THE SECURITIES OFFERED AND SOLD PURSUANT TO THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE, AND THERE ARE RESTRICTIONS ON THE TRANSFERABILITY
OF THE SECURITIES AS DESCRIBED HEREIN.
LOAN AND SECURITIES PURCHASE AGREEMENT
THIS LOAN AND SECURITIES PURCHASE AGREEMENT (this "Agreement")
is made and entered into this 21st day of June, 1996, by and between TURKEY
VULTURE FUND XIII, LTD., having an address at 7001 Center Street, Mentor, Ohio
44060 (the "Fund"), and BRANDYWINE REALTY TRUST, having an address at Two
Greentree Centre, Suite 100, Marlton, New Jersey 08053 (the "Company").
RECITALS
A. The Richard M. Osborne Trust (the "RMO Trust"), an
affiliate of the Fund, owns beneficially, 538,800 common shares of beneficial
interest of the Company, par value $0.01 per share ("Common Stock").
B. To raise working capital and to conduct its business, the
Company desires to (i) sell to the Fund, and the Fund desires to purchase from
the Company, Fifty Nine Thousand Nine Hundred Forty Nine (59,949) units (each, a
"Unit") comprised of one share of Common Stock and one warrant to purchase an
additional share of Common Stock at an initial exercise price of $6.50 per
share, and (ii) borrow from the Fund, and the Fund desires to lend to the
Company, the principal amount of Nine Hundred Ninety Two Thousand Two Hundred
and Ninety Three Dollars ($992,293).
In consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. AGREEMENT TO PURCHASE
1.1. Sale of Units. Subject to and in accordance with the terms of this
Agreement, the Fund hereby purchases from the Company Fifty Nine Thousand Nine
Hundred Forty Nine (59,949) Units, and the Company hereby sells and issues such
Units to the Fund, free and clear of any liens, charges, claims, and
encumbrances whatsoever.
1.2. Purchase Price for Units. The purchase price for each Unit is Five
Dollars and sixty three cents ($5.63), amounting to an aggregate purchase price
for the Units of Three Hundred Thirty Seven Thousand Five Hundred Thirteen
Dollars ($337,513) (the
"Purchase Price"), for an aggregate 59,949 shares of Common Stock (the "Shares")
and warrants to purchase an additional 59,949 shares of Common Stock. The Fund
has delivered contemporaneously with the execution and delivery of this
Agreement a check or wire transfer payable to the Company in the amount of the
Purchase Price.
1.3. Delivery of Units. The Company has delivered to the Fund
contemporaneously with the execution and delivery of this Agreement (i) a stock
certificate representing the Shares and (ii) a Stock Purchase Warrant in
substantially the form attached hereto as Exhibit A (the "Warrant") evidencing
the warrants being purchased and sold hereunder, both of the foregoing duly
executed and registered in the name of the Turkey Vulture Fund XIII, Ltd.
2. THE LOAN
2.1. Loan. Subject to and in accordance with the terms of this
Agreement, the Fund hereby lends to the Company Nine Hundred Ninety Two Thousand
Two Hundred Ninety Three Dollars ($992,293) (the "Loan"). The Fund has delivered
contemporaneously with this Agreement a check or wire transfer payable to the
Company for the entire principal amount of the Loan.
2.2. Delivery of Note. The Company has delivered to the Fund
contemporaneously with the execution and delivery of this Agreement a duly
executed promissory note of the Company (the "Note"), in substantially the form
attached hereto as Exhibit B, evidencing the Loan and setting forth the terms
and conditions pursuant to which the Loan shall be repaid to the Fund.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. Representations, Warranties and Covenants of the Fund.
By executing this Agreement, the Fund hereby:
3.1.1. Represents and warrants that it maintains its
corporate headquarters and principal place of business at the
address set forth above.
3.1.2. Acknowledges that it has received a copy of the
Company's SEC Reports (as defined below).
3.1.3. Represents and warrants that the Units being purchased
and sold hereunder, the Note, and the Units that may be issued to the Fund
thereunder (all of the foregoing, including shares of Common Stock that comprise
part of the Units and shares of Common Stock issuable upon exercise of the
warrants included therein, collectively, the "Securities") are being acquired
for the Fund's own account, without a view to public distribution or resale and
that the Fund has no contract, undertaking, agreement
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or arrangement to sell or otherwise transfer or dispose of any Securities or any
portion thereof to any other person.
3.1.4. Understands that the Securities have not been
registered under the Securities Act of 1933, as amended (the "Securities Act")
or the securities laws of any state, and, as a result thereof, the Securities
are subject to substantial restrictions on transfer.
