Exhibit 10.5
GENERAL PARTNERSHIP AGREEMENT
OF
INTERSTATE 202 GENERAL PARTNERSHIP
BY AND BETWEEN
BRANDYWINE I.S., L.P.
AND
ACROSS THE LINE, L.P.
Dated as of December 31, 1997
TABLE OF CONTENTS
Page
ARTICLE 1
GENERAL PROVISIONS........................................................1
1.1. Interests of Partners...............................................1
1.2. Conduct of Partnership..............................................1
1.3. Name and Principal Place of Business................................2
1.4. Purpose.............................................................2
1.5. Limitation on Purpose...............................................2
1.6. Title to Property...................................................2
1.7. Term................................................................2
1.8. Type of Income......................................................2
ARTICLE 2
CAPITAL CONTRIBUTIONS.....................................................3
2.1. Capital Contributions of Brandywine.................................3
2.2. Capital Contribution of ATL.........................................3
2.3. Additional Capital Contributions....................................3
2.4. Maintenance of Capital Accounts.....................................5
2.5. No Interest.........................................................5
2.6. Revaluation of Partnership Property.................................5
ARTICLE 3
MANAGEMENT................................................................6
3.1. Management..........................................................6
3.2. Manner of Acting....................................................6
3.3. Contact Representatives.............................................7
3.4. Designated Representatives..........................................7
3.5. Bank Accounts and Check Signing Authority...........................8
3.6. Other Fees, Compensation and Reimbursement of Expenses..............8
3.7. Cooperation.........................................................8
ARTICLE 4
THE PARTNERS..............................................................8
4.1. Meeting of Partners.................................................8
4.2. Partnership Records.................................................8
4.3. Duties of Partners..................................................9
4.4. Activities of Partners..............................................9
4.5. Independent Activities of Partners..................................9
4.6. Dealings with the Partnership.......................................9
4.7. Covenant not to Withdraw...........................................10
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES...........................................10
5.1. Representations and Warranties of Partners.........................10
5.2. ATL Representation and Warranty....................................12
ARTICLE 6
INDEMNIFICATION..........................................................12
6.1. Liability..........................................................12
6.2. Partnership Indemnification........................................12
6.3. Partner Indemnification............................................13
ARTICLE 7
TRANSFERS................................................................13
7.1. Transfer Restrictions..............................................13
7.2. Permitted Transfers................................................13
7.3. Conditions of Transfer.............................................13
7.4. Transfers; Recharacterization......................................14
ARTICLE 8
BUY-SELL PROVISIONS......................................................14
8.1. Mutual Disagreement................................................14
8.2. Mandatory Buy-Sell of Interests. .................................15
8.3. Closing of Purchase or Sale........................................15
8.4. Definitions........................................................16
ARTICLE 9
ALLOCATIONS OF PROFITS AND LOSSES........................................16
9.1. Allocations of Profits or Losses...................................16
9.2. Special Allocations................................................16
9.3. Curative Allocations...............................................17
9.4. Allocations for Tax Purposes.......................................17
ARTICLE 10
DISTRIBUTIONS............................................................18
10.1. Net Cash Flow from Operations.....................................18
10.2. Net Cash from Sales or Refinancings...............................18
10.3. Authority to Withhold.............................................18
ARTICLE 11
BOOKS, RECORDS, REPORTS AND ACCOUNTING...................................19
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11.1. Books and Records.................................................19
11.2. Fiscal Year. ....................................................19
11.3. Accounting Period.................................................19
11.4. Annual Reports....................................................19
11.5. Quarterly Reports.................................................19
11.6. Preparation of Tax Returns........................................19
11.7. Tax Controversies.................................................20
11.8. Tax Elections.....................................................20
ARTICLE 12
DISSOLUTION AND LIQUIDATION..............................................20
12.1. Dissolution.......................................................20
12.2. Bankruptcy of a Partner...........................................21
12.3. Liquidation.......................................................21
12.4. No Liquidating Distributions in Kind..............................21
12.5. Non-Recourse......................................................22
ARTICLE 13
[OMITTED]................................................................22
ARTICLE 14
MISCELLANEOUS............................................................22
14.1. Amendments........................................................22
14.2. Notice............................................................22
14.3. Filing with SEC...................................................23
14.4. Governing Law.....................................................24
14.5. Severability......................................................24
14.6. Binding Effect....................................................24
14.7. Titles and Captions...............................................24
14.8. No Third Party Rights.............................................24
14.9. Time is of Essence................................................24
14.10. Further Assurances...............................................24
14.11. Legal Representation.............................................24
14.12. Entire Agreement.................................................24
14.13. Counterparts......................................................24
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GENERAL PARTNERSHIP AGREEMENT
OF
INTERSTATE 202 GENERAL PARTNERSHIP
THIS GENERAL PARTNERSHIP AGREEMENT (the "Agreement") is made and
entered into as of the 31st day of December, 1997 by and between Brandywine
I.S., L.P., a Pennsylvania limited partnership ("Brandywine"), and Across The
Line, L.P., a Delaware limited partnership ("ATL" and, together with
Brandywine, the "Partners"), each as a general partner of Interstate 202
General Partnership (the "Partnership").
Capitalized terms used in this Agreement shall have the meanings set
forth on Exhibit A attached hereto unless they are otherwise defined in the
preamble, the Background or the particular section in this Agreement in which
they are used.
BACKGROUND
The Partners desire to form the Partnership as a general partnership
under the provisions of the Pennsylvania Uniform Partnership Act, as amended,
for the purpose of acquiring the Land, and developing and operating the
Project, which will be owned, leased and operated by the Partnership for the
production of income.
This Agreement sets forth the understanding between the Partners
with respect to the terms and conditions of the acquisition, ownership,
development and operation of the Land and the Project, and the distribution
of proceeds received from the ownership and/or disposition thereof.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the Partners, intending to be legally bound
hereby, covenant and agree as follows:
ARTICLE 1
GENERAL PROVISIONS
1.1. Interests of Partners. The respective Percentage Interests of
Brandywine and ATL in the Partnership are set forth on Exhibit B attached
hereto.
1.2. Conduct of Partnership. The Partners as partners by this Agreement
desire to form the Partnership as a general partnership under the laws of the
Commonwealth of Pennsylvania solely for the purpose set forth in this
Agreement, and in connection therewith desire to set forth their agreements
and understandings as stated in this Agreement. The Partners agree that the
Partnership shall be operated pursuant to the terms and conditions set forth
in this Agreement, and to the extent not inconsistent therewith, the Act.
The Partners agree to execute or cause the Partnership to execute any
filings, including filings with respect to any fictitious names of the
Partnership, and to do any other acts as may be necessary or appropriate to
comply with the laws of operation of a general
partnership in the Commonwealth of Pennsylvania and any other jurisdiction in
which the Partnership may conduct business.
1.3. Name and Principal Place of Business. The name of the Partnership
is "INTERSTATE 202 GENERAL PARTNERSHIP" or such other name as the Partners
from time to time may select. The principal place of business of the
Partnership shall be c/o Brandywine Realty Trust, 00 Xxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx Xxxxxx, XX 00000, or such other place as the Partners from time
to time may determine.
1.4. Purpose. The sole purpose of the Partnership shall be to own,
develop, manage, operate, maintain and lease the Project in accordance with
the terms of this Agreement. In connection therewith, the Partnership shall
have the authority to do all things necessary and appropriate with respect to
its ownership of the Project in order to develop, construct, manage, operate,
maintain and lease the Project.
1.5. Limitation on Purpose. The Partnership shall exist solely for the
purpose specified in Section 1.4 hereof and, unless the Partners unanimously
agree in writing otherwise, the Partnership shall not engage in any other
business. The Partners do not intend, and this Agreement shall not be deemed
to create, any joint venture, partnership, or other arrangement by and
between the Partners with respect to any business or activities of any
Partner other than the business and activities specifically contemplated by
Section 1.4. No Partner shall have the power to bind the other Partner
except with respect to the business of the Partnership as specifically set
forth in this Agreement, and no Partner shall be authorized or empowered to
execute, deliver or perform any agreements, acts, transactions or matters on
behalf of the Partnership or the other Partner without the consent of the
other Partner unless otherwise expressly provided in this Agreement.
1.6. Title to Property. All property owned by the Partnership, whether
real or personal, tangible or intangible, including the Project, shall be
owned by the Partnership as an entity and in the name of the Partnership, and
no Partner shall have any ownership interest in such property. The interest
of all Partners in the Partnership are, for all purposes, personal property.
1.7. Term. The term of the Partnership shall commence upon the execution
of this Agreement and shall continue until the Partnership is terminated in
accordance with Article 12 of this Agreement.
1.8. Type of Income. ATL hereby acknowledges that Brandywine Operating
Partnership, L.P., a Delaware limited partnership ("BOP"), is the sole member
of the sole general partner of Brandywine and that Brandywine Realty Trust
("BRT"), the general partner of BOP, is a real estate investment trust as
defined in Section 856 of the Code, and ATL acknowledges and agrees that as
long as Brandywine is a member of the Partnership, the Partnership shall
manage its affairs in a manner such that the Partnership does not
intentionally earn any income for tax purposes or acquire any assets which
would cause, or could reasonably be expected to cause, BRT to violate any of
the provisions of Section 856 of the Code or cease to remain qualified as a
real estate investment trust
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as defined in Section 856 of the Code; provided that if this Section 1.8
materially and adversely interferes with ATL's realization of cash from the
Partnership or materially and adversely operates to the detriment of ATL's
tax position, ATL may invoke the "buy-sell" provisions in Article 8.
