communications to Optionor shall be given to it at:
c/o Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile No.: (617) 421-1555
with a copy to:
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile No.: (617) 574-4112
All notices and other communications to Optionee shall be given to it at:
The Prudential Insurance Company of America
Prudential Realty Group
8 Campus Drive, 4th Floor
Arbor Circle South
Parsippany, New Jersey 07054
Attention: John R. Triece
Facsimile No.: (201) 734-1472
with a copy to:
The Prudential Insurance Company of America
Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, California 94111
Attention: Harry N. Mixon, Esq.
Facsimile No.: (415) 956-2197
and a copy to:
O'Melveny & Myers LLP
Embarcadero Center West
275 Battery Street
Suite 2600
San Francisco, California 94111
Attention: Stephen A. Cowan, Esq.
Facsimile No.: (415) 984-8701
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the date first above written.
"OPTIONOR"
THREE EMBARCADERO CENTER VENTURE,
a California General Partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES,
INC., a Delaware corporation,
as General Partner
By: /s/ Thomas J. O'Connor ------------------------- Name: Thomas J. O'Connor Title: Vice President |
"OPTIONEE"
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation
By: /s/ Gary L. Frazier ----------------------------------------- Name: ________________________________ Title: _______________________________ |
JOINDER
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: /s/ Paul D. Egan --------------------------------------- Name: Paul D. Egan Title: Vice President |
EXHIBIT A
EXHIBIT B
The Fair Market Value of the Remainder Notes shall equal the aggregate Remaining Cash Flow for all Remainder Notes discounted from each respective scheduled payment due date to the Closing Date at a discount factor equal to the Discount Rate for each such Remainder Note. Notwithstanding the foregoing, if on the Determination Date an Investment Loan Borrower Credit Event exists, then Optionor shall appoint an investment banking firm of national recognition (which will be satisfactory to Optionee in its reasonable discretion) to determine the change in the Fair Market Value of the Remainder Notes for purposes of this Agreement. In the event that an investment banking firm is appointed to determine the change in the Fair Market Value of any Remainder Note as of the Determination Date pursuant to the preceding sentence, such investment banking firm shall be instructed to determine the change in the Fair Market Value of such Remainder Note based on the following four factors: (i) changes in market interest rates since the date of funding of the Remainder Note, (ii) the time period remaining from the Determination Date until the earlier of the next Rate Reset Date of such Remainder Note and the maturity of the Remainder Note, (iii) the Remaining Cash Flow (as defined below) of the Remainder Note, and (iv) changes in the credit quality of the Remainder Note since the date of funding thereof. The parties agree that an acceptable investment banking firm would be Goldman Sachs or Merrill Lynch. As used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of the following events: (x) the credit rating of the Remainder Notes has been downgraded from the credit rating of the Remainder Notes on the date hereof by both of the Rating Agencies, or (y) in the reasonable discretion of the managing general partner of Optionor, there has been, as compared to the date hereof, a material diminution or degradation in the value of the assets of the Investment Loan Borrower or the ability of the Investment Loan Borrower to pay its outstanding obligations as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Remainder Notes is determined and shall occur at 10:00 a.m. (New York City time) on the date that the Option Election Notice or Put Election Notice, as the case may be, is received by the addressee thereof.
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Remainder Note, the Margin (as defined in the Investment Loan Note Purchase Agreement) of such Remainder Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Remainder Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
EXHIBIT C
Date of Note: ____________________
Maker: Prudential Realty Securities, Inc.
Face Amount: $__________________
PAY TO THE ORDER OF __________________________________, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EXCEPT AS SPECIFICALLY PROVIDED IN THAT CERTAIN OPTION AND PUT AGREEMENT DATED AS OF NOVEMBER ___, 1998, BY AND AMONG THREE EMBARCADERO CENTER VENTURE, AS OPTIONOR, AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, AS OPTIONEE.
Dated: ______________, 199__
THREE EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
its Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.
a Delaware Corporation,
as General Partner
By: __________________________________
Name: _________________________________
Title: ______________________________
EXHIBIT D
ASSIGNMENT AND ASSUMPTION
OF LOAN
Assignee hereby accepts the foregoing assignment and agrees to assume, pay, perform and discharge, as and when due, all of the agreements, obligations and liabilities of Assignor under or arising from or out of the Remainder Notes and the Investment Loan Documents (but only to the extent relating to the Remainder Notes) to be paid, performed or discharged on and after the date hereof and agrees to be bound by all of the terms and conditions of the Investment Loan Documents to be performed on and after the date hereof (but only to the extent relating to the Remainder Notes) (all such items, collectively, the "POST-CLOSING OBLIGATIONS").
This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee, and their respective successors and assigns.
"ASSIGNOR"
THREE EMBARCADERO CENTER VENTURE, a
California General Partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.,
a Delaware corporation,
as General Partner
By:_______________________
Name:_____________________
Title:____________________
"ASSIGNEE"
[INSERT ASSIGNEE SIGNATURE BLOCK]
The undersigned, as maker of the Remainder Notes, hereby agrees to release the Assignor from all Post-Closing Obligations and shall look only to Assignee for satisfaction of the same.
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
EXHIBIT 99.22
OPTION AND PUT AGREEMENT
THIS OPTION AND PUT AGREEMENT (this "AGREEMENT") is entered into as of November 12, 1998, by and between FOUR EMBARCADERO CENTER VENTURE, a California general partnership ("OPTIONOR"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("PRUDENTIAL" and together with any permitted assignee or designee hereunder hereinafter sometimes referred to as "OPTIONEE").
B. Pursuant to that certain Redemption Agreement of even date herewith, by and among Optionor, Prudential, Boston Properties LLC and BP EC4 Holdings LLC (the "REDEMPTION AGREEMENT"), the Investment Notes (or certain of the Investment Notes or portions thereof as provided in accordance with the terms and provisions of the Redemption Agreement) may be distributed (together with cash, if necessary pursuant to the Redemption Agreement) to Prudential in full redemption of its partnership interest in Optionor. The date on which such Investment Notes (or portions thereof) are distributed to Prudential and Prudential's partnership interest in the Optionor is fully redeemed (such that Prudential is no longer a partner or constituent of Optionor) pursuant to the Redemption Agreement shall be referred to in this Agreement as the "REDEMPTION DATE".
C. Pursuant to certain terms, provisions and conditions of the Redemption Agreement, less than the entire principal face amount of all Investment Notes may be distributed to Prudential on the Redemption Date. In such event, the Optionor may retain, as payee, a portion of the aggregate principal amount of all Investment Notes (the "REMAINDER") after the Redemption Date, which Remainder will be evidenced by one or more of the Investment Notes that are retained by Optionor pursuant to the Redemption Agreement and, if applicable pursuant to the terms and provisions of the Redemption Agreement and the Investment Loan Note Purchase Agreement, a new promissory note issued by the Investment Loan Borrower in accordance with Section 2 of the Redemption Agreement, all of which notes shall have an aggregate principal amount equal to the Remainder (collectively, the "REMAINDER NOTES"). All documents and instruments evidencing, securing or relating to the Investment Notes or Remainder Notes (including, without limitation,
the Investment Loan Note Purchase Agreement) shall be herein referred to as the
"INVESTMENT LOAN DOCUMENTS".
D. Optionee desires to acquire an option to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionor is willing to grant such option, and Optionor desires to acquire a put right to cause Optionee to purchase and acquire Optionor's entire interest in, to and under any such Remainder Notes and Optionee is willing to grant such put right to Optionor, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the benefits accruing to the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Optionor and Optionee, Optionor and Optionee hereby agree as follows:
--------- ------- 4(a) below). ---- 2. PUT. --- |
(II) On or before the Closing Date, Optionee shall deliver to Optionor, (A) in immediately available funds the Purchase Price (less the Option Fee) and such additional amounts as may be required to satisfy Optionee's share of any Closing costs; and (B) counterpart originals of the Assignment, executed by Optionee.
(III) All reasonable Closing and escrow fees and costs incurred in connection with the transactions described in this Agreement shall be paid fifty percent (50%) by Optionor and fifty percent (50%) by Optionee; provided that, each party hereto shall bear the expense of its own counsel.
-------- ---- 5. OPTIONOR'S REPRESENTATIONS AND WARRANTIES. Optionor hereby ----------------------------------------- |
represents and warrants to Optionee as of the date hereof and as of the Closing Date as follows:
(B) As of the date hereof, Optionor has not assigned or transferred the Investment Notes or any of the other Investment Loan Documents (except for any pledge of the Investment Notes securing the Equity Redemption Loan), nor are there any agreements to assign or convey any portion of such Investment Loan Documents to any person other than Optionee and Prudential in accordance with this Agreement and the Redemption Agreement, respectively. On the Closing Date, Optionor shall not have assigned or transferred the Remainder Notes or any of the other Investment Loan Documents (except for such portion of the Investment Notes transferred to Prudential in accordance with the Redemption Agreement), nor shall there be any agreements to assign or convey the Remainder Notes or any portion of such Investment Loan Documents to any person other than Optionee (except with respect to Prudential's rights under the Redemption Agreement).
(C) To Optionor's knowledge, Optionor has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents to be executed and delivered to Optionee in connection with the transactions described herein.
(D) To Optionor's knowledge, Optionor is a duly formed general partnership under the laws of the State of California, and this Agreement, and all the instruments and documents to be executed and delivered by Optionor in connection herewith, are legal, valid and binding obligations of Optionor enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(E) To Optionor's knowledge, the execution of this Agreement and the performance of Optionor's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to
which Optionor is subject, nor violate any agreement or contract to which Optionor is a party or by which Optionor is bound. To Optionor's knowledge, no consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Optionor of, or compliance by Optionor with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
(A) Optionee is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Optionee has all requisite power and authority to execute and deliver, and to perform all of its obligations under, this Agreement and all instruments and other documents executed and delivered by Optionee in connection with the transactions contemplated herein. This Agreement, and all the instruments and documents to be executed and delivered by Optionee in connection herewith, are legal, valid and binding obligations of Optionee enforceable against it in accordance with their respective terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally.
(B) The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of Optionee and does not require any consent or approval of any party that has not been obtained.
(C) The execution of this Agreement and the performance of Optionee's obligations hereunder will not conflict with or result in a breach of any statute, rule, regulation, judgment, decree or order of any court, board, committee or governmental agency to which Optionee is subject, nor violate any agreement or contract to which Optionee is a party or by which Optionee is bound. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Optionee of, or compliance by Optionee with, this Agreement or the consummation of the transactions contemplated by it, except for such consents, approvals, authorizations or orders, if any, that have been obtained.
(D) Optionee has made, and will make, prior to the Closing, such examination, review and investigation of the facts and circumstances as necessary to evaluate the Remainder Notes. Optionee further acknowledges that in acquiring the Remainder Notes, Optionee is assuming the risk of full or partial loss which is inherent with the credit, collateral and collectibility risks associated with the quality and character of the loan evidenced by the Remainder Notes.
(E) Optionee is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended. The Remainder Notes will be acquired by Optionee for its own account for investment only and not with a view to, or with any intention of, a distribution or resale thereof, in whole or in part.
