-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ie1CfNLlPtzsONTSTQf/aM0SN4pg6VHABQvNatDZSFn1xbB60ZpJjeU9D6SmWIm1 N6P/kXgvh4clSicjFZZM8g== 0000912057-97-030363.txt : 19970912 0000912057-97-030363.hdr.sgml : 19970912 ACCESSION NUMBER: 0000912057-97-030363 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970904 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19970910 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRANDYWINE REALTY TRUST CENTRAL INDEX KEY: 0000790816 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 232413352 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09106 FILM NUMBER: 97678036 BUSINESS ADDRESS: STREET 1: 16 CAMPUS BOULEVARD STREET 2: STE 100 CITY: NEWTOWN SQUARE STATE: PA ZIP: 19073 BUSINESS PHONE: 1-610-325-5600 MAIL ADDRESS: STREET 1: TWO GREENTREE CENTRE STREET 2: SUITE 100 CITY: MARLTON STATE: NJ ZIP: 08053 FORMER COMPANY: FORMER CONFORMED NAME: LINPRO SPECIFIED PROPERTIES DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) September 4, 1997 BRANDYWINE REALTY TRUST ------------------------------------------------------ (Exact name of registrant as specified in its charter) MARYLAND 1-9106 23-2413352 - --------------- ---------------- ----------------- (State or other (Commission file (I.R.S. Employer jurisdiction of number) Identification incorporation) Number) 16 Campus Boulevard, Newtown Square, Pennsylvania 19073 (Address of principal executive offices) (610) 325-5600 (Registrant's telephone number, including area code) Page 1 of 4 pages Item 5. Other Events On September 4, 1997, the Company amended its Declaration of Trust to increase the number of authorized common shares of beneficial interest from 25,000,000 to 100,000,000. During the period January 1, 1997 through September 10, 1997, the Company has acquired 12 individually insignificant properties from parties unaffiliated with the Company and the Operating Partnership (as defined below). The aggregate purchase price for these properties was approximately $48 million. The Company is filing this Current Report on Form 8-K in order to provide audited financial statements for two of the individually insignificant property acquisitions in accordance with Regulation S-X, Rule 3-14. The Company has previously provided audited financial statements for additional individually insignificant property acquisitions in accordance with Regulations S-X, Rule 3-14, in a previously filed Current Report on Form 8-K. On August 15, 1997, Brandywine Operating Partnership, L.P. (the "Operating Partnership"), a limited partnership of which Brandywine Realty Trust (the "Company") is the sole general partner, acquired two office properties located in Fort Washington, Pennsylvania ("500 and 501 Office Center Drive" or the "Properties") containing approximately 211,000 net rentable square feet for approximately $16.9 million. Reference is made to the Current Report on Form 8-K dated August 22, 1997 for additional information regarding 500 and 501 Office Center Drive and to Item 7 herein for certain financial statements related to these properties. -2- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Businesses Acquired. The audited statement of revenue and certain operating expenses of 500 and 501 Office Center Drive for the year ended December 31, 1996 and the unaudited statement of revenue and certain operating expenses for the six months ended June 30, 1997 are included on pages F-13 to F-16. (b) Pro Forma Financial Information. Pro forma financial information which reflects the Company's acquisition of 500 and 501 Office Center Drive as of and for the six months ended June 30, 1997 and for the year ended December 31, 1996 is included on pages F-1 to F-12. (c) Exhibits. 3.1 Articles of Amendment (September 4, 1997) 10.1 Second Amended and Restated Partnership Agreement of Brandywine Realty Services Partnership 23.1 Consent of Arthur Andersen LLP -3- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BRANDYWINE REALTY TRUST Date: September 10, 1997 By: /s/ Gerard H. Sweeney ------------------ --------------------------------- Gerard H. Sweeney, President and Chief Executive Officer (Principal Executive Officer) Date: September 10, 1997 By: /s/ Mark S. Kripke ------------------ --------------------------------- Mark S. Kripke, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) -4- BRANDYWINE REALTY TRUST INDEX TO FINANCIAL STATEMENTS I. UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION Pro Forma Condensed Consolidating Balance Sheet as of June 30, 1997.... F-3 Pro Forma Condensed Consolidating Statement of Operations for the Year Ended December 31, 1996............................................... F-4 Pro Forma Condensed Consolidating Statement of Operations for the Six Months Ended June 30, 1997............................................ F-5 Notes and Management's Assumptions to Unaudited Pro Forma Condensed Consolidating Financial Information................................... F-6 II. 500 AND 501 OFFICE CENTER DRIVE Report of Independent Public Accountants............................... F-13 Statements of Revenue and Certain Expenses for the Year Ended December 31, 1996 (audited) and for the Six Month Period Ended June 30, 1997 (unaudited)........................................................... F-14 Notes to Statements of Revenue and Certain Expenses.................... F-15
F-1 BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION The following sets forth the pro forma condensed consolidating balance sheet of Brandywine Realty Trust ("the Company") as of June 30, 1997 and the pro forma condensed consolidating statements of operations for the six months ended June 30, 1997 and for the year ended December 31, 1996. The pro forma condensed consolidating financial information should be read in conjunction with the historical financial statements of the Company and those acquisitions deemed significant pursuant to the rules and regulations of the Securities and Exchange Commission. The unaudited pro forma condensed consolidating financial information is presented as if the following events occurred no later than June 30, 1997 for balance sheet purposes, and at the beginning of the period presented for purposes of the statements of operations: - The Company acquired the properties described in Note 1 to these pro forma financial statements. - The Company acquired its partnership interests in Brandywine Operating Partnership, L.P. (the "Operating Partnership"). - The Company issued 4,600,000 Common Shares at $16.50 per share, of which 600,000 shares related to the underwriter's exercise of the over-allotment option (the "1996 Offering"). - The Company issued 636,363 Common Shares at $16.50 per share to a voting trust established for the benefit of the Pennsylvania State Employees Retirement System ("SERS"), in exchange for $10.5 million (the "SERS Offering") and contributed such proceeds to the Operating Partnership in exchange for 636,363 units of general partnership interest ("GP Units") in the Operating Partnership. - The Company issued 709,090 Common Shares at $16.50 per share to two investment funds managed by Morgan Stanley Asset Management Inc. (the "Morgan Stanley Offering") and contributed the proceeds to the Operating Partnership in exchange for 709,090 GP Units. - The Operating Partnership repaid $49,805,000 of mortgage indebtedness and $764,000 of loans made by Safeguard Scientifics, Inc. and paid a $500,000 prepayment penalty with a portion of the proceeds of the 1996 Offering, the SERS Offering and the Morgan Stanley Offering. - The Company issued 2,375,500 Common Shares at $20.625 per share, of which 175,500 shares related to the underwriter's exercise of the over-allotment option (the "March 1997 Offering"). - The Company issued 11,500,000 Common Shares at $20.75 per share, of which 1,500,000 shares related to the underwriter's exercise of the over-allotment option (the "July 1997 Offering"). The net proceeds from the July 1997 Offering were contributed to the Operating Partnership in exchange for 11,500,000 GP Units. - The Operating Partnership repaid $160,775,000 of indebtedness under the Company's revolving credit facility using proceeds from the July 1997 Offering. The pro forma condensed consolidating financial information is unaudited and is not necessarily indicative of what the actual financial position would have been at June 30, 1997, nor does it purport to represent the future financial position and the results of operations of the Company. F-2 BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET AS OF JUNE 30, 1997 (Notes 1 and 2) (Unaudited) (In thousands)
BRANDYWINE 500 AND 501 REALTY TRUST GREEN HILLS BERWYN PARK OFFICE HISTORICAL JULY 1997 PROPERTIES PROPERTIES CENTER DRIVE PRO FORMA CONSOLIDATED OFFERING (A) (B) (C) (D) CONSOLIDATED --------------- -------------- -------------- --------------- ---------------- ---------------- ASSETS: Real estate investments, net............ $ 344,209 $ -- $ 40,444 $ 37,664 $ 17,091 $ 439,408 Cash and cash equivalents.... 10,777 64,965 (23,944) (37,664) (2,091) 12,043 Escrowed cash.... 1,213 -- -- -- -- 1,213 Accounts receivable..... 2,755 -- -- -- -- 2,755 Due from affiliates..... 293 -- -- -- -- 293 Investment in management company........ 202 -- -- -- -- 202 Deferred costs and other assets......... 4,980 -- -- -- -- 4,980 --------------- -------------- ------- ------- ------- -------- Total assets..... 364,429 64,965 16,500 -- 15,000 460,894 --------------- -------------- ------- ------- ------- -------- --------------- -------------- ------- ------- ------- -------- LIABILITIES: Mortgage notes payable........ 46,960 -- 1,500 -- -- 48,460 Notes payable, Credit Facility....... 130,775 (160,775) 15,000 -- 15,000 -- Accrued interest....... 395 -- -- -- -- 395 Accounts payable and accrued expenses....... 2,650 -- -- -- -- 2,650 Distributions payable........ 4,192 -- -- -- -- 4,192 Tenant security deposits and deferred rents.......... 2,721 -- -- -- -- 2,721 --------------- -------------- ------- ------- ------- -------- Total liabilities.... 187,693 (160,775) 16,500 -- 15,000 58,418 --------------- -------------- ------- ------- ------- -------- MINORITY INTEREST....... 5,508 -- -- -- -- 5,508 --------------- -------------- ------- ------- ------- -------- BENEFICIARIES' EQUITY: Common shares of beneficial interest....... 111 115 -- -- -- 226 Additional paid-in capital........ 186,426 225,625 -- -- -- 412,051 Share warrants... 962 -- -- -- -- 962 Cumulative earnings....... 460 -- -- -- -- 460 Cumulative distributions.. (16,731) -- -- -- -- (16,731) --------------- -------------- ------- ------- ------- -------- Total beneficiaries' equity......... 171,228 225,740 -- -- -- 396,968 --------------- -------------- ------- ------- ------- -------- Total liabilities and beneficiaries' equity......... $ 364,429 $ 64,965 $ 16,500 $ -- $ 15,000 $ 460,894 --------------- -------------- ------- ------- ------- -------- --------------- -------------- ------- ------- ------- --------
