AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRANDYWINE OPERATING PARTNERSHIP, L.P.
TABLE OF CONTENTS
Page
BACKGROUND.................................................................. 1
AGREEMENTS.................................................................. 1
ARTICLE I - DEFINITIONS..................................................... 2
ARTICLE II - GENERAL PROVISIONS............................................. 11
2.1. Continuation of the Partnership.................................. 11
2.2. Name, Principal Place of Business and Registered Office.......... 11
2.3. Purpose.......................................................... 11
2.4. Powers........................................................... 12
2.5. Term............................................................. 12
2.6. Amendment of Certificate......................................... 12
2.7. Partnership Assets............................................... 12
2.8. Limitation on Liability of Persons Related to Partners........... 13
2.9. Conflicts of Interest and Transactions with Affiliates........... 13
2.10. Statutory Compliance............................................. 13
ARTICLE III - PARTNERSHIP INTERESTS......................................... 14
3.1. In General....................................................... 14
3.2. Class A Units.................................................... 14
3.3. Creation and Issuance of Additional Partnership Interests........ 15
3.4. Issuance of Additional GP Units to General Partner............... 15
3.5. Other Provisions Relating to All Classes of Partnership Interests 16
3.6. Issuance of Class A Units Upon Exercise of Option to Acquire
Retained Interests............................................... 16
3.7. Issuance of Additional Class A and GP Units Upon Achievement
of Mortgage Discounts............................................ 17
3.8. Register......................................................... 18
ARTICLE IV - CAPITAL CONTRIBUTIONS.......................................... 19
4.1. Capital Contributions of the Partners............................ 19
4.2. Capital Contributions Generally.................................. 19
4.3. No Third Party Beneficiary....................................... 19
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ARTICLE V - CAPITAL ACCOUNTS................................................ 20
5.1. Establishment and Maintenance of Capital Accounts................ 20
5.2. Succession to Capital Accounts................................... 20
5.3. Certain Adjustments.............................................. 20
ARTICLE VI - DISTRIBUTIONS.................................................. 20
6.1. Distributions.................................................... 20
6.2. Distributions upon Liquidation................................... 21
6.3. Additional Distribution Rules.................................... 21
6.4. Taxes Withheld................................................... 22
6.5. In-Kind Distributions............................................ 22
ARTICLE VII - ALLOCATIONS................................................... 23
7.1. Allocation of Net Income and Net Loss............................ 23
7.2. Special Allocations.............................................. 24
7.3. Tax Allocations.................................................. 25
ARTICLE VIII - EXPENSES; RIGHTS, DUTIES AND RESTRICTIONS OF THE
GENERAL PARTNER; VOTING RIGHTS OF LIMITED PARTNERS........... 26
8.1. Expenses Borne by the Partnership................................ 26
8.2. Powers and Duties of General Partner............................. 27
8.3. Required Notice.................................................. 30
8.4. Proscriptions.................................................... 31
8.5. Compensation of the General Partner.............................. 31
8.6. Waiver and Indemnification....................................... 31
8.7. Operation in Accordance with REIT Requirements................... 32
8.8. Reliance by Third Parties........................................ 32
8.9. Other Matters Concerning the General Partner..................... 33
8.10. Meetings of Partners............................................. 34
ARTICLE IX - ACCOUNTING AND RECORDS......................................... 35
9.1. Books and Records................................................ 35
9.2. Annual Reports................................................... 35
9.3. Tax Returns...................................................... 36
9.4. Fiscal Year...................................................... 36
9.5. Bank Accounts.................................................... 36
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ARTICLE X - CHANGES IN GENERAL PARTNERS.................................... 37
10.1. Permitted Assignment of General Partnership Interest......... 37
10.2. Admission of Additional General Partners..................... 37
10.3. Effect of Withdrawal of General Partner...................... 37
10.4. Liability of a Withdrawn General Partner..................... 38
ARTICLE XI - TRANSFERS OF LIMITED PARTNERSHIP INTERESTS.................... 38
11.1. General Transfer Provisions and Restrictions................. 38
11.2. Expenses..................................................... 39
11.3. Allocations with Respect to Transferred Interest............. 40
11.4. Section 754 Election......................................... 40
11.5. Transferee's Rights.......................................... 40
ARTICLE XII - ADMISSION OF PARTNERS........................................ 40
12.1. Procedure.................................................... 40
12.2. Admission.................................................... 41
ARTICLE XIII - DISSOLUTION, LIQUIDATION AND WINDING-UP..................... 41
13.1. Events of Dissolution........................................ 41
13.2. Continuation of the Business of the Partnership After
Dissolution................................................. 41
13.3. Effect of Event of Dissolution............................... 42
13.4. Accounting................................................... 42
13.5. Distribution on Dissolution.................................. 42
13.6. Timing Requirements.......................................... 43
13.7. Sale of Partnership Assets................................... 43
13.8. Distributions in Kind........................................ 43
13.9. Documentation of Liquidation................................. 43
13.10. Liability of the Liquidating Trustee......................... 44
ARTICLE XIV - RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS............... 44
14.1. No Participation in Management............................... 44
14.2. Death, Incompetence, Bankruptcy, Etc......................... 44
14.3. No Withdrawal................................................ 44
14.4. Power of Attorney............................................ 44
14.5. Limited Liability of Limited Partners........................ 45
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ARTICLE XV - GRANT OF REDEMPTION RIGHTS TO LIMITED PARTNERS................. 45
15.1. Grant of Redemption Rights.................................... 45
15.2. General Partner Exchange...................................... 46
15.3. Certain Limitations on Redemption Right....................... 47
15.4. Adjustments................................................... 47
15.5. Certain Covenants............................................. 48
15.6. Certain Changes............................................... 48
ARTICLE XVI - LIMITED PARTNER REPRESENTATIONS AND WARRANTIES................ 48
ARTICLE XVII - GENERAL PARTNER REPRESENTATIONS AND WARRANTIES............... 50
ARTICLE XVIII - INDEMNIFICATION............................................. 51
18.1. Indemnification............................................... 51
18.2. Limitations on Indemnification Obligations.................... 51
18.3. Security and Remedies......................................... 52
18.4. Restriction on Transfer....................................... 53
18.5. No Credit to Capital Accounts................................. 54
18.6. Release of Collateral......................................... 54
18.7. Applicability................................................. 54
ARTICLE XIX - ARBITRATION OF DISPUTES....................................... 54
19.1. Settlement of Disputes........................................ 54
19.2. Arbitration................................................... 55
19.3. Binding Character............................................. 55
19.4. Exclusivity................................................... 55
19.5. No Alteration of Agreement.................................... 55
ARTICLE XX - ASSUMPTION OF LIABILITIES AND INDEMNIFICATIONS................. 56
20.1. Assumption of Liabilities..................................... 56
20.2. Indemnification............................................... 56
ARTICLE XXI - GENERAL PROVISIONS............................................ 56
21.1. Notices....................................................... 56
21.2. Successors.................................................... 56
21.3. Effect and Interpretation..................................... 57
21.4. Counterparts.................................................. 57
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21.5. Partners Not Agents........................................... 57
21.6. Entire Understanding; Etc..................................... 57
21.7. Amendments.................................................... 57
21.8. Prior Reference Clarification................................. 58
21.9. Severability.................................................. 58
21.10. Trust Provision............................................... 59
21.11. Pronouns and Headings......................................... 59
21.12. Assurances.................................................... 59
21.13. Effective Time of Amendment................................... 59
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EXHIBITS
Exhibit A List of Partners
Exhibit B List of Contributed Assets
Exhibit C List of Applicable Mortgage Indebtedness
Encumbering Certain Properties
Exhibit D List of Retained Interests
SCHEDULES
Schedule 1 Form of Notice of Redemption
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRANDYWINE OPERATING PARTNERSHIP, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
BRANDYWINE OPERATING PARTNERSHIP, L.P. (the "Agreement") dated as of November
18, 1997 by and among BRANDYWINE REALTY TRUST, a Maryland real estate
investment trust as general partner ("BRT" or "General Partner"), and the
PERSONS identified on Exhibit A attached hereto, as limited partners
(together with any other Person who becomes a limited partner in the
Partnership as hereinafter provided and subject to their continuation as
limited partners in the partnership, the "Limited Partners"). The General
Partner and the Limited Partners are sometimes referred to individually as a
"Partner" and collectively as the "Partners."
BACKGROUND
Brandywine Operating Partnership, L.P. (the "Partnership") was
formed as a Delaware limited partnership on August 13, 1996 upon the filing
of the Certificate (defined below) with the Secretary of the State of
Delaware. In connection with the formation of the Partnership, the General
Partner and certain persons executed that certain Agreement of Limited
Partnership of Brandywine Operating Partnership. L.P. dated as of August 22,
1996 (the "Original Agreement"). The Original Agreement was amended by
Amendment No. 1 dated November 6, 1996; Amendment No. 2 dated December 18,
1996; and Amendment No. 3 dated May 23, 1997. The Original Agreement, as
previously amended, is hereafter referred to as the "Prior Partnership
Agreement".
This Agreement has been executed and delivered by the General
Partner and the other persons whose signatures appear on the signature page
hereto in order to amend and restate in its entirety the Prior Partnership
Agreement and to continue the Partnership in accordance with this Agreement
and, to the extent not inconsistent therewith, the Act.
AGREEMENTS
In consideration of the foregoing and the mutual promises herein
contained and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Except as otherwise herein expressly provided, the following terms
and phrases used in this Agreement and the Exhibits hereto shall have the
meanings set forth below:
"Act" shall mean the Revised Uniform Limited Partnership Act of the
State of Delaware as in effect on the date hereof, and as the same may
hereafter be amended from time to time.
"Adjusted Capital Account Deficit" shall mean, with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of any relevant fiscal year and after giving effect to the following
adjustments:
(a) credit to such Capital Account any amounts which such
Partner is obligated or treated as obligated to restore with respect to any
deficit balance in such Capital Account pursuant to Section
1.704-1(b)(2)(ii)(c) of the Regulations, or is deemed to be obligated to
restore with respect to any deficit balance pursuant to the penultimate
sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
(b) debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the requirements of the alternate test for economic
effect contained in Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
be interpreted consistently therewith.
"Affiliate" shall mean, with respect to any Person, (a) any Person
directly or indirectly controlling, controlled by or under common control
with such Person, (b) any Person owing or controlling ten percent (10%) or
more of the outstanding voting interests of such Person, (c) any Person of
which such Person owns or controls ten percent (10%) or more of the voting
interests, or (d) any officer, director, general partner or trustee of such
Person or of any Person referred to in clauses (a), (b) and (c) above. For
purposes of this definition, "control" when used with respect to any Person,
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" shall mean this Amended and Restated Agreement of
Limited Partnership of Brandywine Operating Partnership, L.P., as it may be
amended, supplemented or restated from time to time.
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"Assumed Liabilities" shall have the meaning set forth in Section
21.1 of the Original Agreement.
"Audited Financial Statements" shall mean financial statements
(balance sheet, statement of operations, statement of partners' equity and
statement of cash flows) prepared in accordance with generally accepted
accounting principles and accompanied by an independent auditor's report.
"August 1996 Property" shall mean each of the 23 Properties
contributed directly or indirectly through Partnership interests to the
capital of the Partnership on August 22, 1996.
"Bankruptcy" shall mean, with respect to any Partner, (a) the
commencement by such Partner of any proceeding seeking relief under any
provision or chapter of the federal Bankruptcy Code, 11 U.S.C. Section 101 et
seq., as the same may be amended from time to time, or any other federal or
state law relating to insolvency, bankruptcy or reorganization; (b) an
adjudication that such Partner is insolvent or bankrupt; (c) the entry of an
order for relief under the federal Bankruptcy Code with respect to such
Partner; (d) the filing of any such petition or the commencement of any such
case or proceeding against such Partner, unless such petition and the case or
proceeding initiated thereby are stayed or dismissed within ninety (90) days
from the date of such filing; (e) the filing of an answer by such Partner
admitting the allegations of any such petition; (f) the appointment of a
trustee, receiver or custodian for all or substantially all of the assets of
such Partner unless such appointment is stayed, vacated or dismissed within
ninety (90) days from the date of such appointment but not less than five (5)
days before the proposed sale of any assets of such Partner; (g) the
insolvency of such Partner or the execution by such Partner of a general
assignment for the benefit of creditors; (h) the convening by such Partner of
a meeting of its creditors, or any class thereof, for purposes of effecting a
moratorium upon or extension or composition of its debts; (i) the failure of
such Partner to pay its debts as they mature; (j) the levy, attachment,
execution or other seizure of substantially all of the assets of such Partner
where such seizure is not discharged within thirty (30) days thereafter; (k)
the admission by such Partner in writing of its inability generally to pay
its debts as they mature or that it is generally not paying its debts as they
become due; or (l) the taking of any corporate or partnership action in
connection with the foregoing.
"BRT Administrative Expenses" shall mean all those administrative
costs and expenses of BRT described in Section 8.1(b).
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which the New York Stock Exchange or The NASDAQ Stock Market is
closed.
"Capital Account" shall mean, with respect to any Partner, the
separate "book" account which the Partnership shall establish and maintain
for such Partner in accordance with Section 704(b) of the Code and Section
1.704-1(b)(2)(iv) of the Regulations and such other
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provisions of Section 1.704-1(b) of the Regulations that must be complied
with in order for the Capital Accounts to be determined in accordance with
the provisions of said Regulations.
"Capital Contribution" shall mean, with respect to any Partner, the
amount of money and the fair market value of assets contributed to the
Partnership by such Partner (net of liabilities to which such contributed
assets are subject).
"Cash Amount" shall mean an amount of cash per Class A Unit equal to
the Current Per Share Market Price of the number of Common Shares issuable in
respect of one Class A Unit pursuant to Section 15.2.
"Cash Equivalents" shall mean obligations of the United States
government with a maturity of not more than 60 days and time deposits and
accounts maintained in a national banking association and fully insured by
the Federal Deposit Insurance Corporation.
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Secretary of
State of Delaware, as amended and as it may hereafter be amended from time to
time in accordance with the terms of this Agreement and the Act.
"Class A Limited Partnership Interest" shall have the meaning
ascribed to it in Section 3.1.
"Class A Units" shall have the meaning ascribed to it in Section 3.1.
"Closing Price" on any date shall mean the last sale price of the
Common Shares, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices of the Common Shares, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange, or such other national securities exchange or
The NASDAQ Stock Market on which the Common Shares are then listed or
admitted to trading.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall have the meaning set forth in Section 18.3(a)
hereof.
"Common Shares" shall mean the common shares of beneficial interest,
par value $.01 per share, of BRT.
"Contributed Assets" shall mean those assets contributed to the
Partnership on or before the date hereof and as reflected on Exhibit B
hereof, as such Exhibit may be amended by
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the General Partner from time to time to reflect additional contributions of
property to the Partnership hereafter.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to elect a majority of
the trustees of a trust, to select the managing partner of a partnership, or
otherwise to select, or have the power to remove and then select, a majority
of those persons exercising governing authority over an Entity. In the case
of a limited partnership, the sole general partner, all of the general
partners to the extent each has equal management control and authority, or
the managing general partner or managing general partners thereof shall be
deemed to have control of such partnership and, in the case of a trust, any
trustee thereof or any Person having the right to select any such trustee
shall be deemed to have control of such trust.
"Current Per Share Market Price" shall mean, with respect to a
Common Share and a given date, the average of the Closing Prices of Common
Shares for the five (5) consecutive Trading Days ending on such date.
"Depreciation" shall mean, with respect to any asset of the
Partnership for any fiscal year or other period, the depreciation, depletion
or amortization, as the case may be, allowed or allowable for federal income
tax purposes in respect of such asset for such fiscal year or other period;
provided, however, that if there is a difference between the Gross Asset
Value and the adjusted tax basis of such asset, Depreciation shall mean "book
depreciation, depletion or amortization" as determined under Section
1.704-1(b)(2)(iv)(g)(3) of the Regulations.
"Discount" shall have the meaning ascribed to it in Section 3.7(b).
"Encumbrance" shall mean any liens, security interests, mortgages,
deeds of trust, charges, claims, encumbrances, pledges, options, rights of
first offer or first refusal and any other rights or interests of others of
any kind or nature, actual or contingent, or other similar encumbrances of
any nature whatsoever.
"Entity" shall mean any general partnership, limited partnership,
corporation, joint venture, limited liability company, trust, business trust,
cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time (or any corresponding provisions of
succeeding laws).
"Event of Withdrawal" shall mean any event specified in Section
17-402 of the Act or any corresponding provision of succeeding law.
"Existing 1996 Mortgage Indebtedness" shall mean the mortgage
indebtedness outstanding on August 22, 1996 on certain of the Properties, and
identified on Exhibit C hereto.
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"Fiscal Year" shall have the meaning ascribed to it in Section 9.4.
"General Partner" shall mean Brandywine Realty Trust, a Maryland
real estate investment trust, in its capacity as general partner of the
Partnership, its duly admitted successors and assigns and any other person
who is a general partner of the Partnership at the time of reference thereto.
"General Partnership Interest" shall mean the Partnership Interest
of any General Partner.
"GP Shares Amount" shall mean one Common Share, as such number may
be adjusted pursuant to Section 15.4.
"GP Units" shall have the meaning ascribed to it in Section 3.1.
"Gross Asset Value" shall mean, with respect to any asset, the
asset's adjusted basis for federal income tax purposes except as follows:
(i) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross fair market
value of such asset at the time of such contribution, as agreed to by the
Partners;
(ii) The Gross Asset Values of all Partnership assets
shall be adjusted to equal their respective gross fair market values, as
agreed to by the Partners, as of the following times: (a) the acquisition of
an additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis capital contribution; (b) the
distribution by the Partnership to a Partner of more than a de minimis amount
of Partnership property other than money, unless all Partners receive
simultaneous distributions of undivided interests in the distributed property
in proportion to their respective Percentage Interests; (c) the liquidation
of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); and (d) the termination of the Partnership for federal
income tax purposes pursuant to Section 708(b)(1)(B) of the Code; and
(iii) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be the gross fair market value of such asset
on the date of distribution.
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to subparagraph (i) or (ii) hereof, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Net Income and Net Loss.
"Indemnity Notice" shall have the meaning set forth in Section
18.3(b) hereof.
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"Liabilities" shall have the meaning set forth in Section 18.1 hereof.
