EXHIBIT 99.4
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED IN THIS WARRANT AND IN THE INVESTMENT AGREEMENT,
DATED AS OF APRIL 19, 1999, BETWEEN BRANDYWINE REALTY TRUST (THE
"COMPANY") AND FIVE ARROWS REALTY SECURITIES III L.L.C., A COPY OF WHICH
WILL BE MADE AVAILABLE BY THE COMPANY UPON REQUEST.
BRANDYWINE REALTY TRUST
COMMON SHARES PURCHASE WARRANT
No. W-1 April 19, 1999
Void after April 19, 2006 Warrant to Purchase 500,000
Common Shares
BRANDYWINE REALTY TRUST, a Maryland real estate investment
trust (the "Company"), for value received, hereby certifies that FIVE
ARROWS REALTY SECURITIES III L.L.C., or registered assigns (the
"Holder"), is entitled to purchase from the Company 500,000 duly
authorized, validly issued, fully paid and nonassessable shares of
beneficial interest, par value $.01 per share, of the Company (the
"Common Shares"), at a purchase price, subject to Section 3.2 herein, of
$24.00 per share, at any time or from time to time prior to 5:00 P.M.,
New York City time, on April 19, 2006 (the "Expiration Date"), all
subject to the terms, conditions and adjustments set forth below in this
Warrant.
This Warrant is originally issued pursuant to the terms of a
certain Investment Agreement, dated as of the date hereof, between the
Company and Five Arrows Realty Securities III L.L.C. (the "Purchase
Agreement"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned such terms in the Purchase
Agreement.
1. DEFINITIONS. As used herein, unless the context
----------- otherwise requires, the following terms
shall have the meanings indicated:
"Additional Common Shares" shall mean all Common Shares issued
------------------------ or sold (or, pursuant to Section
3.3, deemed to be issued) by the Company after the date hereof, and
prior to the twenty-fourth month anniversary of the date this Warrant is
originally issued, whether or not subsequently reacquired or retired by
the Company provided that the following shares shall not constitute
Additional Common Shares:
(a) (i) shares issued upon the exercise of this Warrant or
upon the conversion of the Series B Senior Cumulative Convertible
Preferred Shares and (ii) such number of additional shares as may
become issuable upon the exercise of this Warrant or upon
conversion of the Series B Senior Cumulative Convertible Preferred
Shares by reason of adjustments required pursuant to the anti-
dilution provisions applicable to this Warrant or the Series B
Senior Cumulative Convertible Preferred Shares as in effect on the
date hereof, and
(b) (i) shares issued in the acquisition by the Company or
a subsidiary of one hundred percent (100%) of a public company by
way of merger, consolidation or exchange offer, (ii) shares issued
pursuant to a tender or exchange offer for one hundred percent
(100%) of a public company, (iii) shares issued upon the exercise,
conversion or redemption of options, warrants or units existing or
outstanding on January 11, 1999 or the issuance of shares pursuant
to contractual commitments in effect as of January 11, 1999, (iv)
shares issued as awards to trustees or employees of the Company or
entities in which the Company owns, directly or indirectly, at
least a 50% economic interest for recruitment purposes or pursuant
to an equity incentive plan, provided that the number of Common
-------- Shares, plus the number of
Common Shares issuable upon the exercise of the options or warrants
under the preceding clause (iii) issued in favor of such employees
or trustees, shall not exceed 5,000,000 Common Shares or (v) shares
issued in the acquisition of property or equity interests in
property (e.g., partnership interests of a property-owning
partnership) by the Company or a subsidiary of the Company.
"Business Day" shall mean any day other than a Saturday or a
------------ Sunday or a day on which commercial banking
institutions in the City of New York are authorized by law to be closed.
Any reference to "days" (unless Business Days are specified) shall mean
calendar days.
"Commission" shall mean the Securities and Exchange Commission
---------- or any successor agency having jurisdiction to
enforce the Securities Act.
"Common Shares" shall have the meaning assigned to it in the
------------- introduction to this Warrant, such term to
include any shares of beneficial interest into which such Common Shares
shall have been changed or any shares of beneficial interest resulting
from any reclassification of such Common Shares.
