Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made as of February 3, 2010 (the
“Effective Date”) by and between Howard M. Sipzner (“Employee”) and Brandywine
Operating Partnership, L.P., a Delaware limited partnership (the “Company”).
BACKGROUND
This Agreements sets forth the terms and conditions of Employee’s employment
with the Company.
In consideration of the mutual agreements contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby accepts
employment by the Company, upon the terms and conditions contained in this
Agreement.
2. Office and Duties. Employee shall be employed by the Company as its Executive
Vice President and Chief Financial Officer (the “Position”). Employee shall
report to the Company’s President and Chief Executive Officer. Employee shall
serve the Company faithfully and to the best of his ability and shall devote his
full work time, attention, skill and efforts to the performance of the duties
and responsibilities within the scope of the Position as may be reasonably
assigned to him from time to time by the Company. Employee agrees to comply with
all Company policies in effect from time to time and to comply with all laws,
rules and regulations, including those applicable to the Company.
3. Annual Salary. Employee’s annual base salary shall be $440,000 (the “Annual
Salary”) and the Annual Salary may be paid, at the election of the Company,
either by the Company or by one or more of its subsidiaries, in such relative
proportions as the Company may determine, in accordance with the Company’s
normal payment policies for its executives.
4. Annual Bonus; Incentive Compensation.
(a) Upon achievement by the Company of goals approved from time to time by the
Compensation Committee (the “Committee”) of the Board of Trustees upon the
recommendation of the Company’s President and Chief Executive Officer, as well
as achievement by Employee of his individual goals, as determined by the
Company’s President and Chief Executive Officer and approved by the Committee in
its sole discretion, Employee will be eligible to receive a bonus, with the
target amount for the bonus being 100% of the Annual Salary. Employee
acknowledges that (i) he must be employed by the Company on the payment date to
receive an annual bonus and (ii) his eligibility to receive an annual bonus is
not a guarantee or assurance that he will receive an annual bonus and the target
represents the bonus amount that Employee may expect to receive in a year where
he achieves 100% of his individual goals and the Company achieves 100% of its
goals, in each case as determined by the Committee in its sole discretion.

 

 

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(b) Employee will be eligible to receive an equity-based long-term incentive
award, with the target value for the award being 165% of the Annual Salary.
Employee acknowledges that (i) although the form of the equity-based long term
incentive award provided for in this Section 4 has in the past consisted of
options, restricted shares and restricted performance units, the composition of
equity or equity-based instruments of this award may vary from year to year
based on the sole discretion of the Committee; and (ii) his eligibility to
receive an equity-based long-term incentive award is not a guarantee or
assurance that he will receive an equity-based long-term incentive award (and
the amount and form are based on the sole discretion of the Committee).
(c) In addition to any bonus that may be awarded under Section 4(a), Employee
shall receive a signing bonus, payable in cash within ten (10) days of the
Effective Date, in an amount equal to $200,000.
5. Employee and Fringe Benefits. During Employee’s employment with the Company,
Employee will be eligible to participate in the Company’s employee benefit
programs in accordance with the terms and conditions of each plan. All benefits
plans may be amended by the Company from time to time, at the Company’s
discretion. Without limiting the foregoing, Employee will be eligible to
participate in the Company’s deferred compensation plan and any successor plan
in accordance with and subject to the terms and limitations of such plan(s).
6. Expenses. The Company shall reimburse Employee for all reasonable, ordinary
and necessary business expenses incurred by Employee in the performance of
Employee’s duties hereunder upon receipt of vouchers therefor and in accordance
with the Company’s regular reimbursement procedures and practices in effect from
time to time. The Company will also reimburse Employee for reasonable attorney’s
fees, not to exceed $10,000, incurred in connection with this Agreement.
7. Vacation and Personal Days. Employee shall be entitled to four (4) weeks paid
vacation during each calendar year and shall be entitled to designate up to ten
(10) additional paid personal days per calendar year.
8. Termination. The Company may terminate this Agreement and the employment of
Employee, and Employee may terminate this Agreement and his employment with the
Company, at any time and for any reason or for no reason, whether with or
without cause, and except as expressly provided in Section 9, neither the
Company nor Employee will have any further obligations to the other upon any
such termination.
9. Payments After Termination. If the Company elects to terminate Employee’s
employment for any reason or for no reason then the Company will pay to Employee
the portion, if any, of his Annual Salary accrued but unpaid as of the date of
such termination, and Employee will no longer be entitled to receive any other
payments, rights or benefits from the Company or any of its subsidiaries except
as and to the extent expressly provided to the contrary under the terms of any
Company benefit plan in which Employee participates and pursuant to any federal
or state law regarding continuation of coverage under the Company’s group health
plan. Notwithstanding the foregoing, if the Company terminates Employee’s
employment other than for Cause (as