"Limited Partner" shall mean any Person listed on Exhibit A hereto
(as such Exhibit may be amended from time to time) in such Person's capacity
as a limited partner of the Partnership, such Person's permitted successors
or assigns as a limited partner hereof, or any Person who, at the time of
reference thereto, is a limited partner of the Partnership.
"Limited Partnership Interest" shall mean any equity interest in the
Partnership held by any person or entity as a Limited Partner.
"Liquidating Trustee" shall mean such individual or Entity as is
selected as the Liquidating Trustee hereunder by the General Partner, which
individual or Entity may include the General Partner or an Affiliate of the
General Partner, provided such Liquidating Trustee agrees in writing to be
bound by the terms of this Agreement. The Liquidating Trustee shall be
empowered to give and receive notices, reports and payments in connection
with the dissolution, liquidation and/or winding-up of the Partnership and
shall hold and exercise such other rights and powers as are necessary or
required to permit all parties to deal with the Liquidating Trustee in
connection with the dissolution, liquidation and/or winding-up of the
Partnership.
"Management Company" means Brandywine Realty Services Corporation, a
Pennsylvania corporation.
"Minimum Gain Attributable to Partner Nonrecourse Debt" shall mean
"partner nonrecourse debt minimum gain" as determined in accordance with
Regulation Section 1.704-2(i)(2).
"Net Income or Net Loss" shall mean, for each Fiscal Year or other
applicable period, an amount equal to the Partnership's net income or loss
for such year or period as determined for federal income tax purposes and in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a) of the Code shall be included in taxable income or loss), with
the following adjustments: (a) by including as an item of gross income any
tax-exempt income received by the Partnership; (b) by treating as a
deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or incurred to organize the
Partnership (unless an election is made pursuant to Code Section 709(b)) or
to promote the sale of interests in the Partnership and by treating
deductions for any losses incurred in connection with the sale or exchange of
Partnership property disallowed pursuant to Section 267(a)(1) or Section
707(b) of the Code as expenditures described in Section 705(a)(2)(B) of the
Code; (c) in lieu of depreciation, depletion, amortization, and other cost
recovery deductions taken into account in computing total income or loss,
there shall be taken into account Depreciation; (d) gain or loss resulting
from any disposition of Partnership property with respect to which gain or
loss is recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of such property rather than its adjusted
tax basis; and (e) in the event of an
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adjustment of the Gross Asset Value of any Partnership asset which requires
that the Capital Accounts of the Partnership be adjusted pursuant to
Regulation Section 1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such
adjustment is to be taken into account as additional Net Income or Net Loss
pursuant to Article VII hereof.
"Nichols" shall mean The Nichols Company and Anthony A. Nichols, Sr.
"Nonrecourse Deductions" shall have the meaning set forth in
Sections 1.704-2(b)(1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth in
Section 1.704-2(b)(3) of the Regulations.
"Notice of Redemption" shall mean the Notice of Redemption referred
to in Section 15.1 hereof and substantially in the form of Schedule 1 to this
Agreement.
"Option Agreement" shall mean that certain Option Agreement dated
August 22, 1996 between the Partnership and C/N Horsham Towne Limited
Partnership, a limited partnership, pursuant to which the Partnership has the
right and option to purchase the Option Properties.
"Option Properties" shall mean the office building properties known
as "Horsham 11-14" that the Partnership has the right to purchase pursuant to
the Option Agreement.
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Section 1.704-2(i)(2) of the Regulations.
"Partners" shall mean the General Partner and the Limited Partners,
their duly admitted successors or assigns or any Person who is a partner of
the Partnership at the time of reference hereto.
"Partnership" shall mean the limited partnership hereby
constituted, as such limited partnership may from time to time be constituted.
"Partnership Minimum Gain" shall have the meaning set forth in
Section 1.704-2(b)(2) of the Regulations.
"Partnership Interest" shall mean the entire ownership interest of a
Partner in the Partnership at any particular time, including the right of
such Partner to any and all benefits to which a Partner may be entitled as
provided in this Agreement and in the Act, together with the obligations of
such Partner to comply with all of the terms and provisions of this Agreement
and of the Act.
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"Partnership Unit" shall mean a unit of interest in the Partnership
issued under this Agreement as more fully described in Section 3.1.
"Percentage Interest" shall mean, as to each Partner, such Partner's
interest in the Partnership as determined by dividing (a) the total number of
Partnership Units owned by such Partner, by (b) the total number of
Partnership Units of all classes of Partnership Units issued and outstanding
at the time of determination.
"Person" shall mean any individual or Entity.
"Property" shall mean any real property in which the Partnership,
directly or indirectly, acquires ownership of all or a portion of a fee or
leasehold interest (whether by contribution to, or acquisition by, the
Partnership).
"Record Date" shall mean the date established by the General Partner
for the purpose of making any proper determination in connection with, but
not limited to, the following matters: (i) the Partners entitled to receive
cash distributions pursuant to Section 6.1 hereof; (ii) consent to any matter
for which consent of the Partners is permitted or required under any
provision of this Agreement; or (iii) otherwise when Partners are allocated
rights hereunder.
"Redeeming Partner" shall have the meaning set forth in Section 15.1
hereof.
"Redemption Rights" shall have the meaning set forth in Section 15.1
hereof.
"Register" shall mean the register established pursuant to Section
3.8.
"Registered Office" shall mean the location of the principal office
of the Partnership as set forth in filings made by the Partnership pursuant
to the Act.
"Regulations" shall mean the final or temporary income tax
regulations promulgated under the Code, as such regulations may be amended
and in affect from time to time (including corresponding provisions of
succeeding regulations).
"Regulatory Allocations" shall have the meaning set forth in Section
7.2(f).
"REIT" shall mean a real estate investment trust as defined in
Section 856 of the Code.
"REIT Requirements" shall mean the requirements for qualifying as a
real estate investment trust under the Code and Regulations.
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"Retained Interest" shall mean the 11% capital interest and 1%
profits interest retained by Safeguard and The Nichols Company, as
applicable, in the Title Holding Partnerships identified on Exhibit D.
"Safeguard" shall mean Safeguard Scientifics, Inc., a Pennsylvania
corporation.
"Section 704(c) Tax Items" shall have the meaning set forth in
Section 7.3(c).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Specified Redemption Date" shall mean the tenth (10th) Business Day
after receipt by the General Partner of a Notice of Redemption delivered to
the Partnership.
"Tax Items" shall have the meaning set forth in Section 7.3(a).
"Tax Matters Partner" shall have the meaning ascribed to it in
Section 9.3.
"Tax Payment Loan" shall have the meaning ascribed to it in Section
6.4.
"The Nichols Company" shall mean The Nichols Company, a Pennsylvania
corporation.
"Title Holding Partnership" shall mean any partnership in which
either the Partnership or the Witmer Partnership is the sole general partner
and which holds fee title to an August 1996 Property. The Title Holding
Partnerships of the Partnership, and the August 1996 Properties held by them,
as of the date hereof are listed on Exhibit D.
"Trading Day" shall mean a day on which the principal national
securities exchange or market on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, shall mean any Business Day.
"Transfer" as a noun, shall mean any sale, assignment, conveyance,
pledge, hypothecation, gift, encumbrance or other transfer, and as a verb,
shall mean to sell, assign, convey, pledge, hypothecate, give, encumber or
otherwise transfer.
"Unit" shall have the meaning ascribed to it in Section 3.1.
"Withholding Tax Act" shall have the meaning ascribed to it in
Section 6.4.
"Witmer Partnership" shall mean Witmer Operating Partnership I, L.P.
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ARTICLE II
GENERAL PROVISIONS
2.1. Continuation of the Partnership. The Partners hereby agree to
continue the Partnership as a limited partnership pursuant to the provisions
of the Act for the purposes and upon the terms and conditions set forth in
this Agreement. The Partners agree that the rights and liabilities of the
Partners shall be as provided herein, except as otherwise expressly required
by the Act or other applicable law, if any.
2.2. Name, Principal Place of Business and Registered Office.
(a) The business of the Partnership shall be conducted under
the name of "BRANDYWINE OPERATING PARTNERSHIP, L.P." or such other name as
the General Partner may select, and all transactions of the Partnership and
title to all of the Partnership's assets, to the extent permitted by
applicable law, shall be carried on and completed in such name.
(b) The principal place of business and registered office of
the Partnership shall be located at Newtown Corporate Campus, 16 Campus
Boulevard, Suite 150, Newtown Square, PA 19073. The General Partner may
change the principal place of business or the registered office of the
Partnership at any time in its sole discretion, and, in such event, shall
give written notice thereof to all Limited Partners and file any amendment to
the Certificate required by the Act.
2.3. Purpose. The purpose of the Partnership shall be, directly or
indirectly, to acquire, hold, own, develop, redevelop, construct, improve,
maintain, operate, manage, sell, lease, rent, transfer, encumber, mortgage,
convey, exchange, and otherwise dispose of or deal with real and personal,
tangible and intangible, property of every kind and nature; to act as and
exercise all of the powers of the general partner or a limited partner, as
the case may be, in partnerships or joint ventures in which the Partnership
has an interest; to acquire, own, deal with and dispose of securities and
other interests in partnerships, corporations or joint ventures, including
corporations, partnerships, joint ventures and other associations formed for
the acquisition, development or redevelopment of real and personal property
or the provision of services thereto; to undertake such other activities as
may be necessary, advisable, desirable or convenient to the business of the
Partnership; to engage in such other ancillary activities as shall be
necessary or desirable to effectuate the foregoing purposes; and to otherwise
engage in or conduct any enterprise, business or activity that a limited
partnership may engage in or conduct under the Act.
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2.4. Powers. The Partnership shall have and exercise all powers now
or hereafter permitted by the State of Delaware to be exercised by a limited
partnership formed under the laws of that state. In connection with (and
without limiting) the foregoing, the Partnership shall have full power and
authority, directly or through its interests in other partnerships,
corporations, joint ventures or other associations, to enter into, perform,
and carry out contracts of any kind, to borrow and lend money and to issue
evidences of indebtedness, whether or not secured by mortgages, trust deeds,
pledges or other liens, and to guaranty, provide security for or cause any
subsidiary joint venture or other association in which the Partnership has an
interest to guaranty or provide security for indebtedness or other
obligations of the Partnership or any subsidiary.
2.5. Term. The Partnership commenced on August 13, 1996 and shall
dissolve at 12:01 a.m. on December 31, 2094, unless sooner dissolved pursuant
to law or this Agreement.
2.6. Amendment of Certificate. The General Partner shall make all
filings, including amendments to the Certificate, as required by the Act,
elections, notices, instruments, documents or certificates as may be required
by applicable law, including, without limitation, applications to do business
in all jurisdictions where the Partnership will own property, and which may
be necessary to enable the Partnership to conduct its business, and to own
its properties, under the Partnership's name, to be amended and/or filed or
recorded in all appropriate public offices.
2.7. Partnership Assets.
(a) The Partners shall use the Partnership's credit and assets
solely for the benefit of the Partnership. All real and personal property
owned by the Partnership shall be owned by the Partnership, and the Partners
as such shall have no direct interest therein.
(b) To the extent allowable under applicable law, title to all
or any part of the properties of the Partnership may be held in the name of
the Partnership or any other Person as nominee for the Partnership. Any such
title holder shall perform any and all of its respective functions to the
extent and upon such terms and conditions as may be determined from time to
time by the General Partner.
(c) No Partner shall, either directly or indirectly, take any
action to require partition or appraisement of the Partnership or of any of
its assets or properties or cause the sale of any Partnership property for
other than a Partnership purpose, and notwithstanding any provision of
applicable law to the contrary, each Partner (and its legal representatives,
successors and assigns) hereby irrevocably waives any and all right to
maintain any action for partition or to compel any sale with respect to its
Partnership Interest or with respect to any assets or properties of the
Partnership, except as expressly provided in this Agreement.
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2.8. Limitation on Liability of Persons Related to Partners. Except
as otherwise required by applicable law or as expressly agreed in writing, no
director, trustee, officer, shareholder, partner, employee or agent of any
Partner shall be personally liable for the payment of any sums owing by such
Partner to the Partnership or any other Partner under the terms of this
Agreement or for the performance of any other covenant or agreement of such
Partner contained herein.
2.9. Conflicts of Interest and Transactions with Affiliates.
(a) Subject to the limitations expressly set forth herein, any
Partner and any Affiliate of any Partner may engage in or possess an interest
in any business or activity whatsoever, whether now existing or hereafter
created, without any accountability to the Partnership or any Partner. This
Agreement shall not give the Partnership or any Partner any interest in, or
right to, any such business or activity or any proceeds, income or profit
thereof or therefrom. No Partner shall be obligated to offer any business
opportunity to the Partnership or any other Partner.
(b) Subject to the limitations expressly set forth herein, the
Partnership may enter into any arrangement, contract, agreement or business
venture that is not prohibited under the Act with any Partner or any
Partner's Affiliates. Each Partner understands and acknowledges that the
conduct of the business of the Partnership will involve business dealings
with such other business ventures or undertakings of the Partners and their
Affiliates. Without limiting the generality of the foregoing, the
Partnership, at the discretion of the General Partner, may borrow funds from
any Partner or any Partner's Affiliates. Except to the extent otherwise
expressly provided herein, any material transaction between the Partnership
and any Partner or Affiliate of a Partner shall be on terms reasonably
determined by the General Partner to be no less favorable than the terms
which could be obtained from unrelated third parties.
2.10. Statutory Compliance. The General Partner shall execute
such further documents and take such further action as shall be appropriate
to comply with the Act and all other all requirements of law for the
formation and operation of a limited partnership in the State of Delaware and
all other jurisdictions in which the Partnership may elect to do business.
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ARTICLE III
PARTNERSHIP INTERESTS
3.1. In General.
(a) The Partnership has two (2) classes of Partnership
Interest: "General Partnership Interests," and "Class A Limited Partnership
Interests," each of which shall be divided into units as provided in
paragraph (c) below, which units shall evidence a Person's interest in a
particular class of Partnership Interest. The Class A Limited Partnership
Interests are sometimes referred to herein as "Limited Partnership
Interests." The Partnership may create and issue additional classes of
General or Limited Partnership Interests in accordance with Section 3.3
hereof.
(b) Any Person may at the same time hold more than one class
of Partnership Interest and, in such event, shall for the purposes of this
Agreement be separately entitled to the rights afforded a Partner in each of
such classes under this Agreement. If a General Partner contributes to the
capital of the Partnership as a Limited Partner or acquires any Limited
Partnership Interest, it shall be treated in all respects as a Limited
Partner as to such Limited Partnership Interests.
(c) Each class of Partnership Interest issued by the
Partnership shall be divided into units ("Units") with each Unit within a
class of Partnership Interest representing an equal undivided fractional
share of each item of Partnership income, gain, and loss, and in each
distribution of Partnership assets, allocable to the Units of that class of
Partnership Interest. Accordingly, the General Partnership Interests shall be
divided into GP Units and the Class A Limited Partnership Interests shall be
divided into the Class A Units.
(d) The aggregate total of Units for each class of Partnership
Interest and the aggregate total of all Units outstanding shall be as set
forth on Exhibit A attached hereto, as such Exhibit may be amended from time
to time, and each Partner shall be deemed to hold those Units set forth next
to such Partner's name on Exhibit A attached hereto.
3.2. Class A Units. The Class A Units shall be entitled to the
rights of redemption specified in Article XV hereof and such voting and other
rights as may be herein specified. Additional Class A Units are authorized
for issuance in the future to acquire the Retained Interests as provided in
Section 3.6, upon the achievement of Discounts as provided in Section 3.7,
pursuant to the Option Agreement and as otherwise provided for or
contemplated by this Agreement.
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3.3. Creation and Issuance of Additional Partnership Interests.
(a) Subject only to the limitations expressly set forth in
this Agreement, the General Partner is hereby authorized to cause the
Partnership from time to time to solicit and accept additional Capital
Contributions from any Person and/or cause the Partnership to issue to the
Partners (including the General Partner) or other persons (including, without
limitation, in connection with the contribution of property to the
Partnership) (i) additional Units representing General Partnership Interests
and additional Units representing Class A Limited Partnership Interests, (ii)
additional Partnership Interests and Units in one or more newly created
classes of Partnership Interests, (iii) one or more series of any such
classes of Partnership Interests (iv), rights, options, or warrants
exercisable for or convertible into Partnership Interests, and (v) other
securities or instruments of any type or class whatsoever. Any of the
foregoing may be issued for cash, property, services, or such other type,
form, and amount of consideration (including notes, other evidences of
indebtedness or obligations of the Person acquiring the interest, rights,
instrument or security, as the case may be) as the General Partner may
determine to be appropriate.
(b) Each class of Partnership Interest newly created and
issued hereunder, and any series within such class, shall have such rights,
privileges, preferences and designations, and be subject to such limitations,
as the General Partner shall specify in its sole discretion, including,
without limitation, (i) the allocations of items of Partnership income, gain,
loss, deduction and credit to each such class or series of Partnership
Interest; (ii) the right of each such class or series of Partnership Interest
to share in Partnership distributions; (iii) the rights of each such class or
series of Partnership Interest upon dissolution and liquidation of the
Partnership; (iv) the voting rights of such class or series; and (v)
restrictions on transfer (in addition to the restrictions set forth in
Section 11.1(b)).
(c) The creation of an additional class of Partnership
Interest permitted hereunder, or series within any such class, may be made by
the General Partner by setting forth either in an amendment or an addendum to
this Agreement the relative rights, obligations, duties, and preferences of
each new class, or series within any such class, of Partnership Interests
created. A copy of this Agreement as so amended, or the addendum as so
adopted, as the case may be, shall be provided to each other Partner. Any
filings necessary to be made under the Act or applicable law in connection
with the creation of such interests shall be made by the General Partner on
behalf of the Partnership.
(d) No Limited Partner shall have any preemptive or
preferential or similar right with respect to the issuance or sale of any
Partnership Units.
3.4. Issuance of Additional GP Units to General Partner. If the
General Partner issues additional Common Shares and contributes the net
proceeds thereof as a Capital Contribution to the Partnership, then the
Partnership shall issue to the General Partner additional
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GP Units equal to the number of Common Shares issued by the General Partner,
the net proceeds of which are contributed to the Partnership.
3.5. Other Provisions Relating to All Classes of Partnership
Interests.
(a) Fractional Units may be issued, with the amount of any
such fractional interest being rounded to the fourth decimal place.
