<PAGE>
Execution Copy
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CONTRIBUTION AGREEMENT
Among
TRC REALTY, INC.-GP,
TRC-LB LLC,
TRC ASSOCIATES LIMITED PARTNERSHIP,
and
BRANDYWINE OPERATING PARTNERSHIP, L.P.
August 18, 2004
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS................................................................................1
1.1.
Defined
Terms.........................................................................1
1.2.
General Definitional
Provisions.......................................................9
ARTICLE II
CONTRIBUTION;
CONSIDERATION................................................................9
2.1.
Contribution of the Partnership
Interests.............................................9
2.2.
Payment of the Contribution
Consideration.............................................9
2.3.
Prepayment of Loans; Release of
Guarantors...........................................10
2.4.
Payment of
Expenses..................................................................11
2.5.
Admission to
Partnership.............................................................11
2.6.
Excluded
Assets......................................................................11
2.7.
Redemption of Partnership Interests in Two Logan
Transferee..........................11
2.8.
200 Radnor
Option....................................................................12
2.9.
Name
Change..........................................................................12
2.10.
Tax Protection
Agreement.............................................................13
2.11.
Equitable
Assignment.................................................................13
2.12.
Characterization of sale of interest of LB in
TRCLP..................................13
ARTICLE III
DEPOSIT;
ESCROW...........................................................................13
3.1.
Deposit..............................................................................13
3.2.
Escrow
Agent.........................................................................14
3.3.
Application of Escrow
Funds..........................................................14
3.4.
Manner of
Holding....................................................................14
3.5.
Limitation of
Liability..............................................................14
3.6.
Conflicting
Demands..................................................................14
3.7.
Substitution of Letter of
Credit.....................................................15
ARTICLE IV
PUT AND CALL
RIGHTS.......................................................................15
4.1.
Purchase
Rights......................................................................15
4.2.
Put
Rights...........................................................................16
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE
CONTRIBUTORS........................................17
5.1.
Organization, Power and
Authority....................................................17
5.2.
Binding
Agreement....................................................................18
5.3.
Capitalization of TRCLP and its
Subsidiaries.........................................18
5.4.
No
Conflicts.........................................................................18
5.5.
Title to the Partnership Interests and Eleven Percent
Interests......................19
5.6.
Third Party
Consents.................................................................19
5.7.
Leases...............................................................................19
5.8.
Mortgage Loans and Material Loan
Documents...........................................19
5.9.
Contracts............................................................................19
5.10.
No
Bankruptcy........................................................................20
5.11.
Litigation and Other
Proceedings.....................................................20
5.12.
Securities
Matters...................................................................20
5.13.
FIRPTA
Matters.......................................................................20
5.14.
Security
Deposits....................................................................20
5.15.
Financial
Statements.................................................................20
5.16.
Undisclosed
Liabilities..............................................................21
5.17.
Absence of
Changes...................................................................21
5.18.
Taxes................................................................................21
5.19.
Employees; Union
Contracts...........................................................21
5.20.
No
Condemnation......................................................................22
5.21.
Tenant Improvements and Leasing
Commissions..........................................22
5.22.
Environmental
Laws...................................................................22
5.23.
REA
Documents........................................................................22
5.24.
Surveys..............................................................................22
5.25.
Title; Permitted
Liens...............................................................22
5.26.
Insurance............................................................................23
5.27.
No
Commitments.......................................................................23
5.28.
No Unpaid
Charges....................................................................23
5.29.
Leased
Property......................................................................23
5.30.
Investments by TRCLP and Other
Entities..............................................23
5.31.
Two Logan Square
Associates..........................................................24
5.32.
Certain Matters as to Jack
Blake.....................................................24
5.33.
Limitations Regarding Representations and
Warranties.................................24
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE OPERATING
PARTNERSHIP...............................26
6.1.
Organization, Power and
Authority....................................................26
6.2.
Binding
Agreement....................................................................26
6.3.
No
Conflicts.........................................................................27
6.4.
Third Party
Consents.................................................................27
6.5.
No
Bankruptcy........................................................................27
6.6.
No
Inducement........................................................................27
6.7.
Organizational
Agreements............................................................28
6.8.
Litigation and Other
Proceedings.....................................................28
6.9.
OP Units; Preferred OP Units; Common
Shares..........................................28
6.10.
Tax Status of Operating
Partnership..................................................28
6.11.
REIT
Status..........................................................................28
6.12.
Financing............................................................................29
ARTICLE VII
CONDITIONS
PRECEDENT TO THE CONTRIBUTORS'
OBLIGATIONS.....................................29
7.1.
Accuracy of
Representations..........................................................29
7.2.
Performance..........................................................................29
7.3.
Documents and
Deliveries.............................................................29
7.4.
Required
Consents....................................................................29
7.5.
Recapitalization
Agreement...........................................................29
7.6.
One Commerce
Square..................................................................29
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OPERATING PARTNERSHIP'S AND THE REIT'S
OBLIGATIONS............30
8.1.
Accuracy of
Representations..........................................................30
8.2.
Performance..........................................................................30
8.3.
Documents and
Deliveries.............................................................30
8.4.
Required
Consents....................................................................30
8.5.
Estoppel
Certificates................................................................30
8.6.
New Two Logan
Transfers..............................................................31
8.7.
Compliance with Rule 3-14 of Regulation
S-X..........................................31
8.8.
Condition of
Improvements............................................................31
8.9.
No Additional Proceedings; Tenant
Defaults...........................................31
8.10.
Recapitalization
Agreement...........................................................31
ARTICLE IX
CLOSING; DELIVERIES AT
CLOSING............................................................31
9.1.
Date, Time and
Place.................................................................31
9.2.
Deliveries by
Contributor............................................................32
9.3.
Deliveries by the Operating Partnership and the
REIT.................................33
ARTICLE X
DAMAGE OR DESTRUCTION;
CONDEMNATION.......................................................34
10.1.
Damage or
Destruction................................................................34
10.2.
Condemnation.........................................................................34
ARTICLE XI
APPORTIONMENTS;
EXPENSES..................................................................34
11.1.
Apportionments
Generally.............................................................34
11.2.
Taxes................................................................................35
11.3.
Utilities............................................................................35
11.4.
Rents and
Leases.....................................................................35
11.5.
Tenant Inducement Costs, Leasing Commissions and Capital
Expenditures................36
11.6.
Mortgage
Loans.......................................................................37
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ARTICLE XII
COVENANTS.................................................................................37
12.1.
Assignability........................................................................37
12.2.
Access...............................................................................37
12.3.
Lease................................................................................37
12.4.
Additional
Liabilities...............................................................37
12.5.
Management
Contracts.................................................................38
12.6.
Property Management and
Operations...................................................38
12.7.
Employee
Matters.....................................................................38
12.8.
Leasing Commissions to
TRCALP........................................................39
12.9.
Pre-Approved
Leases..................................................................39
12.10.
Financial
Statements.................................................................39
12.11.
Closing of
Books.....................................................................39
12.12.
One Commerce Square
Lease............................................................39
12.13.
New York Stock Exchange
Listing......................................................39
12.14.
Further
Assurances...................................................................39
ARTICLE XIII
BROKERS...................................................................................40
13.1.
Brokers..............................................................................40
ARTICLE XIV
TERMINATION...............................................................................40
14.1.
Termination..........................................................................40
14.2.
Effect of
Termination................................................................41
ARTICLE XV
INDEMNITY.................................................................................41
15.1.
Survival.............................................................................41
15.2.
Indemnification by Contributors for the Benefit of Operating
Partnership.............42
15.3.
Indemnification by Operating Partnership for the Benefit of
Contributors.............42
15.4.
Limitation in
Liability..............................................................43
15.5.
Notification of
Claims...............................................................43
15.6.
Calculation of Indemnity
Payments....................................................44
ARTICLE XVI
NOTICES...................................................................................44
16.1.
Notices..............................................................................44
16.2.
Notice
Addresses.....................................................................44
ARTICLE XVII
MISCELLANEOUS.............................................................................45
17.1.
Computation of
Time..................................................................45
17.2.
Time of the
Essence..................................................................45
17.3.
Limitation on LB Status as
Contributor...............................................46
17.4.
Waiver of Restrictions on
Assignment.................................................46
17.5.
Knowledge............................................................................46
17.6.
Governing Laws; Parties at
Interest..................................................46
17.7.
Headings.............................................................................46
17.8.
Waiver...............................................................................46
17.9.
Exhibits and
Schedules...............................................................46
17.10.
SEC
Filings..........................................................................46
17.11.
Counterparts.........................................................................47
17.12.
Facsimile
Signatures.................................................................47
17.13.
Limitation on
Liability..............................................................47
17.14.
Dispute..............................................................................47
17.15.
Public
Announcements.................................................................47
17.16.
SEC Reporting
Requirements...........................................................47
17.17.
