EXECUTION
OPERATING AGREEMENT
OF
CHRISTIANA CENTER OPERATING COMPANY II LLC
Dated as of September 19, 1997
TABLE OF CONTENTS
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ARTICLE 1
GENERAL PROVISIONS........................................................1
1.1. Formation...........................................................1
1.2. Name and Principal Place of Business................................2
1.3. Registered Agent....................................................2
1.4. Purpose.............................................................2
1.5. Limitation on Purposes..............................................2
1.6. Title to Property...................................................2
1.7. Term................................................................2
1.8. Type of Income......................................................2
ARTICLE 2
CAPITAL CONTRIBUTIONS.....................................................3
2.1. Initial Capital Contribution of BOP.................................3
2.2. Initial Capital Contribution of Gender Road.........................3
2.3. Additional Capital Contributions....................................3
2.4. Maintenance of Capital Accounts.....................................4
2.5. No Interest.........................................................5
2.6. Revaluation of Company Property.....................................5
ARTICLE 3
MANAGEMENT................................................................5
3.1. Management..........................................................5
3.2. Manner of Acting....................................................6
3.3. Contact Representatives.............................................7
3.4. Designated Representatives..........................................7
3.5. Fees, Compensation and Reimbursement of Expenses....................7
ARTICLE 4
THE MEMBERS...............................................................8
4.1. Meeting of Members..................................................8
4.2. Limitation of Liability.............................................8
4.3. Company Records.....................................................8
4.4. Duties of Members...................................................8
4.5. Activities of Members...............................................8
4.6. Independent Activities of Members...................................8
4.7. Dealings with the Company...........................................9
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4.8. Covenant not to Withdraw............................................9
4.9. Additional Members..................................................9
ARTICLE 5
REPRESENTATIONS AND WARRANTIES...........................................10
5.1. Representations and Warranties of Members..........................10
ARTICLE 6
INDEMNIFICATION..........................................................12
6.1. Liability..........................................................12
6.2. Company Indemnification............................................12
6.3. Member Indemnification.............................................13
6.4. Gender Road Indemnification........................................13
ARTICLE 7
TRANSFERS................................................................13
7.1. Transfer Restrictions..............................................13
7.2. Permitted Transfers................................................14
7.3. Conditions of Transfer.............................................14
7.4. Transfers; Recharacterization......................................15
7.5. Conversion of Gender Road..........................................15
ARTICLE 8
BUY-SELL PROVISIONS......................................................15
8.1. Mutual Disagreement................................................15
8.2. Mandatory Buy-Sell of Interests....................................15
8.3. Closing of Purchase or Sale........................................16
8.4. Definitions........................................................16
ARTICLE 9
ALLOCATIONS OF PROFITS AND LOSSES........................................17
9.1. Allocations of Profits.............................................17
9.2. Allocation of Losses...............................................17
9.3. Special Allocations................................................18
9.4. Curative Allocations...............................................19
9.5. Allocations for Tax Purposes.......................................19
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ARTICLE 10
DISTRIBUTIONS............................................................19
10.1. Distributions Generally...........................................19
10.2. Distributions of Available Cash Flow..............................20
10.3. Authority to Withhold.............................................20
ARTICLE 11
BOOKS, RECORDS, REPORTS AND ACCOUNTING...................................20
11.1. Books and Records.................................................20
11.2. Company's Accountants.............................................21
11.3. Fiscal Year.......................................................21
11.4. Accounting Period.................................................21
11.5. Annual Reports....................................................21
11.6. Quarterly Reports.................................................21
11.7. Preparation of Tax Returns........................................21
11.8. Tax Controversies.................................................21
11.9. Tax Elections.....................................................22
ARTICLE 12
DISSOLUTION AND LIQUIDATION..............................................22
12.1. Dissolution.......................................................22
12.2. Bankruptcy of a Member............................................22
12.3. Liquidation.......................................................22
12.4. No Liquidating Distributions in Kind..............................23
12.5. Deficit Capital Account...........................................23
12.6. Certificate of Cancellation.......................................23
12.7. Non-Recourse......................................................23
ARTICLE 13
MISCELLANEOUS............................................................24
13.1. Amendments........................................................24
13.2. Notice............................................................24
13.3. Governing Law.....................................................25
13.4. Severability......................................................25
13.5. Binding Effect....................................................25
13.6. Titles and Captions...............................................26
13.7. No Third Party Rights.............................................26
13.8. Time is of Essence................................................26
13.9. Further Assurances................................................26
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13.10 Incorporation by Reference.......................................26
13.11. Legal Representation.............................................26
13.12. Entire Agreement.................................................26
13.13. Counterparts.....................................................26
13.14. Execution of Certificate of Formation.............................26
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OPERATING AGREEMENT
OF
CHRISTIANA CENTER OPERATING COMPANY II LLC
THIS OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY II LLC
(the "Agreement") is made and entered into as of the 19th day of September, 1997
by and between Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("BOP"), and Gender Road Joint Venture, a Delaware general
partnership ("Gender Road" and together with BOP, the "Members"), as members of
CHRISTIANA CENTER OPERATING COMPANY II LLC (the "Company").
Capitalized terms used in this Agreement shall have the meanings set
forth on Exhibit A attached hereto unless they are otherwise defined in the
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preamble, the Background or the particular section in this Agreement in which
they are used.
BACKGROUND
Gender Road is the owner of the Pad Sites. The Members desire to
organize and form the Company for the purpose of acquiring the Pad Sites from
Gender Road.
This Agreement sets forth the understanding between the Members with
respect to the terms and conditions of the acquisition of the Pad Sites, the
management and operation of the Company, the future development of the Pad Sites
and the distribution of proceeds received from the development, ownership and/or
disposition of the Pad Sites.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and preceding with the Background paragraphs incorporated by
reference, the Members, intending to be legally bound hereby, covenant and agree
as follows:
ARTICLE 1
GENERAL PROVISIONS
1.1. Formation. The Members desire to form the Company as a limited
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liability company under the laws of the State of Delaware, and in connection
therewith desire to set forth their agreements and understandings as stated in
this Agreement. The Members agree that the Company shall be operated pursuant
to the terms and conditions set forth in this Agreement, and to the extent not
inconsistent therewith, the Act. The Members agree to execute or cause the
Company to execute all certificates and documents, including a Certificate of
Formation, required by the Act in order that the Company qualify as a limited
liability company under the Act. The Members shall do or cause to be done all
such other filings, including amendments of the
Certificate of Formation, recordings, or other acts as may be necessary or
appropriate to comply with the laws of formation and operation of a limited
liability company in the State of Delaware and any other jurisdiction in which
the Company may conduct business.
1.2. Name and Principal Place of Business. The name of the Company shall
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be "CHRISTIANA CENTER OPERATING COMPANY II LLC" or such other name as the
Members from time to time may select. The principal place of business of the
Company shall be Gender Road Joint Venture c/o The Commonwealth Group, 00 Xxxx'x
Xxx, Xxx Xxxxxx, Xxxxxxxx 00000, or such other place as the Members from time to
time shall determine.
1.3. Registered Agent. The registered agent for the Company shall be The
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Corporation Trust Company located at Corporation Trust Center, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
1.4. Purpose. The sole purpose of the Company shall be to acquire the Pad
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Sites, with a view toward the future commercial development, management and
operation of the Pad Sites. In connection therewith, the Company shall have the
authority to do all things necessary and appropriate in connection with the
development, construction, operation, management, financing and maintenance of
the Pad Sites as provided in and/or limited by this Agreement or a Collateral
Agreement.
