January 20, 1998
Four Tower Bridge Associates
c/o Four Xxxxxx Tower Associates,
Managing General Partner
One Tower Bridge
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Dear Xx. Xxxxxx:
Brandywine Operating Partnership, L.P., a Delaware limited partnership, or
its affiliate ("Lender"), hereby offers to make a loan ("Loan") to Four Tower
Bridge Associates, a Pennsylvania limited partnership ("Borrower"), for term
financing for Four Tower Bridge, West Conshohocken Borough, Xxxxxxxxxx County,
Pennsylvania (the "Real Property"), inclusive of the 82,000+- square foot
mid-rise office building to be constructed thereon (the building, parking and
related improvements being collectively referred to as "Improvements"), all on
the terms and conditions set forth herein:
1. Amount; Purpose.
(a) The Loan shall be in the principal amount of up to $10,000,000,
or such lesser amount as shall actually be necessary to fund costs for
development of the Improvements in excess of funds to be advanced under Section
3.07 of that certain Agreement of Limited Partnership of Borrower, and shall be
evidenced by a promissory note in such aggregate principal amount executed by
Xxxxxxxx and made payable to the order of Lender ("Note").
(b) The Loan shall be used by Borrower solely to partially refinance
the cost of acquisition of the Real Property and construction of the
Improvements.
2. Interest Rate. The Loan shall provide for interest to be paid on the
unpaid principal balance outstanding from time to time, at a per annum rate
equal to a 30, 60 or 90 day (as determined by Lender) LIBOR + 250 basis points.
The Loan shall mature ten (10) years from its funding. Interest only shall be
paid in advance for the month in which the loan closing ("Closing") shall occur,
followed by 35 payments of interest only, payable in arrears, commencing on the
fifteenth (15th) day of the second month following the date of the Closing and
each succeeding month thereafter, followed by 84 payments of interest and
principal, also payable in arrears, with all unpaid interest and principal due
on the maturity date. Amortization of the Loan is based upon a thirty (30) year
schedule.
Four Tower Bridge Associates
c/o Four Xxxxxx Tower Associates,
Managing General Partner
Attention: Xxxxxx X. Xxxxxx
January 20, 1998
Page 2
3. Payment Terms.
(a) Borrower shall have the right, prior to the Maturity Date, to
prepay the unpaid principal balance of the Note without premium or penalty,
subject to and upon the terms and conditions governing the prepayment of
indebtedness to be set forth in definitive loan documents.
(b) Any prepayment, whether voluntary or involuntary, shall be
applied first to any accrued and unpaid interest under the Note up to the date
of such prepayment, and then to any other sums which may be payable to Lender
under the Loan Documents up to the date of such prepayment, and then to the
outstanding principal balance of the Note, any such prepayment applied to
principal shall be applied to the principal portions of installments due under
the Note in the inverse order of their maturity, and the acceptance of any such
prepayment when there is an event of default in existence under any of the Loan
Documents shall not constitute a waiver, release or accord and satisfaction
thereof or of any rights with respect thereto by Xxxxxx.
(c) The Note shall provide for a late payment charge of four (4%)
percent of any principal, interest or other amount not paid when due, and a rate
of interest after the occurrence of an event of default under the Loan Documents
("Default Rate") of four (4%) percent in excess of the interest rate then
payable under the Note pursuant to paragraph 2 above.
(d) Xxxxxxxx shall reimburse Lender for any and all fees, costs and
expenses Lender may incur in connection with making, disbursing, administering
and enforcing the Loan contemplated hereby. Without limitation of any
provisions set forth herein or in the Loan Documents, Borrower shall indemnify,
defend and save and hold harmless Lender of, from and against any and all loss,
cost, expense, damage and liability which Lender or Xxxxxx's affiliates may
suffer, sustain or incur by reason of, or arising out of Borrower's breach,
violation or default under, or other failure to timely and fully pay and perform
its obligations under the Loan.
