Exhibit 10.11
OPTION AGREEMENT
BETWEEN
BOSTON PROPERTIES LIMITED PARTNERSHIP
AND
SQUARE 36 PROPERTIES LIMITED PARTNERSHIP
Dated as of April __, 1997
TABLE OF CONTENTS
Page
----
ARTICLE I: THE OPTION.......................................................... 1
1.1 Grant of Option................................................... 1
1.2 Term and Exercise of Option....................................... 1
1.3 Purchase Price and Payment........................................ 2
ARTICLE II: CONTRACT TO PURCHASE AND CLOSING PROCEDURES........................ 2
2.1 Purchase and Sale................................................. 2
2.2 Closing; Condition to Obligations................................. 2
2.3 Documents to be Delivered at Closing.............................. 3
2.4 Cessation of Public Offering...................................... 5
2.5 Further Assurances................................................ 5
ARTICLE III: REPRESENTATIONS, WARRANTIES AND COVENANTS OF GRANTORS............. 5
3.1 Title to Interest................................................. 5
3.2 Authority......................................................... 6
3.3 Litigation........................................................ 6
3.4 No Other Agreements to Sell....................................... 6
3.5 No Brokers........................................................ 6
3.6 Investment Representations and Warranties......................... 7
3.7 Covenant to Remedy Breaches....................................... 8
ARTICLE IV: REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONEE............... 8
4.1 Authority......................................................... 8
4.2 No Brokers........................................................ 9
ARTICLE V: POWER OF ATTORNEY................................................... 9
5.1 Grant of Power of Attorney........................................ 9
5.2 Limitation on Liability........................................... 10
5.3 Ratification; Third Party Reliance................................ 11
ARTICLE VI: MISCELLANEOUS...................................................... 11
6.1 Amendment......................................................... 11
6.2 Entire Agreement; Counterparts; Applicable Law.................... 11
6.3 Assignability..................................................... 11
6.4 Titles............................................................ 12
6.5 Third Party Beneficiary........................................... 12
6.6 Severability...................................................... 12
i
Page
----
6.7 Equitable Remedies................................................ 12
6.8 Disputes.......................................................... 12
6.9 Notices; Exercise of Grantor's Purchase Option.................... 13
6.10 Waiver of Rights; Consents with Respect to Partnership Interest... 14
6.11 Computation of Time............................................... 15
6.12 Survival.......................................................... 15
6.13 Time of the Essence............................................... 15
ii
OPTION AGREEMENT
This Option Agreement (including all exhibits, hereinafter referred to as
this "OPTION AGREEMENT") relates to a proposed acquisition by Boston Properties
Limited Partnership of a 99% general partnership interest in Square 36 Office
Joint Venture, a District of Columbia limited partnership (such interest, the
"INTEREST," and such partnership, the "PROPERTY PARTNERSHIP"), which owns the
building located at 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. (such property, the
"ASSET"). This Option Agreement is executed as of this day of April, 1997 by
Boston Properties Limited Partnership, a Delaware limited partnership
("OPTIONEE"), and Square 36 Properties Limited Partnership, a Massachusetts
limited partnership ("GRANTOR");
WHEREAS, Optionee desires to acquire from Grantor, and Grantor desires to
grant to Optionee, an option to purchase, on the terms and conditions set forth
herein, the Interest;
WHEREAS, the parties acknowledge that Optionee is considering the purchase
of the Interest in connection with a proposed initial public offering
(the "IPO") of shares of common stock ("COMMON STOCK") of Boston Properties
Inc., a Delaware corporation (the "COMPANY"); and
WHEREAS, the current general partner of the Optionee (Boston Properties,
Inc., a Massachusetts corporation) intends to merge with and into the Company
contemporaneously with the IPO, after which the Company will be general partner
of the Optionee.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Optionee and Grantor agree as
follows:
ARTICLE I: THE OPTION
1.1 Grant of Option. Grantor hereby grants to Optionee an option to
purchase the Interest and all right, title and interest of Grantor therein (the
"PURCHASE OPTION") on the terms and conditions hereinafter set forth. Optionee
shall be under no obligation to exercise the Purchase Option and acquire the
Interest, whether or not the IPO occurs and regardless of what other properties
or interests therein Optionee may choose to acquire in connection with the IPO,
it being in Optionee's sole discretion at all times as to whether to exercise
the Purchase Option.
1.2 Term and Exercise of Option. The Purchase Option may be exercised,
in whole or in part, at any time from and after the date hereof through 5:00
p.m., Boston, Massachusetts, time on the earlier of (i) December 31, 1997 or
(ii) the Cessation Date (as such term is defined in Section 2.4 hereof) (the
earlier of such dates, the "OPTION TERMINATION DATE"). The Purchase Option can
be exercised only by the giving of notice by Optionee to Grantor or any of its
Attorneys-in-Fact named in Article V hereof (an
"OPTION EXERCISE NOTICE"). If Optionee does not exercise the Purchase Option by
the Option Termination Date, the Purchase Option shall automatically terminate
and shall be of no further force and effect and Grantor shall have no further
obligations hereunder.
