SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TWO TOWER BRIDGE ASSOCIATES
Dated as of May 11, 1998
TABLE OF CONTENTS
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BACKGROUND STATEMENT...........................................................1
ARTICLE I
DEFINITIONS...........................................................2
1.01. Act..........................................................2
1.02. Additional Capital Balance...................................2
1.03. Additional Capital Contributions.............................2
1.04. Administrative General Partner...............................2
1.05. Book Value...................................................2
1.06. BOP Preference Capital.......................................2
1.07. BOP Preferred Cumulative Return..............................2
1.08. Building.....................................................3
1.09. Capital Accounts.............................................3
1.10. Capital Balance..............................................3
1.11. Capital Contributions........................................3
1.12. Certificate..................................................3
1.13. Code.........................................................3
1.14. Contribution Percentage......................................3
1.15. Cumulative Net Loss..........................................4
1.16. Cumulative Net Profit........................................4
1.17. Depreciation.................................................4
1.18. Fiscal Year..................................................4
1.19. Hypothetical Capital Account.................................4
1.20. Land.........................................................4
1.21. Managing General Partner.....................................4
1.22. Minimum Gain.................................................4
1.23. Minimum Gain Share...........................................5
1.24. Net Cash Flow................................................5
1.25. Net Refinancing Proceeds.....................................5
1.26. Net Sale Proceeds............................................5
1.27. Nonrecourse Deductions.......................................5
1.28. Operating Budget.............................................5
1.29. Participation Percentage.....................................5
1.30. Partner or Partners..........................................6
1.31. Partner Minimum Gain.........................................6
1.32. Partner Nonrecourse Debt.....................................6
1.33. Partner Nonrecourse Deductions...............................6
1.34. Partners' Loans..............................................6
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1.35. Partners' Priority Loans.....................................6
1.36. Preferred Cumulative Return..................................6
1.37. Profits or Losses............................................7
1.38. Project......................................................7
1.39. Project Costs................................................8
ARTICLE II
GENERAL PROVISIONS....................................................8
2.01. Admission of Partners........................................8
2.02. Continuation and Term........................................8
2.03. Name.........................................................8
2.04. Purpose......................................................8
2.05. Places of Business...........................................9
2.06. Nature of Partners' Interests; Non-Partition.................9
2.07. Partnership Income...........................................9
ARTICLE III
CAPITAL CONTRIBUTIONS; LOANS.........................................10
3.01. Capital Contributions.......................................10
3.02. Capital Accounts............................................11
3.03. Capital Calls...............................................11
3.04. Additional Capital Contributions; Partners' Loans...........12
3.05. Procedures Upon a Failure to Make an Additional
Capital Contribution; Partners' Priority Loans..............12
3.06. Partner Affiliate Guaranties; Partners' Priority Loans......13
ARTICLE IV
MANAGEMENT OF THE PARTNERSHIP........................................13
4.01. Duties and Powers of the General Partners...................13
4.02. Fees, Compensation and Reimbursement of Expenses............17
4.03. Concerning the Limited Partners.............................17
4.04. Sale or Refinancing.........................................17
4.05. Bank Accounts...............................................18
4.06. Consents and Approvals......................................18
4.07. Concerning Persons Other Than Partners......................18
4.08. Indemnification of the General Partners.....................19
4.09. Representations and Warranties of the Managing General
Partner.....................................................19
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4.10. Representations and Warranties of the Administrative
General Partner.............................................26
4.11. Certain Definitions.........................................28
4.12. Pledges.....................................................28
ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS........................................29
5.01. Distributions of Net Cash Flow..............................29
5.02. Distributions of Net Refinancing Proceeds and Net
Sale Proceeds...............................................29
5.03. Availability of Funds.......................................30
5.04. Tax Withholding.............................................30
5.05. Allocation of Profits and Losses............................31
ARTICLE VI
BOOKS AND RECORDS; TAX MATTERS.......................................34
6.01. Accounting..................................................34
6.02. Statements..................................................34
6.03. Inspection..................................................35
6.04. Tax Matters.................................................35
ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS;
WITHDRAWAL OF PARTNERS;
REMOVAL OF THE MANAGING GENERAL PARTNER..............................37
7.01. Transfer of General Partnership Interests...................37
7.02. Transfer of Limited Partnership Interests...................40
7.03. Expenses....................................................41
7.04. Withdrawal of Partners......................................41
7.05. Death, Incompetency, Dissolution or Bankruptcy of a
Limited Partner.............................................41
7.06. Deadlock of the General Partners............................41
7.07. Right of First Refusal......................................43
7.08. Status of Interests Transferred.............................44
7.09. Removal of the Managing General Partner.....................45
7.10. Deadlock on Sale............................................47
7.11. Arbitrable Disputes.........................................48
7.12. Right of Contribution in Favor of Managing General Partner..51
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ARTICLE VIII
ADDITIONAL LIMITED PARTNERS..........................................55
8.01. Additional Limited Partners and Their Contributions.........55
ARTICLE IX
INSURANCE............................................................55
9.01. Coverage....................................................55
9.02. Certificates; Notices.......................................56
9.03. Concerning Liability Insurance..............................57
9.04. Miscellaneous...............................................57
ARTICLE X
DISSOLUTION AND TERMINATION..........................................57
10.01. Dissolution.................................................57
10.02. Appointment of Liquidating Partner..........................58
10.03. Distributions and Other Matters.............................59
10.04. Distributions of Property...................................60
10.05. Actions of the Liquidating Partner; Statements of
Account.....................................................60
ARTICLE XI
NOTICES AND COMMUNICATIONS...........................................60
11.01. Notices.....................................................60
11.02. Change of Address...........................................61
11.03. Time of Communications......................................61
ARTICLE XII
MISCELLANEOUS........................................................62
12.01. Filings.....................................................62
12.02. Power of Attorney...........................................62
12.03. Inspections.................................................63
12.04. Other Remedies..............................................63
12.05. Partners as Creditors.......................................63
12.06. Independent Ventures........................................63
12.07. Partial Invalidity..........................................64
12.08. Governing Law; Parties in Interest..........................64
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12.09. Amendment...................................................64
12.10. Execution in Counterpart....................................64
12.11. Computation of Time.........................................64
12.12. Table of Contents; Titles and Captions......................64
12.13. Pronouns and Plurals........................................64
12.14. Approval by General Partners................................64
12.15. Exhibits....................................................64
12.16. Entire Agreement............................................65
12.17. Filing with Securities Exchange Commission..................65
12.18. Non-Recourse................................................65
EXHIBITS
Exhibit "A" - Schedule of Partnership Participation and Capital
Exhibit "B" - Land Description
Exhibit "C" - Leasing Agency Agreement Form
Exhibit "D" - Management Agreement Form
Exhibit "D-1" - Operating Budget
Exhibit "E" - Schedule of Subordinate Debt
Exhibit "F" - Balance Sheet
Exhibit "F-1" - Balance Sheet of BOP
Exhibit "G" - Liabilities not in the Ordinary Course in excess of $1,000
individually since the date of Exhibit "F"
Exhibit "H" - Litigation
Exhibit "I" - Schedule of Contracts not terminable on 30 days' notice
Exhibit "J" - Schedule of Service Contracts
Exhibit "K" - Rent Roll
Exhibit "K-1" - Parking Deck Agreement
Exhibit "L" - Certificate of Insurance
Exhibit "M" - Brokerage Commissions
Exhibit "N" - Schedule of Taxes, insurance, utilities, fuel oil and trash
collection
Exhibit "O" - Rights of Refusal, Options, etc.
Exhibit "P" - Development Agreements
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TWO TOWER BRIDGE ASSOCIATES
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP (this "Agreement") is made and entered into as of _______________,
1998, by and among TWO XXXXXX TOWER ASSOCIATES, a Pennsylvania limited
partnership with offices at c/o Oliver Xxxxxx Xxxxxx Corporation, One Tower
Bridge, 000 Xxxx Xxxxx Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, as
Managing General Partner ("Managing General Partner"), BRANDYWINE XX XX, L.P.,
a Pennsylvania limited partnership with offices at c/o Brandywine Realty
Trust, Newtown Corporate Campus, 00 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000, as Administrative General Partner ("Administrative
General Partner"), and XXXXXX X. XXXXXX, with offices at c/o Oliver Xxxxxx
Xxxxxx Corporation, One Tower Bridge, 000 Xxxx Xxxxx Xxxxxx, Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Limited Partner"). Managing General Partner
and Administrative General Partner are sometimes hereinafter referred to
collectively as the "General Partners" or individually as a "General Partner."
The General Partners and the Limited Partner are sometimes hereinafter
referred to collectively as the "Partners," or individually as a "Partner."
BACKGROUND STATEMENT
A. Two Tower Bridge Associates (the "Partnership") is an existing
Pennsylvania limited partnership formed pursuant to the Act (hereinafter
defined) and that certain Agreement of Limited Partnership dated as of August
13, 1990, as amended and restated in accordance with an Amended and Restated
Agreement of Limited Partnership dated as of January 1, 1991 (such agreement,
as so amended and restated, the "Original Agreement") and a Certificate of
Limited Partnership, dated as of August 13, 1990 (the "Original Certificate"),
as filed in the Department of State of the Commonwealth of Pennsylvania on
March 27, 1991. At the time of its formation, the partnership's sole partners
were Managing General Partner, as general partner, and Limited Partner, as
limited partner.
B. The parties hereto desire to admit Administrative General Partner
as a general partner to the Partnership; to provide for the reconstitution of
the Partnership as the result of the admission of Administrative General
Partner as aforesaid, to provide for the continuation of the Partnership as so
reconstituted, and to reflect the agreements and understandings among the
Partners in respect of the conduct of the business of the Partnership and the
relationship among the Partners -- all of the foregoing on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and premises
hereinafter set forth, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
DEFINITIONS
Certain terms when used in this Agreement shall have the meanings set
forth in the context hereof. The following terms when used in this Agreement
shall have the respective meanings set forth below:
1.01. Act. The Pennsylvania Uniform Limited Partnership Act, 59 Pa.
C.S.A. Section 3.01 et seq., as amended.
1.02. Additional Capital Balance. The Additional Capital
Contributions of a Partner; in each case as reduced from time to time by all
cash distributions to such Partner which are in reduction of a Partner's
Additional Capital Balance; and in each case as increased from time to time by
any contributions by such Partner which are Additional Capital Contributions.
1.03. Additional Capital Contributions. Any additional cash
contributions of a Partner to the capital of the Partnership made pursuant to
Sections 3.03 hereof.
1.04. Administrative General Partner. The entity identified as
Administrative General Partner in the caption hereof.
1.05. Book Value. With respect to any asset, the asset's adjusted
basis for federal income tax purposes, except that (i) where an asset has been
revalued on the books of the Partnership the Book Value of such asset shall be
adjusted to reflect such revaluation; (ii) where an asset has been contributed
by a Partner to the Partnership or distributed by the Partnership to a Partner
its Book Value shall be its agreed fair market value; and (iii) the Book Value
of Partnership assets shall be adjusted to reflect the Depreciation taken into
account with respect to such assets for purposes of determining Profits or
Losses.
1.06. BOP Preference Capital. The Capital Contribution made by
Administrative General Partner as reflected on Exhibit "A" attached hereto and
made a part hereof. BOP Preference Capital shall be part of the Administrative
General Partner's Capital Balance and Capital Account.
1.07. BOP Preferred Cumulative Return. The cumulative right given to
Administrative General Partner, which right is hereby granted, to receive in
respect of each quarter of each Fiscal Year a sum equal to ten percent (10%)
per annum, compounded annually, of such Partner's then aggregate, outstanding
BOP Preference Capital (computed from time to time during any such Fiscal Year
to reflect reductions in or additions to such BOP Preference Capital); and if
such BOP
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Preference Capital shall at any time be reduced to zero, then the BOP
Preferred Cumulative Return shall thereupon cease and shall not be renewed by
virtue of any future capital. The BOP Preferred Cumulative Return shall begin
on the date the BOP Preference Capital is advanced. Any amounts to be
distributed in connection with the foregoing during the first Fiscal Year in
which the BOP Preferred Cumulative Return begins shall be reduced ratably in
the same ratio as the number of days remaining in such first Fiscal Year bears
to 365, and all amounts to be distributed on other than the last day of a
Fiscal Year shall be computed ratably based on the elapsed portion of such
Fiscal Year. The BOP Preferred Cumulative Return shall be payable as specified
in this Agreement only from funds available to the Partnership from Net Cash
Flow, Net Refinancing Proceeds, Net Sale Proceeds or proceeds upon the
Partnership's liquidation, and shall not (i) create a debt of the Partnership
to any Partner to the extent that any such funds are not available for
distribution, or (ii) constitute a guaranteed payment as defined in Section
707(c) of the Code.
1.08. Building. The office building known as Two Tower Bridge,
consisting of an office building consisting of approximately 82,705 square
feet, with the structured parking area immediately adjacent thereto.
1.09. Capital Accounts. The capital accounts of the Partners, as
described in Section 3.01 hereof and Exhibit "A".
1.10. Capital Balance. The Capital Contributions and Additional
Capital Contributions of a Partner; in each case as reduced from time to time
by all cash distributions to such Partner which are in reduction of a
Partner's Capital Balance or a Partner's Capital Account; and in each case as
increased from time to time by any contributions by such Partner which are
Capital Contributions or Additional Capital Contributions. With respect to
Managing General Partner and Limited Partner, the Capital Balance shall
initially be as stated on Exhibit "A" hereof by reason of the adjustment of
fair market value as set forth in Section 3.01 hereof.
1.11. Capital Contributions. The cash capital contributions of the
Partners as described in Section 3.01 hereof and in Exhibit "A" hereto.
1.12. Certificate. The Original Certificate, or, if required by the
Act, any amended and restated certificate with respect to the Partnership,
which is executed now or hereafter by the General Partners and is filed for
record as required by the Act.
1.13. Code. The Internal Revenue Code of 1986, as amended from time
to time, and all successors thereto.
1.14. Contribution Percentage. The Contribution Percentages of the
Partners, as set forth in Exhibit "A" hereto.
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1.15. Cumulative Net Loss. For any Partner, the extent (if any) to
which the aggregate amount of Losses and other items of loss or deduction
allocated to such Partner in the current and all prior Fiscal Years shall
exceed the aggregate amount of Profits and other items of income or gain
allocated to such Partner in the current and all prior Fiscal Years.
1.16. Cumulative Net Profit. For any Partner, the extent (if any) to
which the aggregate amount of Profits and other items income or gain allocated
to such Partner in the current and all prior Fiscal Years shall exceed the
aggregate amount of Losses and other items of loss or deduction allocated to
such Partner in the current and all prior Fiscal Years.
1.17. Depreciation. For each Fiscal Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that
if the Book Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such Fiscal Year (as a result of the
revaluation of such asset or its contribution to the Partnership by a
Partner), Depreciation shall be an amount which bears the same ratio to such
beginning Book Value as the federal income tax depreciation, amortization or
other cost recovery deduction for such Fiscal Year or other period bears to
such beginning adjusted tax basis; provided that if the beginning adjusted tax
basis is zero, Depreciation for such Fiscal Year or other period shall be
determined with reference to such beginning Book Value using any reasonable
method selected by the Managing General Partner.
1.18. Fiscal Year. The calendar year.
1.19. Hypothetical Capital Account. With respect to any Partner, such
Partner's Capital Account, after giving effect to the following adjustments:
(i) Such Capital Account shall be reduced to reflect the
items described in clauses (4), (5) and (6) of Regulation
Section 1.704-1(b)(2)(ii)(d); and
(ii) Such Capital Account shall be increased by any amount
such Partner is obligated to restore or is treated as being obligated to
restore for purposes of Regulation Section 1.704-1(b)(2)(ii)(d), including such
Partner's Minimum Gain Share and such Partner's share of Partner Minimum Gain.
1.20. Land. The real estate described in Exhibit "B" hereto.
1.21. Managing General Partner. Two Xxxxxx Tower Associates, a
Pennsylvania limited partnership.
1.22. Minimum Gain. An amount determined by computing, with respect
to each nonrecourse liability of the Partnership, the amount of gain (of
whatever character), if any, that would be realized by the Partnership if it
disposed of (in a taxable transaction) the Partnership property subject to
such liability in full satisfaction thereof, and by then aggregating the
amounts
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so computed. Such amount shall be determined in a manner consistent with
Regulation Section 1.704-2(d).
1.23. Minimum Gain Share. For each Partner, such Partner's share of
any Minimum Gain for the Fiscal Year (after taking into account any decrease
in the Minimum Gain for such year), as determined under Regulation
Section 1.704-2(g).
1.24. Net Cash Flow. Net Cash Flow of the Partnership with respect to
any calendar period shall mean gross receipts from the ownership or operation
of the Project (excluding Net Refinancing Proceeds and Net Sale Proceeds),
reduced by (i) cash disbursements, including, but not limited to, any payment
to any creditor of the Partnership (other than on account of a Partners' Loan
or Partners' Priority Loan) or any tenant entitled to a share of any such
receipts, and (ii) a reasonable amount for, and any additions to, a reserve
for contingencies, working capital, repairs, improvements, tenant
improvements, tenant concessions, replacements, expenses and the payment of
Partnership obligations, the amount of and any additions to such reserve to be
established by the Managing General Partner and as approved by the
Administrative General Partner.
1.25. Net Refinancing Proceeds. The proceeds realized by the
Partnership upon any refinancing of a Partnership indebtedness, net of
expenses incident to such refinancing and satisfaction of any indebtedness
being refinanced and any right of any other creditor of the Partnership (other
than on account of a Partners' Loan or Partners' Priority Loan) or any tenant
to receive such proceeds or a portion thereof for repayment of indebtedness or
as additional interest.
1.26. Net Sale Proceeds. The proceeds realized by the Partnership
upon the sale of any Partnership asset, net of expenses incident to such sale,
the payment of any Partnership indebtedness secured by or related to such
asset and satisfaction of any right of any other creditor of the Partnership
(other than on account of a Partners' Loan or Partners' Priority Loan) or any
tenant to receive such proceeds or a portion thereof for repayment of
indebtedness or as additional interest.
1.27. Nonrecourse Deductions. For each Fiscal Year, the Partnership
deductions that are characterized as "nonrecourse deductions" under Regulation
Section 1.704-2(b)(1).
1.28. Operating Budget. A budget proposed by the Managing General
Partner and approved by the Administrative General Partner for each fiscal
year of the Partnership, and reviewed each calendar quarter, all in accordance
with Section 4.0l.C(8) and Section 4.01(D) hereof.
1.29. Participation Percentage. The Participation Percentages of the
Partners, as set forth in Exhibit "A" hereto.
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1.30. Partner or Partners. Individually, a General Partner or a
Limited Partner, and collectively, the General Partners and Limited Partner,
including Persons admitted to the Partnership after the date hereof in
accordance with the terms hereof.
1.31. Partner Minimum Gain. An amount determined by computing, with
respect to each Partner Nonrecourse Debt, the Minimum Gain that would result
if such Partner Nonrecourse Debt were treated as a nonrecourse liability,
determined in accordance with Regulation Section 1.704-2(i)(3).
1.32. Partner Nonrecourse Debt means nonrecourse Partnership debt for
which one or more Partners bears an economic risk of loss, determined in
accordance with Regulation Section 1.704-2(b)(4).
1.33. Partner Nonrecourse Deductions means, for each Fiscal Year, the
Partnership deductions which are attributable to Partner Nonrecourse Debt and
are characterized as "partner nonrecourse deductions" under Regulation
Section 1.704-2(i)(1).
1.34. Partners' Loans. All amounts loaned by the Partners to the
Partnership pursuant to Section 3.04. hereof or in satisfaction of a Partner's
own obligation under Section 3.05. hereof. Partners' Loans shall be payable,
as set forth in this Agreement, from and out of Partnership assets, but
otherwise shall be made on a "no-recourse" basis and no Partner shall have any
personal liability in respect of any thereof.
1.35. Partners' Priority Loans. All amounts loaned by a Partner to
the Partnership on behalf of another Partner pursuant to Section 3.05 hereof
and all amounts loaned by a Partner to the Partnership by reason of
satisfaction of a Guaranty by a Partner Affiliate as set forth in Section 3.06
hereof. Partners' Priority Loans shall be payable, as set forth in this
Agreement, from and out of Partnership assets, but otherwise shall be made on
a "no-recourse" basis and no Partner shall have any personal liability in
respect of any thereof.