Entire Agreement;
Amendments.........................................................48
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SCHEDULES:
Contributors Disclosure Schedule
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Section 5.3
Capitalization of TRCLP and its Subsidiaries; Ownership Structure
Charts
Section 5.4
No Conflicts
Section 5.7
Leases
Section 5.8
Mortgage Loans and Material Loan Documentation
Section 5.9
Contracts
Section 5.11
Litigation
Section 5.14
Security Deposits
Section 5.18
Taxes
Section 5.19
Labor Matters
Section 5.21
Tenant Improvements and Leasing Commissions
Section 5.22
Environmental Matters
Section 5.24
Surveys
Section 5.26
Insurance Matters
Section 5.27
No Commitments
Section 5.28
No Unpaid Charges
Section 5.30
Investments by TRCLP and Other Entities
Section 5.33
Due Diligence List
Schedules
Schedule A
Partnership Interests of TRCLP
Schedule 1.1(a)
Title Reports
Schedule 1.1(b)
Properties
Schedule 1.1(c)
Specified Company(ies)
Schedule 2.6
Excluded Assets
Schedule 7.4
Required Consents
Schedule 8.5
Required Estoppel Certificates
Schedule
11.5 Tenant Inducement Costs, Leasing Commissions and
Capital Expenditures Section I - To Be Paid by the
Contributors (a) Tenant Inducement Costs (b) Leasing
Commissions (c) Capital Expenditures Section II - To Be
Paid by the Operating Partnership
Schedule 12.3
Pre-Closing Leases
Schedule 12.7(a) Property
Employees
Schedule 12.7(b) Corporate
Employees
Schedule 12.9
Pre-Approved Leases
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EXHIBITS:
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Exhibit A
Form of Registration Rights Agreement
Exhibit B
Form of Tax Protection Agreement
Exhibit C
Form of Fourteenth Amendment
Exhibit D
Form of Thirteenth Amendment
Exhibit E
Form of Estoppel Certificate
Exhibit F
Form of Assignment and Assumption of Partnership Interest
Exhibit G
Confidentiality Agreement
Exhibit H
Form of Escrow Agent Joinder
Exhibit I-1
Form of General Loan Assumption Agreement
Exhibit I-2
Form of Two Logan Square Consent and Modification Agreement
Exhibit I-3
Form of 201 King of Prussia Loan Assumption Agreement
Exhibit J
Form of Press Release
Exhibit K
Form of Tenant Notice Letter
Exhibit L
Form of Vendor Notice Letter
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") is made as of the
18th
day of August, 2004, by and among TRC
REALTY, INC.-GP, a Pennsylvania
corporation ("TRC-GP"), TRC-LB LLC, a
Delaware limited liability company ("LB")
and TRC ASSOCIATES LIMITED PARTNERSHIP, a
Delaware limited partnership,
("TRCALP" and together with TRC-GP and LB
(but only to the extent provided in
Section 17.3), the "Contributors") and
BRANDYWINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the
"Operating Partnership").
BACKGROUND
A. The Contributors own the partnership interests (the
"Partnership
Interests") of The Rubenstein Company, L.P.
("TRCLP") as specified on Schedule
A.
B. The Partnership Interests represent all of the outstanding
partnership interests of TRCLP.
C. The Contributors desire and intend to transfer, assign and
contribute to the Operating Partnership all
of their Partnership Interests, and
the Operating Partnership desires and
intends to accept the Partnership
Interests in exchange for the consideration
described herein, all of the
foregoing, upon the terms and subject to
the conditions contained herein.
AGREEMENTS
In consideration of the foregoing and of the covenants and
conditions
hereinafter set forth, and intending to be
legally bound hereby, the parties
hereto agree:
ARTICLE I
DEFINITIONS
1.1. DEFINED TERMS. The following terms when used in this
Agreement
will have the respective meanings set forth
below. Certain other terms when used
in this Agreement will have the meanings
set forth in the context hereof.
"200 Radnor" shall have the meaning set forth in Section 2.8.
"Accountants" shall have the meaning set forth in Section
17.16.
"Affiliate" shall mean, with respect to any specified Person, any
other
Person that directly, or indirectly through
one or more intermediaries,
controls, is controlled by, or is under
common control with the specified
Person. For purposes of this definition,
the term "control" means the
possession, directly or indirectly, of the
power to direct or to cause the
direction of the management and policies of
a Person, whether through the
ownership of voting stock, beneficial
interests or partnership or membership
interests, by contract or otherwise. For
the purposes of this Agreement, Mark E.
Rubenstein and David B. Rubenstein are
deemed Affiliates of TRC-GP and TRCALP.
"Agreement" shall mean this Contribution Agreement and all
amendments
and supplements hereto, together with the
Schedules and Exhibits attached
hereto, as the same may be amended,
restated, supplemented or otherwise modified
in accordance with the terms hereof.
"Alternate Cash Consideration" shall have the meaning set forth
in
Section 2.2(c).
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"Approved Bank" shall mean a financial institution which has (x)
(A) a
minimum net worth of $500,000,000 and/or
(B) total assets of at least
$10,000,000,000 and (y) a minimum long-term
debt rating of A+ by S&P or A1 by
Moody's.
"Business Day"
shall mean any day other than a Saturday, Sunday,
federal holiday or other day on which
national banks operating in Philadelphia,
Pennsylvania are authorized or required to
be closed for the conduct of regular
banking business.
"Call Closing" shall have the meaning set forth in Section
4.1(c).
"Call Notice" shall have the meaning set forth in Section
4.1(a).
"Call Party" shall have the meaning set forth in Section
4.1(a).
"Call Right" shall have the meaning set forth in Section
4.1(a).
"Cap" shall have the meaning set forth in Section 15.2(a).
"Claim" shall mean any claim, liability, proof of claim,
demand,
complaint, summons, legal, equitable or
administrative action, suit, proceeding,
chose in action, damage, judgment, penalty
or fine.
"Closing" shall mean the execution and delivery of the Closing
Documents, the contribution of the
Partnership Interests, the payment of the
Total Cash Consideration, the issuance of
the OP Units and the Preferred OP
Units (or, if the Alternate Cash
Consideration is to be paid in lieu of the
delivery of the Preferred OP Units, the
payment of the Alternate Cash
Consideration), and the consummation of the
other transactions contemplated by
this Agreement.
"Closing Date" shall have the meaning set forth in Section 9.1.
"Closing Documents" shall mean all documents and instruments
identified
in Articles VII and VIII hereof and all
other documents and instruments which,
under the terms of this Agreement, are to
be executed and delivered by the
Contributors, the Operating Partnership,
the REIT or any of them at Closing.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from
time to time, and any successor statutory
provisions.
"Common Shares" shall mean common shares of beneficial interest,
par
value $0.01 per share, of the REIT.
"Confidentiality Agreement" shall mean that certain
Confidentiality
Agreement dated May 24, 2004, by and
between the Contributors and the REIT a
copy of which is attached hereto as Exhibit
G.
"Contract" shall mean (1) any agreement of sale, option
agreement,
right of first offer, right of last offer
or right of first refusal; (2) any
development, construction or improvement
agreement, any utility allocation
agreement, any use covenant or any
restrictive or other covenant, or any other
restriction, covenant or agreement; (3) any
equipment leases or other equipment
financing agreements, and (4) any purchase,
management, real estate, leasing or
rental commission, service, maintenance,
employment or other contract or
agreement, in each case of (1) to (4)
involving consideration of not less than
Ten Thousand Dollars ($10,000) (based upon
the non-cancelable term),
individually. The definition of "Contract"
as aforesaid is intended to exclude
the Loan Documents and the Leases.
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"Contribution Consideration" shall mean the aggregate of the Total
Cash
Consideration, the OP Unit Consideration,
the value of the OP Units issued
pursuant to Section 2.2(f), to the extent
applicable, and the aggregate stated
value of the Preferred OP Units.
"Contribution Price" shall mean Six Hundred Twelve Million
Dollars
($612,000,000) as may be increased or
decreased to reflect the pro rations made
at Closing pursuant to Article XI.
"Contributor Certificate" shall mean a certificate of the
Contributors
as to the matters set forth in an Estoppel
Certificate.
"Contributor Indemnified Parties" shall have the meaning set forth
in
Section 15.3(a).
"Contributors" shall have the meaning set forth in the
Preamble.
"Contributors Closing Documents" shall have the meaning set forth
in
Section 9.2.
"Contributors Disclosure Schedule" shall have the meaning set forth
in
the first paragraph of Article V.
"Corporate Employees" shall have the meaning set forth in
Section
12.7(b).
"Defaulted Contract" shall have the meaning set forth in Section
5.9.
"Deferred Payments" shall have the meaning set forth in Section
2.2(e).
"Delayed Consent" shall have the meaning set forth in Section
2.11.
"Demanding Party" shall have the meaning set forth in Section
3.6.
"Deposit" shall have the meaning set forth in Section 3.1.
"Deposit Demand" shall have the meaning set forth in Section
3.6.
"Eleven Percent Interests" shall have the meaning set forth in
Section
5.3.
