Exhibit 10.6
RIGHT OF FIRST OFFER AGREEMENT
(TOWER NORTH)
THIS RIGHT OF FIRST OFFER AGREEMENT (this "Agreement") is made as of this
3rd day of November, 1997, by XXXXXX XXXXXX XXXXXX CORPORATION, a Pennsylvania
corporation ("OTPC"), and XXXXXX TOWER NORTH ASSOCIATES, a Pennsylvania limited
partnership ("OTNA"), in favor of BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership ("BOP").
BACKGROUND:
OTNA has an interest as general partner in Tower Bridge North Associates, a
Pennsylvania limited partnership ("Tower North"), which partnership was formed
pursuant to an Agreement of Limited Partnership dated March 19, 1987 (the "Tower
North Partnership Agreement"). Tower North has a leasehold interest and option
to purchase in a certain parcel of land identified on Exhibit "A" attached
hereto and made a part hereof (the "Premises").
From time to time, Tower North may agree to assign its interest in and to
certain parcels comprising all or a portion of the Premises to OTPC or its
various affiliates in consideration for such payment as Tower North may agree.
By way of example and not limitation, Tower North may enter into agreements
similar in effect to that certain Agreement of Purchase and Sale by and between
Four Tower Bridge Associates and Tower Bridge Land Holding Associates I.
From time to time, upon the agreement of Tower North to assign its
interest, the Xxxxxxxxxx County Development Corporation ("MCDC") may agree to
transfer all or a portion of its fee interest in and to the parcels assigned by
Tower North to OTPC, OTNA or an affiliate of either of them at the direction of
Tower North in consideration for the payment required by its lease with Tower
North or as MCDC may otherwise agree.
OTPC and OTNA desire to agree that if Tower North shall assign its interest
in any one or more portions of the Premises to OTPC, OTNA or any party now or
hereafter owned by, owning, controlled by or controlling either of them,
directly or indirectly, for development, OTPC, OTNA or such other party shall
offer to BOP the right to participate in the acquisition and development of such
portion or portions of the Premises under and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, OTPC and OTNA hereby agree as follows:
A. Provisions with Respect to Multi-tenant Office Buildings
1. Notice of Development. When OTPC, OTNA or any party now or hereafter
owned by, owning, controlled by or controlling either of them (any such entity,
an "OTP Development Entity") desires to acquire, for purposes of developing a
multi-tenant commercial office building to be owned by the OTP Development
Entity and leased to commercial office tenants, a parcel consisting of all or
any portion of the Premises (such parcel, as the same may be modified to fit the
scope of the Multi-tenant Project, as hereinafter defined, a "Multi-tenant
Development Parcel"), the OTP Development Entity shall deliver to BOP notice
(the "Multi-tenant Development Notice") of this desire and of the terms under
which the OTP Development Entity would agree to acquire such Premises or portion
thereof. Together with such notice, the OTP Development Entity shall send BOP
the following information with regard to such proposed acquisition or
development (each particular development, a "Multi-tenant Project"):
a. The estimated purchase price for the land, including both the
amount payable to the MCDC, if any, and the cost payable to Tower North, if any;
b. The following: (i) a feasibility and market analysis of such
proposed development; (ii) a financial pro forma of such proposed development;
(iii) a proposed development schedule, and (iv) a general description of the
nature of the improvements and use contemplated. If any additional information
is provided to the existing partners of Tower Bridge North Associates as
required by Section 4.11(c) of the Agreement of Limited Partnership of Tower
Bridge North Associates (the "Tower North Partnership Agreement"), the OTP
Development Entity shall supply such information to BOP no later than the date
of delivery of the Multi-Tenant Development Notice;
c. A copy of any leases, lease proposals, or other information
regarding potential tenants of the Multi-tenant Project, and, if no leases or
lease proposals are included, information regarding comparable tenants and
vacancy rates in other commercial multi-tenant office buildings in the
Conshohocken/West Conshohocken submarket;
d. The required equity to be contributed by BOP at the construction
stage, as well as the proposed mortgage debt to be incurred at the construction
stage in order to participate in the development of the Multi-tenant Project;
e. The required equity to be contributed by BOP (or to remain in the
Multi-Tenant Project, if previously contributed) upon completion of construction
and refinance of the construction loan, if any, as well as the proposed mortgage
debt to be incurred at the completion of the construction stage in order to
participate in the development of the Multi-tenant Project;
f. The development fees as well as the amount required for general
overhead and administration for the Project to be payable to the OTP Development
Entity or its affiliates; and
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g. Any other economic terms which would cause the Development
Partnership Agreement, as hereinafter defined, to materially differ in substance
from that hereinafter prescribed.
The information provided in subsections (b) and (c), above, or any
other studies, projections or other information, shall not constitute a
representation or warranty as to the physical condition or environmental
condition of the Premises. Any budgets, projections of cash flow and leasing
information delivered to BOP shall constitute only an example of possible
outcomes and not a representation or warranty of future profitability of the
Multi-tenant Project. The determination of the items set forth in subsections
(d), (e), (f) and (g) shall be at the election of the OTP Development Entity, in
its sole discretion.
