EXHIBIT 10.48
CONTRIBUTION AGREEMENT
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THIS CONTRIBUTION AGREEMENT (this "AGREEMENT") is made as of the 26th day
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of November, 1997 (the "Effective Date"), among: (i) BOSTON PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited partnership ("BPLP"), (ii) BOSTON PROPERTIES
L.L.C., a Delaware limited liability company ("BPLLC"), (iii) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, THE ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ REVOCABLE
TRUST, and THE ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ REVOCABLE TRUST (each, individually, an
"OWNER," and collectively, the "OWNERS"), and (iv) TECH PARK 270 PHASE III
LIMITED PARTNERSHIP, a Maryland limited partnership, TECH PARK 270 LIMITED
PARTNERSHIP, a Maryland limited partnership, DECOVERLY TWO LIMITED PARTNERSHIP,
a Maryland limited partnership, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ LIMITED
PARTNERSHIP, a Virginia limited partnership, MGA VIRGINIA 85-1 LIMITED
PARTNERSHIP, a Virginia limited partnership, MGA VIRGINIA 86-2 LIMITED
PARTNERSHIP, a Virginia limited partnership, DECOVERLY FOUR LIMITED PARTNERSHIP,
a Maryland limited partnership, DECOVERLY FIVE LIMITED PARTNERSHIP, a Maryland
limited partnership, DECOVERLY SIX LIMITED PARTNERSHIP, a Maryland limited
partnership, DECOVERLY SEVEN LIMITED PARTNERSHIP, a Maryland limited
partnership, RESTON CORPORATE CENTER LIMITED PARTNERSHIP, a Virginia limited
partnership, and MGA VIRGINIA 86-1 LIMITED PARTNERSHIP, a virginia limited
partnership (each, individually, a "partnership," and collectively, the
"PARTNERSHIPS"). (bplp and bpllc are sometimes hereinafter referred to as the
"PURCHASERS".)
RECITALS:
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A. TECH PARK 270 PHASE III LIMITED PARTNERSHIP, a Maryland limited
partnership ("PARTNERSHIP 1"), is the owner of an office building containing
approximately 59,838 square feet situated on approximately 4.29 acres of land
with 206 parking spaces located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ in Gaithersburg, Maryland,
as more particularly described on Exhibit A-1 ("PARCEL 1").
B. TECH PARK 270 LIMITED PARTNERSHIP, a Maryland limited partnership
("PARTNERSHIP 2"), is the owner of an office building containing approximately
180,650 square feet and the ground lessee under the terms of that certain Lease
dated December 9, 1981, as amended (the
"Aetna Lease") and related loan documents (the "Aetna Loan Documents", which
term shall include the Aetna Lease) by and between Aetna Life Insurance Company
("Aetna") and Partnership 2 concerning the approximately 10.68 acres of land
with 620 parking spaces located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ in Gaithersburg, Maryland,
as more particularly described on Exhibit A-2 ("Parcel 2").
C. Decoverly Two Limited Partnership, a Maryland limited partnership
("Partnership 3"), is the owner of an office building containing approximately
77,747 square feet situated on approximately 4.86 acres of land with 267 parking
spaces located at 15200 Omega Drive in Rockville, Maryland, known as Decoverly
#2, as more particularly described on Exhibit A-3 ("Parcel 3").
D. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ Limited Partnership, a
Virginia limited partnership ("Partnership 4"), is the owner of two office
buildings containing an aggregate of approximately 261,046 square feet situated
on approximately 17 acres of land with 994 parking spaces located at 12020/30
Sunset Hills Road in Reston, Virginia, as more particularly described on
Exhibit A-4 ("Parcel 4").
E. MGA Virginia 85-1 Limited Partnership, a Virginia limited partnership
("Partnership 5") is the owner of an office building containing approximately
255,244 square feet situated on approximately 11 acres of land with 1452 parking
spaces located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ in Reston, Virginia, known as the
LMC Data Center, as more particularly described on Exhibit A-5 ("Parcel 5").
F. MGA Virginia 86-2 Limited Partnership, a Virginia limited partnership
("Partnership 6"), is the owner of an office building containing approximately
263,870 square feet situated on approximately 8 acres of land with 497 parking
spaces located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ in Reston, Virginia, known as NIMA
Reston Center, as more particularly described on Exhibit A-6 ("Parcel 6").
G. Decoverly Six Limited Partnership, a Maryland limited partnership
("Partnership 7"), is the owner of a parcel of undeveloped land containing
approximately 3.22 acres and located at ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ in Rockville,
Maryland, known as Decoverly #3, as more particularly described on Exhibit A-7
("Parcel 7").
H. Decoverly Five Limited Partnership, a Maryland limited partnership
("Partnership 8"), is the owner of a parcel of undeveloped land containing
approximately 6.86 acres and located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in Rockville,
Maryland, known as Decoverly #6, as more particularly described on Exhibit A-8
("Parcel 8").
I. Decoverly Seven Limited Partnership, a Maryland limited partnership
("Partnership 9"), is the owner of a parcel of undeveloped land containing
approximately 7.54 acres
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and located at ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ in Rockville, Maryland, known as Decoverly
#7, as more particularly described on Exhibit A-9 ("Parcel 9").
J. Decoverly Four Limited Partnership, a Maryland limited partnership
("Partnership 10"), is the owner of a parcel of undeveloped land containing
approximately 3.94 acres and located at 15215 Diamondback Drive in Rockville,
Maryland, known as Decoverly #8, as more particularly described on Exhibit A-10
("Parcel 10").
K. Reston Corporate Center Limited Partnership, a Virginia limited
partnership ("Partnership 11"), is the owner of a parcel of undeveloped land
containing approximately 5.6 acres and located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ in
Reston, Virginia, known as the Reston Town Center Gateway Site, as more
particularly described on Exhibit A-11 ("Parcel 11").
L. MGA Virginia 86-1 Limited Partnership, a Virginia limited partnership
("Partnership 12"), is the owner of a parcel of undeveloped land containing
approximately 3.6 acres and located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ in Reston,
Virginia, known as Sunrise Valley Drive Parcel "E-1," as more particularly
described on Exhibit A-12 ("Parcel 12").
M. Partnerships 1 through 12 inclusive are sometimes hereinafter
referred to individually as a "Partnership" and collectively as the
"Partnerships"; the partnership interests in Partnerships 1 through 12 inclusive
held by the Owners are sometimes hereinafter referred to as the "Partnership
Interests"; Parcels 1 through 12 inclusive are sometimes hereinafter referred to
individually as a "Parcel" and collectively as the "Parcels," which terms shall
include the land and all improvements thereon, together with all rights and
appurtenances pertaining to such land, including, without limitation, (i) all
minerals, oil, gas, and other hydrocarbon substances thereon, (ii) all rights,
titles and interests of Owners in and to adjacent strips, ▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇, alleys and rights-of-way, public or private, open or proposed,
including any rights in vault space adjacent to or within the boundaries of such
land, (iii) all easements, covenants, privileges, and hereditaments, whether or
not of record, and (iv) all access, air, water, riparian, development, utility,
and solar rights.
N. The identity of the partners in each of the Partnerships and their
respective percentage of Partnership Interests are set forth in Exhibit G
hereto.
O. Boston Properties, Inc., a Delaware corporation ("BPI"), is the sole
general partner of BPLP. BPLP is the managing member of BPLLC.
P. BPLP and BPLLC desire to acquire, and Owners desire to contribute,
some or all of the Partnership Interests, upon and subject to the terms and
conditions set forth in this Agreement.
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NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement, unless the context
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otherwise requires, the following terms shall have the meanings hereinafter set
forth (such meanings to be applicable to the singular and plural forms of such
terms and the masculine and feminine forms of such terms):
(a) "Accredited Investor" shall have the meaning set forth in
Exhibit F hereto.
(b) "Additional Assessment" shall have the meaning set forth in
Section 10.1 hereto.
(c) "Assessment" shall have the meaning set forth in Section 10.1
hereto.
(d) "BPLLC Closing Documents" shall be the documents set forth in
Exhibit K-2.
(e) "BPLP Closing Documents" shall be the documents set forth in
Exhibit K-1.
(f) "BPLP's Due Diligence and Contract Costs" shall mean,
collectively and in the aggregate, all reasonable costs and expenses (including,
without limitation, reasonable attorneys' and accountants' fees and related
expenses) incurred by BPLP in connection with (x) BPLP's investigation of the
Properties pursuant to Article 5 hereof or otherwise (including, without
limitation, costs and expenses for title examination and for the preparation of
surveys, environmental studies and other third party reports), (y) the
preparation and negotiation of this Agreement, the exhibits attached hereto and
the documents to be executed pursuant hereto, and (z) analysis of securities,
tax and other transaction-related issues (including compensation for BPLP's in-
house counsel provided such compensation does not exceed customary rates for
comparable services)
(g) "Business Day" shall mean any day excluding Saturday, Sunday
and any day which in the State of New York is a legal holiday or a day on which
banking institutions are authorized by law or by other governmental actions to
close.
(h) "Closing" shall have the meaning set forth in Section 13
hereto.
(i) "Closing Date" shall have the meaning set forth in Section 13
hereto.
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(j) "Closing Day Value" shall have the meaning set forth in Section
3.2(b) hereto.
(k) "Common Stock" shall mean shares of common stock,, par value
$.01 per share, in Boston Properties, Inc.
(l) "Contracts" shall have the meaning set forth in Section 8.1(a)
hereto.
(m) "Deposit" shall have the meaning set forth in Section 4.1
hereto.
(n) "Effective Date" shall mean November 26, 1997.
(o) "Environmental Law" shall mean: (i) the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S)(S) 9601 et seq.), as
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amended; (ii) the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act (42 U.S.C. (S)(S) 6901 et seq.), as amended; (iii)
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the Emergency Planning and Community Right to Know Act (42 U.S.C. (S)(S) 11001
et seq.), as amended; (iv) the Clean Air Act (42 U.S.C. (S)(S) 7401 et seq.), as
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amended; (v) the Clean Water Act (33 U.S.C. (S)(S) 1251 et seq.), as amended;
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(vi) the Toxic Substances Control Act (15 U.S.C. (S)(S) 2601 et seq.), as
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amended; (vii) the Hazardous Materials Transportation Act (49 U.S.C. (S)(S) 1801
et seq.), as amended; (viii) the Federal Insecticide, Fungicide and Rodenticide
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Act (7 U.S.C. (S)(S) 136 et seq.), as amended; (ix) the Safe Drinking Water Act
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(42 U.S.C. (S)(S) 300f et seq.), as amended; (x) any state, county, municipal or
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local statutes, laws or ordinances similar or analogous to the federal statutes
listed in parts (i) - (ix) of this Section 1(o); (xi) any amendments to the
statutes, laws or ordinances listed in parts (i) - (x) of this Section 1(o) in
effect as of the Effective Date; (xii) any rules, regulations, guidelines,
directives, orders or the like adopted pursuant to or to implement the statutes,
laws, ordinances and amendments listed in parts (i) - (xi) of this Section 1(o);
and (xiii) any other law, statute, ordinance, amendment, rule, regulation, or
order relating to environmental, health or safety matters.
(p) "Environmental Reports" shall have the meaning set forth in
Section 10.2(f) hereto.
(q) "Equity Value" shall have the meaning set forth in Section 3.2
hereto.
(r) "Escrow Agreement" shall have the meaning set forth in Section
4.1.
(s) "Exchange Value" shall refer to the values for 100% of the
respective Partnership Interests as set forth on Exhibit D hereto.
(t) "Existing Indebtedness" shall have the meaning set forth in
Section 3.8 hereto.
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(u) "General Partners" shall mean the General Partners of each of
the Partnerships respectively.
(v) "Governmental Authorities" shall mean any commission,
department or body of any municipality, township, city, county, state or Federal
governmental unit having jurisdiction over any of the Properties or the
ownership, management, operation, use or improvement thereof.
(w) "Hazardous Conditions" refers to the presence on, in or about
any of the Properties (including ground water) of Hazardous Materials, the
concentration, condition, quantity, location or other characteristics of which
fail to comply with applicable Environmental Laws.
(x) "Hazardous Material" shall mean any chemical, substance, waste,
material, equipment or fixture defined as or deemed hazardous, toxic, a
pollutant, a contaminant, or otherwise regulated under any Environmental Law,
including, but not limited to, petroleum and petroleum products, waste oil,
halogenated and non-halogenated solvents, PCBs, and asbestos and asbestos
containing materials.
(y) "Improvements" shall mean all buildings, parking areas, signs,
driveways, site improvements, structures and other improvements located on any
Parcel.
(z) "Managing Owners" shall have the meaning set forth in Section
8.3 hereto.
(aa) "MGA" shall mean ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ and Associates, Inc., a
Maryland corporation.
(bb) "Owners Closing Documents" shall be the documents set forth in
Exhibit J-1.
(cc) "Parcel" or "Parcels" shall have the meaning set forth in
Recital M hereto.
(dd) "Partnership" or "Partnerships" shall have the meaning set
forth in Recital M hereto.
(ee) "Partnership Closing Documents" shall be the documents set
forth in Exhibit J-2.
(ff) "Partnership Interests" shall have the meaning set forth in
Recital M hereto.
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(gg) "PCBs" shall have the meaning set forth in Section 10.2(e)
hereto.
(hh) "Permitted Exceptions" shall have the meaning set forth in
Section 6.2 hereto.
(ii) "Personal Property" shall mean all of Owners' right, title and
interest, if any, in and to: (i) all signs, supplies, maintenance equipment,
appliances, security systems, tools, decorations, furniture, furnishings,
fixtures, equipment, machinery, mechanical systems, landscaping and other
tangible and intangible personal property owned by Owners, located at and/or
used in connection with the leasing, management, operation, maintenance and
repair of the Properties, including, without limitation, the items listed on
Exhibits B-1 through B-12 attached hereto; (ii) all site plans, surveys, plans
and specifications, marketing materials and floor plans relating to the
Properties; (iii) all warranties, guarantees and bonds relating to the
Properties; (iv) all permits, licenses, certificates of occupancy, and other
governmental approvals which relate to the Properties; and (v) any trade names
used by Owners in connection with the Properties, other than ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇
and Associates, Inc. and derivatives thereof.
(jj) "Property or Properties" shall mean, collectively, the Parcels,
the Tenant Leases, and the Personal Property.
(kk) "Registration Rights Agreement" shall have the meaning set
forth in Section 3.5 hereto.
(ll) "Rejected Interests" shall have the meaning set forth in
Section 5.2 hereto.
(mm) "Retained Indebtedness" shall have the meaning set forth in
Section 3.8 hereto.
(nn) "SEC" shall mean the Securities and Exchange Commission.
(oo) "Study Period" shall have the meaning set forth in Section 5.1
hereto.
(pp) "Subscription Agreement" shall mean the form attached as
Exhibit F hereto.
(qq) "Tenant Leases" shall mean the leases and subleases, if any,
described in Exhibits N-1 through N-12 attached hereto, and all leases and
subleases, if any, entered into by the Partnerships after the date hereof
pursuant to and in accordance with Section 5.3 hereto.
(rr) "Title Company" shall have the meaning set forth in Section
4.1 hereto.
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(ss) "1245 Property" shall mean property classified by the
Partnerships as 5 Year ACRS, 5 Year MACRS, 7 Year MACRS, and 15 Year MACRS
property on the Partnerships' federal income tax returns.
(tt) "Units" shall have the meaning set forth in Section 3.1 hereto.
(uu) "USTs" shall have the meaning set forth in Section 10.2(d)
hereto.
2. Assignment.
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1 Upon and subject to the terms and conditions set forth in this
Agreement, the Owners hereby agree to transfer and assign all of their
Partnership Interests and the Purchasers hereby agree to acquire and accept the
Partnership Interests such that BPLLC shall acquire a one percent (1.00%)
general partner partnership interest in each of the Partnerships and BPLP shall
acquire the remaining ninety-nine percent (99.00%) of partnership interests in
each of the Partnerships.