"Environmental Law" shall mean any applicable federal, state or
local
statute, regulation, order, judgment,
decree, ordinance or rule of common law in
any way relating to the protection of human
health or safety or natural
resources or the environment including,
without limitation, the Comprehensive
Environmental Response, Compensation and
Liability Act (42 U.S.C. Sections 9601
et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Sections 1801 et
seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Sections 6901 et
seq.), the Clean Water Act (33 U.S.C.
Sections 1251 et seq.), the Clean Air Act
(42 U.S.C. Sections 7401 et seq.), the
Toxic Substance Control Act (15 U.S.C.
Sections 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Sections 136 et seq.), and the
regulations promulgated pursuant
thereto.
"Escrow Agent" shall mean Fidelity National Title Insurance
Company,
having offices at 1500 Walnut Street,
Philadelphia, Pennsylvania 19102 who shall
execute the joinder in the form of Exhibit
H.
"Escrow Funds" shall have the meaning set forth in Section 3.3.
"Estoppel Certificate" shall have the meaning set forth in Section
8.5.
"Estoppel Threshold" shall have the meaning set forth in Section
8.5.
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"Excluded Assets" shall have the meaning set forth in Section
2.6.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as
amended from time to time, and any
successor statutory provisions, and the rules
and regulations promulgated by the
Securities Commission thereunder.
"Financial Statement" shall have the meaning set forth in Section
5.15.
"Fourteenth Amendment" shall have the meaning set forth in Section
2.5.
"Governmental Authority" shall mean any and all applicable
courts,
boards, agencies, commissions, offices or
authorities of any nature whatsoever
for any governmental or quasi-governmental
unit (federal, state, county,
township, district, municipal, city,
departmental or otherwise) whether now or
hereafter in existence.
"Incurred Indebtedness" shall have the meaning set forth in the
Tax
Protection Agreement.
"Indemnified Party" shall have the meaning set forth in Section
15.5(a).
"Indemnifying Party" shall have the meaning set forth in
Section
15.5(a).
"Jack Blake" shall mean Jack Blake Properties, Inc.
"Landlord" shall have the meaning set forth in Section 5.7.
"Laws" shall mean all laws, statutes, ordinances, codes, rules,
decrees
and regulations of the United States of
America or any state, commonwealth,
city, county, township, municipality or
department or agency thereof, or of any
other Governmental Authority.
"LB" shall have the meaning set forth in the Preamble.
"LB Cash Consideration" shall mean One Hundred Twenty-Six Million
Two
Hundred Fifty Thousand Dollars
($126,250,000), plus accrued and unpaid preferred
returns on the Class A Units of TRCLP
through the Closing Date.
"Leases" shall mean leases and other agreements for the present
or
future use or occupancy of all or any part
of any Property under which TRCLP or
its Subsidiaries is the landlord, including
leases identified in Section 5.7 of
Contributors Disclosure Schedule as the
Wyeth Leases and Leases related to the
Property owned by Two Logan LP.
"Lease Up Date" shall have the meaning set forth in Section
2.2(f).
"Lease Up Properties" shall mean the properties identified as
130/150/170 Radnor Financial Center, 201
Radnor Financial Center and 555 Radnor
Financial Center.
"Lender" shall mean each lender under a Mortgage Loan as set forth
in
Section 5.8 of Contributors Disclosure
Schedules.
"Lien" shall mean any mortgage, pledge, security deed, deed to
secure
debt, deed of trust, past-due taxes or
past-due assessments, restriction,
security interest, judgment, lease, lien,
levy, charge or other encumbrance of
any kind, or any conditional sale contract,
title retention contract or other
contract to give or to refrain from giving
any of the foregoing.
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"Loan Documents" shall mean the agreements and other documents
evidencing a Mortgage Loan and the
transactions contemplated thereby, including
all amendments, modifications and
supplements thereto.
"Losses" shall have the meaning set forth in Section 15.2(a).
"Material Adverse Effect" shall mean, with respect to any Person,
a
material adverse effect on the assets,
business, operations or condition of such
Person, taken as a whole, except any such
effect resulting from or arising in
connection with (1) changes in general
economic or securities or financial
market conditions (including changes in
interest rates) or (2) changes generally
affecting the commercial real estate
industry or the submarkets in which the
Properties are located but which do not
disproportionately affect such Person
and its Subsidiaries. Notwithstanding the
foregoing, a "Material Adverse Effect"
shall be deemed to have occurred if, at any
time prior to Closing, there exist
(a) monetary delinquencies or defaults in
excess of forty-five (45) days or
other material default under Leases with
tenants leasing ten percent (10%) or
more of the rentable square feet of the
Properties, in the aggregate or (b)
bankruptcy filings or similar petitions for
relief by tenants leasing ten
percent (10%) or more of the rentable
square feet of the Properties, in the
aggregate.
"Material Taking" shall mean any taking or condemnation (or
notice
thereof) for any public or quasi-public
purpose or use by any competent
authority in appropriate proceedings or any
exercise of a right of eminent
domain that results in, or is reasonably
anticipated to result in, an award in
excess of Twenty Million Dollars
($20,000,000) with respect to any given
Property or Sixty Million Dollars
($60,000,000), in the aggregate, with respect
to all of the Properties.
"Mortgage Loans" shall mean the loans secured by a Lien on any of
the
Properties and set forth in Section 5.8 of
the Contributors Disclosure
Schedules. Mortgage Loans shall not include
any loan secured by any property or
assets owned by a Specified Company or
Radnor Properties - 145 KOP, L.P.
"New Two Logan GP" shall have the meaning set forth in Section
2.2(d).
"New Two Logan LP" shall have the meaning set forth in Section
2.2(d).
"New Two Logan Transfer" shall have the meaning set forth in
Section
2.2(d).
"Non-Demanding Party" shall have the meaning set forth in Section
3.6.
"Objection Notice" shall have the meaning set forth in Section
3.6.
"Objection Period" shall have the meaning set forth in Section
3.6.
"One
Commerce Square" shall have the meaning set forth in Section
7.6.
"One Logan" shall have the meaning set forth in Section 2.4.
"OP Unit" shall mean Class A Units of the Operating Partnership
having
the terms set forth in the Partnership
Agreement.
"OP Unit Consideration" shall have the meaning set forth in
Section
2.2(b).
5
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"OP Unit Election" shall have the meaning set forth in Section
2.2(b).
"Operating Partnership" shall have the meaning set forth in the
Preamble.
"Operating Partnership Closing Documents" shall have the meaning
set
forth in Section 9.3.
"Operating Statements" shall have the meaning set forth in
Section
5.15.
"Outside Date" shall have the meaning set forth in Section
14.1(d).
"Partnership Agreement" shall mean the Amended and Restated
Agreement
of Limited Partnership of the Operating
Partnership dated as of November 18,
1997, as amended and supplemented prior to
the Closing, at Closing (pursuant to
the Thirteenth Amendment and the Fourteenth
Amendment) and from time to time
thereafter.
"Partnership Interests" shall have the meaning set forth in
Background
Section A.
"Payoff Loans" shall mean all of the Mortgage Loans specified
on
Section 5.8 of the Contributors Disclosure
Schedule as being a Payoff Loan,
provided that the Operating Partnership
shall have the option by giving written
notice to the Contributors no later than
five (5) Business Days after the date
of this Agreement of removing the Mortgage
Loans for any of the Properties
identified as 130/150/170 Radnor Financial
Center, Radnor Corporate Center and
One Logan Square as a Payoff Loan, in which
event Section 5.8 of the
Contributors Disclosure Schedule shall be
deemed amended thereby. All Payoff
Loans will be paid off in full immediately
after the Closing pursuant to Section
2.3.
"Permitted Liens" shall mean the following: (1) the lien of all
ad
valorem real estate taxes, lienable utility
services and assessments not yet due
and payable as of the Closing Date; (2)
federal, state, and local zoning and
building laws, ordinances and regulations;
(3) the matters shown on the title
reports described in Schedule 1.1(a) to
this Agreement; (4) the Leases
identified in Section 5.7 of the
Contributors Disclosure Schedule and such other
Leases as may be executed and delivered
after the date hereof in accordance with
the terms of this Agreement; (5) any matter
that would be shown on an accurate
title report of the Property, including,
without limitation, any such matters
appearing on Schedule B of the Operating
Partnership's title commitment for each
Property, (6) any matter that would be
shown on an accurate survey of the
Property, including, without limitation,
the Surveys, (7) Liens securing the
Mortgage Loans and (8) Liens securing any
indebtedness of (x) a Specified
Company or (y) Radnor Properties-145 KOP,
L.P., provided that the indebtedness
referred to in this clause (8) does not
encumber any of the Properties, the
Partnership Interests, the Subsidiary
Interests or TRCLP's direct or indirect
interests in the TLS Mortgages.
