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): September 25, 1997
HIGHWOODS PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-13100 56-1871668
(State of Incorporation) (Commission File Number) (IRS Employer Identification
No.)
3100 Smoketree Court, Suite 600, Raleigh, North Carolina 27604
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (919) 872-4924
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Item 5. OTHER EVENTS.
The purpose of this filing is to effect the incorporation of
the exhibits hereto into the prospectus dated September 22, 1997, which
prospectus was used in connection with a public offering (the "Offering") by the
Registrant of up to 6,900,000 shares of 8% Series B Cumulative Redeemable
Preferred Shares, par value $0.01 per share (liquidation preference equivalent
to $25 per share). The Offering was priced on September 22, 1997 and
closed on September 25, 1997.
Item 7(C). EXHIBITS.
Item Description
3.1 Amended and Restated Articles of Incorporation of the Registrant
4.1 Specimen certificate representing shares of 8% Series B Cumulative
Redeemable Preferred Shares issued by the Registrant
10.1 Amendment to Amended and Restated Agreement of Limited Partnership of
Highwoods/Forsyth Limited Partnership
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SIGNATURES
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 thereunto duly authorized.
HIGHWOODS PROPERTIES, INC.
Date: September 25, 1997 /s/ Carman J. Liuzzo
--------------------
Carman J. Liuzzo
Vice President and Chief Financial Officer
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AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
HIGHWOODS PROPERTIES, INC.
ARTICLE I
Incorporator
THE UNDERSIGNED, Robert H. Bergdolt, whose mailing address is
316 W. Edenton Street, Raleigh, North Carolina 27603, being at least eighteen
years of age, acting as incorporator, does hereby form a corporation under the
General Laws of the State of Maryland.
ARTICLE II
Name
The name of the corporation (the "Corporation") is Highwoods
Properties, Inc.
ARTICLE III
Principal Office, Registered Office and Agent
The address of the Corporation's principal office is 3100
Smoketree Court, Suite 700, Raleigh, North Carolina 27625. The address of the
Corporation's principal office and registered office in the State of Maryland is
32 South Street, Baltimore, Maryland 21202. The name of its registered agent at
that office is The Corporation Trust, Incorporated.
ARTICLE IV
Purposes
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the Maryland
Corporations and Associations Article as now or hereafter in force.
ARTICLE V
Capital Stock
Section 5.1. Shares and Par Value. The total number of shares
of stock of all classes which the Corporation has authority to issue is
110,000,000 shares of capital stock (par value $.01 per share), amounting in
aggregate par value to $1,100,000, of which 10,000,000 shares are classified
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as Preferred Stock (par value $.01 per share) and 100,000,000 shares are
classified as Common Stock (par value $.01 per share).
Section 5.2. Common Stock. The following is a description of
the preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of the Common Stock of the Corporation (See also Article Sixth
hereof):
(a) Except as otherwise provided in these Amended and Restated
Articles of Incorporation, each share of Common Stock shall have one vote, and,
except as otherwise provided in respect of any class or series of Preferred
Stock hereafter classified or reclassified, the exclusive voting power for all
purposes shall be vested in the holders of the Common Stock.
(b) Subject to the provisions of law and any preferences of
any class or series of Preferred Stock hereafter classified or reclassified,
dividends, including dividends payable in shares of another class of the
Corporation's stock, may be paid on the Common Stock of the Corporation at such
time and in such amounts as the Board of Directors may deem advisable out of
assets of the Corporation legally available therefor.
(c) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of the Common
Stock then outstanding shall be entitled, after payment or provision for payment
of the debts and other liabilities of the Corporation and the amount to which
the holders of any class or series of Preferred Stock hereafter classified or
reclassified shall be entitled, to share ratably in the remaining net assets of
the Corporation.
Section 5.3. Preferred Stock. The Board of Directors may
classify and reclassify any unissued shares of Preferred Stock by setting or
changing in any one or more respects, from time to time before issuance of such
shares, the preferences, conversion or other rights, voting powers, restrictions
(including restrictions on transfers of shares), limitations as to dividends,
qualifications or terms or conditions of redemption of such shares of Preferred
Stock. Subject to the foregoing, the power of the Board of Directors to classify
and reclassify any of the shares of Preferred Stock shall include, without
limitation, subject to the provisions of the Charter, authority to determine,
fix, or alter one or more of the following:
(a) The distinctive designation of such class or series and
the number of shares to constitute such class or series; provided that, unless
otherwise prohibited by the terms of such or any other class or series, the
number of shares of any class or series may be decreased by the Board of
Directors in connection with any classification or reclassification of unissued
shares and the number of shares of such class or series may be increased by the
Board of Directors in connection with any such classification or
reclassification, and any shares of any class or series which have been
redeemed, purchased, otherwise acquired or converted into shares of Common Stock
or any other class or series shall become part of the authorized capital stock
and be subject to classification and reclassification as provided in this
sub-paragraph.
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(b) Whether or not and, if so, the rates, amounts and times at
which, and the conditions under which, dividends shall be payable on shares of
such class or series, whether any such dividends shall rank senior, or junior to
or on a parity with the dividends payable on any other class or series of stock,
and the status of any such dividends as cumulative, cumulative to a limited
extent or non-cumulative and as participating or non-participating.
(c) Whether or not shares of such class or series shall have
voting rights, in addition to any voting rights provided by law and, if so, the
terms of such voting rights.
(d) Whether or not shares of such class or series shall have
conversion or exchange privileges and, if so, the terms and conditions thereof,
including provision for adjustment of the conversion or exchange rate in such
events or at such times as the Board of Directions shall determine.
(e) Whether or not shares of such class or series shall be
subject to redemption and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be redeemable and the
amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates; and whether or not there
shall be any sinking fund or purchase account in respect thereof, and if so, the
terms thereof.
(f) The rights of the holders of shares of such class or
series upon the liquidation, dissolution or winding up of the affairs of, or
upon any distribution of the assets of, the Corporation, which rights may vary
depending upon whether such liquidation, dissolution or winding up is voluntary
or involuntary and, if voluntary, may vary at different dates, and whether such
rights shall rank senior or junior to or on a parity with such rights of any
other class or series of stock.
(g) Whether or not there shall be any limitations applicable,
while shares of such class or series are outstanding, upon the payment of
dividends or making of distributions on, or the acquisition of, or the use of
moneys for purchase or redemption of, any stock of the Corporation, or upon any
other action of the Corporation, including action under this sub-paragraph, and,
if so, the terms and conditions thereof.
(h) Any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications of shares of such class or
series, not inconsistent with law and the Charter of the Corporation.
Section 5.6. Preemptive Rights. No holder of shares of capital
stock of the Corporation shall, as such holder, have any preemptive or other
right to purchase or subscribe for any shares of Common Stock or any class of
capital stock of the Corporation that the Corporation may issue or sell.
Section 5.7. Business Combinations. Pursuant to Section
3-603(e)(1)(iii) of the Maryland Corporations and Associations Article, the
terms of Section 3-602 of such law shall be inapplicable to the Corporation.
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Section 5.8. 8 5/8% Series A Cumulative Redeemable Preferred
Shares.
(a) Title. The series of Preferred Stock is hereby designated
as the "8 5/8% Series A Cumulative Redeemable Preferred Shares" (the "Series A
Preferred Shares").
(b) Number. The maximum number of authorized shares of the
Series A Preferred Shares shall be 143,750.
(c) Relative Seniority. In respect of rights to receive
dividends and to participate in distributions of payments in the event of any
liquidation, dissolution or winding up of the Corporation, the Series A
Preferred Shares shall rank senior to the Common Stock and any other class or
series of shares of the Corporation ranking, as to dividends and upon
liquidation, junior to the Series A Preferred Shares (collectively, "Junior
Shares").
(d) Dividends.
(i) The holders of the then outstanding Series A Preferred
Shares shall be entitled to receive, when and as declared by the Board of
Directors out of any funds legally available therefor, cumulative dividends at
the rate of 8 5/8% of the liquidation preference of the Series A Preferred
Shares (equivalent to $86.25 per share) per year, payable quarterly in arrears
in cash on the last day of February, May, August, and November of each year or,
if not a Business Day (as hereinafter defined), the next succeeding Business
Day, commencing May 31, 1997 (each such day being hereafter called a "Dividend
Payment Date" and each period beginning on the day next following a Dividend
Payment Date and ending on the next following Dividend Payment Date being
hereinafter called a "Dividend Period"). Dividends shall be payable to holders
of record as they appear in the share records of the Corporation at the close of
business on the applicable record date (the "Record Date"), which shall be the
15th day of the calendar month in which the applicable Dividend Payment Date
falls on or such other date designated by the Board of Directors of the
Corporation for the payment of dividends that is not more than 30 nor less than
10 days prior to such Dividend Payment Date. The amount of any dividend payable
for any Dividend Period shorter than a full Dividend Period shall be prorated
and computed on the basis of a 360-day year of twelve 30-day months.
