Exhibit 10.2
AGREEMENT OF LIMITED PARTNERSHIP
OF
FOUR TOWER BRIDGE ASSOCIATES
Dated as of November 3, 1997
TABLE OF CONTENTS
Page
BACKGROUND STATEMENT...........................................................1
ARTICLE I
DEFINITIONS..................................................................1
1.01. Acquisition Terms..................................................1
1.02 Act................................................................1
1.03. Additional Capital Balance. .....................................2
1.04. Additional Capital Contributions...................................2
1.05. Administrative General Partner.....................................2
1.06. Book Value.........................................................2
1.07. BOP Preference Capital.............................................2
1.08. BOP Preferred Cumulative Return....................................2
1.09. Building...........................................................3
1.10. Capital Accounts...................................................3
1.11. Capital Balance....................................................3
1.12. Capital Contributions..............................................3
1.13. Certificate........................................................3
1.14. Code...............................................................3
1.15. Construction and Acquisition Loan..................................3
1.16. Construction Contract..............................................3
1.17. Construction Costs.................................................3
1.18. Construction Costs Budget..........................................3
1.19. Contribution Percentage............................................4
1.20. Cumulative Net Loss................................................4
1.21. Cumulative Net Profit..............................................4
1.22. Depreciation.......................................................4
1.23. Fiscal Year........................................................4
1.24. Hypothetical Capital Account.......................................4
1.25. Land...............................................................4
1.26. Land Acquisition Agreement.........................................4
1.27. Managing General Partner...........................................5
1.28. Minimum Gain.......................................................5
1.29. Minimum Gain Share.................................................5
1.30. Net Cash Flow......................................................5
1.31. Net Refinancing Proceeds...........................................5
1.32. Net Sale Proceeds..................................................5
1.33. Nonrecourse Deductions.............................................5
1.34. Operating Budget...................................................6
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1.35. Participation Percentage...........................................6
1.36. Partner or Partners................................................6
1.37. Partner Minimum Gain...............................................6
1.38. Partner Nonrecourse Debt...........................................6
1.39. Partner Nonrecourse Deductions.....................................6
1.40. Partners' Loans....................................................6
1.41. Partners' Priority Loans...........................................6
1.42. Plans and Specifications...........................................6
1.43. Preferred Cumulative Return........................................6
1.44. Profits or Losses..................................................7
1.45. Project............................................................8
1.46. Project Budget.....................................................8
1.47. Project Costs......................................................8
ARTICLE II
GENERAL PROVISIONS...........................................................8
2.01. Formation..........................................................8
2.02. Business and Term..................................................9
2.03. Name...............................................................9
2.04. Purpose............................................................9
2.05. Places of Business.................................................9
2.06. Nature of Partners' Interests; Non-Partition.......................9
2.07. Partnership Income.................................................9
ARTICLE III
CAPITAL CONTRIBUTIONS; LOANS................................................11
3.01. Capital Contributions.............................................11
3.02. Capital Accounts..................................................11
3.03 Capital Calls.....................................................12
3.04. Additional Capital Contributions; Partners' Loans.................12
3.05. Procedures Upon a Failure to Make an Additional Capital
Contribution; Partners' Priority Loans............................13
3.06 Partner Affiliate Guaranties; Partners' Priority Loans............13
3.07 BOP Preference Loan; BOP Preference Capital.......................14
ARTICLE IV
MANAGEMENT OF THE PARTNERSHIP...............................................15
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4.01. Duties and Powers of the General Partners.........................15
4.02. Fees, Compensation and Reimbursement of Expenses..................20
4.03. Concerning the Limited Partners...................................20
4.04. Sale or Refinancing...............................................21
4.05. Bank Accounts.....................................................21
4.06. Consents and Approvals............................................21
4.07. Concerning Persons Other Than Partners............................22
4.08. Indemnification of the General Partners...........................22
4.09. Representations and Warranties of the Managing General Partner....22
4.10. Representations and Warranties of the Administrative General
Partner...........................................................24
4.11. Certain Definitions...............................................26
ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS...............................................26
5.01. Distributions of Net Cash Flow....................................26
5.02. Distributions of Net Refinancing Proceeds and Net Sale Proceeds...27
5.03. Availability of Funds.............................................28
5.04 Tax Withholding...................................................28
5.05 Allocation of Profits and Losses..................................28
ARTICLE VI
BOOKS AND RECORDS; TAX MATTERS..............................................32
6.01. Accounting........................................................32
6.02. Statements........................................................32
6.03. Inspection........................................................33
6.04. Tax Matters.......................................................33
ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS;
WITHDRAWAL OF PARTNERS;
REMOVAL OF THE MANAGING GENERAL PARTNER.....................................34
7.01. Transfer of General Partnership Interests.........................34
7.02. Transfer of Limited Partnership Interests.........................38
7.03. Expenses..........................................................39
7.04. Withdrawal of Partners............................................39
7.05. Death, Incompetency, Dissolution or Bankruptcy of a Limited
Partner...........................................................39
7.06. Deadlock of the General Partners..................................39
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7.07. Right of First Refusal............................................41
7.08. Status of Interests Transferred...................................42
7.09. Removal of the Managing General Partner...........................42
7.10. Deadlock on Sale..................................................45
7.11 Arbitrable Disputes...............................................46
7.12 Right of Contribution in Favor of Managing General Partner........48
ARTICLE VIII
ADDITIONAL LIMITED PARTNERS.................................................53
8.01. Additional Limited Partners and Their Contributions...............53
ARTICLE IX
INSURANCE...................................................................54
9.01. Coverage..........................................................54
9.02. Certificates; Notices.............................................55
9.03. Concerning Liability Insurance....................................55
9.04. Miscellaneous.....................................................55
ARTICLE X
DISSOLUTION AND TERMINATION.................................................55
10.01. Dissolution.......................................................55
10.02. Appointment of Liquidating Partner................................57
10.03. Distributions and Other Matters...................................57
10.04. Distributions of Property.........................................58
10.05. Actions of the Liquidating Partner; Statements of Account.........58
ARTICLE XI
NOTICES AND COMMUNICATIONS..................................................59
11.01. Notices...........................................................59
11.02. Change of Address.................................................60
11.03. Time of Communications............................................60
ARTICLE XII
MISCELLANEOUS...............................................................60
12.01. Filings...........................................................60
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12.02. Power of Attorney.................................................60
12.03. Inspections.......................................................61
12.04. Other Remedies....................................................61
12.05. Partners as Creditors.............................................62
12.06. Independent Ventures..............................................62
12.07. Partial Invalidity................................................62
12.08. Governing Law; Parties in Interest................................62
12.09. Amendment.........................................................62
12.10. Execution in Counterpart..........................................62
12.11. Computation of Time...............................................62
12.12. Table of Contents; Titles and Captions............................63
12.13. Pronouns and Plurals..............................................63
12.14. Approval by General Partners......................................63
12.15. Exhibits..........................................................63
12.16. Entire Agreement..................................................63
12.17. Filing with Securities Exchange Commission........................63
12.18. Non-Recourse......................................................63
EXHIBITS
Exhibit "A" - Acquisition Terms
Exhibit "B" - Schedule of Partnership Participation and Capital
Exhibit "C" - Land Description
Exhibit "D" - Project Budget
Exhibit "E" - Project Budget Categories to be Funded By Administrative General
Partner Section 3.07 Partner Loan
Exhibit "F" - Leasing Agency Agreement Form
Exhibit "G" - Management Agreement Form
Exhibit "H" - Balance Sheet of Brandywine Operating Partnership, L.P.
v
AGREEMENT OF LIMITED PARTNERSHIP
OF
FOUR TOWER BRIDGE ASSOCIATES
THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") is made and
entered into as of November 3, 1997, by and among FOUR XXXXXX TOWER
ASSOCIATES, a Pennsylvania limited partnership with offices at c/o Oliver
Xxxxxx Xxxxxx Corporation, One Tower Bridge, 000 Xxxx Xxxxx Xxxxxx, Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, as Managing General Partner ("Managing
General Partner"), BRANDYWINE TB I, L.P., a Pennsylvania limited partnership
with offices at c/o Brandywine Realty Trust, Newtown Corporate Campus, 00
Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000, as
Administrative General Partner ("Administrative General Partner"), and XXXXXX
X. XXXXXX, with offices at c/o Oliver Xxxxxx Xxxxxx Corporation, One Tower
Bridge, 000 Xxxx Xxxxx Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
("Limited Partner"). Managing General Partner and Administrative General
Partner are sometimes hereinafter referred to collectively as the "General
Partners" or individually as a "General Partner." The General Partners and
the Limited Partner are sometimes hereinafter referred to collectively as the
"Partners," or individually as a "Partner."
BACKGROUND STATEMENT
The parties hereto desire to organize and form a limited partnership (the
"Partnership") under the laws of the Commonwealth of Pennsylvania, and in that
connection wish to set forth their agreements and understandings as stated
herein.
NOW, THEREFORE, in consideration of the mutual covenants and premises
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE I
DEFINITIONS
Certain terms when used in this Agreement shall have the meanings set forth
in the context hereof. The following terms when used in this Agreement shall
have the respective meanings set forth below:
1.01. Acquisition Terms. The terms and related agreements relating to
the acquisition and purchase of the Land, all as set forth on Exhibit "A"
hereto.
1.02 Act. The Pennsylvania Uniform Limited Partnership Act, 59 Pa.
C.S.A. Section 3.01 et seq., as amended.
1.03. Additional Capital Balance. The Additional Capital
Contributions of a Partner; in each case as reduced from time to time by all
cash distributions to such Partner which are in reduction of a Partner's
Additional Capital Balance; and in each case as increased from time to time by
any contributions by such Partner which are Additional Capital Contributions.
1.04. Additional Capital Contributions. Any additional cash
contributions of a Partner to the capital of the Partnership made pursuant to
Section 3.03 hereof.
1.05. Administrative General Partner. The entity identified as
Administrative General Partner in the caption hereof.
1.06. Book Value. With respect to any asset, the asset's adjusted
basis for federal income tax purposes, except that (i) where an asset has been
revalued on the books of the Partnership the Book Value of such asset shall be
adjusted to reflect such revaluation; (ii) where an asset has been contributed
by a Partner to the Partnership or distributed by the Partnership to a Partner
its Book Value shall be its agreed fair market value; and (iii) the Book Value
of Partnership assets shall be adjusted to reflect the Depreciation taken into
account with respect to such assets for purposes of determining Profits or
Losses.
1.07. BOP Preference Capital. The BOP Preference Capital Contribution
to be made by Administrative General Partner as set forth in Section 3.07
hereof. BOP Preference Capital shall be part of the Administrative General
Partner's Capital Balance and Capital Account.
1.08. BOP Preferred Cumulative Return. The cumulative right given to
Administrative General Partner, which right is hereby granted, to receive in
respect of each quarter of each Fiscal Year a sum equal to ten percent (10%) per
annum, compounded annually, of such Partner's then aggregate, outstanding BOP
Preference Capital (computed from time to time during any such Fiscal Year to
reflect reductions in or additions to such BOP Preference Capital); and if such
BOP Preference Capital shall at any time be reduced to zero, then the BOP
Preferred Cumulative Return shall thereupon cease and shall not be renewed by
virtue of any future capital. The BOP Preferred Cumulative Return shall begin
on the date the BOP Preference Capital is advanced. Any amounts to be
distributed in connection with the foregoing during the first Fiscal Year in
which the BOP Preferred Cumulative Return begins shall be reduced ratably in the
same ratio as the number of days remaining in such first Fiscal Year bears to
365, and all amounts to be distributed on other than the last day of a Fiscal
Year shall be computed ratably based on the elapsed portion of such Fiscal Year.
The BOP Preferred Cumulative Return shall be payable as specified in this
Agreement only from funds available to the Partnership from Net Cash Flow, Net
Refinancing Proceeds, Net Sale Proceeds or proceeds upon the Partnership's
liquidation, and shall not (i) create a debt of the Partnership to any Partner
to the extent that any such funds are not available for distribution, or (ii)
constitute a guaranteed payment as defined in Section 707(c) of the Code.
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1.09. Building. The office building to be known as Four Tower Bridge,
consisting of an office building consisting of approximately 85,000 square feet,
with the structured parking area physically incorporated therein.
1.10. Capital Accounts. The capital accounts of the Partners, as
described in Section 3.01 hereof and Exhibit "B".
1.11. Capital Balance. The Capital Contributions and Additional
Capital Contributions of a Partner; in each case as reduced from time to time by
all cash distributions to such Partner which are in reduction of a Partner's
Capital Balance or a Partner's Capital Account; and in each case as increased
from time to time by any contributions by such Partner which are Capital
Contributions or Additional Capital Contributions. With respect to Managing
General Partner and Limited Partner, the Capital Balance shall initially be as
stated on Exhibit "B" hereof by reason of the adjustment of fair market value as
set forth in Section 3.01 hereof.
1.12. Capital Contributions. The cash capital contributions of the
Partners as described in Section 3.01 hereof and in Exhibit "B" hereto.
1.13. Certificate. The certificate of limited partnership with respect
to the Partnership, which is executed now or hereafter by the General Partners
and is filed for record as required by the Act.
1.14. Code. The Internal Revenue Code of 1986, as amended from time to
time, and all successors thereto.
1.15. Construction and Acquisition Loan. The loan obtained at the time
of or immediately following the acquisition of the Land which shall be used to
fund (1) acquisition of the Land and (2) construction of the Project.
1.16. Construction Contract. A construction contract or construction
management agreement for the Project with a general contractor satisfactory to,
and otherwise in form and substance approved by, all of the General Partners and
providing for the full construction, completion and equipping of the Project.
1.17. Construction Costs. The dollar amounts actually expended by or
on behalf of the Partnership for the full construction, completion and equipping
of the Project in accordance with the Plans and Specifications therefor.
1.18. Construction Costs Budget. The budgeted amount of Construction
Costs for the Project as set forth in the Project Budget as the same may be
hereafter approved, revised and amended in accordance with this Agreement.
3
1.19. Contribution Percentage. The Contribution Percentages of the
Partners, as set forth in Exhibit "B" hereto.
1.20. Cumulative Net Loss. For any Partner, the extent (if any) to
which the aggregate amount of Losses and other items of loss or deduction
allocated to such Partner in the current and all prior Fiscal Years shall exceed
the aggregate amount of Profits and other items of income or gain allocated to
such Partner in the current and all prior Fiscal Years.
1.21. Cumulative Net Profit. For any Partner, the extent (if any) to
which the aggregate amount of Profits and other items income or gain allocated
to such Partner in the current and all prior Fiscal Years shall exceed the
aggregate amount of Losses and other items of loss or deduction allocated to
such Partner in the current and all prior Fiscal Years.
1.22. Depreciation. For each Fiscal Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Book Value of an asset differs from its adjusted basis for federal income
tax purposes at the beginning of such Fiscal Year (as a result of the
revaluation of such asset or its contribution to the Partnership by a Partner),
Depreciation shall be an amount which bears the same ratio to such beginning
Book Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such Fiscal Year or other period bears to such beginning
adjusted tax basis; provided that if the beginning adjusted tax basis is zero,
Depreciation for such Fiscal Year or other period shall be determined with
reference to such beginning Book Value using any reasonable method selected by
the Managing General Partner.
1.23. Fiscal Year. The calendar year.
1.24. Hypothetical Capital Account. With respect to any Partner, such
Partner's Capital Account, after giving effect to the following adjustments:
(i) Such Capital Account shall be reduced to reflect the items
described in clauses (4), (5) and (6) of Regulation Section
1.704-1(b)(2)(ii)(d); and
(ii) Such Capital Account shall be increased by any amount such
Partner is obligated to restore or is treated as being obligated to restore for
purposes of Regulation Section 1.704-1(b)(2)(ii)(d), including such Partner's
Minimum Gain Share and such Partner's share of Partner Minimum Gain.
1.25. Land. The real estate described in Exhibit "C" hereto.
1.26. Land Acquisition Agreement. The agreement executed, or to be
executed, between the Partnership and Tower Bridge Land Holding Associates I for
acquisition of the Land.
4
1.27. Managing General Partner. Four Xxxxxx Tower Associates, a
Pennsylvania limited partnership.
1.28. Minimum Gain. An amount determined by computing, with respect to
each nonrecourse liability of the Partnership, the amount of gain (of whatever
character), if any, that would be realized by the Partnership if it disposed of
(in a taxable transaction) the Partnership property subject to such liability in
full satisfaction thereof, and by then aggregating the amounts so computed.
Such amount shall be determined in a manner consistent with Regulation Section
1.704-2(d).
1.29. Minimum Gain Share. For each Partner, such Partner's share of
any Minimum Gain for the Fiscal Year (after taking into account any decrease in
the Minimum Gain for such year), as determined under Regulation Section
1.704-2(g).
1.30. Net Cash Flow. Net Cash Flow of the Partnership with respect to
any calendar period shall mean gross receipts from the ownership or operation of
the Project (excluding Net Refinancing Proceeds and Net Sale Proceeds), reduced
by (i) cash disbursements, including, but not limited to, any payment to any
creditor of the Partnership (other than on account of a Partners' Loan or
Partners' Priority Loan) or any tenant entitled to a share of any such receipts,
and (ii) a reasonable amount for, and any additions to, a reserve for
contingencies, working capital, repairs, improvements, tenant improvements,
tenant concessions, replacements, expenses and the payment of Partnership
obligations, the amount of and any additions to such reserve to be established
by the Managing General Partner and as approved by the Administrative General
Partner.
1.31. Net Refinancing Proceeds. The proceeds realized by the
Partnership upon any refinancing of a Partnership indebtedness, net of expenses
incident to such refinancing and satisfaction of any indebtedness being
refinanced and any right of any other creditor of the Partnership (other than on
account of a Partners' Loan or Partners' Priority Loan) or any tenant to receive
such proceeds or a portion thereof for repayment of indebtedness or as
additional interest.
1.32. Net Sale Proceeds. The proceeds realized by the Partnership upon
the sale of any Partnership asset, net of expenses incident to such sale, the
payment of any Partnership indebtedness secured by or related to such asset and
satisfaction of any right of any other creditor of the Partnership (other than
on account of a Partners' Loan or Partners' Priority Loan) or any tenant to
receive such proceeds or a portion thereof for repayment of indebtedness or as
additional interest.
1.33. Nonrecourse Deductions. For each Fiscal Year, the Partnership
deductions that are characterized as "nonrecourse deductions" under Regulation
Section 1.704-2(b)(1).
5
1.34. Operating Budget. A budget proposed by the Managing General
Partner and approved by the Administrative General Partner for each fiscal year
of the Partnership, and reviewed each calendar quarter, all in accordance with
Section 4.0l.C(10) and Section 4.01(D) hereof.
1.35. Participation Percentage. The Participation Percentages of the
Partners, as set forth in Exhibit "B" hereto.
1.36. Partner or Partners. Individually, a General Partner or a
Limited Partner, and collectively, the General Partners and Limited Partner,
including Persons admitted to the Partnership after the date hereof in
accordance with the terms hereof.
1.37. Partner Minimum Gain. An amount determined by computing, with
respect to each Partner Nonrecourse Debt, the Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a nonrecourse liability,
determined in accordance with Regulation Section 1.704-2(i)(3).
1.38. Partner Nonrecourse Debt means nonrecourse Partnership debt for
which one or more Partners bears an economic risk of loss, determined in
accordance with Regulation Section 1.704-2(b)(4).