2. Grant of Right of First Offer of Participation. Upon the giving of
the Multi-Tenant Development Notice, and upon BOP's compliance with Section A(3)
hereof, BOP shall have the right to participate, through the formation of a
single-purpose entity formed by BOP similar to the entities owned directly or
indirectly by BOP or Brandywine Realty Trust as a partner of Four Tower Bridge
Associates (such entity, the "BOP-Sub"), in the ownership and development of the
Multi-tenant Project upon the terms and conditions as follows:
a. BOP-Sub shall become a partner with the OTP Development Entity in a
partnership (the "Development Partnership") to be formed for the acquisition and
development of the Multi-Tenant Development Parcel pursuant to a partnership
agreement (the "Development Partnership Agreement") in the same form as that of
Four Tower Bridge Associates, except such modifications as are necessary to
confirm the economic terms of the partnership as herein set forth and any other
particular aspects of the Multi-tenant Project which differ from the project
known as Four Tower Bridge.
b. The economic terms of the Development Partnership Agreement shall be
as set forth in the Multi-Tenant Development Notice and as follows:
i. The amount of equity initially contributed by BOP or BOP-Sub
(which shall constitute BOP Preference Capital as defined in Article I of the
Development Partnership Agreement) shall be equal to the amount specified in the
Multi-Tenant Development Notice; provided, however, that in the event the
Project Costs through the completion of construction of the Multi-tenant Project
materially exceed the amount projected in the budget supplied in connection with
the information supplied prior to execution of the Development Partnership
Agreement and no mortgage debt is provided to finance such excess, any excess
Project Costs shall be funded pursuant to Sections 3.03, 3.04 and 3.05 of
Article III of the Development Partnership Agreement.
ii. The BOP Preferred Cumulative Return on the BOP Preference
Capital (both as defined in Article I of the Development Partnership Agreement)
with regard to
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the capital contribution of BOP or BOP-Sub described in Section 3.01 and Exhibit
"A" of the Development Partnership Agreement shall be equal to nine percent (9%)
per annum;
iii. If the OTP Development Entity contributes capital to the
Development Partnership concurrently with BOP's contribution of the BOP
Preference Capital, the capital contributed by the OTP Development Entity shall
have the right to the same return, with the same priority, as the BOP Preference
Capital.
iv. If leases for 50% of the rentable square footage of the
Multi-tenant Project or less shall have been executed by prospective tenants of
the Multi-tenant Project on the date the Development Partnership Agreement shall
have been executed and delivered by all parties thereto, the Participation
Percentage of BOP-Sub under the Development Partnership Agreement shall be equal
to sixty-five percent (65%).
If leases for in excess of 50% of the rentable square
footage of the Multi-tenant Project shall have been executed by prospective
tenants of the Multi-tenant Project on the date the Development Partnership
Agreement shall have been executed and delivered by all parties thereto, the
Participation Percentage of BOP-Sub under the Development Partnership Agreement
shall be as set forth in the following table:
IF THE SQUARE FOOTAGE LEASED THEN THE PARTICIPATION
IS: PERCENTAGE OF BOP-SUB SHALL
BE:
More than 50% and up to 55% 64%
More than 55% and up to 60% 63%
More than 60% and up to 65% 62%
More than 65% and up to 70% 61%
More than 70% and up to 75% 60%
More than 75% and up to 80% 59%
More than 80% and up to 85% 58%
More than 85% and up to 90% 57%
More than 90% and up to 95% 56%
More than 95% and up to 100% 55%
Notwithstanding the foregoing, if the OTP Development Entity
contributes capital to the Development Partnership initially and concurrently
with the
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contribution of BOP Preference Capital, the Participation Percentage of the
BOP-Sub shall be reduced to be equal to the product of the following: the
Participation Percentage of the BOP-Sub (in the absence of any contribution by
the OTP Development Entity) multiplied by a fraction, the numerator of which is
the amount of the contribution of BOP Preference Capital and the denominator of
which is the sum of the contribution of BOP Preference Capital plus the
contribution by the OTP Development Entity. In no event shall the required BOP
Preference Capital be reduced, without BOP's consent, to an amount which is less
than one-half of the initial equity contribution under the Development
Partnership Agreement.
v. No guarantees (whether of payment, completion or otherwise)
shall be provided by the OTP Development Entity or Xxxxxx X. Xxxxxx without its
or his consent, all such guarantees being provided by BOP or such affiliate
thereof as shall be approved by the applicable lender, and no collateral other
than the Multi-Tenant Project itself shall be required to be given as security
for any loan.
vi. To the extent any other economic terms and conditions not
included in the clauses set forth as items (i) through (v) above are required by
the OTP Development Entity, provided such terms and conditions do not change the
terms and conditions set forth in items (i) through (v) above, the OTP
Development Entity shall be permitted to incorporate such terms and conditions,
in its sole discretion.