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in New York City are authorized or required by law, regulation or executive
order to close.
(ii) The amount of any dividends accrued on any Series A
Preferred Shares at any Dividend Payment Date shall be the amount of any unpaid
dividends accumulated thereon, to and including such Dividend Payment Date,
whether or not earned or declared, and the amount of dividends accrued on any
Series A Preferred Shares at any date other than a Dividend Payment Date shall
be equal to the sum of the amount of any unpaid dividends accumulated thereon,
to and including the last preceding Dividend Payment Date, whether or not earned
or declared, plus an amount calculated on the basis of the annual dividend rate
for the period after such last preceding Dividend Payment Date to and including
the date as of which the calculation is made based on a 360- day year of twelve
30-day months. When dividends are not paid in full upon the Series A Preferred
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Shares (or a sum sufficient for such full payment is not set apart therefor),
all dividends declared upon Series A Preferred Shares and any other series of
preferred stock ranking on a parity as to dividends with the Series A Preferred
Shares shall be declared pro rata so that the amount of dividends declared per
share on the Series A Preferred Shares and such other series of preferred stock
shall in all cases bear to each other the same ratio that accrued dividends per
share on the shares of Series A Preferred Shares and such other series of
preferred stock bear to each other.
Except as provided in the immediately preceding paragraph,
unless full cumulative dividends on the Series A Preferred Shares have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment of the Series A Preferred Shares for all
past dividend periods and the then current dividend period, (A) no dividends
shall be declared or paid or set apart for payment on the preferred stock of the
Corporation ranking, as to dividends, on a parity with or junior to the Series A
Preferred Shares for any period, and (B) no dividends (other than in Junior
Shares) shall be declared or paid or set aside for payment or other distribution
or shall be declared or made upon the Junior Shares or any other capital stock
of the corporation ranking on a parity with the Series A Preferred Shares as to
dividends or upon liquidation ("Parity Shares"), nor shall any Junior Shares or
any Parity Shares be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any Junior Shares or Parity Shares) by the Corporation (except
by conversion into or exchange for Junior Shares).
(iii) Except as provided in this paragraph (d), the Series A
Preferred Shares will not be entitled to any dividends in excess of full
cumulative dividends as described above and shall not be entitled to participate
in the earnings or assets of the Corporation, and no interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series A Preferred Shares which may be in arrears.
(iv) Any dividend payment made on the Series A Preferred
Shares shall be first credited against the earliest accrued but unpaid dividend
due with respect to such shares which remains payable.
(v) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the Internal
Revenue Code of 1986, as amended (the "Code")), any portion (the "Capital Gains
Amount") of the dividends, within the meaning of Section 315 of the Code, paid
or made available for the year to holders of all classes of shares (the "Total
Dividends"), then the portion of the Capital Gains Amount that shall be
allocated to the holders of the Series A Preferred Shares shall equal (A) the
Capital Gains Amount multiplied by (B) a fraction that is equal to (1) the total
dividends paid, within the meaning of Section 315 of the Code, or made available
to the holders of the Series A Preferred Shares for the year over (2) the Total
Dividends.
(vi) No dividends on the Series A Preferred Shares shall be
authorized by the Board of Directors or be paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibit such
authorization, payment or setting apart for payment or provides that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default
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thereunder, or if such authorization or payment shall be restricted or
prohibited by law. Notwithstanding the foregoing, dividends on the Series A
Preferred Shares will accrue and be cumulative from the date of original issue
thereof 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 authorized.
(e) Liquidation Rights.
(i) Upon the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation, the holders of the Series A Preferred Shares
then outstanding shall be entitled to receive and to be paid out of the assets
of the Corporation legally available for distribution to its stockholders,
before any payment or distribution shall be made to the holders of Common Stock
or any other capital stock of the Corporation ranking junior to the Series A
Preferred Shares as to liquidation rights, a liquidation preference of $1,000.00
per share, plus accrued and unpaid dividends thereon to the date of such
liquidation, dissolution or winding up.
(ii) After the payment to the holders of the Series A
Preferred Shares of the full liquidating distributions provided for in this
paragraph (e), the holder of the Series A Preferred Shares, as such, shall have
no right or claim to any of the remaining assets of the Corporation.
(iii) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable with respect
to the preference value of the Series A Preferred Shares and any other shares of
the Corporation ranking as to any such distribution on a parity with the Series
A Preferred Shares are not paid in full, the holders of the Series A Preferred
Shares and of such other shares will share ratably in any such distribution of
assets of the Corporation in proportion to the full respective liquidating
distributions to which they are entitled.
(iv) Neither the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Corporation, nor the merger
or consolidation of the Corporation into or with any other entity or the merger
or consolidation of any other entity into or with the Corporation, shall be
deemed to be a dissolution, liquidation or winding up, voluntary or involuntary,
for the purposes of this paragraph (e).
(f) Redemption.
(i) The Series A Preferred Shares are not redeemable prior to
February 12, 2027. On and after February 12, 2027, the Corporation may, at its
option, redeem at any time all or, from time to time, part of the Series A
Preferred Shares at a price per share (the "Redemption Price"), payable in cash,
of $1,000.00, together with all accrued and unpaid dividends to and including
the date fixed for redemption (the "Redemption Date"), without interest, to the
full extent the Corporation has funds legally available therefor. The Series A
Preferred Shares have no stated maturity and will not be subject to any sinking
fund or mandatory redemption provisions.
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(ii) Procedures of Redemption.
(A) Notice of redemption will be given by publication in a
newspaper of general circulation in the City of New York, such publication to be
made once a week for two successive weeks commencing not less than 30 nor more
than 60 days prior to the Redemption Date. Notice of any redemption will also be
mailed by the registrar, postage prepaid, not less than 30 nor more than 60 days
prior to the Redemption Date, addressed to each holder of record of the Series A
Preferred Shares to be redeemed at the address set forth in the share transfer
records of the registrar. No failure to give such notice or any defect therein
or in the mailing thereof shall affect the validity of the proceedings for the
redemption of any Series A Preferred Shares except as to the holder to whom the
Corporation has failed to give notice or except as to the holder to whom notice
was defective. In addition to any information required by law or by the
applicable rules of any exchange upon which Series A Preferred Shares may be
listed or admitted to trading, such notice shall state: (1) the Redemption Date;
(2) the Redemption Price; (3) the number of Series A Preferred Shares to be
redeemed; (4) the place or places where certificates for such shares are to be
surrendered for payment of the Redemption Price; and (5) that dividends on the
Series A Preferred Shares to be redeemed will cease to accrue on the Redemption
Date. If fewer than all of the Series A Preferred Shares held by any holder are
to be redeemed, the notice mailed to such holder shall also specify the number
of Series A Preferred Shares to be redeemed from such holder.
(B) If notice has been published and mailed in accordance with
subparagraph (f)(ii)(A) above and provided that on or before the Redemption Date
specified in such notice all funds necessary for such redemption shall have been
irrevocably set aside by the Corporation, separate and apart from its other
funds in trust for the benefit of the holders of the Series A Preferred Shares
so called for redemption, so as to be, and to continue to be available therefor,
then, from and after the Redemption Date, dividends on the Series A Preferred
Shares so called for redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding and shall not have the status of Series A
Preferred Shares and all rights of the holders thereof as holders of such shares
(except the right to receive the Redemption Price) shall cease. Upon surrender,
in accordance with such notice, of the certificates for any Series A Preferred
Shares so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state), such Series A
Preferred Shares shall be redeemed by the Corporation at the Redemption Price.
In case fewer than all the Series A Preferred Shares represented by any such
certificate are redeemed, a new certificate or certificates shall be issued
presenting the unredeemed Series A Preferred Shares without cost to the holder
thereof.
(C) Any funds deposited with a bank or trust company for the
purpose of redeeming Series A Preferred Shares shall be irrevocable except that:
(1) the Corporation shall be entitled to receive from such bank or trust company
the interest or other earnings, if any, earned on any money so deposited in
trust, and the holders of any shares redeemed shall have no claim to such
interest or other earnings; and (2) any balance of monies so deposited by the
Corporation and unclaimed by the holders of the Series A Preferred Shares
entitled thereto at the expiration of two years from the applicable Redemption
Date shall be repaid, together with any interest or other earnings earned
thereon, to the Corporation, and after any such repayment, the holders of the
shares
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entitled to the funds so repaid to the Corporation shall look only to the
Corporation for payment without interest or other earnings.
