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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Brandywine Realty Trust
(Name of Issuer)
Common Shares of Beneficial Interest, $.01 par value
(Title of Class of Securities)
105368104
(CUSIP Number)
James A. Ounsworth, Senior Vice President and General Counsel
Safeguard Scientifics, Inc.
800 The Safeguard Building, 435 Devon Park Drive, Wayne, PA 19087
(610) 293-0600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 22, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1 (b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /X/. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Safeguard Scientifics, Inc. #23-1609753
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS*
OO and WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
8. SHARED VOTING POWER
1,550,000 (assuming exercise of 775,000 warrants)
9. SOLE DISPOSITIVE POWER
10. SHARED DISPOSITIVE POWER
Same as #8 above
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Same as #8 above
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
44.2%
14. TYPE OF REPORTING PERSON*
CO
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Safeguard Scientifics (Delaware), Inc. #51-1291171
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS*
OO and WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
8. SHARED VOTING POWER
1,550,000 (assuming exercise of 775,000 Warrants)
9. SOLE DISPOSITIVE POWER
10. SHARED DISPOSITIVE POWER
Same as #8 above
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Same as #8 above
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
44.2%
14. TYPE OF REPORTING PERSON*
CO
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ITEM 1. SECURITY AND ISSUER
The title of the class of equity securities to which this Schedule 13D
relates is Common Shares of Beneficial Interest ($.01 par value per share) of
Brandywine Realty Trust (hereinafter referred to as the "Shares"). The name and
address of the issuer of the Shares is Brandywine Realty Trust, Two Greentree
Centre, Suite 100, Marlton, NJ 08053 (hereinafter referred to as the "Issuer").
ITEM 2. IDENTITY AND BACKGROUND
Set forth in Exhibit A hereto and the Schedules thereto is the name of each
Reporting Person and the information required by Item 2 of Schedule 13D about
the identity and background of that Reporting Person and its partners,
directors, executive officers and controlling persons, if any, supplied by such
Reporting Person.
During the last five years, none of the Reporting Persons nor, to the best
of each Reporting Person's knowledge, none of such Reporting Person's officers,
directors, partners and controlling persons identified in Exhibit A and the
schedules thereto, has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), or has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws. All of the Reporting Persons and the officers, directors,
partners and controlling persons of such Reporting Persons are United States
citizens, except where otherwise indicated.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to the terms of a Share and Warrant Purchase Agreement between
Safeguard Scientifics, Inc. ("Safeguard") and Issuer dated as of July 31, 1996
(the "Share Purchase Agreement") executed in connection with the transaction
described in Item 4 below, Issuer issued 775,000 Shares and an immediately
exercisable warrant to purchase 775,000 Shares at an exercise price of $6.50 per
Share (the "Warrant") to Safeguard Scientifics (Delaware), Inc. ("Safeguard
Delaware") in exchange for Safeguard's indirect ownership interest in eight
office and industrial buildings owned by a limited partnership in which
Safeguard had a beneficial interest, and $426,250 in cash, the source of which
was working capital.
ITEM 4. PURPOSE OF TRANSACTION
On August 22, 1996, the Issuer, Safeguard and its wholly-owned subsidiary,
Safeguard Delaware, and The Nichols Company, a 40% owned affiliate of Safeguard,
completed a transaction (the "Transaction") which involved, among other things,
(i) the issuance by the Issuer of the Shares and Warrant described in Item 3
above to Safeguard Delaware in exchange for $426,250 and Safeguard's indirect
ownership interest in eight office and industrial buildings; and (ii) the
formation by the Issuer of a Delaware limited partnership of which the Issuer is
the general partner (the "Operating Partnership") which acquired an indirect
ownership interest in additional office and industrial buildings previously
owned by entities controlled by
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Safeguard and/or The Nichols Company, in exchange for Units of Class A Limited
Partnership Interests in the Operating Partnership ("Class A Units").
The Reporting Persons acquired the Shares and Warrant as an investment in
connection with the completion of the Transaction described in the preceding
paragraph.
In connection with the Transaction described above, the Issuer's Board of
Trustees was expanded to seven members. Three individuals designated by
Safeguard and The Nichols Company were elected to the Board of Trustees of the
Issuer. In addition, a fourth Trustee was elected pursuant to the joint
designation of Safeguard, The Nichols Company, and the Issuer. Two of the
Trustees designated by Safeguard are Warren V. Musser, Safeguard's Chairman and
Chief Executive Officer, and Anthony Nichols, the former President of The
Nichols Company.
In addition, in the Transaction Safeguard and The Nichols Company acquired
Class A Units of the Operating Partnership. Safeguard and The Nichols Company
each has the right to require the Operating Partnership, in certain
circumstances, as described in Item 6 below, to redeem these Class A Units for
cash. The Issuer, at its option, may elect to assume the Operating
Partnership's obligation to redeem the Class A Units for cash and either pay the
redemption price in cash or deliver Shares of the Issuer in exchange for Class A
Units at an initial exchange ratio of one Share for each Class A Unit so
redeemed.
As a result of Safeguard's beneficial ownership of Shares of the Issuer and
Safeguard's right to designate three of the seven trustees of the Issuer, as
described in Item 6 below, Safeguard may be deemed to be a control person of the
Issuer.
Although the Reporting Persons have no current intention to do so, the
Reporting Persons may, from time to time, determine to purchase additional
Shares of the Issuer on the open market, in negotiated transactions, or
otherwise. Although the Reporting Persons have no current intention to do so,
the Reporting Persons may also sell the Shares that they have acquired. The
Reporting Persons may also, when entitled to do so, exercise their right to
require the Operating Partnership to redeem its Class A Units for cash or Shares
of the Issuer.
Except as described herein, the Reporting Persons have no plans or
proposals of the type described in paragraphs (a) through (j) of Item 4 of
Schedule 13D.
ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER
The table below sets forth the aggregate number of Shares and percentage of
the Issuer's outstanding Shares beneficially owned by each Reporting Person and
by each executive officer, director, partner and controlling person, if any, of
that Reporting Person named in Exhibit A and the Schedules thereto. Except as
otherwise noted, each person listed has sole voting and dispositive power over
all Shares listed opposite his or its name. Any of the aforementioned persons
whose names do not appear in the table below do not beneficially own any Shares
of the Issuer.
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Unless otherwise indicated in a footnote in the following table, no person
named in Exhibit A and the Schedules thereto has consummated any transaction in
the Issuer's Shares during the past sixty days other than as set forth herein.
Number of Shares Percentage of
Name of Person Beneficially Owned Outstanding Shares
- -------------- ------------------ ------------------
Safeguard Scientifics,
Inc. (1) 1,550,000 44.2%
Safeguard Scientifics,
(Delaware) Inc.(1) 1,550,000 44.2%
- --------
(1) Includes 775,000 Shares issuable upon the exercise of Warrants. The
securities listed for Safeguard are held in the name of Safeguard
Scientifics (Delaware), Inc. ("Safeguard Delaware"). Safeguard
Delaware is a wholly owned subsidiary of Safeguard. Safeguard and
Safeguard Delaware each have shared power to vote and direct the vote
and to dispose of and direct the disposition of all of the securities
listed.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
OWNERSHIP OF CLASS A UNITS OF OPERATING PARTNERSHIP
As noted in Item 3, Safeguard and Issuer are parties to a Share Purchase
Agreement pursuant to which Reporting Persons acquired the Shares and Warrants
reported herein. Safeguard, The Nichols Company and Issuer also are parties to
a Contribution Agreement dated as of July 31, 1996 (the "Contribution
Agreement") pursuant to which Safeguard, Safeguard Delaware and C/N Leedom II,
Inc., a wholly-owned subsidiary of Safeguard, acquired an aggregate of 394,078
Class A Units of the Operating Partnership in exchange for their interest in
seven additional office and industrial buildings, and The Nichols Company and
certain of its wholly-owned subsidiaries acquired an aggregate of 966,643 Class
A Units of the Operating Partnership in exchange for their interest in seven
other office and industrial buildings. Safeguard will acquire an additional
9,740, and The Nichols Company an additional 123,227, Class A Units of the
Operating Partnership in the future upon the Operating Partnership acquiring
certain additional limited partnership interests from Safeguard and The Nichols
Company pursuant to the terms of the Transaction documents.
The Class A Units represent units of limited partnership interest in the
Operating Partnership in which the Issuer holds the general partnership interest
and Class B and Class C Units of Limited Partnership Interests. Following (i) a
public or private sale of securities that generates certain minimum net proceeds
to Issuer and meets certain other criteria or (ii) any 20 consecutive trading-
day period occurring on or after August 22, 1998 for which the average closing
price of a Share equals or exceeds $5.50, the holders of the Class A Units,
including the Reporting Persons, have the right to require the Operating
Partnership to redeem the Class A Units for cash. Issuer, at its option, may
elect to assume the Operating Partnership's obligation to redeem the Class A
Units and either pay the redemption price in cash or deliver Shares in exchange
for such Class A Units at an initial exchange ratio of one Share for each Class
A Unit. To the extent the Issuer elects to
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satisfy such obligation by delivery of cash, Reporting Persons shall have the
option of withdrawing their request for redemption.
STANDSTILL AGREEMENT
Safeguard and Safeguard Delaware (collectively for purposes of this
paragraph, "Safeguard") have also entered into a Standstill Agreement with the
Issuer pursuant to which, during the term of the Standstill Agreement:
Safeguard must (i) vote its Shares for the election of either Richard M. Osborne
or his designee to the Board of Trustees, but only for so long as Mr. Osborne is
the beneficial owner of at least 10% of the outstanding Shares; (ii) refrain
from engaging in proxy solicitations in opposition to the position of a majority
of the Board of Trustees and refrain from engaging in election contests; (iii)
vote its Shares in accordance with the recommendation of a majority of the Board
of Trustees on any matter submitted to a vote of Shareholders other than (a) a
merger, consolidation or liquidation of the Issuer or a sale by the Issuer of
all or substantially all of its assets or (b) any amendment to the Issuer's
Declaration of Trust which adversely affects the rights of Shareholders; (iv)
refrain from disposing of any of its Shares other than (a) in transactions under
Rule 144, (b) in a private transaction to any person who is not then a business
competitor of the Issuer and who, immediately following such transaction, would
own less than 5% of the outstanding Shares, (c) in response to a bona fide third
party tender or exchange offer for a least 80% of the Shares and supported by a
majority of the Board of Trustees, and (d) in a merger or statutory share
exchange in which ownership of the Issuer is acquired by a third party; and (v)
not pursue any action which may disqualify the Trust's REIT status. The
Standstill Agreement permits Safeguard to transfer up to approximately 52,000 of
its Shares to Mr. Anthony Nichols so long as he holds such Shares subject to the
same restrictions applicable to them while they were owned by Safeguard. During
the term of the Standstill Agreement, but only for so long as Safeguard is the
beneficial owner of at least 10% of the outstanding Shares, the Issuer will
cause three individuals designated by Safeguard to be nominated for election to
the Board of Trustees. Richard Osborne and The Richard Osborne Trust have
agreed to vote their Shares for the election as trustees of the Issuer those
persons nominated for election as Trustees by the Board of Trustees of the
Issuer.
The term of the Standstill Agreement will end on the earlier of (i) the
third anniversary of its date and (ii) completion by the Issuer of a public or
private offering of its securities satisfying certain criteria.
REGISTRATION RIGHTS
The Issuer also entered into a Registration Rights Agreement with each
holder of Class A Units of the Operating Partnership and with Safeguard Delaware
and certain other persons (the "Registration Rights Agreement") obligating the
Issuer to register the Shares issuable upon the exercise of the Warrants and the
Shares held by Safeguard Delaware, the Shares, if any, which may be issued upon
redemption of Class A Units and the Shares issued or issuable to the Turkey
Vulture Fund XIII, Ltd. ("RMO Fund") in connection with its investment in the
Issuer on June 21, 1996 (collectively, "Registrable Securities"). The
Registration Rights Agreement provides that, at the request of the holders of
Registrable Securities, the Issuer will, at its expense, register up to two
underwritten distributions of the Shares and provide for an annual shelf
registration of such Shares for sale at the market through
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brokers' transactions and thereafter with market makers; provided, however, that
the Issuer will not be obligated to pay the expenses of an underwritten offering
during the first 12 months after the Closing Date. The holders of Registrable
Securities will also be entitled to "Piggyback" on the Issuer's registrations of
its Shares. In connection with such registrations, the Issuer and the selling
shareholders will mutually indemnify each other against certain liabilities,
including liabilities under the federal securities laws.
LOANS BY SAFEGUARD
Safeguard Delaware has also entered into a Distribution Support and Loan
Agreement with the Operating Partnership that obligates Safeguard Delaware,
among other things, to advance up to $700,000 to the Operating Partnership to
provide it with working capital; loan the Operating Partnership approximately
$400,000 to pay a portion of the costs incurred by the Operating Partnership in
connection with the completion of the Transaction; maintain certain letters of
credit collateralizing mortgage loans secured by certain properties involved in
the Transaction; and make certain other advances in certain other instances.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A Identity and Background
Exhibit B Share and Warrant Purchase Agreement dated as of July 31,
1996
Exhibit C Contribution Agreement dated as of July 31, 1996
Exhibit D Standstill Agreement dated as of August 22, 1996
Exhibit E Registration Rights Agreement dated as of August 22, 1996
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SIGNATURES
After reasonable inquiry and to best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct. In executing this statement, the undersigned agrees, to
the extent required by Rule 13d-1(f), that this statement is being filed on
behalf on each of the Reporting Persons herein.
Dated: September 26, 1996 Safeguard Scientifics, Inc.
By: /s/ James A. Ounsworth
James A. Ounsworth
Sr. Vice President, General
Counsel and Secretary
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SIGNATURES
After reasonable inquiry and to best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct. In executing this statement, the undersigned agrees, to
the extent required by Rule 13d-1(f), that this statement is being filed on
behalf on each of the Reporting Persons herein.
Dated: September 26, 1996 Safeguard Scientifics (Delaware),
Inc.
By: /s/ James A. Ounsworth
James A. Ounsworth
Vice President and Secretary
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EXHIBIT INDEX
Exhibit Title
- ------- -----
A Identity and Background *
B Share and Warrant Purchase Agreement dated as of
July 31, 1996 (1)(Exhibit 10.3)
C Contribution Agreement dated as of July 31, 1996 *
D Standstill Agreement dated as of August 22, 1996 *
E Registration Rights Agreement dated as of
August 22, 1996 (1)(Exhibit 10.4)
* Filed herewith
(1) Filed by Issuer on September 6, 1996 as an exhibit to Form 8-K (No. 1-9106)
and incorporated herein by reference.
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EXHIBIT A
Identity and Background
1. SAFEGUARD SCIENTIFICS, INC.
Safeguard Scientifics, Inc., a Pennsylavania corporation
("Safeguard"), owns all of the outstanding capital stock of Safeguard
Scientifics (Delaware), Inc., a Delaware corporation ("Safeguard
Delaware"). Safeguard has an address at 800 The Safeguard Building,
435 Devon Park Drive, Wayne, PA 19087-1945. Safeguard is a unique
partnership of entrepeneurial companies focused on information technology
markets. See Schedule I with respect to the executive officers and
directors of Safeguard as of the date of filing this Schedule 13D.
