EXHIBIT 99.1
EXECUTION COPY
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), dated as of February 3,
2004, is by and between Brandywine Operating Partnership, L.P., a Delaware
limited partnership (the "Purchaser"), and Commonwealth Atlantic Operating
Properties Inc., a Virginia corporation (the "Seller").
WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Seller, an aggregate number of 1,950,000 Series B
Preferred Units of the Purchaser, with a stated value of $50.00 per unit (the
"Preferred Units"), on the terms and subject to the conditions described herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and warranties herein contained, the parties hereto agree
as follows:
1. PURCHASE AND SALE OF PREFERRED UNITS.
a. Subject to the conditions set forth in this Agreement, at the
Initial Closing (as defined below) the Seller agrees to sell,
assign, transfer, convey and deliver to the Purchaser, free
and clear from any liens, encumbrances or defects of title
(collectively, "Liens"), except (i) such Liens as may be
placed thereon by the Purchaser and (ii) the Liens granted
thereon by the Seller to General Electric Capital Corporation
(the "GE Liens") which the Seller shall cause to be released
no later than and effective as of the Initial Closing, and the
Purchaser agrees to accept, acquire and take delivery of,
1,048,387 Preferred Units (the "First Tranche Units").
b. Subject to the conditions set forth in this Agreement, the
Seller agrees to sell, assign, transfer, convey and deliver to
the Purchaser, and the Purchaser agrees to accept, acquire and
take delivery of, at one or more (but no more than three)
Subsequent Closings (as defined below), an aggregate number of
901,613 Preferred Units (the "Second Tranche Units"), which
portion of the Second Tranche Units to be purchased and sold
at any Subsequent Closing shall be free and clear from any
Liens, except (i) such Liens as may be placed thereon by the
Purchaser and (ii) the GE Liens granted thereon by the Seller
which the Seller shall cause to be released no later than and
as of the applicable Subsequent Closing at which such portion
of the Second Tranche Units are purchased and sold.
2. CLOSINGS; DEPOSIT; PAYMENTS OF PURCHASE PRICE.
a. Initial Closing. Subject to the terms and conditions set forth
herein, the closing (the "Initial Closing") of the purchase
and sale of the First Tranche Units and the deliveries
required at the Initial Closing shall occur via certified
mail, overnight courier, email and/or facsimile delivery on
February 6, 2004, unless a different date shall be agreed upon
in writing by the Seller and the Purchaser. At the Initial
Closing, the Purchaser shall pay to the Seller cash in the
amount set forth on Schedule A hereto (the aggregate amount
payable by the Purchaser at the Initial
Closing, the "Initial Purchase Price"). The Initial Purchase
Price shall be paid to the Seller by means of a wire transfer
of immediately available funds to a bank account designated by
the Seller in writing.
b. Subsequent Closings.
(i) Subject to the terms and conditions set forth herein,
the closing or, as the case may be, closings (each, a
"Subsequent Closing" and collectively, the
"Subsequent Closings"; the Initial Closing and the
Subsequent Closings together are referred to herein
as the "Closings") of the purchase and sale of the
Second Tranche Units and the deliveries required at
each Subsequent Closing shall occur via certified
mail, overnight courier, email and/or facsimile
delivery and at such time or times on or prior to
March 15, 2004 as may be designated by the Purchaser
to the Seller pursuant to a written notice (each, a
"Subsequent Closing Notice") provided no less than
three Business Days in advance of each Subsequent
Closing. Each Subsequent Closing Notice shall specify
the date of the Subsequent Closing and the number of
Second Tranche Units that shall be purchased and sold
at such Subsequent Closing. Subject to the conditions
set forth in this Agreement, the Purchaser shall
purchase all of the Second Tranche Units in one or
more (but no more than three) Subsequent Closings on
or prior to March 15, 2004. For purposes of this
Agreement, the term "Business Days" shall mean a day
other than a Saturday, Sunday or a legal holiday on
which national banks located in the State of New York
are not open for general banking business.
(ii) If the Purchaser elects to purchase all of the Second
Tranche Units at a single Subsequent Closing, then
the Purchaser shall pay to the Seller cash in the
amount set forth on Schedule B hereto (the "One
Subsequent Closing Purchase Price") less the Deposit
(as defined below), which amount shall be paid to the
Seller by means of a wire transfer of immediately
available funds to a bank account designated by the
Seller in writing, and the Deposit shall
automatically be released to and retained by the
Seller.