2 Except as to Partnerships 4, 5 and 6, and subject to the terms and conditions
set forth in Article 24, Purchasers shall have the right to elect by written
notice to the appropriate Partnership(s) to acquire fee title to one or more of
the Parcels, together with the related Tenant Leases and Personal Property, in
lieu of acquiring the Partnership Interests in the Partnership which owns such
Parcel or Parcels. In such event, BPLP shall be the Purchaser which acquires
such Parcel or Parcels and related Tenant Leases and Personal Property.
3 Exchange Value.
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1 The parties hereto have agreed upon the Exchange Value for 100% of
the Partnership Interests for each of the Partnerships, and such agreed upon
Exchange Values are set forth in Exhibit D attached hereto and made a part
hereof. "Equity Value" shall be determined by subtracting the amount of Retained
Indebtedness (as hereinafter defined) or Existing Indebtedness (as hereinafter
defined), as the case may be, for such Partnership from the Exchange Value of
100% of the Partnership Interests for such Partnership, and further adjusted in
accordance with the adjustments set forth in Article 15. Subject to the terms
and conditions set forth herein, each Owner shall have the right to receive the
Equity Value for the Partnership Interests held by such Owner either (i) all in
cash, (ii) all in exchangeable ownership units in BPLP ("Units"), or (iii)
partly in cash and partly in Units; provided, however, that at least $50,000,000
(the "Required Unit Portion") of the aggregate Equity Value of the Partnership
Interests shall be paid (whether to one or more Owners) in Units.
Notwithstanding the foregoing, in the event that one or more of Partnerships 4,
5 or 6 are deleted from this Agreement under the terms of Article 5 or Section
12.2, the Required Unit Portion shall be reduced by one third (1/3) for each
such Partnership which is deleted; provided, however, that the deletion of any
Partnerships from this Agreement other than Partnerships 4, 5 or 6, shall not
result in any reduction in the Required Unit Portion. The manner of payment
shall be determined in accordance with an election made by Owners
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under this Article 3 by delivering written notice to BPLP, which notice shall
include an executed Subscription Agreement in the form attached hereto as
Exhibit F from each Owner electing to take Units for all or any portion of the
Equity Value of such Owner's Partnership Interests, at least twenty (20) days
prior to Closing (as hereinafter defined); provided, however, that only
Accredited Investors shall have the right to elect to receive Units.
2 The owners of Partnership Interests in Partnership 4, Partnership 5
and Partnership 6 (the "Reston Partnership Owners") intend to receive the Equity
Value of their respective Partnership Interests as follows: certain of the
Reston Partnership Owners who are Accredited Investors intend to receive the
Equity Value of their Partnership Interests entirely in Units; other Reston
Partnership Owners who are Accredited Investors intend to receive the Equity
Value of their respective Partnership Interests partly in cash and partly in
Units in an accredited offering transaction; and the remaining Reston
Partnership Owners intend to receive the Equity Value of their respective
Partnership Interests entirely in cash. The manner of payment shall be
determined in accordance with an election made by the Reston Partnership Owners
who are Accredited Investors by written notice to BPLP at least twenty (20) days
prior to Closing. For the Reston Partnership Owners the following shall apply:
(a) With respect to any Reston Partnership Owners who have elected to
receive all or part of the Equity Value of their respective Partnership
Interests in cash, such cash shall be paid to or on behalf of such Reston
Partnership Owners by BPLP at Closing, in accordance with Section 3.3.
(b) The Reston Partnership Owners who are Accredited Investors and have
elected to receive all or a portion of the Equity Value of their respective
Partnership Interests in Units shall be paid the amount so elected by the
issuance of Units to such Reston Partnership Owners at Closing in an accredited
offering transaction. The number of Units to be issued to such Reston
Partnership Owners will be determined at Closing, and will be based on the
average of the closing prices of Common Stock on the New York Stock Exchange for
the twenty (20) trading days immediately preceding the day prior to the day of
Closing (the "Closing Day Value"), subject to the provisions of Section 3.9
hereof. During the 20-day period described in this Section 3.2(b), neither
Purchasers nor any of their respective affiliates will purchase Common Stock in
a public trading transaction; and neither Owners nor any of their respective
affiliates will sell Common Stock in a public trading transaction.
3 Except as otherwise provided in Sections 3.2 and 3.4, all Owners
shall receive the Equity Value of their respective Partnership Interests in cash
in the following manner. The Exchange Value for the Partnership Interests in
each Partnership (other than Partnerships 4, 5 and 6) shall be paid in cash at
Closing to the Title Company, at which time the Title Company shall deduct from
the Exchange Value for the Partnership Interests in each Partnership all sums
necessary to pay in full and retire the Existing Indebtedness owed by the
Partnership in which such Owners have their respective Partnership Interests so
that all liens securing such Existing Indebtedness are released. The Equity
Value for the Partnership Interests in such Partnerships
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shall then be paid to or on behalf of the Owners of such Partnership Interests
in accordance with Section 3.11. Notwithstanding the foregoing, in the event
that the Reston Partnership Owners have not made an election to receive Units in
a sufficient amount to meet the Required Unit Portion, Owners of other
Partnership Interests who are Accredited Investors shall make an election to
receive Units under this Section 3.3 in an amount sufficient to satisfy the
Required Unit Portion.
4 Notwithstanding the foregoing, any Owner who is an Accredited
Investor may elect to receive Units in the amount of all or a portion of the
Equity Value of its respective Partnership Interests by delivering written
notice (including an executed Subscription Agreement) to BPLP of such election
at least twenty (20) days prior to Closing.
5 Commencing on the 375th day after the Closing Date, the Units of BPLP
which are issued to Owners pursuant to the terms of this Article 3 shall be
redeemable on the terms set forth in the Amended and Restated Agreement of
Limited Partnership of Boston Properties Limited Partnership, dated as of June
23, 1997, as amended (the "BPLP Partnership Agreement"). At Closing, Purchasers
and BPI will enter into a Registration Rights Agreement with all Owners
receiving Units, which Registration Rights Agreement will be substantially in
the form of Exhibit H attached hereto.
6 To the extent of the Units issued to Owners in exchange for the
Equity Value of the Partnership Interests, the parties hereto intend, to the
extent permitted by law, that such exchange shall be treated as a contribution
of property in accordance with Internal Revenue Code Section 721.
7 Intentionally Deleted.
8 For purposes of this Agreement, "Existing Indebtedness" shall mean the ind
ebtedness or obligations, other than Retained Indebtedness, secured by any and
all outstanding mechanics' liens, deeds of trust, mortgages, judgment liens,
liens for taxes which are due and payable as of the Closing Date, and any other
monetary liens encumbering the Property owned by each respective Partnership as
of the Closing Date. "Retained Indebtedness" shall mean the existing two loans
made by The Prudential Insurance Company of America ("Prudential"), which are
secured by a deed of trust against Parcel 5 in the principal amount of
approximately Forty-Two Million Four Hundred Eighteen Thousand One Hundred
Eighty-Nine Dollars ($42,418,189) and two deeds of trust against Parcel 6 in the
aggregate principal amount of approximately Forty-Eight Million Eight Hundred
Forty-Four Thousand Nine Hundred Forty-Four Dollars ($48,844,944) as of the
Closing Date and described more fully on Exhibit C, and the existing loan made
by Lutheran Brotherhood which is secured by a deed of trust against Parcel 4 in
the outstanding principal amount of approximately Twenty-One Million Nine
Hundred Ninety-Nine Thousand Two Hundred Fifty-Seven Dollars ($21,999,257) as of
the Closing Date and described more fully on Exhibit C. It is understood and
agreed that the Owners of Partnerships 5 and 6 shall not have any obligation to
release or repay the Retained
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Indebtedness from Prudential (except insofar as the amount of such indebtedness
is deducted from the Exchange Value of such Partnership Interests). Purchasers
shall negotiate with Prudential regarding the repayment, modification or
continuation of such loans, and Purchasers shall pay all costs, expenses and
prepayment penalties that may be required in connection with such repayment,
modification or continuation.. It is further understood and agreed that the
Owners of Partnership 4 shall not have any obligation to release or repay the
Retained Indebtedness from Lutheran Brotherhood (except insofar as the amount of
such indebtedness is deducted from the Exchange Value of such Partnership
Interests); however, if Lutheran Brotherhood shall require the payment of any
prepayment penalties or other expenses pursuant to the terms of a payoff letter
obtained by the Title Company for use at Closing, the total amount of such
penalties and expenses set forth in such payoff letter shall be deducted from
the Equity Value of the Partnership Interests in Partnership 4. Following such
deduction, the Owners of Partnership 4 shall not have any further liability on
account of such prepayment penalties or expenses. Managing Owners shall
cooperate with the Purchasers in any efforts to avoid an acceleration of the
Retained Indebtedness but such cooperation shall not be a condition to Closing.
9 The parties hereto agree that (i) in the event that the actual
Closing Day Value is less than $30.00 per share, the number of Units to be
issued to an Owner under the terms of this Article 3 shall be determined as
though the Closing Day Value is $30.00 per share; and (ii) in the event that the
actual Closing Day Value exceeds $36.00 per share, the number of Units to be
issued to an Owner under the terms of this Article 3 shall be determined as
though the Closing Day Value is $36.00 per share. If the Closing Day Value is
any amount between $30.00 and $36.00, inclusive, the number of Units to be
issued shall be based on the actual Closing Day Value.
10 In the event that the Purchasers acquire all of the Partnership
Interests and/or Parcels, as the case may be, and do not reject any Partnership
Interests or Parcels pursuant to Articles 5 or 19 below, BPLP agrees to pay, in
addition to the aggregate Exchange Value set forth in Exhibit D, an additional
sum in the amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the
"Transaction Fee"), which shall be paid to MGA. In the event that one or more
Partnerships and/or Parcels have been deleted from this Agreement in accordance
with Articles 5 or 19, the Transaction Fee payable to MGA shall be reduced in
the proportion that the Exchange Value of the deleted Partnership or
Partnerships bears to the aggregate Exchange Value of all of the Partnerships.
11 Notwithstanding any provision in this Article 3 to the contrary, all
cash payments to be made to any of the Owners in accordance with this Article 3
shall be delivered to MGA for distribution to the individual Owners, and
Purchasers shall not have any further responsibility for the distribution of
such payments to such Owners.
12 The parties hereto agree that the Exchange Value for each Partnership
shall be allocated to the land owned by such Partnership in an amount equal to
$30 per square
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foot and the balance of the Exchange Value shall be allocated to the
Improvements thereon. No value shall be attributed to any 1245 Property.
13 [The Equity Values payable to Owners under this Agreement shall be in
accordance with their respective Interests.]
14 Deposit.
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1 Purchasers have placed in escrow with Commercial Settlements, Inc.,
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (the "Title Company") the sum of
Four Hundred Fifty Thousand Dollars ($450,000), representing an initial deposit,
and subject to the terms of that certain Escrow Agreement (the "Escrow
Agreement") dated November 14, 1997, a copy of which is attached hereto as
Exhibit E. Within three (3) Business Days of the Effective Date, Purchasers
shall deliver an additional One Million Three Hundred Fifty Thousand Dollars
($1,350,000), representing an additional deposit (the initial deposit and the
additional deposit, together with accrued interest thereon, is hereinafter
referred to as the "Deposit").
2 The Title Company is hereby directed to invest the Deposit in an
interest-bearing account acceptable to Purchasers. Interest earned on the
Deposit shall belong solely to Purchasers and shall be accounted for separately,
but accumulated and reinvested with the Deposit. The Deposit shall be disbursed
by the Title Company in accordance with the terms and conditions of this
Agreement and the Escrow Agreement.
3 Study Period.
------------
1 For purposes of this Agreement, the term "Study Period" shall mean
the period commencing on October 14, 1997 and ending at midnight on December 23,
1997, as the same may be extended pursuant to Section 10.1 or by mutual
agreement of Purchasers and Owners. Notwithstanding the foregoing, Purchasers
shall have the right in their sole discretion to extend the foregoing date to
December 31, 1997 by giving written notice of such extension to Owners no later
than December 20, 1997. If by the expiration of the Study Period, Purchasers, in
their sole and absolute discretion, shall elect not to proceed to Closing for
any reason whatsoever, then Purchasers shall have the right to terminate this
Agreement by giving written notice of termination to the Owners on or before
such date, whereupon this Agreement shall automatically terminate, the Deposit
shall be returned to Purchasers, and neither party shall have any further rights
or obligations under this Agreement, except as expressly set forth in Section
5.5 and Article 23 of this Agreement.
2 If prior to the expiration of the Study Period, Purchasers, in their
sole and absolute discretion, shall determine that their intended acquisition of
any one or more of the Partnership Interests and/or Parcels (the "Rejected
Interests") is not economically or otherwise feasible or advisable at the
Exchange Value for such Partnership Interests and/or Parcel set forth in Exhibit
D, then Purchasers shall so advise Owners by written notice to the Owners, in
which
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event the parties shall use good faith efforts to agree on a revised Exchange
Value for such Rejected Interests, or such other modified terms and conditions
as may be appropriate, including but not limited to the deletion of such
Rejected Interests from this Agreement. In the event that Purchasers and the
Owners of the Rejected Interests reach an agreement on a revised Exchange Value
of such Rejected Interests or other modifications to the terms and conditions of
acquisition of such Rejected Interests, an Amendment to this Agreement shall be
executed by Purchasers and the Owners of the Rejected Interests; in no event
shall the consent of any Owner other than the Owners of the Rejected Interests
be required for such Amendment, nor shall the signatures of such other Owners be
required to make such Amendment effective. In the event that Purchasers and the
Owners of the Rejected Interests agree to delete such Rejected Interests from
this Agreement, such Rejected Interests shall no longer be subject to this
Agreement, but this Agreement shall otherwise continue in full force and effect
with respect to the other Partnerships and the Parcels they own. If the Owners
of the Rejected Interests and Purchasers fail to reach an agreement regarding
the Rejected Interests in accordance with this Section 5.2 on or before January
8, 1998, this Agreement shall terminate on January 8, 1998, the Deposit shall be
returned to Purchasers, and neither party shall have any further rights or
obligations under this Agreement, except as expressly set forth in Section 5.5
and Article 23 of this Agreement.
3 Until Closing hereunder, Purchasers and their agents and
representatives shall have the right, at Purchasers' own cost and expense: (i)
to have full and complete access, during normal business hours and with
reasonable advance notice to Managing Owners, to inspect Partnerships' books,
records, files, operating reports and other information relating to the
Partnerships and the Properties, and related correspondence files; (ii) to enter
upon the Properties during normal business hours, subject to the rights of
tenants under the Tenant Leases (as hereinafter defined) and using best efforts
to avoid causing an unreasonable disruption of the operations of the Properties,
to make such inspections of the Partnerships and the Properties as Purchasers
deem necessary or desirable in connection with the transaction contemplated by
this Agreement, provided that a representative of the Partnerships shall have
the right to be present during such inspections; and (iii) to conduct interviews
with tenants under the Tenant Leases provided that a representative of the
Partnerships shall have the right to be present at such interviews. As used in
this Agreement, "Tenant Leases" shall mean the leases and subleases, if any,
described in Exhibits N-1 through N-12 attached hereto, and all leases and
subleases, if any, entered into by the Partnerships after the date hereof
pursuant to and in accordance with the terms hereof. In addition, Managing
Owners agree to make available to Purchasers all of the following documents
which are in the Partnerships' or their agents' possession, and to request that
the Partnerships' architects, engineers and consultants make available to
Purchasers such of the following documents which are in their respective
possession: all of the records of such architects, engineers and consultants
related to the Properties, and the physical and environmental condition thereof,
including all surveys, plans and specifications, and reports and to otherwise
cooperate with Purchasers in their inspection and investigation of the
Properties, and Purchasers shall have the right to make copies of the same, at
their own cost and expense. In no event shall Purchasers be obligated to pay any
fees to the Partnerships or Owners on account of their making such records
available.