4. Loan Documents; Security. The Loan evidenced by the Note shall be
governed and secured, inter alia, as follows:
(a) a first, insured Open-End Mortgage and Security Agreement
covering the Real Property and Improvements from Borrower to Lender
("Mortgage");
(b) a first Assignment of Leases and Rents from Borrower to Lender
relating to all leases affecting all or any portion of the Real Property
("Assignment of Leases and Rents");
Four Tower Bridge Associates
c/o Four Xxxxxx Tower Associates,
Managing General Partner
Attention: Xxxxxx X. Xxxxxx
January 20, 1998
Page 3
(c) a first Assignment of Xxxxxxxx's interests under contracts,
licenses and permits, documents and rights relating to the property as specified
by Xxxxxx ("Assignments of Contracts");
(d) Uniform Commercial Code financing statements executed by Xxxxxxxx
in favor of Xxxxxx, perfecting Xxxxxx's first security interests granted by
Borrower pursuant to the Mortgage in all tangible and intangible personal
property which at the time of the Loan Closing or thereafter is located on or
used in connection with the Real Property ("UCC's");
(e) an Environmental Indemnification Agreement furnished by
Borrower with which Borrower shall indemnify and hold Lender harmless of and
from any and all loss, cost, expense, damage or liability relating to the
environmental condition of the Real Property or the presence of hazardous wastes
thereon.
5. Loan Closing Date. Xxxxxx's obligation to fund under this Commitment
shall terminate on the earlier of (i) the date which is eighteen (18) months
after the date hereof and (ii) the date on which any alternate financing
contemplated by Section 18 below is funded and the Construction Loan from PNC
Bank, National Association made to Borrower on the date hereof is repaid from
the proceeds thereof.
6. Composition of Borrower. During the term of the Loan, Borrower shall
be and remain a Pennsylvania limited partnership, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania, in which Four
Xxxxxx Tower Associates and Brandywine TB I, L.P., or its affiliate, shall be
and remain its sole partners.
7. General and Special Conditions. The General Conditions attached
hereto are an integral part of this Commitment and are incorporated herein by
this reference. The General Conditions shall not in any way diminish any of the
terms, conditions or requirements set forth herein, and such General Conditions
shall be interpreted to augment, supplement and complement such terms,
conditions and requirements. In addition to the General Conditions and any
other conditions that may be set forth in the Loan Documents, Xxxxxx's
obligation to make the Loan shall be specifically subject to the following
conditions:
(a) Intentionally Omitted.
(b) Intentionally Omitted.
(c) Intentionally Omitted.
Four Tower Bridge Associates
c/o Four Xxxxxx Tower Associates,
Managing General Partner
Attention: Xxxxxx X. Xxxxxx
January 20, 1998
Page 4
(d) Certificate of Occupancy: Borrower shall deliver to Lender a
current, final certificate of occupancy for the building issued by the
Commonwealth of Pennsylvania Department of Labor and Industry and by Xxxxxxxxxx
County (or by other appropriate governmental authorities) and evidence
satisfactory to Lender demonstrating compliance with all zoning, building,
health, fire, traffic, safety, environmental, wetlands and such other rules,
regulations, ordinances, statutes and requirements applicable to the property
and the improvements relating thereto.
8. Fees and Costs. Acceptance of this Commitment shall constitute
Borrower's unconditional agreement, if and when the Loan Closing occurs, to pay
all fees, including a closing fee equal to one (1%) percent of the Loan,
expenses, taxes, costs and charges in respect to the Loan, or in any way
connected therewith, including but not limited to Lender's reasonable counsel
fees and costs, title insurance premiums and search fees, survey costs,
environmental audit costs, appraisal costs, recording and filing fees and site
inspection fees of Lender.