(D) No Series A Preferred Shares may be redeemed except from
proceeds from the sale of other capital stock of the Corporation, including but
not limited to Common Stock, preferred stock, depositary shares, interests,
participations or other ownership interests (however designated) and any rights
(other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(E) Unless full cumulative dividends on all Series A Preferred
Shares shall have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
Dividend Periods and the then current Dividend Period, no Series A Preferred
Shares shall be redeemed or purchased or otherwise acquired directly or
indirectly (except by conversion into or exchange for Junior Shares); provided,
however, that the foregoing shall not prevent the redemption of Series A
Preferred Shares to preserve the Corporation's REIT status or the purchase or
acquisition of Series A Preferred Shares pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding Series A Preferred
Shares.
(F) If the Redemption Date is after a Record Date and before
the related Dividend Payment Date, the dividend payable on such Dividend Payment
Date shall be paid to the holder in whose name the Series A Preferred Shares to
be redeemed are registered at the close of business on such Record Date
notwithstanding the redemption thereof between such Record Date and the related
Dividend Payment Date or the Corporation's default in the payment of the
dividend due. Except as provided above, the Corporation will make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series A Preferred
Shares to be redeemed.
(G) In case of redemption of less than all Series A Preferred
Shares at the time outstanding, the Series A Preferred Shares to be redeemed
shall be selected pro rata from the holders of record of such shares in
proportion to the number of Series A Preferred Shares held by such holders (with
adjustments to avoid redemption of fractional shares) or by any other equitable
method determined by the Corporation.
(g) Voting Rights. Except as required by law, and as set forth
below, the holders of the Series A Preferred Shares shall not be entitled to
vote at any meeting of the stockholders for election of Directors or for any
other purpose or otherwise to participate in any action taken by the Corporation
or the stockholders thereof, or to receive notice of any meeting of
stockholders.
(i) Whenever dividends on any Series A Preferred Shares shall
be in arrears for six or more quarterly periods, whether or not such quarterly
periods are consecutive, the holders of such Series A Preferred Shares (voting
separately as a class with all other series of preferred stock upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional Directors of the Corporation at a special
meeting called by the holders of record of at least ten percent (10%) of the
Series A Preferred Shares or the holders of any other series of preferred stock
so in arrears (unless such request is received less than 90 days before the date
fixed for the next annual or special meeting of the stockholders) or at the next
annual meeting of
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stockholders, and at each subsequent annual meeting until all dividends
accumulated on such Series A Preferred Shares for the past Dividend Periods and
the then current Dividend Period shall have been fully paid or declared and a
sum sufficient for the payment thereof set aside for payment. In such case, the
entire Board of Directors of the Corporation will be increased by two Directors.
(ii) So long as any Series A Preferred Shares remain
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least two-thirds of the Series A Preferred Shares
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class), (A) authorize or create, or
increase the authorized or issued amount of, any class or series of shares of
capital stock ranking prior to the Series A Preferred Shares with respect to the
payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up or reclassify any authorized capital stock of the Corporation into
such shares, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such shares; or (B)
amend, alter or repeal the provisions of the Corporation's Articles of
Incorporation, including this Amendment, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series A Preferred Shares or the
holders thereof; provided, however, with respect to the occurrence of any of the
Events set forth in (B) above, so long as the Series A Preferred Shares remain
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Corporation may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of holders
of Series A Preferred Shares and provided further that (X) any increase in the
amount of the authorized preferred stock or the creating or issuance of any
other series of preferred stock, or (Y) any increase in the amount of authorized
Series A Preferred Shares or any other series of preferred stock, in each case
ranking on a parity with or junior to the Series A Preferred Shares with respect
to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
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 shall be effected, all outstanding Series A Preferred Shares shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
(iii) On each matter submitted to a vote of the holders of
Series A Preferred Shares in accordance with this paragraph (g), or as otherwise
required by law, each Series A Preferred Share shall be entitled to one vote.
With respect to each Series A Preferred Share, the holder thereof may designate
a proxy, with each such proxy having the right to vote on behalf of the holder.
(h) Conversion. The Series A Preferred Shares are not
convertible into or exchangeable for an other property or securities of the
Corporation.
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I.
Section 5.9. 8% Series B Cumulative Redeemable Preferred Shares.
(a) Title. The series of Preferred Stock is hereby designated as the
"8% Series B Cumulative Redeemable Preferred Shares" (the "Series B Preferred
Shares").
(b) Number. The maximum number of authorized shares of the Series B
Preferred Shares shall be 6,900,000.
(c) Relative Seniority. In respect of rights to receive dividends and
to participate in distributions of payments in the event of any liquidation,
dissolution or winding up of the Corporation, the Series B Preferred Shares
shall rank (i) senior to the Common Stock and any other class or series of
shares of the Corporation ranking, as to dividends and upon liquidation, junior
to the Series B Preferred Shares (collectively, "Junior Shares") and (ii) PARI
PASSU with the Corporation's 8 5/8% Series A Cumulative Redeemable Preferred
Shares and any other class or series of shares of the Corporation ranking, as to
dividends and upon liquidation, PARI PASSU with the Series B Preferred Shares.
(d) Dividends.
(i) The holders of the then outstanding Series B Preferred
Shares shall be entitled to receive, when and as declared by the Board of
Directors out of any funds legally available therefor, cumulative dividends at
the rate of 8% of the $25.00 per share liquidation preference per annum of the
Series B Preferred Shares (equivalent to $2.00 per share). Such dividends shall
accrue and be cumulative from the date of original issuance and shall be payable
quarterly in arrears in cash on March 15, June 15, September 15 and
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December 15 of each year or, if not a Business Day (as hereinafter defined), the
next succeeding Business Day, commencing December 15, 1997 (each such day being
hereafter called a "Dividend Payment Date" and each period beginning on the day
next following a Dividend Payment Date and ending on the next following Dividend
Payment Date being hereinafter called a "Dividend Period"). Dividends shall be
payable to holders of record as they appear in the share records of the
Corporation at the close of business on the applicable record date (the "Record
Date"), which shall be the first day of the calendar month in which the
applicable Dividend Payment Date falls on or such other date designated by the
Board of Directors of the Corporation for the payment of dividends that is not
more than 30 nor less than 10 days prior to such Dividend Payment Date. The
amount of any dividend payable for any Dividend Period shorter than a full
Dividend Period shall be prorated and computed on the basis of a 360-day year of
twelve 30-day months.
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in New York City are authorized or required by law, regulation or executive
order to close.
(ii) The amount of any dividends accrued on any Series B
Preferred Shares at any Dividend Payment Date shall be the amount of any unpaid
dividends accumulated thereon, to and including such Dividend Payment Date,
whether or not earned or declared, and the amount of dividends accrued on any
Series B Preferred Shares at any date other than a Dividend Payment Date shall
be equal to the sum of the amount of any unpaid dividends accumulated thereon,
to and including the last preceding Dividend Payment Date, whether or not earned
or declared, plus an amount calculated on the basis of the annual dividend rate
for the period after such last preceding Dividend Payment Date to and including
the date as of which the calculation is made based on a 360-day year of twelve
30-day months. When dividends are not paid in full upon the Series B Preferred
Shares (or a sum sufficient for such full payment is not set apart therefor),
all dividends declared upon Series B Preferred Shares and any other series of
preferred stock ranking on a parity as to dividends with the Series B Preferred
Shares shall be declared pro rata so that the amount of dividends declared per
share on the Series B Preferred Shares and such other series of preferred stock
shall in all cases bear to each other the same ratio that accrued dividends per
share on the shares of Series B Preferred Shares and such other series of
preferred stock bear to each other.
Except as provided in the immediately preceding paragraph,
unless full cumulative dividends on the Series B Preferred Shares have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment of the Series B Preferred Shares for all
past dividend periods and the then current dividend period, (A) no dividends
shall be declared or paid or set apart for payment on the preferred stock of the
Corporation ranking, as to dividends, on a parity with or junior to the Series B
Preferred Shares for any period, and (B) no dividends (other than in Junior
Shares) shall be declared or paid or set aside for payment or other distribution
or shall be declared or made upon the Junior Shares or any other capital stock
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of the corporation ranking on a parity with the Series B Preferred Shares as to
dividends or upon liquidation ("Parity Shares"), nor shall any Junior Shares or
any Parity Shares be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any Junior Shares or Parity Shares) by the Corporation (except
by conversion into or exchange for Junior Shares).