ARTICLE 2
CAPITAL CONTRIBUTIONS
2.1. Capital Contributions of Brandywine. Brandywine shall make a
Capital Contribution to the Partnership at such times and in such manner as
set forth in this Section 2.1.
2.1.1. On the date hereof, Brandywine shall contribute to the
capital of the Partnership cash in the amount of up to Eight Hundred Fifty
Thousand Dollars ($850,000), which cash, together with the proceeds of the
Acquisition Loan, will be used by the Partnership to acquire the Project.
2.1.2. In connection with, and upon the closing of, the
Acquisition Loan, Brandywine shall provide collateral support in the form of
either a letter of credit or guarantee in an aggregate amount of up to
$500,000 to the extent that such collateral support, in the judgment of
Brandywine, (i) is necessary to facilitate the Partnership's procurement of
the Acquisition Loan, or (ii) will result in the Partnership obtaining more
favorable terms and conditions for the Acquisition Loan. The parties
acknowledge and agree that Brandywine's obligation to provide collateral
support under this Section 2.1.2 is expressly conditioned upon the closing of
the Acquisition Loan.
2.1.3. Subsequent to closing of the acquisition of the Project
and in the course of its redevelopment and initial lease-up, it is
anticipated that Brandywine will fund up to but not in excess of Six Hundred
Fifty Thousand Dollars ($650,000) of costs associated with the Project, as
enumerated in the Project Budget.
2.1.4. Brandywine's obligation to make Capital Contributions
under this Section 2.1 (including Sections 2.1.1, 2.1.2, and 2.1.3) shall not
exceed, in the aggregate, One Million Five Hundred Thousand Dollars
($1,500,000) in addition to such amount, if any, as Brandywine shall be
obligated to pay in connection with the collateral support provided by
Brandywine under subsection 2.1.2 above.
2.2. Capital Contribution of ATL. ATL's contribution to the capital of
the Partnership consists of the arrangements it previously undertook to
enable the Partnership to acquire the Project.
2.3. Additional Capital Contributions.
2.3.1. It is not expected that the Partners will be required to
contribute any additional capital to the Partnership other than those Capital
Contributions set forth in Sections 2.1 and 2.2 hereof. In the event,
however, that either Partner (the "Notifying Partner"), in its reasonable
business
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judgment, determines that additional capital is required by the Partnership,
whether for capital expenditures, normal operating expenses, debt service or
otherwise in connection with the Project, then the Notifying Partner shall
give ten (10) days written notice (the "Capital Notice") to the other Partner
(the "Notified Partner") specifying in reasonable detail the amount and
purpose of the additional required capital. If the Notified Partner agrees
within said ten (10) day period that the capital set forth in the Capital
Notice is needed by the Partnership, such additional capital shall be
obtained through bank financing or Additional Capital Contributions, as
mutually determined by the Notified Partner and the Notifying Partner.
2.3.2. If the Notified Partner and the Notifying Partner are
unable to agree within said ten (10) day period as to whether additional
funds are needed by the Partnership or are unable to agree as to whether such
funds should be obtained through bank financing or Additional Capital
Contributions, then the Notifying Partner and the Notified Partner each shall
select a representative who together shall appoint one independent Person,
unrelated to either Partner or its Affiliates and who is experienced in the
real estate development industry and has substantial expertise in the
financial marketplace (the "Advisor"), to determine whether and when
additional funds are needed and/or the manner in which such funds shall be
obtained by the Partnership; provided that, if the Advisor determines that
such additional funds should be obtained from the Partners, then both
Partners shall be required to make an Additional Capital Contribution to the
Partnership as provided in Section 2.3.3 hereof. The Partners hereby agree
that, in either case, the Advisor's determination shall be final and binding
on the Partners.
2.3.3. If additional funds are obtained from the Partners through
Additional Capital Contributions, such contributions shall be made by the
Partners, in cash on the same terms and in the same relative amounts as the
Percentage Interests, within twenty (20) business days after receipt of (a)
the Capital Notice (in the event that the Partners agree to make Additional
Capital Contributions pursuant to Section 2.3.1 hereof) or (b) written notice
from the Advisor (in the event that the procedure under Section 2.3.2 hereof
is utilized).
2.3.4. If Additional Capital Contributions are required to be
made by the Partners under this Section 2.3 and a Partner (the "Defaulting
Partner") fails to advance its pro rata share of such Additional Capital
Contribution, then any amounts advanced by the other Partner (the "Performing
Partner") shall be treated as a loan by the Performing Partner to the
Partnership, and the Performing Partner shall have the right, but not the
obligation, to make a loan to the Partnership in the amount of the Additional
Capital Contribution due from the Defaulting Partner. Any amounts advanced
by the Performing Partner under this Section 2.3.4 whether on its own behalf
or on behalf of the Defaulting Partner shall be treated as a loan (a "Capital
Loan") notwithstanding that such funds may originally have been advanced by
the Performing Partner as an Additional Capital Contribution. All Capital
Loans shall (i) be for a term of five (5) years, (ii) bear annual interest at
a rate of thirteen percent (13%), (iii) be prepayable by the Partnership in
whole or in part without penalty, and (iv) be repaid in full, together with
accrued interest, by the Partnership before any distributions may be made to
any Partner under Sections 10.1, 10.2 or 12.3 hereof. All payments
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received with respect to a Capital Loan shall be applied first against
accrued and unpaid interest thereunder, and then against the outstanding
principal balance thereof.
2.4. Maintenance of Capital Accounts.
2.4.1. The Partnership shall maintain a separate Capital Account for
each Partner in accordance with Treasury Regulations promulgated under
Section 704(b) of the Code, and each Partner's Capital Account shall be as
follows:
(a) Each Partner's Capital Account shall be credited with such
Partner's Capital Contribution, if any, provided that ATL's initial capital
account upon execution of this Agreement shall be zero.
(b) Each Partner's Capital Account shall be (1) increased by
(a) the amount of money contributed by such Partner to the capital of the
Partnership, (b) the Gross Asset Value of any property contributed by such
Partner to the capital of the Partnership (net of liabilities secured by such
contributed property) and (c) the amount of Profits and other items of
Partnership income or gain allocated to such Partner under this Agreement,
and (2) decreased by (a) the amount of money distributed to such Partner by
the Partnership pursuant to this Agreement, (b) the Gross Asset Value of
property distributed to such Partner by the Partnership (net of liabilities
secured by such distributed property) and (c) the amount of Losses and other
items of Partnership deduction, loss or expense allocated to such Partner
under this Agreement.
2.4.2. 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 set forth in Treasury Regulation Section
1.704-1(b)(2)(iv), and that all provisions in this Agreement shall be
interpreted and applied in a manner consistent therewith. In the event that
the Partners determine that it is prudent to modify the manner in which the
Capital Accounts, or any credits or charges thereto, are computed or
maintained in order to comply with such Treasury Regulations, the Partners,
upon agreement, shall make such modifications to the extent necessary to
comply with such Treasury Regulations.
2.5. No Interest. No Partner shall be entitled to interest on that
Partner's Capital Contributions or Capital Account except as otherwise
provided in this Agreement.
2.6. Revaluation of Partnership Property. Upon the agreement of the
Partners, the Capital Accounts of the Partners may be adjusted to reflect a
revaluation of the property of the Partnership in accordance with, and at
such times as specified in, Treasury Regulation Section 1.704-1(b)(2)(iv)(f);
provided that any adjustments hereunder shall be made in accordance with and
to the extent provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(f)
and (g).
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ARTICLE 3
MANAGEMENT
3.1. Management. The management of the Partnership shall be vested in
the Partners as set forth in this Article 3. Each Partner, subject to the
terms, conditions, restrictions and limitations contained in this Agreement,
will possess all of the powers and rights of a general partner under the Act
except that no Partner acting alone shall be authorized or empowered to
undertake any action or make any decision on behalf of the Partnership or in
connection with the Project unless otherwise specifically provided in this
Agreement or specifically delegated to such Partner and set forth in this
Agreement or a Collateral Agreement. Each Partner acknowledges and agrees
that it intends to actively participate in the management of the Partnership
and its operations.
3.2. Manner of Acting.
3.2.1. Where this Agreement specifically requires the vote,
consent or determination of the Partners and/or in order for the Partnership
to undertake any action, including without limitation, a Major Action (as
defined in this Section 3.2), the approval at a duly convened meeting or by
written consent in lieu of a meeting of a Partner or Partners holding a
majority of Interests shall be required. For purposes of this Agreement, a
"Major Action" shall mean and include decisions and undertakings relating to:
(a) the construction and completion of the Project, including
construction contracts, schedules and budgets;
(b) any loans, borrowings, financing or refinancing in
connection with the Project, including without limitation,
the Construction Loan and the Permanent Loan;
(c) the form and substance of the Development Agreement, if any,
the Exclusive Leasing Agency Agreement and the Management
Agreement (each of which will constitute a Collateral
Agreement upon the execution and delivery thereof);
(d) the annual operating budget and business plan for the
Project;
(e) the sale, conveyance, transfer, assignment, ground lease,
hypothecation or disposition of the Project;
(f) leases for occupancy of space in the Project by tenants,
including without limitation, rents, escalations, allowances
and other business terms;
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(g) any contract or agreement giving rise to a financial
commitment or obligation of the Partnership in excess of
$5,000;
(h) the employment of employees and/or agents in connection with
the operation and management of the Project;
(i) the admission of any additional Partners;
(j) the selection of and change of accountants or auditors for
the Partnership; and
(k) significant tax elections required or permitted pursuant to
the Code and/or applicable law of any taxing authority to
which the Partnership is subject.