"Company" shall have the meaning assigned to it in the
------- introduction to this Warrant, such term to include
any trust, corporation or other entity which shall succeed to or assume
the obligations of the Company hereunder in compliance with Section 4.
"Convertible Securities" shall mean any evidences of
---------------------- indebtedness, shares of beneficial
interest (other than Common Shares) or other securities directly or
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indirectly convertible into, redeemable for or exchangeable for
Additional Common Shares.
"Current Market Price" shall mean, on any date specified
-------------------- herein, the average of the daily closing
prices for the five consecutive Trading Days preceding such date
specified herein.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
------------ as amended from time to time, and the rules and
regulations thereunder, or any successor statute.
"Expiration Date" shall have the meaning assigned to it in the
--------------- introduction to this Warrant.
"Fair Value" shall mean, on any date specified herein (i) in
---------- the case of cash, the dollar amount thereof, (ii)
in the case of a security, the Current Market Price, and (iii) in all
other cases, the fair value thereof (as of a date which is within 20
days of the date as of which the determination is to be made) determined
in good faith jointly by the Company and the Holder; provided, however,
-------- -------
that if such parties are unable to reach agreement within a reasonable
period of time, the Fair Value shall be determined in good faith, by an
independent investment banking firm selected jointly by the Company and
the Holder or, if that selection cannot be made within ten days, by an
independent investment banking firm selected by the American Arbitration
Association in accordance with its rules, and provided further, that the
-------- -------
Company and the Holder shall each pay one-half of all of the fees and
expenses of any third parties incurred in connection with determining
the Fair Value.
"Holder" shall have the meaning assigned to it in the
------ introduction to this Warrant.
"Operating Agreement" shall mean the Operating Agreement dated
------------------- as of April 19, 1999, between the Company
and Five Arrows Realty Securities III L.L.C.
"Options" shall mean any rights, options or warrants to
------- subscribe for, purchase or otherwise acquire either
Additional Common Shares or Convertible Securities.
"Other Securities" shall mean any shares of beneficial
---------------- interest (other than Common Shares) and
other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be
entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Shares, or which at any
time shall be issuable or shall have been issued in exchange for or in
replacement of Common Shares or Other Securities pursuant to Section 4
or otherwise.
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"Person" shall mean any individual, firm, partnership,
------ corporation, trust, joint venture, association, joint
stock company, limited liability company, unincorporated organization or
any other entity or organization, including a government or agency or
political subdivision thereof, and shall include any successor (by
merger or otherwise) of such entity.
"Purchase Agreement" shall have the meaning assigned to it in
------------------ the introduction to this Warrant.
"Purchase Price" shall mean initially $24.00 per share,
-------------- subject to adjustment and readjustment from
time to time as provided in Section 3, and, as so adjusted or
readjusted, shall remain in effect until a further adjustment or
readjustment thereof is required by Section 3.
"Restricted Securities" shall mean (i) any Warrants bearing
--------------------- the applicable legend set forth in
Section 10.1, (ii) any Common Shares (or Other Securities) issued or
issuable upon the exercise of Warrants which are (or, upon issuance,
will be) evidenced by a certificate or certificates bearing the
applicable legend set forth in such Section, and (iii) any Common Shares
(or Other Securities) issued subsequent to the exercise of any of the
Warrants as a distribution with respect to, or resulting from a
subdivision of the outstanding Common Shares (or other Securities) into
a greater number of shares by reclassification, share splits or
otherwise, or in exchange for or in replacement of the Common Shares (or
Other Securities) issued upon such exercise, which are evidenced by a
certificate or certificates bearing the applicable legend set forth in
such Section.
"Rights" shall have the meaning assigned to it in Section 3.9.
------
"Securities Act" shall mean the Securities Act of 1933, as
-------------- amended from time to time, and the rules and
regulations thereunder, or any successor statute.
"Series B Senior Cumulative Convertible Preferred Shares"
-------------------------------------------------------
shall mean the Company's 8.75% Series B Senior Cumulative Convertible
Preferred Shares, $.01 par value per share.