(iii) Except as provided in this paragraph (d), the Series B
Preferred Shares will not be entitled to any dividends in excess of full
cumulative dividends as described above and shall not be entitled to participate
in the earnings or assets of the Corporation, and no interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series B Preferred Shares which may be in arrears.
(iv) Any dividend payment made on the Series B Preferred
Shares shall be first credited against the earliest accrued but unpaid dividend
due with respect to such shares which remains payable.
(v) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the Internal
Revenue Code of 1986, as amended (the "Code")), any portion (the "Capital Gains
Amount") of the dividends, within the meaning of Section 316 of the Code, paid
or made available for the year to holders of all classes of shares (the "Total
Dividends"), then the portion of the Capital Gains Amount that shall be
allocated to the holders of the Series B Preferred Shares shall equal (A) the
Capital Gains Amount multiplied by (B) a fraction that is equal to (1) the total
dividends paid, within the meaning of Section 316 of the Code, or made available
to the holders of the Series B Preferred Shares for the year over (2) the Total
Dividends.
(vi) No dividends on the Series B Preferred Shares shall be
authorized by the Board of Directors or be paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibit such
authorization, payment or setting apart for payment or provides that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law. Notwithstanding the foregoing, dividends on the
Series B Preferred Shares will accrue and be cumulative from the date of
original issue thereof 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 authorized.
(e) Liquidation Rights.
(i) Upon the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation, the holders of the Series B Preferred Shares
then outstanding shall be entitled to receive and to be paid out of the assets
of the Corporation legally available for distribution to its stockholders,
before any payment or distribution
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shall be made to the holders of Common Stock or any other capital stock of the
Corporation ranking junior to the Series B Preferred Shares as to liquidation
rights, a liquidation preference of $25.00 per share, plus accrued and unpaid
dividends thereon to the date of such liquidation, dissolution or winding up.
(ii) After the payment to the holders of the Series B
Preferred Shares of the full liquidating distributions provided for in this
paragraph (e), no holder of the Series B Preferred Shares, as such, shall have
any right or claim to any of the remaining assets of the Corporation.
(iii) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable with respect
to the preference value of the Series B Preferred Shares and any other shares of
the Corporation ranking as to any such distribution on a parity with the Series
B Preferred Shares are not paid in full, the holders of the Series B Preferred
Shares and of such other shares will share ratably in any such distribution of
assets of the Corporation in proportion to the full respective liquidating
distributions to which they are entitled.
(iv) Neither the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Corporation, nor the merger
or consolidation of the Corporation into or with any other entity or the merger
or consolidation of any other entity into or with the Corporation, shall be
deemed to be a dissolution, liquidation or winding up, voluntary or involuntary,
for the purposes of this paragraph (e).
(f) Redemption.
(i) The Series B Preferred Shares are not redeemable prior to
September 25, 2002. On and after September 25, 2002, the Corporation may, at its
option, redeem at any time all or, from time to time, part of the Series B
Preferred Shares at a price per share (the "Redemption Price"), payable in cash,
of $25.00, together with all accrued and unpaid dividends to and including the
date fixed for redemption (the "Redemption Date"), without interest, to the full
extent the Corporation has funds legally available therefor. The Series B
Preferred Shares have no stated maturity and will not be subject to any sinking
fund or mandatory redemption provisions.
(ii) Procedures of Redemption.
(A) Notice of redemption will be given by publication in a
newspaper of general circulation in the City of New York, such publication to be
made once a week for two successive weeks commencing not less than 30 nor more
than 60 days prior to the Redemption Date. Notice of any redemption will also be
mailed by the registrar, postage prepaid, not less than 30 nor more than 60 days
prior to the Redemption Date, addressed to each holder of record of the Series B
Preferred Shares to be redeemed at the address set forth in the share transfer
records of the registrar. No failure to give such notice or any defect therein
or in the mailing thereof shall affect the validity of the proceedings for
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the redemption of any Series B Preferred Shares except as to the holder to whom
the Corporation has failed to give notice or except as to the holder to whom
notice was defective. In addition to any information required by law or by the
applicable rules of any exchange upon which Series B Preferred Shares may be
listed or admitted to trading, such notice shall state: (1) the Redemption Date;
(2) the Redemption Price; (3) the number of Series B Preferred Shares to be
redeemed; (4) the place or places where certificates for such shares are to be
surrendered for payment of the Redemption Price; and (5) that dividends on the
Series B Preferred Shares to be redeemed will cease to accrue on the Redemption
Date. If fewer than all of the Series B Preferred Shares held by any holder are
to be redeemed, the notice mailed to such holder shall also specify the number
of Series B Preferred Shares to be redeemed from such holder.
(B) If notice has been published and mailed in accordance with
subparagraph (f)(ii)(A) above and provided that on or before the Redemption Date
specified in such notice all funds necessary for such redemption shall have been
irrevocably set aside by the Corporation, separate and apart from its other
funds in trust for the benefit of the holders of the Series B Preferred Shares
so called for redemption, so as to be, and to continue to be available therefor,
then, from and after the Redemption Date, dividends on the Series B Preferred
Shares so called for redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding and shall not have the status of Series B
Preferred Shares and all rights of the holders thereof as holders of such shares
(except the right to receive the Redemption Price) shall cease. Upon surrender,
in accordance with such notice, of the certificates for any Series B Preferred
Shares so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state), such Series B
Preferred Shares shall be redeemed by the Corporation at the Redemption Price.
In case fewer than all the Series B Preferred Shares represented by any such
certificate are redeemed, a new certificate or certificates shall be issued
representing the unredeemed Series B Preferred Shares without cost to the holder
thereof.
(C) Any funds deposited with a bank or trust company for the
purpose of redeeming Series B Preferred Shares shall be irrevocable except that:
(1) the Corporation shall be entitled to receive from such bank or trust company
the interest or other earnings, if any, earned on any money so deposited in
trust, and the holders of any shares redeemed shall have no claim to such
interest or other earnings; and (2) any balance of monies so deposited by the
Corporation and unclaimed by the holders of the Series B Preferred Shares
entitled thereto at the expiration of two years from the applicable Redemption
Date shall be repaid, together with any interest or other earnings earned
thereon, to the Corporation, and after any such repayment, the holders of the
shares entitled to the funds so repaid to the Corporation shall look only to the
Corporation for payment without interest or other earnings.
(D) Except for any portion of the Redemption Price consisting
of accrued and unpaid dividends, no Series B Preferred Shares may be redeemed
except from proceeds from the sale of other capital stock of the Corporation,
including but not limited to Common Stock, preferred stock, depositary shares,
interests, participations or other ownership interests (however designated) and
any rights (other than debt securities
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convertible into or exchangeable for equity securities) or options to purchase
any of the foregoing.
(E) Unless full cumulative dividends on all Series B Preferred
Shares shall have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
Dividend Periods and the then current Dividend Period, no Series B Preferred
Shares shall be redeemed or purchased or otherwise acquired directly or
indirectly (except by conversion into or exchange for Junior Shares); provided,
however, that the foregoing shall not prevent the redemption of Series B
Preferred Shares to preserve the Corporation's REIT status or the purchase or
acquisition of Series B Preferred Shares pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding Series B Preferred
Shares.
(F) If the Redemption Date is after a Record Date and before
the related Dividend Payment Date, the dividend payable on such Dividend Payment
Date shall be paid to the holder in whose name the Series B Preferred Shares to
be redeemed are registered at the close of business on such Record Date
notwithstanding the redemption thereof between such Record Date and the related
Dividend Payment Date or the Corporation's default in the payment of the
dividend due. Except as provided above, the Corporation will make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series B Preferred
Shares to be redeemed.
(G) In case of redemption of less than all Series B Preferred
Shares at the time outstanding, the Series B Preferred Shares to be redeemed
shall be selected pro rata from the holders of record of such shares in
proportion to the number of Series B Preferred Shares held by such holders (with
adjustments to avoid redemption of fractional shares) or by any other equitable
method determined by the Corporation.
(g) Voting Rights. Except as required by law, and as set forth below,
the holders of the Series B Preferred Shares shall not be entitled to vote at
any meeting of the stockholders for election of Directors or for any other
purpose or otherwise to participate in any action taken by the Corporation or
the stockholders thereof, or to receive notice of any meeting of stockholders.