(F) Optionee has not relied upon any representations, warranties or statements of any kind made by, or on behalf of, Optionor, except as specifically set forth in this Agreement. Optionee acknowledges that, except for the express representations and warranties by Optionor set forth in, or to be made in instruments delivered pursuant to, this Agreement, Optionor negates and disclaims all representations, warranties and statements of every kind or type (express or implied) and, except for the Optionor's representations and warranties set forth herein, the Remainder Notes are being acquired "as is" with no recourse to Optionor for any default thereunder or diminution in value with respect thereto.
Each of the foregoing representations and warranties shall survive the Closing for a period of twelve (12) months immediately thereafter.
EMBARCADERO CENTER INVESTORS PARTNERSHIP, PACIFIC PROPERTY SERVICES, L.P., BOSTON PROPERTIES LIMITED PARTNERSHIP AND BOSTON PROPERTIES, INC. AND ALL TRANSACTION DOCUMENTS DESCRIBED THEREIN (COLLECTIVELY, THE "TRANSACTION DOCUMENTS") REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. The parties make no representations or warranties to each other, except as specifically contained in this Agreement or in the accompanying exhibits or the certificates or other closing documents delivered according to this Agreement or in the other Transaction Documents. All prior agreements and understanding between the parties hereto with respect to the transactions contemplated hereby, whether verbal or in writing, are superseded by, and are deemed to have been merged into, this Agreement and all other Transaction Documents. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or in behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach.
All notices and other communications to Optionor shall be given to it at:
c/o Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116-3495
Attention: General Counsel
Facsimile No.: (617) 421-1555
with a copy to:
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110-3333
Attention: Eli Rubenstein, Esq.
Facsimile No.: (617) 574-4112
All notices and other communications to Optionee shall be given to it at:
The Prudential Insurance Company of America
Prudential Realty Group
8 Campus Drive, 4th Floor
Arbor Circle South
Parsippany, New Jersey 07054
Attention: John R. Triece
Facsimile No.: (201) 734-1472
with a copy to:
The Prudential Insurance Company of America
Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, California 94111
Attention: Harry N. Mixon, Esq.
Facsimile No.: (415) 956-2197
and a copy to:
O'Melveny & Myers LLP
Embarcadero Center West
275 Battery Street
Suite 2600
San Francisco, California 94111
Attention: Stephen A. Cowan, Esq.
Facsimile No.: (415) 984-8701
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the date first above written.
"OPTIONOR"
FOUR EMBARCADERO CENTER VENTURE,
a California General Partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES,
INC., a Delaware corporation,
General Partner
By: /s/ Thomas J. O'Connor --------------------------- Name: Thomas J. O'Connor ------------------------- Title: Vice President ------------------------ |
"OPTIONEE"
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: /s/ Gary L. Frazier --------------------------------- Name: ______________________________ Title: _____________________________ |
JOINDER
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: /s/ Paul D. Egan ------------------------------------ Name: Paul D. Egan ---------------------------------- Title: Vice President --------------------------------- |
EXHIBIT A
EXHIBIT B
The Fair Market Value of the Remainder Notes shall equal the aggregate Remaining Cash Flow for all Remainder Notes discounted from each respective scheduled payment due date to the Closing Date at a discount factor equal to the Discount Rate for each such Remainder Note. Notwithstanding the foregoing, if on the Determination Date an Investment Loan Borrower Credit Event exists, then Optionor shall appoint an investment banking firm of national recognition (which will be satisfactory to Optionee in its reasonable discretion) to determine the change in the Fair Market Value of the Remainder Notes for purposes of this Agreement. In the event that an investment banking firm is appointed to determine the change in the Fair Market Value of any Remainder Note as of the Determination Date pursuant to the preceding sentence, such investment banking firm shall be instructed to determine the change in the Fair Market Value of such Remainder Note based on the following four factors: (i) changes in market interest rates since the date of funding of the Remainder Note, (ii) the time period remaining from the Determination Date until the earlier of the next Rate Reset Date of such Remainder Note and the maturity of the Remainder Note, (iii) the Remaining Cash Flow (as defined below) of the Remainder Note, and (iv) changes in the credit quality of the Remainder Note since the date of funding thereof. The parties agree that an acceptable investment banking firm would be Goldman Sachs or Merrill Lynch. As used herein, the term "INVESTMENT LOAN BORROWER CREDIT EVENT" shall mean any of the following events: (x) the credit rating of the Remainder Notes has been downgraded from the credit rating of the Remainder Notes on the date hereof by both of the Rating Agencies, or (y) in the reasonable discretion of the managing general partner of Optionor, there has been, as compared to the date hereof, a material diminution or degradation in the value of the assets of the Investment Loan Borrower or the ability of the Investment Loan Borrower to pay its outstanding obligations as they become due from the date hereof.
As used herein, the following terms shall have the following meanings:
"DETERMINATION DATE" shall mean the date upon which the Fair Market Value of the Remainder Notes is determined and shall occur at 10:00 a.m. (New York City time) on the date that the Option Election Notice or Put Election Notice, as the case may be, is received by the addressee thereof.
"DISCOUNT RATE" shall mean the Reinvestment Rate plus the Margin.
"MARGIN" shall mean, with respect to any Remainder Note, the Margin (as defined in the Investment Loan Note Purchase Agreement) of such Remainder Note.
"RATING AGENCIES" shall mean Fitch IBCA, Inc. and Standard and Poor's Corporation.
"REINVESTMENT RATE" shall mean, with respect to any Remainder Note, the offered-side yield to maturity as of the Determination Date of the U.S. Treasury security that was used to determine the then Treasury (as defined in the Investment Loan Note Purchase Agreement) of such Investment Note.
EXHIBIT C
Date of Note: __________________________ Maker: Prudential Realty Securities, Inc. Face Amount: $__________________________
PAY TO THE ORDER OF __________________________________, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EXCEPT AS SPECIFICALLY PROVIDED IN THAT CERTAIN OPTION AND PUT AGREEMENT DATED AS OF NOVEMBER ___, 1998, BY AND AMONG FOUR EMBARCADERO CENTER VENTURE, AS OPTIONOR, AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, AS OPTIONEE.
Dated: ______________, 199__
FOUR EMBARCADERO CENTER VENTURE,
a California general partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES, INC.
a Delaware Corporation,
as General Partner
By: __________________________________
Name: _________________________________
Title: ______________________________
EXHIBIT D
ASSIGNMENT AND ASSUMPTION
OF LOAN
Assignee hereby accepts the foregoing assignment and agrees to assume, pay, perform and discharge, as and when due, all of the agreements, obligations and liabilities of Assignor under or arising from or out of the Remainder Notes and the Investment Loan Documents (but only to the extent relating to the Remainder Notes) to be paid, performed or discharged on and after the date hereof and agrees to be bound by all of the terms and conditions of the Investment Loan Documents to be performed on and after the date hereof (but only to the extent relating to the Remainder Notes) (all such items, collectively, the "POST-CLOSING OBLIGATIONS").
[SIGNATURES ON NEXT PAGE]
This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee, and their respective successors and assigns.
"ASSIGNOR"
FOUR EMBARCADERO CENTER VENTURE,
a California General Partnership
By: BOSTON PROPERTIES LLC,
a Delaware limited liability company,
as Managing General Partner
By: BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership, as Manager
By: BOSTON PROPERTIES,
INC., a Delaware corporation,
as General Partner
By:_____________________
Name:___________________
Title:__________________
"ASSIGNEE"
[INSERT ASSIGNEE SIGNATURE BLOCK]
The undersigned, as maker of the Remainder Notes, hereby agrees to release the Assignor from all Post-Closing Obligations and shall look only to Assignee for satisfaction of the same.
PRUDENTIAL REALTY SECURITIES, INC.,
a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
EXHIBIT 99.23
STOCK PURCHASE AGREEMENT
by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
as Investor
and
BOSTON PROPERTIES, INC.
as Company
Dated: September 28, 1998
STOCK PURCHASE AGREEMENT
INDEX
SECTION 1. SALE OF SHARES AND AGGREGATE PURCHASE PRICE............................. 1 ---------- ------------------------------------------- 1.1 Purchase Price and Payment.............................................. 1 -------------------------- 1.2 Transfer of Shares...................................................... 1 ------------------ 1.3 Time and Place of Closing............................................... 2 ------------------------- 1.4 Further Assurances...................................................... 2 ------------------ SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................... 2 ---------- --------------------------------------------- 2.1 Making of Representations and Warranties................................ 2 ---------------------------------------- 2.2 Organization, Good Standing and Authority............................... 2 ----------------------------------------- 2.3 Company's Authorization and Binding Effect.............................. 3 ------------------------------------------ 2.4 Capitalization; Status of Shares........................................ 3 -------------------------------- 2.5 Conflicting Agreements and Other Matters................................ 4 ---------------------------------------- 2.6 Litigation, Proceedings, etc............................................ 5 ---------------------------- 2.7 No Default or Violation................................................. 5 ----------------------- 2.8 Governmental Consents, etc.............................................. 5 -------------------------- 2.9 No Registration Under the Securities Act; No -------------------------------------------- General Solicitation. Registration of Shares............................ 6 -------------------------------------------- 2.10 Insurance............................................................... 6 --------- 2.11 Information Provided.................................................... 6 -------------------- 2.12 No Other Liabilities.................................................... 7 -------------------- 2.13 The Partnership; Taxes; REIT Status..................................... 7 ----------------------------------- 2.14 Compliance With Laws.................................................... 7 -------------------- 2.15 SEC Documents........................................................... 7 ------------- 2.16 Material Contracts...................................................... 8 ------------------ 2.17 No Merger Agreement..................................................... 8 ------------------- 2.18 Certain Actions by the Company.......................................... 8 ------------------------------ 2.19 No Investment Company Status............................................ 8 ---------------------------- SECTION 3. COVENANTS OF THE COMPANY................................................ 9 ------------------------ 3.1 Making of Covenants and Agreements...................................... 9 ---------------------------------- 3.2 Conduct of Business..................................................... 9 ------------------- 3.3 Information Rights...................................................... 9 ------------------ 3.4 Consultation Rights..................................................... 10 ------------------- 3.5 Notice of Default....................................................... 10 ----------------- 3.6 Consummation of Agreement............................................... 10 ------------------------- 3.7 Cooperation of the Company.............................................. 10 -------------------------- 3.8 Negative Covenants of the Company....................................... 10 --------------------------------- 3.9 Survival................................................................ 11 -------- |
SECTION 4. REPRESENTATIONS AND WARRANTIES OF INVESTOR.............................. 11 ---------- ------------------------------------------ 4.1 Making of Representations and Warranties of Investor.................... 11 ---------------------------------------------------- 4.2 Investor's Organization................................................. 11 ----------------------- 4.3 Investment Intent....................................................... 11 ----------------- 4.4 Investor Status......................................................... 11 --------------- 4.5 Access to Information................................................... 12 --------------------- 4.6 Reliance................................................................ 12 -------- 4.7 No Advertisement or Solicitation........................................ 12 -------------------------------- 4.8 Other Investor Representations.......................................... 12 ------------------------------ SECTION 5. COVENANTS OF INVESTOR................................................... 13 ---------- --------------------- 5.1 Making of Covenants and Agreement....................................... 13 --------------------------------- 5.2 Legends................................................................. 13 ------- 5.3 Confidentiality of Information.......................................... 13 ------------------------------ 5.4 Consummation of Agreement............................................... 14 ------------------------- 5.5 Cooperation of Investor................................................. 14 ----------------------- SECTION 6. CONDITIONS.............................................................. 14 ---------- ---------- 6.1 Conditions to the Obligations of Investor............................... 14 ----------------------------------------- 6.2 Conditions to Obligations of the Company................................ 17 ---------------------------------------- SECTION 7. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED............................. 17 ---------- ------------------------------------------- 7.1 Termination............................................................. 17 ----------- 7.2 Effect of Termination................................................... 18 --------------------- 7.3 Right to Proceed........................................................ 18 ---------------- SECTION 8. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING............................ 18 ---------- -------------------------------------------- 8.1 Survival................................................................ 18 -------- SECTION 9. INDEMNIFICATION......................................................... 18 ---------- --------------- 9.1 Indemnification by the Company.......................................... 18 ------------------------------ 9.2 Indemnification by Investor............................................. 19 --------------------------- 9.3 Notice; Defense of Claims............................................... 19 ------------------------- SECTION 10. MISCELLANEOUS........................................................... 20 ----------- ------------- 10.1 Fees and Expenses....................................................... 20 ----------------- 10.2 Governing Law........................................................... 20 ------------- 10.3 Notices................................................................. 20 ------- 10.4 Entire Agreement........................................................ 21 ---------------- 10.5 Assignability; Binding Effect........................................... 21 ----------------------------- 10.6 Captions and Gender..................................................... 22 ------------------- 10.7 Execution in Counterparts............................................... 22 ------------------------- 10.8 Amendments.............................................................. 22 ---------- 10.9 Publicity and Disclosures............................................... 22 ------------------------- |
10.10 Consent to Jurisdiction................................................. 22 ----------------------- 10.11 Specific Performance.................................................... 22 -------------------- |
Schedule 2.4 - Capitalization, Status of Shares Schedule 2.5 - Conflicting Agreements Schedule 2.8 - Required Governmental Consents Schedule 2.11 - Information Provided Schedule 2.12 - Other Liabilities Schedule 2.16 - Material Contracts Schedule 2.17 - Merger Agreements Schedule 4.8(a) - Litigation Exhibit A - Form of Registration Rights Agreement Exhibit B - Form of Opinions of Company's Counsel Exhibit C - Confidentiality Agreement Exhibit D - Form of Agreement Regarding Certain Information Exhibit E - Form of Certificate of Designations Exhibit F - Form of Ownership Resolutions |
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of September ___, 1998, by and between BOSTON PROPERTIES INC., a Delaware corporation (the "COMPANY"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation (the "INVESTOR").