2. SAFEGUARD SCIENTIFICS (DELAWARE), INC.
Safeguard Delaware is a wholly owned subsidiary of Safeguard.
Safeguard Delaware is a holding company and has an office at
103 Springer Building, 3411 Silverside Road, P. O. Box 7048,
Wilmington, DE 19803. Schedule II provides information about the
executive officers and directors of Safeguard Delaware as of the date of
filing this Schedule 13D.
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF
SAFEGUARD SCIENTIFICS, INC.
Executive Officers*
- ------------------
Business Principal
Name Address Occupation
- ---- -------- ----------
Warren V. Musser Safeguard Scientifics, Inc. Chairman of the Board and
800 The Safeguard Building Chief Executive Officer
435 Devon Park Drive
Wayne, PA 19087
Donald R. Caldwell Safeguard Scientifics, Inc. President and Chief
800 The Safeguard Building Operating Officer
435 Devon Park Drive
Wayne, PA 19087
Edward R. Anderson CompuCom Systems, Inc. President and Chief
10100 North Central Expressway Executive Officer,
Dallas, TX 75231 CompuCom Systems
Jerry L. Johnson Safeguard Scientifics, Inc. Senior Vice President,
800 The Safeguard Building Operations
435 Devon Park Drive
Wayne, PA 19087
Charles A. Root Safeguard Scientifics, Inc. Executive Vice President
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Gerald M. Wilk Safeguard Scientifics, Inc. Sr. Vice President--
800 The Safeguard Building Finance
435 Devon Park Drive
Wayne, PA 19087
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Directors*
- ---------
Vincent G. Bell Jr. Verus Corp. President and Chief
259 Radnor-Chester Rd. Executive Officer, Verus
Radnor, PA 19087 Corp.
Donald R. Caldwell (same as previous page) (same as previous page)
Robert A. Fox R.A.F. Industries President,
One Pitcairn PL, Suite 2100 R.A.F. Industries
165 Township Line Road
Jenkintown, PA 19046-3593
Delbert W. Johnson Pioneer Metal Finishing Chairman and CEO, Pioneer
1717 West River Rd. North Metal Finishing and Vice
Minneapolis, MN 55411 President, Safeguard
Robert E. Keith Jr. TL Ventures President and CEO,
800 The Safeguard Building Technology Leaders
435 Devon Park Drive Management, Inc.
Wayne, PA 19087
Peter Likins Lehigh University President,
Bethlehem, PA 19087 Lehigh University
Jack L. Messman Union Pacific Resources President and CEO, Union
801 Cherry Street, MS4001 Pacific Resources
Fort Worth, TX 76102
Warren V. Musser (Same as previous page) (Same as previous page)
Russell E. Palmer The Palmer Group President,
3600 Market Street The Palmer Group
Suite 530
Philadelphia, PA 19104
John W. Poduska Sr. Advanced Visual Systems Chairman of the Board,
300 Fifth Avenue Advanced Visual Systems,
Waltham, MA 02154 Inc.
Heinz Schimmelbusch Safeguard International President and CEO,
Group, Inc. Safeguard International
800 The Safeguard Building Group, Inc. and President
435 Devon Park Drive and CEO, Allied Resource
Wayne, PA 19087-1945 Corporation
Hubert J.P. Schoemaker Centocor, Inc. Chairman of the Board,
200 Great Valley Parkway Centocor, Inc.
Malvern, PA 19355
- ---------
*All Executive Officers and Directors, except Heinz Schimmelbusch and Hubert
J.P. Schoemaker, are U. S. citizens.
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SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS
OF
SAFEGUARD SCIENTIFICS (DELAWARE), INC.
Executive Officers*
- ------------------
Business Principal
Name Address Occupation
- ---- -------- ----------
Donald R. Caldwell Safeguard Scientifics, Inc. President and CEO,
800 The Safeguard Building Safeguard and President,
435 Devon Park Drive Safeguard Delaware
Wayne, PA 19087
James A. Ounsworth Safeguard Scientifics, Inc. Sr. Vice President and
800 The Safeguard Building Secretary, Safeguard and
435 Devon Park Drive Vice President and
Wayne, PA 19087 Secretary, Safeguard
Delaware
George Warren Safeguard Scientifics Vice President
(Delaware), Inc.
103 Springer Building
3411 Silverside Road
Wilmington, DE 19803
Gerald M. Wilk Safeguard Scientifics, Inc. Sr. Vice President-
800 The Safeguard Building Finance, Safeguard and
435 Devon Park Drive Vice President and
Wayne, PA 19087 Treasurer, Safeguard
Delaware
Directors*
- ---------
Gerald M. Wilk (Same as above) (Same as above)
James A. Ounsworth (Same as above) (Same as above)
Michael W. Miles Safeguard Scientifics, Inc. Vice President and
800 The Safeguard Building Controller of Safeguard
435 Devon Park Drive
Wayne, PA 19087
William F. White Safeguard Scientifics, Inc. Tax Director of Safeguard
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
- ----------
*All Executive Officers and Directors are U.S. Citizens
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EXHIBIT C
CONTRIBUTION AGREEMENT
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TABLE OF CONTENTS
Section 1. Agreement to Form Partnership . . . . . . . . . . . . .3
1.1 Formation of Partnership . . . . . . . . . . . . . . . . .3
1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . .3
Section 2. Contributions. . . . . . . . . . . . . . . . . . . . . .3
2.1 By BRT.. . . . . . . . . . . . . . . . . . . . . . . . . .3
2.2 By TNC . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.3 By SSI . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.4 Certain Adjustments and Restricted Units . . . . . . . . .5
2.5 Included and Excluded Assets . . . . . . . . . . . . . . .5
2.6 Assumption of Liabilities. . . . . . . . . . . . . . . . .6
Section 3. Representations and Warranties . . . . . . . . . . . . .7
3.1 By BRT . . . . . . . . . . . . . . . . . . . . . . . . . .7
3.2 By TNC . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 By SSI . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.4 Survival of Representations and Warranties . . . . . . . 27
Section 4. Conditions . . . . . . . . . . . . . . . . . . . . . . 28
4.1 Conditions Precedent to BRT Obligations on the
Closing Date . . . . . . . . . . . . . . . . . . . . . 28
4.2 Conditions Precedent To TNC and SSI Obligations
on the Closing Date . . . . . . . . . . . . . . . . . 30
4.3 Mutual Conditions Precedent of the Parties on the
Closing Date. . . . . . . . . . . . . . . . . . . . . . 30
Section 5. Operations Prior to Transfer . . . . . . . . . . . . . 32
5.1 Property Operations. . . . . . . . . . . . . . . . . . . 32
5.2 Casualty or Condemnation . . . . . . . . . . . . . . . . 33
Section 6. Closing; Closing Deliveries; Transfer Deliveries . . . 34
6.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Closing Documents. . . . . . . . . . . . . . . . . . . . 34
Section 7. Closing Adjustments and Expenses . . . . . . . . . . . 35
7.1 Adjustments. . . . . . . . . . . . . . . . . . . . . . . 35
7.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8. General Provisions 36
8.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 36
8.2 Confidentiality. . . . . . . . . . . . . . . . . . . . . 37
8.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . 38
8.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . 38
8.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . 38
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8.6 Section Headings, Captions and Defined Terms . . . . . . 38
8.7 Amendments, Modifications and Waiver . . . . . . . . . . 38
8.8 Severability . . . . . . . . . . . . . . . . . . . . . . 39
8.9 Liability of Trustees, etc . . . . . . . . . . . . . . . 39
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CONTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 31st day of July, 1996 by and among
BRANDYWINE REALTY TRUST, a Maryland real estate investment trust ("BRT"),
SAFEGUARD SCIENTIFICS, INC., a Pennsylvania corporation ("SSI"), and THE
NICHOLS COMPANY, a Pennsylvania corporation ("TNC").
RECITALS
A. Witmer Operating Partnership I, L.P. ("WITMER") is a Delaware
limited partnership that owns substantially all of the partnership interests
in certain limited partnerships that own office and/or industrial properties.
These partnerships, and the properties owned by them (referred to herein as
the "A PROPERTIES") are listed on EXHIBIT "A" attached hereto. Witmer also
owns in fee the office property known as the Lawrenceville Office Park,
Lawrenceville, New Jersey (the "LAWRENCEVILLE PROPERTY").
B. TNC owns all of the issued and outstanding shares of BRT Witmer,
Inc., a Pennsylvania corporation that is the sole general partner of Witmer
("WITMER GP"), subject to a pledge in favor of SSI securing a loan made by
SSI to TNC, which pledge gives SSI the right to acquire all the issued and
outstanding shares of Witmer GP in satisfaction of such debt. SSI, through
its wholly owned subsidiary, SSI Real, Inc., owns all the Class B partnership
units issued by Witmer (the "WITMER CLASS B UNITS"). TNC and certain other
Existing Partners (hereinafter defined) own all the Class A partnership units
issued by Witmer (the "WITMER CLASS A UNITS").
C. TNC, either directly or through subsidiaries, owns substantially all
of the partnership interests in certain limited partnerships that own office
and/or industrial properties. These partnerships, and the properties owned
by them (referred to herein as the "C PROPERTIES") are listed on EXHIBIT "C"
attached hereto. The partnerships owning the A Properties and the C
Properties and the partnership owning one of the B Properties are sometimes
referred to herein as the "PROJECT PARTNERSHIPS".
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D. SSI, either directly or through a limited partnership in which it
and a subsidiary are the only partners, owns certain office and industrial
properties that are listed on EXHIBIT "B" attached hereto and referred to
herein as the "B PROPERTIES." The A Properties, B Properties, C Properties
and Lawrenceville are referred to herein collectively as the "PROPERTIES" and
individually as a "PROPERTY."
E. BRT is a real estate investment trust and general partner of
Brandywine Realty Partners, a general partnership ("BRT OP"), which owns
certain office properties.
F. This Agreement is being executed as part of a larger transaction, in
which (i) SSI and BRT are entering into a purchase agreement whereby SSI, or
a wholly owned subsidiary of SSI, will acquire common stock and a warrant of
BRT in consideration for the assignment to a wholly-owned qualified real
estate subsidiary of BRT of all of the partnership interests owned by Witmer
GP in Witmer, and SSI's assignment to BRT of the Witmer Class B Units and
payment to BRT of $426,250 in cash, (ii) TNC will cause an affiliated
partnership to grant an option to the Partnership to acquire certain
properties commonly known as Horsham 11 through 14 in exchange for the
issuance of Class A LP Units, (iii) Safeguard Scientifics (Delaware), Inc., a
wholly owned subsidiary of SSI ("SSI DELAWARE") will enter into a
distribution support and loan agreement with the Partnership whereby SSI
Delaware will commit to lend the Partnership certain funds and (iv) TNC will
transfer to the Partnership or its management company affiliate substantially
all of TNC's property management assets.
G. BRT, TNC and SSI desire to form a limited partnership under the law
of the State of Delaware to be known as Brandywine Operating Partnership,
L.P. (the "PARTNERSHIP"), to which (i) BRT will contribute $1,000 in cash,
the furniture, fixtures and equipment BRT is to acquire from TNC for $25,000
on the Closing Date, the Witmer Class B Units and BRT's interest in BRT OP
(in a two stage transaction) in return for issuance of general partner
interests and Class B and Class C limited partner interests in the
Partnership (collectively, the "BRT UNITS"), (ii) the Existing Partners
holding the Witmer Class A Units will contribute the Witmer Class A Units to
the Partnership in return for issuance of Class A limited partner interests
in the Partnership (the "CLASS A LP UNITS"), and (iii) SSI, TNC and the
applicable Existing Partners will contribute, as applicable, the
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B Properties and interests in the Project Partnerships owning C Properties
and one B Property to the Partnership in return for issuance of Class A LP
Units to SSI Delaware, TNC and the other Existing Partners.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, agree as follows:
SECTION 1. AGREEMENT TO FORM PARTNERSHIP
1.1 FORMATION OF PARTNERSHIP. Subject to the terms and conditions of
this Agreement, TNC, SSI and BRT agree to form the Partnership (or, if the
Partnership has been previously formed by BRT, continue the Partnership) by
executing and delivering (in the case of SSI, causing SSI Delaware to execute
and deliver) at the Closing the Agreement of Limited Partnership in the form
attached hereto as EXHIBIT "D" (the "PARTNERSHIP AGREEMENT").
1.2 DEFINITIONS. For purposes of this Agreement, the terms used herein
shall have the definitions specified or referred to in this Agreement.
SECTION 2. CONTRIBUTIONS
2.1 BY BRT. On the Closing Date, BRT will contribute to the Partnership
$1,000 in cash, the furniture, fixtures and equipment BRT is to acquire from
TNC on the Closing Date, a portion of its interest in BRT OP (constituting a
97% profits interest and a 49% capital interest in BRT OP) and the Witmer
Class B Units in return for the issuance of a portion of the BRT Units to
BRT. One year and one day following the Closing Date BRT shall contribute its
remaining interest in BRT OP to the Partnership in return for the issuance of
the remaining BRT Units to BRT. EXHIBIT "E" attached hereto lists the number
of units of general partner interests, Class B limited partner interests and
Class C limited partner interests that collectively constitute
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the BRT Units, and notes which of those Units are to be issued at Closing and
which are to be issued upon contribution to the Partnership of BRT's
remaining interest in BRT OP.
2.2 BY TNC. On the Closing Date, TNC will (a) assign to the Partnership
that certain undated agreement and note in the principal amount of $1,201,746
issued by Witmer in favor of TNC in connection with the formation of Witmer
(the "WITMER NOTE"), which will then be cancelled, and (b) cause all of the
Witmer Class A Units and all of the partnership interests in the Project
Partnerships owning the C Properties (the "PROJECT PARTNERSHIP INTERESTS") to
be conveyed to the Partnership, other than (i) the Newtech III Interest
referred to below and (ii) an 11% capital interest and a 1% profits interest
in each of such Project Partnerships other than Fifteen Horsham, L.P. (the
"RETAINED INTERESTS"), which shall be retained by TNC subject to the put and
call provisions contained in the Partnership Agreement. In consideration for
the assignment of the Witmer Note and conveyance of the Witmer Class A Units
and such Project Partnership Interests to it, the Partnership shall issue to
the partners holding Witmer Class A Units and the partners in the C Property
Project Partnerships as of the date hereof (collectively, the "EXISTING
PARTNERS") Class A LP Units in the Partnership, subject to cancellation of a
portion of such units and the issuance of additional Class A LP Units in
certain circumstances, as more particularly provided in the Partnership
Agreement. EXHIBIT "G" attached hereto lists the Class A LP Units to be
issued to the Existing Partners with respect to the A and C Properties at
Closing and the Class A LP Units to be issued to TNC upon the transfer to the
Partnership of the Retained Interests. A 35% profits interest in Newtech III
Limited Partnership was granted to N.E. Leasing Company in connection with
the leasing of space in the Property known as Newtown 12 to New England
Mutual Life Insurance Company, as more particularly described in the
agreement of limited partnership for Newtech III Limited Partnership (the
"NEWTECH III INTEREST"); the Newtech III Interest will not be conveyed to the
Partnership.
