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BRANDYWINE REALTY TRUST
00 XXXXXX XXXXXXXXX
XXXXXXX XXXXXX, XX 00000
September 28, 1998
LF Strategic Realty Investors, L.P.
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Purchase and Contribution Agreement dated as of
August 6, 1998 by and among Brandywine Realty Trust (the "Trust"), Brandywine
Operating Partnership, L.P. (the "Operating Partnership"), LF Strategic Realty
Investors L.P., Prometheus AAPT and the other signatories thereto (the "Purchase
Agreement"). Unless otherwise defined herein, capitalized terms not defined
herein shall have the meanings ascribed to them in the Purchase Agreement.
1. Initial Appointment: Designation Right. On the date hereof, and in
recognition of the benefits realized by the Trust from the sale of certain
assets owned by LF Strategic Realty Investors, L.P. ("LFSRI"), and in accordance
with Sections 2.1 and 2.4 of the Declaration of Trust (the "Declaration") of the
Trust, the Board of Trustees (the "Board") has increased the number of Trustees
of the Trust from five to six and appointed Xxxxx Xxxxx to fill the vacancy
created by such increase. In further recognition of such benefits, the Trust
agrees to use commercially reasonable efforts, during the Term and subject to
compliance with applicable law and the Declaration, to cause Xxxxx Xxxxx (or
such replacement for Xxxxx Xxxxx as LFSRI may select and who is reasonably
acceptable to the Board) to be nominated for election to the Board at each
annual meeting of shareholders of the Trust and, if elected, to serve until the
next annual meeting of shareholders of the Trust and until his or her successor
is elected and qualified. The Trust's agreement contained herein shall terminate
upon expiration of the Term. Upon expiration of the Term, the holders of a
majority of the Board may, in their discretion, request such designee to resign
from the Board.
2. The Designee. The Trust acknowledges that each of Xxxxx Xxxxx and
Xxxxx Xxxxxxxxxxx is reasonably acceptable to the Board. LFSRI acknowledges that
the Board shall be acting reasonably if (i) it refuses to nominate a person for
election to the Board pursuant to paragraph 1 above if the Trust would be
required to make any of the disclosures required by Item 401(f) of Regulation
S-K promulgated by the Securities and Exchange Commission (the "SEC") with
respect to such person in filings with the SEC or (ii) if the Designee shall
also be serving as a director or trustee or an executive of a competitor of the
Trust and the Board believes that such person's membership on the Board would
pose a threat to the Trust's interest;
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provided, however, that in the event that any LFSRI designee to the Board is
deemed unacceptable pursuant to the provisions of this paragraph 2, LFSRI shall
have the right to propose a replacement for such designee.
3. Attendance Right. If for any reason LFSRI's acceptable designee to the
Board is not elected to the Board during the Term, LFSRI have the right, during
the Term, to have an individual attend, in a non-voting capacity, all meetings
of the Board. Such individual shall be entitled to receive the same notice with
respect to all meetings of the Board as is provided to voting members of the
Board and shall hold all information obtained in connection with such notices
and meetings in confidence to the same extent as if such individual was a voting
member of the Board.
4. Definitions. The following terms have the meanings specified:
a. "Affiliate" shall have the meaning specified in Rule 405
promulgated under the Securities Act of 1933, as amended.
b. "Change in Control" shall mean (i) approval by shareholders of the
Trust of: (A) a merger, reorganization or consolidation involving the Trust if
the shareholders of the Trust immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly immediately
following such merger, reorganization or consolidation, more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
Trust resulting from or surviving such merger, reorganization or consolidation
in substantially the same proportion as their ownership of the Voting Securities
outstanding immediately before such merger, reorganization or consolidation; or
(B) a complete liquidation or dissolution of the Trust; or (C) an agreement for
the sale or other disposition of all or substantially all of the assets of the
Trust; or (ii) acceptance by shareholders of the Trust of shares in a share
exchange if the shareholders of the Trust immediately before such share exchange
do not or will not own directly or indirectly immediately following such share
exchange more than fifty percent (50%) of the combined voting power of the
outstanding voting securities of the entity resulting from or surviving such
share exchange in substantially the same proportion as their ownership of the
Voting Securities outstanding immediately before such share exchange.
c. "Common Share" shall mean a common share of beneficial interest,
par value $.01 per share, of the Trust.
d. "Conversion Price" shall have the meaning specified in, and shall
be subject to adjustment as and to the extent provided in, the amendment to the
Amended and Restated Agreement of Limited Partnership of the Partnership
establishing the designation, preferences and other rights of the Series B
Preferred Units.
e. "Designee" means Xxxxx Xxxxx or such replacement to Xxxxx Xxxxx
who is serving on the Board pursuant the agreement contained in this letter.
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f. "Term" shall mean the period of time commencing on the date hereof and
ending on the earliest to occur of the following: (i) the date that LFSRI ceases
to own, directly or indirectly, any combination of (a) the Series A Preferred
Shares issued on the date hereof, (b) the Common Shares issued on redemption or
conversion of such Series A Preferred Shares, (c) the Series B Preferred Units
issued on the date hereof, (d) the Class A Common Units issued on redemption or
conversion of such Series B Preferred Units and (e) the Common Shares issued on
redemption of such Class A Common Units having an aggregate Value at least equal
to 60% of the aggregate Value of the Series A Preferred Shares and the Series B
Preferred Units issued on the date hereof and (ii) the occurrence of a Change in
Control.
g. "Value" shall be calculated by attributing (i) $50 to each Series A
Preferred Share and to each Series B Preferred Unit and (ii) an amount equal to
the then current Conversion Price of the Series B Preferred Units to each Common
Share issued upon redemption or conversion of a Series A Preferred Share, to
each Class A Unit issued on redemption or conversion of a Series B Preferred
Unit and to each Common Share issued upon redemption of a Class A Unit (such
Series A Preferred Shares, Series B Preferred Units, Class A Units and Common
Shares are collectively referred to herein as the "Securities").
Very truly yours,
BRANDYWINE REALTY TRUST
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Xxxxxx and accepted this
25th day of September, 1998 by:
LF STRATEGIC REALTY INVESTORS, L.P.
By: LAZARD FRERES REAL ESTATE INVESTORS, L.L.C.,
its general partner
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Principal
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