The right of first offer set forth above shall be subject to the
Development Partnership's acquisition of the Multi-Tenant Development Parcel
from MCDC, free of the rights of the partners of Tower North as described in the
recitals hereof. In the event the Development Partnership is unable, for any
reason, to acquire the Multi-Tenant Development Parcel, none of BOP, BOP-Sub or
any entity purporting to benefit from this Right of First Offer will have any
claim against the OTP Development Entity, OTPC, OTNA, or any other person or
entity directly or indirectly controlling any of them, including, but not
limited to Xxxxxx X. Xxxxxx.
3. Exercise of Right of First Offer.
a. If, by reply notice given no later than the Reply Date, as
hereinafter defined, BOP notifies the OTP Development Entity that BOP has
decided to participate in the Development Partnership as hereinafter set forth,
then the OTP Development Entity shall instruct its attorneys to prepare the
Development Partnership Agreement containing the terms set forth in Section A(2)
hereof. BOP-Sub shall execute such Development Partnership Agreement and
deliver it to the OTP Development Entity within fifteen (15) days after receipt
of the Development Partnership Agreement with all exhibits attached, and BOP
shall join in the Development Partnership Agreement within such period for the
purpose of confirming that it will make the equity contributions required
pursuant to the Development Partnership Agreement. If BOP fails to give the
notice set forth herein or BOP-Sub or BOP fail to execute and deliver the
Development Partnership Agreement as set forth herein, BOP's right to
participate in the Development Partnership and the development of the
Multi-Tenant Development Parcel shall be
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deemed waived, whereupon neither BOP nor BOP-Sub shall have any further
rights under the Right of First Offer as to the Development Partnership and
the Multi-Tenant Development Parcel (except as provided in subsection
A(3)(c), below), but otherwise BOP and BOP-Sub shall have no liability in
respect thereof. BOP's rights pursuant to this Right of First Offer as to
any other phase of development of the Premises not identified in the
Multi-Tenant Development Notice and the other information supplied in
accordance with Section A(1) hereof shall not be affected by such waiver.
The OTP Development Entity, OTNA, OTPC, or any affiliate thereof shall
thereafter have the right to acquire the Multi-Tenant Development Parcel on
any terms they see fit with the intent of developing Substantially the Same
Multi-tenant Project, as hereinafter defined, on Substantially the Same Terms
and Conditions, as hereinafter defined. Such acquisition and development may
include the offer of interests to other partners and sources of funding, and,
subject to subsection A(3)(c), below, none of BOP, BOP-Sub or any entity
purporting to benefit from this Right of First Offer will have any claim by
reason thereof against the OTP Development Entity, OTPC, OTNA, or any other
person or entity directly or indirectly controlling any of them, including,
but not limited to Xxxxxx X. Xxxxxx.
The term "Reply Date," as used herein, shall mean the later to
occur of the following events (i) the date which is twenty (20) days after the
date the OTP Development Entity gives the Multi-Tenant Development Notice as
provided herein, or (ii) the date which is forty-five (45) days after the date
the OTP Development Entity delivers the information set forth in subsections
A(1)(a)-(c) hereof to BOP.
b. Following the execution of the Development Partnership Agreement,
the Development Partnership, acting by mutual consent of the general partners,
shall in good faith attempt to negotiate and agree upon a contract for purchase
of the Multi-Tenant Development Parcel for a purchase price consistent with that
set forth in subsection (A)1(a), above, it being understood and agreed that the
form of agreement of sale agreed upon for the acquisition of land by Four Tower
Bridge Associates from Tower Bridge Land Holding Associates shall be an
acceptable model, subject to negotiation of particular economic terms and any
other particular terms arising from aspects of the Multi-tenant Project which
differ from the project known as Four Tower Bridge. If they cannot reach an
agreement with MCDC and Tower North within ninety (90) days after the date the
Development Partnership Agreement has been fully executed and delivered by all
partners thereof, then either general partner of the Development Partnership
shall have the right to terminate the Development Partnership Agreement,
whereupon neither BOP nor BOP-Sub shall have any further rights under the Right
of First Offer as to the Development Partnership and the Multi-Tenant
Development Parcel, subject to subsection A(3)(c), below, but otherwise BOP and
BOP-Sub shall have no liability in respect thereof. The OTP Development Entity,
OTNA, OTPC, or any affiliate thereof shall thereafter have the right to acquire
the Multi-Tenant Development Parcel on any terms they see fit with the intent of
developing Substantially the Same Multi-tenant Project on Substantially the Same
Terms and Conditions, as hereinafter defined, which may include the offer of
interests to other partners and sources of funding, and none of BOP, BOP-Sub or
any entity purporting to benefit from this Right of First Offer will have any
claim by reason thereof against the OTP Development Entity,
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OTPC, OTNA, or any other person or entity directly or indirectly controlling
any of them, including, but not limited to Xxxxxx X. Xxxxxx.