2.3 BY SSI.
(a) On the Closing Date, SSI will convey fee simple title to each
of the B Properties other than Meetinghouse 2 to the Partnership.
(b) Meetinghouse 2 is owned by C/N Leedom Limited Partnership II
("LEEDOM II"), a partnership in which a
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corporation wholly owned by SSI is the general partner and SSI is the limited
partner. On the Closing Date, SSI will cause all of the partnership
interests in Leedom II (the "LEEDOM PARTNERSHIP INTERESTS") to be conveyed to
the Partnership other than an 11% capital interest and a 1% profits interest
in Leedom II (the "LEEDOM RETAINED INTERESTS"), which shall be retained by
SSI subject to the put and call provisions contained in the Partnership
Agreement.
(c) In consideration for the conveyance of the B Properties (other
than Meetinghouse 2) and the transfer of the Leedom Partnership Interests, on
the Closing Date the Partnership shall issue to SSI Delaware 386,162 Class A
LP Units (of which 215,607 Class A LP Units shall be issued in escrow as
provided in the partnership agreement), subject to cancellation of a portion
of such units and the issuance of additional Class A LP Units in certain
circumstances as provided in the Partnership Agreement. An additional 9,444
Class A LP Units shall be issued to SSI Delaware upon conveyance of the
Leedom Retained Interests to the Partnership.
2.4 CERTAIN ADJUSTMENTS AND RESTRICTED UNITS. The number of Class A LP
Units to be issued to the Existing Partners and SSI Delaware will be adjusted
at Closing to reflect any differences in mortgage debt balances between the
balances used by the parties to calculate the number of Units noted on
Exhibit G (with respect to the Existing Partners) and in Section 2.3 (with
respect to SSI Delaware) and the actual debt balances as of the Closing Date,
at the rate of one additional (or less) Class A LP Unit for each $5.50 by
which mortgage debt on the Closing Date is less (or greater) than the debt
balances used in the original calculations. In addition, Units issued with
respect to a Property where the mortgage lender is entitled to receipt of a
participation interest (whether of profits, sale or refinancing proceeds or
calculated based on fair market value) shall be held in escrow until
determination of the participation due such lender as provided in the
Partnership Agreement. The number of Class A LP Units equal to the amount of
the participation payment actually made divided by $5.50 (subject to
adjustment for stock splits, reverse splits and stock dividends) shall be
transferred to the Partnership and cancelled, with the balance released from
escrow to the person or persons entitled thereto, all as more particularly
provided in the Partnership Agreement.
2.5 INCLUDED AND EXCLUDED ASSETS. References in this Agreement
to a Property shall include not only the applicable
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owner's interest in the land and buildings and other improvements erected
thereon, but also all right, title and interest of such owner to any land
lying in the bed of any street, open or proposed, in front of or abutting or
adjoining such land and all right, title and interest of such owner in and to
the leases and other occupancy agreements with respect to all or any part of
such land, building and improvements and the fixtures, equipment, supplies,
machinery, appliances, furniture, furnishings and other personal property,
tangible and intangible, attached or appurtenant to, or located in or on,
such land, building and improvements. The conveyance of the Project
Partnership Interests by the Existing Partners and the Leedom Partnership
Interests by SSI shall convey all of their respective right, title and
interest in and to the Project Partnerships and Leedom II, respectively.
Only the assets of BRT, TNC and SSI specifically identified in this Agreement
as being contributed to the Partnership are being so contributed. Without
limiting the generality of the foregoing, TNC shall retain its interests in
the partnership owning the Option Properties, its limited partnership
interest in LC/N Horsham Partnership II and its general partnership interest
in LC/N Keith Valley Partnership II.
2.6 ASSUMPTION OF LIABILITIES.
(a) At the Closing, pursuant to Article XXI of the Partnership
Agreement, the Partnership shall assume and agree to pay, perform and
discharge, when due, each of the following obligations and liabilities of
SSI, TNC and/or their affiliates relating to the business, assets and
properties to be contributed to the Partnership (the "ASSUMED LIABILITIES"):
(i) the liabilities and obligations of the SSI/TNC
Contributing Parties to be performed or discharged after the Closing pursuant
to the Significant Agreements described in Sections 3.2(j) and 3.3(h) hereof;
(ii) the liabilities and obligations of the SSI/TNC
Contributing Parties to be performed or discharged after the Closing pursuant
to the TNC Leases, SSI Leases, the management contracts and other contracts
or instruments described in Sections 3.2(j), 3.2(l), 3.3(h), 3.3(j), and
4.3(e) hereof, other than those liabilities and obligations noted on any of
EXHIBITS H, I, L or M as liabilities or obligations not to be assumed by the
Partnership;
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(iii) all accounts payable and other current liabilities of
the Initial Properties that are reflected on the combined Balance Sheet of
the Initial Properties at December 31, 1995, less those paid or otherwise
discharged prior to Closing, plus those accounts payable and other current
liabilities of the Initial Properties incurred since the date of such Balance
Sheet in the ordinary course of business, consistent with the past practice
and not paid prior to Closing.
(b) TRANSFERS SUBJECT TO INDEBTEDNESS. The Partnership shall
acquire ownership of each of the Properties directly or by acquiring
ownership of partnership interests in each of the Project Partnerships, under
and subject to the mortgage indebtedness in existence on the date hereof
encumbering such Properties. The Partnership shall not be required by this
Agreement to assume such mortgage indebtedness or to guaranty repayment of
such mortgage indebtedness.
(c) EXCLUDED LIABILITIES. Except as expressly provided in this
Agreement, the Partnership shall not assume or be responsible for any
liabilities or obligations of SSI, TNC or their respective affiliates of any
nature whatsoever, whether or not relating to the A Properties, B Properties
or C Properties or other assets acquired by the Partnership pursuant to this
Agreement. SSI, TNC and their respective affiliates, as applicable, shall
remain responsible for such excluded liabilities and obligations.
(d) DEFINITIONS. For purposes hereof, the SSI/TNC Contributing
Parties means SSI and its affiliates, and TNC, The Nichols Realty Services
Company and their respective affiliates.
SECTION 3. REPRESENTATIONS AND WARRANTIES
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<PAGE>
3.1 BY BRT. BRT hereby represents and warrants that, except as
disclosed in the Proxy Statement or any exhibit to this Agreement:
(a) ORGANIZATION; AUTHORITY. BRT and BRT OP are (i) in the case of
BRT, a real estate investment trust duly formed, validly existing and in good
standing under the laws of the state of Maryland with all the necessary trust
power and authority to own, lease or operate its properties and assets and to
carry on its business as now conducted, and (ii) in the case of BRT OP, a
general partnership validly existing under the laws of the State of
Pennsylvania with full power and authority to own, lease and operate its
properties and to carry on its business as now conducted. BRT and BRT OP, as
applicable, is duly qualified to do business and is in good standing as a
foreign business trust or partnership in each jurisdiction where the
character of its properties or assets and the nature of its business requires
it to be so qualified. BRT has the requisite trust authority to enter into
and perform this Agreement and all other documents and agreements to be
executed by it in connection with the transactions contemplated by this
Agreement.
(b) DUE AUTHORIZATION; BINDING AGREEMENT. Except for the approval
of BRT's shareholders as contemplated by subsection 4.3(c) hereof, the
execution, delivery and performance of this Agreement and all other documents
and agreements to be executed by BRT in connection with the transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary action of BRT. This Agreement and all other documents and
agreements to be executed by BRT in connection with the transactions
contemplated by this Agreement have been and will be duly executed and
delivered by BRT and, subject to receipt of the approval of BRT's
shareholders as contemplated by subsection 4.3(c) hereof, constitute the
legal, valid and binding obligations of BRT enforceable against BRT in
accordance with their respective terms.
(c) CONSENTS AND APPROVALS. Except as contemplated by subsections
4.3(a) and (c) hereof and related filings with the SEC, Blue Sky
administrators, and American Stock Exchange, no consent, waiver, approval,
license or authorization of, or filing, registration or qualification with,
or notice to, any governmental unit or any other person is required to be
made, obtained or given by BRT in connection with the execution, delivery and
performance of this Agreement or any other documents and agreements to be
executed by BRT in connection with the
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transactions contemplated by this Agreement that has not been heretofore
obtained. As contemplated by the Proxy Statement, BRT expects to file an
amendment to its Declaration of Trust with the Maryland Department of
Assessment and Taxation.
(d) NO VIOLATION. None of the execution, delivery or performance
of this Agreement or any other document or agreement to be executed by BRT in
connection with the transactions contemplated by this Agreement does or will,
with or without the giving of notice, lapse of time or both, violate,
conflict with or constitute a default under any term or provision of the
organizational documents of BRT or any other agreement to which BRT is a
party or by which it is bound or any term or provision of any judgment,
decree, order, statute, injunction, rule or regulation of a governmental unit
applicable to BRT, or by which it or its assets or properties are bound or
result in the creation of any lien or other encumbrance upon the assets or
properties of BRT.
(e) COMPLIANCE WITH LAWS AND RECORDED DECLARATIONS. BRT and each
of its subsidiaries 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 or their properties (collectively, the "BRT PROPERTIES"), including,
without limitation, parking and building setback requirements, and has
performed all work and secured all required consents and approvals and
obtained and fully paid for all licenses, permits, certificates,
entitlements, grants of right and any other items and documents required by
applicable law, by contract, or as a condition of any approval granted by the
applicable municipal authority, required of BRT or its subsidiaries for the
completion, ownership, leasing, use and occupancy of its or their properties,
including but not limited to final certificates of occupancy for each of the
current tenancies at such properties (other than where construction of tenant
improvements for new tenancies is not yet completed or applications remain
pending), except where the failure to so comply or obtain would not have a
material adverse effect on BRT or its subsidiaries. Such licenses, permits,
certificates, entitlement, grants of right and other items and documents are
in full force and effect. Neither BRT or any of its subsidiaries have 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 neither BRT nor any of its subsidiaries have
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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 or their properties that in each case has not
been cured or otherwise resolved to the satisfaction of such governmental
entity. To the best of BRT's knowledge, (i) any and all charges (including
condominium fees, to the extent applicable) and other assessments under
declarations and like agreements to which any of the BRT Properties are
subject have been paid and no special assessments thereunder against any of
the BRT Properties are pending, and (ii) all consents and approvals required
to be obtained under such declarations and like agreements with respect to
the BRT Properties have been obtained.
(f) LITIGATION. There are no claims, actions, suits, proceedings
or investigations pending or, to the best of BRT's knowledge, threatened
before any court, governmental unit or any mediator or arbitrator with
respect to BRT, its subsidiaries or its or their 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 Partnership or upon BRT, its subsidiaries or its or their properties
taken as a whole.
(g) BROKERS. No brokers or finders have been employed or engaged
by BRT or any of its subsidiaries with respect to the transactions
contemplated by this Agreement or any other document or agreement to be
executed in connection with the transactions contemplated by this Agreement.
(h) SEC REPORTS. Since January 1, 1995, BRT and its subsidiaries
have 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") or the Securities Act of 1933, as amended (the "1933 Act"),
including without limitation (i) all Annual Reports on Form 10-K, (ii) all
Quarterly Reports on Form 10-Q, (iii) all reports on Form 8-K and (iv) all
proxy statements relating to meetings of stockholders (whether annual or
special) and (v) all information incorporated by reference into any of the
foregoing (collectively, as amended to date, referred to herein as the
"COMPANY SEC REPORTS"). The Company SEC Reports were prepared in all
material respects in accordance with and complied in all
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material respects with the requirements of applicable law, including the
Exchange Act and the 1933 Act and the applicable rules and regulations of the
SEC thereunder, and the company 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 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. BRT has not filed any registration
statements with the SEC at any time within the last three years. BRT has
delivered to TNC and SSI prior to the date hereof true and correct copies of
all Company SEC Reports and any other reports and documents filed with the
SEC since January 1, 1995.
(i) FINANCIAL STATEMENTS. Each of the consolidated financial
statements (including, in each case, any related notes thereto) contained in
the Company 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 consolidated financial position of BRT and its
subsidiaries as of the respective dates thereof and the consolidated results
of operations and cash flows for the periods indicated (subject, in the case
of unaudited consolidated 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 consolidated
financial statements are not necessarily indicative of the consolidated
financial position of BRT and its subsidiaries as of the respective dates
thereof and the consolidated results of operations and cash flows for the
periods indicated. Since December 31, 1995, the Company has not made any
material change in the accounting practices or policies applied in the
preparation of its financial statements.
(j) ENVIRONMENTAL MATTERS. Neither BRT or its subsidiaries have
(a) caused any substance or waste that is listed or defined as hazardous or
toxic under applicable environmental laws or petroleum products
(collectively, "HAZARDOUS MATERIALS") to be improperly maintained or
disposed of on, under or at any of its or their properties, or any part
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thereof in a manner which violates, or could give rise to liability under,
applicable environmental laws, or (b) failed to remediate, alter, mitigate or
abate any condition required to be remediated, altered, mitigated or abated
under such environmental laws, to the extent BRT or its subsidiaries have
been notified of the existence of a condition required to be remediated,
altered, mitigated or abated. Except as set forth in the environmental site
assessments provided by BRT to SSI and TNC or disclosed in the Company SEC
Reports: (1) to the best of BRT's knowledge, each of its properties, and the
properties of its subsidiaries, is in compliance, and has hereto-fore
complied, with all environmental laws in all material respects, (2) to the
best of BRT's knowledge, there has been no discharge of Hazardous Materials
by any tenant of any property of BRT or its subsidiaries, or by any other
person or property in, to or under any property of BRT or its subsidiaries,
in either case in quantities requiring response, remediation or removal, and
(3) BRT has not received any written notice from any governmental unit or
other person that it or its subsidiaries, or any of its or their properties
or operations conducted thereon, are not or have not been in compliance with
the environmental laws.
(k) ABSENCE OF UNDISCLOSED LIABILITIES AND CONTRACTUAL OBLIGATIONS.
