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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 21, 1996
BRANDYWINE REALTY TRUST
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(Exact name of registrant as specified in its charter)
MARYLAND 1-9106 23-2413352
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation or Organization) file number) Identification Number)
Two Greentree Centre, Suite 100, Marlton, New Jersey 08053
(Address of principal executive offices)
(609) 797-0200
(Registrant's telephone number, including area code)
Page 1 of 62 pages
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Item 5. Other Events.
On June 21, 1996, an entity controlled by Richard M. Osborne,
Turkey Vulture Fund XIII, Ltd. (the "RMO Fund"), made an investment in
Brandywine Realty Trust (the "Trust") in the aggregate amount of $1,329,806 (the
"Aggregate Investment"). $337,513 of the Aggregate Investment was made in
exchange for 59, 949 units (each consisting of one common share of beneficial
interest, par value $.01 per share ("Common Stock"), and one warrant exercisable
for six years for an additional share of Common Stock at an initial exercise
price of $6.50), and the balance was made in the form of a loan (the "Loan")
that will be subject to prepayment, under certain circumstances, through the
issuance by the Trust of additional units. Proceeds of the investment (including
proceeds attributable to exercise of warrants included within units) will be
used by the Trust for working capital purposes and, if the Trust acquires
additional real estate, may be used to make a partial payment of the purchase
price.
The Trust has been advised that Mr. Osborne has sole authority
to vote and dispose of the Common Stock owned by the RMO Fund. Mr. Osborne,
through the RMO Fund and the Richard M. Osborne Trust (of which Mr. Osborne is
sole trustee) currently owns beneficially 658,698 shares of Common Stock
(including 59,949 shares issuable upon exercise of warrants included within the
above-referenced units), or approximately 33.3% of the outstanding shares of
Common Stock as of the date hereof.
The principal sum outstanding from time to time under the Loan
will bear interest at an annual rate equal to the prime rate of interest, and
interest will be payable quarterly in arrears, provided that the Trust will have
the right to have such accrued interest added to the principal balance of the
Loan. Principal and accrued interest will be payable in full on the third
anniversary of the date of the Loan. Under certain circumstances, the Trust will
be required to prepay principal plus accrued interest on the Loan by delivering
to the RMO Fund additional units at $5.63 per unit, each units comprised of one
share of Common Stock and an additional six-year warrant exercisable for an
additional share of Common Stock with an initial exercise price of $6.50.
The Trust has agreed to provide the RMO Fund with registration
rights covering the shares of Common Stock issued and issuable as part of its
investment. The registration rights agreement (the "Registration Rights
Agreement") will be entered into by the Trust, the RMO Fund, Safeguard
Scientifics, Inc. ("SSI") and The Nichols Company ("TNC") at the time of the
closing of the proposed transaction among the Trust, SSI and TNC (the "SSI/TNC
Transaction"). If the SSI/TNC Transaction is not consummated, the Trust will
provide registration rights to the RMO Fund on substantially similar terms to
those that would have been provided in the form of Registration Rights Agreement
attached hereto as Exhibit 99.4.
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The Registration Rights Agreement will provide that, at the
request of certain holders of registerable securities, including the RMO Fund
("Registrable Securities"), the Trust will, at its expense, register up to two
underwritten distributions of Registrable Securities and provide for an annual
shelf registration of such Registrable Securities for sale at the market through
brokers' transactions and thereafter with marketmakers; provided, however, that
the Trust will not be obligated to pay the expenses of an underwritten offering
during the first twelve months after the closing date of the SSI/TNC
Transaction. The holders of Registrable Securities will also be entitled to
"piggyback" on the registrations of the Trust's Common Stock. In connection with
the registrations, the Trust and the selling shareholders will mutually
indemnify each other against certain liabilities, including liabilities under
federal securities laws.
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits.
(c) Exhibits
99.1 Loan and Securities Purchase Agreement, dated June 21, 1996,
between the RMO Fund and the Trust.
99.2 Promissory Note, dated June 21, 1996, in the original
principal amount of $992,293 issued by the Trust to the RMO
Fund.
99.3 Warrant to purchase 59,949 shares of Common Stock dated June
21, 1996, issued by the Trust to the RMO Fund.
99.4 Form of Registration Rights Agreement.
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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 hereunto duly authorized.
BRANDYWINE REALTY TRUST
Date: June 21, 1996 By: /s/ Gerard H. Sweeney
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Title: President and Chief
Executive Officer
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Exhibit Index
99.1 Loan and Securities Purchase Agreement, dated June 21, 1996, between
the RMO Fund and the Trust.
99.2 Promissory Note, dated June 21, 1996, in the original principal amount
of $992,293 issued by the Trust to the RMO Fund.
99.3 Warrant to purchase 59,949 shares of Common Stock dated June 21, 1996,
issued by the Trust to the RMO Fund.
99.4 Form of Registration Rights Agreement.
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THE SECURITIES OFFERED AND SOLD PURSUANT TO THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE, AND THERE ARE RESTRICTIONS ON THE TRANSFERABILITY
OF THE SECURITIES AS DESCRIBED HEREIN.
LOAN AND SECURITIES PURCHASE AGREEMENT
THIS LOAN AND SECURITIES PURCHASE AGREEMENT (this "Agreement")
is made and entered into this 21st day of June, 1996, by and between TURKEY
VULTURE FUND XIII, LTD., having an address at 7001 Center Street, Mentor, Ohio
44060 (the "Fund"), and BRANDYWINE REALTY TRUST, having an address at Two
Greentree Centre, Suite 100, Marlton, New Jersey 08053 (the "Company").
RECITALS
A. The Richard M. Osborne Trust (the "RMO Trust"), an
affiliate of the Fund, owns beneficially, 538,800 common shares of beneficial
interest of the Company, par value $0.01 per share ("Common Stock").
B. To raise working capital and to conduct its business, the
Company desires to (i) sell to the Fund, and the Fund desires to purchase from
the Company, Fifty Nine Thousand Nine Hundred Forty Nine (59,949) units (each, a
"Unit") comprised of one share of Common Stock and one warrant to purchase an
additional share of Common Stock at an initial exercise price of $6.50 per
share, and (ii) borrow from the Fund, and the Fund desires to lend to the
Company, the principal amount of Nine Hundred Ninety Two Thousand Two Hundred
and Ninety Three Dollars ($992,293).
In consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. AGREEMENT TO PURCHASE
1.1. Sale of Units. Subject to and in accordance with the terms of this
Agreement, the Fund hereby purchases from the Company Fifty Nine Thousand Nine
Hundred Forty Nine (59,949) Units, and the Company hereby sells and issues such
Units to the Fund, free and clear of any liens, charges, claims, and
encumbrances whatsoever.
1.2. Purchase Price for Units. The purchase price for each Unit is Five
Dollars and sixty three cents ($5.63), amounting to an aggregate purchase price
for the Units of Three Hundred Thirty Seven Thousand Five Hundred Thirteen
Dollars ($337,513) (the
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"Purchase Price"), for an aggregate 59,949 shares of Common Stock (the "Shares")
and warrants to purchase an additional 59,949 shares of Common Stock. The Fund
has delivered contemporaneously with the execution and delivery of this
Agreement a check or wire transfer payable to the Company in the amount of the
Purchase Price.
1.3. Delivery of Units. The Company has delivered to the Fund
contemporaneously with the execution and delivery of this Agreement (i) a stock
certificate representing the Shares and (ii) a Stock Purchase Warrant in
substantially the form attached hereto as Exhibit A (the "Warrant") evidencing
the warrants being purchased and sold hereunder, both of the foregoing duly
executed and registered in the name of the Turkey Vulture Fund XIII, Ltd.
2. THE LOAN
2.1. Loan. Subject to and in accordance with the terms of this
Agreement, the Fund hereby lends to the Company Nine Hundred Ninety Two Thousand
Two Hundred Ninety Three Dollars ($992,293) (the "Loan"). The Fund has delivered
contemporaneously with this Agreement a check or wire transfer payable to the
Company for the entire principal amount of the Loan.
2.2. Delivery of Note. The Company has delivered to the Fund
contemporaneously with the execution and delivery of this Agreement a duly
executed promissory note of the Company (the "Note"), in substantially the form
attached hereto as Exhibit B, evidencing the Loan and setting forth the terms
and conditions pursuant to which the Loan shall be repaid to the Fund.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. Representations, Warranties and Covenants of the Fund.
By executing this Agreement, the Fund hereby:
3.1.1. Represents and warrants that it maintains its
corporate headquarters and principal place of business at the
address set forth above.
3.1.2. Acknowledges that it has received a copy of the
Company's SEC Reports (as defined below).
3.1.3. Represents and warrants that the Units being purchased
and sold hereunder, the Note, and the Units that may be issued to the Fund
thereunder (all of the foregoing, including shares of Common Stock that comprise
part of the Units and shares of Common Stock issuable upon exercise of the
warrants included therein, collectively, the "Securities") are being acquired
for the Fund's own account, without a view to public distribution or resale and
that the Fund has no contract, undertaking, agreement
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or arrangement to sell or otherwise transfer or dispose of any Securities or any
portion thereof to any other person.
3.1.4. Understands that the Securities have not been
registered under the Securities Act of 1933, as amended (the "Securities Act")
or the securities laws of any state, and, as a result thereof, the Securities
are subject to substantial restrictions on transfer.
3.1.5. Agrees that it will not sell or otherwise transfer or
dispose of any Securities or any portion thereof except in accordance with the
Securities Act and any applicable state securities laws, and that the Securities
and certificates evidencing the same will bear a legend reflecting such
restrictions.
3.1.6. Represents and warrants that in determining to purchase
the Securities, it has, during the course of discussions concerning the purchase
of the Securities, been offered the opportunity to ask such questions and
inspect such documents concerning the Company and its business and affairs as it
has requested so as to more fully understand the nature of the investment and to
verify the accuracy of the information supplied.
3.1.7. ACKNOWLEDGES THAT THE PURCHASE OF THE SECURITIES
INVOLVES A HIGH DEGREE OF RISK, AND REPRESENTS AND WARRANTS THAT IT CAN BEAR THE
ECONOMIC RISK OF THE PURCHASE OF THE SECURITIES, INCLUDING THE TOTAL LOSS OF ITS
INVESTMENT.
3.1.8. Represents and warrants that (i) it has adequate means
of providing for its current needs and financial contingencies, (ii) it has no
need for liquidity in this investment, and (iii) the Fund was not formed for the
specific purpose of making an investment in the Securities.
3.1.9. Understands that no federal or state agency has
approved or disapproved the Securities, passed upon or endorsed the merits of
the offering of the Securities hereunder, or made any finding or determination
as to the fairness of the Securities for investment.
3.1.10. Understands that the Securities are being offered and
sold in reliance on specific exemptions from the registration requirements of
federal and state securities laws and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth herein in order to determine the applicability of such
exemption and the suitability of the Fund to acquire the Securities.
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3.1.11. Represents and warrants that it is an "accredited
investor" as such term is defined in Rule 501 of Regulation D under the
Securities Act.
3.2. Representations, Warranties and Covenants of the Company. By
executing this Agreement, the Company hereby represents, warrants and covenants
that:
3.2.1. The Company is a real estate investment trust duly
formed, validly existing and in good standing under the laws of the State of
Maryland and has all requisite trust power and authority, and all necessary
licenses and permits, to own and lease its properties and assets and to conduct
its business as now conducted. The Company is duly qualified to do business and
is in good standing as a foreign business trust in each jurisdiction where the
character of its properties or assets and the nature of its business requires it
to be so qualified.
3.2.2. The Company has all requisite trust power and authority
to execute and deliver this Agreement and each other document, including without
limitation, the Warrant, the Note and the Securities which may be issued
pursuant to the terms of the Note (all of the foregoing, collectively, the
"Transaction Documents") required to be executed and delivered by it in
accordance with the terms hereof, and to carry out the transactions contemplated
hereby and thereby. The execution, delivery and performance by the Company of
this Agreement and each Transaction Document to which it is a party have been
duly authorized by all requisite action. This Agreement has been duly executed
and delivered by the Company and, constitutes (and, when executed and delivered
as contemplated herein each such Transaction Document will constitute) the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforcement
may be limited by bankruptcy, insolvency, moratorium, reorganization and other
similar laws relating to or affecting the enforcement of creditors' rights
generally, and except that the availability of specific performance, injunctive
relief or other equitable remedies is subject to the discretion of the court
before which any such proceeding may be brought.
3.2.3. The execution, delivery and performance by the Company
of this Agreement and each Transaction Document to which it is a party will not,
with or without the giving of notice or lapse of time or both, violate any
provision of law, any rule or regulation of any governmental authority, or any
judgment, decree or order of any court binding on the Company and, will not
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties,
assets or outstanding stock of the Company under its Declaration of Trust or
By-Laws,
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or any indenture, mortgage, lease, agreement or other instrument to which the
Company is a party or by which it or any of its assets or properties is bound.
3.2.4. The authorized capital stock of the Company presently
consists of: (a) 15,000,000 shares of Common Stock, 1,856,200 shares of which
are presently issued and outstanding, and (b) 5,000,000 preferred shares of
beneficial interest, par value $0.01 per share, none of which is presently
issued and outstanding. All issued and outstanding shares of Common Stock have
been duly and validly issued and are fully paid and nonassessable. Except as
otherwise set forth in the SEC Reports (as defined below), and except to the
extent contemplated by the Letter of Intent dated March 20, 1996 among the
Company, Safeguard Scientifics, Inc., and The Nichols Company, a copy of which
the Fund acknowledges receiving, there are no outstanding subscriptions,
warrants, options or other rights to subscribe for or purchase from the Company,
or obligating the Company to issue, any shares of capital stock of the Company
or any securities convertible into or exchangeable for such shares, and there
are no shares of Common Stock reserved for issuance. There are no preemptive or
similar rights to purchase or otherwise acquire shares of capital stock of the
Company pursuant to any provision of law or the Declaration of Trust or By-Laws
of the Company or by agreement or otherwise.