(b) By executing this Agreement, each Partner consents and
authorizes the Partnership, acting solely through the General Partner, to
issue, subject only to the express requirements hereof, such interests,
instruments and securities upon such terms and conditions as the General
Partner may from time to time determine to be appropriate.
(c) Certificates for Units may be issued, at the request of
the holder of any Units, but no Class A Units comprising Collateral may be
certificated prior to the time such Units cease to be Collateral hereunder
unless the certificates are delivered to the holder of the first priority
security interest thereon, duly endorsed in blank for transfer or accompanied
by duly executed transfer powers.
3.6. Issuance of Class A Units Upon Exercise of Option to Acquire
Retained Interests.
(a) The Nichols Company and Safeguard each hereby grants to
the Partnership the irrevocable right and option with respect to each
Retained Interest owned by it as reflected on Exhibit D in a Title Holding
Partnership to acquire, free and clear of any Encumbrance, such Retained
Interest in exchange for Class A Units issued by the Partnership. The
Partnership shall exercise its option hereunder by giving written notice to
such effect to The Nichols Company or Safeguard, as the case may be, at least
five (5) days prior to the exercise of such option. Such option may be
exercised by the Partnership at any time prior to September 1, 1999 (the
"Option Expiration Date"). The exercise notice shall contain the agreement
of the Partnership to pay all Pennsylvania real estate transfer taxes that
may become payable upon the transfer of such Retained Interest as a result of
such option being exercised prior to the Option Expiration Date.
(b) If the option granted pursuant to Section 3.6(a) has not
been exercised prior to the Option Expiration Date, then on the Option
Expiration Date, the Partnership shall acquire from The Nichols Company and
Safeguard, and The Nichols Company and Safeguard shall each Transfer to the
Partnership, all Retained Interests described in paragraph (a), free and
clear of any Encumbrance.
(c) Concurrently with the acquisition of the Retained
Interests pursuant to paragraph (a) or (b) above, the Partnership shall cause
Witmer Partnership or its designee to acquire all of The Nichols Company's
Retained Interests owned by it reflected on
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Exhibit D in each Title Holding Partnership owning a Portfolio A Property in
exchange for Class A Units of Limited Partnership Interest in Witmer
Partnership in accordance with the provisions of Section 13 of the Agreement
of Limited Partnership dated November 21, 1995 of Witmer Partnership no later
than the Option Expiration Date. The Partnership shall pay, or cause to be
paid, all Pennsylvania real estate taxes that may become payable as a result
of the acquisition of such Retained Interest prior to the Option Expiration
Date.
(d) Immediately upon Witmer Partnership acquiring such
Retained Interests, the Partnership shall issue to The Nichols Company Class
A Units in exchange for the Class A Units of Limited Partnership Interest in
Witmer Partnership acquired by The Nichols Company in exchange for such
Retained Interests.
(e) The total number of Class A Units to be issued by the
Partnership to acquire all of the Retained Interests and Class A Units of
Witmer Partnership described in paragraphs (b) and (c) above shall be 44,322
Class A Units. At the closing for the Transfer of the Retained Interests and
Class A Units of Witmer Partnership to the Partnership in accordance with the
preceding paragraphs of this Section 3.6, the Partnership shall issue to
Safeguard and The Nichols Company, or to their successors or designees, that
number of such 44,322 Class A Units as is indicated opposite their names on
Exhibit D and shall pay to each such person the amount, if any, that is equal
to the aggregate amount that would have been distributed in respect of such
Units had they been issued on the date hereof less any amounts distributed to
such person after August 22, 1996 and prior to the date of such acquisition
of the Retained Interests and Class A Units of Witmer Partnership from such
person in respect of such person's Retained Interests and Class A Units of
Witmer Partnership. All such Class A Units shall be, when issued, validly
issued, fully paid, and, except as otherwise required under the Act,
nonassessable.
3.7. Issuance of Additional Class A and GP Units Upon Achievement of
Mortgage Discounts.
(a) If any Existing Mortgage Indebtedness is repaid or
otherwise discharged or satisfied at a Discount as defined in Section 3.7(b),
and as a result thereof additional net equity in the Property is realized,
the Partnership shall issue the number of additional Class A Units and GP
Units that is equal in the aggregate to (x) the dollar amount of the
additional net equity so achieved divided by (y) $16.50 as adjusted in
accordance with customary practice for stock splits, stock combinations and
stock dividends occurring after the date hereof. Twenty-five percent (25%)
of such additional Units shall be GP Units and issued to the General Partner;
and the remaining seventy-five percent (75%) of such additional Units shall
be Class A Units and issued to the persons identified on Exhibit C under the
column entitled "Name of Limited Partners Entitled to Receive Class A Units
Upon Realization Discount", which persons shall receive such Units in the
relative proportions indicated thereon.
(b) For purposes of this Section 3.7, "Discount" shall be the
amount greater than zero obtained by subtracting from (A) the outstanding
principal balance of such
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Existing Mortgage Indebtedness immediately prior to its repayment, (B) the
amount of the cash paid, plus the fair value of any other assets conveyed, to
fully discharge the Identified Indebtedness. If such computation does not
result in a number greater than zero, there shall be no Discount realized in
the repayment of such Identified Indebtedness.
(c) For purposes of this Section 3.7, the additional net
equity in a Property realized through the repayment of Mortgage Indebtedness
at a Discount shall be the amount, greater than zero, obtained by (A) if the
original net equity of the Property is positive, (i) adding the amount of the
Discount to the original net equity of the Property shown on Exhibit C, and
(ii) subtracting therefrom the original net equity assigned to the Property
on Exhibit C; or (B) if the original net equity of the Property is negative,
by subtracting from the Discount, the amount of such negative net equity.
(d) Whenever the Partnership shall issue additional Class A
Units to any person under this Section 3.7, it shall pay to each such person
the amount, if any, that is equal to the aggregate amount that would have
been distributed in respect of such Units had they been issued on the date
hereof.
(e) The persons identified on Exhibit C as being entitled to
receive additional Units issuable under the circumstances set forth in this
Section 3.7 shall remain entitled to receive any such Units notwithstanding
that any such person may, after the date hereof, cease to be a Partner.
3.8. Register. The General Partner shall maintain a Register at the
principal place of business of the Partnership setting forth the names and
addresses and the number and class of Partnership Interests and Units held by
each Partner. Upon any adjustment or cancellation of any Partner's
Partnership Interest and Units, the General Partner shall make such
adjustment or cancellation in the Register and send written notice thereof to
the Partner so affected. Upon an assignment by a Partner of all or a part of
its Partnership Interest and Units in the Partnership pursuant to the terms
hereof and as permitted hereby, the General Partner shall register such
assignment in the Register. The General Partner shall note on the Register
any restrictions on the transfer of all or any part of any Partner's
Partnership Interest and Units and any such Units that are held in escrow
hereunder. In the absence of manifest error, the Register shall constitute
conclusive evidence of the interest of each Partner and other Person in the
Partnership Interests represented by the Units.
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ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1. Capital Contributions of the Partners.
(a) As of the date hereof, each Partner owns the Partnership
Interest represented by Units as set forth on Exhibit A attached hereto,
which Exhibit may be amended from time to time by the General Partner to the
extent necessary to reflect redemptions, conversions, additional Capital
Contributions, the issuance of additional Partnership Interests and Units, or
similar events having an effect on a Partner's ownership of a Partnership
Interest and Units.
(b) The Contributed Assets of the Partnership are indicated on
Exhibit B hereof, which schedule may be amended from time to time by the
General Partner to reflect additional contributions to the Partnership.
4.2. Capital Contributions Generally. Except as otherwise expressly
provided herein or to the extent that a Partner agrees to make a Capital
Contribution to, or to purchase Partnership Interests from, the Partnership:
no Partner shall be required to contribute any capital to the Partnership;
no Partner may withdraw any of its capital from the Partnership; no Partner
shall be required to make any loan to the Partnership; loans by a Partner to
the Partnership shall not be considered a contribution of capital, shall not
increase the Capital Account of the lending Partner or the lending Partner's
ownership interest in the Partnership and the repayment of such loans by the
Partnership shall not decrease, or result in any adjustment to, the Capital
Account of the Partner making the loans; no interest shall be paid on any
capital contributed to the Partnership by any Partner; under any
circumstances requiring a return of all or any portion of a Capital
Contribution, no Partner shall have the right to receive property other than
cash; and no Partner shall be required at any time to restore any deficit in
such Partner's Capital Account.
4.3. No Third Party Beneficiary. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the
right or obligation of any Partner to make Capital Contributions or loans or
to pursue any other right or remedy hereunder or at law or in equity, it
being understood and agreed that the provisions of this Agreement shall be
solely for the benefit of, and may be enforced solely by, the parties hereto
and their respective successors and assigns. None of the rights or
obligations of the Partners herein set forth to make Capital Contributions or
loans to the Partnership shall be deemed an asset of the Partnership for any
purpose by any creditor or other third party, nor may such rights or
obligations be sold, transferred or assigned by the Partnership or pledged or
encumbered by the Partnership to secure any debt or other obligation of the
Partnership or of any of the Partners.
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ARTICLE V
CAPITAL ACCOUNTS
5.1. Establishment and Maintenance of Capital Accounts. A Capital
Account shall be established for each Partner in the amount of such Partner's
Capital Contribution to the Partnership as reflected on Exhibit B attached
hereto, as such Exhibit may be amended from time to time by the General
Partner. Unless otherwise provided in this Agreement, each Partner's Capital
Account shall be determined and maintained in accordance with the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv) (or any corresponding provision
of succeeding law), and all provisions of this Agreement relating to the
maintenance of Capital Accounts shall be interpreted and applied in a manner
consistent therewith. If the General Partner shall determine that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto, are computed in order to comply with such regulations, the
General Partner shall make such modifications. Pursuant to the foregoing
accounting rules, a Partner's Capital Account shall be increased, decreased,
adjusted, and maintained as provided in Article VII.
5.2. Succession to Capital Accounts. Subject to Section 11.4, in
the event of a transfer of any Partnership Interest permitted herein, the
Capital Account of the transferor Partner that is attributable to the
transferred Partnership Interest shall be carried over to the transferee of
such interest and adjusted as provided in the Regulations under Code section
704.
5.3. Certain Adjustments. In connection with any Capital
Contribution to the Partnership in consideration for a Partnership Interest,
or a distribution by the Partnership to a Partner in respect of a Partnership
Interest, the General Partner shall be authorized to increase or decrease the
Capital Accounts to reflect a revaluation of Partnership property as provided
in Regulation Section 1.704-1(b)(2)(iv)(f).
ARTICLE VI
DISTRIBUTIONS
6.1. Distributions. The General Partner shall cause the Partnership
to distribute, on a quarterly or other basis as determined by the General
Partner in its sole discretion, out of funds legally available therefor, such
amount as the General Partner in its discretion shall determine, to the
Partners of record as of the applicable Record Date, which distributions
shall be made to the Partners pro rata based on the number of Units held by
them as of such Record Date, subject to such preferential or subordinated
distributions as may be required to be made by the Partnership on any
additional class of Units that are hereafter created and that have a
different right to share in partnership distributions than the GP Units and
Class A Units. Notwithstanding the foregoing, the General Partner reserves
the right to pro-rate distributions to incoming Limited Partners who were
admitted during the applicable quarter or such other period in which a
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distribution hereunder is to be made (but excluding any incoming Limited
Partners who received Units from an existing Limited Partner) and who held
Partnership Units as of the applicable Record Date but held such Partnership
Units for less than the entire period with respect to which the distribution
hereunder is to be made, such pro-ration to be based on the number of days
such Units were outstanding during the applicable period or any other method
of pro-ration deemed equitable by the General Partner. In the event that
pro-ration is made hereunder, the General Partner shall be authorized to
adjust the amount of the distribution payable to all other Partners as the
General Partner deems necessary. In no event may a Partner receive a
distribution with respect to a Unit if such Partner is entitled to receive a
distribution with respect to a Common Share for which such Unit has been
exchanged, and such distribution shall be made to the Company.
6.2. Distributions upon Liquidation. Liquidating distributions
shall in all cases be made in accordance with the provisions of Section 13.5.
6.3. Additional Distribution Rules.
(a) Effective Date. Distributions shall be charged against
the Partners' Capital Accounts as of the date the distributions are made.
(b) Division Among Limited Partners. Except as may otherwise
be provided herein or in the instruments creating a class of Partnership
Interests, each distribution made to the Limited Partners of a given class
pursuant to this Article VI shall be divided among the Limited Partners of
such class so that each of them shall receive the same proportion thereof as
the Units of such class owned by such Limited Partner bear to all Units of
the same class then owned by all Limited Partners.
(c) Obligation to Repay Distribution. In the absence of fraud
or mistake, or except as otherwise required by law, no Partner shall have any
obligation or responsibility to repay to the Partnership any distribution
made by the Partnership to a Partner pursuant to this Agreement.
(d) Legal Requirements. Notwithstanding anything contained
herein to the contrary, the General Partner may withhold making a
distribution to any Limited Partner, or to any transferee of a Limited
Partner, until the Limited Partner or the transferee has provided the General
Partner with all necessary information and assurances, including an opinion
of counsel satisfactory to the General Partner requested by the General
Partner, to determine that such distribution will be in compliance with all
applicable laws.
(e) Additional Distributions. If the Partnership has taxable
income for any Fiscal Year then the Partnership shall, out of any funds
legally available therefor, distribute to the Partners, in the proportions
described in Section 6.1, on or before the 90th day following the end of the
calendar year that includes the last day of such Fiscal Year, the amount
necessary
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for the original holders of Class A Units issued on August 22, 1996 to pay
federal, state and local income taxes with respect to such taxable income
allocable to such Units, computed by multiplying such taxable income by the
highest combined federal, state and local income tax rate applicable to any
such Partner for the calendar year that includes the last day of the Fiscal
Year in which such taxable income is allocated to such Partner. The
Partnership shall not make a distribution under this Section 6.3(e) if it
does not have sufficient cash on hand to fund such distribution.
6.4. Taxes Withheld. Unless treated as a Tax Payment Loan (as
hereinafter defined), any amount paid by the Partnership for or with respect
to any Partner on account of any withholding tax or other tax payable with
respect to the income, profits or distributions of the Partnership pursuant
to the Code, the Regulations, or any state or local statute, regulation or
ordinance requiring such payment (a "Withholding Tax Act") shall be treated
as a distribution to such Partner for all purposes of this Agreement,
consistent with the character or source of the income, profits or cash which
gave rise to the payment or withholding obligation. To the extent that the
amount required to be remitted by the Partnership under a Withholding Tax Act
exceeds the amount then otherwise distributable to such Partner, the excess
shall constitute a loan from the Partnership to such Partner (a "Tax Payment
Loan") which shall be payable upon demand and shall bear interest, from the
date that the Partnership makes the payment to the relevant taxing authority,
at the federal tax underpayment rate, under section 6621(a)(2) of the Code,
as reported from time to time. So long as any Tax Payment Loan or the
interest thereon remains unpaid, the Partnership shall make future
distributions due to such Partner under this Agreement by applying the amount
of any such distribution first to the payment of any unpaid interest on all
Tax Payment Loans of such Partner and then to the repayment of the principal
of all Tax Payment Loans of such Partner. The General Partner shall have the
authority to take all actions necessary to enable the Partnership to comply
with the provisions of any Withholding Tax Act applicable to the Partnership
and to carry out the provisions of this Section. Nothing in this Section
shall create any obligation on the General Partner to advance funds to the
Partnership or to borrow funds from third parties in order to make any
payments on account of any liability of the Partnership under a Withholding
Tax Act.
6.5. In-Kind Distributions. If, at the discretion of the General
Partner, any assets of the Partnership other than cash are distributed to the
Partners in kind, such assets shall be valued on the basis of the fair market
value thereof as determined by the General Partner in its reasonable
discretion on the date of distribution. Without limiting the General
Partner's discretion to make such a valuation or requiring that any such
appraisal be made, the valuation of any asset by the General Partner on the
basis of the determination of its fair market value by an independent
appraiser shall be deemed to be a reasonable value for such asset and a
reasonable exercise of such discretion. If any Partnership property other
than cash is distributed to a Partner, the Capital Accounts of the Partners
shall be adjusted to reflect the manner in which the unrealized income, gain,
loss or deduction inherent in such property (that has not previously been
reflected in the Partners' Capital Accounts) would be allocated among the
Partners if there had been a taxable disposition of such property at its fair
market value on the date of distribution.
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The Capital Accounts of the Partner receiving a distribution in kind shall
then be reduced by the fair market value of the property distributed.
Subject to the limitations on such distributions in connection with any
distribution of property of the Partnership in kind, including any
distribution in connection with the liquidation of the Partnership, the
General Partner need not distribute each asset ratably to all Partners, so
long as all Partners concurrently receive distributions of cash and other
property, valued as provided above, in the proportion to which they would
otherwise be entitled.
ARTICLE VII
ALLOCATIONS
7.1. Allocation of Net Income and Net Loss. After giving effect to
the special allocations set forth in Section 7.2 hereof, Net Income or Net
Loss shall be allocated among the Partners as follows:
(a) Net Income for any Fiscal Year shall be allocated first to
the Partners until the cumulative amount of Net Income allocated pursuant to
this Section 7.1(a) is equal to the cumulative amount of Net Loss allocated
to the Partners pursuant to Section 7.1(b) hereof for all prior periods
(without duplication) in reverse order to which prior Net Loss was allocated.
Thereafter, Net Income shall be allocated to the Partners in accordance with
their Percentage Interests.
(b) Net Loss for any Fiscal Year shall be allocated first, to
the extent Net Income has been allocated pursuant to Section 7.1(a) hereof
for any prior Fiscal Year (pro rata among the Partners in proportion to their
share of the Net Income being offset); provided that to the extent any
allocations of Net Income are offset pursuant to this Section, such
allocations shall be disregarded for purposes of computing subsequent
allocations pursuant to this Section 7.1(b). Thereafter, Net Loss shall be
allocated to the Partners in accordance with their Percentage Interests.
