EXHIBIT 10.4
FOURTH AMENDMENT TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRANDYWINE OPERATING PARTNERSHIP, L.P.
THIS FOURTH AMENDMENT, dated as of September 28, 1998 (the
"Amendment"), amends the Amended and Restated Agreement of Limited Partnership
Agreement (as heretofore amended to date, the "Partnership Agreement") of
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Partnership"). Capitalized terms used herein but not defined herein shall
have the meanings given to such terms in the Partnership Agreement.
BACKGROUND
A. Pursuant to the Partnership Agreement, Brandywine Realty
Trust (the "General Partner"), as the general partner of the Partnership, has
the power and authority to issue additional Partnership Interests and Units in
one or more newly created classes of Partnership Interests to persons on such
terms and conditions as the General Partner may deem appropriate.
B. The General Partner, pursuant to the exercise of such
power and authority and in accordance with the Partnership Agreement, has
determined to execute this Amendment to the Partnership Agreement to create a
new class of Partnership Interests designated as the Series A Preferred Mirror
Units having designations, preferences and other rights which are
substantially the same as the economic rights of the 7.25% Series A Cumulative
Convertible Preferred Shares of the General Partner (the "Series A Preferred
Shares") and to evidence the issuance of such additional Partnership Interests
to the General Partner in exchange for the General Partner's contribution to
the Partnership of the net proceeds of the sale of the Series A Preferred
Shares.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby amend the Partnership
Agreement as follows:
1. In accordance with the Partnership Agreement, the
Partnership Agreement is hereby amended to establish, and to issue to the
General Partner, the Series A Preferred Mirror Units having the designations,
preferences and other rights set forth below:
(a) Designation and Number. A class of Partnership
Interests designated as Series A Preferred Mirror Units is hereby established.
The number of Series A Preferred Mirror Units shall be 750,000 . The stated
value of each Series A Preferred Mirror Unit shall be $50.00 (the "Stated
Value").
(b) Rank. The Series A Preferred Mirror Units will,
with respect to distribution rights and rights upon liquidation, dissolution
or winding up of the Partnership, rank (a) senior to the Class A Units and all
Partnership Interests ranking junior to the Series A
Preferred Mirror Units; (b) on a parity with all Partnership Interests issued
by the Partnership the terms of which specifically provide that such
Partnership Interests rank on a parity with the Series A Preferred Mirror
Units including the Partnership Interests designated as Class B Preferred
Units; and (c) junior to all Partnership Interests issued by the Partnership
the terms of which specifically provide that such Partnership Interests rank
senior to the Series A Preferred Mirror Units.
(c) Distributions.
(i) Pursuant to Section 6.1 of the
Partnership Agreement, holders of Series A Preferred Mirror Units shall be
entitled to receive, out of funds legally available therefor, cumulative
quarterly cash distributions equal to the amount of the cumulative quarterly
cash distributions payable on the Series A Preferred Shares. Such
distributions shall be payable quarterly in arrears on or before the date on
which distributions on the Series A Preferred Shares are payable (each a
"Series A Preferred Mirror Unit Distribution Payment Date").
(ii) No distributions on Series A
Preferred Mirror Units shall be authorized or paid or set apart for payment by
the Partnership at such time as the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness,
prohibits such authorization, payment or setting apart for payment or provides
that such authorization, payment or setting apart for payment would constitute
a breach thereof, or a default thereunder, or if such authorization or payment
shall be restricted or prohibited by law.
(iii) Notwithstanding the foregoing,
distributions with respect to the Series A Preferred Mirror Units will accrue
whether or not the terms and provisions set forth in Section 1(c)(ii) at any
time prohibit the current payment of distributions, whether or not there are
funds legally available for such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on the Series A
Preferred Mirror Units will accumulate as of the Series A Preferred Mirror
Unit Distribution Payment Date on which they first become payable.