3.3. Contact Representatives. Each Partner shall designate and appoint
one or more individuals who shall be the contact person (a "Contact
Representative") for such Partner and each of whom who shall be authorized by
such Partner to act on its behalf in the performance of this Agreement and
who shall be authorized to make decisions in connection with Major Actions on
behalf of such Partner. Brandywine hereby designates and appoints each of
Xxxxxxx X. Xxxxxxx, Xx. and Xxxxxx X. Xxxxxxx as its initial Contact
Representatives, and ATL hereby designates and appoints Xxxxx X. Xxxxxx as
its initial Contact Representative. A Partner appointing an individual as a
Contact Representative may, at any time, appoint and designate a new Contact
Representative(s), provided that such Partner shall notify the other Partner
of such new appointment or designation within a reasonable time after such
appointment.
3.4. Designated Representatives.
3.4.1. The Partners acknowledge and agree that while Partnership
decisions generally shall be made by the Partners as set forth in Section 3.2
hereof, certain functions in connection with the daily operation and
management of the Project shall, subject to the limitations set forth in this
Section 3.4 or a Collateral Agreement, be delegated to individuals, employees
or agents of the Partnership as determined by the Partners holding a majority
of the Interests (any such designated individuals, employees or agents being
referred to herein as a "Designated Representative"). The Partners hereby
designate Xxxxx X. Xxxxxx as the Designated Representative during the initial
redevelopment of the Project, subject to the right of the Partners to revoke
such designation.
3.4.2.Any Designated Representative appointed hereunder shall have
the specific power and authority set forth in this Agreement, in an
employment agreement, if any, with the Partnership in a Collateral Agreement
and as otherwise delegated to such Designated Representative by the Partners
holding a majority of the Interests; provided that any Designated
Representative shall operate the Partnership subject to (i) basic policy
decisions adopted by the Partners in accordance with this Agreement, (ii)
specific limitations and requirements of this Agreement and any other
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agreement executed by and between a Designated Representative and the
Partnership and (iii) limitations imposed under the Act. Notwithstanding any
provision in this Agreement or any other agreement to the contrary, no
Designated Representative shall have the authority, either individually or
acting in conjunction with other Designated Representatives, to do any act,
make any decision, or engage in any transaction which requires the approval
of the Partners as set forth in Section 3.2 hereof.
3.5. Bank Accounts and Check Signing Authority. The Partners shall open
and maintain a bank account at a financial institution agreeable to the
Partners, and all funds from whatever source derived by the Partnership shall
be deposited in such account. Signatories to all Partnership bank accounts
shall be Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxx. Checks or withdrawals
in the amount of $5,000 or less shall require the signature of one
signatory and checks or withdrawals in excess of $5,000 shall require the
signature of two signatories.
3.6. Other Fees, Compensation and Reimbursement of Expenses.
3.6.1. Upon the funding of the Acquisition Loan, the Partnership
shall reimburse Brandywine for those costs, fees and expenses set forth on
Schedule 3.6.1 attached hereto.
3.6.2. Upon funding of the Acquisition Loan, the Partnership shall
reimburse ATL for those costs, fees and expenses set forth on Schedule 3.6.2
attached hereto.
3.6.3. Except as otherwise provided in this Section 3.6 or in a
Collateral Agreement, no Partner shall be entitled to receive compensation
for services performed in connection with the management of the Partnership
and no Partner shall be entitled to reimbursement for expenses incurred in
connection with the management of the Partnership.
3.7. Cooperation. The Partners agree to use their respective
commercially reasonable efforts to obtain the Acquisition Loan and to agree
upon the terms and scope of the Project.
ARTICLE 4
THE PARTNERS
4.1. Meeting of Partners. The Partners shall hold meetings on a
quarterly basis or such other periodic basis as the Partners may mutually
agree at such location as the Partners may agree. Any Partner may call for a
meeting by giving ten (10) days prior written notice to the other Partner,
which notice shall specify the purpose of the meeting; provided, however,
that the ten (10) days notice period may be waived by the other Partner.
4.2. Partnership Records. Each Partner shall have access to all books
and records of the Partnership during normal business hours and shall be
entitled, at its own expense, to make copies
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of such books and records. Each Partner also shall have access to the
Partnership's officers, attorneys and auditors for any reasonable business
purpose.
4.3. Duties of Partners. Subject to Section 4.5, each Partner shall have
a fiduciary duty to the other Partner to take into account the best interests
of the Partnership when exercising its rights under this Agreement, provided
that it shall not be a breach of any Partner's fiduciary duty to exercise any
of its rights under this Agreement.
4.4. Activities of Partners. Except as otherwise expressly provided in
this Agreement or in any Collateral Agreement, no Partner or Affiliate of any
Partner shall be obligated to devote its exclusive time and effort to the
business or affairs of the Partnership, but each Partner shall devote
sufficient time, effort and resources (including employees or agents of such
Partner) to the business or affairs of the Partnership as in its judgment is
reasonably required to fulfill its obligations and role in the Partnership's
businesses and to promote the purposes of the Partnership.
4.5. Independent Activities of Partners. Each Partner (acting on its own
behalf) and its Affiliates may, notwithstanding any implication in any
provision of this Agreement to the contrary, engage in any activities it may
choose, even if such activities constitute the same type of business as the
business of the Partnership or are competitive with the Partnership, and
neither this Agreement nor any activity undertaken pursuant hereto shall
prevent any Partner or its Affiliates from engaging in such activities or
require any Partner to permit the Partnership or any other Partner to
participate in or share in the benefits of such activity.
4.6. Dealings with the Partnership.
4.6.1. Except as otherwise expressly provided in or limited by this
Agreement or a Collateral Agreement, no Partner or Affiliate of any Partner
shall contract and deal with the Partnership as an independent contractor,
employee or as an agent for others, or receive fees or other compensation
from such others or the Partnership, including without limitation, brokerage
fees, commission fees or any other payment on account of the leasing,
operations, management, financing or refinancing in connection with the
Project, unless and until such Partner or the Affiliate of such Partner first
provides the other Partner with the terms of such proposed dealings and
obtains the prior written consent to such dealing, contract or undertaking
from the other Partner.
4.6.2. Notwithstanding Section 4.6.1, and subject to Section 3.2,
each Partner hereby acknowledges and agrees that, in connection with the
transactions contemplated by this Agreement, the Partnership expects to enter
into (a) the Developer's Agreement pursuant to which an Affiliate of ATL
shall perform those functions set forth therein and shall receive for the
performance of such services the fee set forth therein, (b) the Exclusive
Leasing Agency Agreement pursuant to which an Affiliate of ATL shall perform
those functions set forth therein and shall receive for the performance of
such services the fee set forth therein and (c) the Management Agreement
pursuant to which an Affiliate of ATL shall perform those functions set forth
therein and shall receive for the performance of such services the fees set
forth therein.
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4.7. Covenant not to Withdraw. Notwithstanding any provision in the Act,
each Partner hereby covenants and agrees that such Partner has entered into
this Agreement and formed the Partnership based on its expectation that each
Partner will continue as a Partner of the Partnership and carry out the
duties and obligations undertaken by it in this Agreement and the Collateral
Agreements and that, except as otherwise expressly required or permitted
hereby, each Partner hereby covenants and agrees not to, without the consent
of the other Partner (a) file a certificate of dissolution or its equivalent
with respect to such Partner, (b) take any action that would cause the
voluntary Bankruptcy of such Partner, (c) withdraw or attempt to withdraw
from the Partnership, unless pursuant to a Permitted Transfer in accordance
with Section 7.2 hereof, (d) Transfer all or any portion of its Interest in
the Partnership except as otherwise provided in Article 7, Article 8 and
Article 13 hereof, or (e) demand a return of such Partner's Capital
Contribution or Capital Account prior to the dissolution and liquidation of
the Partnership pursuant to Section 12.1 hereof.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of Partners. By execution and
delivery of this Agreement, each Partner hereby makes to the other Partner
the representations and warranties set forth in this Section 5.1 to the
extent applicable to such Partner. Any and all representations and
warranties set forth in this Section 5.1 shall survive the execution of this
Agreement. For purposes of this Article 5, the term "Partner" shall include
such Partner's Affiliates that are undertaking or performing any services or
activities in connection with the transactions contemplated in this
Agreement, and any representations and warranties made by a Partner hereunder
shall be deemed to include representations and warranties, as appropriate,
with respect to such Affiliates.
5.1.1.Organization. Such Partner is duly organized and formed,
validly existing and in good standing under the laws of the state of its
formation and has all requisite power and authority to own, lease and operate
its property and to carry on its business as of the date hereof and as
contemplated by this Agreement. Each Partner is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to
be so licensed or qualified would have a material adverse effect on its
financial condition or its ability to perform its obligations under this
Agreement or any Collateral Agreement.