(iii) If the Purchaser elects to purchase the Second
Tranche Units at two or three Subsequent Closings,
then the Purchaser shall pay to the Seller in cash at
each Subsequent Closing (at which there remain
additional Second Tranche Units that have not yet
been purchased), an amount equal to the amount set
forth on Schedule C hereto (each, a "Multiple
Subsequent Closings Purchase Price"), which amount
shall be paid to the Seller by means of a wire
transfer of immediately available funds to a bank
account designated by the Seller in writing. At the
Subsequent Closing at which the Purchaser shall
purchase any remaining Second Tranche Units that were
not purchased at prior Subsequent Closings (the
"Final Subsequent Closing"), the Purchaser shall pay
to the Seller cash in an amount equal to the Multiple
Subsequent Closings Purchase Price (the "Final
Subsequent
Closing Purchase Price") less the Deposit (or that
portion remaining if any portion of the Deposit was
applied at a prior Subsequent Closing as contemplated
by the last sentence of this Section 2(b)(iii)),
which amount shall be paid to the Seller by means of
a wire transfer of immediately available funds to a
bank account designated by the Seller in writing, and
the Deposit shall automatically be released to and
retained by the Seller. In the event that at any
Subsequent Closing the portion of the Multiple
Subsequent Closings Purchase Price payable at such
Subsequent Closing that is applicable to the amount
referenced in Clause (A) of the first sentence of
Schedule C attached hereto, together with all amounts
paid by Purchaser at a prior Subsequent Closing that
were applicable to the amount referenced in such
Clause (A), would exceed $39,000,000 then that
portion of the Multiple Subsequent Closings Purchase
Price which exceeds $39,000,000 and that relates to
the amount referenced in such Clause (A) will be paid
from the Deposit (defined below).
c. Deposit.
(i) Contemporaneously with the delivery of the Initial
Purchase Price to the Seller in accordance with
Section 2(a), the Purchaser shall deliver to the
Seller cash in the amount of $4,000,000 (together
with any earnings thereon, the "Deposit") by wire
transfer of immediately available funds to an
interest bearing bank account designated by the
Seller in writing. The Seller shall hold the Deposit
in such bank account until the Deposit shall
automatically be released to and retained by the
Seller and credited toward the payment of the One
Subsequent Closing Purchase Price or the Final
Subsequent Closing Purchase Price, as applicable, to
be paid by the Purchaser to the Seller at the
applicable Subsequent Closing in accordance with
Section 2(b)(ii) or 2(b)(iii).
(ii) If the Purchaser fails to purchase all of the Second
Tranche Units on or prior to March 15, 2004 pursuant
to the terms hereof, and at such time the Seller
shall not be in material breach of its obligations
hereunder, then at 5:00 p.m., New York City time, on
March 15, 2004, the Deposit shall automatically be
released to and retained by the Seller; provided,
however, that if the Seller is in material breach of
any of its obligations hereunder on March 15, 2004
and such breach is cured within 10 days, and the
Purchaser thereafter fails to purchase all of the
Second Tranche Units on or prior March 25, 2004, then
at 5:00 p.m., New York City time, on March 25, 2004,
the Deposit shall automatically be released to and
retained by the Seller.
(iii) The Seller and the Purchaser acknowledge, stipulate
and agree that the damages that may be suffered by
the Seller as a result of a failure of the Purchaser
to consummate the transactions contemplated to be
consummated at the Subsequent Closings under the
circumstances described in Section 2(c)(ii) would be
difficult to ascertain with precision,
that the Deposit represents a reasonable and fair
estimation of such damages and that there would not
be a convenient and adequate alternative to
liquidated damages hereunder. Any retention by the
Seller of the Deposit pursuant to Section 2(c)(ii) is
intended not as a penalty, but as full liquidated
damages under the applicable laws, regulations and
rules of any governmental or regulatory body or
agency. Notwithstanding anything to the contrary
contained in this Agreement, the Seller's right under
such circumstances to retain the Deposit as full
liquidated damages shall be the Seller's sole and
exclusive remedy with respect to any contractual
claim in the event of default by the Purchaser
hereunder and, upon retention of the Deposit by the
Seller, the Seller shall be deemed to have waived and
released any right to xxx the Purchaser for specific
performance of this Agreement or to recover any
damages or other amounts in excess of the Deposit
based on a contractual claim, and the Purchaser
thereupon shall be relieved of all further
obligations and liabilities arising out of this
Agreement to such extent.