F-3 BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (Notes 1 and 3) (Unaudited) (In thousands, except share and per share amounts)
BRANDYWINE 1997 EVENTS REALTY ------------------------- TRUST 1997 500 AND 501 TOTAL HISTORICAL 1996 OTHER OFFICE CENTER PRO FORMA CONSOLIDATED (A) EVENTS (B) SUBTOTAL EVENTS (C) DRIVE (E) CONSOLIDATED -------------------- ------------ ----------- ------------ ----------------- ---------------- REVENUE: Base rents......... $ 8,462 $ 12,646 $ 21,108 $ 35,890 $ 1,754 $ 58,752 Tenant reimbursements.... 1,372 2,838 4,210 5,356 1,358 10,924 Other............. 196 100 296 504 43 843 ---------- ------------ ----------- ------------ ------ ---------------- Total Revenue..... 10,030 15,584 25,614 41,750 3,155 70,519 ---------- ------------ ----------- ------------ ------ ---------------- OPERATING EXPENSES: Interest........... 2,751 513 3,264 (53) 1,125 4,336 Depreciation and amortization...... 2,836 4,687 7,523 8,618 547 16,688 Property expenses.. 3,709 6,830 10,539 17,215 1,561 29,315 General and administrative.... 825 148 973 -- -- 973 ---------- ------------ ----------- ------------ ------ ---------------- Total operating expenses......... 10,121 12,178 22,299 25,780 3,233 51,312 ---------- ------------ ----------- ------------ ------ ---------------- Income (loss) before minority interest......... (91) 3,406 3,315 15,970 (78) 19,207 Minority interest in (income) loss..... (45) (429) (474) 150 -- (324) ---------- ------------ ----------- ------------ ------ ---------------- Income (loss) before uncombined entity............ (136) 2,977 2,841 16,120 (78) 18,883 Equity in income of management company........... (26) 66 40 266 76 382 ---------- ------------ ----------- ------------ ------ ---------------- Net income (loss)... (162) 3,043 2,881 16,386 (2) 19,265 (Income) loss allocated to Preferred Shares............ (401) (1,847) (2,248) -- -- (2,248) ---------- ------------ ----------- ------------ ------ ---------------- Income (loss) allocated to Common Shares..... $ (563) $ 1,196 $ 633 $ 16,386 $ (2) $ 17,017 ---------- ------------ ----------- ------------ ------ ---------------- ---------- ------------ ----------- ------------ ------ ---------------- Earnings (loss) per Common Share...... $ (0.43) $ 0.82 ---------- ---------------- ---------- ---------------- Weighted average number of shares outstanding including share equivalents....... 1,302,648 20,791,406 ---------- ---------------- ---------- ----------------
F-4 BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (Notes 1 and 3) (Unaudited) (In thousands, except share and per share amounts)
BRANDYWINE 1997 EVENTS REALTY --------------------------------- TRUST 1997 500 AND 501 TOTAL HISTORICAL OTHER OFFICE CENTER PRO FORMA CONSOLIDATED (A) EVENTS (D) DRIVE (E) CONSOLIDATED -------------------- ------------ ------------------- ---------------- REVENUE: Base rents............................ $ 16,889 $ 13,223 $ 882 $ 30,994 Tenant reimbursements................. 3,285 1,957 733 5,975 Other................................. 544 64 38 646 ---------- ------------ ----- ---------------- Total Revenue........................ 20,718 15,244 1,653 37,615 ---------- ------------ ----- ---------------- OPERATING EXPENSES: Interest.............................. 3,059 (1,580) 558 2,037 Depreciation and amortization......... 5,775 3,142 271 9,188 Property operating expenses........... 7,032 5,933 774 13,739 Other expenses........................ 1,187 -- -- 1,187 ---------- ------------ ----- ---------------- Total operating expenses............. 17,053 7,495 1,603 26,151 ---------- ------------ ----- ---------------- Income (loss) before minority interest............................. 3,665 7,749 50 11,464 Minority interest in (income) loss..... (174) (19) (1) (194) ---------- ------------ ----- ---------------- Income (loss) before uncombined entity............................... 3,491 7,730 49 11,270 Equity in income of management company.............................. 217 113 38 368 ---------- ------------ ----- ---------------- Net income (loss)...................... 3,708 7,843 87 11,638 (Income) loss allocated to Preferred Shares............................... (499) -- -- (499) ---------- ------------ ----- ---------------- Income (loss) allocated to Common Shares............................... $ 3,209 $ 7,843 $ 87 $ 11,139 ---------- ------------ ----- ---------------- ---------- ------------ ----- ---------------- Earnings (loss) per Common Share....... $ 0.36 $ 0.53 ---------- ---------------- ---------- ---------------- Weighted average number of shares outstanding including share equivalents.......................... 8,809,379 21,155,886 ---------- ---------------- ---------- ----------------
F-5 BRANDYWINE REALTY TRUST NOTES AND MANAGEMENT'S ASSUMPTIONS TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) 1. BASIS OF PRESENTATION: Brandywine Realty Trust (the "Company") is a Maryland real estate investment trust. As of September 10, 1997, the Company owned 85 properties. The Company's interest in 84 of the Properties is held through Brandywine Operating Partnership, L.P. (the "Operating Partnership"). The Company is the sole general partner of the Operating Partnership and as of September 10, 1997, the Company held a 98.6% interest in the Operating Partnership. These pro forma financial statements should be read in conjunction with the historical financial statements and notes thereto of the Company, the SSI/TNC Properties, the LibertyView Building, the nine properties (the "SERS Properties") acquired in November 1996 from SERS and its subsidiaries, Delaware Corporate Center I, 700/800 Business Center Drive, the Columbia Acquisition Properties, the Main Street Acquisition Properties, the TA Properties, the Emmes Properties, the Greentree Executive Campus Acquisition Properties, 748 & 855 Springdale Drive, the Green Hills Properties, the Berwyn Park Properties and 500 & 501 Office Center Drive. In management's opinion, all adjustments necessary to reflect the effects of the 1996 Offering, the SERS Offering, the Morgan Stanley Offering, the March 1997 Offering, the July 1997 Offering, the acquisitions of the SSI/TNC Properties, the LibertyView Building, the 1996 Additional Acquisition Properties (consisting of the SERS Properties, Delaware Corporate Center I, 700/800 Business Center Drive and 8000 Lincoln Drive), the Columbia Acquisition Properties, the Main Street Acquisition Properties, 1336 Enterprise Drive, the Greentree Executive Campus, Five Eves Drive, Kings Manor, the TA Properties, the Emmes Properties, 748 & 855 Springdale Drive, 1974 Sproul Road, the Green Hills Properties, the Berwyn Park Properties and 500 & 501 Office Center Drive by the Company have been made. 2. ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET: (A) Reflects the July 1997 Offering and the use of a portion of the net proceeds to repay $160.8 million of indebtedness under the Credit Facility. (B) Reflects the Company's acquisition of the Green Hills Properties as follows: GREEN HILLS PROPERTIES ----------- Purchase Price........................... $ 40,000 Closing Costs............................ 444 ----------- $ 40,444 (C) Reflects the Company's acquisition of Berwyn Park as follows: F-6 BERWYN PARK PROPERTIES ------------ Purchase Price........................... $ 37,150 Closing Costs............................ 514 ------------ $ 37,664 (D) Reflects the Company's acquisition of 500 and 501 Office Center Drive as follows: 500 AND 501 OFFICE CENTER DRIVE ------------------ Purchase Price.......................... $ 16,900 Closing Costs........................... 191 ------------------ $ 17,091 3. ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS: (A) Reflects the historical consolidated operations of the Company. (B) Reflects the historical operations of the SSI/TNC Properties, LibertyView Building and the 1996 Additional Acquisition Properties from January 1, 1996 through the respective dates of acquisition, plus the pro forma 1996 Offering adjustments. The table below reflects the adjustments:
SSI/TNC PROPERTIES AND 700/800 LIBERTYVIEW DELAWARE BUSINESS CENTER 8000 LINCOLN BUILDING SERS PROPERTIES CORPORATE CENTER DRIVE DRIVE -------------- --------------- ---------------- --------------- ------------ Revenue: Base rents............................. $ 5,714 $4,008 $2,036 $651 $237 Tenant reimbursements.................. 2,511 249 -- 76 2 Other.................................. 100 -- -- -- -- ------- ------ ------ ----- ----- Total revenue........................ 8,325 4,257 2,036 727 239 Operating Expenses: Interest............................... 3,783 194 -- -- -- Depreciation and amortization.......... 2,819 818 374 212 89 Property expenses...................... 2,831 2,217 552 270 231 General and administrative............. 715 -- -- -- -- ------- ------ ------ ----- ----- Total operating expenses............. 10,148 3,229 926 482 320 Income (loss) before minority interest... (1,823) 1,028 1,110 245 (81) Minority interest in (income) loss....... 513 -- -- -- -- Income (loss) before uncombined entity... (1,310) 1,028 1,110 245 (81) Equity in income of management company... 75 -- -- -- -- ------- ------ ------ ----- ----- Net income (loss)........................ (1,235) 1,028 1,110 245 (81) Income allocated to Preferred Shares..... -- -- -- -- -- ------- ------ ------ ----- ----- Income (loss) allocated to Common Shares................................. $(1,235) $1,028 $1,110 $245 $(81) ------- ------ ------ ----- ----- ------- ------ ------ ----- ----- 1996 PRO FORMA & OTHER OFFERING TOTAL PRO FORMA ADJUSTMENTS 1996 EVENTS ---------------- --------------- Revenue: Base rents............................. -$- $12,646 Tenant reimbursements.................. -- 2,838 Other.................................. -- 100 ------ ------- Total revenue........................ -- 15,584 Operating Expenses: Interest............................... (3,464) 513 Depreciation and amortization.......... 375 4,687 Property expenses...................... 729 6,830 General and administrative............. (567) 148 ------ ------- Total operating expenses............. (2,927) 12,178 Income (loss) before minority interest... 2,927 3,406 Minority interest in (income) loss....... (942) (429) Income (loss) before uncombined entity... 1,985 2,977 Equity in income of management company... (9) 66 ------ ------- Net income (loss)........................ 1,976 3,043 Income allocated to Preferred Shares..... 1,847 1,847 ------ ------- Income (loss) allocated to Common Shares................................. $ 129 $ 1,196 ------ ------- ------ -------
F-7 (C) Reflects the pro forma statements of operations of the Columbia Acquisition Properties, the Main Street Acquisition Properties, 1336 Enterprise Drive, Kings Manor, Greentree Executive Campus, Five Eves Drive, the TA Properties, the Emmes Properties, 748 & 855 Springdale Drive, 1974 Sproul Road, the Berwyn Park Properties and the Green Hills Properties for the year ended December 31, 1996 and other pro forma adjustments to reflect the March 1997 Offering and the July 1997 Offering for the year ended December 31, 1996. The operating results reflected below include the historical results and related pro forma adjustments to reflect the period January 1, 1996 through the earlier of the respective acquisition dates or December 31, 1996. Operating results from those dates forward are included in the historical results of the Company. F-8
COLUMBIA MAIN STREET GREENTREE ACQUISITION ACQUISITION 1336 ENTERPRISE EXECUTIVE PROPERTIES PROPERTIES DRIVE KINGS MANOR CAMPUS ----------------- ------------- ----------------- --------------- ----------------- Revenue: Base rents................... $ 5,146 $ 3,141 $ 437 $ 411 $ 1,862 Tenant reimbursements........ 359 347 75 107 175 Other........................ 376 -- -- -- -- ------ ------------- ------- ------ ------- Total revenue.............. 5,881 3,488 512 518 2,037 ------ ------------- ------- ------ ------- Operating Expenses: Interest (i)................. 1,680 -- -- -- 841 Depreciation and amortization (ii)....................... 1,007 629 117 114 359 Property expenses............ 1,979 2,194 107 170 1,018 General and administrative... -- -- -- -- -- ------ ------------- ------- ------ ------- Total operating expenses... 4,666 2,823 224 284 2,218 ------ ------------- ------- ------ ------- Income (loss) before minority interest..................... 1,215 665 288 234 (181) Minority interest in (income) loss......................... (20) (11) (5) (4) 3 ------ ------------- ------- ------ ------- Income (loss) before uncombined entity....................... 1,195 654 283 230 (178) Equity in income of management company (iii)................ -- -- -- -- -- ------ ------------- ------- ------ ------- Net income (loss).............. 1,195 654 283 230 (178) Income allocated to Preferred Shares -- -- -- -- -- ------ ------------- ------- ------ ------- Income (loss) allocated to Common Shares................ $ 1,195 $ 654 $ 283 $ 230 $ (178) ------ ------------- ------- ------ ------- ------ ------------- ------- ------ -------
748 & 855 SPRINGDALE FIVE EVES DRIVE TA PROPERTIES EMMES PROPERTIES DRIVE 1974 SPROUL ROAD ----------------- ------------- ----------------- --------------- ----------------- Revenue: Base rents................... $ 348 $ 5,102 $ 6,214 $ 940 $ 774 Tenant reimbursements........ 39 735 2,681 -- 118 Other........................ 1 9 10 -- -- ------ ------------- ------- ------ ------- Total revenue.............. 388 5,846 8,905 940 892 ------ ------------- ------- ------ ------- Operating Expenses: Interest (i)................. 254 3,168 4,987 400 -- Depreciation and amortization (ii)....................... 108 1,352 2,128 171 134 Property expenses............ 151 1,962 3,482 250 492 General and administrative... -- -- -- -- -- ------ ------------- ------- ------ ------- Total operating expenses... 513 6,482 10,597 821 626 ------ ------------- ------- ------ ------- Income (loss) before minority interest..................... (125) (636) (1,692) 119 266 Minority interest in (income) loss......................... 2 9 27 (2) (5) ------ ------------- ------- ------ ------- Income (loss) before uncombined entity....................... (123) (627) (1,665) 117 261 Equity in income of management company (iii)................ -- 105 65 23 22 ------ ------------- ------- ------ ------- Net income (loss).............. (123) (522) (1,600) 140 283 Income allocated to Preferred Shares....................... -- -- -- -- -- ------ ------------- ------- ------ ------- Income (loss) allocated to Common Shares................ $ (123) $ (522) $ (1,600) $ 140 $ 283 ------ ------------- ------- ------ ------- ------ ------------- ------- ------ -------
MARCH 1997 JULY 1997 BERWYN PARK GREEN HILLS TOTAL OTHER 1997 OFFERING OFFERING PROPERTIES PROPERTIES (iv) EVENTS ----------------- --------------- ----------------- --------------- ------------------- Revenue: Base rents.................... $ -- $ -- $ 3,815 $ 7,700 $ 35,890 Tenant reimbursements......... -- -- 720 -- 5,356 Other......................... -- -- 108 -- 504 ----- ------ ------- ----- ----- Total revenue............... -- -- 4,643 7,700 41,750 ----- ------ ------- ----- ----- Operating Expenses: Interest (i).................. (525) (12,058) -- 1,200 (53) Depreciation and amortization (ii)........................ -- -- 1,205 1,294 8,618 Property expenses............. -- -- 1,991 3,419 17,215 General and administrative.... -- -- -- -- -- ----- ------ ------- ----- ----- Total operating expenses.... (525) (12,058) 3,196 5,913 25,780 ----- ------ ------- ----- ----- Income (loss) before minority interest...................... 525 12,058 1,447 1,787 15,970 Minority interest in (income) loss.......................... 348 (137) (27) (28) 150 Income (loss) before uncombined entity........................ 873 11,921 1,420 1,759 16,120 Equity in income of management company (iii)................. -- -- 166 (115) 266 ----- ------ ------- ----- ----- Net income (loss)............... 873 11,921 1,586 1,644 16,386 Income allocated to Preferred Shares........................ -- -- -- -- -- ----- ------ ------- ----- ----- Income (loss) allocated to Common Shares................. $ 873 $ 11,921 $ 1,586 $ 1,644 $ 16,386 ----- ------ ------- ----- ----- ----- ------ ------- ----- -----
(i) Pro forma interest expense is presented assuming an effective rate of 7.5% on borrowings under the Company's revolving credit facility. The adjustment for the Columbia Acquisition Properties also reflects an effective interest rate of 9.5% on assumed debt. The F-9 adjustments for the March 1997 Offering and the July 1997 Offering represent interest savings related to the payoff of $7 million and $160.8 million, respectively, of credit facility borrowings at an effective rate of 7.5%. (ii) Pro forma depreciation expense is presented assuming an 80% building and 20% land allocation of the purchase price and capitalized closing costs and assumes a useful life of 25 years. (iii) Pro forma equity in income of management company is presented based on management fees less incremental costs estimated to be incurred. (iv) Pro forma property expenses exclude $666,000 from historical amounts. Such amount represents expected salary savings. (D) Reflects the pro forma adjustments relating to the Columbia Acquisition Properties, the Main Street Acquisition Properties, 1336 Enterprise Drive, Kings Manor, Greentree Executive Campus, Five Eves Drive, the TA Properties, the Emmes Properties, 748 & 855 Springdale Drive and 1974 Sproul Road for the six months ended June 30, 1997 and other pro forma adjustments to reflect the March 1997 Offering for the six months ended June 30, 1997. The operating results reflected below include the historical results and related pro forma adjustments to reflect the period January 1, 1997 through the earlier of the respective acquisition date or June 30, 1997. F-10
COLUMBIA MAIN STREET GREENTREE ACQUISITION ACQUISITION 1336 ENTERPRISE EXECUTIVE PROPERTIES PROPERTIES DRIVE KINGS MANOR CAMPUS ----------------- ------------- ----------------- --------------- ----------------- Revenue: Base rents................... $ 338 $ 542 $ 78 $ 105 $ 602 Tenant reimbursements........ 24 60 13 27 17 Other........................ 25 -- -- -- -- ------ ------------- ------- ------ ------- Total revenue.............. 387 602 91 132 619 ------ ------------- ------- ------ ------- Operating Expenses: Interest (i)................. 110 -- -- -- 249 Depreciation and amortization (ii)....................... 66 109 21 29 106 Property expenses............ 130 379 19 43 272 General and administrative... -- -- -- -- -- ------ ------------- ------- ------ ------- Total operating expenses... 306 488 40 72 627 ------ ------------- ------- ------ ------- Income (loss) before minority interest..................... 81 114 51 60 (8) Minority interest in (income) loss......................... (1) (2) (1) (1) -- ------ ------------- ------- ------ ------- Income (loss) before uncombined entity....................... 80 112 50 59 (8) Equity in income of management company (iii)................ -- -- -- -- -- ------ ------------- ------- ------ ------- Net income (loss).............. 80 112 50 59 (8) Income allocated to Preferred Shares....................... -- -- -- -- -- ------ ------------- ------- ------ ------- Income (loss) allocated to Common Shares................ $ 80 $ 112 $ 50 $ 59 $ (8) ------ ------------- ------- ------ ------- ------ ------------- ------- ------ -------