3.1.5. Agrees that it will not sell or otherwise transfer or
dispose of any Securities or any portion thereof except in accordance with the
Securities Act and any applicable state securities laws, and that the Securities
and certificates evidencing the same will bear a legend reflecting such
restrictions.
3.1.6. Represents and warrants that in determining to purchase
the Securities, it has, during the course of discussions concerning the purchase
of the Securities, been offered the opportunity to ask such questions and
inspect such documents concerning the Company and its business and affairs as it
has requested so as to more fully understand the nature of the investment and to
verify the accuracy of the information supplied.
3.1.7. ACKNOWLEDGES THAT THE PURCHASE OF THE SECURITIES
INVOLVES A HIGH DEGREE OF RISK, AND REPRESENTS AND WARRANTS THAT IT CAN BEAR THE
ECONOMIC RISK OF THE PURCHASE OF THE SECURITIES, INCLUDING THE TOTAL LOSS OF ITS
INVESTMENT.
3.1.8. Represents and warrants that (i) it has adequate means
of providing for its current needs and financial contingencies, (ii) it has no
need for liquidity in this investment, and (iii) the Fund was not formed for the
specific purpose of making an investment in the Securities.
3.1.9. Understands that no federal or state agency has
approved or disapproved the Securities, passed upon or endorsed the merits of
the offering of the Securities hereunder, or made any finding or determination
as to the fairness of the Securities for investment.
3.1.10. Understands that the Securities are being offered and
sold in reliance on specific exemptions from the registration requirements of
federal and state securities laws and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth herein in order to determine the applicability of such
exemption and the suitability of the Fund to acquire the Securities.
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3.1.11. Represents and warrants that it is an "accredited
investor" as such term is defined in Rule 501 of Regulation D under the
Securities Act.
3.2. Representations, Warranties and Covenants of the Company. By
executing this Agreement, the Company hereby represents, warrants and covenants
that:
3.2.1. The Company is a real estate investment trust duly
formed, validly existing and in good standing under the laws of the State of
Maryland and has all requisite trust power and authority, and all necessary
licenses and permits, to own and lease its properties and assets and to conduct
its business as now conducted. The Company is duly qualified to do business and
is in good standing as a foreign business trust in each jurisdiction where the
character of its properties or assets and the nature of its business requires it
to be so qualified.
3.2.2. The Company has all requisite trust power and authority
to execute and deliver this Agreement and each other document, including without
limitation, the Warrant, the Note and the Securities which may be issued
pursuant to the terms of the Note (all of the foregoing, collectively, the
"Transaction Documents") required to be executed and delivered by it in
accordance with the terms hereof, and to carry out the transactions contemplated
hereby and thereby. The execution, delivery and performance by the Company of
this Agreement and each Transaction Document to which it is a party have been
duly authorized by all requisite action. This Agreement has been duly executed
and delivered by the Company and, constitutes (and, when executed and delivered
as contemplated herein each such Transaction Document will constitute) the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforcement
may be limited by bankruptcy, insolvency, moratorium, reorganization and other
similar laws relating to or affecting the enforcement of creditors' rights
generally, and except that the availability of specific performance, injunctive
relief or other equitable remedies is subject to the discretion of the court
before which any such proceeding may be brought.
3.2.3. The execution, delivery and performance by the Company
of this Agreement and each Transaction Document to which it is a party will not,
with or without the giving of notice or lapse of time or both, violate any
provision of law, any rule or regulation of any governmental authority, or any
judgment, decree or order of any court binding on the Company and, will not
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties,
assets or outstanding stock of the Company under its Declaration of Trust or
By-Laws,
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or any indenture, mortgage, lease, agreement or other instrument to which the
Company is a party or by which it or any of its assets or properties is bound.
3.2.4. The authorized capital stock of the Company presently
consists of: (a) 15,000,000 shares of Common Stock, 1,856,200 shares of which
are presently issued and outstanding, and (b) 5,000,000 preferred shares of
beneficial interest, par value $0.01 per share, none of which is presently
issued and outstanding. All issued and outstanding shares of Common Stock have
been duly and validly issued and are fully paid and nonassessable. Except as
otherwise set forth in the SEC Reports (as defined below), and except to the
extent contemplated by the Letter of Intent dated March 20, 1996 among the
Company, Safeguard Scientifics, Inc., and The Nichols Company, a copy of which
the Fund acknowledges receiving, there are no outstanding subscriptions,
warrants, options or other rights to subscribe for or purchase from the Company,
or obligating the Company to issue, any shares of capital stock of the Company
or any securities convertible into or exchangeable for such shares, and there
are no shares of Common Stock reserved for issuance. There are no preemptive or
similar rights to purchase or otherwise acquire shares of capital stock of the
Company pursuant to any provision of law or the Declaration of Trust or By-Laws
of the Company or by agreement or otherwise.
