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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A No. 1
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) November 14, 1996
BRANDYWINE REALTY TRUST
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
MARYLAND 1-9106 23-2413352
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) file number) Identification Number)
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10 Campus Boulevard, Newtown Square, Pennsylvania 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 14, 1996, the Company consummated a previously disclosed
transaction (the "SERS Transaction") with a voting trust (the "SERS Voting
Trust") established for the benefit of the Commonwealth of Pennsylvania State
Employes' Retirement System ("SERS") pursuant to which it acquired nine
commercial properties (the "SERS Properties") in suburban Philadelphia
aggregating approximately 418,000 net rentable square feet and that have an
average age of approximately 12 years.
As of September 30, 1996, the SERS Properties were approximately 92.4%
leased to 62 tenants. The SERS Properties were acquired by the Company for an
aggregate purchase price of $30.3 million, payable as follows: (i) by issuing
481,818 preferred shares of beneficial interest, par value $.01 per share
("Preferred Shares") that, subject to certain conditions, are convertible to
4,818,180 common shares of beneficial interest, par value at $.01 per share
("Common Shares") (1,606,060 Common Shares after giving effect to the Company's
previously disclosed one for three reverse split effective November 25, 1996
("Reverse Share Split")); (ii) by agreeing to make deferred payments
aggregating $3.8 million (as described below); and (iii) by issuing two-year
warrants to purchase 400,000 Common Shares at an exercise price of $8.50 per
share (133,333 Common Shares at an exercise price of $25.50 per share after
giving effect to the Company's Reverse Share Split). The purchase price was
determined through negotiation in an arm's-length transaction.
Each Preferred Share will entitle the holder to: (i) receive distributions
equal to the distributions payable in respect of a number of Common Shares
equal to the Conversion Number (defined below); (ii) vote, together with
holders of Common Shares, as a class, and to cast the number of votes equal to
the Conversion Number; and (iii) a liquidation preference equal to the greater
of (a) the amount that would have been payable with respect to the Common
Shares into which such Preferred Shares would have been convertible immediately
prior to the liquidation had the condition to convertibility been satisfied and
(b) the product of $5.50 ($16.50 after giving effect to the Company's Reverse
Share Split) multiplied by the Conversion Number plus all declared but unpaid
dividends. The Company will be required to pay $2.5 million of the deferred
purchase price on June 30, 1998 and $1.3 million on December 31, 1999 in cash
or, at the Company's option, through the issuance of additional Common Shares
equal to the applicable amount of the deferred purchase price divided by the
greater of the Market Value Per Share or the Book Value Per Share (as such
terms are defined below).
The term "Conversion number" means, initially, ten and such number is
subject to adjustment for share splits, reverse share splits, share dividends
and the like.
The term "Book Value Per Share" means, as of any date: (i) the total
beneficiaries' equity as shown on the Company's consolidated balance sheet as
of the
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fiscal quarter end immediately prior to the applicable date (with appropriate
adjustments for any material events subsequent thereto) prepared in accordance
with rules and regulations of the Securities and Exchange Commission and
generally accepted accounting principles applied on a consistent basis (as
adjusted to reflect the consideration received by the Company upon the Exercise
(defined below) of any Convertible Securities (defined below) which are
included in the computation in (ii) below), divided by (ii) the sum of the
number of Common Shares outstanding on such date plus the number of Common
Shares issuable upon the exercise, conversion or exchange (collectively,
"Exercise") of outstanding options, warrants, Preferred Shares and other
convertible securities or similar rights (collectively, "Convertible
Securities") to the extent that the consideration payable upon the exercise of
such Convertible Securities is less than the Market Value Per Share of the
Common Shares issuable upon such Exercise.
The term "Market Value Per Share" means, as of any date (the "Valuation
Date"), the average of the closing per share sale price(s) of the Common Shares
for the period of 20 consecutive trading days ending on the trading date
immediately preceding the Valuation Date as such prices are reported by the
principal United States securities exchange on which the Common Shares are then
traded or, if the Common Shares are not then traded on any such exchange, the
closing per share sale price (or the average of the quoted per share closing
bid and asked prices if no sale is reported) as reported by the National
Association of Securities Dealers, Inc. ("NASD"), Automated Quotation System
("NASDAQ") or any comparable system or, if the Common Shares are not then
quoted on NASDAQ or any comparable system, the average of the closing per share
bid and asked prices as furnished by any member of NASD selected by the Board
of Trustees.
