-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J48MgbpD5ZczjMuiXVRUoinvJwgCMxd46gO5JX1rnxircJV6eiylzSxYETlPzC+y GiN5fRrNZSxXGBI/ZEAabg== 0000912057-97-032630.txt : 19971006 0000912057-97-032630.hdr.sgml : 19971006 ACCESSION NUMBER: 0000912057-97-032630 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19970919 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971003 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRANDYWINE REALTY TRUST CENTRAL INDEX KEY: 0000790816 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 232413352 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09106 FILM NUMBER: 97690782 BUSINESS ADDRESS: STREET 1: 16 CAMPUS BOULEVARD STREET 2: STE 100 CITY: NEWTOWN SQUARE STATE: PA ZIP: 19073 BUSINESS PHONE: 1-610-325-5600 MAIL ADDRESS: STREET 1: TWO GREENTREE CENTRE STREET 2: SUITE 100 CITY: MARLTON STATE: NJ ZIP: 08053 FORMER COMPANY: FORMER CONFORMED NAME: LINPRO SPECIFIED PROPERTIES DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) September 19, 1997 BRANDYWINE REALTY TRUST ----------------------- (Exact name of registrant as specified in its charter) MARYLAND 1-9106 23-2413352 -------- ------ ---------- (State or other (Commission file (I.R.S. Employer jurisdiction of number) Identification incorporation) Number) 16 Campus Boulevard, Newtown Square, Pennsylvania 19073 (Address of principal executive offices) (610) 325-5600 (Registrant's telephone number, including area code) Page 1 of 7 pages Item 5. Other Events On September 19, 1997, Brandywine Operating Partnership, L.P. (the "Operating Partnership"), a limited partnership in which Brandywine Realty Trust ("the Company") is the sole general partner and in which, as of the date of this Report, the Company owns an approximately 98.7% partnership interest, acquired a three-story office building known as 100 Commerce Drive. This building contains approximately 64,000 net rentable square feet and is located in Newark, New Castle County, Delaware for a cash purchase price of approximately $5.5 million. The purchase price was funded from proceeds of the Company's recently completed public offering of Common Shares. As of October 3, 1997, 100 Commerce Drive is approximately 97.1% leased to 6 tenants. The Traveler's Bank, Blaze Systems Corporation and KCI Technology, Inc. are major tenants, occupying approximately 58%, 12% and 10%, respectively, of the total net rentable square feet of 100 Commerce Drive. The seller of 100 Commerce Drive, Gender Road Joint Venture (the "Seller") is a party unaffiliated with the Company and the Operating Partnership. The Company based its determination of the purchase price on the expected cash flow, physical condition, location, competitive advantages, existing tenancies and opportunities to retain and attract additional tenants. The purchase price was determined by arm's-length negotiation between the Company and the Seller. The table below sets forth certain information regarding the rental rates and lease expirations at 100 Commerce Drive as of October 3, 1997. -2-
Year of Number of Leases Rentable Square Final Annualized Percentage of Total Lease Expiring Within Footage Subject Base Rent under Final Annualized Base Rent Expiration the Year at(1) to Expiring Leases Expiring Leases(2) Under Expiring Leases - --------------------------- --------------------- ------------------- ------------------ --------------------------- 1997....................... -- -- $ -- -- 1998....................... 2 2,690 38,370 4.2% 1999....................... 1 1,825 27,831 3.0% 2000....................... 3 14,326 227,632 24.8% 2001....................... 2 43,208 625,603 68.0% 2002....................... -- -- -- -- 2003....................... -- -- -- -- 2004....................... -- -- -- -- 2005....................... -- -- -- -- 2006 and Thereafter........ -- -- -- -- --- ------ ---------- ----- Total.................. 8 62,049 $ 919,436 100.0% --- ------ ---------- ----- --- ------ ---------- -----
(1) A lease is considered to expire if, and at any time, it is terminable by the tenant without payment of penalty or premium. (2) "Final Annualized Base Rent" for each lease scheduled to expire represents the cash rental rate in the final month prior to expiration multiplied by twelve. Concurrently with its acquisition of 100 Commerce Drive, the Company, through a wholly-owned subsidiary of the Operating Partnership, entered into two joint ventures with the Seller. One of these joint ventures, Christiana Center Operating Company I LLC ("Joint Venture I"), was formed by the Seller and a subsidiary of the Operating Partnership to acquire from the Seller approximately 13.3 acres of vacant land located in New Castle County, Delaware for a cash purchase price of approximately $900,000 in anticipation of the development thereon of a three-story office building containing approximately 150,000 net rentable square feet. Closing under the agreement of sale is scheduled to occur on or about October 15, 1997 (subject to customary closing conditions). The