748 & 855 SPRINGDALE FIVE EVES DRIVE TA PROPERTIES EMMES PROPERTIES DRIVE 1974 SPROUL ROAD ----------------- ------------- ----------------- --------------- ----------------- Revenue: Base rents................... $ 103 $ 2,053 $ 2,570 $ 414 $ 354 Tenant reimbursements........ 12 299 1,130 -- 54 Other........................ -- 6 2 -- -- ------ ------------- ------- ------ ------- Total revenue.............. 115 2,358 3,702 414 408 ------ ------------- ------- ------ ------- Operating Expenses: Interest (i)................. 75 1,241 2,049 171 -- Depreciation and amortization (ii)....................... 32 530 875 73 61 Property expenses............ 45 698 1,332 99 225 General and administrative... -- -- -- -- -- ------ ------------- ------- ------ ------- Total operating expenses... 152 2,469 4,256 343 286 ------ ------------- ------- ------ ------- Income (loss) before minority interest..................... (37) (111) (554) 71 122 Minority interest in (income) loss......................... 1 1 9 (1) (2) ------ ------------- ------- ------ ------- Income (loss) before uncombined entity....................... (36) (110) (545) 70 120 Equity in income of management company (iii)................ -- 41 27 10 10 ------ ------------- ------- ------ ------- Net income (loss).............. (36) (69) (518) 80 130 Income allocated to Preferred Shares....................... -- -- -- -- -- ------ ------------- ------- ------ ------- Income (loss) allocated to Common Shares................ $ (36) $ (69) $ (518) $ 80 $ 130 ------ ------------- ------- ------ ------- ------ ------------- ------- ------ -------
MARCH 1997 JULY 1997 BERWYN PARK GREEN HILLS TOTAL OTHER 1997 OFFERING OFFERING PROPERTIES PROPERTIES (iv) EVENTS ----------------- ------------- ----------------- --------------- ----------------- Revenue: Base rents................... $ -- $ -- $ 2,128 $ 3,936 $ 13,223 Tenant reimbursements........ -- -- 321 -- 1,957 Other........................ -- -- 31 -- 64 ------ ------------- ------- ------ ------- Total revenue.............. -- -- 2,480 3,936 15,244 ------ ------------- ------- ------ ------- Operating Expenses: Interest (i)................. (91) (5,979) -- 595 (1,580) Depreciation and amortization (ii)....................... -- -- 598 642 3,142 Property expenses............ -- -- 916 1,775 5,933 General and administrative... -- -- -- -- -- ------ ------------- ------- ------ ------- Total operating expenses... (91) (5,979) 1,514 3,012 7,495 ------ ------------- ------- ------ ------- Income (loss) before minority interest..................... 91 5,979 966 924 7,749 Minority interest in (income) loss......................... 36 (27) (17) (14) (19) ------ ------------- ------- ------ ------- Income (loss) before uncombined entity....................... 127 5,952 949 910 7,730 Equity in income of management company (iii)................ -- -- 82 (57) 113 ------ ------------- ------- ------ ------- Net income (loss).............. 127 5,952 1,031 853 7,843 Income allocated to Preferred Shares....................... -- -- -- -- -- ------ ------------- ------- ------ ------- Income (loss) allocated to Common Shares................ $ 127 $ 5,952 $ 1,031 $ 853 $ 7,843 ------ ------------- ------- ------ ------- ------ ------------- ------- ------ -------
(i) Pro forma interest expense is presented assuming an effective rate of 7.5% on borrowings under the Company's revolving credit facility. The adjustment for the Columbia Acquisition Properties also reflects an effective interest rate of 9.5% on assumed debt. The F-11 adjustments for the March 1997 Offering and the July 1997 Offering represent interest savings related to the payoff of $7 million and $160.8 million, respectively, of credit facility borrowings at an effective rate of 7.5%. (ii) Pro forma depreciation expense is presented assuming an 80% building and 20% land allocation of the purchase price and capitalized closing costs and assumes a useful life of 25 years. (iii) Pro forma equity in income of management company is presented based on management fees less incremental costs estimated to be incurred. (iv) Pro forma property expenses exclude $333,000 from historical amounts. Such amount represents expected salary savings. (E) Reflects the pro forma statements of operations of 500 and 501 Office Center Drive for the six months ended June 30, 1997 and for the year ended December 31, 1996. All amounts represent historical operations except for the pro forma adjustments noted:
500 AND 501 OFFICE CENTER DRIVE ---------------------------------- YEAR ENDED DECEMBER 31, SIX MONTHS ENDED 1996 JUNE 30, 1997 ------------- ------------------- Revenue: Base rents.................................................................... $ 1,754 $ 882 Tenant reimbursements......................................................... 1,358 733 Other......................................................................... 43 38 ------ ----- Total revenue............................................................... 3,155 1,653 Operating Expenses: Interest (i).................................................................. 1,125 558 Depreciation and amortization (ii)............................................ 547 271 Property expenses............................................................. 1,561 774 General and administrative.................................................... -- -- ------ ----- Total operating expenses.................................................... 3,233 1,603 Income (loss) before minority interest.......................................... (78) 50 Minority interest in (income) loss.............................................. -- (1) Income (loss) before uncombined entity.......................................... (78) 49 Equity in income of management company (iii).................................... 76 38 ------ ----- Net income (loss)............................................................... (2) 87 Income allocated to Preferred Shares............................................ -- -- ------ ----- Income (loss) allocated to Common Shares........................................ $ (2) $ 87 ------ ----- ------ -----
(i) Pro forma interest expense is presented assuming an effective rate of 7.5% on $15 million of borrowings under the Company's revolving credit facility. (ii) Pro forma depreciation expense is presented assuming an 80% building and 20% land allocation of the purchase price and capitalized closing costs and assumes a useful life of 25 years. (iii) Pro forma equity in income of management company is presented based on management fees less incremental costs estimated to be incurred. F-12 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Brandywine Realty Trust: We have audited the combined statement of revenue and certain expenses of 500 & 501 Office Center Drive, described in Note 1, for the year ended December 31, 1996. This financial statement is the responsibility of management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The combined statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of Brandywine Realty Trust as described in Note 1 and is not intended to be a complete presentation of 500 & 501 Office Center Drive's revenue and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain expenses of the 500 & 501 Office Center Drive for the year ended December 31, 1996, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Philadelphia, Pa., August 21, 1997 F-13 500 & 501 OFFICE CENTER DRIVE COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE FOR THE SIX YEAR ENDED MONTHS ENDED DECEMBER 31, JUNE 30, 1996 1997 ------------ ------------- (UNAUDITED) ------------- REVENUE: Base rents (Note 2)............................................................... $1,754,000 $ 882,000 Tenant reimbursements............................................................. 1,358,000 733,000 Other............................................................................. 43,000 38,000 ------------ ------------- Total revenue................................................................. 3,155,000 1,653,000 ------------ ------------- CERTAIN EXPENSES: Maintenance and other operating expenses.......................................... 694,000 343,000 Utilities......................................................................... 605,000 301,000 Real estate taxes................................................................. 262,000 130,000 ------------ ------------- Total certain expenses........................................................ 1,561,000 774,000 ------------ ------------- REVENUE IN EXCESS OF CERTAIN EXPENSES............................................... $1,594,000 $ 879,000 ------------ ------------- ------------ -------------