Prior to approval (a "Conversion Approval") of the unlimited conversion of
Preferred Shares into Common Shares by a majority of votes cast by holders of
Common Shares at a meeting of shareholders in which holders of Preferred Shares
have no right to vote such Preferred Shares, Preferred Shares will be
convertible into up to 543,975 Common Shares (181,325 Common Shares after
giving effect to the Company's Reverse Share Split). In the event that a
Conversion Approval has not occurred by July 1, 1997, holders of Preferred
Shares will become entitled to receive distributions equal to 120% of the
distributions payable in respect of a number of Common Shares equal to the
Conversion Number. In the event that a Conversion Approval has not occurred by
July 1, 1998, holders of Preferred Shares will have the right to require the
Company to redeem their Preferred Shares at the Redemption Price (defined
below). Safeguard Scientifics, Inc., The Nichols Company and Richard M. Osborne
have agreed to vote Common Shares beneficially owned by them in favor of the
unlimited conversion. The term "Redemption Price" means, in respect of a
Preferred Share, the greater of: (i) the product of (a) $5.50 ($16.50 after
giving effect to the Company's Reverse Share Split) plus an amount (the "Return
Amount") equal to 8.0% of $5.50 ($16.50 after giving effect to the Company's
Reverse Share Split) per annum from the date of issuance of such Preferred
Share to the redemption date thereof less an amount (not to exceed the Return
Amount) equal to distributions actually received by the holder of account of
such Share and (b) the
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Conversion Number and (ii) the product of the market price of a Common Share
and the Conversion Number.
For information concerning the SERS Properties, reference is made to the
information under the heading "Business and Properties" in the Registration
Statement on Form S-11 (Registration No. 333-13969), as amended, filed by the
Company with the Securities and Exchange Commission and such information is
hereby incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
The audited statement of revenues and certain operating
expenses of the SERS Properties for the year ended December
31, 1995 is incorporated by reference from pages F-51 and
F-52 of the Company's Registration Statement in Form S-11,
File No. 333-13969, as amended, declared effective November
25, 1996.
The unaudited interim statements of revenues and certain
expenses of the SERS Properties included therein include all
adjustments consisting only of normal/recurring accruals,
which the Company considers necessary for a fair presentation
of the SERS Properties revenues and certain expenses for the
nine months ended September 30, 1995 and 1996, as presented
in the unaudited interim financial statements.
(b) Pro Forma Financial Information.
Pro forma financial information which reflects the Company's
acquisition of the SERS Properties as of September 30, 1996
and for the year ended December 31, 1995 and the nine months
ended September 30, 1996 is incorporated by reference from
pages F-3 to F-13 of the Company's Registration Statement on
Form S-11, File No. 333-13969, as amended, declared effective
November 25, 1996.
(c) Exhibits.
10.1* Contribution Agreement among the Company, Greenwood
Square Corporation, BCBC Holding Company, 500 North
Gulph Road and RAI Real Estate Advisers, Inc.
("RAI"), as voting trustee.
10.2* Securities Purchase Agreement between the Company and
RAI, as voting trustee.
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10.3* Warrant to purchase Common Shares in favor of RAI, as
voting trustee.
10.4* Standstill Agreement between the Company and RAI, as
voting trustee.
10.5* Registration Rights Agreement between the Company and
RAI, as voting trustee.
10.6* Pledge Agreement between the Company and RAI, as
voting trustee.
10.7* Voting Agreement between the Company, RAI as voting
trustee, and certain other parties.
10.8* Excerpt from Registration Statement on Form S-11 (No.
333-13969), as amended, consisting of the discussion
under the heading "Business and Properties."
23.1 Consent of Arthur Andersen LLP
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*Previously filed as an exhibit to the Form 8-K dated November 14, 1996.
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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: February 5, 1997 By: /s/ Gerard H. Sweeney .
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Title: President and Chief
Executive Officer
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 8-K/A of our report dated October 31, 1996 on the
combined statement of revenue and certain expenses of the Commonwealth of
Pennsylvania State Employees System Acquisition Properties (the SERS
Properties) included in the Form S-11 Registration Statement File No. 333-13969
of Brandywine Realty Trust. It should be noted that we have not audited any
financial statements of the SERS Properties subsequent to December 31, 1995 or
performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
January 31, 1997