1.39. Partner Nonrecourse Deductions means, for each Fiscal Year, the
Partnership deductions which are attributable to Partner Nonrecourse Debt and
are characterized as "partner nonrecourse deductions" under Regulation Section
1.704-2(i)(1).
1.40. Partners' Loans. All amounts loaned by the Partners to the
Partnership pursuant to Section 3.04 hereof or in satisfaction of a Partner's
own obligation under Section 3.05(A) hereof. Partners' Loans shall be payable,
as set forth in this Agreement, from and out of Partnership assets, but
otherwise shall be made on a "no-recourse" basis and no Partner shall have any
personal liability in respect of any thereof.
1.41. Partners' Priority Loans. All amounts loaned by a Partner to the
Partnership on behalf of another Partner pursuant to Section 3.05 hereof and all
amounts loaned by reason of satisfaction of a Guaranty by a Partner Affiliate as
set forth in Section 3.06 hereof. Partners' Priority Loans shall be payable, as
set forth in this Agreement, from and out of Partnership assets, but otherwise
shall be made on a "no-recourse" basis and no Partner shall have any personal
liability in respect of any thereof.
1.42. Plans and Specifications. The final plans and specifications for
the Project in the form approved in writing by all of the General Partners.
1.43. Preferred Cumulative Return. The cumulative right given to each
Partner, which right is hereby granted, to receive in respect of each quarter of
each Fiscal Year a sum equal to
6
ten percent (10%) per annum, compounded annually, of such Partner's
Additional Capital Balance (computed from time to time during any such Fiscal
Year to reflect reductions in or additions to such Additional Capital
Balance; and if such Partner's Additional Capital Balance shall at any time
be reduced to zero, then the Preferred Cumulative Return shall thereupon be
suspended until such time as such Partner's Additional Capital Balance
returns to a positive figure). The Preferred Cumulative Return shall begin
on the date of the first Additional Capital Contribution. Any amounts to be
distributed in connection with the foregoing during the first Fiscal Year in
which the Preferred Cumulative Return begins shall be reduced ratably in the
same ratio as the number of days remaining in such first Fiscal Year bears to
365, and all amounts to be distributed on other than the last day of a Fiscal
Year shall be computed ratably based on the elapsed portion of such Fiscal
Year. The Preferred Cumulative Return shall be payable as specified in this
Agreement only from funds available to the Partnership from Net Cash Flow,
Net Refinancing Proceeds, Net Sale Proceeds or proceeds upon the
Partnership's liquidation, and shall not (i) create a debt of the Partnership
to any Partner to the extent that any such funds are not available for
distribution, or (ii) constitute a guaranteed payment as defined in Section
707(c) of the Code.
1.44. Profits or Losses. The Partnership's net taxable income or loss
for a Fiscal Year, as computed for federal income tax purposes (including all
items of Partnership income, gain, loss or deduction regardless of whether such
items are required to be separately stated under Section 702(a) of the Code),
with the following adjustments:
(i) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in determining Profits or
Losses shall be added to such Profits or Losses;
(ii) Any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures
pursuant to Regulation Section 1.704-1(b)(2)(iv)(i) and not otherwise taken
into account in computing Profits or Losses shall be subtracted from such
Profits or Losses;
(iii) In any case where, in accordance with Regulation Section
1.704-1(b)(2)(iv)(e) or (f), Partnership property is revalued on the books
of the Partnership to reflect its fair market value, the amount of such
upward or downward adjustment (to the extent not previously taken into
account) shall be taken into account as gain or loss from a taxable
disposition of such property for purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of Partnership
property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Book Value of the
property disposed of, notwithstanding that the adjusted tax basis of such
property differs from such Book Value;
7
(v) In lieu of the depreciation, amortization and other cost recovery
deductions taken into account for federal income tax purposes, Depreciation
as defined herein shall be taken into account in computing Profits or
Losses; and
(vi) Notwithstanding any other provision of this definition,
Nonrecourse Deductions, Partner Nonrecourse Deductions and any items of
income, gain, loss or deduction which are specially allocated pursuant to
subsections C, E or F of Section 5.05(a) below shall not be taken into
account in computing Profits or Losses.
1.45. Project. The acquisition of the Land and the construction,
development, ownership and leasing to others of the Building, together with
related improvements, parking and amenities.
1.46. Project Budget. A budget for the development of the Project
proposed by the Managing General Partner and approved by the Administrative
General Partner, which Project Budget is as initially set forth in Exhibit "D"
hereto, as the same may be amended from time to time with the consent of the
Administrative General Partner.
1.47. Project Costs. All costs and expenses associated with the
acquisition of the Land, site preparation and development, construction, leasing
and carrying of the Project, any future improvements, whether for tenants or
otherwise, which have been or are incurred or committed to by the Partnership
prior to or after the date hereof, including, without limitation, all costs and
expenses heretofore or hereafter incurred in acquiring the Land; preparing the
site; design fees, permit fees and non-refundable deposits; fees (including,
without limitation, financing fees, fees paid for or in connection with any
loans to the Partnership, origination or other fees paid in connection with any
loan of the Partnership); debt service payments, including, but not limited to,
interest, principal and other costs and charges, on all loans to or borrowings
by the Partnership (excluding Partners' Loans and Partners' Priority Loans);
costs of closing loans to the Partnership; real estate taxes; insurance
premiums; promotional, legal, accounting, management and other incidental fees
and expenses incurred or committed to by the Partnership; costs incurred in
leasing space in or maintaining and operating the Project (including, but not
limited to, brokerage fees or commissions paid to brokers); and all other costs
or expenses paid, incurred or committed to by the Partnership prior to or after
the date hereof relating to the Project.
ARTICLE II
GENERAL PROVISIONS
2.01. Formation. The parties hereto do hereby form a limited
partnership pursuant to the Act and agree to execute all certificates and
documents, in addition to this Agreement, required by the Act in order that the
Partnership shall be a limited partnership pursuant to the Act.
8
2.02. Business and Term. The Partners hereby agree to conduct the
business of the Partnership pursuant to the provisions of the Act and on the
terms set forth in this Agreement. The term of the Partnership commenced or
commences on the date on which the Certificate was first filed for record as
provided by the Act, and shall continue until the Partnership is dissolved
pursuant to Article X hereof.
2.03. Name. The business of the Partnership shall be carried on under
the name "Four Tower Bridge Associates" or under such other name as the General
Partners (acting by their unanimous consent) may from time to time designate.
2.04. Purpose. The purpose and character of the business of the
Partnership shall be to (i) acquire, control and own the Project in accordance
with the terms of this Agreement, (ii) operate and maintain the Project and
lease space in the Project to others, and (iii) do all things necessary or
appropriate to effect any part or all of the foregoing.
2.05. Places of Business. The Partnership's principal place of
business shall be at c/o Oliver Xxxxxx Xxxxxx Corporation, Xxx Xxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or at such other principal office
of the Managing General Partner as it may from time to time establish.
The Partnership may have such other or additional places of business
within or without the Commonwealth of Pennsylvania as the General Partners
(acting by their unanimous consent) may from time to time designate.
2.06. Nature of Partners' Interests; Non-Partition. The interests of
the Partners in the Partnership shall be personal property for all purposes.
All property owned by the Partnership, whether real or personal, tangible or
intangible, shall be owned by the Partnership as an entity, and no Partner
individually shall have any ownership of such property. No Partner shall be
entitled to seek partition of any Partnership property.
2.07. Partnership Income. Managing General Partner acknowledges and
agrees that Brandywine Realty Trust, the general partner of Brandywine Operating
Partnership, L.P. ("BOP"), a limited partner in Administrative General Partner,
is a real estate investment trust, as defined in the Code. So long as BOP is a
partner in Administrative General Partner, the Partnership shall endeavor to
manage its affairs such that the Partnership does not intentionally earn any
income for tax purposes or intentionally acquire any assets other than income
and assets as follows:
(i) at least 95% of the Partnership's annual gross income to be
derived from (A) dividends; (B) interest; (C) rents from real property; (D) gain
from the sale or other disposition of stock, securities and real property
(including interests in real property and interests in mortgages on real
property) which is not property described in section 1221(1); (E) abatements and
refunds of taxes on real property; (F) income and gain derived from foreclosure
property (as
9
defined in subsection (e)); (G) amounts (other than amounts the determination
of which depends in whole or in part on the income or profits of any person)
received or accrued as consideration for entering into agreements (a) to make
loans secured by mortgages on real property or on interests in real property
or (b) to purchase or lease real property (including interests in real
property and interests in mortgages on real property); and (H) gain from the
sale or other disposition of a real estate asset which is not a prohibited
transaction solely by reason of Code Section 857(b)(6);
(ii) at least 75% of the Partnership's annual gross income
(excluding gross income from prohibited transactions as defined for purposes of
Code Section 865(c)(3)) to be derived from (A) rents from real property; (B)
interest on obligations secured by mortgages on real property or on interests in
real property; (C) gain from the sale or other disposition of real property
(including interests in real property and interest in mortgages on real
property) which is not property described in Code Section 1221(1); (D) dividends
or other distributions on, and gain (other than gain from prohibited
transactions) from the sale or other disposition of, transferable shares (or
transferable certificates of beneficial interest) in other real estate
investment trusts which meet the requirements of Code Section 856; (E)
abatements and refunds of taxes on real property; (F) income and gain derived
from foreclosure property (as defined in Code Section 856(e)); (G) amounts
(other than amounts the determination of which depends in whole or in part on
the income or profits of any person) received or accrued as consideration for
entering into agreements (a) to make loans secured by mortgages on real property
or on interests in real property or (b) to purchase or lease real property
(including interests in real property and interests in mortgages on real
property); (H) gain from the sale or other disposition of a real estate asset
which is not a prohibited transaction solely by reason of Code Section
857(b)(6); and (I) qualified temporary investment income; and
(iii) at the close of each quarter of each taxable year (A) at
least 75% of the value of its total assets is represented by real estate assets,
cash and cash items (including receivables), and Governmental securities; and
(B) not more than 25 percent of the value of its total assets is represented by
securities (other than those includible in calculating the 75% test in the
preceding clause) for purposes of this calculation limited in respect of any one
issuer to an amount not greater in value than 5 percent of the value of the
total assets of the Partnership and to not more than 10 percent of the
outstanding voting securities of such issuer.
Notwithstanding anything to the contrary contained herein, the
Partnership may have income and assets which do not comply with the above
subsections (i),(ii) and (iii) if the effect of such noncompliance does not and
would not reasonably be expected to cause Brandywine Realty Trust to violate the
provisions of Code Section 856. All terms used in this section 2.07 shall have
the meaning ascribed to them for purposes of Code Section 856. Receipt of
income or acquisition of assets which does not satisfy the criteria set forth in
this Section 2.07 shall not give rise to any claim for damages, consequential or
otherwise.
10
ARTICLE III
CAPITAL CONTRIBUTIONS; LOANS
3.01. Capital Contributions.
A. The Partners shall make Capital Contributions in the amounts and
at the times, and on the other terms and conditions, set forth in Sections
3.01(B) and 3.07 below.
B. On or prior to the date hereof the Partners have contributed to
the capital of the Partnership cash in the amounts and as described in Exhibit
"B" hereto, the receipt whereof is hereby acknowledged, which amounts comprise a
portion of the Partners' respective Capital Contributions hereunder.
3.02. Capital Accounts. A Capital Account shall be determined and
maintained for each Partner on the books and records of the Partnership in
accordance with the following provisions:
A. As of the date of this Agreement, each Partner's Capital Account
shall be as set forth on Exhibit "B" hereto. After the date hereof, each
Partner's Capital Account shall (i) be increased by the amount of money
contributed by it to the Partnership, by the fair market value of property
contributed by it to the Partnership (net of liabilities secured by such
contributed property) and the amount of Profits and other items of Partnership
income or gain allocated to such Partner under Section 5.05, and (ii) be
decreased by the amount of money distributed to it by the Partnership, by the
fair market value of property distributed to it by the Partnership (net of
liabilities secured by such distributed property) and the amount of Losses and
other items of Partnership deduction, loss or expense allocated to such Partner
under Section 5.05.
B. Except as otherwise expressly provided herein, it is intended
that the Capital Accounts shall be determined and maintained throughout the full
term of the Partnership in accordance with the capital accounting rules of
Regulation Section 1.704-1(b)(2)(iv), and that all provisions in this Agreement
of the Regulations relating to the maintenance of Capital Accounts shall be
interpreted and applied in a manner consistent with such Regulations. In the
event the General Partners shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any credits or charges thereto, are
computed in order to comply with such Regulations, the General Partners shall
make such modification, provided that it is not likely to have a material effect
on the amounts distributable to the Limited Partner upon the dissolution and
liquidation of the Partnership.
C. In the event of a transfer of an interest in the Partnership, the
Capital Account of the transferor Partner that is attributable to the
transferred interest shall be carried over to the transferee of such interest
and adjusted as provided in the Regulations under section 704 of the Code.
11
3.03 Capital Calls.
A. Whenever any General Partner determines that additional capital
is required by the Partnership for Project Costs, such General Partner may, by
written notice to all Partners, call for Additional Capital Contributions from
all partners (each, a "Capital Call"). These Additional Capital Contributions
shall be payable in cash or, if such General Partner making the Capital Call so
permits, a note to the Partnership no later than the date specified in the
notice, which date shall be no sooner than fifteen (15) days after notice is
given. Each Partner shall contribute the sum required based upon such Partner's
Contribution Percentage in the Partnership. In the event of a failure of any
Partner to make a requested Additional Capital Contribution the rights of the
Partners and the Partnership shall be governed by Section 3.04 and 3.05 hereof.
B. The Capital Contributions of the Partners, all Partnership
borrowings, and any Additional Capital Contributions, Partners' Loans and
Partners' Priority Loans made pursuant to this Agreement shall be used and
applied only (i) in accordance with an Operating Budget; (ii) Project Costs; or
(iii) for any other Partnership purpose as determined and agreed to by all of
the General Partners.
3.04. Additional Capital Contributions; Partners' Loans.
A. Except as expressly set forth in this Article III, no Partner
shall be required to make any Additional Capital Contributions, Partners' Loans
or Partners' Priority Loans to the Partnership.
B. If any Partner advances any funds to the Partnership after the
date of this Agreement (except as provided for in Section 3.03. above or 3.05
below), which advances are not otherwise specifically designated as Capital
Contributions, Additional Capital Contributions, or Partners' Priority Loans,
such advances will be treated as Partners' Loans, will not increase such
Partner's Participation Percentage, and the amount thereof will be a debt due
from the Partnership to such Partner, entitled to the priorities described in
Article V and Section 10.03 hereof, to be repaid with such interest as will be
expressly agreed upon by all of the General Partners, or, in the absence of
agreement, with interest at a rate equal to ten percent (10%) per annum.
C. Except as set forth in Section 3.05 hereof, in no event may any
Partner advance any funds to the Partnership after the date of this Agreement
and have such advances treated as Partners' Loans unless such advances are
approved by each of the General Partners.
3.05. Procedures Upon a Failure to Make an Additional Capital
Contribution; Partners' Priority Loans.
A. In the event any Partner (a "Non-Contributing Partner") shall
fail for any reason, in accordance with the provisions of Section 3.03 hereof,
to provide all or any part of the
12
advances due the Partnership from it hereunder within the period provided by
such notice, then each Partner which has made the advance, if any, required
to be made by it pursuant to such Section (a "Contributing Partner") shall
have and is hereby given the right and election, but not the obligation, in
all cases exercisable within ten (10) consecutive days following expiration
of the period provided by such notice as aforesaid, (i) to withdraw the
advance so made by it, or (ii) not to withdraw the advance so made and, at
its election, thereupon to advance all or any part of the deficiency. The
amount to be contributed by each Partner electing to contribute such
non-contributed funds shall be as agreed among such electing Partners or, in
the absence of an agreement, shall be in proportion to their respective
relative Contribution Percentage in the Partnership. The amount contributed
by the Contributing Partner in satisfaction of its own obligation shall be
treated as a Partner Loan, and any deficiency amounts advanced on behalf of a
Non-Contributing Partner shall be treated as a Partners' Priority Loan to the
Partnership. Neither such Partner Loan nor such Partners' Priority Loan will
increase such Contributing Partner's Participation Percentage or Contribution
Percentage, and the amount thereof will be a debt due from the Partnership to
such Contributing Partner, entitled to the priorities described in Article V
and Section 10.03 hereof, to be repaid with such interest as will be
expressly agreed upon by all of the General Partners, or in the absence of
agreement with interest at a rate equal to ten percent (10%) per annum.
B. The rights, powers and remedies set forth in the foregoing
provisions of this Section 3.05 shall be the sole and exclusive remedies in the
event of a failure or series of failures to fund Capital Calls provided for in
Section 3.03.
3.06 Partner Affiliate Guaranties; Partners' Priority Loans. In the event
any person or entity which owns an interest in, directly or indirectly, any of
the General Partners (a "Partner Affiliate") guarantees or agrees to become
surety for payment or performance under any loan (other than a Partners' Loan
or Partners' Priority Loan) to the Partnership, and any amount which is required
to be advanced by such Partner Affiliate under such guaranty is advanced by or
for the benefit of the Partnership, then the sum so advanced shall be deemed to
be a Partners' Priority Loan of such Partner. Such Partners' Priority Loan will
not increase such contributing Partner's Participation Percentage or
Contribution Percentage, and the amount thereof will be a debt due from the
Partnership to such contributing Partner, entitled to priorities described in
Article V and Section 10.03 hereof, to be repaid with such interest as will be
expressly agreed upon by all of the General Partners, or in the absence of
agreement, with interest at a rate equal to ten percent (10%) per annum.
3.07 BOP Preference Loan; BOP Preference Capital. In addition to and not
in limitation of Administrative General Partner's Capital Contribution as set
forth on Exhibit "B" attached hereto and made a part hereof, Administrative
General Partner hereby agrees to contribute capital to the Partnership in the
following amounts and at the following times:
A. A Partner Priority Loan in an amount equal to up to Three Million
Seven Hundred Fifty Dollars ($3,750,000), to be funded from time to time in
accordance with cost
13
categories set forth on Exhibit "E" attached hereto and made part hereof to
bear interest at a rate of ten percent (10%) per annum and to be secured by
an Open-end Mortgage and Security Agreement. It is the anticipation of the
parties hereto that the Partner Priority Loan referred to in this Section
3.07(A) shall be repaid from, and all interest accrued thereon shall be paid
from, the proceeds of the construction and acquisition loan to be obtained by
the Partnership at the time of or following the acquisition of the Land (the
"Construction and Acquisition Loan"), but that, in any event, such Partner
Priority Loan shall be due and payable on December 31, 1998, together with
accrued interest thereon.
B. Upon the date of the funding of the Permanent Loan, as
hereinafter defined, a contribution of BOP Preference Capital equal to the
difference between (i) the amount of Project Costs incurred prior to the date
the Permanent Loan, as hereinafter defined, is closed and funded (including, but
not limited to, the amount of any previous Partners' Loans, if any, which have
not previously been repaid) (but only if such Project Costs have been incurred
consistent with a Construction Budget approved by both General Partners, as the
same may be amended from time to time with the consent of both General Partners)
and (ii) the amount of the Permanent Loan. The term "Permanent Loan," as used
herein, shall mean the loan obtained by the Partnership as the refinance of the
Construction and Acquisition Loan. The General Partners shall diligently pursue
a commitment for the Permanent Loan prior to the closing of the Construction and
Acquisition Loan or as soon as practicable thereafter, which commitment shall be
as generally described in Exhibit "K-l" to the PPA, as hereinafter defined.
C. On or about the date hereof, the Partnership has, as set forth in
the PPA, approved a term sheet issued by PNC Bank, N.A. and attached as Exhibit
"K" to the PPA, pursuant to which PNC Bank, N.A. would make the Construction and
Acquisition Loan (the "Term Sheet"). One of the terms and conditions of the
Construction and Acquisition Loan is that a Permanent Loan commitment will be
obtained prior to the closing of the Construction and Acquisition Loan to be
made by PNC Bank, N.A. Pursuant to the Term Sheet, the condition regarding a
commitment for the Permanent Loan is satisfied if Brandywine Operating
Partnership executes and delivers such a commitment for a loan in the amount of
Ten Million Dollars ($10,000,000).
If the Partnership is able to obtain a commitment for the Permanent Loan
prior to the closing of the Construction and Acquisition Loan on terms
acceptable to both General Partners, the Partnership shall do so, it being
understood and agreed that the terms and conditions as set forth in Exhibit
"K-1" to the PPA are acceptable to both General Partners.
If a commitment for the Permanent Loan is not obtained prior to the closing
of the Construction and Acquisition Loan, Brandywine Operating Partnership shall
enter into a commitment for a Permanent Loan on the same terms and conditions as
are set forth in Exhibit "K-l" to the PPA as if Brandywine Operating Partnership
were the unaffiliated third party lender, except that the interest rate shall be
250 basis points over LIBOR, no fees shall be payable until the closing of such
loan and such loan shall be prepayable at any time without premium. Nothing
contained herein shall mean that the General Partners hereto desire to delay the
closing on the Construction and Acquisition Loan until such time as the
commitment for the Permanent Loan from a third party lender other than
Brandywine Operating Partnership is obtained.
If the Partnership is unable to obtain such a commitment prior to the
closing of the Construction and Acquisition Loan, the General Partners shall
continue to diligently pursue such a commitment on behalf of the Partnership
following such closing and the Partnership shall accept
14
such a commitment as soon as it is possible and commercially reasonable to do
so, but in any event it is the anticipation of both General Partners that
such a commitment will be accepted at such a time as to enable the
Partnership to use the financing presented in such commitment rather than the
loan to which Brandywine Operating Partnership has committed. It is the
expectation of the General Partners that if, for some reason, closing occurs
under the Permanent Loan from Brandywine Operating Partnership, the General
Partners on behalf of the Partnership shall nevertheless arrange a refinance
of such Permanent Loan by an unaffiliated lender as soon as possible.
D. In the event that the Option in the Option to Purchase, as
defined in the PPA, is not extended from the first to the second anniversary of
the Option to Purchase, but expires unexercised, then an amount equal to the
aggregate amounts contributed by Brandywine TB III, L.L.C. to the capital of
Five Tower Bridge Associates, a Pennsylvania limited partnership, in payment of
the First Year Option Payment, as defined in Section 4 of the Option to
Purchase, together with ten percent (10%) per annum accrued return thereon,
shall be deemed to be BOP Preference Capital contributed by the Administrative
General Partner on the first anniversary of the Option to Purchase.
ARTICLE IV
MANAGEMENT OF THE PARTNERSHIP
4.01. Duties and Powers of the General Partners.
A. The Partnership will be managed and the conduct of its business
will be controlled solely by the General Partners. Any action to be taken or
determination to be made by the General Partners shall mean action taken or
determination made by the General Partners acting by their unanimous approval.
B. Each General Partner, subject to the terms, conditions,
restrictions and limitations contained herein, will possess all of the powers
and rights of a general partner under the Act.
C. Except as otherwise provided in this Agreement, the Managing
General Partner shall have the following powers and duties and the Managing
General Partner is authorized on behalf of the Partnership to do or cause to be
done the following at Partnership expense (subject, however, to the terms,
conditions, restrictions and limitations contained herein):
(1) acquiring the Land on behalf of the Partnership for the
price, and on the acquisition terms, set forth in the Land Acquisition
Agreement;
(2) obtain title insurance on Partnership property, and execute
all affidavits and other documents necessary in connection therewith (the
identity of the title insurer
15
and the amount, extent, nature, terms and conditions of the insurance
coverage shall in all cases be subject to the approval of the Administrative
General Partner);
(3) prepare and distribute, or cause to be prepared and
distributed, the statements and reports described in Article VI hereof;
(4) provide for the full construction and completion of the
Project pursuant to the construction contracts, schedules and budgets to be
prepared by Managing General Partner and approved by Administrative General
Partner (all with the understanding, nevertheless, that the Managing General
Partner is not intended to be, and is not made hereby, a guarantor of any such
work or of the costs thereof), and in any case in accordance with and pursuant
to the Construction Contract and the Plans and Specifications therein or herein
described or hereafter developed (subject to such change orders or other changes
required by the Project's architect or by field work which, individually or in
combination, do not (i) adversely affect the overall quality or concept of the
Project, (ii) reduce the Project's gross or net rentable areas, or (iii)
increase the Construction Costs of the Project by $25,000 or more for any
individual or series of related change orders, or $250,000 or more in the
aggregate for all change orders, whether or not related); and in connection with
the foregoing execute, on behalf of the Partnership: (i) the Construction
Contract, and (ii) contracts for all necessary architectural, engineering,
designing, planning and surveying work for the construction and completion of
the Project; obtain labor, materials and supplies therefor; and use its best
efforts, at Partnership expense, to perform and accomplish any and all other
activities relating to the foregoing, including, without limitation, the
following:
(a) obtain such approvals, to the extent required by
applicable law or any effective restrictive covenant affecting the Land, of the
Plans and Specifications for the Project by all governmental bodies having
jurisdiction and the beneficiaries of any such covenant, respectively;
(b) seek and obtain all permits and approvals necessary so
that the Project may be hooked up to public sanitary sewer service, which public
sanitary sewer service shall be available to the full extent required for the
full operation of the Project and shall permit the discharge of sewage of the
types and amounts anticipated to be produced from the Project;
(5) with the prior approval of all General Partners, enter into
agreements for construction, long term, standby and any other loans to or
borrowings by the Partnership; execute, with the prior approval of all of the
General Partners and in the name and on behalf of the Partnership, all notes,
mortgages and other agreements, instruments or documents necessary in connection
therewith; and confess judgment against the Partnership as part of or in
connection with any loan or borrowing by the Partnership approved by the General
Partners; it being understood and recognized that unless the General Partners
shall expressly agree to the contrary, every mortgage, note or other evidence of
indebtedness, and every lease, sublease,
16
contract or other agreement of any kind entered into by or on behalf of the
Partnership shall contain a provision, satisfactory to the General Partners,
limiting the claims of all third parties to the assets of the Partnership and
expressly waiving all rights of such third parties to proceed against any
Partner individually, or against any officer, director, shareholder or
partner of a corporate or partnership Partner, except to the extent of their
interest in the Partnership;
(6) with the prior approval of all General Partners, pay to any
person or persons placing the same, in respect of the placing of any loans to or
borrowings by the Partnership, a mortgage brokerage, placement or similar fee;
(7) enter into a leasing agency contract with Xxxxxx Xxxxxx
Xxxxxx Corporation substantially in the form of Exhibit "F" hereto, which may be
modified only with the consent of the Administrative General Partner. No other
contract for leasing agency shall be entered into except with the consent of the
Administrative General Partner.
(8) purchase and maintain fire and extended coverage; liability,
workmen's compensation, rental loss and other insurance with respect to the
Land, Project and other property of the Partnership, or otherwise, all in
accordance with the provisions of Article IX hereof;
(9) enter into a management contract substantially in the form
of Exhibit "G" attached hereto between the Partnership and Xxxxxx Xxxxxx Xxxxxx
Corporation, which may be modified only with the consent of the Administrative
General Partner. No other management contract shall be entered into except with
the consent of the Administrative General Partner.
(10) prepare and deliver to each General Partner for its
approval, on the date hereof and thereafter at least thirty (30) days prior to
the beginning of each calendar year, an Operating Budget with respect to such
calendar year. Each Operating Budget shall set forth all receipts projected for
the period of such Operating Budget, all expenses, by category, of owning and
operating the Project (including capital improvements not included in Project
Costs) projected to be incurred during such period and a contingency reserve in
an amount of not less than 10% of the other budgeted expenses. Each General
Partner shall have fifteen (15) business days next following receipt to respond
to such Operating Budget, and its failure so to respond within such fifteen day
period shall be deemed an acceptance and approval of such Operating Budget.
Following the approval of an Operating Budget by all General Partners, the
Managing General Partner shall have the power to do all of the following with
respect to the period covered by such approved Operating Budget without the
consent or joinder of any other Partner, so long as the aggregate of
expenditures for all items included (i) within the entire Operating Budget
approved for such period does not exceed the total amount allocated therein, and
(ii) within each category in the Operating budget approved for such period does
not exceed (x) the total amount allocated therein for such category, plus (y)
the amount of any unused contingency, plus (z) the amount unused or unneeded
from any other category if the work or services covered in such other
17
category have been fully performed to the satisfaction of all General
Partners (and provided further that if the General Partners are unable to
agree on an Operating Budget for any specific period, then the Managing
General Partner shall be permitted to act under the most recently approved
Operating Budget (without restriction for the amounts allocated, for taxes,
insurance and utilities) until the new Operating Budget is approved or unless
the provisions of Section 7.06 hereof have become operative):
(a) effect normal operating repairs, replacements or
improvements to the Project, as needed, and, subject to subsection (b) below and
the approved Operating Budget, any such work required by a tenant of the Project
in connection with the leasing or releasing of space in the Project in the
ordinary course of business;
(b) enter into leases for the occupancy of space in the
Project by tenants (including Partners or their affiliates), at rentals no less
than those set forth in the then approved Operating Budget and on such lease
form and within such leasing guidelines as may then have been approved by all
General Partners;
(c) make all required payments of principal and interest
with respect to any indebtedness of the Partnership;
(d) pay all taxes and assessments levied against the Land,
Project and other property of the Partnership, or any part thereof;
(e) employ and dismiss from employment any and all
employees and agents, and obtain all legal, leasing, accounting and other
services necessary in connection with the operation or management of the Project
or other property of the Partnership; provided, however, that Managing General
Partner shall have no right to dismiss the asset manager of the Project without
the consent of Administrative General Partner; and
(f) generally, and except as expressly prohibited herein,
do all things in connection with any of the foregoing, generally manage and
administer the day-to-day business and affairs of the Partnership and execute
all documents on behalf of the Partnership in connection therewith, pay as a
Partnership expense all costs or expenses connected with the operation or
management of the Partnership or the Project (except as otherwise provided
herein), and sign or accept all checks, notes and drafts on the Partnership's
behalf except as otherwise provided herein all in a manner consistent with the
Operating Budget.
D. The Managing General Partner shall meet with designated
representatives of the Administrative General Partner on a quarterly or such
other periodic basis as the General Partners may agree, at the offices of the
Managing General Partner, to report on the operations of the Partnership and
development of the Project and to report on and, if appropriate, jointly revise
the Operating Budget, the Project Budget, the development and marketing plans,
and to consider and pass upon other matters which have been submitted to the
Partners for their review or
18
approval. In amplification of the foregoing, it is expressly recognized,
acknowledged and agreed that all General Partners shall be permitted to, and
intend to, participate actively in the management of the Partnership and its
operations, including specifically, but without limitation, participation in:
the review and approval of the Project Budget and Operating Budgets;
development and revision of the plans and specifications; the review and
revision of leasing plans and guidelines, and leasing and marketing plans and
strategies; the approval of the general contractor for the Project and the
project architects and engineers; and the review of capital improvement plans
for the Project.
E. No principal or other affiliate of the Managing General Partner
shall be obligated to devote his or their exclusive time and effort to the
affairs of the Partnership, but each shall devote so much of his or their time
and effort to the management and other affairs of the Partnership as may be
reasonably required to promote the purposes of the Partnership in an efficient,
effective and diligent manner.
Notwithstanding anything to the contrary contained herein, the
Managing General Partner shall be obligated to employ and maintain such
employees and agents as shall be necessary in order to fully perform the duties
described herein, including, but not limited to, the creation and distribution
of monthly cash flow reports and balance sheets. The Partnership shall
reimburse the Managing General Partner for the expenses of such employees and
agents allocated to the affairs of the Partnership.
F. No General Partner shall be liable, responsible or otherwise
accountable to the Partnership or to any Partner for any acts or omissions in
good faith performed or omitted by it or on its behalf in furtherance of the
interests of the Partnership and within the scope of the authority hereunder,
unless such acts or omissions were fraudulent, in bad faith or a result of
wanton and willful misconduct or gross negligence. In amplification of the
foregoing, no General Partner shall be deemed to have violated any of its
responsibilities or duties hereunder if the performance of such responsibilities
or duties shall require the consent or approval of another Partner or Partners
and if such consent or approval shall have been withheld.
4.02. Fees, Compensation and Reimbursement of Expenses.
A. Except as expressly set forth herein or in Exhibit "F" or "G"
hereto or Section 3.07, or as approved in writing by all the General Partners,
no Partner, no affiliate of a Partner, no shareholder, officer, director or
partner of a Partner or any affiliate, and no corporation or any other entity
owned or controlled by a Partner or by any affiliate shall be entitled to any
fees or other compensation, including without limitation any brokerage or other
commission or any other payment or compensation on account of the leasing,
operations, management, financing, refinancing or sale of the Land or the
Project or of any interest therein or part thereof. As set forth in Exhibit E
hereto, each General Partner shall be entitled to reimbursement for any
reasonable expenses incurred or paid for by any of them on behalf of the
Partnership and in furtherance of the Partnership's purposes (including
specifically, but without
19
limitation, reimbursement for the reasonable fees and costs of their
respective counsel in connection with the negotiation and preparation of the
Land Acquisition Agreement and the contracts for designing and construction
of the Project.
B. Notwithstanding anything to the contrary contained herein, the
Managing General Partner shall be entitled to reimbursement for:
(i) general and administrative expenses in connection with the
development of the Project in a liquidated amount equal to Four Dollars ($4.00)
times the number of rentable square feet of building area of the Project, which
reimbursement shall commence on, and shall be included as a line item on, the
first draw request submitted to the Project's construction lender. One-tenth of
such amount shall be reimbursed when such draw request is funded and monthly
thereafter over a ten (10) month period; and
(ii) a development fee in connection with the Project equal to
one and one-half percent (1.5%) of the Project Costs anticipated to be incurred
prior to and during the course of construction, which fee shall commence on, and
shall be included as a line item on, the first draw request submitted to the
Project's construction lender. One-tenth of such amount shall be reimbursed
when such draw request is funded and monthly thereafter over a ten-month period.
4.03. Concerning the Limited Partners. The Limited Partners shall not
take part in the management or control of the business of the Partnership: nor
shall the Limited Partners have any personal liability with respect to
liabilities and obligations of the Partnership. Each Limited Partner, by its
execution hereof and without in any way limiting the powers and authority of the
General Partners contained elsewhere herein, hereby expressly consents to the
sale, mortgaging, leasing, exchange or other disposition of the Project or any
interest therein or part thereof and to any confession of judgment against the
Partnership, each of the foregoing to be on such terms and conditions as the
General Partners may approve.
4.04. Sale or Refinancing. No General Partner shall have the power or
authority, without the written joinder, consent and approval of all the General
Partners: (i) to sell, exchange, lease or otherwise dispose of (or enter into
any contracts for any such sale, exchange, lease or other disposition of) all or
any portion of the Land, Project or other Partnership property, or modify any of
the terms of any of the foregoing; or (ii) to borrow, whether such loans are
secured or unsecured, any funds on behalf of the Partnership or refinance,
increase, consolidate, extend or otherwise modify any of the terms of any
Partnership indebtedness. None of the foregoing limitations shall require the
consent, approval or any other action by any Limited Partner; nor shall such
limitations be applicable to the lease of space in the Project in the ordinary
course of Partnership business, and the Managing General Partner, on behalf of
the Partnership, shall be permitted from time to time to enter into such leases
without the approval of any other General Partner if such leases are in
accordance with the then approved Operating Budget and schedule of rents, and
are on the other terms and conditions, required by Section 4.0l.C(10)(b) above.
20
4.05. Bank Accounts. All funds of the Partnership will be deposited
in a bank located in Philadelphia, Pennsylvania, in such Partnership bank
account or accounts as designated from time to time by the General Partners.
Withdrawals from any such bank account or accounts will be made upon such
signature or signatures as the General Partners may from time to time
designate.
4.06. Consents and Approvals.
A. Except as otherwise expressly provided for in Section 4.06(B)
hereof or elsewhere in this Agreement, whenever a Partner desires to take any
action which requires the consent or approval of any or all of the Partners, the
requesting Partner shall give written notice thereof (delivered in accordance
with the requirements of Article XI hereof) to each Partner from whom any such
consent or approval is required, describing the proposed action in sufficient
detail to enable such Partner or Partners to exercise an informed judgment with
respect thereto. As soon as practicable thereafter, each such Partner shall
give the requesting Partner written notice (delivered in accordance with the
requirements of Article XI hereof) that it either consents to or approves, or
does not consent to or approve the proposed action (setting forth its reasons
therefor if it does not so consent or approve). In the event that any such
Partner fails to respond (as provided herein) on or before the fifteenth (15th)
business day following notice (as provided herein) of any such proposed action
by a Partner, that Partner shall be conclusively presumed to have consented to
or approved such action.
B. Whenever the Managing General Partner shall require on an
expedited basis the consent of the other General Partner in connection with a
proposed change order pursuant to Section 4.01(C)(10) hereof, a proposed
deviation from the adopted leasing terms or lease form not permitted by the
leasing guidelines established pursuant to Subsection 4.01.C(10)(b) hereof, or a
proposed deviation from an Operating Budget adopted by the General Partners
pursuant to Subsection 4.0l.C(10) hereof, the Managing General Partner shall
notify the Administrative General Partner of such proposed change or deviation
in writing. If Administrative General Partner shall fail to approve or
disapprove of such deviation within forty-eight (48) hours after receipt by
Administrative General Partner of written request therefor, Administrative
General Partner shall be conclusively presumed to have consented to or approved
such action.
4.07. Concerning Persons Other Than Partners. The limitations on the
actions of the General Partners contained in this Article IV shall be effective
only as among the Partners themselves, and shall not be binding upon or have any
effect on persons other than Partners dealing with the General Partners,
including without limitation any lender or mortgagee, all of whom shall be
entitled to presume (without the necessity of any inquiry whatsoever) that any
General Partner has complete, unlimited and exclusive authority to borrow money
and to manage, supervise, control, transfer, sell, convey, pledge, mortgage,
encumber, lease or otherwise dispose of, or contract with respect to, all or any
part of the Partnership's property.
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4.08. Indemnification of the General Partners. The Partnership shall
indemnify, defend and hold harmless each General Partner, each officer or
director of a corporate General Partner and each partner of a partnership
General Partner and each trustee or officer of any such partner, and any other
person acting as an agent of any General Partner of the Partnership and to which
agent the General Partners shall specifically and in writing have conferred
rights under this Section 4.08, against any loss, expense, damage, claim,
liability, obligation, judgment or injury suffered or sustained by him, it, them
or any of them by reason of any act, omission or alleged act or omission by him,
it, them or any of them arising out of his, its or their activities on behalf of
the Partnership or in furtherance of the interests of the Partnership,
including, without limitation, any judgment, award, settlement, reasonable
attorney's fees and other costs or expenses as incurred in connection with the
defense of any actual or threatened actions, proceedings or claims, all costs of
which shall be charged to and paid by the Partnership as incurred; provided,
however, that the acts, omissions or alleged acts or omissions upon which such
actual or threatened actions, proceedings or claims are based were performed or
omitted in good faith and were not fraudulent, in bad faith or as a result of
wanton and willful misconduct or gross negligence by the party to be
indemnified, defended and held harmless under this Section.
4.09. Representations and Warranties of the Managing General Partner.
A. To induce Administrative General Partner to become a Partner of
the Partnership, the Managing General Partner hereby represents, warrants and
certifies to Administrative General Partner that it has no actual knowledge
contrary to any of the following:
(1) The Managing General Partner is a limited partnership duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. The Managing General Partner conducts no business
other than its interest as a Partner of the Partnership. The Managing General
Partner has the power and authority to own its property, and to carry on its
business as presently conducted or contemplated. The Managing General Partner
has not, to its knowledge, committed any material default in the obligation to
pay money under any violation of any term of any indenture, mortgage, agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to it, nor has the Managing General Partner received any notice that
it has committed any other material default under any such instrument.
(2) The execution and delivery of this Agreement (including the
admission of the Administrative General Partner as a Partner of the Partnership)
will not result in a breach of, or constitute a default under, any indenture,
mortgage or agreement to which the Managing General Partner is a party or by
which its assets are bound, or any decree, order or rule of any court or
governmental agency or any provision of applicable law which is binding on
Managing General Partner or on any of its assets, or result in the creation or
imposition of any mortgage, lien, charge, assessment, encumbrance, claim or
restriction on such assets or give to others any interest or rights therein or
create in any third party the right to modify, terminate,
22
accelerate or otherwise declare a default under any instrument or contract to
which the Managing General Partner is a party or by which its assets are
bound.
(3) All federal, state and local tax returns and reports
required by law to be filed by Managing General Partner have been duly and
timely filed (or extensions of the same have been timely filed), and all taxes,
assessments, fees and other governmental charges on or against the Managing
General Partner or upon its properties, assets, income or franchises for which a
penalty or interest would be payable if such tax were not paid prior to the date
hereof.
(4) There is no suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation, pending or, to
the best of its knowledge, threatened, which might materially and adversely
affect the business or property of the Managing General Partner.
(5) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein in the manner herein
provided will violate any agreement to which the Managing General Partner is a
party or by which it is bound, or any law, order or decree.
(6) Xxxxxx X. Xxxxxx owns at least fifty-one percent of the
partnership interests in capital and profits of Managing General Partner.
B. The foregoing representations, warranties and covenants shall
survive for a period of one (1) year after the date hereof, including, but not
limited to, any portion of such period following the withdrawal by or removal of
the Managing General Partner as a Partner of the Partnership.
C. The Managing General Partner shall indemnify and hold
Administrative General Partner harmless from and against any losses, claims,
damages or expenses, including reasonable attorneys' fees, resulting either
directly or indirectly from any breach of a warranty or representation during
the period of its survival contained in this Section 4.09.
D. Notwithstanding anything to the contrary contained herein,
Administrative General Partner shall have no claim for damages for a breach of
any representation or warranty under this Section 4.09 unless such damages
exceed $10,000 for any one breach (in which case recovery shall be permitted on
account of such breach) or $30,000 for the aggregate of all breaches (in which
case recovery shall be permitted on account of all such breaches).
E. Administrative General Partner acknowledges and agrees that
Managing General Partner makes no representation or warranty with respect to the
physical condition of the Project, the structural or environmental condition
thereof, any repairs or replacements required thereto or the Net Cash Flow, Net
Refinancing Proceeds or Net Sales Proceeds which will be generated by the
Project. Any projections of cash flow used in negotiations are meant purely as
23
an example of possible outcomes and do not constitute a representation or
warranty of future profitability of the Project.
4.10 Representations and Warranties of the Administrative General Partner.
A. To induce Managing General Partner and Limited Partner to execute
this Second Amended and Restated Agreement of Limited Partnership, the
Administrative General Partner hereby represents, warrant and certifies to
Managing General Partner that it has no actual knowledge contrary to any of the
following:
(1) Administrative General Partner is a limited partnership duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. The Administrative General Partner has the power
and authority to own its property, and to carry on its business as presently
conducted or contemplated. The Administrative General Partner has not, to its
knowledge, committed any material default in the obligation to pay money under
any indenture, mortgage, agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to it, nor has the
Administrative General Partner received any notice that it has committed any
other material default under any of the foregoing.
(2) The execution and delivery of this Agreement (including the
admission of the Administrative General Partner as a Partner of the Partnership)
has been authorized by all necessary action of its general partner and will not
result in a breach of, or constitute a default under, any indenture, mortgage or
agreement to which the Administrative General Partner is a party or by which its
assets are bound, or any decree, order or rule of any court or governmental
agency or any provision of applicable law which is binding on the Administrative
General Partner or on any of its assets, or result in the creation or imposition
of any mortgage, lien, charge, assessment, encumbrance, claim or restriction on
the Project or any of Administrative General Partner's such assets or give to
others any interest or rights therein or create in any third party the right to
modify, terminate, accelerate or otherwise declare a default under any
instrument or contract to which the Administrative General Partner is a party or
by which its assets are bound.
(3) Since the date of the balance sheet of Brandywine Realty
Trust attached hereto as Exhibit "H", there has been no material adverse change
in the financial condition of Brandywine Operating Partnership, L.P. ("BOP").
(4) All federal, state and local tax returns and reports
required by law to be filed by Administrative General Partner and BOP have been
duly and timely filed (or extensions of the same have been timely filed), and
all taxes, assessments, fees and other governmental charges on or against the
Administrative General Partner and BOP or upon their respective properties,
assets, income or franchises for which a penalty or interest would be payable if
such tax were not paid prior to the date hereof.
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(5) There is no suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation, pending or, to
the best of its knowledge, threatened, which might materially and adversely
affect the business or property of the Administrative General Partner or BOP.
(6) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein in the manner herein
provided will violate any agreement to which the Administrative General Partner
or BOP is a party or by which either of them is bound, or any law, order or
decree.
B. The foregoing representations, warranties and covenants shall
survive for a period of one (1) year after the date hereof, including, but not
limited to, any portion of such period following any withdrawal by or removal of
the Administrative General Partner as a Partner of the Partnership.
C. The Administrative General Partner shall indemnify and hold the
Partnership, Managing General Partner and Limited Partner harmless from and
against any losses, claims, damages or expenses, including reasonable attorneys'
fees, resulting either directly or indirectly from any breach of a warranty or
representation during the period of its survival contained in this Section 4.10.
D. Notwithstanding anything to the contrary contained herein,
Managing General Partner shall have no claim for damages for a breach of any
representation or warranty under this Section 4.10 unless such damages exceed
$10,000 for any one breach (in which case recovery shall be permitted on account
of such breach) or $30,000 for the aggregate of all breaches (in which case,
recovery shall be permitted on account of all such breaches).
4.11. Certain Definitions. Where representations are made to the
"knowledge," "actual knowledge," "or best of actual knowledge," or equivalent
words are used, unless specifically otherwise stated herein, such
representations are intended to reflect that the president of the general
partner of the Managing General Partner, as to Managing General Partner, and the
president of the member of the limited liability company which is the general
partner of the Administrative General Partner, as to Administrative General
Partner, have no actual knowledge to the contrary, but (a) shall not mean such
individuals are charged with the knowledge of the acts, omissions or knowledge
of any agents or employees of the entities making such representations; and (b)
shall not mean information or material which may be in the possession of the
entity generally or incidentally, but which is not actually known to the
individuals described above. None of the individuals described above shall have
any personal liability based upon this Agreement, including, but not limited to,
the representations and warranties contained herein.
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ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS
5.01. Distributions of Net Cash Flow. All Net Cash Flow, if any,
realized by or available to the Partnership for or during each Fiscal Year shall
be paid or distributed no less frequently than quarterly in the following order
of priority to the extent available:
A. To the Partners in repayment of the entire principal amounts of
any outstanding Partners' Priority Loans, together with all accrued but unpaid
interest thereon, first on account of accrued interest thereon (in proportion to
the interest so accrued) and then in repayment of the principal amounts thereof
(in proportion to the respective outstanding amounts of principal);
B. Next, to Administrative General Partner, in satisfaction of the
unpaid BOP Preferred Cumulative Return;
C. Next, to the Partners in repayment of the entire principal
amounts of any outstanding Partners' Loans, together with all accrued but unpaid
interest thereon, first on account of accrued interest thereon (in proportion to
the interest so accrued) and then in repayment of the principal amounts thereof
(in proportion to the respective outstanding amounts of principal);
D. Next, to the Partners, in proportion to the respective accrued
amounts of their Preferred Cumulative Returns, in satisfaction of their then
unpaid Preferred Cumulative Return;
E. Next, to the Partners, in proportion to their respective
Additional Capital Balances, in reduction of their Additional Capital Balances,
until such time as their respective Additional Capital Balances shall have been
reduced to zero (but if such Additional Capital Balances shall at any time
thereafter be increased, then this paragraph E shall again be operative); and,
thereafter,
F. To all Partners in accordance with their respective Participation
Percentages,
5.02. Distributions of Net Refinancing Proceeds and Net Sale Proceeds.
All Net Refinancing Proceeds and Net Sale Proceeds, if any, realized by or
available to the Partnership shall be distributed in the following order of
priority to the extent available:
A. To the Partners in repayment of the entire principal amounts of
any outstanding Partners' Priority Loans, together with all accrued but unpaid
interest thereon, first on account of accrued interest thereon (in proportion to
the interest so accrued) and then in
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repayment of the principal amounts thereof (in proportion to the respective
outstanding amounts of principal);
B. Next, to Administrative General Partner in satisfaction of the
then unpaid BOP Preferred Cumulative Return;
C. Next, to Administrative General Partner in reduction of its then
outstanding BOP Preference Capital until such time as the BOP Preference Capital
is reduced to zero;
D. Next, to the Partners in repayment of the entire principal
amounts of any outstanding Partners' Loans, together with all accrued but unpaid
interest thereon, first on account of accrued interest thereon (in proportion to
the interest so accrued) and then in repayment of the principal amounts thereof
(in proportion to the respective outstanding amounts of principal);
E. Next, to the Partners, in proportion to the respective accrued
amounts of their Preferred Cumulative Return, in satisfaction of their then
unpaid Preferred Cumulative Return;
F. Next, to the Partners, in proportion to their respective
Additional Capital Balances, in reduction of their Additional Capital Balances,
until such time as their respective Additional Capital Balances shall have been
reduced to zero (but if such Additional Capital Balances shall at any time
thereafter be increased, then this paragraph F shall again be operative); and,
thereafter,
G. To all Partners in accordance with their respective Participation
Percentages,
5.03. Availability of Funds. The distributions to which the Partners
are entitled pursuant to this Article V are conditioned upon the availability of
funds to the Partnership, and such distributions do not and shall not constitute
interest, nor is there any guarantee or obligation by the Partnership to make
any distributions under this Agreement, except to the extent that the Managing
General Partner determines, in accordance with the Operating Budget, that cash
in excess of the requirements of the Partnership is available for distribution
to the Partners.
5.04 Tax Withholding. To the extent the Partnership pays any amount to
any federal, state or local taxing authority as a result of any obligation to
collect, pay over or withhold taxes with respect to any Partner's allocable
share of Partnership income or gain, the amount so collected, paid over or
withheld shall be treated for all purposes of this Agreement as having been
paid or distributed to such Partner and shall reduce, on a dollar for dollar
basis, amounts otherwise payable or distributable to such Partner under this
Article V. The Partnership may, in
27
the discretion of either General Partner, require each Partner to reimburse
the Partnership, for any tax withholding payments made by the Partnership on
behalf of such Partner.
5.05 Allocation of Profits and Losses.
a. Profits. Profits for any Fiscal Year shall be allocated among
the Partners in the following order of priority:
A. First, if any Partner has a deficit balance in his or its
Capital Account, to the Partners in accordance with and to the extent of such
deficit balances, until no Partner has a deficit balance in his or its Capital
Account;
B. Next, if any Partner has a Cumulative Net Loss, to the
Partners in accordance with and to the extent of their Cumulative Net Losses,
until no Partner has a Cumulative Net Loss;
C. Next, if any Partner has received a payment on account of a
BOP Preferred Cumulative Return, to such Partner until such Partner has a
Cumulative Net Profit equal to the aggregate amount of such Partner's aggregate
BOP Preferred Cumulative Return as of the end of the Fiscal Year to which such
allocation relates;
D. Next, to the Partners entitled to receive payment on account
of a Preferred Cumulative Return, until each such Partner has a Cumulative Net
Profit equal to the aggregate amount of such Partner's aggregate Preferred
Cumulative Return as of the end of the Fiscal Year to which such allocation
relates;
E. Thereafter, to the Partners in accordance with their
respective Participation Percentages.
b. Losses. Losses for any Fiscal Year shall be allocated among the
Partners in the following order of priority:
A. If any Partner has a Cumulative Net Profit, then Losses
shall be allocated to the Partners with Cumulative Net Profit, until no Partner
has a Cumulative Net Profit, in the following order of priority:
i. First, Losses in an amount up to the amount of any
Profits previously allocated under Section 5.05(a)(E) above shall be allocated
among the Partners in the same manner as such Profits were previously allocated
under Section 5.05(a)(E).
ii. Next, Losses in an amount up to the amount of any
Profits previously allocated under Section 5.05(a)(D) above shall be allocated
among the Partners in the same manner as such Profits were previously allocated
under Section 5.05(a)(D);
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iii. Next, Losses in an amount up to the amount of any
Profits previously allocated under Section 5.05(a)(C) above shall be allocated
among the Partners in the same manner as such Profits were previously allocated
under Section 5.05(a)(C);
B. Next, if no Partner has a Cumulative Net Profit, Losses
shall be allocated to the Partners in accordance with their respective
Contribution Percentages; provided, however, that no Losses shall be allocated
to a Partner under this Section 5.05(b)(B) to the extent that such allocation
would cause or increase a deficit balance in such Partner's Hypothetical Capital
Account;
C. Any remaining Losses shall be allocated (i) first, to the
Partners (if any) with positive balances in their Hypothetical Capital Accounts,
in proportion to and to the extent of such positive balances and (ii)
thereafter, any remaining Losses shall be allocated among the Partners in
accordance with their respective interests in the Partnership, in accordance
with Treasury Regulation Section 1.704-1(b)(3).
c. Allocations Upon Sale of Project. Gain or loss recognized upon
the sale of all or substantially all of the assets of the Partnership shall be
determined based upon the Book Value of the Partnership's assets and shall be
allocated so that, to the maximum extent possible, (i) no Partner has a negative
balance in its Capital Account and (ii) the positive balance in each Partner's
Capital Account (as determined immediately prior to the distribution of Net
Sales Proceeds) equals the aggregate amount of liquidating distributions such
Partner is entitled to receive upon the liquidation of the Partnership under
Section 10.03 below.
d. Changes in Interests. If the respective interests of the
Partners in the Partnership change during any Fiscal Year, then the amount of
all items to be allocated, credited or charged to the Partners for such entire
Fiscal Year (other than items of gain or loss from a sale of all or
substantially all of the Partnership's assets, which shall be allocated under
the interim closing of the books method) shall be allocated to the portion of
such Fiscal Year which precedes the date of each such change and to the portion
of the Fiscal Year which occurs on and after the date of each such change, in
proportion to the number of days in each such portion, and the amounts of the
items so allocated to each such portion shall be allocated, credited or charged
to each of the Partners in proportion to their respective interests during each
such portion of the Fiscal Year in question. Notwithstanding the foregoing, the
Managing General Partner may elect to use the closing of the books method or any
other method allowed by the Treasury Regulations in the event that a new Partner
is admitted to the Partnership or an existing Partner is redeemed during a
Fiscal Year.
e. Regulatory Allocations. Notwithstanding any other provisions to
the contrary in this Agreement, the following provisions shall apply:
A. All Nonrecourse Deductions for each Fiscal Year shall be
allocated to the Partners in proportion to their respective Contribution
Percentages. For purposes of
29
Regulation Section 1.752-3, all excess nonrecourse liabilities of the
Partnership will be allocated among the Partners in proportion to their
respective Contribution Percentages.
B. All Partner Nonrecourse Deductions for each Fiscal Year
shall be allocated to the Partners who bear the economic risk of loss with
respect to the Partner Nonrecourse Debt giving rise to such deductions, in
accordance with Treasury Regulation Section 1.704-2(i)(1).
C. Any Partner who unexpectedly receives an adjustment,
allocation or distribution described in clauses (4), (5) or (6) of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) which produces a deficit in its
Hypothetical Capital Account shall, to the extent required by the Treasury
Regulations, be allocated items of income and gain in amount and manner
sufficient to eliminate the deficit in its Hypothetical Capital Account as
quickly as possible. This Section 5.05(e)(C) is intended to comply with the
"qualified income offset" requirement in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(3), and shall be interpreted consistently therewith.
D. If there is a net decrease in Minimum Gain during a Fiscal
Year, then before any other allocation is made for such year, the Partners shall
be allocated items of income and gain for such year (and, if necessary,
subsequent years) in the amount and in the proportions necessary to satisfy the
requirements of a "minimum gain chargeback" under Treasury Regulation Section
1.704-2(f).
E. If there is a net decrease in Partner Minimum Gain during a
Fiscal Year, then before any other allocation is made for such year, the
Partners shall be allocated items of income and gain for such year (and, if
necessary, subsequent years) in the amount and in the proportions necessary to
satisfy the requirements of a partner nonrecourse debt minimum gain chargeback
under Treasury Regulation Section 1.704-2(i)(4).
F. The allocations set forth in subsections A through E above
(the "Regulatory Allocations") are intended to comply with certain requirements
of Treasury Regulation Sections 1.704-1(b) and 1.704-2. Notwithstanding any
other provision of this Section 5.05 (other than the Regulatory Allocations),
the Regulatory Allocations shall be taken into account in allocating other items
of income, gain, loss and deduction among the Partners so that, to the extent
possible, the net amount of such allocation of other items and the Regulatory
Allocations to each Partner should be equal to the net amount that would have
been allocated to each such Partner if the Regulatory Allocations had not
occurred.
f. Contributed/Revalued Property. If any property is contributed to
the Partnership in kind, or if the Book Value of any Partnership property is
adjusted pursuant to applicable Regulations under section 704(b) of the Code and
this Agreement, all income, gain, loss and deduction with respect to such
contributed or revalued property shall, solely for tax purposes, be allocated
among the Partners so as to take account of any variation between the adjusted
basis of such property to the Partnership for federal income tax purposes and
its initial or
30
revalued Book Value, in such manner as the General Partner may determine in
accordance with section 704(c) of the Code, the Treasury Regulations
promulgated thereunder and Treasury Regulation Section 1.704-1(b)(4)(i).
Allocations pursuant to this Section 5.05(f) are solely for purposes of
federal and state taxes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Profit, Loss
or distributions pursuant to any provision of this Agreement.
g. Knowledge of Tax Consequences. The Partners are aware of and
consent to the income tax consequences of the allocations made by this
Section 5.05. The Partners hereby agree to be bound by the provisions of this
Section 5.05 in reporting their shares of Partnership income and loss for income
tax purposes. Upon the advice of an outside accountant or of legal counsel to
the Partnership, this Section 5.05 may be amended from time to time by the
Managing General Partner as may be necessary to comply with Section 704 of the
Code and the Treasury Regulations promulgated thereunder; provided, however,
that no such amendment shall become effective without the consent of those
Partners who would be materially adversely affected thereby.
ARTICLE VI
BOOKS AND RECORDS; TAX MATTERS
6.01. Accounting. Except as may be otherwise directed by all
General Partners, the Partnership shall maintain its books and records on a
cash basis and shall prepare (i) financial statements on the accrual basis
used for federal income tax purposes, and (ii) income tax returns on the
accrual method of accounting and on a calendar year basis. Appropriate
records will be kept so that upon each closing of the Partnership books it is
possible to determine, among other items defined in this Agreement: (i) the
amount of capital actually contributed by each Partner; (ii) the amount of
cash or other property distributed to each Partner; (iii) the effect, if any,
of all Partnership items of income, gain, loss, deduction or credit on each
Partner's Capital Account; and (iv) the amount of Partners' Priority Loans,
Partners' Loans, Additional Capital Contributions, Capital Balances
(including, but not limited to, BOP Preference Capital), Net Cash Flow, Net
Refinancing Proceeds, Net Sale Proceeds, and Preferred Cumulative Returns.
6.02. Statements.
A. Within thirty (30) days after the close of each calendar year,
the Managing General Partner shall endeavor to furnish, at Partnership expense,
to each Partner, with respect to such calendar year, (i) a profit and loss
statement, (ii) a statement of source and application of funds, (iii) a
Partnership balance sheet as of the close of such fiscal year, and (iv) such
other statements showing in detail each Partner's interest in each of the items
described in Section 6.01. hereof. The foregoing statements shall be audited by
certified public accountants acceptable to all
31
of the General Partners, and the cost of preparing the statements and the
cost of each such audit shall be paid for by the Partnership.
B. The Managing General Partner shall have prepared (at Partnership
expense) and shall provide the other General Partners with the following
additional materials: (i) quarterly reports, submitted not later than the
twentieth (20th) day following the close of each calendar quarter, which shall
include a rent roll indicating tenants, lease term, monthly rent and space or
suite identification, and space available for lease; (ii) at the specific
request of any of the other General Partners (a) copies of the disbursements
ledger detailing payees, dates, and amounts of disbursements, (b) copies of the
cash receipts ledger detailing the tenant, and other receipts, date of deposit,
and amount of the receipt, (c) copies of bank statements and cash
reconciliations for all bank accounts, (d) journal entries and explanations
thereof, and (e) trial balances; (iii) a quarterly reconciliation form (in form
and in detail reasonably satisfactory to the requesting General Partner)
detailing all Partnership distributions of cash flow; and (iv) quarterly
unaudited balance sheets and income statements prepared on the cash method of
accounting, to be received within twenty (20) days of the close of the fiscal
quarter.
C. During construction, the Managing General Partner shall have
prepared (at Partnership expense) and shall provide each General Partner with
the following additional materials: (i) a detailed construction cost budget by
major trade category/component and all amendments or other changes to the same
(the budget to be prepared and provided as soon as practicable following the
date hereof, and the amendments or other changes to be provided as soon as
practicable following their preparation); (ii) monthly construction progress
reports, submitted not later than the fifteenth (15th) day following the close
of the month, detailing the amounts expended by category/component (as budgeted
in 6.02.C(i) above) and the percentage of completion; and (iii) such other
materials, reports and other documentation as may be reasonably requested by
Administrative General Partner from time to time.
6.03. Inspection. All books of account and all other records of the
Partnership (including an executed counterpart of this Agreement and all
amendments hereto, and an executed counterpart of the Certificate and all
amendments thereto) shall at all times be kept by the Managing General Partner
at the Partnership's place of business and may be inspected at any reasonable
time by any Partner.
6.04. Tax Matters.
A. The Managing General Partner shall cause, at Partnership expense,
to be prepared and filed all income tax returns for the Partnership on an
accrual basis and shall furnish copies thereof to all Partners. At least thirty
(30) days prior to the filing of any tax return for the Partnership with the
Internal Revenue Service), the Managing General Partner shall deliver to each
other General Partner for its review and written approval before such filing a
draft copy of the Partnership's U.S. Partnership Return of Income for such
fiscal year (which copy shall be prepared by the Partnership's regular certified
public accountants, shall be delivered in accordance
32
with the requirements of Article XI hereof, and shall be accompanied by (i) a
reconciliation, prepared by such accountants, between the Partnership's
financial statements and tax returns; and (ii) a breakdown, prepared by such
accountants, of Project components qualifying for investment tax credit).
B. The Managing General Partner shall, within five (5) days of
receipt thereafter, forward to each General Partner a photocopy of any
correspondences (excluding routine correspondence relating to administrative
forms) relating to the Partnership received from the Internal Revenue Service.
The Managing General Partner shall, within five (5) days thereafter, advise each
General Partner in writing of the substance of any conversation held with any
representative of the Internal Revenue Service. Any reasonable costs incurred
by the Managing General Partner for retaining accountants or lawyers on behalf
of the Partnership in connection with any Internal Revenue Service audit or
state tax audit of the Partnership shall be expenses of the Partnership.
Without the consent of all of the General Partners, no Partner shall (a) take or
assert any position in connection with any Internal Revenue Service audit, state
tax audit, or administrative or court proceeding, which is inconsistent with any
item or position reflected in the Partnership's U.S. Partnership Return of
Income with respect to the fiscal period in question, (b) commence or prosecute
any proceeding in any court for the adjustment of any item reflected in such
return, or (c) take or suffer any action which would impair the authority of any
General Partner to bind the Partnership or the Partners. In connection with the
foregoing, any General Partner shall be permitted to condition its consent
hereunder on the agreement of the Partner requesting the consent to (i) proceed,
or refrain from proceeding, in one or more specified administrative or judicial
forums, (ii) conduct any such proceeding in a particular manner, or (iii) abide
by any other terms or restrictions which the General Partner may impose in the
best interests of the Partnership as a condition of granting its consent
hereunder. The Managing General Partner shall notify all Partners of any
settlement offers from the Internal Revenue Service, and shall not, in any case,
enter into any settlement with the Internal Revenue Service on behalf of the
Partnership without the approval of all of the General Partners.
C. In connection with the assignment of a Limited Partner's interest
in the Partnership permitted by Article VII hereof, any General Partner shall
have the right, but shall not be obligated, on behalf of the Partnership and at
the time and in the manner provided by Section 754 of the Code (or any successor
section thereto) and the Regulations thereunder, to make an election to adjust
the basis of Partnership property in the manner provided in Sections 734(b) and
743(b) of the Code (or any successor sections thereto). All expenses incurred
by the Partnership to make such an election shall be paid by the transferee
benefitted by such election.
D. Should the Managing General Partner fail to fulfill or perform
any of its obligations under this Article VI, then any General Partner, in
addition to any other rights or remedies it may have pursuant to this Agreement,
may (i) engage such certified public accountants as it may select to cure the
default at Partnership expense unless such default is beyond the Managing
General Partner's reasonable control; or (ii) cause the Managing General Partner
to request an extension of the filing date of any income tax return for a period
ending at least thirty
33
(30) days beyond the date on which such return and all accompanying
documentation were received by all of the General Partners pursuant to
Section 6.04.A. above.
ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS;
WITHDRAWAL OF PARTNERS;
REMOVAL OF THE MANAGING GENERAL PARTNER
7.01. Transfer of General Partnership Interests.
A. During the entire term of the Partnership, except as hereinafter
permitted in subsection 7.01(B) or 7.01(C) hereof, none of the following shall
be permitted without the prior written consent of all General Partners, such
consent to be given or withheld by the General Partners in their sole
discretion: (i) no General Partner shall directly or indirectly sell, convey,
assign, pledge, hypothecate, transfer or otherwise dispose of or encumber all or
any part of its interest in the Partnership; (ii) no present general partner of
the Managing General Partner shall directly or indirectly sell, convey, assign,
pledge, hypothecate, transfer or otherwise dispose of or encumber all or any
part of its interest in the Managing General Partner; nor shall any such general
partner withdraw or retire from the Managing General Partner, as the case may
be; and (iii) no present general partner of the Administrative General Partner
shall directly or indirectly sell, convey, assign, pledge, hypothecate, transfer
or otherwise dispose of or encumber all or any part of its interest in the
Administrative General Partner, nor shall any such general partner withdraw or
retire from the Administrative General Partner as the case may be; provided,
however, that following the receipt of the cash capital contributions required
by Section 3.07 hereof, the general partner of Administrative General Partner
may be an entity, all of which is owned directly or indirectly by Brandywine
Operating Partnership, L.P. and/or by Administrative General Partner and/or
Brandywine Realty Trust and which otherwise satisfies the qualifications set
forth in subsections (1)-(4) of subsection (B) hereof.
B. At any time following the receipt by the Partnership of the
Capital Contribution required by Section 3.07(B) hereof, the Partnership
interest of Administrative General Partner may be assigned to an entity, all of
which is owned, directly or indirectly, by Brandywine Operating Partnership,
L.P., a Delaware limited partnership and/or by Administrative General Partner or
Brandywine Realty Trust, which entity shall be admitted as a substituted
Administrative General Partner of the Partnership, provided that the following
conditions are met in each instance:
(1) A duly executed and acknowledged instrument of assignment
and Power of Attorney, setting forth the intention of the assignor that the
assignee become a substituted Administrative General Partner in its place and
confirming and restating the
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appointment and powers contained in Section 12.02. hereof, is delivered to
the Managing General Partner; and
(2) The Managing General Partner, at its request, shall have
been provided, at the expense of the transferor, with an opinion of counsel in
form and substance satisfactory to the Managing General Partner and from counsel
satisfactory to the Managing General Partner to the effect that such transfer or
assignment will not violate the registration provisions of the Securities Act of
1933, as amended, or the rules and regulations thereunder or the applicable
state securities or "Blue Sky" law or laws and the rules and regulations
thereunder; and
(3) The assignor and assignee execute and acknowledge such other
instruments as any Managing General Partner reasonably may deem necessary or
desirable to effect such admission, including the written acceptance and
adoption by the assignee of the provisions of this Agreement and the assumption
of any unperformed obligation of the assignor (provided that such assignor shall
not thereby be released from any of its unperformed obligations hereunder); and
(4) The entity shall have the following characteristics:
(a) It shall be formed for the sole purpose of acquiring
interests in the various partnerships formed to hold
all or portions of the area known as Tower Bridge,
located in Conshohocken and West Conshohocken,
Xxxxxxxxxx County, Pennsylvania, in partnerships formed
with Managing General Partner or affiliates thereof;
(b) It shall have no liabilities except those incurred in
connection with its obligations as a partner in such
partnerships and no other assets constituting real
property;
(c) The Managing General Partner shall consent to the
admission of such substitute Administrative General
Partner, which consent shall not be unreasonably
withheld.
(d) All Partners will if required by the Act, no later than
thirty (30) days after the date of compliance with the
provisions of this Section 7.01(B), amend the
Certificate to reflect the admission of any such
assignee as a substituted limited partner.
C. Notwithstanding anything to the contrary contained herein, but
subject to Section 7.07 hereof, either General Partner shall have the right to
sell, transfer or assign all but
35
not part (except as set forth in subsection 7.01(C)(6) hereof), of its
interest in the Partnership, provided that the following conditions are met
in each instance:
(1) If the transferor is Administrative General Partner, a duly
executed and acknowledged instrument of assignment and Power of Attorney,
setting forth the intention of the assignor that the assignee become a
substituted Administrative General Partner in its place and confirming and
restating the appointment and powers contained in Section 12.02 hereof, shall
have been delivered to the Managing General Partner; and
(2) The other General Partner, at its request, shall have been
provided, at the expense of the transferor, with an opinion of counsel in form
and substance satisfactory to the other General Partner and from counsel
satisfactory to the other General Partner to the effect that such transfer or
assignment will not violate the registration provisions of the Securities Act of
1933, as amended, or the rules and regulations thereunder or the applicable
state securities or "Blue Sky" law or laws and the rules and regulations
thereunder; and
(3) The assignor and assignee execute and acknowledge such other
instruments as any General Partner reasonably may deem necessary or desirable to
effect such admission, including the written acceptance and adoption by the
assignee of the provisions of this Agreement and the assumption of any
unperformed obligation of the assignor (provided that such assignor shall not
thereby be released from any of its unperformed obligations hereunder); and
(4) The entity shall have the following characteristics:
(a) It shall be formed for the sole purpose of acquiring an
interest in the Partnership;
(b) It shall have no liabilities except those incurred in
connection with its obligations as a Partner in the
Partnership and no other assets constituting real
property;
(c) All Partners will, if required by the Act, no later
than thirty (30) days after compliance with the
provisions of this Section 7.01(C), amend the
Certificate to reflect the admission of any such
assignee as a substituted general partner; and
(d) The transferee shall be one hundred percent (100%)
owned, directly or indirectly, by an "Institutional
Investor," as hereinafter defined. The term
"Institutional Investor," as used herein, shall mean an
entity which has a net worth in excess of $25 million
other than an entity which the parties have agreed in
writing is not a permitted transferee; and
36
(5) The transferee shall not be an entity with which, or
controlled by, under common control with or controlling any entity or person
with which, the remaining General Partner has engaged in any actual pending or
threatened litigation previously; and
(6) In the judgment of the non-transferring General Partner,
the transfer of the transferring General Partner's interests, either
individually or in combination with other transfers which have previously
occurred or which are then contemplated pursuant to good faith negotiations
which have commenced, will not result in any other negative tax consequences
for any Partner or the Partnership. Notwithstanding the foregoing, if it is
possible, in the judgment of the non-transferring General Partner, to
structure the transfer in a lawful manner at no cost to the Partnership and
the other Partners so as to avoid all negative tax consequences, the
non-transferring General Partner shall cooperate with such a transfer
provided the remaining requirements of this Subsection 7.01(C) are met and
provided that such transfer shall not result in the transferring General
Partner's interest being held by two general partners of the partnership. By
way of example and not limitation, if the negative tax consequences could be
avoided by transferring the General Partner's interests in stages over time,
the transferring General Partner shall initially transfer only so much of
such transferring General Partner's interest as will not, in the
non-transferring General Partner's judgment, result in such negative tax
consequences, with the remaining interest of such transferring General
Partner being converted to a limited partnership interest automatically upon
such event. The remaining partnership interest of the transferring Partner
would then be transferred one (1) day after the expiration of any period
required, in the judgment of the non-transferring General Partner, to avoid
the negative tax consequence. Such procedure is referred to herein as a "Tax
Staggered Transfer." In all instances requiring judgment of the
non-transferring General Partner under this Section 7.01(C)(6), the judgment
of such General Partner shall be deemed to permit the requested action of the
transferring General Partner unless the non-transferring General Partner does
not notify the transferring General Partner of an objection (and the general
basis therefor) within thirty (30) days after written notice from the
transferring General Partner of its proposed action.
7.02. Transfer of Limited Partnership Interests.
A. Subject to Section 7.05 hereof, the Partnership interest of a
Limited Partner, or any part thereof, may not be transferred or assigned, and no
such transferee or assignee may be admitted as a substituted limited partner of
the Partnership, unless in each instance:
(1) A duly executed and acknowledged instrument of assignment
and Power of Attorney, setting forth the intention of the assignor that the
assignee become a substituted limited partner in its place and confirming and
restating the appointment and powers contained in Section 12.02. hereof, is
delivered to the General Partners; and
(2) The General Partners, if any or all of them shall so
request, shall have been provided, at the expense of the transferor, with an
opinion of counsel in form and
37
substance satisfactory to the requesting General Partner(s) and from counsel
satisfactory to the requesting General Partner(s) to the effect that such
transfer or assignment will not violate the registration provisions of the
Securities Act of 1933, as amended, or the rules and regulations thereunder
or the applicable state securities or "Blue Sky" law or laws and the rules
and regulations thereunder; and
(3) The assignor and assignee execute and acknowledge such other
instruments as any General Partner reasonably may deem necessary or desirable to
effect such admission, including the written acceptance and adoption by the
assignee of the provisions of this Agreement and the assumption of any
unperformed obligation of the assignor ( provided that such assignor shall not
thereby be released from any of its unperformed obligations hereunder).
B. All Partners will if required by the Act, no later than thirty
(30) days after the date of compliance with the provisions of this Section
7.02., amend the Certificate to reflect the admission of any such assignee as a
substituted limited partner.
7.03. Expenses. Expenses of the Partnership or of any Partner (other
than the transferee) occasioned by transfers of interests held by Partners shall
be reimbursed to the Partnership or Partner, as the case may be, by the
transferring Partner.
7.04. Withdrawal of Partners.
A. Except for permitted transfers under Section 7.01, no General
Partner may voluntarily withdraw or retire from the Partnership without the
prior written consent of the other General Partner, such consent to be given or
withheld by the other General Partner in its sole discretion.
B. No Limited Partner may voluntarily withdraw or retire from the
Partnership except upon the assignment of its entire interest in the Partnership
(if and as permitted by this Article VII) or upon the surrender, abandonment or
other voiding of its interest pursuant to the next succeeding sentence hereof.
Any Limited Partner may at any time, by at least thirty (30) days prior written
notice delivered to all General Partners, renounce its interest in all current
and future profits, losses and distributions of the Partnership, and abandon to
the Partnership its capital contributions and its interest in all Partner's
Loans and Partner's Priority Loans made by it; provided, however, that any such
surrender, abandonment or other voiding shall not in any case affect the
withdrawing Partner's obligations hereunder.
7.05. Death, Incompetency, Dissolution or Bankruptcy of a Limited
Partner. Upon the death, legal incompetency, dissolution or bankruptcy of a
Limited Partner, its or his personal representative will have all the rights of
such deceased, incompetent, dissolved or bankrupt Limited Partner for the
purpose of settling or managing its estate, and such power as the deceased,
incompetent, dissolved or bankrupt Limited Partner possessed to constitute a
successor
38
as an assignee of its interest in the Partnership and to join with such
assignee in making application to substitute such assignee as a substituted
limited partner.
7.06. Deadlock of the General Partners.
A. At any time after the date hereof, if the General Partners become
deadlocked on a material issue which, in the opinion of any one of them is
essential for the successful operation or prudent conduct of the Partnership's
business, or if in the opinion of any General Partner the Managing General
Partner has taken unauthorized action on behalf of the Partnership or has failed
to take action which is authorized hereby or which the General Partners have
authorized and has failed to correct such action or inaction within fifteen (15)
days after written notice from any General Partner to the Managing General
Partner specifying such action or inaction, then in either case the provisions
of this Section 7.06. shall apply and either of the aggrieved General Partners
(the "Declaring Partner(s)") shall be permitted to pursue the rights provided
for below.
B. For purposes of this Section 7.06., the following definitions and
other provisions shall apply:
(i) If the Declaring Partner is the Administrative General
Partner, then the "Offeror" shall be the Administrative General Partner and the
"Offeree" shall be the Managing General Partner and (so long as the Limited
Partner is Xxxxxx X. Xxxxxx, an entity at least fifty-one percent (51%) owned by
him or a transferee from him which has not been approved or which is not
required to be approved by Administrative General Partner) the Limited Partner;
(ii) If the Declaring Partner is the Managing General Partner,
then the "Offeror" shall be the Managing General Partner and (so long as the
Limited Partner is Xxxxxx X. Xxxxxx, an entity at least fifty-one percent (51%)
owned by him or a transferee from him which has not been approved or which is
not required to be approved by Administrative General Partner), the Limited
Partner, and the "Offeree" shall be the Administrative General Partner; and
(iii) An "Offer" or the "Offers" shall mean the offer(s) to
sell or purchase partnership interests pursuant to the provisions of this
Section 7.06.
C. In the event of a deadlock described in the foregoing Section
7.06.A., the Declaring Partner shall have the right to deliver to the other
General Partner(s) a written demand that the requested action be taken or that
the deadlocked issue be resolved in favor of the Declaring Partner, but if such
other General Partner does not, within ninety (90) days following the delivery
of such demand, respond affirmatively to the demand and commence and thereafter
continue diligently to perform the action requested or the resolution of the
issue as requested, then the Declaring Partner shall have the right to pursue
the compulsory buy-sell provisions appearing below in Section 7.06.D.
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D. A Declaring Partner, at any time within thirty (30) days
following expiration of the ninety (90) day period established in Section
7.06.C. above, if the other General Partner does not respond affirmatively to
the demand and commence and thereafter continue diligently to perform the action
requested, shall be permitted to institute the following compulsory buy-sell
provisions:
(i) The Offeror may make to the Offeree an Offer to sell the
entire interests in the Partnership of the Offeror, and to purchase the entire
interests in the Partnership of the Offeree. Except as expressly provided in
clause (ii) of this Section 7.06.D., no Offer shall be subject to the provisions
of this Section 7.06. unless such Offer is both an Offer to sell the entire
interests of the Offeror and an Offer to purchase the entire interests of the
Offeree, and such Offer must specify that the price of the interests to be so
transferred is payable by bank certified, cashier's or treasurer's check. The
selling price and the purchase price specified in such Offer must be identical
in amount for each percent of interest in the Partnership and must be, except as
provided for in the parenthetical below, proportionate to the respective
Participation Percentages of the Offeree (that is, the selling price and the
purchase price so specified must be identical as to each other and for each
percent of interest in the Partnership which is subject to such Offer, except
that such price shall be appropriately adjusted to reflect, on a
dollar-for-dollar basis the difference, if any, between (a) the Additional
Capital Balances and BOP Preference Capital of the respective Offeror and
Offeree plus (b) the accrued and unpaid Preferred Cumulative Returns and BOP
Preferred Cumulative Return of the respective Offeror and Offeree, plus (c) the
aggregate amount of principal and interest, if any, owing to the respective
Offeror and Offeree by reason of advances made hereunder as Partners' Loans or
Partners' Priority Loans). Such Offer shall be irrevocable for a period of
thirty (30) days, and the Offeree may, on or before the thirtieth (30th) day
after the date of such offer, accept either the Offer to sell or the Offer to
purchase (but not both), and upon acceptance the Offeror shall be required to
sell or to purchase, as the case may be. If the Offeree fails within such
thirty (30) day period to accept either of such Offers, then the Offer shall
automatically expire and be of no further force or effect; provided, however,
that the Offeror shall thereupon have the right, on or before the fifteenth
(15th) day after the expiration of such thirty (30) day period, to purchase the
interests of the Offeree, at the applicable price specified in the original
Offer, and if the Offeror exercises such right the Offeree shall be required to
sell its interests herein. If the Offeror fails to exercise its right to buy
within the time specified, either General Partner may thereafter make a new
Offer pursuant to this Section 7.06.
(ii) If the Offeror or Offeree, as the case may be, exercises its
rights hereunder to buy or sell, a closing thereunder shall be held at the time
and place and on the date specified by the purchaser by written notice to the
seller(s), which date shall in any case be on or prior to the expiration of the
forty-fifth (45th) day after the Offer to buy or sell has been made. At such
closing, upon payment of the purchase price required by subsection D(i) hereof,
the purchasing party shall have the right to designate a substitute transferee.
40
7.07. Right of First Refusal.
A. Notwithstanding the consent of the Partners under Sections 7.01
and 7.02 hereof (or the absence of a need for consent under Section 7.01(C)),
no Partner may transfer or assign its partnership interest herein, or any
part thereof, unless such interest shall first be offered to the other
Partners for a period of thirty (30) days at a price (the "Refusal Right
Purchase Price") equal to that offered to the selling Partner pursuant to a
bona fide offer arrived at upon arm's length dealing, the terms of which and
the identity of the offeror having been disclosed to all of the Partners. If
any Partner or Partners elect to exercise the right of first refusal granted
hereby, they collectively must accept all of the interest being offered. If
more than one Partner elects to accept all of the interest being offered,
such interest shall be allocated according to the ratio of the respective
Participation Percentages of the accepting Partners. If the offering Partner
has not received written acceptance of its offer within such thirty (30) day
period, it shall then be free, subject to the provisions of this Article VII,
to dispose of the interest offered to the other Partners on the terms of the
bona fide offer and to the offeror previously disclosed to the Partners. If
the offering Partner fails to do so within one hundred twenty (120) days,
following expiration of such 30-day period, the first refusal procedure
established by this Section 7.07 shall be reinstated.
B. The Refusal Right Purchase Price payable hereunder, in the
event one or more Partners elects to exercise the right of first refusal
granted hereby, shall be payable in the manner and on the terms of the third
party offer, except that such Partner may elect to pay cash in the same
amount as and in lieu of any non-cash consideration.
C. The provisions of this Section 7.07 shall not apply to (i) any
transfer occurring by operation of law as a result of the incompetency or
incapacity of a Partner; or (ii) any transfer occurring by operation of law
or by bequest as a result of the death of a Partner; or (iii) any transfer
occurring by reason of the exercise of or a closing under the calls described
in Section 7.06. above; or (iv) any transfers permitted by Section 7.01(B);
but the provisions of this Section 7.07 shall in all cases be subject to the
prohibitions, consents and approvals and other conditions required by
Sections 7.01 and 7.02 hereof.
D. Notwithstanding anything set forth in subsection A hereof, in
the event the selling Partner proposes to transfer or assign its partnership
interest pursuant to Section 7.01(C) hereof, the offering Partner shall give
the other Partners ninety (90) days prior written notice rather than thirty
(30) days provided above, and if the right of first refusal is exercised, the
exercising Partner shall have a period of two hundred seventy (270) days
within which to close the acquisition; provided, however, that in the event
of a Tax Staggered Transfer as required by Section 7.01(C), the exercising
Partner shall have such additional period of time as shall be necessary to
make such event a Tax Staggered Transfer.
7.08. Status of Interests Transferred. In any transfer, assignment
or conveyance of a general or limited partnership interest herein by a
Partner to any other Partner or other person, by the express terms of this
Agreement or by operation of law, subject to Article V hereof, the transferee
41
or assignee shall succeed to the same share of profits and losses of the
Partnership and the same Contribution Percentages, Participation Percentages,
distribution priorities and ownership rights as were incident to the interest
so transferred, assigned or conveyed.
7.09. Removal of the Managing General Partner.
A. Subject to the provisions of this Section 7.09, at any time
after the date hereof the Managing General Partner may be removed as a
General Partner of the Partnership upon the direction of the Administrative
General Partner if the Managing General Partner has:
(1) willfully, or as a result of its negligence, failed in any
year to distribute Net Cash Flow, Net Refinancing Proceeds or Net Sale
Proceeds as and to the extent required hereunder; or
(2) willfully, or as a result of its negligence, failed in any
year to deliver the statements and reports required by Article VI hereof;
failed to carry out any of its duties or obligations under Article IV hereof
(including, without limitation, any failure to devote sufficient time or
attention to the management and other affairs of the Partnership or any
failure to curtail other activities or projects as provided in Section 4.01.
hereof); or otherwise violated in a material respect any other provision of
this Agreement or any provision of applicable law, including, without
limitation, if any of its representations or warranties set forth herein
shall have been wrong or incorrect when made; in each instance under this
clause (2) if such failure, violation or misstatement has a material adverse
effect on the Partnership or on any Partner;
(3) transferred or attempted to transfer its partnership
interest in the Partnership or other interests in or assets of the
Partnership, or withdrawn or retired or attempted to withdraw or retire as a
General Partner, other than in accordance with the provisions of this
Agreement; or
(4) suffered the transfer of interests in Managing General
Partner or in its corporate general partner such that Xxxxxx X. Xxxxxx or an
individual entity who obtains an interest by death or incapacity of Xxxxxx X.
Xxxxxx shall no longer retain effective control over Managing General Partner
but only if any of the foregoing described grounds for removal has not been
completely and fully cured in its entirety, to the satisfaction of the
Administrative General Partner, within thirty (30) consecutive days following
the Managing General Partner's receipt of written notice specifying such
grounds.
B. Notice of intended removal (citing the failure to cure the
cause or causes for removal) (the "Removal Notice") shall be sent to the
Managing General Partner signed by or on behalf of the Administrative General
Partner. Within ten (10) consecutive days after such Removal Notice is
received by the Managing General Partner, the Managing General Partner shall
send written notice to the Administrative General Partner admitting or
denying the grounds for removal. If such grounds for removal are admitted,
42
or if the Managing General Partner fails timely to respond to the Removal
Notice from any General Partner required hereby, then the Managing General
Partner shall be removed as of a date which is one (1) day after the
expiration of such ten (10) day period. If the grounds for removal are
denied, then the matter shall be handled as follows:
At the election of any General Partner, the matter shall be an
"Arbitrable Dispute" and shall be subject to the process set forth in Section
7.11 hereof, in which event the Managing General Partner shall retain all
rights, powers and duties hereunder as a General Partner, all authority in
respect of the Partnership and the conduct of its business until a final
determination of the matter has been rendered by the Arbitrator, as
hereinafter defined. If such determination is made to the effect that
grounds for removal exist, then (a) such determination, at the election of
the Managing General Partner exercised within sixty (60) days of the
rendering thereof, shall not be binding on the Managing General Partner or
the Partnership, (b) the matter shall be litigated, at the election of the
Managing General Partner exercised within sixty (60) days of the rendering of
such determination, in any competent state or federal court in the
Commonwealth of Pennsylvania and in accordance with the rules of court then
obtaining, and (c) the Managing General Partner, on the date on which such
determination was made and thereafter during the period prior to the Removal
Date (the "Suspension Period") shall become divested of all powers and duties
hereunder as the Managing General Partner and all authority in respect of the
Partnership shall become vested in Administrative General Partner. If such
determination is made to the effect that no grounds for removal exist, then
(x) such determination, at the election of Administrative General Partner
exercised within sixty (60) days of the rendering thereof, shall not be
binding upon the Administrative General Partner or the Partnership, (y) the
Managing General Partner shall retain all rights, powers and duties hereunder
as a General Partner and all authority in respect of the Partnership and the
conduct of its business shall continue to be vested in the Managing General
Partner in accordance with the terms of this Agreement until such date, if
any, as a final, unappealable judicial decision is rendered to the effect
that grounds for removal exist (or if an appealable decision to that effect
is rendered, the date on which any period to appeal therefrom has expired
without an appeal therefrom having been taken), and (z) the matter shall be
litigated, at the election of the Administrative General Partner exercised
within sixty (60) days of the rendering of such determination, in any
competent state or federal court in the Commonwealth of Pennsylvania and in
accordance with the rules of court then obtaining.
C. The term "Removal Date," as used herein, shall mean the date,
if any, on which a decision (whether by the Arbitrator or a court of
competent jurisdiction) to the effect that grounds for removal exist becomes
final and unappealable. In addition to and not in limitation of any rights
under Section 7.06 hereof, at any time after the Removal Notice and until the
Removal Date, Administrative General Partner shall have the right to
implement the buy-sell procedures set forth in Section 7.06. hereof.
D. On the Removal Date, the Managing General Partner shall
thereupon become a Limited Partner pursuant to, and with the rights,
privileges and priorities described in, Section 4.03 hereof. The removed or
suspended Managing General Partner shall not be liable or responsible for any
43
actions taken or for any contracts or other obligations entered into by any
other General Partner (on behalf of the Partnership) during the Suspension
Period or on the Removal Date and thereafter.
E. Upon any removal of the Managing General Partner, as promptly
as practicable following the Removal Date, the Administrative General Partner
shall select a Successor Managing General Partner. Once selected, the
successor shall assume all of the duties, responsibilities and obligations,
and shall succeed to the rights and powers of, the Managing General Partner
hereunder. Any such successor Managing General Partner may, at the election
and direction of Administrative General Partner, be Administrative General
Partner or be any person or entity affiliated with or otherwise related to
Administrative General Partner in any capacity; provided, however, that the
manager of the Project may be any unaffiliated or unrelated person or entity.
F. If, following the divesting of Managing General Partner of its
powers and duties as set forth in subsection B and C hereof, a final and
unappealable determination is made that no grounds for removal exist,
Managing General Partner shall be revested in all its powers and duties as
Managing General Partner immediately upon the date such determination becomes
final and unappealable.
7.10. Deadlock on Sale.
A. If at any time after the date hereof any General Partner
receives a bona fide written offer (the "Purchase Offer") to purchase all or
any portion of the Project, the General Partner receiving the Purchase Offer
shall transmit the same to the other Partners. Each General Partner shall
communicate whether it desires to accept or reject the Purchase Offer to the
other Partners within ten (10) days of its receipt of the Purchase offer;
and, in the absence of communication within such ten-day period, any
non-communicating Partner shall be deemed to have communicated its desire to
reject the Purchase Offer. If any General Partner wishes to accept the
Purchase Offer, then the General Partner who desires to reject the Purchase
Offer shall have the option, but shall be required, either (i) to accept the
Purchase Offer, or (ii) to purchase the Partnership interests of the General
Partner who desires to accept the Purchase Offer, and, if the Managing
General Partner desires to accept such Purchase Offer, Administrative
Partner's offer must also be to purchase the Partnership interest of Limited
Partner so long as the Limited Partner is Xxxxxx X. Xxxxxx, an entity at
least 51% owned by him or a transferee from him which has not been approved
or which is not required to be approved by Administrative General Partner.
Any such purchase by Administrative General Partner or Managing General
Partner shall be on the terms and conditions set forth in this Section 7.10.
For purposes of this Section 7.10., the following definitions and other
provisions shall apply: (1) the Partner who wishes to accept the Purchase
Offer (together with, if such Partner is Managing General Partner, Limited
Partner) shall be the "Accepting Partners", and (2) the "Nonaccepting
Partner" shall be the General Partner who wishes to reject the Purchase Offer.
44
B. The terms and conditions of the option provided for herein
shall be as follows: (i) the option period shall commence on the date the
Nonaccepting Partner notifies the Accepting Partners that it does not wish to
accept the Purchase Offer (or on the date the Nonaccepting Partner is deemed
to have rejected the Purchase Offer), and the option period shall expire ten
(10) days after such commencement date; (ii) the purchase price (the "Sale
Purchase Price") for the partnership interests of the Accepting Partners
shall, for purposes of computing such Sale Purchase Price, be the total
amount that would be distributed in cash to the Accepting Partners in
accordance with Section 5.02 hereof if the Partnership sold the Project
pursuant to the Purchase Offer in an all cash transaction; (iii) at the time
of its or their exercise of the option granted herein, the Nonaccepting
Partner shall deliver to the Accepting Partners its bank certified,
treasurer's or cashier's check in amount equal to ten percent (10%) of the
Sale Purchase Price (the "Deposit"), which Deposit shall be forfeited to the
Accepting Partners if a closing hereunder shall not timely occur (except for
non-occurrence by reason of a default by the Accepting Partners in their
obligation so to close); (iv) a closing of the sale by the Accepting Partners
to the Nonaccepting Partner shall be held within eighty (80) days of the
Nonaccepting Partner's notice to the Accepting Partners of the Nonaccepting
Partner's exercise of its option to purchase hereunder; (v) at the closing,
the partnership interests of the Accepting Partners shall be assigned,
transferred and conveyed to the Nonaccepting Partner, or its nominee(s), free
and clear of all liens, charges, security interests and other encumbrances;
and (vi) at the closing, the Nonaccepting Partner, or its nominee(s), shall
deliver to the Accepting Partners cash or a bank certified, treasurers or
cashier's check in the aggregate amount of the Sale Purchase Price less the
Deposit.
C. If the Nonaccepting Partner shall not exercise the option
granted it by the foregoing provisions of this Section 7.10. by written
notice (accompanied by the Deposit) to the Accepting Partners within the
option period provided for hereby, it then shall be obligated to accept the
Purchase Offer and conclude the sale and purchase of the Project on the terms
and conditions provided for thereby; but if such Purchase Offer (and any
agreement of sale executed in connection therewith) is not consummated in
accordance with its terms, then the deadlock procedure established by this
Section 7.10. shall be reinstated.
7.11 Arbitrable Disputes.
A. (i) All disputes and claims under this Agreement which are
designated "Arbitrable Disputes" shall follow the dispute resolution
mechanism set forth in this Section.
(ii) Where no procedure for invoking this mechanism is set
forth in the section in which a particular dispute is designated as an
Arbitrable Dispute, such procedure shall be invoked as follows: any party to
the dispute (hereinafter, an "Arbitration Party") may invoke the process set
forth in this Section 7.11 by written notice (each, an "Arbitration Notice")
to the other Arbitration Party, which Arbitration Notice shall set forth in
reasonable detail the nature of the Arbitrable Dispute, including, without
limitation, the monetary sums which are in dispute. Within ten (10) days from
the date of the Arbitration Notice, the other Arbitration Party shall set
45
forth a summary of its version of the dispute ("Answer") in a notice to the
Arbitration Party sending the Arbitration Notice.
(iii) The Arbitration Parties agree to first attempt to
settle any Arbitrable Dispute by mediation ("Mediation") administered in
accordance with the Commercial Mediation Rules of the American Arbitration
Association, prior to any Arbitration pursuant to Section 7.11(B).
(iv) The Mediation shall take place on a date or dates
(each, a "Mediation Date") mutually agreed to by the Arbitration Parties,
which date(s), unless the Arbitration Parties otherwise agree in writing,
shall be no later than thirty (30) days after the date of the Answer. The
Mediation shall take place at the office of the Managing General Partner or
such other location in the Philadelphia Metropolitan Area as the Arbitration
Parties shall mutually agree.
(v) The Mediation shall be conducted by a mediator selected by
the mutual agreement of the Arbitration Parties (provided, if the Arbitration
Parties are unable to agree as to a mediator, the mediator may be selected by
a third party meeting the qualifications set forth in Section 7.11(B)(ii) for
a third party selecting an arbitrator in the event of a dispute) meeting the
qualifications for an Arbitrator (defined later) as set forth in Section
7.11(B)(ii) below.
B. (i) In the event the Arbitrable Dispute is not finally
resolved by mutual written agreement of the Arbitration Parties within ten
(10) days from the Mediation Date ("Arbitration Commencement Date"), the
Arbitrable Dispute shall be resolved by Arbitration pursuant to the
provisions of this Section 7.11(B).
(ii) Within ten (10) days after the Arbitration Commencement
Date, if the Arbitration Parties have not agreed upon an Arbitrator, the
General Partners shall each (a) appoint one lawyer actively engaged in the
licensed and full-time practice of law (including experience in resolving
partnership disputes) in the Philadelphia Metropolitan area for a continuous
period immediately preceding the Arbitration Commencement Date of not less
than ten (10) years, but who has at no time ever represented or acted on
behalf of any of the Arbitration Parties, and (b) deliver written notice of
the identity of such lawyer to the other Arbitration Party. In the event
that any Arbitration Party fails to so act, such lawyer shall be appointed
pursuant to the same procedure that is followed when agreement cannot be
reached as to the Arbitrator (as set forth below). Within ten (10) days
after such appointment and notice, such lawyers shall appoint a third lawyer
of the same qualification and background and shall deliver written notice of
the identity of such lawyer and notice of the acceptance by such lawyer of
such appointment to each of the Arbitration Parties. Such third lawyer shall
be deemed to be the "Arbitrator" as used herein. In the event that agreement
cannot be reached on the appointment of an Arbitrator within such period,
such appointment and notification shall be made as quickly as possible by any
court of competent jurisdiction, by any licensing authority, agency or
46
organization having jurisdiction over such lawyers, by any professional
association of lawyers in existence for not less than ten (10) years at the
time of such dispute or disagreement and the geographical membership
boundaries of which extend to the Philadelphia metropolitan area, or by any
arbitration association or organization in existence for not less than ten
(10) years at the time of such dispute or disagreement and the geographical
boundaries of which extend to the Philadelphia Metropolitan area, as
determined by the Arbitration Party giving such Notice of Dispute and
simultaneously confirmed in writing delivered by such Arbitration Party to
the other Arbitration Party. Any such court, authority, agency, association
or organization shall be entitled either to directly select such third lawyer
or to designate in writing, delivered to each of the Arbitration Parties, an
individual who shall do so. In the event of any subsequent resignation or
inability to perform by the Arbitrator, the Arbitrator shall be replaced in
accordance with the provisions of this Section 7.11(B)(ii) as if such
replacement was an initial appointment to be made under this Section
7.11(B)(ii) within the time constraints set forth in this Section
7.11(B)(ii), measured from the date of notice of such resignation or
inability to the person or persons required to make such appointment, with
all the attendant consequences of failure to act timely if such appointed
person is an Arbitration Party hereto.
(iii) Consistent with the provisions of this Section 7.11,
the Arbitrator shall utilize his utmost skill and shall apply himself
diligently so as to hear and decide the outcome and resolution of any
Arbitrable Dispute submitted to the Arbitrator as promptly as possible, but
in any event on or before the expiration of ninety (90) days after the
appointment of the Arbitrator. The Arbitrator shall not have any liability
whatsoever for any acts or omissions performed or omitted in good faith
pursuant to the provisions of this Section 7.11(B).
(iv) The Arbitrator shall, having in mind the ninety (90) day
time limitation set forth above for resolving disputes, (a) enforce and
interpret the rights and obligations set forth in this Agreement with respect
to the Arbitrable Dispute to the extent not prohibited by law, (b) fix and
establish any and all rules as it shall consider appropriate, in its
discretion, to govern the proceedings before it, including any and all rules
of procedure and/or evidence, and (c) make and issue any and all orders,
final or otherwise, and any and all awards, as a court of competent
jurisdiction sitting at law or in equity could make and issue, and as it
shall consider appropriate in its sole and absolute discretion, including the
awarding of monetary damages (but shall not award punitive damages except in
situations involving knowing fraud), the awarding of reasonable attorneys'
fees and costs to the prevailing Arbitration Party as determined by the
Arbitrator, in his discretion, and the issuance of injunctive relief.
(v) The Arbitration Parties shall allow and participate in
discovery in accordance with the Federal Rules of Civil Procedure for a
period of forty-five (45) days after the Arbitration Commencement Date.
Unresolved discovery disputes may be brought to the attention of, and
resolved by, the Arbitrator.
(vi) The Arbitrator shall be compensated for any and all
services rendered under this Section 7.11(B) at a rate of compensation equal
to the then-prevailing rate for arbitrators of similar experience and
47
qualifications as the Arbitrator, plus reimbursement for any and all expenses
incurred in connection with the rendering of such services, payable in full
promptly upon conclusion of the proceedings before the Arbitrator. Such
compensation and reimbursement shall be borne by the nonprevailing
Arbitration Party as determined by the Arbitrator in its sole and absolute
discretion.
7.12 Right of Contribution in Favor of Managing General Partner. At
any time during the term of this Partnership Agreement after the third
anniversary hereof and subject to compliance with federal and state
securities laws applicable to private placements of securities, the Managing
General Partner and Limited Partner, or any successor to their respective
interests herein, shall have the right, in their sole discretion, to
contribute all of their respective interests in and to the Partnership to
Brandywine Operating Partnership, L.P., and in exchange to receive Equivalent
Units, as hereinafter defined, of Brandywine Operating Partnership, L.P.
(such contribution right, hereinafter, the "Contribution Election"). The
Contribution Election shall be exercised in accordance with the following
procedure:
A. At any time after the date which is the third anniversary
hereof, and from time to time but no more than once in any Fiscal Year,
Managing General Partner shall have the right, by notice to Administrative
Partner, to request that the Fair Market Value of the Project be determined
in accordance with Section 7.12(F) hereof.
B. Managing General Partner and Limited Partner shall jointly
notify Administrative General Partner of their exercise of the Contribution
Election not less than thirty (30) days prior to the Closing Date, as
hereinafter defined (such notice hereinafter being referred to as the
"Election Notice"), but in any event leaving such time as is necessary, if
any, to determine the Fair Market Value of the Project as set forth herein.
If the Fair Market Value has not yet been determined and no request by
Managing General Partner in accordance with Section 7.12(A) has been made,
immediately upon the giving of the Election Notice, the parties shall
determine the Fair Market Value of the Project in accordance with Section
7.12(F) hereof.
C. On the Closing Date, as hereinafter defined, Managing General
Partner and Limited Partner shall deliver to Administrative General Partner
or its designee an assignment, without recourse, but with a representation
that the partnership interest is free of liens except those disclosed to and
consented to by Administrative General Partner of all of Managing General
Partner's and Limited Partner's right, title and interest in and to the
Partnership, including, but not limited to, all of Managing General Partner's
and Limited Partner's interest as partners in the Partnership, and
Administrative General Partner shall deliver to Managing General Partner and
Limited Partner or their respective designees an assignment, without
recourse, of the Equivalent Units in Brandywine Operating Partnership, L.P.,
convertible into common shares of beneficial interest of Brandywine Realty
Trust as aforesaid. The Partners agree that they shall execute such other
instruments as shall be necessary to effect such assignments as any of them
may reasonably request.
48
D. In no event shall Brandywine Operating Partnership, L.P. be
required to issue upon contribution by the Managing General Partner and the
Limited Partner of their respective interests in the Partnership a number of
Equivalent Units which are convertible into a number of common shares of
beneficial interest of Brandywine Realty Trust in excess of the Stock
Exchange Limit. The term "Stock Exchange Limit" means the maximum number of
common shares of beneficial interest which Brandywine Realty Trust would be
permitted to issue upon conversion of Equivalent Units without obtaining
prior shareholder approval under New York Stock Exchange Rules (or the rules
of any other stock exchange on which the common shares of beneficial interest
of Brandywine Realty Trust are then listed). In addition, in no event shall
the Managing General Partner and Limited Partner (or any successor to their
respective interests) have the right to contribute their respective interests
in the Partnership to Brandywine Operating Partnership, L.P. unless the Fair
Market Value is a positive number.
E. The term "Closing Date," as used above, shall mean the date
mutually agreed upon by the Administrative General Partner and the Managing
General Partner or, if no such date is agreed upon, upon the date which is
thirty (30) days following the later of the date the Election Notice is
deemed delivered or the date upon which the Fair Market Value has been
determined as set forth in subsection 7.12(F) hereof. Notwithstanding
anything to the contrary contained herein, at any time prior to the Closing
Date, Managing General Partner may withdraw the Contribution Election
provided that Managing General Partner pays all fees and expenses of the
appraiser or appraisers who perform(s) the appraisal identified in subsection
(F) hereof.
F. "Fair Market Value," as used in this Section 7.12, shall mean,
as of any date, the amount a willing buyer would pay to a willing seller, as
of such date, for the Project in an arms length transaction in which neither
party is compelled to buy or sell, as the case may be. If Managing General
Partner and Administrative General Partner cannot agree on the Fair Market
Value, or if either Managing General Partner or Administrative General
Partner elects by written notice to the other within ten (10) days after the
date the Contribution Notice is delivered in accordance with Article 11
hereof, the Fair Market Value shall be determined by an appraisal of the
Project conducted by independent MAI appraisers or members of the American
Society of Real Estate Appraisers in accordance with the following appraisal
procedures:
(1) In determining Fair Market Value, it is understood and
agreed by Managing General Partner and Administrative
General Partner that the Project shall be appraised free and
clear of all mortgage indebtedness, Partners' Loans and
Partners' Priority Loans and excluding other liabilities of
the Partnership and that the appraiser or appraisers may, in
connection with its or their appraisal, take into account
such factors affecting Fair Market Value, including, without
limitation, the present value of any benefit of the below
market-rate loans secured by the Project which were made by
any federal, state or local governmental unit, redevelopment
authority, industrial development authority or similar body
("Public Loans") for Project Costs in relation to the
49
then-current market-rate indebtedness (net of (a) any
principal, if any, payable upon an acceleration of such
Public Loans, if any, by reason of the transfer but
otherwise assuming that such Public Loans would be repaid at
maturity and otherwise according to the terms and (b) the
present value of any future participation payments to the
holders of the documents evidencing and securing such Public
Loans based upon the then-current cash flow and then-current
value of the Project, assuming that the Project will be
refinanced at the end of the then-current term of the first
mortgage but not sold prior to maturity of the Public
Loans), the identity and creditworthiness of the tenants of
the Project, the terms and expiration dates of such tenants'
leases, prevailing rental rate and rental concession and
tenant build-out terms, prevailing leasing commission rates
on lease renewals and new leases, general market conditions
in the Conshohocken/West Conshohocken submarket, prevailing
capitalization and discount rates, and comparable sales, as
well as the various assets and liabilities of the
Partnership (excluding the liabilities to be subtracted from
Fair Market Value under subsection H(1)) hereof as such
appraiser or appraisers deem necessary or appropriate; and
(2) Within ten (10) days after Managing General Partner's or
Administrative General Partner's election by written notice
to the other to determine Fair Market Value of the Project
by appraisal, Managing General Partner and Administrative
General Partner each shall select one appraiser who
satisfies the requirements for appraisers referenced above
and notify the other of the appraiser within such 10-day
time period, the appraiser selected by it. If Managing
General Partner or Administrative General Partner fails to
select such an appraiser within such 10-day time period, the
appraiser selected by the other shall act alone. The
appraiser or appraisers so selected shall appraise the Fair
Market Value of the Project within thirty (30) days after
their selection. If one appraiser acts, the Fair Market
Value of the Project shall be the amount determined by such
appraiser. If two appraisers act, the Fair Market Value of
the Project shall be the average of the amounts so
determined, so long as the higher appraisal exceeds the
lower appraisal by ten percent (10%) of the amount of the
lower appraisal or less. If, however, the higher appraisal
exceeds the lower appraisal by in excess of such ten percent
(10%), the two appraisers shall appoint a third appraiser
who satisfies the requirements for appraisers referenced
above within fifteen (15) days. If the two appraisers fail
50
to do so, then either Managing General Partner or
Administrative General Partner may request that the American
Arbitration Association or any successor organization
thereto appoint a third appraiser who satisfies the
requirements for appraisers referenced above. If a third
appraiser has not been appointed by the American Arbitration
Association or its successor within fifteen (15) days after
Managing General Partner's or Administrative General
Partner's request for it to do so, then either Managing
General Partner or Administrative General Partner may apply
to any court of competent jurisdiction for the appointment
of such third appraiser. Such third appraiser, whether
appointed by the original two appraisers, the American
Arbitration Association or its successor, or a court of
competent jurisdiction, shall appraise the Fair Market Value
of the Project within thirty (30) days after his or her
appointment. If the third appraisal exceeds the amount of
the first two appraisals, the Fair Market Value of the
Project shall be the higher of the first two appraisals; if
the third appraisal is less than the lower of the first two
appraisals, the Fair Market Value of the Project shall be
the lower of the first two appraisals; and, in all other
cases, the Fair Market Value of the Project shall be equal
to the amount of the third appraisal. The provisions of
this Section 7.12(F) for determination of the Fair Market
Value of the Project shall be specifically enforceable to
the extent such remedy is available under applicable law and
the determination of such Fair Market Value hereunder shall
be final and binding upon Managing General Partner,
Administrative General Partner and Brandywine Operating
Partnership, L.P. for a one (1) year period. Each of
Managing General Partner and Administrative General Partner
shall pay the fees and expenses of the appraiser selected by
it. The fees and expenses of the third appraiser, if any,
shall be paid one-half (1/2) each by Managing General
Partner and Administrative General Partner. If only one
appraiser is used, the fees and expenses of such appraiser
shall be paid one-half (1/2) each by Managing General Partner
and Administrative General Partner.
G. The term "Equivalent Units" shall mean the number of limited
partnership units of Brandywine Operating Partnership which are convertible,
at the time of issuance, into that number of common shares of beneficial
interest of Brandywine Realty Trust having an aggregate Market Value (as
defined below) equal to the Contributing Partners' Proportionate Share of
Fair Market Value of the Project as of the date which is three (3) days prior
to the scheduled Closing Date. If there are more than one class of interest
in Brandywine Operating Partnership, the class to be issued shall be the
class which meets the requirements of the foregoing sentence and which is
designated by Brandywine Operating Partnership.
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H. The term "Contributing Partners' Share of Fair Market Value" is
determined, with respect to each of the Managing General Partner and Limited
Partner, by (1) subtracting from the Fair Market Value of the Project (a) all
principal outstanding and accrued and unpaid interest as of the Closing Date
on the indebtedness of the Partnership (other than additional or contingent
interest payable, if any, on the Public Loans by reason of the transfer and
considered by the appraisers in determining Fair Market Value), but including
principal and interest outstanding as of the Closing Date on the Partners'
Loans and Partners' Priority Loans; and (b) due and unpaid Preferred
Cumulative Returns and BOP Preferred Cumulative Return, and the Additional
Capital Balances of all Partners; (2) multiplying the resulting number by
the respective Participation Percentages of the Managing General Partner and
Limited Partner, respectively; and (3) adding to the result obtained in item
(2) the sum of the following: (a) outstanding principal and interest on any
Partners' Loans and Partners' Priority Loans made by each of such Partners,
respectively (b) the Preferred Cumulative Returns due each of such partners,
respectively, and (c) the Additional Capital Balances of each of such
Partners, respectively.
I. The term "Market Value" shall mean, as of a given date, the
average of the Closing Price (as defined below) of the common shares of
beneficial interest of Brandywine Realty Trust for the twenty (20)
consecutive trading days ending on such date. The term "Closing Price" on
any date shall mean the last sale price of the common shares of beneficial
interest, regular way, or, in case no such sale takes place on such date, the
average of the closing bid and ask prices of the common shares of beneficial
interest, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to which such
securities are listed or admitted to trading on the New York Stock Exchange,
or such other national securities exchange or the NASDAQ Stock Market on
which the common shares of beneficial interest are then listed or admitted to
trading.
J. The right of contributions set forth in this Section 7.12 is
subject to the following: (1) the filing of an Additional Listing
Application with the New York Stock Exchange and approval of such Application
by the New York Stock Exchange. Administrative General Partner shall use its
best efforts to file such Additional Listing Application and obtain the
approval thereof prior to the third anniversary of the date of this
Agreement; and (2) confirmation with the New York Stock Exchange that no
shareholder approval is required for the granting of the rights set forth
herein. Administrative General Partner will use its best efforts to obtain
confirmation that no such shareholder approval is required.
52
ARTICLE VIII
ADDITIONAL LIMITED PARTNERS
8.01. Additional Limited Partners and Their Contributions.
A. Additional limited partners may be admitted to the Partnership
only upon the written consent of all General Partners.
B. Each such additional limited partner will make such
contribution to the capital of the Partnership and will receive by reason of
his or its contribution such percentage of the income, gains, profits,
credits and other rights of the Partnership as will be set forth in the
instrument evidencing the written consent thereto by all of the General
Partners.
ARTICLE IX
INSURANCE
9.01. Coverage. The Managing General Partner shall, during all times
while the Partnership is actively engaged in the operation of the Project, or
in any development or construction operations or other similar activities,
cause the Partnership to carry at the expense of the Partnership, and require
all of its contractors and subcontractors to carry, insurance in amounts,
with deductibles and in companies satisfactory to both General Partners. The
General Partners shall evaluate and decide from time to time as necessary
respecting the coverages then in effect or which should be in effect, and may
add, eliminate, expand or reduce any of the same. Without limiting the
generality of the foregoing, the Managing General Partner shall maintain on
behalf of the Partnership at least the following minimum coverages, unless
otherwise agreed to in writing by all the General Partners:
A. Insurance which shall comply with the Workers' Compensation and
employer's liability laws of all states in which the Partnership shall have
employees;
B. Comprehensive general liability insurance covering all
operations of the Partnership, having a combined single limit of not less
than $1,000,000 per occurrence for bodily injury (including death) and
property damage;
C. Automobile liability insurance covering all owned, non-owned
and hired vehicles used in the operations of the Partnership, having limits
for bodily injury (including death) not less than $2,000,000 per occurrence
and limits for property damage not less than $1,000,000 per occurrence;
53
D. Umbrella liability insurance, concurrent with the coverages
named in Sections 9.0l.A., 9.0l.B. and 9.0l.C. above, in such amount, if any
as any first mortgagee of the Project shall require or such other amount as
Managing General Partner shall deem prudent;
E. During construction activities at the Project, builders
all-risk extended coverage insurance (such to be maintained in an appropriate
amount until replaced by the coverage described in Section 9.0l.F below);
F. Fire, extended coverage, vandalism and malicious mischief
insurance in an amount based upon the replacement value of the Project
(excluding roads, foundations, parking areas, paths, walkways and like
improvements), including coverage for loss of contents and further coverage
for loss of rentals;
G. Title insurance with respect to the Land, Project, and all
other real estate of the Partnership; and
H. Boiler and machinery insurance, including coverage for loss of
rentals.
9.02. Certificates; Notices.
A. The Managing General Partner shall furnish to the General
Partners duplicate copies of policies and/or certificates of insurance
certifying to the insurance then in effect (i) on or before the execution of
this Agreement, (ii) upon the renewal or replacement of existing coverage or
the obtaining of additional coverage, and (iii) at any other time upon the
request of any General Partner on ten (10) days prior written notice.
B. Each insurance policy of the Partnership shall contain a
provision requiring the insurer to notify the Partnership, in writing and at
least thirty (30) days in advance, of any material change in the policy and
of any notice of cancellation; and upon its receipt of any such notice the
Managing General Partner shall promptly forward a copy of the same to each
General Partner.
9.03. Concerning Liability Insurance. With respect to all liability
policies of the Partnership, the Managing General Partner shall obtain such
liability policies or endorsements thereto naming not only the Partnership as
insured, but also naming all Partners and the manager or managing agent of
the Project as additional insureds.
9.04. Miscellaneous. The Managing General Partner, on behalf of the
Partnership, shall use its best efforts and take such steps as are within its
control to (i) secure an endorsement or endorsements on all of the insurance
policies referred to herein to the effect that all insurance coverage of any
Partner, carried by such Partner in its individual capacity, will be
considered excess coverage, (ii) require all of the Partnership's architects,
engineers and other design professionals to maintain errors and omissions
coverage, (iii) require all of the Partnership's contractors and
54
subcontractors to comply fully with the Occupational, Safety and Health Act
of 1970, as amended from time to time, and (iv) require all of the
Partnership's contractors to indemnify the Partnership and save it harmless
and to submit evidence of contractual liability insurance in amounts
sufficient, in its reasonable opinion, to secure such indemnity; all with the
understanding, nevertheless, that the Managing General Partner shall be
obligated to secure and obtain all or any portion of the foregoing to the
extent the same are, in the Managing General Partner's judgment, available at
reasonable cost.
ARTICLE X
DISSOLUTION AND TERMINATION
10.01. Dissolution.
A. The Partnership will be dissolved:
(i) upon the death, retirement, withdrawal, legal
incompetency, removal, or bankruptcy of an individual General Partner or the
retirement, bankruptcy, withdrawal, removal or dissolution of a corporate or
partnership General Partner, unless (a) all remaining General Partners (if
any remain) unanimously elect to continue the business of the Partnership, or
(b) if no General Partner remains, the Limited Partners unanimously consent
to the continuation of the business of the Partnership and unanimously select
a successor general partner; or
(ii) upon the affirmative vote or written consent of all of the
General Partners; or
(iii) upon the sale of the Project and all of the Land, and the
repayment and satisfaction in full of any financing undertaken by the
Partnership in respect thereof; or
(iv) at 12:00 midnight on July 1, 2050;
provided, however, that the Partnership shall not terminate until its affairs
have been wound up and its assets distributed as provided herein.
B. If the business of the Partnership is continued pursuant to
Section 10.01.A(i) above, (i) the Partnership will continue until the end of
the term for which it is formed (as set forth in Section 10.0l.A. above), or
until the subsequent death, legal incompetency, removal, bankruptcy,
retirement, withdrawal or dissolution of a remaining or successor general
partner, in which event the election to continue, as above set forth, will
again be effective; and (ii) in any such case the incompetent, removed,
retired, withdrawn or bankrupt General Partner (or his or its legal
representative), or the successor in interest of a deceased or dissolved
55
General Partner, will become a Limited Partner with the same share of profits
and losses of the Partnership and the same Participation Percentage and
distribution priorities as before such event and, except as expressly
provided elsewhere herein, will have all the rights of a Limited Partner.
C. As used in Sections 10.0l.A. and 10.0l.B. above, the term
"bankruptcy" shall mean (i) the commencement by a General Partner of a
voluntary case under any Chapter of the Bankruptcy Code (Title 11 of the
United States Code), as now or hereafter in effect, or the taking by a
General Partner of any equivalent or similar action by the filing of a
petition or otherwise under any other federal or state law in effect at the
time relating to bankruptcy or insolvency, (ii) the filing of a petition
against a General Partner under any Chapter of the Bankruptcy Code (Title 11
of the United States Code), as now or hereafter in effect, or the filing of a
petition seeking any equivalent or similar relief against a General Partner
under any other federal or state law in effect at the time relating to
bankruptcy or insolvency, and in either case the failure by such General
Partner to secure the discharge of any such petition within sixty (60)
consecutive days from the date of filing, (iii) the making by a General
Partner of a general assignment for the benefit of his, its or any of their
creditors, (iv) the appointment of a receiver, trustee, custodian or similar
officer for a General Partner or for the property of a General Partner and
the failure by such General Partner to secure the discharge of such receiver,
trustee, custodian or similar officer within sixty (60) consecutive days from
the date of appointment,.or (v) the admission in writing by a General Partner
of any inability to pay debts generally as they become due.
10.02. Appointment of Liquidating Partner.
A. Upon the dissolution of the Partnership, if the Partnership's
business is not continued pursuant to Section 10.01. hereof, the Managing
General Partner (provided it then is a General Partner hereof and is not in
breach or default of any of its obligations under this Agreement) shall act
as Liquidating Partner on the terms hereinafter set forth; or if it no longer
is a General Partner hereof or is in breach or default of any of its
obligations under this Agreement, then Administrative General Partner (or its
successors or assigns) shall select a Partner (the "Liquidating Partner") to
wind up the affairs of the Partnership and distribute its assets. Another
Partner shall be selected (in the same manner and for the same purpose) to
succeed the Partner originally selected or any subsequently selected
successor whenever the Partner originally selected or any such subsequently
selected successor, as the case may be, fails for any reason to carry out
such purpose. The Partner so selected and acting hereunder from time to time
may be any General Partner or any other individual, corporation, or general
or limited partnership, shall be compensated for his or its services
hereunder (as and to the extent authorized by Administrative General Partner,
but no compensation shall be payable if the Liquidating Partner is a Partner
or is affiliated, directly or indirectly, with a Partner), and shall proceed
diligently to wind up the affairs of the Partnership and distribute its
assets in the manner hereinafter provided.
B. No Partner (other than the Managing General Partner) shall be
required to accept appointment as Liquidating Partner. If no Partner is
willing to accept such appointment, the General Partners shall select a third
56
person to act in that capacity, and the person so selected shall for all
purposes of this Agreement have the rights, powers and obligations of
Liquidating Partner.
10.03. Distributions and Other Matters. Promptly upon the dissolution
of the Partnership, if the Partnership's business is not continued pursuant
to Section 10.01. hereof, the Partners (or their legal representatives,
heirs, successors, or assigns) will cause the cancellation of the
Certificate, and the Liquidating Partner will liquidate the assets of the
Partnership and apply and distribute the proceeds of such liquidation in the
following order of priority to the extent available:
A. To payment of secured debts and liabilities of the Partnership
(other than Partner Loans or Partners Priority Loans) in the order of
priority provided by law; provided that the Liquidating Partner shall first
pay, to the extent permitted by law, liabilities with respect to which any
Partner is or may be personally liable;
B. To payment of unsecured debts and liabilities of the
Partnership (other than Partner Loans or Partners' Priority Loans) in the
order of priority provided by law; provided that the Liquidating Partner
shall first pay, to the extent permitted by law, liabilities with respect to
which any Partner is or may be personally liable;
C. To payment of the expenses of liquidation of the Partnership in
the order of priority provided by law; provided that the Liquidating Partner
shall first pay, to the extent permitted by law, expenses with respect to
which any Partner is or may be personally liable;
D. To the setting up of such reserves as the Liquidating Partner
may deem reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Partnership arising out of or in connection with the
Partnership business; provided that any such reserve shall be held by the
Liquidating Partner for the purposes of disbursing such reserves in payment
of any of the aforementioned contingencies and, at the expiration of such
period as the Liquidating Partner shall deem advisable (but in no case to
exceed eighteen (18) months from the date of dissolution unless an extension
of time is consented to by the General Partners), to distribute the balance
thereafter remaining in the manner hereinafter provided; and
E. To the Partners in the order set forth in Section 5.02, above.
10.04. Distributions of Property. No Partner may demand or receive
property other than cash in return for its contributions, loans or advances
or upon dissolution as provided herein, except upon the written approval of
both General Partners.
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10.05. Actions of the Liquidating Partner; Statements of Account.
A. During the period of liquidation (which will be such reasonable
time as may be required for the orderly completion of liquidation and
distribution as set forth above), the Liquidating Partner, as trustee for the
benefit of all Partners as tenants-in-common, shall take any and all action
necessary or appropriate to complete such liquidation and distribution as
provided in this Article, having for such purpose all of the powers
enumerated in Article IV of this Agreement necessary or appropriate to
accomplish the same.
B. The Liquidating Partner will prepare a final statement of the
accounts of the Partnership as of the date of termination, and, as promptly
as possible thereafter, a copy thereof will be furnished to each Partner.
Such statement shall set forth the actual or contemplated application and
distribution of the assets of the Partnership. Upon completion of
distribution as required hereby, a further statement for the period of
liquidation will be so prepared by the Liquidating Partner and furnished to
each Partner.
ARTICLE XI
NOTICES AND COMMUNICATIONS
11.01. Notices. All notices, demands, requests, calls and other
communications required by or permitted under this Agreement shall be in
writing (whether or not a writing is expressly required hereby), and shall be
directed as follows:
A. If to the Managing General Partner:
Four Xxxxxx Tower Associates
c/o Oliver Xxxxxx Xxxxxx Corporation
One Tower Bridge
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
B. If to Administrative General Partner:
c/o Brandywine Realty Trust
Newtown Corporate Campus
00 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Chairman
Xxxxxx X. Xxxxxxx, President and Chief Executive Officer
58
C. If to Limited Partner:
Xx. Xxxxxx X. Xxxxxx
c/o Oliver Xxxxxx Xxxxxx Corporation
One Tower Bridge
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
D. If to the Partnership, in care of each General Partner at its
respective address stated above.
E. Any notice, demand, request, call or other communication
required or permitted to be given or made under this Agreement will be deemed
given or made (i) when delivered by hand delivery at its address set forth
above, or (ii) three business days following its deposit in the U.S. Mail,
addressed to such address, postage prepaid, registered or certified, return
receipt requested (with a copy by regular U.S. mail, first class, postage
prepaid), or (iii) on the next business day following its deposit with
Federal Express or another nationally recognized express delivery service,
addressed to such address (with a copy by regular U.S. mail, first class,
postage prepaid).
11.02. Change of Address. Any Partner may specify a different address
by sending to the Partnership a notice as hereinabove provided of such
different address. If the address of the Partnership is changed, a written
notice of such change of address shall be sent by the Managing General
Partner by registered or certified mail to each other Partner.
11.03. Time of Communications. Any notice, demand, request, call or
other communication required or permitted to be given or made to a Partner or
to the Partnership under this Agreement will be deemed given or made (i) when
delivered to such Partner or the Partnership, as the case may be, at its
address set forth in Section 11.01. above, or (ii) three business days
following its deposit in the U.S. Mail, addressed to such address, postage
prepaid, registered or certified, return receipt requested (with a copy by
regular U.S. mail, first class, postage prepaid), or (iii) on the next
business day following its deposit with Federal Express or another nationally
recognized express delivery service, addressed to such address (with a copy
by regular U.S. mail, first class, postage prepaid).
ARTICLE XII
MISCELLANEOUS
12.01. Filings. The Partners agree that (i) a signed and acknowledged
certificate shall be filed promptly in such offices as are required by the
Act for the continuation of the Partnership as contemplated by this
Agreement; (ii) they shall sign, acknowledge and file from time to time in
59
such offices (and elsewhere) all writings to amend the Certificate as are
required by the Act for the carrying out of the terms and provisions of this
Agreement; (iii) upon dissolution and termination of the Partnership, they
shall sign, acknowledge and file in such offices (and elsewhere) the writing
required by the Act to cancel the Certificate; and (iv) they shall from time
to time sign, acknowledge and file any other certificates, instruments and
documents, as well as amendments thereto, under the laws of the Commonwealth
of Pennsylvania or of any state or other jurisdiction in which the
Partnership is doing or intends to do business in connection with the use of
the name of the Partnership by the Partnership.
12.02. Power of Attorney.
A. Each Partner, by his or its execution of this Agreement, hereby
irrevocably constitutes, empowers and appoints the Managing General Partner
(for so long as it or its nominee shall remain a General Partner of the
Partnership) and, in the absence of any General Partner, the person
designated as Liquidating Partner pursuant to Section 10.02. hereof, as its
true and lawful agent and attorney-in-fact to make, prepare, execute, sign,
acknowledge, certify under oath and file and record, in its name, place and
stead:
(1) the Certificate, as well as amendments thereto and a
statement of cancellation thereof, under the Act, or which may be required
by, or be appropriate under, the laws of any other state or other
jurisdiction;
(2) any certificates, instruments and documents (including
fictitious name applications), as well as amendments thereto and statements
of cancellation thereof, as may be required by, or be appropriate under, the
laws of any state or other jurisdiction in which the Partnership is doing or
intends to do business in connection with the use of the name of the
Partnership by the Partnership;
(3) without limiting the generality of the foregoing, any
amendment to the Certificate which is necessary to reflect: (i) a change in
the name or address of the Partnership or in the amount or character of the
Capital Contributions or Additional Capital Contributions of any Partner;
(ii) the admission of a substituted limited partner pursuant to the
provisions of Article VII hereof; (iii) the admission of a general partner or
additional limited partner pursuant to the provisions of Article VII or
Article VIII hereof; (iv) the correction or clarification of any incorrect
statement in the Certificate (or in any amendment thereto); or (v) a change
in the time stated in the Certificate (or in any amendment thereto) for the
expiration of the term hereof or for the return of the contributions of any
Partner; and
(4) any other instrument which may be required to be filed by
the Partnership under the laws of the United States, any state, or any
political subdivision thereof, or by any governmental or quasi-governmental
agency, or which any General Partner shall deem it advisable to file.
60
B. Each Partner further agrees, whenever requested so to do,
personally to sign, certify under oath and acknowledge any of the foregoing
and to execute whatever further instruments or other documents as shall be
necessary or appropriate in the reasonable judgment of any Partner.
C. The foregoing powers of attorney are coupled with an interest,
are irrevocable and, to the extent permitted by law, shall survive the death,
dissolution, bankruptcy or legal incompetency of a Partner. The foregoing
powers of attorney shall survive the sale, assignment or transfer by a
Partner of any part or all of his interest in the Partnership.
12.03. Inspections. Any Partner shall have the full right and
privilege at any time, at its own cost and expense, to inspect all or any
part of the Land, Project or other Partnership property.
12.04. Other Remedies. Subject to the provisions of Section 4.0l.E.
hereof and Section 12.06 hereof, any Partner shall have and shall maintain
all rights or remedies it may have against any other Partner, at law or in
equity or by this Agreement, including, without limitation, rights or
remedies for or in respect of conduct constituting a fraud on the Partnership
or on any Partner, or for or in respect of a breach of any fiduciary
obligation.
12.05. Partners as Creditors. Any Partner who is a bona fide creditor
of the Partnership as a lender thereto or by reason of any other
debtor/creditor relationship therewith (including, without limitation,
creditor status arising by reason of the making of any Partners' Loan or
Partners' Priority Loan) shall be permitted, in the event of any breach
thereof or default thereunder, to take such action and to exercise and pursue
such other rights, powers or remedies against the Partnership and/or against
any other obligor, which rights, powers or remedies are available to such
Partner by law, in equity or by contract; and the taking of any such action,
the exercise and pursuit of any such right, power or remedy, and the
execution or foreclosure on any Partnership property in connection therewith,
shall each be understood to be for the benefit of the creditor-Partner only
and shall not be deemed or understood to cause or permit a reconstitution of
the Partnership for the benefit of any other Partner.
12.06. Independent Ventures. Any Partner and any affiliate of any
Partner may engage in or possess interests current or future in other
business ventures of every nature and description, independently or with
others, and whether such ventures compete with the Project or not, including,
without limitation, the ownership, financing, leasing, operation, management,
syndication, brokerage and development of real property; and neither the
Partnership nor any Partner will have any rights by virtue of this Agreement
or the existence of this Partnership in or to such independent ventures or to
the income or profits derived therefrom.
12.07. Partial Invalidity. The invalidity or unenforceability of a
portion of this Agreement will not affect the validity or enforceability of
the remainder hereof.
12.08. Governing Law; Parties in Interest. This Agreement will be
governed by and construed according to the laws of the Commonwealth of
Pennsylvania, and will bind and inure to the benefit of the Partners and each
61
of their respective heirs, successors, assigns, executors, administrators and
personal representatives.
12.09. Amendment. This Agreement may be amended only by the unanimous
written consent of all General Partners, provided, however, that no amendment
to this Agreement which adversely affects the rights or liabilities of the
Limited Partner shall be made without the Limited Partner's prior written
consent.
12.10. Execution in Counterpart. This Agreement may be executed in
counterparts, all of which taken together shall be deemed one original.
12.11. Computation of Time. In computing any period of time pursuant
to this Agreement, the day of the act, date of notice, event or default from
which the designated period of time begins to run will not be included. The
last day of the period so computed will be included, unless it is a Saturday,
Sunday or a legal holiday in the Commonwealth of Pennsylvania, in which event
the period runs until the end of the next day which is not a Saturday, Sunday
or such legal holiday.
12.12. Table of Contents; Titles and Captions. The Table of Contents
preceding this Agreement and all article, section or subsection titles or
captions contained herein are for convenience only and are not deemed part of
the context hereof.
12.13. Pronouns and Plurals. All pronouns and any variations thereof
are deemed to refer to the masculine, feminine, neuter, singular or plural as
the identity of the person or persons may require.
12.14. Approval by General Partners. In respect of all provisions of
this Agreement, any reference to approval of the General Partners or consent
of the General Partners shall mean, unless the context hereof shall expressly
require otherwise, the unanimous approval or consent of all of the General
Partners.
12.15. Exhibits. The Exhibits attached hereto form a part of this
Agreement and each is hereby incorporated herein by reference.
12.16. Entire Agreement. This Agreement and the Exhibits hereto
contain the entire understanding and agreement among the Partners, and
supersede any prior understandings and agreements between them respecting the
subject matter hereof. Without limiting the foregoing, this Agreement
amends, supersedes and restates the Original Agreement in its entirety and
the Certificate amends, supersedes and restates the Original Certificate in
its entirety.
12.17. Filing with Securities Exchange Commission. The parties hereto
acknowledge and agree that Brandywine Realty Trust, the general partner of
the sole member of the general partner of the Administrative General Partner,
may make such filings as it deems necessary to comply with securities laws
with the Securities Exchange Commission disclosing this transaction.
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12.18. Non-Recourse.
A. No recourse shall be had for any of the obligations of the
Administrative General Partner hereunder or for any claim based thereon or
otherwise in respect thereof against any past, present or future trustee,
shareholder, officer or employee of Brandywine Realty Trust, whether by
virtue of any statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all of such liability being expressly waived and
released by each of the other Partners.
B. No recourse shall be had for any of the obligations of the
Managing General Partner hereunder or for any claim based thereon or
otherwise in respect thereof against any past, present or future trustee,
shareholder, officer or employee of Four Xxxxxx Tower Corporation, whether by
virtue of any statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all of such liability being expressly waived and
released by each of the other Partners.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amended
and Restated Agreement of Limited Partnership the day and year first above
written.
FOUR XXXXXX TOWER ASSOCIATES,
a Pennsylvania limited partnership
By: FOUR XXXXXX TOWER CORPORATION,
a Pennsylvania corporation, its duly
authorized general partner
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx, President
BRANDYWINE TB I, L.P., a Pennsylvania limited
partnership
By: BRANDYWINE TB I, L.L.C., a
Pennsylvania limited liability company
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
----------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman of the Board
JOINDER AND GUARANTY
BRANDYWINE OPERATING PARTNERSHIP, L.P. hereby joins in this Agreement for
the purpose of confirming that it (i) will perform the obligations required
of Brandywine Operating Partnership, L.P. under Section 7.12 hereof and (ii)
unconditionally guarantees that
63
Administrative General Partner will make the capital contributions and
Partners' Loans required to be made by Administrative General Partner as set
forth in subsection 3.07 hereof.
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: BRANDYWINE REALTY TRUST, its duly authorized
general partner
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman of the Board
64
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FOUR TOWER BRIDGE ASSOCIATES
Exhibit "B"
Schedule of Partners' Capital Contributions,
Capital Balances, Capital Accounts, Contribution Percentages and
Participation Percentages, all as of _________________________
Capital Balances
Capital and Contribution Participation
Contributions Capital Accounts Percentages Percentages
GENERAL PARTNERS
Administrative General
Partner $ 65 $ 65 65% 65%
Managing General Partner $ 34 $ 34 34% 34%
LIMITED PARTNERS
Limited Partner $ 1 $ 1 1% 1%
