Exhibit 10.14

 

CONSENT AGREEMENT

(1255 23rd Street)

 

CONSENT AGREEMENT (this “Agreement”), dated as of December 19, 2003, by and
between THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation
(the “Lender”), and CAPITOL 50 ASSOCIATES, a District of Columbia joint venture
(the “Borrower”).

 

RECITALS

 

A. The Borrower and the Lender are parties to certain of the Loan Documents (as
defined in the Definitional Appendix attached hereto and incorporated herein
(the “Definitional Appendix”)) relating to a secured loan in the original
principal amount of $38,300,000 (the “Loan”).

 

B. CarrAmerica Realty Corporation, a Maryland corporation (“CARC”), owns over
80% of the limited partnership interests in Carr Realty, L.P., a Delaware
limited partnership (“CRLP”) and is the sole general partner of CRLP.

 

C. CRLP owns a 50% partnership interest in Square 50 Associates, a District of
Columbia general partnership (“Square 50”), and the remaining 50% partnership
interest in Square 50 is owned by Tasea Investment Company, a Delaware
corporation.

 

D. CRLP owns a 50% partnership interest in the Borrower, and the remaining 50%
partnership interest in Borrower is owned by Square 50.

 

E. In connection with the Loan, the Borrower, CRLP and Square 50 entered into an
Environmental Indemnity Agreement, dated as of March 19, 1999, with the Lender
(the “Original Indemnity Agreement”), and CRLP and Square 50 entered into a
Guarantee of Recourse Obligations, dated as of March 19, 1999, with the Lender
(the “Original Guarantee”).

 

F. CRLP is contemplating a restructuring transaction (the “CRLP Restructuring”),
as more particularly described on Schedule I attached hereto and incorporated
herein (the “CRLP Restructuring Schedule”), as a result of which, among other
things, (a) CARC will cease to hold directly the general partner interest and
limited partner interests in CRLP, and such interests will be held, directly and
indirectly, by Carr Realty Holdings L.P., a newly formed subsidiary of CARC
(“CRH”), and (b) CRLP will cease to hold its 50% partnership interests in Square
50 and the Borrower, respectively, and such interests will be held, directly and
indirectly, by CRH.

 

--------------------------------------------------------------------------------

G. The Borrower has requested that the Lender consent to the CRLP Restructuring,
and the Lender is willing to do so on the terms set forth below.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1. Defined Terms. All capitalized terms not otherwise defined herein which are
defined in the Definitional Appendix shall have the meanings assigned to them in
the Definitional Appendix.

 

2. Lender Consent. (a) To the extent necessary under the Loan Documents, the
Lender hereby consents to the CRLP Restructuring and to the execution, delivery
and performance of the documents and instruments contemplated by, or necessary
to implement, the CRLP Restructuring (collectively, the “Documents”). The
implementation and consummation of the CRLP Restructuring and the execution,
delivery and performance of the Documents shall not be deemed to be or to give
rise to any Default or Event of Default, and the Lender hereby waives any breach
or default under the Loan Documents that would otherwise be caused by the CRLP
Restructuring or by the execution, delivery and performance of the Documents. To
the extent that the Loan Documents provide that any or all of the transactions
included in the CRLP Restructuring may be implemented if certain advance notice
thereof is given, all such conditions or requirements of advance notice shall be
deemed to have been complied with and all such notices shall be deemed to have
been duly and timely given in accordance with the terms of the Loan Documents.
The Loan Documents are hereby deemed modified to the extent, but only to the
extent, that may be necessary to permit and reflect the consummation of the CRLP
Restructuring and the execution, delivery and performance of the Documents; such
modifications to become effective upon the consummation of the CRLP
Restructuring.