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4 The Partnerships hereby grant to Purchasers, their employees, agents,
consultants and contractors, the right to enter on to the Properties for the
purpose of performing such surveys, soil tests, hydrology tests, percolation
tests, environmental tests, and other engineering tests or environmental
investigations as Purchasers may reasonably deem appropriate. Such entry shall
be subject to the terms of an Access Letter agreement in the form attached
hereto as Exhibit Q, which shall be signed before such entry by all third party
consultants. Purchasers agree to pay all of the costs and expenses associated
with its investigation and testing and to repair and restore any damage to the
Properties caused by Purchasers' investigations or testing, at Purchasers'
expense.
5 Purchasers also agree to hold the Partnerships harmless from all
costs, expenses and liabilities arising out of Purchasers' entry on the
Properties, except that Purchasers shall have no responsibility to the
Partnerships and are hereby released from liability by the Partnerships for any
damage to persons or property or any release arising out of existing
environmental conditions or subterranean structures or utilities that were known
to Owners and/or the Partnerships and not disclosed to Purchasers as provided
below.
6 Soil, rock, water, asbestos, and other samples taken from the
Properties shall remain the property of the Partnerships. At the request of the
Managing Owners, Purchasers will assist in making arrangements for the lawful
disposal of any contaminated samples and will pay any related transportation or
disposal fees, but only if the Managing Owners sign the manifest and any other
documents required in connection with the disposal of contaminated samples. If
the Managing Owners are not willing to sign the required documentation,
Purchasers' only obligation shall be to return the contaminated samples to the
Partnerships. Any investigation or inspection conducted by Purchasers or any
agent or representative of Purchasers pursuant to this Agreement in order to
verify independently the Managing Owners' satisfaction of any conditions
precedent to Purchasers' obligation hereunder or to determine whether the
Managing Owners' representations and warranties are true and accurate shall not
affect or constitute a waiver by Purchasers of any of the Managing Owners'
obligations hereunder or Purchasers' reliance thereon.
7 Managing Owners have delivered to Purchasers or shall have made
available and shall continue to make available to Purchasers true, correct and
complete copies of the following for each Partnership and each Parcel:
(a) All Tenant Leases, including, without limitation, amendments, side
letters, option exercise letters and other documents, certificates or
instruments applicable to any of the Tenant Leases, and copies of all pending
lease proposals.
(b) A current rent roll or other documents, reflecting as of the date
thereof, with respect to each of the Tenants: (i) suite and building number or
address; (ii) name of tenant; (iii) monthly rental (including fixed rent and
escalation payments); (iv) the amount of such tenant's security deposit (and any
other deposits), if any; (v) the date through which each tenant's
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rent is paid; (vi) the expiration date of such tenant's lease; (vii) any rents
or other charges in arrears or prepaid thereunder and the period for which such
rents and other charges are in arrears or have been prepaid; (viii) any free
rent or other rental concessions thereunder and the period to which the same
apply and any outstanding tenant improvement or build out allowances or
obligations; (ix) the utilities which are furnished as part of the rent; (x)
broker's fees or commission, if any, attributable to the lease; (xi) renewal and
expansion options, if any; and (xii) square footage of leased premises.
(c) Financial information and records for the Properties for calendar
year 1996 and the first three quarters of calendar year 1997, together with the
books and records for the Partnerships and the Properties, including historical
property and operating statements, tax bills, capital expenditure records and
maintenance records of the Properties.
(d) As-built plans and specifications for the improvements on the
Properties, to the extent reasonably available.
(e) Copies of all contracts, agreements, equipment leases, service and
maintenance agreements, and vendor contracts listed on Exhibits L-1 through L-12
attached hereto.
(f) Copies of Partnerships' existing title policies for the Properties,
together with legible copies of all documents referred to in the title reports
or policies.
(g) Copies of existing "as-built" surveys of the Properties, any readily
available topographical information and traffic studies in Partnerships' or
their property managers' possession.
(h) All environmental reports and studies in the Partnerships' possession
(including, without limitation, all analytical data, remediation design,
modeling, boring logs, correspondence, submissions and responses to or from
regulatory authorities) and notices and asbestos reports and all reports,
proposals and/or notices relating to the physical condition of the Properties,
including, without limitation, any soils reports, engineering, architectural or
other structural reports or studies and similar data relating to the Properties
in the Partnerships' possession.
(i) Existing fire and casualty insurance policies (or summaries thereof).
(j) All information concerning any pending real estate tax assessment
protests and proceedings.
(k) All agreements relating to leasing commissions affecting the
Properties and a list of leasing commissions to be discharged by the
Partnerships pursuant to Section 8.1(b).
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(l) Copies of all promissory notes, mortgages, deeds of trust and other
documents relating thereto including, without limitation, encumbrances or
documents evidencing and/or securing indebtedness affecting the Properties, and
copies of any applicable interest rate "swap" agreements.
(m) Copies of all construction contracts or other agreements to which any
Partnership or its respective agent is a party relating to any ongoing
construction work, repairs or renovations being done to any Improvements at the
Properties.
(n) Copies of all agreements, proffers, if any, and other non-public
documents relating to land use restrictions or other conditions limiting or
otherwise affecting development of the Properties.
(o) Copies of all unexpired warranties and guaranties covering the
Personal Property and the roof, elevators, heating and air conditioning systems
and any other components of the Improvements, and a list and description of any
material third party bonds, warranties and guaranties which will be in effect
after Closing with respect to the Properties, including, without limitation, the
Improvements.
(p) Copies of all certificates of occupancy, approvals, licenses and
permits. Notwithstanding the foregoing, the parties acknowledge that Managing
Owners may not be able to locate certain certificates of occupancy for the
Improvements on Parcel 2 , as set forth in Exhibit R.
(q) Copies of any and all written claims, demands or notices from any
third party which concern or otherwise affect the Properties received by any
Partnership since January 1, 1995, or earlier if unresolved, including, without
limitation, written notice of potential litigation, written notices from any
Governmental Authority, copies of any reports issued by the local fire ▇▇▇▇▇▇▇▇
regarding inspection of the Improvements during the Partnerships' ownership of
the Properties and a list of major repairs (excluding tenant improvements) and
major casualties occurring during the Partnerships' ownership of the Properties,
together with any internal lists of claims or anticipated litigation related to
the Properties prepared by or on behalf of the Partnerships.
(r) True and complete copies of the limited partnership agreement and
certificate of limited partnership for each Partnership, as well as any
fictitious name or similar filings, including all amendments to the foregoing,
certified as true and complete by a General Partner of each Partnership.
(s) Copies of all federal and state income tax returns for each of the
Partnerships for the most recent three (3) years.
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8 Prior to the end of the Study Period, Purchasers shall provide
written notice to the Owners of the Partnership Interests in Partnership 12 (the
"Partnership 12 Owners") of Purchasers' good faith estimate of the present value
of the charges required to be paid (the "Parking Space Cost") under that certain
Contract to Design and Construct (MGA II Parking Garage), dated May 5, 1992, by
and between Partnership 5 and General Electric Company, pursuant to which 413
parking spaces are to be made available in connection with the future
development of Parcel 12. The Partnership 12 Owners shall respond to such notice
within five (5) days of receipt thereof. In the event that the Partnership 12
Owners agree to the Parking Space Cost, the Exchange Value for Parcel 12 as set
forth in Exhibit D shall be reduced by the amount of the Parking Space Cost. In
the event that the Partnership 12 Owners and Purchasers agree on a revised
Exchange Value for the Partnership Interests in Partnership 12 or other
modifications to the terms and conditions of acquisition of such Partnership 12
Partnership Interests, an Amendment to this Agreement shall be executed by the
Partnership 12 Owners and Purchasers; in no event shall the consent of any Owner
other than the Partnership 12 Owners be required for such Amendment, nor shall
the signatures of such other Owners be required to make such Amendment
effective. In the event that the Partnership 12 Owners and Purchasers are unable
to agree on the Parking Space Cost on or before January 8, 1998, either party
shall have the right to terminate this Agreement on January 8, 1998, by written
notice of such termination to the other party, whereupon the Deposit shall be
returned to Purchasers and the parties shall have no further rights or
obligations under this Agreement except as set forth in Section 5.4 and Article
23.
9 Title.
-----
1 Purchasers shall obtain a commitment (a "Commitment") for an
endorsement to the existing owner's policy of title insurance covering each of
the Properties or for a new owner's policy of title insurance, if necessary,
extending the coverage of each policy to the date of Closing and including such
additional endorsements as Purchasers may require, including but not limited to
a non-imputation endorsement. In addition Purchasers shall obtain a current
survey of each of the Properties (each, a "Survey") prepared by a licensed
surveyor. Each Survey shall be prepared in accordance with the current standards
for Land Title Surveys of the American Title Association and the American
Congress on Surveying and Mapping and shall be certified to Purchasers, the
Owners and the Title Company.
2 Purchasers shall have the right to object, in their sole and absolute
discretion, to any exceptions to title, or to any matter shown on any Survey, by
giving written notice to the Managing Owners on or before thirty (30) days after
the Effective Date, or in any event in a timely manner such that the hereinafter
described notice and response periods will be completed no later than the end of
the Study Period. If Purchasers fail to provide such written objection, then
Purchasers shall be deemed to have approved all matters affecting title to the
Properties and the Surveys as of the date of the Commitment or the Survey, as
applicable (the "Permitted Exceptions", which term shall include the Retained
Indebtedness), subject to the right to deduct from the Exchange Value funds
necessary to satisfy any Existing Indebtedness, which
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in no event shall be considered Permitted Exceptions. The Owners hereby
irrevocably authorize the Title Company to deduct from the Exchange Value at
Closing all sums necessary to pay off and discharge any and all Existing
Indebtedness.
3 If Purchasers timely object to any matter (other than the Permitted
Exceptions) affecting title or any Survey, then the Managing Owners shall,
within ten (10) days after the date of Purchasers' notice, notify Purchasers in
writing of whether the Managing Owners will endeavor to cure or remove any one
or more of such objections. If the Managing Owners either elect not to cure
Purchasers' title objections or fail to provide timely notice of whether they
elect to cure such objections, then Purchasers shall have the option of either
(i) waiving the objections (in which case such exceptions shall thereafter be
treated as Permitted Exceptions) and proceeding to Closing or (ii) terminating
this Agreement whereupon the Deposit shall be returned to Purchasers and the
parties shall have no further rights or obligations hereunder other than those
set forth in Section 5.5 and Article 23. If the Managing Owners elect to
endeavor to cure or remove any title objection or survey matter, the Managing
Owners shall be obligated to cure or remove same on or prior to the Closing
Date.
4 Nothing set forth in this Article 6 shall limit Purchasers' right to
terminate this Agreement for any reason by delivering written notice of
termination to the Owners at any time prior to the expiration of the Study
Period.
5 Authority.
---------
1 Relating to Owners. Each Owner hereby represents and warrants to
Purchasers and to all other Owners that: (i) this Agreement is, and all "Owners
Closing Documents" to be executed by such Owner will be when executed by such
Owner, binding on and enforceable against such Owner in accordance with their
respective terms; (ii) there are no other consents required to authorize such
Owner's entry into and performance of this Agreement, the Owners Closing
Documents to be executed by such Owner and/or the transactions contemplated
hereby or thereby; and (iii) the execution and delivery of the Owners Closing
Documents does not constitute a breach or default under any agreement by which
such Owner or its Partnership Interests is bound other than the loan documents
evidencing the Retained Indebtedness and the Aetna Loan Documents. In addition,
each Owner hereby represents and warrants to Purchasers and to all other Owners
that the Partnership Interests being assigned by such Owner are not subject to
any liens or encumbrances and that such Owner has the right and authority to
assign such Partnership Interests. The foregoing representations and warranties
shall survive Closing for the period specified in Section 21.3. Notwithstanding
the foregoing, Purchasers agree that (i) obtaining the consent of Prudential to
the transfer of the Partnership Interests of Partnerships 5 and 6 shall not be a
condition precedent to Closing, nor shall Owners' inability to obtain such
consent be deemed a breach or default hereunder, and (ii) any costs and expenses
payable to Prudential in connection with any prepayment of the Prudential loans
which may be required because of the acquisition by Purchasers of the
Partnership Interests in Partnerships 5 and 6 shall be borne solely by
Purchasers.
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2 Relating to Partnerships. Each Partnership hereby represents and
warrants to Purchasers that: (i) this Agreement is, and all "Partnership Closing
Documents" to be executed by a General Partner of such Partnership will be when
executed by such General Partner, binding on and enforceable against such
Partnership in accordance with their respective terms; (ii) all consents
required to authorize such Partnership's entry into and performance of this
Agreement, the Partnership Closing Documents to be executed by such General
Partner and/or the transactions contemplated hereby or thereby have been
obtained; and (iii) the execution and delivery of the Partnership Closing
Documents does not constitute a breach or default under any agreement by which
such Partnership or its Property is bound, other than the loan documents
evidencing the Retained Indebtedness and the Aetna Loan Documents. In addition,
each Partnership hereby represents and warrants to Purchasers that any Parcel
being conveyed by such Partnership under the provisions of this Agreement is not
subject to any liens or encumbrances (other than Permitted Exceptions) and that
such Partnership has the right and authority to convey such Parcel. The
foregoing representations and warranties shall survive Closing for the period
specified in Section 21.3.
3 Relating to BPLP. BPLP represents and warrants to Owners that: (i)
this Agreement is, and all documents, affidavits and certificates to be executed
and delivered by BPLP as set forth on Exhibit K-1 hereto ("BPLP Closing
Documents") will be when executed by BPLP, binding on and enforceable against
BPLP, in accordance with their respective terms; (ii) BPLP is a duly formed and
validly existing limited partnership under the laws of the State of Delaware and
is qualified to do business in the States of Maryland and Virginia; (iii) this
Agreement, the BPLP Closing Documents, and the transactions contemplated hereby
and thereby have been, or will have been prior to the Closing Date, approved by
all necessary action of BPLP; and (iv) the execution and delivery of the BPLP
Closing Documents does not constitute a breach or default under any agreement by
which BPLP is bound. The foregoing representations and warranties shall survive
Closing for the period specified in Section 21.3.
4 Relating to BPLLC. BPLLC represents and warrants to Owners that (i)
this Agreement is, and all documents, affidavits and certificates to be executed
and delivered by BPLLC as set forth on Exhibit K-2 hereto ("BPLLC Closing
Documents") will be when executed by BPLLC, binding on and enforceable against
BPLLC, in accordance with their respective terms; (ii) BPLLC is a duly form and
validly existing limited liability company under the laws of the State of
Delaware and is qualified to do business in the States of Maryland and Virginia;
(iii) this Agreement, the BPLLC Closing Documents, and the transactions
contemplated hereby and thereby have been, or will have been prior to the
Closing Date, approved by all necessary action of BPLLC; and (iv) the execution
and delivery of the BPLLC Closing Documents does not constitute a breach or
default under any agreement by which BPLLC is bound. The foregoing
representations and warranties shall survive Closing for the period specified in
Section 21.3.
5 Representations and Warranties.
------------------------------
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1 The Managing Owners (to the extent provided in Section 8.3) represent
and warrant all of the representations and warranties set forth below and, in
addition, the General Partners of the Partnerships ("General Partners") each
make the following representations and warranties solely with respect to each
Partnership of which he is the General Partner and/or the Parcel owned by such
Partnership, which representations and warranties are true and correct on and as
of the Effective Date of this Agreement, shall be true and correct in all
material respects on and as of the Closing Date, subject to Section 8.4, and
shall survive Closing for the respective periods specified in Section 21.3:
(a) CONTRACTS. Each of Exhibits L-1 through L-12 attached hereto is a
complete list of all current contracts entered into by the Partnerships or
the Partnerships' agents relating to the ownership, management, leasing,
operation, maintenance or repair of each of the Properties (such contracts,
together with all contracts entered into after the date hereof pursuant to
Section 9.1, are hereinafter collectively referred to as the "CONTRACTS"),
which lists include the names of the contracting party, the dates of the
Contracts and a listing of all amendments to such Contracts.