"Person" shall mean any natural person, corporation, general
partnership, limited partnership, limited
liability company, joint stock
company, joint venture, proprietorship,
trust, association, or other entity,
enterprise, authority or business
organization.
"Personalty" shall mean all machinery, fixtures, systems, equipment
and
other personal property, if any, owned or
leased by the Contributors, TRCLP,
TRCLP's Subsidiaries and/or any of their
Affiliates and attached or otherwise
located in or on and used exclusively in
connection with, any part or all of the
Properties, including, without limitation,
as of the Closing Date, all supplies,
brochures, tenant lists, correspondence and
files, vendor and supplier lists,
marketing and advertising information and
other materials and property in the
possession of and owned by the
Contributors, TRCLP, TRCLP's Subsidiaries and/or
any of their Affiliates, including leases
for space within the Properties as of
Closing, together with all security
deposits made thereunder (but excluding,
except for security deposits made under
such leases, subject to Article XI, all
cash and accounts receivable of the
Contributors, TRCLP and TRCLP's Subsidiaries
and all equipment, furniture, furnishings
and other property owned by the
property manager or leasing agent for the
Property or by any present or prior
tenant at the Property or by any other
person or persons other than the
Contributors, TRCLP, TRCLP's Subsidiaries
and/or any of their Affiliates).
Personalty shall not include any Excluded
Assets.
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<PAGE>
"Pre-Approved Leases" shall have the meaning set forth in Section
12.9.
"Preferred OP Units" shall have the meaning set forth in
Section
2.2(c).
"Pro Ration Date" shall have the meaning set forth in Section
11.1.
"Property" shall mean each real property held by TRCLP, its
Subsidiaries or other Persons, as listed on
Schedule 1.1(b).
"Property Employees" shall have the meaning set forth in
Section
12.7(a).
"Put-Call Interests" shall have the meaning set forth in
Section
4.1(a).
"Put-Call Price" shall mean Six Hundred Seventy Thousand
Dollars
($670,000), plus accrued interest at a rate
of eight percent (8%) per annum,
less any payments made to the Operating
Partnership with respect to the Put-Call
Interests prior to the Put Closing or the
Call Closing, as applicable.
"Put Closing" shall have the meaning set forth in Section
4.2(b).
"Put Notice" shall have the meaning set forth in Section
4.2(a).
"Put Party" shall have the meaning set forth in Section 4.2(a).
"REA Document" shall mean any reciprocal easement or similar
agreement
applicable to a Property owned by a
Subsidiary of TRCLP or by Two Logan LP and
appearing on a title report described in
Schedule 1.1(a).
"Recapitalization Agreement" shall mean that certain
Recapitalization
Agreement, dated as of June 18, 1996, among
Blackstone Real Estate Advisers
L.P., BRE/Logan I L.L.C., BRE/Logan II
L.L.C., BRE/TLS Inc., BREP/TLS L.L.C.,
Blackstone RE Capital Partners L.P., TLS
Equity Associates, on the one hand, and
Two Logan Square Associates, Two Logan Co.,
Inc., JMB/Urban Development
Partners, JMB Realty Corporation and
Osterview, Inc.
"REIT" shall mean Brandywine Realty Trust, a Maryland real
estate
investment trust.
"REIT Indemnified Parties" shall have the meaning set forth in
Section
15.2(a).
"Registration Rights Agreement" shall mean that certain
Registration
Rights Agreement to be entered into at
Closing by and among TRCALP, the
Operating Partnership and the REIT
substantially in the form of Exhibit A.
"Required Consents" shall mean the consents set forth in Schedule
7.4.
The Required Consent relating to any
Mortgage Loan shall include the execution
and delivery of a loan assumption agreement
by the borrower and the applicable
lender in substantially the forms set forth
in Exhibit I hereto or such other
form as may be reasonably acceptable to the
Operating Partnership and the
applicable lender which otherwise complies
with the terms of this Agreement.
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<PAGE>
"Retained Names" shall have the meaning set forth in Section
2.9.
"Specified Company" shall mean the Person(s) set forth on
Schedule
1.1(c), 11% of which as of the date hereof
are owned by TRCLP.
"Subsidiary" shall mean, with respect to any Person, a
partnership,
corporation, limited liability company,
trust or other entity of which such
Person is (1) the beneficial owner,
directly or indirectly, of a majority of the
ownership interests thereof and/or (2) a
general partner, managing member or
sole trustee, as applicable. For the
purposes of the definitions of "Leases" and
"Personalty", Sections 5.1(b), 5.7, 5.8,
5.9, 5.11, 5.16, 5.17, 5.18, 5.19,
5.20, 5.21, 5.22, 5.23, 5.26, 5.27, 5.28,
5.29, 5.30, 5.32, 8.8, 8.9, 9.2(j),
9.2(k), 12.4, 12.5, 12.6 and 12.9 and
Article XI only, Subsidiary shall include
Two Logan LP.
"Subsidiary Interests" shall have the meaning set forth in Section
5.3.
"Surveys" shall mean each of the surveys of the Properties set
forth in
Section 5.24 of the Contributors Disclosure
Schedule.
"S-X Materials" shall have the meaning set forth in Section
8.7.
"Tax Protection Agreement" shall mean that certain Tax
Protection
Agreement to be entered into at Closing by
and among TRCALP, the REIT, the
Operating Partnership and the other parties
named therein, which Agreement shall
be in the form of Exhibit B hereto.
"Tenant Inducement Costs" shall mean any payments required under
a
Lease to be paid by, or on behalf of, the
landlord thereunder to or for the
benefit of the tenant thereunder which is
in the nature of a tenant inducement,
including specifically, but without
limitation, tenant improvement costs, lease
buyout costs and moving, design,
refurbishment and other allowances for tenants.
"Third Party Claim" shall have the meaning set forth in Section
15.5(a).
"Thirteenth Amendment" shall have the meaning set forth in Section
2.5.
"Threshold" shall have the meaning set forth in Section
15.2(a).
"TLS Mortgages" shall have the meaning set forth in Section
5.25.
"Total Cash Consideration" shall mean the Contribution Price less
the
sum of (A) Sixty-Five Million Dollars
($65,000,000), (B) the outstanding
principal balance of the Mortgage Loans as
of the Closing and (C) the aggregate
value of the OP Unit Consideration
specified in the OP Unit Election.
"TRC-GP" shall have the meaning set forth in the Preamble.
"TRC-GP Cash Consideration" shall mean Two Thousand Dollars
($2,000).
"TRCALP" shall have the meaning set forth in the Preamble.
"TRCALP Cash Consideration" shall have the meaning set forth in
Section
2.2(a).
"TRCLP" shall have the meaning set forth in the Preamble
Background
Section A.
"TRCLP Partnership Agreement" shall mean that certain Amended
and
Restated Agreement of Limited Partnership
dated as of May 3, 2004 by and among
TRC-GP, LB and TRCALP.
8
<PAGE>
"Treasury Regulations" shall mean Income Tax Regulations,
including
Temporary Regulations, promulgated under
the Code, as such Treasury Regulations
may be amended from time to time.
"Two Logan LP" shall have the meaning set forth in Section
2.2(d).
"Two Logan Retained Interests" shall have the meaning set forth
in
Section 2.2(d).
"Two Logan Transferee" shall have the meaning set forth in
Section
2.2(d).
1.2. GENERAL DEFINITIONAL PROVISIONS. Unless the context of
this
Agreement otherwise requires: (1) words of
any gender are deemed to include each
other gender; (2) words using the singular
or plural number also include the
plural or singular number, respectively;
(3) the terms "hereof", "herein",
"hereby", "hereto", and derivative or
similar words, refer to this entire
Agreement; (4) the terms "Section" or
"subsection" refer to the specified
Section or subsection of this Agreement;
(5) the term "party" means, on the one
hand, one or more of the Contributors and,
on the other hand, the Operating
Partnership and/or the REIT, as applicable,
and each of their respective
successors and permitted assigns; (6) as
used herein, the "execution date" of
this Agreement or "date" of this Agreement
will in each case mean and be deemed
to be the date set forth in the Preamble;
(7) all references to "dollars" or "$"
refer to currency of the United States of
America; (8) accounting terms not
otherwise defined herein have the meanings
assigned to them in accordance with
generally accepted accounting principles;
and (9) the terms "include" or
"including" will mean without limitation by
reason of enumeration.
ARTICLE II
CONTRIBUTION; CONSIDERATION
2.1. CONTRIBUTION OF THE PARTNERSHIP INTERESTS. The Contributors
shall
assign, transfer and contribute the
Partnership Interests, free and clear of all
Liens to the Operating Partnership at the
Closing as a contribution to the
Operating Partnership.