1.3 Purchase Price and Payment. The full purchase price for the Interest
(the "PURCHASE PRICE") shall be a number of Units (as hereinafter defined)
having an aggregate value equal to $990,000.00. As used herein, the term "UNITS"
means Units representing a limited partnership interest in Optionee, and the
value of each Unit shall equal the public offering price of a share of Common
Stock of the Company in the IPO.
ARTICLE II: CONTRACT TO PURCHASE AND CLOSING PROCEDURES.
2.1 Purchase and Sale. Upon Optionee's exercise of the Purchase Option,
Grantor shall, subject to Section 2.2 hereof, sell, transfer, assign, and convey
to Optionee, and Optionee shall purchase and accept from Grantor, all right,
title and interest of Grantor in the Interest, free and clear of all
Encumbrances (as defined in Section 3.1) for the Purchase Price, such sale to be
closed in accordance with this Article II.
2.2 Closing; Condition to Obligations. In connection with or at any time
after the exercise by Optionee of the Purchase Option, Optionee will specify a
closing date, which date will be no later than December 31, 1997, for the
initial closing (the "PRE-CLOSING") of the purchase and sale of the Interest. At
or before such Pre-closing, which shall be held at a place and time determined
by Optionee in its sole discretion, Optionee and Grantor (or its attorney-in-
fact) will execute all closing documents (the "CLOSING DOCUMENTS") required by
Optionee in accordance with Section 2.3 and deliver the same to a person
designated by Optionee (such person, the "CLOSING AGENT").
Upon the exercise of the Purchase Option, the transactions contemplated by
this Option Agreement and by the Closing Documents executed and deposited in
connection with such exercise will be consummated only if the IPO Closing (as
hereinafter defined) occurs simultaneously with or within fifteen (15) business
days after the date of the Pre-closing. For purposes hereof, the "IPO CLOSING"
will be deemed to have occurred if, but only if, the share of the net proceeds
to the Company from the IPO that is made available to Optionee is sufficient, as
determined by Optionee in its reasonable discretion, to enable Optionee (i) to
acquire the Interest and (ii) to apply such share of the net proceeds to acquire
such other properties or interests and to repay principal, interest and other
amounts due with respect to indebtedness and to meet such other obligations as
may be described in the Registration Statement on Form S-11 prepared and filed
in connection with the IPO, as the same is in effect on the day of the IPO
Closing. If the IPO Closing occurs within such fifteen (15) business day
period,
(i) Optionee shall, contemporaneously with the IPO Closing, cause to be
delivered to Grantor a certificate of the General Partner of
Optionee certifying that
2
Grantor has been or will be, effective upon the Final Closing
(as hereinafter defined), admitted as a limited partner of Optionee
and that Optionee's books and records indicate that Grantor is the
holder of the number of Units which are called for pursuant to the
Purchase Price,
(ii) upon receipt of the consideration set forth in clause (i) above, the
Closing Agent will release the Closing Documents to Optionee, and
(iii) the transactions described or otherwise contemplated herein or in
the Closing Documents will thereupon be deemed to have been
consummated (such consummation, the "FINAL CLOSING").
Notwithstanding the above, Optionee may, in its sole discretion, elect not to
complete the purchase of the Interest if Grantor has identified, in the
Assignment delivered pursuant to Section 2.3, a breach of or other exception
with respect to Article III hereof or has otherwise breached this Option
Agreement, in which case Optionee shall, in lieu of the delivery with respect to
Grantor pursuant to clause (i) above, notify the Closing Agent of such election
and direct the Closing Agent to return the Closing Documents and Ancillary
Agreements (as defined below) to Grantor.
If the IPO Closing does not occur within fifteen (15) business days after
the date of the Pre-closing, then neither party shall have any obligations under
the Closing Documents executed in connection with the related exercise of the
Purchase Option or under any agreements or instruments executed in connection
with the transactions contemplated by such exercise (such other agreements or
instruments, collectively, "ANCILLARY AGREEMENTS"), the Closing Documents and
the Ancillary Agreements shall be deemed null and void ab initio and the Closing
Agent will be directed to destroy the Closing Documents and any Ancillary
Agreements it holds and return to Optionee the consideration delivered by
Optionee to the Closing Agent in accordance with the previous paragraph. This
Option Agreement shall thereafter remain in effect and Optionee may thereafter
exercise the Grantor's Purchase Option again at any time before the Option
Termination Date.
2.3 Documents to be Delivered at Closing. At the Pre-closing, Grantor
shall, directly or through the Attorney-in-Fact appointed pursuant to Article V
hereof, execute, acknowledge where deemed desirable or necessary by Optionee,
and deliver to the Closing Agent, in addition to any other documents mentioned
elsewhere herein, the following:
(a) An Assignment of Interest (the "ASSIGNMENT"), which
assignment shall be in a form satisfactory to Optionee, shall contain a warranty
of title that Grantor owns the Interest free and clear of all Encumbrances (as
defined in Section 3.1) and shall either (i) reaffirm the accuracy of all
representations and warranties and the satisfaction of all covenants made by
Grantor in Article III hereof or (ii) if such reaffirmation cannot be made,
identify those representations, warranties and covenants of Article III hereof
(other than
3
Section 3.7) with respect to which circumstances have changed, represent that
Grantor has used all reasonable efforts within its control to prevent and remedy
such breach, and reaffirm the accuracy of all other representations and
warranties and the satisfaction of all other covenants made by Grantor in
Article III hereof.