Company's initial percentage interest in Joint Venture I is 50% and its initial contribution to the equity of Joint Venture I will be approximately $2.0 million. The total project costs (including the cost of the land) are estimated to be approximately $15.5 million. The building is anticipated to be completed in July 1998. However, development of the land is subject to receipt of a construction loan in the approximate amount of $14.5 million as well as to certain land development and other necessary approvals, and there can be no assurance that the joint venture will be able to develop the building. In connection with its acquisition of the land, Joint Venture I received an assignment of the lessor's interest in a ten-year lease of the to-be-built building with Computer Science Corporation ("CSC") pursuant to which CSC will lease approximately 125,000 net rentable square feet (with expansion rights) at an initial base rent equal to $13.60 per square foot. -3- The other joint venture, Christiana Center Operating Company II LLC ("Joint Venture II"), was formed to acquire to acquire two parcels of vacant land containing approximately 4.82 and 6.13 acres, respectively, of vacant land located in Newark, New Castle County, Delaware for an aggregate cash purchase price of approximately $1,000,000 in anticipation of the development thereon of two office buildings. Closing on this land acquisition occurred on September 19, 1997. The Company's initial percentage interest in Joint Venture II is 50% and its initial contribution to the equity of Joint Venture II was approximately $1.0 million. Architectural plans for the development of the land have not been completed and development of the land is subject to receipt of a construction loan as well as to certain land development and other necessary approvals, and there can be no assurance that the joint venture will be able to develop the building. On September 29, 1997, the Operating Partnership acquired seven industrial properties located in Bensalem Township, Bucks County, Pennsylvania ("Metropolitan Industrial Center") containing approximately 447,000 net rentable square feet. As of October 3, 1997, Metropolitan Industrial Center was approximately 87.9% leased to 16 tenants. Northtec LLP individually occupies approximately 27% of the total net rentable area of Metropolitan Industrial Center. The purchase price for Metropolitan Industrial Center totaled $16.3 million. The Operating Partnership paid the purchase price and closing expenses using borrowings under its existing revolving credit facility. The seller of Metropolitan Industrial Center, Metropolitan Industrial Associates, is a party unaffiliated with the Company and the Operating Partnership. The Company based its determination of the purchase price of Metropolitan Industrial Center on the expected cash flow, physical condition, location, competitive advantages, existing tenancies and opportunities to retain and attract additional tenants. The purchase price was determined by arm's-length negotiation between the Company and Metropolitan Industrial Associates. -4- The table set forth below shows certain information regarding rental rates and lease expirations for Metropolitan Industrial Center as of October 3, 1997.
Year of Number of Leases Rentable Square Final Annualized Percentage of Total Lease Expiring Within Footage Subject Base Rent under Final Annualized Base Rent Expiration the Year at(1) to Expiring Leases Expiring Leases(2) Under Expiring Leases - --------------------------- --------------------- ------------------ ------------------ --------------------------- 1997....................... 1 42,000 $ 209,160 10.3% 1998....................... 1 14,620 65,790 3.2% 1999....................... 6 114,570 483,155 23.7% 2000....................... 3 31,456 149,622 7.4% 2001....................... 3 38,152 220,950 10.9% 2002....................... 1 33,354 225,140 11.1% 2003....................... -- -- -- -- 2004....................... -- -- -- -- 2005....................... -- -- -- -- 2006 and Thereafter........ 2 118,775 681,651 33.5% --- ------- ------------ ----- Total.................. 17 392,927 $ 2,035,468 100.0% --- ------- ------------ ----- --- ------- ------------ -----
After giving effect to the acquisitions of 100 Commerce Drive and Metropolitan Industrial Center, the Company's portfolio consists of 77 office properties and 16 industrial properties that contain an aggregate of approximately 5.8 million net rentable square feet. -5- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits 10.1--Agreement of Sale dated September 19, 1997 between Brandywine Realty Trust and Gender Road Joint Venture (100 Commerce Drive). 10.2--Agreement of Sale dated September 19, 1997 between Christiana Center Operating Company II LLC and Gender Road Joint Venture (200 and 300 Commerce Drive). 10.3--Agreement of Sale dated September 19, 1997 between Christiana Center Operating Company I LLC and Gender Road Joint Venture (400 Commerce Drive). 