(i) Whenever dividends on any Series B Preferred Shares shall
be in arrears for six or more quarterly periods, whether or not such quarterly
periods are consecutive, the holders of such Series B Preferred Shares (voting
separately as a class with all other series of preferred stock upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional Directors of the Corporation at a special
meeting called by the holders of record of at least ten percent (10%) of the
Series B Preferred Shares or the holders of any other series of preferred stock
so in arrears (unless such request is received less than 90 days before the date
fixed for the next annual or special meeting of the stockholders) or at the next
annual meeting of stockholders, and at each subsequent annual meeting until all
dividends accumulated on such Series B Preferred Shares for the past Dividend
Periods and the then current
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Dividend Period shall have been fully paid or declared and a sum sufficient for
the payment thereof set aside for payment. In such case, the entire Board of
Directors of the Corporation will be increased by two Directors.
(ii) So long as any Series B Preferred Shares remain
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least two-thirds of the Series B Preferred Shares
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class), (A) authorize or create, or
increase the authorized or issued amount of, any class or series of shares of
capital stock ranking prior to the Series B Preferred Shares with respect to the
payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up or reclassify any authorized capital stock of the Corporation into
such shares, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such shares; or (B)
amend, alter or repeal the provisions of the Corporation's Articles of
Incorporation, including this Amendment, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series B Preferred Shares or the
holders thereof; PROVIDED, HOWEVER, with respect to the occurrence of any of the
Events set forth in (B) above, so long as the Series B Preferred Shares remain
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Corporation may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of holders
of Series B Preferred Shares and PROVIDED FURTHER that (x) any increase in the
amount of the authorized preferred stock or the creating or issuance of any
other series of preferred stock, or (y) any increase in the amount of authorized
Series B Preferred Shares or any other series of preferred stock, in each case
ranking on a parity with or junior to the Series B Preferred Shares with respect
to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
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 shall be effected, all outstanding Series B Preferred Shares shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
(iii) On each matter submitted to a vote of the holders of
Series B Preferred Shares in accordance with this paragraph (g), or as otherwise
required by law, each Series B Preferred Share shall be entitled to one vote.
With respect to each Series B Preferred Share, the holder thereof may designate
a proxy, with each such proxy having the right to vote on behalf of the holder.
(h) Conversion. The Series B Preferred Shares are not convertible into
or exchangeable for an other property or securities of the Corporation.
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ARTICLE VI
REIT Provisions
Section 6.1. Definitions. The following terms shall have the
following meanings:
(a) "Acquire" shall mean the acquisition of Beneficial
Ownership of shares of capital stock of the Corporation by any means including,
without limitation, acquisition pursuant to the exercise of any option, warrant,
pledge or other security interest or similar right to acquire shares, but shall
not include the acquisition of any such rights unless, as a result, the acquiror
would be considered a Beneficial Owner, as defined below.
(b) "Beneficial Ownership" shall mean ownership of capital
stock of the Corporation by a Person who would be treated as an owner of such
shares of capital stock either directly or indirectly under Section 542(a)(2) of
the Code, taking into account, for this purpose, constructive ownership
determined under Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code (except where expressly provided otherwise). The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Initial Public Offering" means the sale of shares of
Common Stock pursuant to the Corporation's first effective registration
statement for such Common Stock filed under the Securities Act of 1933, as
amended.
(e) "Ownership Limit" shall mean 9.8% of the outstanding
capital stock of the Corporation.
(f) "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that term
is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended; but does not include an underwriter that participates in a public
offering of the Common Stock for a period of 90 days following the purchase by
such underwriter of the Common Stock.
(g) "REIT" shall mean a Real Estate Investment Trust under
Section 856 of the Code.
(h) "Redemption Price" shall mean the lower of (i) the price
paid by the transferee from whom shares are being redeemed and (ii) the average
of the last reported sales prices on the New York Stock Exchange of the class of
capital stock to be redeemed on the ten trading days immediately preceding the
date fixed for redemption by the Board of Directors, or if such capital stock is
not then traded on the New York Stock Exchange, the average of the last reported
sales
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prices of such capital stock on the ten trading days immediately preceding the
relevant date as reported on any exchange or quotation system over which such
capital stock may be traded, or if such capital stock is not then traded over
any exchange or quotation system, then the price determined in good faith by the
Board of Directors of the Corporation as the fair market value of shares of such
capital stock on the relevant date. The Redemption Price may, at the option of
the Corporation, be paid in the form of Units. If the shares to be redeemed are
shares of Common Stock, the number of Units to be paid shall equal the number of
shares redeemed divided by the Conversion Factor, as that term is defined in the
Partnership Agreement of Highwoods Realty Limited Partnership, a North Carolina
limited partnership, as effective on the date of the Initial Public Offering. If
the shares to be redeemed are not shares of Common Stock, the number of Units to
be paid shall be the number determined in good faith by the Board of Directors
of the Corporation to be equal to the value of the shares to be redeemed.
(i) "Restriction Termination Date" shall mean the first day
after the date of the Initial Public Offering on which the Board of Directors
and the stockholders of the Corporation determine pursuant to Section 6.10 of
these Articles of Incorporation that it is no longer in the best interests of
the Corporation to attempt to, or continue to, qualify as a REIT.
(j) "Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of capital stock or the right to vote or
receive dividends on capital stock (including (i) the granting of any option or
entering into any agreement for the sale, transfer or other disposition of
capital stock or the right to vote or receive dividends on capital stock or (ii)
the sale, transfer, assignment or other disposition or grant of any securities
or rights convertible into or exchangeable for capital stock, or the right to
vote or receive dividends on capital stock), whether voluntary or involuntary,
whether of record or beneficially and whether by operation of law or otherwise.
(k) "Units" shall mean limited partnership interests in
Highwoods Realty Limited Partnership, a North Carolina limited partnership.
Section 6.2. Restrictions.
(a) Except as provided in Section 6.8, during the period
commencing on the date of the Initial Public Offering and prior to the
Restriction Termination Date: (i) no Person shall Acquire any shares of capital
stock if, as a result of such acquisition, such Person shall Beneficially Own
shares of capital stock in excess of the Ownership Limit; (ii) no Person shall
Acquire any shares of capital stock if, as a result of such acquisition, the
capital stock would be directly or indirectly owned by less than 100 Persons
(determined without reference to the rules of attribution under Section 544 of
the Code); and (iii) no Person shall Acquire any shares if, as a result of such
acquisition, the Corporation would be "closely held" within the meaning of
Section 856(h) of the Code.
(b) Any Transfer that would result in a violation of the
restrictions in Section 6.2(a) shall be void ab initio as to the Transfer of
such shares of capital stock that would cause the violation of the applicable
restriction in Section 6.2(a), and the intended transferee shall acquire no
rights in such shares of capital stock.
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Section 6.3. Remedies for Breach.
(a) If the Board of Directors or a committee thereof shall at
any time determine in good faith that a Transfer has taken place that falls
within the scope of Section 6.2(b) or that a Person intends to Acquire
Beneficial Ownership of any shares of the Corporation that will result in
violation of Section 6.2(a) or Section 6.2(b) (whether or not such violation is
intended), the Board of Directors or a committee thereof shall take such action
as it or they deem advisable to refuse to give effect to or to prevent such
Transfer, including, but not limited to, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer.
(b) Without limitation to Section 6.2(b) and 6.3(a), any
purported transferee of shares acquired in violation of Section 6.2 shall, if it
shall be deemed to have received any shares, be deemed to have acted as agent on
behalf of the Corporation in acquiring such of the shares as result in a
violation of Section 6.2 and shall be deemed to hold such shares in trust on
behalf and for the benefit of the Corporation. The transferee shall have no
right to receive dividends or other distributions with respect to such shares,
and shall have no right to vote such shares. Such transferee shall have no
claim, cause of action, or any other recourse whatsoever against a transferor of
shares acquired in violation of Section 6.2. The transferee's sole right with
respect to such shares shall be to receive at the Corporation's sole and
absolute discretion, either (i) consideration for such shares upon the resale of
the shares as directed by the Corporation pursuant to Section 6.3(c) or (ii) the
Redemption Price pursuant to Section 6.3(c).
(c) The Board of Directors shall, within six months after
receiving notice of a Transfer that violates Section 6.2(a), either (in its sole
and absolute discretion) (i) direct the transferee of such shares to sell all
shares held in trust for the Corporation pursuant to Section 6.3(b) for cash in
such manner as the Board of Directors directs or (ii) to the extent permissible
under Maryland law, redeem such shares for the Redemption Price within such
six-month period on such date as the Board of Directors may determine. If the
Board of Directors directs the transferee to sell the shares, the transferee
shall receive such proceeds as trustee for the Corporation and pay the
Corporation out of the proceeds of such sale all expenses incurred by the
Corporation in connection with such sale plus any remaining amount of such
proceeds that exceeds the amount paid by the transferee for the shares, and the
transferee shall be entitled to retain only any proceeds in excess of such
amounts required to be paid to the Corporation.