1.36. Preferred Cumulative Return. The cumulative right given to each
Partner, which right is hereby granted, to receive in respect of each quarter
of each Fiscal Year a sum equal to ten percent (10%) per annum, compounded
annually, of such Partner's Additional Capital Balance (computed from time to
time during any such Fiscal Year to reflect reductions in or additions to such
Additional Capital Balance; and if such Partner's Additional Capital Balance
shall at any time be reduced to zero, then the Preferred Cumulative Return
shall thereupon be suspended until such time as such Partner's Additional
Capital Balance returns to a positive figure). The Preferred Cumulative Return
shall begin on the date of the first Additional Capital Contribution. Any
amounts to be distributed in connection with the foregoing during the first
Fiscal Year in which the Preferred Cumulative Return begins shall be reduced
ratably in the same ratio as the number of days remaining in such first Fiscal
Year bears to 365, and all amounts to be distributed on other than the last
day of a Fiscal Year shall be computed ratably based on the elapsed portion of
such Fiscal Year. The Preferred Cumulative Return shall be payable as
specified in this Agreement
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only from funds available to the Partnership from Net Cash Flow, Net
Refinancing Proceeds, Net Sale Proceeds or proceeds upon the Partnership's
liquidation, and shall not (i) create a debt of the Partnership to any Partner
to the extent that any such funds are not available for distribution, or (ii)
constitute a guaranteed payment as defined in Section 707(c) of the Code.
1.37. Profits or Losses. The Partnership's net taxable income or loss
for a Fiscal Year, as computed for federal income tax purposes (including all
items of Partnership income, gain, loss or deduction regardless of whether
such items are required to be separately stated under Section 702(a) of the
Code), with the following adjustments:
(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in determining Profits
or Losses shall be added to such Profits or Losses;
(ii) Any expenditures of the Partnership described in
Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B)
expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i) and not
otherwise taken into account in computing Profits or Losses shall be subtracted
from such Profits or Losses;
(iii) In any case where, in accordance with Regulation
Section 1.704-1(b)(2)(iv)(e) or (f), Partnership property is revalued on the
books of the Partnership to reflect its fair market value, the amount of such
upward or downward adjustment (to the extent not previously taken into
account) shall be taken into account as gain or loss from a taxable
disposition of such property for purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Book Value
of the property disposed of, notwithstanding that the adjusted tax basis of
such property differs from such Book Value;
(v) In lieu of the depreciation, amortization and other
cost recovery deductions taken into account for federal income tax purposes,
Depreciation as defined herein shall be taken into account in computing
Profits or Losses; and
(vi) Notwithstanding any other provision of this
definition, Nonrecourse Deductions, Partner Nonrecourse Deductions and any
items of income, gain, loss or deduction which are specially allocated
pursuant to subsections C, E or F of Section 5.05(a) below shall not be taken
into account in computing Profits or Losses.
1.38. Project. That certain Land and office building known as Two
Tower Bridge consisting of approximately 82,705 square feet, as the same may
be modified from time to time, together with all right, title and interest of
the Partnership to all related improvements, parking and amenities, including,
but not limited to, that certain parking facility which is structurally part
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of the Project and the top deck of which is currently leased to the Borough of
Conshohocken or a public authority for public parking.
1.39. Project Costs. All costs and expenses associated with the
carrying of the Project and leasing of the Project, any future improvements,
whether for tenants or otherwise, which have been or are incurred or committed
to by the Partnership prior to or after the date hereof, including, without
limitation, all costs and expenses hereafter incurred in design fees, permit
fees and non-refundable deposits; fees (including, without limitation,
financing fees, fees paid for or in connection with any loans to the
Partnership, origination or other fees paid in connection with any loan of the
Partnership); debt service payments, including, but not limited to, interest,
principal and other costs and charges, on all loans to or borrowings by the
Partnership (excluding Partners' Loans and Partners' Priority Loans); costs of
closing loans to the Partnership; real estate taxes; insurance premiums;
promotional, legal, accounting, management and other incidental fees and
expenses incurred or committed to by the Partnership; costs incurred in
leasing space in or maintaining and operating the Project (including, but not
limited to, brokerage fees or commissions paid to brokers); and all other
costs or expenses paid, incurred or committed to by the Partnership after the
date hereof relating to the Project.
ARTICLE II
GENERAL PROVISIONS
2.01. Admission of Partners. Administrative General Partner is hereby
admitted as a General Partner of the Partnership. Upon the admission of
Administrative General Partner as aforesaid, the Participation Percentages and
Contribution Percentages of the Partners are and shall be as set forth on
Exhibit "A" hereto.
2.02. Continuation and Term. The Partners hereby agree to continue
the business of the Partnership pursuant to the provisions of the Act and on
the terms set forth in this Agreement. The term of the Partnership commenced
on the date on which the Partnership's Original Certificate of Limited
Partnership was filed for record as provided by the Act, and shall continue
until the Partnership is dissolved pursuant to Article X hereof.
2.03. Name. The business of the Partnership shall be carried on under
the name "Two Tower Bridge Associates" or under such other name as the General
Partners (acting by their unanimous consent) may from time to time designate.
2.04. Purpose. The purpose and character of the business of the
Partnership shall be to (i) acquire, control and own the Project in accordance
with the terms of this Agreement, (ii) operate and maintain the Project and
lease space in the Project to others, and (iii) do all things necessary or
appropriate to effect any part or all of the foregoing.
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2.05. Places of Business. The Partnership's principal place of
business shall be at c/o Oliver Xxxxxx Xxxxxx Corporation, Xxx Xxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or at such other principal office
of the Managing General Partner as it may from time to time establish.
The Partnership may have such other or additional places of
business within or without the Commonwealth of Pennsylvania as the General
Partners (acting by their unanimous consent) may from time to time designate.
2.06. Nature of Partners' Interests; Non-Partition. The interests of
the Partners in the Partnership shall be personal property for all purposes.
All property owned by the Partnership, whether real or personal, tangible or
intangible, shall be owned by the Partnership as an entity, and no Partner
individually shall have any ownership of such property. No Partner shall be
entitled to seek partition of any Partnership property.
2.07. Partnership Income. Managing General Partner acknowledges and
agrees that Brandywine Realty Trust, the general partner of Brandywine
Operating Partnership, L.P. ("BOP"), a limited partner in Administrative
General Partner, is a real estate investment trust, as defined in the Code. So
long as BOP is a partner in Administrative General Partner, the Partnership
shall endeavor to manage its affairs such that the Partnership does not
intentionally earn any income for tax purposes or intentionally acquire any
assets other than income and assets as follows:
(i) at least 95% of the Partnership's annual gross income
is to be derived from (A) dividends; (B) interest; (C) rents from real
property; (D) gain from the sale or other disposition of stock, securities and
real property (including interests in real property and interests in mortgages
on real property) which is not property described in section 1221(1); (E)
abatements and refunds of taxes on real property; (F) income and gain derived
from foreclosure property (as defined in subsection (e)); (G) amounts (other
than amounts the determination of which depends in whole or in part on the
income or profits of any person) received or accrued as consideration for
entering into agreements (a) to make loans secured by mortgages on real
property or on interests in real property or (b) to purchase or lease real
property (including interests in real property and interests in mortgages on
real property); and (H) gain from the sale or other disposition of a real
estate asset which is not a prohibited transaction solely by reason of Code
Section 857(b)(6);
(ii) at least 75% of the Partnership's annual gross income
(excluding gross income from prohibited transactions as defined for purposes
of Code Section 865(c)(3)) is to be derived from (A) rents from real property;
(B) interest on obligations secured by mortgages on real property or on
interests in real property; (C) gain from the sale or other disposition of
real property (including interests in real property and interest in mortgages
on real property) which is not property described in Code Section 1221(1); (D)
dividends or other distributions on, and gain (other than gain from prohibited
transactions) from the sale or other disposition of, transferable
9
shares (or transferable certificates of beneficial interest) in other real
estate investment trusts which meet the requirements of Code Section 856; (E)
abatements and refunds of taxes on real property; (F) income and gain derived
from foreclosure property (as defined in Code Section 856(e)); (G) amounts
(other than amounts the determination of which depends in whole or in part on
the income or profits of any person) received or accrued as consideration for
entering into agreements (a) to make loans secured by mortgages on real
property or on interests in real property or (b) to purchase or lease real
property (including interests in real property and interests in mortgages on
real property); (H) gain from the sale or other disposition of a real estate
asset which is not a prohibited transaction solely by reason of Code Section
857(b)(6); and (I) qualified temporary investment income; and
(iii) at the close of each quarter of each taxable year (A)
at least 75% of the value of its total assets is represented by real estate
assets, cash and cash items (including receivables), and Governmental
securities; and (B) not more than 25 percent of the value of its total assets
is represented by securities (other than those includible in calculating the
75% test in the preceding clause) for purposes of this calculation limited in
respect of any one issuer to an amount not greater in value than 5 percent of
the value of the total assets of the Partnership and to not more than 10
percent of the outstanding voting securities of such issuer.
Notwithstanding anything to the contrary contained herein,
the Partnership may have income and assets which do not comply with the above
subsections (i),(ii) and (iii) if the effect of such noncompliance does not
and would not reasonably be expected to cause Brandywine Realty Trust to
violate the provisions of Code Section 856. All terms used in this section
2.07 shall have the meaning ascribed to them for purposes of Code Section 856.
Receipt of income or acquisition of assets which does not satisfy the criteria
set forth in this Section 2.07 shall not give rise to any claim for damages,
consequential or otherwise.
ARTICLE III
CAPITAL CONTRIBUTIONS; LOANS
3.01. Capital Contributions.
A. Prior to the date hereof, the Managing General Partner
and the Limited Partner have contributed cash to the Partnership in the
amounts set forth opposite their names on Exhibit "A" hereto. The Partners
further agree that the Project shall be revalued on the books of the
Partnership to reflect its fair market value as of the date hereof and that
the Capital Accounts and Capital Balances of the Managing General Partner and
the Limited Partner as of the date hereof shall be restated as set forth on
Exhibit "A" hereto.
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B. Upon its execution of this Agreement, the Administrative
General Partner shall contribute to the capital of the Partnership the amount
of cash set opposite its name on Exhibit "A" attached hereto.
3.02. Capital Accounts. A Capital Account shall be determined and
maintained for each Partner on the books and records of the Partnership in
accordance with the following provisions:
A. As of the date of this Agreement, each Partner's Capital
Account shall be as set forth on Exhibit "A" hereto. After the date hereof,
each Partner's Capital Account shall (i) be increased by the amount of money
contributed by it to the Partnership, by the fair market value of property
contributed by it to the Partnership (net of liabilities secured by such
contributed property) and the amount of Profits and other items of Partnership
income or gain allocated to such Partner under Section 5.05, and (ii) be
decreased by the amount of money distributed to it by the Partnership, by the
fair market value of property distributed to it by the Partnership (net of
liabilities secured by such distributed property) and the amount of Losses and
other items of Partnership deduction, loss or expense allocated to such
Partner under Section 5.05.
B. Except as otherwise expressly provided herein, it is
intended that the Capital Accounts shall be determined and maintained
throughout the full term of the Partnership in accordance with the capital
accounting rules of Regulation Section 1.704-1(b)(2)(iv), and that all
provisions in this Agreement of the Regulations relating to the maintenance of
Capital Accounts shall be interpreted and applied in a manner consistent with
such Regulations. In the event the General Partners shall determine that it is
prudent to modify the manner in which the Capital Accounts, or any credits or
charges thereto, are computed in order to comply with such Regulations, the
General Partners shall make such modification, provided that it is not likely
to have a material effect on the amounts distributable to the Limited Partner
upon the dissolution and liquidation of the Partnership.
C. In the event of a transfer of an interest in the
Partnership, the Capital Account of the transferor Partner that is
attributable to the transferred interest shall be carried over to the
transferee of such interest and adjusted as provided in the Regulations under
section 704 of the Code.
3.03 Capital Calls.
A. Whenever any General Partner determines that additional
capital is required by the Partnership for Project Costs, such General Partner
may, by written notice to all Partners, call for Additional Capital
Contributions from all partners (each, a "Capital Call"). These Additional
Capital Contributions shall be payable in cash or, if such General Partner
making the Capital Call so permits, a note to the Partnership no later than
the date specified in the notice, which date shall be no sooner than fifteen
(15) days after notice is given. Each Partner shall contribute the sum
required based upon such Partner's Contribution Percentage in the Partnership.
In the event of a failure of any Partner to make a requested Additional
Capital
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Contribution the rights of the Partners and the Partnership shall be governed
by Section 3.04 and 3.05 hereof.
B. The Capital Contributions of the Partners, all
Partnership borrowings, and any Additional Capital Contributions, Partners'
Loans and Partners' Priority Loans made pursuant to this Agreement shall be
used and applied only (i) in accordance with an Operating Budget, (ii) Project
Costs, or (iii) for any other Partnership purpose as determined and agreed to
by all of the General Partners.
3.04. Additional Capital Contributions; Partners' Loans.
A. Except as expressly set forth in this Article III, no
Partner shall be required to make any Additional Capital Contributions,
Partners' Loans or Partners' Priority Loans to the Partnership.
B. If any Partner advances any funds to the Partnership
after the date of this Agreement (except as provided for in Section 3.03.
above or 3.05 below), which advances are not otherwise specifically designated
as Capital Contributions, Additional Capital Contributions, or Partners'
Priority Loans, such advances will be treated as Partners' Loans, will not
increase such Partner's Participation Percentage, and the amount thereof will
be a debt due from the Partnership to such Partner, entitled to the priorities
described in Article V and Section 10.03 hereof, to be repaid with such
interest as will be expressly agreed upon by all of the General Partners, or,
in the absence of agreement, with interest at a rate equal to ten percent
(10%) per annum.
C. Except as set forth in Section 3.05 hereof, in no event
may any Partner advance any funds to the Partnership after the date of this
Agreement and have such advances treated as Partners' Loans unless such
advances are approved by each of the General Partners.
3.05. Procedures Upon a Failure to Make an Additional Capital
Contribution; Partners' Priority Loans.
A. In the event any Partner (a "Non-Contributing Partner")
shall fail for any reason, in accordance with the provisions of Section 3.03
hereof, to provide all or any part of the advances due the Partnership from it
hereunder within the period provided by such notice, then each Partner which
has made the advance, if any, required to be made by it pursuant to such
Section (a "Contributing Partner") shall have and is hereby given the right
and election, but not the obligation, in all cases exercisable within ten (10)
consecutive days following expiration of the period provided by such notice as
aforesaid, (i) to withdraw the advance so made by it, or (ii) not to withdraw
the advance so made and, at its election, thereupon to advance all or any part
of the deficiency. The amount to be contributed by each Partner electing to
contribute such non-contributed funds shall be as agreed among such electing
Partners or, in the absence of an agreement, shall be in proportion to their
respective relative Contribution Percentage in the Partnership. The amount
contributed by the Contributing Partner in satisfaction of its own
12
obligation shall be treated as a Partner Loan, and any deficiency amounts
advanced on behalf of a Non-Contributing Partner shall be treated as a
Partners' Priority Loan to the Partnership. Neither such Partner Loan nor such
Partners' Priority Loan will increase such Contributing Partner's
Participation Percentage or Contribution Percentage, and the amount thereof
will be a debt due from the Partnership to such Contributing Partner, entitled
to the priorities described in Article V and Section 10.03 hereof, to be
repaid with such interest as will be expressly agreed upon by all of the
General Partners, or in the absence of agreement, with interest at a rate
equal to ten percent (10%) per annum.
B. The rights, powers and remedies set forth in the foregoing
provisions of this Section 3.05 shall be the sole and exclusive remedies in
the event of a failure or series of failures to fund Capital Calls provided
for in Section 3.03.
3.06. Partner Affiliate Guaranties; Partners' Priority Loans. In the
event any person or entity which owns an interest in, directly or indirectly,
any of the General Partners (a "Partner Affiliate") guarantees or agrees to
become surety for payment or performance under any loan (other than a
Partners' Loan or Partners' Priority Loan) to the Partnership, and any amount
which is required to be advanced by such Partner Affiliate under such guaranty
is advanced by or for the benefit of the Partnership, then the sum so advanced
shall be deemed to be a Partners' Priority Loan of such Partner. Such
Partners' Priority Loan will not increase such contributing Partner's
participation percentage or contribution percentage, and the amount thereof
will be a debt due from the Partnership to such contributing Partner, entitled
to priorities described in Article V and Section 10.03 hereof, to be repaid
with such interest as will be expressly agreed upon by all of the General
Partners, or in the absence of agreement, with interest at a rate equal to ten
percent (10%) per annum.
ARTICLE IV
MANAGEMENT OF THE PARTNERSHIP
4.01. Duties and Powers of the General Partners.
A. The Partnership will be managed and the conduct of its
business will be controlled solely by the General Partners. Any action to be
taken or determination to be made by the General Partners shall mean action
taken or determination made by the General Partners acting by their unanimous
approval.
B. Each General Partner, subject to the terms, conditions,
restrictions and limitations contained herein, will possess all of the powers
and rights of a general partner under the Act.
13
C. Except as otherwise provided in this Agreement, the
Managing General Partner shall have the following powers and duties and the
Managing General Partner is authorized on behalf of the Partnership to do or
cause to be done the following at Partnership expense (subject, however, to
the terms, conditions, restrictions and limitations contained herein):
(1) obtain title insurance on Partnership property, and
execute all affidavits and other documents necessary in connection therewith
(the identity of the title insurer and the amount, extent, nature, terms and
conditions of the insurance coverage shall in all cases be subject to the
approval of the Administrative General Partner);
(2) prepare and distribute, or cause to be prepared and
distributed, the statements and reports described in Article VI hereof;
(3) with the prior approval of all General Partners,
enter into agreements for long term, standby and any other loans to or
borrowings by the Partnership; execute, with the prior approval of all of the
General Partners and in the name and on behalf of the Partnership, all notes,
mortgages and other agreements, instruments or documents necessary in
connection therewith; and confess judgment against the Partnership as part of
or in connection with any loan or borrowing by the Partnership approved by the
General Partners; it being understood and recognized that unless the General
Partners shall expressly agree to the contrary, every mortgage, note or other
evidence of indebtedness, and every lease, sublease, contract or other
agreement of any kind entered into by or on behalf of the Partnership shall
contain a provision, satisfactory to the General Partners, limiting the claims
of all third parties to the assets of the Partnership and expressly waiving
all rights of such third parties to proceed against any Partner individually,
or against any officer, director, shareholder or partner of a corporate or
partnership Partner, except to the extent of their interest in the
Partnership;
(4) with the prior approval of all General Partners, pay
to any person or persons placing the same, in respect of the placing of any
loans to or borrowings by the Partnership, a mortgage brokerage, placement or
similar fee;
(5) enter into a leasing agency contract with Xxxxxx
Xxxxxx Xxxxxx Corporation substantially in the form of Exhibit "C" hereto,
which may be modified only with the consent of the Administrative General
Partner. No other contract for leasing agency shall be entered into except
with the consent of the Administrative General Partner.
(6) purchase and maintain fire and extended coverage;
liability, workmen's compensation, rental loss and other insurance with
respect to the Land, Project and other property of the Partnership, or
otherwise, all in accordance with the provisions of Article IX hereof;
(7) enter into a management contract substantially in the
form of Exhibit "D" attached hereto between the Partnership and Xxxxxx Xxxxxx
Xxxxxx Corporation,
14
which may be modified only with the consent of the Administrative General
Partner. No other management contract shall be entered into except with the
consent of the Administrative General Partner.