(b) If requested by Optionee, a certified copy of all appropriate
partnership actions authorizing the execution, delivery and performance by
Grantor of this Option Agreement, the Ancillary Agreements, if any, and the
Closing Documents (including certified copies of the corporate or partnership
actions taken by the constituent parties of Grantor, if applicable, in
connection with their consents to give Grantor such authority).
(c) If requested by Optionee, an opinion from counsel for Grantor
in form and content reasonably acceptable to Optionee substantially to the
effect that:
(i) Grantor is a limited partnership duly organized,
validly existing and in good standing under the laws of The
Commonwealth of Massachusetts and, to the knowledge of such counsel,
had and has all applicable partnership power and authority to enter
into, deliver and perform this Option Agreement, the Ancillary
Agreements, if any, and the Closing Documents;
(ii) the execution, delivery and performance of this
Option Agreement, the Ancillary Agreements, if any, and the Closing
Documents, and the transactions contemplated hereby and thereby, do
not and will not constitute a breach or a violation of Grantor's
partnership agreement or other governing instruments; and
(iii) all applicable partnership, corporate or other action
necessary for Grantor to execute and deliver this Option Agreement,
the Ancillary Agreements, if any, and the Closing Documents has been
taken and that the same have been validly executed and delivered and
are the valid and binding obligations of Grantor enforceable against
it in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting creditors' rights and remedies
generally.
(d) An affidavit establishing an exemption from the withholding
requirements of the Foreign Investment in Real Property Tax Act ("FIRPTA"), as
amended. In the event Grantor fails to provide such an affidavit, Optionee shall
be entitled to withhold from the purchase price and pay to the Internal Revenue
Service the sums required to be withheld pursuant to FIRPTA (and the amount so
withheld shall be paid by Optionee to the Internal Revenue Service, in order for
Optionee to comply with the provisions of Section 1445 of the Internal Revenue
Code of 1986 or successor similar legislation, as the same may be amended
hereafter).
4
(e) Any other documents reasonably necessary to assign, transfer and
convey the Interest and effectuate the transactions contemplated hereby,
including filings with any applicable governmental jurisdiction in which the
Optionee is required to file its partnership documentation.
2.4 Cessation of Public Offering. If at any time Optionee or its
underwriter or underwriters determine in good faith to abandon the IPO (the date
of such determination being referred to as the "CESSATION DATE"), Optionee will
so advise Grantor in writing and thereupon all parties hereto will be relieved
of all obligations under this Option Agreement, all Ancillary Agreements, and
all Closing Documents (except for obligations arising under Sections 3.5 and
4.2).
2.5 Further Assurances. Grantor will, from time to time, execute and
deliver to Optionee all such other and further instruments and documents and
take or cause to be taken all such other and further action as Optionee may
reasonably request in order to effect the transactions contemplated by this
Agreement, including instruments or documents deemed necessary or desirable by
Optionee to effect and evidence the conveyance of the Interest in accordance
with the terms of this Option Agreement.
ARTICLE III: REPRESENTATIONS, WARRANTIES AND COVENANTS OF GRANTORS
As a material inducement to Optionee to enter into this Option Agreement
and to consummate the transactions contemplated hereby, Grantor hereby makes to
Optionee each of the representations and warranties set forth in this Article
III, which representations and warranties are true as of the date hereof. As a
condition to Optionee's obligation to complete the purchase of the Interest,
such representations and warranties must continue to be true as of the date of
the Pre-closing and as of the date of the Final Closing.
3.1 Title to Interest. Grantor owns beneficially and of record, free and
clear of any claim, lien, pledge, voting agreement, option, charge, security
interest, mortgage, deed of trust, encumbrance, rights of assignment, purchase
rights or other rights of any nature whatsoever of any third party
(collectively, "ENCUMBRANCES"), and has full power and authority to convey free
and clear of any Encumbrances, the Interest and, upon delivery of an Assignment
by Grantor conveying the Interest and payment for the Interest as herein
provided, Optionee (or its designee) will acquire good and valid title thereto,
free and clear of any Encumbrance except Encumbrances created in favor of
Optionee by the transactions contemplated hereby. The Interest has been validly
issued and Grantor has funded (or will fund before the same is past due) all
capital contributions and advances to the Property Partnership that are required
to be funded or advanced prior to the date hereof and the dates of the Pre-
closing and the Final Closing. There are no agreements, instruments or
understandings with respect to the Interest except as set forth in the
partnership agreement of the Property Partnership. Grantor has no equity
interest, either direct or indirect, in the Asset except for the Interest.