(c) Notwithstanding the provisions of Section 7.1(b), no
amount of Net Loss shall be allocated to any Partner if such allocation would
cause or increase a deficit balance in such Partner's Capital Account, after
adjusting such Capital Account for the items described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4),(5), and (6) to the extent
required therein and increasing such Capital Account by such Partner's share
of Partnership Minimum Gain and Minimum Gain Attributable to Partner
Nonrecourse Debt, if any. Rather, such Net Loss shall be allocated to the
General Partner and, to the extent Losses have been so allocated, then,
notwithstanding Section 7.1(a), subsequent Net Income shall be allocated one
hundred percent (100%) to the General Partner until the aggregate amount of
Net Income allocated under this Section 7.1(c) for the current Fiscal Year
and all previous Fiscal Years is equal to the aggregate amount of Net Loss
allocated to the General Partner under this Section 7.1(c).
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7.2. Special Allocations. Notwithstanding anything to the contrary
contained in this Agreement, the following allocations shall be made as
applicable:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If
there is a net decrease in Partnership Minimum Gain for any Partnership
fiscal year (except as a result of conversion or refinancing of Partnership
indebtedness, certain capital contributions or revaluation of the Partnership
property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or
(f)(3)), each Partner shall be specially allocated items of Partnership
income and gain for each year (and, if necessary, subsequent years) in an
amount equal to that Partner's share of the net decrease in Partnership
Minimum Gain. The items to be so allocated shall be determined in accordance
with Regulation Section 1.704-2(g). This paragraph (a) is intended to comply
with the minimum gain chargeback requirement in said section of the
Regulations and shall be interpreted consistently therewith. Allocations
pursuant to this paragraph (a) shall be made in proportion to the respective
amounts required to be allocated to each Partner pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If
there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse
Debt during any fiscal year (other than due to the conversion, refinancing or
other change in the debt instrument causing it to become partially or wholly
nonrecourse, certain capital contributions, or certain revaluations of
Partnership property as further outlined in Regulation Section
1.704-2(i)(4)), each Partner shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent
years) in an amount equal to that Partner's share of the net decrease in the
Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be so
allocated shall be determined in accordance with Regulation Section
1.704-2(i)(4) and (j)(2). This paragraph (b) is intended to comply with the
minimum gain chargeback requirement with respect to Partner Nonrecourse Debt
contained in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this paragraph (b) shall be
made in proportions to the respective amounts required to be allocated to
each Partner pursuant hereto.
(c) Qualified Income Offset. In the event a Partner receives
any adjustments, allocations or distributions described in Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), and such Partner has an Adjusted Capital
Account Deficit, items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate the
Adjusted Capital Account Deficit as quickly as possible. This paragraph (c)
is intended, among other things, to meet the requirements for a "qualified
income offset" under Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other applicable period shall be allocated to the Partners in
accordance with their respective Percentage Interests.
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(e) Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any fiscal year or other applicable period shall be specially
allocated to the Partner that bears the economic risk of loss for the debt
(i.e., the Partner Nonrecourse Debt) in respect of which such Partner
Nonrecourse Deductions are attributable (as determined under Regulation
Section 1.704-2(b)(4) and (i)(1)).
(f) Curative Allocations. The Regulatory Allocations shall be
taken into account in allocating other items of income, gain, loss and
deduction among the Partners so that, to the extent possible, the cumulative
net amount of allocations of Partnership items under Sections 7.1 and 7.2
shall be equal to the net amount that would have been allocated to each
Partner if the Regulatory Allocations had not occurred. This paragraph (f)
is intended to minimize to the extent possible and to the extent necessary
any economic distortions which may result from application of the Regulatory
Allocations and shall be interpreted in a manner consistent therewith. For
purposes hereof, "Regulatory Allocations" shall mean the allocations provided
under this Section 7.2 (save paragraphs (d) and (f) hereof).
7.3. Tax Allocations.
(a) Generally. Subject to paragraphs (b), (c) and (d) hereof,
items of income, gain, loss, deduction and credit to be allocated for income
tax purposes (collectively, "Tax Items") shall be allocated among the
Partners on the same basis as their respective book items.
(b) Sections 1245/1250 Recapture. If any portion of gain from
the sale of property is treated as gain which is ordinary income by virtue of
the application of Code Sections 1245 or 1250 ("Affected Gain"), then such
Affected Gain shall be allocated among the Partners in the same proportion
that the depreciation and amortization deductions giving rise to the Affected
Gain were allocated and other Tax Items of gain of the same character that
would have been recognized, but for the application of Code Sections 1245
and/or 1250, shall be allocated away from those Partners who are allocated
Affected Gain pursuant to clause (i) so that, to the extent possible, the
other Partners are allocated the same amount, and type, of capital gain that
would have been allocated to them had Code Sections 1245 and/or 1250 not
applied. For purposes hereof, in order to determine the proportionate
allocations of depreciation and amortization deductions for each fiscal year
or other applicable period, such deductions shall be deemed allocated on the
same basis as Net Income and Net Loss for such respective period.
(c) Allocations Respecting Section 704(c) and Revaluations.
Notwithstanding paragraph (b) hereof, Tax Items with respect to Partnership
property that is subject to Code Section 704(c) and/or Regulation Section
1.704-1(b)(2)(iv)(f) (collectively "Section 704(c) Tax Items") shall be
allocated in accordance with said Code section and/or Regulation Section
1.704-1(b)(4)(i), as the case may be. The Partnership shall apply the
"traditional method" for such allocations, as described in Regulation Section
1.704-3(b), and the
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allocation of Tax Items shall be subject to the ceiling rule stated in
Regulation Section 1.704-3(b)(1).
(d) Pre-contribution Gain. In the event that, during any
fiscal year or other applicable period, any Title Holding Partnership
allocates to the Partnership Pre-contribution Gain (as defined below), each
Partner (or its successors in interest) who, pursuant to Article IV hereof,
contributed to the capital of the Partnership the Contributed Asset to which
a distributive share of Pre-contribution Gain is attributable shall be
allocated that Pre-contribution Gain in accordance with its respective
interest in such Pre-contributed Gain. For purposes hereof, "Pre-contribution
Gain" shall mean, with respect to each Property owned by a Title Holding
Partnership, that unrealized gain attributable to the excess of the fair
market value of such Property on the date at which the Contributed Asset is
contributed to the capital of the Partnership pursuant to Article IV hereof,
over the adjusted tax basis of such Property on the date of such
contribution; provided, however, that the amount of any Pre-contribution Gain
associated with a Property shall be adjusted to account for allocations made
in accordance with the provisions of paragraph (c) of this Section 7.3 and
shall not, in any event, exceed that amount of gain actually allocated to the
Partnership by a Title Holding Partnership as a result of the sale or other
disposition of such Property.
ARTICLE VIII
EXPENSES; RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNER;
VOTING RIGHTS OF LIMITED PARTNERS
8.1. Expenses Borne by the Partnership.
(a) The Partnership shall pay all fees and other costs that it
incurs for legal, accounting and other services provided to the Partnership
by third parties, including, without limitation, costs and expenses incurred
in connection with the preparation and maintenance of the books and records,
financial statements, and tax returns of the Partnership. The General
Partner shall be entitled to reimbursement by the Partnership for any such
expenditures incurred by the General Partner on behalf of, or for the benefit
of, the Partnership.
(b) All fees, costs and expenses incurred by BRT for employee
salaries, as well as for legal, accounting and other services in connection
with the preparation and maintenance of BRT's books and records, financial
statements, tax returns and reports to shareholders and the Securities and
Exchange Commission (collectively, "BRT Administrative Expenses") shall be
paid by the Partnership (or reimbursed to BRT, if paid by BRT); provided,
however, that if BRT acquires and holds any Properties outside of, and not
for the benefit of, the Partnership, then BRT Administrative Expenses to be
paid (or reimbursed) by the Partnership hereunder shall be reduced to an
amount that is fair and equitable to the Partnership under the circumstances,
as determined by the General Partner in its sole discretion.
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8.2. Powers and Duties of General Partner.
(a) The General Partner shall be responsible for the
management of the Partnership's business and affairs. Except as otherwise
herein expressly provided and subject to Sections 8.3 and 8.4 hereof, the
General Partner shall have, and is hereby granted, full and complete power,
authority and discretion to take such action for and on behalf of the
Partnership as the General Partner shall, in its sole and absolute
discretion, deem necessary or appropriate to carry out the purposes for which
the Partnership was organized. Except as otherwise expressly provided herein
and subject to Sections 8.3 and 8.4 hereof, the General Partner shall
exercise all of the powers of the Partnership and have specifically, without
limiting the foregoing, the right, power and authority:
(i) To manage, control, invest, reinvest, acquire by
purchase, lease or otherwise, sell, contract to purchase or sell, grant,
obtain, or exercise options to purchase, options to sell or conversion
rights, assign, transfer, convey, deliver, endorse, exchange, pledge,
mortgage, abandon, improve, repair, maintain, insure, lease for any term and
otherwise deal with any and all property of whatsoever kind and nature, and
wheresoever situated, in furtherance of the business or purposes of the
Partnership;
(ii) To acquire, directly or indirectly, interests in real
estate of any kind and of any type, and any and all kinds of interests
therein and interests in Entities investing therein, and to determine the
manner in which title thereto is to be held; to manage (directly or through
property managers), insure against loss, protect and subdivide any of the
real estate, interests therein or parts thereof; to improve, develop or
redevelop any such real estate; to participate in the ownership and
development of any property; to dedicate for public use, to vacate any
subdivisions or parts thereof, to re-subdivide, to contract to sell, to grant
options to purchase or lease, to sell on any terms; to convey, to mortgage,
pledge or otherwise encumber said property, or any part thereof; to lease
said property or any part thereof from time to time, upon any terms and for
any period of time, and to renew or extend leases, to amend, change or modify
the terms and provisions of any leases and to grant options to lease and
options to renew leases and options to purchase; to partition or to exchange
said real property, or any part thereof, for other real or personal property;
to collect all rental and other income accruing to the Partnership; to grant
easements or charges of any kind; to release, convey or assign any right,
title or interest in or about or easement appurtenant to said property or any
part thereof; to construct and reconstruct, remodel, alter, repair, add to or
take from buildings on said premises; to insure any Person having an interest
in or responsibility for the care, management or repair of such property; to
direct the trustee of any land trust to mortgage, lease, convey or contract
to convey the real estate held in such land trust or to execute and deliver
deeds, mortgages, notes, and any and all documents pertaining to the property
subject to such land trust or in any matter regarding such trust; to execute
assignments of all or any part of the beneficial interest in such land trust;
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(iii) To employ, engage or contract with or dismiss
from employment or engagement Persons to the extent deemed necessary or
appropriate by the General Partner for the operation and management of the
Partnership business, including but not limited to, contractors,
subcontractors, engineers, architects, surveyors, mechanics, consultants,
accountants, attorneys, insurance brokers, real estate brokers and others;
(iv) To enter into, make, amend, perform and carry out or
cancel and rescind, contracts and other obligations on behalf of the
Partnership and to cause all Administrative Expenses to be paid;
(v) To borrow money, procure loans and advances from any
Person for Partnership purposes, and to apply for and secure, from any
Person, credit or accommodations; to contract liabilities and obligations,
direct or contingent and of every kind and nature (including interest rate
swaps, caps and hedges) with or without security; and to repay, discharge,
settle, adjust, compromise, or liquidate any such loan, advance, credit,
obligation or liability;
(vi) To pledge, hypothecate, mortgage, assign, deposit;
deliver, enter into sale and leaseback arrangements or otherwise give as
security or as additional or substitute security, or for sale or other
disposition any and all Partnership property, tangible or intangible,
including, but not limited to, real estate and beneficial interests in land
trusts, and to make substitutions thereof, and to receive any proceeds
thereof upon the release or surrender thereof; to sign, execute and deliver
any and all assignments, deeds and other contracts and instruments in
writing; to authorize, give, make, procure, accept and receive moneys,
payments, property, notices, demands, vouchers, receipts, releases,
compromises and adjustments; to waive notices, demands, protests and
authorize and execute waivers of every kind and nature; to enter into, make,
execute, deliver and receive written agreements, undertakings and instruments
of every kind and nature; to give oral instructions and make oral agreements;
and generally to do any and all other acts and things incidental to any of
the foregoing or with reference to any dealings or transactions which the
General Partner may deem necessary, proper or advisable to effect or
accomplish any of the foregoing or to carry out the business and purposes of
the Partnership;
(vii) To sell or otherwise dispose of any or all
assets of the Partnership;
(viii) To acquire and enter into any contract of
insurance which the General Partner deems necessary or appropriate for the
protection of the Partnership, for the conservation of the Partnership's
assets or for any purpose convenient or beneficial to the Partnership and to
settle claims under such insurance;
(ix) To conduct any and all banking transactions on behalf
of the Partnership; to adjust and settle checking, savings, and other
accounts with such institutions as the General Partner shall deem
appropriate; to draw, sign, execute, accept, endorse, guarantee,
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deliver, receive and pay any checks, drafts, bills of exchange, acceptances,
notes, obligations, undertakings and other instruments for or relating to the
payment of money in, into, or from any account in the Partnership's name; to
execute, procure, consent to and authorize extensions and renewals of the
same; to make deposits and withdraw the same and to negotiate or discount
commercial paper, acceptances, negotiable instruments, bills of exchange and
dollar drafts; to pay all taxes, assessments, rents and other impositions
applicable to the assets of the Partnership and to seek to reduce the same;
to invest all monies of the Partnership;
(x) To demand, sue for, receive, and otherwise take steps
to collect or recover all debts, rents, proceeds, interests, dividends,
goods, chattels, income from property, damages and all other property, to
which the Partnership may be entitled or which are or may become due the
Partnership from any Person; to commence, prosecute or enforce, or to defend,
answer or oppose, contest and abandon all legal proceedings in which the
Partnership is or may hereafter be interested; and to settle, compromise or
submit to arbitration any accounts, debts, claims, disputes and matters which
may arise between the Partnership and any other Person and to grant an
extension of time for the payment or satisfaction thereof on any terms, with
or without security;
(xi) To confess judgment against the Partnership;
(xii) To make arrangements for financing, including
the taking of all action deemed necessary or appropriate by the General
Partner to cause any approved loans to be closed including, without
limitation, the execution and delivery on behalf of the Partnership of notes,
mortgages, deeds of trust and like instruments;
(xiii) To take all reasonable measures necessary to
insure compliance by the Partnership with applicable arrangements, and other
contractual obligations and arrangements entered into by the Partnership from
time to time in accordance with the provisions of this Agreement, including
periodic reports as required to be submitted to lenders and using all due
diligence to insure that the Partnership is in compliance with its
contractual obligations;
(xiv) To maintain the Partnership's books and records;
(xv) To prepare and deliver, or cause to be prepared and
delivered by the Partnership's accountants, all financial and other reports
with respect to the operations of the Partnership, and all federal and state
tax returns and reports;
(xvi) To act in any state or nation in which the
Partnership may lawfully act, for itself or as principal, agent or
representative for any Person, including the Partnership, with respect to any
business of the Partnership;
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(xvii) To become a partner or member in, and perform
the obligations of a partner or member of, any general or limited partnership
or limited liability company;
(xviii) To apply for, register, obtain, purchase or
otherwise acquire trademarks, trade names, labels and designs relating to or
useful in connection with any business of the Partnership, and to use,
exercise, develop and license the use of the same;
(xix) To pay or reimburse any and all actual fees,
costs and expenses incurred in the formation and organization of the
Partnership;
(xx) To do all acts which are necessary, customary or
appropriate for the protection and preservation of the Partnership's assets,
including the establishment of reserves;
(xxi) To exercise all rights, and to perform all
duties, responsibilities and obligations, granted to or required of the
General Partner by this Agreement;
(xxii) In general, to exercise all of the general
rights, privileges and powers permitted to be had and exercised by the
provisions of the Act; and
(xxiii) To issue additional classes or series of
Partnership Interests or Partnership Units.
(b) Notwithstanding Section 8.2(a), the Management Company, as
and to the extent determined by the General Partner, may (i) provide the
Partnership with all office space and administrative services needed by the
Partnership in the ordinary course of its business, and (ii) perform all of
its duties under management contracts entered into for the management of
Properties. All costs and expenses of the Management Company so incurred,
such as for office rent, telephone, postage, travel and entertainment, and
compensation of officers and employees and other overhead shall be borne by
the Management Company out of the management fees payable under its
management contracts and shall not be separately charged back to the
Partnership, except for compensation and other related expenses of property
management and maintenance personnel that are permitted under a management
contract to be charged against a Property.
8.3. Required Notice. The Partnership shall not refinance or pay
off (other than payments of principal and interest in accordance with the
existing mortgage amortization schedule) the mortgage indebtedness identified
on Exhibit C that encumbers the Property at 7310 Tilghman Street without the
consent of Safeguard unless it shall first have given Safeguard at least
thirty (30) days' prior written notice thereof.
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8.4. Proscriptions. Notwithstanding Section 8.2 hereof, the General
Partner shall not have the authority to:
(a) Do any act in contravention of this Agreement;
(b) Possess any Partnership property or assign rights in
specific Partnership property for other than Partnership purposes;
(c) Do any act in contravention of applicable law; or
(d) Without the consent of the holders of at least fifty
percent (50%) of the then outstanding Class A Units, cause the Partnership to
make a general assignment for the benefit of creditors, or appoint or
acquiesce in the appointment of a custodian, receiver or trustee for all or
any part of the Partnership's assets, or commence any proceeding seeking
relief for the Partnership under any provision of the federal Bankruptcy Code
11 U.S.C. Section 101 et seq. or any other federal or state law relating to
insolvency, bankruptcy or reorganization.
Nothing herein contained shall impose any obligation on any Person
or firm doing business with the Partnership to inquire as to whether or not
the General Partner has properly exercised its authority in executing any
contract, lease, mortgage, deed or other instrument on behalf of the
Partnership, and any such third Person shall be fully protected in relying
upon such authority.
8.5. Compensation of the General Partner. The General Partner shall
not be entitled to any compensation for services rendered to the Partnership
solely in its capacity as General Partner except with respect to
reimbursement for those costs and expenses pursuant to Section 8.1 hereof
including those constituting BRT Administrative Expenses; provided that
nothing in this Section 8.5 hereof shall preclude the General Partner from
receiving the distributions, payments and allocations to which it may be
entitled under this Agreement.
8.6. Waiver and Indemnification.
(a) Except as otherwise provided in Article XVIII, neither the
General Partner nor any Person acting on its behalf, pursuant hereto, shall
be liable, responsible or accountable in damages or otherwise to the
Partnership or to any Partner for any acts or omissions performed or omitted
to be performed by it within the scope of the authority conferred upon the
General Partner by this Agreement and the Act, provided that the General
Partner's or such other Person's conduct or omission to act was taken in good
faith and in the belief that such conduct or omission was in the best
interests of the Partnership and, provided further, that the General Partner
or such other Person shall not be guilty of fraud, willful misconduct or
gross negligence as determined by a court of competent jurisdiction.