5.1.2. Proper Authorization and Power. Each Partner has the
requisite power and authority to execute and deliver this Agreement and each
Collateral Agreement to which it is a party and to perform its obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement and each of the Collateral Agreements, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by
all necessary limited partnership action, and no other action on the part of
the Partner or any Person is necessary to authorize the execution, delivery
and performance of this Agreement or any Collateral Agreement or the
consummation of the transactions contemplated hereby or thereby. This
Agreement and each of the
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Collateral Agreements constitutes a legal, valid and binding obligation of
such Partner enforceable against it in accordance with their respective
terms.
5.1.3. Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement or any of the Collateral
Agreements and the consummation by the Partner of the transactions
contemplated hereby or thereby does not and will not (i) require the consent
or approval of any governmental or regulatory authority or (ii) violate or
conflict with or constitute a default under (a) any provisions of the
partnership agreement of such Partner or any material agreement or instrument
to which such Partner is a party or by which such Partner is made bound or to
which any of its properties or assets is subject, (b) any provisions of any
law, regulation, order, writ, injunction, decree or determination of any
court or governmental or regulatory agency applicable to such Partner, or (c)
any of the provisions of any indenture, mortgage, lease agreement or
instrument to which such Partner is a party or may be bound or to which its
properties or assets are subject.
5.1.4. Litigation. There are no actions, suits, proceedings, or
investigations pending, or to the knowledge of such Partner threatened,
against or affecting such Partner or any of its businesses, assets or
properties, before any court or governmental or regulatory agency which
could, if adversely determined, reasonably be expected to impair such
Partner's ability to perform its obligations under this Agreement or any
Collateral Agreement or to have a material adverse effect on the financial
condition of such Partner.
5.1.5. Investment Representations
(a) Such Partner's Interest in the Partnership is intended to
be and is being acquired solely for its own account for investment and with
no present intention of distributing, reselling, pledging or otherwise
disposing of, all or any part thereof;
(b) Such Partner is aware that Interests in the Partnership
have not been registered under the Securities Act or the applicable state
securities laws or the "Blue Sky" laws of any state, that Interests in the
Partnership cannot be distributed, sold, pledged or otherwise disposed of
unless they are registered thereunder or unless, in the opinion of counsel
satisfactory to the Partnership, an exemption from such registration is
available, and that the Partnership has no intention of so registering
Interests in the Partnership thereunder and is under no obligation to do so
and that accordingly the Partner is able and is prepared to bear the economic
risk that may be associated with respect to its Interest in the Partnership;
(c) Such Partner understands that the Interests are being
offered and sold in reliance upon specific exemptions from the registration
requirements of federal and state securities laws and that the Partnership is
relying upon the truth and accuracy of the representations and warranties set
forth herein in order to determine the applicability of such exemptions and
the suitability of the Partners to acquire Interests; and
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(d) Such Partner agrees that in addition to the other
restrictions on transfer set forth in this Agreement, it will not sell or
otherwise dispose of its Interest unless a registration statement under the
Securities Act shall be in effect with respect thereto and such Partner shall
have complied with all provisions of the Securities Act and all applicable
state securities laws or at the Partnership's request, the Partner shall have
obtained an opinion of counsel that such proposed sale or disposition will
not require registration under the Securities Act or any applicable state
securities laws.
5.2. ATL Representation and Warranty. ATL represents and warrants to
Brandywine that it has engaged in no business other than its acquisition of
the Project and agrees that this representation and warranty shall survive
the execution and delivery of this Agreement and will indemnify Brandywine
against any loss resulting from the inaccuracy of such representation and
warranty.
ARTICLE 6
INDEMNIFICATION
6.1. Liability. No Partner or any Affiliate of any Partner or any
Designated Representative, if appointed pursuant to Section 3.4 hereof, shall
be liable, responsible, accountable in damages or otherwise to the
Partnership or any Partner for any act or failure to act hereunder in
connection with the Partnership and its business or in the operation and
maintenance of the Project unless the act or omission is attributed to gross
negligence, willful misconduct or fraud or constitutes a material breach by
such person of any term or provision of this Agreement or a Collateral
Agreement; provided that nothing in this Section 6.1 is intended to limit,
modify or alter any Partner's liability or obligations under any Collateral
Agreement except to the extent expressly set forth therein.
6.2. Partnership Indemnification. Each Partner and each Affiliate of any
Partner, as well as each Designated Representative appointed pursuant to
Section 3.4 (each of the foregoing being referred to herein as an
"Indemnitee") shall be indemnified, defended and held harmless by the
Partnership to the fullest extent permitted by the Act from and against any
and all losses, claims, damages, liabilities, expenses (including reasonable
attorneys' fees and costs), judgments, fines, settlements, demands, actions,
or suits relating to or arising out of the business of the Partnership or the
operation and maintenance of the Project, or the exercise by the Indemnitee
of any authority conferred on it hereunder or the performance by the
Indemnitee of any of its duties and obligations under this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, no
Indemnitee shall be entitled to indemnification hereunder with respect to any
claim, issue or matter: (i) in respect of which it (or the Partnership as the
result of an act or omission of such Indemnitee) has been adjudged liable for
fraud, gross negligence or willful misconduct; (ii) based upon or relating to
a material breach by it of any term or provision of this Agreement or any
Collateral Agreement; or (iii) for costs or expenses incurred by the
Indemnitee in connection with a claim or action against it by another Partner
that is not related to the Indemnitee's actions under this Agreement.
Notwithstanding this Section 6.2, no Partner shall be entitled to
indemnification by the Partnership
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when or if acting in a capacity with the Partnership as other than a Partner,
in which case, such right to indemnification shall be governed by an
agreement, if any, between the Partnership and the Partner.
6.3. Partner Indemnification. Each Partner (the "Indemnitor Partner")
shall indemnify, defend and hold harmless the other Partner (the "Indemnitee
Partner") from and against any and all losses, claims, damages, liabilities,
expenses (including reasonable attorneys' fees and costs), judgments, fines,
settlements, demands, actions, or suits relating to or arising out of any (i)
fraud, gross negligence or willful misconduct for which the Indemnitor
Partner or any of its Affiliates (or the Partnership as the result of an act
or omission of any of the same) has been adjudged liable; (ii) material
breach by the Indemnitor Partner of any term or provision of this Agreement
or any Collateral Agreement, and (iii) material breach or inaccuracy in any
representation or warranty made by such Indemnitor Partner in this Agreement
or any Collateral Agreement.
ARTICLE 7
TRANSFERS
7.1. Transfer Restrictions. Except as otherwise provided in this
Agreement, no Partner shall make any Transfer of all or any portion of its
Interest, including, without limitation, a Transfer of a right to Profits,
Losses or distributions hereunder, unless and until the other Partner
consents to the Transfer and the transferor Partner and the proposed
Transferee comply with the provisions of this Article 7. Any Transfer in
violation of the requirements of this Agreement shall be null and void ab
initio and of no force or effect whatsoever. Each Partner hereby
acknowledges the reasonableness of the restrictions on Transfer imposed by
this Agreement in view of the Partnership's purpose and the relationship of
the Partners. Accordingly, the restrictions on Transfer set forth herein
shall be specifically enforceable.
7.2. Permitted Transfers. Notwithstanding Section 7.1, a Partner may
Transfer all or any portion of its Interest in the Partnership (i) to another
Partner or (ii) to one of its Affiliates (in each case, a "Permitted
Transfer"), provided that a Permitted Transfer to an Affiliate shall be
required to comply with the provisions of Section 7.3.
7.3. Conditions of Transfer. Notwithstanding Section 7.2 hereof, a
Transfer (including a Permitted Transfer to an Affiliate under Section 7.2)
shall not be allowed unless and until the following conditions precedent are
satisfied, and once satisfied, the Transferee shall succeed to all rights and
be subject to all obligations of the transferring Partner with respect to the
transferred Interest:
7.3.1. all agreements, written consents and all other necessary
documents and instruments shall have been executed and filed and all other
acts shall have been performed which the non-transferring Partner deems
reasonably necessary to make the Transferee a substitute Partner of the
Partnership, including, without limitation, the execution by such Transferee
of a counterpart signature page to this Agreement pursuant to which the
Transferee shall assume any and all
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obligations and have all rights and interests under this Agreement with
respect to the transferred Interest; and
7.3.2. unless otherwise waived by the non-transferring Partner, the
non-transferring Partner shall have received such assurances as may be
necessary or appropriate in the opinion of counsel to the Partnership to
confirm that the Transfer would not (i) violate the Securities Act or any
state securities laws or cause the Partnership to register thereunder; (ii)
cause the Partnership to be treated as other than a partnership for federal
income tax purposes; or (iii) terminate the Partnership for federal income
tax purposes;
7.3.3. unless otherwise waived by the non-transferring Partner, the
non-transferring Partner shall have received such assurances as it deems
necessary or appropriate to confirm that such Transferee has the ability to
perform all of the Transferor's obligations set forth in this Agreement and
the Collateral Agreements, provided that, unless expressly agreed by the
non-transferring Partner, the Transferor shall not be relieved of any of its
liabilities or obligations under this Agreement or any Collateral Agreement;
and
7.3.4. all reasonable expenses incurred by the Partnership and
the non-transferring Partner in connection with the Transfer shall have been
paid by or for the account of the Transferee.
