PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement"), dated as of July
14, 2004, is by and among BNP Residential Properties Inc., a Maryland
corporation (the "Seller"), each Purchaser listed under the heading "Name of
Direct Purchaser" on Schedule A (each, a "Direct Purchaser") and each Investment
Adviser listed under the heading "Investment Advisers" on the signature pages
hereto (each, an "Investment Adviser") who are entering into this Agreement on
behalf of themselves (as to paragraph 4 of this Agreement) and those Purchasers
which are a fund or individual or other investment advisory client of such
Investment Adviser listed under their respective names on Schedule A (each, a
"Client"). Each of the Direct Purchasers and Clients are referred to herein as
individually, a "Purchaser" and collectively, the "Purchasers."
WHEREAS, the Purchasers desire to purchase from the Seller,
and the Seller desires to issue and sell to the Purchasers, in the aggregate
1,420,000 shares of common stock, par value $0.01 per share, of the Seller (the
"Shares"), with the number of Shares acquired by each Purchaser set forth on
each Purchaser's respective signature page to this Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. Purchase and Sale. Subject to the terms and conditions hereof, each
Purchaser hereby agrees to purchase from the Seller, and the Seller
agrees to issue and sell to the Purchasers, the Shares at a price per
share of $12.50 for an aggregate purchase amount of $17,750,000
(the "Purchase Price"), with the number of Shares to be acquired by
each Purchaser as set forth on each Purchaser's respective signature
page to this Agreement.
2. Representations and Warranties of Purchaser. Each Purchaser represents
and warrants with respect to itself that:
(a) Due Authorization. Such Purchaser is duly authorized to purchase the
Shares. This Agreement has been duly authorized, executed and delivered
by such Purchaser and constitutes a legal, valid and binding agreement
of such Purchaser, enforceable against such Purchaser in accordance
with its terms except as may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights or remedies of creditors or
(ii) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law and the discretion of
the court before which any proceeding therefor may be brought.
(b) Information. Such Purchaser has received the prospectus that is a part
of the registration statement on Form S-3 (no. 333-113384) and reviewed
all information incorporated by reference therein through the date
hereof, including that certain Form 8-K dated June 29, 2004 and filed
with the Securities and Exchange Commission (the "SEC") pursuant to the
Securities and Exchange Act of 1934 as amended (the "Exchange Act") on
July 9, 2004. As used herein, the terms "Registration Statement" and
"Prospectus" shall include the registration statement and prospectus
described in the
preceding sentence, respectively, as amended or supplemented, and the
information incorporated by reference therein.
(c) Ownership of Shares of Common Stock. As of the date hereof and after
giving effect to the issuance and sale of the Shares pursuant to this
Agreement, such Purchaser, together with its respective subsidiaries
and affiliates, will beneficially own (as defined under Section 13(d)
of the Exchange Act) less than 5% of the issued and outstanding shares
of common stock of the Company.
(d) Purchaser Knowledge and Status. No person is authorized to make any
representation in connection with the placement and sale of the Shares
other than as set forth herein, and no person is authorized to provide
any information that is inconsistent to that in the Prospectus. Such
Purchaser acknowledges that it has not received or relied on any such
representations or information.
3. Representations and Warranties of Seller. The Seller represents and
warrants that:
(a) The Registration Statement has been declared effective under the
Securities Act, and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been instituted or
are pending or contemplated by the SEC.
(b) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change or any
development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Seller and the
subsidiaries of the Seller, if any (the "Subsidiaries") considered as
one enterprise, whether or not arising in the ordinary course of
business, (B) there have been no transactions entered into by the
Seller or any of its Subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Seller and
its Subsidiaries considered as one enterprise, and (C) other than
regular quarterly dividends, there has been no dividend or distribution
of any kind declared, paid or made by the Seller on any class of its
shares of common stock.
(c) The Seller has been duly incorporated and is validly existing in good
standing under the laws of the State of Maryland. Each of the
Subsidiaries of the Seller has been duly organized and is validly
existing in good standing under the laws of its jurisdiction of
organization. Each of the Seller and its Subsidiaries has the required
power and authority to own and lease its properties and to conduct its
business as described in the Prospectus; and each of the Seller and its
Subsidiaries is duly qualified to transact business in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material
adverse effect on the condition,
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financial or otherwise, or the earnings, business affairs or business
prospects of the Seller and its Subsidiaries considered as one
enterprise.
(d) As of the date hereof, the authorized capital stock of the Seller
consisted of 100,000,000 shares of common stock and 10,000,000 shares
of convertible preferred stock, par value $.01 per share, of which
7,135,431 shares of common stock and 909,090 shares of Series B
Cumulative Convertible Preferred Stock, are issued and outstanding. The
issued and outstanding shares of common stock of Seller have been duly
authorized and validly issued and are fully paid and non-assessable;
the Shares have been duly authorized, and when issued and delivered as
contemplated hereby, will be validly issued, fully paid and
non-assessable and will be listed, subject to notice of issuance, on
the American Stock Exchange ("AMEX"); the Shares and the shares of ----
common stock of the Seller conform to all statements relating thereto
contained in the Prospectus; and the issuance of the Shares is not
subject to preemptive or other similar rights. No order halting or
suspending trading in securities of the Seller nor prohibiting the sale
of such securities has been issued to and is outstanding against the
Seller or its directors, officers or promoters and no investigations or
proceedings for such purposes are pending or threatened.