9. Tax and Insurance Escrows. Real estate taxes and insurance premiums
shall be paid or caused to be paid by Borrower timely, and Borrower shall be
required to furnish Lender with paid receipts therefor. The Mortgage shall
reserve to Lender upon an event of default the option to collect monthly from
Borrower and hold in escrow amounts sufficient to pay real estate taxes, water
and sewer charges and assessments, other lienable assessments and insurance
premiums, irrespective of whether such items are paid by the tenants under any
executed leases relating to space on the Real Property. Lender shall release
such amounts to Borrower from time to time upon proof of the payment of such
items by Borrower.
10. Accuracy of Information. Borrower represents to Lender that all
documents and/or information provided to Lender by Borrower in connection with
the issuance of this Commitment are true and correct in all material respects
and Borrower further acknowledges that the issuance of this Commitment by Xxxxxx
is in reliance upon the accuracy and truth of such documents and/or information.
11. Waiver of Trial by Jury. Borrower hereby knowingly, voluntarily and
intentionally waives the right it may have to a trial by jury in respect of any
litigation based hereon, arising out of, under or in connection with this
Commitment or the Loan and any document contemplated to be executed in
conjunction herewith or therewith, or any course of conduct, course of dealing,
statements (whether verbal or written) or actions of Borrower or Lender. This
provision is a material inducement for Lender entering into this Commitment.
Four Tower Bridge Associates
c/o Four Xxxxxx Tower Associates,
Managing General Partner
Attention: Xxxxxx X. Xxxxxx
January 20, 1998
Page 5
12. Brokerage and Other Fees. Xxxxxxxx agrees to indemnify and hold
Xxxxxx harmless against the claims of any and all brokers or agents and from
claims for any commissions, fees or other amounts owned or claimed to be owed
regarding the Loan and/or the Real Property and Improvements.
13. Non-Recourse. The Loan shall be non-recourse to the Borrower, subject
to specific "carve-outs" to be set forth in the definitive loan documents,
including, without limitation, (a) fraud or intentional misrepresentation, (b)
environmental liabilities and (c) misapplication of loan proceeds, rental or
other income, security deposits, insurance proceeds or condemnation awards.
14. Lender's Review. Lender and its agents may inspect the plans and
specifications, the Project Budget, the course of construction and other matters
pertaining to construction of the Building and Improvements. Lender will accept
Valcon as its inspector. Borrower acknowledges and agrees that such inspections
are made solely for the protection of the Lender in its capacity as Lender, and
Xxxxxxxx confirms that the Lender is not making and will not be deemed to be
making any representations or warranties as to any matters pertaining to the
Building or Improvements by reason of such inspections or by reason of advances
made by the Lender under the Loan Documents. Without limitation of any of the
foregoing, Xxxxxxxx has selected the general contractor, all major
subcontractors, the project architect and engineer, and all other consultants
providing professional services with respect to the Project, and Lender, in its
capacity as such, has not and shall not have any responsibility for their
selection nor for the quality of their materials, their services, or
workmanship. Neither the Borrower nor any other person shall have any right to
rely on any procedures required by the Lender herein, such procedures being
solely for the protection of the Lender, in its capacity as lender.
Following acceptance of this Commitment and prior to the Closing, Borrower
shall provide to Lender a copy of all periodic architect's reports by the
architect of record and by the construction lender's architect/engineer within
thirty (30) days of submission during the entire period of construction. In
addition to the foregoing, Borrower shall provide to Lender a lease schedule
provided during each calendar quarter of the initial lease-up period of the
property containing not less than the following information: tenant name, lease
term, lease commencement, date of occupancy, monthly rent, concessions, unit
size and unit leased.
15. No Off-set. Anything herein contained to the contrary
notwithstanding, the Borrower and Xxxxxx specifically acknowledge and agree
that Lender shall not have the right to offset its commitment to lend
hereunder against distributions or other sums paid or to be paid to
Brandywine TB I, L.P., in its capacity as a partner of Borrower, and Borrower
shall not have the
Four Tower Bridge Associates
c/o Four Xxxxxx Tower Associates,
Managing General Partner
Attention: Xxxxxx X. Xxxxxx
January 20, 1998
Page 6
right to offset distributions or other sums due Brandywine TB I, L.P. as a
partner of Xxxxxxxx, against Xxxxxx's commitment to lend hereunder.