Except for (i) liabilities disclosed in the financial statements referred to
in subsection 3.1(i), (ii) liabilities described or disclosed in the Proxy
Statement, (iii) liabilities arising in the ordinary course of business
which, if material (individually or in the aggregate), are disclosed in
EXHIBIT "X" attached hereto (the "BRT DISCLOSURE SCHEDULE"), (iv) liabilities
at the date hereof which are specifically disclosed or otherwise reflected in
the Exhibits attached to this Agreement and (v) current liabilities incurred
in the ordinary course of business after the date hereof, no BRT Property is
subject to liabilities of any nature, whether matured or unmatured, fixed or
contingent, which could reasonably be expected to have, individually or in
the aggregate, a material adverse effect upon such property. There are no
Significant Agreements relating to the BRT Properties, or their operations
other than as set forth in the BRT Disclosure Schedule. None of the BRT
Properties are cross-defaulted and/or cross-collateralized with any other
properties other than among the BRT Properties. For purposes hereof,
"SIGNIFICANT AGREEMENT" means and includes any of the following by which any
of the BRT Properties may otherwise be subject or bound, in each such case as
amended and currently in effect, inclusive of any waivers relating thereto:
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(A) all agreements, instruments and documents (excluding
tenant leases referred to in subsection 3.1(l) of this Agreement and
easements and documents providing for the assessment of common charges or
related fees that are included in the Permitted Exceptions) evidencing,
securing or pertaining to contractual obligations that relate to the
ownership or operation of any of the BRT Properties; and
(B) all mortgages.
(l) TENANT LEASES. The rent rolls attached hereto as EXHIBIT "Y"
(the "BRT RENT ROLLS") list each of the leases currently in effect with
respect to the BRT Properties as the same have been amended or modified (the
"BRT LEASES"); there are no leases, licenses or other rights of occupancy
affecting any of the BRT Properties except for the BRT Leases. BRT has made
available to TNC and SSI complete copies of all of the documents that
constitute the BRT Leases. The BRT Leases are in full force and effect and,
except as set forth on the applicable BRT Rent Roll, (A) to the best of BRT's
knowledge, no uncured Event of Default (as defined in such Leases), has
occurred and is continuing under any such Lease, no tenant has asserted a
defense to, offset or claim against its rent or the performance of its
obligations under its Lease and no tenant has asserted a default on the part
of the landlord which would give it the right to terminate its Lease or set
off against rent, (B) there are no rights of first refusal on, or options to
purchase, any of the BRT Properties, or any right to a participation interest
(whether of profits, sale or refinancing proceeds, or calculated based on
fair market value) with respect to any such property, in favor of any tenant,
(C) no proposed modifications to any BRT Lease that would reduce (i) the
space leased to any tenant, (ii) the amount of any tenant's rent or (iii) the
term of any lease, (D) no free rent or other rent concession is due any
tenant under the BRT Leases for periods after the Closing Date, (E) no
landlord under a BRT Lease is required to provide tenant improvements or
refurbishments with respect thereto after the Closing Date (other than any
tenant improvements that the landlord may be required to construct if an
expansion option provided in a BRT Lease is exercised), and (F) no tenant
under a BRT Lease has the option to terminate its lease prior to the stated
expiration date. Except for (i) security deposits or (ii) the first full
month's rent, whether or not the term of a Lease has commenced, no
prepayments of rent more than thirty (30) days in advance have been made
under the BRT Leases. All decorating, repairs, alterations or other work
performed by the landlord under each of the BRT Leases
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prior to the date hereof, or the cost of any such work performed by the
tenant and to be reimbursed by the landlord prior to the date hereof, has
been performed or reimbursed, as applicable. No rent or security deposits
under the BRT Leases have been assigned or encumbered, except as security for
the mortgages noted in the BRT Disclosure Schedule, and there are no
agreements or understandings, written or oral, with any of the tenants other
than as set forth in the BRT Leases or otherwise set forth on the BRT Rent
Rolls. All brokerage commissions and other compensation and fees payable by
reason of the BRT Leases have been paid in full, except as set forth in the
BRT Disclosure Schedule.
(m) REASSESSMENTS. Each of the BRT Properties has been fully
assessed and is not subject to abatement. To the best of BRT's knowledge,
there are no proposed reassessments of any of the BRT Properties by any
taxing authority and there are no threatened or pending special assessments
or other actions or proceedings (other than county-wide reassessments and/or
the usual increases in mileage rates that may be under consideration by the
taxing authorities in the jurisdictions where the BRT Properties are located)
that could reasonably be expected to give rise to an increase in real
property taxes or assessments against any of the BRT Properties.
(n) PROPERTY IMPROVEMENTS. Except as disclosed in any engineering
studies or reports obtained by or delivered to TNC and SSI in connection with
this transaction prior to the date hereof, the improvements at the BRT
Properties are in good condition and repair, ordinary wear and tear excepted,
and have not suffered any casualty or other material damage which has not
been repaired in all material respects. To the best of BRT's knowledge,
there is no material latent or patent structural, mechanical or other
significant defect, soil condition or deficiency in the improvements included
in the BRT Properties, or any other defects, soil conditions or deficiencies
which, in the aggregate, would materially adversely affect the value of such
properties taken as a whole.
(o) CONDEMNATION OR GOVERNMENTAL PROCEEDINGS. No eminent domain,
condemnation, incorporation, annexation or moratorium or similar proceeding
has been commenced or, to the best of BRT's knowledge, threatened by an
authority having the power of eminent domain to condemn any part of the BRT
Properties. To the best of BRT's knowledge, there are no pending or
threatened governmental rules, regulations, plans, studies or efforts, or
court orders or decisions, which do or could
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adversely effect the use or value of the BRT Properties for their present use.
(p) INSURANCE. EXHIBIT "Z" attached hereto lists the insurance
policies relating to the BRT Properties or any part thereof carried by BRT;
all such policies are in full force and effect, and will be continued or
renewed with the existing coverages and policy limits until the Closing Date,
and all premiums thereunder have been paid to the extent due, and will be
paid until the Closing Date; and no notice of cancellation has been received
with respect thereto and, to the best knowledge of BRT, no cancellation is
threatened.
(q) FIRPTA. BRT is neither a "foreign person" within the meaning
of Section 1445(f) of the Code nor a "foreign partner" within the meaning of
Section 1446 of the Code.
(r) TAXES. BRT (i) has filed or has had filed on its behalf all
Tax Returns (as defined below) on a timely basis which are required to be
filed as of the date hereof, and such Tax Returns are correct and complete,
(ii) has paid or has had paid on its behalf on a timely basis all Taxes (as
defined below) shown to be due on such Tax Returns and (iii) with respect to
any period for which Tax Returns have not yet been filed, or for which Taxes
are not yet due or owing, has made due and sufficient current accruals for
such Taxes in its books and records in accordance with generally accepted
accounting principles. For purposes of this subsection, "Tax" shall mean any
Federal, state or local tax of any kind whatsoever, including any interest or
penalty, and "TAX RETURN" shall mean any return, declaration, report, claim
for refund, information return, statement or other similar document relating
to Taxes.
(s) NO DEFAULTS. All payments of principal and interest on all
mortgage indebtedness respecting the BRT Properties are current as of the
date hereof. Neither BRT nor BRT OP is in default of any loan secured by any
of the BRT Properties or any other Significant Agreement and, to the best of
BRT's knowledge, no event has occurred which with the giving of notice or
passage of time would become a default under any such loan or under any such
Significant Agreement.
(t) OWNERSHIP OF BRT PROPERTIES. The properties constituting the
BRT Properties are listed on EXHIBIT "AA" attached hereto. BRT OP owns the
BRT Properties in fee simple
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and, to the best of BRT's knowledge, title thereto is subject only to the
Permitted Exceptions relating to the BRT Properties.
3.2 BY TNC. TNC hereby represents and warrants that, except as
disclosed in the Proxy Statement or any exhibit to this Agreement:
(a) ORGANIZATION; AUTHORITY. TNC, Witmer GP, Witmer and each of
the Project Partnerships, is either (i) in the case of TNC and Witmer GP,
duly incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation and has full corporate power and authority
to own, lease and operate its properties and to carry on its business as
presently conducted, or (ii) in the case of Witmer and the Project
Partnerships, duly formed, validly existing and in good standing under the
laws of its jurisdiction of formation and has full partnership power and
authority to own, lease and operate its properties and to carry on its
business as now conducted. TNC, Witmer GP, Witmer and each of the Project
Partnerships, as applicable, is duly qualified to do business and is in good
standing as a foreign corporation or partnership in each jurisdiction where
the character of its properties or assets and the nature of its business
requires it to be so qualified. TNC has the requisite authority to enter
into and perform this Agreement.
(b) DUE AUTHORIZATION; BINDING AGREEMENT. The execution, delivery
and performance of this Agreement and all other documents and agreements to
be executed by TNC in connection with the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary action of
TNC. This Agreement and all other documents and agreements to be executed by
TNC in connection with the transactions contemplated by this Agreement have
been and will be duly executed and delivered by TNC and constitute the legal,
valid and binding obligations of TNC enforceable against TNC in accordance
with their respective terms.
(c) CONSENTS AND APPROVALS. Except as contemplated by subsection
4.3(d) below and any securities law filing to be made by TNC or any of its
affiliates in connection therewith, no consent, waiver, approval, license or
authorization of, or filing, registration or qualification with, or notice
to, any governmental unit or any other person is required to be made,
obtained or given by TNC in connection with the execution, delivery and
performance of this Agreement or any other documents
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and agreements to be executed by TNC in connection with the transactions
contemplated by this Agreement that has not been heretofore obtained.
(d) NO VIOLATION. None of the execution, delivery or performance
of this Agreement or any other document or agreement to be executed by TNC in
connection with the transactions contemplated by this Agreement does or will,
with or without the giving of notice, lapse of time or both, (i) violate,
conflict with or constitute a default under any term or provision of (a) the
organizational documents of TNC or any Project Partnership or any other
agreement to which TNC or any Project Partnership is a party or by which it
is bound or (b) any term or provision of any judgment, decree, order,
statute, injunction, rule or regulation of a governmental unit applicable to
TNC or any Project Partnership, or by which it or they or its or their assets
or properties are bound or (ii) result in the creation of any lien or other
encumbrance upon the assets or properties of TNC or any Project Partnership,
other than in favor of the Partnership.
(e) OWNERSHIP OF THE A AND C PROPERTIES. EXHIBITS "A" AND "C" are
true and correct lists of the Project Partnerships that own each of the A and
C Properties. The A and C Properties are owned by their respective Project
Partnerships in fee simple and, to the best of TNC's knowledge, title thereto
is subject only to the Permitted Exceptions.
(f) OWNERSHIP OF THE PROJECT PARTNERSHIP INTERESTS.
(i) EXHIBIT "G" attached hereto is a true and correct list of
all Existing Partners of Witmer and each Project Partnership owning a C
Property as shown on the books of Witmer and such Project Partnerships. To
the best of TNC's knowledge, each Existing Partner is the sole owner of the
Witmer Class A Units and/or Project Partnership Interests to be contributed
by him or it to the Partnership and has good, valid and marketable title to
such Witmer Class A Units and/or Project Partnership Interests, free and
clear of all liens, except for those liens created by the partnership
agreements of Witmer or the Project Partnerships, as the case may be. The
Witmer Class A Units and the Project Partnership Interests have been issued
in compliance with the partnership agreements (as then in effect) of Witmer
and each of the Project Partnerships, as applicable, and such interests were
not issued in violation of any federal or state securities laws.
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(ii) There are no rights, subscriptions, warrants, options,
rights of first refusal, conversion rights or agreements of any kind
outstanding to purchase or to otherwise acquire any securities or obligations
of any kind convertible into any partnership interest or other equity
interests or participation interests of any kind in Witmer, any of the
Project Partnerships or the A or C Properties (or any part thereof), except
for (A) those rights, subscriptions, warrants, options, rights of first
refusal, conversion rights or agreements that will not survive the assignment
to the Partnership of the Witmer Class A Units and Project Partnership
Interests, (B) the Newtech III Interests, (C) the participation interest and
right of first refusal granted New England Mutual Life Insurance Company with
respect to Iron Run 3 and the participation interest granted such lender with
respect to Meetinghouse 1 through 4, and (D) the participation interest and
right of first refusal granted to General Electric Capital Corporation
("GECC") in connection with the GECC mortgage loan to Witmer, Lawrenceville
and the A Property Project Partnerships (the "GECC LOAN"). BRT acknowledges
that, as additional security for the GECC Loan, the partnership interests in
the Project Partnerships owning the A Properties were collaterally assigned
to GECC.
(g) COMPLIANCE WITH LAWS AND RECORDED DECLARATIONS. TNC, Witmer
and each of the Project Partnerships 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 the A and C Properties, including, without limitation,
parking and building setback requirements, and has performed all work and
secured all required consents and approvals and obtained and fully paid for
all licenses, permits, certificates, entitlements, grants of right and any
other items and documents required by applicable law, by contract, or as a
condition of any approval granted by the applicable municipal authority,
required of TNC or the Project Partnerships for the completion, ownership,
leasing, use and occupancy of the A and C Properties, including but not
limited to final certificates of occupancy for each of the current tenancies
at such Properties (other than where construction of tenant improvements for
new tenancies is not yet completed or applications remain pending), except
where the failure to so comply or obtain would not have a material adverse
effect on the applicable Property. Such licenses, permits, certificates,
entitlement, grants of right and other items and documents are in full force
and effect. None of TNC, Witmer or any of the Project Partnerships have
taken any action that would
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<PAGE>
(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 none of TNC,
Witmer or any of the Project Partner-ships have 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 the A or C Properties that in each case has not been cured or otherwise
resolved to the satisfaction of such govern-mental entity. To the best of
TNC's knowledge, (i) any and all charges (including condominium fees, to the
extent applicable) and other assessments under declarations and like
agreements to which any of the A or C Properties are subject have been paid
and no special assessments thereunder against any of the A or C Properties
are pending, and (ii) all consents and approvals required to be obtained
under such declarations and like agreements with respect to the A and C
Properties have been obtained.
(h) FINANCIAL STATEMENTS. The combined balance sheets of the
Initial Properties as of December 31, 1995 and 1994, and the related combined
statements of operations, owners' deficit, and cash flows for each of the
three years in the period ended December 31, 1995, and for the calendar
quarter ending March 31, 1996, together with the notes thereto, included in
the proxy statement to be sent to BRT shareholders in connection with this
transaction (the "PROXY STATEMENT"), present fairly in all material respects
the combined financial position of the Initial Properties and the combined
results of their operations and their combined cash flows for each of the
three years in the period ended December 31, 1995 and for the quarter ended
March 31, 1996, in conformity with generally accepted accounting principles.
For purposes hereof, the Initial Properties means the Properties and the
property management, leasing and development operations of The Nichols Realty
Services Company, an affiliate of TNC.
(i) Intentionally Deleted.
(j) ABSENCE OF UNDISCLOSED LIABILITIES AND CONTRACTUAL OBLIGATIONS.
Except for (i) liabilities disclosed in the financial statements referred to
in subsection 3.2(h), (ii) liabilities described or disclosed in the Proxy
Statement, (iii) liabilities arising in the ordinary course of business
which, if material (individually or in the aggregate), are disclosed in
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EXHIBIT "H" attached hereto (the "TNC DISCLOSURE SCHEDULE"), (iv) liabilities
at the date hereof which are specifically disclosed in the Exhibits attached
to this Agreement and (v) current liabilities incurred in the ordinary course
of business after the date hereof, none of Witmer, the Project Partnerships,
Lawrenceville or any A or C Property is subject to liabilities of any nature,
whether matured or unmatured, fixed or contingent, which could reasonably be
expected to have, individually or in the aggregate, a material adverse effect
upon Witmer or such Project Partnership or Property. There are no
Significant Agree-ments of Witmer or the Project Partnerships or relating to
Lawrenceville or the A or C Properties, or their operations other than as set
forth in the TNC Disclosure Schedule. The Class A Properties and
Lawrenceville are cross-defaulted and cross-collateralized with each other.