Section 6.4. Notice of Restricted Transfer. Any Person who
acquires or attempts or intends to acquire shares in violation of Section 6.2
shall immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer or attempted or
intended Transfer on the Corporation's status as a REIT.
Section 6.5. Owners Required to Provide Information. From the
date of the Initial Public Offering and prior to the Restriction Termination
Date:
(a) every stockholder of record of more than 5% (or such lower
percentage as required by the Code or regulations promulgated thereunder) of the
outstanding capital stock of the
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Corporation shall, within 30 days after December 31 of each year, give written
notice to the Corporation stating the name and address of such record
stockholder, the number of shares Beneficially Owned by it, and a description of
how such shares are held; provided that a shareholder of record who holds
outstanding capital stock of the Corporation as nominee for another person,
which other person is required to include in gross income the dividends received
on such capital stock (an "Actual Owner"), shall give written notice to the
Corporation stating the name and address of such Actual Owner and the number of
shares of such Actual Owner with respect to which the stockholder of record is
nominee.
(b) every Actual Owner of more than 5% (or such lower
percentage as required by the Code or regulations promulgated thereunder) of the
outstanding capital stock of the Corporation who is not a stockholder of record
of the Corporation, shall within 30 days after December 31 of each year, give
written notice to the Corporation stating the name and address of such Actual
Owner, the number of shares Beneficially Owned, and a description of how such
shares are held.
(c) each Person who is a Beneficial Owner of capital stock and
each Person (including a stockholder of record) who is holding capital stock for
a Beneficial Owner shall provide to the Corporation such information as the
Corporation may request, in good faith, in order to determine the Corporation's
status as a REIT.
Section 6.6. Remedies Not Limited. Subject to Section 6.12 of
this Article VI, nothing contained in this Article VI shall limit the authority
of the Board of Directors to take such other action as it deems necessary or
advisable to protect the Corporation and the interests of its stockholders in
preserving the Corporation's status as a REIT.
Section 6.7. Ambiguity. In the case of an ambiguity in the
application of any of the provisions of this Article VI, including any
definition contained in Section 6.1, the Board of Directors shall have the power
to determine the application of the provisions of this Article VI with respect
to any situation based on the facts known to it.
Section 6.8. Exception. The Board of Directors may, upon
receipt of either a certified copy of a ruling from the Internal Revenue Service
or an opinion of counsel satisfactory to the Board of Directors, but shall in no
case be required to, exempt a Person (the "Exempted Holder") from the Ownership
Limit if the ruling or opinion concludes that no Person who is an individual as
defined in Section 542(a)(2) of the Code will, as the result of the ownership of
shares by the Exempted Holder, be considered to have Beneficial Ownership of an
amount of capital stock that will violate the Ownership Limit.
Section 6.9. Legend. Each certificate for capital stock of the
Corporation shall bear the following legend:
The shares of capital stock represented by this certificate are subject
to restrictions on transfer for the purpose of the Corporation's
maintenance of its status as a Real Estate Investment Trust under the
Internal Revenue Code of 1986, as amended. No
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Person may Beneficially Own shares of capital stock in excess of 9.8%
of the outstanding capital stock of the Corporation. Any Person who
attempts to Beneficially Own shares of capital stock in excess of the
above limitation must immediately notify the Corporation; any shares of
capital stock so held may be subject to mandatory redemption or sale in
certain events, and acquisitions of shares of capital stock in excess
of such limitation shall be void ab initio. A Person who attempts to
Beneficially Own shares of the Corporation's capital stock in violation
of the ownership limitations set forth in Section 6.2 of the Amended
and Restated Articles of Incorporation shall have no claim, cause of
action, or any other recourse whatsoever against a transferor of such
shares. All capitalized terms in this legend have the meanings defined
in the Corporation's Amended and Restated Articles of Incorporation, a
copy of which, including the restrictions on transfer, will be sent
without charge to each stockholder who so requests.
Section 6.10. Termination of REIT Status. The Corporation
shall take no action to terminate the Corporation's status as a REIT or to amend
the provisions of this Article VI until such time as (i) the Board of Directors
adopts a resolution recommending that the Corporation terminate its status as a
REIT or amend this Article VI, as the case may be, (ii) the Board of Directors
presents the resolution at an annual or special meeting of the stockholders and
(iii) such resolution is approved by holders of two-thirds of the issued and
outstanding shares of the capital stock entitled to vote thereon voting together
as a single class.
Section 6.11. Severability. If any provision of this Article
VI or any application of any such provision is determined to be invalid by any
Federal or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
Section 6.12. NYSE Settlement. Nothing in this Article VI
shall preclude settlement of any transaction entered into through the facilities
of the New York Stock Exchange.
ARTICLE VII
Board of Directors
Section 7.1. Function. The business and affairs of the
Corporation shall be managed by, or under the direction of, its Board of
Directors. The Board of Directors shall consist at all times of a majority of
Independent Directors, provided that upon a failure to comply with this
requirement because of the resignation, removal or death of an Independent
Director, such requirement shall not be applicable for a period of 60 days or
such longer period as may reasonably be needed to fill the vacancy with an
Independent Director. An "Independent Director" shall be a Director who is not
(i) an employee or officer of the Corporation or a subsidiary or division
thereof, (ii) a spouse, parent or child of, or a relative living in the same
household as, a principal executive officer of the Corporation, or (iii) an
individual member of an organization acting as an advisor, consultant, legal
counsel or
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acting in a similar capacity that receives compensation on a continuing basis
from the Corporation in addition to director's fees.
Section 7.2. Number. The number of directors that will
constitute the entire Board of Directors shall be fixed by, or in the manner
provided in, the Bylaws but shall in no event be less than three nor more than
fifteen. The current number of directors is three, and the names of the
directors who will serve until the next annual meeting and until their
successors are elected and qualify are: O. Temple Sloan, Jr., Ronald P. Gibson
and Gregg Gordon.
Section 7.3. Classification. The directors shall be
classified, with respect to the time for which they severally hold office, into
three classes, as nearly equal in number as possible, as shall be provided in
the Bylaws of the Corporation, one class to be originally elected for a term
expiring at the annual meeting of stockholders to be held in 1995, another class
to be originally elected for a term expiring at the annual meeting of
stockholders to be held in 1996, and another class to be originally elected for
a term expiring at the annual meeting of stockholders to be held in 1997, with
each class to hold office until its successors are elected and qualified. At
each annual meeting of the stockholders of the Corporation, the date of which
shall be fixed by or pursuant to the Bylaws of the Corporation, the successors
of the class of directors whose terms expire at the meeting shall be elected to
hold office for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election. No election of directors
need be by written ballot. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.
Section 7.4. Vacancies. The stockholders may elect a successor
to fill a vacancy on the Board of Directors that results from the removal of a
director. Newly created directorships resulting from any increase in the number
of directors may be filled by a majority of the Board of Directors, or as
otherwise provided in the Bylaws, and any vacancies on the Board of Directors
resulting from any cause other than an increase in the number of directors may
be filled by the affirmative vote of a majority of the remaining directors then
in office, even though less than a quorum of the Board of Directors, or by a
sole remaining director, or as otherwise provided in the Bylaws. Any director
elected by directors in accordance with the preceding sentence shall hold office
until the next annual meeting of the Corporation, at which time a successor
shall be elected to fill the remaining term of the position filled by such
director.
Section 7.5. Removal. Any director may be removed from office
only for cause and only by the affirmative vote of the holders of two-thirds of
the shares of capital stock of the Corporation outstanding and entitled to vote
in the election of directors voting together as a group. For purposes of this
Section 7.5, "cause" shall mean the wilful and continuous failure of a director
to substantially perform such director's duties for the Corporation (other than
any such failure resulting from temporary incapacity due to physical or mental
illness) or the wilful engaging by a director in gross misconduct materially and
demonstrably injurious to the Corporation.
Section 7.6. Powers. The enumeration and definition of
particular powers of the Board of Directors included in the foregoing shall in
no way be limited or restricted by reference to or inference from the terms of
any other clause of this or any other Article of these Amended and
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Restated Articles of Incorporation, or construed as or deemed by inference or
otherwise in any manner to exclude or limit the powers conferred upon the Board
of Directors under the Maryland Corporations and Associations Article as now or
hereafter in force.