(b) LEASING COMMISSIONS. On the Closing Date, except as otherwise set
forth on Exhibits N-1 through N-12, there shall be no leasing commissions
due or owing, or to become due and owing, in connection with any of the
Tenant Leases. The Partnerships shall pay and discharge in full at or
before Closing all obligations to pay any leasing commissions with respect
to the existing Tenant Leases, other than leasing commissions and other
fees: (i) for which Purchasers have expressly agreed to pay, se set for in
Exhibits N-1 through N-12; (ii) which are approved by Purchasers in
connection with a new Tenant Lease as described in Section 9.1 of this Agreement
or (iii) which Purchasers have agreed to accept in connection with Parcel 4, as
set forth in Exhibit L-4.
(c) FINANCIAL INFORMATION. Exhibits M-1 through M-12 attached hereto
contain true and correct Statements of Profit and Loss of each Partnership with
respect to each Partnership's Property for the calendar years of 1994, 1995 and
1996. Such Statements properly reflect the profit and loss from the management,
leasing, maintenance, repair and operation of such Property for such periods.
(d) TENANT LEASES.
(i) Each of Exhibits N-1 through N-12 attached hereto is a true and
complete list of all Tenant Leases for each Property, including the name of
the tenant, the date of the Tenant Lease and a complete list of all
amendments, side letters, option exercise letters and any other documents,
certificates or instruments which may create future obligations under any
of the Tenant Leases. The Tenant Leases identified on Exhibits N-1 through
N-12 are the only leases or other rights or grants of occupancy by
Partnerships or General Partners of all or any part of the Properties.
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(ii) Each of Exhibits N-1A through N-12A attached hereto contains a
complete list of all current rental delinquencies under the Tenant Leases
for each Property as of the close of the month immediately preceding the
Effective Date. The Managing Owners agree to provide to Purchasers an
updated list of rental delinquencies ten (10) days prior to the end of the
Study Period and at Closing, both of which shall be certified by the
Managing Owners as true, correct and complete in all material respects.
(iii) Except as set forth on Exhibits N-1 through N-12 or in the lease
documents identified thereon, there are no concessions, rebates, or "free"
or "reduced" rent periods (whether oral or written) of any kind whatsoever
under any of the Tenant Leases which would have an effect on or after the
Closing Date, and, except as contained in (i) that certain Lease Agreement
by and between MGA Virginia 85-1 Limited Partnership, as Landlord, and
General Electric Company ("GE"), as Tenant, dated June 1, 1987, with regard
to Parcel 5, as assigned to Lockheed ▇▇▇▇▇▇ Corporation ("LMC"), as
successor by merger to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation ("MMC"), (ii) that
certain Lease Agreement by and between MGA Virginia 86-2 Limited
Partnership, as Landlord, and GE, as Tenant, dated January 1, 1988, with
regard to Parcel 6, as assigned to LMC, as successor by merger to MMC,
(iii) that certain Second Amended and Restated Lease Agreement by and
between Reston Town Center Office Park Phase One Limited Partnership, as
Landlord, and The United States of America, as Tenant, dated September 15,
1993, with regard to Parcel 4, and (iv) the Aetna Lease with regard
to ▇▇▇▇▇▇ ▇, ▇▇▇▇ of the tenants or any other person or entity has a right
of first refusal, option right, or other right to purchase all or any
portion of the Properties.
(iv) Except as otherwise set forth on Exhibits N-1 through N-12 or
Exhibits N-1A through N-12A, none of the tenants under the Tenant Leases is
in default as of the close of the month immediately preceding the Effective
Date as to any monetary obligation under its Tenant Lease beyond any grace
period provided for in its Tenant Lease and, to the best of each Managing
Owner's and each General Partner's knowledge, none of the tenants under the
Tenant Leases is in material default as to any non-monetary obligation
under its Tenant Lease beyond any grace period provided for in its Tenant
Lease nor is any Tenant entitled to any rebate, concession, deduction or
offset under its Tenant Lease, except for the Partnerships' obligation, if
any, to refund any excess estimated payments made by a Tenant on account of
operating expenses or real estate taxes. Except for security deposits
placed with the Partnerships under the Tenant Leases, a true and correct
list of which is attached hereto as Exhibits N-1B through N-12B, none of
the tenants has paid to the Partnerships any rent or other charge of any
nature under its Tenant Lease or otherwise relating to any Property for a
period of more than thirty (30) days in advance. Except as set forth in
Exhibits N-1 through n-12, each Partnership and each General Partner has
performed or
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paid all obligations (including, without limitation, performance of all
work and payment of all work and other tenant allowances) required to be
performed or paid by it under each of the Tenant Leases and is not in
default of any of its obligations under any of the Tenant Leases.
Notwithstanding the foregoing, the parties hereto acknowledge that certain
construction work has been commenced and is not yet completed with respect
to Parcels 1, 2 and 3 as set forth in Exhibits N-1, N-2 and N-3 hereto.
(a) CONDEMNATION. None of the Managing Owners or General Partners has any
knowledge of or has received any written notice of any pending or contemplated
condemnation proceedings affecting all or any part of any Property.
(b) STRUCTURAL. To the best of each Managing Owner's and each General
Partner's knowledge, there are no existing structural defects in any
Improvements at any Property. No Managing Owner or General Partner has received
any written notice from any insurance company or Governmental Authority of any
defect or inadequacy in connection with any Property's structure or systems
which has not heretofore been cured. On or before the Closing Date, the
Partnerships shall cure (or escrow sufficient funds at Closing with the Title
Company to cure) all such written notices issued on or before the Closing Date.
(c) ZONING/VIOLATIONS. To the best of each Managing Owner's and each
General Partner's knowledge, there is not now pending nor is there any proposed
or threatened proceeding for the rezoning of any Property or any portion
thereof. None of the Managing Owners or General Partners has any knowledge of or
has received any written notice from any Governmental Authority that any zoning,
subdivision, environmental, hazardous waste, building code, health, fire, safety
or other law, order, ordinance or regulation is violated by the continued
maintenance, operation or use of any Property, including, without limitation,
any Improvements located thereon or any parking areas. In addition to its
obligations under Section 6.3, on or before the Closing Date, Owners shall cure
(or escrow sufficient funds at Closing with the Title Company to cure) all
violation notices issued with respect to the Properties.
(d) PERMITTED EXCEPTIONS. Each Partnership has performed all obligations
under and is not in default in complying with the terms and provisions of any of
the covenants, conditions, restrictions, rights-of-way or easements constituting
one or more of the Permitted Exceptions for each Partnership's Parcel.
Notwithstanding the foregoing, the parties acknowledge that the fence on Parcel
4 may constitute a violation of covenants applicable to Parcel 4 and that
Partnership 4 has no obligation to remove such fence.
(e) PERMITS, ETC. To the best of each Managing Owner's knowledge and
except as set forth in Exhibit R, all permits, licenses, authorizations and
certificates of occupancy required by Governmental Authorities for each
Partnership's management, occupancy, leasing and operation of its Property are
in full force and effect, and will remain in full force and effect after the
Closing.
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(f) LITIGATION. No dispute, proceeding, suit or litigation relating to the
Tenant Leases, any Property or any part thereof is pending or, to the best of
each Managing Owner's and each General Partner's knowledge, threatened in any
tribunal. No Partnership is the subject of, nor has any Managing Owner or any
General Partner received, any written notice of or threat that any Partnership
has or will become the subject of, any reorganization, liquidation, dissolution,
receivership or other action or proceeding under the United States Bankruptcy
Code, 11 U.S.C. (S)(S) 101, et seq., or any other federal, state or local laws
-- ---
affecting the rights of debtors and/or creditors generally, whether voluntary or
involuntary and including, without limitation, proceedings to set aside or avoid
any transfer of any interest in property or obligations, whether denominated as
a fraudulent conveyance, preferential transfer or otherwise, or to recover the
value thereof or to charge, encumber or impose a lien thereon.
(g) FIRPTA. No Owner or Partnership is a "foreign person" within the
meaning of Section 1445 of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
(h) INDEBTEDNESS. No material defaults or events of default (as defined
therein) have occurred and are continuing under the terms of any documents
evidencing or securing indebtedness which is secured by any of the Properties or
for which any Partnership is liable.
(i) PARTIES IN POSSESSION. There are no tenants or other parties in
possession of any part of any Property, except tenants under the Tenant Leases
and the beneficiaries of the license agreement attached hereto as Exhibit O or
as may otherwise be set forth in the Permitted Exceptions, and no one other than
tenants under the Tenant Leases have any right to occupy any part of any
Property.
(j) MATERIAL CHANGE. None of the Managing Owners or General Partners has
received written notice from any Governmental Authority of any pending or
contemplated change in any regulation, code, ordinance or law, or private
restriction applicable to the Properties, or any natural or artificial condition
upon or affecting the Properties, or any part thereof, which would result in any
material change in the condition of such Property or any part thereof, or would
in any way limit or impede the operation or development of such Property.
(k) AGREEMENTS AFFECTING PROPERTIES. There are no contracts or other
material obligations currently in effect, other than those matters set forth in
the Contracts, Tenant Leases, the documents evidencing and securing the Retained
Indebtedness and the Permitted Exceptions, and any other documents which have
been delivered to Purchasers, (i) for the sale, exchange or transfer of any
Property or any portion thereof by any Partnership or General Partner, or (ii)
creating or imposing any burdens, obligations or restrictions on the use or
operation of such Property and the businesses conducted thereon.
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(l) ACCURACY OF DOCUMENTS. All documents and records to be delivered
pursuant to Section 5.7 will be true, correct and complete copies of the
documents and records required to be delivered and will accurately reflect the
matters contained therein in every material respect.
(m) PARTNERSHIPS. Each of the Partnerships has been duly formed under the
laws of the State in which it was formed and validly exists in each state in
which it operates or owns property.
(n) RETAINED INDEBTEDNESS. The assignment of the Partnership Interests in
Partnerships 4, 5 and 6 and/or the conveyance of Parcels 4, 5 and 6 as
contemplated hereunder will, if not approved by Lutheran Brotherhood and
Prudential respectively, constitute grounds for acceleration of the Retained
Indebtedness.
(v) For purposes of this Agreement, the phrase "to the best of
Managing Owners' knowledge" and "to the best of General Partner's knowledge" or
words of similar import, shall mean that such party has conducted a reasonable
review of its files and interviewed its current employees in positions of
responsibility on the subject (including, without limitation, leasing and
management personnel), and such review and interviews did not disclose any
information contrary to the accuracy or veracity of any such representation or
warranty.
(vi) Further for purposes of this Agreement, "Managing Owners" shall be
deemed to mean (i) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
for all Properties located in Virginia and the Partnerships which own such
Properties, and (ii) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ for
all Properties located in Maryland and the Partnerships which own such
Properties.
(vii) Managing Owners and General Partners shall provide written notice to
Purchasers at any time and from time to time after the Effective Date through
the Closing Date if any of them acquires any information that any of the
representations or warranties made in this Agreement was inaccurate in any
material respect as of the Effective Date or will be inaccurate in any material
respect as of the Closing Date, except such notice shall not be required for
changes which result from the operation of the Properties in the ordinary course
of business.
(vii) COVENANTS AND ADDITIONAL OBLIGATIONS OF OWNERS, MANAGING OWNERS AND
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GENERAL PARTNERS.
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1 COVENANTS OF THE MANAGING OWNERS AND GENERAL PARTNERS. Each
Managing Owner and each General Partner agrees that from the date of this
Agreement to the Closing Date, it will: (i) operate the Properties only in a
commercially reasonable manner, and use its reasonable efforts to preserve its
relations with tenants and others having business dealings with it; (ii)
maintain the Properties as required by the Tenant Leases, and otherwise maintain
each Property in its present condition, make all necessary repairs and
replacements
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(including repairs and replacements to building systems), and deliver its
Property on the Closing Date substantially in the condition it is in on the
Effective Date, ordinary wear and tear, and damage by fire or other casualty
excepted; (iii) maintain fire and casualty insurance, with broad form extended
coverage on the Improvements, in an amount for each Property at least equal to
the replacement cost for the Improvements on each Property, with a deductible
not in excess of $25,000.00 (such insurance to be canceled by Managing Owners
promptly after the Closing Date, subject to resolution of any pending claims
thereunder); (iv) maintain rental loss insurance in an amount equal to the
reasonably anticipated income from its Property (rent, common area (and building
operation) charges, and real estate tax and insurance contributions) for a 12-
month period (such insurance to be canceled by Managing Owners promptly after
the Closing Date, subject to resolution of any pending claims thereunder); (v)
not mortgage or encumber any part of the Properties or take or suffer any other
action affecting title to the Properties without the prior written consent of
Purchasers; (vi) not make any commitment or incur any liability to any labor
union, through negotiations or otherwise, with respect to the Properties; (vii)
not become a party to any new licenses, equipment leases, contracts or
agreements of any kind relating to the Properties, except such contracts or
agreements as will be terminated at or prior to Closing without cost or expense
to Purchasers or contracts which Purchasers agree in their sole discretion to
assume at Closing, without having obtained in each case the prior written
consent of Purchasers, which consent shall not be unreasonably withheld or
delayed, and any requests for consent shall be responded to within ten (10)
Business Days of receipt of request therefor; (viii) not cancel or terminate
(except for nonpayment of rent in the case of Tenant Leases), modify or amend
any of the Tenant Leases, or accept surrender thereof, enter into any new
leases, or consent to the assignment, subletting or mortgaging of any lease or
space, without having obtained in each case the prior written consent of
Purchasers, which consent shall not be unreasonably withheld or delayed, and any
requests for consent shall be responded to within ten (10) Business Days of
receipt of request therefor; (ix) execute and deliver in the ordinary course of
business all new Tenant Leases and modifications or amendments of Tenant Leases
approved by Purchasers in accordance with clause (viii), it being agreed that if
Closing occurs hereunder, Purchasers shall pay for and perform all tenant work
and tenant allowances required under new Tenant Leases and modifications or
amendments of Tenant Leases approved by Purchasers in accordance with clause
(viii), and pay any leasing commissions in connection with all new Tenant
Leases and modifications and amendments to Tenant Leases approved by Purchasers
in accordance with clause (viii) (all other tenant work, tenant allowances and
leasing commissions to be paid for and/or performed by the Partnerships or
General Partners except as set forth in Exhibits N-1 through N-12); (x) comply
with and perform all provisions and obligations to be complied with and/or
performed by Partnerships or General Partners under the Tenant Leases; (xi)
promptly upon receipt, provide Purchasers with copies of all written notices
delivered or received under the Tenant Leases, sales reports and correspondence
received from tenants, neighboring property owners, any insurance company which
carries insurance on its Property, from any Governmental Authorities or from any
other person or entity with respect to its Property or any portion thereof; and
(xii) use good faith best efforts prior to the Closing Date to satisfy all
conditions to Closing which are within the Managing Owners' and/or General
Partners' power to satisfy.
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2 COVENANTS OF ALL OWNERS AND GENERAL PARTNERS. Except as
permitted under Section 21.2, each Owner and each General Partner agrees that
from the date of this Agreement to the Closing Date, it will not encumber,
assign, transfer or convey any of the Partnership Interests which are the
subject of this Agreement; nor will any Owner or any General Partner take any
action, or omit to take any action, which would or could adversely affect the
Partnerships or the Properties or otherwise adversely affect the rights of
Purchasers under this Agreement.
3 TENANT ESTOPPEL CERTIFICATES. The Partnerships shall send to
each tenant a letter (in form acceptable to BPLP) and an estoppel certificate in
the form attached hereto as Exhibit P or, if applicable, in the form attached to
the subject Tenant Lease. Prior to sending out such estoppel certificates,
Managing Owners shall consult with Purchasers regarding the form of such
certificates. The Partnerships shall, immediately upon receipt, deliver to BPLP
copies of all correspondence or other matters received by the Partnerships in
connection with such estoppel certificates. Managing Owners shall use good
faith efforts to assist BPLP in obtaining delivery of all such certificates.