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(b) The Partnership shall, and hereby does, indemnify and hold
harmless the General Partner and its Affiliates and any individual acting on
their behalf from any loss, cost or expense, damage, claim or liability,
including, but not limited to, reasonable attorneys' fees and expenses,
incurred by them by reason of any act performed by them for or on behalf of
the Partnership or the General Partner, or omitted to be performed by them,
in accordance with the standards set forth above or in enforcing the
provisions of this indemnity; provided, however, no Partner or any of its
Affiliates shall have any personal liability with respect to the foregoing
indemnification, and any such liability or indemnification shall be satisfied
solely out of the assets of the Partnership.
(c) All rights of any indemnitee hereunder shall survive the
dissolution of the Partnership; provided, however, that a claim for
indemnification under this Agreement must be made by or on behalf of the
Person seeking indemnification prior to the time the Partnership is
liquidated hereunder. The indemnification rights contained in this Agreement
shall be cumulative of, and in addition to, any and all other rights,
remedies and recourse to which the person seeking indemnification shall be
entitled, whether at law or at equity.
8.7. Operation in Accordance with REIT Requirements. The Partners
acknowledge and agree that the Partnership shall be operated in a manner that
will enable the General Partner to (a) satisfy the REIT Requirements and (b)
avoid the imposition of any federal income or excise tax liability on either
the General Partner or the Partnership. Notwithstanding any provision of
this Agreement, the General Partner shall not be required to take any action
which would result in the General Partner ceasing to satisfy the REIT
Requirements or the imposition of any federal income or excise tax liability
on the General Partner.
8.8. Reliance by Third Parties.
(a) Notwithstanding anything to the contrary in this
Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority to encumber,
sell or otherwise use in any manner any and all assets of the Partnership and
to enter into any contracts on behalf of the Partnership, and such Person
shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially.
(b) Each Limited Partner hereby waives any and all defenses or
other remedies which may be available against such Person to contest, negate
or disaffirm any action of the General Partner in connection with any such
dealing. In no event shall any Person dealing with the General Partner or
its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or its
representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner shall be
conclusive evidence in favor of any and every person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery of
such certificate, document or instrument, this Agreement
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was in full force and effect, (ii) the Person executing and delivering such
certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership, and (iii) such certificate, document
or instrument was duly executed and delivered in accordance with the terms
and provisions of this Agreement and is binding upon the Partnership.
8.9. Other Matters Concerning the General Partner.
(a) The General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, or other document believed by it to be genuine
and to have been singed or presented by the proper party or parties.
(b) The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion of such Persons as to matters which such
General Partner reasonably believes to be within such Person's professional
expertise shall be conclusively presumed to have been done or omitted in good
faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of
any of its powers or obligations hereunder, to act through any of its duly
authorized officers and any attorney or attorneys-in-fact duly appointed by
the General Partner; and any Person dealing with the Partnership shall be
entitled to rely on any certificate, document or other instrument executed on
behalf of the Partnership by a duly authorized officer or by a duly
authorized attorney or attorneys-in-fact of the General Partner. Each such
attorney-in-fact shall, to the extent provided by the General Partner in the
power of attorney, have full power and authority to do and perform all and
every act and duty which is permitted or required to be done by the General
Partner hereunder.
(d) Notwithstanding any other provisions of this Agreement or
the Act, any action of the General Partner on behalf of the Partnership or
any decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission
is necessary or advisable in order (i) to protect or further the ability of
the General Partner to continue to qualify as a REIT or (ii) to avoid the
General Partner incurring any taxes under Section 857 or Section 4981 of the
Code, is expressly authorized under this Agreement and is deemed approved by
all of the Limited Partners. Nothing however in this Agreement shall be
deemed to give rise to any liability on the part of the Limited Partners for
the General Partner's failure to qualify or continue to qualify as a REIT or
failure to avoid incurring any taxes under the foregoing Sections of the Code.
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8.10. Meetings of Partners.
(a) Meetings of Partners may be called at any time by the
General Partner to consider, and shall be so called so that the Partners may
act on, any matter on which they are entitled to act under the terms of this
Agreement or the Act. In addition, the General Partner shall call a meeting
of Class A Limited Partners when directed to do so by holders of not less
than twenty-five percent (25%) of the then outstanding Class A Units. Such
direction shall be given by delivering to the General Partner a request in
writing stating that such holders desire to call a meeting and indicating the
general or specific purpose for which the meeting is to be called.
(b) The General Partner may fix a date not more than sixty
(60) nor less than five (5) days preceding the date of any meeting of
Partners, or preceding the last day on which the consent of Partners may be
effectively expressed for any purpose without a meeting, as a record date for
the determination of the Partners entitled to notice of, and to vote at, such
meeting or to express such consent. In either such case, such Partners, and
only such Partners as shall be Partners of record on the Record Date shall be
entitled to notice of, and to vote at, such meeting and any adjournment
thereof, or to express such consent, as the case may be, notwithstanding any
transfer of any Partnership Interest on the Register after any such Record
Date fixed as aforesaid.
(c) Notice of any meeting at which Partners are entitled to
vote, or of any matter upon which action by written consent of such Partners
is to be taken, shall be given to each Partner of record not less than five
(5) nor more than sixty (60) days prior to the date of such meeting or the
date on which consent must be given, as the case may be. Each such notice
will include a statement setting forth (i) the date, time and place of the
meeting or the date by which such action is to be taken, (ii) a description
of the matter on which such Partners are entitled to vote or of such matter
upon which written consent is sought and (iii) instructions for the delivery
of proxies or consents.
(d) Except as otherwise provided by law, at any meeting of
Partners, the holders of a majority of the Units entitled to vote as such
meeting shall constitute a quorum at such meeting. In the absence of a
quorum, the holders of a majority of the Units entitled to vote thereat
present in person or by proxy may adjourn any meeting, from time to time,
until a quorum shall be present. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally called.
(e) Each Partner entitled to vote at a meeting or entitled to
express consent to Partnership action in writing without a meeting may
authorize another person or persons to act for him by proxy. A proxy acting
for any Partner shall be duly appointed by an instrument in writing
subscribed by such Partner and reasonably acceptable in form and substances
to the General Partner. Except as otherwise provided by law, no vote on any
question upon which a vote of the Partners may be taken need be by ballot
unless the General Partner shall
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determine that it shall be by ballot or the holders of a majority of all
Units present in person or by proxy and entitled to participate in such vote
shall so demand. In a vote by ballot each ballot shall state the Partnership
Interests voted and the name of the Partner or proxy voting. Unless otherwise
provided by law or by this Agreement, all questions shall be decided by the
vote of the holders of a majority of the Units present in person or by proxy
at the meeting and entitled to vote on the question.
(f) Any action required to or which may be taken at a meeting
of Partners may be taken without a meeting, without prior notice and without
a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by Partners having not less than the minimum number of
votes that would be necessary to authorize such action at a meeting at which
all Units entitled to vote thereon were present and voted, and shall be
delivered to the Partnership by delivery to the General Partner (who shall
have custody of the books in which proceedings of meetings of Partners are
recorded). Prompt notice of the taking of action without a meeting shall be
given to the Partners entitled to vote who have not consented in writing.
(g) The General Partner, in its sole discretion, shall
establish all other provisions relating to meetings of Partners, in addition
to those expressly provided herein, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any Partner,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote, in each case consistent with the terms hereof and in accordance with
the Act.
ARTICLE IX
ACCOUNTING AND RECORDS
9.1. Books and Records. The General Partner shall keep books of
account for the Partnership in accordance with the method of accounting used
for federal income tax purposes. Upon at least five (5) Business Days' prior
notice to the General Partner, any Limited Partner shall have the right, to
the extent provided for in the Act, to inspect and copy at its own expense
the Partnership's books and records during normal business hours.
9.2. Annual Reports.
(a) Not later than ninety (90) days after the end of each
Fiscal Year (or such earlier date as may be required under the Code) the
General Partner shall deliver to each Partner a report indicating each
Partner's share for federal income tax purposes of the Partnership's income,
credits and deductions for the immediately preceding Fiscal Year, together
with all other information concerning the Partnership which may be required
by the Code from time to time.
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(b) The General Partner shall furnish to the Limited Partners
within 120 days after the end of each Fiscal Year Audited Financial
Statements of the General Partner and may also furnish the Limited Partners
with such other periodic reports concerning the Partnership's business and
activities as the General Partner considers necessary to advise all Partners
properly about their investment in the Partnership and shall, upon the
written request of any Limited Partner, provide such Partner with:
(i) a copy of any report filed with the Securities and Exchange
Commission by the General Partner pursuant to the Securities Exchange Act of
1934;
(ii) a copy of the Partnership's federal, state and local
income tax returns for each Fiscal Year;
(iii) a current list of the name and last known
business, residence or mailing address of each Partner; and
(iv) a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate and all amendments thereto
have been executed.
(c) Notwithstanding any other provision of this Section 9.2,
the General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole discretion to be
reasonable, any information that (i) the General Partner reasonably believes
to be in the nature of trade secrets or other information the disclosure of
which the General Partner in good faith believes is not in the best interests
of the Partnership or could damage the Partnership or its business, or (ii)
the Partnership is required by law or by agreements with an unaffiliated
third party to keep confidential.
9.3. Tax Returns. The General Partner shall cause all income and
other tax returns of the Partnership to be prepared and filed in a timely
manner. The General Partner shall be the Tax Matters Partner (as defined in
section 6231(a)(7) of the Code) of the Partnership.
9.4. Fiscal Year. The fiscal year ("Fiscal Year") of the
Partnership shall be the calendar year.
9.5. Bank Accounts. All funds of the Partnership shall be deposited
in such accounts established in the Partnership's name with such financial
institutions as may be determined from time to time by the General Partner.
Withdrawals from any such accounts shall be made in the Partnership's name
upon the signature of such officers of the General Partner and such other
signature or signatures, if any, as the General Partner shall from time to
time designate. Funds in such accounts shall not be commingled with the funds
of any Partner.
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ARTICLE X
CHANGES IN GENERAL PARTNERS
10.1. Permitted Assignment of General Partnership Interest. The
General Partner shall not have the right to resign or withdraw or to Transfer
all or any portion of its General Partnership Interest represented by GP
Units, except that the General Partner may (a) assign all or a portion of its
General Partnership Interest represented by outstanding GP Units to a
substitute or additional General Partner permitted under Section 10.2; (b)
assign its General Partnership Interest represented by outstanding GP Units
to any Entity that has acquired, or in connection with such assignment will
acquire, by merger, consolidation or otherwise, substantially all of its
assets or equity interests and has been designated to succeed to its rights
and obligations under this Agreement in accordance herewith; and (c) pledge
or grant a security interest in its right to receive payments and
distributions under this Agreement. In connection with any Transfer
described in clauses (a) and (b) of all the General Partnership Interest, the
General Partner may withdraw as such upon the admission of the assignee.
Sections 10.2 and 10.4 shall apply in the case of a Transfer of all or a
portion of a General Partnership Interest.
10.2. Admission of Additional General Partners. One or more
additional or substitute General Partners may be admitted to the Partnership
from time to time by the General Partner in the circumstances contemplated by
Section 10.1, provided the additional or substitute general partner is
reasonably expected, as determined by a majority of the Board of Trustees of
BRT, to be able to fulfill the duties of a general partner hereunder.
Otherwise, no additional General Partner may be admitted to the Partnership
except as provided in Section 13.2. The terms of such assignment and the
nature of the duties of the newly admitted General Partner shall be as agreed
upon between the General Partner and such additional General Partner.
10.3. Effect of Withdrawal of General Partner.
(a) Upon the occurrence of an Event of Withdrawal of the
General Partner (other than one permitted by Section 10.1), the General
Partner shall cease to be such, and its General Partnership Interest shall be
converted to an undesignated Limited Partnership Interest entitling the
holder thereof to the same share of the Partnership's income, gain, loss,
deduction and distributions as are allocated to the General Partner
hereunder, subject to the Partnership's right to set off (i) any damages
caused to the Partnership if the Event of Withdrawal is in violation of this
Agreement and (ii) any obligation of the General Partner under paragraph (b).
(b) Upon the occurrence of an Event of Withdrawal of the
General Partner, the General Partner shall pay to the Partnership in cash the
amount of any deficit balance in its Capital Account unless the Event of
Withdrawal is permitted by Section 10.1.
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10.4. Liability of a Withdrawn General Partner. Any General
Partner who shall commit or suffer an Event of Withdrawal or shall otherwise
withdraw from the Partnership shall remain liable for obligations and
liabilities incurred by it as General Partner prior to the occurrence of such
Event of Withdrawal or other withdrawal, but it shall be free of any such
obligation or liability incurred on account of the activities of the
Partnership thereafter.
ARTICLE XI
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
11.1. General Transfer Provisions and Restrictions.
(a) Subject to the restrictions set forth in this Section
11.1, any Limited Partner may Transfer all or any portion of, or right in or
to, his or its Limited Partnership Interest, without the consent of the
General Partner or any other Partner, except that no Limited Partner may
Transfer Class A Units comprising Collateral in violation of the provisions
of Article XVIII below.
(b) Notwithstanding the foregoing,
(i) No Transfer of any Limited Partnership Interest shall
be permitted if, in the opinion of the General Partner based on the advice of
counsel, there is a significant possibility that such Transfer:
(A) may not be effected without registration under
the Securities Act of 1933, or would result in the violation of any
applicable state securities laws; or
(B) would result in the termination of the
Partnership within the meaning of section 708 of the Code, or would have a
material adverse effect on any Partner for federal income tax purposes; or
(C) would cause the Partnership to be taxed other
than as a partnership for federal income tax purposes or impair the ability
of the Partnership to take advantage of any favorable tax election or
treatment as a result of being taxed as a partnership (whether such
impairment shall arise from the termination of the Partnership for federal
tax purposes or otherwise); or
(D) would cause the Partnership to become, with
respect to any employee benefit plan subject to Title 1 of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(c) of the Code); or
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(E) would cause any portion of the assets of the
Partnership to constitute assets of any employee benefit plan pursuant to
Department of Labor Regulations Section 2510.2-101; and
(ii) No Limited Partner shall effect any Transfer:
(A) to any person or entity who lacks the legal
right, power or capacity to own Partnership Units;
(B) in violation of any provision of any mortgage or
trust deed (or the note or bond secured thereby) to which the Partnership is
a party or is otherwise bound;
(C) of any component portion of Partnership Units,
such as the Capital Account, or rights to distribution, separate and apart
from all other components of Partnership Units; or
(D) in the event such Transfer would cause BRT or
any successor thereto to cease to comply with the REIT Requirements.
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In furtherance of this subsection, the General Partner and the
Partnership shall in no event recognize any trade of a Limited Partnership
Interest in a secondary market or the substantial equivalent thereof and
shall take such actions as are necessary so that such trades are not
recognized.
(c) All Transfers of Limited Partnership Interests shall be by
instrument in form and substance reasonably satisfactory to the General
Partner. Any Transfer of Limited Partnership Interests in violation of this
Agreement shall be null and void ab initio and shall not operate to vest any
rights in any transferee.
(d) In no event shall the Partnership dissolve or terminate
upon the admission of any Partner to the Partnership or upon any permitted
Transfer of a Partnership Interest by any Partner. Each Partner hereby
waives its right to dissolve, liquidate or terminate the Partnership in such
event. No Transfer of any Limited Partnership Interest in the Partnership
shall constitute a change of Control of the Partnership.
11.2. Expenses. All expenses of the Partnership and of the
Partners occasioned by a Transfer permitted under Section 11.1 shall be borne
by the Partner effecting such Transfer.
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11.3. Allocations with Respect to Transferred Interest. Upon
the permitted Transfer of all or any part of a Partnership Interest, each
item of Partnership income (or loss) and deduction allocable to such
Partnership Interest shall be pro rated (as to the Transferred Partnership
Interest) between the transferor and transferee on the basis of the number of
days in the taxable year of the Partnership preceding (and including) and
succeeding, respectively, the date as of which the assignment is executed.
Unless otherwise agreed by the Transferor and Transferee Partners and written
notice of such agreement has been given to the General Partner, gain or loss
from the sale or other taxable disposition of a Partnership capital asset
shall be allocated to the Persons who were Partners at the time such gain or
loss was recognized by the Partnership.
11.4. Section 754 Election. The General Partner may, in its
sole discretion, cause the Partnership to elect, pursuant to section 754 of
the Code, to adjust the basis of Partnership property as provided in sections
734(b) and 743(b) of the Code. The General Partner shall be responsible for
determining the adjustments required or permitted by said sections of the
Code, except that, in the case of any adjustment required or permitted under
section 743(b) of the Code, the Transferee Partner or Partners shall be
solely responsible for determining the adjustments required thereunder unless
such Partner or Partners provide the General Partner with all the information
necessary for the General Partner to determine the adjustments. If any
adjustments to the basis of Partnership property are made pursuant to section
732(d), 734(b) or 743(b), the capital accounts of the Partners shall be
adjusted as specified in Regulation Section 1.704-1(b)(2)(iv)(m).
11.5. Transferee's Rights. The Transfer of a Limited
Partnership Interest in accordance with this Agreement entitles the
transferee, subject to Section 11.3, to share in such profits and losses, to
receive such distributions, and to receive such allocations of income, gain,
loss, deduction, or credit or similar item to which the transferor Partner
was entitled (to the extent of the interest Transferred) but does not entitle
the transferee to become or to exercise any other rights of a Partner unless
and until the transferor Partner has advised the General Partner that such
transferor Partner is to be admitted as a Partner pursuant to Article XII.
ARTICLE XII
ADMISSION OF PARTNERS
12.1. Procedure. Substitute or additional General or Limited
Partners may be admitted to the Partnership as a result of a permitted
Transfer of Partnership Interests pursuant to Article X or XI. Additional
General or Limited Partners shall also be admitted to the Partnership as a
result of the issuance of additional Partnership Interests pursuant to
Article III. Each substitute or additional Partner shall sign a supplement
to this Agreement at the time such Partner is admitted confirming the
admission of the new Partner hereunder, and containing such Person's binding
agreement to be bound by all of the terms of this Agreement.
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12.2. Admission. In connection with the admission of any new
Partner to the Partnership, the General Partner shall have the power, right
and authority to amend this Agreement and any applicable Exhibit or Schedule
hereto to reflect the rights and obligations of such new Partner, including
without limitation its obligations to contribute to the capital of the
Partnership, rights to distributions, and rights to approve or consent to
Partnership actions.
ARTICLE XIII
DISSOLUTION, LIQUIDATION AND WINDING-UP
13.1. Events of Dissolution. The occurrence of any of the
following shall constitute an event of dissolution of the Partnership (an
"Event of Dissolution"):
(a) the expiration of the term of the Partnership as provided
in Section 2.5;
(b) the sale or other disposition in a single transaction or
series of related transactions of all or substantially all of the assets of
the Partnership unless such sale or other disposition involves any deferred
payment of the consideration for such sale or disposition, in which case the
General Partner may elect to defer the dissolution of the Partnership until
the last day of the Fiscal Year during which the Partnership shall receive
the balance of such deferred payment;
(c) subject to Section 13.2, the occurrence of an Event of
Withdrawal with respect to a General Partner;
(d) the acquisition by a single Person of all of the
Partnership Interests;
(e) the issuance of a decree of dissolution by a court of
competent jurisdiction pursuant to the Act; or
(f) the consent of the General Partner and the holders of at
least a majority of the then outstanding Class A Units.
13.2. Continuation of the Business of the Partnership After
Dissolution.
(a) Notwithstanding Section 13.1(c), if, at the time of an
Event of Withdrawal, there shall be one or more General Partners not affected
by the Event of Withdrawal, then such other General Partner or General
Partners shall (and are hereby authorized to) carry on the business of the
Partnership, and if they do so, the Partnership shall not be liquidated and
its business wound up.
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(b) Notwithstanding Section 13.1(c), at the time of an Event
of Withdrawal to which subsection (a) is not applicable, the Partnership
shall not be liquidated and its business wound up if, within 90 days after
the occurrence of the Event of Withdrawal, Limited Partners owning a majority
of the Units of each class then outstanding agree in writing to continue the
business of the Partnership and to the appointment of one or more replacement
General Partners who agree to serve as such.
13.3. Effect of Event of Dissolution. Upon the occurrence of an
Event of Dissolution, unless otherwise provided in Section 13.2, the
Partnership shall be dissolved and shall continue solely for the purposes of
winding up its business and liquidating in accordance with this Article XIII
all of its assets and collecting the proceeds from such liquidation, at which
time the Partnership shall be wound up. Unless the business of the
Partnership is continued as provided in Section 13.2, after the occurrence of
an Event of Dissolution, the Partnership shall engage in no further business
other than as necessary to operate on an interim basis and for the
Partnership to collect its receivables, liquidate its assets and pay or
discharge its liabilities in accordance with this Article XIII.
13.4. Accounting. In the event of the dissolution, liquidation
and winding-up of the Partnership, a proper accounting (which shall be
certified) shall be made of the Capital Account of each Partner and of the
Net Income or Net Losses of the Partnership from the date of the last
previous accounting to the date of dissolution. Financial statements
presenting such accounting shall include a report thereon of a certified
public accountant selected by the Liquidating Trustee.
13.5. Distribution on Dissolution.
(a) In the event of the dissolution and liquidation of the
Partnership for any reason, the assets of the Partnership shall be liquidated
for distribution and distributed in the following rank and order:
(i) First, for payment of creditors of the Partnership
(other than Partners) in the order of priority as provided by law;
(ii) Next, for establishment of reserves as provided by
the Liquidating Trustee to provide for contingent liabilities, if any;
(iii) Next, for payment of debts of the Partnership to
Partners, if any, in the order of priority provided by law; and
(iv) Last, for payment to the General Partner and to the
holders of the Class A Units, in accordance with the positive balances in
their respective Capital Accounts after giving effect to all contributions,
distributions and allocations for all periods,
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including the period in which such distribution occurs (other than those
adjustments made pursuant to this Section 13.5(a)(iv)).
(b) Whenever the Liquidating Trustee reasonably determines
that any reserves established pursuant to paragraph (a)(ii) above are in
excess of the reasonable requirements of the Partnership, the amount
determined to be excess shall be distributed to the Partners in accordance
with the above provisions.
13.6. Timing Requirements. In the event that the Partnership is
"liquidated" within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations, any and all distributions to the Partners pursuant to Section
13.5(a) hereof shall be made no later than the later to occur of (i) the last
day of the taxable year of the Partnership in which such liquidation occurs,
or (ii) ninety (90) days after the date of such liquidation.
13.7. Sale of Partnership Assets. In the event of the
liquidation of the Partnership in accordance with the terms of this
Agreement, the Liquidating Trustee may sell Partnership or Title Holding
Partnership property if the Liquidating Trustee has in good faith solicited
bids from unrelated third parties before making any such sale; provided,
however, all sales, leases, encumbrances or transfers of Partnership assets
shall be made by the Liquidating Trustee solely on an "arm's-length" basis,
at the best price and on the best terms and conditions as the Liquidating
Trustee in good faith believes are reasonably available at the time and under
the circumstances and on a non-recourse basis to the Limited Partners. The
liquidation of the Partnership shall not be deemed finally completed until
the Partnership shall have received cash payments in full with respect to
obligations such as notes, installment sale contracts or other similar
receivables received by the Partnership in connection with the sale of
Partnership assets and all obligations of the Partnership have been
satisfied, released or assumed by the General Partner. The Liquidating
Trustee shall continue to act to enforce all of the rights of the Partnership
pursuant to any such obligations until such obligations are paid in full or
otherwise satisfied.
13.8. Distributions in Kind. In the event that it becomes
necessary to make a distribution of Partnership property in kind, the
Liquidating Trustee may transfer and convey such property to the distributees
as tenants in common, subject to any liabilities attached thereto, so as to
vest in them undivided interests in the whole of such property in proportion
to their respective rights to share in the proceeds of the sale of such
property (other than as a creditor) in accordance with the provisions of
Section 13.5 hereof.
13.9. Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall
terminate and the Liquidating Trustee shall have the authority to execute and
record any and all documents or instruments required to effect the
dissolution, liquidation and termination of the Partnership.
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13.10. Liability of the Liquidating Trustee. The Liquidating
Trustee shall be indemnified and held harmless by the Partnership from and
against any and all claims, demands, liabilities, costs, damages and causes
of action of any nature whatsoever arising out of or incidental to the
Liquidating Trustee's taking of any action authorized under or within the
scope of this Agreement; provided, however, that the Liquidating Trustee
shall not be entitled to indemnification, and shall not be held harmless,
where the claim, demand, liability, cost, damage or cause of action at issue
arose out of (a) a matter entirely unrelated to the Liquidating Trustee's
action or conduct pursuant to the provisions of this Agreement; or (b) the
willful misconduct or gross negligence of the Liquidating Trustee.
ARTICLE XIV
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
14.1. No Participation in Management. The Limited Partners
shall not take part in the management or control of the Partnership's
business, transact any business in the Partnership's name, have the power to
sign documents for or otherwise bind the Partnership or except as required by
the Act or expressly provided by this Agreement, have any right to vote on or
consent to any matter, provided, however, that nothing in the foregoing shall
be deemed to prohibit or preclude any Limited Partner or its Affiliates from
serving as an officer, trustee, director or employee of the General Partner
or its Affiliates or otherwise transacting business with the Partnership.
14.2. Death, Incompetence, Bankruptcy, Etc. The death,
incompetence, Bankruptcy, dissolution or liquidation of a Limited Partner
shall not cause a dissolution of the Partnership. The rights of such a
Limited Partner to share in the income and losses of the Partnership, to
receive distributions and to assign its Partnership Interest pursuant to this
Article, on the happening of such an event, shall devolve on such Limited
Partner's beneficiary or other successor, executor, administrator, guardian
or other legal representative for the purpose of settling the estate or
administering the property of such Limited Partner. Such successor or
personal representative, however, shall be admitted as a Limited Partner only
upon compliance with the requirements set forth in Article XII.
14.3. No Withdrawal. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other
than as expressly provided in this Agreement.
14.4. Power of Attorney. Each Limited Partner 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
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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 its terms; (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.
14.5. Limited Liability of Limited Partners. The Limited
Partners shall not be personally liable for any obligations or debts of the
Partnership to third parties, except to the extent provided in the Act.
ARTICLE XV
GRANT OF REDEMPTION RIGHTS TO LIMITED PARTNERS
15.1. Grant of Redemption Rights.
(a) The Partnership does hereby grant to each Limited Partner
owning Class A Units and each such Limited Partner does hereby accept the
right, but not the obligation (hereinafter such right sometimes referred to
as the "Redemption Right"), to require the Partnership to redeem, for cash,
on the Specified Redemption Date all or any portion of the Class A Units held
by such Limited Partner at a redemption price equal to the Cash Amount. The
Redemption Right of a Limited Partner may be exercised on one or more
occasions by the Limited Partner. The Redemption Right shall be exercised
pursuant to a Notice of Redemption delivered to the Partnership (with a copy
to the General Partner) by the Limited Partner (the "Redeeming Partner") who
is exercising the Redemption Right. A Limited Partner may not exercise the
Redemption Right as to fewer Class A Units than the number of such Units that
is equal to the lesser of (a) 100 Units or (b) all of the Class A Units held
by such Limited Partner. Neither the Redeeming Partner nor any assignee of
any Limited Partner shall have any right with respect to any Class A Units so
redeemed to receive any distributions from the Partnership made after the
Specified Redemption Date. The
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assignee of any Limited Partner may exercise the rights of such Limited
Partner pursuant to this Section 15.1, and such Limited Partner shall be
deemed to have assigned such rights to such assignee and shall be bound by
the exercise of such rights by such Limited Partner's assignee. In
connection with any exercise of such rights by such assignee on behalf of
such Limited Partner, the Cash Amount shall be paid by the Partnership
directly to such assignee and not to such Limited Partner.
(b) The General Partner may, in connection with the issuance
by the Partnership of additional Class A Units, impose restrictions on the
exercise by the Limited Partners owning such Class A Units of the Redemption
Right for such period of time as the General Partner may designate.
15.2. General Partner Exchange.
(a) Notwithstanding the provisions of Section 15.1, if a
Limited Partner elects to exercise the Redemption Right, the General Partner
may, in its sole and absolute discretion, elect to assume directly and
satisfy a Redemption Right by paying to the Redeeming Partner either the Cash
Amount or the GP Shares Amount for each Class A Unit redeemed, as elected by
the General Partner (in its sole and absolute discretion) on the Specified
Redemption Date, whereupon the General Partner shall acquire the Class A
Units offered for redemption by the Redeeming Partner and shall be treated
for all purposes of this Agreement as the owner of such Partnership Interests.
(b) In the event that the Partnership shall fail to pay the
Cash Amount to any Redeeming Partner on the Specified Redemption Date
pursuant to Section 15.1, and the General Partner shall not have elected
pursuant to Section 15.2(a) to assume the obligations of the Partnership with
respect thereto, the General Partner shall on the Specified Redemption Date
contribute to the capital of the Partnership in cash (or, at its election,
pay directly to the Redeeming Partner the full Cash Amount or GP Shares
Amount) the full amount necessary to permit the Partnership to satisfy its
obligations to pay to the Redeeming Partner the Cash Amount on the Specified
Redemption Date, and the Partnership shall thereupon immediately pay to such
Redeeming Partner such Cash Amount.
(c) The General Partner shall provide the Redeeming Partner
with at least five (5) days' written notice prior to the Specified Redemption
Date whether the Redemption Right will be redeemed by the Partnership or the
General Partner for the Cash Amount or GP Shares Amount. The Redeeming
Partner may rescind his or its Notice of Redemption at any time prior to the
Specified Redemption Date if the Redemption Right is to be redeemed for the
Cash Amount.
(d) In the event that the General Partner satisfies the
Redemption Right in the manner described in Sections 15.2(a) or (b), each of
the Redeeming Partner, the Partnership, and the General Partner shall treat
the transaction between the General Partner and the Redeeming Partner for
federal income tax purposes as a sale of the Redeeming Partner's Partnership
Units to the General Partner.
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(e) Each Redeeming Partner shall execute such documents as the
General Partner may reasonably require in connection with the issuance of
Common Shares upon exercise of the Redemption Right, including, without
limitation, acknowledgment that the shares will be issued without
registration under the Securities Act, and may not be resold unless
subsequently registered or an exemption from registration is available.
(f) If the Redemption Right is satisfied by the delivery of
Common Shares, the Redeeming Partner shall be deemed to become a holder of
Common Shares as of the close of business on the Specified Redemption Date.
15.3. Certain Limitations on Redemption Right. Notwithstanding
the provisions of Section 15.1, no Limited Partner shall have the right to
require the Partnership to redeem any Class A Units constituting Collateral
until such Collateral is required to be released pursuant to the provisions
of Section 18.3, unless the Limited Partner acknowledges and agrees at the
time of conversion that the cash paid or Common Shares issued in redemption
of the Class A Units shall continue to constitute Collateral under Article
XVIII.
15.4. Adjustments. The number of Common Shares comprising the
GP Shares Amount shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Adjustment for Change in Shares of Beneficial Interest.
If at any time after the date of this Agreement, the General Partner:
(i) pays a dividend or makes a distribution on its Common
Shares in its Common Shares;
(ii) subdivides its outstanding Common Shares into a
greater number of shares;
(iii) combines its outstanding Common Shares into a
smaller number of shares;
(iv) makes a distribution on its Common Shares in its
shares of beneficial interest other than Common Shares; or
(v) issues by reclassification of its Common Shares any
of its shares of beneficial interest;
then the number of Common Shares comprising the GP Shares Amount shall be
adjusted so that the holder of a Class A Unit may receive in an exchange
therefor pursuant to Section 15.2, the number of Common Shares which the
holder of the Class A Unit would have owned immediately following such action
if such Unit had been exchanged immediately prior thereto. In lieu of
adjusting the
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number of Common Shares comprising the GP Shares Amount, the General Partner
may, in its sole discretion, cause an adjustment to be made to the number of
outstanding Class A Units such that, following any of the actions described
above, each Class A Unit shall be converted into that number of Class A Units
equal to the product that results from multiplying one Class A Unit by a
fraction, the numerator of which is the number of Common Shares that will be
outstanding immediately following the Record Date for the dividend or
distribution or the effective date for the subdivision, combination or
reclassification, as applicable, and the denominator of which is the number
of Common Shares outstanding immediately prior to the dividend, distribution,
subdivision, combination or reclassification, as applicable (assuming for
such purposes that the dividend or distribution was paid on the Record Date).
In either case, the adjustment shall become effective immediately after the
Record Date in the case of a dividend or distribution, and immediately after
the effective date in the case of a subdivision, combination or
reclassification.
(b) When No Adjustment Required. No adjustment need be made
for a change in the par value or no par value of the Common Shares.
15.5. Certain Covenants. Each Limited Partner covenants and
agrees with the General Partner that all Class A Units delivered for
redemption by it pursuant to this Article XV shall be delivered to the
Partnership or the General Partner, as the case may be, free and clear of all
Encumbrances.
15.6. Certain Changes. In the event of a merger or
consolidation of the General Partner with a third party or the sale of all or
substantially all of the assets of the General Partner or a third party
acquisition of all of the outstanding Common Shares, the General Partner may
make such changes to this Article 15 as it deems to be appropriate in order
to provide that each holder of Class A Units receives, in such transaction,
or in connection with such transaction, the amount of cash, securities or
other property which such holder would be entitled to receive if it exercised
its Redemption Right and received the GP Shares Amount in exchange for its
Class A Units immediately prior to consummation of such transaction. If the
General Partner makes such provision then, in connection therewith, it may
also terminate or modify the Redemption Right.
ARTICLE XVI
LIMITED PARTNER REPRESENTATIONS AND WARRANTIES
16.1. Representations and Warranties of the Limited Partners.
(a) Each of the Limited Partners hereby represents and
warrants, severally and not jointly, to the Partnership and the General
Partner as follows:
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(i) That such Partner, if a corporation, partnership or
other entity formed pursuant to any statute or other governmental authority,
is validly formed and in good standing under the laws of the jurisdiction of
its formation.
(ii) That, if such Partner is an Entity, the execution,
delivery and performance of this Agreement by such Partner has been duly and
validly authorized by all necessary corporate, partnership, or other similar
action.
(iii) That this Agreement has been duly executed and
delivered by such Limited Partner, and constitutes such Partner's legal,
valid and binding obligation, enforceable against it in accordance with the
terms hereof.
(iv) That no consent, waiver, approval or authorization
of, or filing, registration or qualification with, or notice to any
governmental unit or other person is required to be made, obtained or given
by such Limited Partner in connection with the execution, delivery and
performance of this Agreement and the transactions contemplated hereby other
than consents, waivers, approvals or authorizations which have been obtained
prior to the date hereof.
(v) That such Partner understands that the Class A Units
to be issued hereunder and the Common Shares issuable in redemption of Class
A Units pursuant to Article XV hereof will not be registered under the
Securities Act, on the grounds that the issuance of such securities is exempt
from registration pursuant to Section 4(2) of the Securities Act or
Regulation D promulgated thereunder, and that the reliance of the General
Partner and the Partnership on such exemptions is predicated in part on the
Limited Partner's representations, warranties and covenants set forth herein.
(vi) That the Units and any Common Shares acquired in
exchange therefor by such Partner will be acquired for its own account, not
as a nominee or agent, and without a view to resale or other distribution
within the meaning of the Securities Act and the rules and regulations
thereunder and that it will not distribute any such securities in violation
of the Securities Act.
(vii) That such Partner's principal residence or place
of business is as set forth on Exhibit A.
(viii) That such Partner understands that the Units and
Common Shares issued in respect thereof must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from
registration is available, and that any routine sales of Common Shares made
under Rule 144 of the Securities and Exchange Commission under the Securities
Act may be made only in limited amounts and in accordance with the terms and
conditions of that Rule and that Rule 144 will not be available for use in
connection with resales of any shares of Common Shares issued in respect of
Units for at least one year after the date of issuance or for any Units at
any time.
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(ix) That such Partner is well versed in financial
matters, has had dealings in securities, including "restricted securities,"
and is fully capable of understanding the type of investment being made in
the Units and the Common Shares and the risks involved in connection
therewith.