1.5. Limitation on Purposes. The Company shall exist solely for the
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purposes specified in Section 1.4 hereof and unless the Members agree otherwise,
the Company shall not engage in any business other than the acquisition,
development and management of the Pad Sites. The Members do not intend and this
Agreement shall not be deemed to create any joint venture, partnership, or other
arrangement by and between the Members with respect to any business or
activities of any Member other than the business and activities specifically set
forth in this Agreement. No Member shall have the power to bind the other
Member except with respect to the business of the Company as specifically set
forth in this Agreement.
1.6. Title to Property. All property owned by the Company, whether real or
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personal, tangible or intangible, shall be owned by the Company as an entity and
in the name of the Company, and no Member shall have any ownership interest in
such property. The interest of all Members in the Company are, for all
purposes, personal property.
1.7. Term. The term of the Company shall commence upon the filing of the
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Certificate of Formation in accordance with the Act and shall continue until the
Company is terminated in accordance with Article 12 of this Agreement.
1.8. Type of Income. Gender Road hereby acknowledges and agrees that
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Brandywine Realty Trust, the general partner of BOP is a real estate investment
trust as defined in Section 856 of the Code, and that as long as BOP is a member
of the Company, the Company shall manage its affairs in a manner such that the
Company does not intentionally earn any income for tax purposes
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or acquire any assets which would cause Brandywine Realty Trust to violate any
of the provisions of Code Section 856.
ARTICLE 2
CAPITAL CONTRIBUTIONS
2.1. Initial Capital Contribution of BOP. In connection with, and upon the
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closing of, the Pad Sites Acquisition, BOP shall contribute to the capital of
the Company cash in the amount of One Million Dollars ($1,000,000).
Notwithstanding BOP's agreement hereunder, the parties acknowledge and agree
that BOP's obligation to make the capital contribution hereunder is expressly
conditioned upon the closing of the Pad Sites Acquisition.
2.2. Initial Capital Contribution of Gender Road. By executing this
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Agreement, Gender Road agrees to provide the Company with the right to purchase
the Pad Sites and agrees to perform services in connection with the future
development of the Pad Sites, such services to be mutually determined by the
Members.
2.3. Additional Capital Contributions.
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2.3.1. It is not expected that the Members will be required to
contribute any additional capital to the Company other than those Capital
Contributions set forth in Sections 2.1. and 2.2 hereof. In the event, however,
that either Member (the "Notifying Member"), in its reasonable business
judgment, determines that additional capital is required by the Company, whether
for capital expenditures, normal operating expenses, debt service or otherwise
in connection with the acquisition, development, management or operation of the
Pad Sites, then the Notifying Member shall give ten (10) days written notice
(the "Capital Notice") to the other Member (the Notified Member") specifying in
reasonable detail the amount and purpose of the additional required capital. If
the Notified Member agrees within said ten (10) day period that the capital set
forth in the Capital Notice is needed by the Company, then, unless the Members
mutually agree otherwise, the Company shall obtain such additional capital from
BOP as an Additional Capital Contribution in the amount set forth in the Capital
Notice.
2.3.2. If the Notified Member disagrees that additional funds are
needed by the Company or determines that such additional capital should be
obtained in a manner other than additional capital contributions by BOP, then,
Section 2.3.1 to the contrary notwithstanding, the Notified Member shall notify
the Notifying Member of such decision with said ten (10) day period. In that
event, the Notifying Member and the Notified Member each shall select a
representative who together shall appoint one independent Person, unrelated to
either Member 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 Company;
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provided that, if the Advisor determines that such additional funds should be
obtained from capital contributions, then the Company shall obtain such
additional capital from BOP as an Additional Capital Contribution in the amount
determined by the Advisor to be needed by the Company. The Members hereby agree
that, in either case, the Advisor's determination shall be final and binding on
the Members.
2.3.3. If additional funds are obtained from BOP through Additional
Capital Contributions, such contributions shall be made by BOP, in cash within
ten (10) business days after receipt of (a) the Capital Notice (in the event
that the Notified Member and Notifying Member agree that additional capital is
required) 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 an Additional Capital Contribution is made to the Company by
BOP hereunder, BOP shall be entitled to the Preferred Return on such Additional
Capital Contribution, provided that such Preferred Return shall be calculated as
of the date that BOP makes such Additional Capital Contribution to the Company.
2.3.5. If the Advisor determines that Additional Capital Contributions
are required to be made under this Section 2.3 and BOP fails to advance such
Additional Capital Contribution to the Company, then, Gender Road shall have the
right, but not the obligation, to make an Additional Capital Contribution to the
Company in the amount of the Additional Capital Contribution originally due from
BOP. Any amounts advanced by Gender Road under this Section 2.3.5 as an
Additional Capital Contribution shall be entitled to a preferred return thereon
equal to, and calculated in the same manner as, the BOP Preferred Return;
provided that such preferred return shall be calculated as of the date Gender
Road makes such Additional Capital Contribution. Anything to the contrary in
Article 10 hereof notwithstanding, to the extent Gender Road is entitled to a
preferred return hereunder, such preferred return and the return of Additional
Capital Contribution by Gender Road shall be paid by the Company pari passu and
pro rata with the payment of the BOP Preferred Return and the return of BOP's
Capital Contribution and Additional Capital Contributions. In the event that
Gender Road elects not to make an Additional Capital Contribution hereunder, and
additional capital required by the Company cannot be obtained through any other
means, then, the requirement for additional capital hereunder shall be deemed to
be a Mutual Disagreement under Article 8 hereof.
2.4. Maintenance of Capital Accounts.
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2.4.1. The Company shall maintain a separate Capital Account for each
Member in accordance with Treasury Regulations promulgated under Section 704(b)
of the Code, and each Member's Capital Account shall be as follows:
(a) Each Member's Capital Account shall be credited with such
Member's Capital Contribution, if any; provided that, Gender Road's initial
Capital Account shall be zero.
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(b) Each Member's Capital Account shall be (1) increased by (a)
the amount of money contributed by such Member to the capital of the Company,
(b) the Gross Asset Value of any property contributed by such Member to the
capital of the Company (net of liabilities secured by such contributed property)
and (c) the amount of Profits and other items of Company income or gain
allocated to such Member under this Agreement, and (2) decreased by (a) the
amount of money distributed to such Member by the Company pursuant to this
Agreement, (b) the Gross Asset Value of property distributed to such Member by
the Company (net of liabilities secured by such distributed property) and (c)
the amount of Losses and other items of Company deduction, loss or expense
allocated to such Member under this Agreement.
2.4.2. It is intended that the Capital Accounts shall be determined
and maintained throughout the full term of the Company 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
Members 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 Members, upon agreement, shall
make such modifications to the extent necessary to comply with such Treasury
Regulations, provided that in no event shall such modifications affect (i) BOP's
right to, or the amount of, the BOP Preferred Return or a return of the BOP's
Capital Contribution and Additional Capital Contributions in the time and manner
set forth herein. or (ii) Gender Road's right to, or the amount of, if any,
Gender Road's preferred return or a return Gender Road's Additional Capital
Contribution as provided in Section 2.3.5 hereof in the time and manner set
forth herein.
2.5. No Interest. No Member shall be entitled to interest on that Member's
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Capital Contributions or Capital Account except as otherwise provided in this
Agreement.
2.6. Revaluation of Company Property. Upon the agreement of the Members,
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the Capital Accounts of the Members may be adjusted to reflect a revaluation of
the property of the Company 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).
ARTICLE 3
MANAGEMENT
3.1. Management. The management of the Company shall be vested in the
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Members as set forth in this Article 3. Each Member, subject to the terms,
conditions, restrictions and limitations contained herein, will possess all of
the powers and rights of a member of a limited liability company under the Act;
provided, however, no single Member shall be authorized or empowered to
undertake any action or make any decision on behalf of the Company or in
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connection with the development of the Pad Sites unless otherwise specifically
set forth in this Agreement or a Collateral Agreement. Each Member acknowledges
and agrees that it intends to actively participate in the management of the
Company and its operations and the development, management and operation of the
Pad Sites.