(8) prepare and deliver to each General Partner for its
approval, on the date hereof and thereafter at least thirty (30) days prior to
the beginning of each calendar year, an Operating Budget with respect to such
calendar year. An Operating Budget containing budget categories for the
current calendar year is attached hereto as Exhibit "D-1" (and, if the current
calendar year is 1998, such categories have been completed). Each Operating
Budget shall set forth all receipts projected for the period of such Operating
Budget, all expenses, by category, of owning and operating the Project
(including capital improvements not included in Project Costs) projected to be
incurred during such period and a contingency reserve in an amount of not less
than 10% of the other budgeted expenses. Each General Partner shall have
fifteen (15) business days next following receipt to respond to such Operating
Budget, and its failure so to respond within such fifteen day period shall be
deemed an acceptance and approval of such Operating Budget. Following the
approval of an Operating Budget by all General Partners, the Managing General
Partner shall have the power to do all of the following with respect to the
period covered by such approved Operating Budget without the consent or
joinder of any other Partner, so long as the aggregate of expenditures for all
items included (i) within the entire Operating Budget approved for such period
does not exceed the total amount allocated therein, and (ii) within each
category in the Operating budget approved for such period does not exceed (x)
the total amount allocated therein for such category, plus (y) the amount of
any unused contingency, plus (z) the amount unused or unneeded from any other
category if the work or services covered in such other category have been
fully performed to the satisfaction of all General Partners (and provided
further that if the General Partners are unable to agree on an Operating
Budget for any specific period, then the Managing General Partner shall be
permitted to act under the most recently approved Operating Budget (without
restriction for the amounts allocated for taxes, insurance and utilities)
until the new Operating Budget is approved or unless the provisions of Section
7.06 hereof have become operative):
(a) effect normal operating repairs, replacements or
improvements to the Project, as needed, and, subject to subsection (b) below
and the approved Operating Budget, any such work required by a tenant of the
Project in connection with the leasing or releasing of space in the Project in
the ordinary course of business;
(b) enter into leases for the occupancy of space in
the Project by tenants (including Partners or their affiliates), at rentals no
less than those set forth in the then approved Operating Budget and on such
lease form and within such leasing guidelines as may then have been approved
by all General Partners;
(c) make all required payments of principal and
interest with respect to any indebtedness of the Partnership;
15
(d) pay all taxes and assessments levied against the
Land, Project and other property of the Partnership, or any part thereof;
(e) employ and dismiss from employment any and all
employees and agents, and obtain all legal, leasing, accounting and other
services necessary in connection with the operation or management of the
Project or other property of the Partnership; provided, however, that Managing
General Partner shall have no right to dismiss the asset manager of the
Project without the consent of Administrative General Partner; and
(f) generally, and except as expressly prohibited
herein, do all things in connection with any of the foregoing, generally
manage and administer the day-to-day business and affairs of the Partnership
and execute all documents on behalf of the Partnership in connection
therewith, pay as a Partnership expense all costs or expenses connected with
the operation or management of the Partnership or the Project (except as
otherwise provided herein), and sign or accept all checks, notes and drafts on
the Partnership's behalf except as otherwise provided herein all in a manner
consistent with the Operating Budget.
D. The Managing General Partner shall meet with designated
representatives of the Administrative General Partner on a quarterly or such
other periodic basis as the General Partners may agree, at the offices of the
Managing General Partner, to report on the operations of the Partnership and
to report on and, if appropriate, jointly revise the Operating Budget, the
development and marketing plans, and to consider and pass upon other matters
which have been submitted to the Partners for their review or approval. In
amplification of the foregoing, it is expressly recognized, acknowledged and
agreed that all General Partners shall be permitted to, and intend to,
participate actively in the management of the Partnership and its operations,
including specifically, but without limitation, participation in: the review
and approval of Operating Budgets; the review and revision of leasing plans
and guidelines, and leasing and marketing plans and strategies; and the review
of capital improvement plans for the Project.
E. No principal or other affiliate of the Managing General
Partner shall be obligated to devote his or their exclusive time and effort to
the affairs of the Partnership, but each shall devote so much of his or their
time and effort to the management and other affairs of the Partnership as may
be reasonably required to promote the purposes of the Partnership in an
efficient, effective and diligent manner.
Notwithstanding anything to the contrary contained herein,
the Managing General Partner shall be obligated to employ and maintain such
employees and agents as shall be necessary in order to fully perform the
duties described herein, including, but not limited to, the creation and
distribution of monthly cash flow reports and balance sheets. The Partnership
shall reimburse the Managing General Partner for the expenses of such
employees and agents allocated to the affairs of the Partnership.
16
F. No General Partner shall be liable, responsible or
otherwise accountable to the Partnership or to any Partner for any acts or
omissions in good faith performed or omitted by it or on its behalf in
furtherance of the interests of the Partnership and within the scope of the
authority hereunder, unless such acts or omissions were fraudulent, in bad
faith or a result of wanton and willful misconduct or gross negligence. In
amplification of the foregoing, no General Partner shall be deemed to have
violated any of its responsibilities or duties hereunder if the performance of
such responsibilities or duties shall require the consent or approval of
another Partner or Partners and if such consent or approval shall have been
withheld.
4.02. Fees, Compensation and Reimbursement of Expenses. Except as
expressly set forth herein or in Exhibit "C" or "D" hereto, or as approved in
writing by all the General Partners, no Partner, no affiliate of a Partner, no
shareholder, officer, director or partner of a Partner or any affiliate, and
no corporation or any other entity owned or controlled by a Partner or by any
affiliate shall be entitled to any fees or other compensation, including
without limitation any brokerage or other commission or any other payment or
compensation on account of the leasing, operations, management, financing,
refinancing or sale of the Land or the Project or of any interest therein or
part thereof.
4.03. Concerning the Limited Partners. The Limited Partners shall not
take part in the management or control of the business of the Partnership, nor
shall the Limited Partners have any personal liability with respect to
liabilities and obligations of the Partnership. Each Limited Partner, by its
execution hereof and without in any way limiting the powers and authority of
the General Partners contained elsewhere herein, hereby expressly consents to
the sale, mortgaging, leasing, exchange or other disposition of the Project or
any interest therein or part thereof and to any confession of judgment against
the Partnership, each of the foregoing to be on such terms and conditions as
the General Partners may approve.
4.04. Sale or Refinancing. No General Partner shall have the power or
authority, without the written joinder, consent and approval of all the
General Partners: (i) to sell, exchange, lease or otherwise dispose of (or
enter into any contracts for any such sale, exchange, lease or other
disposition of) all or any portion of the Land, Project or other Partnership
property, or modify any of the terms of any of the foregoing; or (ii) to
borrow, whether such loans are secured or unsecured, any funds on behalf of
the Partnership or refinance, increase, consolidate, extend or otherwise
modify any of the terms of any Partnership indebtedness. None of the foregoing
limitations shall require the consent, approval or any other action by any
Limited Partner; nor shall such limitations be applicable to the lease of
space in the Project in the ordinary course of Partnership business, and the
Managing General Partner, on behalf of the Partnership, shall be permitted
from time to time to enter into such leases without the approval of any other
General Partner if such leases are in accordance with the then approved
Operating Budget and schedule of rents, and are on the other terms and
conditions, required by Section 4.0l.C(8)(b) above.
4.05. Bank Accounts. All funds of the Partnership will be deposited in
a bank located in Philadelphia, Pennsylvania, in such Partnership bank account
or accounts as designated from time
17
to time by the General Partners. Withdrawals from any such bank account or
accounts will be made upon such signature or signatures as the General
Partners may from time to time designate.
4.06. Consents and Approvals.
A. Except as otherwise expressly provided for in Section
4.06(B) hereof or elsewhere in this Agreement, whenever a Partner desires to
take any action which requires the consent or approval of any or all of the
Partners, the requesting Partner shall give written notice thereof (delivered
in accordance with the requirements of Article XI hereof) to each Partner from
whom any such consent or approval is required, describing the proposed action
in sufficient detail to enable such Partner or Partners to exercise an
informed judgment with respect thereto. As soon as practicable thereafter,
each such Partner shall give the requesting Partner written notice (delivered
in accordance with the requirements of Article XI hereof) that it either
consents to or approves, or does not consent to or approve the proposed action
(setting forth its reasons therefor if it does not so consent or approve). In
the event that any such Partner fails to respond (as provided herein) on or
before the fifteenth (15th) business day following notice (as provided herein)
of any such proposed action by a Partner, that Partner shall be conclusively
presumed to have consented to or approved such action.
B. Whenever the Managing General Partner shall require on an
expedited basis the consent of the other General Partner in connection with a
proposed deviation from the adopted leasing terms or lease form not permitted
by the leasing guidelines established pursuant to Subsection 4.01.C(8) (b)
hereof, or a proposed deviation from an Operating Budget adopted by the
General Partners pursuant to Subsection 4.0l.C(8) hereof, the Managing General
Partner shall notify the Administrative General Partner of such proposed
change or deviation in writing. If Administrative General Partner shall fail
to approve or disapprove of such deviation within forty-eight (48) hours after
receipt by Administrative General Partner of written request therefor,
Administrative General Partner shall be conclusively presumed to have
consented to or approved such action.
4.07. Concerning Persons Other Than Partners. The limitations on the
actions of the General Partners contained in this Article IV shall be
effective only as among the Partners themselves, and shall not be binding upon
or have any effect on persons other than Partners dealing with the General
Partners, including without limitation any lender or mortgagee, all of whom
shall be entitled to presume (without the necessity of any inquiry whatsoever)
that any General Partner has complete, unlimited and exclusive authority to
borrow money and to manage, supervise, control, transfer, sell, convey,
pledge, mortgage, encumber, lease or otherwise dispose of, or contract with
respect to, all or any part of the Partnership's property.
4.08. Indemnification of the General Partners. The Partnership shall
indemnify, defend and hold harmless each General Partner, each officer or
director of a corporate General Partner and each partner of a partnership
General Partner and each trustee or officer of any such partner, and any other
person acting as agent of any General Partner of the Partnership and to which
agent
18
the General Partners shall specifically and in writing have conferred rights
under this Section 4.08, against any loss, expense, damage, claim, liability,
obligation, judgment or injury suffered or sustained by him, it, them or any
of them by reason of any act, omission or alleged act or omission by him, it,
them or any of them arising out of his, its or their activities on behalf of
the Partnership or in furtherance of the interests of the Partnership,
including, without limitation, any judgment, award, settlement, reasonable
attorney's fees and other costs or expenses as incurred in connection with the
defense of any actual or threatened actions, proceedings or claims, all costs
of which shall be charged to and paid by the Partnership as incurred;
provided, however, that the acts, omissions or alleged acts or omissions upon
which such actual or threatened actions, proceedings or claims are based were
performed or omitted in good faith and were not fraudulent, in bad faith or as
a result of wanton and willful misconduct or gross negligence by the party to
be indemnified, defended and held harmless under this Section.
4.09. Representations and Warranties of the Managing General
Partner.
A. To induce Administrative General Partner to become a
Partner of the Partnership, the Managing General Partner hereby represents,
warrants and certifies to Administrative General Partner that it has no actual
knowledge contrary to any of the following:
(1) The Partnership is a limited partnership duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. The Partnership conducts no business other than
the ownership, management and operation of the Project. The Partnership has
the power and authority to own its property, and to carry on its business as
presently conducted or contemplated. The Partnership is not in violation of
any term of the Original Agreement, as amended to date. The Partnership has
not, to the knowledge of the Managing General Partner, committed any material
default in the obligation to pay money under any indenture, mortgage,
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to it, nor has the Partnership received any notice that
it has committed any other material default under any of the foregoing.
(2) (A) Except as set forth in subsections 2(B) and 2(C)
hereof, the execution and delivery of this Agreement (including the admission
of the Administrative General Partner as a Partner of the Partnership) will
not result in the violation of any of the terms of the Original Agreement, as
amended to date, and will not result in a breach of, or constitute a default
under, any indenture, mortgage or agreement to which the Partnership is a
party or by which its assets are bound, or any decree, order or rule of any
court or governmental agency or any provision of applicable law which is
binding on the Partnership or on any of its assets, or result in the creation
or imposition of any mortgage, lien, charge, assessment, encumbrance, claim or
restriction on such assets or give to others any interest or rights therein or
create in any third party the right to modify, terminate, accelerate or
otherwise declare a default under any instrument or contract to which the
Partnership is a party or by which its assets are bound.
19
(B) Notwithstanding anything to the contrary
contained in herein, Administrative General Partner acknowledges that Managing
General Partner has provided Administrative General Partner with copies of (1)
a Promissory Note in the original principal amount of Two Hundred Seventy-Two
Thousand Nine Hundred Dollars ($272,900.00) increased to Five Hundred Thousand
Dollars ($500,000.00), from the Partnership to the Redevelopment Authority of
the County of Xxxxxxxxxx (the "RDA"), (2) a Promissory Note in the stated
principal amount of One Hundred Fifty Thousand Dollars ($150,000.00) from the
Partnership to the RDA and (3) a Promissory Note in the stated principal
amount of Three Million Three Hundred Thirty Thousand Dollars ($3,330,000.00)
from the Partnership to the Borough of Conshohocken (the "Borough"), together
with the loan agreements, mortgages, assignment of leases, mortgage
subordination agreements and all other agreements executed in connection
therewith as listed on Exhibit "E" attached hereto and made a part hereof (all
such documents, collectively, the "Subordinate Debt Documents").
Administrative General Partner acknowledges and agrees that, except as
specifically set forth in the following sentence, Managing General Partner
makes no representations with respect to the effect, if any, of this Agreement
upon, or the correctness of the representations and warranties contained in
this Agreement with respect to, such notes, loan agreements, mortgages,
mortgage subordination agreements or other agreements or the loans evidenced
thereby. Managing General Partner represents and warrants that (i) there are
no material Subordinate Debt Documents except those which have been delivered
to Administrative General Partner and (ii) Managing General Partner has
received no notice that the execution and delivery of this Agreement
(including the admission of the Administrative General Partner as a Partner of
the Partnership) will result in a breach of, or constitute a default under any
of the Subordinate Debt Documents or result in the creation or imposition of
any additional lien, charge, assessment, encumbrance, claim or restriction on
the Project, or any portion thereof, or give to the holders of the Subordinate
Debt Documents any additional interest or rights in the Project or create any
right to modify, terminate, accelerate or otherwise declare a default under
the Subordinate Debt Documents.
(C) Notwithstanding anything to the contrary herein,
Administrative General Partner acknowledges that the Partnership intends,
immediately following the execution and delivery of this Agreement, to prepay
all sums due and payable under that certain Note (the "AFL Loan") in the
original principal amount of Eight Million Six Hundred Seventy-Three Thousand
Dollars ($8,673,000.00) in favor of Mercantile-Safe Deposit & Trust Company,
dated August 17, 1992, which Note is secured by a mortgage recorded August 26,
1992 in Mortgage Book 6952, Page 27 in the Office for the Recording of Deeds
and Mortgages in and for Xxxxxxxxxx County, Pennsylvania. The prepayment of
such indebtedness shall be governed by the terms and conditions of a certain
Project Participation Agreement dated as of November 3, 1997 by and among,
among other parties, Brandywine Operating Partnership, L.P., Managing General
Partner, Administrative General Partner Four Xxxxxx Tower Associates and
Limited Partner.
(3) Except for: (i) liabilities disclosed in the balance
sheet (the "Balance Sheet") attached as Exhibit "F" hereto (which Balance
Sheet (a) has been prepared in accordance
20
with the books and records of the Partnership and (b) fairly presents the
Partnership's financial position as of its date), (ii) liabilities arising in
the ordinary course of business since the date of the Balance Sheet consistent
with past practice, including, but not limited to, liabilities to tenants, and
(iii) liabilities of the Partnership not disclosed in the Balance Sheet which
have arisen since the date of the Balance Sheet (A) which are less than One
Thousand Dollars ($1,000) individually or (B) which exceed One Thousand
Dollars ($1,000.00) and are identified on Exhibit "G" hereto, the Partnership
is not subject to liabilities of any nature, whether matured or unmatured,
fixed or contingent. Such Balance Sheet reflects that current assets exceed
current liabilities (other than any liability which arises in connection with
the prepayment of the first mortgage loan intended to be repaid at the time
this Agreement is executed by both parties).
(4) All federal, state and local tax returns and reports
of the Partnership required by law to be filed have been duly and timely filed
(or extensions of the same have been timely filed), and all taxes,
assessments, fees and other governmental charges on or against the Partnership
or upon its properties, assets, income or franchises which are shown thereon
and for which a penalty or interest would be payable if such tax were not paid
prior to the date hereof have been paid.
(5) Since the date of the Balance Sheet, there has not
been any (i) material adverse change in the financial condition or in the
operations, business or property of the Partnership or (ii) damage,
destruction or loss, whether covered by insurance or not, adversely affecting
the operations, business or property of the Partnership. Administrative
General Partner acknowledges and agrees that the termination of the Lease with
Bryn Mawr Trust approximately three (3) months prior to its scheduled
expiration does not constitute a material adverse change and that
Administrative General Partner is executing this Agreement with the
understanding that the Partnership's liabilities may include commissions,
tenant fit-up allowances and tenant inducements for Hayden Real Estate, Inc.
entering into Bryn Mawr Trust's space, all as disclosed in other Exhibits
hereto.
(6) Except as set forth on Exhibit "H" attached hereto
and made a part hereof, there is no suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation, pending or, to
the best of its knowledge, threatened, which might adversely affect the
business or property of the Partnership other than claims which are covered by
insurance.
(7) The Partnership is not a party to, and is not bound
by, any material contract, agreement or other paper regarding the Project
which is not terminable by the Managing General Partner at will without
further liability, upon not more than thirty (30) days' notice, except as
specifically identified in Exhibit "I" and the service contracts listed on
Schedule "J" hereto. Where copies of any agreements have been delivered by the
Managing General Partner or the Partnership to Administrative General Partner,
whether prior to or pursuant to this Agreement, in each case, such copies: (i)
are exact copies of the originals of said documents, as executed and delivered
by all of the parties thereto; (ii) to the best of Managing General Partner's
21
knowledge, constitute, in each case, the entire agreement between the parties
thereto with respect to the subject matter thereof, and the original
instruments in the form delivered to Administrative General Partner are now in
full force and effect, and valid and enforceable in accordance with their
respective terms, and no party thereto has issued any notice of default, and
no claim of default by any party has been made or is now pending; and (iii)
have not been changed or amended except for amendments, if any, specifically
referred to therein.
(8) No proceeding is now pending or, to the best of
Managing General Partner's knowledge, threatened, for the acquisition or
condemnation of the Building or any access thereto or any parking area, by
eminent domain for any public or quasi-public use or purpose.
(9) There are no persons employed by the Managing General
Partner or the Partnership in connection with the operation and maintenance of
the Project.
(10) Exhibit "J" attached hereto is a complete list of
all existing service, equipment, supply and maintenance contracts with respect
to or affecting the Project (the "Service Contracts"). The Partnership has
performed all obligations then due and not contested under all of the Service
Contracts. Any amount subject to dispute in excess of $2,500 is listed on
Exhibit "I" hereto.
(11) There are no public improvements in the nature of
off-site improvements, or otherwise, which have been ordered to be made and of
which Managing General Partner has received notice and which have not
heretofore been assessed, and, to the Managing General Partner's actual
knowledge, there are no special or general assessments currently affecting or
pending against the Project other than the reassessment of properties
generally in Xxxxxxxxxx County. Administrative General Partner acknowledges
and agrees that Managing General Partner has advised the Administrative
General Partner that the tenant under the Parking Deck Agreement has obtained
an exemption of the premises leased under the Parking Deck Agreement, as
hereinafter defined, from real estate taxes. The tenant under such agreement
previously had been responsible for approximately 3.15% of the real estate
taxes on the Project. Managing General Partner makes no representation or
warranty as to the effect, if any, of such tax exemption on the taxes
otherwise applicable to the Project or the portion thereof which is required
to be reimbursed by other tenants.
(12) There are no oral or written leases or rights of
occupancy in any portion of the Property other than the leases (the "Leases")
listed on the rent roll attached hereto as Exhibit "K" and the Parking Deck
Agreement referenced on Exhibit "K-1" (the "Parking Deck Agreement"). Exhibit
"K" or the copies of the leases identified therein previously delivered to
Administrative General Partner identify as of the date of such rent roll with
respect to all Leases other than the Parking Deck Agreement: (i) each tenant
of the Property, (ii) the date that tenant commenced occupancy under the
Lease, (iii) the expiration date of that tenant's Lease, (iv) the annual base
rent, (v) arrearages, if any, in the payment of base rent, (vi) the amount of
base rent
22
prepaid more than forty-five (45) days in advance, if any, (vii) a description
of the documents constituting said tenant's Lease, including all amendments,
modifications, and letter agreements; and (viii) any options to renew, extend,
purchase, cancel or terminate. Except as set forth in Exhibit "K", no tenant
has notified the Managing General Partner or the Partnership that the
Partnership is in default under any of the Leases, or asserted any claim or
basis for any right of setoff against the landlord or the rent under the
Leases. Except as assigned to the RDA and the Borough under the mortgages and
lease assignments previously delivered to Administrative General Partner (as
well as the AFL Loan to the extent the same has not been discharged), the
Partnership has the sole right to collect rents under the Leases with respect
to its Property, and neither such right nor any of the Leases has been
assigned, pledged, hypothecated or otherwise encumbered by the Partnership
except as additional collateral for the existing mortgage upon the Property
which shall be satisfied immediately upon the execution of this Agreement. No
holder of any such collateral assignment has exercised any of its right to
collect such rents. Each of the Leases is in the form of lease previously
delivered to Administrative General Partner, is valid and subsisting and in
full force and effect; except for subleases noted on the rent roll and except
for licensees and occupants under the Parking Deck Agreement, the Landlord has
not received notice of any other subleases or assignments; and the rents set
forth in Exhibit "K", except as noted thereon, are the actual base and net
rents, respectively, scheduled to be collected by the Partnership for the
current lease year under the respective Leases. Except for approximately 1,250
square feet of space which may be occupied by Hayden Real Estate and which is
being vacated by Bryn Mawr Trust approximately three (3) months prior to the
expiration of the term of the lease of Bryn Mawr Trust, any tenant
improvements which the Partnership is obligated to complete pursuant to any
Lease (or any unsigned lease proposal or lease amendment) have been completed
as of this date, all costs therefor have been or shall be paid by the
Partnership, and all of the Partnership's work has or shall have been accepted
by the Tenant without exception, other than routine punch list items. Except
as expressly set forth in the Leases, no tenant or other person has any right
or option to acquire the Project or to terminate any of the rights currently
appurtenant to the Project, or any part thereof. There are no security
deposits being held with regard to any tenant's Lease.