5
3.2 Authority. Grantor has full right, authority, power and capacity:
(i) to enter into this Option Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of Grantor pursuant to
this Option Agreement; (ii) to carry out the transactions contemplated hereby
and thereby; and (iii) to transfer, sell and deliver the Interest to Optionee
(or its designee) upon exercise by Optionee of the Purchase Option and payment
therefor in accordance with this Option Agreement. This Option Agreement and
each agreement, document and instrument executed and delivered by or on behalf
of Grantor pursuant to this Option Agreement constitutes, or when executed and
delivered will constitute, the legal, valid and binding obligation of Grantor,
each enforceable in accordance with its respective terms. The execution,
delivery and performance of this Option Agreement and each such agreement,
document and instrument by or on behalf of Grantor: (x) does not and will not
violate Grantor's partnership agreement or other governing instruments; (y) does
not and will not violate any foreign, federal, state, local or other laws
applicable to Grantor or require Grantor to obtain any approval, consent or
waiver of, or make any filing with, any person or authority (governmental or
otherwise) that has not been obtained or made or which does not remain in
effect; and (z) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under or give rise to a right of
termination of, any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
order, writ, judgment, injunction, decree, determination or arbitration award to
which Grantor is a party or by which the property of Grantor is bound or
affected, or result in the creation of any Encumbrance on any of the property or
assets of any partnership in which the Interest of Grantor represents an
interest.
3.3 Litigation. There is no litigation or proceeding, either judicial or
administrative, pending or overtly threatened, affecting the Interest or
Grantor's ability to consummate the transactions contemplated hereby. Grantor
knows of no outstanding order, writ, injunction or decree of any court,
government, governmental entity or authority or arbitration against or affecting
the Interest, which in any such case would impair Grantor's ability to enter
into and perform all of its obligations under this Option Agreement.
3.4 No Other Agreements to Sell. Grantor represents that it has made no
agreement with, and will not enter into any agreement with, and has no
obligation (absolute or contingent) to, any other person or firm to sell,
transfer or in any way encumber the Interest or to not sell Grantor's Interest,
or to enter into any agreement with respect to a sale, transfer or encumbrance
of, or put or call right with respect to, the Interest.
3.5 No Brokers. Grantor and each of its constituent partners represent
that it has not entered into, and covenants that it will not enter into, any
agreement, arrangement or understanding with any person or firm which will
result in the obligation of Optionee to pay any finder's fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby.
6
3.6 Investment Representations and Warranties.
(a) Grantor has had an opportunity to review the "Summary of
Certain Provisions of the Operating Partnership Agreement and the Registration
Rights Agreement" and the discussion entitled "Tax Matters," each of which was
sent to the Grantor by the Company (collectively, including all supplements
thereto, if any, the "PARTNERSHIP SUMMARY"), and the Private Placement
Memorandum of the Optionee dated April 3, 1997 (including all supplements
thereto, if any, the "PRIVATE PLACEMENT MEMORANDUM") and understands the risks
of, and other considerations relating to, the purchase of the Units. Grantor, by
reason of its business and financial experience, together with the business and
financial experience of those persons, if any, retained by it to represent or
advise it with respect to its investment in the Units, has such knowledge,
sophistication and experience in financial and business matters and in making
investment decisions of this type that it is capable of evaluating the merits
and risks of an investment in Optionee and of making an informed investment
decision, (ii) is capable of protecting its own interest or has engaged
representatives or advisors to assist it in protecting its interests and (iii)
is capable of bearing the economic risk of such investment. Grantor has reviewed
the definition of "accredited investor" under Regulation D of the Securities Act
of 1933, as amended (the "SECURITIES ACT"), and represents that (i) it is an
"accredited investor," and (ii) it recognizes that the Optionee is relying on
such representation in entering into this Agreement and issuing Units to the
Grantor.
(b) Grantor understands that an investment in the Optionee
involves substantial risks. Grantor has been given the opportunity to make a
thorough investigation of the proposed activities of Optionee and has been
furnished with materials relating to the Optionee and its proposed activities,
including, without limitation, the Private Placement Memorandum and the
Partnership Summary. Grantor has been afforded the opportunity to obtain any
additional information deemed necessary by Grantor to verify the accuracy of any
representations made or information conveyed to the Grantor. Grantor confirms
that all documents, records, and books pertaining to its investment in the
Partnership and requested by Grantor have been made available or delivered to
Grantor. Grantor has had an opportunity to ask questions of and receive answers
from Optionee, or from a person or persons acting on Optionee's behalf,
concerning the terms and conditions of this investment. GRANTOR HAS RELIED UPON,
AND IS MAKING ITS INVESTMENT DECISION SOLELY UPON, THE PRIVATE PLACEMENT
MEMORANDUM AND THE PARTNERSHIP SUMMARY.
(c) The Units to be issued to Grantor if Optionee acquires the
Interest will be acquired by Grantor for its own account for investment only and
not with a view to, or with any intention of, a distribution or resale thereof,
in whole or in part, or the grant of any participation therein, without
prejudice, however, to Grantor's right (subject to the terms of the Units) at
all times to sell or otherwise dispose of all or any part of its Units under an
exemption from such registration available under the Securities Act, and
applicable state securities laws, and subject, nevertheless, to the disposition
of its assets being at all times
7
within its control. Grantor was not formed for the specific purpose of acquiring
an interest in Optionee. Grantor will retain the Units that may be acquired by
it hereunder for at least two years before distributing such Units to its
partners or otherwise disposing of such Units, unless Optionee in its sole
discretion agrees to permit such distribution, transfer or disposition.