"Trading Day" shall mean a day on which the Common Shares are
----------- traded on the New York Stock Exchange, or other
national exchange or quotation system used to determine the Current
Market Price.
"Warrant" shall mean this Warrant.
-------
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2. EXERCISE OF WARRANT.
-------------------
2.1. Manner of Exercise; Payment of the Purchase Price.
-------------------------------------------------
(a) This Warrant may be exercised by the Holder hereof, in
whole or in part, at any time or from time to time prior to the
Expiration Date, by surrendering to the Company at its principal office
this Warrant, with the form of Election to Purchase Shares attached
hereto as Exhibit A (or a reasonable facsimile thereof) duly executed by
the Holder and accompanied by payment of the Purchase Price for the
number of Common Shares specified in such form.
(b) Payment of the Purchase Price may be made as follows (or
by any combination of the following): (i) in United States currency by
cash or delivery of a certified check or bank draft payable to the order
of the Company or by wire transfer to the Company, (ii) by cancellation
of such number of the Common Shares otherwise issuable to the Holder
upon such exercise as shall be specified in such Election to Purchase
Shares, such that the excess of the aggregate Current Market Price of
such specified number of shares on the date of exercise over the portion
of the Purchase Price attributable to such shares shall equal the
Purchase Price attributable to the Common Shares to be issued upon such
exercise, in which case such amount shall be deemed to have been paid to
the Company and the number of shares issuable upon such exercise shall
be reduced by such specified number, or (iii) by surrender to the
Company for cancellation certificates representing Common Shares of the
Company owned by the Holder (properly endorsed for transfer in blank)
having an aggregate Current Market Price on the date of Warrant exercise
equal to the Purchase Price.
2.2. When Exercise Effective.
----------------------- Each exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of
business on the Business Day on which this Warrant shall have been
surrendered to, and the Purchase Price shall have been received by, the
Company as provided in Section 2.1, and at such time the Person or
Persons in whose name or names any certificate or certificates for
Common Shares (or Other Securities) shall be issuable upon such exercise
as provided in Section 2.3 shall be deemed to have become the holder or
holders of record thereof for all purposes.
2.3. Delivery of Share Certificates, etc.; Charges, Taxes
----------------------------------------------------
and Expenses.
------------ (a) As soon as practicable after each exercise of this
Warrant, in whole or in part, and in any event within three Trading Days
thereafter, the Company shall cause to be issued in the name of and
delivered to the Holder hereof or, subject to Section 10, as the Holder
may direct,
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(i) a certificate or certificates for the number of Common
Shares (or Other Securities) to which the Holder shall be entitled
upon such exercise plus, in lieu of issuance of any fractional
share to which the Holder would otherwise be entitled, if any, a
check for the amount of cash equal to the same fraction multiplied
by the Current Market Price per share on the date of Warrant
exercise, and
(ii) in case such exercise is for less than all of the
Common Shares purchasable under this Warrant, a new Warrant or
Warrants of like tenor, for the balance of the Common Shares
purchasable hereunder.
(b) An issuance of certificates for Common Shares upon the
exercise of this Warrant shall be made without charge to the Holder
hereof for any issue or transfer tax or other incidental expense,
in respect of the issuance of such certificates, all of which such
taxes and expenses shall be paid by the Company; provided, however,
-------- -------
that the Company shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or
delivery of Common Shares or other securities or property in a name
other than that of the Holder hereof, and no such issue or delivery
shall be made unless and until the person requesting such issue or
delivery has paid to the Company the amount of any such tax or
established, to the reasonable satisfaction of the Company, that
such tax has been paid.