(13) The Managing General Partner has received no written
notice from any governmental authority stating that the Property does not
comply with any law, and there are no outstanding written notices of
violations issued by any governmental authority having jurisdiction over such
Property.
(14) The Managing General Partner has received no
summons, citation, directive, letter or other communication, written or oral,
from any governmental or quasi-governmental authority concerning any
intentional or unintentional action or omission on Managing General Partner's
(or the Partnership's) part which (a) resulted in the releasing, spilling,
leaking, pumping, pouring, emitting, emptying or dumping of Hazardous
Substances or Hazardous Wastes, or (b) related in any way to the generation,
storage, transport, treatment or disposal of Hazardous Substances or Hazardous
Wastes.
23
(15) Exhibit "L" attached hereto contains a true and
correct certificate regarding the insurance affecting the Project and the
operation thereof. The Managing General Partner has not received any written
notice from any insurance company, board of fire underwriters or rating
organization (or other body exercising similar functions) (i) claiming any
defects or deficiencies which have not been addressed and fully cured or
corrected, or (ii) requesting the performance of any repairs, alterations or
other work which have not been performed, or (iii) claiming any default which,
if not corrected, would result in a cancellation of insurance coverage.
(16) No brokerage or leasing commission or other
compensation will be due or payable to any person, firm, corporation, or other
entity with respect to or on account of any of the Leases, or any extensions
or renewals thereof except as set forth on Exhibit "M" hereto.
(17) The Partnership does not constitute a "foreign
person" as such term is defined in Section 1445(f)(3) of the Internal Revenue
Code of 1954, as amended (the "Code").
(18) Exhibit "N" is a correct and complete list of all
real estate taxes, insurance, water and sewer rents and heat, electric, gas,
fuel oil and trash collection charges applicable to the Project and paid by
the Partnership for calendar year 1996.
(19) Except as granted to Administrative General Partner
under this Agreement or listed on Exhibit "O", the Partnership has granted no
agreements, options, rights of first refusal, conditional sales agreements or
other agreements or arrangements, whether oral or written, regarding the
purchase and sale of any portion of the Project or of any interests therein or
in the ownership thereof, or which otherwise affect any portion of the
Project.
(20) The highway occupancy permit required for vehicular
access to and from the Project to adjoining public streets has been obtained
and fully paid for.
(21) Any and all applicable charges, fees and assessments
(including, without limitation, condominium fees, association fees and the
like, to the extent applicable) and any and all other sums due under
declarations, cross-easements and like agreements to which the Property may be
subject and of which Managing General Partner has knowledge, have been paid,
and no special assessments thereunder are pending, and all consents and
approvals required to be obtained under any such declarations, cross-easements
and like agreements have been obtained pursuant to the requirements of such
documentation. Notwithstanding the foregoing, the Partnership has agreed to
contribute a portion of the cost of maintenance of common areas maintained by
the various buildings known as Tower Bridge, including, but not limited to
street sweeping certain streets within the Borough of West Conshohocken and
maintenance of landscaping in area bounded by Matsonford Road and the on ramps
to 76 and 476, and similar types of maintenance. The rate of such maintenance
is approximately one-half of the rate per square foot charged to cooperating
buildings located in West Conshohocken. There is no written
24
evidence of this agreement. The portion of the cost of such maintenance
charged to the Partnership for 1997 was approximately $3,000.
(22) Except as set forth on Exhibit "P" hereto, if any,
the Partnership is not party to any material development, tri-party or similar
agreement with any county, municipal and other governmental and
quasi-governmental agencies and authorities respecting the ownership,
development and operation of the Property and all portions thereof.
(23) The Managing General Partner is a limited
partnership duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania. The Partnership conducts no business
other than its interest as a Partner of the Partnership. The Managing General
Partner has the power and authority to own its property, and to carry on its
business as presently conducted or contemplated. The Managing General Partner
is not in violation of any term of the Original Agreement, as amended to date.
The Managing General Partner has not, to its knowledge, committed any material
default in the obligation to pay money under any indenture, mortgage,
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to it, nor has the Managing General Partner received any
notice that it has committed any other material default under any of the
foregoing.
(24) The execution and delivery of this Agreement
(including the admission of the Administrative General Partner as a Partner of
the Partnership) will not result in a breach of, or constitute a default
under, any indenture, mortgage or agreement to which the Managing General
Partner is a party or by which its assets are bound, or any decree, order or
rule of any court or governmental agency or any provision of applicable law
which is binding on Managing General Partner or on any of its assets, or
result in the creation or imposition of any mortgage, lien, charge,
assessment, encumbrance, claim or restriction on such assets or give to others
any interest or rights therein or create in any third party the right to
modify, terminate, accelerate or otherwise declare a default under any
instrument or contract to which the Managing General Partner is a party or by
which its assets are bound. Notwithstanding anything to the contrary contained
herein, Administrative General Partner acknowledges that Managing General
Partner has provided Administrative General Partner with copies of the
Subordinate Debt Documents, as defined above, and that Managing General
Partner's representations with respect thereto are limited as set forth in
subsection (2), above.
(25) Xxxxxx X. Xxxxxx owns at least fifty-one percent of
the partnership interests in capital and profits of Managing General Partner.
B. The foregoing representations, warranties and covenants
shall survive for a period of one (1) year after the date hereof, including,
but not limited to, any portion of such period following the withdrawal by or
removal of the Managing General Partner as a Partner of the Partnership.
25
C. The Managing General Partner shall indemnify and hold
Administrative General Partner harmless from and against any losses, claims,
damages or expenses, including reasonable attorneys' fees, resulting either
directly or indirectly from any breach of a warranty or representation during
the period of its survival contained in this Section 4.09.
D. Notwithstanding anything to the contrary contained
herein, Administrative General Partner shall have no claim for damages for a
breach of any representation or warranty under this Section 4.09 unless such
damages exceed $10,000 for any one breach (in which case recovery shall be
permitted on account of such breach) or $30,000 for the aggregate of all
breaches (in which case recovery shall be permitted on account of all such
breaches).
E. Administrative General Partner acknowledges and agrees
that Managing General Partner makes no representation or warranty with respect
to the physical condition of the Project, the structural or environmental
condition thereof, any repairs or replacements required thereto or the Net
Cash Flow, Net Refinancing Proceeds or Net Sales Proceeds which will be
generated by the Project. Any projections of cash flow used in negotiations
are meant purely as an example of possible outcomes and do not constitute a
representation or warranty of future profitability of the Project.
4.10. Representations and Warranties of the Administrative General
Partner.
A. To induce Managing General Partner and Limited Partner to
execute this Second Amended and Restated Agreement of Limited Partnership, the
Administrative General Partner hereby represents, warrant and certifies to
Managing General Partner, that it has no actual knowledge contrary to any of
the following:
(1) Administrative General Partner is a limited
partnership duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania. The Administrative General Partner
has the power and authority to own its property, and to carry on its business
as presently conducted or contemplated. The Administrative General Partner has
not, to its knowledge, committed any material default in the obligation to pay
money under any indenture, mortgage, agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to it, nor has the
Administrative General Partner received any notice that it has committed any
other material default under any of the foregoing.
(2) The execution and delivery of this Agreement
(including the admission of the Administrative General Partner as a Partner of
the Partnership) has been authorized by all necessary action of its general
partner and will not result in a breach of, or constitute a default under, any
indenture, mortgage or agreement to which the Administrative General Partner
is a party or by which its assets are bound, or any decree, order or rule of
any court or governmental agency or any provision of applicable law which is
binding on the Administrative General Partner or on any of its assets, or
result in the creation or imposition of
26
any mortgage, lien, charge, assessment, encumbrance, claim or restriction on
the Project or any of Administrative General Partner's such assets or give to
others any interest or rights therein or create in any third party the right
to modify, terminate, accelerate or otherwise declare a default under any
instrument or contract to which the Administrative General Partner is a party
or by which its assets are bound.
(3) Since the date of the balance sheet included in the
Annual Report on Form 10-K for the year ended December 31, 1997, there has
been no material adverse change in the financial condition of Brandywine
Operating Partnership, L.P. ("BOP").
(4) All federal, state and local tax returns and reports
required by law to be filed by Administrative General Partner and BOP have
been duly and timely filed (or extensions of the same have been timely filed),
and all taxes, assessments, fees and other governmental charges on or against
the Administrative General Partner or upon their respective properties,
assets, income or franchises for which a penalty or interest would be payable
if such tax were not paid prior to the date hereof.
(5) There is no suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation, pending or, to
the best of its knowledge, threatened, which might materially and adversely
affect the business or property of the Administrative General Partner of BOP.
(6) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated herein in the manner
herein provided will violate any agreement to which the Administrative General
Partner or BOP is a party or by which either of them is bound, or any law,
order or decree.
B. The foregoing representations, warranties and covenants
shall survive for a period of one (1) year after the date hereof, including,
but not limited to, any portion of such period following any withdrawal by or
removal of the Administrative General Partner as a Partner of the Partnership.
C. The Administrative General Partner shall indemnify and
hold the Partnership, Managing General Partner and Limited Partner harmless
from and against any losses, claims, damages or expenses, including reasonable
attorneys' fees, resulting either directly or indirectly from any breach of a
warranty or representation during the period of its survival contained in this
Section 4.10.
D. Notwithstanding anything to the contrary contained
herein, Managing General Partner shall have no claim for damages for a breach
of any representation or warranty under this Section 4.10 unless such damages
exceed $10,000 for any one breach (in which case recovery shall be permitted
on account of such breach) or $30,000 for the aggregate of all breaches (in
which case recovery shall be permitted on account of all such breaches).
27
4.11. Certain Definitions. Where representations are made to the
"knowledge," "actual knowledge," "or best of actual knowledge," or equivalent
words are used, unless specifically otherwise stated herein, such
representations are intended to reflect that the president of the general
partner of the Managing General Partner, as to Managing General Partner, and
the president of the member of the limited liability company which is the
general partner of the Administrative General Partner, as to Administrative
General Partner, have no actual knowledge to the contrary, but (a) shall not
mean such individuals are charged with the knowledge of the acts, omissions or
knowledge of any agents or employees of the entities making such
representations; and (b) shall not mean information or material which may be
in the position of the entity generally or incidentally, but which is not
actually known to the individuals described above. None of the individuals
described above shall have any personal liability based upon this Agreement,
including, but not limited to, the representations and warranties contained
herein.
4.12. Pledges.
A. Upon the terms hereof, Managing General Partner hereby
grants to Administrative General Partner a security interest in and to the
Managing General Partner's interest under this Agreement as security for
Managing General Partner's obligations arising under Section 4.09 of this
Agreement. Administrative General Partner shall have no right to sell, convey,
assign, pledge, hypothecate, or otherwise dispose of or encumber all or any
part of the security interest granted hereby. Such security interest shall
expire automatically by its terms on the date which is one (1) year after the
date hereof unless prior to that time Administrative General Partner shall
have commenced a proceeding in law or in equity against Managing General
Partner pursuant to which Administrative General Partner, in good faith, seeks
damages by reason of a breach of the representations, warranties and
certifications contained in Section 4.09 hereof.
B. Upon the terms hereof, Administrative General Partner
hereby grants to Managing General Partner a security interest in and to the
Administrative General Partner's interest under this Agreement as security for
Administrative General Partner's obligations arising under Section 4.10 of
this Agreement. Managing General Partner shall have no right to sell, convey,
assign, pledge, hypothecate, or otherwise dispose of or encumber all or any
part of the security interest granted hereby. Such security interest shall
expire automatically by its terms on the date which is one (1) year after the
date hereof unless prior to that time Managing General Partner shall have
commenced a proceeding in law or in equity against Administrative General
Partner pursuant to which Managing General Partner, in good faith, seeks
damages by reason of a breach of the representations, warranties and
certifications contained in Section 4.10 hereof.
28
ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS
5.01. Distributions of Net Cash Flow. All Net Cash Flow, if any,
realized by or available to the Partnership for or during each Fiscal Year
shall be paid or distributed no less frequently than quarterly in the
following order of priority to the extent available:
A. To the Partners in repayment of the entire principal
amounts of any outstanding Partners' Priority Loans, together with all accrued
but unpaid interest thereon, first on account of accrued interest thereon (in
proportion to the interest so accrued) and then in repayment of the principal
amounts thereof (in proportion to the respective outstanding amounts of
principal);
B. Next, to Administrative General Partner, in satisfaction of
the unpaid BOP Preferred Cumulative Return;
C. Next, to the Partners in repayment of the entire
principal amounts of any outstanding Partners' Loans, together with all
accrued but unpaid interest thereon, first on account of accrued interest
thereon (in proportion to the interest so accrued) and then in repayment of
the principal amounts thereof (in proportion to the respective outstanding
amounts of principal);
D. Next, to the Partners, in proportion to the respective
accrued amounts of their Preferred Cumulative Returns, in satisfaction of
their then unpaid Preferred Cumulative Return;
E. Next, to the Partners, in proportion to their respective
Additional Capital Balances, in reduction of their Additional Capital
Balances, until such time as their respective Additional Capital Balances
shall have been reduced to zero (but if such Additional Capital Balances shall
at any time thereafter be increased, then this paragraph E shall again be
operative); and, thereafter,
F. To all Partners in accordance with their respective
Participation Percentages,
5.02. Distributions of Net Refinancing Proceeds and Net Sale
Proceeds. All Net Refinancing Proceeds and Net Sale Proceeds, if any, realized
by or available to the Partnership shall be distributed in the following order
of priority to the extent available:
A. To the Partners in repayment of the entire principal
amounts of any outstanding Partners' Priority Loans, together with all accrued
but unpaid interest thereon, first on account of accrued interest thereon (in
proportion to the interest so accrued) and then in
29
repayment of the principal amounts thereof (in proportion to the respective
outstanding amounts of principal);
B. Next, to Administrative General Partner in satisfaction of
the then unpaid BOP Preferred Cumulative Return;
C. Next, to Administrative General Partner in reduction of
its then outstanding BOP Preference Capital until such time as the BOP
Preference Capital is reduced to zero;
D. Next, to the Partners in repayment of the entire principal
amounts of any outstanding Partners' Loans, together with all accrued but
unpaid interest thereon, first on account of accrued interest thereon (in
proportion to the interest so accrued) and then in repayment of the principal
amounts thereof (in proportion to the respective outstanding amounts of
principal);
E. Next, to the Partners, in proportion to the respective
accrued amounts of their Preferred Cumulative Return, in satisfaction of their
then unpaid Preferred Cumulative Return;
F. Next, to the Partners, in proportion to their respective
Additional Capital Balances, in reduction of their Additional Capital
Balances, until such time as their respective Additional Capital Balances
shall have been reduced to zero (but if such Additional Capital Balances shall
at any time thereafter be increased, then this paragraph F shall again be
operative); and, thereafter,
G. To all Partners in accordance with their respective
Participation Percentages,
5.03. Availability of Funds. The distributions to which the Partners
are entitled pursuant to this Article V are conditioned upon the availability
of funds to the Partnership, and such distributions do not and shall not
constitute interest, nor is there any guarantee or obligation by the
Partnership to make any distributions under this Agreement, except to the
extent that the Managing General Partner determines, in accordance with the
Operating Budget, that cash in excess of the requirements of the Partnership
is available for distribution to the Partners.
5.04 Tax Withholding. To the extent the Partnership pays any amount
to any federal, state or local taxing authority as a result of any obligation
to collect, pay over or withhold taxes with respect to any Partner's allocable
share of Partnership income or gain, the amount so collected, paid over or
withheld shall be treated for all purposes of this Agreement as having been
paid or distributed to such Partner and shall reduce, on a dollar for dollar
basis, amounts otherwise payable or distributable to such Partner under this
Article V. The Partnership may, in
30
the discretion of either General Partner, require each Partner to reimburse
the Partnership, for any tax withholding payments made by the Partnership on
behalf of such Partner.
5.05 Allocation of Profits and Losses.
a. Profits. Profits for any Fiscal Year shall be allocated
among the Partners in the following order of priority:
A. First, if any Partner has a deficit balance in his or
its Capital Account, to the Partners in accordance with and to the extent of
such deficit balances, until no Partner has a deficit balance in his or its
Capital Account;
B. Next, if any Partner has a Cumulative Net Loss, to the
Partners in accordance with and to the extent of their Cumulative Net Losses,
until no Partner has a Cumulative Net Loss;
C. Next, if any Partner has received a payment on account
of a BOP Preferred Cumulative Return, to such Partner until such Partner has a
Cumulative Net Profit equal to the aggregate amount of such Partner's
aggregate BOP Preferred Cumulative Return as of the end of the Fiscal Year to
which such allocation relates;
D. Next, to the Partners entitled to receive payment on
account of a Preferred Cumulative Return, until each such Partner has a
Cumulative Net Profit equal to the aggregate amount of such Partner's
aggregate Preferred Cumulative Return as of the end of the Fiscal Year to
which such allocation relates;
E. Thereafter, to the Partners in accordance with their
respective Participation Percentages.
b. Losses. Losses for any Fiscal Year shall be allocated
among the Partners in the following order of priority:
A. If any Partner has a Cumulative Net Profit, then
Losses shall be allocated to the Partners with Cumulative Net Profit, until no
Partner has a Cumulative Net Profit, in the following order of priority:
i. First, Losses in an amount up to the amount of any
Profits previously allocated under Section 5.05(a)(E) above shall be allocated
among the Partners in the same manner as such Profits were previously
allocated under Section 5.05(a)(E).
ii. Next, Losses in an amount up to the amount of any
Profits previously allocated under Section 5.05(a)(D) above shall be allocated
among the Partners in the same manner as such Profits were previously
allocated under Section 5.05(a)(D);
31
iii. Next, Losses in an amount up to the amount of any
Profits previously allocated under Section 5.05(a)(C) above shall be allocated
among the Partners in the same manner as such Profits were previously
allocated under Section 5.05(a)(C);
B. Next, if no Partner has a Cumulative Net Profit,
Losses shall be allocated to the Partners in accordance with their respective
Contribution Percentages; provided, however, that no Losses shall be allocated
to a Partner under this Section 5.05(b)(B) to the extent that such allocation
would cause or increase a deficit balance in such Partner's Hypothetical
Capital Account;
C. Any remaining Losses shall be allocated (i) first, to
the Partners (if any) with positive balances in their Hypothetical Capital
Accounts, in proportion to and to the extent of such positive balances and
(ii) thereafter, any remaining Losses shall be allocated among the Partners in
accordance with their respective interests in the Partnership, in accordance
with Treasury Regulation Section 1.704-1(b)(3).
c. Allocations Upon Sale of Project. Gain or loss recognized
upon the sale of all or substantially all of the assets of the Partnership
shall be determined based upon the Book Value of the Partnership's assets and
shall be allocated so that, to the maximum extent possible, (i) no Partner has
a negative balance in its Capital Account and (ii) the positive balance in
each Partner's Capital Account (as determined immediately prior to the
distribution of Net Sales Proceeds) equals the aggregate amount of liquidating
distributions such Partner is entitled to receive upon the liquidation of the
Partnership under Section 10.03 below.
d. Changes in Interests. If the respective interests of the
Partners in the Partnership change during any Fiscal Year, then the amount of
all items to be allocated, credited or charged to the Partners for such entire
Fiscal Year (other than items of gain or loss from a sale of all or
substantially all of the Partnership's assets, which shall be allocated under
the interim closing of the books method) shall be allocated to the portion of
such Fiscal Year which precedes the date of each such change and to the
portion of the Fiscal Year which occurs on and after the date of each such
change, in proportion to the number of days in each such portion, and the
amounts of the items so allocated to each such portion shall be allocated,
credited or charged to each of the Partners in proportion to their respective
interests during each such portion of the Fiscal Year in question.
