EXHIBIT 10.6
Brandywine Realty Trust
00 Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx, XX 00000
_____________ __, 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 ____________ __, 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 ___ to ___ and appointed [ ] 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 [ ]
(or such replacement for [ ] 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 [ ] 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 interests; 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.
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e. "Designee" means [ ] or such replacement to [ ] who is
serving on the Board pursuant the agreement contained in this letter.
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:__________________________
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Agreed and accepted this ____ day
of ______, 1998 by:
LF STRATEGIC REALTY INVESTORS, L.P
By:____________________________________
Name:
Title:
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