10.4--Operating Agreement of Christiana Center Operating Company I LLC dated as of September 19, 1997 between Brandywine Operating Partnership, L.P. and Gender Road Joint Venture. 10.5--Operating Agreement of Christiana Center Operating Company II LLC dated as of September 19, 1997 between Brandywine Operating Partnership, L.P. and Gender Road Joint Venture. -6- SIGNATURE - --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BRANDYWINE REALTY TRUST Date: October 3, 1997 By: /s/ Gerard H. Sweeney --------------- --------------------- Gerard H. Sweeney, President and Chief Executive Officer (Principal Executive Officer) Date: October 3, 1997 By: /s/ Mark S. Kripke --------------- ------------------ Mark S. Kripke, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) -7- EX-10.1 2 EXHIBIT 10.1 AGREEMENT OF SALE for 100 COMMERCE DRIVE NEWARK, DELAWARE between BRANDYWINE REALTY TRUST and GENDER ROAD JOINT VENTURE Dated: September 19, 1997 AGREEMENT OF SALE INDEX Section Page 1. PROPERTY BEING SOLD.......................................................1 1.1 Real Property..............................................1 1.2 Personal Property..........................................2 1.3 Leases.....................................................2 1.4 Right to Names.............................................2 2. PURCHASE PRICE AND MANNER OF PAYMENT......................................2 2.1 Purchase Price.............................................2 2.2 Manner of Payment..........................................2 2.2.1 Deposit....................................................2 2.2.2 Additional Deposit.........................................3 2.2.3 Cash Balance...............................................3 2.3 Allocation.................................................3 3. TITLE.....................................................................3 4. COVENANTS.................................................................3 4.1 Maintenance.................................................3 4.2 Alterations.................................................3 4.3 Lease.......................................................3 4.4 Security Deposits...........................................4 4.5 Bill Tenants................................................4 4.6 Notice to Buyer.............................................4 4.7 Update Rent Roll............................................4 4.8 Comply with Leases..........................................4 4.9 No New Agreements...........................................5 4.10 Tax Disputes................................................5 4.11 No Removal of Personalty....................................5 5. REPRESENTATIONS AND WARRANTIES..............................5 5.1 Seller's Authority For Binding Agreement....................5 5.2 Employment on "At-Will" Basis...............................5 5.3 Service Contracts...........................................6 5.4 Condemnation................................................6 5.5 No Lawsuits.................................................6 5.6 No Tax Assessments..........................................7 5.7 Leases......................................................7 5.8 Compliance with Law.........................................8 5.9 Insurance...................................................9 5.10 Current Use Unrestricted....................................9 i 5.11 No Brokers..................................................9 5.12 Utilities...................................................9 5.13 Permits, Approvals and Certificates.........................9 5.14 Good Title to Property.....................................10 5.15 All Taxes and Assessments Paid.............................10 5.16 FIRPTA.....................................................10 5.17 Operating Statement........................................10 5.18 Mechanic's Liens...........................................10 5.19 Inventory Schedule.........................................10 5.20 Charges, Fees and Assessments..............................10 5.21 Rights to Purchase.........................................10 5.22 No Outstanding Obligations.................................11 5.23 Access.....................................................11 5.24 Rollback Taxes.............................................11 5.25 Development Agreements.....................................11 5.26 Correct Copies of Documents................................11 6. POSSESSION...............................................................11 7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY..........................11 7.1 Title Binder...............................................11 7.2 Survey.....................................................12 7.3 Physical and Financial Inspection..........................12 7.3.1 Leases.....................................................13 7.3.2 Contracts, Licenses, Permits...............................13 7.3.3 Utility Costs..............................................13 7.3.4 