3.2.5. The requisite number of duly authorized and unissued
shares of Common Stock of the Company have been duly authorized and reserved for
issuance upon exercise of the Warrant (the "Warrant Shares"), and except as
provided in Section 5.1 hereof, no further action is required for the valid
issuance of shares of Common Stock upon exercise of the Warrant. Upon the
issuance of any Units pursuant to the terms of the Note (the "Additional
Units"), (a) the requisite number of shares of Common Stock will be duly
authorized and issued (the "Additional Shares"), (b) a stock certificate
representing such shares will be delivered to the Fund contemporaneously with
the issuance of the Additional Units, (c) the requisite number of duly
authorized and unissued shares of Common Stock will be duly authorized and
reserved for issuance upon exercise of the warrants issued thereby (the
"Additional Warrant Shares" and together with the Warrant Shares, collectively,
the "Conversion Shares"), (d) a warrant for the Additional Warrant Shares in
substantially the form of the Warrant (the "Additional Warrant") will be
delivered to the Fund contemporaneously with the issuance of Additional Units,
and, except as provided in Section 5.1 hereof, no further action will thereafter
be required for the valid issuance of shares of Common Stock upon exercise of
such warrants. The Shares have been duly and validly issued, are fully paid and
nonassessable and are free and clear of any liens, charges, claims and
encumbrances whatsoever and are not subject to any preemptive rights. The
Additional Shares will when issued in
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accordance with the terms of the Loan be duly and validly issued, fully paid and
nonassessable and will be issued free and clear of any liens, charges, claims
and encumbrances whatsoever and not subject to any preemptive rights. The
Warrant Shares will, when issued against payment therefor in accordance with the
terms of the Warrant, be duly and validly issued, fully paid and nonassessable
and will be issued free and clear of any liens, charges, claims and encumbrances
whatsoever and not subject to any preemptive rights. The Additional Warrant
Shares will, on the date(s) of the issuance of Additional Units pursuant to the
terms of the Note and thereafter, when issued against payment therefor in
accordance with the terms of such warrants, be duly and validly issued, fully
paid and nonassessable and will be issued free and clear of any liens, charges,
claims and encumbrances whatsoever and not subject to any preemptive rights.
3.2.6. No permit, consent, approval or authorization of, or
declaration to or filing with, any federal, state, local or foreign governmental
or regulatory authority or other person or entity is required in connection with
the execution or delivery of this Agreement or any Transaction Document by the
Company, the offer, issuance, sale or delivery of the Securities, including
without limitation, the Note, the Shares, the Warrant, the Additional Units, the
Additional Shares, the Additional Warrant, or the Conversion Shares, or the
carrying out by the Company of the other transactions contemplated hereby, other
than (a) the filing with, and approval of, the American Stock Exchange, Inc.
("ASE") with respect to the listing of the Common Stock and (b) filings under
federal and applicable state securities laws.
3.2.7. Assuming the accuracy of the Fund's representations and
warranties contained in Section 3.1 hereof, the offer, issuance and delivery to
the Fund pursuant to the terms of this Agreement of the Note, the Shares and the
Warrant and, assuming compliance by the Fund with the terms of this Agreement
and applicable law, the Additional Units, the Additional Shares, the Additional
Warrant and the Conversion Shares, are exempt from registration under the
Securities Act.
3.2.8. Since January 1, 1995, the Company has timely filed all
forms, reports, schedules, statements and other documents required to be filed
with the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (collectively,
the "SEC Reports"). The SEC Reports were prepared in all material respects in
accordance with and complied in all material respects with the requirements of
applicable law, including the Exchange Act and the Securities Act and the
applicable rules and regulations of the SEC thereunder, and the SEC Reports did
not at the time they were filed, and do not contain any untrue statement of a
material fact or omit to state a material fact required to
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be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
3.2.9. The Company shall execute a registration rights
agreement substantially in the form attached hereto as Exhibit D concurrently
upon the closing of the Company's proposed transaction with Safeguard
Scientifics, Inc. ("SSI"), The Nichols Company ("TNC") and certain of its
affiliates as such transaction is more particularly described in the Company's
Preliminary Proxy Statement first filed with the SEC on or about May 9, 1996
(the "SSI/TNC Transaction"); provided that in the event the SSI/TNC Transaction
is not consummated on or prior to October 31, 1996, the Company shall execute a
registration rights agreement in favor of the Fund substantially in the form
attached hereto as Exhibit D with the applicable references to SSI and TNC
deleted.
3.2.10. The Company has complied with all laws (including,
without limitation, the Americans with Disabilities Act of 1990) and
requirements of insurance bodies applicable to the ownership, leasing, use and
operation of its properties and has obtained and fully paid for all licenses,
permits, certificates, entitlements, grants of right and any other items and
documents required by applicable law to be obtained by the Company for the
completion, ownership, leasing, use and occupancy of its properties, except
where the failure to so comply or obtain would not have a material adverse
effect on the Company. Such licenses, permits, certificates, entitlement, grants
of right and other items and documents are in full force and effect. The Company
has not taken any action that would (or failed to take any action, the omission
of which would) result in the revocation or suspension of such licenses,
permits, certificates, entitlements, grants of right and other items and
documents, and the Company has not received any notice of any violation from any
federal, state or municipal entity or notice of an intention by any such
governmental entity to revoke any certificate of occupancy or other certificate,
license, permit, entitlement or grant of right issued by it in connection with
the ownership, use and occupancy of any of its properties that in each case has
not been cured or otherwise resolved to the satisfaction of such governmental
entity.
3.2.11. There are no claims, actions, suits, proceedings or
investigations pending or, to the best of the Company's knowledge, threatened
before any court, governmental unit or any mediator or arbitrator with respect
to the Company or its properties, except for litigation arising in the ordinary
course of business, which litigation, individually or in the aggregate, would
not have a material adverse effect upon the Company or its properties.
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3.2.12. Each of the financial statements (including, in each
case, any related notes thereto) contained in the SEC Reports (i) have been
prepared in all material respects in accordance with the published rules and
regulations of the SEC and generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except in the case of the
unaudited financial statements, as permitted by Form 10-Q of the SEC), (ii)
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, and (iii) fairly present in all material respects the financial
position of the Company as of the respective dates thereof and the results of
operations and cash flows for the periods indicated (subject, in the case of
unaudited financial statements for interim periods, to year-end adjustments,
consisting only of normal recurring accruals), except that any pro forma
financial statements contained in such financial statements are not necessarily
indicative of the financial position of the Company as of the respective dates
thereof and the results of operations and cash flows for the periods indicated.
Since January 1, 1994, the Company has not made any material change in the
accounting practices or policies applied in the preparation of its financial
statements.
4. CONDITIONS TO CLOSING BY FUND
The obligation of the Fund to purchase the Units and make the
Loan is subject to the fulfillment, to the Fund's reasonable satisfaction, of
each of the following conditions:
4.1. Performance. All covenants, agreements and conditions contained in
this Agreement and each of the Transaction Documents to be performed or complied
with by the Company on or prior to the date hereof shall have been performed or
complied with by the Company in all respects.
4.2. Legal Opinion. The Company shall have delivered to the Fund an
opinion of Pepper, Hamilton & Scheetz, counsel to the Company, dated the date
hereof, addressed to the Fund and in the form attached hereto as Exhibit C.
4.3. Qualifications. On the date hereof, all authorizations, approvals
or permits of, or filings with, any governmental authority, including state
securities or blue sky offices that are required prior to the date hereof in
connection with the issuance of the Securities to be issued to the Fund on the
date hereof shall have been duly obtained and shall be effective on and as of
the date hereof.
4.4. Secretary's Certificate. The Company shall have delivered to the
Fund copies of each of the following, certified
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as accurate, true and complete copies thereof as of the date hereof by the
Company's Secretary:
(a) resolutions of the Board of Trustees of the
Company, authorizing and approving this Agreement, the Transaction Documents and
all transactions contemplated hereby and thereby; and
(b) the signature(s) and incumbency of the officer(s)
of the Company authorized to execute and deliver the Transaction Documents.
4.5. Good Standing Certificate. The Company shall have delivered to the
Fund a good standing certificate, dated not more than ten (10) days prior to the
date hereof, relating to the Company from the Secretary of State of the State of
Maryland and for each State in which the Company is qualified to do business as
a foreign business trust.
4.6. Additional Documents. The Fund shall have received such other
documents, instruments, approvals or opinions as the Fund shall have reasonably
requested.
4.7. Legal Fees. The Company shall have paid the reasonable fees and
expenses of the Fund's counsel only to the extent incurred in connection with
the negotiation, execution and delivery of this Agreement, the other Transaction
Documents and the consummation of the transactions contemplated herein and
therein.
5. MISCELLANEOUS PROVISIONS
5.1. In no event shall the Company be obligated to issue any shares of
Common Stock upon exercise of any warrants or to deliver any Units hereunder or
under the Note in the event such issuance or delivery would contravene the
provisions of Section 3.3(a) of the Company's Declaration of Trust.
5.2. No recourse shall be had for any obligation of the Company
hereunder, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee of
the Company, whether by virtue of any statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such other liability
being expressly waived and released by the Fund.
5.3. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
5.4. This Agreement and the other Transaction Documents, together with
the exhibits hereto, and thereto, sets forth the
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entire understanding and agreement between the parties hereto with respect to
the subject matter hereof, and supersedes any and all prior and contemporaneous
agreements, inducements, covenants, conditions, representations and warranties,
oral or written, expressed or implied, except as contained herein. This
Agreement may be modified only by a written document signed by each of the
parties hereto. Except as set forth in Section 5.14 hereof, nothing herein shall
modify, amend or limit in any way that certain Agreement dated as of March 20,
1996, by and among the Company, the RMO Trust and Richard M. Osborne (the "March
Agreement"), or the terms and conditions thereof.
5.5. In the event that for any reason any provision of this Agreement
shall be deemed to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. In furtherance and not in limitation of the foregoing, in
no event shall any actions be taken pursuant to this Agreement, the Securities
or the Loan (including without limitation, the exercise of the Warrant and/or
the warrants or the issuance of any shares of Common Stock upon such exercise)
to the extent that such action would result, or could (in the view of the
Company and the Fund) reasonably be construed to result, (i) in a violation of
the provisions of Section 3-601 et. seq. of the Maryland General Corporation Law
or (ii) in the Fund owning an interest in the Company that would fall within, or
be greater than, the "control share" range of "one-third or more, but less than
a majority of all voting power" as provided in and contemplated by the
provisions of Section 3-701 et. seq. of the Maryland General Corporation Law.
5.6. This Agreement shall be governed, construed and enforced in
accordance with the internal laws of the State of Maryland.
5.7. The provisions of this Agreement may be amended only in writing by
mutual agreement of the Company and the Fund.
5.8. All representations and warranties contained herein or made in
writing by any party in connection herewith shall survive the execution and
delivery of this Agreement and the other Transaction Documents, the consummation
of the transactions contemplated hereby and thereby and any investigation made
at any time by or on behalf of the Fund.
5.9. The descriptive headings of this Agreement are inserted for
convenience of reference only and do not constitute a part of this Agreement.
5.10. All notices required to be given to either of the parties
hereunder shall be in writing and shall be deemed to have been sufficiently
given for all purposes when presented
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personally to such party, sent by overnight courier, or sent by certified or
registered mail, return receipt requested, to such party at its address set
forth in the heading of this Agreement. Such notice shall be deemed to be given
when received if delivered personally, the next day after the date sent if sent
by overnight courier, or three days after the date mailed if sent by certified
or registered mail. Any notice of any change in such address shall also be given
in the manner set forth above. Whenever the giving of notice is required the
giving of such notice may be waived in writing by the party entitled to receive
such notice.
5.11. All exhibits hereto and the other Transaction Documents to be
delivered to the Fund pursuant hereto are an integral part of this Agreement.
5.12. No course of dealing between the Company and the Fund or any
delay in exercising or omission to exercise any right, power or remedy accruing
to the Fund, upon any breach or default of the Company under any of the
Transaction Documents, shall impair any such right, power or remedy of the Fund
or shall be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; and any waiver of any single breach or default shall not be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of the
Fund of any provisions or conditions of the Transaction Documents must be made
in writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, under the Transaction Documents or otherwise
afforded to the Fund, shall be cumulative and not alternative.
5.13. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and
such counterparts together shall constitute one instrument. Each party shall
receive a duplicate original of the counterpart copy or copies executed by it
and the other party.
5.14. The Fund agrees to be bound by all of the provisions of the March
Agreement to the same extent as if it were a named party thereto and included in
the term "Holder."
-11-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, intending to be legally bound, this 21st day of June, 1996.
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
--------------------------------
Gerard H. Sweeney, President
TURKEY VULTURE FUND XIII, LTD.
By:________________________________
Title:
ACKNOWLEDGED THIS ___ DAY
OF JUNE, 1996:
SAFEGUARD SCIENTIFICS, INC.
By:_______________________
Title:
THE NICHOLS COMPANY
By:_______________________
Title:
-12-
<PAGE>
THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD,
ASSIGNED OR TRANSFERRED UNLESS EITHER IT IS FIRST REGISTERED UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR SUCH SALE, ASSIGNMENT OR TRANSFER IS
MADE PURSUANT TO AN EXEMPTION GRANTED UNDER THE ACT AND ANY SUCH STATE
SECURITIES LAWS.