7.4. Transfers; Recharacterization. If any Interest is transferred
during any Fiscal Year in compliance with the provisions of this Agreement,
Profits, Losses, each item thereof, and all other items attributable to such
transferred Interest for such period shall be divided and allocated between
the Transferor and the Transferee by taking into account their varying
interests during the period in accordance with Section 706(d) of the Code,
using any conventions permitted by law and reasonably selected by the
non-transferring Partner.
ARTICLE 8
BUY-SELL PROVISIONS
8.1. Mutual Disagreement. In the event of a Mutual Disagreement and as
expressly provided in Section 1.8 hereof, the Partners shall have the rights
of mandatory purchase and sale provided in this Article 8. For purposes of
this Article 8, "Mutual Disagreement" shall mean the objection by a Partner
holding at least a Fifty (50%) Interest to a Major Action if (i) written
notice of such objection is delivered to the Partner(s) that approved such
Major Action within twenty (20) days of the approval and (ii) the Partner(s)
that approved such Major Action have not addressed the objection to the
satisfaction of the Partner making the objection within twenty (20) days of
receipt of the written objection notice.
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8.2. Mandatory Buy-Sell of Interests.
8.2.1. In the event of a Mutual Disagreement, a Partner (the
"Electing Partner") may deliver to the other Partner (the "Notice Partner") a
written notice (the "Election Notice"), which Election Notice shall include
an irrevocable offer by the Electing Partner either (i) to sell all but not
less than all of the Electing Partner's Interest in the Partnership to the
Notice Partner (the "Offer to Sell"), or (ii) to purchase all, but not less
than all, of the Notice Partner's Interest in the Partnership (the "Offer to
Purchase" and together with the Offer to Sell, the "Offers"). The Election
Notice also shall set forth the Gross Value of the Project to be used in
computing the Net Equity Value of a Partner's Interests. The price at which
a Partner's Interest may be purchased or sold under this Section 8.2 (the
"Buy-Sell Price") is the Net Equity Value of such Partner's Interest
determined as of the date (the "Election Day") of the Election Notice.
8.2.2. For a period ending on the forty-fifth (45th) day following
the Election Day (the "Election Period"), the Notice Partner shall have the
right to accept either the Offer to Sell or the Offer to Purchase. Upon
acceptance by the Notice Partner of one of the Offers, the Electing Partner
and the Notice Partner shall be required to sell or required to purchase, as
the case may be, for the Buy-Sell Price.
8.2.3. If the Notice Partner fails to accept either the Offer to
Sell or the Offer to Purchase within the Election Period, then the Offers
automatically shall expire and be of no force or effect, and the Notice
Partner shall be deemed to have made to the Electing Partner an offer (the
"Counter-Offer") to sell all, but not less than all, of the Notice Partner's
Interest in the Partnership for the Buy-Sell Price. Pursuant to the
Counter-Offer, the Electing Partner shall be obligated to purchase, and the
Notice Partner shall be required to sell, all but not less than all of the
Notice Partner's Interest in the Partnership at the Buy-Sell Price.
8.2.4. The Partner purchasing the Interest under this Section 8.2,
whether pursuant to one of the Offers or the Counter-Offer, as the case may
be, shall be referred to as the "Purchasing Partner" and the Partner selling
such Interest shall be referred to as the "Selling Partner."
8.3. Closing of Purchase or Sale. The closing of the purchase and sale
under Section 8.2 shall occur on a date and time and at a place mutually
agreeable to the Electing Partner and the Notice Partner, provided that such
closing shall not be later than forty-five (45) days after the expiration of
the Election Period; and provided, further, that if the Partners cannot agree
on the place of the closing, the closing shall take place at the law offices
of Xxxxxx Xxxxxxxx LLP at the address set forth in Section 16.2 hereof. At
the closing, the Purchasing Partner shall pay to the Selling Partner, by cash
or other immediately available funds, the Buy-Sell Price, and the Selling
Partner shall deliver to the Purchasing Partner good title to its Interest,
free and clear of any liens, claims, encumbrances, security interests or
options, and the Purchasing Partner shall agree to indemnify and hold
harmless the Selling Partner from any and all claims arising in connection
with such Interest that accrue after the date of the closing. At the
closing, the Purchasing Partner and the Selling
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Partner agree to execute such documents and instruments of conveyance as may
be necessary or appropriate to confirm the transactions contemplated hereby.
8.4. Definitions. For purposes of this Article 8, the following terms
shall have the meanings set forth below:
(a) "Gross Value of the Project" shall be the fair market value
of the Project as of the Election Day as determined by the Electing Partner
and set forth in the Election Notice.
(b) "Net Equity Value of a Partner's Interest" shall be, as of
any day, the amount that would be distributed to such Partner in liquidation
of the Partnership pursuant to Section 12.3 hereof if and assuming that the
following first occurred: (i) the Project were sold for the Gross Value of
the Project, (ii) the Partnership paid all apportionments and costs
customarily made and/or paid in the closing of a real estate transaction in
Pennsylvania, (iii) the Partnership paid its accrued, but unpaid liabilities
and established reserves for any contingent liabilities pursuant to Section
12.3.3, including without limitation, the Acquisition Loan and/or the
Permanent Loan (without prepayment premium or penalty), as applicable, and
any Capital Loans and (iv) the Partnership paid in full the Brandywine
Unreturned Capital and the accrued and unpaid Brandywine Preferred Return.
ARTICLE 9
ALLOCATIONS OF PROFITS AND LOSSES
9.1. Allocations of Profits or Losses. After giving effect to the
special allocations set forth in Section 9.2 hereof, (a) Profits for any
Fiscal Year shall be allocated (i) one hundred percent to Brandywine in
respect of the Brandywine Preferred Return to the extent of the excess, if
any, of the cumulative distributions received by Brandywine in respect of the
Brandywine Preferred Return pursuant to Sections 10.1, 10.2 and 12.3.4 from
the date the Brandywine Preferred Return calculation commences to the end of
the Fiscal Year, over the cumulative amounts allocated to Brandywine pursuant
to this Section 9.1 for all prior Fiscal Years, and (ii) thereafter to the
Partners in accordance with their respective Percentage Interests, and (b)
Losses for any Fiscal Year shall be allocated to the Partners in accordance
with their respective Percentage Interests.
9.2. Special Allocations. Notwithstanding anything in this Agreement to
the contrary, the following special allocations shall be made as follows:
9.2.1. All Nonrecourse Deductions for each Fiscal Year shall be
allocated to the Partners in proportion to their respective Percentage
Interests. For purposes of Treasury Regulation Section 1.752-3, all excess
nonrecourse liabilities of the Partnership will be allocated between the
Partners in proportion to their respective Percentage Interests.
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9.2.2.Any items of income, loss, gain or deduction that are
attributable to Partner Nonrecourse Debt shall be allocated to those Partners
who bear the economic risk of loss for such debt in accordance with Treasury
Regulation Section 1.704-2(i).
9.2.3. If there is a net decrease in Minimum Gain for a taxable year
of the Partnership, then, unless and except to the extent that the exceptions
provided in Treasury Regulations Section 1.704-2(f)(2) through (5) are
applicable, before any other allocation is made for such taxable year, each
Partner shall be allocated items of income and gain for such year (and, if
necessary, for subsequent years) in an amount equal to the portion of such
Partner's share of the net decrease in Minimum Gain, as such share is
determined in accordance with Treasury Regulations Section 1.704-2(g)(2).
This Section 9.2.3 is intended to qualify as a "minimum gain chargeback"
under Treasury Regulation Section 1.704-2(f)(1) and shall be interpreted in a
manner consistent therewith.
0.0.0.Xx the extent that any Partner unexpectedly receives any
adjustment, allocation, or distribution described in subparagraphs (4), (5),
or (6) of Treasury Regulation Section 1.704-1(b)(2)(ii)(d), which adjustment,
allocation or distribution creates or increases a deficit in that Partner's
Capital Account, then, items of Partnership income and gain shall be
specially allocated to such Partner in an amount and manner sufficient to
eliminate the deficit balance in its Capital Account created by such
adjustment, allocation, or distribution as quickly as possible. Any special
allocations of items of income or gain pursuant to this provision shall be
taken into account in computing subsequent allocations of Profits so that the
net amount of any items so allocated and the Profits, Losses and all other
items allocated to each Partner shall, to the extent possible, be equal to
the net amount that would have been allocated to each such Partner pursuant
to the other provisions of this Agreement if such unexpected adjustments,
allocations or distributions had not occurred. The foregoing is intended to
qualify as a "qualified income offset" within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be applied in a manner
consistent with that Treasury Regulation.
9.3. Curative Allocations. The allocations set forth in Sections 9.2
(the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulation Section 1.704-1(b) and 1.704-2.
Notwithstanding any other provision of this Article 9 (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into
account in allocating other items of Partnership income, gain, loss,
deduction or credit among the Partners so that, to the extent possible, the
net amount of such allocations or other items of income, gain, loss,
deduction or credit and the Regulatory Allocations to each Partner shall be
equal to the net amount that would have been allocated to each such Partner
if the Regulatory Allocations had not occurred.