(iv) In the event that the transactions contemplated to be
consummated at the Subsequent Closings have not been
consummated on or prior to March 15, 2004 for any
reason other than under the circumstances described
in Section 2(c)(ii), then, upon termination of this
Agreement, the Deposit shall promptly be refunded to
the Purchaser.
d. The Purchaser's Condition to Closing. The obligation of the
Purchaser to proceed with each Closing shall be conditional
upon:
(i) Receipt by the Purchaser from the Seller of a
certificate, dated as of the date of such Closing, of
an executive officer of the Seller, in a form
reasonably satisfactory to the Purchaser, to the
effect that all representations and warranties made
by the Seller in this Agreement are true and correct
in all material respects as of such Closing; and
(ii) There being in existence no injunction, judgment or
order of a court or administrative agency of
competent jurisdiction or any condition imposed under
any law or regulation which would prohibit the
purchase of the Preferred Units to be purchased at
such Closing.
e. The Seller's Conditions to Closing. The obligation of the
Seller to proceed with each Closing shall be conditional upon:
(i) Receipt by the Seller from the Purchaser of a
certificate, dated as of the date of such Closing, of
an executive officer of Brandywine Realty Trust, a
Maryland real estate investment trust and sole
general partner of the Purchaser in a form
satisfactory to the Seller, to the effect that all
representations and warranties made by the Purchaser
in this Agreement are true and correct in all
material respects as of such Closing; and
(ii) There being in existence no injunction, judgment or
order of any court or administrative agency of
competent jurisdiction or any condition imposed under
any law or regulation which would prohibit the
purchase or sale of the Preferred Units to be
purchased and sold at such Closing.
f. Deliveries.
(i) Deliveries at the Initial Closing. The Initial
Closing shall be completed when each of the following
has been delivered, all of which shall be deemed to
have taken place simultaneously:
(A) The Purchaser shall have delivered to the
Seller the Initial Purchase Price; and
(B) The Seller shall have delivered to the
Purchaser a certificate or certificates
evidencing the First Tranche Units, which
certificate(s) shall be duly endorsed in
blank or accompanied by duly executed
powers.
(ii) Deliveries at the Subsequent Closings. Each of the
Subsequent Closings shall be completed when each of
the following has been delivered, all of which shall
be deemed to have taken place simultaneously:
(A) The Purchaser shall have delivered to the
Seller, (1) in the case of a single
Subsequent Closing pursuant to Section
2(b)(ii), the One Subsequent Closing
Purchase Price less the Deposit, or (2) in
the case of two or three Subsequent Closings
pursuant to Section 2(b)(iii), at each
Closing that is not the Final Subsequent
Closing, the Multiple Subsequent Closings
Purchase Price applicable to such Subsequent
Closing (payable in a manner contemplated by
Section 2(b)(iii) above), and at the Final
Subsequent Closing, the Multiple Subsequent
Closings Purchase Price applicable to such
Subsequent Closing less the Deposit (or that
portion remaining if any portion of the
Deposit was applied at a prior Subsequent
Closing as contemplated by Section 2(b)(iii)
above).
(B) If the Purchaser elects to purchase all of
the Second Tranche Units at a single time
pursuant to Section 2(b)(ii), or at the
Final Subsequent Closing, the Deposit shall
have been automatically released to and be
retained by the Seller in accordance with
Section 2(c)(i); and
(C) The Seller shall have delivered to the
Purchaser a certificate or certificates
evidencing the portion of the Second Tranche
Units to be purchased and sold at such
Subsequent Closing, which certificate(s)
shall be duly endorsed in blank or
accompanied by duly executed powers.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to the Purchaser as follows:
a. Due Organization. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Virginia, with all requisite power to own its
properties and to conduct its business as now conducted.
b. Authorization. The Seller has the requisite power and
authority to enter into this Agreement, to carry out its
obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance
of this Agreement have been duly authorized by the Board of
Directors of the Seller and by the stockholders of the Seller,
and no additional corporate or other action of the Seller is
required in order to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and
delivered by the Seller and constitutes the legal, valid and
binding agreement of the Seller, enforceable against the
Seller in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general
equitable principles.