Inventory..................................................13 7.3.5 Three Years' Maintenance Expenses..........................13 7.3.6 Three Years' Tax Bills.....................................13 7.3.7 Three Years' Operating Statements..........................13 7.3.8 Schedule of Violations.....................................14 7.3.9 Schedule of Notices........................................14 7.3.10 Schedule of Replacements and Repairs.......................14 7.3.11 Zoning, Site Plan, Subdivision Plan or Plat................14 7.3.12 ...........................................................14 7.3.13 Takings or Changes.........................................14 7.3.14 Tax Assessments, Appeals and Increases.....................14 7.3.15 Litigation.................................................14 7.3.16 Insurance Policies.........................................14 7.3.17 Schedule of Employees......................................15 7.3.18 Title Information..........................................15 7.4 Seller's Failure to Deliver................................15 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...............................15 9. FIRE OR OTHER CASUALTY...................................................15 ii 9.1 Maintain Insurance.........................................15 9.2 Minimal Damage.............................................15 9.3 Substantial Damage.........................................15 9.4 Closing After Substantial Damage...........................15 9.5 Rent Insurance.............................................16 10. CONDEMNATION.............................................................16 11. Expense Allocations......................................................16 12. CLOSING..................................................................16 12.1 Time and Date and Place....................................16 12.2 Documents..................................................16 12.2.1 Seller's Documents and Other Items.........................17 12.2.1.1 Deed.......................................................17 12.2.1.2 Bill of Sale...............................................17 12.2.1.3 Original Leases............................................17 12.2.1.4 Original Licenses, Contract Documents and Other Personal Property...................................................17 12.2.1.5 Assignment of Leases.......................................17 12.2.1.6 Assignment of Licenses, Contract Documents and Other Personal Property..........................................17 12.2.1.7 FIRPTA Certificates........................................17 12.2.1.8 Tenant Letter..............................................17 12.2.1.9 Estoppel Certificate from Municipality. ...................17 12.2.1.10 Title Insurance Certificates...............................17 12.2.1.11 Updated Rent Roll..........................................18 12.2.1.12 Seller Certificate.........................................18 12.2.1.13 Organization Certifications................................18 12.2.1.14 Keys.......................................................18 12.2.1.15 Tax Bills..................................................18 12.2.1.16 Tax Reduction Rights.......................................18 12.2.1.17 Tenant Estoppels...........................................18 12.2.1.18 Leasing and Management Agreement...........................19 12.2.2 Buyer's Documents..........................................19 12.2.2.1 ...........................................................19 12.2.2.2 ...........................................................19 12.2.2.3 ...........................................................19 12.2.3 Title Insurance............................................19 12.2.4 Necessary Documents........................................19 13. DEFAULT; REMEDIES........................................................19 13.1 ...........................................................19 13.2 ...........................................................20 13.3 Buyer's Out-of-Pocket Costs................................20 iii 14. CONDITIONS PRECEDENT TO CLOSING..........................................20 14.1 Correctness of Warranties and Representations. ................21 14.2 Compliance with Terms and Conditions...........................21 14.3 Buyer's Satisfaction with Inspection...........................21 14.4 Trustee Approval...............................................21 15. PRORATIONS...............................................................21 15.1 Operating Expenses..................................................21 15.1.1 Rents..........................................................21 15.1.2 Taxes..........................................................21 15.1.3 Deposits. .....................................................22 15.1.4 Water and Sewer Charges........................................22 15.1.5 Assigned Contracts.............................................22 15.1.6 Electricity, gas, steam and