9.4. Allocations for Tax Purposes. In the event the book value of any
Partnership asset differs from its adjusted tax basis (upon contribution,
revaluation or otherwise), all income, gain, loss and deduction with respect
to such asset shall be allocated to the Partners in a manner that takes into
account the variation between such book value and adjusted tax basis for such
property for federal income tax purposes, pursuant to Section 704(c) of the
Code or pursuant to the principles thereof using any reasonable allocation
method (including curative allocations) as may be determined by the
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Partners or, if the Partners so elect, the Partnership's accountants.
Allocations made under this Section 9.4 are made solely for federal, state or
local income tax purposes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Profits,
Losses, or other items or distributions pursuant to any provision of this
Agreement.
ARTICLE 10
DISTRIBUTIONS
10.1. Net Cash Flow from Operations. Except as otherwise provided in
Section 12.3 (relating to liquidating distributions) and Section 2.3.4
(relating to Capital Loans), Net Cash Flow from Operations shall be
distributed at such times and in such amounts as the Partners holding a
majority of the Interests shall determine; provided that any distributions of
Net Cash Flow from Operations shall be made in the following order and
priority:
10.1.1. First, one hundred percent (100%) to Brandywine until
Brandywine has received an amount equal to the excess, if any, of (1) the
Brandywine Preferred Return from the commencement of the Partnership to the
date on which the distribution is made over (2) the sum of all prior
distributions to Brandywine in respect of the Brandywine Preferred Return
pursuant to this Section 10.1.1 and Section 10.2.1.
10.1.2. Thereafter, to the Partners in accordance with their
Percentage Interests.
10.2. Net Cash from Sales or Refinancings. Except as otherwise provided
in Section 12.3 (relating to liquidating distributions) and Section 2.3.4
(relating to Capital Loans), Net Cash from Sales or Refinancings, if any,
realized or available to the Partnership shall be distributed as soon as
practicable, as determined by the Partners holding a majority of the
Interests, in the following order and priority:
10.2.1. First, one hundred percent (100%) to Brandywine until
Brandywine has received an amount equal to the excess, if any, of (1) the
Brandywine Preferred Return from the commencement of the Partnership to the
date on which the event giving rise to such Net Cash from Sales or
Refinancings occurred, over (2) the sum of all prior distributions to
Brandywine in respect of the Brandywine Preferred Return pursuant to this
Section 10.2.1 and Section 10.1.1.
10.2.2. Second, one hundred percent (100%) to Brandywine until
Brandywine has received an amount equal to the then Brandywine Unreturned
Capital.
10.2.3. Thereafter, to the Partners in accordance with their
Percentage Interests.
10.3. Authority to Withhold. Upon the written advice of the
Partnership's tax counsel, the Partnership shall be entitled to collect,
withhold and make payments on behalf of or with respect to any Partner's
allocable share of Partnership income or gain, in amounts required to
discharge any
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obligation of the Partnership to withhold or make payments to any
governmental authority with respect to any federal, state, and local tax
liability of such Partner arising as a result of such Partner's Interest in
the Partnership. Any amount withheld pursuant to the foregoing sentence
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
Agreement. Each Partner hereby agrees to indemnify and hold harmless the
Partnership for, from and against any liability with respect to amounts paid
or withheld under this Section 10.3 on behalf of or with respect to such
Partner.
ARTICLE 11
BOOKS, RECORDS, REPORTS AND ACCOUNTING
11.1. Books and Records. The Partnership shall keep or cause to be kept
at its principal place of business appropriate books and records, including
without limitation, the following: (a) true and full financial information
regarding the status of the Project and financial condition of the
Partnership, including without limitation, records of all costs and expenses
incurred, all changes made, all credits made and received, and all income
derived in connection with the business of the Partnership; (b) promptly
after becoming available, a copy of the Partnership's federal, state and
local income tax returns for each year; (c) a copy of this Agreement; and (d)
other information regarding the affairs of the Partnership as is just and
reasonable.
11.2. Fiscal Year. The Fiscal Year of the Partnership shall be the
calendar year or such other accounting period as shall be required under the
Code or as may be determined by the Partner's holding a majority of the
Interests.
11.3. Accounting Period. Unless otherwise determined by the Partner or
Partners holding a majority of the Interests, the Partnership shall use the
accrual method of accounting in maintaining its books and records and in
preparation of its financial statements for federal income tax purposes.
11.4. Annual Reports. Within forty-five (45) days after the close of
each Fiscal Year, ATL shall cause the Partnership to have prepared, and
furnished to each Partner, audited financial statements, presented in
accordance with generally accepted accounting principles, including without
limitation, copies of (i) the balance sheet of the Partnership, (ii) the
Partnership's income statement, (iii) a statement of the Partnership's cash
flow, (iv) a statement of the Partner's Capital Accounts and (v) a statement
of source and application of funds each as of the last day of the Fiscal Year.
11.5. Quarterly Reports. Within twenty (20) days after the close of each
fiscal quarter, ATL shall cause the Partnership to prepare and furnish to
each Partner quarterly reports of (i) the Partnership's operations, (ii)
quarterly unaudited balance sheets and income statements, and (iii) quarterly
statements of cash flow.
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11.6. Preparation of Tax Returns. Within ninety (90) days after the end
of each Fiscal Year, ATL shall cause the Partnership to arrange for the
preparation and timely filing of all tax returns of the Partnership for
federal, state and local income tax purposes and shall cause to be furnished
to the Partners the tax information reasonably required for federal and state
income tax reporting purposes.
11.7. Tax Controversies. The Partners hereby appoint and designate
Brandywine as the initial Tax Matters Partner, and as Tax Matters Partner,
Brandywine shall authorize and require one of its officers (the "Tax Matters
Representative") to represent the Partnership (at the Partnership's expense)
in connection with all examinations of the Partnership's affairs by tax
authorities, including resulting administrative and judicial proceedings, and
to expend Partnership funds for professional services and costs associated
therewith. Each Partner agrees to cooperate with the Tax Matters
Representative and to do or refrain from doing any or all things reasonably
required by the Tax Matters Representative in conducting those proceedings.
The Tax Matters Representative shall promptly notify the each Partner upon
the receipt of any correspondence from any federal, state or local tax
authorities relating to any examination of the Partnership's affairs.
11.8. Tax Elections. Any and all elections for federal, state and local
tax purposes, including without limitation, any election (i) to adjust the
basis of the Partnership Property pursuant to Code Sections 754, 734(b) and
743(b), or comparable state or local law, in connection with Transfers of
Interests in the Partnership; and (ii) to extend the statute of limitations
for assessment of tax deficiencies against the Partnership and the Partners
with respect to adjustments to the Companies federal, state or local tax
returns shall be mutually made by the Partners.
ARTICLE 12
DISSOLUTION AND LIQUIDATION
12.1. Dissolution. The Partnership shall dissolve upon the earliest to
occur of any of the following:
(a) upon the affirmative written vote of the Partners holding a
majority of the Interests;
(b) upon the sale of the Project and the repayment and
satisfaction in full of any financing undertaken by the
Partnership in respect thereof;
(c) the purchase by one Partner of all of the Interests of the
other Partner pursuant to and in accordance with this
Agreement;
(d) the Bankruptcy of any Partner or the occurrence of any other
action which causes dissolution of the Partnership under the
Act;
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(e) the failure of the partnership to close on the Acquisition
Loan prior to the first anniversary of the date of this
Agreement; or
(f) December 31, 2050.
12.2. Bankruptcy of a Partner. Upon the Bankruptcy of a Partner, the
non-Bankrupt Partner shall have the sole right to manage the Partnership and
to wind up the business and affairs of the Partnership, and the rights of the
Bankrupt Partner shall be limited to the right to share in the profits and
losses and distributions of the Partnership to the extent provided in this
Agreement and the Bankrupt Partner shall not have any right to participate in
the management or operation of the Partnership or in making decisions in
connection with the dissolution and winding up of the Partnership.
12.3. Liquidation. Upon the dissolution of the Partnership, the
Partnership shall cease to carry on its business, except insofar as may be
necessary for the winding up of its business. Upon dissolution of the
Partnership, the Partners shall designate a Person to act as the liquidating
trustee (the "Liquidating Trustee") and the business and affairs of the
Partnership shall be wound up and, subject to Section 12.4 hereof, the
Partnership liquidated as rapidly as business circumstances permit, and the
proceeds thereof shall be distributed (to the extent permitted by applicable
law) in the following order and priority:
12.3.1. To the payment of the debts and liabilities of the
Partnership (other than those to Partners) in the order of priority provided
by law.
12.3.2. To the payment of the expenses of liquidation of the
Partnership in the order of priority provided by law, provided that the
Partnership shall first pay, to the extent permitted by law, liabilities or
debts owed to Partners.
12.3.3. To the setting up of such reserves as the Liquidating
Trustee may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Partnership arising out of or in connection
with the Partnership's business, provided that any such reserve will be held
by the Liquidating Trustee 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 Trustee shall deem advisable (but in no case
to exceed eighteen (18) months from the date of liquidation unless an
extension of time is consented to by the Partners), to distribute the balance
thereafter remaining in the manner hereinafter provided.
12.3.4. The balance of the proceeds, if any, to be distributed on or
before the later of (i) the end of the taxable year during which such
liquidation occurs or (ii) ninety (90) days after the date of such
liquidation, in accordance with and in the order set forth in Section 10.2
hereof.