c. Preferred Units. The Seller is the beneficial and legal owner
of record of all of the Preferred Units to be delivered by the
Seller and the Seller holds such Preferred Units free and
clear of all Liens, except for the GE Liens, which (i) with
respect to the First Tranche Units, shall be released at the
Initial Closing and (ii) with respect to the portion of the
Second Tranche Units to be purchased and sold at each
Subsequent Closing, shall be released at such Subsequent
Closing. Except for the Amended and Restated Agreement of
Limited Partnership of the Purchaser, dated as of November 18,
1997, by and among Brandywine Realty Trust, as general
partner, and the other parties signatory thereto (as modified,
supplemented and amended on or prior to the date hereof, the
"Limited Partnership Agreement"), the Seller has no other
agreements, arrangements or understandings, whether by means
of a right of first refusal or first purchase or otherwise,
with respect to a sale or other disposition of the Preferred
Units and there are no shareholder agreements, voting trusts
or other agreements or understandings to which the Seller is a
party or by which it is bound relating to the Preferred Units.
d. No Consents or Approvals. Except for the GE Liens which the
Seller shall cause to be removed at the Initial Closing with
respect to the First Tranche Units and at each Subsequent
Closing with respect to the portion of the Second Tranche
Units to be purchased and sold at such Subsequent Closing, no
consent, authorization or approval of, filing or registration
with, waiver of any right of first refusal or first offer
from, or cooperation from, any governmental authority or any
other person not a party to this Agreement is necessary in
connection with the execution, delivery and performance by the
Seller of this Agreement or the consummation by the Seller of
the transactions contemplated hereby.
e. No Conflicts. The execution, delivery and performance by the
Seller of this Agreement and the consummation by the Seller of
the transactions contemplated hereby do not and shall not
violate any material law applicable to the Seller, or violate
or conflict with any provision of any of the organizational
documents of the Seller.
f. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission from any
party in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the
Seller for which the Purchaser could have any liability.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to the Seller as follows:
a. Due Organization. The Purchaser is a limited partnership duly
formed, validly existing and in good standing under the laws
of the State of Delaware, with all requisite power to own its
properties and to conduct its business as now conducted.
b. Authorization. The Purchaser has the requisite power to enter
into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement have
been duly authorized by the general partner of the Purchaser,
and no additional limited partnership or other action of the
Purchaser is required in order to consummate the transactions
contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Purchaser and constitutes a
valid and binding agreement, enforceable against the Purchaser
in accordance with its terms except to the extent that such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general
equitable principles.
c. No Consents or Approvals. No consent, authorization or
approval of, filing or registration with, waiver of any right
of first refusal or first offer from, or cooperation from, any
governmental authority or any other person not a party to this
Agreement is necessary in connection with the execution,
delivery and performance by the Purchaser of this Agreement or
the consummation by the Purchaser of the transactions
contemplated hereby.
d. No Conflicts. The execution, delivery and performance by the
Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby do not and
shall not violate any material law applicable to the
Purchaser, or violate or conflict with any provision of any of
the organizational documents of the Purchaser.
e. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission from any
party in connection with the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Purchaser for which
the Seller could have any liability.
5. TERMINATION. This Agreement shall be terminable:
a. By the Seller and the Purchaser upon mutual written agreement;
b. By the Seller if the Purchaser materially breaches any
covenant, representation or warranty contained herein upon
written notice to the Purchaser and such breach is not cured
within 10 days following written notice from the Seller to the
Purchaser; and
c. By the Purchaser if the Seller materially breaches any
covenant, representation or warranty contained herein upon
written notice to the Seller and such breach is not cured
within 10 days following written notice from the Purchaser to
the Seller.
Upon termination of this Agreement, all obligations of the parties
hereto under this Agreement shall terminate except those obligations
pursuant to Sections 2(c) and 6. Except as expressly set forth in
Section 2(c), neither party hereto shall have any liability to the
other party hereto upon a termination of this Agreement, unless such
termination arises by reason of the material breach of a covenant,
representation or warranty by one of the parties hereto.