WHEREAS, the Company has agreed to issue and sell to Investor, and Investor has agreed to purchase from the Company, shares of a newly created class of the Company's Series A Convertible Redeemable Preferred Stock (the "SERIES A PREFERRED STOCK"), for aggregate cash consideration of $100,000,000.00; and
WHEREAS, Investor desires to purchase such Series A Preferred Stock on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in order to consummate said purchase and sale and in consideration of the mutual agreements set forth herein, the parties hereto agree as follows:
(b) The purchase price per Share (the "PER SHARE PRICE") shall be equal to $50.00 per share.
(c) The Purchase Price shall be delivered on the Closing Date to the Company by wire transfer of immediately available funds, to a bank account of the Company specified by the Company at least three (3) business days prior to the Closing.
or operations of the Company and the Subsidiaries, taken as a whole (such change a "MATERIAL ADVERSE EFFECT") and the Company and each Subsidiary of the Company is authorized to consummate the transactions contemplated hereby and fulfill all of their respective obligations hereunder and under all documents contemplated hereunder to be executed by the Company and/or any such Subsidiary of the Company, and has all necessary power to execute and deliver this Agreement and all documents contemplated hereunder to be executed by the Company and/or any such Subsidiary of the Company, and to perform all of their respective obligations hereunder and thereunder. The Company has (i) delivered to Investor true, correct and complete copies of (a) its certificate of incorporation and bylaws and (b) the Amended and Restated Agreement of Limited Partnership (the "PARTNERSHIP AGREEMENT") of the Partnership and the Partnership's certificate of limited partnership and (ii) made available to Investor the certificate of incorporation and bylaws, or the partnership agreement and certificate of partnership or certificate of limited partnership or other formation and organizational documents, as the case may be, of each of the Subsidiaries.
hereunder free and clear of all liens, pledges, encumbrances, mortgages, charges or security interests of any kind (each individually a "LIEN" and collectively referred to as "LIENS"). The issuance of the Shares to Investor at the Closing will not require any material approval or consent of any individual, partnership, corporation, trust, unincorporated organization, or any government or agency or political subdivision thereof (each a "PERSON") except any such approval that shall have been obtained on or prior to the Closing.
(b) The shares of common stock of the Company, $0.01 par value (the "COMMON STOCK") issuable upon the conversion of Series A Preferred Stock in accordance with the terms of the Certificate of Designations (defined below) will be duly and validly reserved for issuance and when issued upon such conversion will be duly and validly authorized and issued, fully paid and non- assessable. Upon conversion of any shares of Series A Preferred Stock in accordance with the terms of the Certificate of Designations, the Common Stock issuable upon such conversion will be issued free and clear of all Liens and the issuance of such Common Stock will not require any approval or consent of any Person except any such approval that shall have been obtained on or prior to the Closing.
is not aware of any facts or circumstances that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
approvals, orders, consents, qualifications, franchises, certificates, permits and authorizations from any Governmental Entity, to own or lease its properties and to conduct its property and businesses as currently conducted, except where failure to do so could not reasonably be expected to have a Material Adverse Effect. At the Closing Date, all such registrations, declarations, approvals, orders, consents, qualifications, franchises, certificates, permits and authorizations, the failure of which to file, give notice of or obtain could reasonably be expected to have a Material Adverse Effect, will be in full force and effect. The assets of the Company qualify as exempt assets for purposes of the Hart-Scott-Rodino Act and no filing under the Hart-Scott-Rodino Act is required in connection with the issuance of the Shares to Investor pursuant to this Agreement.
(b) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act, an "AFFILIATE") of the Company has
directly, or through an agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Shares in a
manner that would require registration under the Securities Act of the Shares or
(ii) engaged in any form of general solicitation or general advertising in
connection with the offering of the Shares (as those terms are used in
Regulation D under the Securities Act).
and other documents required by the Securities Act, and Securities Exchange Act of 1934, as amended, (the "EXCHANGE ACT") to be filed by the Company (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the "SEC DOCUMENTS"). The Company has delivered or made available to Investor all SEC Documents. As of their respective filing dates, (or if amended, revised or superseded by a subsequent filing with the Commission, then as of the date of such subsequent filing), the SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and none of the SEC Documents (including any and all financial statements included or incorporated by reference therein) as of such dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The consolidated financial statements of the Company and its Subsidiaries included in all SEC Documents, including any amendments thereto, comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto.
contemplated by this Agreement will not cause the Company to become an investment company subject to registration under such Act.
(a) Conduct its business only in the ordinary course and refrain from changing or introducing any method of management or operations except in the ordinary course of business and consistent with prior practices, provided that the Company shall not have breached its obligation with respect to this
(b) Use its reasonable best efforts to keep intact its business organization and use reasonable efforts to keep available its present officers and employees and to preserve the goodwill of all individuals and entities having business relations with it.
merge or consolidate with any entity, sell, lease, license or otherwise dispose of all or substantially all of its assets (whether now owned or hereafter acquired) to any entity or acquire all or substantially all of the assets or business of any entity in each case whether in one transaction or in a series of transactions pursuant to which the Company or such Subsidiary shall not be the surviving entity.
Securities Act, and has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the Company and an investment in the Company, and is able to bear the economic risk of such investment.
(b) There is no proceeding pending or to Investor's knowledge threatened by or against Investor under the United States Bankruptcy Code.
(i) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATES AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY WHICH OPINION IS REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY AND ITS COUNSEL, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR THE SECURITIES LAWS OF SUCH STATES OR THAT SUCH TRANSACTION COMPLIES WITH THE RULES PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT OR THE SECURITIES LAWS OF SUCH STATES. THIS LEGEND MAY ONLY BE REMOVED AS PROVIDED FOR IN SECTION 5.2 OF THAT CERTAIN STOCK PURCHASE AGREEMENT DATED AS OF SEPTEMBER 28, 1998 ENTERED INTO BETWEEN THE HOLDER HEREOF AND THE COMPANY. A COPY OF SAID AGREEMENT MAY BE INSPECTED AT THE OFFICES OF THE COMPANY."
(ii) Any legend required by any applicable state securities law.
The legends set forth above may be removed if and when the Shares represented by such certificate are disposed of pursuant to an effective registration statement under the Securities Act or upon the Company's receipt of an opinion of counsel, in form and substance and from counsel reasonably satisfactory to the Company and its counsel, confirming that any sale or transfer of such securities will not require registration of such securities under the Securities Act or under any "Blue Sky" or similar laws.
(i) by mutual written consent of all of the parties to this Agreement;
satisfied at or prior to the Closing Date, such written notice to set forth such conditions which have not been or will not be so satisfied.
fines, penalties, costs, and expenses (including, without limitation, reasonable fees of counsel) of any kind or nature whatsoever (whether or not arising out of third-party claims and including all amounts paid in the investigation, defense or settlement of the foregoing) which may be sustained or suffered by any of them arising out of or based upon any of the following matters:
(a) a deliberate or wilful breach by the Company of any of its covenants under this Agreement or in any certificate, schedule or exhibit delivered pursuant hereto; and
(b) any fraud, intentional misrepresentation, other material breach of any representation, warranty or covenant of the Company under this Agreement or in any certificate, schedule or exhibit delivered pursuant hereto, or by reason of any claim, action or proceeding asserted or instituted growing out of any matter or thing constituting a material breach of such representations, warranties or covenants.
(a) a deliberate or wilful breach by the Investor of any of its covenants under this Agreement or in any certificate, schedule or exhibit delivered pursuant hereto; and
(b) any fraud, intentional misrepresentation, other material breach of any representation, warranty or covenant of the Investor under this Agreement or in any certificate, schedule or exhibit delivered pursuant hereto, or by reason of any claim, action or proceeding asserted or instituted growing out of any matter or thing constituting a material breach of such representations, warranties or covenants.
it shall be deemed to have accepted and agreed to the claim, which shall become immediately due and payable. The indemnifying party shall be entitled to direct the defense against a third party claim or liability with counsel selected by it (subject to the consent of the indemnified party, which consent shall not be unreasonably withheld) as long as the indemnifying party is conducting a good faith and diligent defense. The indemnified party shall at all times have the right to fully participate in the defense of a third party claim or liability at its own expense directly or through counsel; provided, however, that if the named parties to the action or proceeding include both the indemnifying party and the indemnified party and the indemnified party is advised that representation of both parties by the same counsel would be inappropriate under applicable standards of professional conduct, the indemnified party may engage separate counsel at the expense of the indemnifying party. If no such notice of intent to dispute and defend a third party claim or liability is given by the indemnifying party, or if such good faith and diligent defense is not being or ceases to be conducted by the indemnifying party, the indemnified party shall have the right, at the expense of the indemnifying party, to undertake the defense of such claim or liability (with counsel selected by the indemnified party), and to compromise or settle it, exercising reasonable business judgment. If the third party claim or liability is one that by its nature cannot be defended solely by the indemnifying party, then the indemnified party shall make available such information and assistance as the indemnifying party may reasonably request and shall cooperate with the indemnifying party in such defense, at the expense of the indemnifying party.