Notwithstanding the foregoing, the Managing General Partner may elect to use
the closing of the books method or any other method allowed by the Treasury
Regulations in the event that a new Partner is admitted to the Partnership or
an existing Partner is redeemed during a Fiscal Year.
e. Regulatory Allocations. Notwithstanding any other
provisions to the contrary in this Agreement, the following provisions shall
apply:
A. All Nonrecourse Deductions for each Fiscal Year shall
be allocated to the Partners in proportion to their respective Contribution
Percentages. For purposes of
32
Regulation Section 1.752-3, all excess nonrecourse liabilities of the
Partnership will be allocated among the Partners in proportion to their
respective Contribution Percentages.
B. All Partner Nonrecourse Deductions for each Fiscal
Year shall be allocated to the Partners who bear the economic risk of loss
with respect to the Partner Nonrecourse Debt giving rise to such deductions,
in accordance with Treasury Regulation Section 1.704-2(i)(1).
C. Any Partner who unexpectedly receives an adjustment,
allocation or distribution described in clauses (4), (5) or (6) of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) which produces a deficit in its
Hypothetical Capital Account shall, to the extent required by the Treasury
Regulations, be allocated items of income and gain in amount and manner
sufficient to eliminate the deficit in its Hypothetical Capital Account as
quickly as possible. This Section 5.05(e)(C) is intended to comply with the
"qualified income offset" requirement in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(3), and shall be interpreted consistently therewith.
D. If there is a net decrease in Minimum Gain during a
Fiscal Year, then before any other allocation is made for such year, the
Partners shall be allocated items of income and gain for such year (and, if
necessary, subsequent years) in the amount and in the proportions necessary to
satisfy the requirements of a "minimum gain chargeback" under Treasury
Regulation Section 1.704-2(f).
E. If there is a net decrease in Partner Minimum Gain
during a Fiscal Year, then before any other allocation is made for such year,
the Partners shall be allocated items of income and gain for such year (and,
if necessary, subsequent years) in the amount and in the proportions necessary
to satisfy the requirements of a partner nonrecourse debt minimum gain
chargeback under Treasury Regulation Section 1.704-2(i)(4).
F. The allocations set forth in subsections A through E
above (the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulation Sections 1.704-1(b) and 1.704-2.
Notwithstanding any other provision of this Section 5.05 (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction among
the Partners so that, to the extent possible, the net amount of such
allocation of other items and the Regulatory Allocations to each Partner
should be equal to the net amount that would have been allocated to each such
Partner if the Regulatory Allocations had not occurred.
f. Contributed/Revalued Property. If any property is
contributed to the Partnership in kind, or if the Book Value of any
Partnership property is adjusted pursuant to applicable Regulations under
section 704(b) of the Code and this Agreement, all income, gain, loss and
deduction with respect to such contributed or revalued property shall, solely
for tax purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial or
33
revalued Book Value, in such manner as the General Partner may determine in
accordance with section 704(c) of the Code, the Treasury Regulations
promulgated thereunder and Treasury Regulation Section 1.704-1(b)(4)(i).
Allocations pursuant to this Section 5.05(f) are solely for purposes of
federal and state taxes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Profit, Loss
or distributions pursuant to any provision of this Agreement.
g. Knowledge of Tax Consequences. The Partners are aware of
and consent to the income tax consequences of the allocations made by this
Section 5.05. The Partners hereby agree to be bound by the provisions of this
Section 5.05 in reporting their shares of Partnership income and loss for
income tax purposes. Upon the advice of an outside accountant or of legal
counsel to the Partnership, this Section 5.05 may be amended from time to time
by the Managing General Partner as may be necessary to comply with Section 704
of the Code and the Treasury Regulations promulgated thereunder; provided,
however, that no such amendment shall become effective without the consent of
those Partners who would be materially adversely affected thereby.
ARTICLE VI
BOOKS AND RECORDS; TAX MATTERS
6.01. Accounting. Except as may be otherwise directed by all General
Partners, the Partnership shall maintain its books and records on a cash basis
and shall prepare (i) financial statements on the accrual basis used for
federal income tax purposes, and (ii) income tax returns on the accrual method
of accounting and on a calendar year basis. Appropriate records will be kept
so that upon each closing of the Partnership books it is possible to
determine, among other items defined in this Agreement: (i) the amount of
capital actually contributed by each Partner; (ii) the amount of cash or other
property distributed to each Partner; (iii) the effect, if any, of all
Partnership items of income, gain, loss, deduction or credit on each Partner's
Capital Account; and (iv) the amount of Partners' Priority Loans, Partners'
Loans, Additional Capital Contributions, Capital Balances (including, but not
limited to, BOP Preference Capital), Net Cash Flow, Net Refinancing Proceeds,
Net Sale Proceeds, and Preferred Cumulative Returns.
6.02. Statements.
A. Within thirty (30) days after the close of each calendar
year, the Managing General Partner shall endeavor to furnish, at Partnership
expense, to each Partner, with respect to such calendar year, (i) a profit and
loss statement, (ii) a statement of source and application of funds, (iii) a
Partnership balance sheet as of the close of such fiscal year, and (iv) such
other statements showing in detail each Partner's interest in each of the
items described in Section 6.01. hereof. The foregoing statements shall be
audited by certified public accountants acceptable to all
34
of the General Partners, and the cost of preparing the statements and the cost
of each such audit shall be paid for by the Partnership.
B. The Managing General Partner shall have prepared (at
Partnership expense) and shall provide the other General Partners with the
following additional materials: (i) quarterly reports, submitted not later
than the twentieth (20th) day following the close of each calendar quarter,
which shall include a rent roll indicating tenants, lease term, monthly rent
and space or suite identification, and space available for lease; (ii) at the
specific request of any of the other General Partners (a) copies of the
disbursements ledger detailing payees, dates, and amounts of disbursements,
(b) copies of the cash receipts ledger detailing the tenant, and other
receipts, date of deposit, and amount of the receipt, (c) copies of bank
statements and cash reconciliations for all bank accounts, (d) journal entries
and explanations thereof, and (e) trial balances; (iii) a quarterly
reconciliation form (in form and in detail reasonably satisfactory to the
requesting General Partner) detailing all Partnership distributions of cash
flow; and (iv) quarterly unaudited balance sheets and income statements
prepared on the cash method of accounting, to be received within twenty (20)
days of the close of the fiscal quarter.
6.03. Inspection. All books of account and all other records of the
Partnership (including an executed counterpart of this Agreement and all
amendments hereto, and an executed counterpart of the Certificate and all
amendments thereto) shall at all times be kept by the Managing General Partner
at the Partnership's place of business and may be inspected at any reasonable
time by any Partner.
6.04. Tax Matters.
A. The Managing General Partner shall cause, at Partnership
expense, to be prepared and filed all income tax returns for the Partnership
on an accrual basis and shall furnish copies thereof to all Partners. At least
thirty (30) days prior to the filing of any tax return for the Partnership
with the Internal Revenue Service), the Managing General Partner shall deliver
to each other General Partner for its review and written approval before such
filing a draft copy of the Partnership's U.S. Partnership Return of Income for
such fiscal year (which copy shall be prepared by the Partnership's regular
certified public accountants, shall be delivered in accordance with the
requirements of Article XI hereof, and shall be accompanied by (i) a
reconciliation, prepared by such accountants, between the Partnership's
financial statements and tax returns; and (ii) a breakdown, prepared by such
accountants, of Project components qualifying for investment tax credit).
B. The Managing General Partner shall, within five (5) days
of receipt thereafter, forward to each General Partner a photocopy of any
correspondences (excluding routine correspondence relating to administrative
forms) relating to the Partnership received from the Internal Revenue Service.
The Managing General Partner shall, within five (5) days thereafter, advise
each General Partner in writing of the substance of any conversation held with
any representative of the Internal Revenue Service. Any reasonable costs
incurred by the
35
Managing General Partner for retaining accountants or lawyers on behalf of the
Partnership in connection with any Internal Revenue Service audit or state tax
audit of the Partnership shall be expenses of the Partnership. Without the
consent of all of the General Partners, no Partner shall (a) take or assert
any position in connection with any Internal Revenue Service audit, state tax
audit, or administrative or court proceeding, which is inconsistent with any
item or position reflected in the Partnership's U.S. Partnership Return of
Income with respect to the fiscal period in question, (b) commence or
prosecute any proceeding in any court for the adjustment of any item reflected
in such return, or (c) take or suffer any action which would impair the
authority of any General Partner to bind the Partnership or the Partners. In
connection with the foregoing, any General Partner shall be permitted to
condition its consent hereunder on the agreement of the Partner requesting the
consent to (i) proceed, or refrain from proceeding, in one or more specified
administrative or judicial forums, (ii) conduct any such proceeding in a
particular manner, or (iii) abide by any other terms or restrictions which the
General Partner may impose in the best interests of the Partnership as a
condition of granting its consent hereunder. The Managing General Partner
shall notify all Partners of any settlement offers from the Internal Revenue
Service, and shall not, in any case, enter into any settlement with the
Internal Revenue Service on behalf of the Partnership without the approval of
all of the General Partners.
C. In connection with the assignment of a Limited Partner's
interest in the Partnership permitted by Article VII hereof, any General
Partner shall have the right, but shall not be obligated, on behalf of the
Partnership and at the time and in the manner provided by Section 754 of the
Code (or any successor section thereto) and the Regulations thereunder, to
make an election to adjust the basis of Partnership property in the manner
provided in Sections 734(b) and 743(b) of the Code (or any successor sections
thereto). All expenses incurred by the Partnership to make such an election
shall be paid by the transferee benefitted by such election.
D. Should the Managing General Partner fail to fulfill or
perform any of its obligations under this Article VI, then any General
Partner, in addition to any other rights or remedies it may have pursuant to
this Agreement, may (i) engage such certified public accountants as it may
select to cure the default at Partnership expense unless such default is
beyond the Managing General Partner's reasonable control; or (ii) cause the
Managing General Partner to request an extension of the filing date of any
income tax return for a period ending at least thirty (30) days beyond the
date on which such return and all accompanying documentation were received by
all of the General Partners pursuant to Section 6.04.A. above.
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ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS;
WITHDRAWAL OF PARTNERS;
REMOVAL OF THE MANAGING GENERAL PARTNER
7.01. Transfer of General Partnership Interests.
A. During the entire term of the Partnership, except as
hereinafter permitted in subsection 7.01(B) or 7.01(C) hereof, none of the
following shall be permitted without the prior written consent of all General
Partners, such consent to be given or withheld by the General Partners in
their sole discretion: (i) no General Partner shall directly or indirectly
sell, convey, assign, pledge, hypothecate, transfer or otherwise dispose of or
encumber all or any part of its interest in the Partnership; (ii) no present
general partner of the Managing General Partner shall directly or indirectly
sell, convey, assign, pledge, hypothecate, transfer or otherwise dispose of or
encumber all or any part of its interest in the Managing General Partner; nor
shall any such general partner withdraw or retire from the Managing General
Partner, as the case may be; and (iii) no present general partner of the
Administrative General Partner shall directly or indirectly sell, convey,
assign, pledge, hypothecate, transfer or otherwise dispose of or encumber all
or any part of its interest in the Administrative General Partner, nor shall
any such general partner withdraw or retire from the Administrative General
Partner as the case may be; provided, however, that following the receipt of
the cash Capital Contribution required by Section 3.01(B), the general partner
of Administrative General Partner may be an entity, all of which is owned
directly or indirectly by Brandywine Operating Partnership, L.P. and/or
Brandywine Realty Trust and which otherwise satisfies the qualifications set
forth in subsections (1)-(4) of subsection (B) hereof.
B. At any time following the receipt by the Partnership of
the cash Capital Contribution required by Section 3.01(B) hereof, the
Partnership interest of Administrative General Partner may be assigned to an
entity, all of which is owned, directly or indirectly, by Brandywine Operating
Partnership, L.P., a Delaware limited partnership, and/or Brandywine Realty
Trust, which entity shall be admitted as a substituted Administrative General
Partner of the Partnership, provided that the following conditions are met in
each instance:
(1) A duly executed and acknowledged instrument of
assignment and Power of Attorney, setting forth the intention of the assignor
that the assignee become a substituted Administrative General Partner in its
place and confirming and restating the appointment and powers contained in
Section 12.02. hereof, is delivered to the Managing General Partner; and
(2) The Managing General Partner, at its request, shall
have been provided, at the expense of the transferor, with an opinion of
counsel in form and substance satisfactory to the Managing General Partner and
from counsel satisfactory to the Managing
37
General Partner to the effect that such transfer or assignment will not
violate the registration provisions of the Securities Act of 1933, as amended,
or the rules and regulations thereunder or the applicable state securities or
"Blue Sky" law or laws and the rules and regulations thereunder; and
(3) The assignor and assignee execute and acknowledge
such other instruments as any Managing General Partner reasonably may deem
necessary or desirable to effect such admission, including the written
acceptance and adoption by the assignee of the provisions of this Agreement
and the assumption of any unperformed obligation of the assignor (provided
that such assignor shall not thereby be released from any of its unperformed
obligations hereunder); and
(4) The entity shall have the following characteristics:
(a) It shall be formed for the sole purpose of
acquiring interests in the various partnerships formed to hold all or portions
of the area known as Tower Bridge, located in Conshohocken and West
Conshohocken, Xxxxxxxxxx County, Pennsylvania, in partnerships formed with
Managing General Partner or affiliates thereof;
(b) It shall have no liabilities except those
incurred in connection with its obligations as a partner in such partnerships
and no other assets constituting real property;
(c) The Managing General Partner shall consent to the
admission of such substitute Administrative General Partner, which consent
shall not be unreasonably withheld.
(d) All Partners will if required by the Act, no
later than thirty (30) days after the date of compliance with the provisions
of this Section 7.01(B), amend the Certificate to reflect the admission of any
such assignee as a substituted limited partner.
C. Notwithstanding anything to the contrary contained
herein, but subject to Section 7.07 hereof, either General Partner shall have
the right to sell, transfer or assign all but not part (except as set forth in
subsection 7.01(C)(6) hereof), of its interest in the Partnership, provided
that the following conditions are met in each instance:
(1) If the transferor is Administrative General Partner,
a duly executed and acknowledged instrument of assignment and Power of
Attorney, setting forth the intention of the assignor that the assignee become
a substituted Administrative General Partner in its place and confirming and
restating the appointment and powers contained in Section 12.02 hereof, shall
have been delivered to the Managing General Partner; and
38
(2) The other General Partner, at its request, shall have
been provided, at the expense of the transferor, with an opinion of counsel in
form and substance satisfactory to the other General Partner and from counsel
satisfactory to the other General Partner to the effect that such transfer or
assignment will not violate the registration provisions of the Securities Act
of 1933, as amended, or the rules and regulations thereunder or the applicable
state securities or "Blue Sky" law or laws and the rules and regulations
thereunder; and
(3) The assignor and assignee execute and acknowledge
such other instruments as any General Partner reasonably may deem necessary or
desirable to effect such admission, including the written acceptance and
adoption by the assignee of the provisions of this Agreement and the
assumption of any unperformed obligation of the assignor (provided that such
assignor shall not thereby be released from any of its unperformed obligations
hereunder); and
(4) The entity shall have the following characteristics:
(a) It shall be formed for the sole purpose of
acquiring an interest in the Partnership;
(b) It shall have no liabilities except those
incurred in connection with its obligations as a Partner in the Partnership
and no other assets constituting real property;
(c) All Partners will, if required by the Act, no
later than thirty (30) days after compliance with the provisions of this
Section 7.01(C), amend the Certificate to reflect the admission of any such
assignee as a substituted general partner; and
(d) The transferee shall be one hundred percent
(100%) owned, directly or indirectly, by an "Institutional Investor," as
hereinafter defined. The term "Institutional Investor," as used herein, shall
mean an entity which has a net worth in excess of $25 million other than an
entity which the parties have agreed in writing is not a permitted transferee;
and
(5) The transferee shall not be an entity with which, or
controlled by, under common control with or controlling any entity or person
with which, the remaining General Partner has engaged in any actual pending or
threatened litigation previously; and
(6) In the judgment of the non-transferring General
Partner, the transfer of the transferring General Partner's interests, either
individually or in combination with other transfers which have previously
occurred or which are then contemplated pursuant to good faith negotiations
which have commenced, will not result in any other negative tax consequences
for any Partner or the Partnership. Notwithstanding the foregoing, if it is
possible, in the judgment of the non-transferring General Partner, to
structure the transfer in a lawful manner at no cost to the Partnership and
the other Partners so as to avoid all negative tax consequences, the
non-transferring General Partner shall cooperate with such a transfer provided
the remaining
39
requirements of this Subsection 7.01(C) are met and provided that such
transfer shall not result in the transferring General Partner's interest being
held by two general partners of the partnership. By way of example and not
limitation, if the negative tax consequences could be avoided by transferring
the General Partner's interests in stages over time, the transferring General
Partner shall initially transfer only so much of such transferring General
Partner's interest as will not, in the non-transferring General Partner's
judgment, result in such negative tax consequences, with the remaining
interest of such transferring General Partner being converted to a limited
partnership interest automatically upon such event. The remaining partnership
interest of the transferring Partner would then be transferred one (1) day
after the expiration of any period required, in the judgment of the
non-transferring General Partner, to avoid the negative tax consequence. Such
procedure is referred to herein as a "Tax Staggered Transfer." In all
instances requiring judgment of the non-transferring General Partner under
this Section 7.01(C)(6), the judgment of such General Partner shall be deemed
to permit the requested action of the transferring General Partner unless the
non-transferring General Partner does not notify the transferring General
Partner of an objection (and the general basis therefor) within thirty (30)
days after written notice from the transferring General Partner of its
proposed action.
7.02. Transfer of Limited Partnership Interests.
A. Subject to Section 7.05 hereof, the Partnership interest
of a Limited Partner, or any part thereof, may not be transferred or assigned,
and no such transferee or assignee may be admitted as a substituted limited
partner of the Partnership, unless in each instance:
(1) A duly executed and acknowledged instrument of
assignment and Power of Attorney, setting forth the intention of the assignor
that the assignee become a substituted limited partner in its place and
confirming and restating the appointment and powers contained in Section
12.02. hereof, is delivered to the General Partners; and
(2) The General Partners, if any or all of them shall so
request, shall have been provided, at the expense of the transferor, with an
opinion of counsel in form and substance satisfactory to the requesting
General Partner(s) and from counsel satisfactory to the requesting General
Partner(s) to the effect that such transfer or assignment will not violate the
registration provisions of the Securities Act of 1933, as amended, or the
rules and regulations thereunder or the applicable state securities or "Blue
Sky" law or laws and the rules and regulations thereunder; and
(3) The assignor and assignee execute and acknowledge
such other instruments as any General Partner reasonably may deem necessary or
desirable to effect such admission, including the written acceptance and
adoption by the assignee of the provisions of this Agreement and the
assumption of any unperformed obligation of the assignor ( provided that such
assignor shall not thereby be released from any of its unperformed obligations
hereunder).
40
B. All Partners will if required by the Act, no later than
thirty (30) days after the date of compliance with the provisions of this
Section 7.02., amend the Certificate to reflect the admission of any such
assignee as a substituted limited partner.
7.03. Expenses. Expenses of the Partnership or of any Partner (other
than the transferee) occasioned by transfers of interests held by Partners
shall be reimbursed to the Partnership or Partner, as the case may be, by the
transferring Partner.
7.04. Withdrawal of Partners.
A. Except for permitted transfers under Section 7.01, no
General Partner may voluntarily withdraw or retire from the Partnership
without the prior written consent of the other General Partner, such consent
to be given or withheld by the other General Partner in its sole discretion.
