Exhibit 10.1
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
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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.
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(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:
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(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
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(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
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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
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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:
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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.
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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]
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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:
----------------------------
Name:
Title: President and Chief Executive Officer
COMMONWEALTH ATLANTIC OPERATING PROPERTIES INC.
By:
----------------------------
Name:
Title:
SCHEDULE A
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Initial Purchase Price
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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
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One Subsequent Closing Purchase Price
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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
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Multiple Subsequent Closings Purchase Price
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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.