 

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defined below) or if Employee terminates his employment and such termination is
a Resignation for Good Reason (as defined below), then, in addition to the
benefits referred to in the prior sentence, (1) the Company will pay to
Employee, within forty five (45) days of the employment termination date, an
amount equal to 1.50 times the sum of (x) the Annual Salary and (y) the annual
cash bonus, if any, paid to Employee in the calendar year immediately prior to
the year of termination (and, for clarity, in no event will the “signing bonus”
be considered part of the annual cash bonus referred to in this clause (y)) and
(2) those “time-based restricted” common shares and stock options awarded to
Employee prior to the employment termination date that have not vested as of the
employment termination date shall thereupon vest (but, for clarity, the time
period following the termination date of Employee’s employment within which
Employee may exercise vested options before they expire shall not be extended
beyond the time period specified in or applicable to such options). For
additional clarity, the references in clause (2) of the preceding sentence to
time-based restricted common shares and stock options means restricted common
shares and options the vesting of which is conditioned on the then current
employment of Employee at the time of the vesting date(s) specified therein (as
distinct from restricted shares, options and other equity-based awards that vest
or are earned in whole or in part based upon the achievement by Employee and/or
the Company of performance targets). The term “Cause” means (i) a material
breach by Employee of this Agreement which Employee fails to cure within fifteen
(15) days after written notice thereof from the Company; (ii) fraud,
embezzlement or theft or the breach of any fiduciary duty owed to the Company;
(iii) conviction of a felony; (iv) disclosure of trade secrets or confidential
information of the Company; or (v) breach of any agreement with or duty to the
Company in respect of confidentiality, non-disclosure or non-competition. The
term “Resignation for Good Reason” means (i) the Company requiring Employee to
relocate his primary office with the Company by more than thirty (30) miles from
Employee’s primary office in Radnor, Pennsylvania without Employee’s consent;
(ii) a change downward in Employee’s title or internal reporting or removal of
Employee as the Company’s principal financial officer; (iii) a reduction in
Employee’s Annual Salary (other than a reduction of not more than 10% of the
amount specified in Section 3 in connection with salary reductions
proportionately affecting all members of the Company’s executive management
team); or (iv) a breach by the Company of this Agreement which the Company fails
to cure within fifteen (15) days after written notice thereof from Employee.
Employee shall have no obligation to mitigate the amounts payable to him
pursuant to this Section 9 by seeking substitute employment or otherwise and
there shall be no offset of the payments or benefits provided for in this
Section 9 on account of any employment of Employee by a third party after his
termination of employment with the Company.
10. Change of Control. Attached to this Agreement as Exhibit A is a
“Change-In-Control Agreement”. In the event of a Change of Control (as defined
in the Change of Control Agreement) while Employee remains an employee of the
Company, then he shall be entitled to the benefits provided for in the
Change-In-Control Agreement but only on and subject to the terms and conditions
provided for therein, and such benefits shall be in lieu of any payments or
benefits that would have been payable to Employee under this Agreement or
provided for his benefit under this Agreement in the absence of a Change of
Control.

 