(a) Each of the parties will bear its own expenses in connection with the negotiation and the consummation of the transactions contemplated by this Agreement, and no expenses of the Company or any Subsidiary relating in any way to the purchase and sale of the Shares hereunder and the transactions contemplated hereby, including without limitation legal, accounting or other professional expenses of the Company or any Subsidiary, shall be charged to or paid by Investor.
(b) The Company will pay all costs incurred, whether at or subsequent to the Closing, in connection with the transfer of the Shares to Investor as contemplated by this Agreement, including without limitation, all transfer taxes and charges applicable to such transfer, and all costs of obtaining permits, waivers, registrations or consents with respect to any assets, rights or contracts of the Company or any Subsidiary.
delivered personally or sent by telex or telecopier, registered or certified mail (return receipt requested), postage prepaid or courier or overnight delivery service to the respective parties at the following addresses (or at such other address for any party as shall be specified by like notice, provided that notices of a change of address shall be effective only upon receipt thereof):
If to the Company: Boston Properties, Inc. 8 Arlington Street Boston, Massachusetts 02116 Attn: Edward H. Linde, President Telecopy: (617) 536-4233 with a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attn: Adam O. Emmerich, Esq. Telecopy: (212) 403-2234 If to the Investor: The Prudential Insurance Company of America 8 Campus Drive, 4th Floor Parsippany, New Jersey 07054-4493 Attn: Robert Falzon Telecopy: (973) 683-1752 with a copy to: Goodwin, Procter & Hoar LLP 599 Lexington Avenue 40th Floor New York, New York 10022 Attn: Robert S. Insolia, Esq. Telecopy: (212) 355-3333 |
to another Prudential Investor and by a Prudential Investor to another Prudential Investor. For purposes of this Agreement, "PRUDENTIAL INVESTOR" shall mean (i) Investor, (ii) any Person controlled (as such term is defined in Rule 12b-2 under the Exchange Act), directly or indirectly, by Prudential, (iii) Strategic Value Investors, LLC, Strategic Value Investors International, LLC and/or Strategic Value Investors II, LLC, (iv) any investor in Strategic Value Investors, LLC, Strategic Value Investors International, LLC and/or Strategic Value Investors II, LLC, and (v) any entity directly or indirectly owned by one or more investors in Strategic Value Investors, LLC, Strategic Value Investors International, LLC and/or Strategic Value Investors II, LLC. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement.
injunction or other appropriate equitable relief to restrain such breach without having to show or prove actual damage to Investor.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed as of the date set forth above by their duly authorized representatives.
By: [Signature Illegible]
By: /s/ Mortimer B. Zuckerman --------------------------------------- Name: Mortimer B. Zuckerman Title: Chairman |
EXHIBIT 99.24
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 Two Preferred Units":
"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 the holders of such Units will be entitled to receive, consists of 60% or more cash. 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 and cash is one of the types of elections that may be made, it will be assumed that all holders of Common Units elect or will elect cash, (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 Two Preferred Units are convertible, as such Conversion Price may be adjusted pursuant to Section 7 hereof. The initial Conversion Price shall be $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.
"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 REIT Share 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 Two 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 Two 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 Two 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.
"Preferred Rate" shall mean, at any given time, the rate per annum as to which distributions accrue on each Series Two 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 ----------- -------------- 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 Two 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 Two Preferred Unit had (i) such Series Two 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 Two 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 Two Preferred Unit is outstanding for only a portion of a Distribution Period, then the Ratchet Distribution with respect to such Series Two 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 Two 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 Security" means any security in addition to Common Units (including Junior Preferred Units) which may be issuable to a holder of Series Two Preferred Units upon conversion of a Series Two 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 Two 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 Two 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 Two 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 Two Preferred Units having a Liquidation Preference equal to one-sixth of the aggregate Liquidation Preference of the Series Two 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.
(a) The holders of Series Two 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 that purpose, cumulative preferential
distributions payable in cash in an amount per Series Two 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 Two 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 Two 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 Two 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 Two 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.
(c) So long as any Series Two 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 Two 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 Two Preferred Units and any other class or classes of Parity Units, all distributions authorized upon the Series Two 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 Two 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 Two 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 Two 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 Two 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 distribution due for the current Distribution Period with respect to the Series Two Preferred Units.
(e) Without limiting the other provisions hereof, no distributions on Series Two 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 Two 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 Two 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 Two 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 Two Preferred Units, as provided in Section 4(a).
(h) Any distribution made on the Series Two 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 Two Preferred Units which remains
payable. Other than liquidating distributions described in Section 4,
the Series Two Preferred Units shall be entitled only to the
distributions on the Series Two Preferred Units as described in this
Section 3.
(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 Two Preferred Units shall be entitled to receive Fifty
Dollars ($50.00) per Series Two 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 Two Preferred
Units if all Series Two 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 Two 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 Two 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 Two Preferred Units and
any such other Parity Units ratably in accordance with the respective
amounts that would be payable on such Series Two 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 Two 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 Two 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 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.
(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 Two 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 Two Preferred Unit, Series Two Preferred Units held by such holder; provided that the maximum number of Series Two 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 Two Preferred Units or, if such holder holds less than one thousand Series Two Preferred Units, all of the Series Two 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 Two Preferred Unit, of a number of Series Two 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 Two 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 Two 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 Two Preferred Units subject to mandatory redemption by either the Partnership or the holders of Series Two Preferred Units on each Option Strike Date); any Series Two Preferred Units that are not converted pursuant to Section 7 or redeemed 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 Two Preferred Units outstanding after such date.
(b) In order to exercise its Redemption Right, a holder of Series Two 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 Two 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 Two 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 Two Preferred Units, with such redemption to be effective on an Option Strike Date, holders tender for redemption a number of Series Two 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 Two 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 Two Preferred Units of less than the Target Amount and the General Partner delivers a Redemption Notice to redeem a number of Series Two Preferred Units greater than the number of Units tendered for redemption by the holders, the Partnership shall first redeem the Series Two Preferred Units of those holders exercising their Redemption Right pursuant to this Section 5 and shall then redeem, on a pro rata basis, Series Two 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 Two Preferred Units to be so redeemed indicating 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 Two Preferred Units, the holders shall have the right, subject to Section 7(a), to convert their Series Two Preferred Units into Common Units, pursuant to Section 7, on or before the Option Strike Date. To the extent that such Series Two Preferred Units are so converted, the right of the General Partner to require the redemption of Series Two Preferred Units shall be reduced by the aggregate Liquidation Preference of the Series Two Preferred Units so converted (and the reduction in the number of Series Two 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 Two Preferred Units, the Partnership shall pay the redemption price by certified check to or on the order of those holders whose Series Two Preferred Units have been redeemed.
(c) Immediately prior to any redemption of Series Two 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 Two Preferred Units, including those Series Two Preferred Units to be redeemed. Unless full cumulative distributions on all Series Two Preferred Units have been paid, the Partnership may not require the Series Two 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 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 Two Preferred Units to be redeemed in the aggregate from all
holders and, if fewer than all the Series Two Preferred Units held by
such holder are to be redeemed, the number of such Series Two
Preferred Units to be redeemed from such holder; and (3) that
distributions on the Series Two 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 Two 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 Two 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 Two 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 Two Preferred Units held by such person immediately after such redemption. The Partnership shall also advise each holder as to the number of Series Two Preferred Units redeemed and the number of Series Two Preferred Units which remain outstanding.
(f) Each Series Two Preferred Unit holder covenants and agrees with the Partnership that all Series Two 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 Two Preferred Units which are or may be subject to any liens.
(6) The rights of each Series Two 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 Two Preferred Units shall constitute equity interests of each Partner hereunder, it being agreed and understood that no 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.
(a) Subject to and upon compliance with the provisions of this Section 7, a holder of Series Two 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 Two 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 Two 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 Two 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 Two Preferred Units, and immediately after the close of business on the Conversion Date the holders of Series Two Preferred Units who had all or a portion of their Series Two 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) 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 Two 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 Two 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 Two 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 Two 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 Two Preferred Units which are to be so converted (the "Forced Conversion Option") ratably in proportion to the Series Two 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 Two 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 Two Preferred Units. A holder of Series Two Preferred Units shall have no right with respect to any Series Two Preferred Units so converted to receive any distributions paid after the Conversion Date with respect to such Series Two 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 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 Two 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 Two 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 Two Preferred Units. Instead of any fractional interest in a Common Unit that would otherwise be deliverable upon the conversion of a Series Two Preferred Unit, the Partnership shall pay to the holder of such Series Two 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 Two 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 Two 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 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 Two 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 Two 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 Two 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 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 (x) cash distributions that were taken into account in calculating the distribution payable under Section 3(a), and (y) 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 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 Two
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 Two 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 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 Two 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 Two Preferred Unit distributions, subdivision of
Series Two Preferred Units, reclassification or combination of
Series Two 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 Two 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 Two 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 Two Preferred Unit Merger Consideration") receivable upon
the consummation of such Transaction by a holder of that number
of Common Units into which one Series Two Preferred Unit was
convertible immediately prior to such Transaction (unless, in
connection with such Transaction, the Series Two 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 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 Two Preferred Unit holder of such election,
and each Series Two 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 Two Preferred Unit held by such holder following
consummation of such Transaction, and after such election the
consideration thereby elected shall be the "Per Series Two
Preferred Unit Merger Consideration" for each Series Two
Preferred Unit held by such holder or any transferee thereof. If
a holder of Series Two Preferred Units fails to make such an
election, such holder (and any of its transferees) shall receive
upon conversion of each Series Two Preferred Unit held by such
holder (or by
any of its transferees) the same Per Series Two Preferred Unit Merger Consideration that a holder of that number of Common Units into which one Series Two 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 Two Preferred Units that will contain provisions enabling the holders of the Series Two Preferred Units that remain outstanding after such Transaction to convert their Series Two 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
(ii) the Partnership shall authorize the granting to the holders of the Commo n 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 Two 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 Two 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 Series Two Preferred Units shall be permitted to tender their Series Two 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 Two Preferred Units shall happen simultaneously with the consummation of the Cash Business Combination such that holders of Series Two 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 Two 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 Two 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.
(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 Two Preferred Units, the Conversion Price for the Series Two 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.
(a) Holders of the Series Two 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 Two Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least a majority of the Series Two 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 Two 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 Two Preferred Units or the holders thereof in their capacity as holders of Series Two 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 Two 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 Two 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 Two 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 Two 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 Two 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 Two Preferred Units.
(iii) Any creation or issuance of any series of Preferred Units (other than an issuance of additional Series Two Preferred Units, as to which a class vote shall be required; provided that no class vote shall be required for any issuance of Series Two 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 Two 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 Two 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 Two 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 Two Preferred Units.
(c) In addition to the voting rights granted in paragraph (b) above, the holders of Series Two 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 Two 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 Two Preferred Units shall have been converted and/or redeemed.
(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 Two 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 Three 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 Two 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 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, Common Units, or shares of preferred stock junior to
the Series A Preferred Stock of the General Partner or common stock
issued by 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).
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)).
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 Designation is amended or modified by the
parties hereto, the holders of the Series Three Preferred Units issued by
the Partnership and the Series A Convertible Redeemable 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 Two Preferred Units shall have the right
to elect, by vote of a majority in interests of the Series Two Preferred
Units, to adopt amendments or modifications of this Certificate of
Designation comparable to amendments and modifications of such securities.
The Partnership and the General Partner agree for the benefit of the
holders of Series Two 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 reasonably appropriate or necessary to
give full effect to this Section 14.
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/ William J. Wedge -------------------------------- Name: William J. Wedge Title: Senior Vice President |
Exhibit A to the Certificate of Designations for the Series Two Preferred Units
NOTICE OF ELECTION BY PARTNER TO CONVERT
SERIES TWO PREFERRED UNITS INTO COMMON UNITS
The undersigned Series Two Preferred Unit holder hereby (i) elects to convert the number of Series Two 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 Two 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 Two 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 Two 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 Two Preferred Unit holder: ___________________________________ (Please Print: Exact Name as Registered with Partnership)
Date of this Notice:_________________________
Date the Series Two Preferred Units are to be converted:________________/1/
Number of Series Two Preferred Units to be converted:_________________
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.
Exhibit B to the Certificate of Designations for the Series Two Preferred Units
NOTICE OF ELECTION BY PARTNER TO REDEEM
SERIES TWO PREFERRED UNITS FOR CASH
The undersigned Series Two Preferred Unit holder hereby (i) elects to redeem the number of Series Two 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 Two 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 Two 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 Two 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 Two Preferred Units to be redeemed shall cease to accrue on the redemption date indicated below.
Name of Series Two Preferred Unit holder: ___________________________________ (Please Print: Exact Name as Registered with Partnership)
Date of this Notice:_________________________
Option Strike Date on which the Series Two Preferred Units are to be redeemed:________________
Number of Series Two Preferred Units to be redeemed:_________________
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 Two Preferred Units.
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":
"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.
"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.
"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 ----------- -------------- 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
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.
(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
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.
(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
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.
(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
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.
(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
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
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
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
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.
(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.
(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
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
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
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
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
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
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
(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
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.
(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.
(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.
(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.
(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.
(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
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).
date hereof among the Partnership and such holders are hereby incorporated herein by reference.
(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
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.
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/ William J. Wedge --------------------------------- Name: William J. Wedge Title: Senior Vice President |
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 Guaranteed by:
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 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.
EXHIBIT 99.26
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
THE SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK
OF
BOSTON PROPERTIES, INC.
Boston Properties, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), does hereby certify:
That, pursuant to authority conferred upon the Board of Directors of the Corporation by the Amended and Restated Certificate of Incorporation of said Corporation, and pursuant to the provisions of Section 151 the Delaware General Corporation Law, said Board of Directors, at a meeting duly held on September __, 1998, adopted a resolution providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of a series of preferred stock, which resolution is as follows:
IN WITNESS WHEREOF, Boston Properties, Inc. has caused this certificate to be executed in its name and on its behalf by its _____________ as of this ___ day of ______, 1998.
BOSTON PROPERTIES, INC.
Title:
"Cash Business Combination" means a Transaction in which the fair market
value of the aggregate consideration into which the outstanding shares of
Common Stock are or will be exchanged or converted, or which holders of
such shares 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 Stock, it will be
assumed that all holders of Common Stock elect or will elect consideration
other than voting common equity, (b) the determination shall be made in
good faith by the Board of Directors, 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.
"Common Stock" shall mean the common stock, par value $.01 per share, of the Corporation.
"Conversion Price" shall mean the conversion price per share of Common Stock for which each share of Series A Preferred Stock is 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.
"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 share of Common Stock 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 Corporation.
"Dividend Payment Date" shall mean the fifteenth day of February, May, August and November, in each year, commencing on ___________, 199_; provided, however, that if any Dividend Payment Date falls on any day other than a Business Day, the dividend payment due on such Dividend Payment Date shall be paid on the first Business Day immediately following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods from and after a Dividend Payment Date and to and excluding the next succeeding Dividend Payment Date (other than the initial Dividend Period, which shall commence on the day after the Issue Date and end on and exclude __________, 199_)
"Fair Market Value" shall mean the average of the daily Current Market Prices per share of Common Stock during the ten (10) consecutive Trading Days selected by the Corporation 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 shares of Common Stock 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 shares of Series A Preferred Stock which the Corporation 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 ____________, 199_ [the date the shares are purchased].
"Junior Preferred Stock" shall mean any class or series of capital stock of the Corporation the holders of which are entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, junior in priority to the holders of the Series A Preferred Stock, but senior in priority to the holders of Common Stock.
"Junior Stock" shall mean the Common Stock and any other class or series of capital stock of the Corporation constituting junior stock 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 Stock" shall have the meaning set forth in paragraph (b) of Section 9 hereof.
"Partnership" shall mean Boston Properties Limited Partnership, a Delaware limited partnership, or any successor entity.
"Preferred Rate" shall mean, at any given time, the rate per annum as to which dividends accrue on each share of Series A Preferred Stock, based on the Liquidation Preference, for purposes of determining the Stated Quarterly Dividend in effect at such time, as set forth in the following schedule:
Time Period Preferred Rate ----------- -------------- [Issue Date] 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 _______, 2009 [up to the midpoint of year 11] 7.0% ________, 2009 and thereafter 6.0% |
"Ratchet Dividend" shall mean for each Dividend Payment Date a dividend payable, if applicable, per share of Series A Preferred Stock in respect of the Dividend Period ending on such Dividend Payment Date. The Ratchet Dividend for each Dividend Period shall be equal to the dividend which would have been paid in respect of such share of Series A Preferred Stock had (i) such share of Series A Preferred Stock been converted into (x) a number of shares of Common Stock determined by dividing the Liquidation Preference by the Conversion Price in effect on such Dividend 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 share of Common Stock and Other Securities (including any fractional portion thereof to the fourth decimal) a dividend (the "Regular Dividend") equal to the regular, quarterly cash dividend paid to holders
of record of Common Stock and Other Securities on that record date (the "Reference Record Date") which is closest to the end of the calendar quarter preceding such Dividend Payment Date. For purposes of determining the Ratchet Dividend, in the event that a special cash dividend or distribution was paid to holders of Common Stock 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 dividends, then in such event the Ratchet Dividend shall include, in addition to the Regular Dividend paid in respect of the Reference Record Date, the amount of such special cash dividend or distribution paid in respect of each share of Common Stock or Other Security (for clarity, it is noted that the effect of this sentence is to assure that in calculating the Ratchet Dividend the holders of Series A Preferred Stock will benefit from any cash dividends or distributions paid in respect of Common Stock and Other Securities even if such cash dividends or distributions might not be characterized as "regular, quarterly cash dividends"). In the event that a share of Series A Preferred Stock is outstanding for only a portion of a Dividend Period, then the Ratchet Dividend with respect to such share of Series A Preferred Stock and such Dividend 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 share of Series A Preferred Stock had been outstanding during such period and the denominator of which shall equal the total number of days during such Dividend Period. As used herein, the term "Other Security" means any security in addition to Common Stock (including Junior Preferred Stock) which may be issuable to a holder of Series A Preferred Stock upon conversion of a share of Series A Preferred Stock.
"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.
"Series A Preferred Nominee" shall have the meaning set forth in Section 3(j).
"Series A Preferred Stock" shall have the meaning set forth in Section 1 hereof.
"Source Agreements" shall mean that certain Master Transaction Agreement dated September __, 1998 by and among the Corporation, the Partnership and certain other parties listed therein, and each of the other agreements contemplated therein.
"Stated Quarterly Dividend" shall mean for each Dividend Payment Date a dividend payable, if applicable, per share of Series A Preferred Stock in respect of the Dividend Period ending on such Dividend Payment Date. The Stated Quarterly Dividend for
each Dividend Period shall equal the sum of the following products for each day in such Dividend Period on which the share of Series A Preferred Stock 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 shares of Series A Preferred Stock having a Liquidation Preference equal to one-sixth of the aggregate Liquidation Preference of the Series A Preferred Stock created hereby and issued on the Issue Date.
"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.
(a) The holders of Series A Preferred Stock shall be entitled to receive,
in respect of each Dividend Payment Date, when, as and if authorized
and declared by the Board of Directors out of assets legally available
for that purpose, cumulative preferential dividends payable in cash in
an amount per share of Series A Preferred Stock equal to the greater
of (i) the Stated Quarterly Dividend for such Dividend Payment Date or
(ii) the Ratchet Dividend for such Dividend Payment Date. Such
dividends shall, with respect to each share of Series A Preferred
Stock, be cumulative from and including the Issue Date, whether or not
in, or with respect to, any Dividend Period or Periods (i) such
dividends are declared, (ii) the Corporation is contractually
prohibited from paying such dividends or (iii) there shall be assets
of the Corporation legally available for the payment of such
dividends, and shall be payable quarterly, when, as and if authorized
and declared by the Board of Directors, in arrears on Dividend Payment
Dates, commencing on the first Dividend Payment Date after the Issue
Date. Dividends are cumulative from the most recent Dividend Payment
Date to which dividends have been paid, whether or not in, or with
respect to, any Dividend Period or Periods (i) such dividends are
declared, (ii) the Corporation is contractually prohibited from paying
such dividends or (iii) there shall be assets legally available
therefor. Each such dividend shall be payable in arrears to the
holders of record of the Series A Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on such
record dates, not more than 30 days preceding the applicable Dividend
Payment Date (the "Dividend Payment Record Date") (or, in the case of
a Dividend Payment
Record Date that coincides with a record date for payment of dividends on Common Stock, not more than 60 days preceding the applicable Dividend Payment Date), as shall be fixed by the Board of Directors; provided, however, that with respect to the first Dividend Period, the Dividend Payment Record Date for such period will be on or after the Issue Date. Accrued and unpaid dividends for any past Dividend 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 Dividend 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 dividends on Common Stock, not more than 60 days preceding the applicable payment date thereof), as may be fixed by the Board of Directors.
(b) The first Dividend Period with respect to the Series A Preferred Stock shall be for the period from on and after the Issue Date to the first Dividend Payment Date of (and excluding) ____________, 199_.
(c) So long as any shares of Series A Preferred Stock are outstanding, no dividends (whether in cash or in kind or upon liquidation of the Corporation), except as described in the immediately following sentence, shall be authorized and declared or paid on any series or class or classes of Parity Stock for any period nor shall any shares of Parity Stock 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 shares of Parity Stock, directly or indirectly (except by conversion into or exchange for shares of Parity Stock or Junior Stock), unless full cumulative dividends, including, if applicable, the further preferential dividend provided in subsection (f), have been or contemporaneously are authorized and declared and paid on the Series A Preferred Stock for all Dividend Periods terminating on or prior to the dividend payment date on (or date of purchase, redemption or other acquisition of) such class or series of Parity Stock. When dividends are not paid in full upon the Series A Preferred Stock and any other class or classes of Parity Stock, all dividends authorized upon the Series A Preferred Stock and any other class or classes of Parity Stock shall be authorized and declared ratably in proportion to the respective amounts of dividends accumulated and unpaid on the Series A Preferred Stock and such Parity Stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such Parity Stock does not have a cumulative dividend).