fuel...............................22 15.1.7 Security Deposits..............................................22 15.2 Custom and Practice............................................22 15.3 Future Installments of Taxes...................................22 15.4 Application of Prorations......................................22 15.5 Schedule of Prorations.........................................22 15.6 Escalations....................................................22 15.7 Readjustments..................................................23 15.8 Indemnification for Seller's Tax Obligations...................23 15.9 Survival.......................................................23 16. BROKERS..................................................................23 17. ESCROW AGENT.............................................................23 17.1 Payment to Seller..............................................23 17.2 Notice of Dispute..............................................24 17.3 Escrow Subject to Dispute......................................24 17.4 Escrow Agent's Rights and Liabilities..........................24 18. GENERAL PROVISIONS.......................................................24 18.1 Notices........................................................24 18.2 Binding Effect.................................................26 18.3 Entire Agreement...............................................26 18.4 Governing Law..................................................26 18.5 No Recording...................................................26 18.6 Tender.........................................................26 18.7 Execution in Counterparts......................................26 18.8 Further Instruments............................................26 18.9 Time...........................................................26 18.10 Designation of Nominee; Assignment of Agreement................27 18.11 Effective Date.................................................27 18.12 Time for Acceptance............................................27 18.13 Confidentiality................................................27 iv 18.14 Delivery of Documents..........................................27 19. SEC REPORTING (8-K) REQUIREMENTS.........................................27 20. INDEMNIFICATION..........................................................28 21. EXCULPATION..............................................................29 22. AS-IS....................................................................29 23. Other Transactions.......................................................30 v Exhibits to Agreement of Sale "A" - Legal Description "B" - Schedule of Inventory "C" - Permitted Encumbrances "D" - Rent Roll "E" - Service Contracts "F" - Insurance "G" - Operating Statements "H" - Form of Tenant Estoppel Certificate AGREEMENT OF SALE 100 COMMERCE DRIVE AGREEMENT OF SALE made this 19th day of September, 1997, between BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust, its permitted assignee or nominee, having its principal office at 16 Campus Boulevard, Suite 150, Newtown Square, Pennsylvania 19073 ("Buyer"), and GENDER ROAD JOINT VENTURE, a Delaware partnership, having its principal office at c/o The Commonwealth Group, 62 Read's Way, New Castle, Delaware 19720 ("Seller"). BACKGROUND The Background of this Agreement is as follows: A. Seller is the owner of a certain tract of land being comprised of 6.75 plus/minus acres, together with the building and improvements thereon, including one (1) three (3)-story office building containing approximately 64,000 net rentable square feet, and accessory off-street parking, commonly known as 100 Commerce Drive, in the City of Newark, New Castle County, Delaware. B. Seller desires to sell to Buyer and Buyer desires to purchase from Seller the property referred to in this Agreement, upon the terms and conditions set forth herein. TERMS AND CONDITIONS NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and with the preceding Background paragraphs incorporated by reference, the parties hereto, intending to he legally bound hereby, covenant and agrees as follows: 1. PROPERTY BEING SOLD. Seller shall sell, transfer and convey to Buyer on the Closing Date (as hereinafter defined), 1.1 Real Property. Fee simple interest in the parcel of land, all as more fully described on Exhibit "A", with the building and improvements thereon, including one (1) three (3)-story office building containing approximately 64,000 net rentable square feet, and accessory off-street parking, commonly known as 100 Commerce Drive, City of Newark, New Castle County, Delaware, and all of the easements, licenses, rights of way, privileges, hereditaments, appurtenances, and rights to any land lying in the beds of any street, road or avenue, open or proposed, adjoining thereto, and inuring to the benefit of said land (hereinafter collectively referred to as the "Premises"); and 1.2 Personal Property. All equipment, fixtures, machinery and personalty of Seller, of every description attached