The accompanying notes are an integral part of these financial statements. F-14 500 & 501 OFFICE CENTER DRIVE NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES DECEMBER 31, 1996 1. BASIS OF PRESENTATION: On August 15, 1997, Brandywine Operating Partnership, L.P. (the "Operating Partnership"), a limited partnership of which Brandywine Realty Trust (the "Company") is the sole general partner, acquired 500 & 501 Office Center Drive, a portfolio of two office buildings located in Fort Washington, Pennsylvania. 500 & 501 Office Center Drive have an aggregate net rentable area of approximately 211,000 square feet which was 98% leased as of December 31, 1996. The net purchase price for 500 & 501 Office Center Drive was $16.9 million. The combined statements of revenue and certain expenses reflect the operations of 500 & 501 Office Center Drive. These combined statements of revenue and certain expenses are to be included in the Company's Current Report on Form 8-K, pursuant to the rules and regulations of the Securities and Exchange Commission. The accounting records of 500 & 501 Office Center Drive are maintained on a cash basis. Adjusting entries have been made to present the accompanying financial statements in accordance with generally accepted accounting principles. The accompanying financial statements exclude certain expenses such as interest, depreciation and amortization, professional fees, and other costs not directly related to the future operations of 500 & 501 Office Center Drive. The combined statement of revenue and certain expenses for the six months ended June 30, 1997 is unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the revenue and certain expenses of 500 & 501 Office Center Drive for the six months ended June 30, 1997 have been included. The combined revenue and certain expenses for such interim period is not necessarily indicative of the results for the full year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities which affect the reported amounts of revenue and expenses during the reporting period. The ultimate results could differ from those estimates. 2. OPERATING LEASES: Base rents for the year ended December 31, 1996 and for the six months ended June 30, 1997, include straight-line adjustments for rental revenue increases in accordance with generally accepted accounting principles. The aggregate rental revenue decreases resulting from the straight-line adjustments for the year ended December 31, 1996 and the six months ended June 30, 1997 were ($25,000), and ($19,000), (unaudited), respectively. Advanta Corporation's minimum rental payments were $419,000 and were greater than 10% of the total base rents in 1996. F-15 The 500 & 501 Office Center Drive is leased to tenants under operating leases with expiration dates extending to the year 2002. Future minimum rentals under noncancelable operating leases, excluding tenant reimbursements of operating expenses as of December 31, 1996, are as follows: 1997.......................... 1,914,000 1998.......................... 1,273,000 1999.......................... 606,000 2000.......................... 330,000 2001.......................... 123,000 Thereafter.................... 3,000 Certain leases also include provisions requiring tenants to reimburse 500 & 501 Office Center Drive for management costs and other operating expenses up to stipulated amounts. F-16 EX-3.1 2 EXHIBIT 3.1 EXHIBIT 3.1 BRANDYWINE REALTY TRUST ARTICLES OF AMENDMENT THIS IS TO CERTIFY THAT: FIRST: The Declaration of Trust of Brandywine Realty Trust, a Maryland real estate investment trust (the "Trust"), is hereby amended by deleting existing Section 6.1 of the Declaration of Trust in its entirety and substituting in lieu thereof the following new section to read as follows: SECTION 6.1. Authorized Shares. The total number of shares of beneficial interest which the Trust is authorized to issue is 105,000,000, of which 5,000,000 shares shall be preferred shares, par value $.01 per share ("Preferred Shares"), and 100,000,000 shares shall be common shares, $.01 par value per share ("Common Shares"). The Board of Trustees, without any action by the Shareholders of the Trust, may amend the Declaration of Trust from time to time to increase or decrease the aggregate number of shares of beneficial interest or the number of shares of beneficial interest of any class that the Company is authorized to issue." SECOND: Pursuant to Section 8-203(a)(7) of the Corporations and Associations Article of the Annotated Code of Maryland, the amendment to the Declaration of Trust of the Trust as hereinabove set forth has been duly approved by the Board of Trustees of the Trust. THIRD: The total number of shares of beneficial interest which the Trust had authority to issue immediately prior to this amendment was 30,000,000 shares of beneficial interest, consisting of 25,000,000 common shares of beneficial interest, $.01 par value per share, and 5,000,000 preferred shares of beneficial interest, $.01 par value per share. The aggregate par value of all shares of beneficial interest having par value was $300,000. The total number of shares of beneficial interest which the Trust has authority to issue pursuant to the amendment described herein is 105,000,000 shares of beneficial interest, consisting of 100,000,000 common shares of beneficial interest, $.01 par value per share, and 5,000,000 preferred shares of beneficial interest, $.01 par value per share. The aggregate par value of all shares of beneficial interest having par value is $1,050,000. FOURTH: The undersigned President acknowledges these Articles of Amendment to be the trust act of the Trust and, as to all matters or facts required to be verified under oath, the undersigned President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the Trust has caused these Articles of Amendment to be signed in its name and on its behalf by its President and attested to by its Secretary on this 4th day of September, 1997. ATTEST: BRANDYWINE REALTY TRUST /s/ Mark S. Kripke By: /s/ Gerard H. Sweeney (SEAL) - ------------------------ ------------------------ Mark S. Kripke Gerard H. Sweeney Secretary and President and Chief Financial Officer Chief Executive Officer EX-10.1 3 EXHIBIT 10.1 EXHIBIT 10.1 SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF BRANDYWINE REALTY SERVICES PARTNERSHIP TABLE OF CONTENTS Page ARTICLE 1 - DEFINED TERMS 2 ARTICLE 2 - ORGANIZATIONAL MATTERS 4 Section 2.1. Organization 4 Section 2.2. Name 4 Section 2.3. Principal Office 4 Section 2.4. Purpose 4 Section 2.5. Powers 4 Section 2.6. Term 4 ARTICLE 3 - PARTNERS AND CAPITAL CONTRIBUTIONS 4 Section 3.1. Partners and Capital Contributions 4 Section 3.2. Percentage Interests 5 Section 3.3. Additional Capital Contributions 5 Section 3.4. Liability of Partners 5 ARTICLE 4 - DISTRIBUTIONS AND ALLOCATIONS 5 Section 4.1. Requirement and Characterization of Distributions 5 Section 4.2. Allocations For Capital Account Purposes 5 Section 4.3. Allocations Upon Changes in Percentage Interests 6 Section 4.4. Code Section 754 Adjustment 6 ARTICLE 5 - RIGHTS AND DUTIES OF THE PARTNERS 6 Section 5.1. Management of Partnership 6 Section 5.2. Voting by Partnership 7 Section 5.3. Outside Activities of the Partners 7 Section 5.4. Contracts with Affiliates 8 ARTICLE 6 - TRANSFER OF A PARTNERSHIP INTEREST; ADDITIONAL PARTNERS 8 Section 6.1. Transfer of Partnership Interest 8 Section 6.2. Additional Partners 9 Section 6.3. Withdrawal 10 ARTICLE 7 - TAX MATTERS 10 Section 7.1. Preparation of Tax Returns 10 Section 7.2. Tax Elections 10 Section 7.3. Tax Matters Partner 10 ARTICLE 8 - DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP 12 Section 8.1. Dissolution 12 Section 8.2. Winding Up 13 Section 8.3. Deemed Distribution and Recontribution 14 Section 8.4. Notice of Dissolution 14 ARTICLE 9 - RECORDS AND ACCOUNTING 15 ARTICLE 10 - AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS 15 Section 10.1. Amendments 15 Section 10.2. Meetings of the Partners 15 ARTICLE 11 - MISCELLANEOUS 16 Section 11.1. Notice 16 Section 11.2. Governing Law; Separability of Provisions 16 Section 11.3. Entire Agreement 16 Section 11.4. Headings, etc 16 Section 11.5. Binding Provisions 16 Section 11.6. No Waiver 17 Section 11.7. Further Action 17 Section 11.8. Creditors 17 Section 11.9. Third Party Beneficiaries 17 SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF BRANDYWINE REALTY SERVICES PARTNERSHIP THIS SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF BRANDYWINE REALTY SERVICES PARTNERSHIP (this "Agreement") is entered into as of August 1, 1997 between Anthony A. Nichols, Sr. ("Nichols") and Gerard H. Sweeney ("Sweeney"), each a resident of Pennsylvania, and amends and restates in its entirety the Partnership Agreement of Brandywine Realty Services Partnership (the "Partnership") dated August 22, 1996 (the "Original Agreement"), previously amended and restated in its entirety on October 30, 1996, but effective as of August 22, 1996, by an Amended and Restated Partnership Agreement (the "First Amendment"). BACKGROUND On August 22, 1996, Nichols, Sweeney, John P. Gallagher ("Gallagher") and Brian F. Belcher ("Belcher") entered into the Original Agreement, and on October 30, 1996, Nichols, Sweeney, Gallagher and Belcher entered into the First Amendment. On April 1, 1997, the entire interest of Gallagher in the Partnership was redeemed for $25.00, and on August 1, 1997, the entire interest of Belcher in the Partnership was redeemed for $25.00. Accordingly, as of the date hereof, the Partners in the Partnership consist of Nichols and Sweeney (hereafter sometimes referred to as the "Original Partners"), and they are entering into this Agreement in order to amend and restate in its entirety the First Amendment. The Original Partners are each executive officers of Brandywine Realty Trust, a Maryland real estate investment trust ("BRT"). The Original Partners desire to continue the Partnership as a general partnership under the laws of the Commonwealth of Pennsylvania to hold title to 95% of the common stock of Brandywine Realty Services Corporation, a Pennsylvania corporation (the "Company"), the remaining common stock of which and all of the preferred stock of which is held by Brandywine Operating Partnership, L.P. upon the terms and subject to the conditions set forth below. NOW THEREFORE, in consideration of the premises and the covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows: 1 AGREEMENT ARTICLE 1 DEFINED TERMS The following definitions shall for all purposes, unless otherwise clearly indicated to the contrary, be applied to the terms used in this Agreement. "Administrative Partner" means