Oaklands 45 and 50 are also cross-defaulted and cross-collateralized with
each other. Otherwise, none of the A or C Properties are cross-defaulted
and/or cross-collateralized with other properties. For purposes hereof,
"SIGNIFICANT AGREEMENT" means and includes any of the following to which
Witmer or a Project Partnership is a party or by which it or any of its
assets or Lawrenceville or any of the A or C Properties may otherwise be
subject or bound, in each such case as amended and currently in effect,
inclusive of any waivers relating thereto:
(A) all agreements, instruments and documents (excluding
tenant leases referred to in subsection 3.2(l) of this Agreement and
easements and documents providing for the assessment of Common Charges or
related fees that are included in the Permitted Exceptions) evidencing,
securing or pertaining to contractual obligations that relate to the
ownership or operation of Lawrenceville or any of the A or C Properties; and
(B) all mortgages.
(k) ENVIRONMENTAL MATTERS. None of TNC, Witmer or any of the
Project Partnerships have (a) caused any Hazardous Materials to be improperly
maintained or disposed of on, under or at the A or C Properties or
Lawrenceville, or any part thereof in a manner which violates, or could give
rise to liability under, applicable environmental laws, or (b) failed to
remediate, alter, mitigate or abate any condition required to be remediated,
altered, mitigated or abated under such environmental laws, to the extent
TNC, Witmer or any Project Partnership has been notified of the existence of
a condition required to be remediated, altered, mitigated or abated. Except
as set forth in
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the environmental site assessments provided by TNC to BRT pursuant to their
due diligence investigation or the TNC Disclosure Schedule: (1) to the best
of TNC's knowledge, each A and C Property and Lawrenceville, and Witmer and
each Project Partnership is in compliance, and has heretofore complied, with
all environmental laws in all material respects, (2) to the best of TNC's
knowledge, there has been no discharge of Hazardous Materials by any tenant
of the A or C Properties or Lawrenceville or by any other person in, to or
under any of the A or C Properties or Lawrenceville, in either case in
quantities requiring response, remediation or removal, and (3) neither TNC,
Witmer nor any Project Partnership has received any written notice from any
governmental unit or other person that it or any of the A or C Properties or
operations conducted thereon are not or have not been in compliance with the
environmental laws.
(l) TENANT LEASES. The rent rolls attached hereto as EXHIBIT "I"
(the "TNC RENT ROLLS") list each of the leases currently in effect with
respect to the A and C Properties and Lawrenceville as the same have been
amended or modified (the "TNC LEASES"); there are no leases, licenses or
other rights of occupancy affecting any of the A or C Properties or
Lawrenceville except for the TNC Leases. TNC has made available to BRT
complete copies of all of the documents that constitute the TNC Leases. The
TNC Leases are in full force and effect and, except as set forth on the
applicable TNC Rent Roll, (A) to the best of TNC's knowledge, no material
uncured Event of Default (as defined in such Leases), has occurred and is
continuing under any such Lease, no tenant has asserted a defense to, offset
or claim against its rent or the performance of its obligations under its
Lease and no tenant has asserted a default on the part of the landlord which
would give it the right to terminate its Lease or set off against rent, (B)
there are no rights of first refusal on, or options to purchase, any of the A
or C Properties or Lawrenceville or any right to a participation interest
(whether of profits, sale or refinancing proceeds, or calculated based on
fair market value) with respect to any such Property, in favor of any tenant,
(C) there are no proposed modifications to any TNC Lease that would reduce
(i) the space leased to any tenant, (ii) the amount of any tenant's rent or
(iii) the term of any lease, (D) no free rent or other rent concession is due
any tenant under the TNC Leases for periods after the Closing Date, (E) no
landlord under a TNC Lease is required to provide tenant improvements or
refurbishments with respect thereto after the Closing Date (other than any
tenant improvements that the landlord may be required to construct if an
expansion option
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provided in a TNC Lease is exercised), and (F) no tenant under a TNC Lease
has the option to terminate its lease prior to the stated expiration date.
Except for (i) security deposits or (ii) the first full month's rent, whether
or not the term of a Lease has commenced, no prepayments of rent more than
thirty (30) days in advance have been made under the TNC Leases. All
decorating, repairs, alterations or other work required to be performed by
the landlord under each of the TNC Leases prior to the date hereof, or the
cost of any such work performed by the tenant and to be reimbursed by the
landlord prior to the date hereof, has been performed or reimbursed, as
applicable. No rent or security deposits under the TNC Leases have been
assigned or encumbered, except as security for the mortgages noted on the TNC
Disclosure Schedule, and there are no agreements or understandings, written
or oral, with any of the tenants other than as set forth in the Leases or
otherwise set forth on the TNC Rent Roll. All brokerage commissions and
other compensation and fees payable by reason of the TNC Leases have been
paid in full, except as set forth in the TNC Disclosure Schedule (and other
than any commissions that may be due if a tenant takes expansion space or
renews its lease).
(m) LITIGATION. There are no claims, actions, suits, proceedings
or investigations pending or, to the best of TNC's knowledge, threatened
before any court, governmental unit or any mediator or arbitrator with
respect to Witmer, any of the Project Partnerships or Lawrenceville or the A
or C Properties, except for litigation listed on EXHIBIT "J" hereto, which
litigation and any projected liability resulting therefrom is covered by
insurance.
(n) REASSESSMENTS. Each of the A and C Properties and
Lawrenceville has been fully assessed and is not subject to abatement. To
the best of TNC's knowledge, there are no proposed reassessments of any of
the A or C Properties or Lawrenceville by any taxing authority and there are
no threatened or pending special assessments or other actions or proceedings
(other than county-wide reassessments and/or the usual increases in millage
rates that may be under consideration by the taxing authorities in the
jurisdictions where the A and C Properties and Lawrenceville are located)
that could reasonably be expected to give rise to an increase in real
property taxes or assessments against any of the A or C Properties or
Lawrenceville.
(o) PARTNERSHIP EMPLOYEES. There are no employees of Witmer or any
Project Partnership.
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(p) PROPERTY IMPROVEMENTS. Except as disclosed in any engineering
studies or reports obtained by or delivered to BRT in connection with this
transaction prior to the date hereof, the improvements at the A and C
Properties and Lawrenceville are in good condition and repair, ordinary wear
and tear excepted, and have not suffered any casualty or other material
damage which has not been repaired in all material respects. To the best of
TNC's knowledge, there is no material latent or patent structural, mechanical
or other significant defect, soil condition or deficiency in the improvements
included in the A and C Properties or Lawrenceville, or any other defects,
soil conditions or deficiencies which, in the aggregate, would materially
adversely affect the value of such Properties taken as a whole.
(q) CONDEMNATION OR GOVERNMENTAL PROCEEDINGS. NO EMINENT DOMAIN,
condemnation, incorporation, annexation or moratorium or similar proceeding
has been commenced or, to the best of TNC's knowledge, threatened by an
authority having the power of eminent domain to condemn any part of the A or
C Properties or Lawrenceville. To the best of TNC's knowledge, there are no
pending or threatened governmental rules, regulations, plans, studies or
efforts, or court orders or decisions, which do or could adversely affect the
use or value of the A or C Properties or Lawrenceville for their present use.
(r) INSURANCE. EXHIBIT "K" attached hereto lists the insurance
policies relating to the A and C Properties and Lawrenceville or any part
thereof carried by TNC or any Project Partnership. All such policies are in
full force and effect, and will be continued or renewed with the existing
coverages and policy limits until the Closing Date, and all premiums
thereunder have been paid to the extent due, and will be paid until the
Closing Date; and no notice of cancellation has been received with respect
thereto and, to the best knowledge of TNC, no cancellation is threatened.
(s) FIRPTA. None of TNC, Witmer or the Project Partnerships is a
"foreign person" within the meaning of Section 1445(f) of the Code or a
"foreign partner" within the meaning of Section 1446 of the Code.
(t) BROKERS. No brokers or finders have been employed or engaged
by TNC or any of the Project Partnerships with respect to the transactions
contemplated by this Agreement or any other
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document or agreement to be executed in connection with the transactions
contemplated by this Agreement.
(u) TAXES. Each of the Project Partnerships, Witmer, Witmer GP and
TNC (i) has filed or has had filed on its behalf all Tax Returns (as defined
below) on a timely basis which are required to be filed as of the date
hereof, and such Tax Returns are correct and complete, (ii) has paid or has
had paid on its behalf on a timely basis all Taxes (as defined below) shown
to be due on such Tax Returns and (iii) with respect to any period for which
Tax Returns have not yet been filed, or for which Taxes are not yet due or
owing, has made due and sufficient current accruals for such Taxes in its
books and records in accordance with generally accepted accounting
principles. For purposes of this subsection, "TAX" shall mean any Federal,
state or local tax of any kind whatsoever, including any interest or penalty,
and "TAX RETURN" shall mean any return, declaration, report, claim for
refund, information return, statement or other similar document relating to
Taxes.
(v) NO DEFAULTS. All payments of principal and interest on all
mortgage indebtedness respecting Lawrenceville and the A and C Properties are
current as of the date hereof. Neither TNC, Witmer nor any Project
Partnership is in default of any loan or any other Significant Agreement to
which it is a party and, to the best of the knowledge of TNC or any Project
Partnership, no event has occurred which with the giving of notice or passage
of time would become a default under any such loan or under any such
Significant Agreement.
(w) BUSINESS OF TNC. None of the Project Partnerships has engaged
in any business other than owning the properties that are being transferred
hereunder.
3.3 BY SSI. SSI hereby represents and warrants that, except as
disclosed in the Proxy Statement or any exhibit to this Agreement:
(a) ORGANIZATION; AUTHORITY. SSI is duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has full corporate power and authority to own, lease and
operate its properties and to carry on its business as presently conducted.
SSI is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the character of its properties or
assets and the nature of its business requires it
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to be so qualified. SSI has the requisite authority to enter into and
perform this Agreement and all other documents and agreements to be executed
by it in connection with the transactions contemplated by this Agreement.
(b) DUE AUTHORIZATION; BINDING AGREEMENT. The execution, delivery
and performance of this Agreement and all other documents and agreements to
be executed by SSI in connection with the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary action of
SSI. This Agreement and all other documents and agreements to be executed by
SSI in connection with the transactions contemplated by this Agreement have
been and will be duly executed and delivered by SSI and constitute the legal,
valid and binding obligations of SSI enforceable against SSI in accordance
with their respective terms.
(c) CONSENTS AND APPROVALS. Except as contemplated by subsection
4.3(d) below, no consent, waiver, approval, license or authorization of, or
filing, registration or qualification with, or notice to, any governmental
unit or any other person is required to be made, obtained or given by SSI in
connection with the execution, delivery and performance of this Agreement or
any other documents and agreements to be executed by SSI in connection with
the transactions contemplated by this Agreement that has not been heretofore
obtained.
(d) NO VIOLATION. None of the execution, delivery or performance
by SSI of this Agreement or any other document or agreement to be executed by
SSI in connection with the transactions contemplated by this Agreement does
or will, with or without the giving of notice, lapse of time or both, (i)
violate, conflict with or constitute a default under any term or provision of
(a) the organizational documents of SSI or any other agreement to which SSI
is a party or by which it is bound or (b) any term or provision of any
judgment, decree, order, statute, injunction, rule or regulation of a
governmental unit applicable to SSI, or by which it or its assets or
properties are bound or (ii) result in the creation of any lien or other
encumbrance upon the assets or properties of SSI, other than in favor of the
Partnership.
(e) COMPLIANCE WITH LAWS AND RECORDED DECLARATIONS. SSI 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 the B Properties, including,
without limitation,
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parking and building setback requirements, and has performed all work and
secured all required consents and approvals and obtained and fully paid for
all licenses, permits, certificates, entitlements, grants of right and any
other items and documents required by applicable law, by contract, or as a
condition of any approval granted by the applicable municipal authority, to
be required of SSI for the completion, ownership, leasing, use and occupancy
of the B Properties, including but not limited to final certificates of
occupancy for each of the current tenancies of such Properties (other than
where construction of tenant improvements for new tenancies is not yet
completed or applications are pending), except where the failure to so comply
or obtain would not have a material adverse effect on the applicable
Property. Such licenses, permits, certificates, entitlement, grants of right
and other items and documents are in full force and effect. SSI 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 SSI 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 the B Properties
that in each case has not been cured or otherwise resolved to the
satis-faction of such governmental entity. To the best of SSI's knowledge,
(i) any and all charges (including condominium fees, to the extent
applicable) and other assessments under declarations and like agreements to
which any of the B Properties are subject have been paid and no special
assessments thereunder are pending against any of the B Properties, and (ii)
all consents and approvals required to be obtained under such declarations
and like agreements with respect to the B Properties have been obtained.
(f) FINANCIAL STATEMENTS. The combined balance sheets of the
Initial Properties as of December 31, 1995 and 1994, and the related combined
statements of operations, owners' deficit, and cash flows for each of the
three years in the period ended December 31, 1995, and for the calendar
quarter ending March 31, 1996, together with the notes thereto, included in
the Proxy Statement, present fairly in all material respects the combined
financial position of the Initial Properties and the combined results of
their operations and their combined cash flows for each of the three years in
the period ended December 31, 1995
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and for the quarter ended March 31, 1996, in conformity with generally
accepted accounting principles.
(g) INTENTIONALLY DELETED
(h) ABSENCE OF UNDISCLOSED LIABILITIES AND CONTRACTUAL OBLIGATIONS.
Except for (i) liabilities disclosed in the financial statements referred to
in subsection 3.3(f), (ii) liabilities described or disclosed in the Proxy
Statement, (iii) liabilities arising in the ordinary course of business
which, if material (individually or in the aggregate), are disclosed in
EXHIBIT "L" attached hereto (the "SSI DISCLOSURE SCHEDULE"), (iv) liabilities
at the date hereof which are specifically disclosed in the Exhibits attached
to this Agreement and (v) current liabilities incurred in the ordinary course
of business after the date hereof, no B Property is subject to liabilities of
any nature, whether matured or unmatured, fixed or contingent, which could
reasonably be ex-pected to have, individually or in the aggregate, a material
adverse effect upon such Property. There are no Significant Agreements
relating to the B Properties, or their operations other than as set forth in
the SSI Disclosure Schedule. The mortgage loans on the four Meetinghouse
Properties are cross-defaulted and cross-collateralized. Otherwise, none of
the B Properties are cross-defaulted and/or cross-collateralized with any
other properties. For purposes hereof, "SIGNIFICANT AGREEMENT" means and
includes any of the following by which any of the B Properties may otherwise
be subject or bound, in each such case as amended and currently in effect,
inclusive of any waivers relating thereto:
(A) all agreements, instruments and documents
(excluding tenant leases referred to in subsection 3.3(j) of this
Agreement and easements and documents providing for the
assessment of common charges or related fees that are included in
the Permitted Exceptions) evidencing, securing or pertaining to
contractual obligations that relate to the ownership or operation
of any of the B Properties; and
(B) all mortgages.