(d) So long as any shares of Series A Preferred Stock are outstanding, no dividends (other than dividends or distributions paid solely in shares of Junior Stock, or options, warrants or rights to subscribe for or purchase shares of Junior Stock) shall be authorized and declared or paid or other distribution authorized and declared or made upon shares of Junior Stock for any period, nor shall any
shares of Junior Stock be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Stock made for purposes of and in compliance with requirements of employee incentive or employee benefit plans of the Corporation or any of its subsidiaries), for any consideration (or any moneys to be paid to or made available for a sinking fund for the redemption of any shares of Junior Stock) by the Corporation, directly or indirectly (except by conversion into or exchange for Junior Stock), unless in each case (i) the full cumulative dividends on all outstanding shares of Series A Preferred Stock, including, if applicable, the further preferential dividend provided in subsection (f), and any other Parity Stock of the Corporation shall have been paid for all past Dividend Periods with respect to the Series A Preferred Stock and all past dividend periods with respect to such Parity Stock and (ii) sufficient funds shall have been paid for or irrevocably set aside and designated for payment of the dividend due for the current Dividend Period with respect to the Series A Preferred Stock.
(e) Without limiting the other provisions hereof, no dividends on shares of Series A Preferred Stock (other than liquidating distributions made in accordance with Section 4 hereof) shall be paid by the Corporation at such time as the terms and provisions of any agreement of the Corporation 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 dividends on the Series A Preferred Stock shall prohibit other dividends and distributions by the Corporation as described in Sections 3(c) and (d)).
(f) Notwithstanding the foregoing, dividends on the Series A Preferred Stock shall accrue whether or not the terms and provisions set forth in Section 3(e) hereof at any time prohibit the current payment of dividends, whether or not the Corporation has earnings, whether or not there are funds legally available for the payment of such dividends and whether or not such dividends are declared. Accrued but unpaid dividends on the Series A Preferred Stock will accumulate as of the Dividend Payment Date on which they first become payable and a further preferential dividend 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 paid in respect of such unpaid dividends until the amount thereof and the further preferential amount thereon shall have been paid in full.
(g) Upon liquidation, dissolution or winding up of the Corporation, no dividends shall be paid to any series or class or classes of Junior Stock until after payment shall have been made in full to the holders of the Series A Preferred Stock, as provided in Section 4(a).
(h) Any dividend made on the Series A Preferred Stock shall first be credited against the further preferential dividend provided in subsection (f) above and then against the earliest accrued but unpaid dividend due with respect to such Series A Preferred Stock which remains payable. The only dividends to which the Series A Preferred Stock shall be entitled are those described in this Section 3.
(j) The holders of Series A Preferred Stock will be eligible to nominate, and to have appointed, one director to the Company's Board of Directors, subject to the following conditions, qualifications and procedures:
(I) The provisions of this subparagraph (j) shall only apply for so long as The Prudential Insurance Company of America ("Prudential"), directly or indirectly through affiliates, beneficially owns 2,000,000 shares of Series A Preferred Stock (subject to adjustment in the event of a stock split or reverse stock split in the Series A Preferred Stock). As used in the preceding sentence, "beneficially owns" has the meaning ascribed thereto in Rule 13d-3, as in effect on the date hereof, under the Securities Exchange Act of 1934, except that it shall not include "shared" voting or investment power (i.e., Prudential will be deemed to beneficially own the Series A Preferred Stock only if it and its affiliates have sole voting or investment power with respect thereto). The provisions of this subparagraph (j) shall not benefit any subsequent transferee of the Series A Preferred Stock except for affiliates of Prudential (i.e., transferees that are controlled by, control or are under common control with Prudential), and in any event only if Prudential or such affiliate is deemed to beneficially own the shares of Series A Preferred Stock acquired by such affiliate. As a condition to implementation of the rights of the holders of Series A Preferred Stock set forth in this subparagraph (j), the Corporation may require certification by Prudential that the condition set forth in this clause (I) is met.
(II) If and for so long as an aggregate of six quarterly
dividends payable on the Series A Preferred Stock are in arrears
(which shall, with respect to any such quarterly dividend, mean
that any such dividend has not been paid in full), whether or not
(i) such dividends are declared, (ii) the Corporation is
contractually prohibited from paying such dividends or (iii)
there shall be assets of the Corporation legally available for
the payment of such dividends, the number of directors then
constituting the Board of Directors shall be increased by one and
the Board of Directors shall appoint a Series A Preferred Nominee
to fill the vacancy thus created. A "Series A Preferred Nominee"
means a person that the holders of a majority of the Series A
Preferred Stock, by written consent of such
holders or by vote at a special meeting of the holders of Series A Preferred Stock, have formally nominated to be appointed to the Board of Directors to fill such vacancy, provided that the Board of Directors shall only be obligated to appoint a Series A Preferred Nominee to fill such vacancy if:
(A) The holders of Series A Preferred Stock nominate three Series A Preferred Nominees, from which the Board of Directors may select one such person to fill such vacancy, and
(B) Each Series A Preferred Nominee (other than any Series A Preferred Nominee that is an employee of Prudential or an affiliate of Prudential) is reasonably acceptable to the Board of Directors, and
(C) Each such Series A Preferred Nominee submits to the Board of Directors a duly-executed, binding and enforceable letter of resignation from the Board, to be effective immediately upon the date on which all arrears in dividends on the Series A Preferred Stock shall have been paid and dividends thereon for the current quarterly dividend period shall have been paid or declared and set apart for payment.
(III) Whenever all arrears in dividends on the Series A Preferred Stock shall have been paid and full dividends thereon for the current quarterly dividend period shall have been paid or declared and set apart for payment, then the right of the holders of the Series A Preferred Stock to have a Series A Preferred Nominee appointed to, and remain on, the Board of Directors shall cease (but subject always to the same provision for the vesting of the rights set forth in this subparagraph (j) in the case of any similar future arrearages in six quarterly dividends), and the term of office of the Series A Preferred Nominee that was appointed to the Board of Directors shall forthwith terminate and the number directors constituting the Board of Directors shall be reduced accordingly.
(IV) At any time after the rights of the holders of Series A Preferred Stock set forth in this subparagraph (j) shall be in effect, the Secretary of the Corporation shall upon the written request of any holder of Series A Preferred Stock (addressed to the Secretary at the principal office of the Corporation), call a special meeting of the holders of the Series A Preferred Stock for the election of three Series A Preferred Nominees.
(V) The Series A Preferred Nominee that is appointed to the Board of Directors shall hold office until the next annual meeting of the stockholders if such office shall not have previously terminated as above
provided. At such annual meeting, the holders of the Series A Preferred Stock may (i) reelect such Series A Preferred Nominee by majority consent or vote or (ii) repeat the procedures described above to have a successor appointed by the Board of Directors. If any vacancy shall occur in the office reserved for the Series A Preferred Nominee, a successor shall be appointed by the Board of Directors after repeating the procedures described above.
(a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to the holders of Junior Stock, the holders of the Series A Preferred Stock shall be entitled to receive Fifty Dollars ($50.00) per share of Series A Preferred Stock (the "Liquidation Preference") or, if greater, the amount which each holder would receive in respect of the Common Stock and Other Securities and property it would receive upon conversion of its shares of Series A Preferred Stock if all shares of Series A Preferred Stock were converted pursuant to Section 7 immediately prior to the distribution of liquidation proceeds, plus an amount equal to all dividends (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 A Preferred Stock shall not be entitled to any further payment. If, upon any such liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of Series A Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other Parity Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of such Series A Preferred Stock and any such other Parity Stock ratably in accordance with the respective amounts that would be payable on such Series A Preferred Stock and any such other Parity Stock if all amounts payable thereon were paid in full.
(b) Upon any liquidation, dissolution or winding up of the Corporation, after payment shall have been made in full to the holders of the Series A Preferred Stock and Parity Stock, as provided in this Section 4, any series or class or classes of Junior Stock 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 A Preferred Stock will have no right or claim to any of the remaining assets of the Corporation.
(d) The consolidation or merger of the Corporation with or into any other corporation, partnership, trust or entity or of any other corporation, partnership, trust or entity with or into the Corporation, or an exchange of capital stock, or the sale, lease or conveyance of all or substantially all of the property or business of the Corporation (unless the net proceeds of any of the foregoing transactions shall be distributed to the holders of capital stock rather than reinvested), shall not be deemed to constitute a liquidation, dissolution or winding up of the Corporation.
(a) Subject to adjustment as provided in this Section 5, on each of [each of those Business Days which is six months after the tenth, eleventh, twelfth, thirteenth, fourteenth and fifteenth anniversary of the Closing Date of the transactions contemplated in the Master Transaction Agreement] (each an "Option Strike Date") (i) each of the holders of Series A Preferred Stock, upon giving prior written notice as provided below, shall have the right (the "Redemption Right") to require that the Corporation redeem for cash, at a redemption price of $50 per share of Series A Preferred Stock, shares of Series A Preferred Stock held by such holder; provided that the maximum number of shares of Series A Preferred Stock 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) shares of Series A Preferred Stock or, if such holder holds less than one thousand shares of Series A Preferred Stock, all of the shares of Series A Preferred Stock held by such holder; and (ii) the Corporation, 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 share of Series A Preferred Stock, of a number of shares of Series A Preferred Stock equal to, but not in excess of, the Target Amount (in the aggregate from all holders); provided, however, that the Corporation may not require the redemption 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 shares of Series A Preferred Stock 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 shares of Series A Preferred Stock 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 shares of Series A Preferred Stock subject to
mandatory redemption by either the Corporation or the holders of Series A Preferred Stock on each Option Strike Date); any shares of Series A Preferred Stock that are not converted pursuant to Section 7 or redeemed pursuant to this Section 5 on or before ______ [the last Option Strike Date] 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 shares of Series A Preferred Stock outstanding after such date.
(b) In order to exercise its Redemption Right, a holder of Series A Preferred Stock shall deliver a notice (a "Redemption Notice," such term to also include the notice required to be delivered by the Corporation upon exercise of its Redemption Right) in the form attached hereto as Exhibit B to the Corporation not less than 40 nor more than 70 days prior to an Option Strike Date. If a holder of Series A Preferred Stock who has delivered a Redemption Notice pursuant to this Section 5 converts the shares tendered for redemption prior to the redemption date, the Redemption Notice shall be deemed revoked. The Corporation may exercise its Redemption Right by delivering in writing a Redemption Notice, containing the information provided in subsection (d), to each holder of record of Series A Preferred Stock, 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 A Preferred Stock, with such redemption to be effective on an Option Strike Date, holders tender for redemption a number of shares of Series A Preferred Stock having an aggregate Liquidation Preference greater than the Target Amount, the Corporation may redeem all such shares tendered for redemption or a lesser number of shares, as the Corporation determines in its sole discretion, but not less than the Target Amount; provided, however, that if the Corporation does not redeem all shares of Series A Preferred Stock so tendered for redemption, the Corporation shall redeem shares ratably from each tendering holder in proportion to the respective number of shares tendered. If the holders have tendered for redemption a number of shares of Series A Preferred Stock less than the Target Amount and the Corporation delivers a Redemption Notice to redeem a number of shares of Series A Preferred Stock greater than the number of shares tendered for redemption by the holders, the Corporation shall first redeem the shares of Series A Preferred Stock of those holders exercising their Redemption Right pursuant to this Section 5 and shall then redeem, on a pro rata basis, shares of Series A Preferred Stock from all holders who hold shares after giving effect to such redemption; provided, however, that in such case, (i) the Corporation shall deliver a separate notice at least 30 days prior to the Option Strike Date, containing the information provided in subsection (d), to all holders of the shares of Series A Preferred Stock to be so redeemed indicating the number of shares to be so redeemed, and (ii) the total number of shares to be
redeemed (upon notice by the Corporation and the holders, collectively) shall not exceed the Target Amount.