6. EXPENSES. Each party hereto shall bear its own expenses with respect to
the negotiation and consummation of this Agreement and the transactions
contemplated hereby.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors,
assigns and affiliates. Neither of the parties hereto shall assign any
of its rights or obligations hereunder without the prior written
consent of the other party hereto.
8. NOTICES. Any notice or other communication provided for herein or given
hereunder to a party hereto shall be in writing and shall be given by
(i) registered or certified mail, postage prepaid, return receipt
requested, (ii) personal delivery, (iii) reputable overnight courier,
or (iv) facsimile transmission, to the respective parties as follows:
If to the Purchaser:
Brandywine Operating Partnership, L.P.
c/o Brandywine Realty Trust
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to (such copy not constituting notice to the Purchaser):
Xxxxxx Xxxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Seller:
c/o Commonwealth Atlantic Properties Inc.
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to (such copy not constituting notice to the Seller):
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
9. FURTHER ASSURANCES. Upon request of the Purchaser, the Seller shall
execute and deliver such other instruments of conveyance, assignment,
transfer and delivery and take such other actions as the Purchaser
reasonably may request in order to consummate the transactions
contemplated by this Agreement.
10. PUBLIC DISCLOSURE. Each of the Seller, the Purchaser, Xxxxxx X. Xxxxxx
and their respective affiliates (including, without limitation, LF
Strategic Realty Investors L.P. and Lazard Freres Real Estate Investors
L.L.C.) may file a copy of this Agreement as an exhibit to any filing
reasonably believed to be required to be made by it with the Securities
and Exchange Commission.
11. TIME IS OF THE ESSENCE. Time shall be of the essence of this Agreement.
12. WAIVER. Neither party hereto may waive any of the terms or conditions
of this Agreement except by a duly signed writing referring to the
specific provision to be waived.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written
and oral, among the parties hereto and their affiliates with respect to
the matters set forth herein.
14. SEVERABILITY. If any provision of this Agreement shall be held invalid,
illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall
not be affected thereby, and there shall be deemed substituted for the
provision at issue a valid, legal and enforceable provision as similar
as possible to the provision at issue.
15. HEADINGS. The section headings herein are for convenience of reference
only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof.
16. COUNTERPARTS; FACSIMILE EXECUTION. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same instrument. Each
counterpart may be delivered by facsimile transmission which
transmission shall be deemed delivery of an originally executed
document.
17. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal substantive laws of the State
of Delaware without regard to principles of choice of law or conflicts
of law of the State of Delaware or any other jurisdiction.
[SIGNATURES ON FOLLOWING PAGES]
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be executed and delivered as of the day and year first written
above.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, its general partner
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
COMMONWEALTH ATLANTIC OPERATING PROPERTIES INC.
By: /s/ XXXX XXXXXXXX
------------------------------
Name: Xxxx Xxxxxxxx
Title: President
SCHEDULE A
Initial Purchase Price
The purchase price for the First Tranche Units shall be $50,000,000 plus
accumulated, accrued and unpaid distributions pursuant to the Limited
Partnership Agreement in respect of such Preferred Units, if any, for the period
from and including January 1, 2004 through and including the date of the Initial
Closing.
SCHEDULE B
One Subsequent Closing Purchase Price
The purchase price for the Second Tranche Units shall be $43,000,000 plus
accumulated, accrued and unpaid distributions pursuant to the Limited
Partnership Agreement in respect of such Preferred Units, if any, for the period
from and including January 1, 2004 through and including the date of the
applicable Subsequent Closing.
SCHEDULE C
Multiple Subsequent Closings Purchase Price
If there are two or three Subsequent Closings, the purchase price for the
portion of the Second Tranche Units to be purchased and sold at each Subsequent
Closing shall be an amount equal to the sum of (A) the Subsequent Closing
Fraction multiplied by $43,000,000 plus (B) accumulated, accrued and unpaid
distributions pursuant to the Limited Partnership Agreement in respect of the
portion of the Second Tranche Units to be purchased and sold at such Subsequent
Closing, if any, for the period from and including January 1, 2004 through and
including the date of such Subsequent Closing. The "Subsequent Closing
Fraction," with respect to any Subsequent Closing, is the fraction, the
numerator of which is the number of the Second Tranche Units set forth in the
Subsequent Closing Notice relating to such Subsequent Closing, and the
denominator of which is 901,613.