c. Notwithstanding the foregoing, if (i) BOP and BOP-Sub are deemed
to waive their rights under subsection (a) with respect to any particular
Multi-Tenant Development Parcel or the Development Partnership Agreement as to
that Multi-Tenant Development Parcel is terminated as set forth in subsection
(b) hereof, and (ii) having acquired such Multi-Tenant Development Parcel, the
OTP Development Entity itself (or through an entity in which the OTP Development
Entity shall have an ownership interest) has obtained or obtains land
development approval to commences a project on the Multi-Tenant Development
Parcel within twelve (12) months after the Multi-Tenant Development Notice which
is not Substantially the Same Multi-tenant Project as outlined in the
Multi-Tenant Development Notice or if the OTP Development Entity is prepared to
enter into an agreement for a Multi-tenant Project within such twelve (12) month
period with another investor-entity which is not upon Substantially the Same
Terms and Conditions as outlined in the Multi-Tenant Development Notice, the
right of first offer as to such Multi-Tenant Development Parcel shall be
reinstated, and the OTP Development Entity shall have the obligation to offer
the development of such Multi-Tenant Development Parcel to BOP by sending to BOP
a revised Multi-Tenant Development Notice. Such revised Multi-Tenant
Development Notice shall identify any changes to the Multi-tenant Project which
make the project not Substantially the Same Multi-tenant Project and shall
identify terms and conditions which make the project not on Substantially the
Same Terms and Conditions as set forth in the original Multi-tenant Development
Notice. BOP shall have the right to review such revised Multi-tenant
Development Notice and act upon it in accordance with Sections A(1) and A(2)
hereof, except that the Reply Date for the purpose of review of such notice
shall be five (5) business days following receipt of such revised Multi-tenant
Development Notice with the additional information required by this subsection
(c).
Notwithstanding anything to the contrary contained herein, if the
OTP Development Entity (or any entity in which the OTP Development Entity shall
have an interest) acquires the Multi-Tenant Development Parcel after initially
complying with Sections A(1) and A(2) hereof and after BOP and BOP-Sub have no
further right to participate in a Multi-Tenant Development Project as set forth
in Sections 3(a) and the first paragraph of Section 3(b) hereof, in no event
shall a subsequent sale of that Multi-Tenant Development Parcel to a third party
unaffiliated with the OPT Development Entity for its own use or development
constitute an event requiring the reinstatement of the right of first offer as
to such Multi-Tenant Development Parcel, even if the OTP Development Entity or
any person or entity affiliated therewith shall provide services in connection
with such use or development.
d. The term "Substantially the Same Multi-tenant Project," as used
herein, shall mean a real estate development for the general use classification
of a Multi-tenant Project; provided, however, that the addition of one or more
tenants or changes in the cost or scope of a development shall not be deemed to
cause it to become not Substantially the Same Multi-tenant Project.
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e. The term "Substantially the Same Terms and Conditions" shall mean
that (1) the fees and general overhead and administration to be paid to
Developer are at least 90% of the fees and general overhead and administration
set forth in the original Multi-Tenant Development Notice; (2) the equity
required to be contributed by the proposed investor-entity upon completion of
the Multi-Tenant Project, as a percentage of project cost, is greater than a
percentage which is five percentage points less than that required of BOP under
the original Multi-tenant Development Notice; (3) the percentage interest to be
given to the proposed investor-entity is less than a percentage which is five
percentage points more than that offered to BOP under the original Multi-tenant
Development Notice; (4) the preferred return, if any, offered to such investor
is no more than 10% per annum; and (5) no other payment is offered to such
investor-entity in consideration for the investor entity's agreement to maintain
the terms on Substantially the Same Terms and Conditions as reflected in clauses
(1) through (4) and (6) hereof.
B. Provisions with Respect to Projects Other than Multi-tenant Office
Buildings
1. Notice of Development. When an OTP Development Entity desires to
acquire, for purposes other than developing a multi-tenant commercial office
building to be owned by the OTP Development Entity and leased to commercial
office tenants, a parcel consisting of all or any portion of the Premises, in
which an investment of equity shall be required and in which the OTP Development
Entity shall receive compensation other than by reason of its share of sales
proceeds as a partner in Tower North or for providing services (each, as the
same may be modified to fit the scope of the other Project as hereinafter
defined, an "Other Development Parcel"), the OTP Development Entity shall
deliver to BOP notice (the "Other Development Notice") of this desire and of the
terms under which the OTP Development Entity would agree to acquire such
Premises or portion thereof. Together with such notice, the OTP Development
Entity shall send BOP the following information with regard to such proposed
acquisition or development (each particular development, an "Other Project"):
a. The estimated purchase price for the land, including both the
amount payable to the MCDC, if any, and the cost payable to Tower North, if any;
b. Information regarding the proposed Other Project, including the
use of the Other Project, the identity of any joint venturer, the identity of
any build-to-suit purchaser or tenant, if any;
c. The required equity to be contributed by the OTP Development
Entity in order to participate in the development of the Other Project;
d. The required equity to be contributed by BOP and BOP-Sub in order
to participate in the development of the Other Project;
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e. The proposed compensation to the OTP Development Entity or any
affiliate thereof by reason of services performed;
f. The proposed compensation to the OTP Development Entity or any
affiliate thereof and to BOP and BOP-Sub by reason of equity contributed to the
Other Project;
g. The development fees as well as the amount required for general
overhead and administration for the Project to be payable to the OTP Development
Entity or its affiliates;
h. Any other economic term which would cause the Other Project
Investment Agreement, as hereinafter defined, to materially differ in substance
from that otherwise prescribed herein.