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11. Confidential Information. Employee acknowledges that during the course of
his employment with the Company he will have access to information about the
Company and/or its subsidiaries and their tenants, clients and suppliers that is
confidential and/or proprietary in nature, and that belongs to the Company
and/or its subsidiaries. As such, at all times, both during Employee’s
employment and thereafter, Employee will hold in the strictest confidence, and
not use or attempt to use except for the benefit of the Company and/or its
subsidiaries, and not disclose to any other person or entity (without the prior
written authorization of the Board) any confidential information.
Notwithstanding anything contained in this Section 11, Employee will be
permitted to disclose any confidential information to the extent required by
validly issued legal process or court order, provided that Employee notifies the
Company and/or its subsidiaries immediately of any such legal process or court
order, to the extent practicable, in an effort to allow the Company and/or its
subsidiaries to challenge such legal process or court order, if the Company
and/or its subsidiaries so elect, prior to Employee’s disclosure of any
confidential information.
12. Restrictive Covenants.
(a) Employee agrees that, while he is employed and during the one-year period
immediately following the termination of Employee’s employment with the Company
(or six months in the case of a termination by the Company of Employee’s
employment with the Company for reasons other than Cause), Employee shall not
directly or indirectly solicit, divert away, or attempt to divert away any
commercial real estate business with the Company to another company, business,
or individual.
(b) If the Company terminates Employee’s employment for any reason or Employee
terminates his employment for any reason, then Employee will not, during the
one-year period immediately following the termination of Employee’s employment
with the Company, directly or indirectly (i) solicit, induce, or attempt to
influence, any employee of the Company or any of its affiliates to terminate
employment; or (ii) interfere with the relationship between the Company and its
existing or prospective tenants, including without limitation encouraging a
tenant to terminate, or elect not to renew, its lease with the Company; or
(iii) interfere with the relationship between the Company and any service
providers to the Company. For purposes of items (ii) and (iii) only of this
Section 12, the one-year period shall be reduced to six months if the Company
terminates Employee’s employment with the Company for reasons other than Cause.
(c) Employee acknowledges that the restrictions contained herein, in view of the
nature of the business in which Employee has been engaged, are reasonable and
necessary to protect the legitimate interest of the Company, and that any
violation of these restrictions would result in irreparable injury to the
Company. Employee acknowledges that, in the event of a violation of any such
restrictions, the Company shall be entitled to preliminary and permanent
injunctive relief as well as an equitable accounting of all earnings, profits
and other benefits arising from such violation which rights shall be cumulative
and in addition to any other rights or remedies to which Company may be
entitled.
13. Indemnification. The Company shall, to the full extent permitted by law,
indemnify and hold harmless Employee from and against any liability, damage,
claim or expense incurred by reason of any act performed or omitted to be
performed by Employee in connection with the business of the Company, including,
without limitation, reasonable attorneys fees and reasonable expenses incurred
by Employee in connection with the defense of any action based on any such act
or omission. Without limiting the foregoing, Employee shall be entitled to the
benefit of the indemnification provisions available to senior officers of the
Company.

 

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14. Miscellaneous.
(a) Controlling Law. This Agreement, and all questions relating to its validity,
interpretation, performance and enforcement, shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
(b) Withholdings. Payments of all compensation to Employee shall be made in
accordance with the Company’s policies in effect from time to time, including
normal payroll practices, and shall be net of all applicable withholdings and
taxes
(c) Compliance with Section 409A. Notwithstanding any provision of this
Agreement to the contrary, if all or any portion of the severance payment
provided for in Section 9 of this Agreement is determined to be “nonqualified
deferred compensation” subject to Section 409A of the Code (after taking into
account all applicable exemptions) and the Company determines that Employee is a
“specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and the
regulations and other guidance issued thereunder, then such severance payment
(or portion thereof) that is subject to Section 409A and cannot be paid to
Employee without incurring additional tax, interest or penalties under
Section 409A shall be paid to Employee (with interest at 5% per annum) on the
first day of the seventh month following the month in which Employee’s
termination of employment occurs. For purposes of this Section 14(c),
“termination of service” shall mean Employee’s “separation from service”, as
defined in Section 1.409A-1(h) of the Treasury Regulations, including the
default presumptions thereunder.
(d) Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given, made and received when delivered in person against receipt, or
when sent by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as set forth below:

  (i)   If to Employee:

Howard M. Sipzner
555 East Lancaster Avenue
Radnor, PA 19087
with a copy to:
Fred R. Green, Esq.
Herrick, Feinstein LLP
2 Park Avenue
New York, NY 10016

 

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  (ii)   If to the Company:

Brandywine Realty Trust
555 East Lancaster Avenue
Radnor, PA 19087
Attention: General Counsel
In addition, notice by mail shall be by air mail if posted outside of the
continental United States.
Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this paragraph for the giving of notice.
(e) Binding Nature of Agreement. This Agreement shall be binding upon and inure
to the benefit of the Company and its successors and assigns and shall be
binding upon Employee, his heirs and legal representatives.
(f) Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party who executes the same, and all of which shall constitute one and the same
instrument. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
(g) Entire Agreement; Termination of Prior Agreements. This Agreement contains
the entire understanding among the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
inducements or conditions, express or implied, oral or written. Without limiting
the forgoing, all rights and obligations of Employee and the Company under the
Employment Agreement dated as of December 6, 2006 between the Company and
Employee and the Change-in-Control Agreement attached as an appendix thereto are
terminated in full. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
(h) Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first above-written.