4 TAX APPEALS. There is not now pending, and Partnerships and
General Partners agree that they will not, without the prior written consent of
BPLP, institute prior to the Closing Date, any proceeding or application for a
reduction in the real estate tax assessment of the Properties for any tax year
unless required by a tenant pursuant to such tenant's Tenant Lease.
5 TERMINATION OF CONTRACTS. On or prior to the Closing Date,
Partnerships and/or General Partners, at their sole cost and expense, shall
terminate those Contracts and management, leasing and other similar agreements
relating to the Properties for which BPLP has requested termination by written
notice to the Partnerships and/or Managing Owners .
6 FINANCIAL STATEMENTS. As soon as available, but in no event
later than fifteen (15) days after the Closing Date, Managing Owners or General
Partners shall make available to BPLP and its accountants a Statement of Income
and Expense for each Property from January 1, 1998, through the Closing Date.
Managing Owners and General Partners shall cooperate with BPLP in any required
filings with the SEC.
7 ENVIRONMENTAL MATTERS.
---------------------
1 Assessments and Additional Assessments. During the Study
Period, BPLP shall have the right to have an environmental consultant or other
professional perform a "Phase I" environmental inspection and assessment (each,
-------
an "ASSESSMENT") of each Property and shall, after receipt of a final report for
the Assessment, deliver a copy thereof to a Managing Owner of the appropriate
Partnership. In the event: (a) the results of any Assessment is inconclusive,
in BPLP's sole judgment; or (b) the results of any Assessment reveal
environmental matters unacceptable to BPLP, in its sole judgment, BPLP, at its
sole option, shall have the right to extend the Study Period and the Closing
Date for thirty (30) days as to the Property which is
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the subject of such inconclusive Assessment (by giving notice to the Managing
Owners of such Partnership prior to the end of the Study Period) and to cause
additional so-called "Phase II" inspections and tests (each, an "ADDITIONAL
--------
ASSESSMENT") to be performed as determined by BPLP in its sole, but reasonable
judgment. BPLP shall provide to the appropriate Partnership(s) a copy of all
Additional Assessments upon completion thereof.
2 REPRESENTATIONS AND WARRANTIES. The Managing Owners and the General
Partners of each Partnership represent and warrant to Purchasers with respect to
the Property owned by such Partnership, which representations and warranties are
true and correct as of the date hereof, shall be true and correct in all
material respects on and as of the Closing Date, subject to Section 8.4, and
shall survive Closing for the period specified in Section 21.3, that, except as
may be specifically described in the Environmental Reports identified in
Exhibits I-1 and I-2 and in any Assessments and/or Additional Assessments which
may be obtained by Purchasers:
(a) During each Partnership's ownership of its Property, there have not
been and there are not now pending or, to General Partner's knowledge,
threatened: (i) claims, complaints, notices, or requests for information
received by such Partnership or General Partner with respect to any alleged
violation of any Environmental Law with respect to the Properties; or (ii)
claims, complaints, notices, or requests for information sent to such
Partnership or General Partner regarding potential or alleged liability under
any Environmental Law with respect to the Properties.
(b) To the best of each General Partner's knowledge, no conditions exist
at, on, or under its Property that, with the passage of time or the giving of
notice or both, would constitute a Hazardous Condition or give rise to liability
under any Environmental Law.
(c) Each Partnership is in compliance in all material respects with all
orders, directives, permits, certificates, approvals, licenses, and other
authorizations from applicable Governmental Authorities, if any, relating to
Environmental Laws with respect to its Property.
(d) To the best of each General Partner's knowledge, there are no above
ground tanks that are not in compliance with all Environmental Laws or any
underground storage tanks (herein referred to as "USTS") at its Property. No
Partnership has removed or abandoned any USTs at its Property nor does any
General Partner have any knowledge of the existence, abandonment or removal of
USTs at such Partnership's Property.
(e) To the best of each General Partner's knowledge, there are no
polychlorinated biphenyls ("PCBS") or friable or damaged asbestos at the
Properties; nor has any Partnership removed (or required or requested the
removal of) any PCBs or damaged or friable asbestos from its Property, nor has
any General Partner knowledge of the previous existence of any PCBs or damaged
or friable asbestos at such Partnership's Property.
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(f) To the best of each General Partner's knowledge, Exhibits I-1 and I-2
contain a true, complete and accurate listing of: (i) all material reports, test
results, analytical data, boring logs, and other studies undertaken by, at the
request of or on behalf of such Partnership and/or in such Partnership's (or its
affiliates' or agents') possession or control with respect to its Property and
the environmental conditions thereof; (ii) all material orders, directives and
notices of Governmental Authorities received by such Partnership or its agents,
consultants and contractors in connection with the environmental condition of
its Property; and (iii) all material correspondence to and from Governmental
Authorities and environmental consultants with respect to the environmental
condition of its Property (the foregoing are hereinafter collective referred to
as the "ENVIRONMENTAL REPORTS").
(g) To the best of each General Partner's knowledge, no property adjacent
to or in the vicinity of such Partnership's Property has a Hazardous Condition
in, on or under such property, except as may be specifically described in the
Environmental Reports and except for the site known as the ▇▇▇▇▇▇▇▇ Engineering
Site located in the vicinity of Parcels 1 and 2.
3 NO RELEASE. Notwithstanding anything to the contrary in this Agreement,
nothing in this Agreement shall be construed to release the Partnerships or the
Managing Owners nor to bar any action by Purchasers to implead the Partnerships
and/or Managing Owners nor to bar any other action by Purchasers against the
Partnerships or Managing Owners where Purchasers or the Partnerships and/or
Managing Owners may have liability to a third party or any Governmental
Authorities for an environmental matter or condition which existed at or near
any Property on or prior to the Closing Date.
4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF BPLP AND BPLLC.
-----------------------------------------------------------
1 BPLP and BPLLC represent and warrant to Owners, which representations
and warranties shall be true and correct as of the Effective Date, shall be true
and correct in all material respects on and as of the Closing Date, and shall
survive the Closing for the respective periods specified in Section 21.3, that:
(a) BPLP is duly formed and in good standing as a limited partnership of
the State of Delaware and is authorized to do business in the State of Maryland
and the State of Virginia. BPLLC is duly formed and in good standing as a
limited liability company of the State of Delaware and is authorized to do
business in the State of Maryland and the State of Virginia.
(b) BPLP has all requisite partnership power and authority to carry on
its business as it is currently being conducted, to accept assignment of the
Partnership Interests and/or fee simple title to the Parcels, as applicable and
as herein contemplated, and to execute, deliver and perform this Agreement and
all documents to be executed and delivered in regard to the consummation of the
transactions contemplated hereby and to perform fully its obligations
-29-
hereunder and thereunder. The execution, delivery and performance by BPLP of
this Agreement and all documents to be executed and delivered in regard to the
consummation of the transaction contemplated hereby have been or will be duly
authorized by all necessary partnership action on the part of BPLP, and BPLP
shall, upon request of the Owners, deliver evidence of such authority at or
prior to the Closing.
(c) This Agreement has been, and all documents to be executed and
delivered in regard to the consummation of the transaction contemplated hereby
will be at or prior to Closing, duly executed and delivered by BPLP and BPLLC,
as applicable, and (assuming the due authorization, execution and delivery by
the other parties hereto and thereto) this Agreement constitutes, and all
documents to be executed and delivered in regard to the consummation of the
transaction contemplated hereby when so executed and delivered will constitute,
legal, valid and binding obligations of BPLP and BPLLC, if a party thereto,
enforceable against BPLP and BPLLC, if a party thereto, in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(d) Neither the execution and delivery of this Agreement, nor compliance
with the terms and provisions hereof on the part of BPLP or BPLLC, as
applicable, and consummation of the transactions contemplated hereby, will
violate any statute, license, decree, order or regulation of any Governmental
Authority, or will, at the Closing Date, breach, conflict with or result in a
breach of any of the terms, conditions or provisions of any material agreement
or instrument to which BPLP or BPLLC is a party, or by which either of them is
or may be bound, or constitute a default thereunder, or result in the creation
or imposition of any lien, charge or encumbrance of any nature whatsoever upon,
or give to others any interest or rights in, the Units to be issued under the
terms of this Agreement. BPLP, BPLLC and BPI have each obtained, or will prior
to Closing obtain, all necessary consents, approvals, orders and authorizations
required in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein.
(e) Neither BPLP nor BPLLC has (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition by BPLP's or BPLLC's creditors,
(iii) suffered the appointment of a receiver to take possession of all or
substantially all of BPLP's or BPLLC's assets, (iv) suffered the attachment, or
other judicial seizure of all, or substantially all, of BPLP's or BPLLC's
assets, (v) admitted in writing its inability to pay its debts as they come due,
or (vi) made an offer of settlement, extension or compromise to its creditors
generally.
(f) The Units to be issued to Owners hereunder have been or will be prior
to Closing authorized for issuance to such Owners and, upon such issuance, will
be validly
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issued, fully paid and non-assessable and will not be subject to any preemptive
rights upon their issuance.
(g) No consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any Governmental Authority or
any other person is required to be made, including, but not limited to, any
governmental bodies, agencies, tenants, partners or lenders, in connection with
the execution, delivery and performance of this Agreement by BPLP and BPLLC.
(h) Unless and until the Board of Directors of BPI determines that it is
not in the best interest of BPI to qualify as a real estate investment trust (a
"REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), BPI,
by its execution of this Agreement, covenants that it shall operate its business
in a manner to qualify, and intends to make an election to qualify, as a REIT
under the Code commencing with its taxable year ending December 31, 1997, and
has not taken, or omitted to take, any action which would reasonably be expected
to result in a challenge to its status as a REIT, and, to the knowledge of BPLP
and BPLLC, no such challenge is pending or threatened.
(i) In addition to the initial Registration Documents filed by BPI (the
"BPI Registration Documents"), BPI has filed timely all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC,
and such reports, schedules and forms comply in all material respects with all
applicable requirements of the Securities Act of 1933 and the Securities and
Exchange Act of 1934 and the rules and regulations promulgated thereunder.
(j) Since the filing of the BPI Registration Documents, there has not
been an occurrence or circumstance that would have a material adverse effect on
the business, properties, assets, financial condition or results of operations
of BPI (a "Material Adverse Change"), nor has there been any occurrence or
circumstance that with the passage of time would reasonably be expected to
result in a Material Adverse Change.
2 Purchasers shall provide to Owners at Closing an opinion of counsel to
Purchasers, which may include in-house counsel, the form of which shall be
finalized during the Study Period.
3 POST-CLOSING AGREEMENTS.
(a) Definitions.
-----------
For purposes of this Section 11.3, the following terms shall have the
meanings hereinafter set forth:
(1) "Code" shall mean the Internal Revenue Code, as amended.
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(2) "Tax Protection Period" shall mean the ten (10) year span of time
commencing on the Closing Date and ending on the tenth (10th) anniversary of the
Closing Date.
(3) "Nonrecourse Debt" shall mean the type of indebtedness defined in
Section 465(b)(6) of the Code and shall specifically include the Retained
Indebtedness as set forth in the documents evidencing and securing such
indebtedness as of the Effective Date.
(4) "Bottom-Up Guarantee" shall mean a guaranty of debt having the
characteristic that the amount of the guaranty is reduced by any amount the
lender receives from any sale or disposition of the collateral including a
foreclosure sale (or the fair market value of any property the lender receives
by way of deed in lieu of foreclosure or any comparable transaction).
(5) "Protected Owners" shall mean those Owners of Partnership Interests in
Partnerships 4, 5 and 6, who receive all or a portion of the Equity Value of
such Partnership Interests in Units and who will be the beneficiaries of the Tax
Protection Agreements described in this Section 11.3. (Such Protected Owners are
sometimes differentiated herein as the "Protected Partnership 4 Owners",
"Protected Partnership 5 Owners" or "Protected Partnership 6 Owners", as the
case may be.)
(6) "Schedule of Required Debt Allocations" shall mean, for each of
Partnerships 4, 5 and 6, the schedule of required debt allocations for each
Protected Owner, which shall be furnished at Closing by each Partnership as an
exhibit to be attached to the respective Tax Protection Agreements. The
aggregate of the scheduled amounts shall not exceed the following amounts: for
Partnership 4, $14,650,000; for Partnership 5, $24,350,000; and for Partnership
6, $17,550,000. In no event shall the amount shown for any Protected Owner
exceed the amount which would be shown for such Protected Owner if every Owner
accepted only Units in exchange for his Partnership Interest. If and to the
extent that a Protected Owner receives cash in exchange for his Partnership
Interest in addition to Units, the amount of Nonrecourse Debt which must be
allocated to such Owner shall be proportionately reduced. The Schedule of
Required Debt Allocations for each Protected Owner shall reflect any reduction
in the debt to be allocated to such Protected Owner required by the preceding
sentence.
(a) Agreement with Protected Partnership 4 Owners. At the Closing,
---------------------------------------------
Purchasers shall enter into an agreement with the Protected Partnership 4 Owners
(the "Partnership 4 Tax Protection Agreement"), which shall include the
following provisions:
(i) Purchasers shall agree not to sell or dispose of Parcel 4 (or any
successor property acquired in a non-taxable transaction) in a transaction
that creates taxable income to the Protected Partnership 4 Owners during
the Tax Protection Period; provided, however that such prohibition shall
not apply to a sale or disposition to the existing Tenants of
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Parcel 4 pursuant to an option or other right presently contained in any such
Tenant's Lease which is triggered by the transactions contemplated in this
Agreement.
(ii) Purchasers shall agree to maintain Nonrecourse Debt in an amount such
that at least the amount set forth in the Schedule of Required Debt Allocations
will be allocated under Section 752 of the Code to each Protected Partnership 4
Owner continuously for the period from the Closing Date until December 31, 2004.
(iii) For the period beginning December 31, 2004 and continuing until the
end of the Tax Protection Period, to the extent that Nonrecourse Debt in the
amount specified in paragraph (b)(ii) above is not allocable under Section 752
of the Code to the Protected Partnership 4 Owners, Purchasers shall agree to
make continuously available to the Protected Partnership 4 Owners other debt of
BPLP for allocation under Section 752 of the Code at least equal to the amount
specified in the Schedule of Required Debt Allocations attached to the
Partnership 4 Tax Protection Agreement. The Protected Partnership 4 Owners shall
be allowed to execute and deliver Bottom-Up Guarantees or partial guarantees of
such debt, as may be required given the nature of such debt.
(iv) Purchasers shall agree that Section 704(c) allocations with respect to
Parcel 4 shall be made by the election of the so-called "traditional method"
with curative allocations limited solely to allocations of gain on sale of
Parcel 4 to the extent allocations of depreciation deductions with respect to
Parcel 4 to Partners in BPLP other than the Owners have been limited by the so-
called "ceiling rule", as described in Regulations Section 1.704-
3(c)(3)(iii)(B).
(b) Agreement with Protected Partnership 5 Owners. At the Closing,
---------------------------------------------
Purchasers shall enter into an agreement with the Protected Partnership 5 Owners
(the "Partnership 5 Tax Protection Agreement"), which shall include the
following provisions:
(i) Purchasers shall agree not to sell or dispose of Parcel 5 (or any
successor property acquired in a non-taxable transaction) in a transaction that
creates taxable income to the Protected Partnership 5 Owners during the Tax
Protection Period; provided, however, that such prohibition shall not apply to a
sale or disposition to the existing Tenants of Parcel 5 pursuant to an option or
other right presently contained in any such Tenant's Lease which is triggered by
the transactions contemplated in this Agreement.
(ii) Purchasers shall agree to maintain Nonrecourse Debt in an amount such
that at least the amount set forth in the Schedule of Required Debt Allocations
will be allocated under Section 752 of the Code to each Protected Partnership 5
Owner continuously for the period from the Closing Date until June 30, 2002.
(iii) For the period beginning June 30, 2002 and continuing until the end
of the Tax Protection Period, to the extent that Nonrecourse Debt in the amount
specified in
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paragraph (c)(ii) above is not allocable under Section 752 of the Code to the
Protected Partnership 5 Owners, Purchasers shall agree to make continuously
available to the Protected Partnership 5 Owners other debt of BPLP for
allocation under Section 752 of the Code at least equal to the amount specified
in the Schedule of Required Debt Allocations attached to the Partnership 5 Tax
Protection Agreement. The Protected Partnership 5 Owners shall be allowed to
execute and deliver Bottom-Up Guarantees or partial guarantees of such debt, as
may be required given the nature of such debt.