(iv) When distributions are not paid in
full (or a sum sufficient for such full payment is not so set apart) upon the
Series A Preferred Mirror Units and any other Partnership Interests ranking on
a parity as to distributions with the Series A Preferred Mirror Units, all
distributions authorized upon the Series A Preferred Mirror Units and any
other Partnership Interests ranking on a parity as to distributions with the
Series A Preferred Mirror Units shall be authorized pro rata so that the
amount of distributions authorized per Partnership Unit of Series A Preferred
Mirror Units and such other Partnership Interests shall in all cases bear to
each other the same ratio that accrued distributions per Partnership Unit on
the Series A Preferred Mirror Units and such other Partnership Interests
(which shall not include any accrual in respect of unpaid distributions for
prior distribution periods if such other Partnership Interests do not have a
cumulative distribution) bear to each other. No interest, or sum of money in
lieu of
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interest, shall be payable in respect of any distribution payment or payments
on Series A Preferred Mirror Units which may be in arrears.
(v) Except as provided in Section
1(c)(iv), unless full cumulative distributions on the Series A Preferred
Mirror Units have been or contemporaneously are authorized and paid or
authorized and a sum sufficient for the payment thereof is set apart for
payment for all past distribution periods and the then current distribution
period, no distributions (other than in Partnership Interests ranking junior
to the Series A Preferred Mirror Units as to distributions and upon
liquidation) shall be authorized or paid or set aside for payment nor shall
any other distribution be authorized or made upon the Class A Units or any
other Partnership Interests ranking junior to or on a parity with the Series A
Preferred Mirror Units as to distributions or upon liquidation, nor shall any
Class A Units or any other Partnership Interests ranking junior to or on a
parity with the Series A Preferred Shares as to distributions or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any such units or other Partnership Interests) by the
Partnership or any other entity controlled directly or indirectly by the
Partnership (except by conversion into or exchange for Partnership Interests
ranking junior to the Series A Preferred Mirror Units as to distributions and
upon liquidation).
(vi) Holders of the Series A Preferred
Mirror Units shall not be entitled to any distribution, whether payable in
cash, property or Partnership Units in excess of full cumulative distributions
on the Series A Preferred Mirror Units as described above. Any distribution
payment made on the Series A Preferred Mirror Units shall first be credited
against the earliest accrued but unpaid distribution due with respect to such
Series A Preferred Mirror Units which remains payable.
(d) Liquidation Preference.
(i) Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Partnership, the
holders of Series A Preferred Mirror Units then outstanding are entitled to be
paid out of the assets of the Partnership available for distribution to the
Partners pursuant to Section 13.5(a) of the Partnership Agreement a
liquidation preference equal to the Stated Value per Series A Preferred Mirror
Unit, plus an amount equal to any accrued and unpaid distributions to the date
of payment, before any distribution of assets is made to holders of Class A
Units and GP Units or any other Partnership Interests that rank junior to the
Series A Preferred Mirror Units as to liquidation rights.
(ii) In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available
assets of the Partnership are insufficient to pay the amount of the
liquidating distributions on all outstanding Series A Preferred Mirror Units
and the corresponding amounts payable on all other Partnership Interests
ranking on a parity with the Series A Preferred Mirror Units in the
distribution of assets, then such assets shall be
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allocated among the Series A Preferred Mirror Units, as a class, and each
class or series of such other such Partnership Interests, as a class, in
proportion to the full liquidating distributions to which they would otherwise
be respectively entitled.
(iii) After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of
Series A Preferred Mirror Units will have no right or claim to any of the
remaining assets of the Partnership.
(iv) The consolidation or merger of the
Partnership with or into any other partnership, corporation, trust or entity
or of any other partnership, corporation, trust or other entity with or into
the Partnership, or the sale, lease or conveyance of all or substantially all
of the property or business of the Partnership, shall not be deemed to
constitute a liquidation, dissolution or winding up of the Partnership for
purposes of this Section 1(d).