16. Borrower and Lender. Xxxxxx and Xxxxxxxx acknowledge and agree that
their respective obligations to one another hereunder and under the Loan
Documents are in addition to, and shall be independent of, any obligations of
Borrower to its partners, and the obligations of Xxxxxxxx's partners, each to
the other. Borrower, Four Xxxxxx Tower Corporation and Four Xxxxxx Tower
Associates expressly acknowledge and agree that Xxxxxx has no fiduciary duty or
fiduciary obligation of any kind to them by reason of this Commitment or the
Loan, or any of them, and Xxxxxx is and shall be free to exercise any and all
rights and remedies reserved to Lender hereunder and under the Loan Documents,
notwithstanding that Brandywine TB I, L.P., an affiliate of Brandywine Operating
Partnership, is a partner in Borrower.
17. Exculpation. No recourse shall be had for any obligation of
Brandywine Realty Trust under this Commitment or under any document executed in
connection herewith or pursuant hereto, or for any claim based thereon or
otherwise in respect thereof, against any past, present or future trustee,
shareholder, officer or employee of Brandywine Realty Trust, whether by virtue
of any statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released by
the Borrower and all parties claiming by, through or under Borrower.
18. Alternate Financing. Xxxxxx acknowledges and agrees that nothing
herein prevents Borrower from obtaining alternate financing in lieu of the Loan,
and that by executing the acceptance attached hereto Borrower is not obligated
to accept the Loan from Lender, but only to accept the terms set forth herein if
Borrower elects to accept the Loan. Xxxxxx's commitment to make the Loan
hereunder will remain in effect and available to Borrower until such time as any
such alternate financing is funded.
[remainder of this page left intentionally blank]
Four Tower Bridge Associates
c/o Four Xxxxxx Tower Associates,
Managing General Partner
Attention: Xxxxxx X. Xxxxxx
January 20, 1998
Page 7
19. Acceptance; Termination. The acceptance of this Commitment shall be
evidenced by the return of the enclosed copy hereof executed by Xxxxxxxx, within
three (3) days from the date hereof. Unless this Commitment is so accepted, it
shall become null and void.
Very truly yours,
Brandywine Operating Partnership, L. P. , a
Delaware limited partnership
By: Brandywine Realty Trust, a Maryland real
estate investment trust, its General Partner
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman of the Board
ACCEPTANCE
Intending to be legally bound, the undersigned hereby accept the foregoing
Commitment and agree to the terms and conditions thereof.
FOUR TOWER BRIDGE ASSOCIATES, a Pennsylvania
limited partnership
By: FOUR XXXXXX TOWER ASSOCIATES, a
Pennsylvania limited partnership
By: FOUR XXXXXX TOWER CORPORATION, a
Pennsylvania corporation, its duly
authorized general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx, President
By: BRANDYWINE TB I, L.P., a Pennsylvania
limited partnership
By: BRANDYWINE TB I, L.L.C., a
Pennsylvania limited liability
company
By:/s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman
GENERAL CONDITIONS
The following General Conditions are an integral part of this
commitment:
1. Documents and Information to be Furnished to Lender Before Loan
Closing. At least ten (10) business days prior to the scheduled date of the
Loan Closing, Borrower must obtain at its expense and submit to Lender the
documents and information set forth below. Such documentation and information
shall be subject to Lender's review and approval, both as to form and substance,
and shall be updated and effective at the time of Loan Closing. None of the
materials provided by Borrower shall vary in any material respect from the
information and materials previously provided to Lender in order to induce
Lender to underwrite and approve the Loan.