3.2. Manner of Acting. Where this Agreement specifically requires the
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vote, consent or determination of the Members and/or in order for the Company to
undertake any 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 each Member
shall be required. For purposes of this Agreement, a "Major Action" shall mean
and include, without limitation, decisions and undertakings relating to:
(a) the acquisition of the Pad Sites by the Company;
(b) the development or construction of the Pad Sites,
(c) operation or management of the Pad Sites;
(c) any loans, borrowings, financing or refinancing in
connection with the development of the Pad Sites, including
without limitation, obtaining construction loans and
permanent financing in connection with the development of
the Pad Sites;
(d) the annual operating budget and business plan for the
Company;
(e) any contract or agreement giving rise to a financial
commitment or obligation of the Company;
(f) Subject to Section 3.4 hereof, the employment of employees
and/or agents in connection with the Company or the
development of the Pad Sites;
(g) the admission of any additional Members;
(h) the selection of and change of accountants, auditors and/or
legal counsel for the Company; and
(i) significant tax elections required or permitted pursuant to
the Code and/or applicable law of any taxing authority to
which the Company is subject.
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3.3. Contact Representatives. Each Member shall designate and appoint one
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or more individuals who shall be the contact person (a "Contact Representative")
for such Member and each of whom shall be authorized by such Member 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 Member. BOP
hereby designates and appoints Xxxxxxx X. Xxxxxxx, Xx. and Xxxxxx X. Xxxxxxx as
its initial Contact Representatives, and Gender Road hereby designates and
appoints Xxxxx X. Xxxxxx as its initial Contact Representative. A Member
appointing an individual as a Contact Representative may, at any time, appoint
and designate a new Contact Representative, provided that such Member shall
notify the other Member of such new appointment or designation within a
reasonable time after such appointment.
3.4. Designated Representatives.
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3.4.1. The Members acknowledge and agree that while Company decisions
generally shall be made by the Members, the daily operation and management of
the Company shall, subject to the limitations set forth in this Section 3.4 or a
Collateral Agreement, be delegated to the Administrative Officer, who initially
shall be Xxxxx X. Xxxxxx. In addition to the day-to-day management of the
Company, the Administrative Officer shall be responsible for the preparation of
quarterly and annual financial statements as set forth in Sections 11.5 and 11.6
hereof.
3.4.2. The Members also acknowledge and agree that certain functions
of the Company shall, subject to the limitations set forth in this Section 3.4
or a Collateral Agreement, be delegated to the employees or agents of Gender
Road (any such designated employees or agents of Gender Road being referred to
herein as a "Designated Representative"), provided that Gender Road shall keep
BOP apprised of any such employees or agents and their activities.
3.4.3. The Administrative Officer and any Designated Representative
appointed hereunder shall have the specific power and authority set forth in
this Agreement, in an employment agreement, if any, in a Collateral Agreement
and as otherwise delegated to such Administrative Officer and/or Designated
Representative by the Members; provided that the Administrative Officer and any
Designated Representative shall operate the Company subject to (i) basic policy
decisions adopted by the Members, (ii) specific limitations and requirements of
this Agreement and any other agreement executed by and between the
Administrative Officer and the Company and/or a Designated Representative and
the Company, as the case may be, and (iii) limitations imposed under the Act.
Notwithstanding any provision in this Agreement or any other agreement to the
contrary, neither the Administrative Officer nor any Designated Representative
shall have the authority, either individually or acting in conjunction with each
other or other Designated Representatives, to do any act, make any decision, or
engage in any transaction which requires the approval of the Members as set
forth in Section 3.2 hereof.
3.5. Fees, Compensation and Reimbursement of Expenses. None of the
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Administrative Officer or any Designated Representative shall be entitled to
fees, compensation or reimbursement
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of expenses by the Company, except as otherwise specifically set forth in a
Collateral Agreement, an employment agreement or other agreement between the
Company and such Person.
ARTICLE 4
THE MEMBERS
4.1. Meeting of Members. The Members shall hold meetings on a quarterly
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basis or such other periodic basis as the Members may agree at such location as
the Members may agree. Any Member may call for a meeting by giving ten (10)
days prior written notice to the other Member, which notice shall specify the
purpose of the meeting; provided that the ten (10) days notice period may be
waived by the other Member.
4.2. Limitation of Liability. Each Member's liability for the debts,
-----------------------
obligations and liabilities of the Company shall be limited to the maximum
extent permitted by the Act and other applicable law.
4.3. Company Records. Each Member shall have access to all books and
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records of the Company and to the Company's officers, attorneys and auditors for
any reasonable business purpose and shall be entitled to make copies of such
books and records at the Company's expense.
4.4. Duties of Members. Each Member shall have a fiduciary duty to the
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other Member to take into account the best interests of the Company when
exercising its rights under this Agreement, provided that it shall not be a
breach of any Member's fiduciary duty to exercise any of its rights under this
Agreement.
4.5. Activities of Members. Except as otherwise expressly provided in this
---------------------
Agreement, no Member or Affiliate of any Member shall be obligated to devote
its, his or their exclusive time and effort to the business or affairs of the
Company or the development of the Pad Sites, but each Member shall devote
sufficient time, effort and resources (including employees or agents of such
Member) to the business or affairs of the Company as in its judgment is
reasonably required to fulfill its obligations and role in the Company's
businesses and to promote the purposes of the Company; provided, however, that
Gender Road shall employ and maintain such employees and agents as shall be
necessary to fully perform and undertake the daily operation of the Company as
set forth in Section 3.4 hereof.
4.6. Independent Activities of Members. Except as otherwise expressly
---------------------------------
provided in or limited by this Agreement or a Collateral Agreement, each Member
(acting on its own behalf) and its Affiliates may, notwithstanding this
Agreement, engage in any activities it may choose, whether the same operate the
same type of business as the Company or are competitive with the Company, and
neither this Agreement nor any activity undertaken pursuant hereto shall prevent
any Member
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or its Affiliates from engaging in such activities or require any Member to
permit the Company or any other Member to participate in such activity.
4.7. Dealings with the Company.
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4.7.1. Except as otherwise expressly provided in or limited by this
Agreement or a Collateral Agreement, no Member or Affiliate of any Member shall
contract and deal with the Company as an independent contractor, employee or as
an agent for others, or receive fees or other compensation from such others or
the Company, including without limitation, brokerage fees or commission fees, or
any other payment on account of the leasing, operations, management, financing
or refinancing in connection with the Pad Sites or the development thereof,
unless and until such Member or the Affiliate of such Member first provides the
other Member with the terms of such proposed dealings and obtains the prior
written consent to such dealing, contract or undertaking from the other Member.
4.7.2. Notwithstanding Section 4.7.1 hereof, each Member acknowledges
and agrees that, in connection with the transactions contemplated by this
Agreement and the future development of the Pad Sites, the Company shall execute
a leasing and management agreement pursuant to which Gender Road or its
Affiliates shall perform certain functions set forth in such agreement and shall
receive a fee for the performance of such functions as set forth therein.
4.8. Covenant not to Withdraw. Notwithstanding any provision in the Act,
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each Member hereby covenants and agrees that the Member has entered into this
Agreement and formed the Company based on its expectation that each Member will
continue as a Member of the Company and carry out the duties and obligations
undertaken by it in this Agreement and the Collateral Agreements in
contemplation of the development of the Pad Sites and that, except as otherwise
expressly required or permitted hereby, each Member hereby covenants and agrees
not to, without the consent of the other Member (a) take any action to file a
certificate of dissolution or its equivalent with respect to such Member, (b)
take any action that would cause the voluntary Bankruptcy of such Member, (c)
withdraw or attempt to withdraw from the Company, unless pursuant to a Permitted
Transfer in accordance with Section 7.2 hereof, (d) Transfer all or any portion
of its Interest in the Company except as otherwise provided in Article 7 hereof,
or (e) demand a return of such Member's Capital Contribution or Capital Account
prior to the dissolution and liquidation of the Company pursuant to Section 12.1
hereof.