 

(b) Without limiting the terms of Section 2(a), it is hereby agreed that,
effective upon the CRLP Restructuring Effective Date, the Loan Documents shall
be deemed to be modified as follows:

 

(i) any references to CARC as the general partner of CRLP shall be replaced by
references to CARC as the general partner of CRH or by references to GPLLC as
the general partner of CRLP, as the context requires;

 

(ii) any references to CARC as a limited partner of CRLP shall be replaced by
references to CARC as a limited partner of CRH or by references to CRH as a
limited partner of CRLP, as the context requires;

 

2

--------------------------------------------------------------------------------

(iii) any references to CARC holding direct ownership interests in CRLP shall be
replaced by references to CARC holding direct ownership interests in CRH or
indirect ownership interests in CRLP through CRH, or by references to CRH
holding direct and indirect interests in CRLP, as the context requires;

 

(iv) any references to CRLP as the owner, directly or indirectly, of interests
in the Borrower or Square 50 or any Collateral shall be replaced by references
to CRH;

 

(v) any references to the CRLP as an indemnitor under the Original Indemnity
Agreement shall be replaced by references to CRH as an indemnitor under the
Replacement Indemnity Agreement; and any references to the Original Indemnity
Agreement shall be replaced by references to the Replacement Indemnity
Agreement;

 

(vi) any references to CRLP as a guarantor under the Original Guarantee shall be
replaced by references to CRH as a guarantor under the Replacement Guarantee;
and any references to the Original Guarantee shall be replaced by references to
the Replacement Guarantee; and

 

(vii) the Mortgage shall be deemed amended to replace the definition of “change
in the proportionate ownership of Grantor” set forth in the Mortgage with the
definition set forth in Schedule II hereof.

 

(c) The Lender has advised the Borrower that it wishes to record the amendment
to the Mortgage deemed made pursuant to clause (vii) of Section 2(b) by
recording the Lien Instrument Amendment (as defined in Section 4(iii)) following
the CRLP Restructuring Effective Date. The Lender hereby acknowledges and agrees
that the other modifications deemed made to the Loan Documents pursuant Sections
2(a) and 2(b) hereof shall have the same force and effect as the modifications
set forth in the Lien Instrument Amendment notwithstanding that such other
modifications are not included in an amendment of lien instrument or other
recorded instrument.

 

3. Borrower Representations and Warranties. To induce the Lender to enter into
this Agreement, the Borrower hereby covenants, represents and warrants to the
Lender that (a) the Borrower has full power and authority to enter into this
Agreement, to execute and deliver all documents and instruments required
hereunder, and to incur and perform the obligations provided for herein and
therein, all of which have been duly authorized by all necessary partnership
action of the Borrower, and no consent or approval of any third party other than
those which will have been obtained and will still be in effect as of the CRLP
Restructuring Effective Date is required as a condition to the validity or
enforceability hereof or thereof; (b) this Agreement has been duly executed and

 

3

--------------------------------------------------------------------------------

delivered by the Borrower; (c) this Agreement constitutes the valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, subject to bankruptcy and other laws affecting the rights of
creditors generally and the application of general principles of equity; (d) the
execution, delivery and performance by the Borrower of this Agreement will not
violate (i) any provision of law or any order, rule or regulation of any court
or governmental authority, or (ii) any instrument, contract, agreement,
indenture, mortgage, deed of trust or other document or obligation to which the
Borrower is a party or by which the Borrower, or any of the Borrower’s property,
is bound; and (e) upon giving effect hereto, no Default or Event of Default has
occurred and is continuing under the Loan Documents.

 

4. Delivery of Additional Documents by the Borrower.

 

Within thirty-five (35) days after the CRLP Restructuring Effective Date, the
Borrower shall deliver to the Lender:

 

(i) an Environmental Indemnity Agreement, dated as of the CRLP Restructuring
Effective Date, by the Borrower, Square 50 and CRH, as indemnitors, in favor of
the Lender, in the same form and containing the same terms (except for its date
and the substitution of CRH for CRLP as an indemnitor thereunder) as the
Original Indemnity Agreement (the “Replacement Indemnity Agreement”), executed
by the Borrower, Square 50 and CRH;

 

(ii) a Guarantee of Recourse Obligations, dated as of the CRLP Restructuring
Effective Date, by CRH and Square 50, as guarantors, in favor of the Lender, in
the same form and containing the same terms (except for its date and the
substitution of CRH for CRLP as a guarantor thereunder) as the Original
Guarantee (the “Replacement Guarantee”), executed by CRH and Square 50;

 