The information provided in subsection (b), above, or any other
studies, projections or other information, shall not constitute a representation
or warranty as to the physical condition or environmental condition of the
Premises. Any budgets and projections of cash flow delivered to BOP shall
constitute only an example of possible outcomes and not a representation or
warranty of future profitability of the Other Project. The determination of the
items set forth in subsections (c), (d), (e), (f), (g) and (h) shall be at the
election of the OTP Development Entity, in its sole discretion.
2. Grant of Right of First Offer of Participation. Upon the giving of
the Other Development Notice, and upon BOP's compliance with Section B(3)
hereof, BOP shall have the right to participate, through the formation of a
single-purpose entity formed by BOP similar to the entities owned directly or
indirectly by BOP as a partner of Four Tower Bridge Associates (such entity, the
"BOP-Sub"), in the ownership and development of the Other Project upon the terms
and conditions as follows:
a. BOP-Sub and the OTP Development Entity shall form a partnership (the
"Other Project Investment Partnership") which shall acquire an interest in the
entity (the "Development Company") to be formed for the development of the Other
Development Parcel pursuant to documentation (the "Development Governing
Documents") in such form as the OTP Development Entity and any unrelated joint
venturer (i.e., an entity which seeks to have the Other Development Parcel
developed by the OTP Development Entity) shall agree. Under no circumstances
shall BOP, BOP-Sub or any entity affiliated therewith be entitled to any portion
of the compensation to which the OTP Development Entity or any entity affiliated
therewith is entitled by reason of its share of purchase proceeds due OTNA or by
reason of the provision of services consistent with arms length transactions by
the OTP Development Entity.
b. The Other Project Investment Partnership shall be formed pursuant to a
partnership agreement (the "Other Project Investment Partnership Agreement") in
the same form as that of Four Tower Bridge Associates, except such modifications
as are necessary to reflect that the Other Project Investment Partnership is a
passive investor in the Development Company
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and such modifications as are necessary to confirm the economic terms of the
partnership as herein set forth and any other particular aspects of the Other
Project which differ from the project known as Four Tower Bridge.
c. The economic terms of the Other Project Investment Partnership
Agreement shall be as set forth in the Other Development Notice and as follows:
i. The amount of equity initially contributed by BOP or BOP-Sub
(which shall constitute BOP Preference Capital as defined in
Article I of the Other Project Investment Partnership
Agreement) shall be equal to the amount specified in the
Other Development Notice; provided, however, that in the
event the Project Costs through the completion of
construction of the Other Project materially exceed the
amount projected in the budget supplied in connection with
the information supplied prior to execution of the Other
Project Investment Partnership Agreement and the Other
Project Investment Partnership is required to finance such
excess, any excess Project Costs required to be funded by
the Other Project Investment Partnership shall be funded
pursuant to Sections 3.03, 3.04 and 3.05 of Article III of
the Other Project Investment Partnership Agreement.
ii. The BOP Preferred Cumulative Return on the BOP Preference
Capital (both as defined in Article I of the Other Project
Investment Partnership Agreement) with regard to the capital
contribution of BOP or BOP-Sub described in Section 3.01 and
Exhibit "A" of the Other Project Investment Partnership
Agreement shall be equal to nine percent (9%) per annum;
iii. If the OTP Development Entity contributes capital to the
Other Project Investment Partnership concurrently with BOP's
contribution of the BOP Preference Capital, the capital
contributed by the OTP Development Entity shall have the
right to the same return, with the same priority, as the BOP
Preference Capital.
iv. The Participation Percentage of BOP-Sub under the Other
Project Investment Partnership Agreement shall be equal to
fifty-five percent (55%). Notwithstanding the foregoing, if
the OTP Development Entity contributes capital to the Other
Project Investment Partnership initially and concurrently
with the contribution of BOP Preference Capital, the
Participation Percentage of the BOP-Sub shall be reduced to
be equal to the product of the following: fifty-five percent
(55%) multiplied by a
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fraction, the numerator of which is the amount of the
contribution of BOP Preference Capital and the denominator
of which is the sum of the contribution of BOP Preference
Capital plus the contribution by the OTP Development Entity.
In no event shall the required BOP Preference Capital be
reduced below one-half of the investment required to be
contributed by the Other Project Investment Partnership
under the Development Governing Documents without the
consent of BOP.