4.9. Additional Members. Additional Members shall be admitted to the
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Company upon the unanimous agreement of the Members; provided that such Members
also shall unanimously agree on the capital contributions, if any, to be made by
such additional Member, the Interests in the Company to which such Member shall
be entitled and the expected duties and obligations of such additional Member.
Notwithstanding this Section 4.9, no Person shall be admitted to the Company as
an additional Member unless such Person executes a counterpart to this Agreement
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thereby agreeing to be bound by the terms and provisions of this Agreement as if
he, she or it were an original Member.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of Members. By execution and delivery
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of this Agreement, each Member hereby makes to the other Member the
representations and warranties set forth in this Section 5.1 to the extent
applicable to such Member. 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 "Member" shall include such Member's Affiliates that
are intended to undertake or perform any services or activities in connection
with the Company or the future development of the Pad Sites, as contemplated at
this time, and any representations and warranties made by a Member hereunder
shall be deemed to include representations and warranties, as appropriate, with
respect to such Affiliates.
5.1.1.Organization. Each Member is a limited or general partnership,
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as applicable, duly organized and formed, validly existing and in good standing
under the laws of the State of Delaware 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 Member is duly
qualified to do business and is in good standing as a limited partnership in
each and every 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 and each of the Collateral
Agreements.
5.1.2. Proper Authorization and Power. Each Member has the requisite
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power and authority to execute and deliver this Agreement and each of the
Collateral Agreements 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 partnership
action, and no other action on the part of the Member or any Person is necessary
to authorize the execution, delivery and performance of this Agreement or any of
the Collateral Agreements, or the consummation of the transactions contemplated
hereby or thereby. This Agreement and each of the Collateral Agreements
constitutes a legal, valid and binding obligation of such Member enforceable
against it in accordance with their respective terms. No consent, waiver,
approval, license or authorization of, or filing, registration or qualification
with, or notice to, any governmental unit or any other person is required to be
made, obtained or given by the Member or any Person in connection with the
execution, delivery and performance of this Agreement or any Collateral Document
that has not been heretofore obtained.
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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 Member of the transactions contemplated hereby or thereby
does not and will not (i) require any filing or registration with, or consent,
authorization, approval or permit of, any governmental or regulatory authority
and (ii) violate, conflict with, contravene, result in the breach of, or
constitute a default under, accelerate the performance required by, or require
the consent, authorization, or approval under (a) any terms, conditions or
provisions of the certificate of Limited Partnership of such Member, the
partnership agreement of such Member, or any material agreement or instrument to
which such Member is a party or by which such Member is made bound or to which
any of its properties or assets is subject, (b) any of the terms, conditions or
provisions of any law, regulation, order, writ, injunction, decree or
determination of any court or governmental or regulatory agency applicable to
such Member, (c) any of the terms, conditions or provisions of any indenture,
mortgage, lease agreement or instrument to which such Member is a party or may
be bound or to which its properties or assets is subject.
5.1.4. Litigation. There are no actions, suits, proceedings, or
----------
investigations pending, or to the knowledge of such Member threatened against or
affecting such Member 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 Member'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 Member.
5.1.5. Investment Representations
--------------------------
(a) Such Member's Interest in the Company 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 Member is aware that Interests in the Company have not
been registered under the Securities Act or applicable state securities laws or
the "Blue Sky" laws of any state, that Interests in the Company cannot be
distributed, sold, pledged or otherwise disposed of unless they are registered
thereunder or unless, in the opinion of counsel satisfactory to the Company, an
exemption from such registration is available, and that the Company has no
intention of so registering Interests in the Company thereunder and is under no
obligation to do so and that accordingly the Member is able and is prepared to
bear the economic risk that may be associated with respect to its Interest in
the Company;
(c) Such Member 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 Company 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 Members to acquire Interests; and
11
(d) Such Member 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 Member shall have complied with all
provisions of the Securities Act and all applicable state securities laws or at
the Company's request, the Member 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.
ARTICLE 6
INDEMNIFICATION
6.1. Liability. No Member or any Affiliate of any Member or any Designated
---------
Representative, if appointed pursuant to Section 3.4 hereof, shall be liable,
responsible, accountable in damages or otherwise to the Company or any Member
for any act or failure to act hereunder in connection with the Company and its
business, the development of the Pad Sites or in the operation and maintenance
of the Pad Sites once developed, 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 Member's liability or obligations under any Collateral
Agreement except to the extent expressly set forth therein.
6.2. Company Indemnification. To the fullest extent permitted by law, each
-----------------------
Member and each Affiliate of any Member, as well as each Designated
Representative appointed pursuant to Section 3.4 (each of the foregoing being
referred to herein as an "Indemnitee", and each Affiliate to which each such
Indemnitee is related being referred to herein as such Indemnitee's "Related
Person") shall be indemnified, defended and held harmless by the Company to the
fullest extent permitted by the Act for, 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 Company or the, the development of the Pad
Sites or the exercise by the Indemnitee of any authority conferred on it, him or
them hereunder or the performance by the Indemnitee of any of its, his or their
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, he or its or his Related Person (or the Company as the
result of an act or omission of such Related Person) has been adjudged liable
for fraud, gross negligence or willful misconduct; (ii) based upon or relating
to a material breach by it, him or his or its Related Person 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, him or his or its Related Person by another Member or such other Member's
Related Person that is not related to the Indemnitee's actions under this
Agreement. Notwithstanding this Section 6.2, no Member shall be entitled to
indemnification by the Company when or if acting in a capacity with
12
the Company as other than a Member, in which case, such right to indemnification
shall be governed by an agreement, if any, between the Company and the Member.
6.3. Member Indemnification. Each Member (the "Indemnitor Member") shall
----------------------
indemnify, defend and hold harmless the other Member (the "Indemnitee Member")
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 Member or any of its
Affiliates or Related Persons (or the Company as the result of an act or
omission of any of the same) has been adjudged liable; (ii) material breach by
the Indemnitor Member of any term or provision of this Agreement or any
Collateral Agreement; and (iii) a material breach or inaccuracy in any
representation or warranty made by such Indemnitor Member in this Agreement or
any Collateral Agreement.
6.4. Gender Road Indemnification. Notwithstanding any provision in this
---------------------------
Agreement to the contrary and in addition to the indemnification set forth in
Section 6.3 hereof, Gender Road shall indemnify, defend and hold wholly
harmless BOP, the Company and Brandywine Realty Trust from and against any and
all Additional Delaware Realty Transfer Taxes (as defined in this Section 6.4)
relating to or arising out of the Company's obligation to pay Delaware realty
transfer taxes due in connection with the conveyance of the Pad Sites to the
Company pursuant to the Pad Sites Acquisition Agreement. For purposes of this
Section 6.4, "Additional Delaware Realty Transfer Taxes" shall mean any Delaware
realty transfer taxes (in excess of the amount of Delaware Realty Transfer Taxes
paid by the Company upon the closing of the Pad Sites Acquisition) that are or
become due and payable by the Company as a result of the conveyance of the Pad
Sites to the Company pursuant to the Pad Sites Acquisition Agreement, including
any and all penalties and interests imposed thereon; provided, however, that
Additional Delaware Realty Transfer Taxes shall not include any Delaware Realty
Transfer Taxes imposed on the Company in connection with the construction and
development of the Pad Sites as a result of obtaining a building permit or a
certificate of occupancy in connection with the development of the Pad Sites.