2.2. PAYMENT OF THE CONTRIBUTION CONSIDERATION.
(a) On the Closing Date, the Operating Partnership shall pay
to (i) TRCALP an amount equal to the
difference between (x) the Total Cash
Consideration and (y) the sum of (A) the LB
Cash Consideration, and (B) the
TRC-GP Cash Consideration (such difference,
the "TRCALP Cash Consideration"),
(ii) TRCALP an amount equal to the
Alternate Cash Consideration (if any), (iii)
LB an amount equal to the LB Cash
Consideration and (iv) TRC-GP an amount equal
to the TRC-GP Cash Consideration. The
TRCALP Cash Consideration, the Alternate
Cash Consideration (if any), the LB Cash
Consideration and the TRC-GP Cash
Consideration shall be paid in cash by wire
transfer of immediately available
federal funds to the accounts designated by
the Contributors and in accordance
with the instructions set forth on Schedule
A. Subject to the pro ration of the
distribution on the OP Units for the
quarter in which such OP Units are issued,
as provided in the Thirteenth Amendment,
each OP Unit shall be entitled, while
such OP Unit remains outstanding, to a
distribution equal to the amount of the
distribution payable by the REIT on a
Common Share.
(b) At the option of TRCALP, on the Closing Date up to Ten
Million Dollars ($10,000,000) of the
Contribution Consideration shall be paid to
TRCALP in OP Units (the "OP Unit
Consideration") by the Operating Partnership.
TRCALP shall notify the Operating
Partnership no later than five (5) Business
Days prior to the Closing Date if it elects
to exercise the option to receive
the OP Unit Consideration (the "OP Unit
Election"). Such notice shall specify
the aggregate value of the OP Unit
Consideration. Each such OP Unit shall be
valued at an amount equal to the arithmetic
average of the daily closing sale
price per Common Share, as reported on the
New York Stock Exchange for the ten
(10) trading days ending on and including
the second (2nd) Business Day prior to
the Closing Date.
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<PAGE>
(c) On the Closing Date, the Operating Partnership shall
deliver to TRCALP (a) Series F-1 Preferred
OP Units with an aggregate stated
value equal to Ten Million Dollars
($10,000,000), (b) Series F-2 Preferred OP
Units with an aggregate stated value equal
to Twenty Million Dollars
($20,000,000) and (c) Series F-3 Preferred
OP Units with an aggregate stated
value equal to Thirty-Five Million Dollars
($35,000,000) (collectively, the
"Preferred OP Units"), in each case having
the terms set forth in the
designation attached as Exhibit C.
Notwithstanding the foregoing, the Operating
Partnership may elect to pay to TRCALP in
the manner provided in Section 2.2(a)
the sum of Fifty-Five Million ($55,000,000)
at the Closing in lieu of issuing
any Preferred OP Units (the "Alternate Cash
Consideration").
(d) On or prior to the Closing, the Contributors shall cause
(a) Two Logan Co., Inc. to contribute its
general partnership interest in Two
Logan Square Associates ("Two Logan LP") to
a newly formed wholly-owned limited
liability company (the "New Two Logan GP")
and (b) TLS Equity Associates-II to
contribute its limited partnership interest
in Two Logan LP to a newly formed
wholly-owned limited liability company or
limited partnership ("New Two Logan
LP"). The contributions described in
clauses (a) and (b) of the preceding
sentence are referred to collectively as
the "New Two Logan Transfer". On the
Closing Date, the Contributors shall cause
to be transferred to a newly-formed
limited partnership (the "Two Logan
Transferee") which shall be under the
exclusive control of the Operating
Partnership, equity interests in New Two
Logan GP and New Two Logan LP representing
seventy-nine percent (79%) of the
equity interests of each such entity in
exchange for limited partnership
interests in the Two Logan Transferee
representing 90% of the ownership (and
notwithstanding the issuance of such 90%
interest to Two Logan Co., Inc. and TLS
Equity Associates-II, the Two Logan
Transferee shall be afforded all of the
rights of a sole general partner of a
limited partnership with respect to New
Two Logan GP and New Two Logan LP),
provided that, after the Closing, the
Operating Partnership agrees that it shall
cause such equity interests to be
held in a manner that is consistent with
the transaction structure contemplated
by this Agreement so as not to violate the
Recapitalization Agreement. The
twenty-one percent (21%) of the equity
interests of New Two Logan GP and New Two
Logan LP that will not be transferred shall
be referred to as the "Two Logan
Retained Interests." Nothing in this
Section 2.2(d) shall be deemed or construed
to limit Contributors' representations and
warranties in Section 5.31. The
Contributors and the Operating Partnership
agree that any built-in taxable gain
(which is defined in this section to be the
difference between the agreed upon
fair market value of the property and its
tax basis at the date of contribution)
on Two Logan LP that is allocable, directly
or indirectly, to the Two Logan
Transferee, shall be allocated to Two Logan
Co., Inc. and TLS Equity
Associates-II. Such allocation provision
will be included in the tax allocation
section of the partnership agreement of the
Two Logan Transferee.
(e) The TRCALP Cash Consideration and Alternate Cash
Consideration (if any) payable to TRCALP at
Closing, as well as any proceeds to
be used to redeem the Preferred OP Units
after Closing, to the extent
applicable, (such proceeds used to redeem
the Preferred OP Units are referred to
as the "Deferred Payments"), shall be
comprised of, treated as and funded from
the proceeds of Incurred Indebtedness and
which, at the option of TRCALP, will
be guaranteed by TRCALP, pursuant to and as
more completely set forth in the Tax
Protection Agreement and Section 2.10
hereof and the terms of which are
reasonably acceptable to TRCALP (subject to
finalization with reasonable
modifications approved by TRCALP). TRCALP
shall have the right to approve in its
reasonable discretion any indebtedness
which is intended to be treated as
Incurred Indebtedness and the proceeds of
which shall be used to pay the TRCALP
Cash Consideration, the Alternate Cash
Consideration or the Deferred Payments.
Without limiting the Operating
Partnership's alternatives, possible indebtedness
which may constitute Incurred Indebtedness
may be derived from (i) a public
offering of debt on an unsecured basis
which is recourse to all of the assets of
the Operating Partnership with a term of
five years, (ii) a private placement of
debt on an unsecured basis which is
recourse to all of the assets of the
Operating Partnership with a term of five
years or (iii) a secured financing
which is guaranteed by, or an obligation
of, the Operating Partnership which in
either case is recourse to all of the
assets of the Operating Partnership with a
term of not less than four years. Without
limiting the bases for a reasonable
objection by TRCALP, (1) an objection as to
the tax treatment of such
transaction shall be deemed to be
reasonable if based on the inability of Wolf,
Block, Schorr and Solis Cohen LLP to
provide an opinion to TRCALP that such
indebtedness should qualify as Incurred
Indebtedness under the Tax Protection
Agreement and that satisfies the
requirements of Treasury Regulation
Section 1.707-5(b) so that all of the
distribution traceable to the Incurred
Indebtedness is characterized as a
debt-financed distribution that is not taken
into account as part of a "disguised sale"
of the Property or the Partnership
Interests, and (2) an objection to the
non-tax terms of such transaction shall
be deemed to be reasonable if the
incurrence or offering (including a subsequent
exchange offer for any private placement
debt) of such indebtedness would
require or could result in public
disclosure of any personal financial
information of any direct or indirect
owners of TRCALP.
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<PAGE>
(f) In the event that the Operating Partnership elects to pay
TRCALP the Alternate Cash Consideration,
ten (10) days after the date (such
date, the "Lease Up Date") that at least
95% of the rentable square footage at
130/150/170 Radnor Financial Center, 201
Radnor Financial Center and 555 Radnor
Financial Center (collectively, the "Lease
Up Properties") are occupied by
tenants paying rent, the Operating
Partnership shall issue additional
consideration to TRCALP in the form of OP
Units having an aggregate value equal
to figure corresponding to Lease Up Date on
Schedule 2.2(f). Each such OP Unit
shall be valued at an amount equal to the
arithmetic average of the daily
closing sale price per Common Share, as
reported on the New York Stock Exchange
for the ten (10) trading days ending on and
including the second (2nd) Business
Day prior to the Lease Up Date.
2.3. PREPAYMENT OF LOANS; RELEASE OF GUARANTORS. Immediately after
the
Closing, the Operating Partnership shall
cause and be responsible for the
payment of the outstanding principal amount
of the Payoff Loans, together with
any prepayment penalties or other fees due
under the applicable Loan Documents
as a result of such prepayment, to be paid
to the lenders under such Payoff
Loans in full satisfaction thereof;
provided, however, that the Contributors
shall be responsible for the payment of any
interest payable in respect of such
loans accrued through the Closing Date in
the manner provided in Article XI. The
Operating Partnership shall use its
commercially reasonable efforts to cause the
Lenders to unconditionally release any
guarantors (other than TRCLP or any of
its Subsidiaries) of any Mortgage Loan, but
in no event shall the Operating
Partnership be required to indemnify any
Contributor or any Lender with respect
to liabilities relating to the pre-Closing
period.