(iii) an Amendment of Lien Instrument dated as of the CRLP Restructuring
Effective Date between Borrower and Lender amending the Mortgage by replacing
the definition of “change in the proportionate ownership of Grantor” in the
Mortgage with the definition set forth in Schedule II attached hereto (the “Lien
Instrument Amendment”);

 

(iv) certified copies of the certificate of limited partnership and the limited
partnership agreement of CRH;

 

(v) a certificate of good standing of CRH issued by the Secretary of State of
the State of Delaware and dated not more than 15 days prior to the date of its
delivery to the Lender;

 

(vi) certified copy of resolutions of the Borrower authorizing the execution,
delivery and performance of this Agreement, the Lien Instrument

 

4

--------------------------------------------------------------------------------

Amendment and the other agreements and documents contemplated hereby to be
executed and delivered by the Borrower;

 

(vii) certified copy of resolutions of CRH authorizing the execution, delivery
and performance of the Replacement Indemnity Agreement and the Replacement
Guarantee; and

 

(ix) a certificate of good standing of CARC issued by the Secretary of State of
the State of Maryland and dated not more than 15 days prior to the date of its
delivery to the Lender.

 

5. Confirmations Regarding Loan Documents.

 

(a) Each Loan Document is hereby confirmed by the Borrower to be in full force
and effect and is hereby ratified and continued in all respects, and remains
subject to the Liens of the Lender pursuant to the Loan Documents. Except as
deemed modified pursuant to Section 2 hereof and pursuant to the Lien Instrument
Amendment (and except as contemplated herein with respect to the replacement of
the Original Indemnity Agreement and the Original Guarantee by the Replacement
Indemnity Agreement and the Replacement Guarantee, respectively), the Loan
Documents shall remain unchanged after giving effect to the CRLP Restructuring
and, as so modified or replaced, are hereby ratified and confirmed and shall
continue in full force and effect.

 

(b) Without limiting the terms of Section 5(a), the Borrower hereby confirms for
the benefit of the Lender that:

 

(i) the Borrower shall pay, perform and discharge each and every obligation of
payment and performance by the Borrower under, pursuant to and as set forth in
the Mortgage and the other Loan Documents to which the Borrower is party, at the
time and in the manner set forth in such agreements;

 

(ii) there are no defenses, set-offs or counterclaims, or rights of defense,
set-off or counterclaim, whether legal, equitable or otherwise, to the
obligations evidenced by or set forth in the Mortgage and the other Loan
Documents; and

 

(iii) this Agreement in no way releases, relinquishes or otherwise affects the
Liens created by or arising under the Loan Documents in the Collateral to secure
the Borrower’s obligations under the Loan Documents, or the priority of such
Liens, and such Liens are hereby ratified and confirmed by the Borrower in all
respects.

 

(c) By signing the Confirmation attached hereto, each of CRLP and Square 50
hereby confirms for the benefit of the Lender that each of the Original

 

5

--------------------------------------------------------------------------------

Indemnity Agreement and the Original Guarantee is in full force and effect, is
hereby ratified, confirmed and continued in all respects, and shall continue in
full force and effect until replaced as contemplated herein by the Replacement
Indemnity Agreement and the Replacement Guarantee, respectively.

 

6. Further Assurances. Each party hereto agrees promptly to do, make, execute
and deliver all such additional and further acts, things, deeds, assurances,
instruments and documents as the other party may reasonably request to evidence
and/or implement the terms of this Consent Agreement, and to vest in and assure
to the requesting party its rights (and/or to confirm the agreements and
obligations of the non-requesting party) hereunder or under any of the Modified
Agreements.

 

7. Expenses. The Borrower agrees to pay all out-of-pocket expenses (including,
without limitation, attorneys’ fees) reasonably incurred by the Lender in
connection with the review, negotiation, execution and delivery of this
Agreement and any other agreements and documents executed or to be executed in
connection herewith.

 

8. Counterparts; Facsimile Execution. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which counterparts shall together constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.

 

9. Recitals Incorporated. The recitals hereto are hereby incorporated into and
made a part hereof as though fully set forth herein.