B. No Limited Partner may voluntarily withdraw or retire
from the Partnership except upon the assignment of its entire interest in the
Partnership (if and as permitted by this Article VII) or upon the surrender,
abandonment or other voiding of its interest pursuant to the next succeeding
sentence hereof. Any Limited Partner may at any time, by at least thirty (30)
days prior written notice delivered to all General Partners, renounce its
interest in all current and future profits, losses and distributions of the
Partnership, and abandon to the Partnership its capital contributions and its
interest in all Partner's Loans and Partner's Priority Loans made by it;
provided, however, that any such surrender, abandonment or other voiding shall
not in any case affect the withdrawing Partner's obligations hereunder.
7.05. Death, Incompetency, Dissolution or Bankruptcy of a Limited
Partner. Upon the death, legal incompetency, dissolution or bankruptcy of a
Limited Partner, its or his personal representative will have all the rights
of such deceased, incompetent, dissolved or bankrupt Limited Partner for the
purpose of settling or managing its estate, and such power as the deceased,
incompetent, dissolved or bankrupt Limited Partner possessed to constitute a
successor as an assignee of its interest in the Partnership and to join with
such assignee in making application to substitute such assignee as a
substituted limited partner.
7.06. Deadlock of the General Partners.
A. At any time after the date hereof, if the General
Partners become deadlocked on a material issue which, in the opinion of any
one of them is essential for the successful operation or prudent conduct of
the Partnership's business, or if in the opinion of any General Partner the
Managing General Partner has taken unauthorized action on behalf of the
Partnership or has failed to take action which is authorized hereby or which
the General Partners have authorized and has failed to correct such action or
inaction within fifteen (15) days after written notice from any General
Partner to the Managing General Partner specifying such action or inaction,
then in either case the provisions of this Section 7.06. shall apply and
either of the
41
aggrieved General Partners (the "Declaring Partner(s)") shall be permitted to
pursue the rights provided for below.
B. For purposes of this Section 7.06., the following
definitions and other provisions shall apply:
(i) If the Declaring Partner is the Administrative
General Partner, then the "Offeror" shall be the Administrative General
Partner and the "Offeree" shall be the Managing General Partner and (so long
as the Limited Partner is Xxxxxx X. Xxxxxx, an entity at least fifty-one
percent (51%) owned by him or a transferee from him which has not been
approved or which is not required to be approved by Administrative General
Partner) the Limited Partner;
(ii) If the Declaring Partner is the Managing General
Partner, then the "Offeror" shall be the Managing General Partner and (so long
as the Limited Partner is Xxxxxx X. Xxxxxx, an entity at least fifty-one
percent (51%) owned by him or a transferee from him which has not been
approved or which is not required to be approved by Administrative General
Partner), the Limited Partner, and the "Offeree" shall be the Administrative
General Partner; and
(iii) An "Offer" or the "Offers" shall mean the offer(s)
to sell or purchase partnership interests pursuant to the provisions of this
Section 7.06.
C. In the event of a deadlock described in the foregoing
Section 7.06.A., the Declaring Partner shall have the right to deliver to the
other General Partner(s) a written demand that the requested action be taken
or that the deadlocked issue be resolved in favor of the Declaring Partner,
but if such other General Partner does not, within ninety (90) days following
the delivery of such demand, respond affirmatively to the demand and commence
and thereafter continue diligently to perform the action requested or the
resolution of the issue as requested, then the Declaring Partner shall have
the right to pursue the compulsory buy-sell provisions appearing below in
Section 7.06.D.
D. A Declaring Partner, at any time within thirty (30) days
following expiration of the ninety (90) day period established in Section
7.06.C. above if the other General Partner does not respond affirmatively to
the demand and commence and thereafter continue diligently to perform the
action requested, shall be permitted to institute the following compulsory
buy-sell provisions:
(i) The Offeror may make to the Offeree an Offer to sell
the entire interests in the Partnership of the Offeror, and to purchase the
entire interests in the Partnership of the Offeree. Except as expressly
provided in clause (ii) of this Section 7.06.D., no Offer shall be subject to
the provisions of this Section 7.06. unless such Offer is both an Offer to
sell the entire interests of the Offeror and an Offer to purchase the entire
interests of the Offeree, and such Offer must specify that the price of the
interests to be so transferred is payable by bank certified, cashier's or
treasurer's check. The selling price and the purchase price specified in such
Offer
42
must be identical in amount for each percent of interest in the Partnership
and must be, except as provided for in the parenthetical below, proportionate
to the respective Participation Percentages of the Offeree (that is, the
selling price and the purchase price so specified must be identical as to each
other and for each percent of interest in the Partnership which is subject to
such Offer, except that such price shall be appropriately adjusted to reflect,
on a dollar-for-dollar basis the difference, if any, between (a) the
Additional Capital Balances and BOP Preference Capital of the respective
Offeror and Offeree plus (b) the accrued and unpaid Preferred Cumulative
Returns and BOP Preferred Cumulative Return of the respective Offeror and
Offeree, plus (c) the aggregate amount of principal and interest, if any,
owing to the respective Offeror and Offeree by reason of advances made
hereunder as Partners' Loans or Partners' Priority Loans). Such Offer shall be
irrevocable for a period of thirty (30) days, and the Offeree may, on or
before the thirtieth (30th) day after the date of such offer, accept either
the Offer to sell or the Offer to purchase (but not both), and upon acceptance
the Offeror shall be required to sell or to purchase, as the case may be. If
the Offeree fails within such thirty (30) day period to accept either of such
Offers, then the Offer shall automatically expire and be of no further force
or effect; provided, however, that the Offeror shall thereupon have the right,
on or before the fifteenth (15th) day after the expiration of such thirty (30)
day period, to purchase the interests of the Offeree, at the applicable price
specified in the original Offer, and if the Offeror exercises such right the
Offeree shall be required to sell its interests herein. If the Offeror fails
to exercise its right to buy within the time specified, either General Partner
may thereafter make a new Offer pursuant to this Section 7.06.
(ii) If the Offeror or Offeree, as the case may be,
exercises its rights hereunder to buy or sell, a closing thereunder shall be
held at the time and place and on the date specified by the purchaser by
written notice to the seller(s), which date shall in any case be on or prior
to the expiration of the forty-fifth (45th) day after the Offer to buy or sell
has been made. At such closing, upon payment of the purchase price required by
subsection D(i) hereof, the purchasing party shall have the right to designate
a substitute transferee.
7.07. Right of First Refusal.
A. Notwithstanding the consent of the Partners under
Sections 7.01. and 7.02. hereof or the absence of a need for consent under
Section 7.01(C) hereof, no Partner may transfer or assign its partnership
interest herein, or any part thereof, unless such interest shall first be
offered to the other Partners for a period of thirty (30) days at a price (the
"Refusal Right Purchase Price") equal to that offered to the selling Partner
pursuant to a bona fide offer arrived at upon arm's length dealing, the terms
of which and the identity of the offeror having been disclosed to all of the
Partners. If any Partner or Partners elect to exercise the right of first
refusal granted hereby, they collectively must accept all of the interest
being offered. If more than one Partner elects to accept all of the interest
being offered, such interest shall be allocated according to the ratio of the
respective Participation Percentages of the accepting Partners. If the
offering Partner has not received written acceptance of its offer within such
thirty (30) day period, it shall then be free, subject to the provisions of
this Article VII, to dispose of the interest offered to the other Partners on
the terms of the bona fide offer and to the offeror previously disclosed to the
43
Partners. If the offering Partner fails to do so within one hundred twenty
(120) days, following expiration of such 30-day period, the first refusal
procedure established by this Section 7.07 shall be reinstated.
B. The Refusal Right Purchase Price payable hereunder, in
the event one or more Partners elects to exercise the right of first refusal
granted hereby, shall be payable in the manner and on the terms of the third
party offer, except that such Partner may elect to pay cash in the same amount
as and in lieu of any non-cash consideration.
C. The provisions of this Section 7.07 shall not apply to
(i) any transfer occurring by operation of law as a result of the incompetency
or incapacity of a Partner; or (ii) any transfer occurring by operation of law
or by bequest as a result of the death of a Partner; or (iii) any transfer
occurring by reason of the exercise of or a closing under the calls described
in Section 7.06. above; or (iv) any transfers permitted by Section 7.01(B);
but the provisions of this Section 7.07 shall in all cases be subject to the
prohibitions, consents and approvals and other conditions required by Sections
7.01. and 7.02. hereof.
D. Notwithstanding anything set forth in subsection A
hereof, in the event the selling Partner proposes to transfer or assign its
partnership interest pursuant to Section 7.01(C) hereof, the offering Partner
shall give the other Partners ninety (90) days prior written notice rather
than thirty (30) days provided above, and if the right of first refusal is
exercised, the exercising Partner shall have a period of two hundred seventy
(270) days within which to close the acquisition; provided, however, that in
the event of a Tax Staggered Transfer as required by Section 7.01(C), the
exercising Partner shall have such additional period of time as shall be
necessary to make such event a Tax Staggered Transfer.
7.08. Status of Interests Transferred. In any transfer, assignment or
conveyance of a general or limited partnership interest herein by a Partner to
any other Partner or other person, by the express terms of this Agreement or
by operation of law, subject to Article V hereof, the transferee or assignee
shall succeed to the same share of profits and losses of the Partnership and
the same Contribution Percentages, Participation Percentages, distribution
priorities and ownership rights as were incident to the interest so
transferred, assigned or conveyed.
7.09. Removal of the Managing General Partner.
A. Subject to the provisions of this Section 7.09, at any
time after the date hereof the Managing General Partner may be removed as a
General Partner of the Partnership upon the direction of the Administrative
General Partner if the Managing General Partner has:
(1) willfully, or as a result of its negligence, failed
in any year to distribute Net Cash Flow, Net Refinancing Proceeds or Net Sale
Proceeds as and to the extent required hereunder; or
44
(2) willfully, or as a result of its negligence, failed
in any year to deliver the statements and reports required by Article VI
hereof; failed to carry out any of its duties or obligations under Article IV
hereof (including, without limitation, any failure to devote sufficient time
or attention to the management and other affairs of the Partnership or any
failure to curtail other activities or projects as provided in Section 4.01.
hereof); or otherwise violated in a material respect any other provision of
this Agreement or any provision of applicable law, including, without
limitation, if any of its representations or warranties set forth herein shall
have been wrong or incorrect when made; in each instance under this clause (2)
if such failure, violation or misstatement has a material adverse effect on
the Partnership or on any Partner; or
(3) transferred or attempted to transfer its partnership
interest in the Partnership or other interests in or assets of the Partnership
or withdrawn or retired or attempted to withdraw or retire as a General
Partner, other than in accordance with the provisions of this Agreement; or
(4) suffered the transfer of interests in Managing
General Partner or in its corporate general partner such that Xxxxxx X. Xxxxxx
or an individual or entity who obtains an interest by the death or incapacity
of Xxxxxx X. Xxxxxx shall no longer retain effective control over Managing
General Partner but only if any of the foregoing described grounds for removal
has not been completely and fully cured in its entirety, to the satisfaction
of the Administrative General Partner, within thirty (30) consecutive days
following the Managing General Partner's receipt of written notice specifying
such grounds.
B. Notice of intended removal (citing the failure to cure
the cause or causes for removal) (the "Removal Notice") shall be sent to the
Managing General Partner signed by or on behalf of the Administrative General
Partner. Within ten (10) consecutive days after such Removal Notice is
received by the Managing General Partner, the Managing General Partner shall
send written notice to the Administrative General Partner admitting or denying
the grounds for removal. If such grounds for removal are admitted, or if the
Managing General Partner fails timely to respond to the Removal Notice from
any General Partner required hereby, then the Managing General Partner shall
be removed as of a date which is one (1) day after the expiration of such ten
(10) day period. If the grounds for removal are denied, then the matter shall
be handled as follows:
At the election of any General Partner, the matter shall
be an "Arbitrable Dispute" and shall be subject to the process set forth in
Section 7.11 hereof, in which event the Managing General Partner shall retain
all rights, powers and duties hereunder as a General Partner, all authority in
respect of the Partnership and the conduct of its business until a final
determination of the matter has been rendered by the Arbitrator, as
hereinafter defined. If such determination is made to the effect that grounds
for removal exist, then (a) such determination, at the election of the
Managing General Partner exercised within sixty (60) days of the rendering
45
thereof, shall not be binding on the Managing General Partner or the
Partnership, (b) the matter shall be litigated, at the election of the
Managing General Partner exercised within sixty (60) days of the rendering of
such determination, in any competent state or federal court in the
Commonwealth of Pennsylvania and in accordance with the rules of court then
obtaining, and (c) the Managing General Partner, on the date on which such
determination was made and thereafter during the period prior to the Removal
Date (the "Suspension Period") shall become divested of all powers and duties
hereunder as the Managing General Partner and all authority in respect of the
Partnership shall become vested in Administrative General Partner. If such
determination is made to the effect that no grounds for removal exist, then
(x) such determination, at the election of Administrative General Partner
exercised within sixty (60) days of the rendering thereof, shall not be
binding upon the Administrative General Partner or the Partnership, (y) the
Managing General Partner shall retain all rights, powers and duties hereunder
as a General Partner and all authority in respect of the Partnership and the
conduct of its business shall continue to be vested in the Managing General
Partner in accordance with the terms of this Agreement until such date, if
any, as a final, unappealable judicial decision is rendered to the effect that
grounds for removal exist (or if an appealable decision to that effect is
rendered, the date on which any period to appeal therefrom has expired without
an appeal therefrom having been taken) and (z) the matter shall be litigated,
at the election of the Administrative General Partner exercised within sixty
(60) days of the rendering of such determination, in any competent state or
federal court in the Commonwealth of Pennsylvania and in accordance with the
rules of court then obtaining.
C. The term "Removal Date," as used herein, shall mean the
date, if any, on which a decision (whether by the Arbitrator or a court of
competent jurisdiction) to the effect that grounds for removal exist becomes
final and unappealable. In addition to and not in limitation of any rights
under Section 7.06 hereof, at any time after the Removal Notice and until the
Removal Date, Administrative General Partner shall have the right to implement
the buy-sell procedures set forth in Section 7.06. hereof.
D. On the Removal Date, the Managing General Partner shall
thereupon become a Limited Partner pursuant to, and with the rights,
privileges and priorities described in, Section 4.03 hereof. The removed or
suspended Managing General Partner shall not be liable or responsible for any
actions taken or for any contracts or other obligations entered into by any
other General Partner (on behalf of the Partnership) during the Suspension
Period or on the Removal Date and thereafter.
E. Upon any removal of the Managing General Partner, as
promptly as practicable following the Removal Date, the Administrative General
Partner shall select a Successor Managing General Partner. Once selected, the
successor shall assume all of the duties, responsibilities and obligations,
and shall succeed to the rights and powers of, the Managing General Partner
hereunder. Any such successor Managing General Partner may, at the election
and direction of Administrative General Partner, be Administrative General
Partner or be any person or entity affiliated with or otherwise related to
Administrative General Partner in any
46
capacity; provided, however, that the manager of the Project may be any
unaffiliated or unrelated person or entity.
F. If, following the divesting of Managing General Partner
of its powers and duties as set forth in subsection B and C hereof, a final
and unappealable determination is made that no grounds for removal exist,
Managing General Partner shall be revested in all its powers and duties as
Managing General Partner immediately upon the date such determination becomes
final and unappealable.
7.10. Deadlock on Sale.
A. If at any time after the date hereof the Managing General
Partner receives a bona fide written offer (the "Purchase Offer") to purchase
all or any portion of the Project, the Managing General Partner shall have the
right, but not the obligation, to transmit the same to the other Partners. If,
at any time after the date which is the fourth (4th) anniversary of the date
hereof, any General Partner receives a bona fide written offer to purchase all
or any portion of the Project, the General Partner receiving such offer shall
transmit the same to the other Partners. Each General Partner shall
communicate whether it desires to accept or reject any such transmitted
Purchase Offer to the other Partners within ten (10) days of its receipt of
the Purchase Offer; and, in the absence of communication within such ten-day
period, any non-communicating Partner shall be deemed to have communicated its
desire to reject the Purchase Offer. If any General Partner wishes to accept
the Purchase Offer, then the General Partner who desires to reject the
Purchase Offer shall have the option, but shall be required, either (i) to
accept the Purchase Offer, or (ii) to purchase the Partnership interests of
the General Partner who desires to accept the Purchase Offer, and, if the
Managing General Partner desires to accept such Purchase Offer, Administrative
Partner's offer must also be to purchase the Partnership interest of Limited
Partner so long as the Limited Partner is Xxxxxx X. Xxxxxx, an entity at least
51% owned by him or a transferee from him which has not been approved or which
is not required to be approved by Administrative General Partner. Any such
purchase by Administrative General Partner or Managing General Partner shall
be on the terms and conditions set forth in this Section 7.10. For purposes of
this Section 7.10., the following definitions and other provisions shall
apply: (1) the Partner who wishes to accept the Purchase Offer (together with,
if such Partner is Managing General Partner, Limited Partner) shall be the
"Accepting Partners", and (2) the "Nonaccepting Partner" shall be the General
Partner who wishes to reject the Purchase Offer.
B. The terms and conditions of the option provided for
herein shall be as follows: (i) the option period shall commence on the date
the Nonaccepting Partner notifies the Accepting Partners that it does not wish
to accept the Purchase Offer (or on the date the Nonaccepting Partner is
deemed to have rejected the Purchase Offer), and the option period shall
expire ten (10) days after such commencement date; (ii) the purchase price
(the "Sale Purchase Price") for the partnership interests of the Accepting
Partners shall, for purposes of computing such Sale Purchase Price, be the
total amount that would be distributed in cash to the Accepting Partners in
accordance with Section 5.02 hereof if the Partnership sold the Project
pursuant to the
47
Purchase Offer in an all cash transaction; (iii) at the time of its or their
exercise of the option granted herein, the Nonaccepting Partner shall deliver
to the Accepting Partners its bank certified, treasurer's or cashier's check
in amount equal to ten percent (10%) of the Sale Purchase Price (the
"Deposit"), which Deposit shall be forfeited to the Accepting Partners if a
closing hereunder shall not timely occur (except for non-occurrence by reason
of a default by the Accepting Partners in their obligation so to close); (iv)
a closing of the sale by the Accepting Partners to the Nonaccepting Partner
shall be held within eighty (80) days of the Nonaccepting Partner's notice to
the Accepting Partners of the Nonaccepting Partner's exercise of its option to
purchase hereunder; (v) at the closing, the partnership interests of the
Accepting Partners shall be assigned, transferred and conveyed to the
Nonaccepting Partner, or its nominee(s), free and clear of all liens, charges,
security interests and other encumbrances; and (vi) at the closing, the
Nonaccepting Partner, or its nominee(s), shall deliver to the Accepting
Partners cash or a bank certified, treasurers or cashier's check in the
aggregate amount of the Sale Purchase Price less the Deposit.
C. If the Nonaccepting Partner shall not exercise the option
granted it by the foregoing provisions of this Section 7.10. by written notice
(accompanied by the Deposit) to the Accepting Partners within the option
period provided for hereby, it then shall be obligated to accept the Purchase
Offer and conclude the sale and purchase of the Project on the terms and
conditions provided for thereby; but if such Purchase Offer (and any agreement
of sale executed in connection therewith) is not consummated in accordance
with its terms, then the deadlock procedure established by this Section 7.10.
shall be reinstated.
7.11 Arbitrable Disputes.
A. (i) All disputes and claims under this Agreement which
are designated as "Arbitrable Disputes" shall follow the dispute resolution
mechanism set forth in this Section.
(ii) Where no procedure for invoking this mechanism is
set forth in the section in which a particular dispute is designated as an
Arbitrable Dispute, such procedure shall be invoked as follows: any party to
the dispute (hereinafter, an "Arbitration Party") may invoke the process set
forth in this Section 7.11 by written notice (each, an "Arbitration Notice")
to the other Arbitration Party, which Arbitration Notice shall set forth in
reasonable detail the nature of the Arbitrable Dispute, including, without
limitation, the monetary sums which are in dispute. Within ten (10) days from
the date of the Arbitration Notice, the other Arbitration Party shall set
forth a summary of its version of the dispute ("Answer") in a notice to the
Arbitration Party sending the Arbitration Notice.
(iii) The Arbitration Parties agree to first attempt to
settle any Arbitrable Dispute by mediation ("Mediation") administered in
accordance with the Commercial Mediation Rules of the American Arbitration
Association, prior to any Arbitration pursuant to Section 7.11(B).
