Exhibit 10.56
LOAN AGREEMENT
This Loan Agreement is entered into as of February 18, 2000 by and between
Xxxxxx X. Xxxxxxx ("Executive") and Brandywine Operating Partnership, L.P.
("Company").
Intending to be legally bound, Executive and Company agree as follows:
1. LOAN. On the date hereof, Company shall loan to Executive $1.5
million (the "Loan").
2. USE OF PROCEEDS; NO SECURITY. Executive agrees to use the proceeds
of the Loan solely to purchase common shares of beneficial interest
("Common Shares") of Brandywine Realty Trust ("BRT") from Company. The
obligations of Executive under this Agreement are unsecured, and, without
limiting the generality of the foregoing, Executive and Company agree that
Executive's obligations under this Agreement are not secured by a pledge of
the Common Shares.
3. INTEREST. Interest shall accrue on the outstanding principal
balance of the Loan from the date hereof at a variable rate equal to the
lower of: (i) the interest rate borne by Company's then outstanding
revolving credit facility (as refinanced from time to time), (ii) the
Dividend-Computed Rate (as defined below) and (iii) 10%. If borrowings
under the revolving credit facility bear interest at different rates (e.g.,
prime rate versus LIBOR), the applicable rate will be the highest of the
rates in effect from time to time. The "Dividend Computed Rate" shall mean
the rate, expressed as a percentage, computed as follows: FIRST, multiply
by four the most recent regular quarterly dividend paid on a Common Share;
SECOND, multiply the result from the first step by the number of Common
Shares purchased with the Loan proceeds; THIRD, divide the result from the
second step by the original principal amount of the Loan. For purposes of
the foregoing, if the amount of the quarterly dividend changes, the
Dividend Computed Rate will change, effective as of the payment date for
such new dividend level. Accrued interest on the principal balance of the
Loan shall be payable annually on the first business day of each April,
commencing April 2001.
4. MATURITY DATE. Subject to Section 6, the outstanding principal
balance of the Loan, plus accrued but unpaid interest thereon, shall be due
and payable on the first business day of April 2004.
5. MANNER OF PAYMENT. The principal of, and interest on, the Loan
shall be payable at Company's office at 00 Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000 (or such other address as Company shall,
from time to time, notify Executive). All such principal and interest shall
be payable in lawful money of the United States of America in immediately
available funds; provided, however, that Executive may, in his sole
discretion, tender Common Shares to Company in repayment of all or any
portion of the Loan and accrued interest thereon, with each share tendered
valued at $15.625 (subject to equitable
and proportionate adjustment in the event of a split or reverse split of,
or share dividend on, the Common Shares).
6. LOAN FORGIVENESS.
a. Upon a Change of Control of BRT, the outstanding principal balance
of the Loan, plus accrued but unpaid interest thereon, shall automatically
be forgiven. As used herein, the term "Change of Control" shall have the
meaning assigned to it in the Amended and Restated Employment Agreement
(the "Employment Agreement") between BRT and Executive.
b. Within thirty (30) days following the first business day of each
April 2001, 2002 and 2003, Company shall compute the total shareholder
return on the Common Shares from February 18, 2000 through such first
business day of April, and shall compare such total shareholder return to
the total shareholder return over the same time period on the common shares
of the other companies in the Peer Group (as defined below). If BRT's total
shareholder return for each applicable period falls in the bottom quadrant
of the Peer Group, then 25% of one-third of the original principal amount
of the Loan shall be automatically forgiven as of such computation date. If
BRT's total shareholder return falls in the third, second or first quadrant
of the Peer Group, then 50%, 75% or 100%, respectively, of one third of the
original principal amount of the Loan shall be automatically forgiven as of
the computation date.
c. In addition to the forgiveness provided in the preceding paragraph,
if BRT's total shareholder return for any of the three measurement periods
specified in the preceding paragraph exceeds the average total shareholder
return of the companies in the first quadrant of the Peer Group for any
such measurement period, then any portion of the principal of the Loan that
was previously eligible for forgiveness, but which was not forgiven, shall
be automatically forgiven.
d. Whenever a portion of the principal of the Loan is forgiven,
accrued interest on such portion of the principal shall also be forgiven.
e. The Peer Group shall initially consist of the following companies,
in addition to BRT: Xxxxx Equity Inc., XX Xxxxx Realty Corp., Xxxxxx Realty
Corp., Xxxxxxxx Properties Trust, Reckson Associates Realty Corp., First
Industry Realty Trust Inc., Arden Realty Inc., CarrAmerica Realty Corp.,
Highwoods Properties Inc., Xxxx-Xxxx Realty Corp., Bedford Properties,
Liberty Property Trust and Great Lakes. In the event that any of such
companies is involved in a business combination or similar extraordinary
transaction, it shall be removed from the Peer Group.
7. TREATMENT OF LOAN. For purposes of the "three times multiplier"
referenced in Sections 18(b) and (d) of the Employment Agreement, the amount of
the Loan and any portion of the Loan that is forgiven shall not be treated as an
amount paid to Executive
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pursuant to Section 5 of the Employment Agreement and shall not be treated as
the short-term portion of any bonus amounts paid or payable to Executive
pursuant to Section 6 of the Employment Agreement.
8. MISCELLANEOUS. This Agreement may be amended only by a written
instrument executed by Company and Executive. This Agreement shall be governed
by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Brandywine Realty Trust
By:_____________________________
Title:__________________________
_______________________________
Xxxxxx X. Xxxxxxx
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