 

10. Headings. The headings and subheadings contained in the titling of this
Agreement and the schedules and exhibits hereto are intended to be used for
convenience only and shall not be deemed to be part of, or affect the
interpretation of, the provisions hereof or thereof.

 

11. Governing Law. The performance and construction of this Agreement shall be
governed by the internal laws of the District of Columbia (exclusive of
principles of conflicts of laws).

 

12. Replacement of Certain Loan Documents; Release. Upon the delivery of the
Replacement Indemnity Agreement to the Lender executed by the Borrower, CRH and
Square 50, and without any further action on the part of any party, the Original
Indemnity Agreement shall be deemed to be cancelled and terminated and shall be
of no further force and effect as of the effective date of the Replacement
Indemnity Agreement, and the Borrower, CRLP and Square 50 shall be released and
discharged from any further liability or obligation under the Original Indemnity
Agreement as of such date. Upon the delivery of the Replacement Guarantee to the
Lender executed by CRH and Square 50, and without any further action on the part
of any party, the Original Guarantee shall be deemed to be cancelled and
terminated and shall be of no further force and effect as of the effective date
of the Replacement Guarantee, and CRLP and Square 50 shall

 

6

--------------------------------------------------------------------------------

be released and discharged from any further liability or obligation under the
Original Guarantee as of such date. The Lender shall mark as “Cancelled” and
deliver to the Borrower any and all originals in the possession or control of
the Lender or its agents or representatives of: (i) the Original Indemnity
Agreement, promptly upon delivery to the Lender of an original of the
Replacement Indemnity Agreement executed by the Borrower, CRH and Square 50, and
(ii) the Original Guarantee, promptly upon delivery to the Lender of an original
of the Replacement Guarantee executed by CRH and Square 50.

 

13. Termination of Certain Provisions. The Borrower shall notify the Lender of
the consummation of the CRLP Restructuring. If the CRLP Restructuring Effective
Date has not occurred on or before April 30, 2004, the terms of Sections 2, 4, 5
and 6 of this Agreement shall lapse and be of no further force or effect.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Consent Agreement to be
duly executed under seal by their duly authorized respective officers as of the
day and year first above written.

 

LENDER:

 

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation

By:   Northwestern Investment Management Company, LLC, a Delaware limited
liability company, its wholly-owned affiliate and authorized representative    
By:  

/s/ DAVID D. CLARK

       

--------------------------------------------------------------------------------

   

Name:

 

David D. Clark

   

Title:

 

Managing Director

 

(Signatures continue on next page)

 

8

--------------------------------------------------------------------------------

BORROWER:

 

CAPITOL 50 ASSOCIATES, a District of Columbia joint venture

By:   CARR REALTY, L.P., a Delaware limited partnership, partner     By:  
CARRAMERICA REALTY CORPORATION, a Maryland corporation, its general partner    
   

By:

 

/s/ STEPHEN E. RIFFEE

           

--------------------------------------------------------------------------------

       

Name:

 

Stephen E. Riffee

       

Title:

 

CFO & Treasurer

 

By:   SQUARE 50 ASSOCIATES, a District of Columbia general partnership, partner
    By:   CARR REALTY, L.P., a Delaware limited partnership, partner        

By:

  CARRAMERICA REALTY CORPORATION, a Maryland corporation, its general partner  
         

By:

 

/s/ STEPHEN E. RIFFEE

               

--------------------------------------------------------------------------------

           

Name:

 

Stephen E. Riffee

           

Title:

 

CFO & Treasurer

 

(Signatures continue on next page)

 

9

--------------------------------------------------------------------------------

    By:   TASEA INVESTMENT COMPANY, a Delaware corporation, partner (which, by
executing below, hereby also consents to the CRLP Restructuring in its capacity
as a partner of Square 50 Associates)        

By:

 

/s/ ROBERT W. LOWE

           

--------------------------------------------------------------------------------

       

Name:

 

Robert W. Lowe

       

Title:

 

Vice President

 

10

--------------------------------------------------------------------------------

CONFIRMATION

 

Each of the undersigned, as to itself, hereby confirms the matters set forth as
confirmed by it in Section 5(c) of the above Consent Agreement dated as of
December 19, 2003 (the “Consent Agreement”), as to each Loan Document referred
to in said Section 5(c) and by executing this Confirmation shall be a party to
the Consent Agreement solely for purposes of said Section 5(c) and for purposes
of the releases of the undersigned set forth in Section 12 of the Consent
Agreement.