(i) ENVIRONMENTAL MATTERS. SSI has not (a) caused any Hazardous
Materials to be improperly maintained or disposed of on, under or at any of
the B Properties or any part thereof in a manner which violates, or could
give rise to liability under, applicable environmental laws, or (b) failed to
remediate, alter, mitigate or abate any condition required to be remediated,
altered, mitigated or abated under such environmental laws, to the extent
that SSI has been notified of the existence of a condition required to be
remediated,
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altered, mitigated or abated. Except as set forth in the environmental site
assessments provided by TNC to BRT pursuant to its due diligence review or
the SSI Disclosure Schedule: (1) to the best of SSI's knowledge, each B
Property is in compliance, and has heretofore complied, with all
environmental laws in all material respects, (2) to the best of SSI's
knowledge, there has been no discharge of Hazardous Materials by any tenant
of the B Properties or by any other person or property in, to or under any B
Property, in either case in quantities requiring response, remediation or
removal, and (3) SSI has not received any written notice from any
governmental unit or other person that it or any of the B Properties or
operations conducted thereon are not or have not been in compliance with the
environmental laws.
(j) TENANT LEASES. The rent rolls attached hereto as EXHIBIT "M"
(the "SSI RENT ROLLS") list each of the leases currently in effect with
respect to the B Properties as the same have been amended or modified (the
"SSI LEASES"); there are no leases, licenses or other rights of occupancy
affecting any of the B Properties except for the SSI Leases. SSI has made
available to BRT complete copies of all of the documents that constitute the
SSI Leases. The SSI Leases are in full force and effect and, except as set
forth on the applicable SSI Rent Roll, (A) to the best of SSI's knowledge, no
uncured Event of Default (as defined in such Leases), has occurred and is
continuing under any such Lease, no tenant has asserted a defense to, offset
or claim against its rent or the performance of its obligations under its
Lease and no tenant has asserted a default on the part of the landlord which
would give it the right to terminate its Lease or set off against rent, (B)
there are no rights of first refusal on, or options to purchase, any of the B
Properties, or any right to a participation interest (whether of profits,
sale or refinancing proceeds, or calculated based upon fair market value)
with respect to any such Property, in favor of any tenant, (C) no proposed
modifications to any SSI Lease that would reduce (i) the space leased to any
tenant, (ii) the amount of any tenant's rent or (iii) the term of any lease,
(D) no free rent or other rent concession is due any tenant under the SSI
Leases for periods after the Closing Date, (E) no landlord under an SSI Lease
is required to provide tenant improvements or refurbishments with respect
thereto after the Closing Date (other than any tenant improvements that the
landlord may be required to construct if an expansion option provided in an
SSI Lease is
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exercised), and (F) no tenant under an SSI Lease has the option
to terminate its lease prior to the stated expiration date. Except for (i)
security deposits or (ii) the first full month's rent, whether or not the
term of a Lease has commenced, no prepayments of rent more than thirty (30)
days in advance have been made under the SSI Leases. All decorating,
repairs, alterations or other work performed by the landlord under each of
the SSI Leases prior to the date hereof, or the cost of any such work
performed by the tenant and to be reimbursed by the landlord prior to the
date hereof, has been performed or reimbursed, as applicable. No rent or
security deposits under the SSI Leases have been assigned or encumbered,
except as security for the mortgages noted in the SSI Disclosure Schedule,
and there are no agreements or understandings, written or oral, with any of
the tenants other than as set forth in the SSI Leases or otherwise set forth
on the SSI Rent Rolls. All brokerage commissions and other compensation and
fees payable by reason of the SSI Leases have been paid in full, except as
set forth in the SSI Disclosure Schedule.
(k) LITIGATION. There are no claims, actions, suits,
proceedings or investigations pending or, to the best of SSI's
knowledge, threatened before any court, governmental unit or any
mediator or arbitrator with respect to SSI or the B Properties,
except for litigation listed on EXHIBIT "N", which litigation and
any projected liability resulting therefrom is covered by
insurance.
(l) REASSESSMENTS. Each of the B Properties has been fully
assessed and is not subject to abatement. To the best of SSI's
knowledge, there are no proposed reassessments of any of the B
Properties by any taxing authority and there are no threatened or
pending special assessments or other actions or proceedings
(other than county-wide reassessments and/or the usual increases
in mileage rates that may be under consideration by the taxing
authorities in the jurisdictions where the B Properties are
located) that could reasonably be expected to give rise to an
increase in real property taxes or assessments against any of the
B Properties.
(m) PARTNERSHIP EMPLOYEES; LABOR MATTERS. There are no
employees of SSI or Leedom who, by reason of transfer of the B
Properties to the Partnership, shall become employees of the
Partnership.
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(n) PROPERTY IMPROVEMENTS. Except as disclosed in any
engineering studies or reports obtained by or delivered to BRT in
connection with this transaction prior to the date hereof, the
improvements at the B Properties are in good condition and
repair, ordinary wear and tear excepted, and have not suffered
any casualty or other material damage which has not been repaired
in all material respects. To the best of SSI's knowledge, there
is no material latent or patent structural, mechanical or other
significant defect, soil condition or deficiency in the improve-
ments included in the B Properties, or any other defects, soil
conditions or deficiencies which, in the aggregate, would
materially adversely affect the value of such Properties taken as
a whole.
(o) CONDEMNATION OR GOVERNMENTAL PROCEEDINGS. No eminent
domain, condemnation, incorporation, annexation or moratorium or
similar proceeding has been commenced or, to the best of SSI's
knowledge, threatened by an authority having the power of eminent
domain to condemn any part of the B Properties. To the best of
SSI's knowledge, there are no pending or threatened governmental
rules, regulations, plans, studies or efforts, or court orders or
decisions, which do or could adversely effect the use or value
of the B Properties for their present use.
(p) INSURANCE. EXHIBIT "O" attached hereto lists the insurance
policies relating to the B Properties or any part thereof carried
by SSI; all such policies are in full force and effect, and will
be continued or renewed with the existing coverages and policy
limits until the Closing Date, and all premiums thereunder have
been paid to the extent due, and will be paid until the Closing
Date; and no notice of cancellation has been received with
respect thereto and, to the best knowledge of SSI, no
cancellation is threatened.
(q) FIRPTA. SSI is neither a "foreign person" within the
meaning of Section 1445(f) of the Code nor a "foreign partner"
within the meaning of Section 1446 of the Code.
(r) BROKERS. No brokers or finders have been employed or
engaged by SSI with respect to the transactions contemplated by
this Agreement or any other document or agreement to be executed
in connection with the transactions contemplated by this Agreement.
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(s) TAXES. SSI (i) has filed or has had filed on its behalf all
Tax Returns (as defined below) on a timely basis which are required to be
filed as of the date hereof, and such Tax Returns are correct and complete,
(ii) has paid or has had paid on its behalf on a timely basis all Taxes (as
defined below) shown to be due on such Tax Returns and (iii) with respect to
any period for which Tax Returns have not yet been filed, or for which Taxes
are not yet due or owing, has made due and sufficient current accruals for
such Taxes in its books and records in accordance with generally accepted
accounting principles. For purposes of this subsection, "Tax" shall mean any
Federal, state or local tax of any kind whatsoever, including any interest or
penalty, and "TAX RETURN" shall mean any return, declaration, report, claim
for refund, information return, statement or other similar document relating
to Taxes.
(t) NO DEFAULTS. All payments of principal and interest on all
mortgage indebtedness respecting the B Properties are current as of the date
hereof. SSI is not in default of any loan secured by any of the B Properties
or any other Significant Agreement and, to the best of SSI's knowledge, no
event has occurred which with the giving of notice or passage of time would
become a default under any such loan or under any such Significant Agreement.
(u) OWNERSHIP OF B PROPERTIES. Leedom II owns Meetinghouse 2 in
fee simple and SSI owns the remaining B Properties in fee simple and, to the
best of SSI's knowledge, title thereto is subject only to the Permitted
Exceptions.
3.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the parties in this Agreement shall survive the execution
of this Agreement for the period and to the extent set forth in Article XIX
of the Partnership Agreement. Any claims by a party against any other party
for breach of any representation, warranty or covenant set forth herein shall
only be made pursuant to and in accordance with, and shall be subject to all
of the limitations expressed in, Article XIX of the Partnership Agreement,
including the limitation that the liability of SSI and TNC hereunder shall be
restricted to their interests in the Collateral pledged under Section 19.3 of
the Partnership Agreement. The remedies set forth in Article XIX of the
Partnership Agreement for breaches of this Agreement shall be the sole and
exclusive remedies available to the parties hereto for claims made after
Closing for breach of this Agreement.
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SECTION 4. CONDITIONS
4.1 CONDITIONS PRECEDENT TO BRT OBLIGATIONS ON THE CLOSING DATE. The
obligations of BRT to effect the transactions contemplated under this
Agreement at the Closing are subject to the fulfillment on or prior to the
Closing of the following conditions, any one or more of which may be waived
in whole or in part by BRT in writing:
(a) TITLE INSURANCE. Title to the Properties shall be good and
marketable and insurable as such by Commonwealth Land Title Insurance Company
free and clear of all liens, restrictions, easements, encroachments,
exceptions and other encumbrances other than Permitted Exceptions. For
purposes of this Agreement "PERMITTED EXCEPTIONS" means (i) for each of the
Properties, the existing leases with respect thereto and the mortgages,
liens, restrictions, easements, encroachments, exceptions and other
encumbrances listed on EXHIBIT "P" hereto with respect to such Property, (ii)
for each of the BRT Properties, the existing leases with respect thereto and
the mortgages, liens, restrictions, easements, encroachments, exceptions and
other encumbrances listed on EXHIBIT "P" hereto with respect to such BRT
Property, and (iii) for each Property and BRT Property, the lien of taxes not
yet due and payable and applicable laws and ordinances.
(b) NO MATERIAL ADVERSE CHANGE. There shall not have occurred
any material adverse change to the Properties, taken as a whole.
(c) TENANT ESTOPPELS. Estoppel Certificates with respect to
the B and C Properties in form and substance satisfactory to BRT
shall have been executed by the tenants of the B and C Properties
listed on EXHIBIT "Q" hereto.
(d) FAIRNESS OPINION. BRT shall have received confirmation from
Legg Mason Walker Wood, Incorporated that as of the date of the
Proxy Statement such firm continues to be of the opinion that the
transactions contemplated by this Agreement are fair to the
shareholders of BRT from a financial point of view.
(e) SURVEYS, ETC.. The environmental and engineering reports
and surveys obtained for the A Properties in connection with the
GECC Loan shall have been certified in favor of BRT or
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the Partnership. BRT shall have received updated environmental and
engineering reports and surveys for the B and C Properties, certified to
either BRT or the Partnership, in form reasonably satisfactory to BRT and not
disclosing any conditions not disclosed in the original reports and surveys
for such Properties which have a material adverse effect on the Properties
taken as a whole.
(f) LIQUIDITY. (i) On the Closing Date, the combined current
assets of the Initial Properties at such date to be acquired by the
Partnership pursuant to this Agreement shall not be less than the combined
current liabilities of the Initial Properties at such date to be assumed by
the Partnership pursuant to this Agreement. The combined current assets and
combined current liabilities of the Initial Properties on the Closing Date
shall be computed in accordance with United States generally accepted
accounting principles applied on a basis consistent with the preparation of
the combined balance sheet of the Initial Properties at December 31, 1995
("GAAP"), except to the extent the computation rules provided in paragraphs
(ii) or (iii) below differ from GAAP. BRT, TNC and SSI shall cooperate with
one another in the preparation of a closing balance sheet showing such
combined current assets and combined current liabilities as of the Closing
Date, and any disagreements over the calculation of such combined current
assets and combined current liabilities shall be resolved by Arthur Andersen
LLP.
(ii) For purposes of this Section, the combined current assets
of the Initial Properties means an amount equal to the sum of the following,
computed as of the Closing Date: (A) unrestricted cash; (B) unrestricted
cash equivalents; (C) accounts receivable not more than 30 days overdue; (D)
prepaid insurance; (E) prepaid taxes; and (F) the amount of rents that are
payable by tenants under leases within 30 days of the Closing Date.
(iii) For purposes of this Section, the combined current
liabilities means an amount equal to all current liabilities, computed as of
the Closing Date, excluding from current liabilities any principal and
interest payments on mortgage loans falling due more than 30 days after the
Closing Date.
(iv) In the event the combined current assets of the Initial
Properties on the Closing Date are less than the combined current liabilities
of the Initial Properties on the
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Closing Date, SSI or TNC or their affiliates may, at its or their option,
contribute in cash to the Partnership (as a capital contribution
[for which no Units will be issued] and not as a loan) an amount equal to
such deficiency, in which event the closing condition set forth in this
subsection shall be deemed satisfied.
(g) NO MORTGAGE DEFAULTS. As of the Closing Date, all payments of
principal and interest on all mortgage indebtedness respecting the Properties
shall be current and no loan secured by any of the Properties otherwise shall
be in default in any material respect.
4.2 CONDITIONS PRECEDENT TO TNC AND SSI OBLIGATIONS ON THE CLOSING DATE.
The obligations of TNC and SSI to effect the transactions contemplated under
this Agreement at the Closing are subject to the fulfillment on or prior to
the Closing Date of the following condition, which may be waived by TNC and
SSI in writing:
(a) NO MATERIAL ADVERSE CHANGE. There shall not have occurred
any material adverse change to BRT or the properties owned by BRT
and its subsidiaries, taken as a whole.
4.3 MUTUAL CONDITIONS PRECEDENT OF THE PARTIES ON THE CLOSING DATE. The
obligations of BRT, TNC and SSI to effect the transactions contemplated under
this Agreement at the Closing are subject to the fulfillment on or prior to
the Closing Date of the following conditions, any one or more of which may be
waived in whole or in part by BRT, TNC and SSI in writing:
(a) BRT APPROVALS. BRT shall have obtained all approvals required
of its lenders and the other partners in BRT OP for the transfer of BRT's
interest in BRT OP to the Partnership.
(b) SSI INVESTMENT IN BRT. Pursuant to the Share and Warrant
Purchase Agreement of even date herewith between BRT and SSI, the general
partnership interest in Witmer shall be conveyed to a wholly-owned subsidiary
of BRT and SSI shall have exchanged SSI's Witmer Class B Units, together with
$426,250, in return for the issuance by BRT to SSI of 775,000 shares of
common stock and a warrant of BRT.
