<PAGE>
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) March 31, 1998
BRANDYWINE REALTY TRUST
-----------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
MARYLAND 1-9106 23-2413352
-------- ------ ----------
<S> <C> <C>
(State or other jurisdiction of (Commission file number) (I.R.S. Employer Identification
incorporation) Number)
</TABLE>
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 5 pages
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On March 31, 1998, Brandywine Operating Partnership, L.P. (the
"Operating Partnership"), a limited partnership of which Brandywine Realty Trust
(the "Company") is the sole general partner and in which the Company owns, on
the date of this Current Report on Form 8-K an approximately 98.4% interest,
acquired six office properties located in East Windsor, Trenton and
Lawrenceville, N.J. (the "DKM Portfolio") containing an aggregate of
approximately 928,427 net rentable square feet. As of March 31, 1998, the DKM
Portfolio was approximately 96.3% leased to 54 tenants. Agencies of the State of
New Jersey collectively occupy more than 10% of the total net rentable area of
the DKM Portfolio.
The purchase price for the DKM Portfolio totaled $137.8 million. The
Operating Partnership paid $118.8 million of the purchase price and closing
expenses in cash using borrowings under its existing revolving credit facility,
assumed mortgage indebtedness of $15.4 million and paid $3.6 million of the
acquisition price in the form of 153,036 units of limited partnership interest
("Units") in the Operating Partnership.
The Units are redeemable, in whole or in part, at the option of the
holder at any time after 185 days following their date of issuance for cash
based on the market value of the Company's common shares of beneficial interest
("Common Shares") at the time of redemption or, at the Company's option, in
exchange for a number of Common Shares equal to the number of Units tendered for
redemption. The Units and the Common Shares issuable upon redemption of the
Units have not been registered under the Securities Act of 1933 or any state
securities laws and may not be offered and sold in the United States absent
registration or an applicable exemption from registration. The Company has
agreed to file a registration statement registering the resale of Common Shares
issuable upon redemption of Units. See Exhibit 10.2 under Item 7.
In connection with its acquisition of the DKM Portfolio, the Company
agreed to pay certain tax liabilities that might be incurred by certain persons
who held ownership interests in four properties included in the DKM Portfolio in
the event the Company were to take certain actions, such as a sale of the
applicable properties during a four or five year period following the closing.
See Exhibits 10.4, 10.5, 10.6 and 10.7 under Item 7.
The sellers of the DKM Portfolio are parties unaffiliated with the
Company and the Operating Partnership. The identity of each of the sellers is
set forth on Exhibit A of Exhibit 10.1. The Company based its determination of
the purchase price of the properties on the expected cash flow, physical
condition, location, competitive advantages, existing tenancies and
opportunities to retain and attract additional tenants. The purchase price was
determined by arm's-length negotiation between the Company and the sellers.
-2-
<PAGE>
The table set forth below shows certain information regarding rental
rates and lease expirations for the DKM Portfolio.
Scheduled Lease Expirations
(DKM Portfolio)
<TABLE>
<CAPTION>
Year of Number of Leases Rentable Square Final Annulaized Percentage of Total
Lease Expiring Within Footage Subject Base Rent Under Final Annualized Base Rent
Expiration the Year at (1) to Expiring Leases Expiring Leases (2) Under Expiring Leases
---------- --------------- ------------------ ------------------- ---------------------
<S> <C> <C> <C> <C>
1998 13 106,136 $ 1,664,750 9.5%
1999 7 25,250 429,207 2.5%
2000 13 118,825 2,342,404 13.4%
2001 10 100,858 2,034,203 11.6%
2002 7 49,896 972,703 5.6%
2003 5 47,816 733,438 4.2%
2004 3 86,158 1,771,938 10.1%
2005 3 22,492 462,462 2.6%
2006 - - - -
2007 and
Thereafter 2 340,415 7,088,076 40.5%
---- -------- ---------------- ------
Total 63 897,846 $ 17,499,181 100.0%
==== ======== ================ ======
</TABLE>
(1) A lease is considered to expire if, and at any time, it is terminable by
the tenant without payment of penalty or premium.
(2) "Final Annualized Base Rent" for each lease scheduled to expire represents
the cash rental rate in the final month prior to expiration multiplied by
twelve.
After giving effect to the acquisition of the DKM Portfolio, the
Company's portfolio consists of 139 office properties and 28 industrial
properties (including an office property that is currently under construction
and that the Company has agreed to acquire upon its completion during the second
quarter of 1998) that contain an aggregate of approximately 11.5 million net
rentable square feet.
-3-
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements.
The financial statements of the DKM Portfolio will be included
in an amendment to this Form 8-K by no later than May 30,
1998.
(b) Pro Forma Financial Information.
Pro Forma financial information will be included in an
amendment to this Form 8-K by no later than May 30, 1998.
(c) Exhibits.
10.1 Amended and Restated Transfer Agreement, dated March
31, 1998, by and between the entities listed on
Exhibit A thereto and Brandywine Operating
Partnership, L.P.
10.2 Registration Rights Agreement, dated March 31, 1998,
by and among Brandywine Realty Trust, Brandywine
Operating Partnership, L.P., Brookstone Investors,
L.L.C., Brookstone Holdings of Del. - 4, L.L.C.,
Brookstone Holdings of Del. - 5, L.L.C. and
Brookstone Holdings of Del. - 6, L.L.C., Ronald
Berman and Marie Berman.
10.3 Second Amendment, dated March 31, 1998, to the
Amended and Restated Agreement of Limited
Partnership Agreement of Brandywine Operating
Partnership, L.P.
10.4 Tax Indemnification Agreement, dated March 31, 1998,
by and between Brandywine Operating Partnership,
L.P. and Brookstone Investors, L.L.C.
10.5 Tax Indemnification Agreement, dated March 31, 1998,
by and between Brandywine Operating Partnership,
L.P. and Brookstone Holdings of Del. - 4, L.L.C.
10.6 Tax Indemnification Agreement, dated March 31, 1998,
by and between Brandywine Operating Partnership,
L.P. and Brookstone Holdings of Del. - 5, L.L.C.
10.7 Tax Indemnification Agreement, dated March 31, 1998,
by and between Brandywine Operating Partnership,
L.P. and Brookstone Holdings of Del. - 6, L.L.C.
-4-
<PAGE>
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: April 13, 1998 By: /s/ Gerard H. Sweeney
-------------- -----------------------
Gerard H. Sweeney, President and Chief
Executive Officer
(Principal Executive Officer)
Date: April 13, 1998 By: /s/ Mark S. Kripke
-------------- --------------------
Mark S. Kripke, Chief Financial Officer
(Principal Financial and Accounting
Officer)
-5-
<PAGE>
EXHIBIT 10.1
Amended and Restated Transfer Agreement
---------------------------------------
THIS AGREEMENT is made and entered into as of the 31st day of
March, 1998, by and between those entities listed on the attached Exhibit "A"
(collectively, "Transferors"), having an office c/o Pitney, Hardin, Kipp & Szuch
200 Campus Drive, Florham Park, New Jersey 07932 and BRANDYWINE OPERATING
PARTNERSHIP, L.P., a limited partnership of the State of Delaware, having an
office at 16 Campus Boulevard, Suite 150, Newtown Square, Pennsylvania 19073
("BOP").
RECITALS
--------
WHEREAS, Transferors and BOP are parties to that certain Real
Property Purchase Agreement, dated February 24, 1998 (the "Prior Agreement").
WHEREAS, Transferors and BOP wish to amend and restate the
Prior Agreement in its entirety.
WHEREAS, collectively Transferors own (1) certain real estate
("Land") as set forth on the attached Exhibit "B," and (2) all improvements,
structures, and fixtures located upon the Land (but excluding any portion of the
same owned by tenants under "Tenant Leases" ("Tenants") if any (as defined
below) ("Improvements"). The Land and Improvements are sometimes referred to
herein collectively as the "Real Property" and, for the purpose of general
description and not the limitation of that which is set forth on Exhibit "B,"
consist primarily of eight (8) office buildings located in the Townships of
Lawrenceville and East Windsor and the City of Trenton in Mercer County, New
Jersey, and in the Township of Montgomery in Somerset County, New Jersey, and in
the City of New Brunswick, Middlesex County, New Jersey, and two (2) tracts of
vacant land located in the Townships of Lawrenceville, Mercer County and
Montgomery, Somerset County, New Jersey. The owner of each parcel of Real
Property is set forth on Exhibit "A."
WHEREAS, BOP desires to acquire and Transferors are willing to
transfer the "Assets" (as defined below), on the terms and conditions
hereinafter documented.
NOW, THEREFORE, in consideration of the promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Transfer. Subject to the terms, covenants, and conditions
of this Agreement, Transferors shall transfer to BOP, and BOP shall acquire from
Transferors, (a) all right, title, and interest of Transferors in the Real
Property, (b) all right, title, and interest of Transferors as lessors in and to
all leases shown on the Rent Roll attached hereto as Exhibit "C"
<PAGE>
("Tenant Leases") relating to the leasing of space in the Real Property and all
of the rights, interests, benefits, and privileges of the lessors thereunder,
(c) to the extent assignable, all right, title, and interest of Transferors in
and to any contract rights and agreements (including, but not limited to,
service agreements), the tradenames Princeton Pike Corporate Center, Bloomberg
(518) Business Park, 104 Windsor Center, Capital Center, 33 West State Street
and Kilmer Square (all renderings, artwork, flags, awnings depicting or being a
part of ) utility contracts, or other contracts, warranties and guarantees
relating to the operation of the Assets ("Intangible Assets"). The Real
Property, the Tenant Leases, and the Intangible Assets are hereinafter referred
to collectively as the "Assets."
2. Consideration. The consideration ("Consideration") for the
transfer of the Assets shall be the sum of One Hundred Sixty Million and 00/100
Dollars ($160,000,000.00) as may be adjusted in accordance with Paragraph 3
below. Each of the Assets is allocated a portion of the Consideration as set
forth on Exhibit "B" attached hereto. This portion allocated to an individual
Asset shall be hereinafter referred to as the "Asset Allocated Consideration."
3. Payment of Consideration. The Consideration shall be
remitted to Transferors by BOP as follows:
a. Deposit. Concurrently with the execution of the
Prior Agreement, BOP delivered to National Title Service, Inc., agents for
Commonwealth Land Title Insurance Company, Attention: M. Gordon Daniels, 1700
Market Street, Philadelphia, PA 19103 (the "Escrow Agent") by wire transfer, the
sum of Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00) (the
"Initial Deposit"). On or before the Inspection Termination Date, as defined
hereinafter, BOP shall pay to Escrow Agent the sum of One Million and 00/100
Dollars ($1,000,000.00) (the "Additional Deposit") (the Initial Deposit and the
Additional Deposit being referred to herein collectively as the "Deposit").
Escrow Agent shall place the Deposit in an interest-bearing account. The portion
of the Deposit allocated to an individual Asset shall be that percentage of the
entire Deposit equal to the proportion in which the numerator is the Asset
Allocated Consideration and the denominator is the Consideration (the "Asset
Allocated Deposit"). The Escrow Agent shall not be obligated to segregate the
Deposit based upon the Asset Allocated Deposit. The terms and provisions of the
disposition of the Deposit are more particularly set forth in paragraph 10 of
this Agreement.
b. Closing Consideration. The balance of the
Consideration (i) as may be reduced by the principal amount of Transferors' debt
(which equals $16,406,258.46 as of January 31, 1998) with Connecticut General
Life Insurance Company ("Pike IV Lender") that is assumed by BOP for the Asset
known as Princeton Pike Corporate Center IV ("Pike IV"); and (ii) as otherwise
adjusted by the prorations and credits specified herein, shall be remitted on
the "Closing Date" (as defined below) (the amount to be remitted under this
subparagraph B being herein called the "Closing Consideration"). The Closing
Consideration shall be made by one of two methods, which method shall be
selected by Transferors: (a) wire transfer of immediately available federal
funds; or (b) issuance to Transferors or any of Transferors' partners or
-2-
<PAGE>
shareholders of Class A Units of Limited Partnership Interest ("Units") in BOP,
the valuation of which Units shall be determined in accordance with the method
set forth in Exhibit "N" attached hereto and made a part hereof provided,
however, that if Transferors or any of Transferors' partners or shareholders
elect and are qualified as "accredited investors," at their option, to receive
all or a portion of their share of the Consideration in the form of Units in
BOP, then the election must be made to BOP in writing no later than March 20,
1998. Such election notice shall also be in form and content substantially
similar to Exhibit "N". If such election is made, the parties thereto shall, in
good faith, execute and deliver to each other such additional documentation as
may be reasonably requested by the other setting forth mutually acceptable terms
for the conveyance of the Units, witch documentation shall include the
representations from the Transferor partnership and the exerciser all as set
forth in Exhibit "N".
4. Title.
------
a. Title Policies. Transferors have delivered to BOP
copies of title policies in respect to each of the Assets, dated and prepared by
such title companies as set forth in the summary attached hereto as Exhibit "D"
(collectively the "Title Policy"). BOP shall be using the National Title
Service, Inc. of Commonwealth Land Title Insurance Company as its title company
(the "Title Company").
Transferors shall deliver good and marketable title to the
Assets on the Closing Date. Conclusive evidence of the availability of such
title shall be the willingness of' Title Company to issue to BOP on the Closing
Date an A.L.T.A. owner's title insurance policy ("Owner's Policy"), in the face
amount of the Asset Allocated Consideration for each of the Assets, which
Owner's Policy shall show (i) title to the Asset to be vested of record in BOP,
and (2) the Permitted Exceptions (as hereinafter defined) to be the only
exceptions to title.
b. BOP's Title Examination. If BOP elects to conduct
its own title examination and obtain a survey of any or all of the Assets, then
it shall do so at its sole cost and expense. If BOP objects to title or survey
matters, then it shall do so by the Inspection Termination Date by providing
Transferors with written notice of such objection together with an explanation
thereof (the "Title Notice"). As used in this Agreement, the term "Permitted
Exceptions" means: (a) any and all matters shown on the Title Policy and any
matter as to which (i) BOP does not provide a written exception in the Title
Notice or (ii) as to which Transferors have elected in "Transferors' Notice"
(defined below) not to cure in accordance with the following paragraph but which
BOP nevertheless thereafter elects to accept; (b) all matters reflecting the
existence or terms of Tenant Leases shown on the "Rent Roll" attached as Exhibit
"C" hereto and incorporated herein, other than in the manner of the nature of a
default under any of the Tenant Leases; and (c) all matters, whether or not of
record, that arise out of the actions of BOP, or its agents, representatives, or
contractors.
If, in the Title Notice, BOP notifies Transferors of an
objection or objections to one or more title matters, other than any Permitted
Exceptions and other than any mortgages
-3-
<PAGE>
respecting any of the Assets, Transferors shall, within seven (7) days after the
Title Notice, provide BOP with a notice ("Transferors' Notice") stating whether
or not Transferors will cure any or all such defects. Any or all defects which
Transferors elect to cure must be cured prior to Closing (defined below).
Transferors shall be conclusively deemed to have agreed to cure any mortgages
and other voluntary liens dischargeable by the payment of money relative to any
of the Assets by the payment of same at Closing out of the Closing proceeds.