ARTICLE 7
TRANSFERS
7.1. Transfer Restrictions. Except as otherwise provided in this
---------------------
Agreement, no Member 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 Member consents to
the Transfer and the Transferor 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 Member hereby acknowledges the reasonableness of the
restrictions on Transfer imposed by this Agreement in
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view of the Company's purpose and the relationship of the Members. Accordingly,
the restrictions on Transfer set forth herein shall be specifically enforceable.
7.2. Permitted Transfers. Notwithstanding Section 7.1, a Member may
-------------------
Transfer all or any portion of its Interest in the Company to a (i) another
Member, and (ii) to one of its Affiliates (in each case, a "Permitted
Transfer"), provided that a Permitted Transfer to an Affiliate shall 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 Transferor with respect to the transferred
Interest:
7.3.1. all agreements, articles, minutes, 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 Member deems
necessary to make the Transferee a substitute Member of the Company, 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
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 Member, the
non-transferring Member shall have received such assurances as may be necessary
or appropriate in the opinion of counsel to the Company to confirm that Transfer
would not (i) violate the Securities Act or any state securities laws or cause
the Company to register thereunder; (ii) require the Company to register as an
investment company under the Investment Company Act; (iii) cause the Company to
be treated as other than a partnership for federal income tax purposes; and (iv)
cause the termination of the Company for federal income tax purposes;
7.3.3. unless otherwise waived by the non-transferring Member, the
non-transferring Member 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, however, that, unless expressly agreed by the
non-transferring Member, 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 Company and the
non-transferring Member 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
14
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
Member.
7.5. Conversion of Gender Road. Notwithstanding the provisions of this
-------------------------
Article 7, the Members acknowledge that subsequent to the closing of the Pad
Sites Acquisition, Gender Road will convert from a Delaware general partnership
to a Delaware limited liability company pursuant to and in accordance with
Delaware law; provided that Gender Road shall obtain the prior written consent
of BOP, which consent shall not be unreasonably withheld, as to the conversion,
and provided, further, that all of the representations and warranties set forth
in Section 5.1 hereof (other than Section 5.1.1) and made by Gender Road shall
remain true and correct with respect to Gender Road notwithstanding the
conversion.
ARTICLE 8
BUY-SELL PROVISIONS
8.1. Mutual Disagreement. In the event of a Mutual Disagreement, the
-------------------
Members 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
failure the Members to mutually agree upon a Major Action to be undertaken by
the Company, which failure remains unresolved for a period ending on the
twentieth (20th) day following the submission of a written notice by one Member
to the other Member stating that such failure to agree on a Major Action has
occurred (the "Election Day").
8.2. Mandatory Buy-Sell of Interests.
-------------------------------
8.2.1. In the event of a Mutual Disagreement, a Member (the "Electing
Member") may deliver to the other Member (the "Notice Member") a written notice
(the "Election Notice"), which Election Notice shall include an irrevocable
offer by the Electing Member either (i) to sell all but not less than all of the
Electing Member's Interest in the Company to the Notice Member (the "Offer to
Sell"), or (ii) to purchase all, but not less than all, of the Notice Member's
Interest in the Company (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 Company to be used in computing the Net Equity Value of a Member's
Interests. The price at which a Member's Interest may be purchased or sold
under this Section 8.2 (the "Buy-Sell Price") is the Net Equity Value of a
Member's Interest, determined as of the Election Day.
8.2.2. For a period ending on the forty-fifth (45th) day following the
Election Day (the "Election Period"), the Notice Member shall have the right to
accept either the Offer to Sell or the Offer to Purchase. Upon acceptance by
the Notice Member of one of the Offers, the
15
Electing Member and the Notice Member 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 Member 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 Member
shall be deemed to have made to the Electing Member an offer (the
"Counter-Offer") to sell all, but not less than all, of the Notice Member's
Interest in the Company for the Buy-Sell Price. Pursuant to the Counter-Offer,
the Electing Member shall be obligated to purchase, and the Notice Member shall
be required to sell, all but not less than all of the Notice Member's Interest
in the Company at the Buy-Sell Price.
8.2.4. The Member purchasing the Interests 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 Member" and the Member selling such
Interests as the "Selling Member."
8.3. Closing of Purchase or Sale. The closing of the purchase or sale
under Section 8.2 shall occur on a date and time and at a place mutually
agreeable to the Electing Member and the Notice Member, 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 Members cannot agree on the
place of the closing, the closing shall take place at the law offices of Pepper,
Xxxxxxxx & Xxxxxxx LLP at the address set forth in Section 13.2.1 hereof. At
the closing, the Purchasing Member shall pay to the Selling Member, by cash or
other immediately available funds, the Buy-Sell Price, and the Selling Member
shall deliver to the Purchasing Member good title, free and clear of any liens,
claims, encumbrances, security interests or options of its Interests in the
Company, and the Purchasing Member shall agree to indemnify and hold harmless
the Selling Member from any and all claims arising in connection with said
Interests that accrue after the date of the closing. At the closing, the
Purchasing Member and the Selling Member 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 definitions set forth in this Section 8.4.
(a) "Gross Value of the Company" shall be the fair market value
of the assets of the Company as of the Election Day as determined by the
Electing Member and set forth in the Election Notice.
(b) "Net Equity Value of a Member's Interest" shall be, as of any
day, the amount that would be distributed to such Member in liquidation of the
Company pursuant to Section 12.3 hereof if and assuming that the following first
occurred: (i) the assets of the Company were sold for the Gross Value of the
Company, and (ii) the Company paid all apportionments and costs customarily made
and/or paid in the closing of a real estate transaction in Delaware (iii) the
Company paid its accrued, but unpaid liabilities and established reserves for
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any contingent liabilities pursuant to Section 12.3.3; provided that the Net
Equity Value of a Member's Interest shall be adjusted to reflect payment of
(a) the BOP Unreturned Preferred Capital, (b) the accrued and unpaid BOP
Preferred Return; (c) Gender Road's preferred return on Additional Capital
Contributions, if any, as provided in Section 2.3.5 hereof, and (d) the
return of Gender Road's Additional Capital Contribution, if any, as provided
in Section 2.3.5 hereof.
ARTICLE 9
ALLOCATIONS OF PROFITS AND LOSSES
9.1. Allocations of Profits. After giving effect to the special
allocations set forth in Section 9.3 hereof, Profits for any Fiscal Year shall
be allocated to the Members in the following order and priority:
9.1.1. First, to the Members until the cumulative Profits allocated
pursuant to this Section 9.1.1 are equal to the cumulative Losses allocated to
the Members pursuant to Section 9.2. hereof for all prior periods (without
duplication) in reverse order to which the prior Losses were allocated.
9.1.2. Second, one hundred percent (100%) to BOP in respect of the BOP
Preferred Return to the extent of the excess, if any, of (i) the cumulative
distributions received by BOP in respect of the BOP Preferred Return pursuant to
Sections 10.2.1 and 12.3.4 from the Preferred Capital Date to the end of the
Fiscal Year, over (ii) the cumulative amounts allocated to BOP pursuant to this
Section 9.1.2 for all prior Fiscal Years.
9.1.3. Thereafter, to the Members in accordance with their Percentage
Interests.
9.1.4. The foregoing provisions of Section 9.1 shall be deemed amended
as appropriate to take into consideration the situation whereby Gender Road has
been paid a preferred return on its Additional Capital Contribution, if any,
pursuant to Section 2.3.5 hereof, such that the allocations hereunder reflect
the distribution of cash under Section 10.2 hereof.