the Partner elected by a majority in interest of the Partners to administer the business affairs of the Partnership (including, without limitation, to cause the Partnership to pay its bills as and when due and to file all reports and returns, including income tax returns, required to be filed by the Partnership). "Affiliate" means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person owning or controlling ten percent or more of the outstanding voting interests of such Person, (iii) any Person of which such Person owns or controls ten percent or more of the voting interests or (iv) any officer, director, general partner or trustee of such Person or any Person referred to in clauses (i), (ii), and (iii) above. "Agreement" means this Partnership Agreement, as originally executed and as amended, modified, supplemented, or restated from time to time, as the context requires. "Capital Account" means the Capital Account maintained for a Partner in accordance with the rules of Regulation Section 1.704-1(b)(2)(iv). "Capital Contribution" means, with respect to any Partner, any cash, cash equivalents or the net agreed value of property which such Partner contributes or is deemed to contribute to the Partnership pursuant to Sections 3.1 and 3.3 hereof. "Code" means the Internal Revenue Code of 1986, as amended and in effect from time to time, as interpreted by the applicable regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law. "Fiscal Year" means the fiscal year ending on the 31st day of December of each calendar year. "IRS" means the Internal Revenue Service, which administers the internal revenue laws of the United States (or any successor entity thereto). 2 "Net Income" means, for any taxable period, the excess, if any, of the Partnership's items of income and gain for such taxable period over the Partnership's items of loss and deduction for such taxable period. "Net Loss" means, for any taxable period, the excess, if any, of the Partnership's items of loss and deduction for such taxable period over the Partnership's items of income and gain for such taxable period. "Partner(s)" means any Person that becomes a Partner of the Partnership as provided herein. "Partnership" means the partnership governed hereby, as such partnership may from time to time be constituted. "Partnership Act" means the Uniform Partnership Act of the Commonwealth of Pennsylvania, set forth as Chapter 83 of Title 15 of the Pennsylvania Consolidated Statutes, as amended from time to time. "Partnership Interest" means the entire ownership interest of a Partner in the Partnership at any particular time, including the right of such Partner to any and all benefits to which a Partner may be entitled as provided in this Agreement together with the obligations of such Partner to comply with the terms and provisions of this Agreement. "Percentage Interest" means, as to a Partner, its interest in the Partnership as specified in Section 3.2 and set forth on Exhibit A hereto. "Person" means any individual, partnership, corporation, unincorporated organization or association, trust or other entity. "Regulations" means the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "Subsidiary" means, with respect to any Person, any corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person. 3 "Transfer" refers to a transaction in which a Partner purports to assign its Partnership Interest to another Person and includes a sale, assignment, gift, pledge, hypothecation, encumbrance, mortgage, exchange, or any other disposition by law or otherwise. ARTICLE 2 ORGANIZATIONAL MATTERS Section 2.1 Organization. The Partners hereby agree to organize the Partnership as a general partnership pursuant to the provisions of the Partnership Act and upon the terms and conditions set forth in this Agreement. Section 2.2 Name. The name of the Partnership shall be Brandywine Realty Services Partnership. Section 2.3 Principal Office. The principal office of the Partnership shall be located at 16 Campus Boulevard, Newtown Square, Pennsylvania 19073. Section 2.4 Purpose. The sole purpose of the Partnership is to purchase and hold 95% of the common stock of the Company. Section 2.5 Powers. The Partnership shall have all lawful powers to take any and all actions and to engage in any and all activities and transactions as may be necessary or desirable to carry out its purpose. Section 2.6 Term. The term of the Partnership shall commence upon the execution of this Agreement and shall continue until December 31, 2096, unless it is dissolved sooner pursuant to the provisions of Article 8 or as otherwise provided by law. 4 ARTICLE 3 PARTNERS AND CAPITAL CONTRIBUTIONS Section 3.1 Partners and Capital Contributions. The Partners shall consist of the Original Partners and such additional Partners as may be designated from time to time (less such Partners who may withdraw or who otherwise may transfer their respective Partnership Interests) pursuant to the provisions of Article 6. Each Original Partner has made a $25.00 Capital Contribution in cash. The initial Capital Contributions of each Partner shall be set forth on Exhibit A hereto. Section 3.2 Percentage Interests. The Percentage Interests of each of the Original Partners shall be equal to 50%. The Percentage Interest of each Partner is set forth on Exhibit A hereto. Section 3.3 Additional Capital Contributions. From time to time, additional Capital Contributions by the Partners may be necessary to pay the expenses of the Partnership. In such event, each Partner shall pay its respective share of such additional Capital Contributions, based on its respective Percentage Interest, within 20 days of receipt of notice from the Administrative Partner that such additional Capital Contribution is required; provided that, in no event shall the Administrative Partner be entitled to require the Partners to make additional Capital Contributions of more than $1,000 in the aggregate, in any Fiscal Year. Section 3.4 Liability of Partners. All Partners are jointly and severally liable for all debts and obligations of the Partnership. ARTICLE 4 DISTRIBUTIONS AND ALLOCATIONS Section 4.1 Requirement and Characterization of Distributions. The Partners will receive quarterly distributions of available cash after setting aside any amounts necessary to defray potential or actual liabilities or expenses of the Partnership. All distributions shall be made to the Partners in accordance with their respective Percentage Interests. 5 Section 4.2 Allocations For Capital Account Purposes. For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership's items of income, gain, loss and deduction shall be allocated among the Partners for each Fiscal Year (or portion thereof) in accordance with their respective Percentage Interests. Section 4.3 Allocations Upon Changes in Percentage Interests. In the event of any change in a Partner's Percentage Interest, such Partner's distributive share of all items of income, gain, loss, deduction or credit for the taxable year in which such change occurs shall be allocated by taking into account the portion of the year before and after such change or in such other manner as may be required by Section 706 of the Code. Section 4.4 Code Section 754 Adjustment. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations. ARTICLE 5 RIGHTS AND DUTIES OF THE PARTNERS Section 5.1 Management of Partnership. Except as otherwise expressly provided in this Agreement, the Partners hereby agree to do on behalf of the Partnership all things which are necessary or appropriate to manage the Partnership's affairs and fulfill the purposes of the Partnership. In furtherance and not in limitation of the foregoing, the Partners shall, as necessary or appropriate from time to time, select an Administrative Partner, and if determined to be necessary or desirable by the Partners, an alternative Administrative Partner who shall fulfil the duties of the Administrative Partner from time to time when the Administrative Partner is unable, for any reason, to do so. Notwithstanding any other provision of this Agreement, the Administrative Partner shall have no right or power to cause the Partnership to acquire or dispose of any assets or to vote any securities held by the Partnership except in accordance with the express written direction of a majority in interest of the Partners pursuant to Section 5.2 hereof. 6 Section 5.2 Voting by Partnership. All decisions requiring the approval of the majority in interest of the Partners, including without limitation, decisions regarding the manner in which to vote the stock of the Company held by the Partnership shall be decided by the Administrative Partner in accordance with the instructions received by the Partnership from a majority in interest of the Partners. The Administrative Partner shall provide each Partner with adequate prior written notice of any matter with respect to which the Partnership will be required to decide, including without limitation, decisions regarding the manner in which to vote the stock of the Company, together with any information necessary to permit such Partner to provide instruction in a reasonably informed manner. No Partner shall grant to any other partner or Person a proxy, power of attorney or other similar instrument permitting such other Partner or Person to render instructions as to the manner in which such Partner desires the Partnership to decide, including without limitation, decisions regarding the manner in which to vote the stock of the Company. Each Partner represents, warrants, and covenants with the Partnership and each other Partner that, in directing the Administrative Partner regarding decisions requiring the approval of the majority in interest of the Partners, including without limitation, decisions regarding the manner in which to vote the stock of the Company held by the Partnership, such Partner is acting and shall act solely for its own account and not as an agent or attorney for or otherwise under the direction or control of any other Person (including, without limitation, any other Partner). Section 5.3 Outside Activities of the Partners. Subject to any agreements entered into by a Partner or its Affiliates with the Partnership and/or the Company, any Partner and any officer, director, employee, agent, trustee, Affiliate or shareholder of any Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, except for any such business interests and activities that are in direct competition with the Partnership and/or the Company. Neither the Partnership nor any other Partner shall have any rights by virtue of this Agreement in any business venture of any Partner. None of the Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any business ventures of any other Person, and such Partner shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures to the Partnership, any Partner or any other Person even if such opportunity is of a character which, if presented to the Partnership, any Partner or such other Person, could be taken by such Person. 