(iv) Section 704(c) allocations with regard to Parcel 5 shall be made by
the election of either the "traditional with curative" method specified in
(b)(iv) above or the "remedial" method as described in Regulations
Section 1.704-3(d) (but using a 40-year recovery period as provided by
Section 168(g)(2) of the Code), at the option of Purchasers, exercisable in
their sole discretion.
(c) Agreement with Protected Partnership 6 Owners. At the Closing,
---------------------------------------------
Purchasers shall enter into an agreement with the Protected Partnership 6 Owners
(the "Partnership 6 Tax Protection Agreement"), which shall include the
following provisions:
(i) Purchasers shall agree not to sell or dispose of Parcel 6 (or any
successor property acquired in a non-taxable transaction) in a transaction that
creates taxable income to the Protected Partnership 6 Owners during the Tax
Protection Period; provided, however, that such prohibition shall not apply to a
sale or disposition to the existing Tenants of Parcel 6 pursuant to an option or
other right contained in any such Tenant's Lease which is triggered by the
transactions contemplated in this Agreement.
(ii) Purchasers shall agree to maintain Nonrecourse Debt in an amount such
that at least the amount set forth in the Schedule of Required Debt Allocations
will be allocated under Section 752 of the Code to each Protected Partnership 6
Owner continuously for the period from the Closing Date until January 31, 2003.
(iii) For the period beginning January 31, 2003 and continuing until the
end of the Tax Protection Period, to the extent that Nonrecourse Debt in the
amount specified in paragraph (d)(ii) above is not allocable under Section 752
of the Code to the Protected Partnership 6 Owners, Purchasers shall agree to
make continuously available to the Protected Partnership 6 Owners debt of BPLP
for allocation under Section 752 of the Code at least equal to the amount
specified in the Schedule of Required Debt Allocations attached to the
Partnership 6 Tax Protection Agreement. The Protected Partnership 6 Owners
shall be allowed to execute and deliver Bottom-Up Guarantees or partial
guarantees of such debt, as may be required given the nature of such debt.
(iv) Section 704(c) allocations with regard to Parcel 6 shall be made by
the election of either the "traditional with curative" method specified in
(b)(iv) above or the "remedial" method as described in Regulations Section
1.704-3(d) (but using a 40-year recovery
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period as provided by Section 168(g)(2) of the Code), at the option of
Purchasers, in their sole discretion.
(d) Additional Provisions in Tax Protection Agreements. Each of he Tax
--------------------------------------------------
Protection Agreements with the Protected Owners shall also include the following
provisions:
(i) Such Agreement shall note that such Protected Owners would prefer that
BPLP's obligations pursuant to (b)(iii), (c)(iii) and (d)(iii) be satisfied by
making available qualified Nonrecourse Debt to such Protected Owners; in the
event that such debt is not made available, the preference of such Protected
Owners as to the nature of BPLP's debt that would be made available is as
follows:
(1) Bottom-Up Guarantee of recourse mortgage debt secured by
Parcels 4, 5 or 6.
(2) Bottom-Up Guarantee of recourse mortgage debt secured by
other properties.
(3) Partial guarantee of recourse unsecured debt.
It is understood and agreed that if commercially reasonable, BPLP will try to
accommodate such preferences in fulfilling its obligations under the Tax
Protection Agreements, but it shall have no liability if BPLP determines, in its
sole discretion, that it is not in BPLP's overall best interest to follow such
preferences in making debt available for the Protected Owners.
(i) In the event that Purchasers violate a Tax Protection Agreement,
thereby triggering recognition of taxable income to the Protected Owners prior
to the end of the Tax Protection Period, BPLP shall be obligated to proceed with
(1) or (2) below, at BPLP's option:
(ii) BPLP shall provide an interest-free loan to such Protected Owners in
the amount of the federal and state income taxes payable by such Protected
Owners on account of such event, which loan shall be repayable in full by such
Protected Owners at the end of the Tax Protection Period. Such loan shall be
secured by a pledge of Units having a value equal to 120% of the amount of such
loan, provided that the Protected Owners shall have the right to substitute
collateral acceptable to BPLP in its sole discretion in place of such Units
(iii) BPLP shall pay to such Protected Owners an amount equal to the
"Foregone Earnings" attributable to the federal and state taxes paid by such
Protected Owners on account of such event. For this purpose, "Foregone Earnings"
shall be the present value of the hypothetical interest income that would have
been earned on the amount of such taxes if they not had to be paid until the end
of the Tax Protection Period. Such hypothetical
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interest shall be calculated using an interest rate equal to 100 basis points
over the yield then being earned on U.S. Treasury Notes having a maturity co-
extensive with the remaining term of the Tax Protection Period. Such interest
rate shall also be used as the discount rate for purposes of determining the
present value of such hypothetical interest.
(iv) If the federal or state taxing authorities impose any interest and/or
penalties with respect to the taxes assessed against the Protected Owners solely
as a result of BPLP's violation of the Tax Protection Agreement, BPLP shall pay
to the taxing authorities the amount of any interest and penalties solely
attributable to such taxes.
(v) To the extent that the Protected Owners are required to pay additional
federal and state taxes as a result of any payment or loan made by BPLP to
Owners under the provisions of paragraphs (ii)(1), (ii)(2) and/or (iii) hereof
(such payment or loan referred to hereinafter as the "Taxable Benefit Amount"),
BPLP shall be obligated to pay to such Protected Owners an additional sum equal
to the Make Whole Amount. For purposes of this paragraph, the "Make Whole
Amount" shall be an amount such that the after-tax value of (x) the Taxable
Benefit Amount plus (y) the Make Whole Amount shall equal (z) the Taxable
Benefit Amount.
(a) To the extent that any Protected Owner redeems its Units, the Tax
Protection Period as to such Protected Owner with respect to such Units shall
end at the time of such redemption.
(b) Each of the Tax Protection Agreements is a separate agreement;
therefore, the satisfaction of BPLP's obligations to a Protected Owner under one
Tax Protection Agreement shall not constitute a satisfaction of BPLP's
obligations to that Protected Owner under another Tax Protection Agreement.
(c) Documentation. During the Study Period the Protected Owners and
--------------
Purchasers shall finalize the form of the Tax Protection Agreements to be
executed at the Closing pursuant to this Section 11.3.
1. CONDITIONS PRECEDENT.
--------------------
1 Purchasers' obligation to accept the assignment of the Partnership
Interests hereunder shall be subject to the full and timely satisfaction of the
following conditions (all or any of which may be waived, in whole or in part, by
Purchasers in writing in their sole discretion) on or prior to the Closing Date:
(a) The Partnership shall have received confirmation from the title
insurers that there have been no changes in the state of title to the Properties
since the end of the Study Period
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and that the title insurers are issuing, at Closing, endorsements to the
existing title policies or new owners' title policies, as required (reflecting
the release of indebtedness other than the Retained Indebtedness and bringing
the title current to the date of Closing) without exceptions other than the
Permitted Exceptions and with such additional endorsements as BPLP requires,
including, without limitation, zoning, comprehensive and non-imputation
endorsements. The Title Company shall have received payoff instructions from the
lenders of the Existing Indebtedness.
(b) Purchasers shall have received confirmation reasonably satisfactory to
Purchasers that all licenses, permits and similar authorizations required by all
Governmental Authorities relating to the ownership and operation of each of the
Properties are in full force and effect, except as set forth in Section 5.7(p).
Purchasers agree to use reasonable efforts to obtain such confirmations.
(c) Except to the extent of any written notice provided to Purchasers
pursuant to Section 8.4, (i) the representations and warranties made by Owners,
Managing Owners and General Partners in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as of
such date, (ii) Managing Owners, the Partnerships, and the General Partners
shall have performed all covenants and obligations and complied with all
conditions, obligations and agreements required by this Agreement to be
performed or complied with by them on or before the Closing Date, including, but
not limited to, the obligations set forth in Exhibits N-1 through N-12, and
(iii) each Owner and each Partnership shall have executed and delivered to
Purchasers a certificate, dated as of the Closing Date, to the foregoing effect.
(d) Purchasers shall have received an estoppel certificate, in the form
attached hereto as Exhibit P or as may be attached to the subject lease, or as
otherwise agreed upon by Purchasers and Managing Owners, without changes or
additional notations (other than as may be acceptable to Purchasers in their
sole and absolute discretion), dated not earlier than thirty (30) days prior to
the Closing Date, confirming the accuracy of the information set forth on
Exhibits N-1 through N-12 and such estoppel certificate, from each tenant
pursuant to the Tenant Leases. In the case of the tenant improvement work or
allowances described in Exhibits N-1, N-2 and N-3, each such Tenant shall
provide an estoppel or certification at Closing certifying that such work has
been completed to the satisfaction of such Tenant or certifying as to the status
of any incomplete work, as well as a statement as to the status of funding for
such work or such allowances, including any landlord liability for payment or
reimbursement for such work.
(e) Purchasers shall have received a certificate from Prudential
confirming the outstanding balances of the loans to Partnerships 5 and 6
respectively, the absence of any defaults under such loans other than such
defaults as may result from the transactions contemplated under this Agreement,
and such other matters as reasonably requested by Purchasers.
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(f) Purchasers shall have received estoppel certificates, in form and
substance satisfactory to Purchasers, from each declarant or beneficiary (except
for the beneficiary of the covenants relating to The Reston Center for Industry
and Government) of any covenants, conditions or restrictions or similar
instruments or cross-easement agreements affecting any of the Properties;
provided, however, that in the event Managing Owners are unable to obtain one or
more of such estoppel certificates, Managing Owners shall provide such indemnity
therefor as may be required by Purchasers. Managing Owners shall provide
estoppel certificates relating to monetary assessments under any covenants or
cross-easement agreements affecting any of the Properties, stating that all such
assessments that have become due and payable have been paid.
(g) Managing Owners shall have obtained and delivered to Purchasers copies
of certificates of occupancy (or the local equivalent) required for the use and
occupancy of the Properties, including, without limitation, all certificates of
occupancy for all Improvements on the Properties and/or all tenants, as
applicable, to the extent there have been any changes from and after the
delivery of such documents to Purchasers during the Study Period and except as
set forth in Section 5.7(p).
(h) BPLP shall have received an opinion of counsel of ▇▇▇▇▇▇, Flyer &
▇▇▇▇▇, the form of which shall be finalized during the Study Period.
(i) Each Owner receiving Units shall have delivered to BPLP an executed
Subscription Agreement in the form attached hereto as Exhibit F.
2 If any condition described in this Article 12 is not satisfied at the
times required and to the satisfaction of BPLP, in its sole and absolute
discretion, then BPLP may, at its sole option, (i) extend the Closing Date for
up to an additional thirty (30) days to allow for the satisfaction of such
conditions, or (ii) terminate this Agreement by giving written notice to Owners
at any time on or before the Closing. In the event that BPLP extends the Closing
Date in accordance with this Section 12.2, any documents which have been
executed by parties other than Owners and delivered to Purchasers by or on
behalf of Owners prior to the commencement of such extension and which are
otherwise in complete compliance with the terms and conditions of this Agreement
shall be deemed accepted by Purchasers at the time of commencement of such
extension in satisfaction of the requirement for such document or documents. If
BPLP extends the Closing Date and any such conditions remain unsatisfied at the
end of such extended period, then BPLP shall have the option, in its sole
discretion, to either terminate this Agreement or proceed to Closing. Upon
termination of this Agreement under this Article 12, the Deposit shall be
returned to BPLP, and neither party shall have any further rights, obligations
or liabilities under this Agreement (other than as set forth in Section 5.5 and
Article 23), except that if the failed condition is due to a material breach by
Owners of any of their representations, warranties or obligations hereunder,
then Owners shall be liable to Purchasers for BPLP's Due Diligence and Contract
Costs. The parties hereto acknowledge that the failure to satisfy any of the
conditions precedent in this Agreement shall not in and of itself constitute a
default by Owners under this Agreement, unless such failure is caused by Owners'
material breach of any of their
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respective representations, warranties or covenants set forth herein. The
conditions set forth in this Article 12 are for BPLP's sole benefit, and BPLP
may, in its sole discretion, waive (conditionally or absolutely) the fulfillment
of any one or more of the conditions, or any part thereof. Owners shall not take
or authorize, directly or indirectly, any action that modifies or changes the
circumstances upon which the conditions set forth in this Article 12 were deemed
satisfied or waived by BPLP without BPLP's prior written consent. In the event
that at any time prior to Closing circumstances arise which prevent Owners or
the Partnerships, as the case may be, from being able to deliver either an
assignment of the Partnership Interests in one or more of the Partnerships or
fee simple title to one or more of the Parcels, as the case may be
("Undeliverable Interests"), which circumstances are beyond the control of the
parties hereto, the parties agree that Closing shall proceed as to all other
Partnership Interests and/or Parcels and such Undeliverable Interests shall
remain subject to this Agreement for a period of one year. If the Owners of such
Undeliverable Interests are unable to deliver such Interests within such time,
the Undeliverable Interests shall no longer be subject to this Agreement and the
parties shall have no further obligations as to such Undeliverable Interests,
other than as set forth in Section 5.5 and Article 23.
3 CLOSING. Closing of the transactions contemplated hereby ("CLOSING")
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shall be held at the offices of Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, on or before February 1, 1998 (the
"CLOSING DATE"), but in no event earlier than January 5, 1998. The Closing Date
may be adjourned or postponed by BPLP from time to time, in its sole discretion,
as provided for in Section 10.1 and Article 12.
4 CLOSING MATTERS.
---------------
1 On or before the Closing Date, the Partnerships shall cure
(or escrow sufficient funds at Closing with the Title Company to cure) all
written notices described in Section 8.1(f) and issued on or before the Closing
Date.
2 On or before the Closing Date, the Partnerships shall cure
(or escrow sufficient funds at Closing with the Title Company to cure) all
violation notices issued with respect to the Properties, as described in Section
8.1(g).
3 On the Closing Date, Owners shall execute and deliver to BPLP
and BPLLC respectively assignments of the Partnership Interests, such
assignments to be substantially in the form attached hereto as Exhibit T.
4 On the Closing Date, Managing Owners shall update all
Exhibits to the extent necessary to make the Exhibits accurate in all material
respects as of Closing, and Purchasers shall add to Exhibits I-1 and I-2 a list
of Assessments or Additional Assessments obtained by Purchasers, if any.
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5 Partnerships shall give full possession of the Properties to
BPLP on the Closing Date, subject only to the rights of tenants under the Tenant
Leases and the rights of NASD as set forth in Exhibit O.
6 On the Closing Date, BPLP and BPLLC shall execute and deliver
(or cause to be delivered) to the Owners and the Partnerships the BPLP Closing
Documents and the BPLLC Closing Documents and the Owners and the Partnerships
shall execute and deliver (or cause to be delivered) to BPLP and BPLLC the
Owners Closing Documents and the Partnership Closing Documents, and each shall
deliver (or cause to be delivered) to the other such other documents, affidavits
and certificates as may be required by this Agreement.
7 Partnerships shall deliver all keys and master keys to all
locks located on the Properties to the extent that Partnerships have such keys,
properly tagged for identification, as well as combinations, card keys and cards
for the security systems, if any.
8 Purchasers shall either replace the bonds listed in Exhibit U
hereto, or shall reimburse Owners for the amounts of such bonds.
9 BPLP and Owners receiving Units shall execute and deliver an
Amendment to the BPLP Partnership Agreement at Closing, the form of which shall
be finalized during the Study Period, but which shall include an amendment to
Section 8.6 of the BPLP Partnership Agreement [get language from CBT].
10 On or before the Closing Date, all Owners shall execute and
deliver to the Title Company, an affidavit and indemnity agreement, in form
attached hereto as Exhibit W, as required by the Title Company for issuance of a
non-imputation endorsement to the owner's title policy for each Property.