                      BRANDYWINE REALTY TRUST    
 
                    By:   /s/ Gerard H. Sweeney                  
 
      Title:   President and Chief Executive Officer    
 
                    EMPLOYEE    
 
                    /s/ Howard M. Sipzner                   Howard M. Sipzner  
 

 

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EXHIBIT A
AMENDED AND RESTATED
AGREEMENT
THIS AGREEMENT is entered into as of the 3rd day of February, 2010 by and
between Howard M. Sipzner (“Executive”) and Brandywine Realty Trust (the
“Company”).
WHEREAS, Executive is currently employed by the Company and/or a Subsidiary (as
defined below) of the Company;
WHEREAS, in order to encourage Executive to remain an employee of the Company
and/or a Subsidiary, the Company is entering into this Agreement with Executive.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Payment Obligation: Change of Control. The Company agrees that if (i) a
Change of Control of the Company occurs at a time when Executive is then an
employee of the Company and/or a Subsidiary of the Company and (ii) within
730 days following the occurrence of the Change of Control (a) the Company or
the purchaser or successor thereto (the “Purchaser”) terminates the employment
of Executive other than for Cause or (b) Executive resigns for Good Reason:
a. then the Company or Purchaser will be obligated to pay to Executive an amount
equal to the product of: (x) 2.50 multiplied by (y) the sum of (1) Executive’s
annual base salary as in effect at the time the Change of Control occurs plus
(2) the greater of (i) the annual bonus most recently paid to Executive prior to
the date of the occurrence of the Change of Control and (ii) Executive’s Target
Bonus for the calendar year in which the Change of Control occurs, provided that
if a Target Bonus has not been established for the calendar year in which the
Change of Control occurs at the time of such occurrence, then the amount to be
used for purposes of this clause (2) shall be the annual bonus most recently
paid to Executive prior to the date of the occurrence of the Change of Control.
Payment of the amounts provided for in this Section 1.a shall be made as soon as
reasonably practicable following Executive’s termination or resignation, but, in
any event, not later than ten (10) days after such termination or resignation.
b. Executive shall be entitled to continuation of medical coverage until the
earlier of (1) the last day of the 730 day period following the date of
termination or resignation or (2) the date on which the Executive is eligible
for medical coverage under a plan maintained by a new employer or under a plan
maintained by his spouse’s employer. Coverage shall be generally comparable to
that provided by the Company from time to time to similarly situated active
employees (i.e., as if the Executive had continued in employment during such
period). The COBRA health care continuation coverage period under section 4980B
of the Code shall run concurrently with the foregoing benefit period. In
addition, Executive shall be entitled to continuation of all group term life
insurance benefits (but not including any supplemental life insurance benefits
provided to executives), or equivalent coverage if provision of such
continuation of coverage is not possible under the group term life insurance
policy, at no cost to Executive for the 730 day period following the date of
Executive’s termination or resignation.

 

 

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c. All compensation and benefits will cease at the time Executive’s employment
terminates and, except as otherwise provided in this Section 1, the Company will
have no further liability or obligation by reason of such termination. The
benefits described in this Section 1 are in lieu of, and not in addition to,
benefits under any other severance arrangement maintained by the Company.
2. No Right to Employment. This Agreement shall not confer upon Executive any
right to remain an employee of the Company or a Subsidiary of the Company, and
shall only entitle Executive to the payments and benefits in the limited
circumstances set forth in Paragraphs 1 and 2 above.
3. Compliance with Section 409A. If the termination giving rise to the payments
described in Section 1 is not a “Separation from Service” within the meaning of
Treas. Reg. § 1.409A-1(h)(1) (or any successor provision), then the amounts
otherwise payable pursuant to that section will instead be deferred without
interest and will not be paid until Executive experiences a Separation from
Service. In addition, to the extent compliance with the requirements of Treas.
Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the
application of an additional tax under Section 409A of the Code to payments due
to Executive upon or following his Separation from Service, then notwithstanding
any other provision of this Agreement (or any otherwise applicable plan, policy,
agreement or arrangement), any such payments that are otherwise due within six
months following Executive’s Separation from Service (taking into account the
preceding sentence of this paragraph) will be deferred without interest and paid
to Executive in a lump sum immediately following that six month period. This
paragraph should not be construed to prevent the application of Treas. Reg. §
1.409A-1(b)(9)(iii)(or any successor provision) to amounts payable hereunder.
Notwithstanding anything to the contrary contained in this Agreement or
otherwise, to the extent an in-kind benefit due to the Executive constitutes a
“deferral of compensation” within the meaning of Section 409A of the Code, the
provision of such in-kind benefits will be subject to the conditions stated in
Treas. Reg. §§ 1.409A-3(i)(iv)(3), (4) and (5).
4. Certain Definitions. As used herein:
a. “Board” means the Board of Trustees of the Company, as constituted from time
to time.
b. “Cause” has the meaning assigned to it in the Plan (except that references in
such Plan definition to “Company” shall be interpreted to mean the Company or
Purchaser, as applicable).

