April 13, 1999
Reference is hereby made to (i) that certain Agreement of Limited
Partnership of Berkshire Realty Holdings, L.P. dated as of the date hereof (as
it may be amended, modified or supplemented from time to time, the "Partnership
Agreement") and (ii) that certain commitment letter dated as of the date hereof
(the "Bridge Loan Commitment Letter") issued by Whitehall Street Real Estate
Limited Partnership XI and Blackstone Real Estate Acquisitions III L.L.C. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Partnership Agreement.
Each General Partner hereby acknowledges and agrees that any election
or decision to be made by the Partnership with respect to the Bridge Loan
Commitment Letter, including, without limitation, the election by the
Partnership to borrow the Bridge Loan thereunder, shall require the approval of
both the Blackstone GP and WHGP, each of which approvals may be withheld in
their sole discretion. BGP and Berkshire acknowledge that in the event the
Blackstone GP and WHGP elect not to authorize a borrowing under the Bridge Loan
Commitment Letter, the Partnership may be unable to satisfy its obligations
under the Merger Agreements and as a result, the Cash Collateral (as defined in
the Merger Agreement)(or its substitute) may be forfeited thereunder. Failure of
the Blackstone GP or WHGP to approve the Partnership's borrowing of the Bridge
Loan, whether or not such failure leads to a loss of the Cash Collateral or
other assets of the Partnership, shall not (i) constitute a default by such
Partner under the Partnership Agreement, including under Section 12.21 of the
Partnership Agreement, (ii) otherwise constitute a breach of any obligations,
express or implied, at law or in equity, which otherwise may be owed by the
Blackstone GP or WHGP to the Partnership or (iii) excuse Berkshire or BGP from
any of its obligations under Section 12.21 of the Partnership Agreement.
The Partners acknowledge that, on the date hereof, the Partnership will
deliver a letter of credit issued by The Chase Manhattan Bank ("Chase") in the
amount of $29,500,000 (the "LC") to American Stock Transfer Trust Company, as
escrowee, pursuant to the terms of the Merger Agreement. In connection with the
issuance of the LC, each of the Investor Group Partners have entered into
reimbursement obligations with Chase with respect to the LC as follows: (i) the
members of the Blackstone Group have jointly agreed to reimburse Chase for up to
40% of amounts due with respect to the LC; (ii) the members of the Whitehall
Group have jointly agreed to reimburse Chase for up to 40% of amounts due with
respect to the LC; and (iii) the members of the Berkshire Group have jointly
agreed to reimburse Chase for up to 20% of amounts due with respect to the LC.
The foregoing obligations of the members of the Blackstone Group shall be
several from the foregoing obligations of the members of the Whitehall Group and
the Berkshire Group; the foregoing obligations of the members of the Whitehall
Group shall be several from the foregoing obligations of the members of the
Blackstone Group and the Berkshire Group; and the foregoing obligations of the
members of the Berkshire Group shall be several from the foregoing obligations
of the members of the Whitehall Group and the Blackstone Group. The Partners
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further acknowledge and agree that for the purposes of Section 12.21 of the
Partnership Agreement, the amount any Partner shall be responsible for in
connection with its reimbursement obligations with respect to the LC shall be
deemed to be such Partner's Capital Contributions made to the Partnership which
will be reimbursed by a defaulting Partner in accordance with the provisions of
Section 12.21.
The Partners acknowledge and agree that as promptly as practicable
after the full execution and delivery of the BRI Merger Agreement and BRI OP
Merger Agreement (and in any event within seven (7) days after the date hereof),
the General Partners shall cause the Partnership to purchase an interest rate
hedge agreement having the following characteristics (such agreement, the
"Hedge"): (i) the Hedge will be a European style put option with a strike rate
equal to 50 basis points (0.50%) above the yield on the five year U.S. Treasury
security on the date of purchase; (ii) the expiration date of the Hedge will be
August 4, 1999 (or as soon thereafter as is available); and (iii) the notional
amount of the Hedge will be approximately $593,000,000. Any two General Partners
shall have the authority to execute on behalf of the Partnership any and all
documentation required to implement the Hedge and all of the Partners agree to
take any steps reasonably required to implement the Hedge. Each of the Investor
Group Partners shall fund its pro rata share of the cost of the Hedge, based on
its Partnership Percentage Interest.
By its execution below, each of The Berkshire Companies Limited
Partnership and Xxxxxxx Xxxxx, jointly and severally, hereby guarantees to the
Partnership and the Partners the full payment and performance of all of the
obligations of BGP and Berkshire under Section 12.21 of the Agreement.
By its execution below, Blackstone Real Estate Acquisitions III L.L.C.
hereby guarantees to the Partnership and the Partners the full payment and
performance of all of the obligations of the Blackstone GP and the Blackstone LP
under Section 12.21 of the Agreement.
By its execution below, Whitehall Street Real Estate Limited
Partnership XI hereby guarantees to the Partnership and the Partners the full
payment and performance of all of the obligations of WHGP, Whitehall,
XxxxxXxxxxx, XxxxxxXxxxxx and StoneCorp under Section 12.21 of the Agreement.
The Partnership Agreement, as modified hereby, is and remains in full
force and effect and is hereby ratified and confirmed.
This terms of this letter shall be binding upon, and inure to the
benefit of, each of the parties hereto and their respective successors and
assigns.
This letter shall be governed by and construed in accordance with the
laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this letter as of
the date written above.
GENERAL PARTNERS:
WXI/BRH GEN-PAR LLC
By: /s/ XXXXXX XXXXXXX
------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
BRE/BERKSHIRE GP L.L.C.
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
APTCO GEN-PAR, L.L.C.
By: /s/ XXXXXXX XXXXX
-----------------
Name: Xxxxxxx Xxxxx
Title:
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LIMITED PARTNERS:
WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP XI
By: WH Advisors, L.L.C. XI, its general partner
By: /s/ XXXXXX XXXXXXX
------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
STONE STREET REAL ESTATE FUND 1998 L.P.
By: Stone Street Advantage Realty Corp.,
its general partner
By: /s/ XXXX XXXX
-------------
Name: Xxxx Xxxx
Title: Vice President
BRIDGE STREET REAL ESTATE FUND 1998 L.P.
By: Stone Street Advantage Realty Corp.,
its general partner
By: /s/ XXXX XXXX
-------------
Name: Xxxx Xxxx
Title: Vice President
STONE STREET WXI/BRH CORP.
By: /s/ XXXX XXXX
-------------
Name: Xxxx Xxxx
Title: Vice President
BRE/BERKSHIRE LP L.L.C.
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
APTCO HOLDINGS, L.L.C.
By: /s/ XXXXXXX XXXXX
-----------------
Name: Xxxxxxx Xxxxx
Title:
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GUARANTORS:
THE BERKSHIRE COMPANIES LIMITED
PARTNERSHIP
By: /s/ XXXXXXX XXXXX
-----------------
Name: Xxxxxxx Xxxxx
Title:
/s/ XXXXXXX XXXXX
-----------------
XXXXXXX XXXXX
BLACKSTONE REAL ESTATE ACQUISITIONS III L.L.C.
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP XI
By: WH Advisors, L.L.C. XI, its general partner
By: /s/ XXXXXX XXXXXXX
------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