No guarantees (whether of payment, completion or otherwise) shall
be provided by the OTP Development Entity or Xxxxxx X. Xxxxxx without its or his
consent, all such guarantees being provided by BOP or such affiliate thereof as
shall be approved by the applicable lender or joint venturer, and no collateral
other than the Other Project itself shall be required to be given as security
for any loan.
e. The right of first offer set forth above shall be subject to the
Development Company's acquisition of the Other Development Parcel from MCDC,
free of the rights of the partners of Tower North as described in the recitals
hereof. In the event the Development Company is unable, for any reason, to
acquire the Other Development Parcel, none of BOP, BOP-Sub or any entity
purporting to benefit from this Right of First Offer will have any claim against
the OTP Development Entity, OTPC, OTNA, or any other person or entity directly
or indirectly controlling any of them, including, but not limited to Xxxxxx X.
Xxxxxx.
3. Exercise of Right of First Offer.
a. If, by reply notice given no later than the Other Project Reply
Date, as hereinafter defined, BOP notifies the OTP Development Entity that BOP
has decided to participate in the Development Company as herein set forth, then
the OTP Development Entity shall instruct its attorneys (or the attorneys of any
joint venture partner) to prepare the Development Governing Documents and the
Other Project Investment Partnership Agreement containing the terms set forth in
Section B(2) hereof. BOP-Sub shall execute such Development Governing Documents
and the Other Project Investment Partnership Agreement and deliver them to the
OTP Development Entity within fifteen (15) days after receipt of the Development
Governing Documents and Other Project Investment Partnership Agreement with all
exhibits attached, and BOP shall join in the Development Governing Documents and
Other Project Investment Partnership Agreement within such period for the
purpose of confirming that it will make the equity contributions required
pursuant to the Development Governing Documents and the Other Project Investment
Partnership Agreement. If BOP fails to give the notice set forth herein or
BOP-Sub or BOP fail to execute and deliver the Development Governing Documents
and the Other Project Investment Partnership Agreement as set forth herein,
BOP's right to participate in the Development Company, the Other Project
Investment Partnership and the development of the Other Development Parcel shall
be deemed waived, whereupon neither BOP nor BOP-Sub shall have any further
rights under the Right of First Offer as to the Development
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Company, the Other Project Investment Partnership and the Other Development
Parcel, but otherwise BOP and BOP-Sub shall have no liability in respect
thereof. BOP's rights pursuant to this Right of First Offer as to any other
phase of development of the Premises not identified in the Other Development
Notice and the other information supplied in accordance with Section B(1) hereof
shall not be affected by such waiver. The OTP Development Entity, OTNA, OTPC,
or any affiliate thereof shall thereafter have the right to acquire the Other
Development Parcel on any terms they see fit with the intent of developing
Substantially the Same Other Project on Substantially the Same Other Terms and
Conditions. Such acquisition and development may include the offer of interests
to other partners and sources of funding, and none of BOP, BOP-Sub or any entity
purporting to benefit from this Right of First Offer will have any claim by
reason thereof against the OTP Development Entity, OTPC, OTNA, or any other
person or entity directly or indirectly controlling any of them, including, but
not limited to Xxxxxx X. Xxxxxx.
The term "Other Reply Date," as used herein, shall mean the later
to occur of the following events (i) the date which is twenty (20) days after
the date the OTP Development Entity gives the Other Development Notice as
provided herein, or (ii) the date which is forty-five (45) days after the date
the OTP Development Entity delivers the information set forth in subsections
B(1)(a)-(e) hereof to BOP.
b. Following the execution of the Development Governing
Documents, the Development Company shall in good faith attempt to negotiate
and agree upon a contract for purchase of the Other Development Parcel for a
purchase price consistent with that set forth in subsection B(1)(a), above,
it being understood and agreed that the form of agreement of sale may be
agreed upon by the Development Company in its discretion so long as neither
BOP nor Brandywine Realty Trust nor any of trustee, partner or shareholder of
either shall have personal liability thereunder. If the Development Company
cannot reach an agreement with MCDC and Tower North within ninety (90) days
after the date the Development Governing Documents have been fully executed
and delivered by all partners thereof, then any entity with an interest in
the Development Company shall have the right to terminate the Development
Governing Documents, whereupon neither BOP nor BOP-Sub shall have any further
rights under the Right of First Offer as to the Development Partnership and
the Other Development Parcel subject to subsection (c) hereof, but otherwise
BOP and BOP-Sub shall have no liability in respect thereof. The OTP
Development Entity, OTNA, OTPC, or any affiliate thereof or joint venturer
therewith shall thereafter have the right to acquire the Other Development
Parcel on any terms they see fit with the intent of developing the Other
Development Parcel for Substantially the Same Other Project on Substantially
the Same Other Terms and Conditions, which may include the offer of interests
to other partners and sources of funding, and none of BOP, BOP-Sub or any
entity purporting to benefit from this Right of First Offer will have any
claim by reason thereof against the OTP Development Entity, OTPC, OTNA, or
any other person or entity directly or indirectly controlling any of them,
including, but not limited to Xxxxxx X. Xxxxxx or any joint venturer or any
officer, shareholder, partner or principal thereof.