(e) Neither the Seller nor any of its Subsidiaries is in violation of its
organizational documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument or agreement to which the Seller or any of its
Subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Seller or any of its
Subsidiaries is subject where such violation or default would have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Seller and
its Subsidiaries considered as one enterprise; and, the execution,
delivery and performance of this Agreement, and the issuance and
delivery of the Shares and the consummation of the transactions
contemplated herein have been duly authorized by all necessary action
and will not conflict with or constitute a material breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Seller or any
of its Subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument or agreement to which
the Seller or any of its Subsidiaries is a party or by which it or any
of them may be bound, or to which any of the property or assets of the
Seller or any of its Subsidiaries is subject, nor will any such action
result in any violation of the provisions of the articles of
incorporation, by-laws or other organizational documents of the Seller
or any of its Subsidiaries or any applicable law, administrative
regulation or administrative or court decree.
(f) The Seller is organized in conformity with the requirements for
qualification and, as of the date hereof and as of the Closing,
operates in a manner that qualifies it as a "real estate investment
trust" under the Internal Revenue Code of 1986, as
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amended, and the rules and regulations thereunder and will be so
qualified after giving effect to the sale of the Shares.
(g) The Seller is not required to be registered under the Investment
Company Act of 1940, as amended.
(h) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Seller, threatened or contemplated, against or
affecting the Seller or any of its Subsidiaries, which is required to
be disclosed in the Prospectus (other than as disclosed therein), or
which might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Seller and its Subsidiaries considered as one
enterprise, or which might materially and adversely affect their
respective property or assets or which might materially and adversely
affect the consummation of this Agreement; all pending legal or
governmental proceedings to which the Seller or any of its Subsidiaries
is a party or of which any of their respective property or assets is
the subject which are not described in the Prospectus, including
ordinary routine litigation incidental to its business, are, considered
in the aggregate, not material to the business of the Seller and its
Subsidiaries considered as one enterprise.
(i) No authorization, approval or consent of any court or United States
federal or state governmental authority or agency is necessary in
connection with the sale of the Shares hereunder.
(j) No authorization, approval or consent of the shareholders of the Seller
is required or necessary in connection with the sale of the Shares
pursuant to the articles of incorporation, by-laws or other
organizational documents of the Seller.
(k) The Seller and its Subsidiaries possess such material certificates,
authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business
now conducted by them, and neither the Seller nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Seller and its subsidiaries considered as one
enterprise, nor, to the knowledge of the Seller, are any such
proceedings threatened or contemplated.
(l) The Seller has full power and authority to enter into this Agreement,
and this Agreement has been duly authorized, executed and delivered by
the Seller and constitutes a legal, valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms except
as may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the
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rights or remedies of creditors or (ii) the effect of general
principles of equity, whether enforcement is considered in a proceeding
in equity or at law and the discretion of the court before which any
proceeding therefor may be brought.
(m) The Seller has good and marketable title to all of the properties and
assets reflected in the audited financial statements contained in the
Prospectus, subject to no lien, mortgage, pledge or encumbrance of any
kind except those reflected in such financial statements (or as
otherwise described in the Prospectus) or which are not material or
which constitute customary provisions of mortgage loans secured by the
Seller's properties creating obligations of the Seller with respect to
proceeds of the properties, environmental liabilities and other
customary protections for the mortgagees.
4. Representation and Warranty of the Investment Advisers. To induce
Seller to enter into this Agreement, each of the Investment Advisers
hereby, jointly and severally, represent and warrant that:
(a) It is an "investment adviser" as such term is defined under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
is duly registered with the SEC or is an investment adviser not
required to be so registered pursuant to an exemption under the
Advisers Act.
(b) It is duly organized, validly existing and in good standing under the
laws of its state of organization. It is duly qualified to do business
and is in good standing in each jurisdiction where its ownership or
leasing of property or assets or the conduct of its business requires
it to be so qualified. It has in effect all federal, state, local and
foreign governmental authorizations necessary for it to own or lease
its properties and assets and to carry on its business as it is now
conducted.
(c) It has been duly authorized to act as investment adviser on behalf of
each of the Clients listed under its name on the signature page to this
Agreement for such Investment Adviser.
(d) It has the power and authority to enter into and execute this Agreement
on behalf of each of the Clients listed under its name on the signature
page to this Agreement for such Investment Adviser.
(e) This Agreement has been duly executed and delivered by it and
constitutes a legal, valid and binding agreement of such Investment
Adviser, enforceable against it in accordance with its terms except as
may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights or remedies of creditors or (ii) the effect of
general principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court before
which any proceeding therefor may be brought.