 

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c. “Change of Control” means:
(1) the acquisition in one or more transactions by any “Person” (as the term
person is used for purposes of Sections 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) of “Beneficial ownership”
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty-five percent (25%) or more of the combined voting power of the Company’s
then outstanding voting securities (the “Voting Securities”), provided that for
purposes of this clause (1) Voting Securities acquired directly from the Company
by any Person shall be excluded from the determination of such Person’s
Beneficial ownership of Voting Securities (but such Voting Securities shall be
included in the calculation of the total number of Voting Securities then
outstanding); or
(2) consummation of a merger, reorganization or consolidation involving the
Company if the shareholders of the Company 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 company 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;
(3) approval by shareholders of the Company of a complete liquidation or
dissolution of the Company; or
(4) approval by shareholders of the Company of an agreement for the sale or
other disposition of all or substantially all of the assets of the Company; or
(5) acceptance by shareholders of the Company of shares in a share exchange if
the shareholders of the Company 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; or
(6) a change in the composition of the Board over a period of twenty four
(24) months or less such that a majority of the Board members ceases to be
comprised of individuals who either: (a) have been board members continuously
since the beginning of such period; or (b) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (a) who were still in office at the time such
election or nomination was approved by the Board.
d. “Code” means the Internal Revenue Code of 1986, as amended.
e. “Good Reason” means any of the following:
(1) a reduction in Executive’s base salary as in effect at the time of the
Change of Control, other than a reduction in salary of no more than 10% of
Executive’s then current base salary done in connection with salary reductions
proportionately affecting all members of the Company’s executive management team
and (if the Change of Control involves a Purchaser) proportionately affecting
all members of the Purchaser’s executive management team as well;

 

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(2) a significant adverse alteration in the nature or status of Executive’s
responsibilities from those in effect at the time of the Change of Control; or
(3) relocation of the place where Executive performs his day-to-day
responsibilities at the time of the Change of Control by more than thirty
(30) miles.
However, none of the foregoing events or conditions will constitute Good Reason
unless the Executive provides the Company with written objection to the event or
condition within 60 days following the occurrence thereof, the Company does not
reverse or otherwise cure the event or condition within 30 days of receiving
that written objection, and the Executive resigns his employment within 240 days
following the expiration of that cure period (but in no event later the deadline
specified above in Section 1(ii)).
f. “Plan” means the Company’s Amended and Restated 1997 Long-Term Incentive
Plan, as amended.
g. “Subsidiary” means, in respect of the Company or parent, a subsidiary
company, whether now or hereafter existing, as defined in Sections 424(f) and
(g) of the Code, and any other entity 50% or more of the economic interests in
which are owned, directly or indirectly, by the Company.
h. “Target Bonus” means, with respect to any year, the target amount of
Executive’s annual bonus for that year.
5. Tax Withholding, Etc. All compensation payable under this Agreement shall be
subject to customary withholding taxes and other employment taxes as required
with respect to compensation paid by an employer to an employee and the amount
of compensation payable hereunder shall be reduced appropriately to reflect the
amount of any required withholding. The Company shall have no obligation to make
any payments to the Executive or make the Executive whole for the amount of any
required taxes.
6. Miscellaneous.
a. Controlling Law. This Agreement, and all questions relating to its validity,
interpretation, performance and enforcement, shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
b. Entire Agreement. This Agreement contains the entire understanding among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, inducements or conditions, express or
implied, oral or written, except as herein contained. This Agreement may not be
modified or amended other than by an agreement in writing.
c. Liability of Trustees, etc. 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 liability
being expressly waived and released by Executive.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above-written.

                  BRANDYWINE REALTY TRUST    
 
           
 
  By:    /s/ Gerard H. Sweeney
 
President and Chief Executive Officer    
 
           
 
      /s/ Howard M. Sipzner
 
Howard M. Sipzner    

 

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