Exhibit 10.29
November 21, 1997
Kenvic Associates
c/o Madison Equities
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Gentlemen:
Reference is made to the Contribution Agreement dated as of September 2,
1997 (the "Agreement") by and between Kenvic Associates, a New York partnership
("Contributor"), and Boston Properties Limited Partnership, a Delaware limited
partnership ("Partnership"). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Agreement or the
Partnership Agreement.
Contributor agrees, as required by Section 12.2 of the Partnership
Agreement in order to become an Additional Limited Partner of the Partnership,
to be bound by all of the terms and conditions of the Partnership Agreement,
including without limitation, the power of attorney granted to certain Persons
as set forth in Section 2.4 thereof, and with respect to the redemption rights
set forth in Section 8.6 thereof, provided that, notwithstanding anything to the
contrary set forth in Section 8.6 thereof, Contributor shall not have the right
to exercise its redemption rights set forth in such Section until the date which
is one (1) year following the Closing Date.
If as of December 31, 1998, the average daily closing price as reported by
the New York Stock Exchange of the common stock of the REIT (the "REIT Shares")
for the ten (10) consecutive preceding trading days including December 31, 1998
is less than $31.43 per share (such average amount, the "Share Average"),
promptly following such date, Partnership shall transfer to Contributor the
number of additional Units equal to (i) the amount of the difference between
$31.43 and the Share Average multiplied by 890,869, divided by (ii) the Share
Average.
The Contributor and Partnership further agree that notwithstanding anything
to the contrary in the Partnership Agreement:
Kenvic Associates
___________, 1997
Page 2
(i) During the 10 year period following the Closing, Partnership may not
directly or indirectly sell or otherwise dispose of or transfer or permit the
direct or indirect sale, transfer or disposition of the Property or a Successor
Designated Property (as hereinafter defined) in a transaction that causes gain
recognition under any section of the Code for Contributor without the consent of
Contributor; it being agreed that for purposes of this Section, the term
"Successor Designated Property" means a property acquired by Partnership upon
the disposition of the Property in a Section 1031 like kind exchange or any
other exchange transaction that does not result in gain recognition; provided,
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however, the provisions of this Section shall not be applicable if at any time
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Contributor, together with its Permitted Distributees (as such term shall
hereinafter be defined) beneficially owns fewer than 35% of the number of Units
owned by Contributor following the Closing.
(ii) Contributor, the Partnership and REIT will reflect and report, on
all tax forms or tax returns to be filed with any Federal, State, or local
governmental agency or taxing authority, the transactions contemplated and
evidenced by the Contribution Agreement in a manner that to the greatest extent
possible is consistent with the form of the transactions as evidenced by the
Contribution Agreement and the terminology used in the Contribution Agreement.
(iii) As long as Contributor (including, for this purpose, the Permitted
Distributees) retains any Units, Partnership shall utilize the traditional
method of allocating gain and depreciation under Section 704(c) of the Code with
respect to the Property, with curative allocations limited to gain upon sale of
the Property to the extent allocations of depreciation deductions with respect
to the Property to other Unit holders have been limited by the so-called
"ceiling rule", as described in Regulations Section 1.704-3(c)(iii)(B).
(iv) In the event and to the extent that Partnership reduces the amount
of non-recourse debt secured by the Property from $180,000,000 to not less than
$130,000,000, Partnership agrees to permit Contributor and the Permitted
Distributees (each such party, the "Affected Party") to (a) restore deficits in
each of their capital accounts in an amount to be determined by the Affected
Party, which amounts the Affected Party shall be permitted to reduce at any time
except to the extent that the Affected Party's capital account is negative at
such time, and on the same tier of risk of loss as is provided to the other Unit
holders and/or (b) guarantee debt of Partnership not secured by the Property and
not guaranteed at that time by any other partner of Partnership and to become
the guarantor or guarantors of last resort with respect to any such debt
reasonably satisfactory to the Affected Party, the form and content of which
guaranty shall also be reasonably satisfactory to the Affected Party, provided
however that the sum of the amounts provided for under clauses (a) and (b) of
this
Kenvic Associates
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Page 3
subparagraph (iv) shall not exceed 50% of the amount of such reduction in non-
recourse debt secured by the Property. In the event and to the extent that the
Partnership reduces the amount of non-recourse debt secured by the Property to
below $130,000,000 (other than as a result of normal amortization of the debt as
currently provided in the Xxxxxxx Mortgage), Partnership agrees to permit each
Affected Party to (x) restore deficits in its capital account in an amount to be
determined by the Affected Party which amounts the Affected Party shall be
permitted to reduce at any time except to the extent that the Affected Party's
capital account is negative at such time, and on the same tier of risk of loss
as is provided to the other Unit holders and/or (y) guarantee debt of
Partnership not secured by the Property (except as otherwise provided in the
following sentence) and not guaranteed at that time by any other partner of
Partnership and to become the guarantor or guarantors of last resort with
respect to any such debt reasonably satisfactory to the Affected Party, the form
and content of which guaranty shall be reasonably satisfactory to the Affected
Party. For purposes of clause (y) of this subparagraph (iv), during the period
from September 4, 2002 until the expiration of this clause (iv) as provided
below, if there is debt secured by the Property at any time during such period,
the Partnership shall permit the Affected Party to guarantee such debt in an
amount equal to the lesser of $100,000,000 or the entire amount of such debt,
which debt shall be acceptable to the Affected Party. The parties agree that the
sum of the amounts provided for under clauses (a), (b), (x) and (y) of this
subparagraph (iv) shall not exceed the lesser of (aa) $130,000,000 less the
aggregate amount of debt allocable to all Affected Parties under Code Section
752 with respect to the debt secured by the Property or (bb) the sum of 50% of
the amount of such reduction in non-recourse debt secured by the Property from
$180,000,000 to not less than $130,000,000 and 100% of such reduction below
$130,000,000.