(x) That such Partner will not sell transfer or otherwise
dispose of any of the Units or the Common Shares acquired in exchange
therefor unless such securities have been registered under the Securities Act
or the holder thereof shall have furnished to the General Partner such
information as the General Partner may reasonably require to the effect that
such securities may be sold without registration thereunder.
(b) Each Limited Partner also agrees that certificates, if
any, representing Units or Common Shares issued to it may contain a
restrictive legend noting the restrictions on transfer described in this
section and required by federal and applicable state securities laws and that
appropriate "stop-transfer" instructions may be given to the transfer agent
for the General Partner and the Partnership.
ARTICLE XVII
GENERAL PARTNER REPRESENTATIONS AND WARRANTIES
17.1. Representations and Warranties of the General Partner.
The General Partner represents and warrants to the Partnership and the
Limited Partners as follows
(a) The General Partner is a real estate investment trust duly
formed and existing under and by virtue of the laws of the State of Maryland.
(b) The execution, delivery and performance of this Agreement
by the General Partner has been duly and validly authorized by all necessary
trust action of the General Partner. This Agreement has been duly executed
and delivered by the General Partner, and constitutes a legal, valid and
binding obligation of the General Partner, enforceable against the General
Partner in accordance with the terms hereof.
(c) No consent, waiver, approval or authorization of, or
filing, registration or qualification with, or notice to, any governmental
unit or any other person is required to be made, obtained or given by the
General Partner in connection with the execution, delivery and performance of
this Agreement other than consents, waivers, approvals or authorizations
which have been obtained prior to the date hereof.
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ARTICLE XVIII
INDEMNIFICATION
18.1. Indemnification.
(a) Subject to the provisions of Section 18.2, the General
Partner hereby indemnifies and holds harmless the Partnership and each
Limited Partner against and from any and all liabilities, demands, claims,
actions, causes of action, assessments, losses, fines, penalties, costs,
damages and expenses (including, without limitation, attorneys' and
accounting fees and expenses) (any such item, a "Liability," and collectively
"Liabilities") sustained or incurred by such Limited Partner or the
Partnership as a result of or arising out of (i) any inaccuracy in any
representation or warranty made in this Agreement by the General Partner, or
(ii) any breach by the General Partner of any of its obligations under this
Agreement.
(b) Subject to the provisions of Section 18.2 hereof, each
Limited Partner who is a Pledgor (as defined in Section 18.3(a)), severally
and not jointly, indemnifies and holds harmless the Partnership and the
General Partner against and from all Liabilities sustained or incurred by the
Partnership or the General Partner as a result of or arising out of (i) any
inaccuracy in a representation or warranty made under this Agreement by such
Limited Partner, or (ii) any breach by such Limited Partner of its
obligations hereunder.
18.2. Limitations on Indemnification Obligations.
(a) No indemnified person hereunder shall be entitled to
indemnification under Section 18.1 hereof unless the indemnified person shall
have delivered a written notice specifying in reasonable detail the matter
giving rise to such person's right to indemnification to the indemnifying
party on or before the second anniversary of the date hereof.
(b) No person providing indemnification hereunder shall be
liable under Section 18.1 hereof unless the total amount recoverable from
such indemnifying person exceeds, with respect to all indemnities provided by
such indemnifying person hereunder, an aggregate of $75,000 in the case of
Safeguard, an aggregate of $75,000 in the case of The Nichols Company, and an
aggregate of $75,000 in the case of BRT.
(c) If a claim for indemnification arises from a third party
claim asserted against the Partnership, the indemnifying party shall have the
right, at its own expense, to participate in the defense of the claim, action
or proceeding which resulted in the claim for indemnification, and if such
right is exercised, the parties shall cooperate in the defense of such action
or proceeding; provided, however, the indemnified party shall at all times
have the right to be in control of such defense.
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(d) Indemnification pursuant to Section 18.1 hereof and the
remedies in respect thereof as set forth in Section 18.3 hereof shall be the
sole and exclusive remedy of the indemnified parties for any matter covered
thereby, regardless of the legal theories on which the claim for
indemnification is based.
18.3. Security and Remedies.
(a) Each of Safeguard and Nichols, on behalf of themselves and
their affiliates (collectively, "Pledgors") hereby grants to the Partnership
a lien upon and continuing security interest in such Pledgor's Class A Units,
and in any Common Shares issued upon redemption of such Class A Units
pursuant to Article XV (collectively, the "Collateral") which shall be
security for the indemnification obligations of such Pledgor hereunder. The
indemnification obligation of each Pledgor shall be payable out of such
Pledgor's entire Collateral, but only from such Collateral. Any transfer by a
Pledgor of such Pledgor's Class A Units, or Common Shares issued upon
redemption of Class A Units, shall be subject to the lien and security
interest granted hereby. Each Pledgor represents and warrants that his or
its Class A Units constituting Collateral are owned by it free and clear of
Encumbrances other than Permitted Encumbrances, which Permitted Encumbrances
are senior in priority to the lien and security interest created under this
Section 18.3.
(b) Any person claiming indemnification hereunder shall (when
the amount claimed is known) deliver written notice (the "Indemnity Notice")
to the party or parties from whom indemnification is claimed describing in
reasonable detail the rationale for the amount for which indemnification is
sought. A Limited Partner shall be entitled to satisfy his indemnification
obligation by directing the Partnership to cancel in the Register that number
of Class A Units included in the Collateral as shall be equal in value (based
on the Current Per Share Market Price of the Common Shares issuable in
exchange therefor pursuant to Section 15.2 as of the date of the Indemnity
Notice) to the amount recoverable from such Limited Partner hereunder. If
such indemnification obligation shall not have been satisfied by any party
within thirty (30) days after its receipt of an Indemnity Notice, the matter
shall be submitted for binding arbitration in accordance with the provisions
of Article XIX below.
(c) In the case of an adverse decision by the arbitrators in
respect of indemnification being provided by any Limited Partner, if such
Limited Partner does not satisfy the obligations within ten (10) days after
the decision is rendered in the arbitration, then the Partnership shall
cancel in the Register, without the payment of any consideration to or the
taking of any action required by the Limited Partner, that number of Class A
Units included in the Collateral as shall be equal in value (based on the
Current Per Share Market Price of the Common Shares issuable in exchange
therefor pursuant to Section 15.2 as of the date of the Indemnity Notice) to
the amount recoverable from such Limited Partner hereunder. Within ten (10)
days thereafter, the General Partner shall deliver notice of such
cancellation to the Limited Partner affected.
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(d) The rights of the Partnership and General Partner to
cancel Collateral shall be the sole and exclusive remedy of the General
Partner or the Partnership under this Article XVIII and no Limited Partner
shall have any personal liability hereunder, except as otherwise provided in
the next succeeding section.
18.4. Restriction on Transfer.
(a) In connection with the security interests granted by the
Limited Partners to the Partnership under Section 18.3 hereof, except as
provided in paragraph (b), the Limited Partners agree that any Class A Units
owned by such Limited Partners shall not be Transferred, without the consent
of the General Partner until August 22, 1998. In addition, in the event that
notice of a claim for indemnification has been duly given pursuant to Section
18.2(a) but the matter for which indemnification is sought or the amount of
the indemnification required to be paid has not been finally determined as of
August 22, 1998, Class A Units having a sufficient value (based on the
Current Per Share Market Price at such date of the Common Shares issuable in
exchange therefor pursuant to Section 15.2) shall remain subject to the
restrictions of this Section 18.4(a), until such time as the matter in
question has been finally determined.
(b) Nothing in this Agreement shall prohibit the following
Transfers: (i) transfers occurring by reason of a Limited Partner's exercise
of his Redemption Rights subject to the pledge of the Common Shares received
upon redemption pursuant to Section 18.3(a); (ii) transfers by The Nichols
Company of Class A Units to its equity owners; (iii) transfers by a Limited
Partner to his or its Affiliates; or (iv) transfers in connection with the
foreclosure of a Permitted Encumbrance. In the event of a Transfer permitted
under clause (ii) or (iii), the transferee shall as a condition of such
transfer execute an agreement acknowledging that the Class A Units are
Collateral and are being transferred subject to the Partnership's security
interest therein.
(c) Notwithstanding the foregoing, a Limited Partner may, with
the consent of the General Partner exercised by its independent trustees in
their sole and absolute discretion, be relieved of the restrictions on
transferability contained in this Section 18.4 by (i) consenting to personal
liability (by execution and delivery of an agreement to such effect in form
and substance reasonably satisfactory to the General Partner) for any
indemnification obligations secured by the Partnership Units, or (ii)
pledging (by execution and delivery of a pledge agreement in form and
substance reasonably satisfactory to the General Partner) substitute
collateral which, in the reasonable determination of the General Partner, is
substantially equivalent in value to the Class A Units then comprising
Collateral. In the event that a Limited Partner is relieved of the
restrictions on transferability in accordance with the terms of this Section
18.4, the security interest in such Limited Partner's Class A Units hereunder
shall terminate without further action, and the Partnership, at the request
of such Limited Partner, shall promptly execute and deliver any document or
instrument reasonably requested by such Limited Partner to evidence such
termination.
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18.5. No Credit to Capital Accounts. No payments made by a
Limited Partner pursuant to this Article XVIII shall be credited to the
Capital Account of such Limited Partner.
18.6. Release of Collateral. The lien and security interest on
the Collateral shall terminate on the second anniversary of the date of this
Agreement, except to the extent provided in the next sentence. In the event
that notice of a claim for indemnification has been duly given pursuant to
Section 18.2(a) but the matter for which indemnification is sought or the
amount of the indemnification required to be paid has not been finally
determined at the second anniversary of the date hereof, Class A Units having
a sufficient value (based on the Current Per Share Market Price at such date
of the Common Shares issuable in exchange therefor pursuant to Section 15.2)
shall remain subject to the lien and security created under Section 18.3,
until such time as the matter in question has been finally determined.
18.7. Applicability. The provisions of this Article XVIII shall
not be applicable to any Person that becomes a Limited Partner after August
22, 1996 except as and to the extent agreed to by the General Partner and
such Person in connection with such Person's admission as a Limited Partner.
ARTICLE XIX
ARBITRATION OF DISPUTES
19.1. Settlement of Disputes. The parties will attempt in good
faith to resolve any and all controversies of every kind and nature between
the parties to this Agreement arising out of or in connection with the
existence, construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation, breach, continuance or termination
of this Agreement (each, a "Dispute") promptly by negotiations between senior
executives of the parties who have authority to settle the Dispute (and who
do not have direct responsibility for administration of this Agreement). The
disputing party shall give the other party written notice of the Dispute.
Within twenty (20) days after receipt of said notice, the receiving party
shall submit to the other a written response. The notice and response shall
include (a) a statement of each party's position and a summary of the
evidence and arguments supporting its position, and (b) the name and title of
the executive who will represent that party. The executives shall meet at a
mutually acceptable time and place within thirty days of the date of the
disputing party's notice and thereafter as often as they reasonably deem
necessary to exchange relevant information and to attempt to resolve the
Dispute. If the matter has not been resolved within sixty (60) days of the
disputing party's notice, or if the party receiving said notice will not meet
within thirty days, either party may initiate mediation of the controversy or
claim in accordance with the Center for Public Resources Model Procedure for
Mediation of Business Disputes.
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19.2. Arbitration.
(a) If the Dispute has not been resolved pursuant to the
aforesaid mediation procedure within sixty (60) days of the initiation of
such procedure, or if either party will not participate in a mediation, the
Dispute shall be submitted to binding arbitration in accordance with the
rules of the American Arbitration Association. The parties further agree
that all matters shall be governed by the laws of the Commonwealth of
Pennsylvania. The parties further agree that any arbitration conducted
pursuant to this Section shall be held in Philadelphia, Pennsylvania before a
panel of three (3) arbitrators, one selected by the Partnership, and one
selected by Safeguard and The Nichols Company, and the third selected by the
arbitrators selected by the parties. All deadlines specified in this Section
may be extended by mutual agreement.
(b) The arbitration panel shall have the discretion to include
in its decision a direction that all or part of the attorneys' fees and costs
of any party or parties and/or the costs of such arbitration be paid by any
other party or parties. On the application of a party before or after the
initial decision of the arbitration panel, and proof of its attorneys' fees
and costs, the arbitration panel shall order the other party to make any
payments directed pursuant to the preceding sentence.
19.3. Binding Character. Any decision rendered by the
arbitration panel pursuant to this Article XIX shall be final and binding on
the parties hereto, and judgment thereon may be entered by any state or
federal court of competent jurisdiction.
19.4. Exclusivity. Arbitration shall be the exclusive method
available for resolution of claims, disputes and controversies described in
Section 19.1 hereof, and the Partnership and its Partners stipulate that the
provisions hereof shall be a complete defense to any suit, action, or
proceeding in any court or before any administrative or arbitration tribunal
with respect to any such claim, controversy or dispute. The provisions of
this Article XIX shall survive the dissolution of the Partnership.
19.5. No Alteration of Agreement. Nothing contained herein
shall be deemed to give the arbitrators any authority, power or right to
alter, change, amend, modify, add to, or subtract from any of the provisions
of this Agreement.
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ARTICLE XX
ASSUMPTION OF LIABILITIES AND INDEMNIFICATIONS
20.1. Assumption of Liabilities. The Partnership has assumed
and shall pay, perform and discharge when due, each of those liabilities and
obligations that constitute Assumed Liabilities. Obligations of the
Partnership under this Section 20.1 shall continue to inure to the benefit of
Partners notwithstanding any subsequent redemption of Units held by them and
their cessation as Partners in connection therewith.
20.2. Indemnification. From and after the date hereof, the
Partnership shall indemnify and hold harmless each of the Limited Partners
and its Affiliates against and from all liability, demands, claims, actions
or causes of action, assessments, losses, fines, penalties, costs, damages
and expenses (including, without limitation, reasonable attorneys' and
accountants' fees and expenses) sustained or incurred by such Limited Partner
or Affiliate or any assignee or successor thereof (including, without
limitation, any Substituted Limited Partner) as a result of or arising out of
any Assumed Liability. If a claim for indemnification is asserted against
the Partnership hereunder, the Partnership shall have the right, at its own
expense, to participate in the defense of any claim asserted against such
Limited Partner or its Affiliate which resulted in the claim for
indemnification, and if such right is exercised, the parties shall cooperate
in the defense of such action or proceeding.
ARTICLE XXI
GENERAL PROVISIONS
21.1. Notices. All notices, offers or other communications
required or permitted to be given pursuant to this Agreement shall be in
writing and may be personally served, telecopied, delivered by reputable
courier service or sent by United States mail and shall be deemed to have
been given when delivered in person, upon receipt of telecopy or courier
service or three business days after deposit in United States Mail,
registered or certified, postage prepaid, and properly addressed, by or to
the appropriate party. For purposes of this Section 21.1, the addresses of
the parties hereto shall be as set forth on Exhibit A hereto. The address of
any party hereto may be changed by a notice in writing given in accordance
with the provisions hereof.
21.2. Successors. This Agreement and all the terms and
provisions hereof shall be binding upon and shall inure to the benefit of all
Partners, and their legal representatives, heirs, successors and permitted
assigns, except as expressly herein otherwise provided.
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21.3. Effect and Interpretation. This Agreement and all of the
terms and provisions hereof shall be governed by and construed in accordance
with the law, including the law on conflicts of law, of the State of Delaware.
21.4. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
21.5. Partners Not Agents. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Partners in the
carrying on of their own respective businesses or activities. Notwithstanding
anything to the contrary contained herein, no recourse shall be had by the
Partnership or any Partner against any trustee, director, shareholder,
officer, employee, agent or attorney of the General Partner under this
Agreement, and none of the foregoing shall have any personal liability for or
with respect to any of the foregoing.
21.6. Entire Understanding; Etc. This Agreement constitutes the
entire agreement and understanding among the Partners and supersedes any
prior understandings and/or written or oral agreements among them respecting
the subject matter within.
21.7. Amendments.
(a) Except as provided in Sections 21.7(b) and (c), the
General Partner shall have the power and authority, in its sole discretion
and without the consent of any other Partner, to amend any and all of the
provisions of this Agreement to issue additional Partnership Interests, or to
establish the rights, privileges, duties and obligations of any Partner or
class of Partnership Interest, or otherwise, except that, without the consent
of each existing Partner adversely affected thereby, the General Partner
shall not (except, in each and every case, as may be required to correct
plain errors or ambiguities in this Agreement) amend this Agreement so as to
(i) require any Partner to make any additional contribution to the capital of
the Partnership; or (ii) require any Partner to restore any negative balance
in its capital account or otherwise to contribute any capital to the
Partnership, except as required under the Act, the Code or other applicable
laws or as expressly provided herein.
(b) This Agreement shall not be amended without the prior
written consent of each Partner adversely affected if such amendment would
(i) convert a Limited Partnership Interest in the Partnership into a General
Partnership Interest, or (ii) modify the limited liability of a Limited
Partner.
(c) In addition to the foregoing, for so long as any Class A
Units remain outstanding, this Agreement may not be amended unless such
amendment is approved by the holders of at least a majority of the Class A
Units then outstanding (including the Class A Units held by the General
Partner), except:
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(i) as otherwise expressly provided herein;
(ii) to add to the obligations of the General Partner or
surrender any right or power granted to the General Partner or any Affiliate
of the General Partner for the benefit of the Limited Partners;
(iii) to reflect the issuance of additional
Partnership Interests, and the admission, substitution, termination or
withdrawal of Partners, in each case in accordance with the provisions of
this Agreement;
(iv) to record permitted Transfers of Partnership Units on
the books of the Partnership;
(v) to reflect a change that is of an inconsequential
nature and does not adversely affect the holders of the Class A Units in any
material respect;
(vi) to cure any ambiguity or correct plain errors in this
Agreement; or
(vii) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion, ruling or regulation
of a federal or state agency or contained in federal or state law.
(d) In any matter requiring the vote or consent of holders of
Class A Units hereunder, Class A Units, if any, held by the General Partner
will be entitled to be counted in such vote or consent.
(e) This Section 21.7 may not be amended except with the prior
written consent of the General Partner and the holders of at least a majority
of the Class A United then outstanding.
21.8. Prior Reference Clarification. All references in the
Prior Agreement to "Safeguard Scientifics (Delaware), Inc." or "SSI" shall be
deemed to have been references to Safeguard Scientifics, Inc., a Pennsylvania
corporation, notwithstanding the stated effective date of this amendment and
restatement of the Prior Agreement.