12.4. No Liquidating Distributions in Kind. The Liquidating Trustee
shall not distribute, and no Partner may demand or receive, property other
than cash in return for a Partner's
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contributions, loans or advances, unless Partners holding at least 75% of the
Interests agree to a distribution in kind to any Partner; provided, however,
that all Partners receive, whether in kind or in cash and whether from the
Partnership or the Partner receiving an in kind distribution, the amount
which such Partner is entitled to receive under Section 12.3.4 hereof.
12.5. Non-Recourse. No recourse shall be had for any of the obligations
of Brandywine hereunder or for any claim based thereon or otherwise in
respect thereof, against any past, present or future trustee, shareholder,
officer or employee of BRT, 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 ATL any such Person who acts
through ATL
ARTICLE 13
[OMITTED]
ARTICLE 14
MISCELLANEOUS
14.1. Amendments. This Agreement may not be amended, modified or revised
in any manner without the prior written consent of each of the Partners.
14.2. Notice.
14.2.1. All notices, requests and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
delivered to a Partner either personally or by sending a copy thereof by
first class or express mail, postage prepaid, or by telex or TWX (with answer
back received) or courier services, charges prepaid, or by telecopier (with a
copy sent by first class mail), to such Partner's address (or to such party's
telex, TWX, telecopier, or telephone number) as follows:
If to Brandywine:
c/o Brandywine Realty Trust
Newtown Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
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Attn: Xxxxxxx X. Xxxxxxx, Xx., Chairman of the Board
or
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esquire
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Xxxxxx
Xxxxxxxxxx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to ATL:
c/o The Commonwealth Group
00 Xxxx'x Xxx
Xxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
with a copy to:
Xxxxxxx X. Xxx, Esquire
Saul, Ewing, Xxxxxx & Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
14.2.2. Any such notice, request or communication shall be deemed to
be delivered, given and received for all purposes of this Agreement (i) as of
the date so delivered, if delivered personally or by telecopy to the person
entitled thereto, (ii) three (3) business days after being deposited in the
United States mail, if delivered by first class or express mail, postage
prepaid or (iii) one (1) business day after being deposited with a telegraph
office or courier service for delivery if notice is sent by telegraph or
courier services.
14.3. Filing with SEC. ATL acknowledges that BRT intends to file a copy
of this Agreement as an exhibit to a filing it intends to make with the
Securities and Exchange Commission.
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14.4. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania and, to the
maximum extent possible, in such manner as to comply with all of the terms
and conditions of the Act.
14.5. Severability. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, such provision shall be ineffective only to the
extent of such invalidity or unenforceability without invalidating or
affecting the remainder of this Agreement thereby.
14.6. Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the Partners and their respective successors and, where
permitted, their assigns and Affiliates.
14.7. Titles and Captions. All article, section and paragraph titles and
captions contained in this Agreement are for convenience only and are not a
part of the context hereof.
14.8. No Third Party Rights. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in,
or obligations to, any other Persons whatsoever.
14.9. Time is of Essence. Time is of the essence in the performance of
each and every obligation herein imposed.
14.10. Further Assurances. Each Partner, upon the request of the other
Partner, shall execute all further instruments and perform all further acts
which are or may become reasonably necessary to effectuate and to carry out
the matters contemplated by this Agreement.
14.11. Legal Representation. Each party to this Agreement acknowledges
that such party is represented by competent legal counsel and that such
counsel has fully reviewed this Agreement. This Agreement shall be construed
in accordance with its fair meaning without any presumption against the party
responsible for drafting this Agreement.
14.12. Entire Agreement. This Agreement, and the agreements attached as
exhibits hereto, contain the entire agreement between the parties hereto and
supersede any and all prior and contemporaneous agreements, arrangements or
understandings between the parties relating to the subject matter hereof. No
oral understandings, oral statements, oral promises or oral inducements
exist. No representations, warranties, covenants or conditions, express or
implied, whether by statute or otherwise, other than as set forth herein,
have been made by the parties hereto.
14.13.Counterparts. This Agreement may be signed in any number of
counterparts, with the same effect as if all of the Partners had signed the
same document. All counterparts shall be construed together and shall
constitute but one and the same agreement. Any and all counterparts may be
executed by facsimile.
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[SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this GENERAL
PARTNERSHIP AGREEMENT effective as of the day and year first above written.
PARTNERS:
BRANDYWINE I.S., L.P., a Pennsylvania limited
partnership, by Brandywine I.S., LLC, a Pennsylvania
limited liability company, its sole general partner, by
Brandywine Operating Partnership, L.P., a Delaware
limited partnership, its sole member, by Brandywine
Realty Trust, a Maryland real estate investment trust,
its sole general partner
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
ACROSS THE LINE, L.P., a Delaware limited partnership,
General Partner
By: ACROSS THE LINE, INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx, President
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EXHIBIT A
TO
GENERAL PARTNERSHIP AGREEMENT OF
INTERSTATE 202 GENERAL PARTNERSHIP
DEFINITIONS OF TERMS
The following terms used in this Agreement shall have the meanings
described below:
"Act" shall mean the Pennsylvania Uniform Partnership Act, 15 Pa.
C.S.A. Section 8301 et. seq., as amended from time to time.
"Acquisition Loan" shall mean the loan to be made to the Partnership
in respect of the Project, which shall provide financing for the acquisition of
the Project and related costs approved by the Partners holding a majority of the
Interests.
"Additional Capital Contributions" shall mean, with respect to a
Partner, any additional contributions to the capital of the Partnership made
pursuant to Section 2.3 hereof.
"Advisor" shall have the meaning set forth in Section 2.3.2 hereof.
"Affiliate" shall mean a Person who, with respect to any Partner: (a)
directly or indirectly controls, is controlled by or is under common control
with such Partner; (b) owns or controls ten percent (10%) or more of the
outstanding voting securities of such Partner; or (c) is an officer, director,
member, manager or partner of such Partner.
"Agreement" means this General Partnership Agreement, as it may be
amended, restated or supplemented from time to time.
"Bankruptcy" means, with respect to a Partner, the happening of any of
the following: (a) the making of a general assignment for the benefit of
creditors; (b) the filing of a voluntary petition in bankruptcy or the filing of
a pleading in any court of record admitting in writing an inability to pay debts
as they become due; (c) the entry of an order, judgment or decree by any court
of competent jurisdiction adjudicating such Partner to be bankrupt or insolvent;
(d) the filing of a petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation; (e) the filing of an answer or other pleading
admitting the material allegations of, or consenting to, or defaulting in
answering, a bankruptcy petition filed against a Partner in any bankruptcy
proceeding; (f) the filing of an application or other pleading or any action
otherwise seeking, consenting to or acquiescing in the appointment of a
liquidating trustee, receiver or other liquidator of all or any substantial part
of a Partner's properties; and (g) the commencement of any proceeding seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation which has not been
quashed or dismissed within 180 days.
"BOP" shall have the meaning set forth in Section 1.8 hereof.
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"Brandywine Preferred Return" shall mean the cumulative right given to
Brandywine to receive in respect of each Fiscal Year a sum equal to ten percent
(10%) per annum (determined on the basis of a year of 365 days, for the actual
number of days occurring in the period for which the Brandywine Preferred Return
is being determined, cumulative to the extent not distributed in any quarter
pursuant to Sections 10.1.1 or 10.2.1 hereof, but not compounded) of the average
daily balance of the Brandywine Unreturned Capital from time to time. The
Brandywine Preferred Return shall commence on the date(s) that the Brandywine
contributes capital to the Partnership as set forth in this Agreement and will
terminate when the Brandywine Unreturned Capital has been reduced to zero and
the Brandywine Preferred Return has been paid in full.
"Brandywine Unreturned Capital" shall mean the Capital Contributions
made by the Brandywine pursuant to this Agreement (including, without
limitation, any advances made under the collateral support provided by
Brandywine pursuant to Section 2.1.2 hereof) reduced by cash distributions to
Brandywine made pursuant to Section 10.2.2 hereof.
"BRT" shall have the meaning set forth in Section 1.8 hereof.
"Buy-Sell Price" shall have the meaning set forth in Section 8.2.1
hereof.
"Capital Account" shall mean the accounting record of each Partner's
capital interest in the Partnership maintained pursuant to and in accordance
with Section 2.4 hereof.
"Capital Contribution" shall mean, with respect to a Partner, the
amount of cash and the fair market value of any property contributed by such
Partner to the capital of the Partnership as set forth in this Agreement and,
with respect to Brandywine, also shall include any advances or drawings in
connection with any collateral support provided by Brandywine pursuant to
Section 2.1.2 hereof.
"Capital Notice" shall have the meaning set forth in Section 2.3.1
hereof.
"Code" shall mean the Internal Revenue Code of 1986 (or successor
thereto), as amended from time to time.
"Collateral Agreements" shall mean each of the documents, agreements
and instruments, including without limitation, the Development Agreement, the
Exclusive Leasing Agency Agreement and the Management Agreement, to be executed
and delivered in connection with the consummation of the transactions
contemplated by this Agreement.
"Contact Representative" shall have the meaning set forth in Section
3.3 hereof.
"Defaulting Partner" shall have the meaning set forth in Section 2.3.4
hereof.