(a) A currently dated title report, in form and substance
satisfactory to Lender, issued by Lawyers Title Insurance Corporation, covering
the Real Property, which contains copies of all identified documents referred to
therein. The title report shall stipulate that title insurance, in a form
approved by Lender, shall be issued to Lender at time of the Loan Closing which
shall insure Lender as the holder of a valid first mortgage lien for the full
amount of the Mortgage, free and clear of all liens (including mechanic's liens
filed or unfiled), encumbrances and exceptions other than those which may be
approved by Lender.
(b) A current ALTA/ASCM as-built survey of the Real Property,
certified to and acceptable to Lender and to Lawyers Title Insurance
Corporation, issuing the title insurance, showing such items as Lender shall
specify, together with a metes and bounds description of the Real Property
corresponding to such survey.
(c) Any and all lease agreements relating to any portion of the Real
Property, and any form of proposed lease agreement to be used by Borrower in
connection with the Real Property during the term of the Loan.
(x) Xxxxxxxx's Agreement of Limited Partnership, Certificate of
Limited Partnership, pertinent incumbency and signature certificates, and
resolutions authorizing the transaction.
(e) A written opinion of Xxxxxxxx's 's counsel, who shall be
acceptable to Xxxxxx, stating that, inter alia: (i) Borrower is duly organized,
validly existing and in good standing in the Commonwealth of Pennsylvania,
authorized to do business in the Commonwealth of Pennsylvania, (ii) Borrower has
full authority and legal right to carry out the terms of this Commitment and any
other documentation required hereunder or in connection with the Loan, (iii)
Borrower has taken all necessary and appropriate action to authorize the
execution and delivery of this Commitment and all other documents required to be
executed by it in connection with the Loan, (iv) this Commitment and all other
documents required to be executed by Xxxxxxxx in connection with the Loan have
been duly executed and acknowledged or witnessed, as appropriate, by Xxxxxxxx,
(v) none of the aforesaid actions, undertakings and agreements contravene or
shall contravene Borrower's Partnership Agreement or Certificate of Limited
Partnership, the provisions of this Commitment, or the provisions of any
contract or agreement to which Borrower is a party or by which Borrower is bound
or any applicable law, (vi) the Note, Mortgage and all other loan documents are
valid and binding and enforceable according to their respective terms in the
state where the Real Property is located, and (vii) the Loan is not civilly
usurious.
(f) Fully paid fire and casualty insurance policies with extended
coverage, covering risk of loss or damage to the Real Property due to fire and
such other casualties as Lender may require, with limits equal to one hundred
percent of the full replacement cost with such company or companies approved by
Lender (but such company must have an A or better rating by Best's Rating
Service) and containing mortgagee clauses in favor of Lender in form and content
satisfactory to Lender; fully paid flood insurance policy, if determined to be
necessary by Xxxxxx; and fully paid liability insurance and workmen's
compensation insurance in such amounts as may be required by Lender or, as to
workmen's compensation, mandated by statute.
(g) The final as-built plans and specifications for the Building and
Improvements, which shall have been approved in writing by all necessary and
appropriate governmental authorities, the general contractor, the primary
subcontractors, and the architect, engineer and bonding company, as appropriate.
(h) Appraisals of the Real Property in accordance with the
requirements of Title 11 of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") based upon its fair market value currently
and upon its projected fair market value following completion of the
construction of the Building as shown in the plans and specifications, which
appraisals shall be paid for by Borrower, performed by an MAI appraiser selected
by or acceptable to Lender and acceptable in form and substance to Lender having
a value of at least Sixteen Million Seven Hundred Fifty Thousand Dollars
($16,750,000.00).
(i) A Phase I Environmental Report (and the report of such further
investigations, if any, as shall be deemed appropriate by Lender), prepared by
an independent environmental engineering firm acceptable to Lender, which may be
McLarer Xxxx, indicating that there are no hazardous substances or wastes in, on
or around the Real Property, that the Real Property does not contain any
wetlands, that the Real Property is not located in a flood hazard area or
100-year flood plain, and otherwise in form and substance satisfactory to
Lender.