3.2.5. The requisite number of duly authorized and unissued
shares of Common Stock of the Company have been duly authorized and reserved for
issuance upon exercise of the Warrant (the "Warrant Shares"), and except as
provided in Section 5.1 hereof, no further action is required for the valid
issuance of shares of Common Stock upon exercise of the Warrant. Upon the
issuance of any Units pursuant to the terms of the Note (the "Additional
Units"), (a) the requisite number of shares of Common Stock will be duly
authorized and issued (the "Additional Shares"), (b) a stock certificate
representing such shares will be delivered to the Fund contemporaneously with
the issuance of the Additional Units, (c) the requisite number of duly
authorized and unissued shares of Common Stock will be duly authorized and
reserved for issuance upon exercise of the warrants issued thereby (the
"Additional Warrant Shares" and together with the Warrant Shares, collectively,
the "Conversion Shares"), (d) a warrant for the Additional Warrant Shares in
substantially the form of the Warrant (the "Additional Warrant") will be
delivered to the Fund contemporaneously with the issuance of Additional Units,
and, except as provided in Section 5.1 hereof, no further action will thereafter
be required for the valid issuance of shares of Common Stock upon exercise of
such warrants. The Shares have been duly and validly issued, are fully paid and
nonassessable and are free and clear of any liens, charges, claims and
encumbrances whatsoever and are not subject to any preemptive rights. The
Additional Shares will when issued in
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accordance with the terms of the Loan be duly and validly issued, fully paid and
nonassessable and will be issued free and clear of any liens, charges, claims
and encumbrances whatsoever and not subject to any preemptive rights. The
Warrant Shares will, when issued against payment therefor in accordance with the
terms of the Warrant, be duly and validly issued, fully paid and nonassessable
and will be issued free and clear of any liens, charges, claims and encumbrances
whatsoever and not subject to any preemptive rights. The Additional Warrant
Shares will, on the date(s) of the issuance of Additional Units pursuant to the
terms of the Note and thereafter, when issued against payment therefor in
accordance with the terms of such warrants, be duly and validly issued, fully
paid and nonassessable and will be issued free and clear of any liens, charges,
claims and encumbrances whatsoever and not subject to any preemptive rights.
3.2.6. No permit, consent, approval or authorization of, or
declaration to or filing with, any federal, state, local or foreign governmental
or regulatory authority or other person or entity is required in connection with
the execution or delivery of this Agreement or any Transaction Document by the
Company, the offer, issuance, sale or delivery of the Securities, including
without limitation, the Note, the Shares, the Warrant, the Additional Units, the
Additional Shares, the Additional Warrant, or the Conversion Shares, or the
carrying out by the Company of the other transactions contemplated hereby, other
than (a) the filing with, and approval of, the American Stock Exchange, Inc.
("ASE") with respect to the listing of the Common Stock and (b) filings under
federal and applicable state securities laws.
3.2.7. Assuming the accuracy of the Fund's representations and
warranties contained in Section 3.1 hereof, the offer, issuance and delivery to
the Fund pursuant to the terms of this Agreement of the Note, the Shares and the
Warrant and, assuming compliance by the Fund with the terms of this Agreement
and applicable law, the Additional Units, the Additional Shares, the Additional
Warrant and the Conversion Shares, are exempt from registration under the
Securities Act.
3.2.8. Since January 1, 1995, the Company has timely filed all
forms, reports, schedules, statements and other documents required to be filed
with the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (collectively,
the "SEC Reports"). The SEC Reports were prepared in all material respects in
accordance with and complied in all material respects with the requirements of
applicable law, including the Exchange Act and the Securities Act and the
applicable rules and regulations of the SEC thereunder, and the SEC Reports did
not at the time they were filed, and do not contain any untrue statement of a
material fact or omit to state a material fact required to
-6-
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
3.2.9. The Company shall execute a registration rights
agreement substantially in the form attached hereto as Exhibit D concurrently
upon the closing of the Company's proposed transaction with Safeguard
Scientifics, Inc. ("SSI"), The Nichols Company ("TNC") and certain of its
affiliates as such transaction is more particularly described in the Company's
Preliminary Proxy Statement first filed with the SEC on or about May 9, 1996
(the "SSI/TNC Transaction"); provided that in the event the SSI/TNC Transaction
is not consummated on or prior to October 31, 1996, the Company shall execute a
registration rights agreement in favor of the Fund substantially in the form
attached hereto as Exhibit D with the applicable references to SSI and TNC
deleted.