If Transferors elect to cure none or less than all of the
matters properly objected to by BOP (other than those matters which Transferors
are required to cure pursuant to the preceding paragraph), then BOP shall,
within seven (7) days thereafter, provide notice to Transferors that BOP elects
either (a) to accept such cure as Transferors specify in Transferors' Notice or
Transferors are obligated to effect under the preceding paragraph and withdraw
the balance of BOP's objections and proceed to Closing without diminution of the
Consideration, or (b) to terminate this Agreement in respect to the Asset(s)
subject to the uncured title defect, in which case the Asset Allocated Deposit
relative to such Asset(s) shall be forthwith refunded to BOP as well as a
reimbursement of title and survey charges actually incurred by BOP, but not to
exceed Ten Thousand and 00/100 Dollars ($10,000.00) for each affected Asset, and
not more than Thirty Thousand and 00/100 Dollars ($30,000.00) in total, and the
parties shall have no further obligation under this Agreement for each such
affected Asset. Notwithstanding the preceding, BOP shall be permitted to
terminate this Agreement in its entirety if the aggregate value of the Asset(s)
in respect to which it is permitted to terminate this Agreement pursuant to this
paragraph exceeds thirty (30%) percent of the total Consideration; and upon
termination pursuant to this sentence, BOP shall receive a refund of the entire
Deposit, along with a reimbursement of title and survey charges actually
incurred by it, but not to exceed Thirty Thousand and 00/100 ($30,000.00)
Dollars, and the parties shall have no further obligation under this Agreement,
with this Agreement being deemed canceled in its entirety and null and void.
5. Due Diligence Review. BOP shall have a period of
twenty-five (25) days from February 24, 1998 (the "Effective Date") (the
twenty-fifth (25th) such day after the Effective Date being the "Inspection
Termination Date") to complete its due diligence review, examination, and
inspection of all matters pertaining to its acquisition of the Assets,
including, without limitation, the Tenant Leases, service agreements, survey,
and all financial physical, environmental, and compliance matters and conditions
respecting the Assets. BOP shall conduct its due diligence review, inspections,
and examinations in a manner so as to not cause damage, loss, cost, or expense
to Transferors, the Assets, or the tenants of the Assets and so as to not
interfere with or disturb any tenant at the Assets, and BOP will indemnify,
protect, defend, and hold Transferors harmless from and against any such damage,
loss, cost or expense. The foregoing indemnity shall survive Closing or the
termination or cancellation of this Agreement. Without limitation of the
foregoing, in no event shall BOP contact any tenant of the Assets without
Transferors' express written consent. BOP shall procure comprehensive general
liability insurance in connection with its investigations of the Assets and its
entry thereon pursuant to the provisions of this paragraph, with limits,
coverage and from an insurer reasonably satisfactory to Transferors and with
Transferors named as an additional named insured thereunder. Transferors
-4-
<PAGE>
shall have the right, at their option, to cause a representative of Transferors
to be present at all inspections, reviews, and examinations conducted hereunder.
BOP, at its expense, shall promptly deliver to Transferors true, accurate, and
complete copies of any written reports relating to the Assets prepared for or on
behalf of BOP by any third party. BOP shall keep all information or data
received or discovered in connection with any of the inspections, reviews, or
examinations strictly confidential in accordance paragraph 13G hereof.
On or prior to the Inspection Termination Date, if BOP has
determined in the exercise of its reasonable discretion, that the Assets are not
suitable for its purposes, then, on notice to Transferors, it may terminate this
Agreement and receive a return of the Deposit in accordance with the provisions
of paragraph 10. In the event such a notice is not tendered to Transferors on or
prior to the Inspection Termination Date, then BOP shall be deemed to have
waived its rights pursuant to this paragraph, and shall proceed to Closing
hereunder.
6. Closing; Time of the Essence. The transfer of the Assets
herein provided shall be consummated by delivery and exchange of the necessary
funds and documents by the parties to each other in order to consummate the
transaction contemplated by this Agreement on the Closing Date. The "Closing
Date" shall be the seventh (7th) day following the Inspection Termination Date,
provided that BOP has not previously exercised its right to terminate this
Agreement in accordance with paragraph 5 hereof. Time is of the Essence for the
Closing Date, however, in order to satisfy the requirements of paragraphs
6A(l)(o) or 11A(3), Transferors may elect in writing to extend such Closing Date
for a period of thirty (30) days.
a. Deliveries. At the Closing, the parties shall
deliver the following:
(1) By Transferors.
---------------
(a) a duly executed and
acknowledged original deed of bargain and sale with covenant against grantor's
acts in customary New Jersey form ("Deed") in favor of BOP, conveying the Real
Property portion of the Assets to BOP;
(b) a duly executed and
acknowledged counterpart of an Assignment and Assumption in the form of Exhibit
"E" attached hereto and made a part hereof ("Assignment and Assumption"),
covering the interest of Transferors in the Tenant Leases and the Intangible
Assets to be conveyed to BOP hereunder;
(c) an affidavit of title in
the customary New Jersey form;
(d) a certificate of each of
Transferors respecting the "non-foreign" status of each of Transferors in order
to satisfy the requirements of Section 1445(f) of the Internal Revenue Code;
-5-
<PAGE>
(e) a duly executed counterpart of
a Bill of Sale in the form of Exhibit "F" covering the any personal property to
be conveyed to BOP hereunder;
(f) to the extent available to
Transferors, originals of all Tenant Leases;
(g) to the extent available to
Transferors, originals of all governmental licenses, permits, approvals,
certificates of occupancy, and the like, and originals of all plans and
specifications respecting the Assets and originals of all service contracts
concerning or affecting the Assets;
(h) any and all Tenant Estoppel
Certificates not previously delivered to BOP. Transferors shall be deemed to
have satisfied this requirement upon presentation to BOP of Tenant Estoppel
Certificates for any tenant occupying not less than eighty percent (80%) of the
gross rentable square footage of the relevant parcel of Real Property.
Notwithstanding the preceding, Transferors shall be obligated to provide Tenant
Estoppel Certificates for any tenant occupying in excess of ten percent (10%) of
the gross rentable square footage of any relevant parcel of the Real Property.
In lieu of Tenant Estoppel Certificates, Transferors may elect to satisfy their
percentage requirements of this paragraph with the delivery to BOP of Landlord
Estoppel Certificate(s);
(i) form letters executed by
Transferors and addressed to each tenant at the Assets and each service
provider, advising such tenants ("Notice to Tenants") and service providers of
the transfer of the Assets to BOP;
(j) a counterpart Transferors-BOP
closing statement reflecting all financial aspects of the transaction;
(k) all keys and security codes, if
any, to the Real Property;
(l) a current Rent Roll;
(m) a certificate that all of
Transferors' representations and warranties remain true in all material respects
as of the Closing;
(n) a receipt from all brokers
identified in this Agreement, stating the payment in full of all brokerage
commissions due to such brokers;
(o) to the extent issued by the New
Jersey Department of Environmental Protection and available to Transferors,
Industrial Site Recovery Act, N.J.S.A.- 13:1K-6 et seq., (ISRA) determination
letters for each of the Assets;
-6-
<PAGE>
(p) such other documentation as may
be reasonably requested by the Title Company to vest title to the Assets in BOP;
(q) a duly executed and
acknowledged counterpart of an Assignment, Assumption and Estoppel Agreement in
form and substance substantially similar to Exhibit "M" attached hereto and made
a part hereof, evidencing the parties agreement that, upon Closing, Transferors
have assigned and BOP has assumed the principal amount of the Pike IV debt and
all rights and responsibilities under the loan documents with the Pike IV
Lender.
(2) By BOP. BOP shall deliver (i) the
Closing Consideration in accordance with paragraph 3B hereof, (ii) a duly
executed and acknowledged counterpart of the Assignment and Assumption covering
the assumption by BOP of Transferors' obligation under the Tenant Leases and the
Intangible Assets to be conveyed to BOP hereunder as well as Transferors'
obligations for any and all real estate commissions and tenant improvement costs
approved by BOP as set forth on the attachment to the Assignment and Assumption,
Exhibit "E", and (iii) a duly executed and acknowledged counterpart of an
Assignment, Assumption and Estoppel Agreement in form and substance
substantially similar to Exhibit "M" attached hereto and made a part hereof,
evidencing the parties agreement that, upon Closing, Transferors will have
assigned and BOP will have assumed the principal amount of the Pike IV debt and
all rights and responsibilities under the loan documents with the Pike IV
Lender. In addition, BOP shall duly execute the Notices to Tenants and shall be
responsible for the prompt delivery of the same to the tenants of the Assets.
b. Closing Costs. BOP shall pay (1) all costs and
expenses of the issuance of the Owner's Policy and the policies of title
insurance herein provided, including, but not limited to, survey costs, title
insurance premiums, and the costs of any preliminary title reports required in
connection with the same, and (2) the cost of any of its examinations and
inspections and audits of the Assets, including, but not limited to, the cost of
any environmental or financial audits. Transferors shall pay the New Jersey
transfer taxes payable in connection with the recording of the Deed. Transferors
and BOP shall each pay their respective (i) legal fees and expenses, (ii) share
of prorations (as provided below) and (iii) all assumption fees due in
connection with the Pike IV loan.
c. Prorations.
-----------
(1) Items to Be Prorated. With respect
to income and expenses for the month of the Closing, the following shall be
prorated between Transferors and BOP as of the Closing Date, and except where
specifically provided in this Agreement to the contrary, Transferors shall be
entitled to the income and responsible for expenses of the Assets prior to the
Closing Date and BOP shall be entitled to the income and responsible for
expenses of the Assets after the Closing Date:
-7-
<PAGE>
(a) All real estate taxes on the
Assets for the current year. In no event shall Transferors be charged with or be
responsible for any increase in the taxes on the Assets after the Closing
resulting from the transfer of the Assets or from any improvements made or
leases entered into at any time or for any reason.
(b) All current rentals and other
tenant reimbursements required under the Tenant Leases and received by
Transferors as of the Closing Date. As and when collected after the Closing
Date, BOP will pay all rentals in regards to Transferors' period of ownership to
Transferors (including, without limitation, delinquent rentals). BOP shall be
deemed to be holding such rentals in trust for Transferors until such payment is
made. BOP further agrees on reasonable request of Transferors to provide an
accounting for such rentals received after the Closing Date.
(c) All operating expenses.
(2) Security Deposits. Security deposits under
Tenant Leases (if and to the extent that such deposits are in Transferors'
actual possession and have not been otherwise permissibly applied by Transferors
pursuant to the relevant Tenant Leases to any other obligations of any lessee
under the Tenant Leases) shall be credited against the Consideration.
(3) Calculation. The prorations and payments shall
be made on the basis of a written statement submitted to BOP by Transferors
three (3) business days prior to the Closing Date and approved by BOP and
Transferors. In the event any prorations or apportionments made under this
subparagraph C shall prove to be incorrect for any reason within ninety (90)
days from the Closing Date, then either party shall be entitled to an adjustment
to correct the same. Any item which cannot be finally prorated because of the
unavailability of information including but not limited to prior year Common
Area Maintenance (CAM) expense reconciliations, shall be tentatively prorated on
the basis of the best data then available and recalculated when the information
is available, which both parties agree shall be completed on or before one (1)
year from the Closing Date.
(4) Indemnity. BOP shall indemnify, protect, defend,
and hold Transferors harmless from and against any and all claims by and
liabilities to any third persons arising out of the deposits or fees for which
BOP obtains a credit as provided in subparagraph (1)(b) or (2) above in this
paragraph C.
(5) Closing Credit. Transferors shall provide BOP
with a yield protection credit of $1.6 million dollars against the Consideration
if BOP assumes the Pike IV Lender debt.
7. Destruction/Condemnation of Assets. In the event any of the
Assets is damaged or destroyed by any casualty or by a partial taking or
condemnation under the provisions of applicable eminent domain law after the
date hereof but prior to the Closing Date,
-8-
<PAGE>
Transferors shall have no obligation to repair or replace any such damage or
destruction. Transferors shall, upon consummation of the transaction herein
provided, assign to BOP all claims of Transferors under or pursuant to any
applicable casualty insurance coverage or under the provisions of applicable
eminent domain law and all proceeds from any such casualty insurance or
condemnation awards received by Transferors on account of any such casualty or
condemnation, the damage from which shall not have been repaired by Transferors
prior to the Closing Date (and there shall be no reduction of the
Consideration). Notwithstanding the foregoing, in the event any of the Assets
are damaged or destroyed by any casualty or by a partial taking or condemnation
under the provisions of applicable eminent domain law after the date hereof but
prior to the Closing Date, BOP shall have no obligation to acquire any of the
Asset(s) if such damage, destruction or taking exceeds $350,000 for any one
Asset or fifteen (15%) percent or more of the Real Property for any one Asset.
In the event BOP elects to terminate this Agreement in respect to the Asset(s)
subject to the destruction/condemnation as provided in this paragraph 7, the
Asset Allocated Deposit relative to such Asset(s) shall be forthwith refunded to
BOP, the Consideration shall be reduced by the Asset Allocated Consideration
relative to such Asset(s) and the parties shall have no further obligation under
this Agreement for each such affected Asset.
8. Representations and Warranties.
-------------------------------
a. DISCLAIMER OF REPRESENTATIONS OR
WARRANTIES BY TRANSFERORS. Except as otherwise expressly provided in paragraph
8B below, BOP hereby acknowledges and agrees that the transfer of the Assets
hereunder is and will be made on an "AS IS, WHERE IS" basis and that Transferors
have not made, does not make, and specifically negates and disclaims any
representations, warranties, or guarantees of any kind or character whatsoever,
whether express or implied, oral or written, past, present, future, or otherwise
of, as to, concerning, or with respect to the Assets, including, without
limitation, (1) environmental matters relating to the Assets or any portion
thereof, (2) geological conditions, including, without limitation, subsidence,
subsurface conditions, water table, underground water reservoirs, limitations
regarding the withdrawal of water, and faulting, (3) whether or not and to the
extent to which the Assets or any portion thereof is affected by any stream
(surface or underground), body of water, flood prone area, flood plain,
floodway, or special flood hazard, (4) drainage, (5) soil conditions, including
the existence of instability, past soil repairs, soil additions, or conditions
of soil fill, or susceptibility to landslides, or the sufficiency of any
undershoring, (6) zoning to which the Assets or any portion thereof may be
subject, (7) the availability of any utilities to the Assets or any portion
thereof including, without limitation, water, sewage, gas, and electric, (8)
usages of neighboring properties, (9) access to the Assets or any portion
thereof, (10) the value, compliance with the plans and specifications, size,
location, age, use, design, quality, description, durability, structural
integrity, operation, title to, or physical or financial condition of the Assets
or any portion thereof, or any income, expenses, charges, liens, encumbrances,
rights, or claims on or affecting or pertaining to the Assets or any part
thereof, (11) the presence of Hazardous Substances, as defined hereinafter, in
or on, under, or in the vicinity of the Assets, (12) the condition or use of the
Assets or compliance of the
-9-
<PAGE>
Assets with any or all past, present, or future federal, state, or local
ordinances, rules, regulations, or laws, building, fire, or zoning ordinances,
codes, or other similar laws, (13) the existence or non-existence of underground
storage tanks, (14) any other matter affecting the stability or integrity of the
Land or Improvements, (15) the potential for further development of the Assets,
(16) the existence of vested land use, zoning, or budding entitlements affecting
the Assets or (17) the merchantability of the Assets or fitness of the Assets
for any particular purpose (BOP affirming that BOP has not relied on
Transferors' skill or judgment to select or furnish the Assets for any
particular purpose, and that Transferors make no warranty that the Assets are
fit for any particular purpose). For purposes hereof, the term "Hazardous
Substances" means any hazardous, toxic, or dangerous waste, substance, or
material, pollutant or contaminant, as defined for purposes of the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.), as amended ("CERCLA"), or the Resource Conservation and
Recover), Act (42 U.S.C. Sections 6901 et seq.), as amended, or any other
federal, state, or local law, ordinance, rule, or regulation applicable to the
Assets, or any substance which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous, or any
substance which contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenyls ("PCBs"), radon gas, urea formaldehyde, asbestos, or
lead. BOP acknowledges that it has or will complete all physical and financial
examinations relating to the acquisition of the Assets hereunder and will
acquire the same solely on the basis of such examinations and the title
insurance protection afforded by the Owner's Policy and not on any information
provided or to be provided by Transferors. BOP further acknowledges and agrees
that any information provided or to be provided with respect to the Assets was
obtained from a variety of sources and that Transferors have not made any
independent Investigation or verification of such information and makes no
representations as to the accuracy or completeness of such information.