2.4. PAYMENT OF EXPENSES. In addition to the contributions and
payments
described in Sections 2.1, 2.2 and 2.3: (a)
except as otherwise provided below,
each party shall pay its respective legal
fees and expenses incurred in
connection with this Agreement and the
transactions contemplated hereby, (b)(i)
the Contributors on the one hand and the
Operating Partnership on the other hand
shall each pay one-half (1/2) of any
transfer taxes due based on the events
contemplated at Closing (other than with
respect to the transfer taxes caused by
the events contemplated at Closing with
respect to the Property located at One
Logan Square, Philadelphia, Pennsylvania,
which shall be referred to herein as
"One Logan"), unless one of the parties
takes (x) an action outside of the
structure provided for in this Agreement to
consummate the Closing or (y) any
other action after the Closing, where in
each case such action causes a transfer
tax to be due, in which case the party
taking such action will be fully
responsible for such transfer tax and costs
and expenses relating thereto and
shall indemnify the other parties hereto
for all such taxes and costs and
expenses, and (ii) with respect to One
Logan, the Operating Partnership shall
pay fifteen percent (15%), and TRCALP shall
pay eighty-five percent (85%), of
any transfer taxes, if any (with TRCALP
handling the administration and defense
of such matter, the Operating Partnership
reasonably cooperating in respect
thereof, and TRCALP being responsible for
the expense of handling such
administration and defense), (c) the
Operating Partnership shall be responsible
for the costs associated with (i) assuming
and/or discharging any Liens, (ii)
any fees, penalties, or other costs
incurred in connection with the Mortgage
Loans or for satisfying the Payoff Loans,
provided, however, that the
Contributors shall be responsible for the
payment of any interest payable in
respect of such Mortgage Loans accrued
through the Closing Date in the manner
provided in Article XI, (iii) title
insurance costs, (iv) survey costs and (v)
all other due diligence costs incurred by
Operating Partnership and/or the REIT,
including the cost of obtaining
environmental reports and engineering reports,
and (d) the Operating Partnership shall
reimburse the Contributors for any
reasonable costs paid to unaffiliated third
parties to cause the Financial
Statements and the Operating Statements to
fulfill the requirement of Rule 3-14
of Regulation S-X and in preparing and
delivering the form of management
representation letter to the Operating
Partnership's auditors, whether incurred
prior to or after Closing.
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<PAGE>
2.5. ADMISSION TO PARTNERSHIP. At the Closing, the Operating
Partnership shall deliver to TRCALP a
certificate representing the OP Units for
which an election has been made pursuant to
Section 2.2(b) and Preferred OP
Units (the latter to be consistent with the
terms of Exhibit C) to be issued (if
any) to TRCALP pursuant hereto, and TRCALP
shall execute and deliver to the
Operating Partnership and the Operating
Partnership shall cause the REIT to
execute and deliver the amendment to the
Partnership Agreement in the form set
forth on Exhibit D (the "Thirteenth
Amendment") and the Fourteenth Amendment, to
the extent applicable.
2.6. EXCLUDED ASSETS. Prior to the Closing, the Contributors
shall
cause the assets and properties (or the
entities owning the properties) listed
on Schedule 2.6 to be transferred from
TRCLP to an Affiliate of the Contributors
that is not a Subsidiary of TRCLP (the
"Excluded Assets").
2.7. REDEMPTION OF PARTNERSHIP INTERESTS IN TWO LOGAN TRANSFEREE.
If
the Operating Partnership desires to cause
the redemption of the partnership
interests in the Two Logan Transferee,
which were issued to Two Logan Co., Inc.
and TLS Equity Associates-II pursuant to
Section 2.2(d), at any time after the
eighth (8th) anniversary of the Closing
Date, the Operating Partnership shall
have the option to cause the redemption of
such partnership interests in the Two
Logan Transferee by providing to Two Logan
Co., Inc. and TLS Equity
Associates-II an interest in a real
property (which real property, and the terms
of the transfer and the ownership of such
real property, being acceptable to the
Contributors in their sole discretion), and
which real property shall be
encumbered by sufficient indebtedness to
cause Two Logan Co., Inc. and TLS
Equity Associates-II to not recognize gain
or income in connection with such
redemption.
2.8. 200 RADNOR OPTION. The Contributors hereby grant the
Operating
Partnership the option to acquire the
property located at 200 North Radnor
Chester Road, Radnor, Pennsylvania ("200
Radnor") pursuant and subject to the
terms of this Section 2.8. If and only if
the Contributors choose to redevelop
200 Radnor for office use (such not to
include a sale to an "owner occupier" or
"owner occupiers"; provided that such owner
occupier or owner occupiers occupy
substantially all of the rentable space at
200 Radnor), the Contributors shall
provide the Operating Partnership with
written notice that it intends to
redevelop 200 Radnor for office use and the
Operating Partnership shall be
entitled to exercise such option upon the
terms set forth in this Section 2.8.
Such notice shall state whether the
Contributors (i) have received any notices
from any Governmental Authorities or other
third parties relating to 200 Radnor
which indicates a material adverse
condition (i.e., title, environmental, etc.)
at 200 Radnor from and after the Closing
Date (with copies of such notices to be
enclosed with the Contributors' notice to
the Operating Partnership) and (ii)
otherwise have actual knowledge of any
information which would be reasonably
likely to cause the representations and
warranties contained in this Agreement
to be untrue or incorrect in any material
respect with respect to 200 Radnor (as
if such representation or warranty were
made with respect to 200 Radnor as of
the date of such notice). If the Operating
Partnership elects to exercise its
option to acquire 200 Radnor, it shall
provide a notice of such election within
twenty (20) days of its receipt of the
Contributors' notice, which shall include
the Operating Partnership's unconditional
undertaking to pay an amount equal to
One Million Six Hundred Thousand Dollars
($1,600,000) as payment in full for 200
Radnor plus any costs and expenses of
transferring 200 Radnor to the Operating
Partnership and closing shall occur within
twenty (20) days after the Operating
Partnership's election notice. At such
closing, the Contributors will convey 200
Radnor to the Operating Partnership or its
designee free and clear of all
monetary Liens and non-monetary Liens that
would be materially adverse to 200
Radnor, other than Permitted Liens. The
Operating Partnership shall not be
required to complete the purchase of 200
Radnor if a material adverse condition,
matter or defect that was not disclosed to
the Operating Partnership as of the
Closing Date is noted on an updated title
report or property survey obtained by
the Operating Partnership after the Closing
Date. The twenty (20) day period for
closing shall be extended by a reasonable
number of days to allow the Operating
Partnership to obtain a title report or
property survey with respect to 200
Radnor. If, and to the extent that, the
Operating Partnership agrees to accept
title to 200 Radnor subject to any monetary
Lien that secures indebtedness of
the Contributors or any other Person, the
amount of such the indebtedness shall
be credited against the One Million Six
Hundred Thousand ($1,600,000) purchase
price. If the Operating Partnership elects
not to exercise such option and,
thereafter, the Contributors do not develop
200 Radnor for office use within the
next eighteen (18) months, the Operating
Partnership's rights under this Section
2.8 will once again be applicable. Nothing
in this Section 2.8 shall require the
Contributors to redevelop 200 Radnor in any
way, and if the Contributors elect
to redevelop 200 Radnor for a use other
than office use (other than owner
occupiers) or elect not to redevelop 200
Radnor at all, the Operating
Partnership shall not have the right to
exercise the foregoing option. This
option shall expire and terminate upon any
transfer of 200 Radnor to any
third-party that is not affiliated with the
Contributors. The Operating
Partnership agrees not to take, and shall
cause its Affiliates not to take, any
action that could adversely effect any
efforts of the Contributors or their
Affiliates to obtain variances or other
zoning relief, change or action
contemplated with respect to 200
Radnor.
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<PAGE>
2.9. NAME CHANGE. The Operating Partnership and the REIT
acknowledge
that TRC-GP and TRCALP shall retain any and
all rights to the names "The
Rubenstein Company, L.P.", "Rubenstein",
"TRC", "TRCLP" or words of similar
import (collectively, the "Retained Names")
and that neither the Operating
Partnership nor the REIT is acquiring any
interest therein. The Retained Names
shall include internet domain names derived
therefrom. Immediately after the
Closing, the Operating Partnership shall
cause the name of TRCLP to be changed
from "The Rubenstein Company, L.P." and
cause the name of any Subsidiary
containing a Retained Name to be changed so
that it shall no longer contain such
Retained Name. Further, the Operating
Partnership and the REIT agree not to use
any Retained Name with respect to any of
their properties, subsidiaries or
affiliates.
2.10. TAX PROTECTION AGREEMENT. TRCALP and the Operating
Partnership
and the REIT and the other parties thereto
have acknowledged and agreed to
certain structuring issues and treatments
of distributions and certain other
tax-related treatments and undertakings,
all as more completely set forth and
reflected in the Tax Protection Agreement
and as follows:
(a) TRCALP shall have the right to specify that all or some
portion of the TRCALP Cash Consideration,
the Alternate Cash Consideration (if
any) and the Deferred Payments shall be
accounted for by the parties hereto as a
"debt-financed distribution" (within the
meaning of Treasury Regulation
ss.1.707-5(b)).