(d) Grantor acknowledges that (i) the Units to be issued to
Grantor if Optionee acquires Grantor's Interest have not been registered under
the Securities Act or state securities laws by reason of a specific exemption or
exemptions from registration under the Securities Act and applicable state
securities laws and, if such Units are represented by certificates, such
certificates will bear a legend to such effect, (ii) the Company's and
Optionee's reliance on such exemptions is predicated in part on the accuracy and
completeness of the representations and warranties of Grantor contained herein,
(iii) such Units, therefore, cannot be resold unless registered under the
Securities Act and applicable state securities laws, or unless an exemption from
registration is available, (iv) there is no public market for such Units, and
(v) Optionee has no obligation or intention to register such Units for resale
under the Securities Act or any state securities laws or to take any action that
would make available any exemption from the registration requirements of such
laws. Grantor hereby acknowledges that because of the restrictions on transfer
or assignment of such Units to be issued hereunder, which will be set forth in
the partnership agreement of Optionee, the Grantor may have to bear the economic
risk of the investment commitment evidenced by this Option Agreement and any
Units purchased hereby for an indefinite period of time, although under the
terms of the partnership agreement of Optionee, as it will be in effect at the
time of the initial public offering of the Company's Common Stock, Units will be
redeemable at the request of the holder thereof at any time after a period not
exceeding fourteen months after their issuance for cash or (at the option of the
Company) for shares of the Company's Common Stock.
3.7 Covenant to Remedy Breaches. Grantor covenants to use all reasonable
efforts within its control (i) to prevent the breach of any representation or
warranty of it hereunder, (ii) to satisfy all covenants of Grantor hereunder and
(iii) to promptly cure any breach of a representation, warranty or covenant of
Grantor hereunder upon its learning of same.
ARTICLE IV: REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONEE
As a material inducement to Grantor to enter into this Option Agreement and
to consummate the transactions contemplated hereby, Optionee hereby makes to
Grantor each of the representations and warranties set forth in this Article IV,
which representations and warranties shall be true as of the date hereof, as of
the date of the Pre-closing and as of the date of consummation of the Final
Closing.
4.1 Authority. Optionee has full right, authority, power and capacity:
(i) to enter into this Option Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of it pursuant to this
Option Agreement; (ii) to carry out the transactions contemplated hereby and
thereby; and (iii) to issue Units to Grantor as provided
8
herein. This Option Agreement and each agreement, document and instrument
executed and delivered by Optionee pursuant to this Option Agreement
constitutes, or when executed and delivered will constitute, the legal, valid
and binding obligation of Optionee, each enforceable in accordance with their
respective terms. The execution, delivery and performance of this Option
Agreement and each such agreement, document and instrument by Optionee: (x) does
not and will not violate the partnership agreement of Optionee; (y) does not and
will not violate any foreign, federal, state, local or other laws applicable to
Optionee or require Optionee to obtain any approval, consent or waiver of, or
make any filing with, any person or authority (governmental or otherwise) that
has not been obtained or made; and (z) does not and will not result in a breach
of, constitute a default under, accelerate any obligation under or give rise to
a right of termination of, any indenture or loan or credit agreement or any
other agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination or
arbitration award to which Optionee is a party or by which the property of
Optionee is bound or affected.
4.2 No Brokers. Optionee represents that it has not entered into, and
covenants that it will not enter into, any agreement, arrangement or
understanding with any person or firm which will result in the obligation of
Grantor to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
ARTICLE V: POWER OF ATTORNEY
5.1 Grant of Power of Attorney. Grantor hereby irrevocably appoints
Xxxxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxx, and each of them individually and any
successor thereof from time to time (such persons or any such successor of any
of them acting in his, her or its capacity as Attorney-in-Fact pursuant to this
Article V, the "ATTORNEY-IN-FACT") as the true and lawful Attorney-in-Fact and
agent of Grantor, with the power to act in the name, place and stead of Grantor:
(a) To take for Grantor all steps deemed necessary or advisable,
if any, by Optionee in connection with the registration of the Company's Common
Stock under the Securities Act, including without limitation (i) filing a
registration statement and amendments thereto (the "REGISTRATION STATEMENT")
under the Securities Act that describes the benefits to be received by Grantor
in connection with the formation of the Operating Partnership and the offering
of the Company's Common Stock, (ii) distributing a preliminary prospectus and
prospectus regarding the offering of the Company's Common Stock that contain
such information as is deemed necessary or desirable to lawfully effect the
initial public offering of such shares, and (iii) to take such other steps as
the Attorney-in-Fact may deem necessary or advisable.
(b) To make, execute, acknowledge and deliver all such other
contracts, orders, receipts, notices, requests, instructions, certificates,
consents, letters and other writings (including without limitation the execution
of Closing Documents, Ancillary Agreements, the
9
partnership agreement, as then in effect, of Optionee, any other documents
relating to the acquisition by Optionee of the Interest, and any consents and
waivers given or contemplated by or in furtherance of Section 6.10 hereof) and,
in general, to do all things and to take all action which the Attorney-in-Fact
in its sole discretion may consider necessary or proper in connection with or to
carry out the transactions contemplated by this Option Agreement, the Ancillary
Agreements, if any, and the Closing Documents as fully as could Grantor if
personally present and acting.