Transferors shall not be liable for any negligent misrepresentation or any
failure to investigate the Assets nor shall Transferors be bound in any manner
by any verbal or written statements, representations, appraisals, environmental
assessment reports, or other information pertaining to the Assets or the
operation thereof furnished by Transferors or by any real estate broker, agent,
representative, employee, servant, or other person acting on Transferors'
behalf. It is understood and agreed that the Assets are transferred by
Transferors to BOP subject to the foregoing.
b. Representations and Warranties of Transferors.
Transferors hereby represent and warrant to BOP that, as of the Effective Date
and at all times through the Closing Date:
(1) Authority. On the Closing Date,
Transferors will have all requisite power and authority to execute and deliver
and to perform all of its obligations under this Agreement.
(2) Due Execution. As of the Effective
Date and on the Closing Date, the execution, delivery, and performance of this
Agreement have been duly authorized by all necessary action on the part of
Transferors.
-10-
<PAGE>
(3) Enforceability. As of the date hereof and on the
Closing Date, this Agreement constitutes a legal, valid and binding obligation
of Transferors enforceable against Transferors in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium, and
other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and general equitable principles.
Notwithstanding the preceding subparagraphs 13B(l)-(3), BOP
hereby acknowledges and agrees that Transferors' representations and warranties
contained therein are limited by certain tenant and partner "Rights to Purchase"
for the Assets known as Bloomberg (518) Business Park and Kilmer Square,
respectively, as such rights are more fully addressed on Exhibit "J" and in
paragraph 11A(3), "Transferors' Conditions to Closing."
(4) Rent Roll. Transferors have delivered or made
available to BOP copies of all Tenant Leases and other occupancy agreements
affecting the Assets. To the best of Transferors' knowledge, the Rent Roll
attached hereto as Exhibit "C" is true and complete, and identifies (i) each
tenant of the Assets under the Tenant Leases; (ii) the commencement date of the
Tenant Leases; (iii) the expiration date of the Tenant Leases; (iv) the monthly
minimum rental charge, the tenant's share of budding operating costs (including
without limitation, taxes) and any and all costs, expenses and other charges
payable by the tenant under the Tenant Leases.
(5) Service Agreements. Transferors have delivered
or made available to BOP copies of all management, leasing, and other service
contracts and other contracts and agreements available or otherwise known to
Transferors that will affect the ownership, use, and/or operation of the Assets
after the Closing.
(6) Suits and Proceedings. To the best of
Transferors' knowledge, there are no actions, suits, or proceedings pending or
threatened against or affecting any of the Transferors or the Assets which, if
determined adversely to any of the Transferors, would adversely affect its
ability to perform its obligations hereunder, or materially adversely affect the
Assets except for actions for possession, damages and or rent, if any, against
defaulted tenants under the Tenant Leases, as disclosed on Exhibit "G."
(7) Employment on "At-Will" Basis. All persons and
entities presently employed in connection with the operation and maintenance of
the Assets are employed on an "at will" basis; are dischargeable upon thirty
(30) days notice, and, unless otherwise directed by BOP, shall not be employed
in connection with the operation and maintenance of the Assets after Closing.
Transferors have no employment agreements, either written or oral, with any
person which would require BOP to employ any person after the date hereof, in
connection with the operation and maintenance of the Assets after Closing.
Transferors acknowledge and are aware that BOP may, but shall have no obligation
to, offer employment to any of the current employees of Transferors.
-11-
<PAGE>
(8) Condemnation. Except as set forth on Exhibit
"H," there is no condemnation or eminent domain proceeding pending with regard
to any part of the Assets, and to the best of Transferors' knowledge, no such
proceedings are proposed.
(9) Leases. To the best of Transferors' knowledge,
no tenant has advised Transferors that Transferors are in default under any of
the Tenant Leases, or asserted any claim or basis for any claim for free or
reduced rent or right of setoff against the landlord or the rent under the
Tenant Leases, and Transferors and its agents have no actual knowledge of any
default or any event which has taken place which, with the passage of time, or
the delivery of notice, or both, could become an event of Transferors' default.
To the best of Transferors' knowledge, Transferors have the sole right to
collect rents under the Tenant Leases, and neither such right nor any of the
Tenant Leases has been assigned, pledged, hypothecated or otherwise encumbered
by Transferors except as additional collateral for the existing mortgages upon
the Assets which shall be satisfied at or before Closing. To the best of
Transferors' knowledge, no holder of any such collateral assignment has asserted
or exercised any of its right to collect such rents. Except as provided on the
Assignment and Assumption, Exhibit "E", any tenant improvements which
Transferors are obligated to complete pursuant to any Tenant Leases (or any
unsigned lease proposal or lease amendment) has been completed as of this date
or shall be completed as of Closing, and all costs therefore have been or shall
be Consideration by Transferors, and all of Transferors' work has or shall have
been accepted by the tenant without exception on or before Closing.
(10) Compliance with Law. Except as may be set forth
in the Transferors' environmental reports previously delivered to BOP, to the
best of Transferors' knowledge without independent investigation there are no
Hazardous Substances (defined below) and no Hazardous Wastes (defined below)
present on the Assets including, without limitation, asbestos, flammable
substances, explosives, radioactive materials, hazardous wastes, toxic
substances, pollutants, pollution, contaminant, polychlorinated biphenyls
("PCBs"), urea formaldehyde foam insulation, radon, corrosive, irritant,
biologically infectious materials, petroleum product, garbage, refuse, sludge,
hazardous or waste materials, and there has been no use of the Assets that may,
under any federal, state or local environmental statute, ordinance or
regulation, require, at any time, any closure or cessation of the use or
occupancy of the Assets and/or impose, at any time, upon the owner of the Assets
any clean-up or other monetary obligation. To the best of Transferors'
knowledge, Transferors have not been identified in any litigation,
administrative proceeding or investigation with respect to the Assets as a
responsible party or potentially responsible party for any liability for
clean-up costs, natural resource damages or other damages or liability for prior
disposal or release of Hazardous Substances, Hazardous Wastes or other
environmental pollutants or contaminants, and no lien or superlien has been
recorded, filed or otherwise asserted against any real or personal assets of
Transferors for any clean-up costs or other costs incurred in connection with
any environmental contamination that is attributable, in whole or in part, to
Transferors Assets. For purposes of this Agreement, "Hazardous Substances" means
actionable amounts of those elements and
-12-
<PAGE>
compounds which are designated as such in Section 101(14) of the Comprehensive
Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601(14),
as amended, all petroleum products and by-products, and any other hazardous
substances as that term may be further defined in any and all applicable
federal, state and local laws including the New Jersey Industrial Site Recovery
Act ("ISRA"); and "Hazardous Wastes" means actionable amounts of any hazardous
waste, residential or household waste, solid waste, or other waste as defined in
applicable federal, state and local laws. Transferors have not received any
summons, citation, directive, letter or other communication, written or oral,
from any governmental or quasi-governmental authority concerning any intentional
or unintentional action or omission on Transferors' part in connection with the
Assets which (a) resulted in the releasing, spilling, leaking, pumping, pouring,
emitting, emptying or dumping of Hazardous Substances or Hazardous Wastes, or
(b) related in any way to a violation in the generation, storage, transport,
treatment or disposal of Hazardous Substances or Hazardous Wastes. To the best
of Transferors' knowledge, neither the Assets nor any portion thereof, have been
identified on the federal CERLIS, the National Priorities List (40 C.F.R. Part
300, App. B) or any state or local list of potential hazardous waste disposal
sites.
(11) Permits, Approvals and Certificates. To the
best of Transferors' knowledge, all required certificates of occupancy for the
Assets and for separately demised spaces at the Assets, and all other licenses,
permits, authorizations and approvals necessary for the operation of the Assets,
have been validly issued.
(12) FIRPTA. Transferors are not "foreign persons"
as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of
1954, as amended (the "Code").
(13) Operating Statement. To the best of
Transferors' knowledge, Exhibit "I" is a correct and complete list of the cash
basis income statements for 1995, 1996 and 1997 containing all (a) actual
expenses of the Assets, including real estate taxes, heat, electric, insurance,
water, sewer, gas, fuel oil, trash removal, maintenance and repairs for 1995,
1996 and 1997; and (b) actual income collected from rents and other charges paid
by tenants (but specifically excluding interest in reserves, tenant security
deposits held as such, and interest thereon) for 1995, 1996 and 1997.
(14) Mechanic's Liens. To the best of Transferors'
knowledge, except as provided in the Assignment and Assumption, Exhibit "E", no
work has been performed or is in progress at, and no materials have been
furnished to the Assets which, though not presently the subject of, might give
rise to construction, mechanic's, materialmen's, municipal or other liens
against the Assets or any portion thereof, except that for which full and
complete releases have been obtained. If any lien for any such work is filed
before or after Closing, Transferors shall promptly discharge the same.
-13-
<PAGE>
(15) Rights to Purchase. Except as may be provided
on Exhibit "J," to the best of Transferors' knowledge, 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 to any third party of the Assets.
(16) Rollback Rates. Except as may be provided on
Exhibit "K," the Assets are not subject to any roll-back or agricultural
taxation or other similar tax abatement program. To the extent that any of such
Assets as provided on Exhibit "K" are subject to such rollbacks or abatements,
Transferors make no representation or warranty as to the continuation of such
status and BOP shall be solely responsible for payment of any rollback taxes
and/or the cost and responsibility for continuation of the abatement status.
(17) Development Agreements. Except as may be
provided on Exhibit "L," to the best of Transferors' knowledge, Transferors are
in compliance with and have fully paid and discharged all obligations arising
under any and all development and any and all other agreements with county,
municipal and other governmental and quasi-governmental agencies and authorities
respecting the ownership, development and operation of the Assets and all
portions thereof.
c. Representations and Warranties of BOP. BOP hereby
represents and warrants to Transferors that as of the Effective Date and at all
times through the Closing Date:
(1) Authority. BOP has all requisite power and
authority to execute and deliver and to perform all its obligations under this
Agreement.
(2) Due Execution. The execution, delivery, and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of BOP and does not and will not (i) require any
consent or approval of any other party or individuals that have not been
obtained or (ii) violate any provision of BOP's formation or governing
documents, if any.
(3) Enforceability. This Agreement constitutes a
legal, valid, and binding obligation of BOP enforceable against BOP in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization moratorium, and other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights and general
equitable principles.
(4) Intention. BOP is acquiring the Assets for its
own account and not with a view to any public sale or distribution thereof,
provided, however, nothing herein shall be construed or applied to prohibit or
otherwise limit BOP's right to dispose of all or any portion of BOP's interest
in the Assets in compliance with all applicable law.
-14-
<PAGE>
(5) Expertise. BOP has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks relating to its acquisition of the Assets and making an informed
acquisition and investment decision in connection therewith.
(6) Due Diligence. BOP has or will have made such
examination, review, and investigation of the facts and circumstances necessary
to evaluate the Assets as it has deemed necessary or appropriate to form a basis
for its evaluation of an acquisition of the Assets.
(7) No Bankruptcy/Dissolution Event. No "Bankruptcy/
Dissolution Event" (as defined below) has occurred with respect to BOP. BOP has
sufficient capital or net worth to meet its obligations, including remittance of
the Consideration, under this Agreement.
d. Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in paragraphs 8B
and 8C of this Agreement shall survive the expiration or earlier termination of
this Agreement, the Closing, and all conveyance of title to BOP for a period of
six (6) months.
e. BOP'S WAIVER AND RELEASE. As part of BOP's
agreement to acquire and accept the Assets "AS-IS WHERE-IS," and not as a
limitation on such agreement, BOP, except as otherwise expressly provided in
paragraph 8B above, hereby unconditionally and irrevocably waives any and all
actual or potential rights BOP might have regarding any form of warranty,
express or implied, of any kind or type, relating to the Assets or any of the
matters referred to in subparagraph A above ("Assets Condition"). Such waiver is
absolute, complete, total and unlimited in any way. Such waiver includes, but is
not limited to, a waiver of express warranties, implied warranties, warranties
of fitness for a particular use, warranties of merchantability, warranties of
habitability, strict liability rights, and claims, liabilities, demands, or
causes of action of every kind and type, whether statutory, contractual or under
tort principles, at law or in equity, including, but not limited to, claims
regarding defects which might have been discoverable, claims regarding defects
which were not or are not discoverable, product liability claims, product
liability type claims, all other extant or later created or conceived of strict
liability or strict liability type claims and rights, and any claims under
CERCLA, except to the extent Transferors willfully fail to disclose relevant
material facts or if Transferors commit fraud. Except as otherwise expressly
provided in paragraph 8B above, effective upon the Closing Date, and to the
fullest extent permitted by law, BOP hereby, releases, discharges, and forever
acquits Transferors and every entity affiliated with Transferors and all of
their officers, directors, shareholders, employees, agents, and independent
contractors, and the successor of each and every one of them, from all demands,
claims, liabilities, obligations, costs, and expenses which BOP may suffer or
incur relating to the Assets Condition or any other aspect of the Assets. As
part of the provisions of this subparagraph E, but not as a limitation thereon,
BOP hereby agrees, represents, and warrants that the matters released herein are
not limited to
-15-
<PAGE>
matters which are known or disclosed, and BOP hereby waives any and all rights
and benefits which it now has, or in the future may have conferred upon it, by
virtue of the provisions of federal, state, or local law, rules, or regulations.
In this connection and to the extent permitted by law, BOP
hereby agrees, represents, and warrants that BOP realizes and acknowledges that
factual matters now unknown to it may have, given or may hereafter give rise to
causes of action, claims, demands, debts, controversies, damages, costs, losses,
and expenses which are presently unknown, unanticipated and unsuspected, and BOP
further agrees, represents, and warrants that the waivers and releases herein
have been negotiated and agreed upon in light of that realization and that BOP
nevertheless hereby intends to release, discharge, and acquit Transferors from
any such unknown causes of action, claims, demands, debts, controversies,
damages, costs, losses, and expenses which might in any way be included in the
waivers and matters released as set forth in this subparagraph E.
9. BOP's Indemnification.
----------------------
BOP shall indemnify, protect, and defend Transferors against
and hold them harmless from (1) any "Claim" (as defined below) which arises
under the Assignment and Assumption, Exhibit "E", or which arises or accrues on
or after the Closing Date in connection with BOP's indemnification obligations
under paragraphs 5, 6C(4) and 13A, and (2) any Claim in any way arising from
BOP's inspections or examinations of the Assets prior to the Closing Date.
"Claim" means any obligation, liability, claim (including; any
claim for damage to Assets or injury to or death of any persons), lien or
encumbrance, loss, damage, cost, or expense.
BOP's indemnification obligations under this Agreement shall
cover the costs and expenses of Transferors, including reasonable attorneys'
fees, related to any actions, suits, or judgments incident to any of the matters
covered by such indemnities. BOP's indemnification obligations under this
Agreement shall also extend to any present or future advisor, trustee, director,
officer, partner, employee, beneficiary, shareholder, participant, or agent of
or in Transferors or any entity now or hereafter having a direct or indirect
ownership interest in Transferors. BOP's indemnification obligations under this
Agreement shall survive the Closing of the transaction contemplated hereunder.
BOP's indemnification obligations under paragraphs 5, 6C(4) and 13A shall
survive regardless of whether the transaction contemplated by this Agreement
closes.
10. Disposition of Deposit.
-----------------------
a. If the transaction herein provided shall not
be Closed, due to BOP's determination in the exercise of its reasonable
discretion that the Assets are not suitable
-16-
<PAGE>
for its purposes in accordance with paragraph 5 hereof, then neither BOP nor
Transferors shall have defaulted under this Agreement, and if this Agreement has
been terminated as provided herein, then the Deposit, together with all
interest, shall be returned to BOP, and neither party shall have any further
obligation or liability to the other.
b. In the event that any of Transferors'
Representations and Warranties contained in paragraph 8B of this Agreement are
materially false or if Transferors have failed or been unable to have performed
any of Transferors' Covenants contained in paragraph 12 of this Agreement which
are to be performed by Transferors on or before the date set forth in this
Agreement for the performance thereof, BOP may, prior to Closing, at its option,
terminate this Agreement by giving written notice of such termination to
Transferors and thereafter the Deposit shall be returned to BOP, and thereupon,
subject to the provisions of paragraph 9, the parties shall have no further
liability to each other hereunder. In the alternative, but without limiting
BOP's right upon any default by Transferors hereunder to receive the prompt
return of the Deposit, and solely in the event Transferors' default constitutes
Transferors' willful act or intentional omission, BOP may seek to enforce
specific performance of this Agreement.
c. BOP recognizes that the Assets will be removed by
Transferors from the market during the existence of this Agreement and that if
the transfer of the Assets contemplated hereby is not consummated because of
BOP's default, Transferors shall be entitled to compensation for such detriment.
Transferors and BOP acknowledge that it is extremely difficult and impracticable
to ascertain the extent of the detriment, and to avoid this problem, Transferors
and BOP agree that if the transfer of the Assets contemplated in this Agreement
is not consummated because any of BOP's Representations and Warranties contained
in paragraph 8C of this Agreement are materially false or because of BOP's
default under this Agreement, Transferors 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 Transferors
might otherwise be entitled, Transferors hereby specifically waiving any and all
rights which it may have to damages or specific performance as a result of BOP's
default under this Agreement.
d. In the event of Transferors' default under
subparagraph B above which results in BOP's termination of this Agreement, upon
termination by BOP hereunder, in addition to receiving the immediate return of
the Deposit, anything contained in the Agreement to the contrary
notwithstanding, BOP shall also receive from Transferors, upon demand, BOP's
actual, documented out-of-pocket costs and expenses associated with this
Agreement and BOP's anticipated acquisition of the Assets including, without
limitation, BOP's reasonable counsel fees and costs, title expenses, survey
costs, and other costs and expenses associated with BOP's due diligence,
including, without limitation, legal, financial and accounting due diligence,
BOP's structural inspection of the Assets and BOP's environmental assessment of
the Assets (collectively, "Transaction Costs"). The foregoing list is not
intended to be exclusive, but representative of the costs and expenses that the
parties anticipate that BOP will incur in
-17-
<PAGE>
anticipation of this transaction. Transferors' maximum reimbursement liability
under this subparagraph D shall not exceed $15,000 for any one Asset and $75,000
for all of the Assets.
11. Conditions to Closing.
----------------------
a. Transferors' Conditions to Closing. In addition
to the conditions provided in other provisions of this Agreement, Transferors'
obligations to perform its undertakings provided in this Agreement (including
its obligation to transfer the Assets) are conditioned on the following:
(1) Performance by BOP. The due performance
by BOP of each and every undertaking and agreement to be performed by it
hereunder (including the delivery to Transferors of the items specified to be
delivered by BOP in paragraph 6 hereof) and the material truth of each
representation and warranty made by BOP in this Agreement at the time as of
which the same is made and as of the Closing Date as if made on and as of the
Closing Date and BOP has delivered to Transferors a certificate duly executed by
BOP reaffirming the same as of the Closing Date.
(2) No Bankruptcy or Dissolution. That at
no time on or before the Closing Date shall any of the following
("Bankruptcy/Dissolution Event") have occurred with respect to BOP: (i) the
commencement of a case under Title 11 of the U.S. Code, as now constituted or
hereafter amended or under any other applicable federal or state bankruptcy law
or other similar law; (ii) the appointment of a trustee or receiver of any
Assets interest; (iii) an assignment for the benefit of creditors; (iv) an
attachment, execution, or other judicial seizure of a substantial Assets
interest; (v) the taking of, failure to take, or submission to any action
indicating an inability to meet its financial obligations as they accrue; or
(vi) a dissolution or liquidation, death, or incapacity.
(3) Tenant/Partner "Rights to Purchase."
That on or before the Closing Date, tenant and partner "Rights to Purchase"
shall have been canceled, waived or otherwise terminated for the Assets known as
Bloomberg (518) Business Park and Kilmer Square, respectively, as such rights
are more fully addressed on Exhibit "J". To the extent that either or both of
the aforementioned "Rights to Purchase" have not been canceled, waived or
otherwise terminated on or before the Closing Date, then Transferors may elect
to terminate this Agreement in respect to such Asset(s), the Asset Allocated
Deposit relative to such Asset(s) shall be forthwith refunded to BOP, the
Consideration shall be reduced by the Asset Allocated Consideration relative to
such Asset(s) and the parties shall have no further obligation under this
Agreement for either or both of such Assets.
b. BOP's Conditions to Closing. In addition to the
conditions provided in other provisions of this Agreement, BOP's obligations to
perform its undertakings provided in this Agreement (including its obligation to
acquire the Assets) are conditioned on the following:
-18-
<PAGE>
(1) Performance by Transferors. The due
performance by Transferors of each and every undertaking and agreement to be
performed by them hereunder (including the delivery to BOP of the items
specified to be delivered by Transferors in paragraph 6), and the material truth
of each representation and warranty made by Transferors in this Agreement at the
time as of which the same is made, and as of the Closing Date as if made on and
as of the Closing Date and Transferors have delivered to BOP a certificate duly
executed by Transferors reaffirming same as of the Closing Date.
(2) No Bankruptcy or Dissolution. That at
no time on or before the Closing Date shall a Bankruptcy/Dissolution Event have
been done by, against, or with respect to Transferors or any of the general
partners of Transferors.
12. Transferors' Covenants. Transferors covenant that they
will, after the date hereof until the Closing Date:
a. Maintenance. Maintain the Assets in their current
condition and repair, reasonable wear and tear alone excepted, operate the
Assets with first class management practices and leasing standards in its usual
and customary manner (including, but not limited to, maintaining in effect until
the Closing Date, the insurance policies now in effect with respect to the
Assets), 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 prior to Closing, except to the extent BOP is expressly assuming
obligations as set forth in the Assignment and Assumption, Exhibit "E," or
otherwise provided by this Agreement.
b. Alterations. Not make or permit to be made any
alterations, improvements or additions to the Assets without the prior written
consent of BOP, except those made by tenants pursuant to the right to do so
under their Tenant Leases, or by Transferors or its agents or representatives if
required by applicable law or ordinance, or as required under any Tenant Leases.
c. Lease. Not enter into any new lease, nor amend,
modify or terminate any existing Tenant Leases without BOP's reasonable consent,
except to the extent such new lease or amendment or modification equals or
exceeds the minimum leasing standards as set forth in the Proforma Assumptions
Section on page 4-15 of the investment offering previously prepared by
Transferors and delivered to BOP in connection with the marketing of the Assets
for sale.
d. Security Deposits. Not improperly apply any
tenant's security deposit to the discharge of such tenant's obligations in
violation of law or any terms of the Tenant Leases.
-19-
<PAGE>
e. Bill Tenants. Timely bill all tenants for all
rent billable under the Tenant Leases.
f. Notice to BOP. Notify BOP promptly of the
occurrence if, and to the extent Transferors receive notice, or have actual
knowledge of any of the following: (i) a fire or other casualty causing damage
to any of the Assets, or any portion thereof, (ii) receipt of notice of eminent
domain proceedings or condemnation of or affecting the Assets, or any portion
thereof, (iii) receipt of notice from any governmental authority or insurance
underwriter relating to the condition, use or occupancy of the Assets, or any
portion thereof, or setting forth any requirements with respect thereto; (iv)
receipt or delivery of any default or termination notice or claim of offset or
defense to the payment of rent from any tenant under the Tenant Leases; (v)
receipt of any notice of default from the holder of any lien or security
interest in or encumbering the Assets, or any portion thereof, (vi) a change in
the occupancy of the leased portions of the Assets; (vii) notice of any actual
litigation against Transferors, materially, adversely affecting or relating to
the Assets, or any portion thereof, or (ix) the commencement of any strike,
lock-out, boycott or other labor trouble, materially adversely affecting the
Assets, or any portion thereof.
g. Comply with Leases. Perform all obligations of
the landlord as required by the Tenant Leases or by any order or direction of
any governmental authority having jurisdiction thereof, and to the extent
required by law or by any of the Tenant Leases, maintain all security deposits
held under all Tenant Leases in a segregated account, with interest thereon as
required.
h. 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 affect the Assets or the transactions contemplated by
this Agreement, without the prior written consent of BOP which shall not be
unreasonably withheld; and not permit the creation of any liability which shall
bind BOP or the Assets after Closing, without the prior consent of BOP.
i. ISRA Determination. Prior to the Closing Date,
receive an ISRA Approval, as hereafter defined, for each of the Assets. The
"ISRA Approval" required by this subparagraph I shall be deemed to have been
obtained when Transferors' obtain the following in connection with the transfer
of title to the Assets to BOP: (i) a Letter of Non-Applicability from the NJDEP;
(ii) a No Further Action Letter from the NJDEP; (iii) a Remediation Agreement
from the NJDEP; (iv) approval by NJDEP of an application for a "small quantity"
exemption, underground storage tank exemption or a "minimal environmental
concern" exemption; or (v) any other approval or authorization pursuant to ISRA
that will permit the transaction contemplated by this Agreement to Close. To the
extent required, BOP shall cooperate with Transferors, its agents, contractors,
and employees and representatives of NJDEP as may be reasonably required for the
ISRA compliance process. Notwithstanding the preceding, in the event a Letter of
Non-Applicability or No Further Action Letter cannot be obtained, Transferors'
shall not be obligated to take any remedial action that may be required pursuant
to ISRA if such
-20-
<PAGE>
action would exceed $350,000 for any one of the Assets or if the aggregate value
of such required remedial action exceeds $ 1,000,000 for the Assets. In the
event Transferors elect to terminate this Agreement in respect to the Asset(s)
subject to the remedial work threshold as provided in this subparagraph I, the
Asset Allocated Deposit relative to such Asset(s) shall be forthwith refunded to
BOP, and the parties shall have no further obligation under this Agreement for
each such affected Asset.
13. Miscellaneous.
--------------
a. Brokers. Transferors represent and warrant to
BOP, and BOP represents and warrants to Transferors, that no broker or finder
has been engaged by it, respectively, in connection with any of the transactions
contemplated by this Agreement or to its knowledge is in any way connected with
any of such transactions other than Gale & Wentworth Corporate Services, Inc.
(the "Broker"). Transferors agree to pay the Broker a commission upon Closing in
accordance with a separate agreement between Transferors and the Broker. Other
than with respect to a claim by the Broker, in the event of a claim for broker's
or finder's fee or commissions in connection herewith, then Transferors shall
indemnify, protect, defend, and hold BOP harmless from and against the same if
it shall be based upon any statement or agreement alleged to have been made by
Transferors, and BOP shall indemnify, protect, defend, and hold Transferors
harmless from and against the same if it shall be based upon any statement or
agreement alleged to have been made by BOP. The parties' respective
indemnification obligations under this paragraph shall survive the Closing of
the transaction contemplated hereunder or the earlier termination of this
Agreement.
b. SEC Reporting (8-K) Requirements. For the period
of time commencing on the Effective Date and continuing through the first
anniversary of the Closing Date, and without limitation of other document
production otherwise required of Transferors hereunder, Transferors shall, from
time to time, upon reasonable advance written notice from BOP, provide BOP and
its representatives, with (i) access to all financial and other information
pertaining to the period of Transferors' ownership and operation of the Assets,
which information is relevant and reasonably necessary, in the reasonable
opinion of BOP's outside, third party accountants (the "Accountants"), to enable
BOP and its Accountants to prepare financial statements in compliance with any
or all of (a) Rule 3-05 or 3-14 of Regulation S-X of the Securities and Exchange
Commission (the "Commission"), as applicable; (b) any other rule issued by the
Commission and applicable to BOP; and (c) any registration statement, report or
disclosure statement filed with the Commission by, or on behalf of BOP; and (ii)
provided that, except in the case of a willful omission or material
misstatement, BOP pays the Transferors actual, documented out-of-pocket costs
and expenses and indemnifies and holds harmless Transferors for same, a
representation letter, signed by the individual(s) responsible for Transferors'
financial reporting, as prescribed by generally accepted auditing standards
promulgated by the Auditing Standards Division of the American Institute of
Certified Public Accountants, which representation letter may be required by the
Accountants in order to render an opinion concerning Transferors' financial
statements.
-21-
<PAGE>
c. Exculpation. No recourse shall be had for any
obligation of Brandywine Realty Trust or BOP or any of the Transferors 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 or BOP or any of the Transferors, 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 mutually waived and released
and all parties claiming by, through or under Brandywine Realty Trust or BOP or
any of the Transferors.
d. Successors and Assigns. BOP may not assign or
transfer its rights or obligations under this Agreement without the prior
written consent of Transferors (in which event such transferee shall assume in
writing all of the transferees obligations hereunder, but such transferor shall
not be released from its obligations hereunder), which consent may be withheld
in Transferors' sole and absolute discretion. No consent given by Transferors to
any transfer or assignment of BOP's rights or obligations hereunder shall be
construed as a consent to any other transfer or assignment of BOP's rights or
obligations hereunder. No transfer or assignment in violation of the provisions
hereof shall be deemed valid or enforceable. Subject to the foregoing, this
Agreement and the terms and provisions hereof shall inure to the benefit of and
be binding upon the successors and assigns of the parties.
e. Notices. Any notice which a party is required or
may desire to give the other shall be in writing and shall be sent by personal
delivery or by mail (either (i) by United States registered or certified mail,
return receipt requested, postage prepaid, or (ii) by Federal Express or similar
generally recognized overnight carrier regularly providing proof of delivery),
addressed as follows (subject to the right of a party to designate a different
address for itself by notice similarly given):
To BOP:
Brandywine Realty Trust
16 Campus Boulevard
Suite 150
Newtown Square, Pennsylvania 19073
Attn: Gerard H. Sweeney, President & CEO
and
Brad A. Molotsky, General Counsel
Brandywine Realty Trust
16 Campus Boulevard
Suite 150
Newtown Square, Pennsylvania 19073
-22-
<PAGE>
To Transferors:
c/o Gale & Wentworth Corporate Services, Inc.
Princeton Forrestal Village
136-200 Main Street
Princeton, New Jersey 08540
Attn: Donald M. Slaght, Senior Vice President
With a copy to:
Pitney, Hardin, Kipp & Szuch
200 Campus Drive
Florham Park, New Jersey 07932
Attention: Joel M. Rosen, Esq.
Any notice so given by mail shall be deemed to have been given
as of the date of delivery (whether accepted or refused) established by U.S.
Post Office return receipt or the overnight carrier's proof of delivery, as the
case may be. Any such notice not so given shall be deemed given upon receipt of
the same by the party to whom the same is to be given.
f. Legal Costs. The parties hereto agree that they
shall pay directly any and all legal costs which they have incurred on their own
behalf in the preparation of all deeds and other agreements pertaining to this
transaction and that such legal costs shall not be part of the closing costs. If
either party is found in default of this Agreement and judgment is issued
against said party for its default, then said party in default agrees to pay any
and all costs arising as a result of said default, including reasonable
attorneys' fees.
g. Confidentiality. Prior to Closing and without
limitation upon paragraph 5 hereof, the terms of the transfers contemplated in
this Agreement, including, without limitation, the Consideration and all other
financial terms, including Transferors' rate of return (which shall not be
disclosed after Closing), shall remain confidential and shall not be disclosed
by either party hereto without the written consent of the other except (i) to
such party's directors, officers, partners, employees, legal counsel,
accountants, engineers, architects, financial advisors, and similar
professionals and consultants to the extent such party deems it necessary or
appropriate in connection with the transaction contemplated hereunder (and such
party shall inform each of the foregoing parties of such party's obligations
under this paragraph and shall secure the agreement of such parties to be bound
by the terms hereof or (ii) as otherwise required by law or regulation.
h. Jurisdiction and Venue. With respect to this
Agreement, BOP and Transferors each hereby consent to the jurisdiction of any
state or federal court located within Camden or Burlington Counties, New Jersey
in a law suit initiated by BOP, or within Somerset, Middlesex or Mercer
Counties, New Jersey in a lawsuit initiated by Transferors, and each hereby
waive personal service of any and all process upon it, consents to service of
process by registered mail directed to it at the address stated in paragraph 13E
hereof, and acknowledges that service
-23-
<PAGE>
so made shall be deemed to be completed upon actual delivery (whether accepted
or refused) thereof. In addition, BOP and Transferors each consent and agree
that venue of any action instituted under this Agreement shall be proper in
Camden or Burlington Counties, New Jersey in a lawsuit initiated by BOP or
within Somerset, Middlesex or Mercer Counties, New Jersey in a lawsuit initiated
by Transferors, and each hereby waive any objection to venue.
i. Further Instruments. Each party will, whenever
and as often as it shall be requested so to do by the other, cause to be
executed, acknowledged, or delivered any and all such further instruments and
documents as may be necessary or proper, in the reasonable opinion of the
requesting party, in order to carry out the intent and purpose of this
Agreement.
j. Matters of Construction.
------------------------
(1) Incorporation of Exhibits. All exhibits
attached and referred to in this Agreement are hereby incorporated herein as
fully set forth in (and shall be deemed to be a part of) this Agreement.
(2) Entire Agreement. This Agreement
contains the entire agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements between the parties hereto
respecting such matters.
(3) Non-Business Days. Whenever action must
be taken (including the giving of notice or the delivery of documents) under
this Agreement during a certain period of time (or by a particular date) that
ends (or occurs) on a non-business day, then such period (or date) shall be
extended until the immediately following business day. As used herein, "business
day" means any day other than a Saturday, Sunday or federal or New Jersey state
holiday.
(4) Severability. If any term or provision
of this Agreement or the application thereof to any person or circumstance
shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each such term and provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by law.
(5) Captions. Paragraph headings shall not
be used in construing this Agreement.
(6) Cumulative Remedies. Except for
Transferors remedy in the event of a default by BOP, in accordance with
paragraph 10, no remedy conferred upon a party in this Agreement is intended to
be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other
-24-
<PAGE>
remedy given hereunder or now or hereafter existing at law, in equity, or by
statute (except as otherwise expressly herein provided).
(7) No Waiver. No waiver by a party of any
breach of this Agreement or of any warranty or representation hereunder by the
other party shall be deemed to be a waiver of any other breach by such other
party (whether preceding or succeeding and whether or not of the same or similar
nature), and no acceptance of payment or performance by a party after any breach
by the other party shall be deemed to be a waiver of any breach of this
Agreement or of any representation or warranty hereunder by such other party,
whether or not the first party knows of such breach at the time it accepts such
payment or performance. No failure or delay by a party to exercise any right it
may have by reason of the default of the other party shall operate as a waiver
of default or modification of this Agreement or shall prevent the exercise of
any right by the first party while the other party continues to be so in
default.
(8) Consents and Approvals. Except as
otherwise expressly provided herein, any approval or consent provided to be
given by a party hereunder may be given or withheld in the absolute discretion
of such party.
(9) Governing Law. This Agreement shall be
construed and enforced in accordance with the internal laws of the State of New
Jersey without regard to conflicts of law.
(10) Third Party Beneficiaries. Nothing in
this Agreement, expressed or implied, is intended to confer any rights or
remedies upon any person, other than the parties hereto, and, subject to the
restrictions on assignment herein contained, their respective successors and
assigns.
(11) Amendments. This Agreement may be
amended by written agreement of amendment executed by all parties, but not
otherwise.
k. Counterparts. This Agreement may be executed in
any number of counterparts, provided each of the parties hereto executes at
least one counterpart; each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
l. Actions Through Transferors' Agents. Any action
or exercise of rights or duties required or permitted to be taken or done by
Transferors hereunder relative to the transactions contemplated by this
Agreement may be taken by any agent, officer, attorney, employee, or other
person duly designated and authorized by Transferors in writing as such is sent
to BOP, or otherwise under Transferors' customary policies and procedures to
take such action in its behalf. This subparagraph L shall not be construed to
delegate authority to any such person or to entitle BOP or any other person to
rely upon any purported authority exercised by any person purporting to
represent Transferors, but shall solely be interpreted as permitting
-25-
<PAGE>
Transferors to so delegate authority for its actions, exercise of rights, and
exercise of duties as above provided.
14. Escrow Agent.
-------------
a. The duties and obligations of Escrow Agent
hereunder shall be determined solely by the express provisions of this
Agreement, and Escrow Agent shall have no duties other than those expressly
imposed hereby, nor shall Escrow Agent be required to take any action other than
in accordance with the terms hereof. The duties of Escrow Agent hereunder are
entirely ministerial, and Escrow Agent shall have no responsibility for the
content, validity or genuineness of or otherwise in respect of any document or
instrument delivered to Escrow Agent hereunder. Escrow Agent shall not be
liable, whether in acting or failing to act, for any error in judgment or for
any mistake in fact or in law, or for any loss suffered by any of the parties
hereto or herein referred to, for a loss resulting from willful malfeasance or
bad faith on the part of Escrow Agent in performing its duties hereunder. Escrow
Agent may rely conclusively upon, and shall be protected in acting or failing to
act upon, any agreement, notice, demand, document or instrument believed by
Escrow Agent in good faith to be genuine. BOP and Transferors hereby jointly and
severally agree to indemnify Escrow Agent and hold it harmless from and against
all loss, cost, damage and expense (including, but not limited to, reasonable
attorneys' fees and disbursements) which Escrow Agent may incur arising out of
or in connection herewith, except for willful misfeasance or bad faith on the
part of Escrow Agent, as aforesaid.
b. Escrow Agent is acting as a stakeholder only with
respect to the Deposit. If there is any dispute as to whether Escrow Agent is
obligated to deliver the Deposit or as to whom said Deposit is to be delivered,
Escrow Agent shall continue to hold the same until receipt by Escrow Agent of an
authorization in writing, signed by all the parties having any interest in such
dispute, directing the disposition of the Deposit. In the absence of such
authorization, Escrow Agent may hold the Deposit until the final determination
of the rights of the parties in an appropriate judicial proceeding. If such
written authorization is not given, or proceedings for such determination are
not begun within thirty (30) days after the date set forth herein for the
Closing (as the same may have been changed by agreement of the parties) and
diligently continued, Escrow Agent may, but is not required to, bring an
appropriate action or proceeding for leave to deposit the Deposit in a court of
competent jurisdiction pending such determination. Escrow Agent shall be
reimbursed for all costs and expenses of such action or proceeding including,
without limitation, reasonable attorneys' fees and disbursements, by the party
determined not to be entitled to the Deposit, or if the Deposit is shared
between the parties hereto, such costs of Escrow Agent shall be shared pro rata,
between Transferors and BOP, based upon the amount of Deposit received by each.
Upon making delivery of the Deposit in the manner provided in this Agreement,
Escrow Agent shall have no further liability hereunder.
c. Escrow Agent may resign at any time by giving two
(2) days written notice to Transferors and BOP. In the event of such
resignation, Escrow Agent shall deliver the Deposit to another escrow agent
designated by Transferors and BOP to serve
-26-
<PAGE>
hereunder who shall be a practicing attorney or to a court of competent
jurisdiction, whereupon Escrow Agent shall be discharged from its duties and
obligations hereunder. The new escrow agent, if any, shall execute and deliver
to each of Transferors and BOP a written notice acknowledging that such new
escrow agent is subject to and shall comply with the terms hereof as fully and
completely and with the same legal force and effect as if new escrow agent had
been originally named as the "Escrow Agent" hereunder.
d. Any notice, demand, or other communication to
Escrow Agent hereunder shall be in writing and sent by certified mail, return
receipt requested, with all postage and fees prepaid, addressed in accordance
with paragraph 12C above or to such address as shall be specified by Escrow
Agent by written notice to Transferors and BOP.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
WITNESS: TRANSFERORS:
PRINCETON PIKE
CORPORATE CENTER
ASSOCIATES II LIMITED
PARTNERSHIP By: DKM
Properties Corp., as
authorized
representative By:
Gale & Wentworth
Corporate Services,
Inc., as authorized
representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ----------------------- -----------------------------------------
Name:__________________ Name: Donald M. Slaght
Title:_________________ Title: Senior Vice President
PRINCETON PIKE CORPORATE CENTER
ASSOCIATES III
By: DKM Properties Corp., as authorized
representative
By: Gale & Wentworth Corporate Services,
Inc., as a representative for DKM Properties
Corp.
BY:/s/Donald M. Slaght
- ----------------------- -----------------------------------------
Name:__________________ Name: Donald M. Slaght
Title:_________________ Title: Senior Vice President
-27-
<PAGE>
PIKE CORPORATE CENTER
ASSOCIATES IV
By: Pike IV Holding, LLC, a General Partner
By: DKM Properties Corp., as attorney-in-fact
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ ---------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
PRINCETON PIKE PARK, INC.
By: DKM Properties Corp., as authorized
representative
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ ---------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
DKM MONTGOMERY ASSOCIATES -
TWO, L. P.
By: DKM Montgomery Corp., its General
Partner
By: DKM Properties Corp., as authorized
representative for DKM Montgomery Corp.
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ ---------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
-28-
<PAGE>
DKM MONTGOMERY CORP.
By: DKM Properties Corp., as authorized
representative
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ ------------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
DKM PROPERTIES CORP.
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ ------------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
DB STATE STREET URBAN RENEWAL
ASSOCIATES
By: DKM Properties Corp., as authorized
representative
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ ------------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
-29-
<PAGE>
CAPITAL CENTER URBAN RENEWAL
CORPORATION
By: DKM Properties Corp., as authorized
representative
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ -------------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
REGENCY URBAN RENEWAL
ASSOCIATES
By: DKM Properties Corp., a General Partner
By: Gale & Wentworth Corporate Services,
Inc., as authorized representative for DKM
Properties Corp.
BY:/s/Donald M. Slaght
- ------------------------ --------------------------------------------
Name:___________________ Name: Donald M. Slaght
Title:__________________ Title: Senior Vice President
WITNESS: BOP:
----
BRANDYWINE OPERATING
PARTNERSHIP, L.P.
By: BRANDYWINE REALTY TRUST, its
authorized general partner
BY:/s/Gerard H. Sweeney
- ------------------------ --------------------------------------------
Name:___________________ Name: Gerard H. Sweeney
Title:__________________ Title: President and Chief Exexcutive
Officer
-30-
<PAGE>
STATE OF NEW JERSEY )
) SS.:
COUNTY OF MIDDLESEX )
I CERTIFY as follows:
1. On __________, 1998, Donald M. Slaght personally
appeared before me;
2. I was satisfied that this person is the person who executed
the attached instrument as Senior Vice President of Gale & Wentworth Corporate
Services, Inc., a New Jersey corporation which is authorized representative for
DKM Properties Corp., a New Jersey corporation, which is (i) an authorized
representative of Princeton Pike Corporate Center Associates II Limited
Partnership, a New Jersey limited partnership, (ii) an authorized representative
of Princeton Pike Corporate Center Associates III, a New Jersey partnership,
(iii) attorney-in-fact for Pike IV Holding, LLC, a New Jersey limited liability
company which is a general partner of Princeton Pike Corporate Center Associates
IV, a New Jersey partnership, (iv) an authorized representative for Princeton
Pike Park, Inc., an Illinois corporation, (v) an authorized representative of
DKM Montgomery Corp. for such corporation and in DKM Montgomery Corp.'s capacity
as general partner of DKM Montgomery Associates - Two, L.P., a New Jersey
limited partnership), (vi) an authorized representative of DB State Street Urban
Renewal Associates, a New Jersey partnership, (vii) an authorized representative
of Capital Center Urban Renewal Corporation, a New Jersey corporation, and
(viii) a general partner of Regency Urban Renewal Associates.
3. This person stated that he was authorized to execute the
instrument on behalf of Gale & Wentworth Corporate Services, Inc., as authorized
representative for DKM Properties Corp. in the capacities listed above, and that
he executed the instrument as the act of such entity.
_____________________________
[Notary]
<PAGE>
STATE OF _____________ )
) SS.:
COUNTY OF ___________ )
I CERTIFY as follows:
1. On __________, 1998, _______________ personally
appeared before me;
2. I was satisfied that this person is the person who executed
the attached instrument as __________ of _______________, a _______________; and
3. This person stated that (he/she) was authorized to execute
the instrument on behalf of _______________, and that (he/she) executed the
instrument as the act of such entity.
_____________________________
[Notary]
<PAGE>
EXHIBIT A
LIST OF TRANSFERORS
Princeton Pike Corporate Center
Pike II - Princeton Pike Corporate Center Associates II Limited
Partnership, a New
Jersey limited partnership
Pike III - Princeton Pike Corporate Center Associates III, a New
Jersey general
partnership
Pike IV - Princeton Pike Corporate Center Associates IV, a New
Jersey general
partnership Land for Pikes V, VI and VII - Princeton Pike
Park, Inc. an Illinois corporation
518 Bloomberg Business Park
Building - DKM Montgomery Associates - Two, L.P., a New Jersey
limited partnership
Land - DKM Montgomery Corp., a New Jersey corporation
104 Windsor Center - DKM Properties Corp., a New Jersey corporation
33 West State Street - DB State Street Urban Renewal Associates, a New Jersey
general partnership
Capital Center - Capital Center Urban Renewal Corporation, a New Jersey
corporation
Kilmer Square - Regency Urban Renewal Associates, a New Jersey general
partnership
<PAGE>
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 31, 1998,
is entered into by and among BRANDYWINE REALTY TRUST, a Maryland real estate
investment trust (the "Trust"), BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the "Partnership"), Brookstone Investors, L.L.C.,
Brookstone Holdings of Del. - 4, L.L.C., Brookstone Holdings of Del. - 5, L.L.C.
and Brookstone Holdings of Del. - 6, L.L.C. (each an "LLC" and, collectively,
the "LLCs") and Ronald Berman (a member of each of the LLCs) and Marie Berman (a
member of Brookstone Investors, L.L.C.)(together, the "Members").