48
(iv) The Mediation shall take place on a date or dates
(each, a "Mediation Date") mutually agreed to by the Arbitration Parties,
which date(s), unless the Arbitration Parties otherwise agree in writing,
shall be no later than thirty (30) days after the date of the Answer. The
Mediation shall take place at the office of the Managing General Partner or
such other location in the Philadelphia Metropolitan Area as the Arbitration
Parties shall mutually agree.
(v) The Mediation shall be conducted by a mediator
selected by the mutual agreement of the Arbitration Parties (provided, if the
Arbitration Parties are unable to agree as to a mediator, the mediator may be
selected by a third party meeting the qualifications set forth in Section
7.11(B)(ii) for a third party selecting an arbitrator in the event of a
dispute) meeting the qualifications for an Arbitrator (defined later) as set
forth in Section 7.11(B)(ii) below.
B. (i) In the event the Arbitrable Dispute is not finally
resolved by mutual written agreement of the Arbitration Parties within ten
(10) days from the Mediation Date ("Arbitration Commencement Date"), the
Arbitrable Dispute shall be resolved by Arbitration pursuant to the provisions
of this Section 7.11(B).
(ii) Within ten (10) days after the Arbitration
Commencement Date, if the Arbitration Parties have not agreed upon an
Arbitrator, the General Partners shall each (a) appoint one lawyer actively
engaged in the licensed and full-time practice of law (including experience in
resolving partnership disputes) in the Philadelphia Metropolitan area for a
continuous period immediately preceding the Arbitration Commencement Date of
not less than ten (10) years, but who has at no time ever represented or acted
on behalf of any of the Arbitration Parties, and (b) deliver written notice of
the identity of such lawyer to the other Arbitration Party. In the event that
any Arbitration Party fails to so act, such lawyer shall be appointed pursuant
to the same procedure that is followed when agreement cannot be reached as to
the Arbitrator (as set forth below). Within ten (10) days after such
appointment and notice, such lawyers shall appoint a third lawyer of the same
qualification and background and shall deliver written notice of the identity
of such lawyer and notice of the acceptance by such lawyer of such appointment
to each of the Arbitration Parties. Such third lawyer shall be deemed to be
the "Arbitrator" as used herein. In the event that agreement cannot be reached
on the appointment of an Arbitrator within such period, such appointment and
notification shall be made as quickly as possible by any court of competent
jurisdiction, by any licensing authority, agency or organization having
jurisdiction over such lawyers, by any professional association of lawyers in
existence for not less than ten (10) years at the time of such dispute or
disagreement and the geographical membership boundaries of which extend to the
Philadelphia metropolitan area, or by any arbitration association or
organization in existence for not less than ten (10) years at the time of such
dispute or disagreement and the geographical boundaries of which extend to the
Philadelphia Metropolitan area, as determined by the Arbitration Party giving
such Notice of Dispute and simultaneously confirmed in writing delivered by
such Arbitration Party to the other Arbitration Party. Any such court,
authority, agency, association or organization shall be entitled
49
either to directly select such third lawyer or to designate in writing,
delivered to each of the Arbitration Parties, an individual who shall do so.
In the event of any subsequent resignation or inability to perform by the
Arbitrator, the Arbitrator shall be replaced in accordance with the provisions
of this Section 7.11(B)(ii) as if such replacement was an initial appointment
to be made under this Section 7.11(B)(ii) within the time constraints set
forth in this Section 7.11(B)(ii), measured from the date of notice of such
resignation or inability to the person or persons required to make such
appointment, with all the attendant consequences of failure to act timely if
such appointed person is an Arbitration Party hereto.
(iii) Consistent with the provisions of this Section 7.11,
the Arbitrator shall utilize his utmost skill and shall apply himself
diligently so as to hear and decide the outcome and resolution of any
Arbitrable Dispute submitted to the Arbitrator as promptly as possible, but in
any event on or before the expiration of ninety (90) days after the
appointment of the Arbitrator. The Arbitrator shall not have any liability
whatsoever for any acts or omissions performed or omitted in good faith
pursuant to the provisions of this Section 7.11(B).
(iv) The Arbitrator shall, having in mind the ninety (90)
day time limitation set forth above for resolving disputes, (a) enforce and
interpret the rights and obligations set forth in this Agreement with respect
to the Arbitrable Dispute to the extent not prohibited by law, (b) fix and
establish any and all rules as it shall consider appropriate, in its
discretion, to govern the proceedings before it, including any and all rules
of procedure and/or evidence, and (c) make and issue any and all orders, final
or otherwise, and any and all awards, as a court of competent jurisdiction
sitting at law or in equity could make and issue, and as it shall consider
appropriate in its sole and absolute discretion, including the awarding of
monetary damages (but shall not award punitive damages except in situations
involving knowing fraud), the awarding of reasonable attorneys' fees and costs
to the prevailing Arbitration Party as determined by the Arbitrator, in his
discretion, and the issuance of injunctive relief.
(v) The Arbitration Parties shall allow and participate in
discovery in accordance with the Federal Rules of Civil Procedure for a period
of forty-five (45) days after the Arbitration Commencement Date. Unresolved
discovery disputes may be brought to the attention of, and resolved by, the
Arbitrator.
(vi) The Arbitrator shall be compensated for any and all
services rendered under this Section 7.11(B) at a rate of compensation equal
to the then-prevailing rate for arbitrators of similar experience and
qualifications as the Arbitrator, plus reimbursement for any and all expenses
incurred in connection with the rendering of such services, payable in full
promptly upon conclusion of the proceedings before the Arbitrator. Such
compensation and reimbursement shall be borne by the nonprevailing Arbitration
Party as determined by the Arbitrator in its sole and absolute discretion.
7.12 Right of Contribution in Favor of Managing General Partner. At any
time during the term of this Partnership Agreement after the third anniversary
hereof and subject to
50
compliance with federal and state securities laws applicable to private
placements of securities, the Managing General Partner and Limited Partner, or
any successor to their respective interests herein, shall have the right, in
their sole discretion, to contribute all of their respective interests in and
to the Partnership to Brandywine Operating Partnership, L.P., and in exchange
to receive Equivalent Units, as hereinafter defined, of Brandywine Operating
Partnership, L.P. (such contribution right, hereinafter, the "Contribution
Election"). The Contribution Election shall be exercised in accordance with
the following procedure:
A. At any time after the date which is the third anniversary
hereof, and from time to time but no more than once in any Fiscal Year,
Managing General Partner shall have the right, by notice to Administrative
Partner, to request that the Fair Market Value of the Project be determined in
accordance with Section 7.12(F) hereof.
B. Managing General Partner and Limited Partner shall
jointly notify Administrative General Partner of their exercise of the
Contribution Election not less than thirty (30) days prior to the Closing
Date, as hereinafter defined (such notice hereinafter being referred to as the
"Election Notice"), but in any event leaving such time as is necessary, if
any, to determine the Fair Market Value of the Project as set forth herein. If
the Fair Market Value has not yet been determined and no request by Managing
General Partner in accordance with Section 7.12(A) has been made, immediately
upon the giving of the Election Notice, the parties shall determine the Fair
Market Value of the Project in accordance with Section 7.12(F) hereof.
C. On the Closing Date, as hereinafter defined, Managing
General Partner and Limited Partner shall deliver to Administrative General
Partner or its designee an assignment, without recourse, but with a
representation that the partnership interest is free of liens except those
disclosed to and consented to by Administrative General Partner of all of
Managing General Partner's and Limited Partner's right, title and interest in
and to the Partnership, including, but not limited to, all of Managing General
Partner's and Limited Partner's interest as partners in the Partnership, and
Administrative General Partner shall deliver to Managing General Partner and
Limited Partner or their respective designees an assignment, without recourse,
of the Equivalent Units in Brandywine Operating Partnership, L.P., convertible
into common shares of beneficial interest of Brandywine Realty Trust as
aforesaid. The Partners agree that they shall execute such other instruments
as shall be necessary to effect such assignments as any of them may reasonably
request.
D. In no event shall Brandywine Operating Partnership, L.P.
be required to issue upon contribution by the Managing General Partner and the
Limited Partner of their respective interests in the Partnership a number of
Equivalent Units which are convertible into a number of common shares of
beneficial interest of Brandywine Realty Trust in excess of the Stock Exchange
Limit. The term "Stock Exchange Limit" means the maximum number of common
shares of beneficial interest which Brandywine Realty Trust would be permitted
to issue upon conversion of Equivalent Units without obtaining prior
shareholder approval under New York Stock Exchange Rules (or the rules of any
other stock exchange on which the common shares of
51
beneficial interest of Brandywine Realty Trust are then listed). In addition,
in no event shall the Managing General Partner and Limited Partner (or any
successor to their respective interests) have the right to contribute their
respective interests in the Partnership to Brandywine Operating Partnership,
L.P. unless the Fair Market Value is a positive number.
E. The term "Closing Date," as used above, shall mean the
date mutually agreed upon by the Administrative General Partner and the
Managing General Partner or, if no such date is agreed upon, upon the date
which is thirty (30) days following the later of the date the Election Notice
is deemed delivered or the date upon which the Fair Market Value has been
determined as set forth in subsection 7.12(F) hereof. Notwithstanding anything
to the contrary contained herein, at any time prior to the Closing Date,
Managing General Partner may withdraw the Contribution Election provided that
Managing General Partner pays all fees and expenses of the appraiser or
appraisers who perform(s) the appraisal identified in subsection (F) hereof.
F. "Fair Market Value," as used in this Section 7.12, shall
mean, as of any date, the amount a willing buyer would pay to a willing
seller, as of such date, for the Project in an arms length transaction in
which neither party is compelled to buy or sell, as the case may be. If
Managing General Partner and Administrative General Partner cannot agree on
the Fair Market Value, or if either Managing General Partner or Administrative
General Partner elects by written notice to the other within ten (10) days
after the date the Contribution Notice is delivered in accordance with Article
11 hereof, the Fair Market Value shall be determined by an appraisal of the
Project conducted by independent MAI appraisers or members of the American
Society of Real Estate Appraisers in accordance with the following appraisal
procedures:
(1) In determining Fair Market Value, it is understood
and agreed by Managing General Partner and Administrative General Partner that
the Project shall be appraised free and clear of all indebtedness, Partners'
Loans and Partners' Priority Loans and excluding other liabilities of the
Partnership and that the appraiser or appraisers may, in connection with its
or their appraisal, take into account such factors affecting Fair Market
Value, including, without limitation, the present value of any benefit of the
indebtedness secured by the Subordinate Debt Documents in relation to the
then-current market-rate indebtedness (net of (a) any principal, if any,
payable upon an acceleration of such indebtedness, if any, by reason of the
transfer but otherwise assuming that the Subordinate Debt Documents would be
repaid at maturity and otherwise according to the terms and (b) the present
value of any future participation payments to the holders of the Subordinate
Debt Documents based upon the then-current cash flow and then-current value of
the Project, assuming that the Project will be refinanced at the end of the
then-current term of the first mortgage but not sold prior to maturity of the
Subordinate Debt Documents), the identity and creditworthiness of the tenants
of the Project, the terms and expiration dates of such tenants' leases,
prevailing rental rate and rental concession and tenant build-out terms,
prevailing leasing commission rates on lease renewals and new leases, general
market conditions in the Conshohocken/West Conshohocken submarket, prevailing
capitalization and discount rates, and comparable sales, as well as the
various assets and liabilities of the
52
Partnership (excluding the liabilities to be subtracted from Fair Market Value
under subsection H(1)) hereof as such appraiser or appraisers deem necessary
or appropriate; and
(2) Within ten (10) days after Managing General Partner's
or Administrative General Partner's election by written notice to the other to
determine Fair Market Value of the Project by appraisal, Managing General
Partner and Administrative General Partner each shall select one appraiser who
satisfies the requirements for appraisers referenced above and notify the
other of the appraiser within such 10-day time period, the appraiser selected
by it. If Managing General Partner or Administrative General Partner fails to
select such an appraiser within such 10-day time period, the appraiser
selected by the other shall act alone. The appraiser or appraisers so selected
shall appraise the Fair Market Value of the Project within thirty (30) days
after their selection. If one appraiser acts, the Fair Market Value of the
Project shall be the amount determined by such appraiser. If two appraisers
act, the Fair Market Value of the Project shall be the average of the amounts
so determined, so long as the higher appraisal exceeds the lower appraisal by
ten percent (10%) of the amount of the lower appraisal or less. If, however,
the higher appraisal exceeds the lower appraisal by in excess of such ten
percent (10%), the two appraisers shall appoint a third appraiser who
satisfies the requirements for appraisers referenced above within fifteen (15)
days. If the two appraisers fail to do so, then either Managing General
Partner or Administrative General Partner may request that the American
Arbitration Association or any successor organization thereto appoint a third
appraiser who satisfies the requirements for appraisers referenced above. If a
third appraiser has not been appointed by the American Arbitration Association
or its successor within fifteen (15) days after Managing General Partner's or
Administrative General Partner's request for it to do so, then either Managing
General Partner or Administrative General Partner may apply to any court of
competent jurisdiction for the appointment of such third appraiser. Such third
appraiser, whether appointed by the original two appraisers, the American
Arbitration Association or its successor, or a court of competent
jurisdiction, shall appraise the Fair Market Value of the Project within
thirty (30) days after his or her appointment. If the third appraisal exceeds
the amount of the first two appraisals, the Fair Market Value of the Project
shall be the higher of the first two appraisals; if the third appraisal is
less than the lower of the first two appraisals, the Fair Market Value of the
Project shall be the lower of the first two appraisals; and, in all other
cases, the Fair Market Value of the Project shall be equal to the amount of
the third appraisal. The provisions of this Section 7.12(F) for determination
of the Fair Market Value of the Project shall be specifically enforceable to
the extent such remedy is available under applicable law and the determination
of such Fair Market Value hereunder shall be final and binding upon Managing
General Partner, Administrative General Partner and Brandywine Operating
Partnership for a one-year period. Each of Managing General Partner and
Administrative General Partner shall pay the fees and expenses of the
appraiser selected by it. The fees and expenses of the third appraiser, if
any, shall be paid one-half (1/2) each by Managing General Partner and
Administrative General Partner. If only one appraiser is used, the fees and
expenses of such appraiser shall be paid one-half (1/2) each by Managing
General Partner and Administrative General Partner.
53
G. The term "Equivalent Units" shall mean the number of
limited partnership units of Brandywine Operating Partnership which are
convertible, at the time of issuance, into that number of common shares of
beneficial interest of Brandywine Realty Trust having an aggregate Market
Value (as defined below) equal to the Contributing Partners' Proportionate
Share of Fair Market Value of the Project as of the date which is three (3)
days prior to the scheduled Closing Date. If there is more than one class of
interest in Brandywine Operating Partnership, the class to be issued shall be
the class which meets the requirements of the foregoing sentence and which is
designated by Brandywine Operating Partnership.
H. The term "Contributing Partners' Share of Fair Market
Value" is determined, with respect to each of the Managing General Partner and
Limited Partner, by (1) subtracting from the Fair Market Value of the Project
(a) all principal outstanding and accrued and unpaid interest as of the
Closing Date on the indebtedness of the Partnership (other than additional or
contingent interest payable, if any, on the indebtedness evidenced by the
Subordinate Debt Documents by reason of the transfer and considered by the
appraisers in determining Fair Market Value), but including principal and
interest outstanding as of the Closing Date on the Partners' Loans and
Partners' Priority Loans; and (b) due and unpaid Preferred Cumulative Returns
and BOP Preferred Cumulative Return, and the Additional Capital Balances of
all Partners; (2) multiplying the resulting number by the respective
Participation Percentages of the Managing General Partner and Limited Partner,
respectively; and (3) adding to the result obtained in item (2) the sum of the
following: (a) outstanding principal and interest on any Partners' Loans and
Partners' Priority Loans made by each of such Partners, respectively (b) the
Preferred Cumulative Returns due each of such partners, respectively, and (c)
the Additional Capital Balances of each of such Partners, respectively.
I. The term "Market Value" shall mean, as of a given date,
the average of the Closing Price (as defined below) of the common shares of
beneficial interest of Brandywine Realty Trust for the twenty (20) consecutive
trading days ending on such date. The term "Closing Price" on any date shall
mean the last sale price of the common shares of beneficial interest, regular
way, or, in case no such sale takes place on such date, the average of the
closing bid and ask prices of the common shares of beneficial interest,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to which such securities are listed
or admitted to trading on the New York Stock Exchange, or such other national
securities exchange or the NASDAQ Stock Market on which the common shares of
beneficial interest are then listed or admitted to trading.
J. The right of contributions set forth in this Section 7.12
is subject to the following: (1) the filing of an Additional Listing
Application with the New York Stock Exchange and approval of such Application
by the New York Stock Exchange. Administrative General Partner shall use its
best efforts to file such Additional Listing Application and obtain the
approval thereof prior to the third anniversary of the date of this Agreement;
and (2) confirmation with the New York Stock Exchange that no shareholder
approval is required for the granting of the rights
54
set forth herein. Administrative General Partner will use its best efforts to
obtain confirmation that no such shareholder approval is required.
ARTICLE VIII
ADDITIONAL LIMITED PARTNERS
8.01. Additional Limited Partners and Their Contributions.
A. Additional limited partners may be admitted to the
Partnership only upon the written consent of all General Partners.
B. Each such additional limited partner will make such
contribution to the capital of the Partnership and will receive by reason of
his or its contribution such percentage of the income, gains, profits, credits
and other rights of the Partnership as will be set forth in the instrument
evidencing the written consent thereto by all of the General Partners.
ARTICLE IX
INSURANCE
9.01. Coverage. The Managing General Partner shall, during all times
while the Partnership is actively engaged in the operation of the Project, or
in any development or construction operations or other similar activities,
cause the Partnership to carry at the expense of the Partnership, and require
all of its contractors and subcontractors to carry, insurance in amounts, with
deductibles and in companies satisfactory to both General Partners. The
General Partners shall evaluate and decide from time to time as necessary
respecting the coverages then in effect or which should be in effect, and may
add, eliminate, expand or reduce any of the same. Without limiting the
generality of the foregoing, the Managing General Partner shall maintain on
behalf of the Partnership at least the following minimum coverages, unless
otherwise agreed to in writing by all the General Partners:
A. Insurance which shall comply with the Workers'
Compensation and employer's liability laws of all states in which the
Partnership shall have employees;
B. Comprehensive general liability insurance covering all
operations of the Partnership, having a combined single limit of not less than
$1,000,000 per occurrence for bodily injury (including death) and property
damage;
C. Automobile liability insurance covering all owned,
non-owned and hired vehicles used in the operations of the Partnership, having
limits for bodily injury (including death)
55
not less than $2,000,000 per occurrence and limits for property damage not less
than $1,000,000 per occurrence;
D. Umbrella liability insurance, concurrent with the
coverages named in Sections 9.0l.A., 9.0l.B. and 9.0l.C. above, in such
amount, if any, as any first mortgagee of the Project shall require or such
other amount as Managing General Partner shall deem prudent;
E. During construction activities at the Project, builders
all-risk extended coverage insurance (such to be maintained in an appropriate
amount until replaced by the coverage described in Section 9.0l.F below);
F. Fire, extended coverage, vandalism and malicious mischief
insurance in an amount based upon the replacement value of the Project
(excluding roads, foundations, parking areas, paths, walkways and like
improvements), including coverage for loss of contents and further coverage
for loss of rentals;
G. Title insurance with respect to the Land, Project, and
all other real estate of the Partnership; and
H. Boiler and machinery insurance, including coverage for
loss of rentals.
9.02. Certificates; Notices.
A. The Managing General Partner shall furnish to the General
Partners duplicate copies of policies and/or certificates of insurance
certifying to the insurance then in effect (i) on or before the execution of
this Agreement, (ii) upon the renewal or replacement of existing coverage or
the obtaining of additional coverage, and (iii) at any other time upon the
request of any General Partner on ten (10) days prior written notice.
B. Each insurance policy of the Partnership shall contain a
provision requiring the insurer to notify the Partnership, in writing and at
least thirty (30) days in advance, of any material change in the policy and of
any notice of cancellation; and upon its receipt of any such notice the
Managing General Partner shall promptly forward a copy of the same to each
General Partner.
9.03. Concerning Liability Insurance. With respect to all liability
policies of the Partnership, the Managing General Partner shall obtain such
liability policies or endorsements thereto naming not only the Partnership as
insured, but also naming all Partners and the manager or managing agent of the
Project as additional insureds.