(b) To the extent that all or any portion of the TRCALP Cash
Consideration, Alternate Cash Consideration
(if any) or the Deferred Payments is
specified as constituting a "debt-financed
distribution" (within the meaning of
Treasury Regulation ss.1.707-5(b)), the
Operating Partnership shall: (i) comply
with the provisions of the Tax Protection
Agreement and (ii) incur indebtedness
that meets the characteristics of Incurred
Indebtedness (as defined in the Tax
Protection Agreement) and that satisfies
the requirements of Treasury Regulation
ss.1.707-5(b) so that in the judgment of
TRCALP all of the distribution
traceable to the Incurred Indebtedness is
characterized as a debt-financed
distribution that is not taken into account
as part of a "disguised sale" of the
Property or the Partnership Interests.
2.11. EQUITABLE ASSIGNMENT. Notwithstanding anything to the
contrary
contained in this Agreement, to the extent
that the assignment or transfer to
the Operating Partnership, as contemplated
hereunder, of any of the Personalty
associated with the Properties would
require the consent of any third party
(other than the Required Consents) and such
consent shall not have been obtained
prior to the Closing (a "Delayed Consent"),
this Agreement shall not constitute
a contribution, assignment or transfer
thereof. Following the Closing, the
parties shall use reasonable efforts, and
shall cooperate with each other, to
obtain promptly the Delayed Consents;
provided that all reasonable out-of-pocket
expenses incurred in connection with
obtaining such Delayed Consents shall be
borne equally by the Operating Partnership,
on the one hand, and TRCALP, on the
other hand. Pending receipt of the Delayed
Consents, the parties hereto shall
cooperate with each other in any reasonable
and lawful arrangements, effectively
transferring to the Operating Partnership,
from and after the Closing, the
rights and benefits of, and entitlements to
exercise TRCLP's or the
Contributors' rights under, and effectively
causing the Operating Partnership to
assume all liabilities and expenses with
respect to, such Personalty as if such
assets had been transferred by the
Contributors to the Operating Partnership at
the Closing and any liabilities associated
with the arrangements specifically
established by the Operating Partnership
and Contributors pursuant to this
Section 2.11. Once any Delayed Consent is
obtained, the Contributors shall
assign such Personalty to the Operating
Partnership at the expense of the
Operating Partnership and TRCALP, with the
Operating Partnership, on the one
hand, and the Contributors, on the other
hand, jointly and equally responsible
for all reasonable out-of-pocket costs
associated with such transfer; provided
that no additional consideration shall be
paid by the Operating Partnership to
the Contributors in connection
therewith.
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<PAGE>
2.12. CHARACTERIZATION OF SALE OF INTEREST OF LB IN TRCLP. The
parties
hereto intend that the sale by LB of its
Partnership Interest in TRCLP shall be
treated as a purchase of such Partnership
Interest by the Operating Partnership.
LB consents to treat the sale of its
Partnership Interest in exchange for the LB
Cash Consideration as a sale of its
Partnership Interest in TRCLP under Section
741 of the Code, as provided in Treasury
Regulation Section 1.708-1(c)(4).
ARTICLE III
DEPOSIT; ESCROW
3.1. DEPOSIT. As a good faith deposit to the Operating
Partnership's
obligations hereunder, the Operating
Partnership shall, no later than 12:00 p.m.
on the next succeeding Business Day after
the date of this Agreement, make a
deposit and down payment (the "Deposit") of
cash in the amount of Thirty Million
Dollars ($30,000,000). The Deposit shall be
made by wire transfer of immediately
available federal funds to the escrow
account of Escrow Agent, wiring
instructions for which having been
separately given by the Escrow Agent to the
Operating Partnership.
3.2. ESCROW AGENT. The Deposit has been deposited by the
Operating
Partnership with, and shall be held in
escrow by, the Escrow Agent.
3.3. APPLICATION OF ESCROW FUNDS. The parties and the Escrow
Agent
agree that the Deposit, together with all
interest earned thereon (the Deposit,
together with all interest earned thereon,
are referred to herein together as
the "Escrow Funds"), shall be applied as
follows:
(a) If Closing is held, the Escrow Funds shall be paid over to
the Operating Partnership.
(b) If this Agreement is terminated by the Contributors
pursuant to Section 14.1(c), the Escrow
Funds shall be paid over to TRCALP as
liquidated damages.
(c) If this Agreement is terminated pursuant to Section 14.1
(other than Section 14.1(c)), the Escrow
Funds shall be paid over to the
Operating Partnership.
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<PAGE>
3.4. MANNER OF HOLDING. The Escrow Funds shall be held in an
interest
bearing money-market account with a
federally insured national or
state-chartered bank, savings bank, or
savings and loan association acceptable
to and first approved by the Contributors
and the Operating Partnership. The
Operating Partnership shall provide a
completed and executed W-9 form to the
Escrow Agent.
3.5. LIMITATION OF LIABILITY. The Escrow Agent and its officers
and
employees are acting as agents only, and
will in no case be held liable either
jointly or severally to any party for the
performance of any term or covenant of
this Agreement or for damages for the
nonperformance hereof, nor shall the
Escrow Agent be required or obligated to
determine any questions of fact or law.
The Escrow Agent's only responsibility
hereunder shall be for the safekeeping of
the Escrow Funds and the full and faithful
performance by the Escrow Agent of
the duties imposed by this Article III.
3.6. CONFLICTING DEMANDS. Upon receipt of a written demand for
the
Escrow Funds (a "Deposit Demand") by the
Contributors or the Operating
Partnership (the "Demanding Party"), the
Escrow Agent shall promptly send a copy
of such Deposit Demand to the other
part(ies) (the "Non-Demanding Party"). The
Escrow Agent shall hold the Escrow Funds
for three (3) Business Days from the
date of delivery by the Escrow Agent of the
Deposit Demand to the Non-Demanding
Party (the "Objection Period") or until the
Escrow Agent receives a confirming
instruction from the Non-Demanding Party.
In the event the Non-Demanding Party
delivers to the Escrow Agent written
objection to the release of the Escrow
Funds to the Demanding Party (an "Objection
Notice") within the Objection Period
(which Objection Notice shall set forth the
basis under this Agreement for
objecting to the release of the Escrow
Funds), the Escrow Agent shall promptly
send a copy of the Objection Notice to the
Demanding Party. In the event that no
Objection Notice is received by the Escrow
Agent within the Objection Period,
the Escrow Agent shall promptly release the
Escrow Funds to the Demanding Party
in accordance with the Deposit Demand. In
the event an Objection Notice is
received by the Escrow Agent within the
Objection Period, the Escrow Agent, in
its good faith business judgment, may
disregard all inconsistent instructions
received from either party and may either
(1) hold the Escrow Funds until the
dispute is mutually resolved and the Escrow
Agent is advised of such mutual
resolution in writing by both the
Contributors and the Operating Partnership, or
the Escrow Agent is otherwise instructed by
a final, non-appealable judgment of
a court of competent jurisdiction, or (2)
deposit the Escrow Funds with a court
of competent jurisdiction by an action of
interpleader (whereupon the Escrow
Agent shall be released and relieved of any
further liability or obligations
hereunder from and after the date of such
deposit). In the event the Escrow
Agent shall in good faith be uncertain as
to its duties or obligations hereunder
or shall receive conflicting instructions,
claims or demands from the parties
hereto, the Escrow Agent shall promptly
notify both parties in writing and
thereafter the Escrow Agent shall be
entitled (but not obligated) to refrain
from taking any action other than (a) to
perform its duties under Sections 3.2
and 3.4 above, and (b) to keep safely the
Escrow Funds until the Escrow Agent
shall receive a joint instruction form both
parties clarifying the Escrow
Agent's uncertainty or resolving such
conflicting instructions, claims or
demands, or until a final non-appealable
judgment of a court of competent
jurisdiction instructs the Escrow Agent to
act.
15
<PAGE>
3.7. SUBSTITUTION OF LETTER OF CREDIT. In lieu of depositing the
Escrow
Funds with the Escrow Agent, the Operating
Partnership shall have the option of
providing to the Contributors coincident
with its execution of this Agreement a
letter of credit in an amount of Thirty
Million Dollars ($30,000,000) (and
otherwise in form and substance reasonably
satisfactory to the Contributors)
from an Approved Bank, the terms of which
will permit TRCALP to unconditionally
draw upon such letter of credit under those
circumstances in which (i) TRCALP
would be entitled to the Escrow Funds
pursuant to this Article III or, (ii) in
the event that the letter of credit (in
form and substance reasonably
satisfactory to the Contributors) has not
been replaced with a substitute letter
of credit at least ten (10) Business Days
prior to the expiration of the
then-existing letter of credit (and, in the
event of any draw pursuant to this
clause (ii), the proceeds shall constitute
the Escrow Funds and shall be held
and disbursed in accordance with the
provisions of this Article III).