to or used in connection with the Premises (and not owned by tenants under leases of the Premises), including, without limitation, those listed on the Schedule of Inventory attached hereto as Exhibit "B", all artwork, renderings, flags, awnings, trade dress, and to the extent legally assignable, all intangible personal property owned by the Seller and used in connection with the ownership, operation and maintenance of the land, improvements and other property, excluding cash on hand but including, without limitation, all contract rights, guaranties and warranties of any nature, all architects', engineers', surveyors' and other real estate professionals' plans, specifications, certifications, contracts, reports, data or other technical descriptions, reports or audits (including, without limitation, all environmental, structural and mechanical inspection reports), and all marketing materials ("Contract Documents"), all governmental permits, licenses, certificates, and approvals in connection with the ownership of the Premises ("Licenses"), all security deposits, utility deposits, escrow accounts, instruments, documents of title, general intangibles, all computers, computer software programs and data and business records pertaining to the Premises, all telephone, communications and security systems and equipment, and all of Seller's rights, claims, and causes of action if any, to the extent they are assignable, under any warranties and/or guarantees of manufacturers, contractors or installers, all rights against tenants and others relating to the Premises or the operation or maintenance thereof, including to the extent applicable, any warranties from any previous owners of the Premises (hereinafter collectively referred to as "Personal Property"); and 1.3 Leases. All leases, licenses and other occupancy agreements for any part of the Premises, and all prepaid rent and unapplied security deposits (the "Leases"); and 1.4 Right to Names. Any and all right, title and interest of Seller in and to the name of 100 Commerce Drive, and the right to all printing styles, trademarks and logos ("Name"). The Premises, Personal Property, Leases and Name are sometimes hereinafter referred to as "Property." 2. PURCHASE PRICE AND MANNER OF PAYMENT. 2.1 Purchase Price. Buyer shall pay the total sum of Five Million Five Hundred Thousand ($5,500,000) Dollars (hereinafter referred to as the "Purchase Price") subject to adjustment. 2.2 Manner of Payment. The Purchase Price shall be paid in the following manner: 2.2.1 Deposit. By delivery, upon Seller's execution and delivery of this Agreement, of Buyer's good check in the amount of Eighty-Five Thousand ($85,000) Dollars to the Title Company (hereinafter referred to as "Escrow Agent" or "Escrowee"). This sum, the sum specified in Section 2.2.2 below, and all other sums paid by Buyer to the Escrow Agent under this Agreement (hereinafter referred to as the "Deposit") shall be held by Escrow Agent in a federally-insured, segregated money market account at an institution to be designated by Buyer 2 until termination or consummation of this Agreement. Interest on the Deposit shall be credited to Buyer at Closing, or paid to the party otherwise entitled to the Deposit in the event of the termination of this Agreement prior to Closing. 2.2.2 Additional Deposit. By delivery, within two (2) business days next following the Inspection Period Expiration Date (as hereinafter defined), of Buyer's good check in the amount of One Hundred Seventy Thousand ($170,000) Dollars. 2.2.3 Cash Balance. The balance by delivery to the Seller on the Closing Date, by wire transfer, the amount of Five Million Two Hundred Forty-Five Thousand ($5,245,000) Dollars, subject to adjustment as herein provided. 2.3 Allocation. The Purchase Price shall be allocated between realty and personalty in the manner provided on Schedule 2.3 attached hereto. 3. TITLE. On the Closing Date, Seller shall convey to Buyer good and marketable fee simple title to the Premises subject only to those rights of way, easements, covenants restrictions, and objections to title (hereinafter "Permitted Exceptions") listed on Exhibit "C" hereto, unless identified by Buyer as "Title Objections" as hereinafter provided, and subject to the rights of tenants listed on the rent roll attached hereto as Exhibit "D", which title shall be insurable at regular rates by a reputable title insurance company ("Title Company") under an ALTA 1970 Form B (Revised 10/17/70 and 3/30/84) title insurance policy ("Title Policy"), with the endorsements and affirmative insurance specified in Section 12.2.1.10 below. Seller and Buyer consent to use, at Buyer's option, Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation or Congress Title Insurance Company as the Title Company. 