3.2.10. The Company has complied with all laws (including,
without limitation, the Americans with Disabilities Act of 1990) and
requirements of insurance bodies applicable to the ownership, leasing, use and
operation of its properties and has obtained and fully paid for all licenses,
permits, certificates, entitlements, grants of right and any other items and
documents required by applicable law to be obtained by the Company for the
completion, ownership, leasing, use and occupancy of its properties, except
where the failure to so comply or obtain would not have a material adverse
effect on the Company. Such licenses, permits, certificates, entitlement, grants
of right and other items and documents are in full force and effect. The Company
has not taken any action that would (or failed to take any action, the omission
of which would) result in the revocation or suspension of such licenses,
permits, certificates, entitlements, grants of right and other items and
documents, and the Company has not received any notice of any violation from any
federal, state or municipal entity or notice of an intention by any such
governmental entity to revoke any certificate of occupancy or other certificate,
license, permit, entitlement or grant of right issued by it in connection with
the ownership, use and occupancy of any of its properties that in each case has
not been cured or otherwise resolved to the satisfaction of such governmental
entity.
3.2.11. There are no claims, actions, suits, proceedings or
investigations pending or, to the best of the Company's knowledge, threatened
before any court, governmental unit or any mediator or arbitrator with respect
to the Company or its properties, except for litigation arising in the ordinary
course of business, which litigation, individually or in the aggregate, would
not have a material adverse effect upon the Company or its properties.
-7-
3.2.12. Each of the financial statements (including, in each
case, any related notes thereto) contained in the SEC Reports (i) have been
prepared in all material respects in accordance with the published rules and
regulations of the SEC and generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except in the case of the
unaudited financial statements, as permitted by Form 10-Q of the SEC), (ii)
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, and (iii) fairly present in all material respects the financial
position of the Company as of the respective dates thereof and the results of
operations and cash flows for the periods indicated (subject, in the case of
unaudited financial statements for interim periods, to year-end adjustments,
consisting only of normal recurring accruals), except that any pro forma
financial statements contained in such financial statements are not necessarily
indicative of the financial position of the Company as of the respective dates
thereof and the results of operations and cash flows for the periods indicated.
Since January 1, 1994, the Company has not made any material change in the
accounting practices or policies applied in the preparation of its financial
statements.
4. CONDITIONS TO CLOSING BY FUND
The obligation of the Fund to purchase the Units and make the
Loan is subject to the fulfillment, to the Fund's reasonable satisfaction, of
each of the following conditions:
4.1. Performance. All covenants, agreements and conditions contained in
this Agreement and each of the Transaction Documents to be performed or complied
with by the Company on or prior to the date hereof shall have been performed or
complied with by the Company in all respects.
4.2. Legal Opinion. The Company shall have delivered to the Fund an
opinion of Pepper, Hamilton & Scheetz, counsel to the Company, dated the date
hereof, addressed to the Fund and in the form attached hereto as Exhibit C.
4.3. Qualifications. On the date hereof, all authorizations, approvals
or permits of, or filings with, any governmental authority, including state
securities or blue sky offices that are required prior to the date hereof in
connection with the issuance of the Securities to be issued to the Fund on the
date hereof shall have been duly obtained and shall be effective on and as of
the date hereof.
4.4. Secretary's Certificate. The Company shall have delivered to the
Fund copies of each of the following, certified
-8-
as accurate, true and complete copies thereof as of the date hereof by the
Company's Secretary:
(a) resolutions of the Board of Trustees of the
Company, authorizing and approving this Agreement, the Transaction Documents and
all transactions contemplated hereby and thereby; and
(b) the signature(s) and incumbency of the officer(s)
of the Company authorized to execute and deliver the Transaction Documents.
4.5. Good Standing Certificate. The Company shall have delivered to the
Fund a good standing certificate, dated not more than ten (10) days prior to the
date hereof, relating to the Company from the Secretary of State of the State of
Maryland and for each State in which the Company is qualified to do business as
a foreign business trust.
4.6. Additional Documents. The Fund shall have received such other
documents, instruments, approvals or opinions as the Fund shall have reasonably
requested.
4.7. Legal Fees. The Company shall have paid the reasonable fees and
expenses of the Fund's counsel only to the extent incurred in connection with
the negotiation, execution and delivery of this Agreement, the other Transaction
Documents and the consummation of the transactions contemplated herein and
therein.