PROMISSORY NOTE
$992,293 Marlton, New Jersey
June 21, 1996
FOR VALUE RECEIVED, BRANDYWINE REALTY TRUST, a Maryland real
estate investment trust with an office at Two Greentree Centre, Suite 100,
Marlton, New Jersey 08053 ("Maker"), promises to pay to the order of TURKEY
VULTURE FUND XIII, LTD., having an address at 7001 Center Street, Mentor, Ohio
44060 ("Payee"), at such office or residence of Payee, or at such other office
or other place as Payee may designate from time to time in writing, the
principal sum of Nine Hundred Ninety Two Thousand Two Hundred Ninety Three
Dollars ($992,293), as adjusted as provided in Section 2 below, in lawful money
of the United States of America, together with interest thereon from the date
hereof at the rate hereafter provided, and both payable as hereafter provided.
This Promissory Note is made in connection with the transactions contemplated by
that certain Loan and Securities Purchase Agreement, dated the date hereof, by
and between Maker and the Payee (the "Loan and Securities Purchase Agreement").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Loan and Securities Purchase Agreement.
1. Interest Rate. The principal sum outstanding from time to
time hereunder shall bear interest at an annual rate equal to the prime rate of
interest as published in The Wall Street Journal from time to time (the "Prime
Rate"). Interest shall be calculated on the basis of the actual number of days
the principal sum is outstanding over a 365 day year.
2. Payments of Principal and Interest. Unless first prepaid in
accordance with the terms of Section 3 hereof, payments of principal plus
interest shall be payable in accordance with the terms set forth in this Section
2. Principal shall be payable in full on the third (3rd) anniversary of the date
hereof (the "Maturity Date"). Interest shall be payable on the unpaid principal
hereof outstanding from time to time and shall accrue quarterly in arrears, on
the last business day of March, June, September and December of each year (each,
an
<PAGE>
"Interest Payment Date"), commencing on September 30, 1996. On an Interest
Payment Date, the Maker shall have the right either to pay the interest accrued
during the preceding quarter in cash, or to have such interest added to the
principal amount evidenced hereby, and to the extent that interest is not paid
in cash by the Maker on any particular Interest Payment Date, such interest
shall be added to the principal amount due hereunder. If not earlier paid in
full, interest shall be payable in full on the Maturity Date. All amounts
payable hereunder shall be paid by the Maker in lawful money of the United
States of America, by check or wire transfer (at Maker's option), or any other
method approved in advance in writing by Payee at the place set forth in the
heading of this Note, or such place as may be designated by Payee in writing to
Maker.
3. Prepayments.
(a) Except as otherwise provided in Sections 3(b)
and 3(c) hereof, the Maker may not prepay this Note.
(b) In the event that (i) any provision of this
Note shall violate a provision of applicable law, or (ii) the amendment to the
Maker's Declaration of Trust intended to eliminate Section 3.3(a) thereof is not
approved at the Maker's next Annual Meeting of Shareholders, and the book value
per share of Common Stock as of the end of any fiscal quarter of the Maker
beginning with the first fiscal quarter of 1996 shall exceed $5.50, then the
Payee, upon five (5) days written notice thereof, may accelerate the payment of
the entire unpaid principal balance hereof, whereupon the Maker shall be
required to prepay, in cash, this Note in its entirety (which shall include
principal and interest accrued thereon). In the event that the Maker, as
determined in accordance with a written opinion of its counsel, is prohibited
from making a prepayment required by the terms of Section 3(c) hereof due to
either (i) or (ii) above, the Maker, upon five (5) days written notice thereof,
may prepay, in cash, this Note in its entirety (which shall include principal
and interest accrued thereon).
(c) (i) In the event the number of outstanding
shares of Maker's capital stock shall increase at any time, or from time to time
following the date of this Note, the Maker shall, as of the next business day
following such increase (each, a "Prepayment Date") (A) calculate (x) in
accordance with the provisions of ss.3-601 et seq. (the "business combination
statute") of the Maryland General Corporation Law, the total market value of the
outstanding stock of the Maker as of such Prepayment Date (the "Market Value")
and (y) an amount equal to 4.9% of the Market Value (the "4.9% Threshold"), and
(B) prepay that portion of the outstanding principal balance of the Loan (the
"Prepayable Portion") by the delivery to the Payee of that number of Units
-2-
<PAGE>
(the "Prepayable Units"), at $5.63 per Unit, as shall be calculated by the
Maker as follows:
PP = FPNT - (VEI + VOS)
where:
(1) "PP" means the Prepayable Portion. In the event that PP is
zero or a negative number, PP shall be deemed to be equal to
zero, and none of the Loan will be prepaid.
(2) "FPNT" means the 4.9% Threshold.
(3) "VEI" means the "Value of the Equity Issued." Value of the
Equity Issued shall be calculated by the Maker determining the
sum of (i) the total aggregate number of shares of Common
Stock previously issued by the Maker directly to the Payee, or
any Affiliate thereof (as such term is defined in the business
combination statute) including upon the exercise of warrants
issued by the Maker to the Payee, multiplied by an amount
equal to the value of a share of Common Stock (based on the
thirty day period prior to the Prepayment Date and computed in
accordance with the provisions of the business combination
statute), and (ii) the total aggregate number of warrants
previously issued by the Maker directly to the Payee, or any
Affiliate thereof, multiplied by an amount determined by the
Board of Trustees of the Company, in good faith, to be the per
warrant value of such warrants as of the Prepayment Date
(excluding the value of any such warrants previously
exercised). To the extent that the Board of Trustees
determines that the warrants included in different Units have
a different value, that factor shall be taken into
consideration in determining the Value of the Equity Issued.
(4) "VOS" means the "Value of Other Issued Securities". Value of
Other Issued Securities shall be calculated by the Maker
determining the total aggregate number of other equity
securities (not referred to above, if any) issued by the Maker
to the Payee, or any Affiliate thereof, on or following the
date hereof, multiplied by an amount determined in accordance
with the provisions of the business combination statute to be
the value of such securities as of the Prepayment Date.
Notwithstanding the foregoing formula, in the event that the formula would
result on any Prepayment Date in the Maker issuing to Payee Prepayable Units
such that the sum of (i) VEI, (ii) VOS, and (iii) value of the Prepayable Units
determined in accordance with the definition of VEI above, exceeds the 4.9%
Threshold, the
-3-
<PAGE>
number of Prepayable Units shall be automatically reduced to the nearest whole
number so that the sum of the foregoing (i), (ii) and (iii) is less than or
equal to the 4.9% Threshold. The Prepayable Portion shall then be calculated by
multiplying such reduced number of Prepayable Units by $5.63. No fractional
Units shall be issued to Payee, and to the extent the foregoing calculation
would require the issuance of a fractional Unit, such portion of the Loan will
not be included in the Prepayable Portion and shall remain part of the principal
outstanding hereunder. All of the foregoing calculations made by the Maker shall
be conclusive absent manifest error.
(ii) In the case of any prepayment pursuant
to this Section 3(c), the outstanding principal amount under this Note shall be
automatically reduced by the Prepayable Portion. All Units issued by the Maker
upon such prepayment(s) hereunder shall consist of fully paid and nonassessable
shares of Common Stock, and warrants to purchase Common Stock, all free of liens
and charges and not subject to any preemptive rights.
(d) Except as otherwise provided in Section 3(b)
and 4, in no event shall the Payee have any right to require the Maker to prepay
all or any portion of the Loan with cash, and except as otherwise provided in
Sections 3(c) and 4, in no event shall the Payee have any right to require the
Maker to prepay all or any portion of the Loan with Units.
Any Units, Common Stock or warrants to be issued by the Maker
to Payee under this Section 3 shall be delivered by the Maker to Payee as soon
as practicable, but in no event more than ten (10) business days after each
Prepayment Date.
4. Events of Default; Remedies.
(a) If any of the following events (each is
herein referred to as an "Event of Default") shall occur:
(i) default shall occur in the performance
of or compliance with any covenant contained in Section 3 of the Loan and
Securities Purchase Agreement or Section 3 hereunder, subject in each case to
any grace or cure period set forth herein;
(ii) if any representation or warranty to
Payee made by the Maker in the Loan and Securities Purchase Agreement or in any
other Transaction Document, or in connection with the transactions contemplated
hereby or thereby, shall prove to have been false or inaccurate in any material
respect on the date as of which made;
(iii) all or any part of the principal or
interest due hereunder is not paid when and as the same shall
-4-
<PAGE>
become due and payable, whether at the maturity thereof, by acceleration, by
notice of prepayment or otherwise and such failure shall continue uncured for 5
days, provided that, an election by the Maker not to pay interest in cash on an
Interest Payment Date but rather to add such accrued interest to the principal
amount due hereunder shall not be a failure to pay interest due hereunder, and
therefore shall not be an Event of Default hereunder;
(iv) any default in excess of $250,000 shall
occur in the making of the payment of the principal of or interest on any other
indebtedness of the Maker for borrowed money, as and when the same shall become
due and payable by the lapse of time, by acceleration, by call for redemption or
otherwise;
(v) any default or the happening of any
event shall occur under any indenture, agreement or other instrument under which
any indebtedness of the Maker for borrowed money is or may be issued, and such
default or event shall continue for a period of time sufficient to permit the
acceleration of the maturity of any indebtedness of the Maker outstanding
thereunder;
(vi) a receiver, conservator, custodian,
liquidator or trustee of the Maker or of all or any of its assets or property is
appointed by court order and such order remains in effect for more than sixty
(60) days; or an order for relief is entered under the federal bankruptcy laws
with respect to the Maker; or any of its material property is sequestered by
court order and such order remains in effect for more than sixty (60) days; or a
petition is filed against the Maker under the bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, and is not dismissed
within sixty (60) days after such filing;
(vii) the Maker files a petition in
voluntary bankruptcy or seeking relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, or
consents to the filing of any petition against it under any such law;
(viii) the Maker makes an assignment for the
benefit of its creditors, or admits in writing its inability to pay, or in fact
does not pay, its debts generally as they become due, or consents to the
appointment of a receiver, conservator, custodian, liquidator or trustee of the
Maker, or of all or any part of its property;
-5-
<PAGE>
(ix) final judgment for the payment of money
in excess of $250,000 shall be rendered by a court of record against the Maker,
and the Maker shall not (1) discharge the same (by insurance or otherwise) or
provide for its discharge in accordance with its terms, or (2) procure a stay of
execution thereof within sixty (60) days from the date of entry thereof and
within said period of sixty (60) days, or such longer period during which
execution of such judgment shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal;
(x) a breach of any material term or
material provision of any of the Warrants or Additional Warrants; or
(xi) the Maker is delisted or otherwise
removed from the American Stock Exchange and is not on the same or next business
day listed on any national securities exchange or the Nasdaq Market;
then, when any Event of Default described in clause (ii), (iv), (v) or (ix) of
this Section 4(a) has occurred and shall be continuing, this Note shall, upon
written notice from Payee, forthwith be due and payable, if not already due and
payable; and when any Event of Dealt described in clause (i), (iii), (vi),
(vii), (viii), (x) or (xi) of this Section 4(a) has occurred, then, at the
option of Payee, the principal of this Loan shall be immediately due and payable
by acceleration, without presentment, demand or notice of any kind, upon the
occurrence thereof. If any principal or installment of interest is not paid in
full on the due date thereof (whether by maturity or acceleration or otherwise),
then the outstanding principal balance of this Loan and any overdue installment
of interest thereon (to the extent permitted by applicable law) shall bear
additional interest from the due date of such payment, or from and after an
Event of Default, at a rate equal to the lesser of (1) the highest rate allowed
by applicable law, or (2) the Prime Rate plus two percent (2%) per annum (the
"Default Rate") until the amount due is paid. If payment of this Loan is
accelerated, then the outstanding principal balance thereof shall bear interest
at the Default Rate from and after the Event of Default and, at the option of
Payee, payment of interest shall be made in cash.
(b) If an Event of Default shall have occurred
pursuant to Section 4(a), Payee shall be entitled, in addition to the rights
specified in Section 4(a), to proceed to protect and enforce any or all other
rights, powers and remedies of the Payee by an action at law, suit in equity or
other appropriate proceeding, whether for the specific performance of any
covenant contained herein or in the Loan and Securities Purchase Agreement, the
Warrant or any Additional Warrant or for an injunction against a violation of
any of the terms hereof or
-6-
<PAGE>
thereof, or in aid of the exercise of any right, power or remedy granted hereby
or thereby or available at law, in equity, by statute or otherwise. In
furtherance of the foregoing and not by way of limitation, the Payee shall be
entitled to specific performance as a remedy for any breach by Maker of its
obligations to prepay this Loan in Units to the extent required by Section 3
hereof.
(c) If any holder of any shares of capital stock or
any indebtedness of the Maker for borrowed money shall serve any notice or
demand or take any other action in respect of a claimed default, the Maker shall
forthwith give written notice thereof to Payee, describing the notice, demand or
action and the nature of the claimed default.
(d) No right or remedy conferred upon or reserved to
Payee, or now or hereafter existing at law or in equity or by statute or other
legislative enactment, is intended to be exclusive of any other right or remedy,
and each and every such right or remedy shall be cumulative and concurrent, and
shall be in addition to every other such right or remedy, and may be pursued
singly, concurrently, successively or otherwise, at the sole discretion of
Payee.
5. Costs and Expenses. Following the occurrence of any Event
of Default, Maker shall pay upon demand all reasonable costs and expenses
(including all reasonable amounts paid to attorneys), incurred by Payee in the
exercise of any of its rights and remedies hereunder with respect to such Event
of Default and any amount thereof not paid promptly following demand therefor
shall be added to the principal sum hereunder and shall bear interest at the
rate per annum set forth above from the date of such demand until paid in full.