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(f) In connection with the execution, delivery or performance of this
Agreement, it is not required to make or obtain any consents or
approvals of, or filings or registrations with, any court,
administrative agency or commission or other governmental authority or
instrumentality, including the SEC, or with any third party.
(g) Neither the Investment Adviser nor any "person associated with an
investment adviser" (as defined in the Advisers Act) thereof, as
applicable, is ineligible pursuant to Section 203 of the Advisers Act
to serve as an investment adviser or as an associated person to a
registered investment adviser or has committed any act enumerated in
Rule 206(4)-(4)(b) under the Advisers Act.
5. Conditions to Obligations of the Parties. As a condition to Closing,
(i) each of the representations and warranties of the parties hereto
shall be true and correct in all respects, (ii) the Purchasers and
▇▇▇▇▇ & Steers Capital Advisors, LLC shall have received an opinion
from ▇▇▇▇▇▇ & Bird LLP, dated as of July 19, 2004, substantially in
the form attached hereto as Exhibit A, (iii) ▇▇▇▇▇ & Steers Capital
Advisors, LLC shall have received a comfort letter from Ernst & Young
LLP, dated as of July 14, 2004, substantially in the form attached
hereto as Exhibit B, (iv) the AMEX shall have approved the Shares for
listing, subject to notice of issuance, and (v) ▇▇▇▇▇ & Steers Capital
Advisors, LLC shall have received a "no objections" opinion from the
National Association of Securities Dealers, Inc. regarding the proposed
terms and arrangements of the offering of the Shares.
6. Closing. Provided that the conditions set forth in Section 5 hereto
have been met or waived at such time, the transactions contemplated
hereby shall be consummated on July 19, 2004, or at such other time
and date as the parties hereto shall agree (each such time and date of
payment and delivery being herein called the "Closing"). At the
Closing, settlement shall occur through ▇▇▇▇▇▇▇▇▇ and Company, Inc., or
an affiliate thereof, on a delivery versus payment basis through the
DTC ID System.
7. Governing Law. This Agreement shall be construed in accordance with and
governed by the substantive laws of the State of New York, without
regard to conflict of laws principles. Any right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract,
tort or otherwise) related to or arising out of the issuance and sale
of the Shares, and the Purchasers' activities pursuant to, or the
performance by the Purchasers of the services contemplated by, this
Agreement is hereby waived. The Seller hereby submits to the
non-exclusive jurisdiction of the federal and New York State courts
located in the City of New York in connection with any dispute related
to this Agreement or any of the matters contemplated hereby. The Seller
agrees that any legal suit, action or proceeding brought by the
Purchasers, any of their respective affiliates or any indemnified party
to enforce any rights under or with respect to this Agreement or the
offer may be instituted in any state or federal court in the City of
New York, State of New York, waives to the fullest extent permitted by
law any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding and irrevocably submits to
the non-exclusive jurisdiction of any such court in any such suit,
action or proceeding. Nothing in this Section 7 shall affect the right
of the Purchasers,
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any of their respective affiliates or any indemnified party to serve
process in any manner permitted by law or limit the right of the
Purchasers, any of their respective affiliates or any indemnified party
to bring proceedings against the company in the courts of any
jurisdiction or jurisdictions.
8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof
and may be amended only in a writing that is executed by each of the
parties hereto.
9. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Seller and the Purchasers and the respective
successors and assigns of such parties. Nothing in this Agreement is
intended, or shall be construed, to give to any other person or entity
any right hereunder or by virtue hereof. This Agreement may not be
assigned by the Seller or the Purchasers without the prior written
consent of the other party hereto.
10. Counterparts. In the event that any provision hereof shall be
determined to be invalid or unenforceable in any respect, such
determination shall not affect such provision in any other respect or
any other provision hereof, which shall remain in full force and
effect. This Agreement may be executed in separate counterparts, each
of which shall be deemed an original, and all of which together shall
be deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
BNP RESIDENTIAL PROPERTIES INC.
By:
----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman and Chief Financial Officer
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DIRECT PURCHASERS:
----------------------------------------
By:
----------------------------------------------------
Name:
Title:
[Note: A separate signature page will be used for each Purchaser]
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INVESTMENT ADVISERS:
___________________________________., on behalf of itself
(solely with respect to paragraph 4) and each Client set
forth under its name on Schedule A
----------
By:
----------------------------------------------------
Name:
Title:
[Note: A separate signature page will be used for each Adviser]
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SCHEDULE A
Name of Direct Purchase Share Allocation
----------------------- ----------------
Investment Advisor Share Allocation
------------------ ----------------
Clients:
--------
[Note: Schedule A information will be broken out and listed separately for
each Direct Purchaser and each Investment Advisor]
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EXHIBIT A
Form of Opinion of ▇▇▇▇▇▇ & Bird LLP
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EXHIBIT B
Form of Comfort Letter
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