7 Section 5.4 Contracts with Affiliates. Except as expressly permitted in this Agreement, no Partner nor any of its Affiliates shall sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are on terms that are fair and reasonable and no less favorable to the Partnership than would be obtained from an unaffiliated third party. ARTICLE 6 TRANSFER OF A PARTNERSHIP INTEREST; ADDITIONAL PARTNERS Section 6.1 Transfer of Partnership Interest. In the event that any Partner at any time shall desire to Transfer all or any portion of such Partner's Partnership Interest or any right or interest therein, such Partner (the "Transferring Partner") shall first give written notice of intention to Transfer, in the manner hereinafter provided (the "Transfer Notice"), to the other Partners. Such notice must specify the full name and address of the proposed transferee, the Percentage Interest to be transferred (the "Offered Interest"), the price to be paid by the proposed transferee for the Offered Interest, the terms under which the Transfer is to be made, and a statement signed by the proposed transferee that the terms specified are a bona fide offer to purchase and that the proposed transferee has the financial and other capability necessary to complete the transaction as proposed. The Offered Interest shall be subject to the following rights and options by the other Partners and by the Company. (i) For thirty (30) days following receipt by the other Partners of a Transfer Notice from the Transferring Partner, the other Partners (referred to as the "Offeree Partners") shall have the right and option to elect by notice to the Transferring Partner and to the Company to elect to purchase the Offered Interest or any portion thereof. In the event that more than one Offeree Partner elects to purchase the Offered Interest, then each such Offeree Partner shall purchase its pro rata share of the Offered Interest (based on their respective Partnership Interests (the "Pro Rata Portion")). The purchase price for the Offered Interest (the "Purchase Price") shall be the purchase price offered to the Transferring Partner by the prospective third party purchaser. (ii) If the Offeree Partners do not elect to exercise their right and option to purchase the entire Offered Interest within said thirty (30) day period, then during the thirty-first (31st) through sixtieth (60th) days following receipt of such notice by the Partners, the Company shall have the right and option to elect by notice sent to the Transferring Partner to purchase any remaining portion of the Offered Interest subject to the Transfer Notice (but not less than all of the remaining portion of the Offered Interest) at a price equal to the Purchase Price. 8 (iii) If the Company does not elect to exercise its right and option to purchase all the Partnership Interests specified in said notice with said sixty (60) day period, the Transferring Partner may transfer the Offered Interest to the proposed transferee at the price and on the terms specified in said Transfer Notice at any time after said sixty (60) day period but within ninety (90) days from the date said notice is received by the Offeree Partners. The transferee will receive and hold said Partnership Interests subject to this right of first refusal, and shall be required to become a party to this Agreement. Any Transfer of Partnership Interests specified in said Transfer Notice after the end of said ninety (90) day period or any change in the terms of the sale from the terms set forth in the original notice shall require a new notice of intention to transfer be given to the Partners and the Company and shall again give rise to their respective rights and options to purchase provided in this Section 6.1. (iv) In the event that the Company shall elect to exercise its rights to purchase a Partnership Interest under Section 6.1(ii), the Company shall have the right, and the Partners shall use their best efforts to cause the Company, to assign its rights to any other Person who would be permitted to be a Partner under Section 6.2.A. Section 6.2 Additional Partners. A. The admission of a new Partner to the Partnership shall require the consent of the Partners who hold in the aggregate 80% of the Percentage Interests in the Partnership (in their sole and absolute discretion). The admission of any Person as an additional Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership. B. In connection with the admission to the Partnership of any Partner pursuant to Section 6.2.A hereof, the Partners shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical, an amendment to this Agreement memorializing such admission. Section 6.3 Withdrawal. No Partner shall have the right to withdraw from the Partnership (other than as a result of a transfer of the Partner's Partnership Interest in accordance with this Article VI). 9 In the event that a Partner withdraws from the Partnership in violation hereof, the remaining Partners agree to perform and continue the Partnership in accordance with the terms of the Agreement. ARTICLE 7 TAX MATTERS Section 7.1 Preparation of Tax Returns. The Administrative Partner shall arrange for the preparation and timely filing of all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for federal and state income tax purposes and shall use all reasonable efforts to furnish, within 90 days of the close of each taxable year, the tax information reasonably required by Partners for federal and state income tax reporting purposes. Section 7.2 Tax Elections. Except as otherwise provided herein, the Partners appoint the Administrative Partner to determine whether to make any available election pursuant to the Code; provided, however, that the Administrative Partner shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder. The Administrative Partner shall have the right to seek to revoke any such election (including, without limitation, the election under Section 754 of the Code) upon such Partner's determination in its sole and absolute discretion that such revocation is in the best interests of the Partners. Section 7.3. Tax Matters Partner. A. The Partners appoint the Administrative Partner to be the "tax matters partner" of the Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the tax matters partner shall furnish the IRS with the name, address and profit interest of each Partner; provided, however, that such information is provided to the Partnership by the Partners. B. The tax matters partner is authorized, but not required: (1) to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a "tax audit" and such judicial proceedings being referred to as "judicial review"), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner (i) who (within the time 10 prescribed pursuant to the Code and Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or (ii) who is a "notice partner" (as defined in Section 6231 of the Code) or a member of a "notice group" (as defined in Section 6223(b)(2) of the Code); (2) in the event that a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a "final adjustment") is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the United States Claims Court, or the filing of a complaint for refund with the District Court of the United States for the district in which the Partnership's principal place of business is located; (3) to intervene in any action brought by any other Partner for judicial review of a final adjustment; (4) to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request; (5) to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Partner for tax purposes, or an item affected by such item; and (6) to take any other action on behalf of the Partners of the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations. The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner. 11 C. The tax matters partner shall receive no compensation for its services. All third party costs and expenses incurred by the tax matters partner in performing his duties as such (including legal and accounting fees) shall be borne by the Partnership. Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm to assist the tax matters partner in discharging his duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable. ARTICLE 8 DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP Section 8.1. Dissolution. A. The Partnership shall be dissolved upon the happening of any of the following events ("Liquidating Events"): (1) the expiration of its term under Section 2.6 hereof; (2) the sale or other disposition of all or substantially all of the assets of the Partnership; (3) a final and non-appealable judgment is entered by a court with appropriate jurisdiction ruling that a partner is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the Partner, in each case under any federal or state bankruptcy or insolvency laws or now or hereafter in effect; or (4) a termination otherwise required by operation of law. B. Dissolution of the Partnership shall be effective on the day on which the event occurs giving rise to the dissolution, but the Partnership shall not terminate until the assets of the Partnership have been distributed as provided in Section 8.2. 