RECITALS
--------
WHEREAS, the LLCs holds indirect ownership interests in
certain properties (the "Properties") which they may cause to be contributed to
the Partnership in exchange for units of limited partnership interests ("Units")
in the Partnership in accordance with the terms of that certain Amended and
Restated Transfer Agreement, dated as of March 31, 1998, by and among the
Partnership and the Transferors (as defined therein)(the "Transfer Agreement");
WHEREAS, pursuant to the Partnership Agreement (as defined
below), the Units will be redeemable for cash or common shares of beneficial
interest, par value $.01 per share, of the Trust (the "Common Shares") upon the
terms and subject to the conditions contained therein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. In addition to the definitions set
forth above, the following terms, as used herein, have the following meanings:
"Affiliate" of any Person means any other Person
directly or indirectly controlling or controlled by or under common control with
such Person. For the purposes of this definition, "control", when used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" means this Registration Rights
Agreement, as it may be amended, supplemented or restated from time to time.
"Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York, New York are
authorized by law to close.
<PAGE>
"Commission" means the United States Securities and
Exchange Commission.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Partnership Agreement" means the Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of
November 18, 1997, as previously amended and as the same may be amended,
modified or restated from time to time.
"Person" means an individual or a corporation,
partnership, limited liability company, association, trust, or any other entity
or organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Registrable Securities" means any Common Shares
issued or issuable upon any redemption of Units issued pursuant to the Transfer
Agreement; provided that such Common Shares shall cease to constitute
Registrable Securities once: (i) a registration statement covering such Common
Shares has been declared effective by the Commission and such Common Shares have
been sold or transferred pursuant to such effective registration statement, (ii)
such Common Shares may be sold pursuant to Rule 144(k) under the Securities Act
or (iii) such Common Shares have been otherwise transferred in a transaction
that would constitute a sale thereof under the Securities Act, the Trust has
delivered a new certificate or other evidence of ownership for such Common
Shares not bearing the Securities Act restricted stock legend and such Common
Shares may be resold without subsequent registration under the Securities Act.
"Registration Expenses" means all expenses incident
to the Trust's performance of or compliance with Article 2, including, without
limitation, all registration and filing fees, all listing fees, all fees and
expenses of complying with securities or blue sky laws, and printing expenses,
the fees and disbursements of counsel for the Trust and of the Trust's
independent public accountants, but excluding fees and disbursements of counsel
or other advisors for the LLCs and the Members and excluding any brokerage
discounts or commissions payable in connection with a sale of Registrable
Securities.
"Rule 144" means Rule 144 under the Securities Act,
as amended from time to time (or any successor statute).
"Securities Act" means the Securities Act of 1933,
as amended.
2. Registration Rights.
--------------------
2.1 Registration on Demand.
-----------------------
2.1.1 Registration of Registrable Securities.
Subject to Sections 2.1.3 and 2.1.6, within 60 days after the date hereof the
Trust shall prepare and file with the Commission a "shelf" registration
statement under the Securities Act covering the offer and sale
-2-
<PAGE>
of the Registrable Securities by the LLCs in an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act, and the Trust
shall use its best efforts to cause that registration statement to be effective
within 180 days after the date hereof. Thereafter, the Trust shall use best
efforts to take all such action (including timely filing of all reports required
to be filed pursuant to the Securities Exchange Act of 1934) as may be necessary
to cause that registration to remain in effect until all of the Registrable
Securities have been sold by the LLCs (or such earlier date as any unsold shares
of Registrable Securities may lawfully be sold without registration under the
Securities Act), subject to Section 12 hereof.
2.1.2 Registration of Other Securities. Whenever the
Trust shall effect a registration pursuant to this Section 2.1, holders of
securities of the Trust who have registration rights may include all or a
portion of such securities in such registration, offering or sale.
2.1.3 Registration Statement Form S-3. Registrations
under this Section 2.1 shall only be required to be made on Form S-3, or any
successor form. In the event the Trust is not eligible to use Form S-3 to
register the Registrable Securities, it may delay the filing of the applicable
registration statement until that date on which the Trust is again eligible to
file a Form S-3. The Trust hereby represents and warranties to the LLCs that, as
of the date hereof, the Trust is eligible to register the Registrable Securities
on Form S-3, and the Trust shall use its best efforts to remain eligible to
register the Registrable Securities on Form S-3.
2.1.4 Expenses. The Trust shall pay the Registration
Expenses in connection with the registration effected pursuant to this Section
2.1. If a registration pursuant to this Section 2.1 is withdrawn or otherwise
not effected, other than at the request of the LLCs, the Trust shall pay the
Registration Expenses in connection therewith. If the registration is withdrawn
at the request of the LLCs and if the LLCs elect not to have such registration
count as their single registration under this Section 2.1, the LLCs shall pay
all the Registration Expenses of such registration, other than the fees and
expenses of counsel to the Trust or of any other holder of Trust securities
participating in the registration (a "Participating Holder").
2.1.5 Effective Registration Statement. A
registration pursuant to this Section 2.1 shall not be deemed to have been
effected (i) unless a registration statement with respect thereto has been
declared effective by the Commission or (ii) if after it has become effective,
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason and has not thereafter become effective.
2.1.6 Limitations on Registration on Demand.
(i) In no event shall the Trust be
required to effect more than one registration pursuant to this Section 2.1.
-3-
<PAGE>
(ii) Notwithstanding anything
herein, if the Trust reasonably believes that the filing of a registration
statement with the Commission would adversely affect the contemplated activities
of the Trust, then the Trust may postpone the filing of the applicable
registration statement for a period not in excess of 30 days or, in the event
the filing is being postponed in connection with a proposed underwritten public
offering of the Trust's securities, for such longer period (not to exceed an
additional 30 days) as may be reasonably requested by the managing underwriter
for such proposed offering.
(iii) Notwithstanding anything
herein, if the filing of a registration statement pursuant to this Agreement
would require the Trust to include in a filing with the Commission financial
statements of probable or completed acquisitions in order that such registration
statement be in compliance with rules and regulations of the Commission, then
the Trust may delay the filing of such registration statement until it has
included the requisite financial statements (including any necessary pro forma
financial information) in a filing with the Commission.
2.2 Registration Procedures.
------------------------
2.2.1 In connection with the registration
of any Registrable Securities under the Securities Act as provided in Section
2.1, the Trust shall as promptly as practicable:
(i) prepare and file with the
Commission the requisite registration statement to effect such registration and
thereafter use commercially reasonable efforts to cause such registration
statement to become and remain effective;
(ii) prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such registration statement until all of such Registrable Securities have been
sold thereunder;
(iii) furnish to the LLCs such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such number of copies of such other
documents as the LLCs may reasonably request;
(iv) use commercially reasonable
efforts (x) to register or qualify all Registrable Securities under such other
securities or Blue Sky laws of such States
-4-
<PAGE>
of the United States of America where an exemption is not available and as an
LLC shall reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and (z) to
take any other action which may reasonably be necessary or advisable to enable
an LLC to consummate the disposition in such jurisdictions of the Registrable
Securities to be sold by such LLC, except that the Trust shall not for any such
purpose be required to qualify generally to do business as a foreign trust in
any jurisdiction wherein it would not, but for the requirements of this
paragraph (iv), be obligated to be so qualified or to consent to general service
of process in any such jurisdiction;
(v) notify the LLCs upon discovery
that, or upon the happening of any event as a result of which, the prospectus
included in the registration statement filed pursuant to this agreement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances under which they were
made, and at the request of the LLCs, use its best efforts to promptly prepare
and furnish to the LLCs such number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(vi) use commercially reasonable
efforts to list all Registrable Securities covered by such registration
statement on any national securities exchange or over-the-counter market, if
any, on which Registrable Securities covered by such registration statement are
then listed.
The LLCs agree that upon receipt of any notice from the Trust
of the happening of an event of the kind described in Section 2.2.1(v), the LLCs
shall forthwith discontinue their disposition of Registrable Securities pursuant
to the registration statement relating to such Registrable Securities until the
LLCs' receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.2.1(v).
2.3. Holdback Agreements; Information Blackout.
------------------------------------------
2.3.1 Holdback Agreements. In connection
with an underwritten public offering of securities of the Trust, the LLCs agree
that, if required by the underwriter or underwriters, they will not effect any
public sale or distribution, including any sale pursuant to Rule 144 under the
Securities Act, of any Registrable Securities, during the period commencing 10
days prior to the expected commencement of the offering and ending 30 days after
the closing of such offering.
2.3.2 Information Blackout. At any time
when a registration statement effected pursuant to this Section 2 relating to
Registrable Securities is effective, upon
-5-
<PAGE>
written notice from the Trust to the LLCs that the Trust has determined in good
faith that sale of Registrable Securities pursuant to the registration statement
would require disclosure by the Trust of non-public material information not
otherwise required, in the judgment of the Trust, to be disclosed under
applicable law, the LLCs shall suspend sales of Registrable Securities pursuant
to such registration statement until the earlier of (a) 30 days after the Trust
makes such good faith determination and (b) such time as the Trust notifies the
LLCs that such material information has been disclosed to the public or has
ceased to be material or that sales pursuant to such registration statement may
otherwise be resumed.
2.4 Preparation. In connection with the preparation
and filing of any registration statement under the Securities Act in which the
LLCs are selling shareholders, the Trust shall give the LLCs not less than 15
days prior written notice of the preparation of such registration statement and
give the LLCs and their counsel and accountants the opportunity to review and
comment on, at the LLCs' expense, the applicable portions, relating to the LLCs
(including the Selling Shareholder and Plan of Distribution sections), of the
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto (provided that the
LLCs shall furnish the Trust with comments on any such amendment or supplement
as promptly as the Trust shall reasonably require).
2.5 Indemnification.
----------------
2.5.1 Indemnification by the Trust. In the
event of any registration of any securities of the Trust under the Securities
Act in which an LLC is or may be a selling shareholder, the Trust shall, and
hereby does, indemnify and hold harmless, such LLC, its members, officers,
employees, agents and affiliates and each Person who controls such LLC within
the meaning of the Securities Act, insofar as losses, claims, damages, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus, or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they were
made not misleading, or (b) any violation by the Trust, its trustees, officers,
employees or agents of this Agreement or any law applicable to and in connection
with such registration, and the Trust shall reimburse such LLC and each such
member, officer, agent or affiliate and controlling Person of such LLC for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or proceeding
described in clauses (a) or (b); provided, however, that the Trust shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with information furnished to the
-6-
<PAGE>
Trust by such LLC. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such LLC or any member,
officer, agent, affiliate or controlling Person of such LLC and shall survive
the transfer of such securities by such LLC.
2.5.2 Indemnification by the LLCs If any
Registrable Securities are included in any registration statement, the LLCs
shall, jointly and severally, indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 2.5.1 above) the Trust and each
trustee, officer and employee of the Trust and each Person who controls the
Trust within the meaning of the Securities Act, with respect to any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with information furnished to the Trust by the LLCs.
2.5.3 Notice of Claims, Etc. Promptly after
receipt by an indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding paragraphs of this
Section 2.5, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnifying party, immediately give written notice to the
latter of the commencement of such action; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 2.5, except to the extent that the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that the indemnifying
parties may agree, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable out of pocket costs related to the indemnified party's cooperation
with the indemnifying party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption of the defense
thereof. No indemnifying party shall be liable for any settlement of any action
or proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Consent of the indemnified party
shall be required for the entry of any judgment or to enter into a settlement
only when such judgment or settlement does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect such claim or litigation.
2.5.4 Contribution. If the indemnification
provided for in this Section 2.5 shall for any reason be held by a court to be
unavailable to an indemnified party
-7-
<PAGE>
under Section 2.5.1 or 2.5.2 hereof in respect of any loss, claim, damage or
liability, or any action in respect thereof, then, in lieu of the amount paid or
payable under Sections 2.5.1 or 2.5.2 hereof, the indemnified party and the
indemnifying party under Sections 2.5.1 or 2.5.2 hereof shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Trust on one hand and the LLCs on the other or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect the relative fault of the Trust on
one hand and the LLCs on the other that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. No Person guilty of fraudulent misrepresentation (within the
meaning of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim, effected without such Person's written
consent, which consent shall not be unreasonably withheld.
3. Decisions; Modification; Waivers. All decisions by, and
notices from, the LLCs hereunder shall be made by the holders of not less than a
majority of the Registrable Securities outstanding and all other holders of
Registrable Securities shall be bound by any such decision. This Agreement may
be modified or amended only with the written consent the Trust, the Partnership
and the LLCs holding not less than a majority of the Registrable Securities. No
party shall be released from its obligations hereunder without the written
consent of the other party. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but any such waiver
shall be effective only if in a writing signed by the party against which such
waiver is to be asserted. Except as otherwise specifically provided herein, no
delay on the part of any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party hereto of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any right, power or
privilege hereunder.
4. Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersedes all other prior and contemporaneous
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
5. Severability. If any provision of this Agreement, or the
application of such provision to any party or circumstance, shall be held
invalid, the remainder of this Agreement or the application of such provision to
other parties or circumstances, to the extent permitted by law, shall not be
affected thereby; provided, that the parties shall negotiate in good faith with
respect to an equitable modification of the provision or application thereof
held to be invalid.
6. Notices. All notices, requests and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be delivered (i) in person, (ii) by certified mail, return receipt
requested, (iii) by recognized overnight delivery service providing positive
tracking of items (for example, Federal Express), or (iv) by confirmed
telecopier, in each case addressed as follows:
-8-
<PAGE>
If to the Trust or the Partnership, addressed to:
-------------------------------------------------
c/o Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Attention: Gerard H. Sweeney, President and Chief
Executive Officer
Fax: (610) 325-5622
with a copy in each instance to:
--------------------------------
Brad A. Molotsky, General Counsel
Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Fax: (610) 325-5622
If to the LLCs or a Member, addressed to:
-----------------------------------------
c/o R. Berman Development Co., L.L.C.
150 West State Street
P.O. Box 4571
Trenton, NJ 08611
Fax: (609) 393-0447
with a copy in each instance to:
--------------------------------
S. L. Warhaftig, Esquire
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Fax: (212) 969-2900
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. All such notices, requests and other
communications shall be deemed to have been sufficiently given for all purposes
hereof only if given pursuant to the foregoing requirements as to both manner
and address, and only upon receipt (or refusal to accept delivery) by the party
to whom such notice is sent. Notices by the parties may be given on their behalf
by their respective attorneys.
-9-
<PAGE>
7. Successors and Assigns. This Agreement shall inure to the benefit
of and shall be binding upon the Trust and its successors and permitted assigns.
The LLCs may transfer all of the Units to the Members in one or more
transactions exempt from the registration requirements of the Securities Act.
Following the first such transfer, all references herein to the "LLCs" shall be
deemed to refer collectively to the LLCs and the Members then holding
Registrable Securities.
8. Counterparts. This Agreement may be executed in counterparts, each
of which for all purposes shall be deemed to be an original and all of which
together shall constitute the same agreement.
9. Headings. The Section headings in this Agreement are for
convenience of reference only, and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
10. Construction. This Agreement shall be governed, construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania without
regard to its principles of conflict of laws.