6. Waivers. Maker hereby waives presentment, demand notice of
nonpayment, protest, notice of protest or other notice of dishonor, and (except
as otherwise provided herein) any and all other notices in connection with any
default in the payment of, or any enforcement of the payment of all amounts due
under this Note. To the extent permitted by law, Maker waives the right to any
stay of execution and the benefit of all exemption laws now or hereafter in
effect.
7. Severability. In the event that for any reason one or more
of the provisions of this Note or their application to any person or
circumstance shall be held to be invalid, illegal or unenforceable in any
respect or to any extent, such provisions shall nevertheless remain valid, legal
and enforceable in all such other respects and to such extent as may be
permissible. In addition, any such invalidity, illegality or unenforceability
shall not affect any other provisions of this Note, but this Note shall be
construed as if such invalid,
-7-
<PAGE>
illegal or unenforceable provision had never been contained herein. In
furtherance and not in limitation of the foregoing, in no event shall this Note
(or the Loan evidenced hereunder) be prepayable in Units, nor shall any warrants
issued upon such prepayment into Units be exchangeable, in whole or in part for
shares of Common Stock, nor shall shares of Common Stock be issued by the Maker
in connection herewith, to the extent that such prepayment, exchange or issuance
(as the case may be) would result, or could reasonably be construed to result,
in a violation of the business combination statute.
8. Transfer; Successors and Assigns. Neither this Note, nor
any portion hereof, may be transferred or disposed of except to an Affiliate of
the Payee. Neither this Note, nor any portion hereof, may be transferred or
disposed of unless registered under the Act and any applicable state securities
laws or there exists a valid exemption therefrom. Subject to the foregoing, this
Note inures to the benefit of Payee and binds Maker, and their respective
successors and assigns, and the words "Payee" and "Maker" whenever occurring
herein shall be deemed and construed to include such respective successors and
assigns.
9. Notices. All notices required to be given to either of the
parties hereunder shall be in writing and shall be deemed to have been
sufficiently given for all purposes when presented personally to such party,
sent by overnight courier, or sent by certified or registered mail, return
receipt requested, to such party at its address set forth in the heading of this
Note. Such notice shall be deemed to be given when received if delivered
personally, the next day after the date sent if sent by overnight courier, or
three days after the date mailed if sent by certified or registered mail. Any
notice of any change in such address shall also be given in the manner set forth
above. Whenever the giving of notice is required the giving of such notice may
be waived in writing by the party entitled to receive such notice.
10. Captions. The captions of the paragraphs in this Note are
for convenience only and shall not affect the meaning of any of the terms or
provisions of this Note.
11. No Recourse. No recourse shall be had for any obligation
of the Maker hereunder, or for any claim based thereon or otherwise in respect
thereof, against any past, present or future trustee, shareholder, officer or
employee of the Maker, whether by virtue of any statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, all such other
liability being expressly waived and released by the Payee.
12. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of Maryland.
-8-
<PAGE>
IN WITNESS WHEREOF, Maker has executed this Promissory Note
the day and year first above written.
BRANDYWINE REALTY TRUST
By: /S/ Gerald H. Sweeney
----------------------
Title: President
-9-
<PAGE>
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF SUCH SECURITIES
MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Void after 5:00 p.m. New York Time, on June 21, 2002.
BRANDYWINE REALTY TRUST
Warrant Agreement for the Purchase of Shares of Common Stock
------------------------------------------------------------
No. 1 59,949 Shares
FOR VALUE RECEIVED, BRANDYWINE REALTY TRUST, a Maryland real
estate investment trust (the "Company"), with its principal office at Two
Greentree Centre, Suite 100, Marlton, New Jersey 08053, hereby certifies that
Turkey Vulture Fund XIII, Ltd. or its assigns (the "Holder") is entitled,
subject to the provisions of this Warrant, to purchase from the Company, at any
time before 5:00 p.m. (Eastern Time) on June 21, 2002 (the "Expiration Date"),
the number of fully paid and nonassessable common shares of beneficial interest
of the Company (the "Common Stock") set forth above, subject to adjustment as
hereinafter provided.
The Holder may purchase such number of shares of Common Stock
at a purchase price per share (as appropriately adjusted pursuant to Section 6
or Section 8 hereof) of Six Dollars and 50/100 Cents ($6.50) (the "Exercise
Price"). As provided in Section 6(i), the term "Common Stock" shall mean the
aforementioned Common Stock of the Company, together with any other equity
securities that may be issued by the Company in addition thereto or in
substitution therefor as provided herein.
The number of shares of Common Stock to be received upon the
exercise of this Warrant and the price to be paid for a share of Common Stock
are subject to adjustment from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise, as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Shares."
Section 1. Exercise of Warrant. (a) This Warrant may be
exercised in whole or in part on any business day (the "Exercise Date") and on
or before the Expiration Date by
<PAGE>
presentation and surrender hereof to the Company at its principal office at the
address set forth in the initial paragraph hereof or at the office of its stock
transfer or warrant agent, if any, (or at such other address as the Company may
hereafter notify the Holder in writing) with the Purchase Form annexed hereto
duly executed and accompanied by proper payment of the Exercise Price in lawful
money of the United States of America in the form of a check, subject to
collection, for the number of Warrant Shares specified in the Purchase Form. If
this Warrant should be exercised in part only, the Company shall, upon surrender
of this Warrant, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder. Upon receipt by the Company of this Warrant and such Purchase Form,
together with proper payment of the Exercise Price, at such office, the Holder
shall be deemed to be the holder of record of the Warrant Shares,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such Warrant Shares shall not then be
actually delivered to the Holder. The Company shall pay any and all documentary
stamp or similar issue or transfer taxes payable in respect of the issue or
delivery of the Warrant Shares.
(b) In addition to and without limiting the rights of the
Holder under any other terms set forth herein, the Holder shall have, upon
written request by the Holder delivered or transmitted to the Company together
with this Warrant, the right (the "Conversion Right") to require the Company to
convert this Warrant into shares of Common Stock as follows: upon exercise of
the Conversion Right, the Company shall deliver to the Holder (without payment
by the Holder of any Exercise Price) that number of shares of Common Stock that
is equal to the quotient obtained by dividing (x) the value of this Warrant at
the time the Conversion Right is exercised (determined by subtracting the
aggregate Exercise Price in effect immediately prior to the exercise of the
Conversion Right from the aggregate current market value (determined as provided
in Section 3 below) of the shares of Common Stock issuable upon exercise of this
Warrant immediately prior to the exercise of the Conversion Right) by (y) the
current market value of one share of Common Stock (determined as provided in
Section 3 below) immediately prior to the exercise of the Conversion Right.
The Conversion Right referred to above may be exercised by the
Holder by surrender of this Warrant at the principal office of the Company or at
the offices of its stock transfer or warrant agent, if any, together with a
written statement specifying that the Holder thereby intends to exercise the
Conversion Right. Certificates for shares of Common Stock issuable upon exercise
of the Conversion Right shall be delivered to the Holder within fifteen (15)
days following the Company's receipt of this Warrant together with the aforesaid
written statement.
(c) Notwithstanding anything herein to the contrary, in no
event shall the Company be required to issue shares of Common Stock upon the
exercise hereof if, at the time of such exercise, the issuance of such shares
would be restricted by Section 3.3(a) of the Company's Declaration of Trust, as
in effect on the date hereof; provided that if the amendment to the Declaration
of Trust intended to eliminate Section 3.3(a) is approved by shareholders of the
Company, the foregoing provision of this Section 1(c) shall have no force and
effect.
-2-
<PAGE>
Notwithstanding anything herein to the contrary, in no event shall the Company
be required to issue shares of Common Stock upon the exercise hereof if and to
the extent that, at the time of such exercise, the sum of the market value of
such shares (as determined in accordance with the provisions of Section 3-601 et
seq. of the Maryland General Corporation Law), plus the VEI and VOS, would
exceed 4.9% of the total market value of the outstanding stock of the Company as
of such date (as determined in accordance with said statute). As used herein,
the terms "VEI" and "VOS" shall have the respective meanings assigned to them in
the Promissory Note dated the date hereof issued by the Company to the Holder.
Section 2. Reservation of Shares. The Company shall reserve at
all times for issuance and delivery upon exercise of this Warrant all shares of
its Common Stock or other shares of capital stock of the Company from time to
time issuable upon exercise of this Warrant. All such shares shall be duly
authorized and, when issued upon the exercise of the Warrant in accordance with
the terms hereof, shall be validly issued, fully paid and nonassessable, free
and clear of all taxes, liens, security interests, charges and other
encumbrances or restrictions (other than restrictions pursuant to applicable
federal and state securities laws) and free and clear of all preemptive rights.
If the Common Stock is listed on any national securities exchange or The NASDAQ
National Market, the Company shall also list the shares issued upon exercise of
the Warrant on such exchange, subject to notice of issuance, or maintain the
listing of its Common Stock on the NASDAQ system, as the case may be.
Section 3. Fractional Interest. The Company will not issue a
fractional share of Common Stock or scrip upon any exercise or conversion of
this Warrant. Instead, the Company will deliver its check for the "current
market value" of the fractional share. The "current market value" of a fraction
of a share is determined as follows: multiply the "current market price" of a
full share by the fraction of a share and round the result to the nearest cent.
The "current market price" of a share of Common Stock shall be
determined as follows:
(a) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on The NASDAQ National Market, the current market price shall be the
mean of the last reported sale prices of the Common Stock on such exchange or
system over the last ten (10) business days prior to the date of exercise of
this Warrant, or if no such sale is made on such day, the average closing bid
and asked prices of the Common Stock for such day on such exchange or system; or
(b) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the current market price shall be the mean of the
last reported bid and asked prices reported by the National Quotation Bureau,
Inc., over the last ten (10) business days prior to the date of exercise of this
Warrant; or
(c) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current market price per share shall
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<PAGE>
be an amount, not less than 90% of the book value per share of the Common Stock
as at the end of the most recent fiscal year of the Company ending prior to the
date of the exercise of this Warrant, determined in such reasonable manner as
may be prescribed in good faith by the Board of Trustees of the Company.
Section 4. Exchange, Transfer, Assignment or Loss of Warrant.
(a) The Holder of this Warrant may not transfer or assign its
interest in this Warrant, or any of the Warrant Shares, in whole or in part,
unless, prior to any such transfer, the transferee agrees in writing, in form
and substance reasonably satisfactory to the Company, to be bound by the terms
of this Agreement and provides the Company with an opinion of counsel in such
form reasonably acceptable to the Company, that such transfer would not be in
violation of the Act or any applicable state securities or blue sky laws.
(b) Subject to the provisions of subsection (a) above and
Section 10, upon surrender of this Warrant to the Company or its stock transfer
agent or warrant agent, accompanied by the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees named in such instrument of assignment and, if the
Holder's entire interest is not being assigned, in the name of the Holder, and
this Warrant shall promptly be canceled.
(c) This Warrant may be divided by or combined with other
Warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its stock transfer or warrant agent,
if any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any warrants into which this Warrant may be
divided or exchanged.
(d) Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnification reasonably satisfactory to the
Company, and upon surrender and cancellation of this Warrant, if mutilated, the
Company shall execute and deliver a new Warrant of like tenor and date
registered in the Holder's name representing the number of shares purchasable
under the original Warrant. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation of the Company, whether or not
the original Warrant shall be at any time enforceable by anyone.
Section 5. Rights of the Holder. The Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in the Company, either
at law or equity, and the rights of the Holder are limited to those set forth in
this Warrant.
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<PAGE>
Section 6. Adjustment of Exercise Price and Number of Shares.
The number and kind of securities purchasable upon the exercise of each Warrant
and the Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Adjustment for Change in Capital Stock. If at any time
after the date hereof, the Company:
(i) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(iii) combines its outstanding shares of Common Stock
into a smaller number of shares;
(iv) makes a distribution on its Common Stock in
shares of its capital stock other than Common Stock;
or
(v) issues by reclassification of its Common Stock
any shares of its capital stock;
then the Exercise Price in effect (and the number of Warrant Shares and other
securities, if any, issuable upon exercise of this Warrant) immediately prior to
such action shall be adjusted so that the Holder may receive upon exercise of
the Warrant, and payment of the same aggregate consideration, the number of
shares of capital stock of the Company which the Holder would have owned
immediately following such action if the Holder had exercised the Warrants
immediately prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution, and immediately after the
effective date in the case of a subdivision, combination or reclassification.
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<PAGE>
(b) Adjustment for Other Distributions. If at any time after
the date hereof, the Company distributes to all holders of its Common Stock any
of its assets or debt securities, the Exercise Price following the record date
for such distribution shall be adjusted in accordance with the following
formula:
M-F
---
E' = E x M
where: E' = the adjusted Exercise Price.
E = the Exercise Price immediately prior to the adjustment.
M = the current market price (as defined in Section 3
above) per share of Common Stock on the record date of
the distribution.
F = the aggregate fair market value (determined in such
reasonable manner as may be prescribed in good faith by
the Board of Trustees of the Company) on the record
date of the distribution of the assets or debt
securities divided by the number of outstanding shares
of Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive the distribution
or the effective date of such issuance, as applicable. In the event that such
distribution or issuance is not actually made, the Exercise Price shall again be
adjusted to the Exercise Price as determined without giving effect to the
calculation provided hereby.
This subsection does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company and paid in the ordinary course of business.
(c) Adjustment for Common Stock Issue. (i) If at any time
after the date hereof, the Company issues shares of Common Stock for a
consideration per share that is less than the current market price per share
(determined as provided in Section 3 above) on the date the Company fixes the
offering price of such additional shares, the Exercise Price shall be adjusted
in accordance with the following formula:
E' = Y x [O + (P / E)]
-------------
A
where: E' = the adjusted Exercise Price.
Y = the then current Exercise Price immediately prior to
the adjustment.