Failure by the Affected Party to notify the Partnership that the Affected
Party objects to certain offered debt or guaranty pursuant to this subparagraph
(iv) within thirty (30) days after receiving notice from Partnership containing
details of such offered debt, and which notice is accompanied by a copy of the
proposed guaranty, shall mean that such offered debt and the form and content of
such offered guaranty are acceptable to the Affected Party for purposes of this
subparagraph (iv).
Partnership shall not permit any partner (other than Contributor or the
Permitted Distributees as provided in this subparagraph (iv)) to guarantee any
non-recourse debt secured by the Property. This subparagraph (iv) shall be
deemed to expire on the earlier of the tenth anniversary of the date hereof or
the date on which Contributor, together with its Permitted Distributees
beneficially owns fewer than 35% of the number of Units owned by Contributor
following the Closing.
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(v) Partnership shall reasonably prior thereto endeavor to keep Contributor
advised of any discussion with Xxxxxxx involving modifications of the Xxxxxxx
Mortgage, or refinancing or payment of the Xxxxxxx Mortgage before maturity and
when deemed reasonable and appropriate by Partnership in its sole discretion,
exercised in good faith, include Contributor in any such formal discussions.
As used herein, the term "Permitted Distributees" shall mean those persons
described in Exhibit A to that certain Lock-Up and Registration Rights Agreement
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by and among Contributor, the Partnership and the REIT, dated as of the date
hereof. Any communications required or permitted under this letter may be given
to the Permitted Distributees at their respective addresses shown on the books
and records of the Partnership.
This letter agreement, together with the Agreement, constitutes the entire
agreement among the parties hereto and thereto covering the subject matter
hereof and thereof. This letter agreement may not be amended or terminated
except in a writing signed by each party hereto; may be executed in multiple
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement; shall be binding on each party
hereto, each Permitted Distributee and any permitted assignee of such party;
shall not be assignable by any party hereto without the prior written consent of
the other party (except to a Permitted Distributee); and shall be governed by
and construed in accordance with the laws of the State of New York (without
giving effect to any conflict of laws provision thereof). Any Permitted
Distributee shall only be considered an "Affected Party" pursuant to this letter
upon execution and delivery of a counterpart of this letter by such Permitted
Distributee.
Kenvic Associates
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Page 5
Kindly confirm your agreement with the foregoing by signing and returning
the enclosed copy of this letter.
BOSTON PROPERTY LIMITED PARTNERSHIP
By: Boston Properties, Inc., Its General Partner
By:
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Name:
Title:
Agreed and Accepted
KENVIC ASSOCIATES, A New York General
Partnership
By:
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Xxxxxxx Xxxxxxxxx, General Partner of
Kenvic Associates
By:
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Xxxxxxx Xxxxxxxxx, General Partner of Kenvic
Associates
By: Gladwater Associates a New York Limited
Partnership, as a General Partner of Kenvic
Associates
By:
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Xxxxxxx Xxxxxxxxx, General Partner of
Gladwater Associates
By:
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Xxxxxxx Xxxxxxxxx,
General Partner of Gladwater Associates
By: Vic Associates, a New York Limited
Partnership, as a General Partner of Kenvic
Associates
By: General Chemical and Supply Co., Inc.,
as a General Partner of Vic Associates
By:
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Name:
Title:
Kenvic Associates
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Page 6
By:
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Xxxxxxx Xxxxxxxxx, General Partner of
Gladwater Associates
By: Vic Associates, a New York Limited
Partnership, as a General Partner of Kenvic
Associates
By: General Chemical and Supply Co., Inc., as a
General Partner of Vic Associates
By:
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Name:
Title:
