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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 29, 1997
BRANDYWINE REALTY TRUST
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(Exact name of registrant as specified in its charter)
MARYLAND 1-9106 23-2413352
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(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification Number)
16 Campus Boulevard, Newtown Square, Pennsylvania 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
Page 1 of 7 pages
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Item 5. Other Events
Tower Bridge Transaction - Overview
On November 4, 1997, Brandywine Operating Partnership, L.P. (the
"Operating Partnership"), a limited partnership in which the Company is the
sole general partner and in which the Company owns, as of the date hereof, an
approximately 98.7% interest, entered into a Project Participation Agreement
(the "Project Agreement") with Donald W. Pulver ("Pulver") and certain
entities controlled by him (each, a "Pulver Entity"). Mr. Pulver is a
developer unaffiliated with the Company.
The Project Agreement specifies the terms on which the Operating
Partnership, directly and indirectly through direct and indirect wholly-owned
subsidiaries (each, a "BRT Subsidiary"), will enter into a series of related
transactions (referred to collectively as the "Tower Bridge Transactions") in
the Boroughs of Conshohocken and West Conshohocken, Montgomery County,
Pennsylvania. The terms of the Tower Bridge Transactions were determined
through arm's-length negotiation between the Company and Pulver.
The Tower Bridge Transaction involves three principal components: (i)
formation of a partnership (the "Four Tower Bridge Partnership") between a
BRT Subsidiary (holding a residual 65% interest) and a Pulver Entity (holding
a residual 35% interest) to acquire approximately two acres of undeveloped
land for a purchase price of approximately $2.6 million and the construction
thereon of a four-story office building containing approximately 82,000
leasable square feet (the "Four Tower Bridge Building") for a budgeted
construction cost of approximately $16.8 million; (ii) the agreement by a BRT
Subsidiary to contribute to an existing partnership controlled by Pulver
(the "Two Tower Bridge Partnership") an amount that, together with proceeds
of a new mortgage loan, will enable the Two Tower Bridge Partnership to
prepay an existing mortgage loan (having an outstanding principal balance,
net of any equity participation to which the lender may be entitled, as of
October 31, 1997 of approximately $8.5 million) in exchange for the admission
into the Two Tower Bridge Partnership of the BRT Subsidiary (with a 35%
residual interest); and (iii) formation of a partnership (the "Five Tower
Bridge Partnership") between a BRT Subsidiary (holding a residual 65%
interest) and a Pulver Entity (holding a residual 35% interest) to acquire an
option to purchase an aggregate of approximately 10 acres of undeveloped land
at an exercise price of approximately $3.2 million.
As part of the Tower Bridge Transactions, Pulver and Pulver Entities
will enter into agreements with the Operating Partnership providing the
Operating Partnership with certain rights to participate in future
developments by Pulver and Pulver Entities in the Boroughs of Conshohocken
and West Conshohocken.
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In connection with each of the three projects to be operated by the Two,
Four and Five Tower Bridge Partnerships (each, a "Tower Bridge Partnership"),
a Pulver Entity and Brandywine Realty Services Corporation ("BRSC"), a
majority-owned subsidiary of the Operating Partnership, will enter into a
management and asset management agreement. Under these agreements, the Pulver
Entity will be entitled to be paid by the applicable Tower Bridge Partnership
a management fee equal to 4% of the gross receipts from the applicable
property, and BRSC will be entitled to be paid by the applicable Tower Bridge
Partnership an asset management fee equal to 1% of such gross receipts.
In connection with each of the three projects to be operated by a Tower
Bridge Partnership, a Pulver Entity will enter into a leasing agency
agreement with the applicable Tower Bridge Partnership. Under these
agreements, the Pulver Entity will be entitled to be paid a leasing
commission (i) generally equal to $4.00 multiplied by the number of rentable
square feet subject to a lease (if there is no cooperating agent) and (ii)
generally equal to $1.50 multiplied by the number of rentable square feet
subject to a lease (if there is a cooperating broker).
The partnership agreements for each of the Tower Bridge Partnerships
contain a provision permitting the Pulver Entities that are partners in the
applicable partnerships to convert, after the third anniversary of formation
of the partnerships, their partnership interests into units of limited
partnership interest in the Operating Partnership, which units would, in
turn, be convertible into an equal number of common shares of beneficial
interest ("Common Shares") of the Company. The number of units so issuable
upon conversion would be based on the residual equity value of the
partnership interest being converted divided by the trading price of the
Common Shares at the time of conversion. Exercise by the Pulver Entity of
the conversion election is subject to customary conditions, including
compliance with applicable laws relating to the private placement of
securities.
Summarized below is additional information relating to the Tower Bridge
Transaction. The summary of the Tower Bridge Transaction is qualified in its
entirety by reference to the terms of the definitive documents attached as
exhibits to this Current Report on Form 8-K.
Four Tower Bridge
The Four Tower Bridge Partnership acquired the land on which the Four
Tower Bridge Building is to be constructed for a purchase price of
approximately $2.6 million. The Four Tower Bridge Partnership expects
construction of the Four Tower Bridge Building will commence during November
and, absent unanticipated delays, be completed during the third quarter of
1998. The Four Tower Bridge Partnership has executed a term sheet with a
bank for a construction loan (the "Construction Loan") in the principal
amount of $16.75 million. Under the term sheet, the Operating Partnership
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will agree to provide an equity contribution of approximately $6.75 million
upon the earlier of: (i) one year from the Construction Loan closing; (ii)
receipt of a certificate of occupancy for the building; and (iii) a default
under the Construction Loan. In addition, the Operating Partnership will
agree to provide a $10.0 million forward commitment, although Four Tower
Bridge Partnership expects that an unaffiliated third party, such as an
insurance company, will provide the permanent loan upon completion of the
Four Tower Bridge Building. The Operating Partnership's equity contribution
would be entitled to a 10% preferential return. Consummation of the
Construction Loan is subject to negotiation of definitive documentation and
satisfaction of customary closing conditions. In anticipation of the
consummation of the Construction Loan, the Operating Partnership is loaning
the Four Tower Bridge Partnership up to an aggregate of approximately $3.8
million. The amounts so loaned bear interest at 10%, are secured by a
mortgage and are expected to be repaid from proceeds under the Construction
Loan.
Two Tower Bridge
Two Tower Bridge is an existing four-story office building containing
approximately 83,000 leasable square feet constructed in 1992. As of
November 1, 1997, this building was approximately 100% leased to seven
tenants. The parties have given notice of the intention to prepay the
existing mortgage loan secured by the building with proceeds from a new
mortgage loan the parties expect to obtain and an equity contribution by a
BRT Subsidiary. The amount of the BRT Subsidiary's equity contribution would
be entitled to a 10% preferential return. The amount necessary to prepay the
existing mortgage loan depends, in part, on the appraised value of Two Tower
Bridge and has not, as of the date hereof, been determined. Two
subordinated, participating loans held by third parties, having current
outstanding principal balances of approximately $3.7 million, are secured by
this building.
Five Tower Bridge
Five Tower Bridge consists of approximately 10 acres of undeveloped land
that the Company believes can accommodate an office building containing
approximately 215,000 leasable square feet. This land is the subject of a
one year purchase option, extendible for one additional year, held by the
newly-formed Five Tower Bridge Partnership. A BRT Subsidiary has contributed
approximately $48,000 to the equity of the Five Tower Bridge Partnership to
fund the estimated cost of the initial term of the option. In addition, if
the option is extended or exercised, upon mutual agreement by the BRT
Subsidiary and the Pulver Entity, the BRT Subsidiary has agreed to contribute
the amounts required to pay for the extension (approximately $300,000) and
the exercise (approximately $3.2 million less the excess of the $300,000
extension payment over the amount of carrying costs paid by the seller during
the second year of the option). These equity contributions of the BRT
Subsidiary will be entitled to a 10% preferential return. Plans for the
development of Five Tower Bridge have not been prepared and
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development of Five Tower Bridge will require land development and other
necessary approvals
Property Acquisitions
On October 29, 1997, the Operating Partnership purchased Cherry Hill
Executive Center #5, a two-story office property located in Cherry Hill, NJ.
The property was purchased for a cash price of $1.3 million, contains
approximately 66,000 net rentable square feet and was approximately 10%
occupied upon acquisition. The Company currently intends to renovate the
property, although the timing and cost of the renovation have not been
determined.
On October 31, 1997, the Operating Partnership purchased Cherry Hill
Executive Center #6, a four-story office property located in Cherry Hill, NJ.
The property was purchased for a cash price of $2.2 million, contains
approximately 105,972 net rentable square feet and was vacant upon
acquisition. The Company currently intends to renovate the property, although
the timing and cost of the renovation have not been determined.
On November 5, 1997, the Operating Partnership purchased 220 Commerce
Drive, a four-story office property located in Fort Washington, PA. The
property was purchased for a cash price of $5.3 million, contains
approximately 46,366 net rentable square feet and was 100% occupied upon
acquisition.
On November 6, 1997, the Operating Partnership purchased Provident
Place, two office properties located in the Horsham Business Center in
Horsham, PA. The properties were purchased for an aggregate cash price of
$6.3 million, contain an aggregate of approximately 58,994 square feet and
were 100% occupied upon acquisition.
Cherry Hill Executive Center #5, Cherry Hill Executive Center #6, 220
Commerce Drive and Provident Place were all negotiated in arm's-length
transactions with sellers unaffiliated with the Company.
Forward-Looking Information
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. This Current Report on Form
8-K contains statements that are forward-looking, such as statements relating
to current and future developments at Tower Bridge, future construction costs
and financing sources and availability. The subject matter of such
forward-looking statements involve important risks and uncertainties that
could significantly affect anticipated results and, accordingly, actual
results may differ from those expressed in any forward-looking statements
made by, or on behalf of, the Company. These risks and uncertainties
include, but are not limited to, uncertainties affecting real estate
businesses generally (such as entry into new leases, renewals of leases and
dependence on tenants' business operations), risks relating
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to acquisition, construction and development activities (such as cost
over-runs and unanticipated delays), possible environmental liabilities,
compliance with local land use regulation, including zoning and permitting
requirements, risks relating to leverage and debt service (including
availability of financing terms acceptable to the Company and the applicable
Tower Bridge Partnerships) and risks associated with joint ventures
(including possible disagreements between the partners).
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
10.1 - Project Participation Agreement
10.2 - Agreement of Limited Partnership of Four Tower Bridge Associates
10.3 - Agreement of Limited Partnership of Five Tower Bridge Associates
10.4 - Agreement of Sale (Four Tower Bridge)
10.5 - Purchase Option Agreement (Five Tower Bridge)
10.6 - Right of First Offer Agreement (Tower Bridge North)
10.7 - Right of First Offer Agreement (Three Tower Bridge)
10.8 - Right of First Offer Agreement (One Tower Bridge)
10.9 - Form of Management and Asset Management Agreement
10.10 - Form of Leasing Agency Agreement
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BRANDYWINE REALTY TRUST
Date: November 18, 1997 By: /s/ Gerard H. Sweeney
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Gerard H. Sweeney, President and
Chief Executive Officer
(Principal Executive Officer)
Date: November 18, 1997 By: /s/ Mark S. Kripke
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Mark S. Kripke, Chief Financial Officer
(Principal Financial and Accounting Officer)
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Exhibit 10.1
PROJECT PARTICIPATION AGREEMENT
THIS PROJECT PARTICIPATION AGREEMENT is dated as of November 3, 1997
and is by and among Brandywine Operating Partnership, L.P. ("BOP"),
Brandywine TB I, L.P. ("BOP Sub I"), Brandywine TB II, L.P. ("BOP Sub II"),
Brandywine TB III, L.P. ("BOP Sub III"), Donald W. Pulver ("Pulver"), Two
Oliver Tower Associates ("Two OTA"), Four Oliver Tower Associates ("Four
OTA"), Five Oliver Tower Associates ("Five OTA"), Oliver Tower Land Holding
Associates ("OTLHA") and Oliver Tyrone Pulver Corporation ("OTP Corp.").
Background
Two Tower Bridge Associates (the "Two T.B. Partnership") owns the
property and building (the "Two T.B. Project") described on Exhibit A .
Tower Bridge Land Holding Associates I (the "Four T.B. Seller") owns the
property (the "Four T.B. Property") described on Exhibit B. Tower Bridge
Land Holding Associates II (the "Five T.B. Seller") owns the property (the
"Five T.B. Property") described on Exhibit C. OTLHA is a general partner in
the Four T.B. Seller and the Five T.B. Seller. The direct and indirect
interests of Pulver in real estate in the Boroughs of Conshohocken and West
Conshohocken are identified on Exhibit D.
The parties are entering into this Agreement in order to set forth
the terms upon which: (i) BOP Sub II will be admitted as a general partner
of the Two T.B. Partnership; (ii) BOP Sub I and Four OTA will enter into an
Agreement of Limited Partnership (the "Four T.B. Partnership") in order to
purchase and develop the Four T.B. Property; (iii) BOP Sub III and Five OTA
will enter into an Agreement of Limited Partnership (the "Five T.B.
Partnership") in order to acquire an option to purchase the Five T.B.
Property; and (iv) certain related matters will be handled.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Two T.B. Partnership.
a. Attached to this Agreement as Exhibit E is an unexecuted
copy of the Second Amended and Restated Agreement of Limited Partnership of
the Two T.B. Partnership (the "Two T.B. Partnership Agreement"). Upon
satisfaction of the conditions specified in subparagraphs a(i) and (ii)
below, BOP Sub II, Two OTA and Pulver (as limited partner) shall execute the
Two T.B. Partnership Agreement and take the actions provided for therein and
shall complete those exhibits to the Two T.B. Partnership Agreement that are
not included as part of Exhibit E or that require completion or updating
(Exhibits A, F, F-1, G, H, I, K and M).
(i) Funding of a mortgage loan (the "Two T.B. Mortgage
Loan"), secured by the Two T.B. Project, in the principal amount of not less
than $5,000,000 and not more than that number which produces a ratio of (a)
mortgage debt to (b) the sum of
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mortgage debt plus equity in the Two T.B. Partnership of 65%. Subject to
paragraph 1.c below, BOP and Two OTA agree to use their best efforts to
obtain the Two T.B. Mortgage Loan as promptly as commercially practicable.
To avoid uncertainty on the matter, BOP and Two OTA agree that a mortgage
loan having terms comparable to the terms contained in Exhibit F would be
acceptable.
(ii) Prepayment of the outstanding indebtedness (the
"AFL-CIO Debt") owing to the AFL-CIO Building Investment Trust (the
"AFL-CIO").
b. Immediately upon execution and delivery of the Four T.B.
Sale Agreement (as defined in paragraph 2 below) by the parties thereto, Two
OTA will deliver to the AFL-CIO the prepayment notice in the form attached
hereto as Exhibit G (the "Prepayment Notice").
c. Until execution and delivery of the Four T.B. Sale
Agreement by the parties thereto, and delivery by Two OTA of the Prepayment
Notice to the AFL-CIO, neither BOP nor BOP Sub II shall have any obligation
to pay a commitment fee to a lender in respect of the Two T.B. Mortgage Loan.
The amount of any commitment fee payable to a lender in respect of the Two
T.B. Mortgage Loan (and any other fees called for in the loan commitment)
shall be paid by BOP or BOP Sub II and shall accrue interest at the rate of
10% from the date made. Upon execution of the Two T.B. Partnership Agreement,
the amount so paid by BOP or BOP Sub II (plus a 10% return) on account of the
commitment fee shall constitute BOP Preference Capital under the Two T.B.
Partnership Agreement and shall (unless simultaneously repaid to BOP or BOP
Sub II) be deemed to have been made pursuant to Section 3.01 of the Two T.B.
Partnership Agreement (whether or not expressly provided therein). Two OTA
shall not be required to pay any portion of the commitment fee or any other
fees called for in the commitment.
d. The parties agree that all the net proceeds of the Two
T.B. Mortgage Loan will be applied to prepayment of the AFL-CIO Debt and that
the additional amount required to fully prepay the AFL-CIO Debt and to pay
actual costs associated with such prepayment will be funded by the capital
contribution required to be made by BOP Sub II pursuant to Section 3.01 of
the Two T.B. Partnership Agreement (which amount shall constitute BOP
Preference Capital under the Two T.B. Partnership Agreement).
e. Prior to the earlier of: (i) execution by BOP Sub II, Two
OTA and Pulver of the Two T.B. Partnership Agreement and (ii) the Termination
Date (as defined in subparagraph g below), Two OTA agrees (a) to operate the
Two T.B. Partnership and the Two T.B. Project in the ordinary course,
consistent with current practice, (b) to obtain the prior consent of BOP to
any new leasing arrangements at the Two T.B. Project (other than as and to
the extent provided in Section 4.09A.(5) of the Two T.B. Partnership
Agreement with respect to "Relocating Tenants"), (c) not to permit additional
encumbrances on the Two T.B. Project, (d) not to permit a change in the
ownership of the Two T.B. Partnership or the Two T.B. Project
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(other than upon the death of a partner) and (e) not to permit a modification
to use or easement agreements affecting the Two T.B. Project.
f. Two OTA hereby represents and warrants to BOP and BOP Sub
II as to each of the matters contained in Section 4.09 of the Two T.B.
Partnership Agreement. At the time the Two T.B. Partnership Agreement is
signed and BOP Sub II is admitted as a partner in the Two T.B. Partnership,
Two OTA shall again make such representations and warranties, with such
exceptions thereto to be listed on a schedule as shall be necessary to
reflect changes occurring after the date hereof. In addition, Two OTA
represents and warrants that: (i) Exhibit H attached hereto consists of two
letters (the "Debt Letters") from holders of subordinated debt relating to
the Two T.B. Project stating the outstanding principal amount of such
subordinated debt, plus accrued interest, as of the dates specified in such
Debt Letters and (ii) the outstanding principal amount of the AFL-CIO Debt as
of December 31, 1996 is as reflected in the audited balance sheet of the Two
T.B. Partnership as of December 31, 1996. Two OTA represents and warrants
that since the respective date(s) of the Debt Letters, all amounts that have
fallen due on the indebtedness that is the subject of the Debt Letters
(consisting of $8,675.88 (principal and interest) (RDA) and $0 (UDAG),
respectively, in respect of the debt covered thereby) have been paid in full.
g. In the event that BOP and Two OTA, despite use of their
best efforts, have been unable to obtain the Two T.B. Mortgage Loan by March
31, 1999 (the "Termination Date"), the rights and obligations of the parties
under this paragraph 1 shall terminate without further liability.
2. Four T.B. Partnership.
a. Attached to this Agreement as Exhibit I is an unexecuted
copy of the Agreement of Limited Partnership of the Four T.B. Partnership
(the "Four T.B. Partnership Agreement").
b. Immediately following the execution of this Agreement, BOP
Sub I and Four OTA shall execute and deliver the Four T.B. Partnership
Agreement and shall execute and deliver an agreement of sale for the Four
T.B. Property (the "Four T.B. Sale Agreement") with the Four T.B. Seller.
The terms of the Four T.B. Sale Agreement must be mutually agreeable to BOP
and Four OTA.
c. Following acquisition by the Four T.B. Partnership of the
Four T.B. Property pursuant to the Four T.B. Agreement of Sale, BOP shall
advance funds to pay those costs identified on Exhibit J, provided that BOP
shall not be obligated to advance any funds to pay for the costs of
construction of the culvert at the Four T.B. Property until it has been
provided: (x) an updated engineer's certificate certifying that all licenses,
permits and approvals for construction of the culvert have been obtained, (y)
an acceptable guaranteed maximum price construction contract for construction
of the culvert and (z) a waiver of liens in recordable form
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delivered by the general contractor for the culvert construction. The
amounts so advanced by BOP (the "BOP Advances"): (i) shall accrue interest at
the rate of 10% per annum from the date made, (ii) shall constitute the
obligation of the Four T.B. Partnership, (iii) shall be secured by an
open-end mortgage and security agreement and (iv) shall be repaid by the Four
T.B. Partnership from proceeds of an acquisition and construction loan (the
"Acquisition and Construction Loan") that the Four T.B. Partnership intends
to obtain to fund the cost of acquiring and developing the Four T.B.
Property. In the event the Acquisition and Construction Loan has not closed
by December 31, 1998, the BOP Advances, together with accrued interest
thereon, shall become due and payable on such date. Prior to repayment in
full of the BOP Advances and accrued interest thereon, the BOP Advances shall
be treated for all purposes as a "Partner Priority Loan" under the Four T.B.
Partnership Agreement.
d. BOP, Pulver and Four OTA agree that an Acquisition and
Construction Loan having terms comparable to the terms contained in Exhibit K
would be acceptable. BOP and Pulver agree to provide the commitments and
collateral required to be furnished by them under the term sheet attached as
Exhibit K in connection with the consummation of the Acquisition and
Construction Loan provided for therein.
e. The terms and conditions attached as Exhibit K require
that a loan commitment for a permanent loan be issued prior to closing under
the Acquisition and Construction Loan. BOP and Four OTP shall use their best
efforts to obtain a permanent loan commitment in the form of Exhibit K-1
attached hereto and made a part hereof as soon as commercially practicable.
3. Five T.B. Partnership.
a. Attached to this Agreement as Exhibit L is an unexecuted
copy of the Agreement of Limited Partnership of the Five T.B. Partnership
(the "Five T.B. Partnership Agreement"). Attached to this Agreement as
Exhibit M is an unexecuted copy of a Purchase Option Agreement, with exhibits
thereto attached (the "Option Agreement") between the Five T.B. Seller and
the Five T.B. Partnership. Concurrently with the closing under the Four T.B.
Sale Agreement, and as a condition to such closing: (i) BOP Sub III and Five
OTA will form the Five T.B. Partnership and (ii) the Five T.B. Seller and the
Five T.B. Partnership will execute the Option Agreement.
b. Exercise of the Option pursuant to the Option Agreement
and extension of the Option from the first to the second anniversary of the
date of the Option Agreement shall each require the joint consent of BOP Sub
III and Five OTA; provided, however, that in the event that a Bona Fide Third
Party Offer (as defined in Section 8 of the Option Agreement) is submitted to
the Five T.B. Seller, BOP Sub III shall have the sole and exclusive right and
authority to determine, on behalf of the Five T.B. Partnership, whether the
Five T.B. Partnership shall exercise the Option.
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c. Subject to execution of the Option Agreement, BOP Sub III
agrees to advance the Option payments pursuant to Section 4 of the Option
Agreement. Each such advance shall accrue interest from the date made at the
rate of 10% per annum, compounded annually, and shall be treated as a capital
contribution by BOP Sub III to the Five T.B. Partnership and added to the BOP
Preference Capital under the Five T.B. Partnership Agreement.
d. In the event that the Option is not extended from the
first to the second anniversary of its date of issuance and expires
unexercised, then an amount equal to the aggregate amount contributed or
deemed contributed by BOP Sub III to the capital of the Five T.B. Partnership
in payment of the First Year Option Payment (as defined in Section 4 of the
Option Agreement), together with the 10% accrued return thereon, shall
automatically be deemed to have been contributed to the capital of the Four
T.B. Partnership by or on behalf of BOP Sub I on the expiration of the Option
and shall thereupon become a part of and increase the BOP Preference Capital
under the Four T.B. Partnership.
4. Right of First Offer. Pulver, on behalf of himself and
entities controlled by him, and BOP will execute: (i) the Right of First
Offer Agreements attached as Exhibits N-1 and N-2 (in respect of properties
known, respectively, as Three Tower Bridge and Tower Bridge North)
concurrently with the closing under the Four T.B. Agreement of Sale; and (ii)
the Right of First Offer Agreement attached as Exhibit N-3 (in respect of
Pulver's partnership interest in the partnership that owns property known as
One Tower Bridge) concurrently with the closing under the Four T.B. Agreement
of Sale.
5. OTLHA Representations and Warranties. OTLHA represents and
warrants for the benefit of BOP and its subsidiaries that: (i) attached
hereto as Exhibit O-1 is a true and correct copy of the Agreement of Limited
Partnership of the Five T.B. Seller and such Agreement is currently in full
force and effect; and (ii) attached hereto as Exhibit O-2 is a true and
correct copy of the Agreement of Limited Partnership of Tower Bridge North
Associates (which Partnership owns the land referred to as Tower Bridge
North, including Six Tower Bridge) and such Agreement is currently in full
force and effect.
6. Miscellaneous.
a. No recourse shall be had for any obligation of Brandywine
Realty Trust, in its capacity as general partner of BOP, under this Agreement
or under any document executed in connection herewith or pursuant hereto, or
for any claim based thereon or otherwise in respect thereof, against any
past, present or future trustee, shareholder, officer or employee of
Brandywine Realty Trust.
b. Pulver represents and warrants that his current direct and
indirect interests in real estate in the Boroughs of Conshohocken and West
Conshohocken are identified on Exhibit D and this representation and warranty
shall survive consummation of the transactions provided for herein.
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c. Pulver shall have no personal liability for any
obligations arising hereunder other than his obligations arising under
paragraphs 1.a, 2.d, 4 and 6.b. The obligation of Pulver under paragraph 1.a
is to execute the Two T.B. Partnership Agreement as provided therein. The
obligation of Pulver under paragraph 2.d is to provide the guaranty and
collateral required to be provided by him pursuant to the term sheet attached
as Exhibit K. The obligation of Pulver under paragraph 4 is to execute or
cause certain entities to execute the Rights of First Offer Agreement
identified therein at the times specified therein.
d. The parties shall be entitled to the remedy of specific
performance to enforce the obligations of the other parties hereunder in
addition to all other remedies at law and equity.
e. The parties agree that time is of the essence for the
performance of their respective obligations hereunder.
f. The rights and obligations of the parties hereunder shall
be assignable only upon the written consent of the other parties hereto.
g. No person who is not a party to this Agreement shall be
deemed a third-party beneficiary of this Agreement.
h. The parties acknowledge that Brandywine Realty Trust
intends to file this Agreement (and some or all of the exhibits) as an
exhibit to a filing it makes with the Securities and Exchange Commission
("SEC"). Upon execution and delivery of this Agreement, the parties shall
jointly issue a press release and shall jointly issue future press releases
with respect to the subject matter of this Agreement. Brandywine Realty
Trust reserves the right to issue such press releases as it believes are
reasonably necessary to enable it to comply with federal securities laws and
shall endeavor to conform the format of any such press releases to the format
of any press releases reflected in jointly issued press releases. In no
event shall Brandywine Realty Trust be required to review with any other
party hereto or any party to any of the documents referred to herein any
filings it makes with the SEC or any stock exchange.
i. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
j. This Agreement may be amended only by a writing signed by
the parties hereto.
k. This Agreement, together with the exhibits hereto,
represents the entire agreement of the parties with respect to the subject
matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
BRANDYWINE OPERATING PARTNERSHIP
By: BRANDYWINE REALTY TRUST, as
general partner
By: /s/ Anthony A. Nichols, Sr.
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Anthony A. Nichols, Sr.
Title: Chairman of the Board
BRANDYWINE TB I, L.P.
By: BRANDYWINE TB I, L.L.C., as general
partner
By: /s/ Anthony A. Nichols, Sr.
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Anthony A. Nichols, Sr.
Title: Chairman of the Board
BRANDYWINE TB II, L.P.
By: BRANDYWINE TB II, L.L.C., as general
partner
By: /s/ Anthony A. Nichols, Sr.
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Anthony A. Nichols, Sr.
Title: Chairman of the Board
BRANDYWINE TB III, L.P.
By: BRANDYWINE TB III, L.L.C., as general
partner
By: /s/ Anthony A. Nichols, Sr.
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Anthony A. Nichols, Sr.
Title: Chairman of the Board
/s/ Donald W. Pulver
---------------------------------------------
Donald W. Pulver
[SIGNATURES CONTINUED ON THE NEXT PAGE]
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TWO OLIVER TOWER ASSOCIATES
By: TWO OLIVER TOWER CORPORATION,
as general partner
By: /s/ Donald W. Pulver
--------------------------
Donald W. Pulver
Title: President
FOUR OLIVER TOWER ASSOCIATES
By: FOUR OLIVER TOWER CORPORATION,
as general partner
By: /s/ Donald W. Pulver
--------------------------
Donald W. Pulver
Title: President
FIVE TOWER ASSOCIATES
By: FIVE OLIVER TOWER CORPORATION,
as general partner
By: /s/ Donald W. Pulver
--------------------------
Donald W. Pulver
Title: President
OLIVER TOWER LAND HOLDING
ASSOCIATES
By: OLIVER TYRONE PULVER
CORPORATION, as general partner
By: /s/ Donald W. Pulver
--------------------------
Donald W. Pulver
Title: President
OLIVER TYRONE PULVER CORPORATION
By: /s/ Donald W. Pulver
--------------------------
Donald W. Pulver
Title: President
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Exhibit 10.2
AGREEMENT OF LIMITED PARTNERSHIP
OF
FOUR TOWER BRIDGE ASSOCIATES
Dated as of November 3, 1997
<PAGE>
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.
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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 OLIVER TOWER
ASSOCIATES, a Pennsylvania limited partnership with offices at c/o Oliver
Tyrone Pulver Corporation, One Tower Bridge, 100 West Front Street, West
Conshohocken, Pennsylvania 19428, 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, 16
Campus Boulevard, Suite 150, Newtown Square, Pennsylvania 19073, as
Administrative General Partner ("Administrative General Partner"), and DONALD
W. PULVER, with offices at c/o Oliver Tyrone Pulver Corporation, One Tower
Bridge, 100 West Front Street, West Conshohocken, Pennsylvania 19428
("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.
<PAGE>
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.
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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.
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1.27. Managing General Partner. Four Oliver 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).
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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
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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;
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(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.
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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 Tyrone Pulver Corporation, One Tower Bridge,
Suite 900, Conshohocken, Pennsylvania 19482, 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
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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.
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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.
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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
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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
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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
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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
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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,
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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 Oliver Tyrone
Pulver 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 Oliver Tyrone Pulver
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
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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
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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
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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.
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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,
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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) Donald W. Pulver 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
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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
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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
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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
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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
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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
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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
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(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,
Montgomery 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
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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
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(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
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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
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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 Donald W. Pulver, 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 Donald W. Pulver, 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.
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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
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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 Donald W. Pulver or an
individual entity who obtains an interest by death or incapacity of Donald W.
Pulver 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,
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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
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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 Donald W. Pulver, 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.
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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
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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
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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
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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.
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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
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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
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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.
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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;
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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
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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
<PAGE>
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
<PAGE>
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 Oliver Tower Associates
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, PA 19428
B. If to Administrative General Partner:
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
Attn: Anthony A. Nichols, Chairman
Gerard H. Sweeney, President and Chief Executive Officer
58
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C. If to Limited Partner:
Mr. Donald W. Pulver
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, PA 19428
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
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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.
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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
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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 Oliver 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 OLIVER TOWER ASSOCIATES,
a Pennsylvania limited partnership
By: FOUR OLIVER TOWER CORPORATION,
a Pennsylvania corporation, its duly
authorized general partner
By: /s/ Donald W. Pulver
----------------------------------
Donald W. Pulver, President
BRANDYWINE TB I, L.P., a Pennsylvania limited
partnership
By: BRANDYWINE TB I, L.L.C., a
Pennsylvania limited liability company
By: /s/ Anthony A. Nichols, Sr.
----------------------------------
Name: Anthony A. Nichols, Sr.
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
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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/ Anthony A. Nichols, Sr.
--------------------------------------
Name: Anthony A. Nichols, Sr.
Title: Chairman of the Board
64
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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 _________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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%
</TABLE>
<PAGE>
EXHIBIT 10.3
AGREEMENT OF LIMITED PARTNERSHIP
OF
FIVE TOWER BRIDGE ASSOCIATES
Dated as of November 3, 1997
<PAGE>
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..............................................6
1.34. Operating Budget....................................................6
<PAGE>
Page
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.........................................7
1.44. Profits or Losses...................................................7
1.45. Project.............................................................8
1.46. Project Budget......................................................8
1.47. Project Costs.......................................................8
ARTICLE II
GENERAL PROVISIONS...........................................................9
2.01. Formation...........................................................9
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
ii
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Page
3.07 BOP Preference Capital.............................................14
ARTICLE IV
MANAGEMENT OF THE PARTNERSHIP...............................................14
4.01. Duties and Powers of the General Partners..........................14
4.02. Fees, Compensation and Reimbursement of Expenses...................19
4.03. Concerning the Limited Partners....................................20
4.04. Sale or Refinancing................................................20
4.05. Bank Accounts......................................................20
4.06. Consents and Approvals.............................................20
4.07. Concerning Persons Other Than Partners.............................21
4.08. Indemnification of the General Partners............................21
4.09. Representations and Warranties of the Managing General Partner.....22
4.11. Certain Definitions................................................25
ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS...............................................25
5.01. Distributions of Net Cash Flow.....................................25
5.02. Distributions of Net Refinancing Proceeds and Net Sale Proceeds....26
5.03. Availability of Funds..............................................27
5.04 Tax Withholding....................................................27
5.05 Allocation of Profits and Losses...................................27
ARTICLE VI
BOOKS AND RECORDS; TAX MATTERS..............................................31
6.01. Accounting.........................................................31
6.02. Statements.........................................................31
6.03. Inspection.........................................................32
6.04. Tax Matters........................................................32
ARTICLE VII
TRANSFER OF PARTNERSHIP INTERESTS;
WITHDRAWAL OF PARTNERS;
REMOVAL OF THE MANAGING GENERAL PARTNER.....................................33
7.01. Transfer of General Partnership Interests..........................33
7.02. Transfer of Limited Partnership Interests..........................37
iii
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Page
7.03. Expenses...........................................................38
7.04. Withdrawal of Partners.............................................38
7.05. Death, Incompetency, Dissolution or Bankruptcy of a Limited
Partner............................................................38
7.06. Deadlock of the General Partners...................................38
7.07. Right of First Refusal.............................................40
7.08. Status of Interests Transferred....................................41
7.09. Removal of the Managing General Partner............................41
7.10. Deadlock on Sale...................................................44
7.11 Arbitrable Disputes................................................45
7.12 Right of Contribution in Favor of Managing General Partner.........47
ARTICLE VIII
ADDITIONAL LIMITED PARTNERS.................................................52
8.01. Additional Limited Partners and Their Contributions................52
ARTICLE IX
INSURANCE...................................................................53
9.01. Coverage...........................................................53
9.02. Certificates; Notices..............................................54
9.03. Concerning Liability Insurance.....................................54
9.04. Miscellaneous......................................................54
ARTICLE X
DISSOLUTION AND TERMINATION.................................................54
10.01. Dissolution........................................................54
10.02. Appointment of Liquidating Partner.................................56
10.03. Distributions and Other Matters....................................56
10.04. Distributions of Property..........................................57
10.05. Actions of the Liquidating Partner; Statements of Account..........57
ARTICLE XI
NOTICES AND COMMUNICATIONS..................................................58
11.01. Notices............................................................58
11.02. Change of Address..................................................59
11.03. Time of Communications.............................................59
iv
<PAGE>
ARTICLE XII
MISCELLANEOUS...............................................................59
12.01. Filings............................................................59
12.02. Power of Attorney..................................................59
12.03. Inspections........................................................60
12.04. Other Remedies.....................................................60
12.05. Partners as Creditors..............................................61
12.06. Independent Ventures...............................................61
12.07. Partial Invalidity.................................................61
12.08. Governing Law; Parties in Interest.................................61
12.09. Amendment..........................................................61
12.10. Execution in Counterpart...........................................61
12.11. Computation of Time................................................61
12.12. Table of Contents; Titles and Captions.............................62
12.13. Pronouns and Plurals...............................................62
12.14. Approval by General Partners.......................................62
12.15. Exhibits...........................................................62
12.16. Entire Agreement...................................................62
12.17. Filing with Securities Exchange Commission.........................62
12.18. Non-Recourse.......................................................62
EXHIBITS
Exhibit "A" - Acquisition Terms
Exhibit "B" - Schedule of Partnership Participation and Capital
Exhibit "C" - Land Description
Exhibit "D" - Leasing Agency Agreement Form
Exhibit "E" - Management Agreement Form
Exhibit "F" - Balance Sheet of Brandywine Operating Partnership, L.P.
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AGREEMENT OF LIMITED PARTNERSHIP
OF
FIVE TOWER BRIDGE ASSOCIATES
THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") is made and
entered into as of November 3, 1997, by and among FIVE OLIVER TOWER
ASSOCIATES, a Pennsylvania limited partnership with offices at c/o Oliver Tyrone
Pulver Corporation, One Tower Bridge, 100 West Front Street, West Conshohocken,
Pennsylvania 19428, as Managing General Partner ("Managing General Partner"),
BRANDYWINE TB III, L.P., a Pennsylvania limited partnership with offices at c/o
Brandywine Realty Trust, Newtown Corporate Campus, 16 Campus Boulevard, Suite
150, Newtown Square, Pennsylvania 19073, as Administrative General Partner
("Administrative General Partner"), and DONALD W. PULVER, with offices at c/o
Oliver Tyrone Pulver Corporation, One Tower Bridge, 100 West Front Street, West
Conshohocken, Pennsylvania 19428 ("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.
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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 Contributions
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 or buildings to be known as Five
Tower Bridge, consisting of an office building consisting of approximately
215,000 square feet of floor area ratio, with the structured parking area
physically incorporated therein or located thereon.
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.
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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 Purchase Option Agreement, with
Terms and Conditions of Sale attached thereto executed, or to be executed,
between the Partnership and Tower Bridge Land Holding Associates II for
acquisition of the Land, as the same may be
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modified, or any other agreement executed and delivered by the Partnership
and Tower Bridge Land Holding Associates II for acquisition of the Land.
1.27. Managing General Partner. Five Oliver 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.
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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).
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.
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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 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;
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(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 to
be proposed by the Managing General Partner and approved by 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.
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.
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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 "Five 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 Tyrone Pulver Corporation, One Tower Bridge,
Suite 900, Conshohocken, Pennsylvania 19482, 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 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
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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.
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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.
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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
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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 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 contribution of BOP Preference Capital in an amount equal to
the option payments required under the Land Acquisition Agreement and any other
amounts
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necessary to fund the acquisition of the Land. It is the anticipation of
the parties hereto that the BOP Preference Capital 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"), unless and to the extent
such amounts are necessary to fund equity under the Construction and
Acquisition Loan.
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. Unless the parties shall otherwise agree,
the amount of the BOP Preference Capital under this subsection 3.07(B) shall be
equal to thirty-five percent (35%) of the Project Costs incurred prior to the
date of the Permanent Loan.
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;
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(2) obtain title insurance on Partnership property, and execute
all affidavits and other documents necessary in connection therewith (the
identity of the title insurer 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
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contrary, every mortgage, note or other evidence of indebtedness, and every
lease, sublease, 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 Oliver Tyrone
Pulver Corporation substantially in the form of Exhibit "D" 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 "E" attached hereto between the Partnership and Oliver Tyrone Pulver
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
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amount unused or unneeded from any other category if the work or services
covered in such other 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
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and pass upon other matters which have been submitted to the Partners for
their review or 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.
G. Notwithstanding anything to the contrary contained herein, (1)
exercise of the purchase option set forth in the Land Acquisition Agreement and
extension of such option from the first to the second anniversary date of the
Land Acquisition Agreement shall only be made with the consent of both General
Partners; provided, however, that in the event that a Bona Fide Third Party
Offer (as defined in Section 8 of the Option Agreement) is submitted to Tower
Bridge Land Holding Associates II, current owner of the Land, Administrative
General Partner shall have the sole and exclusive authority to determine on
behalf of the Partnership whether to exercise the said option; and (2) the terms
of the Construction and Acquisition Loan and the terms of the Permanent Loan
shall be subject to the review and approval of both General Partners.
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4.02. Fees, Compensation and Reimbursement of Expenses.
A. Except as expressly set forth herein or in Exhibit "D" or "E"
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. 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 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) in accordance with a budget to be
agreed upon by both of the General Partners.
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
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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.
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, 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
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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) Donald W. Pulver 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
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
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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.
(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,
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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.
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);
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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 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,
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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 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:
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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);
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:
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A. All Nonrecourse Deductions for each Fiscal Year shall be
allocated to the Partners in proportion to their respective Contribution
Percentages. For purposes of 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 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,
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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 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
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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 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
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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 (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
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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 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,
Montgomery 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;
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(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 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
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(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
(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
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(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 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 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.
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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 Donald W. Pulver, 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 Donald W. Pulver, 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.
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
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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.
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.
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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 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;
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(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 Donald W. Pulver or an
individual entity who obtains an interest by death or incapacity of Donald W.
Pulver 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, 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)
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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 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 Donald W. Pulver,
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.
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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.
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.
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Within ten (10) days from the date of the Arbitration Notice, the other
Arbitration Party shall set 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 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
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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 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
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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.
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
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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
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
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(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
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
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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.
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
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set forth herein. Administrative General Partner will use its best efforts
to obtain confirmation that no such shareholder approval is required.
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;
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;
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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 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.
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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 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
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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 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;
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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.
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:
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A. If to the Managing General Partner:
Five Oliver Tower Associates
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, PA 19428
B. If to Administrative General Partner:
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
Attn: Anthony A. Nichols, Chairman
Gerard H. Sweeney, President and Chief Executive
Officer
C. If to Limited Partner:
Mr. Donald W. Pulver
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, PA 19428
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
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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 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
54
<PAGE>
(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.
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.
55
<PAGE>
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 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.
12.18. Non-Recourse.
56
<PAGE>
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 Five Oliver 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.
FIVE OLIVER TOWER ASSOCIATES,
a Pennsylvania limited partnership
By: FIVE OLIVER TOWER CORPORATION, a Pennsylvania
corporation, its duly authorized general
partner
By: /s/ Donald W. Pulver
------------------------------
Donald W. Pulver, President
BRANDYWINE TB III, L.P., a Pennsylvania limited
partnership
By: BRANDYWINE TB III, L.L.C., a Pennsylvania
limited liability company
By: /s/ Anthony A. Nichols, Sr.
-----------------------------
Name: Anthony A. Nichols, Sr.
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 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
57
<PAGE>
By: BRANDYWINE REALTY TRUST, its duly authorized
general partner
By: /s/ Anthony A. Nichols, Sr.
-----------------------------
Name: Anthony A. Nichols, Sr.
Title: Chairman of the Board
58
<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FIVE 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%
<PAGE>
AGREEMENT OF SALE
FOUR TOWER BRIDGE
between
FOUR TOWER BRIDGE ASSOCIATES,
a Pennsylvania limited partnership
and
TOWER BRIDGE LAND HOLDING ASSOCIATES I,
a Pennsylvania limited partnership
Dated: November 3, 1997
<PAGE>
AGREEMENT OF SALE
INDEX
Section Page
1. PROPERTY BEING SOLD.................................................... 1
1.1 Real Property..................................................... 1
1.2 Personal Property................................................. 2
1.3 Leases............................................................ 2
1.4 Right to Names.................................................... 2
1.5 FAR................................................................ 2
1.6 Perpetual Easement................................................ 2
1.7 Access Easements.................................................. 2
1.8 Sewer Rights...................................................... 2
2. PURCHASE PRICE AND MANNER OF PAYMENT................................... 3
2.1 Purchase Price.................................................... 3
2.2 Manner of Payment................................................. 3
2.2.1 Deposit.................................................... 3
2.2.2 Cash Balance............................................... 3
2.3 Allocation........................................................ 3
3. TITLE.................................................................. 3
4. COVENANTS.............................................................. 3
4.1 Maintenance....................................................... 4
4.2 Alterations....................................................... 4
4.3 Lease............................................................. 4
4.4 Notice to Buyer................................................... 4
4.5 No New Agreements................................................. 4
4.6 Tax Disputes...................................................... 4
5. REPRESENTATIONS AND WARRANTIES......................................... 4
5.1 Seller's Authority For Binding Agreement.......................... 5
5.2 Employment........................................................ 5
5.3 Condemnation...................................................... 5
5.4 No Lawsuits....................................................... 5
5.5 No Tax Assessments................................................ 5
5.6 Leases............................................................ 5
5.7 Compliance with Law............................................... 5
5.8 No Leasing Brokers................................................ 5
5.9 Good Title to Premises............................................ 6
5.10 All Taxes and Assessments Paid.................................... 6
5.11 FIRPTA............................................................ 6
5.12 Charges, Fees and Assessments Under Declaration................... 6
5.13 Rights to Purchase................................................ 6
<PAGE>
Page
5.14 Rollback Taxes.................................................... 6
6. POSSESSION............................................................. 6
7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY........................ 6
7.1 Title Binder...................................................... 6
7.2 Survey............................................................ 7
7.3 Inspection........................................................ 7
7.4 Buyer's Indemnification for Inspection............................ 8
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................. 8
9. CONDEMNATION........................................................... 8
10. EXPENSE ALLOCATIONS.................................................... 9
10.1 Seller's Payments................................................. 9
10.2 Buyer's Payments.................................................. 9
10.3 Attorney's Fees................................................... 9
10.4 Culvert Extension and Estoppel Certificates....................... 9
11. CLOSING................................................................ 9
11.1 Time, Date and Place.............................................. 9
11.2 Documents......................................................... 9
11.2.1 Seller's Documents and Other Items........................ 9
11.2.1.1 Deed............................................ 9
11.2.1.2 Original Licenses, Contract Documents and Other
Personal Property............................... 9
11.2.1.3 Assignment of Licenses, Contract Documents and
Other Personal Property......................... 9
11.2.1.4 Assignment of Perpetual Easement................ 10
11.2.1.5 Assignment of Sewer Allocation.................. 10
11.2.1.6 Assumption of Certain Obligations of Buyer...... 10
11.2.1.7 Option Agreement................................ 10
11.2.1.8 Sign Easement................................... 10
11.2.1.9 Temporary Construction Easement................. 10
11.2.1.10 FIRPTA Certificates............................. 10
11.2.1.11 Seller's Certificate............................ 10
11.2.1.12 Tax Bills....................................... 10
11.2.1.13 Tax Reduction Rights............................ 10
11.2.1.14 Certificate as to No Additional Environmental
Disclosures..................................... 10
11.2.2 Buyer's Documents....................................... 10
11.2.3 Assumptions............................................. 11
11.2.4 Option Agreement........................................ 11
11.2.5 Title Insurance......................................... 11
11.2.6 Necessary Documents..................................... 11
ii
<PAGE>
Page
12. DEFAULT; REMEDIES...................................................... 11
12.1 Seller's Default.................................................. 11
12.2 Buyer's Default................................................... 12
13. CONDITIONS PRECEDENT TO CLOSING........................................ 12
13.1 Conditions Precedent to Buyer's Obligations....................... 12
13.1.1 Correctness of Warranties and Representations........... 12
13.1.2 Compliance with Terms and Conditions.................... 12
13.1.3 Culvert Extension....................................... 12
13.1.4 Perpetual Easement Amendment............................ 12
13.1.5 ASTM Estoppel........................................... 12
13.1.6 Declaration Estoppel.................................... 13
13.1.7 Borough Estoppel........................................ 13
13.1.8 Sewer Authority Estoppel................................ 13
13.1.9 No Additional Environmental Disclosures................. 13
13.2 Conditions Precedent to Seller's Obligations...................... 13
13.2.1 ASTM Estoppel........................................... 13
13.2.2 Borough Estoppel........................................ 13
13.2.3 Sewer Authority Estoppel................................ 13
14. PRORATIONS............................................................. 13
14.1 Expenses.......................................................... 13
14.1.1 Taxes................................................... 13
14.1.2 Water and Sewer Charges................................. 14
14.2 Custom and Practice............................................... 14
14.3 Application of Prorations......................................... 14
14.4 Readjustments..................................................... 14
15. BROKERS................................................................ 14
16. ESCROW AGENT........................................................... 14
16.1 Payment to Seller................................................. 14
16.2 Notice of Dispute................................................. 14
16.3 Escrow Subject to Dispute......................................... 14
16.4 Escrow Agent's Rights and Liabilities............................. 15
17. GENERAL PROVISIONS..................................................... 15
17.1 Notices........................................................... 15
17.2 Binding Effect.................................................... 17
17.3 Entire Agreement.................................................. 17
17.4 Governing Law..................................................... 17
17.5 Tender............................................................ 17
17.6 Execution in Counterparts......................................... 17
17.7 Further Instruments............................................... 17
17.8 Time.............................................................. 18
17.9 Designation of Nominee; Assignment of Agreement................... 18
iii
<PAGE>
Page
17.10 Time for Acceptance.......................................... 18
17.11 Confidentiality.............................................. 18
18. EXCULPATION............................................................ 18
19. PROPERTY "AS-IS"....................................................... 18
19.1 No Side Agreements or Representations............................. 18
19.2 AS-IS PURCHASE.................................................... 19
19.3 Buyer Representations............................................. 19
20. HAZARDOUS SUBSTANCES................................................... 19
20.1 Definitions....................................................... 19
20.2 Seller Environmental Assessments.................................. 20
20.3 Notices Regarding Hazardous Substances............................ 20
20.4 Indemnity and Release as to Third Party Claims.................... 20
21. TEMPORARY CONSTRUCTION EASEMENT........................................ 21
22. CONSENT OF PARTNERS.................................................... 21
23. PARCEL "H"............................................................. 21
EXHIBITS
Exhibit "A" - Legal Description
Exhibit "B" - Permitted Exceptions
Exhibit "C" - Form of Option Agreement
Exhibit "D" - Form of ASTM Estoppel
Exhibit "E" - Form of Borough Estoppel
Exhibit "F" - Form of Sewer Estoppel
SCHEDULES
Schedule 2.3 - Allocation of Purchase Price
Schedule 5.3 - Condemnation
Schedule 20.2 - Environmental Assessments
iv
<PAGE>
AGREEMENT OF SALE
Four Tower Bridge
AGREEMENT OF SALE made this 3rd day of November, 1997, between FOUR
TOWER BRIDGE ASSOCIATES, a Pennsylvania limited partnership, its assignee or
nominee ("Buyer"), and TOWER BRIDGE LAND HOLDING ASSOCIATES I, a Pennsylvania
limited partnership ("Seller").
BACKGROUND
The Background of this Agreement is as follows:
A. Seller is the owner of two (2) certain parcels of land consisting
of Parcel "J" on the south side of the Conrail right-of-way and Parcel "F" Lot 2
on the north side of the Conrail right-of-way, which latter parcel contains
approximately 1.938 net acres and is commonly known as the Four Tower Bridge
development site in the Borough of West Conshohocken (the "Borough"), Montgomery
County, Pennsylvania. Such Parcels are depicted on the Tower Bridge
Consolidation and Subdivision Plan II prepared by Greiner Engineering Sciences,
Inc. dated 5/24/88 and last revised 4/27/94, which Plan is recorded with the
Recorder of Deeds in and for Montgomery County, Pennsylvania (the "Montgomery
Recorder") at Plan Book A-54, page 480-481 (the "Subdivision Plan"); and
B. Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the property and the development rights referred to in this
Agreement, upon the terms and conditions set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and with the preceding Background paragraphs
incorporated by reference, the parties hereto, intending to he legally bound
hereby, covenant and agree as follows:
1. PROPERTY BEING SOLD. Seller shall sell, transfer and convey to
Buyer on the Closing Date (as defined in Section 11.1 below),
1.1 Real Property. Fee simple interest in Parcels "J" and "F"
Lot 2 located in the Borough, all as more fully described on Exhibit "A", the
improvements now constructed thereon and all of the easements, licenses, rights
of way, privileges, hereditaments, appurtenances, and rights to any land lying
in the beds of any street, road or avenue, open or proposed, adjoining thereto,
and inuring to the benefit of said land (hereinafter collectively referred to as
the "Premises"); provided, however, title to Parcel "J" shall be subject to the
right and easement of Seller and its assignees (including, without limitation,
the owners of all parcels at Tower Bridge on the north side of the Conrail
right-of-way) to construct and maintain signage relating to other parcels at
Tower Bridge pursuant to an easement agreement prepared by Buyer's counsel and
in form and substance satisfactory to Seller and Seller's counsel to be entered
into at Closing. The sign easement shall also encumber Parcel "H" referred to
in Section 23 hereof.
1.2 Personal Property. All right, title and interest of Seller,
if any, in all assignable intangible personal property used in connection with
the ownership, development of the Premises,
<PAGE>
including without limitation, all contract rights, guaranties and warranties
of any nature, all architects', engineers', surveyors' and other real estate
professionals' plans, specifications, certifications, contracts, reports,
data or other technical descriptions, reports or audits relating to the
Premises (including, without limitation, all environmental, structural and
mechanical inspection reports) ("Contract Documents"), all state, county and
municipal governmental, quasi-governmental permits, licenses, certificates,
and approvals and correspondence related thereto to be used or which will be
useful in connection with the development of the Premises ("Licenses") and
all of Seller's rights, claims, and causes of action if any, to the extent
they are assignable, under any warranties and/or guarantees relating to the
improvements on the Premises (hereinafter collectively referred to as
"Personal Property").
1.3 Leases. All right, title and interest of Seller in any
letters of intent to lease any part of the Premises (the "Letters of Intent").
1.4 Right to Names. All right, title and interest of Seller, if
any, in and to the name "Four Tower Bridge" (the "Name") and the non-exclusive
right to all printing styles, trademarks and logos used in connection with the
Name; provided, however, Seller shall retain the non-exclusive right to the name
"Tower Bridge" and any variations thereof other than "Four Tower Bridge".
1.5 FAR. The right to utilize 81,700 square feet of floor area
for the gross building area of improvements to be constructed on the Premises
(the "FAR"), subject to the requirement that, if required, Buyer shall join
Seller and its affiliates in the execution of any common or consolidated
subdivision plan which allocates FAR in the manner provided in this Section 1.5.
Buyer shall have the right to increase the FAR being constructed on the Premises
and included under this Agreement by not more than five percent (5%) by giving
Seller written notice thereof before Closing, in which case, the Purchase Price
(as defined in Section 2.1 below) will be increased by $32 per gross square foot
of FAR being sold to Buyer in excess of 81,700 square feet. Buyer will have the
right to purchase such additional FAR within six (6) months after closing by
payment of the required amount, and Seller will join in an instrument of record
confirming the conveyance of such additional FAR simultaneously with receipt of
such payment.
1.6 Perpetual Easement. All right, title and interest of Seller
in and to the easement granted in the Perpetual Easement Agreement dated May 2,
1994 from the Borough to Seller and recorded with the Montgomery Recorder in
Deed Book 5076, Page 2327 relating to the cul-de-sac to the west of Parcel "F",
Lot 2 (the "Perpetual Easement") as the same may be amended pursuant to the
provisions of Section 13.1.4 below.
1.7 Access Easements. Temporary easements for vehicular and
pedestrian access over the bridge and Bullock Avenue Extension as shown on the
Subdivision Plan until the same have been dedicated to and accepted by the
Borough (the "Access Easements").
1.8 Sewer Rights. The right to use 2,733 GPD average daily flow
of sewer capacity (the "Sewer Allocation") reserved under the Agreement dated
July 18, 1988 by and among the West Conshohocken Municipal Authority (the "Sewer
Authority"), Tower Bridge Associates, Seller, Tower Bridge Land Holding
Associates II ("TBLHAII"), Tower Bridge Land Holding Associates III ("TBLHAIII")
and Four Falls Associates ("Four Falls") (the "Sewer Agreement"), subject to the
obligation to pay any unpaid fees allocable to such sewer capacity and subject
to the assumption by Buyer of any unperformed obligations by Seller under the
Sanitary Sewer Construction Agreement dated May 4, 1994 by and between the Sewer
Authority and Seller (the "Sewer Construction Agreement"), as the same relate to
the Premises.
2
<PAGE>
The Premises, the Personal Property, the Letters of Intent, the
Name, the FAR, the Perpetual Easement, the Access Easements and the Sewer
Allocation are sometimes hereinafter collectively referred to herein as the
"Property". The Property shall not include any right, title and interest in or
to any award, claim or right to award for any condemnation of any interest in
any part of the Property prior to the date of this Agreement.
2. PURCHASE PRICE AND MANNER OF PAYMENT.
2.1 Purchase Price. Buyer shall pay the total sum of Two
Million Six Hundred Fourteen Thousand ($2,614,000) Dollars (hereinafter referred
to as the "Purchase Price") subject to adjustment, on a per diem basis. The
Purchase price is also subject to adjustment pursuant to Section 1.5 above if
Buyer increases the amount of FAR included in the sale.
2.2 Manner of Payment. The Purchase Price shall be paid in the
following manner:
2.2.1 Deposit. By delivery, upon Seller's execution and
delivery of this Agreement, of Buyer's good check in the amount of One Hundred
Fifty Thousand ($150,000) Dollars to Lawyers Title Corporation (hereinafter
referred to as "Escrow Agent" or "Escrowee"). This sum and any other sums paid
by Buyer to the Escrow Agent under this Agreement and any interest earned
thereon (such amounts so deposited and any interest earned thereon are
hereinafter referred to as the "Deposit") shall be held by Escrow Agent in a
segregated money market mutual fund with assets in excess of One Billion Dollars
($1,000,000,000) at an institution to be designated by Buyer until termination
or consummation of this Agreement. The Deposit shall be credited to Buyer at
Closing, or paid to the party otherwise entitled thereto in the event of the
termination of this Agreement prior to Closing.
2.2.2 Cash Balance. The balance by delivery to the
Seller on the Closing Date, by wire transfer of immediately available funds, in
the amount of $2,464,000, subject to adjustment as herein provided.
2.3 Allocation. The Purchase Price shall be allocated among the
assets set forth in Section 1 above in the manner provided on Schedule 2.3
attached hereto.
3. TITLE. On the Closing Date, Seller shall convey to Buyer good
and marketable fee simple title to the Premises subject only to those rights of
way, easements, covenants restrictions, and objections to title (hereinafter
"Permitted Exceptions") listed on Exhibit "B" hereto and such other matters as
shall be disclosed by the Title Binder (as defined in Section 7.1 below), unless
identified by Buyer as "Title Objections" as hereinafter provided, which title
shall be insurable at regular rates by a reputable title insurance company
("Title Company") under an ALTA 1970 Form B (Revised 10/17/70 and 3/30/84) title
insurance policy or such other form of title policy customarily issued by the
Title Company ("Title Policy"), with such endorsements and affirmative insurance
reasonably requested by Buyer.
4. COVENANTS. In addition to the covenants contained in the other
Sections of this Agreement, Seller covenants that it shall:
4.1 Maintenance. At all times prior to the Closing Date,
maintain the improvements now constructed on the Premises in good condition and
repair, reasonable wear and tear alone
3
<PAGE>
excepted, and pay in the normal course of business prior to Closing, all sums
due for work, materials or service furnished or otherwise incurred in the
ownership and operation of the Premises prior to Closing.
4.2 Alterations. Not make or permit to be made any alterations,
improvements or additions to the improvements now constructed on the Premises
without the prior written consent of Buyer, unless Seller shall be required to
do so by the Declaration (as defined in Section 13.1.3) or by applicable law or
ordinance.
4.3 Lease. Not enter into any lease or letter of intent to
lease with respect to the Premises.
4.4 Notice to Buyer. Notify Buyer promptly of the occurrence of
any of the following from and after this date:
(a) receipt of notice of eminent domain proceedings or
condemnation of or affecting the Premises or any portion thereof;
(b) receipt of notice from any governmental or
quasi-governmental agency or authority or insurance underwriter relating to the
condition of the Premises, or any portion thereof, or setting forth any
requirements with respect thereto; or
(c) notice of any actual or threatened litigation against
Seller which affects or relates to the Premises or any portion thereof or which
may affect Seller's ability to perform its obligations under this Agreement.
4.5 No New Agreements. Except for agreements which can be
terminated on not more than thirty (30) days notice, not enter into any other
agreements which shall bind Buyer or the Premises after Closing.
4.6 Tax Disputes. Notify buyer of any tax assessment disputes
(pending or threatened) prior to Closing, and not agree to any changes in the
real estate tax assessment, nor settle, withdraw or otherwise compromise any
pending claims with respect to prior tax assessments, without Buyer's prior
written consent.
5. REPRESENTATIONS AND WARRANTIES. In order to induce Buyer to
enter into this Agreement, Seller hereby represents and warrants to Buyer that
the following representations and warranties are true now and will be true at
Closing with only such changes as may occur in the ordinary course of business
which do not materially adversely affect the value or utility of the Property
for Buyer's intended purpose. As used herein, the phrases "to the best of
Seller's knowledge", "to Seller's knowledge" or phrases of similar meaning shall
mean to the actual and direct knowledge, without the duty of inquiry, of Craig
Snyder, John Markey and/or Coleman Benedict, officers or representatives of
Provestco, Inc. and TB Land Associates Limited Partnership, general partners of
Seller, and shall not include any actual knowledge of any officer, employee,
contractor, agent or representative of Oliver Tower Land Holding Associates,
Oliver Tyrone Pulver Corporation or any affiliate of either of them. Similarly,
any reference herein to receipt of notice or references of similar meaning shall
refer only to those written notices received by Craig Snyder, John Markey and/or
Coleman Benedict.
4
<PAGE>
5.1 Seller's Authority For Binding Agreement. Seller is a
limited partnership duly organized and validly subsisting under the laws of
Pennsylvania. Seller has full power, right and authority to own its properties,
to carry on its business as now conducted, and to enter into and fulfill its
obligations under this Agreement. Each of the persons executing this Agreement
on behalf of Seller is authorized to do so. This Agreement is the valid and
legally binding obligation of Seller, enforceable against Seller in accordance
with its terms. The execution and delivery of this Agreement and compliance
with its terms will not conflict with or result in the breach of any law,
judgement, order, writ, injunction, decree, rule or regulation, or conflict with
or result in the breach of any other agreement, document or instrument to which
Seller is a party or by which it or the Property is bound or affected.
5.2 Employment. There are no persons employed by Seller in
connection with the Premises.
5.3 Condemnation. Except as provided in Schedule 5.3 hereto,
there are no condemnation or eminent domain proceedings pending with regard to
any part of the Property, and to the best of Seller's knowledge, no such
proceedings are proposed.
5.4 No Lawsuits. There are no claims, lawsuits or proceedings
pending, or to the best of the Seller's knowledge, threatened against or
relating to the Property, or which could affect them, or either of them, in any
court or before any governmental agency, other than applications and proceedings
initiated by or on behalf of Buyer relating to the extension of the culvert over
Aramingo Creek and the development of the Premises.
5.5 No Tax Assessments. Except for improvements hereafter to be
made pursuant to that certain Application and Agreement dated May 2, 1994 by and
between Seller and the Borough, as supplemented by a letter dated April 14, 1994
(with respect to Ballimingo Road) from Douglas Murray to the Borough (the
"Development Agreement"), the Sewer Construction Agreement and the Open Space
Agreement (as defined in Section 11.2.1 below), there are no public improvements
in the nature of off-site improvements, or otherwise, which have been ordered to
be made and/or which have not heretofore been assessed, and, to Seller's
knowledge, there are no special or general assessments currently affecting or
pending against the Property.
5.6 Leases. There are no oral or written leases, licenses or
rights of occupancy or grants or claims of right, title or interest in any
portion of the Premises or outstanding letters of intent to lease the Premises,
or any portion thereof except Permitted Exceptions.
5.7 Compliance with Law. To the best of Seller's knowledge,
there are no outstanding notices of any violations issued by governmental
authority having jurisdiction over the Property. The zoning classification of
the Property is "O-1" as to Parcel "F", Lot 2 and "R-2" as to Parcel "J".
5.8 No Leasing Brokers. There are no commissions or other
considerations due to any brokers or other persons relating to the leasing of
the Premises or any part thereof which would be binding on Buyer.
5.9 Good Title to Premises. Seller holds good and marketable,
indefeasible fee simple title to the Premises, free and clear of liens and
encumbrances, other than the lien of security interests securing any existing
mortgage loans which shall be paid and discharged at or before Closing, and the
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Permitted Exceptions, if any. Seller makes no representations as to the title
to the Property other than the Premises and shall assign and convey the same to
Buyer without warranty.
5.10 All Taxes and Assessments Paid. Seller will have paid prior
to Closing, all taxes and assessments, including assessments payable in
installments, which are to become due and payable and/or a lien on the Premises,
except for taxes for the current year which shall be prorated at Closing.
5.11 FIRPTA. Seller is not a "foreign person" as such term is
defined in Section 1445(f)(3) of the Internal Revenue Code of 1954, as amended
(the "Code").
5.12 Charges, Fees and Assessments Under Declaration. Any and
all charges, fees and assessments payable by or chargeable against the Premises
under the Declaration which are payable by Seller have been paid, except for
charges for the current period, if any, which shall be prorated at Closing.
5.13 Rights to Purchase. There are no outstanding agreements,
options, rights of first refusal, conditional sales agreements or other
agreements or arrangements, whether oral or written, regarding the purchase and
sale of the Property, or which otherwise affect any portion of or all the
Property, except rights among the partners of Seller pursuant to Seller's
partnership agreement which shall be deemed waived by the execution of this
Agreement by the general partners of Seller.
5.14 Rollback Taxes. The Property is not subject to any
roll-back or agricultural taxation or other tax abatement program which would
result in taxes being assessed against the Property for a prior period as a
result of the sale contemplated hereby. Any previously assessed roll-back taxes
payable in connection with Seller's development of the Property have been paid
in full.
6. POSSESSION. Possession of the Premises is to be given to Buyer
on the Closing Date, by delivery of the Deed.
7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY.
7.1 Title Binder. Within five (5) business days after Buyer's
receipt of a fully executed copy of this Agreement from Seller, Buyer shall
secure a current title commitment (the "Title Binder") from the Title Company,
and shall have until the Inspection Period Expiration Date (as hereinafter
defined) to examine the condition of title, including the terms and provisions
of all items and documents referred to in the Title Binder, and all information
regarding title as disclosed on the Survey (as defined in Section 7.3 below),
and to approve or disapprove the same. If Buyer shall disapprove the condition
of title, such disapproval shall be set forth in a written notice given to
Seller (the "Disapproval Notice") on or before the Inspection Period Expiration
Date (as defined in Section 7.3 below) identifying the condition of title to the
Premises or any of the terms, provisions or contents of said items, documents or
Survey which are disapproved by Buyer (the "Title Objections"). Subject to the
provisions of the succeeding portion of this Section 7.1, Seller shall have
until the date which is ten (10) days after the date of the Disapproval Notice
(the "Title Cure Expiration Date") in which to cure or eliminate all items which
Buyer disapproves in the Disapproval Notice, and to furnish evidence
satisfactory to Buyer and the Title Company that all such items have been cured
or eliminated or that arrangements have been made with the Title Company and any
parties in interest to cure or eliminate the same at or prior to the Closing.
If Seller fails to remove any Title Objection in accordance with the provisions
of the immediately preceding sentence, Buyer, nevertheless, may elect at or
prior to the Closing as its sole and exclusive remedy either (a) to consummate
the transaction provided for in this Agreement subject to any such Title
Objection(s) as may exist as of the Closing with a credit against the Purchase
Price
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equal to the sum necessary to remove any Title Objection(s) of a fixed or
ascertainable amount up to $100,000 (except there shall be no dollar limitation
with respect to mortgage liens or liens hereafter created by Seller), but with
no other diminution of or adjustment to the Purchase Price, or (b) terminate
this Agreement by notice in writing to Seller, whereupon the Deposit shall be
immediately refunded to Buyer, and this Agreement shall be null and void, and
the parties hereto shall be relieved of all further obligations and liability
under this Agreement except as set forth in Section 7.4 below.
7.2 Survey. Promptly upon the receipt of a fully executed copy
of this Agreement from Seller, Buyer shall, at Buyer's sole expense, order a
current or updated survey of the Premises (the "Survey"), prepared by a duly
licensed land surveyor acceptable to Buyer. The Survey shall, at Buyer's
election, show the location on the Premises of all buildings and improvements,
building and set-back lines, easements, rights-of-way, encroachments, elevations
between public roads providing access to the Premises, and the boundary of the
Premises, and other such matters affecting the Premises whether physically
apparent from the ground, of record in public offices, or otherwise, and shall
contain a legal description of the boundaries of the Premises by metes and
bounds which shall include a reference to the recorded plat, if any. The
surveyor shall certify to Buyer, Seller and to the Title Company and to any
lender making a loan to Buyer secured by the Premises that the Survey is correct
and was made on the ground; and that there are no visible discrepancies,
conflicts, encroachments, overlapping of improvements, violations of set-back
lines, easements, rights-of-way or other such matters affecting the Property
except as are shown on the Survey, and that the Survey conforms to all ACTA/ACSM
and Pennsylvania Land Title Association standards and requirements for a Class A
Survey. Any and all recorded matters shown on said Survey shall be legibly
identified by appropriate volume and page recording references with dates of
recording noted. Buyer shall have until the Inspection Period Expiration Date
to approve or disapprove the material contained thereon. If Buyer shall
disapprove such Survey, such disapproval shall be set forth in a Disapproval
Notice as hereinabove provided in Section 7.1, and the provisions of Section 7.1
with respect to Disapproval Notices shall apply.
7.3 Inspection. For a period (the "Inspection Period")
commencing on the second (2nd) business day next following the date upon which
Buyer shall receive from Seller a fully-executed counterpart of this Agreement,
and expiring seventy-five (75) days thereafter (such date is herein referred to
as the "Inspection Period Expiration Date"), Buyer shall have the right to have
performed a full and complete physical inspection and audit of the Property, and
Seller shall cooperate with Buyer and shall furnish to Buyer such information,
materials and documents in Seller's possession and are related to the Property
as Buyer may reasonably request to assist in Buyer's inspection and review. The
inspection and audit of the Property's condition shall include, without
limitation, such environmental and engineering inspections, reviews and
assessments that Buyer deems appropriate. If Buyer, at Buyer's sole and absolute
discretion, shall find any such inspection(s) and audit(s) to be unsatisfactory
for any reason whatsoever, or determines that it will be unable to satisfy the
conditions set forth in Section 13.1 hereof at or prior to Closing, or
determines that it will be unable to obtain all licenses and approvals for
development and use of the Property for Buyer's intended purpose, Buyer shall
have the right, at its option, to terminate this Agreement by written notice
given to Seller on or before the Inspection Period Expiration Date, and upon
such termination, the Deposit shall be immediately refunded to the Buyer, and
thereupon the parties hereto shall have no further liabilities one to the other
with respect to the subject matter of this Agreement except as set forth in
Section 7.4 below.
7.4 Buyer's Indemnification for Inspection. If the transaction
contemplated by this Agreement does not close for any reason other than Seller's
willful refusal to close, Buyer shall, at Buyer's expense, to the extent
practicable, restore the Premises to its condition prior to Buyer's entry.
Whether or not the transaction closes and regardless of the reason therefor,
Buyer agrees to indemnify and save harmless Seller, its partners and the
directors, officers, employees and agents of Seller and/or its partners, against
all
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loss, cost, expense, damage, claim and liability which may be imposed upon
or incurred by Seller arising directly from or out of any act of Buyer or any of
its agents, employees and/or contractors occurring on the Premises during
Buyer's inspection of same as provided in this Section 7. If any claim, action
or proceeding shall be made or commenced, as the case may be, against Seller as
to which the indemnification provided for in this Section may be applicable,
Seller shall give Buyer prompt notice thereof and shall afford Buyer the
opportunity, at Buyer's sole cost and expense, to resist or defend against such
claim, action or proceeding by counsel selected by Buyer, provided that Buyer
shall within thirty (30) days of notice of any such claim, action or proceeding,
notify Seller of its election so to resist and defend, and Seller shall not
settle the same without Buyer's consent. This indemnity shall survive the
Closing or termination of this Agreement. Prior to any entry by Buyer or any of
its agents, employees or contractors on to the Property, Buyer shall provide an
insurance certificate to Seller showing general liability insurance with a
responsible insurance company with limits of at least $1,000,000 per occurrence,
combined single limit, and naming Seller as an additional insured.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer and Seller set forth herein shall survive Closing and
delivery of the deed for a period of six (6) months. Notwithstanding anything
in this Agreement to the contrary, if Seller or Buyer discovers prior to Closing
that a representation or warranty made herein by the other was untrue, incorrect
or misleading in any respect, such representation or warranty shall be deemed
modified by the information so discovered and Seller or Buyer, as the case may
be, shall only be entitled to rely on the representation or warranty as so
modified.
9. CONDEMNATION. If between the date hereof and the Closing Date,
all or any portion of the Premises is taken by condemnation or eminent domain or
a notice of any condemnation or eminent domain proceedings with respect to the
Premises or any part thereof is received by Seller, then Seller shall within
five (5) days thereafter give notice thereof to Buyer and Buyer shall have the
option to (a) complete the purchase hereunder or (b) if such taking, in Buyer's
sole and absolute discretion, adversely affects the Premises, its economic
viability or its potential for development as contemplated by Buyer, terminate
this Agreement, in which event the Deposit shall be immediately refunded to
Buyer, and this Agreement shall be null and void. Buyer shall deliver written
notice of its election to the Seller within ten (10) days after the date upon
which the Buyer receives written notice of such condemnation or eminent domain
proceedings. If this Agreement is not so terminated and Buyer closes hereunder,
Buyer shall be entitled to all awards or damages by reason of any exercise of
the power of eminent domain or condemnation with respect to or for the taking of
the Premises or any portion thereof occurring after the execution of this
Agreement. Any negotiation for, or agreement to, and all contests of any offers
and awards relating to eminent domain proceedings occurring after the execution
of this Agreement shall be conducted with the joint approval and consent of
Seller and Buyer.
10. EXPENSE ALLOCATIONS.
10.1 Seller's Payments. Seller shall pay for one-half of all
applicable realty transfer taxes related to the execution, delivery and
recording of the Deed.
10.2 Buyer's Payments. Buyer shall pay for one-half of all
applicable realty transfer taxes, for Buyer's title examination, and survey (if
obtained), for all recording charges (other than charges related to existing
mortgage financing, if any, which shall be discharged at Closing at Seller's
expense), and for Buyer's title premiums.
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10.3 Attorney's Fees. Buyer and Seller shall be responsible for
paying their own attorney's fees in connection with this transaction.
10.4 Culvert Extension and Estoppel Certificates. Buyer agrees
that Buyer shall be responsible for all fees and expenses incurred in connection
with the obtaining of the Culvert Extension over Aramingo Creek and for the
obtaining of all estoppel certificates required by Section 13 of this Agreement.
11. CLOSING.
11.1 Time, Date and Place. The closing ("Closing") on the sale
of the Property shall take place at a time and date (the "Closing Date")
specified by Buyer in writing to Seller at least ten (10) days prior to the
specified Closing Date, but in any event no later than thirty (30) days next
following the Inspection Period Expiration Date, at the offices of Pepper,
Hamilton & Scheetz, 3000 Two Logan Square, Eighteenth & Arch Streets,
Philadelphia, PA, commencing at 10:00 a.m.
11.2 Documents. At Closing, the parties indicated shall
simultaneously execute and deliver the following:
11.2.1 Seller's Documents and Other Items. Seller shall
execute and deliver or cause to be executed and delivered to Buyer in proper
form for recording:
11.2.1.1 Deed. A special warranty deed prepared by
Buyer's counsel in form and substance acceptable to Seller (the "Deed"),
conveying the Premises and FAR to Buyer and granting Buyer the Access Easements,
duly executed by Seller for recording. The Deed description shall be based upon
the metes and bounds description attached as Exhibit "A", unless Buyer requests
that Seller convey the Premises by the metes and bounds description shown on a
new ALTA survey, if any, obtained by Buyer, in which event the Premises shall be
so conveyed.
11.2.1.2 Original Licenses, Contract Documents and
Other Personal Property. All original Licenses, Contract Documents, and other
Personal Property described in Section 1.2 of this Agreement.
11.2.1.3 Assignment of Licenses, Contract Documents
and Other Personal Property. An assignment agreement prepared by Buyer's
counsel, in form and substance acceptable to Seller, assigning, conveying and
transferring to Buyer without warranty the Licenses, Contracts Documents and
Other Personal Property, including, specifically, the Names.
11.2.1.4 Assignment of Perpetual Easement. An
assignment agreement prepared by Buyer's counsel, in form and substance
acceptable to Seller, assigning, conveying and transferring to Buyer without
warranty the Perpetual Easements.
11.2.1.5 Assignment of Sewer Allocation. The
assignment to Buyer of 2,700 GPD average daily flow of sewer capacity.
11.2.1.6 Assumption of Certain Obligations of Buyer.
The assumption by Buyer of all unperformed obligations of Seller (if any) under:
(a) the Declaration,(b) the Application and Agreement Relating to Traffic Plan
for West Conshohocken dated February 5, 1987 by and
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among Four Falls, Oliver Tyrone Pulver Corporation and the Borough, as
amended December 12, 1989, July 30, 1990, December 30, 1992 and April 14,
1994(the "Traffic Agreement"), but only as to such requirements, if any,
imposed as a result of the development of the Premises and the land sold by
Seller to ASTM,(c) the Development Agreement relating to the development of
the ASTM project and Four Tower Bridge,(d) the Sewer Construction Agreement
and (e) the Agreement dated February 13, 1989 by and among the Borough,
Seller and TBLHAII, as amended by First Amendment to Open Space Agreement
dated May 2, 1994, but only as to obligations related to the Premises and the
land sold by Seller to ASTM.
11.2.1.7 Option Agreement. Executed counterpart
copies of an Option Agreement (the "Option Agreement") in the form attached
hereto as Exhibit "C" with respect to the land owned by TBLHAII duly executed by
TBLHAII.
11.2.1.8 Sign Easement. The Sign Easement referred to
in Section 1.1 hereof.
11.2.1.9 Temporary Construction Easement. The
Temporary Construction Easement referred to in Section 21 hereof.
11.2.1.10 FIRPTA Certificates. All certificate(s)
required under Section 1445 of the Code.
11.2.1.11 Seller's Certificate. A title company's
Seller's Certificate in customary form and such organizational documents as the
Title Company may require.
11.2.1.12 Tax Bills. Current tax bills and, if
available, tax bills for each of the years of Seller's ownership of the
Property;
11.2.1.13 Tax Reduction Rights. An instrument
assigning to Buyer without warranty any claims for the reduction of real or
personal property taxes assessed against any portion of the Property for the
fiscal year in which the Closing takes place; any refund for such year shall be
prorated when received;
11.2.1.14 Certificate as to No Additional Environmental
Disclosures. The Certificate referred to in Section 13.1.9.
11.2.2 Buyer's Documents. Buyer shall deliver or cause
to be delivered to Seller:
11.2.2.1 The amounts required to be paid to Seller
pursuant to this Agreement;
11.2.2.2 Copies of the estoppel certificate referred
to in Sections 13.1.4 and 13.1.5 below, duly executed as provided therein.
11.2.3 Assumptions. Executed original counterparts of
the assumptions by Buyer referred to in Section 11.2.1.6 above.
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11.2.4 Option Agreement. Executed original counterparts
of the Option Agreement, executed by Buyer, as referred to in Section 11.2.1.7
above.
11.2.5 Title Insurance. As a condition to Buyer's
obligations at Closing, Title Company shall furnish Buyer at Closing with the
Title Policy, in the form approved by Buyer pursuant to Section 3, in the full
amount of the Purchase Price, wherein the Title Company shall insure fee simple
title to the Property in Buyer or its designee as of the Closing Date containing
no exceptions to title other than Permitted Exceptions and those other
exceptions which have been approved by Buyer pursuant to Section 3 hereof and
providing the title endorsements specified by Buyer.
11.2.6 Necessary Documents. Buyer and Seller shall
execute and deliver such other documents and instruments as may be reasonably
necessary to complete the transaction contemplated by this Agreement.
12. DEFAULT; REMEDIES
12.1 Seller's Default. In the event that any of Seller's
representations, warranties or covenants contained in this Agreement are untrue
or if Seller shall have failed to have performed any of the covenants and/or
agreements contained in this Agreement which are to be performed by Seller, on
or before the date set forth in this Agreement for the performance thereof, or
if any of the conditions precedent to Buyer's obligation to consummate the
transaction contemplated by this Agreement shall have failed to occur, Buyer
may, at its option, terminate this Agreement by giving written notice of such
termination to Seller and Seller shall immediately thereafter return the
Deposit, and thereupon, subject to the provisions of Section 12.3 below, the
parties shall have no further liability to each other hereunder except as
provided in Section 7.4 above. In the alternative, in the event of Seller's
willful default and refusal to close hereunder, Buyer may seek specific
performance of Seller's obligations; provided however, any complaint seeking
such specific performance must (a) allege with specificity Seller's wilful
default and refusal to close under this Agreement on the Closing Date; (b)
allege with specificity that Buyer had sufficient funds to close the transaction
on the Closing Date; and (c) allege that as of the date of the filing such
complaint seeking specific performance, sufficient funds continue to be
available to Buyer and will be available to Buyer for at least thirty-one (31)
days following the entry of an order by a court of competent jurisdiction
requiring specific performance by Seller under this Agreement. In the event
Buyer terminates this Agreement after a willful default of Seller, Seller shall
reimburse Buyer for its actual out-of-pocket costs incurred in connection with
the entering into of this Agreement and Buyer's inspection of the Premises.
Buyer acknowledges and agrees that, except as set forth in the immediately
preceding sentence, under no circumstances shall Buyer have any right to seek or
collect damages from Seller, its partners or the officers, directors, employees,
agents or contractors of any of them, whether actual, punitive, consequential or
otherwise as a result of Seller's failure or refusal to close hereunder and/or
as a result of the specific performance hereof.
12.2 Buyer's Default. Buyer recognizes that the Property will be
removed by Seller from the market during the existence of this Agreement and
that if this purchase and sale is not consummated because of Buyer's default
Seller shall be entitled to compensation for such detriment. Seller and Buyer
acknowledge that it is extremely difficult and impracticable ascertain the
extent of the detriment, and to avoid this problem, Seller and Buyer agree that
if the purchase and sale contemplated in this Agreement is not consummated
because of Buyer's default under this Agreement, Seller shall be entitled to
retain the Deposit as liquidated damages. The parties agree that the sum stated
above as liquidated damages shall be in lieu of any other relief to which Seller
might otherwise be entitled, Seller hereby specifically waiving any and all
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rights which it may have to damages or specific performance as a result of
Buyer's default under this Agreement.
13. CONDITIONS PRECEDENT TO CLOSING.
13.1 Conditions Precedent to Buyer's Obligations. The
obligations of Buyer hereunder are subject to the fulfillment of the following
conditions prior to or on the Closing Date (any one of which may be waived in
whole or in part by Buyer at or prior to the Closing) and in the event any of
the conditions are not complied with, Buyer may terminate this Agreement by
notifying Seller and Escrow Agent and thereupon shall be returned the Deposit
and thereafter this Agreement shall be null and void except as set forth in
Section 7.4 above:
13.1.1 Correctness of Warranties and Representations.
The warranties and representations made by Seller in this Agreement (and not as
deemed modified by Section 8 hereof) shall remain true and correct on the
Closing Date as though such representations and warranties were made on the
Closing Date, except for changes in the ordinary course of business which do not
materially adversely affect the value and utility of the Property for Buyer's
intended purposes. Each such representation and warranty shall be deemed to
have been restated as of such Closing Date, except as aforesaid.
13.1.2 Compliance with Terms and Conditions. Seller
shall have performed and complied with all of the terms and conditions required
by this Agreement to be performed and complied with by it prior to or on the
Closing Date.
13.1.3 Culvert Extension. Buyer shall have obtained, at
Buyer's sole cost and expense, all permits required to extend the Aramingo Creek
Culvert from its present location northwestwardly toward the Schuylkill River to
a new head wall to be constructed by Buyer in order to allow the Service Road,
as defined in that certain Declaration of Easements and Protective Covenants
(the "Declaration") by and among Seller, TBLHAII and American Society for
Testing and Materials ("ASTM"), recorded in Deed Book 5076, Page 2342 with the
Montgomery Recorder to be completed in accordance with such Declaration and to
otherwise permit the construction of Buyer's building in accordance with the
approved land development plans.
13.1.4 Perpetual Easement Amendment. The Borough has
agreed to amend the Perpetual Easement in a manner satisfactory to Buyer curing
deficiencies therein and permitting Buyer to use the Perpetual Easement for
driveway and parking purposes.
13.1.5 ASTM Estoppel. Buyer shall have obtained, at
Buyer's sole cost and expense, an estoppel certificate addressed to Buyer,
Seller and TBLHAII executed by ASTM (the "ASTM Estoppel") in substantially the
form and substance attached hereto as Exhibit "D".
13.1.6 Declaration Estoppel. Seller and TBLHAII shall
have executed and delivered to Buyer an estoppel addressed to Buyer to the
effect set forth in Section 21 of the Declaration.
13.1.7 Borough Estoppel. Buyer shall have obtained, at
Buyer's sole cost and expense, an estoppel certificate from the Borough
addressed to Seller and Buyer executed by the President of the Borough Council,
Building or Zoning Officer or Solicitor of the Borough (the "Borough Estoppel")
in substantially the form and substance attached hereto as Exhibit "E".
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13.1.8 Sewer Authority Estoppel. Buyer shall have
obtained, at Buyer's sole cost and expense, an estoppel from the Sewer Authority
(the "Sewer Authority Estoppel") addressed to Buyer and Seller and in
substantially the form and substance attached hereto as Exhibit "F".
13.1.9 No Additional Environmental Disclosures. Seller
shall not have made any disclosures to Buyer after the Inspection Period
Expiration Date of the release or existence of any Hazardous Substances at, on
or under the Property which had not been previously disclosed to Buyer and shall
have delivered to Buyer at Closing a certificate to such effect.
13.2 Conditions Precedent to Seller's Obligations. The
obligations of Seller hereunder are subject to the fulfillment of the following
conditions prior to or on the Closing Date (any one of which may be waived in
whole or in part by Seller at or prior to the Closing) and in the event any of
the conditions are not satisfied, Seller may terminate this Agreement by
notifying Buyer and Escrow Agent and thereupon shall be returned the Deposit and
thereafter this Agreement shall be null and void except as set forth in Section
7.4 above.
13.2.1 ASTM Estoppel. ASTM has executed and delivered
the ASTM estoppel, an original copy thereof has been delivered to Seller and the
ASTM Estoppel is in substantially the form attached hereto as Exhibit "D".
13.2.2 Borough Estoppel. A representative of the Borough
has executed and delivered the Borough Estoppel, an original copy thereof has
been delivered to Seller and the Borough Estoppel is in substantially the form
attached hereto as Exhibit "E".
13.2.3 Sewer Authority Estoppel. The Sewer Authority has
executed and delivered the Sewer Authority Estoppel, an original copy thereof
has been delivered to Seller and the Sewer Authority Estoppel is in
substantially the form attached hereto as Exhibit "F".
14. PRORATIONS.
14.1 Expenses. The following items shall be prorated at Closing,
as of midnight of the day immediately preceding Closing (the "Adjustment Date"):
14.1.1 Taxes. Real estate and personal property taxes,
if any, on the basis of the fiscal year for which assessed. If the Closing
shall occur before the tax rate or assessment is fixed, the apportionment of
such real estate and personal property taxes at the Closing shall be upon the
basis of the tax rate for the next preceding year applied to the latest assessed
valuation. Final adjustment will be made upon the actual tax amount, when
determined.
14.1.2 Water and Sewer Charges. Water and sewer charges
if applicable based upon meter readings to be obtained by Seller effective as of
the Adjustment Date, or if not so obtainable, a date not more than ten (10) days
prior to the Adjustment Date, and the unfixed meter charges based thereon for
the intervening period shall be apportioned on the basis of such last reading.
Upon the taking of a subsequent actual reading, such apportionment shall be
readjusted and Seller or Buyer, as the case may be, will promptly deliver to the
other the amount determined to be so due upon such readjustment. If Seller is
unable to furnish such prior reading, any reading subsequent to the Closing will
be apportioned on a per diem basis from the date of such reading immediately
prior thereto and Seller shall pay the proportionate charges due up to the date
of Closing.
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14.2 Custom and Practice. Except as set forth in this Agreement,
the customs of the State and County in which the Premises are located shall
govern prorations.
14.3 Application of Prorations. If such prorations result in a
payment due Buyer, the cash payable at Closing shall be reduced by such sum. If
such prorations result in a payment due Seller, the same shall be added to the
Purchase Price and paid at Closing.
14.4 Readjustments. The parties shall correct any errors in
prorations as soon after the Closing as amounts are finally determined.
15. BROKERS. Each party hereby represents and warrants to the other
that it has not employed or retained any broker or finder in connection with the
transactions contemplated by this Agreement other than Thomas J. Maher & Company
pursuant to an Agreement dated as of October 15, 1997, to whom Buyer alone shall
be responsible to pay such fee or commission as may be due and that neither has
had any dealings with any other person or party which may entitle that person or
party to a fee or commission. Each party shall indemnify the other of and from
any claims for commissions by any person or party claiming such commission by or
through the indemnifying party.
16. ESCROW AGENT. The parties hereto have requested that the Deposit
be held in escrow by the Escrow Agent to be applied at the Closing or prior
thereto in accordance with this Agreement. The Escrow Agent will deliver the
Deposit to Seller or to Buyer, as the case may be, under the following
conditions:
16.1 Payment to Seller. To Seller on the Closing Date upon the
consummation of Closing;
16.2 Notice of Dispute. If either Seller or Buyer believes that
it is entitled to the Deposit or any part thereof, it shall make written demand
therefor upon the Escrow Agent. The Escrow Agent shall promptly mail a copy
thereof to the other party in the manner specified in Section 18.1 below. The
other party shall have the right to object to the delivery of the Deposit by
filing written notice of such objections with the Escrow Agent at any time
within ten (10) days after the mailing of such copy to it in the manner
specified in Section 18.1 below, but not thereafter. Such notice shall set
forth the basis for objection to the delivery of the Deposit. Upon receipt of
such notice, the Escrow Agent shall promptly deliver a copy thereof to the party
who filed the written demand.
16.3 Escrow Subject to Dispute. In the event the Escrow Agent
shall have received the notice of objection provided for in 16.2 above of this
Section, in the manner and within the time therein prescribed, the Escrow Agent
shall continue to hold the Deposit until (i) the Escrow Agent receives written
notice from both Seller and Buyer directing the disbursement of the Deposit in
which case the Escrow Agent shall then disburse said Deposit in accordance with
said direction, or (ii) litigation arises between Seller and Buyer, in which
event the Escrow Agent shall deposit the Deposit with the Clerk of the Court in
which said litigation is pending, or (iii) the Escrow Agent takes such
affirmative steps as the Escrow Agent may, at the Escrow Agent's option elect in
order to terminate the Escrow Agent's duties including, but not limited to,
deposit in Court and an action for interpleader.
16.4 Escrow Agent's Rights and Liabilities. Escrow Agent shall
not be required to determine questions of fact or law, and may act upon any
instrument or other writing believed by it in good faith to be genuine and to be
signed and presented by the proper person, and shall not be liable in connection
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with the performance of any duties imposed upon Escrow Agent by the provisions
of this Agreement, except for Escrow Agent's own willful default or gross
negligence. Escrow Agent shall have no duties or responsibilities except those
set forth herein. Escrow Agent shall not be bound by any modification of this
Agreement, unless the same is in writing and signed by Buyer and Seller, and, if
Escrow Agent's duties hereunder are affected, unless Escrow Agent shall have
given prior written consent thereto. In the event that Escrow Agent shall be
uncertain as to Escrow Agent's duties or rights hereunder, or shall receive
instructions from Buyer or Seller which, in Escrow Agent's opinion, are in
conflict with any of the provisions hereof, Escrow Agent shall be entitled to
hold and apply the Deposit pursuant to Section 17.3, and may decline to take any
other action.
17. GENERAL PROVISIONS.
17.1 Notices. All notices or other communications required or
permitted to be given under the terms of this Agreement shall be in writing, and
shall be deemed effective when (i) sent by nationally-recognized overnight
courier, (ii) facsimile with original following by regular mail, or (iii)
deposited in the United States mail and sent by certified mail, postage prepaid,
addressed as follows:
17.1.1 If to Buyer, addressed to:
Four Tower Bridge Associates
Four Oliver Tower Associates, Managing Partner
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, PA 19428
FAX No. 610-834-2011
with a copy in each instance to:
David M. Scolnic, Esquire
Hangley, Aronchick, Segal & Pudlin
One Logan Square
Philadelphia, PA 19103
FAX No. 215-568-0300
and to:
Eric L. Stern, Esquire
Pepper, Hamilton & Scheetz, LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
FAX No. 215-981-4750
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17.1.2 If to Seller, addressed to:
Provident Mutual Life Insurance Company
1205 Westlakes Drive, Suite 270
Berwyn, PA 19312-2405
Attention: Craig L. Snyder, Vice President,
Mortgage Loans and Real Estate
FAX No. 610-407-1036
and to:
TB Land Associates Limited Partnership
c/o The Hillman Company
1900 Grant Building
Pittsburgh, PA 15219
Attention: Bartley J. Rahuba, Vice President
FAX No. 412-338-3644
and to:
Tower Bridge Land Holding Associates I
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge, Suite 900
West Conshohocken, PA 19425
FAX No. 610-831-2011
with a copy in each instance to:
Clifford H. Swain, Esquire
Drinker Biddle & Reath LLP
1345 Chestnut Street, 11th Floor
Philadelphia, PA 19107
FAX No. 215-988-2757
and to:
Marian Faye Dietrich, Esquire
The Hillman Company
1900 Grant Building
Pittsburgh, Pennsylvania 15219
FAX No. 412-338-3644
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If to Escrow Agent, addressed to:
Lawyers Title Corporation
Two Penn Center Plaza, Suite 1230
Philadelphia, PA 19102
Attention: Alan D. Keiser, Esquire
FAX No. 215-665-3430
or to such-other address or addresses and to the attention of such other person
or persons as any of the parties may notify the other in accordance with the
provisions of this Agreement.
17.2 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
17.3 Entire Agreement. All Exhibits attached to this Agreement
are incorporated herein and made a part hereof. This Agreement constitutes the
entire agreement between the parties hereto and supersedes all prior
negotiations, understandings and agreements of any nature whatsoever with
respect to the subject matter hereof. This Agreement may not be modified or
amended other than by an agreement in writing. The captions included in this
Agreement are for convenience only and in no way define, describe or limit the
scope or intent of the terms of this Agreement.
17.4 Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the Commonwealth of Pennsylvania.
17.5 Tender. Tender of Deed by Seller and of the Purchase Price
by Buyer, are hereby mutually waived.
17.6 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
17.7 Further Instruments. Seller will, whenever and as often as
it shall be reasonably request so to do by Buyer, and Buyer will, whenever and
as often as it shall be reasonably requested so to do by Seller, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all conveyances, assignments, correction instruments and all other
instruments and documents as may be reasonably necessary in order to complete
the transaction provided for in this Agreement and to carry out the intent and
purposes of this Agreement. All such instruments and documents shall be
satisfactory to the respective attorneys for Buyer and Seller. The provisions
of this Section shall survive the Closing and shall be subject to all of the
terms, conditions and provisions of this Agreement.
17.8 Time. Time is of the essence. In the event the last day
permitted for the performance of any act required or permitted under this
Agreement falls on a Saturday, Sunday, or legal holiday of the United States or
the Commonwealth of Pennsylvania, the time for such performance will be extended
to the next succeeding business day. Time periods under this Agreement will
exclude the first day and include the last day of such time period.
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17.9 Designation of Nominee; Assignment of Agreement. Buyer
shall have the right to designate one or more of its subsidiaries or affiliate
entities to acquire title to the Premises hereunder.
17.10 Time for Acceptance. This Agreement shall constitute
an offer to buy or sell the Property, as case may be, on the terms herein set
forth only when executed by the Seller or Buyer. This Agreement may be accepted
by the party receiving such executed Agreement only by executing this Agreement
and delivering an original signed copy hereof to the Escrow Agent and an
originally signed copy hereof to the other party hereto within five (5) business
days after such receipt. Failure to accept in the manner and within the time
specified shall constitute a rejection and termination of such officer.
17.11 Confidentiality. Each of the parties hereto covenants
and agrees to hold the nature and content of this Agreement, including without
limitation, the Purchase Price contained herein, in strict confidence, and other
than disclosure deemed necessary or appropriate by Buyer to comply with
applicable regulations of the Securities and Exchange Commission, and except as
may be necessary to comply with this Agreement, neither party shall disclose the
nature, content or the Purchase Price of this Agreement without the express
written consent of the other party.
18. EXCULPATION.
No recourse shall be had for any obligation of Brandywine Realty
Trust under this Agreement or under any document executed in connection herewith
or pursuant hereto, or for any claim based thereon or otherwise in respect
thereof, against any past, present or future trustee, shareholder, officer or
employee of Brandywine Realty Trust, whether by virtue of any statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise, all
such liability being expressly waived and released by the Seller and all parties
claiming by, through or under Seller.
19. PROPERTY "AS-IS".
19.1 No Side Agreements or Representations. No person acting on
behalf of Seller, including without limitation, any partner or officer or
employee of any partner of Seller, is authorized to make, and by execution
hereof, Buyer acknowledges that no person has made any representation,
agreement, statement, warranty, guarantee or promise, express or implied,
regarding the Property or the transaction contemplated herein or the zoning,
construction, physical condition, fitness for use, title or any other matter or
status of the Property except as may be expressly set forth in this Agreement.
No representation, warranty, agreement, statement, guarantee or promise, if any,
made by any person acting on behalf of Seller which is not contained in this
Agreement will be valid or binding on Seller, and Buyer disclaims the right to
rely thereon.
19.2 AS-IS PURCHASE. BUYER REPRESENTS AND WARRANTS TO SELLER
THAT BUYER HAS INDEPENDENTLY AND PERSONALLY INSPECTED OR, PRIOR TO THE
EXPIRATION OF THE INSPECTION PERIOD, WILL INSPECT THE PROPERTY AND IMPROVEMENTS,
IF ANY, AND THAT BUYER HAS ENTERED INTO THIS AGREEMENT BASED UPON SUCH PERSONAL
EXAMINATION AND INSPECTION OR THE RIGHT THERETO. BUYER AGREES THAT UNLESS THIS
AGREEMENT IS TERMINATED AS PROVIDED HEREIN, BUYER WILL ACCEPT THE PROPERTY, AT
CLOSING, IN ITS THEN CONDITION AS-IS AND WITH ALL FAULTS, INCLUDING WITHOUT
LIMITATION, THOSE FAULTS AND CONDITIONS SPECIFICALLY REFERENCED IN THIS
AGREEMENT. THE PURCHASE PRICE HAS BEEN NEGOTIATED WITH THE MUTUAL UNDERSTANDING
THAT BUYER IS PURCHASING THE PROPERTY AS-IS AND THAT BUYER'S COSTS ASSOCIATED
WITH DEVELOPMENT, OPERATION AND
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MANAGEMENT OF THE PROPERTY ARE UNCERTAIN. IT IS NOT CONTEMPLATED THAT THE
PURCHASE PRICE WILL BE INCREASED IF THESE COSTS PROVE TO BE LESS THAN
EXPECTED NOR WILL THE PURCHASE PRICE BE REDUCED IF BUYER'S PLAN LEADS TO
HIGHER COST PROJECTIONS. EXCEPT AS PROVIDED HEREIN, THE SOLE REMEDY OF
BUYER, IF BUYER IS NOT SATISFIED WITH ANY ASPECT OF THE PROPERTY, WILL BE TO
TERMINATE THIS AGREEMENT AS PROVIDED HEREIN PRIOR TO THE END OF THE
INSPECTION PERIOD. IF ANY CONDITION PRECEDENT TO CLOSING IS NOT SATISFIED,
BUYER'S SOLE REMEDY IS TO TERMINATE THIS AGREEMENT AND RECEIVE THE RETURN OF
THE DEPOSIT.
19.3 Buyer Representations. Without limiting any other
representations or warranties by Buyer hereunder, Buyer represents and warrants
that, except as expressly set forth in this Agreement, (i) Buyer is a
sophisticated purchaser of commercial real estate and is relying solely upon
Buyer's inspection, investigation, and personal knowledge of the entire
Property; (ii) Seller and Seller's agents have made no representations,
warranties or other agreements concerning matters relating to the Property,
including without limitation, the physical and environmental condition of the
Property, except as otherwise expressly stated in this Agreement; (iii) Seller
and Seller's agents have made no agreement or promise to repair, alter or
improve the Property; and (iv) Buyer takes and acquires the Property in its
present condition, "WHERE IS" and "AS IS" and without representations or
warranties of any kind (except as expressly set forth in this Agreement).
20. HAZARDOUS SUBSTANCES
20.1 Definitions. For the purposes of this Agreement, the
following terms have the following meanings:
(a) "Environmental Law" means any federal, state or local
law, statute, ordinance or regulation pertaining to health, industrial hygiene
or the environment including, without limitation CERCLA (Comprehensive
Environmental Response, Compensation and Liability Act of 1980) and RCRA
(Resources Conservation and Recovery Act of 1976).
(b) "Hazardous Substance" means any substance, material or
waste which is or becomes designated, classified or regulated as being "toxic"
or "hazardous" or a "pollutant" or which is or becomes similarly designated,
classified or regulated, under any Environmental Law, including asbestos,
petroleum and petroleum products.
(c) "Environmental Assessment" means an environmental
assessment, review or testing of the Property delivered to Buyer by Seller,
performed by Buyer or performed by any third party or consultant engaged by
Buyer to conduct such assessment, review or study.
20.2 Seller Environmental Assessments. Buyer acknowledges and
agrees that Seller has delivered to Buyer or Buyer's agents or representatives
the Environmental Assessments related to the Property referred to in the letter
dated April 9, 1997 from Stephen D. Krisko of Oliver Tyrone Pulver Corporation
addressed to Charles S. Phillips at McLaren Hart, Buyer's consultant, attached
hereto as Schedule 20.2. To the knowledge of Seller (as defined in Section 5
above) there exist no other Environmental Assessments obtained by Seller.
20.3 Notices Regarding Hazardous Substances. To the knowledge of
Seller, except as are disclosed in the Environmental Assessments, there has been
no release of a Hazardous Substance
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from, on or under the Property, nor does Seller have knowledge of any
threatened or pending investigation pertaining to any release of a Hazardous
Substance from, on or under the Property. During the term of this Agreement,
Seller will promptly notify Buyer if Seller obtains knowledge that any
release of a Hazardous Substance from, on or underneath the Property (other
than any Hazardous Substance releases already disclosed in the Environmental
Assessments) or that Seller or the Property may be subject to any threatened
or pending investigation by any governmental agency under any law, regulation
or ordinance pertaining to any Hazardous Substance.
20.4 Indemnity and Release as to Third Party Claims.
(a) If there are any third party claims against Seller
which arise after Closing on account of any release of any Hazardous Substance
from, on or under the Property first occurring after Closing, Buyer will
indemnify, defend (by counsel reasonably acceptable to Seller), protect and hold
Seller harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including reasonable attorneys' and experts'
fees and expenses) arising therefrom.
(b) As used in this Section 20.4, "third party claims" are
defined as any claims or rights of recovery by any person or entity (including
governmental agencies):
(i) which result from injury, damage or loss to or of
any person or property; or
(ii) for cost recovery, removal or remedial action.
Third party claims will also include any costs paid or
payable by either party for damage, loss, injury, investigation, removal,
remediation or other liability in response to any third party claim or in
anticipation of any enforcement or remedial action undertaken or threatened by
any government agency or private party.
(c) Seller will not be liable to Buyer under this
Agreement, and Buyer hereby (i) releases Seller from any and all liability under
any federal, state or local law pertaining to or concerning Hazardous
Substances, (ii) covenants not to sue or join Seller in any proceeding in which
Buyer is named as a defendant or responsible party and (iii) indemnifies Seller
from and against any third party claims which are attributable to any
environmental condition which:
(i) was specifically described in any Environmental
Assessment delivered to or obtained by Buyer prior to Closing; or
(ii) existed on the Premises prior to Seller's
acquisition of the Premises, or were created or discovered during Seller's
period of ownership of the Premises and disclosed to Buyer in writing prior to
Closing; or
(iii) was otherwise disclosed by Seller to Buyer or
discovered by Buyer at any time prior to Closing.
(d) The provisions of this Subparagraph 20.4 will survive
Closing hereunder; however, all indemnity obligations shall lapse following the
sale of the Property by Buyer (or such other party to which title of the
Property is transferred at Closing) to an unaffiliated third party.
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21. TEMPORARY CONSTRUCTION EASEMENT. At Closing, the partners of
Seller shall cause TBLHAII to grant a temporary easement over not more than one
(1) acre of the land owned by TBLHAII to be used as a staging area for the
construction of a building on the Premises. Such easement shall be prepared by
counsel to Buyer, shall be in form and substance satisfactory to Seller and
Seller's counsel and shall provide inter alia that, at Seller's Option, the
location of such temporary easement shall be relocated to an alternative site on
the land owned by TBLHAII if the initial location thereof is required by
TBLHAII, or a subsequent owner for a different purpose.
22. CONSENT OF PARTNERS. By their execution of this Agreement by the
General Partners of Seller, each of such General Partners hereby consent to the
sale of the Property upon the terms and conditions set forth herein as this
Agreement may hereafter be amended in a writing signed by all such General
Partners and such General Partners hereby waive any and all rights which any of
them may have under Seller's Agreement of Limited Partnership, as amended, or
otherwise to purchase the Property or any part thereof.
23. Intentionally omitted.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed the day and year first above written.
FOUR TOWER BRIDGE ASSOCIATES, a Pennsylvania limited partnership
By Four Oliver Tower Limited Partnership, Managing General Partner
By Four Oliver Tower Corporation, General Partner
By /s/ Donald W. Pulver
----------------------------------------------
Name: Donald W. Pulver
Title: President
TOWER BRIDGE LAND HOLDING ASSOCIATES I, a Pennsylvania limited
partnership
By Oliver Tower Land Holding Associates, General Partner
By Oliver Tyrone Pulver Corporation, General Partner
By /s/ Donald W. Pulver
----------------------------------------------
Name: Donald W. Pulver
Title: Donald W. Pulver
By Provestco, Inc., General Partner
By /s/ Craig L. Snyder
----------------------------------------------
Name: Craig L. Snyder
Title: President
By TB Land Associates Limited Partnership, General Partner
By TB Land Company
By /s/ Darlene Clarke
----------------------------------------------
Name: Darlene Clarke
Title: Vice President
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Exhibit 10.5
PURCHASE OPTION AGREEMENT
THIS AGREEMENT is made as of the 3rd day of November, 1997, by and
between TOWER BRIDGE LAND HOLDING ASSOCIATES II, a Pennsylvania limited
partnership ("Seller") and FIVE TOWER BRIDGE ASSOCIATES, a Pennsylvania
limited partnership ("Buyer").
WITNESSETH
A. Seller is the owner in fee simple of title to certain tracts of
land located in the Borough of West Conshohocken, County of Montgomery,
Commonwealth of Pennsylvania, as more fully described on Exhibit "1" attached
hereto and incorporated herein by reference, together with the improvements
thereon (collectively, the "Property"). For purposes of this Agreement,
"Property" shall also include all of the Seller's right, title and interest
in and to all easements, rights-of-way, privileges and appurtenances thereto,
property and property rights to be assigned or transferred pursuant to the
"Terms and Conditions of Sale" attached hereto as Exhibit "2" and made a part
hereof (the "Terms and Conditions of Sale").
B. Seller desires to sell and grant to Buyer, and Buyer desires to
purchase and receive from Seller, a right and option to purchase the Property
for the purchase price and upon and subject to the terms and conditions
hereinafter set forth.
NOW THEREFORE, for and in consideration of the payments, covenants
and agreements hereinafter specified, the parties hereto, intending to be
legally bound hereby, covenant and agree as follows:
1. Grant of Option. Seller hereby grants to Buyer or Buyer's
assignee(s) or nominee(s) a right and option ("Option") to purchase the
Property upon and subject to the terms and conditions hereinafter set forth
and as set forth in the Terms and Conditions of Sale.
2. Term of Option.
(a) The Option to purchase the Property granted hereunder
shall commence on the date entered in the caption of this Agreement (the
"Execution Date") and shall, subject to Section 2(b) and Section 8 hereof,
extend thereafter until 11:59 P.M. on the date which is the day preceding the
first anniversary of the Execution Date (such date, as the same may be
extended as provided for herein, the "Expiration Date"). If Buyer shall not
have exercised the Option in the manner provided in Paragraph 3 hereof as of
the Expiration Date, then the Option shall thereupon terminate and be null
and void, and neither party hereto shall have any further rights or
obligations hereunder. The period from the Execution Date through the day
preceding the first anniversary of the Execution Date is hereinafter referred
to as the First Option Year.
(b) Notwithstanding anything to the contrary contained herein,
if Buyer pays the Second Year Option Payment, as hereinafter defined, on or
before the Expiration Date provided for under subsection 2(a) hereof, the
Expiration Date of this Option shall be extended to be the day preceding the
second anniversary of the Execution Date. The period from and after the day
preceding the first anniversary of the Execution Date through the day
preceding the second anniversary of the Execution Date is hereinafter
referred to as the "Second Option Year."
3. Exercise of Option. To exercise the option, Buyer shall so
notify Seller in writing (in the manner provided in Paragraph 1 of the Terms and
Conditions of Sale) not later than the Expiration Date, as the same may be
extended as herein set forth and, if such exercise is prior to the payment of
the Second Year Option Payment, deposits the Deposit as provided in such
paragraph 1 of the Terms and Conditions of Sale. Upon such written notice, this
Agreement shall become an Agreement of Sale and Purchase for the Property,
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns, and Seller shall sell and convey the
Property to Buyer,
<PAGE>
and Buyer shall purchase and accept the Property from Seller, upon the terms
and conditions set forth herein and in the Terms and Conditions of Sale.
4. Option Payment.
(a) In consideration of the Option granted hereunder by
Seller, Buyer hereby agrees to pay to Seller (the "First Year Option
Payment") all Carrying Costs, as hereinafter defined, for the First Option
Year. Upon execution hereof, Buyer shall pay Seller the sum of Forty-Eight
Thousand Dollars ($48,000) on account of the First Year Option Payment, which
shall be allocated to the estimated Carrying Costs as set forth in Exhibit
"3" hereto. As such Carrying Costs are incurred, the First Year Option
Payment by Buyer shall be adjusted in the manner set forth in Section 5 below.
(b) If Buyer desires to extend the Expiration Date of this
Option from the day preceding the first anniversary of the Execution Date to
the day preceding the second anniversary of the Execution Date, Buyer shall
pay to Seller, prior to the Expiration Date set forth in Subsection 2(a), an
amount equal to Three Hundred Thousand Dollars ($300,000.00) (the "Second
Year Option Payment"). Seller shall be responsible to pay Carry Costs for
the Second Option Year. The Second Year Option Payment, less the Carrying
Costs for the Second Option Year, shall be credited against the Purchase
Price for the Property if Buyer purchases the Property after payment of the
Second Year Option Payment.
(c) The capitalized term "Option Payments", as used herein,
shall mean the First Year Option Payment and the Second Year Option Payment,
collectively.
(d) The Option Payments shall not be refundable except as
expressly set forth in this Agreement and in the Terms and Conditions of
Sale. The Option Payments shall only be credited against the Purchase Price
for the Property to the extent set forth herein.
5. Taxes and Insurance.
(a) The term "Carrying Costs", as used herein, shall mean all
Taxes, Insurance and Maintenance Costs, as hereinafter defined.
(b) The term "Taxes", as used herein, shall mean all ad
valorem real property taxes which are levied or assessed against the Property
by the school district, borough and county in which the Property is located,
and any other taxes however described which are levied or assessed against
the Property or its owner in addition to or in lieu of a general property tax
or increase in general property tax and including any special taxing district
assessments or other municipal impositions for security, police or other
municipal services. In no event shall Taxes refer to any corporate franchise
tax, estate, inheritance, succession or capital levy imposed upon Seller or
any of its constitute partners or any income, excess profits or revenue tax
or any other tax, assessment, charge or levy based upon or measured by the
net income or capital stock of Seller or any of its constituent partners.
(c) The term "Insurance", as used herein, shall mean the
following insurance coverages with respect to the Property: general
liability coverage, including broad form endorsement, on an occurrence basis,
in combined policy limits of One Million Dollars ($1,000,000.00) per person
for bodily injury and One Hundred Thousand Dollars ($100,000) for property
damage with respect to the Property, carried with Seller's current insurance
companies or such other insurance companies as are selected by Seller.
(d) The term "Maintenance Costs", as used herein, shall mean the
actual, documented costs of maintaining the Property, including, but not limited
to, landscaping, snow plowing and related costs, any sums due under Sections 4
and 5 of the Declaration of Easements and Protective Covenants (the
"Declaration") as recorded with the Montgomery County Recorder of Deeds in Deed
Book 5076, page 2342, and any interest, but not principal, due the Redevelopment
Authority of the County of Montgomery, Pennsylvania under the loan in the
original principal amount
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of $225,000 secured by the mortgage recorded in Mortgage Book 7577, page 151
(the "RDA Loan"), as the same may be modified or extended (provided, however,
the principal amount of the RDA Loan shall not be increased).
Notwithstanding the foregoing, Buyer shall have no obligation to make or pay
for any capital repair, replacement or improvements.
(e) Seller represents that the estimated Carrying Costs for
the First Option Year will be approximately $48,000, as set forth on Exhibit
"3" attached hereto.
(f) If during the First Option Year, Seller determines in good
faith that the estimated Carrying Costs set forth in Exhibit "3" hereto will
exceed $48,000, Seller shall give written notice thereof to Buyer, specifying
the amount of such excess and Buyer shall have a period of thirty (30) days
thereafter to pay the amount of such excess to Seller. The amount of such
excess shall be an integral part of the First Year Option Payment and, if
Buyer fails to pay such sum to Seller within thirty (30) days following
receipt of such notice, Buyer shall be in default hereunder and, if such
default shall continue for five (5) days following written notice thereof
given to Buyer by or on behalf of Seller, this Agreement and the rights of
Buyer hereunder shall terminate absolutely. Within thirty (30) days
following the end of the First Option Year (or the Closing Date, if the
Closing Date occurs during the First Option Year), Seller shall send an
accounting of Carrying Costs to Buyer, together with a repayment of any
excess of the First Year Option Payments over the actual Carrying Costs for
the First Option Year, or an invoice for any deficiency of the actual
Carrying Costs for the First Option Year over the First Year Option Payments.
If Buyer shall fail to pay any such deficiency within thirty (30) days
following receipt of Seller's invoice therefor, Buyer shall be in default
hereunder and, if such default shall continue for five (5) days after written
notice thereof given to Buyer by or on behalf of Seller, this Agreement and
Buyer's rights hereunder shall terminate absolutely.
6. Access to the Property. Commencing on the Execution Date and
continuing thereafter until the earlier of the completion of Closing under
the Terms and Conditions of Sale, the Expiration Date or the termination of
this Agreement, Seller agrees that Buyer and its agents, employees and
contractors shall have access to and the right of entry upon the Property and
any part thereof for the purpose of making surveys, plans, soil tests and
borings, water tests and other engineering and environmental tests and
studies, as Buyer may reasonably require, in all cases using reasonable care
to avoid damage to the Property. Buyer shall indemnify and hold harmless
Seller from any injury to persons or damage to property arising from the acts
or omissions of Buyer, its agents, employees or contractors in making any
such surveys, plans, tests or studies on the Property. In addition,
immediately following execution of this Agreement, Seller will deliver to
Buyer, without charge, all plans, maps, surveys, descriptions, title reports,
environmental assessments and engineering reports respecting the property, if
any, presently in the possession of Seller, which material shall be returned
to Seller if Buyer does not elect to purchase the Property hereunder. During
the term of this Agreement, Seller shall provide to Buyer such additional
information in Seller's possession with respect to the Property as Buyer may
request from time to time.
7. Submission and Application. Commencing on the Execution Date
and continuing thereafter until the earlier of the completion of Closing, the
Expiration Date or the termination of this Agreement, Buyer shall have the
right to prepare and submit applications, plans and other materials for
approval by governmental authorities having jurisdiction over the Property
and Buyer's plans for the development, improvement and operation of the
Property, and for the provision to the Property of water, sewer, electric and
other utility or governmental services to the Property for Buyer's proposed
development. Seller agrees, but without expense to Seller, to cooperate with
Buyer and Buyer's efforts to obtain all necessary or desirable subdivision,
zoning, site plan, building and environmental approvals, permits and waivers
or approvals, permits, licenses, variances and any other governmental action
or approvals with respect to the Property and Buyer's proposed development
thereon during the period between the Execution Date and Closing, the
Expiration Date or the earlier termination of this Agreement, and Seller
agrees, at no cost to Seller, to execute and join in (and voice no objections
to) any applications to any governmental bodies for any such approvals,
permits, licenses, waivers or variances deemed necessary or desirable by
Buyer. Notwithstanding the foregoing, Buyer shall not agree to make any
public improvements or make any payments to governmental authorities in
connection with the future development of the Property which are or would be
binding on Seller or the Property if Buyer fails to exercise its Option
hereunder, or having exercised its Option, fails to close hereunder.
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8. Other Offers; Right of First Refusal. It is the anticipation
of the parties hereto that Seller shall not actively market the Property to
third parties during the First Option Year or the Second Option Year.
Notwithstanding the foregoing, if, prior to Buyer's exercise of the Option,
Seller receives a Bona Fide Third Party Offer to purchase the Property which
Seller desires to accept, Seller shall so notify Buyer and deliver a copy of
such Bona Fide Third Party Offer to Buyer. Simultaneously with such notice,
Seller shall offer to Buyer the right to purchase the Property on the terms
and conditions contained in the Bona Fide Third Party Offer.
Within fifteen (15) days after receipt of notice from Seller of
the Bona Fide Third Party Offer, Buyer may: (a) exercise the Option pursuant
to the terms and conditions set forth herein,(b) deliver to Seller a notice
agreeing to purchase the Property for the terms and upon the same conditions
contained in the Bona Fide Third Party Offer or (c) decline either to
exercise the Option or agree to purchase the Property upon the same terms and
conditions as the Bona Fide Third Party Offer. If Buyer gives notice under
clause (b) above, Seller and Buyer shall execute an Agreement of Sale for the
Property pursuant to the terms and conditions of the Bona Fide Third Party
Offer (with such modifications as are necessary to reflect the names of the
parties and the passage of time since the presentation of the Bona Fide Third
Party Offer) and Buyer shall no longer have any right to acquire the Property
in accordance with the terms of Sections 1-7 hereof; provided, however, that
in such event, if the Second Year Option Payment has been paid, the Second
Year Option Payment, less Carrying Costs during the Second Option Year, shall
nevertheless be credited to the purchase price payable under the terms of the
Bona Fide Third Party Offer in the same manner as such payment would have
been credited to the Purchase Price if the Option had been exercised and this
Agreement shall terminate and be of no further force and effect.
If Buyer does not elect to purchase the Property under either
clause (a) or clause (b) above within such fifteen (15) day period, Buyer's
rights under this Agreement shall terminate (except as set forth below) and
Seller shall have the right to sell the Property upon the terms and
conditions contained in the Bona Fide Third Party Offer free an clear of this
Agreement and Buyer's Option hereunder; provided, however, that if closing
upon such Bona Fide Third Party Offer shall occur following the payment of
the Second Year Option Payment, Seller shall repay to Buyer an amount equal
to the Second Year Option Payment theretofore paid by Buyer to Seller, less
Carrying Costs to the date of execution of the Agreement of Sale with the
Buyer under the Bona Fide Third Party Offer (the "Third Party Agreement of
Sale"). If Seller does not complete the sale of the Property on the terms
and conditions and in accordance with the Bona Fide Third Party Offer within
the lesser of the period set forth in the Third Party Agreement of Sale or
one hundred eighty (180) days following the date of expiration of this first
refusal as set forth in this paragraph (such time period, the "Lock Out
Period"), the right of Buyer to exercise the Option as set forth in Sections
1 through 7 above shall be reinstated and be exercisable by Buyer, and the
right of first refusal contained in this Section 8 shall be reinstated and
shall apply with respect to any subsequent Bona Fide Third Party Offer to
purchase the Property during the balance of the First Option Period and the
Second Option Period, as set forth herein; provided, however, if the time to
exercise or extend the Option occurred during the Lock Out Period, then Buyer
shall have until thirty (30) days following the expiration of the Lock Out
Period in which to exercise the expired Option or to extend the Option, as
the case may be.
The term "Bona Fide Third Party Offer," as used above, shall
mean an arms-length offer, presented in the form of an agreement of sale
containing all the terms and conditions, including, but not limited to, the
purchase price and other consideration receivable by either party, which
Seller would be willing to accept, executed by the purchaser thereunder,
which purchaser shall be an entity which is not owned or controlled by, in
whole or in part, directly or indirectly, or under common ownership or
control with, in whole or in part, directly or indirectly, Seller or any of
its constituent general partners.
9. Covenants. Seller covenants that during the term of this
Agreement, Seller shall:
(a) Maintain the Property in good condition and repair,
reasonable wear and tear alone excepted, and pay, in the normal course of
business, all sums due for work, materials or service furnished or otherwise
incurred in the ownership of the Property prior to Closing.
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(b) Not make or permit to be made any alterations,
improvements or additions on the Property without the prior written consent
of Buyer, unless Seller shall be required to do so by the Declaration of
Easements and Protective Covenants (the "Declaration") by and among Seller,
Tower Bridge Land Holding Associates I ("TBLHAI") and American Society for
Testing and Materials recorded in the Office of the Montgomery County
Recorder of Deeds in Deed Book 5076, page 2342, or by applicable law or
ordinance.
(c) Not enter into any lease or letter of intent to lease with
respect to the Property.
(d) Notify Buyer promptly of the occurrence of any of the
following from and after this date:
(i) receipt of notice of newly filed eminent domain
proceedings or condemnation of or affecting the Property or any portion
thereof;
(ii) receipt of notice from any governmental or
quasi-governmental agency or authority or insurance underwriter relating to
the condition of the Property, or any portion thereof, or setting forth any
requirements with respect thereto; or
(iii) notice of any actual or threatened litigation
against Seller which affects or relates to the Property or any portion
thereof or which may affect Seller's ability to perform its obligations under
this Agreement.
(e) Except for agreements which can be terminated on not more
than thirty (30) days notice, not enter into any other agreements which shall
bind Buyer or the Property after Closing.
(f) Notify Buyer of any tax assessment disputes (pending or
threatened) prior to Closing, and not agree to any changes in the real estate
tax assessment, nor settle, withdraw or otherwise compromise any pending
claims with respect to prior tax assessments, without Buyer's prior written
consent.
10. Representations and Warranties. In order to induce Buyer to
enter into this Agreement, Seller hereby represents and warrants to Buyer:
(a) Seller is a limited partnership duly organized and validly
subsisting under the laws of Pennsylvania. Seller has full power, right
and authority to own its properties, to carry on its business as now
conducted, and to enter into and fulfill its obligations under this
Agreement. Each of the persons executing this Agreement on behalf of
Seller is authorized to do so. This Agreement is the valid and legally
binding obligation of Seller, enforceable against Seller in accordance with
its terms. The execution and delivery of this Agreement and compliance
with its terms will not conflict with or result in the breach of any law,
judgement, order, writ, injunction, decree, rule or regulation, or conflict
with or result in the breach of any other agreement, document or instrument
to which Seller is a party or by which it or the Property is bound or
affected.
(b) Seller holds good and marketable, indefeasible fee simple
title to the Property, free and clear of liens and encumbrances, other than
the lien of the RDA Loan and the Permitted Exceptions, if any. Title to a
portion of the Property may be subject to a Temporary Construction Staging
Easement Agreement and Soil Deposit Easement Agreement in favor of an
affiliate of Buyer named herein.
(c) Seller is not a "foreign person" as such term is defined in
Section 1445(f)(3) of the Internal Revenue Code of 1954, as amended (the
"Code").
(d) There are no outstanding agreements, options, rights of
first refusal, conditional sales agreements or other agreements or
arrangements, whether oral or written, regarding the purchase and sale of
the Property, or which otherwise affect any portion of or all the Property,
except rights among the partners of
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Seller pursuant to Seller's partnership agreement which shall be deemed
waived by the execution of this Agreement by the general partners of Seller.
The representations and warranties of Seller set forth herein shall survive
Closing and delivery of the deed for a period of six (6) months.
Notwithstanding anything in this Agreement to the contrary, if Buyer
discovers prior to Closing that a representation or warranty made herein was
untrue, incorrect or misleading in any respect, such representation or
warranty shall be deemed modified by the information so discovered and Buyer
shall only be entitled to rely on the representation or warranty as so
modified.
11. Insurance. Seller shall, without charge to Buyer except as a
part of the Carrying Costs, cause Seller's insurer to endorse Buyer as an
additional insured on all insurance policies respecting the Property on and
as of the Execution Date and such endorsement shall remain in effect until
the earlier of Closing, the Expiration Date or the termination of this
Agreement, and Seller shall deliver to Buyer, within thirty (30) days
following the Execution Date, a Certificate of Insurance evidencing such
insurance and endorsement.
12. Binding Effect. All of the terms and conditions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
assigns, and it is specifically understood and agreed that Buyer shall have
the right to assign this Agreement and Buyer's rights and interest hereunder.
Buyer shall have the further right to nominate a party to receive title to
the Property or any part thereof at Closing in the event Buyer shall elect to
exercise the Option granted to Buyer hereunder.
13. No Recordation. This Agreement shall not be recorded. Buyer
may file a copy of this Agreement with the Securities and Exchange Commission
if Buyer deems such filing necessary or appropriate to comply with applicable
regulations of the Securities and Exchange Commission.
14. No Recourse to Brandywine Realty Trust. No recourse shall be
had for any of the obligations of Buyer 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 Seller.
15. Brokers. Each party hereby represents and warrants to the
other that it has not employed or retained any broker or finder in connection
with the transactions contemplated by this Agreement other than Thomas J.
Maher & Company, pursuant to an Agreement dated as of October 15, 1997, to
whom Buyer alone shall be responsible to pay such fee or commission as may be
due and that neither has had any dealings with any other person or party
which may entitle that person or party to a fee or commission. Each party
shall indemnify the other of and from any claims for commissions by any
person or party claiming such commission by or through the indemnifying party.
16. General Provisions.
(a) Notices. All notices or other communications required or
permitted to be given under the terms of this Agreement shall be in writing,
and shall be deemed effective when (i) sent by nationally-recognized
overnight courier, (ii) facsimile with original following by regular mail, or
(iii) deposited in the United States mail and sent by certified mail, postage
prepaid, addressed as follows:
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If to Buyer, addressed to:
Four Tower Bridge Associates
Four Oliver Tower Associates, Managing Partner
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, Pennsylvania 19428
FAX No. 610-834-2011
with a copy in each instance to:
David M. Scolnic, Esquire
Hangley, Aronchick, Segal & Pudlin
One Logan Square
Philadelphia, Pennsylvania 19103
FAX No. 215-568-0300
and to:
Eric L. Stern, Esquire
Pepper, Hamilton & Scheetz, LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103-2799
FAX No. 215-981-4750
If to Seller, addressed to:
Provident Mutual Life Insurance Company
1205 Westlakes Drive, Suite 270
Berwyn, Pennsylvania 19312-2405
Attention: Craig L. Snyder, Vice President, Mortgage
Loans and Real Estate
FAX No. 610-407-1036
and to:
TB Land Associates Limited Partnership
c/o The Hillman Company
1900 Grant Building
Pittsburgh, Pennsylvania 15219
Attention: Bartley J. Rahuba, Vice President
FAX No. 412-338-3644
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and to:
Tower Bridge Land Holding Associates I
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge, Suite 900
West Conshohocken, Pennsylvania 19425
FAX No. 610-831-2011
with a copy in each instance to:
Clifford H. Swain, Esquire
Drinker Biddle & Reath LLP
1345 Chestnut Street, 11th Floor
Philadelphia, Pennsylvania 19107
FAX No. 215-988-2757
and to:
Marian Faye Dietrich, Esquire
The Hillman Company
1900 Grant Building
Pittsburgh, Pennsylvania 15219
FAX No. 412-338-3644
If to Escrow Agent, addressed to:
Lawyers Title Corporation
Two Penn Center Plaza, Suite 1230
Philadelphia, Pennsylvania 19102
Attention: Alan D. Keiser, Esquire
FAX No. 215-665-3430
or to such-other address or addresses and to the attention of such other
person or persons as any of the parties may notify the other in accordance
with the provisions of this Agreement.
(b) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
(c) Entire Agreement. All Exhibits attached to this Agreement
are incorporated herein and made a part hereof. This Agreement constitutes
the entire agreement between the parties hereto and supersedes all prior
negotiations, understandings and agreements of any nature whatsoever with
respect to the subject matter hereof. This Agreement may not be modified or
amended other than by an agreement in writing. The captions included in this
Agreement are for convenience only and in no way define, describe or limit
the scope or intent of the terms of this Agreement.
(d) Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the Commonwealth of Pennsylvania.
(e) Tender. Tender of Deed by Seller and of the Purchase
Price by Buyer, are hereby mutually waived.
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(f) Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or
taken together, shall bear the signatures of all of the parties reflected
hereon as the signatories.
(g) Further Instruments. Seller will, whenever and as often
as it shall be reasonably request so to do by Buyer, and Buyer will, whenever
and as often as it shall be reasonably requested so to do by Seller, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all conveyances, assignments, correction instruments and all other
instruments and documents as may be reasonably necessary in order to complete
the transaction provided for in this Agreement and to carry out the intent
and purposes of this Agreement. All such instruments and documents shall be
satisfactory to the respective attorneys for Buyer and Seller. The
provisions of this Section shall survive the Closing and shall be subject to
all of the terms, conditions and provisions of this Agreement.
(h) Time. Time is of the essence. In the event the last day
permitted for the performance of any act required or permitted under this
Agreement falls on a Saturday, Sunday, or legal holiday of the United States
or the Commonwealth of Pennsylvania, the time for such performance will be
extended to the next succeeding business day. Time periods under this
Agreement will exclude the first day and include the last day of such time
period.
17. Consent of Partners. By the execution of this Agreement by the
General Partners of Seller, each of such General Partners hereby consent to
the Option granted hereunder and, upon the exercise of the Option, the sale
of the Property upon the terms and conditions set forth herein as this
Agreement may hereafter be amended in a writing signed by all such General
Partners and such General Partners hereby waive any and all rights which any
of them may have under Seller's Agreement of Limited Partnership, as amended,
or otherwise, to purchase the Property or any part thereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
intending to be legally bound hereby, as of the day and year first above
written.
SELLER:
TOWER BRIDGE LAND HOLDING ASSOCIATES, II, a
Pennsylvania limited partnership
By Oliver Tower Land Holding Associates
By Oliver Tyrone Pulver Corporation
By /s/ Donald W. Pulver
------------------------------------------
Name: Donald W. Pulver
Title: President
By Provestco, Inc.
By /s/ Craig L. Snyder
------------------------------------------
Name: Craig L. Snyder
Title: President
By TB Land Associates
By TB Land Company
By /s/ Darlene Clarke
------------------------------------------
Name: Darlene Clarke
Title: Vice President
BUYER:
FIVE TOWER BRIDGE ASSOCIATES, a Pennsylvania
limited partnership
By Five Oliver Tower Limited Partnership, a
Pennsylvania limited partnership, managing
general partner
By Five Oliver Tower Corporation, a Pennsylvania
corporation
By /s/ Donald W. Pulver
------------------------------------------
Name: Donald W. Pulver
Title: President
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EXHIBIT 1 TO
PURCHASE OPTION AGREEMENT
DESCRIPTION OF PROPERTY
<PAGE>
EXHIBIT 2 TO
PURCHASE OPTION AGREEMENT
TERMS AND CONDITIONS OF SALE
-----------------------------
1. MANNER OF EXERCISE. Subject to the provisions of Section 8 of
the Option Agreement, Buyer may exercise the Option by giving Seller written
notice thereof on or before the Expiration Date of the Option, as such
Expiration Date may be extended, together with:
(a) a notification of the time, date (the "Closing Date") and
place of Closing. The Closing Date shall be no earlier than ten (10) days
and no later than the earlier of (i)sixty (60) days following the giving of
such notice or (ii) thirty (30) days following the Expiration Date, as the
same may have been extended, and Closing shall be held at a location within
the five (5) county Philadelphia region; and
(b) if Buyer exercises the Option before the payment of the
Second Year Option Payment, Buyer shall pay to Seller concurrently with the
giving of such notice a good faith deposit (the "Deposit") of $150,000 on
account of the Purchase Price. If Buyer fails to pay the Deposit as provided
herein, Buyer's notice of exercise shall be null and void.
2. PROPERTY BEING SOLD. Seller shall sell, transfer and convey to
Buyer on the Closing Date,
2.1 Real Property. The Property.
2.2 Personal Property. All right, title and interest of
Seller, if any, in all assignable intangible personal property used in
connection with the ownership, development of the Property, including without
limitation, all contract rights, guaranties and warranties of any nature, all
architects', engineers', surveyors' and other real estate professionals'
plans, specifications, certifications, contracts, reports, data or other
technical descriptions, reports or audits relating to the Property
(including, without limitation, all environmental, structural and mechanical
inspection reports) ("Contract Documents"), all state, county and municipal
governmental, quasi-governmental permits, licenses, certificates, and
approvals and correspondence related thereto to be used or which will be
useful in connection with the development of the Property ("Licenses") and
all of Seller's rights, claims, and causes of action if any, to the extent
they are assignable, under any warranties and/or guarantees relating to any
improvements on the Property (hereinafter collectively referred to as
"Personal Property").
2.3 Leases. All right, title and interest of Seller in any
letters of intent to lease any part of the Property (the "Letters of Intent").
2.4 Right to Names. All right, title and interest of Seller,
if any, in and to the name "Five Tower Bridge" (the "Name") and the
non-exclusive right to all printing styles, trademarks and logos used in
connection with the Name; provided, however, Seller shall retain the
non-exclusive right to the name "Tower Bridge" and any variations thereof
other than "Five Tower Bridge".
2.5 FAR. The right to utilize approximately 214,062 square
feet of floor area for the gross building area of improvements to be
constructed on the Property (the "FAR"), being the remaining FAR available in
the Tower Bridge Project in West Conshohocken (less the amount, if any, by
which the FAR purchased by Buyer from Tower Bridge Land Holding Associates I
("TBLHAI") exceeds 81,700 square feet of FAR), subject to the requirement
that, if required, Buyer shall join Seller and its affiliates in the
execution of any common or consolidated subdivision plan which allocates FAR
in the manner provided in this Paragraph 2.5.
<PAGE>
2.6 Access Easements. Temporary easements for vehicular and
pedestrian access over the bridge and Bullock Avenue Extension as shown on
the Subdivision Plan until the same have been dedicated to and accepted by
the Borough (the "Access Easements").
2.7 Sewer Rights. The right to use approximately 77,000 GPD
average daily flow of sewer capacity (the "Sewer Allocation") reserved under
the Agreement dated July 18, 1988 by and among the West Conshohocken
Municipal Authority (the "Sewer Authority"), Tower Bridge Associates, Seller,
TBLHAI, Tower Bridge Land Holding Associates III ("TBLHAIII") and Four Falls
Associates ("Four Falls") (the "Sewer Agreement"), subject to the obligation
to pay any unpaid fees allocable to such sewer capacity.
3. PURCHASE PRICE AND MANNER OF PAYMENT.
3.1 Purchase Price. The Purchase Price (the "Purchase Price")
shall be Three Million Dollars ($3,000,000), plus the assumption of the RDA
Loan and the liabilities referred to in Section 8.1.1.5 of these Term and
Conditions of Sale. If TBLHAI has conveyed more than 81,700 square feet of
FAR to Buyer's affiliate pursuant to an Agreement of Sale for Four Tower
Bridge executed concurrently herewith, the Purchase Price for the Property
being sold hereunder shall be reduced by an amount equal to the number of
square feet of FAR sold which is in excess of 81,700 square feet of FAR
multiplied by $14.00.
3.2 Manner of Payment. The Purchase Price, less the Deposit
or the Second Year Option Payment net of Carrying Costs during the Second
Year Option to the Closing Date shall be paid by wire transfer of immediately
available funds on the Closing Date.
4. TITLE. On the Closing Date, Seller shall convey to Buyer good
and marketable fee simple title to the Property subject only to the RDA Loan
and those rights of way, easements, covenants restrictions, and objections to
title (hereinafter "Permitted Exceptions") as exist on the date of this
Option Agreement, which title shall be insurable at regular rates by a
reputable title insurance company ("Title Company") under an ALTA 1970 Form B
(Revised 10/17/70 and 3/30/84) title insurance policy or such other form of
title policy customarily issued by the Title Company ("Title Policy"), with
such endorsements and affirmative insurance reasonably requested by Buyer.
5. POSSESSION. Possession of the Property is to be given to Buyer
on the Closing Date, by delivery of the Deed.
6. CONDEMNATION. If between the date of exercise of the Option
and the Closing Date, all or any portion of the Property is taken by
condemnation or eminent domain or a notice of any condemnation or eminent
domain proceedings with respect to the Property or any part thereof is
received by Seller, then Seller shall within five (5) days thereafter give
notice thereof to Buyer and Buyer shall have the option to (a) complete the
purchase hereunder or (b) if such taking, in Buyer's sole and absolute
discretion, adversely affects the Property, its economic viability or its
potential for development as contemplated by Buyer, terminate this Agreement,
in which event, if previously paid, the Second Year Option Payment less
Carrying Costs or the Deposit paid pursuant to Paragraph 1 of these Terms
Conditions of Sale shall be immediately refunded to Buyer, and this Agreement
shall be null and void. Buyer shall deliver written notice of its election
to Seller within ten (10) days after the date upon which Buyer receives
written notice of such condemnation or eminent domain proceedings. If this
Agreement is not so terminated and Buyer closes hereunder, Buyer shall be
entitled to all awards or damages by reason of any exercise of the power of
eminent domain or condemnation with respect to or for the taking of the
Property or any portion thereof occurring after the exercise of the Option.
Any negotiation for, or agreement to, and all contests of any offers and
awards relating to eminent domain proceedings occurring after the exercise of
the Option shall be conducted with the joint approval and consent of Seller
and Buyer.
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7. EXPENSE ALLOCATIONS.
7.1 Seller's Payments. Seller shall pay no closing costs
(except as provided below).
7.2 Buyer's Payments. Buyer shall pay for all applicable
realty transfer taxes, for Buyer's title examination, and survey (if
obtained), for all recording charges (other than charges related to existing
mortgage financing, if any, which shall be discharged at Closing at Seller's
expense), and for Buyer's title premiums.
7.3 Attorney's Fees. Buyer and Seller shall be responsible
for paying their own attorney's fees in connection with this transaction.
8. CLOSING.
8.1 Documents. At Closing, the parties indicated shall
simultaneously execute and deliver the following:
8.1.1 Seller's Documents and Other Items. Seller
shall execute and deliver or cause to be executed and delivered to Buyer in
proper form for recording:
8.1.1.1 Deed. A special warranty deed prepared by
Buyer's counsel in form and substance acceptable to Seller (the "Deed"),
conveying the Property and FAR to Buyer and granting Buyer the Access
Easements, duly executed by Seller for recording. The Deed description shall
be based upon the metes and bounds description attached as Exhibit 1 to the
Option Agreement, unless Buyer requests that Seller convey the Property by
the metes and bounds description shown on a new ALTA survey, if any, obtained
by Buyer, in which event the Property shall be so conveyed.
8.1.1.2 Original Licenses, Contract Documents and
Other Personal Property. All original Licenses, Contract Documents, and
other Personal Property described in Paragraph 2.2 of these Terms and
Conditions of Sale.
8.1.1.3 Assignment of Licenses, Contract Documents
and Other Personal Property. An assignment agreement prepared by Buyer's
counsel, in form and substance acceptable to Seller, assigning, conveying and
transferring to Buyer without warranty the Licenses, Contracts Documents and
Other Personal Property, including, specifically, the Names.
8.1.1.4 Assignment of Sewer Allocation. The
assignment to Buyer of approximately 77,000 GPD average daily flow of sewer
capacity.
8.1.1.5 Assumption of Certain Obligations of Buyer.
The assumption by Buyer of all unperformed obligations of Seller or Seller's
affiliates (if any) under: (a) the Declaration (as defined in Section 9 of
the Option Agreement),(b) the Application and Agreement Relating to Traffic
Plan for West Conshohocken dated February 5, 1987 by and among Four Falls,
Oliver Tyrone Pulver Corporation and the Borough, as amended December 12,
1989, July 30, 1990, December 30, 1992, April 14, 1994 and as supplemented by
a letter from Douglas Murray at Oliver Tyrone Pulver Corporation to the
Borough dated April 14, 1994 and a letter from Tower Bridge Land Holding
Associates II to the Borough dated September 12, 1997 (relating to
Balligamingo Road), as the same may hereafter be further amended or
supplemented (the "Traffic Agreement"),(c) the Agreement dated February 13,
1989 by and among the Borough, Seller and TBLHAI, as amended by First
Amendment to Open Space Agreement dated May 2, 1994 and (d) the RDA Loan.
8.1.1.6 FIRPTA Certificates. All certificate(s)
required under Section 1445 of the Code.
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8.1.1.7 Seller's Certificate. A title company's
Seller's Certificate in customary form and such organizational documents as
the Title Company may require.
8.1.1.8 Tax Bills. Current tax bills and, if
available, tax bills for the prior three (3) years of Seller's ownership of
the Property;
8.1.1.9 Tax Reduction Rights. An instrument
assigning to Buyer without warranty any claims for the reduction of real or
personal property taxes assessed against any portion of the Property for the
fiscal year in which the Closing takes place; any refund for such year shall
be prorated when received;
8.1.2 Payment of Purchase Price and Buyer's Documents.
Buyer shall deliver or cause to be delivered to Seller:
8.1.2.1 Purchase Price. Payment of the Purchase
Price in the manner required by Paragraph 3.2 of these Terms and Conditions;
8.1.2.2 Assumptions. Executed original
counterparts of the assumptions by Buyer referred to in Section 8.1.1.6 above.
8.1.3 Title Insurance. As a condition to Buyer's
obligations at Closing, Title Company shall furnish Buyer at Closing with the
Title Policy, in the form required pursuant to Paragraph 4 of these Terms and
Conditions of Sale, in the full amount of the Purchase Price, wherein the
Title Company shall insure fee simple title to the Property in Buyer or its
designee as of the Closing Date containing no exceptions to title other than
Permitted Exceptions and those other exceptions which have been approved by
Buyer and providing the title endorsements reasonably specified by Buyer.
8.1.4 Necessary Documents. Buyer and Seller shall
execute and deliver such other documents and instruments as may be reasonably
necessary to complete the transaction contemplated by these Terms and
Conditions of Sale.
9. DEFAULT; REMEDIES
9.1 Seller's Default. In the event that Seller shall have
failed to have performed any of the covenants and/or agreements contained in
these Terms and Conditions of Sale which are to be performed by Seller or if
the representations and warranties made by Seller in these Terms and
Conditions of Sale or the Option Agreement are not true and correct in every
material respect (without regard to deemed modifications under Section 10 of
the Option Agreement), Buyer may, at its option, terminate the Option
Agreement by giving written notice of such termination to Seller and Seller
shall immediately thereafter return the Second Year Option Payment less the
Carrying Costs or the Deposit, as the case may be, and thereupon the parties
shall have no further liability to each other hereunder. In the alternative,
in the event of Seller's willful default and refusal to close hereunder,
Buyer may seek specific performance of Seller's obligations; provided
however, any complaint seeking such specific performance must (a) allege with
specificity Seller's willful default and refusal to close under the Option
Agreement on the Closing Date; (b) allege with specificity that Buyer had
sufficient funds to close the transaction on the Closing Date; and (c) allege
that as of the date of the filing such complaint seeking specific
performance, sufficient funds continue to be available to Buyer and will be
available to Buyer for at least thirty-one (31) days following the entry of
an order by a court of competent jurisdiction requiring specific performance
by Seller under the Option Agreement. In the event Buyer terminates this
Agreement after a willful default of Seller, Seller shall reimburse Buyer for
its actual out-of-pocket costs incurred in connection with the entering into
of this Agreement and Buyer's inspection of the Premises. Buyer acknowledges
and agrees that, except as set forth in the immediately preceding sentence,
under no circumstances shall Buyer have any right to seek or collect damages
from Seller, its partners or the officers, directors, employees, agents or
contractors of any of them, whether actual, punitive, consequential or
otherwise as a result of Seller's failure or refusal to close hereunder
and/or as a result of the specific performance hereof.
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9.2 Buyer's Default. Buyer recognizes that the Property will
be removed by Seller from the market during the existence of the Option and
that if the purchase and sale is not consummated following the exercise of
the Option because of Buyer's default, Seller shall be entitled to
compensation for such detriment. Seller and Buyer acknowledge that it is
extremely difficult and impracticable to ascertain the extent of the
detriment, and to avoid this problem, Seller and Buyer agree that if the
purchase and sale contemplated in the Option Agreement is not consummated
because of Buyer's default following the exercise of the Option, Seller shall
be entitled to retain any Option Payment and any Deposit as liquidated
damages. The parties agree that the sum stated above as liquidated damages
shall be in lieu of any other relief to which Seller might otherwise be
entitled, Seller hereby specifically waiving any and all rights which it may
have to damages or specific performance as a result of Buyer's default under
the Option Agreement.
10. PRORATIONS.
10.1 Expenses. The following items shall be prorated at
Closing, as of midnight of the day immediately preceding Closing (the
"Adjustment Date"):
10.1.1 Taxes. Real estate and personal property taxes,
if any, on the basis of the fiscal year for which assessed. If the Closing
shall occur before the tax rate or assessment is fixed, the apportionment of
such real estate and personal property taxes at the Closing shall be upon the
basis of the tax rate for the next preceding year applied to the latest
assessed valuation. Final adjustment will be made upon the actual tax
amount, when determined.
10.1.2 Water and Sewer Charges. Water and sewer
charges if applicable based upon meter readings to be obtained by Seller
effective as of the Adjustment Date, or if not so obtainable, a date not more
than ten (10) days prior to the Adjustment Date, and the unfixed meter
charges based thereon for the intervening period shall be apportioned on the
basis of such last reading. Upon the taking of a subsequent actual reading,
such apportionment shall be readjusted and Seller or Buyer, as the case may
be, will promptly deliver to the other the amount determined to be so due
upon such readjustment. If Seller is unable to furnish such prior reading,
any reading subsequent to the Closing will be apportioned on a per diem basis
from the date of such reading immediately prior thereto and Seller shall pay
the proportionate charges due up to the date of Closing.
10.2 Custom and Practice. Except as set forth in these Terms
and Conditions of Sale, the customs of the State and County in which the
Property are located shall govern prorations.
10.3 Application of Prorations. If such prorations result in a
payment due Buyer, the cash payable at Closing shall be reduced by such sum.
If such prorations result in a payment due Seller, the same shall be added to
the Purchase Price and paid at Closing.
10.4 Readjustments. The parties shall correct any errors in
prorations as soon after the Closing as amounts are finally determined.
11. PROPERTY "AS-IS".
11.1 No Side Agreements or Representations. No person acting
on behalf of Seller, including without limitation, any partner or officer or
employee of any partner of Seller, is authorized to make, and by execution
hereof, Buyer acknowledges that no person has made any representation,
agreement, statement, warranty, guarantee or promise, express or implied,
regarding the Property or the transaction contemplated herein or the zoning,
construction, physical condition, fitness for use, title or any other matter
or status of the Property except as may be expressly set forth in this
Agreement. No representation, warranty, agreement, statement, guarantee or
promise, if any, made by any person acting on behalf of Seller which is not
contained in this Agreement will be valid or binding on Seller, and Buyer
disclaims the right to rely thereon.
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11.2 AS-IS PURCHASE. BUYER REPRESENTS AND WARRANTS TO SELLER
THAT BUYER HAS INDEPENDENTLY AND PERSONALLY INSPECTED OR, PRIOR TO THE
EXERCISE OF THE OPTION, WILL INSPECT THE PROPERTY AND IMPROVEMENTS, IF ANY,
AND THAT BUYER HAS ENTERED INTO THIS AGREEMENT BASED UPON SUCH PERSONAL
EXAMINATION AND INSPECTION OR THE RIGHT THERETO. BUYER AGREES THAT IF BUYER
EXERCISES THE OPTION AS PROVIDED HEREIN, BUYER WILL ACCEPT THE PROPERTY, AT
CLOSING, IN ITS THEN CONDITION AS-IS AND WITH ALL FAULTS, INCLUDING WITHOUT
LIMITATION, THOSE FAULTS AND CONDITIONS SPECIFICALLY REFERENCED IN THIS
AGREEMENT. THE PURCHASE PRICE HAS BEEN NEGOTIATED WITH THE MUTUAL
UNDERSTANDING THAT BUYER IS PURCHASING THE PROPERTY AS-IS AND THAT BUYER'S
COSTS ASSOCIATED WITH DEVELOPMENT, OPERATION AND MANAGEMENT OF THE PROPERTY
ARE UNCERTAIN. IT IS NOT CONTEMPLATED THAT THE PURCHASE PRICE WILL BE
INCREASED IF THESE COSTS PROVE TO BE LESS THAN EXPECTED NOR WILL THE PURCHASE
PRICE BE REDUCED IF BUYER'S PLAN LEADS TO HIGHER COST PROJECTIONS. EXCEPT AS
PROVIDED HEREIN, THE SOLE REMEDY OF BUYER, IF BUYER IS NOT SATISFIED WITH ANY
ASPECT OF THE PROPERTY, WILL BE NOT TO EXERCISE THE OPTION.
11.3 Buyer Representations. Without limiting any other
representations or warranties by Buyer hereunder, Buyer represents and
warrants that, except as expressly set forth in this Agreement, (i) Buyer is
a sophisticated purchaser of commercial real estate and is relying solely
upon Buyer's inspection, investigation, and personal knowledge of the entire
Property; (ii) Seller and Seller's agents have made no representations,
warranties or other agreements concerning matters relating to the Property,
including without limitation, the physical and environmental condition of the
Property, except as otherwise expressly stated in this Agreement; (iii)
Seller and Seller's agents have made no agreement or promise to repair, alter
or improve the Property; and (iv) Buyer takes and acquires the Property in
its present condition, "WHERE IS" and "AS IS" and without representations or
warranties of any kind (except as expressly set forth in this Agreement).
12. HAZARDOUS SUBSTANCES
12.1 Definitions. For the purposes of this Agreement, the
following terms have the following meanings:
(a) "Environmental Law" means any federal, state or local
law, statute, ordinance or regulation pertaining to health, industrial
hygiene or the environment including, without limitation CERCLA
(Comprehensive Environmental Response, Compensation and Liability Act of
1980) and RCRA (Resources Conservation and Recovery Act of 1976).
(b) "Hazardous Substance" means any substance, material
or waste which is or becomes designated, classified or regulated as being
"toxic" or "hazardous" or a "pollutant" or which is or becomes similarly
designated, classified or regulated, under any Environmental Law, including
asbestos, petroleum and petroleum products.
(c) "Environmental Assessment" means an environmental
assessment, review or testing of the Property delivered to Buyer by Seller,
performed by Buyer or performed by any third party or consultant engaged by
Buyer to conduct such assessment, review or study.
(d) "Knowledge of Seller" means the actual knowledge of
the parties executing the Option Agreement for Provestco, Inc. and TB Land
Associates Limited Partnership.
12.2 Seller Environmental Assessments. Buyer acknowledges and
agrees that Seller has delivered to Buyer or Buyer's agents or
representatives the Environmental Assessments related to the Property
referred to in the letter dated April 9, 1997 from Stephen D. Krisko of
Oliver Tyrone Pulver Corporation addressed to Charles
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S. Phillips at McLaren Hart, Buyer's consultant. To the knowledge of Seller,
as of the date of the execution of the Option Agreement, there exist no other
Environmental Assessments obtained by Seller.
12.3 Notices Regarding Hazardous Substances. To the knowledge
of Seller, except as are disclosed in the Environmental Assessments and for
the placing of Hazardous Substances on the Property by an affiliate of Seller
during the construction of another portion of Tower Bridge, there has been no
release of a Hazardous Substance from, on or under the Property, nor does
Seller have knowledge of any threatened or pending investigation pertaining
to any release of a Hazardous Substance from, on or under the Property.
During the term of this Agreement, Seller will promptly notify Buyer if
Seller obtains knowledge that any release of a Hazardous Substance from, on
or underneath the Property (other than any Hazardous Substance releases
already disclosed in the Environmental Assessments or these Terms and
Conditions of Sale) or that Seller or the Property may be subject to any
threatened or pending investigation by any governmental agency under any law,
regulation or ordinance pertaining to any Hazardous Substance.
12.4 Indemnity and Release as to Third Party Claims.
(a) If there are any third party claims against Seller
which arise after Closing on account of any release of any Hazardous
Substance from, on or under the Property first occurring after Closing, Buyer
will indemnify, defend (by counsel reasonably acceptable to Seller), protect
and hold Seller harmless from and against any and all claims, liabilities,
penalties, forfeitures, losses or expenses (including reasonable attorneys'
and experts' fees and expenses) arising therefrom.
(b) As used in this Section 12.4, "third party claims"
are defined as any claims or rights of recovery by any person or entity
(including governmental agencies):
(i) which result from injury, damage or loss to or
of any person or property; or
(ii) for cost recovery, removal or remedial action.
Third party claims will also include any costs paid
or payable by either party for damage, loss, injury, investigation, removal,
remediation or other liability in response to any third party claim or in
anticipation of any enforcement or remedial action undertaken or threatened
by any government agency or private party.
(c) Seller will not be liable to Buyer under this
Agreement, and Buyer hereby (i) releases Seller from any and all liability
under any federal, state or local law pertaining to or concerning Hazardous
Substances, (ii) covenants not to sue or join Seller in any proceeding in
which Buyer is named as a defendant or responsible party and (iii)
indemnifies Seller from and against any third party claims which are
attributable to any environmental condition which:
(i) was specifically described in any Environmental
Assessment delivered to or obtained by Buyer prior to Closing; or
(ii) existed on the Premises prior to Seller's
acquisition of the Premises, or were created or discovered during Seller's
period of ownership of the Premises and disclosed to Buyer in writing prior
to Closing; or
(iii) was otherwise disclosed by Seller to Buyer or
discovered by Buyer at any time prior to Closing.
(d) The provisions of this Subsection 12.4 will survive
Closing hereunder; however, all indemnity obligations shall lapse following
the sale of the Property by Buyer (or such other party to which title to the
Property is transferred at Closing) to an unaffiliated third party.
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EXHIBIT 3 TO PURCHASE OPTION AGREEMENT
ESTIMATED CARRYING COSTS FOR FIVE TOWER BRIDGE
DURING FIRST OPTION YEAR
Real Estate Taxes $33,000
Grass Cutting/Snow Removal 8,000
Interest 4,500
Traffic Lights/Road Maintenance 1,500
Insurance 1,000
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$48,000
<PAGE>
Exhibit 10.6
RIGHT OF FIRST OFFER AGREEMENT
(TOWER NORTH)
THIS RIGHT OF FIRST OFFER AGREEMENT (this "Agreement") is made as of this
3rd day of November, 1997, by OLIVER TYRONE PULVER CORPORATION, a Pennsylvania
corporation ("OTPC"), and OLIVER TOWER NORTH ASSOCIATES, a Pennsylvania limited
partnership ("OTNA"), in favor of BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership ("BOP").
BACKGROUND:
OTNA has an interest as general partner in Tower Bridge North Associates, a
Pennsylvania limited partnership ("Tower North"), which partnership was formed
pursuant to an Agreement of Limited Partnership dated March 19, 1987 (the "Tower
North Partnership Agreement"). Tower North has a leasehold interest and option
to purchase in a certain parcel of land identified on Exhibit "A" attached
hereto and made a part hereof (the "Premises").
From time to time, Tower North may agree to assign its interest in and to
certain parcels comprising all or a portion of the Premises to OTPC or its
various affiliates in consideration for such payment as Tower North may agree.
By way of example and not limitation, Tower North may enter into agreements
similar in effect to that certain Agreement of Purchase and Sale by and between
Four Tower Bridge Associates and Tower Bridge Land Holding Associates I.
From time to time, upon the agreement of Tower North to assign its
interest, the Montgomery County Development Corporation ("MCDC") may agree to
transfer all or a portion of its fee interest in and to the parcels assigned by
Tower North to OTPC, OTNA or an affiliate of either of them at the direction of
Tower North in consideration for the payment required by its lease with Tower
North or as MCDC may otherwise agree.
OTPC and OTNA desire to agree that if Tower North shall assign its interest
in any one or more portions of the Premises to OTPC, OTNA or any party now or
hereafter owned by, owning, controlled by or controlling either of them,
directly or indirectly, for development, OTPC, OTNA or such other party shall
offer to BOP the right to participate in the acquisition and development of such
portion or portions of the Premises under and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, OTPC and OTNA hereby agree as follows:
<PAGE>
A. Provisions with Respect to Multi-tenant Office Buildings
1. Notice of Development. When OTPC, OTNA or any party now or hereafter
owned by, owning, controlled by or controlling either of them (any such entity,
an "OTP Development Entity") desires to acquire, for purposes of developing a
multi-tenant commercial office building to be owned by the OTP Development
Entity and leased to commercial office tenants, a parcel consisting of all or
any portion of the Premises (such parcel, as the same may be modified to fit the
scope of the Multi-tenant Project, as hereinafter defined, a "Multi-tenant
Development Parcel"), the OTP Development Entity shall deliver to BOP notice
(the "Multi-tenant Development Notice") of this desire and of the terms under
which the OTP Development Entity would agree to acquire such Premises or portion
thereof. Together with such notice, the OTP Development Entity shall send BOP
the following information with regard to such proposed acquisition or
development (each particular development, a "Multi-tenant Project"):
a. The estimated purchase price for the land, including both the
amount payable to the MCDC, if any, and the cost payable to Tower North, if any;
b. The following: (i) a feasibility and market analysis of such
proposed development; (ii) a financial pro forma of such proposed development;
(iii) a proposed development schedule, and (iv) a general description of the
nature of the improvements and use contemplated. If any additional information
is provided to the existing partners of Tower Bridge North Associates as
required by Section 4.11(c) of the Agreement of Limited Partnership of Tower
Bridge North Associates (the "Tower North Partnership Agreement"), the OTP
Development Entity shall supply such information to BOP no later than the date
of delivery of the Multi-Tenant Development Notice;
c. A copy of any leases, lease proposals, or other information
regarding potential tenants of the Multi-tenant Project, and, if no leases or
lease proposals are included, information regarding comparable tenants and
vacancy rates in other commercial multi-tenant office buildings in the
Conshohocken/West Conshohocken submarket;
d. The required equity to be contributed by BOP at the construction
stage, as well as the proposed mortgage debt to be incurred at the construction
stage in order to participate in the development of the Multi-tenant Project;
e. The required equity to be contributed by BOP (or to remain in the
Multi-Tenant Project, if previously contributed) upon completion of construction
and refinance of the construction loan, if any, as well as the proposed mortgage
debt to be incurred at the completion of the construction stage in order to
participate in the development of the Multi-tenant Project;
f. The development fees as well as the amount required for general
overhead and administration for the Project to be payable to the OTP Development
Entity or its affiliates; and
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g. Any other economic terms which would cause the Development
Partnership Agreement, as hereinafter defined, to materially differ in substance
from that hereinafter prescribed.
The information provided in subsections (b) and (c), above, or any
other studies, projections or other information, shall not constitute a
representation or warranty as to the physical condition or environmental
condition of the Premises. Any budgets, projections of cash flow and leasing
information delivered to BOP shall constitute only an example of possible
outcomes and not a representation or warranty of future profitability of the
Multi-tenant Project. The determination of the items set forth in subsections
(d), (e), (f) and (g) shall be at the election of the OTP Development Entity, in
its sole discretion.
2. Grant of Right of First Offer of Participation. Upon the giving of
the Multi-Tenant Development Notice, and upon BOP's compliance with Section A(3)
hereof, BOP shall have the right to participate, through the formation of a
single-purpose entity formed by BOP similar to the entities owned directly or
indirectly by BOP or Brandywine Realty Trust as a partner of Four Tower Bridge
Associates (such entity, the "BOP-Sub"), in the ownership and development of the
Multi-tenant Project upon the terms and conditions as follows:
a. BOP-Sub shall become a partner with the OTP Development Entity in a
partnership (the "Development Partnership") to be formed for the acquisition and
development of the Multi-Tenant Development Parcel pursuant to a partnership
agreement (the "Development Partnership Agreement") in the same form as that of
Four Tower Bridge Associates, except such modifications as are necessary to
confirm the economic terms of the partnership as herein set forth and any other
particular aspects of the Multi-tenant Project which differ from the project
known as Four Tower Bridge.
b. The economic terms of the Development Partnership Agreement shall be
as set forth in the Multi-Tenant Development Notice and as follows:
i. The amount of equity initially contributed by BOP or BOP-Sub
(which shall constitute BOP Preference Capital as defined in Article I of the
Development Partnership Agreement) shall be equal to the amount specified in the
Multi-Tenant Development Notice; provided, however, that in the event the
Project Costs through the completion of construction of the Multi-tenant Project
materially exceed the amount projected in the budget supplied in connection with
the information supplied prior to execution of the Development Partnership
Agreement and no mortgage debt is provided to finance such excess, any excess
Project Costs shall be funded pursuant to Sections 3.03, 3.04 and 3.05 of
Article III of the Development Partnership Agreement.
ii. The BOP Preferred Cumulative Return on the BOP Preference
Capital (both as defined in Article I of the Development Partnership Agreement)
with regard to
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the capital contribution of BOP or BOP-Sub described in Section 3.01 and Exhibit
"A" of the Development Partnership Agreement shall be equal to nine percent (9%)
per annum;
iii. If the OTP Development Entity contributes capital to the
Development Partnership concurrently with BOP's contribution of the BOP
Preference Capital, the capital contributed by the OTP Development Entity shall
have the right to the same return, with the same priority, as the BOP Preference
Capital.
iv. If leases for 50% of the rentable square footage of the
Multi-tenant Project or less shall have been executed by prospective tenants of
the Multi-tenant Project on the date the Development Partnership Agreement shall
have been executed and delivered by all parties thereto, the Participation
Percentage of BOP-Sub under the Development Partnership Agreement shall be equal
to sixty-five percent (65%).
If leases for in excess of 50% of the rentable square
footage of the Multi-tenant Project shall have been executed by prospective
tenants of the Multi-tenant Project on the date the Development Partnership
Agreement shall have been executed and delivered by all parties thereto, the
Participation Percentage of BOP-Sub under the Development Partnership Agreement
shall be as set forth in the following table:
IF THE SQUARE FOOTAGE LEASED THEN THE PARTICIPATION
IS: PERCENTAGE OF BOP-SUB SHALL
BE:
More than 50% and up to 55% 64%
More than 55% and up to 60% 63%
More than 60% and up to 65% 62%
More than 65% and up to 70% 61%
More than 70% and up to 75% 60%
More than 75% and up to 80% 59%
More than 80% and up to 85% 58%
More than 85% and up to 90% 57%
More than 90% and up to 95% 56%
More than 95% and up to 100% 55%
Notwithstanding the foregoing, if the OTP Development Entity
contributes capital to the Development Partnership initially and concurrently
with the
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contribution of BOP Preference Capital, the Participation Percentage of the
BOP-Sub shall be reduced to be equal to the product of the following: the
Participation Percentage of the BOP-Sub (in the absence of any contribution by
the OTP Development Entity) multiplied by a fraction, the numerator of which is
the amount of the contribution of BOP Preference Capital and the denominator of
which is the sum of the contribution of BOP Preference Capital plus the
contribution by the OTP Development Entity. In no event shall the required BOP
Preference Capital be reduced, without BOP's consent, to an amount which is less
than one-half of the initial equity contribution under the Development
Partnership Agreement.
v. No guarantees (whether of payment, completion or otherwise)
shall be provided by the OTP Development Entity or Donald W. Pulver without its
or his consent, all such guarantees being provided by BOP or such affiliate
thereof as shall be approved by the applicable lender, and no collateral other
than the Multi-Tenant Project itself shall be required to be given as security
for any loan.
vi. To the extent any other economic terms and conditions not
included in the clauses set forth as items (i) through (v) above are required by
the OTP Development Entity, provided such terms and conditions do not change the
terms and conditions set forth in items (i) through (v) above, the OTP
Development Entity shall be permitted to incorporate such terms and conditions,
in its sole discretion.
The right of first offer set forth above shall be subject to the
Development Partnership's acquisition of the Multi-Tenant Development Parcel
from MCDC, free of the rights of the partners of Tower North as described in the
recitals hereof. In the event the Development Partnership is unable, for any
reason, to acquire the Multi-Tenant Development Parcel, none of BOP, BOP-Sub or
any entity purporting to benefit from this Right of First Offer will have any
claim against the OTP Development Entity, OTPC, OTNA, or any other person or
entity directly or indirectly controlling any of them, including, but not
limited to Donald W. Pulver.
3. Exercise of Right of First Offer.
a. If, by reply notice given no later than the Reply Date, as
hereinafter defined, BOP notifies the OTP Development Entity that BOP has
decided to participate in the Development Partnership as hereinafter set forth,
then the OTP Development Entity shall instruct its attorneys to prepare the
Development Partnership Agreement containing the terms set forth in Section A(2)
hereof. BOP-Sub shall execute such Development Partnership Agreement and
deliver it to the OTP Development Entity within fifteen (15) days after receipt
of the Development Partnership Agreement with all exhibits attached, and BOP
shall join in the Development Partnership Agreement within such period for the
purpose of confirming that it will make the equity contributions required
pursuant to the Development Partnership Agreement. If BOP fails to give the
notice set forth herein or BOP-Sub or BOP fail to execute and deliver the
Development Partnership Agreement as set forth herein, BOP's right to
participate in the Development Partnership and the development of the
Multi-Tenant Development Parcel shall be
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deemed waived, whereupon neither BOP nor BOP-Sub shall have any further
rights under the Right of First Offer as to the Development Partnership and
the Multi-Tenant Development Parcel (except as provided in subsection
A(3)(c), below), but otherwise BOP and BOP-Sub shall have no liability in
respect thereof. BOP's rights pursuant to this Right of First Offer as to
any other phase of development of the Premises not identified in the
Multi-Tenant Development Notice and the other information supplied in
accordance with Section A(1) hereof shall not be affected by such waiver.
The OTP Development Entity, OTNA, OTPC, or any affiliate thereof shall
thereafter have the right to acquire the Multi-Tenant Development Parcel on
any terms they see fit with the intent of developing Substantially the Same
Multi-tenant Project, as hereinafter defined, on Substantially the Same Terms
and Conditions, as hereinafter defined. Such acquisition and development may
include the offer of interests to other partners and sources of funding, and,
subject to subsection A(3)(c), below, none of BOP, BOP-Sub or any entity
purporting to benefit from this Right of First Offer will have any claim by
reason thereof against the OTP Development Entity, OTPC, OTNA, or any other
person or entity directly or indirectly controlling any of them, including,
but not limited to Donald W. Pulver.
The term "Reply Date," as used herein, shall mean the later to
occur of the following events (i) the date which is twenty (20) days after the
date the OTP Development Entity gives the Multi-Tenant Development Notice as
provided herein, or (ii) the date which is forty-five (45) days after the date
the OTP Development Entity delivers the information set forth in subsections
A(1)(a)-(c) hereof to BOP.
b. Following the execution of the Development Partnership Agreement,
the Development Partnership, acting by mutual consent of the general partners,
shall in good faith attempt to negotiate and agree upon a contract for purchase
of the Multi-Tenant Development Parcel for a purchase price consistent with that
set forth in subsection (A)1(a), above, it being understood and agreed that the
form of agreement of sale agreed upon for the acquisition of land by Four Tower
Bridge Associates from Tower Bridge Land Holding Associates shall be an
acceptable model, subject to negotiation of particular economic terms and any
other particular terms arising from aspects of the Multi-tenant Project which
differ from the project known as Four Tower Bridge. If they cannot reach an
agreement with MCDC and Tower North within ninety (90) days after the date the
Development Partnership Agreement has been fully executed and delivered by all
partners thereof, then either general partner of the Development Partnership
shall have the right to terminate the Development Partnership Agreement,
whereupon neither BOP nor BOP-Sub shall have any further rights under the Right
of First Offer as to the Development Partnership and the Multi-Tenant
Development Parcel, subject to subsection A(3)(c), below, but otherwise BOP and
BOP-Sub shall have no liability in respect thereof. The OTP Development Entity,
OTNA, OTPC, or any affiliate thereof shall thereafter have the right to acquire
the Multi-Tenant Development Parcel on any terms they see fit with the intent of
developing Substantially the Same Multi-tenant Project on Substantially the Same
Terms and Conditions, as hereinafter defined, which may include the offer of
interests to other partners and sources of funding, and none of BOP, BOP-Sub or
any entity purporting to benefit from this Right of First Offer will have any
claim by reason thereof against the OTP Development Entity,
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OTPC, OTNA, or any other person or entity directly or indirectly controlling
any of them, including, but not limited to Donald W. Pulver.
c. Notwithstanding the foregoing, if (i) BOP and BOP-Sub are deemed
to waive their rights under subsection (a) with respect to any particular
Multi-Tenant Development Parcel or the Development Partnership Agreement as to
that Multi-Tenant Development Parcel is terminated as set forth in subsection
(b) hereof, and (ii) having acquired such Multi-Tenant Development Parcel, the
OTP Development Entity itself (or through an entity in which the OTP Development
Entity shall have an ownership interest) has obtained or obtains land
development approval to commences a project on the Multi-Tenant Development
Parcel within twelve (12) months after the Multi-Tenant Development Notice which
is not Substantially the Same Multi-tenant Project as outlined in the
Multi-Tenant Development Notice or if the OTP Development Entity is prepared to
enter into an agreement for a Multi-tenant Project within such twelve (12) month
period with another investor-entity which is not upon Substantially the Same
Terms and Conditions as outlined in the Multi-Tenant Development Notice, the
right of first offer as to such Multi-Tenant Development Parcel shall be
reinstated, and the OTP Development Entity shall have the obligation to offer
the development of such Multi-Tenant Development Parcel to BOP by sending to BOP
a revised Multi-Tenant Development Notice. Such revised Multi-Tenant
Development Notice shall identify any changes to the Multi-tenant Project which
make the project not Substantially the Same Multi-tenant Project and shall
identify terms and conditions which make the project not on Substantially the
Same Terms and Conditions as set forth in the original Multi-tenant Development
Notice. BOP shall have the right to review such revised Multi-tenant
Development Notice and act upon it in accordance with Sections A(1) and A(2)
hereof, except that the Reply Date for the purpose of review of such notice
shall be five (5) business days following receipt of such revised Multi-tenant
Development Notice with the additional information required by this subsection
(c).
Notwithstanding anything to the contrary contained herein, if the
OTP Development Entity (or any entity in which the OTP Development Entity shall
have an interest) acquires the Multi-Tenant Development Parcel after initially
complying with Sections A(1) and A(2) hereof and after BOP and BOP-Sub have no
further right to participate in a Multi-Tenant Development Project as set forth
in Sections 3(a) and the first paragraph of Section 3(b) hereof, in no event
shall a subsequent sale of that Multi-Tenant Development Parcel to a third party
unaffiliated with the OPT Development Entity for its own use or development
constitute an event requiring the reinstatement of the right of first offer as
to such Multi-Tenant Development Parcel, even if the OTP Development Entity or
any person or entity affiliated therewith shall provide services in connection
with such use or development.
d. The term "Substantially the Same Multi-tenant Project," as used
herein, shall mean a real estate development for the general use classification
of a Multi-tenant Project; provided, however, that the addition of one or more
tenants or changes in the cost or scope of a development shall not be deemed to
cause it to become not Substantially the Same Multi-tenant Project.
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e. The term "Substantially the Same Terms and Conditions" shall mean
that (1) the fees and general overhead and administration to be paid to
Developer are at least 90% of the fees and general overhead and administration
set forth in the original Multi-Tenant Development Notice; (2) the equity
required to be contributed by the proposed investor-entity upon completion of
the Multi-Tenant Project, as a percentage of project cost, is greater than a
percentage which is five percentage points less than that required of BOP under
the original Multi-tenant Development Notice; (3) the percentage interest to be
given to the proposed investor-entity is less than a percentage which is five
percentage points more than that offered to BOP under the original Multi-tenant
Development Notice; (4) the preferred return, if any, offered to such investor
is no more than 10% per annum; and (5) no other payment is offered to such
investor-entity in consideration for the investor entity's agreement to maintain
the terms on Substantially the Same Terms and Conditions as reflected in clauses
(1) through (4) and (6) hereof.
B. Provisions with Respect to Projects Other than Multi-tenant Office
Buildings
1. Notice of Development. When an OTP Development Entity desires to
acquire, for purposes other than developing a multi-tenant commercial office
building to be owned by the OTP Development Entity and leased to commercial
office tenants, a parcel consisting of all or any portion of the Premises, in
which an investment of equity shall be required and in which the OTP Development
Entity shall receive compensation other than by reason of its share of sales
proceeds as a partner in Tower North or for providing services (each, as the
same may be modified to fit the scope of the other Project as hereinafter
defined, an "Other Development Parcel"), the OTP Development Entity shall
deliver to BOP notice (the "Other Development Notice") of this desire and of the
terms under which the OTP Development Entity would agree to acquire such
Premises or portion thereof. Together with such notice, the OTP Development
Entity shall send BOP the following information with regard to such proposed
acquisition or development (each particular development, an "Other Project"):
a. The estimated purchase price for the land, including both the
amount payable to the MCDC, if any, and the cost payable to Tower North, if any;
b. Information regarding the proposed Other Project, including the
use of the Other Project, the identity of any joint venturer, the identity of
any build-to-suit purchaser or tenant, if any;
c. The required equity to be contributed by the OTP Development
Entity in order to participate in the development of the Other Project;
d. The required equity to be contributed by BOP and BOP-Sub in order
to participate in the development of the Other Project;
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e. The proposed compensation to the OTP Development Entity or any
affiliate thereof by reason of services performed;
f. The proposed compensation to the OTP Development Entity or any
affiliate thereof and to BOP and BOP-Sub by reason of equity contributed to the
Other Project;
g. The development fees as well as the amount required for general
overhead and administration for the Project to be payable to the OTP Development
Entity or its affiliates;
h. Any other economic term which would cause the Other Project
Investment Agreement, as hereinafter defined, to materially differ in substance
from that otherwise prescribed herein.
The information provided in subsection (b), above, or any other
studies, projections or other information, shall not constitute a representation
or warranty as to the physical condition or environmental condition of the
Premises. Any budgets and projections of cash flow delivered to BOP shall
constitute only an example of possible outcomes and not a representation or
warranty of future profitability of the Other Project. The determination of the
items set forth in subsections (c), (d), (e), (f), (g) and (h) shall be at the
election of the OTP Development Entity, in its sole discretion.
2. Grant of Right of First Offer of Participation. Upon the giving of
the Other Development Notice, and upon BOP's compliance with Section B(3)
hereof, BOP shall have the right to participate, through the formation of a
single-purpose entity formed by BOP similar to the entities owned directly or
indirectly by BOP as a partner of Four Tower Bridge Associates (such entity, the
"BOP-Sub"), in the ownership and development of the Other Project upon the terms
and conditions as follows:
a. BOP-Sub and the OTP Development Entity shall form a partnership (the
"Other Project Investment Partnership") which shall acquire an interest in the
entity (the "Development Company") to be formed for the development of the Other
Development Parcel pursuant to documentation (the "Development Governing
Documents") in such form as the OTP Development Entity and any unrelated joint
venturer (i.e., an entity which seeks to have the Other Development Parcel
developed by the OTP Development Entity) shall agree. Under no circumstances
shall BOP, BOP-Sub or any entity affiliated therewith be entitled to any portion
of the compensation to which the OTP Development Entity or any entity affiliated
therewith is entitled by reason of its share of purchase proceeds due OTNA or by
reason of the provision of services consistent with arms length transactions by
the OTP Development Entity.
b. The Other Project Investment Partnership shall be formed pursuant to a
partnership agreement (the "Other Project Investment Partnership Agreement") in
the same form as that of Four Tower Bridge Associates, except such modifications
as are necessary to reflect that the Other Project Investment Partnership is a
passive investor in the Development Company
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and such modifications as are necessary to confirm the economic terms of the
partnership as herein set forth and any other particular aspects of the Other
Project which differ from the project known as Four Tower Bridge.
c. The economic terms of the Other Project Investment Partnership
Agreement shall be as set forth in the Other Development Notice and as follows:
i. The amount of equity initially contributed by BOP or BOP-Sub
(which shall constitute BOP Preference Capital as defined in
Article I of the Other Project Investment Partnership
Agreement) shall be equal to the amount specified in the
Other Development Notice; provided, however, that in the
event the Project Costs through the completion of
construction of the Other Project materially exceed the
amount projected in the budget supplied in connection with
the information supplied prior to execution of the Other
Project Investment Partnership Agreement and the Other
Project Investment Partnership is required to finance such
excess, any excess Project Costs required to be funded by
the Other Project Investment Partnership shall be funded
pursuant to Sections 3.03, 3.04 and 3.05 of Article III of
the Other Project Investment Partnership Agreement.
ii. The BOP Preferred Cumulative Return on the BOP Preference
Capital (both as defined in Article I of the Other Project
Investment Partnership Agreement) with regard to the capital
contribution of BOP or BOP-Sub described in Section 3.01 and
Exhibit "A" of the Other Project Investment Partnership
Agreement shall be equal to nine percent (9%) per annum;
iii. If the OTP Development Entity contributes capital to the
Other Project Investment Partnership concurrently with BOP's
contribution of the BOP Preference Capital, the capital
contributed by the OTP Development Entity shall have the
right to the same return, with the same priority, as the BOP
Preference Capital.
iv. The Participation Percentage of BOP-Sub under the Other
Project Investment Partnership Agreement shall be equal to
fifty-five percent (55%). Notwithstanding the foregoing, if
the OTP Development Entity contributes capital to the Other
Project Investment Partnership initially and concurrently
with the contribution of BOP Preference Capital, the
Participation Percentage of the BOP-Sub shall be reduced to
be equal to the product of the following: fifty-five percent
(55%) multiplied by a
10
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fraction, the numerator of which is the amount of the
contribution of BOP Preference Capital and the denominator
of which is the sum of the contribution of BOP Preference
Capital plus the contribution by the OTP Development Entity.
In no event shall the required BOP Preference Capital be
reduced below one-half of the investment required to be
contributed by the Other Project Investment Partnership
under the Development Governing Documents without the
consent of BOP.
No guarantees (whether of payment, completion or otherwise) shall
be provided by the OTP Development Entity or Donald W. Pulver without its or his
consent, all such guarantees being provided by BOP or such affiliate thereof as
shall be approved by the applicable lender or joint venturer, and no collateral
other than the Other Project itself shall be required to be given as security
for any loan.
e. The right of first offer set forth above shall be subject to the
Development Company's acquisition of the Other Development Parcel from MCDC,
free of the rights of the partners of Tower North as described in the recitals
hereof. In the event the Development Company is unable, for any reason, to
acquire the Other Development Parcel, none of BOP, BOP-Sub or any entity
purporting to benefit from this Right of First Offer will have any claim against
the OTP Development Entity, OTPC, OTNA, or any other person or entity directly
or indirectly controlling any of them, including, but not limited to Donald W.
Pulver.
3. Exercise of Right of First Offer.
a. If, by reply notice given no later than the Other Project Reply
Date, as hereinafter defined, BOP notifies the OTP Development Entity that BOP
has decided to participate in the Development Company as herein set forth, then
the OTP Development Entity shall instruct its attorneys (or the attorneys of any
joint venture partner) to prepare the Development Governing Documents and the
Other Project Investment Partnership Agreement containing the terms set forth in
Section B(2) hereof. BOP-Sub shall execute such Development Governing Documents
and the Other Project Investment Partnership Agreement and deliver them to the
OTP Development Entity within fifteen (15) days after receipt of the Development
Governing Documents and Other Project Investment Partnership Agreement with all
exhibits attached, and BOP shall join in the Development Governing Documents and
Other Project Investment Partnership Agreement within such period for the
purpose of confirming that it will make the equity contributions required
pursuant to the Development Governing Documents and the Other Project Investment
Partnership Agreement. If BOP fails to give the notice set forth herein or
BOP-Sub or BOP fail to execute and deliver the Development Governing Documents
and the Other Project Investment Partnership Agreement as set forth herein,
BOP's right to participate in the Development Company, the Other Project
Investment Partnership and the development of the Other Development Parcel shall
be deemed waived, whereupon neither BOP nor BOP-Sub shall have any further
rights under the Right of First Offer as to the Development
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Company, the Other Project Investment Partnership and the Other Development
Parcel, but otherwise BOP and BOP-Sub shall have no liability in respect
thereof. BOP's rights pursuant to this Right of First Offer as to any other
phase of development of the Premises not identified in the Other Development
Notice and the other information supplied in accordance with Section B(1) hereof
shall not be affected by such waiver. The OTP Development Entity, OTNA, OTPC,
or any affiliate thereof shall thereafter have the right to acquire the Other
Development Parcel on any terms they see fit with the intent of developing
Substantially the Same Other Project on Substantially the Same Other Terms and
Conditions. Such acquisition and development may include the offer of interests
to other partners and sources of funding, and none of BOP, BOP-Sub or any entity
purporting to benefit from this Right of First Offer will have any claim by
reason thereof against the OTP Development Entity, OTPC, OTNA, or any other
person or entity directly or indirectly controlling any of them, including, but
not limited to Donald W. Pulver.
The term "Other Reply Date," as used herein, shall mean the later
to occur of the following events (i) the date which is twenty (20) days after
the date the OTP Development Entity gives the Other Development Notice as
provided herein, or (ii) the date which is forty-five (45) days after the date
the OTP Development Entity delivers the information set forth in subsections
B(1)(a)-(e) hereof to BOP.
b. Following the execution of the Development Governing
Documents, the Development Company shall in good faith attempt to negotiate
and agree upon a contract for purchase of the Other Development Parcel for a
purchase price consistent with that set forth in subsection B(1)(a), above,
it being understood and agreed that the form of agreement of sale may be
agreed upon by the Development Company in its discretion so long as neither
BOP nor Brandywine Realty Trust nor any of trustee, partner or shareholder of
either shall have personal liability thereunder. If the Development Company
cannot reach an agreement with MCDC and Tower North within ninety (90) days
after the date the Development Governing Documents have been fully executed
and delivered by all partners thereof, then any entity with an interest in
the Development Company shall have the right to terminate the Development
Governing Documents, whereupon neither BOP nor BOP-Sub shall have any further
rights under the Right of First Offer as to the Development Partnership and
the Other Development Parcel subject to subsection (c) hereof, but otherwise
BOP and BOP-Sub shall have no liability in respect thereof. The OTP
Development Entity, OTNA, OTPC, or any affiliate thereof or joint venturer
therewith shall thereafter have the right to acquire the Other Development
Parcel on any terms they see fit with the intent of developing the Other
Development Parcel for Substantially the Same Other Project on Substantially
the Same Other Terms and Conditions, which may include the offer of interests
to other partners and sources of funding, and none of BOP, BOP-Sub or any
entity purporting to benefit from this Right of First Offer will have any
claim by reason thereof against the OTP Development Entity, OTPC, OTNA, or
any other person or entity directly or indirectly controlling any of them,
including, but not limited to Donald W. Pulver or any joint venturer or any
officer, shareholder, partner or principal thereof.
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c. Notwithstanding the foregoing, if (i) BOP and BOP-Sub are deemed
to waive their rights under subsection (a) with respect to any particular Other
Development Parcel or the Development Governing Documents as to that Other
Development Parcel are terminated as set forth in subsection (b) hereof, and
(ii) the OTP Development Entity (or any entity in which the OTP Development
Entity shall have an interest) obtains land development approval to commence a
project which is not Substantially the Same Other Project on such Other
Development Parcel within twelve (12) months after the date of the Other
Development Notice pertaining to such Other Development Parcel, or if the OTP
Development Entity is prepared to enter into a written agreement within such
twelve (12) month period for an Other Project which is not on Substantially the
Same Other Terms and Conditions as outlined in the Other Development Notice, the
right of first offer as to such Other Development Parcel shall be reinstated,
and the OTP Development Entity shall have the obligation to offer the
development of such Other Development Parcel to BOP by sending to BOP a revised
Other Development Notice. Such revised Other Development Notice shall identify
any changes to the Other Project which make the project not Substantially the
Same Other Project and shall identify terms and conditions which make the
project not on Substantially the Same Terms and Conditions as set forth in the
original Other Development Notice. BOP shall have the right to review such
revised Other Development Notice and act upon it in accordance with Sections
B(1) and B(2) hereof, except that the Reply Date for the purpose of review of
such notice shall be five (5) business days following receipt of such revised
Other Development Notice with the additional information required by this
subsection (c).
Notwithstanding anything to the contrary contained herein, if the
OTP Development Entity (or any entity in which the OTP Development Entity shall
have an interest) acquires the Other Development Parcel after initially
complying with Sections B(1) and B(2) hereof, in no event shall a subsequent
sale of that Other Development Parcel to a third party unaffiliated with the OPT
Development Entity for its own use or development constitute an event requiring
the reinstatement of the right of first offer as to such Other Development
Parcel, even if the OTP Development Entity or any person or entity affiliated
therewith shall provide services in connection with such use or development.
d. The term "Substantially the Same Other Project," as used herein,
shall mean a real estate development for the general use classification of a
referenced Other Project; provided, however, that the addition of one or more
occupants or changes in the cost or scope of a development shall not be deemed
to cause it to become not Substantially the Same Other Project.
e. The term "Substantially the Same Other Terms and Conditions," as
used herein, shall mean that (1) the equity required to be contributed by the
proposed investor-entity, as a percentage of project cost, is greater than a
percentage which is five percentage points less than that required of BOP under
the original Other Development Notice, (2) the percentage interest to be given
to the proposed investor-entity is less than a percentage which is five
percentage points more than that offered to BOP under the original Other
Development Notice;
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(3) the preferred return, if any, offered to such investor is no more than 10%
per annum; and (4) no other payment is offered to such investor-entity in
consideration for the investor entity's agreement to maintain the terms on
Substantially the Same Terms and Conditions as reflected in clauses (1) through
(3) hereof.