12 C. If the Partnership dissolves pursuant to Section 8.1.A(3) or (4), each of the Partners hereby agrees to re-form the Partnership immediately subsequent to such dissolution on terms substantially similar to those set forth herein and to continue the Partnership in accordance with such terms. Section 8.2. Winding Up. A. Upon the occurrence of a Liquidating Event, then unless Section 8.1.C shall be applicable, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners. A Person elected by Partners holding in the aggregate 65% of the outstanding interests (the "Liquidator") shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership's liabilities and property and, the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof. B. After adjusting the Capital Accounts of the Partners for any gains or losses realized or deemed realized with respect to the disposition of Partnership assets, the assets of the Partnership shall be paid out by the end of the taxable year in which the liquidation occurs or, if later, within 90 days of the date of liquidation in the following order: (1) First, to the discharge of all the Partnership's debts and liabilities to creditors other than the Partners; (2) Second, to the payment and discharge of all of the Partnership's debts and liabilities to the Partners; (3) Third, to fund reserves for contingent and unforeseen liabilities of the Partnership to the extent deemed reasonable by the Partners holding 51% of the outstanding Percentage Interests in the Partnership; and (4) The balance, if any, to the Partners in accordance with their Capital Accounts, after giving effect to all contributions, distributions and allocations for all periods. C. Notwithstanding the provisions of Section 8.2.B hereof which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership, Partners holding 51% of the outstanding Percentage Interests in the Partnership determine that an immediate sale of part or all of the Partnership's assets would be impractical or would cause undue loss to the Partners, the Partners may defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Partners as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in common and in accordance with the provisions of Section 8.2.B hereof, undivided interests in such 13 Partnership assets as the Partners deem not suitable for liquidation. Any such distributions in kind shall be made only if Partners holding 51% of the outstanding Percentage Interests in the Partnership believe that such distributions in kind are in the best interest of the Partners, and shall be subject to such conditions relating to the disposition and management of such properties as the Partners deem reasonable and equitable and to any agreements governing the operation of such properties at such time. D. Upon dissolution and liquidation of the Partnership, after any allocations of profits or losses, but before any distributions upon such liquidation, the Partners shall contribute to the capital of the Partnership an amount equal to the negative amount, if any, of the Capital Accounts of the Partners. E. Any reserves established by the Partners pursuant to Section 8.2.B(3) shall be held for so long as the Partners deem necessary in a special account maintained for the purpose of paying contingent and unforeseen liabilities or obligations and shall thereafter be distributed in accordance with Section 8.2.B. F. For purposes of this Section 8.2, expenses of dissolution and liquidation shall be treated as debts and obligations of the Partnership. Section 8.3. Deemed Distribution and Recontribution. Notwithstanding any other provisions of this Article 8, in the event the Partnership is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's Property shall not be liquidated, the Partnership's liabilities shall not be paid or discharged, and the Partnership's affairs shall not be wound up. Instead, the Partnership shall be deemed to have distributed the Property in kind to the Partners, who shall be deemed to have assumed and taken such property subject to all Partnership liabilities, all in accordance with their respective Capital Accounts. Immediately thereafter, the Partners shall be deemed to have recontributed the Partnership property in kind to the Partnership, which shall be deemed to have assumed and taken such property subject to all such liabilities. Section 8.4. Notice of Dissolution. In the event a Liquidating Event occurs, a Partner appointed by the Partners shall, within 30 days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business. 14 ARTICLE 9 RECORDS AND ACCOUNTING The Administrative Partners shall keep or cause to be kept proper and complete records and books of account of the business of the Partnership, including a current and updated list of the names, business addresses, Capital Contributions, Capital Accounts, and Percentage Interests of the Partners, which shall be maintained at the Partnership's principal place of business, and the Partners or their duly authorized representatives shall have access to them, upon reasonable notice, at all reasonable times during business hours. Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographics or any other information storage device, provided that the records so maintained are convertible into clearly legible written form within a reasonable period of time. ARTICLE 10 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS Section 10.1. Amendments. Amendments to this Agreement may be proposed by any Partner. The Partners shall take a written vote on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deemed appropriate. For purposes of obtaining a written vote, the response must be given within a reasonable specified time, but not less than 10 days, and failure to respond in such time period shall constitute a vote which is consistent with the majority of the Partner's recommendations with respect to the proposal. A proposed amendment shall be adopted and be effective as an amendment hereto only if it receives the consent of Partners holding, in the aggregate, 80% of the outstanding interests in the Partnership. Section 10.2. Meetings of the Partners. Meetings of the Partners may be called by any Partner. Notice of any such meeting shall be given to the Partners not less than seven days nor more than 30 days prior to the date of such meeting. 15 ARTICLE 11 MISCELLANEOUS Section 11.1. Notice. A. Any notice, demand, request or report required or permitted to be given or made to a Partner under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by a recognized overnight courier, first class United States mail or by other means of written communication to the Partner at the address set forth in Section 11.1.B hereof. B. Any notice to Partners shall be sent to the address of such Partner as set forth on Exhibit A hereto or such other address as such Partner advises in writing. Section 11.2. Governing Law; Separability of Provisions. The laws of the Commonwealth of Pennsylvania shall govern the validity of this Agreement, the construction of its terms and interpretation of the rights and duties of the parties. If any provision of this Agreement shall be held to be invalid, the remainder of this Agreement shall not be affected thereby. Section 11.3. Entire Agreement. This constitutes the entire agreement among the parties; it supersedes any prior agreement or understandings among them, oral or written, all of which are hereby canceled. Section 11.4 Headings, etc. The headings in this Agreement are inserted for convenience of reference only and shall not affect interpretation of this Agreement. Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in either the masculine or the neuter gender shall include the masculine, the feminine and the neuter. Section 11.5. Binding Provisions. 16 The covenants and agreements contained herein shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the respective parties hereto. Section 11.6. No Waiver. The failure of any Partner to seek redress for violation, or to insist on strict performance, of any covenant or condition of this Agreement shall not prevent a subsequent act which would have constituted a violation from having the effect of an original violation. Section 11.7. Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement. Section 11.8. Creditors. None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership. Section 11.9. Third Party Beneficiaries. No Person but a named party to this Agreement shall have any rights under or as a result of this Agreement, whether by reason of such Person's relationship to or ownership of an interest in a party to this Agreement or otherwise. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. /s/ Anthony A. Nichols, Sr. --------------------------- Anthony A. Nichols, Sr. /s/ Gerard H. Sweeney --------------------------- Gerard H. Sweeney BRANDYWINE REALTY SERVICES CORPORATION: (solely for the purpose of joining in Section 6.1 and Section 6.2 hereof) By: /s/ Gerard H. Sweeney --------------------- Title: Gerard H. Sweeney 17 EXHIBIT A INITIAL CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS Initial Capital Percentage Name and Address of Partner Contribution Interest - ----------------------------------------------------------------- Anthony A. Nichols, Sr. $25.00 50% 16 Campus Boulevard Newtown Square, PA 19073 Gerard H. Sweeney $25.00 50% 16 Campus Boulevard Newtown Square, PA 19073 EX-23.1 4 EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report dated August 21, 1997 included in this Form 8-K, into the Company's previously filed Registration Statements on Forms S-3 (File No. 333-20991 and File No. 333-20999) and Forms S-8 (File No. 333-14243 and File No. 333-28427). ARTHUR ANDERSEN LLP Philadelphia, Pa., September 10, 1997 -----END PRIVACY-ENHANCED MESSAGE-----