If the Corporation delivers a Redemption Notice to the holders of the
Series A Preferred Stock, the holders shall have the right, subject to
Section 7(a), to convert their shares of Series A Preferred Stock into
Common Stock, pursuant to Section 7, on or before the Option Strike
Date. To the extent that such shares of Series A Preferred Stock are
so converted, the right of the Corporation to require the redemption
of Series A Preferred Stock shall be reduced by the aggregate
Liquidation Preference of the shares of Series A Preferred Stock so
converted (and the reduction in the number of shares of Series A
Preferred Stock to be redeemed from each holder shall be allocated
first to the holders who so elected to convert their shares and second
pro rata among all other holders).
Within two Business Days of a redemption of Series A Preferred Stock, the Corporation shall pay the redemption price by certified check to or on the order of those holders whose shares of Series A Preferred Stock have been redeemed.
(c) Immediately prior to any redemption of Series A Preferred Stock and as a condition to such redemption, the Corporation shall pay, in cash, all accumulated and unpaid dividends, including the further preferential dividend provided in Section 3(f), through the Option Strike Date in respect of all shares of Series A Preferred Stock, including those shares to be redeemed. Unless full cumulative dividends on all shares of Series A Preferred Stock have been paid, the Corporation may not require the shares of Series A Preferred Stock to be redeemed.
(d) A Redemption Notice shall be provided in the manner provided in
Section 11. Any defect in a Redemption Notice or in the mailing
thereof to any particular holder or the Corporation 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 delivery provided in
Section 11, whether or not the holder receives the notice. Each of
the Corporation's Redemption Notices shall state, as appropriate: (1)
the Option Strike Date; (2) the number of shares of Series A Preferred
Stock to be redeemed in the aggregate from all holders and, if fewer
than all the shares of Series A Preferred Stock held by such holder
are to be redeemed, the number of such shares of Series A Preferred
Stock to be redeemed from such holder; and (3) that dividends on the
shares of Series A Preferred Stock 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 Corporation shall fail to pay the redemption
price on the date
required), (i) except as otherwise provided herein, dividends on the shares of Series A Preferred Stock so called for redemption shall cease to accrue, (ii) said shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as holders of Series A Preferred Stock of the Corporation 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 A Preferred Stock as aforesaid, the Corporation shall deliver to such holder, upon his written request, a certificate of the Corporation certifying the number of shares of Common Stock and Series A Preferred Stock held by such person immediately after such redemption. The Corporation shall also advise each holder as to the number of shares of Series A Preferred Stock redeemed and the number of shares of Series A Preferred Stock which remain outstanding.
(e) Each holder of Series A Preferred Stock covenants and agrees with the Corporation that all shares of Series A Preferred Stock delivered for redemption pursuant to this Section 5 shall be delivered to the Corporation free and clear of all liens, and, notwithstanding anything contained herein to the contrary, the Corporation shall not be under any obligation to acquire shares of Series A Preferred Stock which are subject to any liens.
(6) Intentionally Omitted.
(a) Subject to and upon compliance with the provisions of this Section 7,
a holder of Series A Preferred Stock 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) __________ [the last Business Day of the
calendar year of the fourth anniversary of the Closing Date of the
transactions contemplated in the Master Transaction Agreement] 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 its shares of Series A Preferred Stock into the
number of fully paid and non-assessable shares of Common Stock
obtained by dividing the aggregate Liquidation Preference of such
shares of Series A Preferred Stock 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 11; provided, however, that the right to deliver a conversion notice with respect to shares of Series A Preferred Stock 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 shares are to be redeemed, unless the Corporation shall default in making any cash payment required upon a redemption on such date as provided in Section 5 hereof. A conversion of shares of Series A Preferred Stock 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 A Preferred Stock, and immediately after the close of business on the Conversion Date the holders of Series A Preferred Stock who had all or a portion of their shares of Series A Preferred Stock converted shall be credited on the books and records of the Corporation with the issuance as of the opening of business on the next day of the shares of Common Stock issuable upon such conversion.
(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 holders of Series A Preferred Stock and/or the Corporation exercising Redemption Rights pursuant to Section 5 and/or such holders exercising their conversion rights pursuant to this Section 7, the Corporation, 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 shares of Series A Preferred Stock 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 shares of Series A Preferred Stock 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 A Preferred Stock into a number of shares of Common Stock 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 11 within one business day after the applicable Option Strike Date, to the holders of the shares of Series A Preferred Stock which are to be so converted (the "Forced Conversion Option") ratably in proportion to the shares of Series A Preferred Stock 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 Corporation if the value of a share of Common Stock, calculated on its 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 shares of Series A Preferred
Stock, the Corporation shall pay, in cash, all accumulated and unpaid
dividends including the further preferential dividends provided in
Section 3(f) through the Conversion Date on all shares of Series A
Preferred Stock. A holder of shares of Series A Preferred Stock shall
have no right with respect to any shares of Series A Preferred Stock
so converted to receive any distributions paid after the Conversion
Date with respect to such shares and his interest in the Corporation
as to such converted shares shall be terminated; provided, however,
that in the event the Corporation is legally or contractually
prohibited from paying, or fails for any other reason to pay, such
accumulated and unpaid dividends prior to any conversion and such
holder elects to continue with and permit such conversion after notice
from the Corporation of such inability or failure, such holder shall
still be entitled to receive all such accumulated and unpaid
dividends, if any, that remain unpaid after such conversion, as well
as a further preferential dividend on such unpaid dividends as
provided in Section 3(f), which dividends shall be paid by the
Corporation as soon as it is legally and contractually permitted to do
so.
(d) After the conversion of shares of Series A Preferred Stock as aforesaid, the Corporation shall deliver to such holder, upon his written request, a certificate of the Corporation certifying the number of shares of Common Stock and Series A Preferred Stock 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 shares of Series A Preferred Stock so presented for conversion shall be deemed converted into shares of Common Stock 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 shares of Common Stock shall be issued upon conversion of shares of Series A Preferred Stock. Instead of any fractional interest in a share
of Common Stock that would otherwise be deliverable upon the conversion of a share of Series A Preferred Stock, the Corporation shall pay to the holder of such share of Series A Preferred Stock an amount in cash based upon the Current Market Price of the Common Stock on the Trading Day immediately preceding the date of conversion. If more than one share of Series A Preferred Stock shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series A Preferred Stock so surrendered.
(f) Intentionally Omitted.
(g) The Conversion Price shall be adjusted from time to time as follows:
(i) If the Corporation shall after the Issue Date (A) pay a dividend or make a distribution to holders of its Common Stock in shares of Common Stock, (B) subdivide its outstanding Common Stock into a greater number of shares of Common Stock, (C) combine its outstanding Common Stock into a smaller number of shares of Common Stock or (D) issue any shares of Common Stock by reclassification of its Common Stock, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of holders of Common Stock entitled to receive such dividend or 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 share of Series A Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock that such holder would have owned or have been entitled to receive after the happening of any of the events described above had such share of Series A Preferred Stock been converted immediately prior to the record date in the case of a dividend or 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 dividend or 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 Corporation or the holders of Series A Preferred Stock.
(ii) If the Corporation shall issue after the Issue Date rights, options or warrants to all holders of Common Stock entitling them to subscribe for or purchase Common Stock (or securities convertible into or
exchangeable for Common Stock) at a price per share of Common Stock less than the Fair Market Value per share of Common Stock on the record date for the determination of holders of Common Stock 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 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 shares of Common Stock outstanding on the close of business on the record date fixed for such determination and (B) the number of shares of Common Stock that the aggregate proceeds to the Corporation from the exercise of such rights, options or warrants for Common Stock would purchase at such Fair Market Value, and the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding on the close of business on the date fixed for such determination and (B) the number of additional shares of Common Stock 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 Stock to subscribe for or purchase Common Stock at less than such Fair Market Value, there shall be taken into account any consideration received by the Corporation 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 Board of Directors.
(iii) If the Corporation shall distribute to all holders of its Common
Stock any shares of capital stock of the Corporation (other than
Common Stock) or evidence of its indebtedness or assets
(excluding (x) cash dividends and distributions that were taken
into account in calculating the dividend payable under Section
3(a), and (y) cash dividends and cash distributions to the extent
that after giving effect to such dividends and distributions the
fair market value of the assets of the Corporation exceed the sum
of the liabilities of the Corporation, as determined in good
faith by the Board of Directors) or rights or warrants to
subscribe for or purchase any of its securities (excluding those
rights and warrants issued to all holders of Common Stock
entitling them to subscribe for or purchase Common Stock or
securities convertible into or exchangeable for Common Stock,
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 stockholders entitled to receive such distribution by (II) a fraction, the numerator of which shall be the Fair Market Value per share of Common Stock on the record date mentioned below less the then fair market value (as determined by the Board of Directors in good faith) of the portion of the capital stock or assets or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock, and the denominator of which shall be the Fair Market Value per share of Common Stock 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 stockholders 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 Stock on the date fixed for the determination of stockholders entitled to such distribution of such Security, but also is required to be distributed with each share of Common Stock delivered to a person converting a share of Series A Preferred Stock 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 share of Series A Preferred Stock would no longer be entitled to receive such Security with a share of Common Stock (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 stockholders 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 Stock. Notwithstanding any other provisions of this Section 7, the Corporation shall not be required to
make any adjustment of the Conversion Price for the issuance of any shares of Common Stock pursuant to any employee benefit or compensation plan or other plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in shares of Common Stock under such plan. 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 share (with .05 of a share being rounded upward), as the case may be. Anything in this paragraph (g) to the contrary notwithstanding, the Corporation 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 share of Series A Preferred Stock), in addition to those required by this paragraph (g), as it in its discretion shall determine to be advisable in order that any Series A Preferred Stock dividends, subdivision of shares of Series A Preferred Stock, reclassification or combination of shares of Series A Preferred Stock, distribution of rights, options or warrants to purchase stock or securities, or a distribution of other assets (other than cash dividends) hereafter made by the Corporation to the holders of the Series A Preferred Stock shall not be taxable.
(h) If the Corporation shall be a party to any transaction (including without limitation a merger, consolidation, share exchange, self tender offer for all or substantially all of the shares of Common Stock, sale of all or substantially all of the Corporation's assets or recapitalization of the Common Stock 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 shares of Common Stock shall be exchanged for or converted into the right, or the holders of such shares shall otherwise be entitled, to receive securities or other property (including cash or any combination thereof), each share of Series A Preferred Stock shall upon the commencement of the Conversion Period be convertible into the kind and amount of shares of stock or securities and other property (including cash or any combination thereof) (the "Series A Preferred Stock Merger Consideration") receivable upon the consummation of such Transaction by a holder of that number of shares of Common Stock into which one share of Series A Preferred Stock was convertible immediately prior to such Transaction (unless, in connection with such Transaction, the shares of Series A Preferred Stock had been converted into the right to receive such consideration (and thus, are no longer outstanding)), assuming such holder of Common Stock is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation 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 Stock have the opportunity to
elect the form or type of consideration to be received upon consummation of the Transaction, prior to such transaction the Corporation shall give prompt written notice to the holders of Series A Preferred Stock of such election, and the holders of Series A Preferred Stock shall also have the right to elect, by written notice to the Corporation, the form or type of consideration to be received upon conversion of shares of Series A Preferred Stock following consummation of such Transaction, and after such election the consideration thereby elected by holders of a majority of the shares of Series A Preferred Stock shall be the "Series A Preferred Stock Merger Consideration" for each share of Series A Preferred Stock. If holders of a majority of shares of Series A Preferred Stock fail to make such an election, the "Series A Preferred Stock Merger Consideration" for each share of Series A Preferred Stock shall be the consideration that a holder of that number of shares of Common Stock into which one share of Series A Preferred Stock was convertible immediately prior to such Transaction would receive if such holder of Common Stock failed to make such an election.