9.04. Miscellaneous. The Managing General Partner, on behalf of the
Partnership, shall use its best efforts and take such steps as are within its
control to (i) secure an endorsement or endorsements on all of the insurance
policies referred to herein to the effect that all insurance
56
coverage of any Partner, carried by such Partner in its individual capacity,
will be considered excess coverage, (ii) require all of the Partnership's
architects, engineers and other design professionals to maintain errors and
omissions coverage, (iii) require all of the Partnership's contractors and
subcontractors to comply fully with the Occupational, Safety and Health Act of
1970, as amended from time to time, and (iv) require all of the Partnership's
contractors to indemnify the Partnership and save it harmless and to submit
evidence of contractual liability insurance in amounts sufficient, in its
reasonable opinion, to secure such indemnity; all with the understanding,
nevertheless, that the Managing General Partner shall be obligated to secure
and obtain all or any portion of the foregoing to the extent the same are, in
the Managing General Partner's judgment, available at reasonable cost.
ARTICLE X
DISSOLUTION AND TERMINATION
10.01. Dissolution.
A. The Partnership will be dissolved:
(i) upon the death, retirement, withdrawal, legal
incompetency, removal, or bankruptcy of an individual General Partner or the
retirement, bankruptcy, withdrawal, removal or dissolution of a corporate or
partnership General Partner, unless (a) all remaining General Partners (if any
remain) unanimously elect to continue the business of the Partnership, or (b)
if no General Partner remains, the Limited Partners unanimously consent to the
continuation of the business of the Partnership and unanimously select a
successor general partner; or
(ii) upon the affirmative vote or written consent of all
of the General Partners; or
(iii) upon the sale of the Project and all of the Land,
and the repayment and satisfaction in full of any financing undertaken by the
Partnership in respect thereof; or
(iv) at 12:00 midnight on July 1, 2050; provided,
however, that the Partnership shall not terminate until its affairs have been
wound up and its assets distributed as provided herein.
B. If the business of the Partnership is continued pursuant
to Section 10.01.A.(i) above, (i) the Partnership will continue until the end
of the term for which it is formed (as set forth in Section 10.0l.A. above),
or until the subsequent death, legal incompetency, removal, bankruptcy,
retirement, withdrawal or dissolution of a remaining or successor general
57
partner, in which event the election to continue, as above set forth, will
again be effective; and (ii) in any such case the incompetent, removed,
retired, withdrawn or bankrupt General Partner (or his or its legal
representative), or the successor in interest of a deceased or dissolved
General Partner, will become a Limited Partner with the same share of profits
and losses of the Partnership and the same Participation Percentage and
distribution priorities as before such event and, except as expressly provided
elsewhere herein, will have all the rights of a Limited Partner.
C. As used in Sections 10.0l.A. and 10.0l.B. above, the term
"bankruptcy" shall mean (i) the commencement by a General Partner of a
voluntary case under any Chapter of the Bankruptcy Code (Title 11 of the
United States Code), as now or hereafter in effect, or the taking by a General
Partner of any equivalent or similar action by the filing of a petition or
otherwise under any other federal or state law in effect at the time relating
to bankruptcy or insolvency, (ii) the filing of a petition against a General
Partner under any Chapter of the Bankruptcy Code (Title 11 of the United
States Code), as now or hereafter in effect, or the filing of a petition
seeking any equivalent or similar relief against a General Partner under any
other federal or state law in effect at the time relating to bankruptcy or
insolvency, and in either case the failure by such General Partner to secure
the discharge of any such petition within sixty (60) consecutive days from the
date of filing, (iii) the making by a General Partner of a general assignment
for the benefit of his, its or any of their creditors, (iv) the appointment of
a receiver, trustee, custodian or similar officer for a General Partner or for
the property of a General Partner and the failure by such General Partner to
secure the discharge of such receiver, trustee, custodian or similar officer
within sixty (60) consecutive days from the date of appointment,.or (v) the
admission in writing by a General Partner of any inability to pay debts
generally as they become due.
10.02. Appointment of Liquidating Partner.
A. Upon the dissolution of the Partnership, if the
Partnership's business is not continued pursuant to Section 10.01. hereof, the
Managing General Partner (provided it then is a General Partner hereof and is
not in breach or default of any of its obligations under this Agreement) shall
act as Liquidating Partner on the terms hereinafter set forth; or if it no
longer is a General Partner hereof or is in breach or default of any of its
obligations under this Agreement, then Administrative General Partner (or its
successors or assigns) shall select a Partner (the "Liquidating Partner") to
wind up the affairs of the Partnership and distribute its assets. Another
Partner shall be selected (in the same manner and for the same purpose) to
succeed the Partner originally selected or any subsequently selected successor
whenever the Partner originally selected or any such subsequently selected
successor, as the case may be, fails for any reason to carry out such purpose.
The Partner so selected and acting hereunder from time to time may be any
General Partner or any other individual, corporation, or general or limited
partnership, shall be compensated for his or its services hereunder (as and to
the extent authorized by Administrative General Partner, but no compensation
shall be payable if the Liquidating Partner is a Partner or is affiliated,
directly or indirectly, with a Partner), and shall proceed diligently to wind
up the affairs of the Partnership and distribute its assets in the manner
hereinafter provided.
58
B. No Partner (other than the Managing General Partner)
shall be required to accept appointment as Liquidating Partner. If no Partner
is willing to accept such appointment, the General Partners shall select a
third person to act in that capacity, and the person so selected shall for all
purposes of this Agreement have the rights, powers and obligations of
Liquidating Partner.
10.03. Distributions and Other Matters. Promptly upon the dissolution
of the Partnership, if the Partnership's business is not continued pursuant to
Section 10.01. hereof, the Partners (or their legal representatives, heirs,
successors, or assigns) will cause the cancellation of the Certificate, and
the Liquidating Partner will liquidate the assets of the Partnership and apply
and distribute the proceeds of such liquidation in the following order of
priority to the extent available:
A. To payment of secured debts and liabilities of the
Partnership (other than Partner Loans or Partners Priority Loans) in the order
of priority provided by law; provided that the Liquidating Partner shall first
pay, to the extent permitted by law, liabilities with respect to which any
Partner is or may be personally liable;
B. To payment of unsecured debts and liabilities of the
Partnership (other than Partner Loans or Partners' Priority Loans) in the
order of priority provided by law; provided that the Liquidating Partner shall
first pay, to the extent permitted by law, liabilities with respect to which
any Partner is or may be personally liable;
C. To payment of the expenses of liquidation of the
Partnership in the order of priority provided by law; provided that the
Liquidating Partner shall first pay, to the extent permitted by law, expenses
with respect to which any Partner is or may be personally liable;
D. To the setting up of such reserves as the Liquidating
Partner may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Partnership arising out of or in connection
with the Partnership business; provided that any such reserve shall be held by
the Liquidating Partner for the purposes of disbursing such reserves in
payment of any of the aforementioned contingencies and, at the expiration of
such period as the Liquidating Partner shall deem advisable (but in no case to
exceed eighteen (18) months from the date of dissolution unless an extension
of time is consented to by the General Partners), to distribute the balance
thereafter remaining in the manner hereinafter provided; and
E. To the Partners in the order set forth in Section 5.02,
above.
10.04. Distributions of Property. No Partner may demand or receive
property other than cash in return for its contributions, loans or advances or
upon dissolution as provided herein, except upon the written approval of both
General Partners.
59
10.05. Actions of the Liquidating Partner; Statements of Account.
A. During the period of liquidation (which will be such
reasonable time as may be required for the orderly completion of liquidation
and distribution as set forth above), the Liquidating Partner, as trustee for
the benefit of all Partners as tenants-in-common, shall take any and all
action necessary or appropriate to complete such liquidation and distribution
as provided in this Article, having for such purpose all of the powers
enumerated in Article IV of this Agreement necessary or appropriate to
accomplish the same.
B. The Liquidating Partner will prepare a final statement of
the accounts of the Partnership as of the date of termination, and, as
promptly as possible thereafter, a copy thereof will be furnished to each
Partner. Such statement shall set forth the actual or contemplated application
and distribution of the assets of the Partnership. Upon completion of
distribution as required hereby, a further statement for the period of
liquidation will be so prepared by the Liquidating Partner and furnished to
each Partner.
ARTICLE XI
NOTICES AND COMMUNICATIONS
11.01. Notices. All notices, demands, requests, calls and other
communications required by or permitted under this Agreement shall be in
writing (whether or not a writing is expressly required hereby), and shall be
directed as follows:
A. If to the Managing General Partner:
Two Xxxxxx Tower Associates
c/o Oliver Xxxxxx Xxxxxx Corporation
One Tower Bridge
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
B. If to Administrative General Partner:
c/o Brandywine Realty Trust
Newtown Corporate Campus
00 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Chairman
Xxxxxx X. Xxxxxxx, President and Chief Executive
Officer
60
C. If to Limited Partner:
Xx. Xxxxxx X. Xxxxxx
c/o Oliver Xxxxxx Xxxxxx Corporation
One Tower Bridge
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
D. If to the Partnership, in care of each General Partner at
its respective address stated above.
E. Any notice, demand, request, call or other communication
required or permitted to be given or made under this Agreement will be deemed
given or made (i) when delivered by hand delivery at its address set forth
above, or (ii) three business days following its deposit in the U.S. Mail,
addressed to such address, postage prepaid, registered or certified, return
receipt requested (with a copy by regular U.S. mail, first class, postage
prepaid), or (iii) on the next business day following its deposit with Federal
Express or another nationally recognized express delivery service, addressed
to such address (with a copy by regular U.S. mail, first class, postage
prepaid).
11.02. Change of Address. Any Partner may specify a different address
by sending to the Partnership a notice as hereinabove provided of such
different address. If the address of the Partnership is changed, a written
notice of such change of address shall be sent by the Managing General Partner
by registered or certified mail to each other Partner.
11.03. Time of Communications. Any notice, demand, request, call or
other communication required or permitted to be given or made to a Partner or
to the Partnership under this Agreement will be deemed given or made (i) when
delivered to such Partner or the Partnership, as the case may be, at its
address set forth in Section 11.01. above, or (ii) three business days
following its deposit in the U.S. Mail, addressed to such address, postage
prepaid, registered or certified, return receipt requested (with a copy by
regular U.S. mail, first class, postage prepaid), or (iii) on the next
business day following its deposit with Federal Express or another nationally
recognized express delivery service, addressed to such address (with a copy by
regular U.S. mail, first class, postage prepaid).
ARTICLE XII
MISCELLANEOUS
12.01. Filings. The Partners agree that (i) a signed and acknowledged
certificate shall be filed promptly in such offices as are required by the Act
for the continuation of the Partnership as contemplated by this Agreement;
(ii) they shall sign, acknowledge and file from time to time in
61
such offices (and elsewhere) all writings to amend the Certificate as are
required by the Act for the carrying out of the terms and provisions of this
Agreement; (iii) upon dissolution and termination of the Partnership, they
shall sign, acknowledge and file in such offices (and elsewhere) the writing
required by the Act to cancel the Certificate; and (iv) they shall from time
to time sign, acknowledge and file any other certificates, instruments and
documents, as well as amendments thereto, under the laws of the Commonwealth
of Pennsylvania or of any state or other jurisdiction in which the Partnership
is doing or intends to do business in connection with the use of the name of
the Partnership by the Partnership.
12.02. Power of Attorney.
A. Each Partner, by his or its execution of this Agreement,
hereby irrevocably constitutes, empowers and appoints the Managing General
Partner (for so long as it or its nominee shall remain a General Partner of
the Partnership) and, in the absence of any General Partner, the person
designated as Liquidating Partner pursuant to Section 10.02. hereof, as its
true and lawful agent and attorney-in-fact to make, prepare, execute, sign,
acknowledge, certify under oath and file and record, in its name, place and
stead:
(1) the Certificate, as well as amendments thereto and a
statement of cancellation thereof, under the Act, or which may be required by,
or be appropriate under, the laws of any other state or other jurisdiction;
(2) any certificates, instruments and documents
(including fictitious name applications), as well as amendments thereto and
statements of cancellation thereof, as may be required by, or be appropriate
under, the laws of any state or other jurisdiction in which the Partnership is
doing or intends to do business in connection with the use of the name of the
Partnership by the Partnership;
(3) without limiting the generality of the foregoing, any
amendment to the Certificate which is necessary to reflect: (i) a change in
the name or address of the Partnership or in the amount or character of the
Capital Contributions or Additional Capital Contributions of any Partner; (ii)
the admission of a substituted limited partner pursuant to the provisions of
Article VII hereof; (iii) the admission of a general partner or additional
limited partner pursuant to the provisions of Article VII or Article VIII
hereof; (iv) the correction or clarification of any incorrect statement in the
Certificate (or in any amendment thereto); or (v) a change in the time stated
in the Certificate (or in any amendment thereto) for the expiration of the
term hereof or for the return of the contributions of any Partner; and
(4) any other instrument which may be required to be
filed by the Partnership under the laws of the United States, any state, or
any political subdivision thereof, or by any governmental or
quasi-governmental agency, or which any General Partner shall deem it
advisable to file.
62
B. Each Partner further agrees, whenever requested so to do,
personally to sign, certify under oath and acknowledge any of the foregoing
and to execute whatever further instruments or other documents as shall be
necessary or appropriate in the reasonable judgment of any Partner.
C. The foregoing powers of attorney are coupled with an
interest, are irrevocable and, to the extent permitted by law, shall survive
the death, dissolution, bankruptcy or legal incompetency of a Partner. The
foregoing powers of attorney shall survive the sale, assignment or transfer by
a Partner of any part or all of his interest in the Partnership.
12.03. Inspections. Any Partner shall have the full right and
privilege at any time, at its own cost and expense, to inspect all or any part
of the Land, Project or other Partnership property.
12.04. Other Remedies. Subject to the provisions of Section 4.0l.E.
hereof and Section 12.06 hereof, any Partner shall have and shall maintain all
rights or remedies it may have against any other Partner, at law or in equity
or by this Agreement, including, without limitation, rights or remedies for or
in respect of conduct constituting a fraud on the Partnership or on any
Partner, or for or in respect of a breach of any fiduciary obligation.
12.05. Partners as Creditors. Any Partner who is a bona fide creditor
of the Partnership as a lender thereto or by reason of any other
debtor/creditor relationship therewith (including, without limitation,
creditor status arising by reason of the making of any Partners' Loan or
Partners' Priority Loan) shall be permitted, in the event of any breach
thereof or default thereunder, to take such action and to exercise and pursue
such other rights, powers or remedies against the Partnership and/or against
any other obligor, which rights, powers or remedies are available to such
Partner by law, in equity or by contract; and the taking of any such action,
the exercise and pursuit of any such right, power or remedy, and the execution
or foreclosure on any Partnership property in connection therewith, shall each
be understood to be for the benefit of the creditor-Partner only and shall not
be deemed or understood to cause or permit a reconstitution of the Partnership
for the benefit of any other Partner.
12.06. Independent Ventures. Any Partner and any affiliate of any
Partner may engage in or possess interests current or future in other business
ventures of every nature and description, independently or with others, and
whether such ventures compete with the Project or not, including, without
limitation, the ownership, financing, leasing, operation, management,
syndication, brokerage and development of real property; and neither the
Partnership nor any Partner will have any rights by virtue of this Agreement
or the existence of this Partnership in or to such independent ventures or to
the income or profits derived therefrom.
12.07. Partial Invalidity. The invalidity or unenforceability of a
portion of this Agreement will not affect the validity or enforceability of the
remainder hereof.
63
12.08. Governing Law; Parties in Interest. This Agreement will be
governed by and construed according to the laws of the Commonwealth of
Pennsylvania, and will bind and inure to the benefit of the Partners and each
of their respective heirs, successors, assigns, executors, administrators and
personal representatives.
12.09. Amendment. This Agreement may be amended only by the unanimous
written consent of all General Partners; provided, however, that no amendment
to this Agreement which adversely affects the rights or liabilities of the
Limited Partner shall be made without the Limited Partner's prior written
consent.
12.10. Execution in Counterpart. This Agreement may be executed in
counterparts, all of which taken together shall be deemed one original.
12.11. Computation of Time. In computing any period of time pursuant
to this Agreement, the day of the act, date of notice, event or default from
which the designated period of time begins to run will not be included. The
last day of the period so computed will be included, unless it is a Saturday,
Sunday or a legal holiday in the Commonwealth of Pennsylvania, in which event
the period runs until the end of the next day which is not a Saturday, Sunday
or such legal holiday.
12.12. Table of Contents; Titles and Captions. The Table of Contents
preceding this Agreement and all article, section or subsection titles or
captions contained herein are for convenience only and are not deemed part of
the context hereof.
12.13. Pronouns and Plurals. All pronouns and any variations thereof
are deemed to refer to the masculine, feminine, neuter, singular or plural as
the identity of the person or persons may require.
12.14. Approval by General Partners. In respect of all provisions of
this Agreement, any reference to approval of the General Partners or consent
of the General Partners shall mean, unless the context hereof shall expressly
require otherwise, the unanimous approval or consent of all of the General
Partners.
12.15. Exhibits. The Exhibits attached hereto form a part of this
Agreement and each is hereby incorporated herein by reference.
12.16. Entire Agreement. This Agreement and the Exhibits hereto
contain the entire understanding and agreement among the Partners, and
supersede any prior understandings and agreements between them respecting the
subject matter hereof. Without limiting the foregoing, this Agreement amends,
supersedes and restates the Original Agreement in its entirety and the
Certificate amends, supersedes and restates the Original Certificate in its
entirety.
64
12.17. Filing with Securities Exchange Commission. The parties hereto
acknowledge and agree that Brandywine Realty Trust, the general partner of the
sole member of the general partner of the Administrative General Partner, may
make such filings as it deems necessary to comply with securities laws with
the Securities Exchange Commission disclosing this transaction.
12.18. Non-Recourse.
A. No recourse shall be had for any of the obligations of
the Administrative General Partner hereunder or for any claim based thereon or
otherwise in respect thereof against any past, present or future trustee,
shareholder, officer or employee of Brandywine Realty Trust, whether by virtue
of any statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all of such liability being expressly waived and
released by each of the other Partners.
B. No recourse shall be had for any of the obligations of
the Managing General Partner hereunder or for any claim based thereon or
otherwise in respect thereof against any past, present or future trustee,
shareholder, officer or employee of Two Xxxxxx Tower Corporation, whether by
virtue of any statute or rule of law, or by the enforcement of any
65
assessment or penalty or otherwise, all of such liability being expressly
waived and released by each of the other Partners.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Agreement of Limited Partnership the day and year first
above written.
TWO XXXXXX TOWER ASSOCIATES,
a Pennsylvania limited partnership
By: TWO XXXXXX TOWER CORPORATION,
a Pennsylvania corporation, its duly
authorized general partner
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx, President
BRANDYWINE XX XX, L.P., a Pennsylvania limited
partnership
By: BRANDYWINE XX XX, L.L.C., a
Pennsylvania limited liability company
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------------
Xxxxxxx X. Xxxxxxx, Xx., Chairman
JOINDER
BRANDYWINE OPERATING PARTNERSHIP, L.P. hereby joins in this Agreement
for the purpose of confirming that it will perform the obligations required of
Brandywine Operating Partnership, L.P. under Section 7.12 hereof.
BRANDYWINE OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership
By: BRANDYWINE REALTY TRUST, its duly
authorized general partner
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------------
Xxxxxxx X. Xxxxxxx, Xx., Chairman
66
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TWO TOWER BRIDGE ASSOCIATES
Exhibit "A"
[Blanks to be completed]
Schedule of Partners' Capital Contributions,
Capital Balances, Capital Accounts, Contribution Percentages and
Participation Percentages, all as of May 11, 1998
------------
Capital Balances
Capital and Contribution Participation
Contributions Capital Accounts Percentages Percentages
------------- ---------------- ------------ -------------
GENERAL PARTNERS
-----------------
Administrative General
Partner $2,709,889(1) $2,709,889(1) 35% 35%
---------- ----------
Managing General Partner $1,200,000 $1,200,000 64% 64%
LIMITED PARTNERS
----------------
Limited Partner $ 0 $ 1% 1%
---------------------
(1) To be equal to the amount of the prepayment of the AFL-CIO Debt (as
defined in the Project Participation Agreement) plus actual costs associated
with such prepayment (including, but not limited to, all actual costs in
refinancing such AFL-CIO Debt and any commitment fee to the new lender), less
the net proceeds of the Two T.B. Mortgage Loan, as defined in the Project
Participation Agreement.