(d) To make, acknowledge, verify and file on behalf of Grantor
applications, consents to service of process and such other undertakings or
reports as may be required by law with state commissioners or officers
administering state securities or Blue Sky laws and to take any other action
required to facilitate the exemption from registration of the Units and the
qualification of the Company's Common Stock under the securities or Blue Sky
laws of the jurisdictions in which the Units and the Company's Common Stock are
to be offered.
The Power of Attorney granted by Grantor pursuant to this Article V and all
authority conferred by this Article V is granted and conferred subject to and in
consideration of the interests of the Optionee and the Company and is for the
purpose of completing the transactions contemplated by this Option Agreement.
The Power of Attorney of Grantor granted by this Article V and all authority
conferred by this Article V is coupled with an interest and therefore shall be
irrevocable and shall not be terminated by any act of Grantor or by operation of
law, whether by the death, disability, incapacity or liquidation of Grantor or
by the occurrence of any other event or events (including without limitation the
termination of any trust or estate for which Grantor is acting as a fiduciary or
fiduciaries), and if, after the execution hereof, Grantor is liquidated, or if
any other such event or events shall occur before the completion of the
transactions contemplated by this Option Agreement, the Attorney-in-Fact shall
nevertheless be authorized and directed to complete all such transactions as if
such liquidation or other event or events had not occurred and regardless of
notice thereof. Grantor acknowledges that the Attorneys-in-Fact named in the
first paragraph of this Section 5.1 have, and any successor thereof acting as
Attorney-in-Fact may have, an economic interest in the transactions contemplated
by this Option Agreement. Grantor agrees that, at the request of Optionee, it
will promptly execute a separate Power of Attorney on the same terms set forth
in this Article V, such execution to be witnessed and notarized if so requested
by an Attorney-in-Fact.
5.2 Limitation on Liability. It is understood that each Attorney-in-Fact
assumes no responsibility or liability to any person by virtue of the Power of
Attorney granted by Grantor hereby. Each Attorney-in-Fact makes no
representations with respect to and shall have no responsibility for the
formation of the Operating Partnership, the acquisitions of the Interest by
Optionee, the Registration Statement, the prospectus or any preliminary
prospectus relating to the offer and sale of Common Stock in the IPO, nor for
any aspect of the offering of the Common Stock, and he shall not be liable for
any error of judgment or for any act done or omitted or for any mistake of fact
or law except for his own gross negligence or willful
10
misconduct. Grantor agrees to indemnify the Attorney-in-Fact for and to hold the
Attorney-in-Fact harmless against any loss, claim, damage or liability incurred
on its part arising out of or in connection with it acting as the Attorney-in-
Fact under the Power of Attorney created by Grantor hereby, as well as the cost
and expense of investigating and defending against any such loss, claim, damage
or liability, except to the extent such loss, claim, damage or liability is due
to the gross negligence or willful misconduct of the Attorney-in-Fact. Grantor
agrees that an Attorney-in-Fact may consult with counsel of his own choice (who
may be counsel for Optionee or the Company) and he shall have full and complete
authorization and protection for any action taken or suffered by him hereunder
in good faith and in accordance with the advice of such counsel. It is
understood that the Attorney-in-Fact may, without breaching any express or
implied obligation to the Grantor hereunder, release, amend or modify any other
Power of Attorney granted by any other person under any related agreement.
5.3 Ratification; Third Party Reliance. Grantor does hereby ratify and
confirm all that the Attorney-in-Fact shall lawfully do or cause to be done by
virtue of the exercise of the powers granted unto him by Grantor under this
Article V, and Grantor authorizes the reliance of third parties on this Power of
Attorney and waives its rights, if any, as against any such third party for its
reliance hereon.
ARTICLE VI: MISCELLANEOUS
6.1 Amendment. Any amendment hereto shall be effective only against
those parties hereto who have acknowledged in writing their consent to such
amendment. No waiver of any provisions of this Option Agreement shall be valid
unless in writing and signed by the party against whom enforcement is sought.
6.2 Entire Agreement; Counterparts; Applicable Law. This Option
Agreement and all Ancillary Agreements (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, (b) may be executed in
several counterparts, each of which will be deemed an original and all of which
shall constitute one and the same instrument and (c) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Delaware without giving effect to the conflict of law provisions
thereof. This Agreement shall be enforceable as between Grantor and the Optionee
upon the execution by both of signature pages hereto.
6.3 Assignability. This Option Agreement shall be binding upon, and
shall be enforceable by and inure to the benefit of, the parties hereto and
their respective heirs, legal representatives, successors and assigns; provided,
however, that this Option Agreement may not be assigned by Grantor without the
prior written consent of the Optionee, and any attempted assignment without such
consent shall be void and of no effect; and provided, further, that Optionee may
assign this Option Agreement, the Closing Documents and the
11
Ancillary Agreements and any agreement contemplated hereunder or thereunder, in
whole or in part, or the right to acquire from Grantor all or any part of the
Interest after exercise of the Purchase Option, to the Company or to an
affiliate of Optionee or the Company without the consent of Grantor.
6.4 Titles. The titles and captions of the Articles, Sections and
paragraphs of this Option Agreement are included for convenience of reference
only and shall have no effect on the construction or meaning of this Option
Agreement.