ARTICLE IV
PUT AND CALL RIGHTS
4.1. PURCHASE RIGHTS.
(a) At any time after the third anniversary of the Closing
Date, TRCALP (or its assignee or designee)
shall have the right (the "Call
Right") to irrevocably exercise a right to
purchase all but not less than all of
the partnership interests (the "Put-Call
Interests") then held, directly or
indirectly, by the Operating Partnership in
the Specified Company, for cash in
an amount equal to the Put-Call Price;
provided that TRCALP may assign to one or
more parties the Call Right (TRCALP and any
such parties to whom the Call Right
is assigned being collectively referred to
as the "Call Party"), but no such
assignment shall release the Operating
Partnership from any of its obligations
pursuant to this Section 4.1; provided
further that if TRCALP assigns the Call
Right as provided above, TRCALP shall be
responsible for and indemnify the
Operating Partnership for any additional
transfer taxes or any increase in the
transfer taxes that would have been
payable, but for such transfer. The Call
Party may exercise its purchase rights by
providing written notice to the
Operating Partnership of its desire to do
so (a "Call Notice"). The Operating
Partnership shall, within five (5) Business
Days after receipt of the Call
Notice, take all necessary action and
execute all appropriate documents to
evidence the conveyance of the Put-Call
Interests to the Call Party, free and
clear of any security interests, liens,
encumbrances or restrictions that did
not exist as of the Closing Date, but
otherwise without any representation,
warranty or recourse whatsoever, and
deliver the same to the Call Party
concurrently with the delivery by the Call
Party of the Put-Call Price in
immediately available funds.
(b) No transfer of the Put-Call Interests by the Operating
Partnership shall be permitted. The Call
Right shall survive any Transfer or
purported Transfer of any of the Put-Call
Interests.
(c) The consummation of the purchase and sale of the Put-Call
Interests pursuant to this Section 4.1
shall occur at the offices of the
Operating Partnership within five (5)
Business Days after the giving of the Call
Notice, or at such other time and place as
may be agreed to by the Call Party
and the Operating Partnership (the "Call
Closing"). At the Call Closing, the
Operating Partnership shall deliver to the
Call Party a duly executed assignment
of the Put-Call Interests, free and clear
of any security interests, liens,
encumbrances or restrictions that did not
exist as of the Closing Date, but
otherwise without any representation,
warranty or recourse whatsoever, and the
Call Party shall deliver to the Operating
Partnership cash in an amount equal to
the Put-Call Price in immediately available
funds. The Call Party and the
Operating Partnership each shall execute
and deliver such other documents as may
reasonably be requested by the other party
in connection with the Call Closing.
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<PAGE>
(d) As security for the Operating Partnership's obligations
under this Section 4.1 and Section 4.2 to
convey the Put-Call Interests to the
Call Party free and clear of any security
interests, liens, encumbrances or
restrictions that did not exist as of the
Closing Date, the Operating
Partnership hereby pledges and irrevocably
grants in favor of TRCALP a first
priority perfected security interest in the
Put-Call Interests. The Operating
Partnership shall take any and all action
reasonably requested by TRCALP, and
consents to TRCALP taking any and all
action it deems necessary, including
without limitation, the filing of UCC-1
financing statements, to perfect its
security interest in the Put-Call
Interests. TRCALP may assign such security
interest to any Call Party.
(e) Notwithstanding anything contained in this Section 4.1 to
the contrary, TRCALP may exercise the Call
Right prior to the third anniversary
of the Closing Date, but in such event
TRCALP will be responsible for and
indemnify the Operating Partnership for any
and all transfer taxes then due and
payable as a result thereof.
4.2. PUT RIGHTS.
(a) At any time after the third anniversary of the Closing
Date, the Operating Partnership shall have
the right to irrevocably exercise its
right to cause TRCALP (or its assignee or
designee) to purchase all but not less
than all of the Put-Call Interests for cash
in an amount equal to the Put-Call
Price; provided that TRCALP may delegate to
one or more parties the obligation
to purchase the Put-Call Interests (TRCALP
any such parties to whom the
obligation to purchase the Put-Call
Interests is delegated being collectively
referred to as the "Put Party"), but no
such assignment shall release TRCALP
from any of its obligations pursuant to
this Section 4.2. The Operating
Partnership may exercise its put rights by
providing written notice to the Put
Party of its desire to do so (a "Put
Notice"). The Operating Partnership shall,
within five (5) Business Days after
delivering the Put Notice, take all
necessary action and execute all
appropriate documents to evidence the
conveyance of the Put-Call Interests to the
Put Party, free and clear of any
security interests, liens, encumbrances or
restrictions that did not exist as of
the Closing Date, but otherwise without any
representation, warranty or recourse
whatsoever, and deliver the same to the Put
Party concurrently with the delivery
by the Put Party of the Put Price in
immediately available funds.
(b) The consummation of the purchase and sale of the Put-Call
Interests pursuant to this Section 4.2
shall occur at the offices of the
Operating Partnership within five (5)
Business Days after the giving of the Put
Notice, or at such other time and place as
may be agreed to by the Put Party and
the Operating Partnership (the "Put
Closing"). At the Put Closing, the Operating
Partnership shall deliver to the Put Party
a duly executed assignment of the
Put-Call Interests, free and clear of any
security interests, liens,
encumbrances or restrictions that did not
exist as of the Closing Date, but
otherwise without any representation,
warranty or recourse whatsoever, and the
Put Party shall deliver to the Operating
Partnership cash in an amount equal to
the Put-Call Price in immediately available
funds. The Put Party and the
Operating Partnership each shall execute
and deliver such other documents as may
reasonably be requested by the other party
in connection with the Put Closing.
(c) On the Closing Date, the Contributors shall pledge OP
Units having a value as of the Closing Date
equal to Six Hundred Seventy
Thousand Dollars ($670,000) to the
Operating Partnership as security for the
obligations of the Contributors under this
Article IV. Such security interest
shall terminate upon the consummation of
the purchase and sale of the Put-Call
Interests pursuant to this Article IV.
17
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
Except as set forth in Section 17.3 and the disclosure
schedules
delivered to the Operating Partnership
concurrently herewith (together, the
"Contributors Disclosure Schedule"), each
of TRC-GP and TRCALP, severally and
jointly, and LB, severally and not jointly,
represents and warrants to the
Operating Partnership as follows, provided
that as to any representation or
warranty relating to a Contributor, TRC-GP
and TRCALP are making such
representations and warranties as to
themselves and not as to LB, and LB is only
making the representations and warranties
set forth in this Article V as to
itself, and not as to any other
Contributor, TRCLP, its Subsidiaries, Two Logan
LP or the Properties:
5.1. ORGANIZATION, POWER AND AUTHORITY.
(a) TRCLP is a limited partnership duly formed, validly
existing and in good standing under the
laws of the State of Delaware. TRCLP is
duly qualified, licensed or admitted to do
business and is in good standing in
those jurisdictions in which the ownership,
use, or leasing of its assets and
properties, or the conduct or nature of its
business makes such qualification,
licensing or admission necessary, except
for failure to be so qualified,
licensed or admitted and in good standing
that individually or in the aggregate
would not reasonably be expected to have a
Material Adverse Effect on TRCLP.
True, correct and complete copies of the
organizational documents of TRCLP have
been made available to the Operating
Partnership and the Operating Partnership
acknowledges receipt of the same. The TRCLP
Partnership Agreement has not been
modified, amended or supplemented and the
same is in full force and effect.
(b) Each of TRCLP's Subsidiaries is a corporation, limited
partnership or limited liability company
(as applicable), duly formed, validly
existing and in good standing under the
laws of its state of formation. Each of
TRCLP's Subsidiaries is duly qualified,
licensed or admitted to do business and
is in good standing in those jurisdictions
in which the ownership, use, or
leasing of its assets and properties, or
the conduct or nature of its business
makes such qualification, licensing or
admission necessary, except for failure
to be so qualified, licensed or admitted
and in good standing that individually
or in the aggregate would not reasonably be
expected to have a Material Adverse
Effect on such Subsidiaries. True, correct
and complete copies of the
organizational documents of each of TRCLP's
Subsidiaries have been made
available to the Operating Partnership and
the Operating Partnership
acknowledges receipt of the same. Such
organizational documents have not been
modified, amended or supplemented and the
same are in full force and effect.
(c) Such Contributor is a corporation, limited liability
company or limited partnership (as
applicable), duly formed, validly existing
and in good standing under the laws of its
state of formation with full power
and authority to execute, deliver and
perform this Agreement and the
Contributors Closing Documents to be
executed by such Contributor.
5.2. BINDING AGREEMENT. The execution, delivery and performance of
this
Agreement by such Contributor have been
duly and validly authorized by all
necessary action on the part of such
Contributor. This Agreement has been, and
the Contributors Closing Documents to be
executed by such Contributor will be,
duly executed and delivered by such
Contributor. This Agreement constitutes, and
when so execu