C. Sale of Land; Provision of Services; No Equity Investment Required
BOP acknowledges and agrees as follows, as a material condition to this
Agreement:
1. OTNA IS THE MANAGING GENERAL PARTNER OF TOWER NORTH AND HAS CERTAIN
FIDUCIARY DUTIES IN CONNECTION WITH SUCH ROLE. CERTAIN PARTNERS IN TOWER NORTH
ALSO HAVE CERTAIN RIGHTS TO PARTICIPATE IN THE DEVELOPMENT OF THE PREMISES, AND
SUCH PARTNERS MAY CHOOSE TO EXERCISE SUCH RIGHTS. TO THE EXTENT OTNA MAKES ANY
DECISION AS MANAGING GENERAL PARTNER UNDER THE TOWER NORTH PARTNERSHIP AGREEMENT
OR REGARDING THE DISPOSITION OF LAND BY TOWER NORTH OR AT ITS DIRECTION, OR TO
THE EXTENT OTNA OTHERWISE DEVELOPS THE PREMISES AS REQUIRED BY TOWER NORTH OR
THE TOWER NORTH PARTNERSHIP AGREEMENT, BOP AND BOP-SUB SHALL HAVE NO CLAIM
AGAINST OTPC, OTNA, OR ANY OTHER PERSON OR ENTITY DIRECTLY OR INDIRECTLY
CONTROLLING ANY OF THEM, INCLUDING, BUT NOT LIMITED TO DONALD W. PULVER, WHETHER
OR NOT SUCH DECISION IS ADVERSE TO BOP OR BOP-SUB.
2. Where the sole compensation to an OTP Development Entity or OTNA
arises from the provision of services for a fee consistent with an arms-length
transaction or the disposition of Tower North's interest in the Premises (or a
combination of the two), BOP and BOP-Sub shall have no right of first offer or
other right to participate in such compensation or the activities giving rise
thereto. Where no investment of equity is required to be made in an Other
Project, BOP and BOP-Sub shall have no right of first offer or other right to
participate in such Other Project.
D. Miscellaneous.
1. Notices. All notices, demands, requests, calls and other
communications required by or permitted under this Agreement shall be in writing
(whether or not a writing is expressly required hereby), and shall be directed
as follows:
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a. If to the OTP Development Entity:
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street, Suite 900
West Conshohocken, PA 19428
b. If to BOP or BOP-Sub:
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
Any entity may specify a different address by sending to the other
party a notice by registered or certified mail of such different address. Any
notice, demand, request, call or other communication required or permitted to be
given or made under this Agreement will be deemed given or made (i) when
delivered by hand delivery at its address set forth above, or (ii) three
business days following its deposit in the U.S. Mail, addressed to such address,
postage prepaid, registered or certified, return receipt requested (with a copy
by regular U.S. mail, first class, postage prepaid), or (iii) on the next
business day following its deposit with Federal Express or another nationally
recognized express delivery service, addressed to such address (with a copy by
regular U.S. mail, first class, postage prepaid).
2. Representations and Warranties. The parties hereto warrant and
represent to one another that the execution and delivery of this Agreement will
not result in a breach of, or constitute a default under, any indenture,
mortgage or agreement to which any of the respective parties hereto is a party
or by which its assets are bound.
3. Binding Effect; No Assignment. All of the terms and conditions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
assigns, provided, however, that no party hereto shall have any right to assign,
hypothecate, pledge or grant a security interest in this Agreement or any
interest herein to any person or entity without the express written consent of
the other, which consent may be withheld for any reason or for no reason.
Notwithstanding the foregoing, the rights and obligations of the BOP Sub as used
above may be assigned to an entity which meets the requirements set forth in
subsection 7.01(B) of the Partnership Agreement of Four Tower Bridge Associates.
4. Expiration. This Agreement shall automatically expire on the date
which is the fourth (4th) anniversary hereof unless before such time it shall
have been extended or terminated in writing.
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5. No Recording. This Agreement shall not be lodged for recording in any
place or office of public record and any action in violation of this provision
shall be deemed to be a default hereunder and permit the other party hereto to
terminate this Agreement immediately and without further notice.
Notwithstanding the foregoing, Brandywine Realty Trust, the general partner of
BOP, may make any filings it deems necessary to comply with securities laws with
the Securities and Exchange Commission disclosing this transaction.
6. Brokerage. The parties hereto represent and warrant that each has not
dealt with any broker, agent, finder or other intermediary in connection with
this Agreement other than Thomas J. Maher & Co., payment of whom is covered by a
separate agreement dated October 15, 1997. The parties hereto agree to
indemnify, defend and hold the other harmless of, from and against any damages,
costs, claims, losses or liabilities whatsoever (including attorney's fees,
expenses and court costs) arising from any breach by the other of the foregoing
warranties, representations and agreements.
7. Time of the Essence. Time, wherever mentioned herein, shall be of the
essence of this Agreement.
8. Written Evidence of Waiver. If BOP shall fail to exercise its right
of first offer within the applicable time period set forth herein for a
particular Multi-tenant Project or Other Project, the OTP Development Entity
may, but shall not be obligated to, request that BOP so certify in writing
formally waiving its right of first offer, whereupon BOP shall execute and
deliver such certification within five (5) business days after receipt of
written request therefor.
9. Entire Agreement. This is the entire agreement between the parties
hereto regarding the transaction contemplated hereby and there are no other
terms, covenants, conditions, warranties, representations or statements, oral or
otherwise, of any kind whatsoever. Any agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of this
Agreement in whole or in part unless such agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.
10. Headings. The headings incorporated in this Agreement are for
convenience and reference only and are not a part of this Agreement and do not
in any way control, define, limit, or add to the terms and conditions hereof.
11. Governing Law. This Agreement shall be construed, interpreted and
governed by the laws of the Commonwealth of Pennsylvania.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and such counterparts together
shall constitute one and the same instrument.
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13. Limitations on Recourse.
a. No recourse shall be had for any of the obligations of the BOP or
BOP-Sub hereunder or for any claim based thereon or otherwise in respect thereof
against any past, present or future trustee, shareholder, officer or employee of
Brandywine Realty Trust, whether by virtue of any statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, all of such liability
being expressly waived and released by each of the other parties hereto.
b. No recourse shall be had for any of the obligations of the OTP, OTNA
or the OTP Development Entity hereunder or for any claim based thereon or
otherwise in respect thereof against any past, present or future trustee,
shareholder, officer or employee of OTP,
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whether by virtue of any statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all of such liability being expressly waived
and released by each of the other parties hereto.
14. Acquisition of Interests in Tower North. If BOP or any BOP-Sub
acquires any partnership interest in Tower North, this Agreement shall be null
and void, and neither BOP nor any BOP-Sub shall have any further right to
participate in any Multi-Tenant Project or any Other Project by reason of this
Agreement, it being understood and agreed that following the date of such
acquisition of interest in Tower North, BOP and all BOP-Subs shall derive any
right to develop the Premises under and through the Tower North Partnership
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Right of First
Offer Agreement the day and year first above written.
OLIVER TYRONE PULVER CORPORATION, a Pennsylvania
corporation, its duly authorized general partner
By: /s/Donald W. Pulver
---------------------------
Donald W. Pulver, President
OLIVER TOWER NORTH ASSOCIATES, a Pennsylvania
limited partnership
By: OLIVER TYRONE PULVER CORPORATION, a
Pennsylvania corporation, its duly authorized
general partner
By: /s/Donald W. Pulver
---------------------------
Donald W. Pulver, President
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: BRANDYWINE REALTY TRUST, its duly authorized
general partner
By: /s/Anthony A. Nichols, Sr.
--------------------------
Anthony A. Nichols, Sr.,
Chairman of the Board
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Exhibit 10.7
RIGHT OF FIRST OFFER AGREEMENT
(THREE TOWER BRIDGE)
THIS RIGHT OF FIRST OFFER AGREEMENT (the "Agreement") is made as of this
3rd day of November, 1997 by THREE TOWER BRIDGE ASSOCIATES, a Pennsylvania
limited partnership ("TTBA"), and BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership ("BOP").
BACKGROUND:
TTBA is the tenant and holder of a purchase option pursuant to a Lease
Agreement dated March 28, 1996, between Montgomery County Industrial Development
Corporation and TTBA (the "Lease Agreement") with regard to a certain parcel of
land and all the improvements located thereon identified on Exhibit "A" attached
hereto and made a part hereof (the "Premises").
The parties hereto desire to enter into this Agreement for the purpose of
confirming that in the event TTBA desires to sell the Premises or assign its
interest in the Lease Agreement, it shall first offer to sell the Premises or
assign such interest to BOP.
NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, TTBA hereby agrees as follows:
1. Right of First Offer; Procedure
a. If TTBA at any time during the term of this Agreement decides
that it is interested in selling the Premises or assigning its interest under
the Lease Agreement, TTBA shall so advise BOP by written notice as hereinafter
set forth (the "Offering Notice"). The Offering Notice shall outline the price
("Asking Price") TTBA shall seek to obtain in negotiations with any prospective
purchaser. If BOP, by reply notice given within twenty (20) days after the
Offering Notice, advises TTBA that it is interested in purchasing the Premises
or obtaining an assignment of its interest for substantially the same price and
terms, then TTBA and BOP shall in good faith attempt to negotiate and agree upon
a contract (a "Sale Contract") for purchase of the Premises, it being
understood, however that TTBA shall have no obligation to sell to BOP for a
price less than the Asking Price or upon terms other than those acceptable to
TTBA. If TTBA and BOP cannot agree within thirty (30) days after BOP's notice
of interest to TTBA, then TTBA shall be free to offer the Premises for sale to a
third party for substantially the same price and terms as specified in the
Offering Notice, and TTBA shall be free to negotiate, agree upon and close the
sale with such third party on substantially the same price and terms, free and
clear of any rights of BOP. "Substantially the same price and terms," as used
herein, means
<PAGE>
that the price shall be not more than ten percent (10%) less than the price
specified in TTBA's previous notice to BOP.
b. If, following failure of TTBA and BOP to agree upon a Sale
Contract, TTBA decides that it is interested in selling the Premises or
assigning its interest in the Lease Agreement for a price and on terms not
"substantially the same price and terms" as contained in the Offering Notice, or
if TTBA is unable to enter into an agreement to sell the Premises or assign its
interest upon "substantially the same price and terms" within one year after the
Offering Notice, TTBA shall so advise BOP by sending an additional Offering
Notice to BOP, and the process set forth in subsection 1(a) hereof shall be
repeated as if the additional Offering Notice were the original Offering Notice.
2. Miscellaneous.
a. Interest of Jacobs Engineering. BOP acknowledges and agrees that
TTBA may be admitting Jacobs Engineering Group Inc. as a seventy percent (70%)
limited partner in order to comply with requirements of the Pennsylvania
Industrial Development Authority. Such admission shall not be subject to any
right of first offer contained herein.
b. 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:
(i) If to TTBA
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street, Suite 900
West Conshohocken, PA 19428
(ii) If to BOP:
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
Any entity may specify a different address by sending to the
other party a notice by registered or certified mail of such different address.
Any notice, demand, request, call or other communication required or permitted
to be given or made under this Agreement will be deemed given or made (i) when
delivered by hand delivery at its address set forth above, or (ii) three
business days following its deposit in the U.S. Mail, addressed to such address,
postage
2
<PAGE>
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).
c. Representations and Warranties. The parties hereto warrant and
represent to one another that the execution and delivery of this Agreement will
not result in a breach of, or constitute a default under, any indenture,
mortgage or agreement to which any of the respective parties hereto is a party
or by which its assets are bound.
d. Binding Effect; No Assignment. All of the terms and conditions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
assigns, provided, however, that BOP shall have no right to assign, hypothecate,
pledge or grant a security interest in this Agreement or any interest herein to
any person or entity without the express written consent of TTBA, which consent
may be withheld for any reason or for no reason. Notwithstanding the foregoing,
the rights and obligations of BOP may be assigned to an entity which meets the
requirements set forth in subsection 7.01(B) of the Partnership Agreement of
Four Tower Bridge Associates.
e. Expiration. This Agreement shall automatically expire on the
date which is the fourth (4th) anniversary hereof unless before such time it
shall have been extended or terminated in writing.
f. No Recording. This Agreement shall not be lodged for recording
in any place or office of public record and any action in violation of this
provision shall be deemed to be a default hereunder and permit the other party
hereto to terminate this Agreement immediately and without further notice.
Notwithstanding the foregoing, Brandywine Realty Trust, the general partner of
BOP may make any filings it deems necessary to comply with securities laws with
the Securities and Exchange Commission disclosing this transaction.
g. Brokerage. The parties hereto represent and warrant that each
has not dealt with any broker, agent, finder or other intermediary in connection
with this Agreement other than Thomas J. Maher & Co., payment of whom is covered
by a separate agreement dated _______, 1997. The parties hereto agree to
indemnify, defend and hold the other harmless of, from and against any damages,
costs, claims, losses or liabilities whatsoever (including attorney's fees,
expenses and court costs) arising from any breach by the other of the foregoing
warranties, representations and agreements.
h. Time of the Essence. Time, wherever mentioned herein, shall be
of the essence of this Agreement.
i. Written Evidence of Waiver. If BOP shall fail to exercise its
right of first offer within the applicable time period set forth herein, TTBA
may, but shall not be obligated to,
3
<PAGE>
request that BOP so certify in writing formally waiving its right of first
offer, whereupon BOP shall execute and deliver such certification within five
(5) business days after receipt of written request therefor.
j. Savings Clause. In the event any portion of this Agreement shall
be deemed to violate that certain Open-end Mortgage and Security Agreement from
the Montgomery County Industrial Development Corporation and Three Tower Bridge
Associates, as mortgagor, and The Union Labor Life Insurance Company, as
mortgagee, such portion of this Agreement shall be of no force or effect, but
all remaining portions of this Agreement shall continue in full force and
effect.
k. Entire Agreement. This is the entire agreement between the
parties hereto regarding the transaction contemplated hereby and there are no
other terms, covenants, conditions, warranties, representations or statements,
oral or otherwise, of any kind whatsoever. Any agreement hereafter made shall
be ineffective to change, modify, discharge or effect an abandonment of this
Agreement in whole or in part unless such agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.
l. Headings. The headings incorporated in this Agreement are for
convenience and reference only and are not a part of this Agreement and do not
in any way control, define, limit, or add to the terms and conditions hereof.
m. Governing Law. This Agreement shall be construed, interpreted
and governed by the laws of the Commonwealth of Pennsylvania.
n. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and such counterparts together
shall constitute one and the same instrument.
o. Limitations on Recourse.
(i) No recourse shall be had for any of the obligations of
the BOP or BOP-Sub hereunder or for any claim based thereon or otherwise in
respect thereof against any past, present or future trustee, shareholder,
officer or employee of Brandywine Realty Trust, whether by virtue of any statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all of such liability being expressly waived and released by each of the other
parties hereto.
(ii) No recourse shall be had for any of the obligations of
TTBA hereunder or for any claim based thereon or otherwise in respect thereof
against any past, present or future partner or employee of TTBA or any
shareholder, officer, director or employee of any
4
<PAGE>
general partner of TTBA, whether by virtue of any statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, all of such liability
being expressly waived and released by each of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THREE TOWER BRIDGE ASSOCIATES
By: THREE OLIVER TOWER ASSOCIATES
By: THREE OLIVER TOWER CORPORATION,
general partner
By: /s/Donald W. Pulver
-------------------------------
Donald W. Pulver, President
BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership
By: BRANDYWINE REALTY TRUST, its duly
authorized general partner
By: /s/ Anthony A. Nichols, Sr.
---------------------------
Anthony A. Nichols, Sr.
Chairman of the Board
5
<PAGE>
Exhibit "A"
Legal Description
<PAGE>
Exhibit 10.8
RIGHT OF FIRST OFFER AGREEMENT
(ONE TOWER BRIDGE)
THIS RIGHT OF FIRST OFFER AGREEMENT (the "Agreement") is made as of this
3rd day of November, 1997 by OLIVER TOWER ASSOCIATES, a Pennsylvania limited
partnership ("OTA"), and BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership ("BOP").
BACKGROUND:
OTA is the managing general partner and a general partner and limited
partner of Tower Bridge Partners I, a Pennsylvania limited partnership (the
"Partnership") pursuant to an Amended and Restated Agreement of Limited
Partnership dated as of December 30, 1986 by and among OTA, Provestco, Inc., a
Delaware corporation ("Provestco"), and TB Land Associates Limited Partnership,
a Delaware limited partnership ("TBL") as modified on January 19, 1987 as
further modified by a Second Amendment to Amended and Restated Partnership
Agreement dated April 15, 1989 (the "Partnership Agreement") and attached hereto
as Exhibit "A", for the purpose of owning, developing and operating a certain
parcel of land and all the improvements located thereon identified on Exhibit
"B" attached hereto and made a part hereof (the "Premises").
The parties hereto desire to enter into this Agreement for the purpose of
confirming that in the event OTA desires to sell or assign its general or
limited partnership interests (each, an "Interest" and collectively,
"Interests") in the Partnership Agreement, it shall first offer to sell or
assign such interest to BOP.
NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, OTA hereby agrees as follows:
1. Right of First Offer; Procedure
a. If OTA at any time during the term of this Agreement decides that
it is interested in selling or assigning any Interest or Interests under the
Partnership Agreement, OTA shall so advise BOP by written notice as hereinafter
set forth (the "Offering Notice"). The Offering Notice shall outline the price
("Asking Price") OTA shall seek to obtain in negotiations with any prospective
purchaser. If BOP, by reply notice given within twenty (20) days after the
Offering Notice, advises OTA that it is interested in purchasing the Interest or
Interests, for substantially the same price and terms, then OTA and BOP shall in
good faith attempt to negotiate and agree upon a contract (a "Sale Contract")
for purchase of the Interest or Interests, it
<PAGE>
being understood, however that OTA shall have no obligation to sell to BOP for a
price less than the Asking Price or upon terms other than those acceptable to
OTA. If OTA and BOP cannot agree within thirty (30) days after BOP's notice of
interest to OTA, then OTA shall be free to offer any Interest or Interests for
sale to a third party for substantially the same price and terms as specified in
the Offering Notice, and OTA shall be free to negotiate, agree upon and close
the sale with such third party on substantially the same price and terms, free
and clear of any rights of BOP. "Substantially the same price and terms," as
used herein, means that the price shall be not more than ten percent (10%) less
than the price specified in OTA's previous notice to BOP.
b. If, following failure of OTA and BOP to agree upon a Sale
Contract, OA decides that it is interested in selling any Interest or
Interests in the Partnership Agreement for a price and on terms not
"substantially the same price and terms" as contained in the Offering Notice,
or if OTA is unable to enter into an agreement to sell any Interest or
Interests upon "substantially the same price and terms" within one year after
the Offering Notice, OTA shall so advise BOP by sending an additional
Offering Notice to BOP, and the process set forth in subsection 1(a) hereof
shall be repeated as if the additional Offering Notice were the original
Offering Notice.
2. Limitations on Right of First Offer
a. Consents; Prior Rights of First Refusal. BOP acknowledges and
agrees that its rights hereunder are subject to the prior rights set forth in
any provisions concerning the transfer of any Interest or Interests in the
Partnership Agreement, including, without limitation, (i) the right of the
general partners of the Partnership to withhold consent to such transfer in
their sole discretion as set forth in Sections 7.01 and 7.02 of the
Partnership Agreement, and (ii) the right of first refusal of any partner of
the Partnership set forth in Section 7.07 of the Partnership Agreement.
b. Exclusions from Right of First Offer. BOP acknowledges and
agrees that (i) a partner or partners of the Partnership possess the right to
sell or purchase partnership interests to resolve a deadlock of the general
partners as set forth in Section 7.06 of the Partnership Agreement, and (ii)
the Partnership possesses the right to sell, exchange, assign, lease or
otherwise dispose of, mortgage or otherwise hypothecate all or any portion of
the Premises, and that such rights shall not be subject to any right of first
offer contained in this Agreement.
3. Miscellaneous.
a. 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:
2
<PAGE>
(i) If to OTA
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street, Suite 900
West Conshohocken, PA 19428
(ii) If to BOP:
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
Attention: Anthony A. Nichols, Chairman
Gerard H. Sweeney, President and Chief
Executive Officer
Any entity may specify a different address by sending to the
other party a notice by registered or certified mail of such different address.
Any notice, demand, request, call or other communication required or permitted
to be given or made under this Agreement will be deemed given or made (i) when
delivered by hand delivery at its address set forth above, or (ii) three
business days following its deposit in the U.S. Mail, addressed to such address,
postage prepaid, registered or certified, return receipt requested (with a copy
by regular U.S. mail, first class, postage prepaid), or (iii) on the next
business day following its deposit with Federal Express or another nationally
recognized express delivery service, addressed to such address (with a copy by
regular U.S. mail, first class, postage prepaid).
b. Representations and Warranties. The parties hereto warrant and
represent to one another that the execution and delivery of this Agreement will
not result in a breach of, or constitute a default under, any indenture,
mortgage or agreement to which any of the respective parties hereto is a party
or by which its assets are bound.
c. Binding Effect; No Assignment. All of the terms and
conditions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives,
successors and assigns, provided, however, that BOP shall have no right to
assign, hypothecate, pledge or grant a security interest in this Agreement or
any interest herein to any person or entity without the express written
consent of OTA, which consent may be withheld for any reason or for no
reason.
d. Expiration. This Agreement shall automatically expire on the
date which is the fourth (4th) anniversary hereof unless before such time it
shall have been extended or terminated in writing.
3
<PAGE>
e. No Recording. This Agreement shall not be lodged for
recording in any place or office of public record and any action in violation
of this provision shall be deemed to be a default hereunder and permit the
other party hereto to terminate this Agreement immediately and without
further notice. Notwithstanding the foregoing, Brandywine Realty Trust, the
general partner of BOP, may make any filings it deems necessary to comply
with securities laws with the Securities and Exchange Commission disclosing
this transaction.
f. Brokerage. The parties hereto represent and warrant that each
has not dealt with any broker, agent, finder or other intermediary in
connection with this Agreement other than Thomas J. Maher & Co., payment of
whom is covered by a separate agreement dated _______, 1997. The parties
hereto agree to indemnify, defend and hold the other harmless of, from and
against any damages, costs, claims, losses or liabilities whatsoever
(including attorney's fees, expenses and court costs) arising from any breach
by the other of the foregoing warranties, representations and agreements.
g. Time of the Essence. Time, wherever mentioned herein, shall
be of the essence of this Agreement.
h. Written Evidence of Waiver. If BOP shall fail to exercise its
right of first offer within the applicable time period set forth herein, OTA
may, but shall not be obligated to, request that BOP so certify in writing
formally waiving its right of first offer, whereupon BOP shall execute and
deliver such certification within five (5) business days after receipt of
written request therefor.
i. Savings Clause. In the event any portion of this Agreement
shall be deemed to violate that certain mortgage in favor of New York Life
Insurance Company dated December 27, 1989, such portion of this Agreement
shall be of no force or effect, but all remaining portions of this Agreement
shall continue in full force and effect.
j. Entire Agreement. This is the entire agreement between the
parties hereto regarding the transaction contemplated hereby and there are no
other terms, covenants, conditions, warranties, representations or
statements, oral or otherwise, of any kind whatsoever. Any agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of this Agreement in whole or in part unless such agreement is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.
k. Headings. The headings incorporated in this Agreement are for
convenience and reference only and are not a part of this Agreement and do
not in any way control, define, limit, or add to the terms and conditions
hereof.
4
<PAGE>
l. Governing Law. This Agreement shall be construed, interpreted
and governed by the laws of the Commonwealth of Pennsylvania.
m. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and such counterparts together
shall constitute one and the same instrument.
n. Limitations on Recourse.
(i) No recourse shall be had for any of the obligations of
the BOP or BOP-Sub hereunder or for any claim based thereon or otherwise in
respect thereof against any past, present or future trustee, shareholder,
officer or employee of Brandywine Realty Trust, whether by virtue of any statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all of such liability being expressly waived and released by each of the other
parties hereto.
(ii) No recourse shall be had for any of the obligations of
OTA hereunder or for any claim based thereon or otherwise in respect thereof
against any past, present or future partner or employee of OTA or any
shareholder, officer, director or employee of any general partner of OTA,
whether by virtue of any statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all of such liability being expressly waived
and released by each of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OLIVER TOWER ASSOCIATES
By: OLIVER TYRONE PULVER CORPORATION, its sole
general partner
By: /s/ Donald W. Pulver
___________________________
Donald W. Pulver, President
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: BRANDYWINE REALTY TRUST, its duly authorized
general partner
By: /s/ Anthony A. Nichols, Sr.
___________________________
Anthony A. Nichols, Sr.,
Chairman of the Board
5
<PAGE>
Exhibit "A"
Partnership Agreement
<PAGE>
Exhibit "B"
Legal Description
<PAGE>
MANAGEMENT AND ASSET MANAGEMENT AGREEMENT
By and Among
FOUR TOWER BRIDGE ASSOCIATES
as Owner
and
OLIVER TYRONE PULVER CORPORATION,
as Manager,
and
BRANDYWINE REALTY SERVICES CORPORATION,
as Asset Manager
Dated as of November 3, 1997
<PAGE>
TABLE OF CONTENTS
Page
1. Designation and Appointment...............................................1
2. Term......................................................................2
3. Duties of Manager. ......................................................2
4. Asset Manager.............................................................6
5. Authority.................................................................6
6. Petty Cash................................................................6
7. Signs.....................................................................6
8. Emergencies...............................................................7
9. Compensation to Manager and Asset Manager; Definitions; Reimbursement of
Expenses..................................................................7
10. Default; Termination......................................................9
11. Final Accounting.........................................................10
12. Notices..................................................................11
13. Assignment; Binding Effect...............................................11
14. Headings.................................................................12
15. Applicable Law...........................................................12
16. Indemnities; Waiver of Subrogation.......................................12
17. Entire Agreement.........................................................13
i
<PAGE>
MANAGEMENT AND ASSET MANAGEMENT AGREEMENT
MANAGEMENT AND ASSET MANAGEMENT AGREEMENT, dated as of November 3,
1997, by and between FOUR TOWER BRIDGE ASSOCIATES, a Pennsylvania limited
partnership ("Owner"), OLIVER TYRONE PULVER CORPORATION, a Pennsylvania
corporation ("Manager") and BRANDYWINE REALTY SERVICES CORPORATION, a
Delaware corporation("Asset Manager").
BACKGROUND
Owner is the owner of certain land and building known as Four Tower
Bridge, located in Conshohocken, Pennsylvania (the "Property").
Owner has requested Manager and Asset Manager to provide certain
management services with regard to the Property for the benefit of Owner, and
Manager and Asset Manager have agreed to do so, in accordance with the terms and
provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises, covenants and
conditions herein set forth, and intending to be legally bound hereby, Owner,
Manager and Asset Manager agree as follows:
1. Designation and Appointment.
(a) Owner hereby designates and appoints Manager to provide
complete real estate management and administration for the Property, and Manager
accepts such designation and appointment. In connection with such management
and administration, Manager shall have full responsibility and authority to
maintain and manage the Property on the terms and conditions hereinafter set
forth.
(b) Owner hereby designates and appoints Asset Manager to
coordinate with Manager in the real estate management, leasing and
administration for the Property, and Asset Manager accepts such designation and
appointment. In connection with such management and administration, Asset
Manager shall perform
<PAGE>
its obligations on the terms and conditions hereinafter set forth.
2. Term. Unless otherwise agreed, the term (the "Term") of this
Agreement shall commence on the date hereof shall continue for so long as Four
Oliver Tower Associates or any other entity owned or controlled by Donald W.
Pulver is the Managing General Partner of the Owner of the Property.
3. Duties of Manager. Manager shall perform its services hereunder
in the status of an agent of Owner, with the quality of such services, in all
respects and at all times, to be equal to the standards of professional property
management for Class A commercial office real estate. Without limiting the
generality of the foregoing, Manager shall have the following duties:
(a) Personnel. Manager shall have full responsibility for, full
authority with respect to, and will use reasonable care in, selecting,
recruiting, hiring, firing, training, supervising and scheduling work for all
permanent or part time personnel, professionals and ad valorem tax consultants
necessary to perform the services of Manager under this Agreement. Personnel
and professionals for the Property may be hired directly by Manager, may be
provided through independent contractors or may be a combination of both. In no
event shall any person be considered an employee by Owner.
(b) Records and Reports. Manager shall maintain accurate
business records reflecting, as to the Property, all income, if any, all costs
and expenses incurred for the Property and all bills and other disbursements
made for the Property. Such records shall be kept on an accrual basis or on
such other basis as Owner shall require to be consistent with Owner's books and
records. A quarterly summary of such records, reasonably acceptable in form to
Owner, supported by copies of the underlying bills and invoices, shall be
furnished to Owner at the address hereinafter provided for notice. Such records
may be examined by representatives authorized by Owner at all reasonable times.
Manager shall retain such records for a minimum period of three (3) years and
shall deliver them to Owner upon termination of this Agreement. Owner shall
retain the responsibility for preparation of tax returns, but Manager shall in
all cases
2
<PAGE>
cooperate with Owner and Owner's authorized representatives in compiling
necessary information from the property records maintained by Manager. In the
event of the termination of this Agreement, Manager specifically agrees to
turn over to an authorized representative of Owner at the date of such
termination all records, correspondence, contracts and documents pertaining
to the management and administration of the Property.
(c) Property Account. Manager will maintain on behalf of Owner
a checking account in the name of the Owner (the "Property Account") at a bank
selected by Manager and approved by Owner. All income from the Property shall
be collected by Manager and promptly deposited in the Property Account. In any
instance where cash or cash equivalents shall be received by Manager, Manager
shall hold such funds as trust funds for Owner, and shall promptly deposit such
funds in the Property Account. At the request of Owner, Manager will cooperate
in any reasonable control procedures for collections which Owner shall deem
desirable. All disbursements made on behalf of the Property (except for petty
cash expenditures as hereinafter provided) and all distributions to Owner out of
the Property Account shall be made by checks drawn on the Property Account. The
Property Account and all funds on deposit therein shall at all times be deemed
to be the property of Owner, subject, however, to the terms and conditions of
this Agreement. The following expenses shall be paid out of the Property
Account:
(i) payment of Debt Service (as defined in Subsection (f)
hereof);
(ii) all costs associated with income collection efforts;
(iii) all operating expenses and capital expenditures
associated with the Property including, without limitation, taxes,
insurance, cleaning, maintenance, landscaping, if any, trash removal, snow
and ice removal, capital improvements, supplies, and other expenses
normally characterized as operating expenses;
(iv) costs incurred in connection with emergencies pursuant
to Section 8 hereof;
3
<PAGE>
(v) the fees payable to Manager and Asset Manager and
expenses of Manager and Asset Manager to which either is entitled to
reimbursement pursuant to Section 9 hereof; and
(vi) any other expense properly chargeable to the Property
Account pursuant to the terms of this Agreement or as otherwise agreed
between Owner and Manager.
Manager shall use its best efforts to conduct its duties in accordance with the
Operating Budget for the Property provided to Manager by Owner; provided,
however, that if there are insufficient funds in the Property Account to pay all
expenses associated with the management and operation of the Property, Manager
shall so notify Owner promptly, and Owner shall immediately fund the Property
Account to pay all such expenses.