(e) Redemption. In connection with a redemption by
the General Partner, pursuant to the exercise of a Cash Redemption Right (as
defined in the General Partner's Declaration of Trust, as amended (the
"Declaration of Trust")), of any or all of the Series A Preferred Shares, the
Partnership shall provide cash to the General Partner for such purpose which
shall be equal to redemption price of the Series A Preferred Shares to be
redeemed and one Series A Preferred Mirror Unit shall be canceled with respect
to each Series A Preferred Share so redeemed. In connection with a redemption
by the General Partner, pursuant to the exercise of a Share Redemption Right
(as defined in the Declaration of Trust), of any or all of the Series A
Preferred Shares, the Partnership shall issue to the General Partner a number
of Class A Units equal to the number of Common Shares issued in payment of the
redemption price of the Class A Preferred Shares so redeemed, and one Series A
Preferred Mirror Unit for each Series A Preferred Share so redeemed shall be
canceled. From and after the date on which the Series A Preferred Shares are
redeemed, the Series A Preferred Mirror Units so canceled shall no longer be
outstanding and all rights hereunder, to distributions or otherwise, with
respect to such Series A Preferred Mirror Units shall cease.
(f) Conversion. In connection with, and at the time
of, the conversion of all or any Series A Preferred Shares into Common Shares,
a number of Series A Preferred Mirror Units equal to the number of Series A
Preferred Shares so converted shall be converted into a number of Class A
Units equal to the number of Common Shares issuable upon such conversion.
(g) Allocations. Allocations of the Partnership's
items of income, gain, loss and deduction shall be allocated among holders of
Series A Preferred Mirror Units in accordance with Article VII of the
Partnership Agreement.
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2. Section 13.5(a) of the Partnership Agreement is amending
redesignating subparagraph (iv) as subparagraph (v) and inserting the
following new subparagraph (iv):
(iv) Next, to the holders of Partnership Interests
that are entitled to any preference in distribution upon liquidation in
accordance with the rights of any such class or series of Partnership
Interests (and, within each such class or series, to each holder thereof pro
rata based on the proportion of the total number of outstanding units of such
class or series represented by such holder's units of such series or class);
and
3. Section 7.2 of the Partnership Agreement is amending by
inserting the following new subparagraph (g):
(g) Priority Allocation. All or a portion of the
Net Income of the Partnership for the Fiscal Year, if any, shall be specially
allocated to the Partners holding Series A Preferred Mirror Units and Series B
Preferred Units in proportion to the cumulative distributions each has
received pursuant to Sections 6.1, 6.2, and 13.5 hereof and, with respect to
the Partners holding Series A Preferred Mirror Units, Section 1(c) and 1(d) of
the Fourth Amendment to this Agreement or, with respect to Partners holding
Series B Preferred Units, Section 1.C and 1.D of the Fifth Amendment to this
Agreement, from the commencement of the Partnership to the end of such Fiscal
Year, in an amount equal to the excess, if any, of the sum of (i) the
aggregate Net Loss allocated to such Partners pursuant to Section 7.1(b)
hereof for all prior Fiscal Years, if any, and (ii) the aggregate
distributions received by such Partners pursuant to Sections 6.1, 6.2, and
13.5 of this Agreement and, with respect to Partners holding Series A
Preferred Mirror Units, Section 1(c) and 1(d) of the Fourth Amendment to this
Agreement or, with respect to Partners holding Series B Preferred Units,
Section 1C and 1D of the Fifth Amendment, from the commencement of the
Partnership to the end of such Fiscal Year, over the aggregate items of Net
Income allocated to such Partners pursuant to this Section 7.1(g) for all
prior Fiscal Years.
4. Except as expressly set forth in this Amendment to the
Partnership Agreement, the Partnership Agreement is hereby ratified and
confirmed in each and every respect.
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IN WITNESS WHEREOF, this Amendment to the Partnership
Agreement has been executed and delivered as of the date first above written.
GENERAL PARTNER:
BRANDYWINE REALTY TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President and Chief Executive Officer
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