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<PAGE>
O = the number of shares outstanding immediately prior to
the issuance of such additional shares.
P = the aggregate consideration received for the issuance
of such additional shares.
E = the current market price (determined as provided in
Section 3 above) immediately prior to the adjustment.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
(ii) This subsection 6(c) does not apply to (A) any of the
transactions described in subsections (b) and (d) of this Section 6, (B) Common
Stock issued pursuant to options and warrants outstanding on the date hereof,
(C) Common Stock issued to officers, trustees, directors or employees of, or
consultants to, the Company and its affiliates upon the exercise of warrants,
rights or options which (x) are issued pursuant to employee benefit plans,
employment agreements or consulting agreements, in each case approved by the
Company's Board of Trustees or an appropriate committee of the Company's Board
of Trustees, and (y) have an exercise price not less than 85% of the current
market price of the Company's Common Stock at the time of issuance of such
warrant, right or option, (D) Common Stock issued in exchange for Class A units
of limited partnership interest in Brandywine Operating Partnership, L.P.
issuable to Safeguard Scientifics, Inc. ("SSI"), The Nichols Company ("TNC"),
and certain other persons in connection with the transactions (the "SSI/TNC
Transaction") contemplated by the Letter of Intent dated March 20, 1996, by and
among the Company, SSI and TNC, (E) up to 730,000 shares of Common Stock
reserved for issuance upon exercise of warrants to be issued to certain
employees of the Company and TNC in connection with the SSI/TNC Transaction, (F)
up to 775,000 shares of Common Stock reserved for issuance to SSI upon the
exercise of a warrant to be issued to it in connection with the SSI/TNC
Transaction, (G) Common Stock issued to the Holder in connection with the
repayment of its loan to the Company or in connection with the exercise of any
warrants issued to the Holder in connection with any such repayment (the
"Repayment Warrants"), and (H) any securities sold to the public in connection
with an underwritten public offering of the Company's securities.
(d) Adjustment for Convertible Securities Issue. If at any
time after the date hereof, the Company issues for consideration any securities
convertible into or exchangeable or exercisable for Common Stock for
consideration per share of Common Stock initially deliverable upon conversion,
exchange or exercise of such securities, together with the consideration paid
upon issuance of such securities, less than the current market price per share
(determined as
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<PAGE>
provided in Section 3 above) on the date of issuance of such securities, the
Exercise Price shall be adjusted in accordance with this formula:
E' = Y x [O + (P / E)]
-------------
O + D
where: E' = the adjusted Exercise Price.
Y = the then current Exercise Price immediately prior to
the adjustment.
O = the number of shares outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received and receivable for
the issuance of such securities.
E = the current market price (determined as provided in
Section 3 above).
D = the maximum number of shares deliverable upon
conversion, exchange or exercise of such securities at
the initial conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance. If
all of the Common Stock deliverable upon conversion, exchange or exercise of
such securities has not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion, exchange or exercise of such
securities.
This subsection does not apply to any of the transactions
described in subsections (c)(ii)(B), (C), (D), (E), (F) and (G) above.
(e) Adjustment to Number of Warrant Shares. Upon each
adjustment to the Exercise Price pursuant to Section 6(c) or (d), the number of
Warrant Shares purchasable hereunder at that Exercise Price shall be adjusted,
to the nearest one hundredth of a whole share, to the product obtained by
multiplying such number of shares purchasable immediately prior to such
adjustment in the Exercise Price by a fraction, the numerator of which shall be
the Exercise Price immediately prior to such adjustment and the denominator of
which shall be the Exercise Price immediately thereafter.
(f) Deferral of Issuance or Payment. In any case in which an
event covered by this Section 6 shall require that an adjustment in the Exercise
Price be made effective as of
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<PAGE>
a record date, the Company may elect to defer until the occurrence of such event
(i) issuing to the Holder, if this Warrant is exercised after such record date,
the shares of Common Stock and other capital stock of the Company, if any,
issuable upon such exercise over and above the shares of Common Stock or other
capital stock of the Company, if any, issuable upon such exercise on the basis
of the Exercise Price in effect prior to such adjustment, and (ii) paying to the
Holder by check any amount in lieu of the issuance of fractional shares pursuant
to Section 3.
(g) When No Adjustment Required. No adjustment need be made
for a change in the par value or no par value of the Common Stock.
(h) Notice of Certain Actions. In the event that:
(i) the Company shall authorize the issuance to all
holders of its Common Stock of rights, warrants, options or convertible
securities to subscribe for or purchase shares of its Common Stock, or of any
other subscription rights, warrants, options or convertible securities; or
(ii) the Company shall authorize the distribution to
all holders of its Common Stock of evidences of its indebtedness or assets
(other than dividends paid in or distributions of the Company's capital stock
for which the Exercise Price shall have been adjusted pursuant to subsection (a)
of this Section 6) or cash dividends or cash distributions payable out of
consolidated current or retained earnings as shown on the books of the Company
and paid in the ordinary course of business); or
(iii) the Company shall authorize any capital
reorganization or reclassification of the Common Stock (other than a subdivision
or combination of the outstanding Common Stock and other than a change in par
value of the Common Stock) or of any consolidation or merger to which the
Company is a party and for which approval of any shareholders of the Company is
required (other than a consolidation or merger in which the Company is the
continuing corporation and that does not result in any reclassification or
change of the Common Stock outstanding), or of the conveyance or transfer of the
properties and assets of the Company as an entirety or substantially as an
entirety; or
(iv) the Company is the subject of a voluntary or
involuntary dissolution, liquidation or winding-up procedure; or
(v) the Company proposes to take any action (other
than actions of the character described in subsection (a) of this Section 6)
that would require an adjustment of the Exercise Price pursuant to this Section
6;
then the Company shall cause to be mailed by first-class mail to the Holder, at
least ten (10) days prior to the applicable record or effective date, a notice
stating (x) the date as of which the holders of Common Stock of record to be
entitled to receive any such rights, warrants or distributions are to be
determined, or (y) the date on which any such consolidation, merger,
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<PAGE>
conveyance, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding-up.
(i) No Adjustment Upon Exercise of Warrants. No adjustments
shall be made under any Section herein in connection with the issuance of
Warrant Shares upon exercise of the Warrants.
(j) Common Stock Defined. The term "Common Stock" shall
include any equity securities of any class of the Company hereinafter authorized
which shall not be limited to a fixed sum or percentage in respect of the right
of the holders thereof to participate in dividends or distributions of assets
upon the voluntary or involuntary liquidation, dissolution or winding up of the
Company. However, subject to the provisions of Section 8 hereof, shares issuable
upon exercise hereof shall include only shares of the class designated as Common
Stock of the Company as of the date hereof or shares of any class or classes
resulting from any reclassification or reclassifications thereof or as a result
of any corporate reorganization as provided for in Section 8 hereof.
(k) Warrants Issued After Adjustments. Irrespective of any
adjustments in the Exercise Price or the number or kind of Warrant Shares
purchasable upon exercise of this Warrant, Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in the similar warrants initially issuable pursuant to this
Agreement.
Section 7. Officers' Certificate. Whenever the Exercise Price
shall be adjusted as required by the provisions of Section 6, the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office an officers' certificate showing the adjusted Exercise Price
determined as herein provided, setting forth in reasonable detail the facts
requiring such adjustment and the manner of computing such adjustment. Each such
officers' certificate shall be signed by the Chairman, President or Chief
Financial Officer of the Company and by the Secretary or any Assistant Secretary
of the Company. A copy of each such officers' certificate shall be promptly
mailed, by certified mail, to each holder of a Warrant and the original shall be
made available at all reasonable times for inspection by any other holder of a
Warrant executed and delivered pursuant to Section 4 hereof.
Section 8. Reclassification, Reorganization, Consolidation or
Merger. In the event of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the Company (other than a
subdivision or combination of the outstanding Common Stock and other than a
change in the par value of the Common Stock) or in the event of any
consolidation or merger of the Company with or into another person or entity
(other than a merger in which the Company is the continuing person or entity and
that does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock
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<PAGE>
of the class issuable upon exercise of this Warrant) or in the event of any
sale, lease, transfer or conveyance to another person or entity of the property
and assets of the Company as an entirety or substantially as an entirety, the
Company shall, as a condition precedent to such transaction, cause effective
provisions to be made so that the Holder shall have the right thereafter, by
exercising this Warrant, to purchase the kind and amount of shares of stock and
other securities and property (including cash) receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
that might have been received upon exercise of this Warrant immediately prior to
such reclassification, capital reorganization, change, consolidation, merger,
sale or conveyance. Any such provision shall include provisions for adjustments
in respect of such shares of stock and other securities and property that shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 8 shall similarly apply
to successive reclassifications, capital reorganizations and changes of shares
of Common Stock and to successive consolidations, mergers, sales or conveyances.
In the event that in connection with any such capital reorganization, or
classification, consolidation, merger, sale or conveyance, additional shares of
Common Stock shall be issued in exchange, conversion, substitution or payment,
in whole or in part, for, or of, a security of the Company other than Common
Stock, any such issue shall be treated as an issue of Common Stock covered by
the provisions of Section 6 hereof.
Section 9. Duty to Make Fair Adjustments in Certain Cases. If
any event occurs as to which, in the reasonable opinion of either the Board of
Trustees of the Company or a majority of the holders of the warrants then
outstanding under this Warrant, the Repayment Warrants and the Warrant to be
issued to SSI as part of the SSI/TNC Transaction (the "SSI Warrant"), the
provisions of Section 6 and Section 8 hereof are not strictly applicable or, if
strictly applicable, would not fairly protect the purchase rights of such
warrants in accordance with the essential intent and principles of such
provisions, then the Board of Trustees of the Company and a majority of the
holders of the warrants then outstanding under this Warrant, the Repayment
Warrants and the SSI Warrant shall mutually agree upon an adjustment in the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights as aforesaid.
Section 10. Transfer to Comply with the Securities Act of
1933; Registration Rights.
(a) No sale, transfer, assignment, hypothecation or other
disposition of this Warrant or of the Warrant Shares shall be made if such sale,
transfer, assignment, hypothecation or other disposition would result in a
violation of the Act, or any state securities laws. Upon exercise of this
Warrant, the Holder shall, if requested by the Company, confirm in writing, in a
form reasonably satisfactory to the Company, that the shares of Common Stock so
purchased are being acquired solely for the Holder's own account, and not as a
nominee thereof, for investment, and not with a view toward distribution or
resale, except as permitted by the Act, and shall provide such other information
to the Company as the Company may reasonably request. Any Warrant and any
Warrants issued upon substitution for, or upon assignment or transfer of
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<PAGE>
this Warrant, as the case may be, and all shares of Common Stock issued upon
exercise hereof or conversion thereof shall bear a legend (in addition to any
legend required by state securities laws) in substantially the form set forth on
the first page of this Warrant, unless and until such securities have been
transferred pursuant to an effective registration statement under the Act or may
be freely sold to the public pursuant to Rule 144 (or any successor rule
thereto) or otherwise.
(b) The Holder and any transferee of the Warrant or the
Warrant Shares issuable hereunder shall have the right to require the Company to
register the Warrant Shares with the Securities and Exchange Commission for
resale as contemplated by Section 3.2.9 of the Loan and Securities Purchase
Agreement dated the date hereof between the Company and the Holder.
Section 11. Modification and Waiver. Neither this Warrant nor
any term hereof may be changed, waived, discharged or terminated other than by
an instrument in writing signed by the Company and by the Holder hereof.
Section 12. Notices. Any notice, request or other document
required or permitted to be given or delivered to the Holder hereof or the
Company shall be delivered or shall be sent by certified mail, postage prepaid,
or by overnight courier to each such Holder at its address as shown on the books
of the Company or to the Company at the address indicated therefor in the first
paragraph of this Warrant.
Section 13. Descriptive Headings and Governing Law. The
description headings of the several sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant. This
Warrant shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of Maryland.
Section 14. No Impairment. The Company will not knowingly
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by it, but will at all times in good faith
assist in the carrying out of all of the provisions of this Warrant.
Section 15. Non-Recourse. No recourse shall be had for any
obligation of the Company hereunder, or for any claim based thereon or otherwise
in respect thereof, against any past, present or future trustee, shareholder,
officer or employee of the Company, whether by virtue of any statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
other liability being expressly waived and released by each other party hereto.
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<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Warrant
to be signed by its duly authorized officer and to be dated as of June 21, 1996.
BRANDYWINE REALTY TRUST
By: /s/ Gerald H. Sweeney
---------------------
Title: President & CEO
---------------------
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<PAGE>
PURCHASE FORM
Dated:____________
The undersigned hereby irrevocably elects to exercise the
within Warrant to purchase _____________ shares of Common Stock and hereby makes
payment of ___________________________ in payment of the exercise price thereof.
Signature________________________
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<PAGE>
ASSIGNMENT FORM
Dated:____________
FOR VALUE RECEIVED,__________________hereby sells, assigns and transfers unto
_______________________________________ (the "Assignee"),
(please type or print in block letters)
________________________________________________________________________________
(insert address)
its right to purchase up to ________ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint ____________________
___________ Attorney, to transfer the same on the books of the Company, with
full power of substitution in the premises.
Signature________________
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<PAGE>
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made and
entered into as of this ___th day of _________, 1996 by and among BRANDYWINE
REALTY TRUST, a Maryland real estate investment trust (the "Company"), SAFEGUARD
SCIENTIFICS (DELAWARE), INC., a Delaware corporation ("SSI"), THE NICHOLS
COMPANY, a Pennsylvania corporation ("TNC"), and the TURKEY VENTURE FUND XIII,
LTD., an Ohio limited liability company of which Richard M. Osborne is the
manager ("TVF XIII").