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c. Notwithstanding the foregoing, if (i) BOP and BOP-Sub are deemed
to waive their rights under subsection (a) with respect to any particular Other
Development Parcel or the Development Governing Documents as to that Other
Development Parcel are terminated as set forth in subsection (b) hereof, and
(ii) the OTP Development Entity (or any entity in which the OTP Development
Entity shall have an interest) obtains land development approval to commence a
project which is not Substantially the Same Other Project on such Other
Development Parcel within twelve (12) months after the date of the Other
Development Notice pertaining to such Other Development Parcel, or if the OTP
Development Entity is prepared to enter into a written agreement within such
twelve (12) month period for an Other Project which is not on Substantially the
Same Other Terms and Conditions as outlined in the Other Development Notice, the
right of first offer as to such Other Development Parcel shall be reinstated,
and the OTP Development Entity shall have the obligation to offer the
development of such Other Development Parcel to BOP by sending to BOP a revised
Other Development Notice. Such revised Other Development Notice shall identify
any changes to the Other Project which make the project not Substantially the
Same Other Project and shall identify terms and conditions which make the
project not on Substantially the Same Terms and Conditions as set forth in the
original Other Development Notice. BOP shall have the right to review such
revised Other Development Notice and act upon it in accordance with Sections
B(1) and B(2) hereof, except that the Reply Date for the purpose of review of
such notice shall be five (5) business days following receipt of such revised
Other Development Notice with the additional information required by this
subsection (c).
Notwithstanding anything to the contrary contained herein, if the
OTP Development Entity (or any entity in which the OTP Development Entity shall
have an interest) acquires the Other Development Parcel after initially
complying with Sections B(1) and B(2) hereof, in no event shall a subsequent
sale of that Other Development Parcel to a third party unaffiliated with the OPT
Development Entity for its own use or development constitute an event requiring
the reinstatement of the right of first offer as to such Other Development
Parcel, even if the OTP Development Entity or any person or entity affiliated
therewith shall provide services in connection with such use or development.
d. The term "Substantially the Same Other Project," as used herein,
shall mean a real estate development for the general use classification of a
referenced Other Project; provided, however, that the addition of one or more
occupants or changes in the cost or scope of a development shall not be deemed
to cause it to become not Substantially the Same Other Project.
e. The term "Substantially the Same Other Terms and Conditions," as
used herein, shall mean that (1) the equity required to be contributed by the
proposed investor-entity, as a percentage of project cost, is greater than a
percentage which is five percentage points less than that required of BOP under
the original Other Development Notice, (2) the percentage interest to be given
to the proposed investor-entity is less than a percentage which is five
percentage points more than that offered to BOP under the original Other
Development Notice;
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(3) the preferred return, if any, offered to such investor is no more than 10%
per annum; and (4) no other payment is offered to such investor-entity in
consideration for the investor entity's agreement to maintain the terms on
Substantially the Same Terms and Conditions as reflected in clauses (1) through
(3) hereof.
C. Sale of Land; Provision of Services; No Equity Investment Required
BOP acknowledges and agrees as follows, as a material condition to this
Agreement:
1. OTNA IS THE MANAGING GENERAL PARTNER OF TOWER NORTH AND HAS CERTAIN
FIDUCIARY DUTIES IN CONNECTION WITH SUCH ROLE. CERTAIN PARTNERS IN TOWER NORTH
ALSO HAVE CERTAIN RIGHTS TO PARTICIPATE IN THE DEVELOPMENT OF THE PREMISES, AND
SUCH PARTNERS MAY CHOOSE TO EXERCISE SUCH RIGHTS. TO THE EXTENT OTNA MAKES ANY
DECISION AS MANAGING GENERAL PARTNER UNDER THE TOWER NORTH PARTNERSHIP AGREEMENT
OR REGARDING THE DISPOSITION OF LAND BY TOWER NORTH OR AT ITS DIRECTION, OR TO
THE EXTENT OTNA OTHERWISE DEVELOPS THE PREMISES AS REQUIRED BY TOWER NORTH OR
THE TOWER NORTH PARTNERSHIP AGREEMENT, BOP AND BOP-SUB SHALL HAVE NO CLAIM
AGAINST OTPC, OTNA, OR ANY OTHER PERSON OR ENTITY DIRECTLY OR INDIRECTLY
CONTROLLING ANY OF THEM, INCLUDING, BUT NOT LIMITED TO XXXXXX X. XXXXXX, WHETHER
OR NOT SUCH DECISION IS ADVERSE TO BOP OR BOP-SUB.