The Corporation 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 Corporation 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 A Preferred Stock that will contain provisions enabling the holders of the Series A Preferred Stock that remains outstanding after such Transaction to convert their shares of Series A Preferred Stock 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 Corporation shall declare a dividend (or any other distribution) on the Common Stock (excluding cash dividends and cash distributions to the extent that after giving effect to such dividends and distributions the fair market value of the assets of the Corporation exceed the sum of the liabilities of the Corporation, as determined in good faith by the Board of Directors); or
(ii) the Corporation shall authorize the granting to the holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of any class or series of capital stock of the Corporation or any other rights or warrants; or
(iii) there shall be any reclassification of the Common Stock (other than an event to which subparagraph (g)(i) of this Section 7 applies) or any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or a share exchange involving the conversion or exchange of Common Stock into securities or other property, or a self tender offer by the Corporation for all or substantially all of its outstanding Common Stock, or the sale or transfer of all or substantially all of the assets of the Corporation as an entirety and for which approval of any stockholders of the Corporation is required; or
(iv) if there shall occur the voluntary or involuntary liquidation, dissolution or winding up of the Corporation;
then the Corporation shall cause to be mailed to the holders of the Series A Preferred Stock at their addresses as shown on the stock records of the Corporation, 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 dividend, 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 Stock of record to be entitled to such dividend, distribution or granting of rights or warrants are to be determined or (B) the date on which such reclassification, consolidation, merger, share 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 Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, share 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 Stock, 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 A Preferred Stock simultaneously with the mailing of notice to holders of Common Stock 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 Series A Preferred Stock shall be permitted to tender their shares 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 A Preferred Stock shall happen simultaneously with the consummation of the Cash Business Combination such that holders of Series A Preferred Stock 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 Corporation shall promptly file in the books and records of the Corporation 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 Corporation 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 share of Series A Preferred Stock at such holder's last address as shown on the stock records of the Corporation.
(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 Corporation may defer until the occurrence of such event (A) issuing to the holder of any share of Series A Preferred Stock converted after such record date and before the occurrence of such event the additional Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock 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 share of Common Stock.
(m) There shall be no adjustment of the Conversion Price in case of the issuance of any capital stock of the Corporation 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.
(n) If the Corporation shall take any action affecting the Common Stock, other than action described in this Section 7, that in the opinion of the Board of Directors would materially adversely affect the conversion rights of the holders of the Series A Preferred Stock, the Conversion Price for the Series A Preferred Stock may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors, in its sole discretion, may determine to be equitable in the circumstances.
(a) Holders of the Series A Preferred Stock will not have any voting rights, except as set forth in Section 3(j) or as set forth below or as otherwise from time to time required by law.
(b) So long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote of the holders of at least a majority of the shares of Series A Preferred Stock 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 this Certificate, the Amended and Restated Certificate of Incorporation or the amended and Restated Bylaws of the Corporation, increase the number of authorized shares of Series A Preferred Stock or create any additional class or series of Preferred Stock, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock or the holders thereof in their capacity as holders of Series A Preferred Stock; 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 shares of the Series A Preferred Stock remain outstanding with the terms thereof materially unchanged or, if the Corporation 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 dividends, liquidation or other distributions, voting, redemption and conversion as the Series A Preferred Stock (and with the terms of the Common Stock or such other securities for which the Series A Preferred Stock (or the substitute security therefor) is convertible materially the same with respect to rights to dividends, liquidation or other 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 A Preferred Stock.
(ii) Any creation or issuance of any class or series of capital stock of the Corporation ranking junior to the Series A Preferred Stock with respect to payment of dividends, 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 A Preferred Stock.
(iii) Any creation or issuance of any class or series of Preferred Stock (other than an issuance of additional shares of Series A Preferred Stock, as to which a class vote shall be required), or any increase in the amount of authorized shares of such series, in each case ranking on a parity with
the Series A Preferred Stock with respect to payment of dividends, 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 A Preferred Stock if such issuance is done (x) in connection with an issuance of Preferred Stock 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 (y) in connection with a bona fide capital raising transaction.
(iv) Any creation or issuance of any class or series of Preferred Stock ranking senior to the Series A Preferred Stock with respect to the payment of dividends, redemption rights and the distribution of assets upon liquidation, dissolution or winding up, to the extent the issuance of such Preferred Stock 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 A Preferred Stock.
(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 shares of Series A Preferred Stock shall have been converted and/or redeemed.
(a) Senior to any class or series of capital stock of the Corporation, if such class or series shall be Common Stock or if the holders of Series A Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of shares of such class or series, including Junior Preferred Stock ("Junior Stock");
(b) On a parity with any other class or series of capital stock of the Corporation, if the holders of such other class or series of capital stock and the Series A Preferred Stock shall be entitled to the receipt of dividends and of amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid distributions per share or liquidation preferences, without preference or priority one over the other ("Parity Stock"); and
(c) Junior only to (I) any indebtedness issued by the Corporation and (II) senior preferred stock (A) issued only for cash by the Corporation 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 shares
of preferred stock so issued) not affiliated with the Corporation 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
shares of preferred stock were Junior Preferred Stock, 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 are
contributed by the Corporation 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 preferred units of the Partnership junior to the Series Two
Preferred Units and the Series Three Preferred Units of the
Partnership or common units of the Partnership), and (v) none of which
proceeds are used (AA) to purchase, redeem, retire or otherwise
acquire directly or indirectly any preferred units of the Partnership
junior to the Series Two Preferred Units and the Series Three
Preferred Units of the Partnership or common units of the Partnership,
or shares of Junior Preferred Stock or Common Stock of the
Corporation, 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 Corporation as of the date hereof
(except that the 5% threshold referred to therein shall be deemed for
these purposes to be a 10% threshold).
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 holders of Series A Preferred Stock shall be sent to their address of record with the Corporation. Any holder of Series A Preferred Stock may change its address of record by written notice as given as aforesaid. Notices delivered to the Corporation shall be addressed to Boston Properties, Inc. Attn.: Chief Financial Officer, 8 Arlington Street, Boston, MA 02116 or to such other address as the Corporation may have notified holders in the manner provided in this Section 11.
(a) In the event of a redemption pursuant to Section 5, on or before the applicable Option Strike Date, a holder of shares of Series A Preferred Stock subject to such redemption shall surrender certificates ("Series A Certificates") representing such shares to the place or places designated by the Corporation in writing. The date on which the Corporation shall be required to pay to such holder the redemption price and the amounts required to be paid under Section 5(c) shall be the later of (i) the date set forth in the last paragraph of Section 5(b) and (ii) two Business Days after the date such Series A Certificates have been so surrendered. From and after the Option Strike Date, such Series A Certificates shall (subject to the last sentence of the first paragraph of Section 5(d)) represent only the right to receive the redemption price and the amounts required to be paid under Section 5(c), without interest thereon.
(b) In the event of a conversion pursuant to Section 7, within 5 days of the Conversion Date, a holder of shares of Series A Preferred Stock subject to such conversion shall surrender Series A Certificates representing such shares to the place or places designated by the Corporation in writing. As promptly as practicable after the surrender of such Series A Certificates, the Corporation shall cause to be issued and delivered to such holder a certificate or certificates representing the number of full shares of Common Stock issuable upon such conversion. From and after the Conversion Date, such Series A Certificates shall represent only the right to receive the number of full shares of Common Stock issuable upon such conversion and the amounts required to be paid under Sections 7(c) and 7(e) (if such amounts have not yet been paid) without interest thereon.
(c) A holder of Series A Preferred Stock shall be deemed to have surrendered the certificate or certificates representing such stock only if (i) the holder surrenders such certificate to the Corporation's headquarters, attention Chief Financial Officer, or to such other place as the Corporation may specify in writing in its Redemption Notice or Conversion Notice, and (ii) such surrendered certificate is
duly endorsed or assigned to the Corporation or in blank and is accompanied by any other duly executed instruments of transfer that the Corporation or its transfer agent may reasonably specify.
(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 Partnership and the Series Three Preferred Units issued by the Partnership 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 A Preferred Stock shall have the right to elect, by vote of a majority-in- interest of the Series A Preferred Stock, to adopt amendments or modifications of this Certificate of Designations comparable to amendments and modifications of such securities. The Corporation agrees for the benefit of the holders of Series A Preferred Stock that the Corporation, as the general partner of the Partnership, shall not permit the amendment or modification of such other securities without causing this Section 14 to be given full effect, and the Corporation shall take such action as is reasonably appropriate or necessary to give full effect to this Section 14.
Exhibit A to the Certificate of Designations for the Series A Preferred Stock
NOTICE OF ELECTION BY HOLDER TO CONVERT
SERIES A PREFERRED STOCK INTO COMMON STOCK
The undersigned holder of Series A Preferred Stock hereby (i) elects to convert the number of shares of Series A Preferred Stock in Boston Properties, Inc. (the "Corporation") set forth below into shares of Common Stock in accordance with the terms of the Certificate of Designations relating to the Series A Preferred Stock; and (ii) directs that any cash in lieu of fractional shares of Common Stock 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 shares of Series A Preferred Stock, free and clear of the rights or interests of any other person or entity other than the Corporation; (b) has the full right, power, and authority to cause the conversion of such shares of Series A Preferred Stock 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 holder of Series A Preferred Stock: ___________________________________ (Please Print: Exact Name as Registered with Corporation)
Date of this Notice:_________________________
Date the shares of Series A Preferred Stock are to be converted:_____________/1/
Number of shares of Series A Preferred Stock to be converted:_________________
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.
Exhibit B to the Certificate of Designations for the Series A Preferred Stock
NOTICE OF ELECTION BY HOLDER TO REDEEM
SERIES A PREFERRED STOCK FOR CASH
The undersigned holder of Series A Preferred Stock hereby (i) elects to
redeem the number of shares of Series A Preferred Stock in Boston Properties,
Inc. (the "Corporation") set forth below for the redemption price determined in
accordance with the terms of the Certificate of Designations (the "Certificate")
relating to the Series A Preferred Stock; 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 shares of Series A Preferred Stock, free and clear of the
rights or interests of any other person or entity other than the Corporation;
(b) has the full right, power, and authority to cause the redemption of such
shares of Series A Preferred Stock 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, dividends on the shares of Series A
Preferred Stock to be redeemed shall cease to accrue on the redemption date
indicated below.
Name of holder of Series A Preferred Stock: ___________________________________ (Please Print: Exact Name as Registered with Corporation)
Date of this Notice:_________________________
Option Strike Date on which the shares of Series A Preferred Stock are to be redeemed:________________
Number of shares of Series A Preferred Stock to be redeemed:_________________
Signature Guaranteed by:
Note: Redemptions are subject to reduction and proration as provided in the Certificate of Designations in respect of the Series A Preferred Stock.