BACKGROUND
Pursuant to a Stock and Warrant Purchase Agreement, dated
_____________, 1996 (the "SSI Agreement"), by and between the Company and
Safeguard Scientifics, Inc., a Pennsylvania corporation, the Company has issued
to SSI 775,000 (the "SSI Shares") of the Company's common shares of beneficial
interest (the "Common Stock") and a Warrant to purchase an additional 775,000
shares of Common Stock (the "SSI Warrant").
Pursuant to a Loan and Securities Purchase Agreement, dated
June ___, 1996, by and between the Company and TVF XIII (a) the Company has
issued to TVF XIII 59,949 shares (the "Initial TVF XIII Shares") of the
Company's Common Stock and a warrant to purchase an additional 59,949 shares of
Common Stock (the "Initial TVF XIII Warrant") and (b) TVF XIII has made a loan
to the Company that in accordance with the terms of said agreement may be repaid
with additional shares of the Company's Common Stock (the "Additional TVF XIII
Shares" and together with the Initial TVF XIII Shares, the "TVF XIII Shares")
and additional warrants to purchase additional shares of the Company's Common
Stock (the "Additional TVF XIII Warrant" and, together with the Initial TVF XIII
Warrant, the "TVF XIII Warrants") (the TVF XIII Warrants, together with the SSI
Warrant, the "Warrants").
In connection with the SSI Agreement, the Company has
acquired, either directly or indirectly, a general partnership interest in
Brandywine Operating Partnership, L.P., a Delaware limited partnership (the
"Partnership"), and SSI, TNC and certain other persons listed on Schedule A
hereto (the "Other Purchasers") have received units of Class A Limited
Partnership Interest in the Partnership in exchange for certain interests in
real property and other assets contributed by them to the Partnership. These
units are redeemable, on a one-for-one basis, subject to adjustment, for shares
of Common Stock upon the satisfaction of certain conditions, as provided in the
Agreement of Limited Partnership of even date herewith creating the Partnership
(the "Partnership Agreement").
<PAGE>
To induce SSI, TNC, the Other Purchasers and TVF XIII to enter
into the foregoing transactions, the Company has agreed to provide them with the
registration rights set forth in this agreement.
1. CERTAIN DEFINITIONS.
In addition to the other terms defined in this Agreement, the
following terms shall be defined as follows:
"Brokers Transactions" has the meaning ascribed to such term
pursuant to Rule 144 under the Securities Act.
"Business Day" means any day on which the New York Stock
Exchange ("NYSE") is open for trading.
"Closing Date" means ______________, 1996.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the relevant time.
"Fair Market Value" means:
(a) If the Registrable Security is listed on a
national securities exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on The NASDAQ Stock Market, the fair market value
shall be the last reported sale price of the Registrable Security on such
exchange or system on the last business day prior to the date the determination
of fair market value is made, or if no such sale is made on such day, the
average closing bid and asked prices of the Registrable Security for such day on
such exchange or system; or
(b) If the Registrable Security is not so listed or
admitted to unlisted trading privileges, the fair market value shall be the mean
of the last reported bid and asked prices reported by the National Quotation
Bureau, Inc., on the last business day prior to the date the determination of
fair market value is made; or
(c) If the Registrable Security is not so listed or
admitted to unlisted trading privileges and bid and asked prices are not so
reported, the fair market value per share shall be an amount, not less than 90%
of the book value per share of the Registrable Security as at the end of the
most recent fiscal year of the Company ending prior to the date the
determination of fair market value is made, determined in such reasonable manner
as may be prescribed in good faith by the Board of Trustees of the Company.
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<PAGE>
"Holders" means SSI, TNC, TVF XIII and the Other Purchasers
listed on Schedule A hereto, for so long as (and to the extent that) each owns
any Registrable Securities, and each of their respective successors, assigns,
and direct and indirect transferees who become registered owners of Registrable
Securities or securities exercisable, exchangeable or convertible into
Registrable Securities.
"Outstanding" means with respect to any securities as of any
date, all such securities theretofore issued, except any such securities
theretofore converted, exercised or canceled or held by the issuer or any
successor thereto (whether in its treasury or not) or any affiliate of the
issuer or any successor thereto.
"Registrable Security(ies)" means (i) the SSI Shares, (ii) the
TVF XIII Shares, (iii) all or any portion of any shares of Common Stock of the
Company that may be issued upon the exercise of, or in exchange for, the
Warrants, (iv) any shares of Common Stock or other equity securities of the
Company that may be issued in redemption of any Units under the Partnership
Agreement, and (v) any additional shares of Common Stock or other equity
securities of the Company issued or issuable after the Closing Date in respect
of any such securities (or other equity securities issued in respect thereof) by
way of a stock dividend or stock split, in connection with a combination,
exchange, reorganization, recapitalization or reclassification of Company
securities, or pursuant to a merger, division, consolidation or other similar
business transaction or combination involving the Company; provided that in the
case of equity securities other than Common Stock such securities are registered
under Section 12(b) or Section 12(g) of the Exchange Act; and further provided
that: as to any particular Registrable Securities, such securities shall cease
to constitute Registrable Securities (i) when a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of thereunder; or
(ii) when and to the extent such securities are permitted to be publicly sold
without limitation as to amount pursuant to Rule 144(k) (or any successor
provision to such Rule) under the Securities Act or are otherwise freely
transferrable to the public without further registration under the Securities
Act; or (iii) when such securities shall have ceased to be issued and
outstanding; or (iv) on the tenth anniversary of the date such securities were
issued. In the case of clause (ii) of the foregoing sentence, the Company shall,
if requested by the Holder or Holders thereof, have delivered to such Holder or
Holders the written opinion of independent counsel to the Company to such
effect. Any time this Agreement requires the vote or consent of the Holder of a
"majority" or other stated percentage of the Registrable Securities, the term
Registrable Securities shall, solely for purposes of calculating such vote, be
deemed to include the Registrable Securities that could be issued under the
Units and the Warrant and any other securities exercisable or exchangeable for,
or convertible into, Registrable Securities. The term Registrable Securities
shall not include the Units or the Warrants.
"Person" means an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a quasi-
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<PAGE>
governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the registration requirements set
forth in this Agreement including, without limitation, the following: (i) the
fees, disbursements and expenses of the Company's counsel(s), accountants, and
experts in connection with the registration under the Securities Act of
Registrable Securities; (ii) all expenses in connection with the preparation,
printing and filing of the registration statement, any preliminary prospectus or
final prospectus, any other offering document and amendments and supplements
thereto, and the mailing and delivering of copies thereof to the underwriters
and dealers, if any; (iii) the cost of printing or producing any agreement(s)
among underwriters, underwriting agreement(s) and blue sky or legal investment
memoranda, any selling agreements, and any other documents in connection with
the offering, sale or delivery of Registrable Securities to be disposed of; (iv)
any other expenses in connection with the qualification of Registrable
Securities for offer and sale under state securities laws, including the fees
and disbursements of counsel for the underwriters in connection with such
qualification and in connection with any blue sky and legal investment surveys;
(v) the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of Registrable
Securities to be disposed of and any blue sky registration or filing fees, and
(vi) the fees and expenses incurred in connection with the listing of
Registrable Securities on each securities exchange (or The NASDAQ Stock Market)
on which Company securities of the same class are then listed; provided,
however, that Registration Expenses with respect to any registration pursuant to
this Agreement shall not include (x) expenses incurred by any Holder in
connection with any offering, including the fees and expenses of counsel,
accountants, and experts retained by such Holder (other than the fees and
expenses of one counsel for the Holders as and to the extent provided in Section
11), (y) any underwriting discounts or commissions attributable to Registrable
Securities, or (z) any SEC registration or filing fees attributable to
Registrable Securities or transfer taxes applicable to Registrable Securities.
"SEC" means the United States Securities and Exchange
Commission, or such other federal agency at the time having the principal
responsibility for administering the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the relevant time.
"Shelf Registration Statement" means a Shelf Registration
Statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers Common Stock on an appropriate form then permitted by the
SEC to be used for such registration and the sales contemplated to be made
thereby, under Rule 415 under the Securities Act, or any similar rule that may
be adopted by the SEC, and all amendments and supplements to such Registration
Statement, including pre and post-effective amendments thereto, in each case
including the
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prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Shelf Registration" means a registration of Common Stock
effected pursuant to Section 2(b) hereof.
"Trading Day" means a day on which the principal securities
exchange or stock market on which the applicable security is traded is open for
the transaction of business.
"Unit" means any unit of Class A Limited Partnership Interest
in the Partnership and any securities which may be issued in respect thereof or
exchange therefor in connection with any combination, consolidation, merger,
recapitalization, or other similar transaction.
2. DEMAND REGISTRATION; SHELF REGISTRATION.
(a) (i) A Holder or Holders may request at any time (by
written notice delivered to the Company) that the Company register under the
Securities Act all or any portion of the Registrable Securities held by (or then
issuable to) such Holder or Holders (the "Requesting Holders"), representing in
the aggregate not less than twenty percent of the Registrable Securities, for
sale in the manner specified in such notice (including, but not limited to, an
underwritten public offering); provided, however, that no such request may be
made without the written consent of SSI and TVF XIII at any time when SSI or TVF
XIII would be prohibited from selling Registrable Securities pursuant to an
effective registration statement under the Securities Act by the terms of the
Agreement, dated June ___, 1996, between the Company and SSI, or the Agreement,
dated March 20, 1996, among the Company, the Richard M. Osborne Trust and
Richard M. Osborne, as the case may be. In each such case, such notice shall
specify the number of Registrable Securities for which registration is
requested, the proposed manner of disposition of such securities, and the
minimum price per share at which the Requesting Holders would be willing to sell
such securities in an underwritten offering. The Company shall, within five (5)
Business Days after its receipt of any Requesting Holders' notice under this
Section 2(a)(i), give written notice of such request to all other Holders of
Registrable Securities and afford them the opportunity of including in the
requested registration statement such of their Registrable Securities as they
shall specify in a written notice given to the Company within twenty (20) days
after their receipt of the Company's notice. Within ten (10) Business Days after
the expiration of such twenty (20) day period, the Company shall notify all
Holders requesting registration of (A) the aggregate number of Registrable
Securities proposed to be registered by all Holders, (B) the proposed filing
date of the registration statement, and (C) such other information concerning
the offering as any Holder may have reasonably requested. If the Holders of a
majority in aggregate amount of the Registrable Securities to be included in
such offering shall have requested that such offering be underwritten, the
managing underwriter for such offering shall be chosen by the Holders of a
majority in aggregate amount of the Registrable Securities being registered,
with the consent of the Company, which consent shall not be unreasonably
withheld, not less than thirty (30) days prior to the proposed filing date
stated in the Company's notice, and the Company shall thereupon promptly notify
such Holders
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as to the identity of the managing underwriter, if any, for the offering. On or
before the 30th day prior to such anticipated filing date, any Holder may give
written notice to the Company and the managing underwriter specifying either
that (A) Registrable Securities of such Holder are to be included in the
underwriting, on the same terms and conditions as the securities otherwise being
sold through the underwriters under such registration or (B) such Registrable
Securities are to be registered pursuant to such registration statement and sold
in the open market without any underwriting, on terms and conditions comparable
to those normally applicable to offerings in reasonably similar circumstances,
regardless of the method of disposition originally specified in Holder's request
for registration.
(ii) The Company shall use its commercially
reasonable best efforts to file with the SEC within eighty (80) days (thirty
(30) days if the Company may use a Registration Statement on Form S-3 to
register such Registrable Securities) after the Company's receipt of the initial
Requesting Holders' written notice pursuant to Section 2(a)(i), a registration
statement for the public offering and sale, in accordance with the method of
disposition specified by such Holders, of the number of Registrable Securities
specified in such notice, and thereafter use its commercially reasonably best
efforts to cause such registration statement to become effective within sixty
(60) days after its filing. Such registration statement may be on Form S-1 or
another appropriate form (including Form S-3) that the Company is eligible to
use and that is reasonably acceptable to the managing underwriter; provided,
however, that if any Form other than Form S-1 is used in an underwritten
offering, upon the request of the managing underwriter, or the selling
shareholders, the prospectus included in the registration statement shall be
amplified to include such additional information as such persons may reasonably
request regarding the Company, its business and management (including, without
limitation, the information called for by Items 101, 102, 103, 201, 202, 301 and
303 of Regulation S-K under the Securities Act).
(iii) The Company shall not have any obligation
hereunder (A) to permit or participate in more than two offerings pursuant to
this Section 2(a), except as and to the extent provided by Section 7(b), or (B)
to register any Registrable Securities under this Section 2(a) unless it shall
have received requests from Holders to register at least 20% of the aggregate
Registrable Securities issued at the date hereof.
(iv) If the Company is required to use commercially
reasonable best efforts to register Registrable Securities in a registration
initiated upon the demand of any Holder pursuant to Section 2(a) of this
Agreement and the managing underwriters for such offering advise that the
inclusion of all securities sought to be registered by the Holders may interfere
with an orderly sale and distribution of or may materially adversely affect the
price of such offering, the aggregate number of Registrable Securities included
by the Holders in such offering shall be reduced to a number which the managing
underwriters advise will not likely have such effect and the maximum number of
Registrable Securities able to be included in such offering by each Holder shall
be reduced pro rata (in accordance with such Holder's proportionate share of the
Fair Market Value of all Registrable Securities duly requested to be included in
such registration).