(j) Intentionally Omitted.
2. Xxxxxx's Approval of Documents and Title. The need for and the
adequacy as to form and substance of each and every document relating to the
Loan and all questions relating to the validity, status and priority of the
security for the Loan shall be determined by and must be satisfactory to Lender.
3. Condemnation. Lender shall have the right to terminate this
Commitment in the event there occurs, between the date of this Commitment and
the date of the Loan Closing, any loss or damage to the Real Property due to any
taking of all or any portion of the Real Property
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by exercise of the power of condemnation or eminent domain, which precludes or
substantially delays completion of the Project.
4. Maximum Rate of Interest on Loan. Notwithstanding anything to the
contrary contained herein or in any other document executed in connection with
the Loan, the effective rate of interest on the Loan shall not exceed the
maximum effective rate of interest permitted by applicable law or regulation.
Xxxxxxxx hereby agrees to give Xxxxxx prior written notice in the event any
interest payment made to Lender with respect to this Loan will cause the total
interest payments collected in any one year to be usurious under applicable law,
and Xxxxxx hereby agrees not to collect knowingly any interest from Borrower in
the form of fees or otherwise which will render this Loan usurious. In the
event that such interest would be usurious in Xxxxxx's opinion, Xxxxxx reserves
the right to reduce the interest payable by Borrower or, if the Loan Closing has
not yet occurred and at its option, to terminate this Commitment. This
provision shall survive the Loan Closing and the repayment of the Loan.
5. No Other Liens on Real Property. Borrower hereby agrees that during
the term of the Loan and any extension thereof, there shall be no other
financing secured by the Real Property and no lien or encumbrance other than
those contemplated by this Commitment shall be created or permitted to exist
against the Real Property without the written consent of Lender. In the event
such consent is given, any and all such financing and liens shall be absolutely
and unconditionally subordinated to the lien of the Mortgage contemplated by
this Commitment.
6. No Transfer of Real Property. Xxxxxxxx hereby agrees that during the
term of the Loan and any extension thereof, there shall be no transfer of legal
or equitable ownership of the Real Property.
7. No Waiver of Rights. Neither the failure of Lender nor the delay of
Lender to exercise any right, power or privilege under this Commitment shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other or further exercise of any other
right, power or privilege.
8. Assignment.
(a) Neither this Commitment nor the Loan proceeds shall be assignable
by Borrower without the prior written consent of Xxxxxx, and any attempt at such
assignment without such consent shall be void.
(b) This Commitment, the Loan and any and all documents pertaining
thereto may be placed, assigned, serviced or participated (either in whole or in
part) by Xxxxxx, its successors and assigns.
9. Modification; Entire Commitment; No Reliance by Third Parties. No
change or modification of this Commitment shall be valid unless the same is in
writing and signed by the parties hereto. This Commitment contains the entire
agreement between the parties hereto and there are no promises, agreements,
conditions, undertakings, warranties and representations, either written or
oral, expressed or implied between the parties hereto other than as herein set
-3-
forth. It is expressly understood and agreed that this Commitment represents an
integration of any and all prior and contemporaneous promises, agreements,
conditions, undertakings, warranties and representation between the parties
hereto. This Commitment is directed solely and exclusively to Borrower and
shall not inure to the benefit of or be relied upon by any third party.
10. Commitment to Survive Closing. This Commitment shall survive the Loan
Closing and each and every one of the obligations and undertakings of Borrower
named herein shall be continuing obligations and undertakings and shall not
cease and determine until the entire Loan, together with all interest and fees
due hereon and any other amounts which may accrue pursuant hereto or to the
Loan, shall have been paid in full, and until all obligations and undertakings
of Borrower shall have been fully completed and discharged. To the extent the
Loan Documents conflict with this Commitment, the Loan Documents shall prevail.
* * * *
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