3. ADJUSTMENT OF COMMON SHARES ISSUABLE UPON EXERCISE.
--------------------------------------------------
3.1. Adjustment of Number of Shares.
------------------------------
Upon each adjustment of the Purchase Price as a result of
the calculations made in this Section 3, this Warrant shall thereafter
evidence the right to receive, at the adjusted Purchase Price, that
number of Common Shares (calculated to the nearest one-tenth) obtained
by dividing (i) the product of the aggregate number of shares covered by
this Warrant immediately prior to such adjustment and the Purchase Price
in effect immediately prior to such adjustment of the Purchase Price by
(ii) the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
3.2. Adjustment of Purchase Price.
----------------------------
3.2.1. Below Purchase Price.
-------------------- In case the Company, before (but
not after) the twenty-fourth-month anniversary of the date hereof, shall
issue or sell Additional Common Shares (including Additional Common
Shares deemed to be issued pursuant to Section 3.3 but excluding
Additional Common Shares purchasable upon the exercise of Rights
referred to in Section 3.9) without consideration or for a consideration
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per share (without taking into account customary underwriters' or
placement agents' discounts) less than the Purchase Price in effect
immediately prior to such issue or sale, then the Purchase Price shall
be reduced, concurrently with such issue or sale, to the amount of
consideration for such issuance or sale (or, if for no consideration, to
zero).
3.2.2. Extraordinary Distributions.
--------------------------- In case the Company at any
time or from time to time after the date hereof shall distribute to all
holders of Common Shares evidence of its indebtedness or assets other
than (a) a distribution payable in Common Shares or (b) a Regular
Quarterly Dividend, or (c) a distribution of Rights referred to in
Section 3.9 hereof, then, in each such case, subject to Section 3.7, the
Purchase Price in effect immediately prior to the close of business on
the record date fixed for the determination of holders of any class of
securities entitled to receive such distribution shall be reduced,
effective as of the close of business on such record date, to a price
determined by multiplying such Purchase Price by a fraction
(x) the numerator of which shall be the Current Market Price
in effect on such record date or, if the Common Shares trade on an
ex-distribution basis, on the date prior to the commencement of ex-
distribution trading, less the Fair Value of such distribution
applicable to one Common Share, and
(y) the denominator of which shall be such Current Market
Price,
3.3. Treatment of Options and Convertible Securities.
----------------------------------------------- In
case the Company at any time or from time to time after the date hereof
shall issue, sell, grant or assume, or shall fix a record date for the
determination of holders of any class of securities of the Company
entitled to receive, any Options or Convertible Securities (whether or
not the rights thereunder are immediately exercisable), then, and in
each such case, the maximum number of Additional Common Shares (as set
forth in the instrument relating thereto, without regard to any
provisions contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be Additional Common
Shares issued as of the time of such issue, sale, grant or assumption
or, in case such a record date shall have been fixed, as of the close of
business on such record date (or, if the Common Shares trade on an ex-
distribution basis, on the date prior to the commencement of ex-
distribution trading), provided that such Additional Common Shares shall
-------- not be deemed to have been issued (i)
unless the consideration per share (determined pursuant to Section 3.5)
of such shares would be less than the Current Market Price (or, in the
case of an adjustment pursuant to Section 3.2.1, less than the Purchase
Price) in effect on the date of and immediately prior to such issue,
sale, grant or assumption or immediately prior to the close of business
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on such record date (or, if the Common Shares trade on an ex-
distribution basis, on the date prior to the commencement of ex-
distribution trading), as the case may be, and (ii) such Additional
Common Shares are not purchasable pursuant to Rights referred to in
Section 3.9, and provided, further, that in any such case in which
-------- ------- Additional Common Shares are deemed
to be issued,
(a) whether or not the Additional Common Shares underlying
such Options or Convertible Securities are deemed to be issued, no
further adjustment of the Purchase Price shall be made upon the
subsequent issue or sale of Convertible Securities or Common Shares
upon the exercise of such Options or the conversion or exchange of
such Convertible Securities, except in the case of any such Options
or Convertible Securities which contain provisions requiring an
adjustment, subsequent to the date of the issue or sale thereof, of
the number of Additional Common Shares issuable upon the exercise
of such Options or the conversion or exchange of such Convertible
Securities by reason of (x) a change of control of the Company, (y)
the acquisition by any Person or group of Persons of any specified
number or percentage of the voting securities of the Company or (z)
any similar event or occurrence, each such case to be deemed
hereunder to involve a separate issuance of Additional Common
Shares, Options or Convertible Securities, as the case may be;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Company, or decrease in the number