11 On the Closing Date, Purchasers shall deliver to the Title
Company the consideration required under the terms of this Agreement.
12 ADJUSTMENTS.
-----------
1 The following items of expense shall be adjusted as of
midnight of the day immediately preceding the Closing Date:
(a) Real estate taxes and personal property taxes. Assessments, if any,
for Improvements completed prior to the Closing Date, whether assessment
therefor has been levied or not, shall be paid by the applicable Partnership or
allowance therefor made at the Closing by adjustment to the Equity Value of the
Partnership Interests of that Partnership.
(b) Utility charges. If there are meters on the Properties measuring the
consumption of utilities which are paid by Partnerships and not by any tenant,
Partnerships shall,
-40-
prior to the Closing Date, cause such meters to be read, and shall pay promptly
all utility bills for which Partnerships are liable. BPLP shall be liable for
and shall pay all utility bills for services relating to the period from and
after the Closing Date. To the extent required, reconciliation of such charges
under the terms of the Tenant Leases will be done as soon as possible after
Closing.
(c) All charges payable with respect to any Contracts relating to the
Properties which continue in effect after the Closing and all other costs and
expenses of operating the Properties which are customarily prorated in similar
transactions.
(d) To the extent that any tenant is entitled to any rebate, concession,
deduction or offset under its Tenant Lease, such entitlement shall be included
as a closing adjustment. Further, except as to New Leases (as hereinafter
defined), to the extent that any tenant is entitled to future tenant
improvements work to be paid for by the landlord under such tenant's Tenant
Lease, the amount of landlord's liability for such work shall be included as a
closing adjustment by reducing the Equity Value for the Partnership Interests of
the Partnership which owns the Parcel which is subject to such Tenant Lease.
Monthly rent and tenant charges (for real estate taxes, insurance, utilities,
common area maintenance and building expenses) payable by tenants shall be
adjusted as of 12:01 a.m. on the Closing Date, and any such rent or tenant
charges prepaid to Partnerships (including, a pro rata portion of the rent and
tenant charges paid for the month in which the Closing occurs) and other credits
for the account of tenants shall be paid to BPLP by adjustment to the Equity
Value. Adjustments will be made on a reasonable basis for estimated operating
expenses paid by Tenants as additional rent. Rent and such tenant charges which
are due but uncollected as of the Closing Date shall not be adjusted, but, with
respect to tenants whose rent is no more than sixty (60) days in arrears,
provided Partnerships provide in a timely manner all back-up materials,
reconciliations and other information requested by tenants with respect thereto,
BPLP shall remit promptly to or on behalf of Owners any such amounts actually
paid by such tenants to BPLP (provided that such amounts shall be in excess of
the then current rent and other charges due) within ninety (90) days after the
Closing Date. BPLP's obligations with respect to such delinquent rent and other
charges shall be limited to billing the applicable tenant therefor on no more
than two (2) occasions. Notwithstanding anything to the contrary in the
foregoing, Owners retain all rights against former tenants whose Tenant Leases
have expired or have been terminated and possession discontinued prior to the
Closing Date; provided, however, in no event shall Owners be entitled after the
Closing Date to institute any litigation or other judicial proceedings against
any tenant that is in occupancy at any of the Properties on the Closing Date
with respect to any obligations or liabilities of such tenant relating to the
Properties or arising out of such tenant's occupancy thereof. BPLP shall have no
further obligation or liability to Owners under this subsection after the
expiration of said ninety (90) day period. No adjustment shall be made with
respect to percentage or overage rent. Except as otherwise adjusted, Owners
shall remain responsible and liable to BPLP to refund to tenants (or reimburse
BPLP for any refunds to tenants of) any excess payments made by tenants for real
estate taxes (including any arising as a result of tax appeals), insurance,
utility, common area maintenance and building expenses applicable to the period
prior to the Closing Date, such responsibility and liability to survive Closing
until such time as all audit rights of tenants under
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Tenant Leases with respect to periods prior to the Closing Date shall have
expired and all amounts owing to tenants as a result of any such audits shall
have been fully paid by Owners to the applicable tenant (directly or by
reimbursement to BPLP). The parties agree that in the event that any tax appeals
relating to any of the Properties, whether now existing or hereafter filed,
results in any rebate of real property or other taxes paid for such Property,
such rebate (after deducting therefrom all costs and expenses of procuring the
same) shall be prorated as of the Closing Date between the respective Owner and
BPLP based on respective periods of ownership.
(e) At Closing, BPLP shall reimburse Owners for all utility deposits
relating to the Properties. All prepaid rentals, tenant security deposits,
whether cash or non-cash (including security deposits for tenants who owe rent
or other charges on the Closing Date), together with all interest required to be
paid thereon which has accrued through the Closing Date, shall be delivered to
BPLP on the Closing Date. Promptly following the Closing Date, the Managing
Owners shall cause any tenants who have posted letters of credit as security
deposits to have such security deposits amended or re-issued, if necessary, so
that they run to the benefit of BPLP, if applicable, as landlord under the
Tenant Leases.
(f) New Leases. The parties acknowledge that the leases listed in Exhibit
V_ (the "New Leases") were finalized after the time at which Owners and
Purchasers agreed on the Exchange Values set forth in Exhibit D. To the extent
that any Partnership has advanced any sums on account of these New Leases prior
to Closing, an adjustment will be made at Closing by increasing the Equity Value
of the Partnership Interests in such Partnership; Purchasers shall bear all
other costs, such as leasing commissions, tenant improvement work, rebates or
other concessions, related to such New Leases.
(g) Association Assessments. Prepaid association assessments shall be
adjusted as of the Closing Date by an increase in the Equity Value of the
respective Partnership Interests. Association assessments which are due and
payable as of the Closing Date shall be paid by the Owners of the respective
Partnership Interests or allowance therefor made at Closing by a decrease in the
Exchange Value of the respective Partnership Interests.
(h) Existing Partnership Bank Accounts. To the extent any Partnership
reserve or other bank accounts are to be transferred to Purchasers at Closing,
the Equity Value of the Partnership Interests in such Partnership shall be
increased by an amount equal to the funds in such accounts as of the Closing
Date.
(i) Purchasers shall be solely responsible for the following: (i) all
costs necessary to provide Purchasers with the required endorsement to the
existing title insurance policies or new owner's title policies, as required,
for the Properties, including, without limitation, all expenses of examination
of title, conducting settlement, escrow fees, title clearance, title insurance
commitments, endorsements (including, without limitation, zoning, comprehensive
and non-imputation) and premiums; and (ii) all costs of preparation of ALTA
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surveys for the Properties. Any costs of state, county, city, local, municipal
and township recording and transfer taxes with respect to the conveyance of the
Properties shall be paid in accordance with the provisions of Article 24.
Purchasers and Owners shall each pay their respective legal fees and expenses
incurred in connection with the negotiation of this Agreement and all related
documents, and in addressing each such party's tax and securities issues.
Purchasers shall pay the costs of conducting all environmental tests and studies
of the Properties. The appropriate Partnerships shall pay all costs associated
with (i) repaying all indebtedness secured by the Properties except for any
costs relating to the Prudential Loans and subject to the limitations set forth
in Section 3.8, including, without limitation, any prepayment premiums
associated therewith, (ii) any restructuring or "rolling up" of any of the
partnerships constituting Owners; (iii) any gains taxes, income taxes or similar
taxes owing as a result of the transactions contemplated hereby; and (iv) any
costs associated with terminating any interest rate "swap" agreements which the
BPLP does not elect to have assigned to the Purchasers at Closing, and all such
costs and expenses and any other transactions costs of the Partnerships shall be
treated as a reduction from the Equity Value of the Partnership Interests of the
Partnerships respectively.
(j) Notwithstanding any of the foregoing to the contrary, in the event
the net adjustments made pursuant to this Article 15 result in additional sums
being payable to Owners, the Equity Value of the respective Partnership
Interests shall be increased by such amount, and in the event the net
adjustments made pursuant to this Article 14 result in additional sums being
payable by Owners, the Exchange Value shall be decreased accordingly.
2 DEFAULT BY PURCHASERS. If this transaction fails to close as a
---------------------
result of a material default by the Purchasers with respect to any of the terms
of this Agreement, and such material default continues for a period of ten (10)
days after Owners notify BPLP in writing of such default, Owners' sole and
exclusive remedy for such material default shall be the right to cancel and
terminate this Agreement and receive and retain the Deposit. Unless Owners waive
the Purchasers' default in writing within five (5) days after the expiration of
the 10-day period specified in the preceding sentence, or such default is cured
within such 10-day period, this Agreement shall automatically terminate
effective fifteen (15) days after the notice of default is given without the
necessity of further notice being given. Upon such termination, each party shall
be released from all duties or obligations contained herein and the Title
Company shall immediately pay the Deposit to Owners as liquidated damages, it
being understood and agreed that Owners are hereby releasing and/or waiving any
right they might have to either specifically enforce this Agreement or to ▇▇▇
for damages. Owners have agreed to this liquidated damage provision because of
the difficulty of ascertaining Owners' actual damages given the uncertainties of
the real estate market, fluctuating property values and differences of opinion
with respect to such matters.
3 DEFAULT BY OWNERS.
-----------------
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(a) If any of the representations and warranties made by Owners in this
Agreement are inaccurate or incorrect in any material respect on the date made
or deemed made, or if Owners fail to perform their covenants, obligations or
agreements under this Agreement and such failure is not cured on or before the
earlier of fifteen (15) days after written notice by BPLP to Owners or the
Closing Date, BPLP shall have the right, at its sole option, to: (i) terminate
this Agreement, whereupon the Deposit shall be returned to BPLP, Owners shall
reimburse Purchasers on demand for all of BPLP's Due Diligence and Contract
Costs and neither party shall have any further right or liability to the other
under this Agreement except as may be specifically set forth in Section 5.5 and
Article 23; (ii) proceed under Section 17(b) below, to the extent applicable,
and/or (iii) pursue any legal or equitable remedies to which BPLP may be
entitled on account of the foregoing, including, without limitation, specific
performance; provided, however, that in no event shall the aggregate amount
payable by Owners under this Section 17(a) exceed the sum of One Million Eight
Hundred Thousand Dollars ($1,800,000). Notwithstanding the foregoing, in the
event that Closing occurs, nothing contained herein shall limit Purchasers'
remedies or the amount of damages Purchasers may recover from Owners pursuant to
Section 18.1.
(b) In the event that, at any time prior to Closing, any of the Owners
breaches in any material regard any of its respective representations,
warranties or covenants relating to a particular Partnership or Parcel under
this Agreement, which breach is not cured within fifteen (15) days after notice
thereof ("Defaulted Interests"), Purchasers may elect not to acquire such
Defaulted Interests by providing written notice of such election to the Owners
of the Defaulted Interests, in which event the Defaulted Interests shall no
longer be subject to this Agreement, but this Agreement shall otherwise continue
in full force and effect with respect to the other Partnerships and the related
Parcels, and the parties shall have no further rights or liabilities on account
of such Defaulted Interests.
(c) INDEMNIFICATION.
---------------
1 The Managing Owners hereby agree to jointly and severally indemnify
and hold Purchasers harmless from and against: (i) any loss, cost, liability or
damage suffered or incurred by Purchasers because any representation or warranty
by any Owner shall be false or misleading in any material respect on the date
made or deemed made; (ii) any loss, cost, liability or damage suffered or
incurred by Purchasers because of any Owner's failure to timely perform any of
its covenants, obligations or agreements under this Agreement; (iii) any and all
liabilities, claims, demands, losses, suits and judgments of any kind or nature
(except those items which under the terms of this Agreement specifically become
obligations of Purchasers), brought by third parties and based on events
occurring on or before the Closing Date and which are in any way related to the
ownership, maintenance or operation of the Properties, and all expenses related
thereto, including, but not limited to, court costs and attorneys' fees; and
(iv) all reasonable costs and expenses (including reasonable attorneys' fees)
incurred by Purchasers in connection with any action, suit, proceeding, demand,
assessment or judgment incident to any of the matters
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indemnified against in this Section 18.1. As to any claim, action or other
matter subject to the foregoing indemnity, the Managing Owners shall assume the
defense thereof with counsel acceptable to Purchasers. Such claim, action or
other matter shall not be settled without the approval of both Purchasers and
the Managing Owners.
2 Purchasers hereby agree to indemnify and hold Owners harmless from
and against any loss, cost, liability or damage to person or the Improvements at
the Properties suffered or incurred by Owners as a result of Purchasers' entry
onto any Property prior to Closing, and all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by Owners in connection with any
action, suit, proceeding, demand, assessment or judgment incident to any of the
matters indemnified against in this Section 18.2. Further, provided Closing
occurs hereunder, Purchasers hereby agree to indemnify and hold Owners harmless
from and against: (i) any loss, cost, liability or damage suffered or incurred
by Owners because any representation or warranty by either Purchaser shall be
false or misleading in any material respect on the date made or deemed made;
(ii) any loss, cost, liability or damage suffered or incurred by Owners because
of Purchasers' failure to timely perform any of its covenants, obligations or
agreements under this Agreement; and (iii) any and all liabilities, claims,
demands, losses, suits and judgments of any kind or nature, brought by third
parties and based on events occurring subsequent to the Closing Date and which
are in any way related to the ownership, maintenance or operation of the
Properties, and all expenses related thereto, including, but not limited to,
court costs and attorneys' fees. As to any claim, action or other matter subject
to the foregoing indemnity, Purchasers shall assume the defense thereof with
counsel acceptable to Managing Owners. Such claim, action or other matter shall
not be settled without the approval of both Purchasers and the Managing Owners.
Purchasers hereby agree to enter into an agreement at Closing indemnifying the
General Partners for any recourse obligation which survives Closing that they
may have under the documents evidencing and securing the Retained Indebtedness,
to the extent of and solely as to events which occur after Closing.
3 DAMAGE, DESTRUCTION OR CONDEMNATION.
-----------------------------------
1 In the event of any loss, damage or destruction to any Property or
any part thereof prior to Closing that would cost Five Hundred Thousand Dollars
($500,000) or less to repair or replace as estimated by a person or company
jointly agreed to by Purchasers and Managing Owners, the Exchange Value for such
Partnership Interests shall be reduced by the estimated cost of such repairs,
the transaction contemplated herein shall be consummated without further
reduction of the Exchange Value and Owners shall receive such insurance proceeds
as are paid on the claim of loss. Notwithstanding the foregoing, at Purchasers'
option, Purchasers may elect to receive all such insurance proceeds, and in such
case, each affected Owner shall assign to Purchasers its right to receive said
proceeds (and credit Purchasers with any deductible related thereto) and there
shall be no reduction in the Exchange Value.
2 If the estimated cost of repairing or replacing any loss, damage or
destruction to any Property exceeds Five Hundred Thousand Dollars ($500,000) but
is less than
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Fifty Million Dollars ($50,000,000) as estimated as aforesaid, Purchasers shall
have the right to delete such Property from this Agreement and all rights,
obligations and liabilities of the parties hereto as to such Property shall
thereupon terminate. If, however, Purchasers elect to consummate the acquisition
of the Partnership Interests as to such affected Property, the Exchange Value of
such Partnership Interests shall be reduced by the estimated cost of such
repairs, the transaction contemplated herein shall be consummated without
further reduction of the Exchange Value, and Owners shall receive such insurance
as is paid on the claim of loss. Notwithstanding the foregoing, at Purchasers'
option, Purchasers may elect to receive all such insurance proceeds, and in such
case, each affected Owner shall assign to Purchasers its right to receive said
proceeds (and credit Purchasers with any deductible related thereto) and there
shall be no reduction in the Exchange Value.