(b) At any time during the 60-day period following the end of
any fiscal year of the Company, other than the fiscal year in which a
registration statement is to be filed
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pursuant to Section 2(a), any Holder or Holders may request in writing that the
Company register under the Securities Act all or any portion of the Registrable
Securities held by (or then issuable to) such Requesting Holders for sale
pursuant to a Shelf Registration Statement; provided that any distribution or
sale pursuant to any such Shelf Registration shall be limited to Brokers'
Transactions. The Company shall, within five (5) Business Days after its receipt
of any Requesting Holders' notice under this Section 2(b), give written notice
of such request to all other Holders of Registrable Securities and afford them
the opportunity of including in the requested Shelf Registration Statement such
of their Registrable Securities as they shall specify in a written notice given
to the Company within twenty (20) days after their receipt of the Company's
notice. The Company shall thereupon use its commercially reasonable best efforts
to file the Shelf Registration Statement with the SEC within sixty (60) days
after its receipt of the initial Requesting Holders' notice and to cause such
registration statement to be declared effective within sixty (60) days after its
filing; provided, however, that the Company shall not be required (A) to effect
more than one registration pursuant to this Section 2(b) in any fiscal year for
Holders, or (B) to effect any registration pursuant to this Section 2(b) during
the fiscal year during which Registrable Securities are registered pursuant to
Section 2(a) of this Agreement, or (C) to register any Registrable Securities
under this Section 2(b) unless it shall receive requests from Holders to
register at least 10% of the aggregate Registrable Securities issued at the date
hereof. The Company shall use its commercially reasonable best efforts to keep
such Shelf Registration Statement (or, if required hereunder, a successor Shelf
Registration Statement filed pursuant to Section 2(d) below) continuously
effective in order to permit the prospectus forming a part thereof to be usable
by Holders of Registrable Securities until all securities included in such Shelf
Registration Statement have ceased to be Registrable Securities (the "Lapse
Date").
(c) Notwithstanding any other provision of this Agreement, the
Company shall have the right to defer the filing or effectiveness of a
registration statement relating to any registration requested under Section 2(a)
for a reasonable period of time not to exceed 180 days if (x) the Company is, at
such time, working on an underwritten, primary public offering of its securities
and is advised by its managing underwriter(s) that such offering would in its or
their opinion be materially adversely affected by such filing; or (y) a prior
registration statement of the Company for an underwritten, primary public
offering by the Company of its securities was declared effective by the SEC less
than 120 days prior to the anticipated effective date of the requested
registration.
(d) If the Company is precluded by Rule 415 or any other
applicable rule under the Securities Act from including all Registrable
Securities in any Shelf Registration or from keeping any Shelf Registration
Statement continuously effective from the filing date thereof through the Lapse
Date, the Company shall file such additional or further Shelf Registration
Statements, as may be required, so that, subject to the other provisions of this
Agreement, all Registrable Securities requested to be included are included on a
continuously effective Shelf Registration Statement for substantially all of the
period from the filing date of the first Shelf Registration Statement through
the Lapse Date.
(e) Neither the Company nor any Person other than a Holder
shall be entitled to include any securities held by it or him in any
underwritten offering pursuant to Section 2(a) of this Agreement.
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(f) No registration of Registrable Securities under this
Article 2 shall relieve the Company of its obligation (if any) to effect
registrations of Registrable Securities pursuant to Article 3.
3. INCIDENTAL REGISTRATION.
(a) Until all securities subject to this Agreement have ceased
to be Registrable Securities, if the Company proposes, other than pursuant to
Article 2 hereof, to register any of its Common Stock or other securities issued
by it having terms substantially similar to Registrable Securities or any
successor securities (collectively, "Other Securities") for public sale under
the Securities Act (whether proposed to be offered for sale by the Company or by
any other Person) on a form and in a manner which would permit registration of
Registrable Securities for sale to the public under the Securities Act, it will
give prompt written notice (which notice shall specify the intended method or
methods of disposition) to the Holders of its intention to do so, and upon the
written request of any Holder delivered to the Company within fifteen (15)
Business Days after the giving of any such notice (which request shall specify
the number of Registrable Securities intended to be disposed of by such Holder)
the Company will use its commercially reasonable best efforts to effect, in
connection with the registration of the Other Securities, the registration under
the Securities Act of all Registrable Securities which the Company has been so
requested to register by Holders; provided, however, that:
(i) if, at any time after giving such written notice
of its intention to register Other Securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such Other Securities,
the Company may, at its election, give written notice of such determination to
the Holders requesting registration and thereupon the Company shall be relieved
of its obligation to register such Registrable Securities in connection with the
registration of such Other Securities (but not from its obligation to pay
Registration Expenses to the extent incurred in connection therewith as provided
in Article 11), without prejudice, however, to the rights (if any) of the
Holders to request that such registration be effected as a registration under
Article 2; and
(ii) the Company will not be required to effect any
registration of Registrable Securities pursuant to this Article 3 in connection
with a primary offering of securities by it if the Company shall have been
advised in writing (with a copy to the Holders requesting registration) by a
nationally recognized investment banking firm (which may be the managing
underwriter for the offering) selected by the Company that, in such firm's
opinion, a registration of Registrable Securities at that time may interfere
with an orderly sale and distribution of the securities being sold by the
Company in such offering or materially and adversely affect the price of such
securities; provided, however, that if an offering of some but not all of the
Registrable Securities requested to be registered by the Holders and all other
Persons having rights to include securities held by them in such registration
would not adversely affect the distribution or price of the securities to be
sold by the Company in the offering in the opinion of such firm or are included
in such offering notwithstanding any such opinion, the Company shall only
include such lesser amount of Registrable Securities and the aggregate number of
Registrable Securities to be included in such offering by each Holder shall be
allocated pro rata among the Holders requesting such registration on the basis
of the percentage
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of the Registrable Securities held by such Holders which have requested that
such Registrable Securities be included; and
(iii) The Company shall not be required to give
notice of, or effect any registration of Registrable Securities under this
Article 3 incidental to, the registration of any of its securities in connection
with mergers, consolidations, acquisitions, exchange offers, subscription
offers, dividend reinvestment plans or stock options or other employee benefit
or compensation plans.
(b) No registration of Registrable Securities effected under
this Article 3 shall relieve the Company of its obligations (if any) to effect
registrations of Registrable Securities pursuant to Article 2.
4. HOLDBACKS AND OTHER RESTRICTIONS.
(a) Each Holder hereby covenants and agrees with the Company
that:
(i) such Holder shall not, if requested by the
managing underwriters in an underwritten offering that includes such Holder's
Registrable Securities, effect any public sale or distribution of securities of
the Company of the same class as the securities included in such registration
statement (or convertible into such class), including a sale pursuant to Rule
144(k) under the Securities Act (except as part of such underwritten
registration): (A) during the ten (10) day period prior to, and during the
ninety 90-day period (or such longer period of not more than one hundred eighty
(180) days if such longer period is also required of the Company and all other
Persons having securities included in such registration) beginning on the
closing date of each underwritten offering made pursuant to such registration
statement, to the extent timely notified in writing by the Company or the
managing underwriters; and (B) in the event of a primary offering by the
Company, to the extent such Holder does not elect to sell such securities in
connection with such offering, during the period of distribution of the
Company's securities in such offering and during the period in which the
underwriting syndicate, if any, participates in the aftermarket. In any such
case the Company shall require the underwriters to notify the Company and the
Company, in turn, shall notify all Holders of Registrable Securities included in
the offering promptly after such participation ceases;
(ii) such Holder shall not, during any period in
which any of his or its Registrable Securities are included in any effective
registration statement: (A) effect any stabilization transactions or engage in
any stabilization activity in connection with the Common Stock or other equity
securities of the Company in contravention of Rule 10b-7 under the Exchange Act;
(B) permit any Affiliated Purchaser (as that term is defined in Rule 10b-6 under
the Exchange Act) to bid for or purchase for any account in which such Holder
has a beneficial interest, or attempt to induce any other person to purchase,
any shares of Common Stock or Registrable Securities in contravention of Rule
10b-6 under the Exchange Act; or (C) offer or agree to pay, directly or
indirectly, to anyone any compensation for soliciting another to purchase, or
for purchasing (other than for such Holder's own account), any securities of the
Company on a national securities exchange in contravention of Rule 10b-2 under
the Exchange Act; and
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(iii) such Holder shall, in the case of a
registration including Registrable Securities to be offered by it for sale
through Brokers Transactions furnish each broker through whom such Holder offers
Registrable Securities such number of copies of the prospectus as the broker may
require and otherwise comply with the prospectus delivery requirements under the
Securities Act.
(b) The Company covenants and agrees with the Holders not to
effect any public or private sale or distribution (other than distributions
pursuant to employee benefit plans) of its securities, including a sale pursuant
to Regulation D under the Securities Act (or Section 4(2) thereof), during the
ten (10) day period prior to, and during the ninety (90) day period beginning
with, the effectiveness of a Registration Statement filed under Section 2(a)
hereof, to the extent timely requested in writing by the managing underwriters,
if any, or, if there be none, by the Holders of a majority in aggregate amount
of the Registrable Securities included on such registration statement for such
registration, except pursuant to registrations on Form S-4, Form S-8 or any
successor form.
5. REGISTRATION PROCEDURES.
If and whenever the Company is required by the provisions of this
Agreement to use commercially reasonable best efforts to effect or cause a
registration as provided in this Agreement, the Company will:
(a) Use its commercially reasonable best efforts to prepare
and file with the SEC, a registration statement within the time periods
specified herein, and use its commercially reasonable best efforts to cause such
registration statement to become effective as promptly as practicable and to
remain effective under the Securities Act until (i) the Lapse Date with respect
to registrations pursuant to Section 2(b) and (ii) until the earlier of such
time as all securities covered thereby are no longer Registrable Securities or
one hundred and eighty (180) days after such registration statement becomes
effective with respect to registrations pursuant to Section 2(a), in every case
as any such period may be extended pursuant to Section 5(h) or Article 7 hereto.
(b) Prepare and file with the SEC such amendments,
post-effective amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for such period of time required by Section
5(a) above, as such period may be extended pursuant to Section 5(h) or Article 7
hereto.
(c) Comply in all material respects with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during the period during which any such registration
statement is required to be effective.
(d) Furnish to any Holder and any underwriter of Registrable
Securities, (i) such number of copies (including manually executed and conformed
copies) of such registration statement and of each amendment thereof and
supplement thereto (including all annexes, appendices, schedules and exhibits),
(ii) such number of copies of the prospectus, used in connection with such
registration statement (including each preliminary prospectus, any summary
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prospectus and the final prospectus), and (iii) such number of copies of other
documents, in each case as such Holder or such underwriter may reasonably
request.
(e) Use its commercially reasonable best efforts to register
or qualify all Registrable Securities covered by such registration statement
under the securities or "blue sky" laws of states of the United States as any
Holder or any underwriter shall reasonably request, and do any and all other
acts and things which may be reasonably requested by such Holder or such
underwriter to consummate the offering and disposition of Registrable Securities
in such jurisdictions; provided, however, that the Company shall not be required
to qualify generally to do business as a foreign corporation or as a dealer in
securities, subject itself to taxation, or consent to general service of process
in any jurisdiction wherein it is not then so qualified or subject.
(f) Use, as soon as practicable after the effectiveness of the
registration statement, commercially reasonable best efforts to cause the
Registrable Securities covered by such registration statement to be registered
with, or approved by, such other United States public, governmental or
regulatory authorities, if any, as may be required in connection with the
disposition of such Registrable Securities.
(g) Use its commercially reasonable best efforts to list the
Common Stock covered by such registration statement on any securities exchange
(or if applicable, The NASDAQ Stock Market) on which any securities of the
Company is then listed, if the listing of such Registrable Securities are then
permitted under the applicable rules of such exchange (or if applicable, The
NASDAQ Stock Market).
(h) Notify each Holder as promptly as practicable and, if
requested by any Holder, confirm such notification in writing, (i) when a
prospectus or any prospectus supplement has been filed with the SEC, and, with
respect to a registration statement or any post-effective amendment thereto,
when the same has been declared effective by the SEC, (ii) of the issuance by
the SEC of any stop order or the coming to the Company's attention of the
initiation of any proceedings for such or a similar purpose, (iii) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (iv) of the
occurrence of any event which requires the making of any changes to a
registration statement or related prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (and
the Company shall promptly prepare and furnish to each Holder a reasonable
number of copies of a supplemented or amended prospectus such that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading), and (v) of the Company's determination that the filing of a
post-effective amendment to the Registration Statement shall be necessary or
appropriate. Upon the receipt of any notice from the Company of the occurrence
of any event of the kind described in clause (iv) or (v) of this Section 5(h),
the Holders shall forthwith discontinue any offer and disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
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Securities until all Holders shall have received copies of a supplemented or
amended prospectus which is no longer defective and, if so directed by the
Company, shall deliver to the Company, at the Company's expense, all copies
(other than permanent file copies) of the defective prospectus covering such
Registrable Securities which are then in the Holders' possession. If the Company
shall provide any notice of the type referred to in the preceding sentence, the
period during which the registration statements are required to be effective as
set forth under Section 5(a) shall be extended by the number of days from and
including the date such notice is provided, to and including the date when
Holders shall have received copies of the corrected prospectus.
(i) Enter into such agreements and take such other appropriate
actions as are customary and reasonably necessary to expedite or facilitate the
disposition of such Registrable Securities, and in that regard, deliver to the
Holders such documents and certificates as may be reasonably requested by any
Holder of the Registrable Securities being sold or, as applicable, the managing
underwriters, to evidence the Company's compliance with this Agreement
including, without limitation, using commercially reasonable best efforts to
cause its independent accountants to deliver to the Company's Board of Trustees
(and to the Holders of Registrable Securities being sold in any registration) an
accountants' comfort letter substantially similar to that in scope delivered in
an underwritten public offering and covering audited and interim financial
statements included in the registration statement or, if such letter can not be
obtained through the exercise of commercially reasonable best efforts, cause its
independent accountants to deliver to the Company's Board of Trustees (and to
the Holders of Registrable Securities being sold in any registration) a comfort
letter based on negotiated procedures providing comfort with respect to the
Company's financial statements included or incorporated by reference in the
registration statement at the highest level permitted to be given by such
accountants under the then applicable standards of the Association of
Independent Certified Accountants with respect to such registration statement.