11. Recapitalizations, etc. In the event that any shares of beneficial
interest or other securities are issued in respect of, in exchange for, or in
substitution of, any Registrable Securities by reason of any reorganization,
recapitalization, reclassification, merger, consolidation, spin-off, partial or
complete liquidation, share dividend, split-up, sale of assets, distribution to
shareholders or combination of the Registrable Securities or any other similar
change in the Trust's capital structure, appropriate adjustments shall be made
in this Agreement so as to fairly and equitably preserve, as far as practicable,
the original rights and obligations of the parties hereto under this Agreement.
12. Term. This Agreement shall continue in full force and effect until
the earlier of (i) six (6) years after the date hereof and (ii) the first date
on which the LLCs may sell all of the Registrable Securities held by him in a
ninety (90) day period pursuant to Rule 144 under the Securities Act.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the date first above written and delivered by their respective
duly authorized officers.
BRANDYWINE REALTY TRUST
By: /s/Gerard H. Sweeney
------------------------------------
Name: Gerard H. Sweeney
Title: President & CEO
BRANDYWINE OPERATING
PARTNERSHIP, L.P.
By: BRANDYWINE REALTY
TRUST, its sole general partner
By: /s/Gerard H. Sweeney
------------------------------------
Name: Gerard H. Sweeney
Title: President & CEO
BROOKSTONE INVESTORS, L.L.C.
By: /s/Ronald Berman
------------------------------------
Ronald Berman, Member
BROOKSTONE HOLDINGS OF
DEL. - 4, L.L.C.
By: /s/Ronald Berman
------------------------------------
Ronald Berman, Member
[signatures continued]
-11-
<PAGE>
[signatures continued from prior page]
BROOKSTONE HOLDINGS OF
DEL. - 5, L.L.C.
By: /s/Ronald Berman
------------------------
Ronald Berman, Member
BROOKSTONE HOLDINGS OF
DEL. - 6, L.L.C.
By: /s/Ronald Berman
------------------------
Ronald Berman, Member
/s/Ronald Berman
----------------------------
Ronald Berman
/s/Marie Berman
----------------------------
Marie Berman
-12-
<PAGE>
EXHIBIT 10.3
SECOND AMENDMENT TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRANDYWINE OPERATING PARTNERSHIP, L.P.
THIS SECOND AMENDMENT, dated as of March 31, 1998 (the
"Amendment"), further amends the Amended and Restated Agreement of Limited
Partnership Agreement (as amended to date, the "Partnership Agreement") of
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Partnership"). Capitalized terms used herein but not defined herein shall have
the meanings given such terms in the Partnership Agreement.
BACKGROUND
----------
A. Pursuant to the Partnership Agreement, Brandywine Realty Trust (the
"General Partner"), as the general partner of the Partnership, has the power and
authority to issue additional Partnership Interests to persons on such terms and
conditions as the General Partner may deem appropriate.
B. The General Partner, pursuant to the exercise of such power and
authority and in accordance with the Partnership Agreement, has determined to
execute this Amendment to the Partnership Agreement to evidence the issuance of
additional Partnership Interests and the admission of the other signatories
hereto as Limited Partners of the Partnership in exchange for certain
contributions of interests in real estate and real estate related assets that
are being made to the Partnership on the date hereof pursuant to a
"contribution" agreement (relating, respectively, to properties commonly known
as 33 West State Street and Princeton Pike 2, 3 and 4) among the Partnership and
the other signatories thereto.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby amend the Partnership Agreement as
follows:
1. The Partnership Agreement is hereby amended to reflect the
admission as a Limited Partner on the date hereof of the Persons set forth on
Schedule A attached hereto (the "Admitted Partners") and the ownership by such
Persons of the number of Class A Units listed opposite each Person's name on
Schedule A. Attached as Schedule B is a list of the Partners of the Partnership
prior to the admission of the Admitted Partners, together with the number and
class of Partnership Interests owned by such partners.
<PAGE>
2. The Partnership Interests issued hereby shall constitute
Class A Units; provided that any distribution to be received by the Admitted
Partners on the Class A Units issued to them on the date hereof on account of
the fiscal quarter in which they are admitted to the Partnership shall be
pro-rated to reflect the portion of the fiscal quarter of the Partnership for
which the Admitted Partners held such Class A Units and shall not be pro-rata in
accordance with their then Percentage Interests; provided further that (i) the
Redemption Right granted to holders of Class A Units in Article XV of the
Partnership Agreement shall not be exercisable by the holders of the Class A
Units issued on the date hereof to the Admitted Partners until the 185th day
following the date hereof (the "Termination Date") at which time the foregoing
restriction on exercise of the Redemption Right shall automatically terminate
and (ii) in addition to the other restrictions on Transfer contained in the
Partnership Agreement, the Class A Units issued on the date hereof to the
Admitted Parrtners shall not be transferable until the Termination Date.
3. By execution of this Amendment to the Partnership Agreement
by the General Partner, the Admitted Partners agree to be bound by each and
every term of the Partnership Agreement as amended from time to time in
accordance with the terms of the Partnership Agreement. The General Partner
confirms that the provisions in Section 18.1(a) of the Partnership Agreement
shall apply to the Admitted Partners notwithstanding Section 18.7 of the
Partnership Agreement.
4. On the date of this Amendment, each of the Admitted
Partners shall execute and deliver to Brandywine Realty Trust an Irrevocable
Proxy coupled with an Interest in the form set forth on Exhibit 1 hereto
attached.
5. Except as expressly set forth in this Amendment to the
Partnership Agreement, the Partnership Agreement is hereby ratified and
confirmed in each and every respect.
-2-
<PAGE>
IN WITNESS WHEREOF, this Amendment to the Partnership
Agreement has been executed and delivered as of the date first above written.
GENERAL PARTNER:
BRANDYWINE REALTY TRUST
By: /s/Gerard H. Sweeney
-------------------------------------------
Gerard H. Sweeney
Its: President and Chief Executive Officer
ADMITTED PARTNERS:
BROOKSTONE INVESTORS, L.L.C.
By: /s/Ronald Berman
--------------------------------------------
Ronald Berman, Member
BROOKSTONE HOLDINGS OF DEL. - 4, L.L.C.
By: /s/Ronald Berman
--------------------------------------------
Ronald Berman, Member
BROOKSTONE HOLDINGS OF DEL. - 5, L.L.C.
By: /s/Ronald Berman
--------------------------------------------
Ronald Berman, Member
BROOKSTONE HOLDINGS OF DEL. - 6, L.L.C.
By: /s/Ronald Berman
--------------------------------------------
Ronald Berman, Member
-3-
<PAGE>
SCHEDULE "A"
NUMBER OF
ADMITTED PARTNERSHIP
PARTNERS INTERESTS
-------- ---------
BROOKSTONE INVESTORS, L.L.C. 57,126
BROOKSTONE HOLDINGS OF DEL. - 4, L.L.C. 7,579
BROOKSTONE HOLDINGS OF DEL. - 5, L.L.C. 80,445
BROOKSTONE HOLDINGS OF DEL. - 6, L.L.C. 7,886
<PAGE>
SCHEDULE "B"
BRANDYWINE OPERATING PARTNERSHIP, L.P.
OUTSTANDING PARTNERSHIP INTERESTS
AS OF MARCH 31, 1998
NUMBER OF
PARTNERSHIP
INTERESTS
LIMITED PARTNERS (ALL CLASS A UNITS)
- ---------------- -------------------
The Nichols Company 2,742
Brian F. Belcher 7,245
Jack R. Loew 1,245
Craig C. Hough 1,245
Gary C. Bender 1,434
Werner A. Fricker 6,830
R. Randle Scarborough 59,578
M. Sean Scarborough 60,576
Steven L. Shapiro 1,902
Robert K. Scarborough 265,384
Raymond J. Perkins 2,536
Brandywine Holdings I, Inc. 5
Brandywine Realty Trust 415,786
NUMBER OF
PARTNERSHIP
INTERESTS
GENERAL PARTNER (ALL GP UNITS)
- --------------- --------------
Brandywine Realty Trust 37,010,209
<PAGE>
IRREVOCABLE PROXY COUPLED WITH AN INTEREST
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
irrevocably constitutes and appoints the General Partner, any Liquidating
Trustee, and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to: execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (i) all certificates, documents and
other instruments (including, without limitation, this Agreement and the
Certificate and all amendments or restatements thereof) that the General Partner
or the Liquidating Trustee deems appropriate or necessary to form, qualify or
continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (ii) all instruments that the
General Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with the terms of
this Agreement; (iii) all conveyances and other instruments or documents that
the General Partner deems appropriate or necessary to reflect the dissolution
and liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; and (iv) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to the provisions of this Agreement, or the Capital
Contribution of any Partner. The foregoing power of attorney is irrevocable and
a power coupled with an interest, in recognition of the fact that each of the
Partners will be relying upon the power of the General Partner to act as
contemplated by this Agreement in any filing or other action by it on behalf of
the Partnership, and it shall survive the death, incapacity or incompetency of a
Limited Partner to the effect and extent permitted by law and the Transfer of
all or any portion of such Limited Partner's Partnership Units and shall extend
to such Limited Partner's heirs, distributees, successors, assigns and personal
representatives.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Proxy on this 31st day of March, 1998.
BROOKSTONE INVESTORS, L.L.C.
By: /s/Ronald Berman
---------------------
Ronald Berman, Member
<PAGE>
IRREVOCABLE PROXY COUPLED WITH AN INTEREST
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
irrevocably constitutes and appoints the General Partner, any Liquidating
Trustee, and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to: execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (i) all certificates, documents and
other instruments (including, without limitation, this Agreement and the
Certificate and all amendments or restatements thereof) that the General Partner
or the Liquidating Trustee deems appropriate or necessary to form, qualify or
continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (ii) all instruments that the
General Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with the terms of
this Agreement; (iii) all conveyances and other instruments or documents that
the General Partner deems appropriate or necessary to reflect the dissolution
and liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; and (iv) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to the provisions of this Agreement, or the Capital
Contribution of any Partner. The foregoing power of attorney is irrevocable and
a power coupled with an interest, in recognition of the fact that each of the
Partners will be relying upon the power of the General Partner to act as
contemplated by this Agreement in any filing or other action by it on behalf of
the Partnership, and it shall survive the death, incapacity or incompetency of a
Limited Partner to the effect and extent permitted by law and the Transfer of
all or any portion of such Limited Partner's Partnership Units and shall extend
to such Limited Partner's heirs, distributees, successors, assigns and personal
representatives.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Proxy on this 31st day of March, 1998.
BROOKSTONE HOLDINGS OF DEL. - 4, L.L.C.
By: /s/Ronald Berman
-------------------------------
Ronald Berman, Member
<PAGE>
IRREVOCABLE PROXY COUPLED WITH AN INTEREST
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
irrevocably constitutes and appoints the General Partner, any Liquidating
Trustee, and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to: execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (i) all certificates, documents and
other instruments (including, without limitation, this Agreement and the
Certificate and all amendments or restatements thereof) that the General Partner
or the Liquidating Trustee deems appropriate or necessary to form, qualify or
continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (ii) all instruments that the
General Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with the terms of
this Agreement; (iii) all conveyances and other instruments or documents that
the General Partner deems appropriate or necessary to reflect the dissolution
and liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; and (iv) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to the provisions of this Agreement, or the Capital
Contribution of any Partner. The foregoing power of attorney is irrevocable and
a power coupled with an interest, in recognition of the fact that each of the
Partners will be relying upon the power of the General Partner to act as
contemplated by this Agreement in any filing or other action by it on behalf of
the Partnership, and it shall survive the death, incapacity or incompetency of a
Limited Partner to the effect and extent permitted by law and the Transfer of
all or any portion of such Limited Partner's Partnership Units and shall extend
to such Limited Partner's heirs, distributees, successors, assigns and personal
representatives.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Proxy on this 31st day of March, 1998.
BROOKSTONE HOLDINGS OF DEL. - 5, L.L.C.
By: /s/Ronald Berman
------------------------------
Ronald Berman, Member
<PAGE>
IRREVOCABLE PROXY COUPLED WITH AN INTEREST
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
irrevocably constitutes and appoints the General Partner, any Liquidating
Trustee, and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to: execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (i) all certificates, documents and
other instruments (including, without limitation, this Agreement and the
Certificate and all amendments or restatements thereof) that the General Partner
or the Liquidating Trustee deems appropriate or necessary to form, qualify or
continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (ii) all instruments that the
General Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with the terms of
this Agreement; (iii) all conveyances and other instruments or documents that
the General Partner deems appropriate or necessary to reflect the dissolution
and liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; and (iv) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to the provisions of this Agreement, or the Capital
Contribution of any Partner. The foregoing power of attorney is irrevocable and
a power coupled with an interest, in recognition of the fact that each of the
Partners will be relying upon the power of the General Partner to act as
contemplated by this Agreement in any filing or other action by it on behalf of
the Partnership, and it shall survive the death, incapacity or incompetency of a
Limited Partner to the effect and extent permitted by law and the Transfer of
all or any portion of such Limited Partner's Partnership Units and shall extend
to such Limited Partner's heirs, distributees, successors, assigns and personal
representatives.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Proxy on this 31st day of March, 1998.
BROOKSTONE HOLDINGS OF DEL. - 6, L.L.C.
By: /s/Ronald Berman
------------------------------
Ronald Berman, Member
<PAGE>
EXHIBIT 10.4
TAX INDEMNIFICATION AGREEMENT
This Tax Indemnification Agreement (the "Agreement") is made
as of March 31, 1998, by and between Brandywine Operating Partnership, L.P., a
Delaware limited partnership (the "Partnership"), and Brookstone Investors,
L.L.C. (the "Limited Partner").
WITNESSETH:
WHEREAS, the Limited Partner has executed that certain Second
Amendment to the Amended and Restated Agreement of Limited Partnership of
Brandywine Operating Partnership, L.P., dated as of November 18, 1997 (the
"Partnership Agreement"); and
WHEREAS, the Limited Partner received its limited partnership
interest in the Partnership in exchange for the contribution to the Partnership
of certain assets relating to the Property known as Princeton Pike 4 and listed
on Schedule A hereto (the "Assets") in a transaction to which Section 721 of the
Internal Revenue Code of 1986, as amended (the "Code") applied; and
WHEREAS, at the time of the contribution, Limited Partner had
unrealized built-in gain (as defined in Treasury Regulation ss. 1.704-3(a)(3))
in each Asset as set forth on Schedule A hereto; and
WHEREAS, the Partnership is willing to reimburse and indemnify
the Limited Partner for possible tax on the built-in gain of the Limited Partner
in the Assets under the limited circumstances set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
AGREEMENT
1. Definitions. As used in this Agreement, the capitalized
terms shall have the respective meanings ascribed to them in this Section 1.
Capitalized terms not defined herein, shall have the meanings ascribed to them
in the Partnership Agreement.
"Built-in Gain" means the unrealized built-in gain of the
Limited Partner in the Assets as determined from time to time in accordance with
Section 704(c), Treasury Regulation ss. 1.704-3(a)(3) and the Partnership
Agreement.
"Covered Tax Liabilities" means the sum of (A) any federal and
state taxes (excluding interest and penalties if notice of the Event (as defined
in Section 2 below) is given by
<PAGE>
the Partnership to the Limited Partner within 90 days of the occurrence of such
Event) imposed on any realized Built-in Gain of the Limited Partner plus (B) any
additional federal and state taxes (excluding interest and penalties if notice
of the Event is given by the Partnership to the Limited Partner within 90 days
of the occurrence of such Event) which may be imposed on payments to the Limited
Partner under this Agreement.