3 If the estimated cost of repairing or replacing any loss, damage or
destruction to any Property exceeds Fifty Million Dollars ($50,000,000), either
Purchasers or Owners may elected to terminate this Agreement by written notice
of such election to all other parties. In the event of such termination, the
Deposit shall be returned to Purchasers and all rights, obligations and
liabilities of the parties hereunder shall be released and discharged other than
the obligations set forth herein in Section 5.5 and Article 23. If neither
Purchasers nor Owners elect to terminate this Agreement in accordance with this
Section 19.3, the Exchange Value of the Partnership Interests for the
Partnership(s) owning such affected Property shall be reduced by the estimated
cost of such repairs, the transaction contemplated herein shall be consummated
without further reduction of such Exchange Value, and Owners shall receive such
insurance as is paid on the claim of loss. Notwithstanding the foregoing, at
Purchasers' option, Purchasers may elect to receive all such insurance proceeds,
and in such case, each affected Owner shall assign to Purchasers its right to
receive said proceeds (and credit Purchasers with any deductible related
thereto) and there shall be no reduction in the Exchange Value.
4 In the event that any condemnation proceedings are instituted, or
notice of intent to condemn is given, with respect to any Property or portion of
any Property, Managing Owners shall promptly notify Purchasers thereof. In the
event that such proposed condemnation could or would have an effect on the
Property or on the use and operation of the Property (the "Condemnation
Consequences") estimated by Purchasers to be Five Hundred Thousand Dollars
($500,000) or less, the Exchange Value for the Partnership Interests in the
Partnership which owns the Property which is the subject of the condemnation
proceedings shall be reduced by the estimated Condemnation Consequences, the
transaction contemplated herein shall be consummated without further reduction
of the Exchange Value, and Owners shall receive any condemnation award or
compensation. Notwithstanding the foregoing, at Purchasers' option, Purchasers
may elect to receive such condemnation award or compensation, and in such case,
each affected Owner shall assign to Purchasers its right to receive such award
or compensation and there shall be no reduction in the Exchange Value.
5 If the value of the Condemnation Consequences is estimated by
Purchasers to be an amount which exceeds Five Hundred Thousand Dollars
($500,000) but is less than Fifty
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Million Dollars ($50,000,000), Purchasers shall have the right to delete such
affected Property from this Agreement and all rights, obligations and
liabilities of the parties hereto as to such Property shall thereupon terminate.
If, however, Purchasers elect to consummate the acquisition of the Partnership
Interests as to such affected Property, the Exchange Value of such Partnership
Interests shall be reduced by the estimated value of the Condemnation
Consequences, the transaction contemplated herein shall be consummated without
further reduction of the Exchange Value, and Owners shall receive such
condemnation award or compensation as is paid on account of the condemnation.
Notwithstanding the foregoing, at Purchasers' option, Purchasers may elect to
receive such condemnation award or compensation, and in such case, each affected
Owner shall assign to Purchasers its right to receive such award or compensation
and there shall be no reduction in the Exchange Value.
6 If the value of the Condemnation Consequences is estimated by
Purchasers to be an amount in excess of Fifty Million Dollars ($50,000,000),
either Purchasers or Owners may elect to terminate this Agreement by written
notice of such election to all other parties. In the event of such termination,
the Deposit shall be returned to Purchasers and all rights, obligations and
liabilities of the parties hereunder shall be released and discharged other than
the obligations set forth in Section 5.5 and Article 23. In the event that
neither Purchasers nor Owners elect to terminate this Agreement under this
Section 19.6, the Exchange Value of the affected Partnership Interests shall be
reduced by the estimated value of the Condemnation Consequences, the transaction
contemplated herein shall be consummated without further reduction of the
Exchange Value, and Owners shall receive such condemnation award or compensation
as is paid on account of the condemnation. Notwithstanding the foregoing, at
Purchasers' option, Purchasers may elect to receive the condemnation award or
compensation, and in such case, each affected Owner shall assign to Purchasers
its right to receive said award or compensation and there shall be no reduction
in the Exchange Value.
7 No Partnership shall agree to or accept any compromise or
condemnation award without obtaining Purchasers' written approval thereof. In
the event any Owners are entitled to receive a compromise or condemnation award
under the terms of this Agreement, Purchasers shall not agree to or accept such
compromise or condemnation award without such Owners' written approval thereof.
For purposes of this Article 19, a condemnation shall be deemed to include any
governmental action which could limit or render inconvenient the current access
to any Property.
8 BROKERS. Each Owner, on the one hand, and the Purchasers, on the other,
-------
hereby represent and warrant to the other that it has not authorized any
broker, agent or finder to act on its behalf in connection with the transaction
contemplated by this Agreement other than MGA. Owners shall be responsible for
claims made by MGA, if any, in connection with this transaction, not otherwise
provided for herein. Each party agrees that it shall indemnify, defend and save
the other harmless from and against any cost, expense, claim, loss, liability or
damages, including reasonable attorneys' fees and court costs, resulting from a
breach of the foregoing representation
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and warranty. The provisions of this Article 20 shall survive Closing or
termination of this Agreement for the period specified in Section 21.3.
9 MISCELLANEOUS.
-------------
1 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given/received: (i) on the date delivered if delivered personally; (ii) the next
Business Day after deposit with a recognized overnight courier service when
marked for delivery on the next Business Day; (iii) three (3) days after mailing
if sent by registered or certified United States mail, properly addressed and
postage pre-paid; or (iv) upon completion of transmission (which is confirmed by
telephone or a statement generated by the transmitting machine) if sent by
facsimile to compatible equipment in the possession of the recipient, and
addressed to the party for whom it is intended at the address hereinafter set
forth:
(A)
IF TO THE PARTNERSHIP
AND/OR MANAGING
OWNERS:
To each c/▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ and
Associates, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇, Flyer & ▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
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(B)
IF TO OWNERS:
To the addresses in Exhibit U
WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇, Flyer & ▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
(C)
IF TO BPLP:
c/o Boston Properties, Inc.
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▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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WITH A COPY TO:
Boston Properties, Inc.
▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
AND TO: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Any party may designate a change of address by written notice to the other
in accordance with the provisions set forth above, which notice shall be given
at least ten (10) days before such change of address is to become effective.
1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the respective personal representatives, heirs,
successors and assigns of the parties. Managing Owners shall be jointly and
severally liable hereunder. No Owner shall have any right to assign its rights
or obligations under this Agreement without the prior written consent of
Purchasers; provided, however, that Purchasers' consent shall not be required
for the assignment by any Owner of its respective rights and obligations under
this Agreement to an entity wholly owned by such Owner or to a partnership or
limited liability company consisting solely of family members of such Owner.
Purchasers shall have no right to assign their respective rights or obligations
under this Agreement without the prior written consent of Owners; provided,
however, no Owner's consent shall be required for any assignment by BPLP or
BPLLC of its respective rights and obligations under this Agreement to any
person or entity that is an affiliate or subsidiary of BPLP or that is otherwise
owned or controlled by BPLP, so long as such assignment will not interfere with
Purchasers' ability to issue Units pursuant to this Agreement. Any assignment
or attempted assignment of this Agreement or the rights and obligations
hereunder other than strictly in accordance with the provisions of this Section
21.2 shall be null and void and of no force or effect. Notwithstanding the
foregoing, any assignment made in accordance with this Section 21.2 shall not
release any of the parties hereto from any liabilities or obligations hereunder.
2 SURVIVAL. The representations and warranties set forth in
Sections 7.1, 7.2, 7.3 and 10.2 and in Article 20 of this Agreement, the
provisions of Section 10.3, and any indemnification related to any of the
foregoing (including, without limitation, any indemnification pursuant to
Section 18 hereof), shall survive Closing indefinitely ,subject to any
applicable statute of limitations. Owners' responsibility and liability
pursuant to the last sentence of Section 23.4 and pursuant to Section 15.1(d)
shall survive Closing for the period specified in such Section. All other
representations, warranties, covenants, agreements and indemnities set forth in
or made pursuant to this Agreement and any indemnification related thereto under
Section 18 hereof or otherwise shall remain operative, and shall survive the
Closing under this Agreement, only with respect to claims made in writing by
Purchasers to Owners on or before
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April 1, 1999. In addition to all rights which BPLP may have against Owners
receiving Units, BPLP shall have the right to set-off the amount of any final
judgment obtained against any Owner on account of a breach of this Agreement
against any dividends or distributions payable to such Owner with respect to
Units issued pursuant to this Agreement. For purposes of the preceding sentence,
a judgment will be considered final only after it has been affirmed on appeal or
the time for filing an appeal has expired.
3 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the state of Virginia, excluding conflicts of laws
principles.
4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument; provided, however, in no
event shall this Agreement be effective unless and until signed by all parties
hereto.
5 POST CLOSING COOPERATION. Following the Closing and upon
reasonable notice by any General Partner or Managing Owner, BPLP covenants and
agrees to provide (or cause to be provided) to the representatives, employees,
counsel, accountants and other authorized agents of such General Partner or
Managing Owner reasonable access, during normal business hours, to all books and
records and other materials with respect to the Partnerships and/or the Parcels,
including, without limitation, due diligence materials delivered by the Managing
Owners (or their representatives) to Purchasers during the Study Period or
otherwise under this Agreement relating to periods prior to Closing or any
obligation of the General Partners under this Agreement (the "Records and
Materials") in connection with the preparation of tax returns and financial
reporting matters, audits and other business purposes. In connection therewith,
BPLP covenants and agrees to permit the General Partners and their
representatives to examine and copy the Records and Materials to the extent
reasonably requested and at the sole expense of the General Partners and
Managing Owners, provided such actions do not unreasonably disrupt the normal
course of business of BPLP or the Partnerships. BPLP further covenants and
agrees to use reasonable efforts to cooperate with the General Partners and
Managing Owners in connection with any tax audit or similar proceedings
involving or otherwise relating to any Partnership or any Owner with regard to a
Partnership or the transactions contemplated herein, provided that BPLP shall
not incur any liability on account thereof and all costs and expenses incurred
in affording such cooperation are paid by the affected Owner.
6 RISK OF LOSS. Subject to the provisions of Article 19, the risk of
loss or damage from fire or other casualty until the Closing is assumed by the
Partnerships.
7 FURTHER ASSURANCES. Owners agree that they will, at any time
and from time to time after the Closing Date, upon request of Purchasers, do,
execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be
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required for the better assigning, transferring, granting, assuring and
confirming to Purchasers, or to their respective successors and assigns, or for
aiding and assisting in collecting and reducing to possession, any or all of the
assets or property being contributed to Purchasers pursuant to this Agreement.
Managing Owners agree to grant BPLP, and its agents and certified public
accountants, access during normal business hours to the Owners' books and
records with respect to the Partnerships and the Properties for the purpose of
reviewing and auditing the same for a period of one (1) year following the
Closing Date.
8 RECITALS; EXHIBITS. Each and all of the recitals set forth above and
the exhibits attached hereto are hereby incorporated into this Agreement by
reference.
9 RULES OF CONSTRUCTION. Section captions used in this Agreement are
for convenience only and shall not affect the construction of the Agreement. All
references to "Articles" and "Sections," without reference to a document other
than this Agreement are intended to designate articles and sections of this
Agreement, and the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section, unless specifically designated otherwise. The use of the term
"including" shall mean in all cases "including but not limited to," unless
specifically designated otherwise. No rules of construction against the drafter
of this Agreement shall apply in any interpretation or enforcement of this
Agreement, any documents or certificates executed pursuant hereto, or any
provisions of any of the forgoing.
10 TIME OF ESSENCE. Time is important to all parties in the performance
of this Agreement, and the parties have agreed that strict compliance is
required as to any date set out in this Agreement.
11 PRORATION OF DIVIDENDS. With respect to Units issued pursuant to this
Agreement, the quarterly dividends distributed subsequent to the issuance of
such Units shall be prorated on a per diem on the basis of the number of days in
such quarter occurring from and after the Closing Date.
12 JOINT AND SEVERAL LIABILITY. Notwithstanding anything herein to the
contrary, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and the Partnerships are jointly and severally liable for all obligations
and liabilities of Owners and Partnerships hereunder.
13 ENTIRE AGREEMENT. This Agreement and the exhibits attached hereto
----------------
and thereto contain the entire agreement between the parties relating to the
contribution of the Partnership Interests, all prior negotiations between the
parties, including, without limitation, any letter of intent (including all
amendments or modifications thereof), are merged in this Agreement, and there
are no promises, agreements, conditions, undertakings, warranties or
representations, oral or written, express or implied, between them other than as
herein set forth. No change or modification of this Agreement shall be valid
unless the same is in writing and signed by the
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parties hereto. No waiver of any of the provisions of this Agreement and other
agreements referred to herein shall be valid unless in writing and signed by the
party against whom it is sought to be enforced.
14 CONFIDENTIALITY.
---------------
1 Except as provided otherwise in this Section 23.1, Purchasers
and Owners, for the benefit of each other, hereby agree that neither of them
will release or cause or permit to be released to the public any press notices,
publicity (oral or written) or advertising promotion relating to, or otherwise
publicly announce or disclose or cause or permit to be publicly announced or
disclosed, in any manner whatsoever, the terms, conditions or substance of this
Agreement or the transactions contemplated herein, without first obtaining the
consent of the other party hereto which shall not be unreasonably withheld.
Owners, being aware that BPI's securities are traded on the New York Stock
Exchange, acknowledge that BPLP and BPI may be compelled by legal requirements
to issue a public press release announcing that it has entered into this
Agreement and stating the material terms hereof. BPLP agrees to send a copy of
such press release directly to Managing Owners at least 24 hours prior to the
time when BPLP issues such press release to the public; and Owners consent to
the dissemination of such press release and to all such additional statements
and disclosures BPLP may reasonably make in responding to inquiries arising as a
result of any such press release. Owners likewise consent to any disclosure of
this Agreement which BPLP reasonably believes is required by law or which is
recommended in good faith by securities counsel to BPLP.
2 It is understood that the foregoing shall not preclude any party from
discussing the substance or any relevant details of the transactions
contemplated in this Agreement on a confidential basis with such party's spouse
or any of its attorneys, accountants, professional consultants, financial
advisors, rating agencies, or potential lenders, as the case may be, or prevent
any party hereto from complying with applicable laws, including, without
limitation, governmental regulatory, disclosure, tax and reporting requirements.
3 Purchasers shall indemnify and hold Owners harmless, and Owners shall
indemnify and hold Purchasers and the affiliates of BPLP harmless, from and
against any and all actual direct claims, demands, causes of action, losses,
damages, liabilities, costs and expenses (including, without limitation,
attorneys' fees and disbursements) suffered or incurred by the other party and
proximately caused by a breach by Purchasers or Owners, as the case may be, of
the provisions of this Article 23; but this Section 23.3 will not entitle either
Purchasers, Owners, Purchasers' affiliates or Owners' affiliates to recover
consequential damages.
4 In addition to any other remedies available to Owners and Purchasers,
Owners and Purchasers shall each have the right to seek equitable relief,
including, without limitation, injunctive relief or specific performance,
against the other party or their representatives in order to enforce the
provisions of this Agreement. The provisions of this
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Section 23.4 shall survive the termination of this Agreement for one (1) year
following the Closing.
5 OPTION TO ACQUIRE PARCELS. Pursuant to Section 2.2 hereof,
-------------------------
Purchasers have the option to elect to acquire fee title to certain of the
Parcels, in lieu of acquiring the Partnership Interests in the Partnership or
Partnerships which own such Parcels. Purchasers shall notify Owners in writing
of their intent to elect such option, designating which Parcel or Parcels are to
be so acquired. Subject to the terms and conditions set forth herein, each
Partnership agrees to convey fee title to the Parcel it owns to BPLP in the
event of such election by Purchasers. Upon receipt of such written notice from
Purchasers, the General Partners of any Partnership so designated shall provide
Purchasers with such additional representations and warranties as may reasonably
be required by Purchasers. In the event that a Parcel is conveyed to Purchasers
under the terms of this Article 24, the selling Partnership and BPLP shall each
pay one-half of the applicable transfer and recordation taxes. Notwithstanding
the foregoing, it is understood and agreed that it is the parties' joint
intention to structure this transaction as a transfer of partnership interests
and, therefore, Purchasers may not proceed with the election provided in Section
2.2 as to any Parcel unless they have substantial reasons for making such
election.
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