9.2. Allocation of Losses. After giving effect to the special allocations
set forth in Section 9.3 hereof, Losses for any Fiscal Year shall be allocated
to the Members in the following order and priority:
9.2.1. First, to the extent any Profits have been allocated pursuant
to Section 9.1.3 hereof, Losses shall be allocated to offset any Profits
allocated pursuant to Section 9.1.3 in an amount up to the amount of Profits
previously allocated under Section 9.1.3. To the extent Profits are offset
pursuant to this Section 9.2.1, such allocations shall be disregarded for
purposes of computing subsequent allocations pursuant to this Section 9.2.1.
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9.2.2. Next, to the Members in accordance with their Percentage
Interests.
9.2.3. Notwithstanding Section 9.2.1 and 9.2.2, no amount of Loss
shall be allocated to a Member to the extent that such allocation would cause or
increase a deficit balance in such Member's Capital Account, as adjusted.
Rather, such amount of Loss shall be allocated to the Member with positive
Capital Account, provided, however, that if no Member has a positive Capital
Account at the time of such allocation, Losses shall be allocated to the Members
in accordance with Section 9.2.2, provided further, that to the extent that
Losses have been allocated to a Member pursuant to this Section 9.2.3, then,
notwithstanding Section 9.1 hereof, subsequent Profits shall be allocated to
that Member under this Section 9.2.3 until the aggregate Profits allocated to
such Member hereunder shall be equal to the aggregate Losses allocated under
this Section 9.2.3 for all prior periods.
9.3. Special Allocations. Notwithstanding anything in this Agreement to
the contrary, the following special allocations shall be made as follows:
9.3.1. All Nonrecourse Deductions for each Fiscal year shall be
allocated to the Members in proportion to their respective Percentage
Interests. For purposes of Treasury Regulation Section 1.752-3, all excess
nonrecourse liabilities of the Company will be allocated between the Members
in proportion to their respective Percentage Interests.
9.3.2.Any items of income, loss, gain or deduction that are
attributable to Member Nonrecourse Debt shall be allocated to those Members who
bear the economic risk of loss for such debt in accordance with Treasury
Regulation Section 1.704-2(i).
9.3.3. If there is a net decrease in Minimum Gain for a taxable year
of the Company, 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
Member 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
Member'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
9.3.3 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 Member 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 Member's
Capital Account, then, items of Company income and gain shall be specially
allocated to such Member 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
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allocated and the Profits, Losses and all other items allocated to each Member
shall, to the extent possible, be equal to the net amount that would have been
allocated to each such Member 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.
9.4.Curative Allocations. The allocations set forth in Sections 9.2.3 and
9.3 (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 Company income, gain, loss, deduction or credit among
the Members 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 Member shall be equal to the net amount that would have been
allocated to each such Member if the Regulatory Allocations had not occurred.
9.5. Allocations for Tax Purposes. In the event the book value of any
Company 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 Members 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 Members or, if the
Members so elect, the Company's accountants. Allocations made under this
Section 9.5 are made solely for federal, state or local income tax purposes and
shall not affect, or any way be taken into account in computing, any Member'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. Distributions Generally. Except as otherwise provided in Section
12.3 (relating to liquidating distributions), Available Cash Flow, if any, shall
be distributed as mutually determined by the Members, except that any
distributions to be made under Section 10.2.1 hereof to BOP in respect of the
BOP Preferred Return shall be made at the end of the first quarter in which the
Company has Available Cash Flow and thereafter shall be payable quarterly to the
extent of Available Cash Flow.
10.2. Distributions of Available Cash Flow. Except as otherwise provided
in Sections 2.3.5 (in connection with Gender Road's preferred return on
Additional Capital Contributions, if
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any) and 12.3 (relating to liquidating distributions) and subject to Section
10.1 hereof, distributions of Available Cash Flow shall be made in the following
order and priority:
10.2.1. First, one hundred percent (100%) to BOP in respect of the BOP
Preferred Return until BOP has received an amount equal to the excess, if any,
of (i) the BOP Preferred Return from the Preferred Capital Date to the date of
such distribution, over (ii) the sum of all prior distributions to BOP in
respect of the BOP Preferred Return pursuant to this Section 10.2.1.
10.2.2. Second, one hundred percent (100%) to BOP until the BOP
Unreturned Preferred Capital has been reduced to zero;
10.2.3. Thereafter, to the Members in accordance with their Percentage
Interests.
10.3. Authority to Withhold. Upon the written advice of the Company's
legal tax counsel, the Company shall be entitled to collect, withhold and make
payments on behalf of or with respect to any Member's allocable share of Company
income or gain, in amounts required to discharge any obligation of the Company
to withhold or make payments to any governmental authority with respect to any
federal, state, and local tax liability of such Member arising as a result of
such Member's Interest in the Company. 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 Member and shall reduce, on a dollar for dollar
basis, amounts otherwise payable of distributable to such Member under this
Agreement. Each Member hereby agrees to indemnify and hold harmless the
Company 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 Member.
ARTICLE 11
BOOKS, RECORDS, REPORTS AND ACCOUNTING
11.1. Books and Records. The Company 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
Company and the status of the development of the Pad Sites and financial
condition of the Company, 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 Company; (b) promptly
after becoming available, a copy of the Company's federal, state and local
income tax returns for each year; (c) a copy of this Agreement and Certificate
of Formation and all amendments thereto, together with executed copies of any
written powers of attorney pursuant to which this Agreement and the Certificate
of Formation and all amendments thereto have been executed; and (d) other
information regarding the affairs of the Company as is just and reasonable.
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11.2. Company's Accountants. The Members hereby select and appoint Xxxxxx
Xxxxxxxx LLP to be the Company's independent accountants.
11.3. Fiscal Year. The Fiscal Year of the Company shall be the calendar
year or such other accounting period as shall be required under the Code or as
may be determined by the Company's independent accountants.
11.4. Accounting Period. Unless otherwise determined by the Company's
independent accountants to be in the best interests of the Company, the Company
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.
11.5. Annual Reports. Within forty-five (45) days after the close of each
Fiscal Year, the Administrative Officer shall cause the Company to have prepared
and furnished to each Member, audited financial statements, presented in
accordance with generally accepted accounting principles, including without
limitation, copies of (i) the balance sheet of the Company, (ii) the Company's
income statement, (iii) a statement of the Company's cash flow, (iv) a statement
of the Member's Capital Accounts and Preferred Capital and (v) a statement of
source and application of funds each as of the last day of the Fiscal Year.
11.6. Quarterly Reports. Within twenty (20) days after the close of each
fiscal quarter, the Administrative Officer shall cause the Company to prepare
and furnish to each Member quarterly reports of (i) the Company's operations,
(ii) quarterly unaudited balance sheets and income statements, and (iii)
quarterly statements of cash flow.
11.7. Preparation of Tax Returns. Within sixty (60) days after the end of
each Fiscal Year, the Administrative Officer shall cause the Company to arrange
for the preparation and timely filing of all tax returns of the Company for
federal, state and local income tax purposes and shall cause the Company to be
furnish to each Member the tax information reasonably required for federal and
state income tax reporting purposes.
11.8. Tax Controversies. The Members hereby appoint and designate BOP as
the initial Tax Matters Member, and BOP shall authorize and require one of its
officers (the "Tax Matters Representative") to represent the Company (at the
Company's expense) in connection with all examinations of the Company's affairs
by tax authorities, including resulting administrative and judicial proceedings,
and to expend Company funds for professional services and costs associated
therewith. Each Member 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 Member upon the receipt of any
correspondence from any federal, state or local tax authorities relating to any
examination of the Company's affairs.
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11.9. 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 Company Property pursuant to Code Section 754, 734(b) and 743(b), or
comparable state or local law, in connection with Transfers of Interests in the
Company; and (ii) to extend the statute of limitations fro assessment of tax
deficiencies against the Company and the Members with respect to adjustments to
the Companies federal, state or local tax returns, shall be made by the Members.