6.5 Third Party Beneficiary. No provision of this Option Agreement is
intended, nor shall it be interpreted, to provide or create any third party
beneficiary rights or any other rights of any kind in any customer, affiliate,
stockholder, partner, director, officer or employee of any party hereto or any
other person or entity, provided, however, that Sections 5.2, 5.3 and 6.10 of
this Option Agreement shall be enforceable by and shall inure to the benefit of
the persons described therein.
6.6 Severability. If any provision of this Option Agreement, or the
application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Option Agreement and application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Option Agreement with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provision and
to execute any amendment, consent or agreement deemed necessary or desirable by
Optionee to effect such replacement.
6.7 Equitable Remedies. The parties hereto agree that irreparable damage
would occur to the Operating Partnership in the event that any of the provisions
of this Option Agreement were not performed by Grantor in accordance with their
specific terms or were otherwise breached by Grantor. It is accordingly agreed
that Optionee shall be entitled to an injunction or injunctions to prevent
breaches of this Option Agreement by Grantor and to enforce specifically the
terms and provisions hereof in any federal or state court located in Boston,
Massachusetts (as to which the parties agree to submit to jurisdiction for the
purposes of such action), this being in addition to any other remedy to which
Optionee is entitled at law or in equity.
6.8 Disputes
(a) The parties agree that (subject to Section 6.8(b)) any and all
disputes, claims or controversies arising out of or relating to this agreement
that are not resolved by their mutual agreement shall be submitted to final and
binding arbitration before J.A.M.S./ENDISPUTE, or its successor, in its Boston,
Massachusetts office and pursuant to the United States Arbitration Act and the
provisions of J.A.M.S./ENDISPUTE's
12
Streamlined Arbitration Rules and Procedures in effect at the time. The parties
will cooperate with J.A.M.S./ENDISPUTE and with one another in selecting an
arbitrator from J.A.M.S./ENDISPUTE's panel of neutrals and in scheduling the
arbitration proceedings. The provisions of this Section may be enforced by any
court of competent jurisdiction.
In the event of any dispute relating to the Interest, the consideration
paid therefor or the actions taken in connection with the Formation Transactions
(as defined in the Private Placement Memorandum), the arbitrator shall be
instructed to value such Interest by (i) using the appraised value of the Asset
and (ii) determining the Grantor's allocable share, in accordance with the
applicable partnership agreement or partnership agreements, of the net proceeds
of a sale of the Asset for a price equal to such appraised value (after
deducting (x) the arbitrator's estimate of the costs of such a sale, and (y) the
aggregate amount of indebtedness at the time of the IPO of the Property
Partnership or that otherwise was secured by the Asset). The arbitrator shall be
instructed that the appraised value of the Asset shall be determined (I) as of
the date of the IPO (even though the appraisal may be conducted some time
thereafter) and (II) by a qualified appraiser, chosen by the arbitrator, who
shall use customary and traditional methods for valuing properties of the same
type as the Asset.
By executing this agreement each party is agreeing (subject to Section
6.8(b)) to have all disputes, claims or controversies arising out of or relating
to this agreement decided by neutral arbitration, and is giving up any rights it
might possess to have those matters litigated in a court or jury trial. By
executing this agreement each party is giving up its judicial rights to
discovery and appeal except to the extent that they are specifically provided
for under this agreement.
(b) Notwithstanding Section 6.8(a), the Operating Partnership may
seek an injunction or injunctions or specific performance, in a court of
competent jurisdiction, to the extent permitted by Section 6.7.
6.9 Notices; Exercise of Grantor's Purchase Option. Any notice or demand
that must or may be given under this Option Agreement (including an Option
Exercise Notice) or by law shall, except as otherwise provided, be in writing
and shall be deemed to have been given (i) when physically received by personal
delivery (which shall include the confirmed receipt of a telecopied facsimile
transmission), or (ii) three business days after being deposited in the United
States certified or registered mail, return receipt requested, postage prepaid,
or (iii) one business day after being deposited with a nationally known
commercial courier service
13
providing next day delivery service (such as Federal Express); addressed and
delivered or telecopied (a) in the case of a notice to the Optionee at the
following address and telecopy number:
Boston Properties Limited Partnership
0 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
and (b) in the case of a notice to Grantor, at the address and telecopy number
set forth on the signature page attached hereto.
6.10 Waiver of Rights; Consents with Respect to Partnership Interest.
Grantor acknowledges that the agreements contained herein and the
transactions contemplated hereby and any actions taken in contemplation of the
transactions contemplated hereby may conflict with, and may not have been
contemplated by, the partnership agreement of the Property Partnership (the
"PROPERTY PARTNERSHIP AGREEMENT") or another agreement among one or more persons
with a direct or indirect interest in the Interest. With respect to the
Property Partnership Agreement and other agreements, Grantor expressly gives all
Consents (and any consents necessary to authorize the proper parties in interest
to give all Consents) and Waivers (as each such capitalized term is hereinafter
defined) necessary or desirable to facilitate the transfer of the Interest to
Optionee pursuant to the terms hereof.