5. MISCELLANEOUS PROVISIONS
5.1. In no event shall the Company be obligated to issue any shares of
Common Stock upon exercise of any warrants or to deliver any Units hereunder or
under the Note in the event such issuance or delivery would contravene the
provisions of Section 3.3(a) of the Company's Declaration of Trust.
5.2. No recourse shall be had for any obligation of the Company
hereunder, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee of
the Company, whether by virtue of any statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such other liability
being expressly waived and released by the Fund.
5.3. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
5.4. This Agreement and the other Transaction Documents, together with
the exhibits hereto, and thereto, sets forth the
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entire understanding and agreement between the parties hereto with respect to
the subject matter hereof, and supersedes any and all prior and contemporaneous
agreements, inducements, covenants, conditions, representations and warranties,
oral or written, expressed or implied, except as contained herein. This
Agreement may be modified only by a written document signed by each of the
parties hereto. Except as set forth in Section 5.14 hereof, nothing herein shall
modify, amend or limit in any way that certain Agreement dated as of March 20,
1996, by and among the Company, the RMO Trust and Richard M. Osborne (the "March
Agreement"), or the terms and conditions thereof.
5.5. In the event that for any reason any provision of this Agreement
shall be deemed to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. In furtherance and not in limitation of the foregoing, in
no event shall any actions be taken pursuant to this Agreement, the Securities
or the Loan (including without limitation, the exercise of the Warrant and/or
the warrants or the issuance of any shares of Common Stock upon such exercise)
to the extent that such action would result, or could (in the view of the
Company and the Fund) reasonably be construed to result, (i) in a violation of
the provisions of Section 3-601 et. seq. of the Maryland General Corporation Law
or (ii) in the Fund owning an interest in the Company that would fall within, or
be greater than, the "control share" range of "one-third or more, but less than
a majority of all voting power" as provided in and contemplated by the
provisions of Section 3-701 et. seq. of the Maryland General Corporation Law.
5.6. This Agreement shall be governed, construed and enforced in
accordance with the internal laws of the State of Maryland.
5.7. The provisions of this Agreement may be amended only in writing by
mutual agreement of the Company and the Fund.
5.8. All representations and warranties contained herein or made in
writing by any party in connection herewith shall survive the execution and
delivery of this Agreement and the other Transaction Documents, the consummation
of the transactions contemplated hereby and thereby and any investigation made
at any time by or on behalf of the Fund.
5.9. The descriptive headings of this Agreement are inserted for
convenience of reference only and do not constitute a part of this Agreement.
5.10. All notices required to be given to either of the parties
hereunder shall be in writing and shall be deemed to have been sufficiently
given for all purposes when presented
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personally to such party, sent by overnight courier, or sent by certified or
registered mail, return receipt requested, to such party at its address set
forth in the heading of this Agreement. Such notice shall be deemed to be given
when received if delivered personally, the next day after the date sent if sent
by overnight courier, or three days after the date mailed if sent by certified
or registered mail. Any notice of any change in such address shall also be given
in the manner set forth above. Whenever the giving of notice is required the
giving of such notice may be waived in writing by the party entitled to receive
such notice.
5.11. All exhibits hereto and the other Transaction Documents to be
delivered to the Fund pursuant hereto are an integral part of this Agreement.
5.12. No course of dealing between the Company and the Fund or any
delay in exercising or omission to exercise any right, power or remedy accruing
to the Fund, upon any breach or default of the Company under any of the
Transaction Documents, shall impair any such right, power or remedy of the Fund
or shall be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; and any waiver of any single breach or default shall not be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of the
Fund of any provisions or conditions of the Transaction Documents must be made
in writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, under the Transaction Documents or otherwise
afforded to the Fund, shall be cumulative and not alternative.
5.13. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and
such counterparts together shall constitute one instrument. Each party shall
receive a duplicate original of the counterpart copy or copies executed by it
and the other party.
5.14. The Fund agrees to be bound by all of the provisions of the March
Agreement to the same extent as if it were a named party thereto and included in
the term "Holder."
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, intending to be legally bound, this 21st day of June, 1996.
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
--------------------------------
Gerard H. Sweeney, President
TURKEY VULTURE FUND XIII, LTD.
By:________________________________
Title:
ACKNOWLEDGED THIS ___ DAY
OF JUNE, 1996:
SAFEGUARD SCIENTIFICS, INC.
By:_______________________
Title:
THE NICHOLS COMPANY
By:_______________________
Title:
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