ARTICLE 12
DISSOLUTION AND LIQUIDATION
12.1. Dissolution. The Company shall dissolve upon the earliest to occur
of any of the following:
(a) the affirmative vote of the Members;
(b) upon the sale of all of the assets of the Company and the
repayment and satisfaction in full of any financing undertaken by the Company in
respect thereof;
(c) an entry of a decree of judicial dissolution pursuant to the
Act; or
(d) December 31, 2050.
12.2. Bankruptcy of a Member. The Bankruptcy of a Member shall not cause a
dissolution of the Company under the Act. Upon the Bankruptcy of a Member, the
non-Bankrupt Member shall have the sole right to manage the Company, and the
Bankrupt Member shall not have any right to participate in the management or
operation of the Company. Rather, the rights of the Bankrupt Member shall be
limited to the right to share in the profits and losses of the Company to the
extent provided in this Agreement.
12.3. Liquidation. Upon the dissolution of the Company, the Company shall
cease to carry on its business, except insofar as may be necessary for the
winding up of its business, but its separate existence shall continue until the
Certificate of Cancellation has been filed as required by the Act. Upon
dissolution of the Company, the Members shall designate a Person to act as the
liquidating trustee (the "Liquidating Trustee") and the business and affairs of
the Company shall be wound up and, subject to Section 12.4 hereof, the Company
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 Company
(other than those to Members) in the order of priority provided by law.
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12.3.2. To the payment of the expenses of liquidation of the Company
in the order of priority provided by law, provided that the Company shall first
pay, to the extent permitted by law, liabilities or debts owed to Members.
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 Company arising out of or in connection with the Company'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 Members), 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 and, to the extent
applicable, Section 2.3.5.
12.4. No Liquidating Distributions in Kind. The Liquidating Trustee shall
not distribute, and no Member may demand or receive, property other than cash in
return for a Member's contributions, loans or advances, unless the Members
unanimously agree to a distribution in kind to any Member; provided, however,
that all Members receive, whether in kind or in cash and whether from the
Company or the Member receiving an in kind distribution, the amount which such
Member is entitled to receive under Section 10.2 hereof.
12.5. Deficit Capital Account. Upon liquidation, each Member shall look
solely to the assets of the Company for the return of that Member's Capital
Contribution. No Member shall be personally liable for a deficit Capital
Account balance of that Member, it being expressly understood that the
distribution of liquidation proceeds shall be made solely from existing Company
assets in the order and priority set forth in Section 12.3 hereof, and to the
extent applicable 12.4.
12.6. Certificate of Cancellation. Following dissolution and liquidation
of the Company, when all debts, liabilities and obligations have been paid,
satisfied, compromised or otherwise discharged, or adequate provisions have been
made therefore, and all of the remaining property and assets have been
distributed to Members, the Liquidating Trustee shall file a Certificate of
Cancellation as required by the Act.
12.7. Non-Recourse. No recourse shall be had for any of the obligations of
BOP hereunder or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee of
Brandywine Realty Trust, whether by virtue of any statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, all of such liability
being expressly waived and released by Gender Road.
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ARTICLE 13
MISCELLANEOUS
13.1. Amendments. This Agreement may not be amended, modified or revised
in any manner without the prior written consent of each of the Members.
13.2. Notice.
13.2.1. 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 Member 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, to such
Member's address (or to such party's telex, TWX, telecopier, or telephone
number) as follows:
If to BOP:
c/o Brandywine Realty Trust
Newtown Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Xx., Chairman
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 or 5622
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esquire
Pepper, Xxxxxxxx & Xxxxxxx LLP
3000 Two Xxxxx Xxxxxx
Xxxxxxxxxx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (215) 981- 4750
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If to Gender Road:
Gender Road Joint Venture
c/o The Commonwealth Group
00 Xxxx'x Xxx
Xxx Xxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (302) 323- 9703
with a copy to:
Xxxxxxx X. Xxx, Esquire
Saul, Ewing, Xxxxxx & Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
13.2.2. 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, or (iii) one (1) business day after being deposited in the
United States mail or with a telegraph office or courier service for delivery if
notice is sent by telegraph, or courier services.
13.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and, to the maximum extent
possible, in such manner as to comply with all of the terms and conditions of
the Act.
13.4. 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.
13.5. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the Members and their respective successors and, where permitted,
their assigns and Affiliates.
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13.6. 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.
13.7. 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.
13.8. Time is of Essence. Time is of the essence in the performance of
each and every obligation herein imposed.
13.9. Further Assurances. Each Member, upon the request of the other
Member, 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.
13.10. Incorporation by Reference. Any reference to an Exhibit or Schedule
or Attachment herein, is hereby incorporated by reference in this Agreement as
if such Exhibit, Schedule or Attachment was set out in full in the text of this
Agreement.
13.11. 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.
13.12. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes 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.
13.13. Counterparts. This Agreement may be signed in any number of
counterparts. with the same effect as if all of the Members 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.
13.14.Execution of Certificate of Formation. The Members acknowledge and
agree that Xxxxxxxx X. Xxxx, Esquire of Pepper, Xxxxxxxx & Xxxxxxx LLP has the
power and authority to execute and file the Certificate of Formation with the
Secretary of State of the State of Delaware on behalf of the Members in order to
form the Company under the Act.
[SPACE INTENTIONALLY LEFT BLANK]
-26-
IN WITNESS WHEREOF, the parties have executed this Operating Agreement
of CHRISTIANA CENTER OPERATING COMPANY II LLC effective as of the day and year
first above written.
MEMBERS:
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership, by
Brandywine Realty Trust, a Maryland Real
Estate Investment Trust, its sole general partner
By:/S/ Xxxxxx X. Xxxxxxx, President & CEO
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
GENDER ROAD JOINT VENTURE,
a Delaware partnership
By:______________________________
Xxxxx X. Xxxxxx, Managing Venturer,
Hereunto Duly Authorized
[END OF EXECUTIONS]
-27-
EXHIBIT A
TO
OPERATING AGREEMENT OF
CHRISTIANA CENTER OPERATING COMPANY II LLC
DEFINITIONS OF TERMS
The following terms used in this Agreement shall have the meanings
described below:
"Act" shall mean the Delaware Limited Liability Company Act, 6 Del. C.
Section 18-101 et. seq., as amended from time to time.
"Additional Capital Contributions" shall mean, with respect to a
Member, any additional contributions to the capital of the Company pursuant to
Section 2.3 hereof.
"Administrative Officer" shall mean the Person designated as such
pursuant to Section 3.4 hereof to undertake the day to day operation of the
Company as provided in Section 3.4 hereof.
"Advisor" shall have the meaning set forth in Section 2.3 hereof.
"Affiliate" shall mean a Person who, with respect to any Member: (a)
directly or indirectly controls, is controlled by or is under common control
with such Member; (b) owns or controls 10 percent (10%) or more of the
outstanding voting securities of such Member; or (c) is an officer, director,
manager, trustee, partner or member of such Member.
"Agreement" means this operating agreement, as it may be amended,
restated or supplemented from time to time.
"Available Cash Flow" shall mean and consist of all cash proceeds
received by the Company (other than Capital Contributions and Additional
Capital Contributions), including, but not limited to, proceeds realized by the
Company upon any financing or refinancing, proceeds generated by Company
operations, and proceeds derived from sales or other dispositions of Company
property, less the portion thereof used to pay or establish reserves for the
Company's working capital needs, expenses, fees, principal and interest payments
on Company debt and contingencies, all as determined by the Members.
"Bankruptcy" means, with respect to a Member, 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 Member 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 Member in any bankruptcy
proceeding; (f) the filing of an
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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 Member'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.