"Term" means the 48 month period beginning as of the date of
this Agreement.
2. Indemnification for Tax on Built-in Gain. Within 90 days
following the occurrence of an event during the Term caused by the Partnership
(such as, but not limited to, a sale or distribution of the Assets (other than a
distribution to the Limited Partner) to which Section 704(c) of the Code applies
or a repayment by the Partnership of Partnership indebtedness) which causes the
Limited Partner to become liable for all or any part of the Covered Tax
Liabilities, the Partnership hereby agrees that it shall cause a payment to be
made by the Partnership to the Limited Partner (other than distributions to the
partners of the Partnership under and in accordance with Section 6.1 of the
Partnership Agreement) such that the Limited Partner shall receive, as payment
pursuant to this Section 2, an aggregate amount equal to the Covered Tax
Liabilities incurred by the Limited Partner. Notwithstanding the foregoing,
federal, state or local tax on the Built-in Gain of the Limited Partner arising
as a result of (i) the sale or distribution of the Assets after the Term or (ii)
the disposition, transfer or conversion by the Limited Partner of its limited
partnership interest in the Partnership at any time (including during the Term),
shall be the sole obligation of the Limited Partner and the Partnership shall
not have any obligation to effect a payment under this Section 2 and shall have
no other liability therefor under this Agreement or otherwise.
3. Initial Determination of its Built-in Gain. The Limited
Partner hereby represents and warrants that as of the date of their contribution
to the Partnership, the Built-in Gain of the Limited Partner in each of the
Assets is as set forth on Schedule A hereto.
4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without regard
to the conflict of law principles thereof.
-2-
<PAGE>
5. Counterparts. This Agreement may be executed in one or more
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts together constituting the same agreement.
IN WITNESS WHEREOF, this Tax Indemnification Agreement has
been duly executed and delivered by the respective parties on the date first
above written.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, its general partner
/s/Gerard H. Sweeney
---------------------------------------------
By: Gerard H. Sweeney
Title: President and Chief Executive Officer
LIMITED PARTNER
BROOKSTONE INVESTORS, L.L.C.
By:/s/Ronald Berman
------------------------------------------
Ronald Berman, Member
-3-
<PAGE>
EXHIBIT 10.5
TAX INDEMNIFICATION AGREEMENT
This Tax Indemnification Agreement (the "Agreement") is made
as of March 31, 1998, by and between Brandywine Operating Partnership, L.P., a
Delaware limited partnership (the "Partnership"), and Brookstone Holdings of
Del. - 4, L.L.C. (the "Limited Partner").
WITNESSETH:
WHEREAS, the Limited Partner has executed that certain Second
Amendment to the Amended and Restated Agreement of Limited Partnership of
Brandywine Operating Partnership, L.P., dated as of November 18, 1997 (the
"Partnership Agreement"); and
WHEREAS, the Limited Partner received its limited partnership
interest in the Partnership in exchange for the contribution to the Partnership
of certain assets relating to the Property known as Princeton Pike 2 and listed
on Schedule A hereto (the "Assets") in a transaction to which Section 721 of the
Internal Revenue Code of 1986, as amended (the "Code") applied; and
WHEREAS, at the time of the contribution, Limited Partner had
unrealized built-in gain (as defined in Treasury Regulation ss. 1.704-3(a)(3))
in each Asset as set forth on Schedule A hereto; and
WHEREAS, the Partnership is willing to reimburse and indemnify
the Limited Partner for possible tax on the built-in gain of the Limited Partner
in the Assets under the limited circumstances set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
AGREEMENT
1. Definitions. As used in this Agreement, the capitalized
terms shall have the respective meanings ascribed to them in this Section 1.
Capitalized terms not defined herein, shall have the meanings ascribed to them
in the Partnership Agreement.
"Built-in Gain" means the unrealized built-in gain of the
Limited Partner in the Assets as determined from time to time in accordance with
Section 704(c), Treasury Regulation ss. 1.704-3(a)(3) and the Partnership
Agreement.
"Covered Tax Liabilities" means the sum of (A) any federal and
state taxes (excluding interest and penalties if notice of the Event (as defined
in Section 2 below) is given by
<PAGE>
the Partnership to the Limited Partner within 90 days of the occurrence of such
Event) imposed on any realized Built-in Gain of the Limited Partner plus (B) any
additional federal and state taxes (excluding interest and penalties if notice
of the Event is given by the Partnership to the Limited Partner within 90 days
of the occurrence of such Event) which may be imposed on payments to the Limited
Partner under this Agreement.
"Term" means the 48 month period beginning as of the date of
this Agreement.
2. Indemnification for Tax on Built-in Gain. Within 90 days
following the occurrence of an event during the Term caused by the Partnership
(such as, but not limited to, a sale or distribution of the Assets (other than a
distribution to the Limited Partner) to which Section 704(c) of the Code applies
or a repayment by the Partnership of Partnership indebtedness) which causes the
Limited Partner to become liable for all or any part of the Covered Tax
Liabilities, the Partnership hereby agrees that it shall cause a payment to be
made by the Partnership to the Limited Partner (other than distributions to the
partners of the Partnership under and in accordance with Section 6.1 of the
Partnership Agreement) such that the Limited Partner shall receive, as payment
pursuant to this Section 2, an aggregate amount equal to the Covered Tax
Liabilities incurred by the Limited Partner. Notwithstanding the foregoing,
federal, state or local tax on the Built-in Gain of the Limited Partner arising
as a result of (i) the sale or distribution of the Assets after the Term or (ii)
the disposition, transfer or conversion by the Limited Partner of its limited
partnership interest in the Partnership at any time (including during the Term),
shall be the sole obligation of the Limited Partner and the Partnership shall
not have any obligation to effect a payment under this Section 2 and shall have
no other liability therefor under this Agreement or otherwise.
3. Initial Determination of its Built-in Gain. The Limited
Partner hereby represents and warrants that as of the date of their contribution
to the Partnership, the Built-in Gain of the Limited Partner in each of the
Assets is as set forth on Schedule A hereto.
4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without regard
to the conflict of law principles thereof.
-2-
<PAGE>
5. Counterparts. This Agreement may be executed in one or more
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts together constituting the same agreement.
IN WITNESS WHEREOF, this Tax Indemnification Agreement has
been duly executed and delivered by the respective parties on the date first
above written.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, its general partner
/s/Gerard H. Sweeney
-------------------------------------------------
By: Gerard H. Sweeney
Title: President and Chief Executive Officer
LIMITED PARTNER
BROOKSTONE HOLDINGS OF DEL. - 4, L.L.C.
By:/s/Ronald Berman
----------------------------------------------
Ronald Berman, Member
-3-
<PAGE>
EXHIBIT 10.6
TAX INDEMNIFICATION AGREEMENT
This Tax Indemnification Agreement (the "Agreement") is made
as of March 31, 1998, by and between Brandywine Operating Partnership, L.P., a
Delaware limited partnership (the "Partnership"), and Brookstone Holdings of
Del. - 5, L.L.C. (the "Limited Partner").
WITNESSETH:
WHEREAS, the Limited Partner has executed that certain Second
Amendment to the Amended and Restated Agreement of Limited Partnership of
Brandywine Operating Partnership, L.P., dated as of November 18, 1997 (the
"Partnership Agreement"); and
WHEREAS, the Limited Partner received its limited partnership
interest in the Partnership in exchange for the contribution to the Partnership
of certain assets relating to the Property known as 33 West State Street and
listed on Schedule A hereto (the "Assets") in a transaction to which Section 721
of the Internal Revenue Code of 1986, as amended (the "Code") applied; and
WHEREAS, at the time of the contribution, Limited Partner had
unrealized built-in gain (as defined in Treasury Regulation ss. 1.704-3(a)(3))
in each Asset as set forth on Schedule A hereto; and
WHEREAS, the Partnership is willing to reimburse and indemnify
the Limited Partner for possible tax on the built-in gain of the Limited Partner
in the Assets under the limited circumstances set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
AGREEMENT
1. Definitions. As used in this Agreement, the capitalized
terms shall have the respective meanings ascribed to them in this Section 1.
Capitalized terms not defined herein, shall have the meanings ascribed to them
in the Partnership Agreement.
"Built-in Gain" means the unrealized built-in gain of the
Limited Partner in the Assets as determined from time to time in accordance with
Section 704(c), Treasury Regulation ss. 1.704-3(a)(3) and the Partnership
Agreement.
"Covered Tax Liabilities" means the sum of (A) any federal and
state taxes (excluding interest and penalties if notice of the Event (as defined
in Section 2 below) is given by
<PAGE>
the Partnership to the Limited Partner within 90 days of the occurrence of such
Event) imposed on any realized Built-in Gain of the Limited Partner plus (B) any
additional federal and state taxes (excluding interest and penalties if notice
of the Event is given by the Partnership to the Limited Partner within 90 days
of the occurrence of such Event) which may be imposed on payments to the Limited
Partner under this Agreement.
"Term" means the 60 month period beginning as of the date of
this Agreement.
2. Indemnification for Tax on Built-in Gain. Within 90 days
following the occurrence of an event during the Term caused by the Partnership
(such as, but not limited to, a sale or distribution of the Assets (other than a
distribution to the Limited Partner) to which Section 704(c) of the Code applies
or a repayment by the Partnership of Partnership indebtedness) which causes the
Limited Partner to become liable for all or any part of the Covered Tax
Liabilities, the Partnership hereby agrees that it shall cause a payment to be
made by the Partnership to the Limited Partner (other than distributions to the
partners of the Partnership under and in accordance with Section 6.1 of the
Partnership Agreement) such that the Limited Partner shall receive, as payment
pursuant to this Section 2, an aggregate amount equal to the Covered Tax
Liabilities incurred by the Limited Partner. Notwithstanding the foregoing,
federal, state or local tax on the Built-in Gain of the Limited Partner arising
as a result of (i) the sale or distribution of the Assets after the Term or (ii)
the disposition, transfer or conversion by the Limited Partner of its limited
partnership interest in the Partnership at any time (including during the Term),
shall be the sole obligation of the Limited Partner and the Partnership shall
not have any obligation to effect a payment under this Section 2 and shall have
no other liability therefor under this Agreement or otherwise.
3. Initial Determination of its Built-in Gain. The Limited
Partner hereby represents and warrants that as of the date of their contribution
to the Partnership, the Built-in Gain of the Limited Partner in each of the
Assets is as set forth on Schedule A hereto.
4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without regard
to the conflict of law principles thereof.
-2-
<PAGE>
5. Counterparts. This Agreement may be executed in one or more
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts together constituting the same agreement.
IN WITNESS WHEREOF, this Tax Indemnification Agreement has
been duly executed and delivered by the respective parties on the date first
above written.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, its general partner
/s/Gerard H. Sweeney
--------------------------------------------------
By: Gerard H. Sweeney
Title: President and Chief Executive Officer
LIMITED PARTNER
BROOKSTONE HOLDINGS OF DEL. - 5, L.L.C.
By:/s/Gerard H. Sweeney
-----------------------------------------------
Ronald Berman, Member
-3-
<PAGE>
EXHIBIT 10.7
TAX INDEMNIFICATION AGREEMENT
This Tax Indemnification Agreement (the "Agreement") is made
as of March 31, 1998, by and between Brandywine Operating Partnership, L.P., a
Delaware limited partnership (the "Partnership"), and Brookstone Holdings of
Del. - 6, L.L.C. (the "Limited Partner").
WITNESSETH:
WHEREAS, the Limited Partner has executed that certain Second
Amendment to the Amended and Restated Agreement of Limited Partnership of
Brandywine Operating Partnership, L.P., dated as of November 18, 1997 (the
"Partnership Agreement"); and
WHEREAS, the Limited Partner received its limited partnership
interest in the Partnership in exchange for the contribution to the Partnership
of certain assets relating to the Property known as Princeton Pike 3 and listed
on Schedule A hereto (the "Assets") in a transaction to which Section 721 of the
Internal Revenue Code of 1986, as amended (the "Code") applied; and
WHEREAS, at the time of the contribution, Limited Partner had
unrealized built-in gain (as defined in Treasury Regulation ss. 1.704-3(a)(3))
in each Asset as set forth on Schedule A hereto; and
WHEREAS, the Partnership is willing to reimburse and indemnify
the Limited Partner for possible tax on the built-in gain of the Limited Partner
in the Assets under the limited circumstances set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
AGREEMENT
1. Definitions. As used in this Agreement, the capitalized
terms shall have the respective meanings ascribed to them in this Section 1.
Capitalized terms not defined herein, shall have the meanings ascribed to them
in the Partnership Agreement.
"Built-in Gain" means the unrealized built-in gain of the
Limited Partner in the Assets as determined from time to time in accordance with
Section 704(c), Treasury Regulation ss. 1.704-3(a)(3) and the Partnership
Agreement.
"Covered Tax Liabilities" means the sum of (A) any federal and
state taxes (excluding interest and penalties if notice of the Event (as defined
in Section 2 below) is given by
<PAGE>
the Partnership to the Limited Partner within 90 days of the occurrence of such
Event) imposed on any realized Built-in Gain of the Limited Partner plus (B) any
additional federal and state taxes (excluding interest and penalties if notice
of the Event is given by the Partnership to the Limited Partner within 90 days
of the occurrence of such Event) which may be imposed on payments to the Limited
Partner under this Agreement.
"Term" means the 48 month period beginning as of the date of
this Agreement.
2. Indemnification for Tax on Built-in Gain. Within 90 days
following the occurrence of an event during the Term caused by the Partnership
(such as, but not limited to, a sale or distribution of the Assets (other than a
distribution to the Limited Partner) to which Section 704(c) of the Code applies
or a repayment by the Partnership of Partnership indebtedness) which causes the
Limited Partner to become liable for all or any part of the Covered Tax
Liabilities, the Partnership hereby agrees that it shall cause a payment to be
made by the Partnership to the Limited Partner (other than distributions to the
partners of the Partnership under and in accordance with Section 6.1 of the
Partnership Agreement) such that the Limited Partner shall receive, as payment
pursuant to this Section 2, an aggregate amount equal to the Covered Tax
Liabilities incurred by the Limited Partner. Notwithstanding the foregoing,
federal, state or local tax on the Built-in Gain of the Limited Partner arising
as a result of (i) the sale or distribution of the Assets after the Term or (ii)
the disposition, transfer or conversion by the Limited Partner of its limited
partnership interest in the Partnership at any time (including during the Term),
shall be the sole obligation of the Limited Partner and the Partnership shall
not have any obligation to effect a payment under this Section 2 and shall have
no other liability therefor under this Agreement or otherwise.
3. Initial Determination of its Built-in Gain. The Limited
Partner hereby represents and warrants that as of the date of their contribution
to the Partnership, the Built-in Gain of the Limited Partner in each of the
Assets is as set forth on Schedule A hereto.
4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without regard
to the conflict of law principles thereof.
-2-
<PAGE>
5. Counterparts. This Agreement may be executed in one or more
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts together constituting the same agreement.
IN WITNESS WHEREOF, this Tax Indemnification Agreement has
been duly executed and delivered by the respective parties on the date first
above written.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, its general partner
/s/Gerard H. Sweeney
--------------------------------------------------
By: Gerard H. Sweeney
Title: President and Chief Executive Officer
LIMITED PARTNER
BROOKSTONE HOLDINGS OF DEL. - 6, L.L.C.
By:/s/Ronald Berman
-----------------------------------------------
Ronald Berman, Member
-3-