(d) Taxes; Insurance. Manager shall obtain and verify
statements for ad valorem property taxes and assessments against the
Property. Unless otherwise provided for by Owner, such statements shall be
paid from the Property Account. Manager shall arrange for and obtain
insurance with respect to the Property of such kinds, in such amounts, in
such forms and with such companies (including, without limitation, insurance
companies, if competitively priced, utilized by Manager (and its affiliates)
or Asset Manager (and its affiliates) under blanket policies) to the extent
obtainable, as Owner shall specify based upon Manager recommendation from
time to time. Unless otherwise provided for by Owner, premiums for all
insurance relating to the Property shall be paid from the Property Account.
All such insurance coverages shall be subject to review by Owner annually.
(e) Maintenance; Repairs; Other Operational Duties.
(i) Manager shall be responsible for performing, or
contracting for the performing of, the maintenance of the Property.
Manager shall, either directly or through the use of independent
contractors, keep the Property in a clean and sightly condition at all
times, and cause maintenance work to be performed promptly and efficiently
so as to fulfill Owner's obligation under any lease or governmental
regulation or other commitment
4
<PAGE>
or agreement. Manager shall also make or cause to be made all necessary
repairs, and shall purchase, in reasonable quantities and at reasonable
prices, all materials and supplies necessary or proper for maintenance
of the Property.
(ii) Manager shall notify Owner promptly (together with
copies of supporting papers) of any notice of violation of governmental
requirements.
(iii) Manager shall promptly notify Owner of any personal
injury or property damage suffered or claimed by any tenant or third party
on or with respect to the Property, other than injury or damage which would
be covered by insurance and Manager shall forward to Owner any summons,
subpoena or other like legal documents served upon Manager relating to
actual or alleged potential liability of Owner, Manager or the Property.
(iv) Manager shall take advantage of labor and materials
savings through quantity purchases when reasonable. All such savings (or
the proportionate share of such savings allocable to the Project) shall be
for the account of Owner.
(v) Notwithstanding anything herein to the contrary, Manager
shall also be entitled to an additional fee from Owner, in such amount as
Manager and Owner shall agree, for the supervision of construction on,
major alterations to, or capital repairs of, the Property and improvements
located thereon from time to time. The indemnity provided under Section
16(b) hereof shall be deemed to cover, without limitation, Manager's
activities under this subsection (v). In no event shall such fee exceed
five percent (5%) of the costs of the construction, alterations or capital
repairs. Manager shall provide to Owner an insurance certificate
evidencing at least $1,000,000 of public liability insurance if not covered
by the insurance provided under Section 3(d) hereof.
(f) Debt Service. Manager shall pay from the Property Account,
at Owner's request, all payments of principal
5
<PAGE>
and interest on all financing with respect to the Property ("Debt Service").
(g) Professionals. Manager shall retain, at Owner's expense and
subject to Owner's prior approval, such attorneys, leasing agents, accountants,
engineers, architects and other professionals as shall be necessary in Manager's
or Asset Manager's judgment to perform its obligations hereunder.
(h) Budget. Manager shall prepare and deliver to the Asset
Manager, Managing General Partner and Administrative General Partner of Owner
for their respective approval, 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) projected to be incurred during such
period and such reserves as shall be required by such Managing General Partner
and Administrative General Partner, jointly. Manager shall revise such budget
as directed by the Managing General Partner and Administrative General Partner
of Owner, acting jointly. In the absence of any such joint instructions,
Manager shall use the previous year's operating budget for such current year.
(i) Supplies. Asset Manager and Manager shall endeavor to
purchase office supplies and office equipment from common sources to take
advantage of economies of scale in purchasing.
4. Asset Manager. At the request of Manager or Owner, Asset Manager
shall review management issues as the same arise from time to time.
5. Authority. Manager, as agent for Owner, shall have the power to
bind Owner in all matters relating to the management of the Property, except as
limited elsewhere in this Agreement. Notwithstanding the foregoing, if, under
the partnership agreement of Owner, any action of Managing General Partner
requires the consent of the Administrative General Partner, Manager shall not be
permitted to take such action without such consent.
6
<PAGE>
6. Petty Cash. Owner authorizes petty cash funds to be maintained
at the Manager's office for routine expenditures for costs and expenses herein
authorized. Such fund may be reimbursed from the Property Account from time to
time, but nothing contained herein shall be deemed to modify Manager's
obligation to maintain adequate records of all expenditures, and total
expenditures from such funds during any month shall be subject to reasonable
limits which may be established by Owner from time to time.
7. Signs. Owner hereby grants Manager and Asset Manager (or
Brandywine Realty Trust) the privilege of displaying Manager's and Asset
Manager's signs upon the Property announcing that the Property is under
Manager's management and Asset Manager's asset management. Such signs will be
at Manager's and Asset Manager's sole expense and subject to the provisions of
local laws.
8. Emergencies. Manager shall have the right to incur costs and
expenses in connection with emergencies occurring or which Manager, in the
exercise of its reasonable discretion, deems threatened without the prior
written consent of Owner and shall be entitled to reimbursement from the
Property Account for actual costs and expenses incurred for such emergency
action to the extent such costs relate to the Property. "Emergencies" shall
refer not only to threatened riots or other civil commotions, but also to any
emergency action necessary in Manager's reasonable judgment to protect the
Property in case of damage or destruction, so threatened or occurring, from any
cause.
9. Compensation to Manager and Asset Manager; Definitions;
Reimbursement of Expenses.
(a) Management Fee. As compensation for the services of Manager
hereunder, Manager shall receive a Management Fee in an amount equal to four
percent (4%) of the Gross Receipts, as defined below, from the Property per
calendar month and Asset Manager shall receive an Asset Management Fee equal to
one percent (1%) of the Gross Receipts from the Property per calendar month.
Management Fees and Asset Management Fees shall be paid solely from the Property
Account, and should there be insufficient funds in the Property Account, Owner
shall be
7
<PAGE>
required to immediately fund the Property Account to pay the Management Fees
and Asset Management Fees, subject, however, to Section 9(f) hereof. If only
a portion of the Management Fees and Asset Management Fees are payable for
any month (whether by reason of Section 9(f) hereof or otherwise), the
Management Fee shall be equal to eighty percent (80%) of the total of the
Management Fee and the Asset Management Fee payable, and the Asset Management
Fee shall be equal to twenty percent (20%) of the total of such fees.
(b) Monthly Installments; Reconciliation. Subject to Section
9(f) hereof, the Management Fee and Asset Management Fee shall be payable on the
tenth day of the calendar month based upon the Gross Receipts from the preceding
calendar month.
(c) Partial Months. If the term of service of Manager or Asset
Manager under this Agreement shall commence on any date other than the first day
of a calendar month or end on any date other than the last day of a calendar
month, then the Management Fee or Asset Management Fee, as applicable, for the
portion of any payment period which is only partially coincidental with the term
of this Agreement shall be based upon the Gross Receipts through such portion of
such payment period which is so coincidental.
(d) Gross Receipts. The term "Gross Receipts" as used in this
Agreement, is defined to be all gross receipts from operations and ownership
of the Property, including, but not limited to, base rent, all reimbursements
for taxes, insurance and operating expenses and electric costs, whether or
not separately billed to tenants, but excluding condemnation proceeds,
financing or refinancing proceeds and capital contributions.
(e) Reimbursement of Expenses. In addition to receiving the
compensation set forth in the portion of this Section 9 above, Manager shall
be reimbursed by Owner for overhead relating to Manager's expenses directly
incurred in supplies, telephone charges, postage charges and similar
out-of-pocket expenses with respect to the Property; provided, however, that
the amount payable to Manager on account of such
8
<PAGE>
expenses shall be limited to the amount which is payable by tenants with
regard to such expenses.
(f) Subordination. This Management and Asset Management
Agreement and any extensions, renewals, replacements or modifications
thereof, and all of the rights of Manager and Asset Manager to collect any
Management Fees, Asset Management Fees are and shall be subject and
subordinate to the rights and claims of the Administrative General Partner
under that certain Agreement of Limited Partnership of Four Tower Bridge
Associates (the "Partnership Agreement") to receive the BOP Preferred
Cumulative Return, as defined therein. No Management Fees or Asset
Management Fees shall be paid hereunder at any time when any portion of the
BOP Preferred Cumulative Return is due and unpaid. In addition to and not in
limitation of the foregoing, Manager and Asset Manager acknowledge that this
Agreement and their respective rights hereunder are subject and subordinate
to any first mortgage encumbering the Property from time to time, and Manager
and Asset Manager shall, in confirmation of this, execute and deliver such
subordination agreement as such first mortgagee shall reasonably request.
10. Default; Termination.
(a) If either Manager or Asset Manager shall default in its
obligations under this Agreement and such default is not cured within thirty
(30) days after the date of notice of such default, Owner shall have all
rights and remedies at law or in equity, including, but not limited to, the
right to terminate this Agreement as to the defaulting party (provided,
however, if such default is not reasonably capable of being cured within
thirty (30) days, Manager or Asset Manager, as the case may be, shall have
such additional period within which to cure such default as is reasonably
necessary (not in excess of an additional ninety (90) days so long as Manager
or Asset Manager commences such cure within thirty (30) days after notice of
default and diligently prosecutes such cure until completion).
Notwithstanding the foregoing, if the Managing General Partner of Owner is
removed as Managing General Partner of Owner, such removal shall
automatically be a default of Manager without any further right of manager to
cure; provided, however, that if such Managing General Partner is ever
reinstated as the Managing General Partner of Owner, Manager shall be
reinstated as Manager
9
<PAGE>
under this Agreement. If Owner shall default in its obligations under this
Agreement, and such default is not cured within thirty (30) days after the
date of notice of such default, the party or parties aggrieved by such
default shall have all rights at law and in equity, which may be exercised
jointly or severally. If the defaulting party is Asset Manager or Manager,
Owner shall have the further right to replace the defaulting Asset Manager or
Manager with a new manager or asset manager to perform the functions of such
party hereunder.
(b) In the event of (I) a sale of the Property; or (II) the
exercise of any remedies by the first mortgagee of the Property pursuant to
which such mortgagee takes title to or possession of the Property, then, in
any such event, Owner shall have the right and option, to be exercised by
giving written notice thereof to Agent, to either (a) terminate this
Agreement and Agent's rights and authority hereunder on thirty (30) days'
prior written notice, in which event the entire unpaid balance (if any) of
fees earned by Manager and Asset Manager to the date of termination shall
become and be due and payable by Owner to Manager and Asset Manager on the
date of settlement for the conveyance or transfer and upon making such lump
sum payment, Owner shall have no further liabilities or obligations
hereunder, or (b) assign this Agreement to the transferee or mortgagee of the
Property and, if such transferee is not the mortgagee, cause such transferee
or mortgagee to assume all of the obligations of Owner under this Agreement,
whereupon this Agreement shall continue and shall not terminate. The
provisions of this Section 10(b) shall apply to all subsequent conveyances or
transfers of the Property or of Owner's interest therein, and the term
"Owner" shall refer to the owner for the time being of any interest in the
Property.
11. Final Accounting. Upon the termination of this Agreement,
Manager shall render to Owner a final accounting (the "Final Accounting")
within thirty (30) days after the termination of this Agreement. The Final
Accounting shall cover the period from the date of this Agreement to the
termination date. All funds in the Property Account as of the effective date
of the Final Accounting shall be paid to Owner.
12. Notices. All notices, demands, requests, calls and other
communications required by or permitted under this
10
<PAGE>
Agreement shall be in writing (whether or not a writing is expressly required
hereby), and shall be directed as follows:
OWNER: Four Tower Bridge Associates
c/o Oliver Tyrone Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, PA 19428
With a copy to:
Brandywine TB II, L.P.
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
MANAGER: Oliver Tyrone Pulver Corporation
One Tower Bridge, Suite 900
West Conshohocken, PA 19428
ASSET
MANAGER: c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
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). Any party hereto may specify a different address by
sending to the other parties hereto a notice as hereinabove provided of such
different address.
11
<PAGE>
13. Assignment; Binding Effect. Neither Manager nor Asset Manager
shall have the right to assign or transfer this Agreement or any of its
rights or duties hereunder except with the prior written consent of Owner;
however, Owner consents that Manager may make such subcontracts as it deems
necessary or desirable for the performance of its duties and powers
hereunder; provided, however, that Manager may not engage any subcontractor
that is affiliated with Manager without the prior consent of Owner. Subject
to the foregoing, this Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, Asset Manager may assign its interest in this
Agreement to an entity owned or controlled, directly or indirectly, by
Brandywine Realty Trust.
14. Headings. The headings used in this Agreement are for
convenience only and are not to be considered in connection with the
interpretation or construction of this Agreement.
15. Applicable Law. This Agreement and the rights and obligations
of the parties hereunder shall be governed by the laws of the Commonwealth of
Pennsylvania.
16. Indemnities; Waiver of Subrogation.
(a) Owner agrees to indemnify and hold Manager and Asset
Manager harmless from and against any and all damages, claims, actions,
obligations, and liabilities, and to reimburse Manager and Asset Manager for
such reasonable costs, expenses and fees incurred in defending or responding
to any such claim, action, obligation, damage or liability arising out of the
proper performance of its duties hereunder or in carrying out the directions
of Owner, and from liability from injury on or at the Property suffered by
any employee or other person whatsoever, provided, however, Owner shall not
indemnify Manager from or against its negligence or willful misconduct, nor
shall Owner indemnify Asset Manager from or against its negligence or willful
misconduct.
(b) Manager agrees to indemnify and hold Owner and Asset Manager
harmless from and against any and all damages or injuries to person or property,
or claims, actions, obligations, liabilities, and to reimburse Owner and Asset
12
<PAGE>
Manager for such reasonable costs, expenses and fees incurred in defending or
responding to any such claim, action, obligation, damage or liability by
reason of Manager's negligence or willful misconduct or any conduct of
Manager outside the scope of its authority hereunder.
(c) Asset Manager agrees to indemnify and hold Owner and Manager
harmless from and against any and all damages or injuries to person or property,
or claims, actions, obligations, liabilities, and to reimburse Owner and Manager
for such reasonable costs, expenses and fees incurred in defending or responding
to any such claim, action, obligation, damage or liability by reason of Asset
Manager's negligence or willful misconduct or any conduct of Asset Manager
outside the scope of its authority hereunder.
(d) The parties hereto hereby waive any rights each may have
against the other on account of any loss or damage occasioned to either of
them, or any of their respective property, the Building or its contents
arising from any risks covered (or which is required to be covered under the
terms hereof) by so-called "all risk" or other fire and extended coverage
insurance, and to the extent of recovery under valid and collectible policies
of such insurance; provided, however, such waivers of subrogation shall only
be effective with respect to loss or damage occurring during such time as
such parties' insurance policies shall contain a clause or endorsement
providing in substance that the aforesaid waiver of subrogation shall not
prejudice the type and amount of coverage under such policies or of the named
insured to recover thereunder. If, at any time, any parties' insurance
carrier refuses to write insurance which contains a consent to the foregoing
waiver of subrogation, the insured thereunder shall notify the other party
thereof in writing, and upon the giving of such notice, the provisions of
this Section shall be null and void as to any casualty which occurs after
such notice. If any party's insurance carrier shall make a charge for the
incorporation of the aforesaid waiver of subrogation in its policies, then
the party requesting the waiver shall promptly pay such charge to the other
party, upon demand. In the event the party requesting the waiver fails to
pay such charge upon demand, that party shall be released of its obligation
to supply such waiver.
13
<PAGE>
(e) It is expressly agreed that the foregoing provisions of
this Section 16 shall survive the termination of this Agreement.
16. Consent of Owner. Where the consent, approval or other action
of "Owner" is required or taken under this Agreement, that consent or
approval shall require the consent of both the Administrative General Partner
and the Managing General Partner under Owner's partnership agreement unless
the Managing General Partner is permitted to take such action under such
Agreement without the consent of the Administrative General Partner, in which
latter event only the consent or approval of the Managing General Partner
shall be required.
17. Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the management of the Property
and all prior agreements, whether written or oral, are deemed to be merged
herein. This Agreement cannot be
14
<PAGE>
amended or otherwise modified or discharged except by an instrument in
writing signed by the parties hereto.
IN WITNESS WHEREOF, intending to be legally bound, the parties
hereto have executed this Agreement as of the date set forth above.
OWNER:
FOUR TOWER BRIDGE ASSOCIATES
By: Four Oliver Tower Associates, its
managing general partner
By: Four Oliver Tower Corporation,
its general partner
By: /s/ Donald W. Pulver
---------------------------
Donald W. Pulver,
President
MANAGER:
OLIVER TYRONE PULVER CORPORATION
By: /s/ Donald W. Pulver
--------------------------------
Donald W. Pulver
President
ASSET MANAGER:
BRANDYWINE REALTY SERVICES CORPORATION
By: /s/ Anthony A. Nichols, Sr.
--------------------------------
Name: Anthony A. Nichols, Sr.
Title: Chairman of the Board
15
<PAGE>
Exhibit 10.10
LEASING AGENCY AGREEMENT
between
FOUR TOWER BRIDGE ASSOCIATES,
as Owner
and
OLIVER TYRONE PULVER CORPORATION,
as Agent
for
Four Tower Bridge
Conshohocken, Pennsylvania
Dated: As of November 3, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
1. Appointment of Agent..............................................1
2. Term..............................................................1
3. Duties of Agent...................................................1
4. Compensation......................................................2
a. Initial Term of a Lease......................................2
b. Time of Payment..............................................3
c. Renewals.....................................................3
d. Rights on Expiration or Termination..........................3
5. Intentionally omitted.............................................3
6. Sale of Building; Assignability...................................3
7. Notice............................................................4
8. Assignment........................................................5
9. Default; Indemnities..............................................5
10. Subordination.....................................................5
11. Confirmation of Payment...........................................6
12. Termination of Prior Agreements...................................6
13. Whole Agreement; Existing Lease Transactions......................6
14. Successors and Assigns............................................6
15. Consent of Owner..................................................6
16. Governing Law.....................................................7
<PAGE>
LEASING AGENCY AGREEMENT
------------------------
LEASING AGENCY AGREEMENT (the "Agreement") dated as of November 3,
1997 by and between FOUR TOWER BRIDGE ASSOCIATES, a Pennsylvania limited
partnership, as Owner ("Owner"), and OLIVER TYRONE PULVER CORPORATION, a
Pennsylvania corporation, as Agent ("Agent").
BACKGROUND
----------
Owner is the owner of a building consisting of approximately 85,000
rentable square feet known as Four Tower Bridge, Conshohocken, Pennsylvania (the
"Building"). Owner wishes to retain Agent to act as the leasing agent for the
Building as provided for in this Agreement, and Agent is willing to do so, upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, Owner and Agent, intending to be legally bound, hereby
agree as follows:
1. Appointment of Agent. Owner hereby appoints, retains and hires
Agent, and Agent hereby accepts appointment and agrees to act, as the exclusive
agent to list and offer for rent, for Owner's account, such space in the
Building which, as determined by Owner, is available from time to time for
leasing during the Term of this Agreement.
2. Term.
a. Subject to the terms and conditions contained herein, the
term (the "Term") of this Agreement, and the agency hereby created, shall be for
so long as Four Oliver Tower Associates (or any other entity owned or controlled
by Donald W. Pulver) is the Managing General Partner of Owner.
b. This Agreement shall govern all obligations of Agent and
Owner with respect to all leases for space in the Building executed during the
Term, notwithstanding the fact that negotiations with respect thereto may have
been commenced prior to the date hereof. Without the prior written consent of
Owner, Agent shall not enter into any exclusive agreements with any other
leasing agents.
c. On the expiration or termination of this Agreement, Owner
shall prepay, on and as of the date of such expiration or termination, all
earned and unpaid commissions to Agent in accordance with the provisions of
Section 4(d) hereof.
3. Duties of Agent.
a. Agent shall use its best efforts to fully lease the Building
and to keep the Building fully leased, upon such terms as shall be acceptable to
Owner during the Term of this Agreement.
<PAGE>
b. Agent shall list from time to time through its own
organization, and, if requested to do so by Owner, through other real estate
brokers, such space in the Building as Owner may determine is vacant or
available for leasing.
c. Agent shall negotiate with prospective tenants for new
leases in the Building, and shall negotiate with tenants for the extension,
renewal, modification, amendment or termination (collectively, "amendment"), of
existing leases, pursuant to such rental and other guidelines relating to the
foregoing as shall have been approved by Owner, or are as otherwise approved by
Owner. All leases and amendments shall be submitted to Owner for approval and
execution. At the option of Owner, Owner may by specific or standing letter of
authorization, authorize Agent to execute leases and amendments in Owner's name
as Owner's agent. Agent will prepare for Owner a lease abstract for each
proposed tenant and shall update, as necessary, lease abstracts for executed
leases. Agent shall procure credit references for prospective tenants and
investigate such references.
d. Agent shall prepare all leases on the standard form of Lease
Agreement provided by Owner to Agent for use in connection with the leasing of
the Building. In addition, Agent shall from time to time submit proposed rental
guidelines to Owner for approval.
e. Agent shall develop, after consultation with Owner, a tenant
retention program consistent with those provided by entities leasing and
managing first-class office buildings in suburban Philadelphia.
f. Owner shall have the right to take any space in the Building
off the rental market in anticipation of the sale of the Building.
g. If requested by Owner, Agent will prepare and submit to
Owner for approval a promotional and advertising program for the Building. The
promotional and advertising program budget shall be submitted by Agent to Owner
and shall set forth all direct and indirect costs to Owner resulting from such
promotion or advertising. No promotion or advertising shall occur without being
approved by Owner. All promotional and advertising material shall be prepared
in accordance with applicable law. All promotional and advertising expense
shall be paid directly by Owner.
h. For any calendar quarter in which there is marketing
activity regarding the Building, Agent shall prepare and deliver to Owner a
summary in reasonable detail of the marketing activity conducted by Agent during
the preceding calendar quarter. Such summary shall include a detailed list of
all current prospective tenants of space in the Building.
4. Compensation. Owner shall pay, and Agent shall accept, as
compensation for all of Agent's services performed for the benefit of Owner
pursuant to this Agreement, commissions to be determined and paid as follows:
a. Initial Term of a Lease. Upon proper execution and delivery
during the Term of the Agreement, or during the three (3) month period referred
to in Section 4(d) below, of any lease with regard to the
3
<PAGE>
Building, including a lease or the expansion of the space occupied by a
tenant (but excluding, however, (x) leases representing relocation space for
a tenant then occupying space within the Building, except to the extent of
any increase in rental thereunder and (y) renewal leases, which are covered
by Section 4(c), below), Agent shall have earned a commission equal to the
following:
I. If Agent obtains a tenant without the cooperation of
another leasing agent, four dollars ($4.00) times the number of rentable
square feet in the premises leased; or
II. If Agent obtains a tenant with the cooperation of another
leasing agent, Agent shall be paid One Dollar and Fifty Cents ($1.50) times
the number of rentable square feet in the premises leased. The other leasing
agent shall receive such compensation as is generally prevailing in the
market.
b. Time of Payment. The commission earned for each lease as
above provided shall be paid by Owner to Agent in installments in accordance
with the following schedule:
At signing and delivery of lease 50%
Upon the date the tenant commences
payment of rent under the lease
("Lease Commencement Date") 50%
c. Renewals. If, during the Term of this Agreement, an
existing tenant gives notice of its intention to renew or to extend the term
of its existing lease, Agent shall earn a commission equal One Dollar and
Fifty Cents ($1.50) times the number of rentable square feet in the Premises
leased, payable upon commencement of the extension term.
d. Rights on Expiration or Termination. During the three
(3) month period following the termination or expiration of this Agreement,
Agent shall, if directed by Owner, continue any or all lease negotiations
which were being conducted by Agent at the time of such termination or
expiration. Such continued negotiations shall be conducted by Agent pursuant
to the provisions of this Agreement. Agent shall submit to Owner, within
thirty (30) days following such expiration or termination, a written list of
each and every active pending negotiation and prospective tenant, together
with full and complete details in respect thereof. In the event that any
such pending negotiation is consummated by execution and delivery by Owner of
a lease within such three (3) month period, then Owner shall pay to Agent a
commission therefor in accordance with the provisions of this Agreement,
provided that the tenant executing such lease shall have appeared on the
aforesaid list of prospective tenants. Such commission shall be paid in a
lump sum upon commencement of payment of rent under such lease.
5. Intentionally omitted.
6. Sale of Building; Assignability. In the event of (I) a sale
of the Building; or (II) the exercise of any remedies by the first mortgagee
4
<PAGE>
of the Property pursuant to which such mortgagee takes title to or possession
of the Property, then, in any such event, Owner shall have the right and
option, to be exercised by giving written notice thereof to Agent, to either
(a) terminate this Agreement and Agent's rights and authority hereunder, in
which event the entire unpaid balance (if any) of commissions then earned by
Agent under this Agreement shall become and be due and payable by Owner to
Agent on the date of settlement for the conveyance or transfer and upon
making such lump sum payment, Owner shall have no further liabilities or
obligations hereunder, or (b) assign this Agreement to the transferee of the
Building; provided, however, Owner shall pay the entire unpaid balance of
commissions then earned by Agent under this Agreement on the date of
assignment as if the Owner had elected to prepay such commissions pursuant to
Section 4(b) hereof, but this Agreement shall not terminate. The provisions
of this Section 6 shall apply to all subsequent conveyances or transfers of
the Building or of owner's interest therein, and the term "Owner" shall refer
to the owner for the time being of any interest in the Building.
7. Notice. 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:
OWNER: Four Tower Bridge Associates
c/o Oliver Tyrone
Pulver Corporation
One Tower Bridge
100 West Front Street
West Conshohocken, PA 19428
With a copy to:
Brandywine TB I, L.P.
c/o Brandywine Realty Trust
Newtown Corporate Campus
16 Campus Boulevard, Suite 150
Newtown Square, PA 19073
AGENT: Oliver Tyrone Pulver Corporation
One Tower Bridge, Suite 900
West Conshohocken, PA 19428
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).
5
<PAGE>
8. Assignment. Agent shall not assign any of Agent's rights or
obligations hereunder without the prior written consent of Owner, and any
such assignment shall be void.
9. Default; Indemnities.
a. If either party shall default in its obligations under
this Agreement, and such default is not cured within thirty (30) days after
the date of notice of such default, the other party shall have all rights and
remedies at law or in equity (provided however if such default is not
reasonably capable of being cured with thirty (30) days, Agent or Owner, as
the case may be, shall have such additional period within which to cure such
default as is reasonably necessary (not in excess of an additional ninety
(90) days so long as Agent or Owner, as the case may be, commences such cure
within thirty (30) days written notice of default and diligently prosecutes
such cure until completion). Notwithstanding the foregoing, if the Managing
General Partner of Owner is removed as Managing General Partner of Owner,
such removal shall automatically be a default of Agent without any further
right of Agent to cure; provided, however, that if such Managing General
Partner is ever reinstated as the Managing General Partner of Owner, Agent
shall be reinstated as Agent under this Agreement. If the defaulting party
is Agent, Owner shall have the further right to terminate this Agreement on
the terms set forth in Section 6(a) hereof.
b. Owner agrees to indemnify and hold Agent harmless from
and against any and all damages, claims, actions, obligations, and
liabilities, and to reimburse Agent for such reasonable costs, expenses and
fees incurred in defending or responding to any such claim, action,
obligation, damage or liability arising out of the proper performance of its
duties hereunder or in carrying out the directions of Owner, and from
liability from injury on the Properties suffered by any employee or other
person whatsoever, provided, however, Owner shall not indemnify Agent from or
against Agent's negligence or willful misconduct.
c. Agent agrees to indemnify and hold Owner harmless from
and against any and all damages or injuries to person or property, claims,
actions, obligations, and liabilities, and to reimburse Owner for such
reasonable costs, expenses and fees incurred in defending or responding to
any such claim, action, obligation, damage or liability by reason of Agent's
negligence or willful misconduct or the conduct of Agent outside of the scope
of its authority hereunder.
d. It is expressly agreed that the foregoing provisions of
this Section 9 shall survive the termination of this Agreement.
10. Subordination. This Leasing Agency Agreement and any
extensions, renewals, replacements or modifications thereof, and all of the
rights of Agent to collect any fees, leasing commissions or other amounts
hereunder are and shall be subject and subordinate to the rights and claims
of Brandywine Operating Partnership, L.P.("BOP") or its affiliate, under that
certain Agreement of Limited Partnership of Four Tower Bridge Associates (the
"Partnership Agreement") to receive the BOP Preferred Cumulative Return, as
6
<PAGE>
defined therein. No fees or leasing commissions shall be paid hereunder at
any time when any portion of the BOP Preferred Cumulative Return is due and
unpaid. In addition to and not in limitation of the foregoing, Agent
acknowledges that this Agreement (and Agent's rights hereunder) is subject
and subordinate to any first mortgage encumbering the Building from time to
time, and Agent shall, in confirmation of this, execute and deliver such
subordination agreement as such first mortgagee shall reasonably request.
11. Confirmation of Payment. Agent hereby confirms that, except
as set forth on Schedule "I" hereto, which Agent represents is true, complete
and correct, Agent has been paid all leasing commissions owed to Agent as of
the date hereof. Agent warrants and represents that any leases which are the
subject of current negotiation and which could give rise to the payment of a
leasing commission to Agent are as set forth in Schedule "II" attached hereto
and made a part hereof.
12. Termination of Prior Agreements. All other agreements between
Owner and Agent for the Leasing Agency of Four Tower Bridge are hereby
terminated and of no further force or affect.
13. Whole Agreement; Existing Lease Transactions. This Agreement
sets forth the entire understanding of the parties with respect to the
leasing of space in the Building. This Agreement shall govern all
compensation hereafter payable to Agent with respect to the Building,
including compensation with respect to leases in negotiation. This Agreement
supersedes in its entirety all prior Leasing Agency Agreements between Owner
and Agent. There are no other representations or agreements, either oral or
written other than as set forth herein. The parties agree that this
Agreement may be modified only by an express written amendment and not orally
or by any commission agreements contained in any future leases of space in
the Building.
14. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and/or assigns.
15. Consent of Owner. Where the consent, approval or other action
of "Owner" is required or taken under this Agreement, that consent or
approval shall require the consent of both the Administrative General Partner
and the Managing General Partner under Owner's partnership agreement unless
the Managing General Partner is permitted to take such action under such
Agreement without the consent of the Administrative General Partner, in which
latter event only the consent or approval of the Managing General Partner
shall be required.
7
<PAGE>
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws, including the conflicts of laws, of
the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Leasing Agency
Agreement on the day and year first above mentioned.
OWNER:
FOUR TOWER BRIDGE ASSOCIATES
By: Four Oliver Tower Associates
By: Four Oliver Tower
Corporation, General
Partner
By: /s/ Donald W. Pulver
-----------------------------------
Donald W. Pulver
President
AGENT:
OLIVER TYRONE PULVER CORPORATION
By:/s/ Donald W. Pulver
----------------------------------
Donald W. Pulver
President
8
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SCHEDULE I
Due and Unpaid Commissions
[To Be Attached]
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Schedule II
Leases under Negotiation
[To Be Attached]