"Buy-Sell Price" shall have the meaning set forth in Section 8.2.1
hereof.
"BOP Preferred Capital" shall mean the Capital Contribution made by
BOP pursuant to Section 2.1 and all Additional Capital Contributions made by
BOP pursuant to Section 2.3 hereof, which shall provide the basis upon which the
BOP Preferred Return shall be calculated.
"BOP Preferred Return" shall mean the right given to BOP 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 BOP Preferred Return is being determined,
cumulative to the extent not distributed pursuant to Section 10.2.1 hereof, but
not compounded), of the average daily balance of the BOP Unreturned Preferred
Capital from time to time during the period to which BOP Preferred Return
relates. The calculation of the BOP Preferred Return shall commence upon the
Preferred Capital Date and shall be payable as provided in this Agreement.
"BOP Unreturned Preferred Capital" shall mean the BOP Preferred
Capital reduced by cash distributions made pursuant to Sections 10.2.2 and 12.3
hereof.
"Capital Account" shall mean the accounting record of each Member's
capital interest in the Company maintained pursuant to and in accordance with
Section 2.4 hereof.
"Capital Contribution" shall mean, with respect to each Member, the
amount contributed by such Member to the Capital of the Company, if any, as set
forth in Sections 2.1 and 2.2 hereof, as applicable.
"Certificate of Formation" shall mean the certificate of formation of
the Company, as amended or restated from time to time, filed in the Office of
the Secretary of State of the State of Delaware in accordance with the Act.
"Certificate of Cancellation" shall mean the certificate of
cancellation filed by the Liquidating Trustee under the Act at such time as set
forth in Section 12.6 hereof.
"Code" shall mean the Internal Revenue Code of 1986 (or successor
thereto), as amended from time to time.
A-2
"Collateral Agreements" shall mean each of the documents, agreements
and instruments, including without limitation, the Pad Sites Agreement of Sale,
executed, delivered or performed or to be executed, delivered or performed in
connection with, or as a condition of, the consummation of the transactions
provided in or contemplated by this Agreement, including without limitation,
those documents, agreements and instruments in connection with the development
of the Pad Sites to which the Company is a party.
"Company" means the limited liability company which is the subject of
this Agreement, as such limited liability company may from time to time be
constituted.
"Contact Representative" shall have the meaning set forth in Section
3.3 hereof.
"Defaulting Member" shall have the meaning set forth in Section 2.3
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 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 Representatives" shall have the meaning set forth in
Section 3.4 hereof.
"Electing Member" 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 8.2.3
hereof.
"Fiscal Year" means the year on which the accounting and federal
income tax records of the Company are kept.
"Gross Asset Value" shall mean with respect to any asset of the
Company, the asset's adjusted basis for federal income tax purposes, except that
(i) where an asset has been revalued on the books of the Company the Gross Asset
Value shall be adjusted to reflect such revaluation, (ii) where an asset has
been contributed to the Company by a Member, the Gross Asset Value shall be its
fair market value as established by the Members and (iii) the Gross Asset Value
of Company 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 Company" shall have the meaning set forth in
Section 8.4 hereof.
A-3
"Indemnitee" shall have the meaning as set forth in Section 6.2
hereof.
"Indemnitee Member" shall have the meaning as set forth in Section 6.3
hereof.
"Indemnitor Member" shall have the meaning as set forth in Section 6.3
hereof.
"Interest" shall mean with respect to a Member such Member's interest
in the rights, powers, privileges, duties and obligations with respect to the
company as specified in this Agreement.
"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.
"Members" shall have the meaning set forth in the first paragraph of
this Agreement and shall be used where no distinction between BOP and Gender
Road is required. To the extent applicable, the term "Members" shall include
any Person that is admitted to the Company as an additional or substitute
member, in accordance with the terms of this Agreement.
"Member Minimum Gain" shall mean an amount determined by computing
with respect to each Member Nonrecourse Debt, the Minimum Gain that would result
if such Member Nonrecourse Debt were treated as a nonrecourse liability,
determined in accordance with Treasury Regulation Section 1.704-2(i)(3).
"Member Nonrecourse Debt" shall mean nonrecourse indebtedness of the
Company with respect to which any Member has a direct or indirect risk of loss,
as more fully defined in Treasury Regulation Section 1.704-2(b)(4).
"Member Nonrecourse Deduction" shall mean, for each Fiscal Year, the
Company deductions which are attributable to Member Nonrecourse Debt and are
characterized as "partner nonrecourse deductions" under Treasury Regulation
Section 1.704-2(i)(l).
"Minimum Gain" shall mean and refer to, at any time, with respect to
all nonrecourse liabilities of the Company (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 Company if it disposed of (in
a taxable transaction) all Company 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 Equity of a Member's Interest" shall have the meaning set forth
in Section 8.4 hereof.
"Nonrecourse Deductions" shall have the meaning set forth in Treasury
Regulation Section 1.704-2(b)(1).
A-4
"Notified Member" shall have the meaning set forth in Section 2.3
hereof.
"Notifying Member" shall have the meaning set forth in Section 2.3
hereof.
"Pad Sites" shall mean the two (2) existing vacant, approved,
partially improved parcels of land located in New Castle County, Delaware, as
more fully described in the Pad Sites Agreement of Sale.
"Pad Sites Acquisition" shall mean the acquisition of the Pad Sites
pursuant to and in accordance with the Pad Sites Agreement of Sale.
"Pad Sites Agreement of Sale" shall mean that certain agreement
executed by and between the Company, as purchaser, and Gender Road, as seller,
for the acquisition of the Pad Sites.
"Percentage Interest" shall mean with respect to a Member, such
Member's Interest expressed as a percentage in relation to the Interests held by
the other Members, as adjusted from time to time by the admission or withdrawal
of Members for any reason as provided in this Agreement or as agreed to by the
unanimous consent of the Members and reflected on Exhibit B attached hereto.
The initial Percentage Interest of each Member shall be fifty percent (50%) as
set forth on Exhibit B attached hereto.
"Performing Member" shall have the meaning set forth in Section 2.3
hereof.
"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.
"Preferred Capital Date" shall mean, for purposes of calculating the
BOP Preferred Return, the date on which BOP makes an initial capital
contribution to the Company pursuant to Section 2.1 hereof; provided that with
respect to Additional Capital Contributions, the Preferred Capital Date for
purposes of calculating the BOP Preferred Return on such Additional Capital
Contributions shall be the date on which such Additional Capital Contributions
are made by BOP to the Company.
"Profits" and "Losses" shall mean, for each Fiscal Year or other
period, an amount equal to the Company'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 Company 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;
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(b) Any expenditures of the Company 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 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, Member Nonrecourse Deductions and any items of income,
gain, loss or deduction which are specially allocated pursuant to Section 9.3 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) Company property is revalued on the books of
the Company 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.
"Regulatory Allocations" shall have the meaning as set forth in
Section 9.4 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Tax Matters Member" means the "tax matters member" as defined in Code
section 6231(a)(7) and is selected under Section 11.7 hereof.
"Tax Matters Representative" shall have the meaning set forth in
Section 11.8 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 Company.
"Transferee" shall mean a Person to whom a Transfer is made pursuant
to Article 7.
"Transferor" shall mean a Member making a Transfer under this
Agreement pursuant to Article 7.
"Treasury Regulations" or "Regulations" shall mean pronouncements, as
amended from time to time, or their successor pronouncements, which clarify,
interpret and apply the
A-6
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
OPERATING AGREEMENT OF
CHRISTIANA CENTER OPERATING COMPANY II LLC
PERCENTAGE INTERESTS
PERCENTAGE
MEMBER INTEREST
______ _____________
BOP 50%
GENDER ROAD 50%
X-0
X-0