 

IN WITNESS WHEREOF, each of the undersigned has caused this Confirmation to be
executed by its duly authorized officer as of the date of the Consent Agreement.

 

CARR REALTY, L.P., a Delaware limited partnership, partner By:   CARRAMERICA
REALTY CORPORATION, a Maryland corporation, its general partner    

By:

 

/s/ STEPHEN E. RIFFEE

       

--------------------------------------------------------------------------------

   

Name:

 

Stephen E. Riffee

   

Title:

 

CFO & Treasurer

 

SQUARE 50 ASSOCIATES, a District of Columbia general partnership, partner By:  

CARR REALTY, L.P., a Delaware limited partnership, partner

    By:   CARRAMERICA REALTY CORPORATION, a Maryland corporation, its general
partner        

By:

 

/s/ STEPHEN E. RIFFEE

           

--------------------------------------------------------------------------------

       

Name:

 

Stephen E. Riffee

       

Title:

 

CFO & Treasurer

 

--------------------------------------------------------------------------------

By:   TASEA INVESTMENT COMPANY, a Delaware corporation, partner    

By:

 

/s/ ROBERT W. LOWE

       

--------------------------------------------------------------------------------

   

Name:

 

Robert W. Lowe

   

Title:

 

Vice President

 

2

--------------------------------------------------------------------------------

SCHEDULE I

 

CRLP RESTRUCTURING SCHEDULE

 

The “CRLP Restructuring,” as such term is used in the Consent Agreement to which
this Schedule is attached (the “Consent Agreement”), include (i) the
transactions and events referred to in the following paragraphs of this
Schedule, in substantially the form described herein or with such exclusions or
changes as will not in the aggregate have a material adverse effect on the
Collateral or the Lender’s rights under any one or more of the Modified
Agreements and (ii) such other related transactions and steps, occurring prior
to or concurrently with or within a reasonable time after the transactions and
events described below, as may be reasonably necessary to complete the
transactions and events described below, provided that the related transactions
and steps referred to in this clause (ii) shall not result in the creation of
any Lien on the Collateral in violation of the Modified Agreements or the
transfer of ownership of the Collateral to any person or entity (except as and
to the extent contemplated by the transactions and events described below) nor
otherwise in the aggregate have a material adverse effect on the Collateral or
the Lender’s rights under any one or more of the Modified Agreements.

 

Capitalized terms used but not defined in this Schedule shall have the meanings
assigned to them in the Consent Agreement or the Definitional Appendix attached
thereto. Matters described in this Schedule are not necessarily listed in the
chronological order in which they may be taken. Nothing in this Schedule shall
constitute a binding obligation on the Borrower or any other party to enter into
all or any of the transactions described in this Schedule.

 

CRLP Restructuring

 

The CRLP Restructuring includes the following steps:

 

Step 1 – CRLP will form CRH as a Delaware limited partnership that is owned 99%
by CRLP as the sole limited partner of CRH and 1% by a newly formed wholly-owned
Delaware limited liability company subsidiary of CRLP as the sole general
partner of CRH (“HMLLC”).

 

Step 2 – CRH will form a Delaware limited partnership (“Merger LP”) that is
owned 99% by CRH as the sole limited partner of Merger LP and 1% by a
wholly-owned Delaware limited liability company subsidiary of CRH as the sole
general partner of Merger LP (“GPLLC”).

 

Step 3 – Merger LP will merge with and into CRLP, with CRLP as the surviving
entity (the “CRLP Merger”). In the CRLP Merger, (i) the

 

--------------------------------------------------------------------------------

existing CRLP unitholders (including CARC) will receive interests in CRH
reflecting the same percentage ownership interests and substantially the same
terms as their interests in CRLP in exchange for their CRLP interests, (ii) the
interests in Merger LP held by CRH and GPLLC will become interests in CRLP, and
(iii) the interests in CRH held by CRLP and HMLLC will be extinguished.