As used herein, the term "CONSENTS" means any consent necessary or
desirable under the Property Partnership Agreement or any other agreement among
all or any of the holders of direct or indirect interests therein or any other
agreement relating thereto or referred to therein (i) to permit the transfer of
the Interest as contemplated or to amend the Property Partnership Agreement
and/or other agreements so that no provision thereof prohibits, restricts,
impairs or interferes with the transfer of the Interest as contemplated (such
amendments to include, without limitation, the deletion or modification of
provisions which cause a default under such agreement if the Interest were
transferred as contemplated herein), (ii) to admit Optionee (or its designees)
as a substitute limited partner or general partner of the Property Partnership
upon Optionee's acquisition of the Interest, and to adopt such amendment as is
necessary or desirable to effect such admission, (iii) to continue the Property
Partnership following the transfer of interests therein to Optionee and (iv) to
cause an amendment to the Property Partnership Agreement that provides that any
disputes arising thereunder, or any disputes arising among the partners of such
partnership with respect to the Formation Transactions, shall be resolved by
arbitration in accordance with the procedures and principles set forth in
Section 6.8 hereof (and to cause any conflicting provision of such partnership
agreement to be repealed). As used herein, the term "WAIVERS" means the waiving
of any and all rights that Grantor may have with respect to, and (to the extent
possible) that any other
14
person may have with respect to, or that may accrue to Grantor or any other
person upon the transfer of the Interest, including, but not limited to, the
following rights: rights of notice, rights to response periods, rights to
purchase the direct or indirect interests of another partner in such partnership
or to sell Grantor's or other person's direct or indirect interest therein to
another partner, rights to sell Grantor's or any other person's direct or
indirect interest therein at a price other than as provided herein, or rights to
prohibit, limit, invalidate, otherwise restrict or impair the transfer of the
Interest as contemplated herein or to cause a termination or dissolution of a
partnership because of the transfer of the Interest as contemplated herein.
Grantor further covenants that it will take no action to enjoin, or seek damages
resulting from the transfer of the Interest as contemplated herein.
6.11 Computation of Time. Any time period provided for herein which
shall end on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. of
the next full business day. All times are Eastern Time.
6.12 Survival. It is the express intention and agreement of the parties
hereto that the representations, warranties and covenants of Grantor set forth
in this Option Agreement shall survive the consummation of the transactions
contemplated hereby. The waiver by any party hereto of any of the conditions
precedent to its obligations under this Agreement shall not preclude such party
for seeking redress for any breach of this agreement.
6.13 Time of the Essence. Time is of the essence with respect to all
obligations of Grantor under this Option Agreement.
15
IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement, or caused this Option Agreement to be duly executed on its behalf, as
of the date first above written.
OPTIONEE: BOSTON PROPERTIES LIMITED PARTNERSHIP
By: Boston Properties, Inc.,
as general partner
By: /s/ Xxxxxx X. Xxxxx
_________________________________
Name:
Title:
GRANTOR: SQUARE 36 PROPERTIES LIMITED
PARTNERSHIP
By: BOSTON SQUARE 36 OFFICE
ASSOCIATES LIMITED PARTNERSHIP
By: Elandzee News
General Associates,
as general partner
By: /s/ Xxxxxx X. Xxxxx
_________________________________
Name:
General Partner
and authorized representative
Telecopy Number:
Address:
BY THE GRANTOR'S EXECUTION OF THIS OPTION AGREEMENT,
THE GRANTOR GRANTS A POWER OF ATTORNEY TO CERTAIN INDIVIDUALS
PURSUANT TO ARTICLES V HEREOF AND AGREES TO THE ARBITRATION
OF ANY DISPUTE ARISING HEREUNDER PURSUANT TO SECTION 6.8.
16
JOINDER
Each of the undersigned is a constituent partner of the Grantor and desires
to join this agreement solely for the purpose of (i) indicating his or its
consent to the transfer of the Interest as contemplated herein, (ii) confirming,
to our knowledge, the representations of Grantor set forth in Article III and,
in addition, hereby making for the benefit of Optionee (I) the representations
set forth in Section 3.6(a) and (b) (as if references to "Grantor" therein were
references to such constituent partner) and (II) the agreement set forth in
Section 6.10 (as if references to "Grantor" therein were references to such
constituent partner and references to the "Property Partnership Agreement"
therein were references to the partnership agreement of Grantor). 0000 X Xxxxxx
Associates further represents that each of its partners is an "accredited
investor" under Regulation D of the Securities Act.
/s/ Xxxxxxxx X. Xxxxxxxxx
____________________________________________
Xxxxxxxx X. Xxxxxxxxx, as the holder of a
25.2525% limited partnership interest
in the Grantor
BOSTON SQUARE 36 OFFICE
ASSOCIATELIMITEDED PARTNERSHIP, as the
holder of a 24.2425% general partnership
interest in the Grantor
By: Elandzee News General Associates, as
general partner
By: /s/ Xxxxxxxx X. Xxxxxxxxx
_______________________________________
Name:
General Partner
and authorized representative
Telecopy Number:
Address:
0000 X XXXXXX ASSOCIATES, as the holder
of a 50.505% limited partnership
interest in the Grantor
By: /s/ Xxxxxx Xxxxxxxx
_______________________________________
Name: Xxxxxx Xxxxxxxx,
General Partner
and authorized representative
Telecopy Number:
Address:
17