In addition, the Company shall furnish to the Holders of Registrable Securities
being included in any registration hereunder an opinion of counsel substantially
identical in substance and scope to that customarily delivered to underwriters
in public offerings.
6. UNDERWRITING.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration hereunder, the
Company will enter into and perform its obligations under an underwriting
agreement with the underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, customary provisions
relating to indemnities and contribution and the provision of opinions of
counsel and accountants' letters.
(b) If any registration pursuant to Article 3 hereof shall
involve, in whole or in part, an underwritten offering, the Company may require
Registrable Securities requested to be registered pursuant to Article 3 to be
included in such underwriting on the same terms and conditions as shall be
applicable to the securities being sold through underwriters under such
registration. In such case, each Holder requesting registration shall be a party
to any such underwriting agreement. Such agreement shall contain such
representations and warranties by
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the Holders requesting registration and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, provisions relating to indemnities
and contribution.
(c) In any offering of Registrable Securities pursuant to a
registration hereunder, each Holder requesting registration shall also enter
into such additional or other agreements as may be customary in such
transactions, which agreements may contain, among other provisions, such
representations and warranties as the Company or the underwriters of such
offering may reasonably request (including, without limitation, those concerning
such Holder, its Registrable Securities, such Holder's intended plan of
distribution and any other information supplied by it to the Company for use in
such registration statement), and customary provisions relating to indemnities
and contribution.
7. INFORMATION BLACKOUT.
(a) At any time when a registration statement effected
pursuant to Sections 2(a), 2(b) or 3 relating to Registrable Securities is
effective, upon written notice from the Company to the Holders that the Company
has determined in good faith that sale of Registrable Securities pursuant to the
registration statement would require disclosure of non-public material
information not otherwise required to be disclosed under applicable law having a
material adverse effect on the Company (an "Information Blackout"), all Holders
shall suspend sales of Registrable Securities pursuant to such registration
statement until the earlier of:
(i) forty-five (45) days after the Company makes such
good faith determination, and
(ii) such time as the Company notifies the Holders
that such material information has been disclosed to the public or has
ceased to be material or that sales pursuant to such registration
statement may otherwise be resumed (the number of days from such
suspension of sales by the Holders until the day when such sale may be
resumed hereunder is hereinafter called a "Sales Blackout Period").
(b) Any delivery by the Company of notice of an Information
Blackout during the forty-five (45) days immediately following effectiveness of
any registration statement effected pursuant to Section 2(a) hereof shall give
the Holders of a majority in aggregate amount of Registrable Securities being
sold the right, by written notice to the Company within twenty (20) Business
Days after the end of such Sales Blackout Period, to cancel such registration,
in which event the Holders shall have one additional registration right under
the Section pursuant to which such registration was filed in such fiscal year (a
"Blackout Termination Right").
(c) If there is an Information Blackout and the cancellation
right, if any, pursuant to (b) above, is not available or exercised, the time
period set forth in clause (ii) of Section 5(a) shall be extended for a number
of days equal to the number of days in the Sales Blackout Period.
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(d) Notwithstanding the foregoing, there shall be no more than
two (2) Information Blackouts during the term of this Agreement and no Sales
Blackout Period shall continue for more than forty-five (45) consecutive days.
8. RULE 144.
The Company shall use commercially reasonable best efforts to
take all actions necessary to comply with the filing requirements described in
Rule 144(c)(1) or any successor thereto so as to enable the Holders to sell
Registrable Securities without registration under the Securities Act. Upon the
written request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with the filing requirements under Rule
144(c)(1) or any successor thereto.
9. PREPARATION; REASONABLE INVESTIGATION; INFORMATION.
In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act, (a) the Company will give the Holders and the underwriters, if any, and
their respective counsel and accountants, drafts of such registration statement
for their review and comment prior to filing and (during normal business hours
and subject to such reasonable limitations as the Company may impose to prevent
disruption of its business) such reasonable and customary access to its books
and records and such opportunities to discuss the business of the Company with
its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the reasonable opinion of the
Holders of a majority in aggregate amount of the Registrable Securities being
registered and such underwriters or their respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act and (b) as a
condition precedent to including any Registrable Securities of any Holder in any
such registration, the Company may require such Holder to furnish the Company
such information regarding such Holder and the distribution of such securities
as the Company may from time to time reasonably request in writing or as shall
be required by law or the SEC in connection with any registration; provided,
however, that, upon the reasonable request of the supplier of any such
information, the recipient thereof shall enter into a confidentiality agreement
respecting such information in customary form for an underwritten public
offering.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) In the case of each offering of Registrable Securities
made pursuant to this Agreement, the Company shall indemnify and hold harmless
each Holder, its officers, directors and trustees, each underwriter of
Registrable Securities so offered and each Person, if any, who controls any of
the foregoing Persons within the meaning of the Securities Act ("Holder
Indemnitees"), from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, and shall promptly
reimburse them, as and when incurred, for any legal or other expenses incurred
by them in connection with investigating any claims and defending any actions,
insofar as such losses, claims, damages, liabilities or actions shall arise out
of, or shall be based upon, any violation or alleged violation by the Company of
the Securities Act, or
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relating to action taken or action or inaction required of the Company in
connection with such offering, or shall arise out of, or shall be based upon,
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement (or in any preliminary or final prospectus included
therein) relating to the offering and sale of such Registrable Securities, or
any amendment thereof or supplement thereto, or in any document incorporated by
reference therein, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, that the Company shall not be liable to any
Holder Indemnitee in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of such Holder
specifically for use in the preparation of the registration statement (or in any
preliminary or final prospectus included therein), or any amendment thereof or
supplement thereto. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Holder and shall
survive the transfer of such securities. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any Holder
Indemnitee.
(b) In the case of each offering of Registrable Securities
made pursuant to this Agreement, each Holder, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and trustees, and each
Person, if any, who controls any of the foregoing within the meaning of the
Securities Act and (if requested by the underwriters) each underwriter who
participates in the offering and each Person, if any, who controls any such
underwriter within the meaning of the Securities Act (the "Company
Indemnitees"), from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, and shall promptly
reimburse them, as and when incurred, for any legal or other expenses incurred
by them in connection with investigating any claims and defending any actions,
insofar as any such losses, claims, damages, liabilities or actions shall arise
out of, or shall be based upon, any violation or alleged violation by such
Holder of the Securities Act, any blue sky laws, securities laws or other
applicable laws of any state or country in which the Registrable Securities are
offered and relating to action taken or action or inaction required of such
Holder in connection with such offering, or shall arise out of, or shall be
based upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein) relating to the offering and sale of such
Registrable Securities or any amendment thereof or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
in each case only to the extent that such untrue statement is contained in, or
such fact is omitted from, information furnished in writing to the Company by or
on behalf of such Holder specifically for use in the preparation of such
registration statement (or in any preliminary or final prospectus included
therein). The liability of each Holder under such indemnity provision shall be
limited to an amount equal to the total net proceeds received by such Holder
from such offering. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company and shall
survive the transfer of such securities. The foregoing indemnity is in addition
to any liability which Holder may otherwise have to any Company Indemnitee.
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(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to this Article 10, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 10(a) or (b) shall be available to any
person who shall fail to give notice as provided in this Section 10(c) if the
indemnifying party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 10(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel, in the written opinion of such counsel, would be
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by the Holders of
a majority in aggregate Fair Market Value of the then Outstanding Registrable
Securities in the case of parties indemnified pursuant to Section 10(a) and by
the Company in the case of parties indemnified pursuant to Section 10(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgement for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(d) If the indemnification provided for in this Article 10 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 10(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
or if the indemnified party failed to give the notice required under Section
10(c) above, then each indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in proportion as is
appropriate to reflect not only both the relative benefits received by such
party (as compared to the benefits received by all other parties) from the
offering in respect of which indemnity is sought, but also the relative fault of
all parties in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by a party shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by
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<PAGE>
it bear to the total amounts (including, in the case of any underwriter,
underwriting commission and discounts) received by each other party. Relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this Section 10(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 10(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The indemnity provided for hereunder shall not inure to
the benefit of any indemnified party to the extent that such indemnified party
failed to comply with the applicable prospectus delivery requirements of the
Securities Act as then applicable to the person asserting the loss, claim,
damage or liability for which indemnity is sought.
11. EXPENSES.
In connection with any registration under this Agreement, the
Company shall pay all Registration Expenses. In addition, in connection with
each registration, the Company shall pay the reasonable fees and expenses of one
counsel to represent the interests of the Holders selling Registrable Securities
in such registration. Notwithstanding the foregoing, in the event that any
Holder or Holders require the Company to conduct an underwritten public offering
of Registrable Securities pursuant to Section 2(a) prior to 12 months after the
date hereof, each such Holder or Holders shall pay its pro rata share of all
Registration Expenses.
12. NOTICES.
Except as otherwise provided below, whenever it is provided in
this Agreement that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties hereto, or whenever any of the parties hereto, desires to provide to or
serve upon the other party any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be delivered in person, mailed
by registered or certified mail (return receipt requested) or sent by overnight
courier service or via facsimile transmission (which is confirmed), as follows:
(a) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 12, which address initially is, with respect to: (i) SSI, the address
set forth in the SSI Agreement, (ii) TNC, the address set forth in the Agreement
of Limited Partnership for the Partnership, (iii) TVF XIII, 7001 Center Street,
Mentor, Ohio 44060,
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facsimile number (216) 255-8645, (iv) all other holders, the address set forth
in the register for the applicable security; and (b) if to the Company,
initially at the address set forth in the SSI Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 12. The furnishing of any notice required hereunder may be waived
in writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration or other communication hereunder shall
be deemed to have been duly furnished or served on the party to which it is
addressed, in the case of delivery in person or by facsimile, on the date when
sent (with receipt personally acknowledged in the case of telecopied notice), in
the case of overnight mail, on the day after it is sent and in all other cases,
five business days after it is sent. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
13. ENTIRE AGREEMENT.
This Agreement represents the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes any and all prior oral and written agreements, arrangements and
understandings among the parties hereto with respect to such subject matter; and
this Agreement can be amended, supplemented or changed, and any provision hereof
can be waived or a departure from any provision hereof can be consented to, only
by a written instrument making specific reference to this Agreement signed by
the Company and the Holders of at least 80% of the Registrable Securities then
outstanding; provided that any amendment that adversely affects the rights of
any Holder must be signed by the adversely affected Holder; provided further
that any waiver must be signed by the party entitled to the benefit of the term
or matter being waived.
14. PARAGRAPH HEADINGS.
The paragraph headings contained in this Agreement are for
general reference purposes only and shall not affect in any manner the meaning,
interpretation or construction of the terms or other provisions of this
Agreement.
15. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts to be made, executed, delivered and performed wholly within such state
and, in any case, without regard to the conflicts of law principles of such
state.
16. SEVERABILITY.
If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon and shall not impair the enforceability of any other provision of this
Agreement.
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<PAGE>
17. EQUITABLE REMEDIES.
The parties hereto agree that irreparable harm would occur in
the event that any of the agreements and provisions of this Agreement were not
performed fully by the parties hereto in accordance with their specific terms or
conditions or were otherwise breached, and that money damages are an inadequate
remedy for breach of this Agreement because of the difficulty of ascertaining
and quantifying the amount of damage that will be suffered by the parties hereto
in the event that this Agreement is not performed in accordance with its terms
or conditions or is otherwise breached. It is accordingly hereby agreed that the
parties hereto shall be entitled to an injunction or injunctions to restrain,
enjoin and prevent breaches of this Agreement by the other parties and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, such remedy being in addition to and
not in lieu of, any other rights and remedies to which the other parties are
entitled to at law or in equity.
18. NO WAIVER.
The failure of any party at any time or times to require
performance of any provision hereof shall not affect the right at a later time
to enforce the same. No waiver by any party of any condition, and no breach of
any provision, term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
19. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same original instrument.
20. THIRD PARTY BENEFICIARIES; SUCCESSORS AND ASSIGNS.
The Other Purchasers shall be third party beneficiaries of
this Agreement. This Agreement shall inure to the benefit of and be binding upon
the successors, assigns and transferees of each of the parties hereto and of
each of the Other Purchasers, including, without limitation and without the need
for an express assignment, subsequent Holders; provided that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the SSI Agreement, the
Warrant, the Units, the Agreement of Limited Partnership of the Partnership or
applicable law. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registerable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement.
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<PAGE>
21. NON-RECOURSE.
No recourse shall be had for any obligation of the Company
hereunder, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee of
the Company, whether by virtue of any statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such other liability
being expressly waived and released by each other party hereto.
IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first above written.
BRANDYWINE REALTY TRUST
By:
---------------------------
Title:
SAFEGUARD SCIENTIFICS
(DELAWARE), INC.
By:
---------------------------
Title:
THE NICHOLS COMPANY
By:
---------------------------
Title:
TURKEY VULTURE FUND XIII, LTD.
By:
---------------------------
Richard M. Osborne, Manager
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Schedule A
OTHER PURCHASERS
Brian F. Belcher
Jack R. Loew
Craig C. Hough
RDC Institute, Inc.
Gary C. Bender
Lotz Designers Engineers and Constructors, Inc.
Werner A. Fricker
C/N Oaklands III, Inc.**
Iron Run V, Inc.**
C/N Iron Run III, Inc.**
C/N Leedom II, Inc.*
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* Wholly-owned subsidiary of Safeguard Scientifics, Inc.
** Wholly-owned subsidiary of The Nichols Company.
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