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(c) SHAREHOLDER APPROVAL. BRT shall have received the approval
of its shareholders to the transactions contemplated by this
Agreement and the Partnership Agreement.
(d) LENDER AND PARTNER CONSENTS. TNC and SSI shall have received
the consent of all lenders with respect to the Properties to the transfers of
interests with respect to the Properties under and subject to their
respective mortgages. TNC shall have received the agreement of all other
Existing Partners to transfer their Witmer Class A Units or Project
Partnership Interests, as the case may be, to the Partnership as contemplated
by this Agreement, and such other Existing Partners shall have executed and
delivered the necessary documents to effect such transfers at the Closing.
TNC shall not be deemed to have breached this Agreement if any such Existing
Partner refuses to consent to the transfer or execute and deliver the
transfer documents.
(e) TNC ASSET SALE; MANAGEMENT CONTRACTS. TNC and BRT shall have
closed on the sale by TNC to BRT of the furniture, fixtures and equipment of
TNC for $25,000 in cash. The management contracts for BRT Properties other
than the BRT Property located in North Carolina shall have been transferred
to the Partnership's management company affiliate (or any such contracts
shall have been cancelled and new management contracts executed with the
management company affiliate). The management contracts for the Properties
and all third party properties (including the Option Properties) currently
managed by TNC or any of its affiliates shall have been transferred to the
Partnership's management company affiliate.
(f) SSI LOAN COMMITMENT. SSI Delaware and the Partnership shall
have executed and delivered the Distribution Support and Loan Agreement in
the form attached hereto as EXHIBIT "W".
(g) OPTION AGREEMENT. TNC shall have executed and delivered an
Option Agreement to the Partnership in the form attached hereto as EXHIBIT "R",
with respect to Horsham 11-14 (the "OPTION PROPERTIES").
(h) CONCURRENT CLOSINGS AND DELIVERIES. All of the closing
documents to be delivered at the Closing shall have been executed and be
available for concurrent delivery.
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(i) REPRESENTATIONS AND WARRANTIES TRUE AS OF CLOSING DATE. The
representations and warranties of each of the parties contained in this
Agreement shall be true at and as of the Closing Date in all material
respects, with the same effect as though such representations and warranties
were made as of such date, provided that the representations and warranties
of each of the parties shall be modified at Closing as provided in their
respective Closing Certificates to reflect, as necessary, the operation of
the Properties from the date hereof through the Closing Date in accordance
with Article 5 hereof.
(j) CLOSING CERTIFICATES. Each party to this Agreement shall have
executed and delivered a certificate dated as of the Closing Date (the
"CLOSING CERTIFICATE"), and signed by the President or other authorized
officer, as the case may be, certifying that its representations and
warranties set forth in this Agreement remain true and correct in all
material respects, as may be modified by information relating to events after
the date hereof set forth in the Closing Certificate. The ability of the
parties to modify their representations and warranties in a Closing
Certificate to reflect events occurring after the date hereof shall not
affect the other conditions set forth in this Section 4.
(k) OPINIONS. Counsel for each of the parties to this Agreement
shall have delivered to the other parties, as appropriate, its written
opinion, dated the Closing Date, in form and substance satisfactory to the
other parties and its counsel, as appropriate, substantially in the form
attached hereto as EXHIBIT "S".
(l) EMPLOYMENT AGREEMENTS. The Partnership's management company
affiliate shall have entered into employment agreements with Anthony A.
Nichols, Brian F. Belcher and John P. Gallagher in the forms attached hereto
as EXHIBIT "T", with the management company's obligations thereunder
guaranteed by BRT, the management company shall have entered into a new
employment agreement with Gerard H. Sweeney, with the management company's
obligations thereunder guaranteed by BRT, and BRT shall have issued its
warrants to such persons as contemplated by their employment agreements.
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(m) AMEX APPROVAL. The shares issuable by BRT as contemplated by
this Agreement shall have been approved for listing by the American Stock
Exchange, Inc.
SECTION 5. OPERATIONS PRIOR TO TRANSFER
5.1 PROPERTY OPERATIONS.
(a) Except as otherwise expressly provided herein, between the date
hereof and the Closing Date, SSI shall operate and TNC shall cause the
Project Partnerships to operate their respective Properties in the ordinary
course in a manner consistent with past practice, maintaining the Properties
in the same state of repair, order and condition as they are on the date
hereof, reasonable wear and tear, damage by fire or other casualty excepted.
Without limiting the foregoing, the applicable owner shall not defer any
required maintenance or repair unless such maintenance or repair would
otherwise be deferred in the ordinary course of business. SSI shall
maintain, and TNC shall cause each of the Project Partnerships to maintain,
its books and records in accordance with past practice and use diligent
efforts to maintain in full force and effect all authorizations and all
insurance policies with respect to their respective Properties.
(b) Without in each case obtaining the prior written consent of
BRT, neither SSI nor any Project Partnership shall enter into new Leases or
modify, cancel, waive any material default under, accept any rental more than
thirty (30) days in advance of its accrual date or accept early surrender of
any of the Leases; provided that SSI and the Project Partnerships may enter
into Leases for 5,000 square feet of space or less provided that such Leases
are on terms and conditions consistent with the leasing pro forma provided by
SSI or TNC for the applicable Property.
(c) SSI and TNC shall notify BRT of any material change in any of
the information set forth in Section 3 hereof or any of the Exhibits attached
hereto with respect to their respective Properties, promptly after such party
has knowledge of such material change. SSI and TNC shall promptly deliver to
BRT copies of all default notices and other material written communications
sent or received by them or any Project Partnership with respect to their
respective Properties.
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5.2 CASUALTY OR CONDEMNATION.
(a) If prior to the Closing Date there shall be any damage or
destruction to a Property by fire or other casualty, TNC (with respect to the
A and C Properties) or SSI (with respect to the B Properties) shall give
prompt notice thereof to BRT. Unless such damage or destruction results in a
material adverse change to the Properties taken as a whole, such damage or
destruction shall in no way void or impair this Agreement or reduce the
number of Class A LP Units to be issued with respect to such Property; all
insurance proceeds relating to such damage or destruction shall be
contributed to the Partnership together with such Property or the partnership
interests relating thereto, as otherwise provided in this Agreement. In such
event, subject to BRT's right to participate in the adjustment of the loss
with the applicable insurance companies involved and approve the manner of
repair and restoration, SSI or the applicable Project Partnership shall
settle with the insurance companies and apply the insurance proceeds to
promptly and diligently repair and restore, or commence to repair and
restore, the affected Property to its condition and character immediately
prior to the damage or destruction. If such repair and restoration is not
completed by the Closing Date, then on the Closing Date the owner of the
affected Property shall pay over to the Partnership the amount of the
insurance proceeds collected to the extent such proceeds have not yet been
applied to the repair and restoration of the affected Property, (and if any
such proceeds have not been collected, the owner of the affected Property
shall assign to the Partnership all its right, title and interest in and to
the same). The foregoing provisions regarding repair and restoration and use
of insurance proceeds are subject to the terms and conditions of the mortgage
encumbering the affected Property.
(b) If prior to the Closing Date condemnation or eminent domain
proceedings are commenced against any Property, SSI (with respect to the B
Properties) or TNC (with respect to the A and C Properties) shall give prompt
notice thereof to BRT. Unless the taking contemplated by such condemnation or
eminent domain proceeding would result in a material adverse change to the
Properties taken as a whole, no such condemnation or eminent domain
proceeding shall void or impair this Agreement, or reduce the number of Class
A LP Units to be issued with respect to such Property, provided that the
owner of the affected Property shall be relieved from any obligation
hereunder to convey title to the portion of any such Property so taken. BRT
shall have the right to participate in the negotiation of the award to be
made for
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such taking, and the owner of the affected Property shall not agree to any
proposed award or execute a deed in lieu of foreclosure without BRT's prior
written consent. Any condemnation award payable with respect to the taking
of a Property shall be assigned to the Partnership.
SECTION 6. CLOSING; CLOSING DELIVERIES; TRANSFER DELIVERIES
6.1 CLOSING. The closing for the transfer by TNC, the Existing Partners
and SSI of all of the Properties or partnership interests with respect
thereto (the "CLOSING"), shall take place at the offices of Drinker Biddle &
Reath, at 10:00 a.m., on July 31, 1996, or on such other date or at such
other time or place as may be agreed upon in writing by the parties hereto
(the "CLOSING DATE").
6.2 CLOSING DOCUMENTS. In addition to the opinions, certificates and
other documents and instruments referred to in Section 4 of this Agreement,
at the Closing, the parties shall also execute and deliver, or cause to be
executed and delivered, the following documents:
(a) The Partnership Agreement, in substantially the form attached
hereto as EXHIBIT D;
(b) Assignments of Project Partnership Interests in all of the C
Properties to the Partnership and, with respect to a .1% interest in each
Project Partnership, to BRT; and, with respect to the A Properties,
assignments of all Witmer Class A Units from each Existing Partner owning
such units to the Partnership, in substantially the form attached hereto as
EXHIBIT "U";
(c) Amendments and Restatements of the C Property Project
Partnership documents in substantially the form attached hereto as EXHIBIT "V";
and
(d) Deeds and Assignment Agreements in respect of each of the B
Properties other than Meetinghouse 2 in substantially the forms attached
hereto as EXHIBITS "F-1" and "F-2".
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(e) With respect to Meetinghouse 2, assignments of the Leedom
Partnership Interests to the Partnership and, with respect to a .1% limited
partnership interest, to BRT, in substantially the form attached hereto as
EXHIBIT "U".
(f) SSI shall execute and deliver to the Partnership an
Environmental Indemnity Agreement with respect to the B Property known as
Whitelands Business Park, 110 Summit Drive, in the form attached hereto as
EXHIBIT "BB".
(g) With respect to each of the A Property Project Partnerships,
assignment of Witmer GP's limited partnership interests to the Partnership.
SECTION 7. CLOSING ADJUSTMENTS AND EXPENSES
7.1 ADJUSTMENTS.
(a) No closing adjustments shall be made in connection with the
transfer of any of the interests in the Project Partnerships or Properties
contemplated by this Agreement, provided that:
(i) payments of rent and additional rent that fall due after
the Closing Date and are received prior to their due date shall, in the case
of the Project Partnerships, continue to be held in Project Partnership bank
accounts, effective control of which is transferred to the Partnership on the
Closing Date, and in the case of the B Properties, be paid over to the
Partnership on the Closing Date;
(ii) all security deposits under Leases and all interest
required to be paid thereon pursuant to the terms of such Leases shall, in
the case of the Project Partnerships, continue to be held in Project
Partnership bank accounts effective control of which is transferred on the
Closing Date, and in the case of the B Properties, be paid over to the
Partnership on the Closing Date; and
(iii) all debt service payments, real estate taxes and
payments due under service contracts and to service providers that in the
ordinary course would have been paid prior to the Closing Date shall have
been paid.
(b) No delinquent rent payment shall be apportioned on the
Closing Date. All rent receivables shall remain the property
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of the Project Partnerships with respect to the Properties owned by them and,
with respect to the B Properties, shall be deemed assigned by SSI to the
Partnership on the Closing Date.
7.2 EXPENSES. Transfer taxes payable with respect to the conveyance of
the B Properties shall be divided equally between the Partnership and SSI.
The parties contemplate that the transfers of Project Partnership Interests
in accordance with the procedures and time periods set forth herein and in
the Partnership Agreement will not be subject to transfer tax. In the event
either the Partnership or an Existing Partner makes or causes a transfer of
Project Partnership Interests not in accordance with the procedures and time
periods set forth herein and in the Partnership Agreement, then the
Partnership or such Existing Partner making or causing such transfer shall be
responsible for payment of any transfer tax due as a result thereof. The
Partnership shall be responsible for all title insurance premiums and title
company charges and recording costs payable in connection with this
Agreement. Otherwise each party shall be responsible for all expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby, including without limitation the fees and expenses of
such party's accountants, attorneys and other advisors, except as otherwise
provided in the Partnership Agreement.
SECTION 8. GENERAL PROVISIONS
8.1 NOTICES. Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally, sent by
reputable next business day delivery service or by telegram or by
registered or certified mail, postage prepaid, as follows:
If to BRT, to:
Brandywine Realty Trust
Two Greentree Center
Suite 100
Marlton, NJ 08053
Attn: Gerard H. Sweeney
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With a required copy to:
Pepper, Hamilton & Scheetz
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103-2799
Attn: Michael H. Friedman, Esq.
If to TNC, to:
The Nichols Company
16 Campus Blvd.
Suite 150
Newtown Square, PA 19073
Attn: Anthony A. Nichols
With a required copy to:
Drinker Biddle & Reath
1000 Westlakes Drive
Suite 300
Berwyn, PA 19312
Attn: Robert H. Strouse, Esq.
If to SSI, to:
Safeguard Scientifics, Inc.
800 Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Attn: James A. Ounsworth, Esq.
With a required copy to:
Drinker Biddle & Reath
1000 Westlakes Drive
Suite 300
Berwyn, PA 19312
Attn: Robert H. Strouse, Esq.
8.2 CONFIDENTIALITY. The parties to this Agreement acknowledge that
certain of the information that may be made available to them in connection
with their due diligence investigation or otherwise is proprietary and
includes confidential information. The parties shall hold all such
information in confidence and shall not disclose it to any person
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before the Closing without the approval of the other parties, as applicable;
provided, however, that the foregoing restriction shall not apply to any
information that is or becomes publicly known or that is lawfully obtained
from a third party, or to any disclosure required by law or in connection
with the enforcement of any party's rights under this Agreement. Prior to
the Closing, none of the parties (or any of their respective affiliates)
shall make any public announcement or disclosure relating to the transactions
contemplated herein without the prior agreement of each other party hereto,
except as required by law, provided that each other party shall use its best
efforts to consult with the other in advance of any disclosure required by
law.
8.3 ENTIRE AGREEMENT. This Agreement, together with the Exhibits and
certificates referred to herein or delivered pursuant hereto, constitute the
entire agreement between the parties hereto with respect to its subject
matter and supersede all prior and contemporaneous agreements and
understandings with respect to the subject matter thereof.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement, and all of which, when taken together, shall be deemed to
constitute but one and the same Agreement.
8.5 GOVERNING LAW. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania (and United States federal law, to the extent applicable),
irrespective of the principal place of business, residence or domicile of the
parties hereto, and without giving effect to otherwise applicable principles
of conflicts of laws. Nothing contained herein or in any other document
contemplated hereunder shall prevent or delay any party from seeking, in any
court of competent jurisdiction, specific performance or other equitable
remedies in the event of any breach or intended breach by any party of any of
their respective obligations hereunder.
8.6 SECTION HEADINGS, CAPTIONS AND DEFINED TERMS. The section headings
and captions contained herein are for reference purposes only and shall not
in any way affect the meaning and interpretation of this Agreement. The
terms defined herein and in any agreement executed in connection herewith
include the plural as well as the singular and the use of masculine pronouns
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include the feminine and neuter. Except as otherwise indicated, all
agreements defined herein refer to the same as from time to time amended or
supplemented or the terms thereof waived or modified in accordance herewith
and therewith.