21.9. Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those to which it is held invalid by such court, shall not be
affected thereby.
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21.10. Trust Provision. This Agreement, to the extent executed
by the trustee of a trust, is executed by such trustee solely as trustee and
not in a separate capacity. Nothing herein contained shall create any
liability on, or require the performance of any covenant by, any such trustee
individually, nor shall anything contained herein subject the individual
personal property of any trustee to any liability. No recourse shall be had
for any obligation of the General Partner against any past, present or future
trustee, shareholder, officer or employee thereof.
21.11. Pronouns and Headings. As used herein, all pronouns shall
include the masculine, feminine and neuter, and all defined terms shall
include the singular and plural thereof wherever the context and facts
require such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof. Any references in this Agreement to
"including" shall be deemed to mean "including without limitation."
21.12. Assurances. Each of the Partners shall hereafter execute
and deliver such further instruments and do such further acts and things as
may be required or useful to carry out the intent and purpose of this
Agreement and as are not inconsistent with the terms hereof.
21.13. Effective Time of Amendment. This amendment and
restatement of the Prior Partnership Agreement shall become effective
automatically as of November 18, 1997 upon the execution and delivery of this
Agreement by the General Partner and the holders of 75% or more of the
outstanding Class A Units (as of the date of this Agreement).
SPACE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Amended
and Restated Agreement of Limited Partnership of Brandywine Operating
Partnership, L.P. as of the date and year first above written.
GENERAL PARTNER:
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
--------------------------------
Name: Gerard H. Sweeney,
President and Chief Executive Officer
CLASS A LIMITED PARTNERS:
Safeguard Scientifics, Inc.
By: /s/ James A. Ounsworth
--------------------------------
Name: James A. Ounsworth
Title: Senior Vice President
The Nichols Company
By: /s/ Anthony A. Nichols, Sr.
--------------------------------
Anthony A. Nichols, Sr., President
/s/ Brian F. Belcher
-------------------------------------
Brian F. Belcher
EXECUTIONS CONTINUED
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/s/ Jack R. Loew
--------------------------------
Jack R. Loew
/s/ Craig C. Hough
--------------------------------
Craig C. Hough
--------------------------------
Gary C. Bender
/s/ Werner Fricker
--------------------------------
Werner Fricker
EXECUTIONS CONTINUED
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BRANDYWINE HOLDINGS I, INC.
By: /s/ Gerard H. Sweeney
--------------------------------
Name: Gerard H. Sweeney,
President and Chief Executive Officer
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
--------------------------------
Name: Gerard H. Sweeney,
President and Chief Executive Officer
The Management Company joins in this Agreement solely for the
purpose of agreeing to be bound by the provisions of Section 8.2(b) hereof.
BRANDYWINE REALTY SERVICES
CORPORATION
By: /s/ Gerard H. Sweeney
--------------------------------
Authorized Officer
END OF EXECUTIONS
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EXHIBIT A
LIST OF LIMITED PARTNERS
ADDRESS OF RESIDENCE
(IF AN INDIVIDUAL) OR
EXECUTIVE OFFICES SOCIAL SECURITY
NAME (IF AN ENTITY) OR TAX ID NUMBER CLASS A UNITS
- --------------------------- ------------------------- ----------------- -------------
Safeguard Scientifics, Inc. 800 The Safeguard Building 51-0291171 252,387
435 Devon Park Drive
Wayne, PA 19087
The Nichols Company 16 Campus Boulevard 23-2415327 2,742
Newtown Square, PA 19073
Brian F. Belcher 829 Juniper Drive ###-##-#### 7,245
Lafayette Hill, PA 19444
Jack R. Loew 1090 New Street ###-##-#### 1,245
West Chester, PA 19382
Craig C. Hough 1740 Hunter Circle ###-##-#### 1,245
West Chester, PA 19380
Gary C. Bender 46 Heron Hill ###-##-#### 1,434
Downingtown, PA 19335
Werner A. Fricker 708 McKean Road ###-##-#### 6,830
Ambler, PA 19002
Brandywine Holdings I, Inc. 16 Campus Boulevard 23-2856456 5
Newtown Square, PA 19073
Brandywine Realty Trust 16 Campus Boulevard 23-2413352 163,399
Newtown Square, PA 19073
LIST OF GENERAL PARTNERS
NAME ADDRESS TAX ID NUMBER GP UNITS
- --------------------------- ------------------------- ----------------- -------------
Brandywine Realty Trust 16 Campus Boulevard 23-2413352 23,172,642
Newtown Square, PA 19073
A-1
EXHIBIT B
LIST OF CONTRIBUTED ASSETS
PART I: CONTRIBUTIONS OF INTERESTS IN WITMER PARTNERSHIP
ASSETS CONTRIBUTED
TO PARTNERSHIP BY
CLASS A NUMBER OF CLASS A
LIMITED PARTNER UNITS OF
NAME OF CLASS A AS INITIAL PARTNERSHIP ISSUED DATE OF
LIMITED PARTNER CAPITAL CONTRIBUTION IN EXCHANGE CONTRIBUTION
- --------------------- --------------------- ----------------------- ------------------
Brian F. Belcher 497 Class A Units of 5,893 August 22, 1996
Witmer Partnership
Jack R. Loew 105 Class A Units of 1,245 August 22, 1996
Witmer Partnership
Craig C. Hough 105 Class A Units of 1,245 August 22, 1996
Witmer Partnership
RDC Institute, Inc. 243 Class A Units of 2,881 August 22, 1996
Witmer Partnership
Gary C. Bender 121 Class A Units of 1,434 August 22, 1996
Witmer Partnership
Lotz Designers 1,803 Class A Units of 21,380 August 22, 1996
Engineers and Witmer Partnership
Constructors, Inc.
Werner A. Fricker 576 Class A Units of 6,830 August 22, 1996
Witmer Partnership
B-1
ASSETS CONTRIBUTED
TO PARTNERSHIP BY
CLASS A NUMBER OF CLASS A
LIMITED PARTNER UNITS OF
NAME OF CLASS A AS INITIAL PARTNERSHIP ISSUED DATE OF
LIMITED PARTNER CAPITAL CONTRIBUTION IN EXCHANGE CONTRIBUTION
- --------------------- --------------------- ----------------------- ------------------
The Nichols Company 14,577 Class A Units 253,168* August 22, 1996
of Witmer Partnership
and Promissory Note of
Witmer Operating
Partnership I, L.P. to
The Nichols Company in
the outstanding principal
amount of $1,201,746.
- ------------------------------------------------------------------------------------------------
TOTAL CLASS A UNITS 293,076 August 22, 1996
ISSUED
* Includes 72,833 units issued in exchange for a note from Witmer Partnership,
as maker, to The Nichols Company, as payee, dated November 21, 1995, in the
original principal amount of $1,201,746.
B-2
PART II: CONTRIBUTIONS OF INTERESTS IN TITLE HOLDING PARTNERSHIPS THAT OWN
CERTAIN PROPERTIES
ASSETS CONTRIBUTED NUMBER OF
TO PARTNERSHIP BY CLASS A UNITS OF
NAME OF CLASS A CLASS A LIMITED PARTNER PARTNERSHIP ISSUED DATE OF
LIMITED PARTNER AS INITIAL CAPITAL CONTRIBUTION IN EXCHANGE CONTRIBUTION
- --------------------- -------------------------------- -------------------- ----------------
The Nichols Company -- 87% Capital and 97% Profits 11,064 August 22, 1996
Limited Partnership interest in
C/N Oaklands Limited
Partnership III
-- 87% Capital and 97% Profits 34,217 August 22, 1996
Limited Partnership interest in
Iron Run Limited Partnership V
-- 82% Capital and 92% Profits 22,183 August 22, 1996
Limited Partnership interest in
C/N Iron Run Limited
Partnership III
- ---------------------------------------------------------------------------------------------------------
C/N Oaklands III, Inc. -- 2% Capital and 2% Profits 254 August 22, 1996
General Partnership interest in
C/N Oaklands Limited
Partnership III*
- ---------------------------------------------------------------------------------------------------------
Iron Run V, Inc. -- 2% Capital and 2% Profits 786 August 22, 1996
General Partnership interest in
Iron Run Limited Partnership V**
- ---------------------------------------------------------------------------------------------------------
B-3
ASSETS CONTRIBUTED NUMBER OF
TO PARTNERSHIP BY CLASS A UNITS OF
NAME OF CLASS A CLASS A LIMITED PARTNER PARTNERSHIP ISSUED DATE OF
LIMITED PARTNER AS INITIAL CAPITAL CONTRIBUTION IN EXCHANGE CONTRIBUTION
- --------------------- -------------------------------- -------------------- ----------------
C/N Iron Run III, Inc. -- 2% Capital and 2% Profits 541 August 22, 1996
General Partnership interest
in C/N Iron Run Limited
Partnership III
- ---------------------------------------------------------------------------------------------------------
Brian F. Belcher -- 5% Capital and 5% Profits 1,352 August 22, 1996
Limited Partnership interest
in C/N Iron Run Limited
Partnership III
- ---------------------------------------------------------------------------------------------------------
TOTAL CLASS A UNITS 70,397 August 22, 1996
ISSUED
- ---------------------------------------------------------------------------------------------------------
* On August 22, 1996, this general partnership interest was assigned to a
wholly-owned qualified REIT subsidiary of the General Partner called "BRT
Holding II, Inc." As of November 18, 1997, BRT Holding II, Inc. transferred
this general partnership interest to Brandywine Realty Trust which, in turn,
contributed such interest to the Partnership.
** On August 22, 1996, this general partnership interest was assigned to a
wholly-owned qualified REIT subsidiary of the General Partner called "BRT
Holding III, Inc." As of November 18, 1997, BRT Holding III, Inc.
transferred this general partnership interest to Brandywine Realty Trust
which, in turn, contributed such interest to the Partnership.
B-4
PART III: CONTRIBUTIONS OF CERTAIN PROPERTIES
ASSETS CONTRIBUTED TO
PARTNERSHIP BY CLASS A
LIMITED PARTNER AS NUMBER OF CLASS A
NAME OF CLASS A INITIAL CAPITAL UNITS ISSUED IN DATE OF
LIMITED PARTNER CONTRIBUTION EXCHANGE CONTRIBUTION
- ----------------------------------- ----------------------------------- -------------------- ------------------
Safeguard Scientifics, Inc. Fee title to 2240/2250 Butler Pike 35,258 August 22, 1996
Plymouth Meeting, PA
Fee title to 140 West Germantown 171 August 22, 1996
Pike Plymouth Meeting, PA
Fee title to 2260 Butler Pike 14,207 August 22, 1996
Plymouth Meeting,PA
Fee title to 7310 Tilghman Street 14,951 August 22, 1996
Allentown, PA
Fee title to 110 Summit Drive 25,958 August 22, 1996
Exton, PA
- --------------------------------------------------------------------------------------------------------------------
Safeguard Scientifics, Inc. Fee title to 650 Dresher Road, 14,545 August 22, 1996
Horsham, PA
87% Capital and 99% Profits Limited 25,679 August 22, 1996
Partnership Interest in C/N Leedom
Limited Partnership II
- --------------------------------------------------------------------------------------------------------------------
B-5
ASSETS CONTRIBUTED TO
PARTNERSHIP BY CLASS A
LIMITED PARTNER AS NUMBER OF CLASS A
NAME OF CLASS A INITIAL CAPITAL UNITS ISSUED IN DATE OF
LIMITED PARTNER CONTRIBUTION EXCHANGE CONTRIBUTION
- ----------------------------------- ----------------------------------- -------------------- ------------------
C/N Leedom II, Inc. 2% Capital and 2% Profits General 590 August 22, 1996
Partnership Interest in C/N Leedom
Limited Partnership II
- --------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A UNITS ISSUED 131,359 August 22, 1996
- --------------------------------------------------------------------------------------------------------------------
B-6
PART IV: CONTRIBUTIONS BY BRANDYWINE REALTY TRUST
ASSETS CONTRIBUTED TO
PARTNERSHIP AS CAPITAL DATE OF
NAME OF PARTNER CONTRIBUTION NUMBER OF GP UNITS CONTRIBUTION
- ------------------------------- ------------------------------- ----------------------- ------------------------
Brandywine Realty Trust 49% Capital and 97% Profits 533,333 August 22, 1996
interest in Brandywine Realty
Partners
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust The SSI Ownership Interest (as 238,606 August 22, 1996
defined in Brandywine Realty
Trust's Proxy Statement for its
August 22, 1996 Shareholders
meeting)
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust $1,000 cash and furniture, 61 August 22, 1996
fixtures and equipment
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 1,606,060 December 2, 1996
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 5,345,454 December 2, 1996
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 600,000 December 13, 1996
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 2,200,000 March 4, 1997
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 175,500 March 17, 1997
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 10,000,000 July 28, 1997
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 1,500,000 August 20, 1997
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust 21% Capital and 1% Profits 85,400 August 23, 1997
interest in Brandywine Realty
Partners
- --------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust Proceeds of Share issuance 786,840 September 16, 1997
- --------------------------------------------------------------------------------------------------------------------
B-7
ASSETS CONTRIBUTED TO
PARTNERSHIP AS CAPITAL DATE OF
NAME OF PARTNER CONTRIBUTION NUMBER OF GP UNITS CONTRIBUTION
- ------------------------------- ------------------------------- ----------------------- ------------------------
Brandywine Realty Trust Assignment of income, gain, 101,388 November 18, 1997
profits, losses and cash flow
from LibertyView Building
- -------------------------------------------------------------------------------------------------------------------
B-8
EXHIBIT C
LIST OF APPLICABLE MORTGAGE INDEBTEDNESS
ENCUMBERING CERTAIN PROPERTIES
PERCENTAGE OF
NAME OF LIMITED CLASS A UNITS
PARTNERS ENTITLED ISSUABLE UPON
OUTSTANDING TO RECEIVE REALIZATION OF
PROPERTY ENCUMBERED BY VALUE IN PRINCIPAL AMOUNT OF CLASS A UNITS DISCOUNT TO
APPLICABLE MORTGAGE BRT BALANCE AS NET EQUITY UPON REALIZATION SUCH LIMITED
INDEBTEDNESS MERGER OF 8/22/96 LENDER IN PROPERTY OF DISCOUNT PARTNER
- ------------------------- ------------ ------------ --------- ----------- ----------------- --------------
7310 Tilghman Street $2,782,000 $2,535,297 Pennsylvania State $246,703 Safeguard Scientifics, 100%
Employees' Inc.
Retirement System
486 Thomas Jones Way (1) $6,645,000 $6,435,156 First Union $209,844 The Nichols Company 100%
468 Creamery Way (1) National Bank
6575 Snowdrift Road $3,000,000 $2,351,067 First Union $648,933 The Nichols Company 100%
National Bank
- ------------------------
(1) Both of these Properties secure a single loan. As of 8/22/96, the
outstanding principal balance of this loan was $6,435,156.
C-1
EXHIBIT D
LIST OF RETAINED INTERESTS
NUMBER OF
NAME OF CLASS A UNITS
NAME OF TITLE HOLDING PARTNER OWNING ISSUABLE TO ACQUIRE
PARTNERSHIP/PROPERTIES OWNED AMOUNT OF RETAINED INTEREST RETAINED INTEREST RETAINED INTEREST
- ------------------------------------ ----------------------------------- ------------------- -------------------
C/N Oaklands Limited Partnership III 1% Profits and 11% Capital Interest The Nichols Company 1,399
- -486 Thomas Jones Way
- -468 Creamery Way
Iron Run Limited Partnership V 1% Profits and 11% Capital Interest The Nichols Company 4,326
- -6575 Snowdrift Road
C/N Iron Run Limited Partnership III 1% Profits and 11% Capital Interest The Nichols Company 2,976
- -7248 Tilghman Street
C/N Leedom Limited Partnership II 1% Profits and 11% Capital Interest Safeguard Scientifics, 3,246
- -120 West Germantown Pike Inc.
C/N Oaklands Limited Partnership I 1% Profits and 11% Capital Interest The Nichols Company 2,177
- -456 Creamery Way
Newtech IV Limited Partnership 1% Profits and 11% Capital Interest The Nichols Company 6,075
- -18 Campus Boulevard
Newtech III Limited Partnership 1% Profits and 11% Capital Interest The Nichols Company 1,744
- -16 Campus Boulevard
LC/N Keith Valley Limited Partnership 1% Profits and 11% Capital Interest The Nichols Company 6,067
- -500 Enterprise Road
LC/N Horsham Limited Partnership 1% Profits and 11% Capital Interest The Nichols Company 12,826
- -One Progress Road
Nichols Lansdale Limited 1% Profits and 11% Capital Interest The Nichols Company 3,486
Partnership III
- -1510 Gehman Road
TOTAL CLASS A UNITS 44,322
------
------
D-1
Schedule I
Notice of Redemption
The undersigned Limited Partner hereby irrevocably requests
Brandywine Operating Partnership, L.P., a Delaware limited partnership (the
"Partnership") to redeem _______________ Partnership Units in the Partnership
in accordance with the terms of the Amended and Restated Agreement of Limited
Partnership of the Partnership and the Redemption Right referred to therein;
and the undersigned Limited Partnership irrevocably (i) surrenders such
Partnership Units and all right, title and interest therein; and (ii) directs
that the Cash Amount or GP Shares Amount (as determined by the General
Partner) deliverable upon exercise of the Redemption Right be delivered to
the address specified below, and if Common Shares are to be delivered, such
Common Shares be registered or placed in the name(s) and at the address(es)
specified below. The undersigned hereby represents, warrants, and certifies
that the undersigned (a) has marketable and unencumbered title to such
Partnership Units, free and clear of the rights or interests of any other
person or entity; (b) has the full right, power, and authority to request
such redemption and surrender such Partnership Units as provided herein; and
(c) has obtained the consent or approval of all persons or entities, if any,
having the right to consent or approve such redemption and surrender of
Units. The undersigned Limited Partner further agrees that, in the event
that any state or local property tax is payable as a result of the transfer
of its Partnership Units to the Partnership or the General Partner, the
undersigned Limited Partner shall assume and pay such transfer tax.
Dated:___________________
Name of Limited Partner: _______________________________
Please Print
_______________________________
(Signature of Limited Partner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
________________________________
If Common Shares are to be issued, issue to:
Name: ________________________
Please insert social security number: __________________