 

Step 4 – CRLP will assign to CRH its ownership interests in its subsidiaries and
joint venture investments (including its ownership interests in the Borrower and
Square 50) but not its interests in properties currently owned directly by CRLP.

 

Step 5 – GPLLC will elect to be classified as an association for income tax
purposes.

 

GPLLC, a wholly owned subsidiary of CRH, will replace CARC as the 1% sole
general partner of CRLP. CRH will replace CARC and the other current limited
partners in CRLP as a 99% limited partner in CRLP. CARC will be the 1% sole
general partner in CRH, and CARC and the other current limited partners in CRLP
will become the limited partners in CRH, with CARC holding the same percentage
interest of over 80% that it currently holds in CRLP.

 

The Borrower will continue to exist and will continue to own the real estate
property it now owns. Except as contemplated herein and in the Consent Agreement
with respect to the replacement of the Original Indemnity Agreement by the
Replacement Indemnity Agreement, the Loan Documents to which the Borrower is a
party will remain in effect. The Lender’s existing Liens under the Loan
Documents will remain in effect. CRH will replace CRLP, and CRLP will be
released, as an obligor under any Loan Documents.

 

2

--------------------------------------------------------------------------------

DEFINITIONAL APPENDIX

 

“Collateral” shall mean all property (including any after-acquired property) of
the Borrower in which the Lender has a Lien under the Loan Documents, and all
property (including after-acquired property) of the Borrower in which the Lender
may in the future acquire a Lien under the Loan Documents.

 

“CRLP Merger” shall have the meaning given to such term in the CRLP
Restructuring Schedule.

 

“CRLP Restructuring Effective Date” shall mean the effective date of the CRLP
Merger.

 

“Default” shall mean any event which, with the giving of notice or passage of
time (or both), would constitute an Event of Default.

 

“Event of Default” shall mean any event which would, if remaining uncured or
unwaived upon the expiration of any applicable cure period, cause or permit the
Lender to declare due and payable or otherwise accelerate the maturity of any
indebtedness of the Borrower evidenced or secured by the Loan Documents.

 

“GPLLC” shall have the meaning given to such term in the CRLP Restructuring
Schedule.

 

“Lien” shall mean any statutory or common law consensual or nonconsensual
mortgage, pledge, security interest, encumbrance, lien, right of setoff, claim
or charge of any kind, including, without limitation, any conditional sale or
other title retention transaction, any lease transaction in the nature thereof
and any secured transaction under the Uniform Commercial Code of any
jurisdiction.

 

“Loan Documents” shall mean, as the same may be in effect on the date hereof:
the Mortgage and any and all loan agreements, credit agreements, contracts,
promissory notes and other instruments, security agreements, assignments, pledge
agreements, hypothecation agreements, environmental indemnities, other
indemnification agreements, subordination agreements, guaranties and other
documents and agreements executed and delivered by the Borrower and the Lender
or for the benefit of the Lender and delivered to the Lender in connection with
the Mortgage, as the foregoing have been amended and supplemented to the date
hereof.

 

“Modified Agreements” shall mean the Loan Documents as deemed modified pursuant
to this Agreement.

 

--------------------------------------------------------------------------------

“Mortgage” shall mean the Amended and Restated Deed of Trust and Security
Agreement, dated as of March 19, 1999, by the Borrower to William H. Norton as
trustee for the benefit of the Lender.

 

2

--------------------------------------------------------------------------------

SCHEDULE II

 

DEFINITION OF “CHANGE IN PROPORTIONATE OWNERSHIP OF

GRANTOR” UPON CRLP RESTRUCTURING

 

For purposes of this instrument, a “change in the proportionate ownership of
Grantor” means (i) any change in the ownership of the joint venture interests in
Grantor resulting in Carr Realty Holdings, L.P., a Delaware limited partnership
(“CRH”), owning, directly or indirectly, less than a 75% interest in Grantor, or
(ii) any conveyance or transfer by CarrAmerica Realty Corporation, the general
partner of CRH, of any of its partnership interest in CRH.