8.7 AMENDMENTS, MODIFICATIONS AND WAIVER. The parties may amend or
modify this Agreement in any respect. Any such amendment or modification
shall be in writing. The waiver by any party of any provision of this
Agreement shall not constitute or operate as a waiver of any other provision
hereof, nor shall any failure to enforce any provision hereof operate as a
waiver of such provision or of any other provision.
8.8 SEVERABILITY. The invalidity or unenforceability of any particular
provision, or part of any provision, of this Agreement shall not affect the
other provisions or parts hereof, and this Agreement shall be construed in
all respects as if such invalid or unenforceable provisions or parts were
omitted.
8.9 LIABILITY OF TRUSTEES, ETC. No recourse shall be had for any
obligation of BRT hereunder, or for any claim based thereon or otherwise in
respect thereof, against any past, present or future trustee, shareholder,
officer or employee of
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BRT, whether by virtue of any statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being expressly
waived and released by each other party hereto.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
all as of the date first written above.
BRANDYWINE REALTY TRUST
By:____________________
Title:_________________
THE NICHOLS COMPANY
By:____________________
Title:_________________
SAFEGUARD SCIENTIFICS, INC.
By:____________________
Title:_________________
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EXHIBIT LIST
------------
Exhibit A: "A Properties" and owners thereof.
Exhibit B: "B Properties"
Exhibit C: "C Properties" and owners thereof.
Exhibit D: Agreement of Limited Partnership
Exhibit E: Description of BRT Units
Exhibit F-1: Form of Deed
Exhibit F-2: Form of Assignment and Assumption Agreement
Exhibit G: Allocation of Class A LP Units among Existing Partners
Exhibit H: TNC Disclosure Schedule
Exhibit I: TNC Rent Rolls
Exhibit J: TNC Litigation
Exhibit K: Insurance Policies Relating to A & C Properties
Exhibit L: SSI Disclosure Schedule
Exhibit M: SSI Rent Rolls
Exhibit N: SSI Litigation
Exhibit O: Insurance Policies Relating to B Properties
Exhibit P: Permitted Exceptions on Properties
Exhibit Q: Required Tenant Estoppels
Exhibit R: Form of Horsham 11-14 Option
Exhibit S: Form of Opinion
Exhibit T: Form of Employment Agreement
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Exhibit U: Form of Assignments of Project Partnership Interests
Exhibit V: Form of Amendment and Restatement of Project Partnership Agreements
Exhibit W: Form of Distribution Support and Loan Agreement
Exhibit X: BRT Disclosure Schedule
Exhibit Y: BRT Rent Rolls
Exhibit Z: Insurance Policies relating to BRT Properties
Exhibit AA: BRT Properties
Exhibit BB: Form of Whitelands Environmental Indemnity
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INDEX OF DEFINED TERMS
----------------------
Defined Term Section
- ------------ -------
A Properties............................................................Recitals
B Properties............................................................Recitals
Assumed Liabilities..........................................................2.6
BRT Disclosure Schedule...................................................3.1(k)
BRT OP..................................................................Recitals
BRT Properties............................................................3.1(e)
BRT Rent Rolls............................................................3.1(e)
BRT Units...............................................................Recitals
C Properties............................................................Recitals
Class A LP Units........................................................Recitals
Closing......................................................................6.1
Closing Certificate.......................................................4.3(f)
Closing Date.................................................................6.1
Company SEC Reports.......................................................3.1(h)
Existing Partners............................................................2.2
GECC......................................................................3.2(f)
GECC Loan.................................................................3.2(f)
Hazardous Materials.......................................................3.1(j)
Initial Properties........................................................3.2(h)
Lawrenceville Property..................................................Recitals
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Leedom II............................................................Section 2.3
Leedom Partnership Interests.........................................Section 2.3
Leedom Retained Interest.............................................Section 2.3
Newtech III Interest.........................................................2.2
Partnership.............................................................Recitals
Partnership Agreement........................................................1.1
Permitted Exceptions......................................................4.1(a)
Project Partnership Interests................................................2.2
Project Partnerships....................................................Recitals
Properties..............................................................Recitals
Property................................................................Recitals
Proxy Statement...........................................................3.2(h)
Retained Interests...........................................................2.2
SSI Disclosure Schedule...................................................3.3(h)
SSI Leases................................................................3.3(j)
SSI Rent Rolls............................................................3.3(j)
Significant Agreement............................................3.2(j) & 3.3(h)
Tax..............................................................3.2(u) & 3.3(s)
Tax Return.......................................................3.2(u) & 3.3(s)
TNC Disclosure Schedule...................................................3.2(j)
TNC Leases................................................................3.2(l)
TNC Rent Rolls............................................................3.2(l)
Witmer..................................................................Recitals
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Witmer Class A Units....................................................Recitals
Witmer Class B Units....................................................Recitals
Witmer GP...............................................................Recitals
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EXHIBIT D
AGREEMENT
THIS AGREEMENT is made as of the ___ day of August, 1996 by and among
Brandywine Realty Trust, a Maryland real estate investment trust (the "Trust"),
Safeguard Scientifics, Inc., a Pennsylvania corporation ("SSI"), and Safeguard
Scientifics (Delaware), Inc. ("Sub"), a Delaware corporation and a wholly-owned
subsidiary of SSI (SSI and Sub are collectively referred to herein as the
"Holder").
WHEREAS, as of the date hereof, Sub is acquiring 775,000 common
shares of beneficial interest, par value $.01 per share ("Common Shares"), of
the Trust, warrants exercisable for an additional 775,000 Common Shares and
additional securities convertible under certain circumstances into Common
Shares; and
WHEREAS, the Trust desires to obtain from the Holder, and the Holder
desires to obtain from the Trust, certain agreements, as set forth herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. NOMINATION OF DESIGNEES TO THE BOARD. During the term hereof,
but only for so long as Richard M. Osborne ("RMO") and the Richard M. Osborne
Trust ("RMO Trust") are collectively the beneficial owners of at least ten
percent (10%) of the outstanding Common Shares, the Holder agrees to vote its
Common Shares for the election of either RMO or, in the discretion of RMO, any
person designated by RMO and who is reasonably acceptable to a majority of the
Board of Trustees of the Trust to the Board of Trustees at each annual meeting
of shareholders of the Trust at which elections to the Board of Trustees are to
be held, provided that such agreement of the Holder shall terminate in the
event (i) of the occurrence of any matter relating to RMO or such designee that
would require disclosure by the Trust in any filing to be made by it with the
Securities and Exchange Commission of any of the events enumerated in
Item 401(f) of Regulation S-K, as now in effect or as amended from time to time
(an "Item 401(f) Occurrence") or (ii) RMO or such designee takes any action
which could reasonably be expected to have a material adverse effect on the
Trust. For purposes of this Agreement, beneficial ownership shall be determined
in the manner prescribed by Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). During the term hereof, but only
for so long as the Holder is the beneficial owner of at least ten percent (10%)
of the outstanding Common Shares,
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the Company will cause three individuals designated by the Holder to be
nominated for election to the Board of Trustees provided that (i) no
Item 401(f) Occurrence has occurred with respect to any such individual,
(ii) no such individual has taken any action which could reasonably be
expected to have a material adverse effect on the Trust, and (iii) each such
individual is reasonably acceptable to a majority of the Board of Trustees.
The initial designees of the Holder are Warren V. Musser, Anthony A.
Nichols, Sr. and Walter D'Allessio.
2. PROXY SOLICITATIONS. During the term hereof, without the
consent of a majority of the independent members of the Board of Trustees,
Holder agrees that it will not: (i) make or participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are defined or used
in Regulation 14A promulgated pursuant to the Exchange Act) or become a
"participant" in any "election contest" (as such terms are used in
Regulation 14A) with respect to the Trust, (ii) seek to encourage any third
person to vote Common Shares in opposition to the recommendation of a majority
of the Board of Trustees, (iii) propose any change in the Declaration of Trust
of the Trust or (iv) assist any attempt by any other person or entity to do any
of the foregoing. During the term hereof, if the Holder learns of any efforts
by any third party to (i) make or participate in, directly or indirectly, any
solicitation of proxies or become a participant in any election contest with
respect to the Trust, (ii) encourage any third person to vote Common Shares in
opposition to the recommendation of a majority of the Board of Trustees, (iii)
propose any change in the Declaration of Trust or (iv) assist any person or
entity to do any of the foregoing, the Holder will promptly inform the Board of
Trustees.
3. VOTING OF COMMON SHARES. During the term hereof, and except as
otherwise required by Section 1 hereof, the Holder agrees to vote all Common
Shares beneficially owned by it in accordance with the recommendations of a
majority of the Board of Trustees on any matter submitted to a vote of
shareholders other than on any of the following matters: (i) a merger,
consolidation or liquidation of the Trust or a sale by the Trust of all or
substantially all of its assets and (ii) any amendment to the Declaration of
Trust of the Trust which, in the reasonable judgment of a majority of the Board
of Trustees, adversely affects the rights of shareholders. In any event,
during the term hereof, the Holder agrees to vote all Common Shares
beneficially owned by it in favor of any financing for which shareholder
approval is sought, including without limitation, any financing having the
terms referenced in clause (ii) of the first sentence of Section 7(a), provided
that the financing is recommended by a majority of the Board of Trustees.
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4. RESTRICTIONS ON DISPOSITIONS. During the term hereof, the
Holder shall not, directly or indirectly, sell, assign, transfer or otherwise
dispose of any Common Shares except: (i) in transactions under Rule 144
promulgated under the Securities Act of 1933, as amended; (ii) in a private
transaction to any person who is not then a business competitor of the Trust
and who, immediately following the transaction, would own less than five
percent (5%) of the outstanding Common Shares; (iii) in response to a bona fide
tender or exchange offer by a third party for at least 80% of the outstanding
Common Shares and supported by a majority of the Board of Trustees; or (iv) in
a merger or statutory share exchange pursuant to which ownership of the Trust
is acquired by a third party. Notwithstanding the foregoing, during the term
hereof, Holder may transfer up to 52,000 Common Shares to Anthony A.
Nichols, Sr. (subject to adjustment for stock splits, stock dividends and
reverse stock splits) so long as Mr. Nichols holds such Common Shares subject to
the same restrictions applicable to them while they were owned by the Holder.
During the term hereof, the Holder agrees to enter into a customary "lock-up"
letter upon the request of the underwriters in connection with any public equity
offering described in Section 7a(ii) by the Trust, provided that (i) the
duration thereof does not extend for more than 365 days following the effective
date of the applicable registration statement and (ii) all other holders of in
excess of ten percent (10%) of the Common Shares and all Trustees and executive
officers of the Trust execute a substantially similar letter.
5. REIT STATUS. During the term hereof, the Holder agrees not to
pursue any action which may disqualify the Trust's status as a real estate
investment trust under the Internal Revenue Code of 1986.
6. LEGEND. During the term hereof, the Trust may cause any
certificates evidencing Common Shares beneficially owned by the Holder to bear
a legend indicating the existence of this Agreement.
7. TERM.
a. The term of this Agreement shall be for a period ending on
the earlier of the (i) third anniversary of the date of this Agreement or (ii)
completion by the Trust of a public or private equity offering yielding (a) at
least $35.0 million of net proceeds to the Trust at a price per share at least
equal to the per share book value of the Common Shares as of the end of the
most recently preceding quarter or (b) at least $25.0 million of net proceeds,
but less than $35.0 million of net proceeds, at a price per share of at least
$5.50.
b. Upon expiration or termination of the term, all rights and
obligations of the parties hereto shall terminate, except for any
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rights arising out of the breach by a party hereto of its obligations
hereunder.
8. SPECIFIC PERFORMANCE AND REMEDIES. The parties to this
Agreement acknowledge and agree that irreparable damage would occur to the
aggrieved party in the event that any provision of this Agreement is not
performed in accordance with its specific terms or is otherwise breached, and
acknowledge and agree that termination of this Agreement and monetary damages
would not provide adequate remedies. It is accordingly agreed that each of the
parties shall be entitled to injunctive relief to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States in addition to any other
remedy to which it may be entitled at law or in equity, including, without
limitation, monetary damages.
9. EXPENSES. All fees and expenses incurred by any party hereto
shall be borne by the party incurring them; provided that if any party incurs
expenses in an effort to enforce compliance by another party of its obligations
hereunder and prevails in such effort, the prevailing party shall be entitled
to recover such expenses from such other party.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings, whether oral
or written, among the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended orally, but may be amended only by an
instrument in writing signed by each of the parties hereto.
11. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties hereto. Each
such executed counterpart shall be, and shall be deemed, an original
instrument, and all such executed counterparts shall be deemed to be one and
the same instrument.
12. NOTICES. All notices given hereunder shall be in writing and
delivered personally, or sent by telex, telecopier or registered mail, postage
prepaid, or by overnight delivery service, if to:
THE TRUST
Two Greentree Centre
Suite 100
Marlton, NJ 08053
Telecopier No. (609) 797-0425
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THE HOLDER
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
or to such other address, or such telex or telecopier number, as any party may,
from time to time, designate in a written notice given in like manner. Notice
given by overnight delivery service shall be deemed delivered on the day
following the date the same is accepted for next day delivery by said service.
Notice delivery by telecopier shall be deemed to be delivered when transmitted.
Notice delivered personally shall be deemed to be delivered when delivered to
the addressee.
13. CHOICE OF LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Maryland,
without reference to the conflict of laws principles thereof.
14. HEADINGS. The headings in this Agreement are for convenience
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
15. NO WAIVER. Any waiver by any party of a breach of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.
16. SEVERABILITY. If any clause, provision or section of this
Agreement is held illegal or invalid by any court, the illegality or invalidity
of such clause, provision or section shall not affect any of the remaining
clauses, provisions or sections of this Agreement, and this Agreement shall be
construed and enforced as if such illegal or invalid clause, provision or
section had not been contained herein. In case any agreement or obligation
contained in this Agreement is held to be in violation of law, then such
agreement or obligation shall be deemed to be the agreement or obligation of
the applicable party hereto to the full extent permitted by law.
17. RESTRICTION ON CERTAIN AMENDMENTS. During the term hereof, the
Trust agrees that it will not make any amendment to that certain Agreement
dated as of March 20, 1996 among the Trust, RMO and the RMO Trust (the "RMO
Agreement") without either making a corresponding amendment to
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this Agreement or obtaining the consent of the Holder and the Trust will not
make any amendment to this Agreement without either making a corresponding
amendment to the RMO Agreement or obtaining the consent of RMO.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
BRANDYWINE REALTY TRUST
By:__________________________
President
SAFEGUARD SCIENTIFICS, INC.
By:__________________________
Vice President
[EXECUTIONS CONTINUED]
SAFEGUARD SCIENTIFICS
(DELAWARE), INC.
By:__________________________
Vice President
The undersigned hereby acknowledges the provisions of Section 17
hereof.
THE RMO TRUST
By:_________________________
Title: Trustee
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