of Additional Common Shares issuable, upon the exercise, conversion
or exchange thereof (by change of rate or otherwise), the Purchase
Price computed upon the original issue, sale, grant or assumption
thereof (or upon the occurrence of the record date, or date prior
to the commencement of ex-distribution trading, as the case may be,
with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options, or the rights of conversion or
exchange under such Convertible Securities, which are outstanding
at such time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not
have been exercised or the expiration of any rights of conversion
or exchange under any such Convertible Securities which (or
purchase by the Company and cancellation or retirement of any such
Convertible Securities the rights of conversion or exchange under
which) shall not have been exercised, the Purchase Price computed
upon the original issue, sale, grant or assumption thereof (or upon
the occurrence of the record date, or date prior to the
commencement of ex-distribution trading, as the case may be, with
respect thereto), and any subsequent adjustments based thereon,
shall, upon such expiration (or such cancellation or retirement, as
the case may be), be recomputed as if:
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(i) in the case of Options for Common Shares or
Convertible Securities, the only Additional Common Shares
issued or sold were the Additional Common Shares, if any,
actually issued or sold upon the exercise of such Options or
the conversion or exchange of such Convertible Securities and
the consideration received therefor was the consideration
actually received by the Company for the issue, sale, grant or
assumption of all such Options, whether or not exercised, plus
the consideration actually received by the Company upon such
exercise, or for the issue or sale of all such Convertible
Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by the
Company upon such conversion or exchange, and
(ii) in the case of Options for Convertible Securities,
only the Convertible Securities, if any, actually issued or
sold upon the exercise of such Options were issued at the time
of the issue or sale, grant or assumption of such Options, and
the consideration received by the Company for the Additional
Common Shares deemed to have then been issued was the
consideration actually received by the Company for the issue,
sale, grant or assumption of all such Options, whether or not
exercised, plus the consideration deemed to have been received
by the Company (pursuant to Section 3.5) upon the issue or
sale of such Convertible Securities with respect to which such
Options were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of increasing the Purchase Price by an amount
in excess of the amount of the adjustment thereof originally made
in respect of the issue, sale, grant or assumption of such Options
or Convertible Securities; and
(e) in the case of any such Options which expire by their
terms not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Purchase Price shall be
made until the expiration or exercise of all such Options,
whereupon such adjustment shall be made in the manner provided in
subdivision (c) above.
3.4. Treatment of Share Distributions, Share Splits, etc.
----------------------------------------------------
In case the Company at any time or from time to time after the date
hereof shall declare or pay any distribution on the Common Shares
payable in Common Shares, or shall effect a subdivision of the
outstanding Common Shares into a greater number of Common Shares (by
reclassification or otherwise than by payment of a distribution in
Common Shares), then the Purchase Price in effect immediately prior to
such action shall be proportionately reduced and the number of Common
Shares issuable upon exercise of this Warrant shall be proportionately
increased.
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3.5. Computation of Consideration.
---------------------------- For the purposes of this
Section 3,
(a) the consideration for the issue or sale of any
Additional Common Shares shall, irrespective of the accounting
treatment of such consideration,
(i) insofar as it consists of cash, be computed at the
amount of cash payable to the Company, without deducting any
expenses paid or incurred by the Company or any commissions or
compensations paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in
connection with such issue or sale,
(ii) insofar as it consists of property (including
securities) other than cash, be computed at the Fair Value
thereof at the time of such issue or sale, and
(iii) in case Additional Common Shares are issued or
sold together with other shares of beneficial interest or
securities or other assets of the Company for a consideration
which covers both, be the portion of such consideration so
received, computed as provided in clauses (i) and (ii) above,
allocable to such Additional Common Shares, such allocation to
be determined in the same manner that the Fair Value of
property not consisting of cash or securities is to be
determined as provided in the definition of "Fair Value"
herein;
(b) Additional Common Shares deemed to have been issued
pursuant to Section 3.3, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration
per share determined by dividing
(i) the total amount, if any, received and receivable by
the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration to protect
against dilution) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such
Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of Common Shares (as set forth
in the instruments relating thereto, without regard to any
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