2. Where the sole compensation to an OTP Development Entity or OTNA
arises from the provision of services for a fee consistent with an arms-length
transaction or the disposition of Tower North's interest in the Premises (or a
combination of the two), BOP and BOP-Sub shall have no right of first offer or
other right to participate in such compensation or the activities giving rise
thereto. Where no investment of equity is required to be made in an Other
Project, BOP and BOP-Sub shall have no right of first offer or other right to
participate in such Other Project.
D. Miscellaneous.
1. 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:
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a. If to the OTP Development Entity:
c/o Oliver Xxxxxx Xxxxxx Corporation
One Tower Bridge
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
b. If to BOP or BOP-Sub:
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
Newtown Corporate Campus
00 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Any entity may specify a different address by sending to the other
party a notice by registered or certified mail of such different address. 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).
2. Representations and Warranties. The parties hereto warrant and
represent to one another that the execution and delivery of this Agreement will
not result in a breach of, or constitute a default under, any indenture,
mortgage or agreement to which any of the respective parties hereto is a party
or by which its assets are bound.
3. Binding Effect; No Assignment. All of the terms and conditions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
assigns, provided, however, that no party hereto shall have any right to assign,
hypothecate, pledge or grant a security interest in this Agreement or any
interest herein to any person or entity without the express written consent of
the other, which consent may be withheld for any reason or for no reason.
Notwithstanding the foregoing, the rights and obligations of the BOP Sub as used
above may be assigned to an entity which meets the requirements set forth in
subsection 7.01(B) of the Partnership Agreement of Four Tower Bridge Associates.
4. Expiration. This Agreement shall automatically expire on the date
which is the fourth (4th) anniversary hereof unless before such time it shall
have been extended or terminated in writing.
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5. No Recording. This Agreement shall not be lodged for recording in any
place or office of public record and any action in violation of this provision
shall be deemed to be a default hereunder and permit the other party hereto to
terminate this Agreement immediately and without further notice.
Notwithstanding the foregoing, Brandywine Realty Trust, the general partner of
BOP, may make any filings it deems necessary to comply with securities laws with
the Securities and Exchange Commission disclosing this transaction.
6. Brokerage. The parties hereto represent and warrant that each has not
dealt with any broker, agent, finder or other intermediary in connection with
this Agreement other than Xxxxxx X. Xxxxx & Co., payment of whom is covered by a
separate agreement dated October 15, 1997. The parties hereto agree to
indemnify, defend and hold the other harmless of, from and against any damages,
costs, claims, losses or liabilities whatsoever (including attorney's fees,
expenses and court costs) arising from any breach by the other of the foregoing
warranties, representations and agreements.
7. Time of the Essence. Time, wherever mentioned herein, shall be of the
essence of this Agreement.
8. Written Evidence of Waiver. If BOP shall fail to exercise its right
of first offer within the applicable time period set forth herein for a
particular Multi-tenant Project or Other Project, the OTP Development Entity
may, but shall not be obligated to, request that BOP so certify in writing
formally waiving its right of first offer, whereupon BOP shall execute and
deliver such certification within five (5) business days after receipt of
written request therefor.
9. Entire Agreement. This is the entire agreement between the parties
hereto regarding the transaction contemplated hereby and there are no other
terms, covenants, conditions, warranties, representations or statements, oral or
otherwise, of any kind whatsoever. Any agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of this
Agreement in whole or in part unless such agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.
10. Headings. The headings incorporated in this Agreement are for
convenience and reference only and are not a part of this Agreement and do not
in any way control, define, limit, or add to the terms and conditions hereof.
11. Governing Law. This Agreement shall be construed, interpreted and
governed by the laws of the Commonwealth of Pennsylvania.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and such counterparts together
shall constitute one and the same instrument.
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13. Limitations on Recourse.
a. No recourse shall be had for any of the obligations of the BOP or
BOP-Sub 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 parties hereto.
b. No recourse shall be had for any of the obligations of the OTP, OTNA
or the OTP Development Entity hereunder or for any claim based thereon or
otherwise in respect thereof against any past, present or future trustee,
shareholder, officer or employee of OTP,
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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 parties hereto.
14. Acquisition of Interests in Tower North. If BOP or any BOP-Sub
acquires any partnership interest in Tower North, this Agreement shall be null
and void, and neither BOP nor any BOP-Sub shall have any further right to
participate in any Multi-Tenant Project or any Other Project by reason of this
Agreement, it being understood and agreed that following the date of such
acquisition of interest in Tower North, BOP and all BOP-Subs shall derive any
right to develop the Premises under and through the Tower North Partnership
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Right of First
Offer Agreement the day and year first above written.
XXXXXX XXXXXX XXXXXX CORPORATION, a Pennsylvania
corporation, its duly authorized general partner
By: /s/Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx, President
XXXXXX TOWER NORTH ASSOCIATES, a Pennsylvania
limited partnership
By: XXXXXX XXXXXX XXXXXX CORPORATION, a
Pennsylvania corporation, its duly authorized
general partner
By: /s/Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx, President
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 of the Board
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