ARTICLE VIII
Liability
The liability of the directors and officers of the Corporation
to the Corporation and its stockholders for money damages is hereby limited to
the fullest extent permitted by Section 5-349 of the Courts and Judicial
Proceedings Article of the Annotated Code of Maryland (or its successor) as such
provisions may be amended from time to time. No amendment of these Amended and
Restated Articles of Incorporation or repeal of any of its provisions shall
limit or eliminate the benefits provided to Directors and officers under this
provision with respect to any act or omission that occurred prior to such
amendment or repeal.
ARTICLE IX
Indemnification
The Corporation shall indemnify directors, officers, agents
and employees as follows: (a) the Corporation shall indemnify its Directors and
officers, whether serving the Corporation or at its request any other entity, to
the full extent required or permitted by the Maryland Corporations and
Associations Article now or hereafter in force, including the advance of
expenses under the procedures and to the full extent permitted by law and (b)
the Corporation shall indemnify other employees and agents, whether serving the
Corporation or at its request any other entity, to such extent as shall be
authorized by the Board of Directors or the Corporation's Bylaws and be
permitted by law. The foregoing rights of indemnification shall not be exclusive
of any other rights to which those seeking indemnification may be entitled and
shall continue as to a person who has ceased to be a director, officer, agent or
employee and shall inure to the benefit of the heirs, executors and
administrators of such a person. The Board of Directors may take such action as
is necessary to carry out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time such Bylaws, resolutions
or contracts implementing such provisions or such further indemnification
arrangements as may be permitted by law. No amendment of these Amended and
Restated Articles of Incorporation of the Corporation shall limit or eliminate
the right to indemnification provided hereunder with respect to acts or
omissions occurring prior to such amendment or repeal.
ARTICLE X
Voting Requirements
Notwithstanding any provision of the General Laws of the State
of Maryland requiring action to be taken or authorized by the affirmative vote
of the holders of a designated proportion greater than a majority of the shares
of capital stock of the Corporation outstanding and entitled to
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<PAGE>
vote thereupon, such action shall, except as otherwise provided in these Amended
and Restated Articles of Incorporation, be valid and effective if taken or
authorized by the affirmative vote of the holders of a majority of the total
number of shares of capital stock of the Corporation outstanding and entitled to
vote thereupon voting together as a single class.
ARTICLE XI
Amendment
The Corporation reserves the right to amend, alter or repeal
any provision contained in these Amended and Restated Articles of Incorporation
in any manner permitted by Maryland law, including any amendment changing the
terms or contract rights, as expressly set forth in its Charter, of any of its
outstanding stock by classification, reclassification or otherwise, upon the
vote of the holders of a majority of the shares of capital stock of the
Corporation outstanding and entitled to vote thereon voting together as a single
class; provided that any amendment to Article VI, Section 7.5 of Article VII or
to this Article X must be adopted by the vote of the holders of two-thirds of
the shares of capital stock of the Corporation outstanding and entitled to vote
thereon voting together as a single class. All rights conferred upon
stockholders herein are subject to this reservation.
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<PAGE>
8% SERIES B CUMULATIVE 8% SERIES B CUMULATIVE
REDEEMABLE PREFERRED SHARES REDEEMABLE PREFERRED SHARES
NUMBER THIS CERTIFICATE IS TRANSFERABLE SHARES
HPB IN CHARLOTTE, NORTH CAROLINA CUSIP 431284 30 6
OR IN NEW YORK CITY SEE REVERSE FOR CERTAIN
DEFINITIONS AND RESTRICTIONS
(Highwoods logo) HIGHWOODS PROPERTIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
This Certifies that
is the owner of
fully paid and non-assessable shares of the 8% SERIES B CUMULATIVE
REDEEMABLE PREFERRED SHARES, $.01 par value, of
Highwoods Properties, Inc. transferable on the books of the Corporation by
the holder hereof in person or by duly authorized attorney upon surrender of
this Certificate properly endorsed. This Certificate and the shares represented
hereby are issued and shall be subject to all of the provisions of the Amended
and Restated Articles of Incorporation and Bylaws of the Corporation, each as
from time to time amended (copies of which are on file with the Transfer
Agent), to all of which the holder by acceptance hereof assents. This
Certificate is not valid until countersigned and registered by the Transfer
Agent and Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
(Seal appears here)
COUNTERSIGNED AND REGISTERED:
FIRST UNION NATIONAL BANK
(CHARLOTTE, NORTH CAROLINA)
TRANSFER AGENT
AND REGISTRAR
/s/ Edward J. Fritsch /s/ Ronald P. Gibson
AUTHORIZED SIGNATURE VICE PRESIDENT PRESIDENT AND CHIEF
AND SECRETARY EXECUTIVE OFFICER
<PAGE>
HIGHWOODS PROPERTIES, INC.
The shares of capital stock represented by this certificate are subject
to restrictions on transfer for the purpose of the Corporation's maintenance
of its status as a Real Estate Investment Trust under the Internal Revenue Code
of 1986, as amended. No Person may Beneficially Own shares of capital stock in
excess of 9.8% of the outstanding capital stock of the Corporation. Any Person
who attempts to Beneficially Own shares of capital stock in excess of the above
limitation must immediately notify the Corporation; any shares of capital
stock so held may be subject to mandatory redemption or sale in certain
events, and acquisitions of shares of capital stock in excess of such
limitation shall be void ab initio. A Person who attempts to Beneficially
Own shares of the Corporation's capital stock in violation of the ownership
limitations set forth in Section 6.2 of the Amended and Restated Articles
of Incorporation shall have no claim, cause of action, or any other recourse
whatsoever against a transferor of such shares. All capitalized terms in this
legend have the meanings defined in the Corporation's Amended and Restated
Articles of Incorporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder who so requests.
The Corporation is authorized to issue more than one class of capital
stock. The Corporation will furnish to any stockholder upon request and
without charge a full statement of the designations, and any preferences,
conversions and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption of the
shares of each class authorized to be issued and, with respect to the
classes of capital stock which may be issued in series, the differences in
the relative rights and preferences between the shares of each such series,
so far as the same have been fixed and determined, and the authority of the
Board of Directors to fix and determine the relative rights and preferences
of subsequent series. Such requests may be made to the Secretary of the
Corporation at its principal office or to the Corporation's transfer agent.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
UNIF GIFT MIN ACT --
TEN COM -- as tenants in common _______Custodian ______
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act ________________________
in common (State)
For value received, __________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
___________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
____________________________________________________________________________
____________________________________________________________________________
________________________________________________________________________shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
_____________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated_____________________________________
_______________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED: ____________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR
DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION
TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
As of this 25th day of September, 1997, the First Amended and Restated
Agreement of Limited Partnership of Highwoods/Forsyth Limited Partnership dated
June 14, 1995, as amended (the "Agreement"), is hereby amended pursuant to
Sections 4.2.A and 14.1.B thereof as follows:
Section 1. Definitions.
Article 1 is hereby amended to add the following new definitions:
"Series B Preferred Partnership Unit" means a Partnership Unit
issued by the Partnership to the General Partner in consideration of
the contribution by the General Partner to the Partnership of the
entire net proceeds received by the General Partner from the issuance
of the Series B Preferred Shares. The Series B Preferred Partnership
Units shall constitute Preferred Partnership Units. The Series B
Preferred Partnership Units shall have the voting powers, designations,
preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions as are set forth
in Exhibit I, attached hereto. It is the intention of the General
Partner, in establishing the Series B Preferred Partnership Units, that
each Series B Preferred Partnership Unit shall be substantially the
economic equivalent of a Series B Preferred Share.
"Series B Preferred Shares" means the 8% Series B Cumulative
Redeemable Preferred Shares, par value $0.01 per share, having a
liquidation preference equivalent to $25.00 per share, issued by the
General Partner.
Section 2. Exhibit to the Agreement.
The Agreement is hereby amended by attaching thereto as Exhibit I the
Exhibit I attached hereto.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of
the date first written above.
HIGHWOODS PROPERTIES, INC.,
as General Partner of
Highwoods/Forsyth Limited Partnership
By: /s/ Ronald P. Gibson
-------------------------------
Ronald P. Gibson, President
[CORPORATE SEAL]
2
<PAGE>
EXHIBIT I
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
DESIGNATION OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF THE
SERIES B PREFERRED PARTNERSHIP UNITS
The following are the terms of the Series B Preferred Partnership Units
established pursuant to this Amendment:
(a) Number. The maximum number of authorized Series B Preferred
Partnership Units shall be 6,900,000.