"Depreciation" shall mean, for each Fiscal Year or other period, an
amount equal to the depreciation, amortization, or other cost recovery deduction
allowable for federal income tax purposes with respect to an asset for such
Fiscal Year or other period, except that if the Gross Asset
A-2
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Fiscal Year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
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. In the event that the federal income tax depreciation,
amortization, or other cost recovery deduction is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method.
"Designated Representative" shall have the meaning set forth in
Section 3.4 hereof.
"Development Agreement" means an agreement providing for the
development of the Project.
"Electing Partner" shall have the meaning set forth in Section 8.2.1
hereof.
"Election Notice" shall have the meaning set forth in Section 8.2.1
hereof.
"Election Period" shall have the meaning set forth in Section 8.2.2
hereof.
"Exclusive Leasing Agency Agreement" means an agreement providing for
an exclusive leasing agency for the Project.
"Fiscal Year" means the year on which the accounting and federal
income tax records of the Partnership are kept.
"Gross Asset Value" shall mean, with respect to any asset of the
Partnership, 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
Gross Asset Value shall be adjusted to reflect such revaluation, (ii) where an
asset has been contributed to the Partnership by a Partner, the Gross Asset
Value shall be its fair market value as established by the Partners and (iii)
the Gross Asset Value of Partnership assets shall be adjusted to reflect
Depreciation taken into account with respect to such assets for purposes of
determining Profits or Losses.
"Gross Value of the Project" shall have the meaning set forth in
Section 8.4 hereof.
"Indemnitee" shall have the meaning as set forth in Section 6.2
hereof.
"Indemnitee Partner" shall have the meaning set forth in Section 6.3
hereof.
"Indemnitor Partner" shall have the meaning as set forth in Section
6.3 hereof.
"Interest" shall mean, with respect to a Partner, such Partner's
interest in the Partnership, as provided in this Agreement.
"Land" shall mean the 5.4-plus minus- acres of land, as presently
improved with a 72,000 S.F.-plus minus- two-story building, located in Chadds
Ford, Delaware County, Pennsylvania, and bearing a street
A-3
address of 161 Wilmington - West Xxxxxxx Xxxx (Route 202), all as more fully
described on Exhibit C attached hereto.
"Liquidating Trustee" shall have the meaning set forth in Section 12.3
hereof.
"Major Action" shall have the meaning set forth in Section 3.2 hereof.
"Management Agreement" means that an agreement providing for the
management of the Project.
"Minimum Gain" shall mean and refer to, at any time, with respect to
all nonrecourse liabilities of the Partnership (within the meaning of Treasury
Regulation Section 1.704-2(b)(3)) the aggregate amount of gain (of whatever
character), if any, that would be realized by the Partnership if it disposed of
(in a taxable transaction) all Partnership Property subject to such liabilities
in full satisfaction thereof, and as further defined in Treasury Regulation
Section 1.704-2(d).
"Mutual Disagreement" shall have the meaning set forth in Section 8.1
hereof.
"Net Cash Flow from Operations" shall mean the gross cash proceeds
from the ownership or operation of the Property (excluding Capital
Contributions, Additional Capital Contributions and proceeds from Capital
Loans), less the portion thereof used to pay or establish reserves for all
Partnership expenses, debt payments, capital improvements, replacements and
contingencies, all as determined by the Partners holding a majority of the
Interests. Net Cash from Operations shall not be reduced by depreciation,
amortization, cost recovery deductions or similar allowances, but shall be
increased by any reductions to reserves previously established.
"Net Cash from Sales or Refinancings" shall mean the net cash proceeds
from all sales or other dispositions of the Property (other than in the ordinary
course of business) and all proceeds realized by the Partnership upon any
refinancing of Partnership indebtedness, less (i) expenses incident to such
refinancing and satisfaction of any indebtedness being refinanced, and (ii) any
portion thereof used to establish reserves, all as determined by the Partners
holding a majority of the Interests. "Net Cash from Sales or Refinancings"
shall include all principal and interest payments with respect to any note or
other obligation received by the Partnership in connection with any sales or
other dispositions of the Property.
"Net Equity Value of a Partner's Interest" shall have the meaning set
forth in Section 8.4(b) hereof.
"Nonrecourse Deductions" shall have the meaning set forth in Treasury
Regulation Section 1.704-2(b)(1).
"Notified Partner" shall have the meaning set forth in Section 2.3.1
hereof.
"Notifying Partner" shall have the meaning set forth in Section 2.3.1
hereof.
A-4
"Partners" shall have the meaning set forth in the first paragraph of
this Agreement and shall be used where no distinction between the Partners is
required. The term "Partners" shall include any Person that is admitted to the
Partnership as an additional or substitute Partner, in accordance with the terms
of the Agreement.
"Partner Minimum Gain" shall mean 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 Treasury Regulation Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" shall mean nonrecourse indebtedness of the
Partnership with respect to which any Partner has a direct or indirect risk of
loss, as more fully defined in Treasury Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Deduction" shall mean, for each Fiscal Year, the
Partnership deductions which are attributable to Partner Nonrecourse Debt and
are characterized as "partner nonrecourse deductions" under Treasury Regulation
Section 1.704-2(i)(l).
"Percentage Interest" shall mean with respect to a Partner, such
Partner's Interest in the Partnership expressed as a percentage in relation to
the Interests held by the other Partners, as adjusted from time to time by the
admission or withdrawal of Partners for any reason as provided in this Agreement
or as agreed to by the unanimous consent of the Partners and reflected on a
schedule attached hereto as Exhibit B. The initial Percentage Interest of
Brandywine shall be fifty percent (50%) and the initial Percentage Interest of
ATL shall be fifty percent (50%).
"Performing Partner" shall have the meaning set forth in Section 2.3.4
hereof.
"Permanent Loan" shall mean a loan which may hereafter be obtained by
the Partnership, the proceeds of which would be applied to reduce or repay the
Acquisition Loan.
"Permitted Transfer" shall have the meaning set forth in Section 7.2
hereof.
"Person" means an individual, firm, corporation, partnership, limited
liability company, association, estate, trust, pension or profit-sharing plan,
or any other entity.
"Profits" and "Losses" shall mean, for each Fiscal Year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period, as computed for federal income tax purposes and determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss, or deduction required to be stated separately pursuant to
Section 703(a)(l) of the Code shall be included in taxable income or loss), with
the following adjustments:
(a) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits or Losses
shall be added to such taxable income or loss;
A-5
(b) Any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as such expenditures pursuant to Treasury
Regulation Section 1.704-l(b)(2)(iv)(i), and not otherwise taken into account in
computing Profits or Losses shall be subtracted from such taxable income or
loss;
(c) 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 Gross Asset Value of the Property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value.
(d) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing taxable income or loss,
Depreciation shall be taken into account for such Fiscal Year or other period in
computing taxable income or loss;
(e) 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 Section 9.2 of
this Agreement, shall not be taken into account in computing taxable income or
loss; and
(f) In any case where, in accordance with Treasury 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
revaluation (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 taxable income or loss.
"Project" shall mean a to-be-determined project involving the
redevelopment of the existing facility on the Land, and shall include fixtures,
machinery, equipment, and all other improvements hereafter constructed on the
Land, including site improvements and parking facilities, and all equipment,
fixtures, furnishings and other personalty used in connection therewith.
"Project Budget" shall mean a budget prepared by Brandywine
enumerating the costs anticipated to be incurred in consummating the Project.
"Project Costs" shall mean all costs incurred in connection with the
acquisition and development of the Project in accordance with the Project
Budget prepared and agreed to by the Partners holding a majority of the
Interests.
"Property" shall mean the Land and the Project, collectively.
"Regulatory Allocations" shall have the meaning as set forth in
Section 9.3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Tax Matters Partner" means the "tax matters Partner" as defined in
Code Section 6231(a)(7).
A-6
"Tax Matters Representative" shall have the meaning set forth in
Section 11.7 hereof.
"Transfer" means to sell, assign, transfer, give, donate, pledge,
deposit, alienate, bequeath, devise or otherwise dispose of or encumber all or
any portion of an Interest to any Person other than the Partnership.
"Transferee" shall mean a Person to whom a Transfer is made.
"Transferor" shall mean a Partner making a Transfer under this
Agreement.
"Treasury Regulations" or "Regulations" shall mean pronouncements, as
amended from time to time, or their successor pronouncements, which clarify,
interpret and apply the provisions of the Code, and which are designated as
"Treasury Regulations" by the United States Department of the Treasury.
END OF EXHIBIT A
A-7
EXHIBIT B
TO
GENERAL PARTNERSHIP AGREEMENT OF
INTERSTATE 202 GENERAL PARTNERSHIP
PERCENTAGE INTERESTS
PERCENTAGE
Partner INTEREST
------- ------------
Brandywine 50%
ATL 50%
B-1
EXHIBIT C
TO
GENERAL PARTNERSHIP AGREEMENT OF
INTERSTATE 202 GENERAL PARTNERSHIP
DESCRIPTION OF THE LAND
C-1
SCHEDULE 3.6.1
Brandywine Reimbursable Fees
Brandywine shall be reimbursed by the Partnership for:
1. Fees associated with letter of credit or other collateral support provided
pursuant to Section 2.1.2.
C-2
SCHEDULE 3.6.2
ATL Reimbursable Fees
ATL shall be reimbursed by the Partnership for:
C-3