(b) Relative Seniority. In respect of rights to receive quarterly
distributions and to participate in distributions of payments in the event of
any liquidation, dissolution or winding up of the Partnership, the Series B
Preferred Partnership Units shall rank (i) senior to the Common Partnership
Units and any other class or series of Partnership Units of the Partnership
ranking, as to quarterly distributions and upon liquidation, junior to the
Series B Preferred Partnership Units (collectively, "Junior Partnership Units")
and (ii) PARI PASSU with the Series A Preferred Partnership Units and any other
class or series of Partnership Units of the Partnership ranking, as to quarterly
distributions and upon liquidation, PARI PASSU with the Series B Preferred
Partnership Units.
(c) Quarterly Distributions.
(1) The General Partner, in its capacity as the holder of the then
outstanding Series B Preferred Partnership Units, shall be entitled to receive,
when and as declared by the General Partner out of any funds legally available
therefor, cumulative quarterly distributions at the rate of $2.00 per Series B
Preferred Partnership Unit per year, payable quarterly in arrears in cash on
March 15, June 15, September 15 and December 15 of each year or, if not a
Business Day (as hereinafter defined), the next succeeding Business Day,
commencing December 15, 1997 (each such day being hereafter called a "Quarterly
Distribution Date" and each period beginning on the day next following a
Quarterly Distribution Date and ending on the next following Quarterly
Distribution Date being hereinafter called a "Distribution Period"). Quarterly
distributions on each Series B Preferred Partnership Unit shall accrue and be
cumulative from and including the date of original issue thereof, whether or not
(i) quarterly distributions on such Series B Preferred Partnership Units are
earned or declared or (ii) on any Quarterly Distribution Date there shall be
funds legally available for the payment of quarterly distributions. Quarterly
distributions paid on the Series B Preferred Partnership Units in an amount less
than the total amount of such quarterly distributions at the time accrued and
payable on such Partnership Units shall be allocated pro rata on a per unit
basis among all such Series B Preferred Partnership Units at the time
outstanding.
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<PAGE>
"Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.
(2) The amount of any quarterly distributions accrued on any Series B
Preferred Partnership Units at any Quarterly Distribution Date shall be the
amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or declared,
and the amount of quarterly distributions accrued on any Series B Preferred
Partnership Units at any date other than a Quarterly Distribution Date shall be
equal to the sum of the amount of any unpaid quarterly distributions accumulated
thereon, to and including the last preceding Quarterly Distribution Date,
whether or not earned or declared, plus an amount calculated on the basis of the
annual distribution rate for the period after such last preceding Quarterly
Distribution Date to and including the date as of which the calculation is made
based on a 360-day year of twelve 30-day months. When distributions are not paid
in full upon the Series B Preferred Partnership Units (or a sum sufficient for
such full payment is not set apart therefor), all distributions declared upon
Series B Preferred Partnership Units and any other series of Preferred
Partnership Units ranking on a parity as to distributions with the Series B
Preferred Partnership Units shall be declared pro rata so that the amount of
distributions declared per unit on the Series B Preferred Partnership Units and
such other series of Preferred Partnership Units shall in all cases bear to each
other the same ratio that accrued distributions per unit on the Series B
Preferred Partnership Units and such other series of Preferred Partnership Units
bear to each other.
(3) Except as provided in the immediately preceding paragraph, unless
full cumulative distributions on the Series B Preferred Partnership Units have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment of the Series B Preferred
Partnership Units for all past distribution periods and the then current
distribution period, (A) no distributions shall be declared or paid or set apart
for payment on the Preferred Partnership Units ranking, as to distributions, on
a parity with or junior to the Series B Preferred Partnership Units for any
period, and (B) no distributions (other than in Junior Partnership Units) shall
be declared or paid or set aside for payment or other distribution or shall be
declared or made upon the Junior Partnership Units or any other Preferred
Partnership Units ranking on a parity with the Series B Preferred Partnership
Units as to distributions or upon liquidation ("Parity Units"), nor shall any
Junior Partnership Units or any Parity Units be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any Junior Partnership Units or Parity Units)
by the Partnership (except by conversion into or exchange for Junior Partnership
Units).
(4) Except as provided herein, the Series B Preferred Partnership Units
shall not be entitled to participate in the earnings or assets of the
Partnership, and no interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution or distributions on the Series B
Preferred Partnership Units which may be in arrears.
(5) Any distribution made on the Series B Preferred Partnership Units
shall be first credited against the earliest accrued but unpaid quarterly
distribution due with respect to such Partnership Units which remains payable.
4
<PAGE>
(6) No quarterly distributions on the Series B Preferred Partnership
Units shall be authorized by the General Partner or be paid or set apart for
payment by the Partnership at such time as the terms and provisions of any
agreement of the General Partner or the Partnership, including any agreement
relating to its indebtedness, prohibit such authorization, payment or setting
apart for payment or provides that such authorization, payment or setting apart
for payment would constitute a breach thereof or a default thereunder, or if
such authorization or payment shall be restricted or prohibited by law.
Notwithstanding the foregoing, quarterly distributions on the Series B Preferred
Partnership Units will accrue whether or not the Partnership has earnings,
whether or not there are funds legally available for the payment of such
quarterly distributions and whether or not such quarterly distributions are
authorized.
(d) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, the General Partner, in its capacity as the
holder of the Series B Preferred Partnership Units then outstanding, shall be
entitled to receive and to be paid out of the assets of the Partnership
available for distribution to its partners, before any payment or distribution
shall be made on any Junior Partnership Units, the amount of $25.00 per Series B
Preferred Partnership Unit, plus accrued and unpaid quarterly distributions
thereon.
(2) After the payment to the holders of the Series B Preferred
Partnership Units of the full preferential amounts provided for herein, the
General Partner, in its capacity as the holder of the Series B Preferred
Partnership Units as such, shall have no right or claim to any of the remaining
assets of the Partnership.
(3) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Partnership, the amounts payable with respect to the
preference value of the Series B Preferred Partnership Units and any other
Preferred Partnership Units of the Partnership ranking as to any such
distribution on a parity with the Series B Preferred Partnership Units are not
paid in full, the holders of the Series B Preferred Partnership Units and of
such other Preferred Partnership Units will share ratably in any such
distribution of assets of the Partnership in proportion to the full respective
preference amounts to which they are entitled.
(4) Neither the sale, lease or conveyance of all or substantially all
of the property or business of the Partnership, nor the merger or consolidation
of the Partnership into or with any other entity or the merger or consolidation
of any other entity into or with the Partnership, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary, for the
purposes hereof.
(e) Redemption.
(1) The Series B Preferred Partnership Units are not redeemable prior
to September 25, 2002. On and after September 25, 2002, the General Partner may,
at its option, cause the Partnership to redeem at any time all or, from time to
time, part of the Series B Preferred Partnership Units at a price per unit (the
" Redemption Price"), payable in cash, of $25.00, together with all accrued and
unpaid distributions to and including the date fixed for redemption (the
"Redemption Date"). The
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<PAGE>
Series B Preferred Partnership Units have no stated maturity and will not be
subject to any sinking fund or mandatory redemption provisions.
(2) Procedures of Redemption.
(i) At any time that the General Partner exercises its right
to redeem all or any of the Series B Preferred Shares, the General
Partner shall exercise its right to cause the Partnership to redeem an
equal number of Series B Preferred Partnership Units in the manner set
forth herein.
(ii) No Series B Preferred Partnership Units may be redeemed
except from proceeds from the sale of capital stock of the General
Partner, including but not limited to common stock, preferred stock,
depositary shares, interests, participations or other ownership
interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity securities) or
options to purchase any of the foregoing. The proceeds of such sale of
capital stock of the General Partner shall be contributed by the
General Partner to the Partnership pursuant to the requirements of
Section 4.2 of the Partnership Agreement.
(f) Voting Rights. Except as required by law, the General Partner, in
its capacity as the holder of the Series B Preferred Partnership Units, shall
not be entitled to vote at any meeting of the Partners or for any other purpose
or otherwise to participate in any action taken by the Partnership or the
Partners, or to receive notice of any meeting of Partners.
(g) Conversion. The Series B Preferred Partnership Units are not
convertible into or exchangeable for any other property or securities of the
Partnership.
(h) Restrictions on Ownership. The Series B Preferred Partnership Units
shall be owned and held solely by the General Partner.
(i) General. The rights of the General Partner, in its capacity as
holder of the Series B Preferred Partnership Units, are in addition to and not
in limitation of any other rights or authority of the General Partner, in any
other capacity, under the Partnership Agreement. In addition, nothing contained
herein shall be deemed to limit or otherwise restrict any rights or authority of
the General Partner under the Partnership Agreement, other than in its capacity
as the holder of the Series B Preferred Partnership Units.