4. COVENANTS. In addition to the covenants contained in the other Sections of this Agreement, Seller covenants that it shall: 4.1 Maintenance. At all times prior to the Closing Date, maintain the Property in good condition and repair, reasonable wear and tear and casualty alone excepted, operate the Property with first class management practices and leasing standards, and pay in the normal course of business prior to Closing, all sums due for work, materials or service furnished or otherwise incurred in the ownership and operation prior to Closing. 4.2 Alterations. Not make or permit to be made any alterations, improvements or additions to the Property without the prior written consent of Buyer, not to be unreasonably withheld or delayed , except those made by tenants pursuant to the right to do so under their Leases, or by Seller if required by applicable law or ordinance, or as required under any Lease. 4.3 Lease. Not enter into any new Lease, nor amend, modify or terminate any existing Lease without Buyer's consent, not to be unreasonably withheld or delayed. 4.4 Security Deposits. Not apply any Tenant's security deposit to the discharge of such Tenant's obligations without Buyer's consent, not to be unreasonably withheld or delayed. 3 4.5 Bill Tenants. Timely bill all Tenants for all rent billable under Leases, and use its best efforts to collect any rent in arrears. 4.6 Notice to Buyer. Notify Buyer promptly of the occurrence of any of the following: (i) a fire or other casualty causing damage to the Property, or any portion thereof; (ii) receipt of notice of eminent domain proceedings or condemnation of or affecting the Property, or any portion thereof; (iii) receipt of notice from any governmental authority or insurance underwriter relating to the condition, use or occupancy of the Property, or any portion thereof, or any real property adjacent to any of the Property, or setting forth any requirements with respect thereto; (iv) receipt or delivery of any default or termination notice or claim of offset or defense to the payment of rent from any tenant; (v) receipt of any notice of default from the holder of any lien or security interest in or encumbering the Property, or any portion thereof; (vi) a change in the occupancy of the leased portions of the Property; (vii) notice of any actual or threatened litigation against Seller or affecting or relating to the Property, or any portion thereof; or (ix) the commencement of any strike, lock-out, boycott or other labor trouble affecting the Property, or any portion thereof. 4.7 Update Rent Roll. Provide Buyer with monthly updates of the rent roll attached as Exhibit "D", each warranted by Seller to be true, correct and complete, with a final update as of one day prior to the Closing Date, also warranted by Seller to be true, correct and complete. 4.8 Comply with Leases. Perform all obligations of the landlord as required by the Leases or by any order or direction of any governmental authority having jurisdiction thereof, and to the extent required by law or by any of the Leases, maintain all security deposits held under all Leases in a segregated account, with interest thereon as required. 4.9 No New Agreements. Except for agreements which can be terminated on not more than thirty (30) days' notice, not enter into any other agreements which affect the Property or the transactions contemplated by this Agreement, without the prior written consent of Buyer, not to be unreasonably withheld or delayed; and not permit the creation of any liability which shall bind Buyer or the Premises after Closing. 4 4.10 Tax Disputes. Notify Buyer of any tax assessment disputes (pending or threatened) prior to Closing, and not agree to any changes in the real estate tax assessment, nor settle, withdraw or otherwise compromise any pending claims with respect to prior tax assessments, without Buyer's prior written consent. If any proceedings shall result in any reduction of assessment and/or tax for the tax year in which the Closing occurs, it is agreed that the amount of tax savings or refund for such tax year, less the reasonable fees and disbursements in connection with such proceedings, shall be apportioned between the parties as of the date real estate taxes are apportioned under this Agreement. The parties agree that from and after the execution and delivery of this Agreement, Buyer, at its sole cost, shall have the right to appeal the current tax assessment of each tax parcel comprising the Premises. Buyer shall consult with Seller prior to filing tax appeal documents, and shall afford Seller reasonable advance notice prior to any public hearings or proceedings at which said appeal will be considered. Seller agrees that Buyer may file such appeals in its name or in Seller's name, as may be required, and Seller shall cooperate with Buyer in the prosecution of such appeal; provided, however, that Buyer agrees to pay the reasonable legal fees incurred by Seller, if any, in connection with furnishing such cooperation. 4.11 No Removal of Personalty. Not remove any non-consumable Personal Property from the Premises without replacing it with similar personal property, new and of equal or better quality. 5. REPRESENTATIONS AND WARRANTIES. In order to induce Buyer to enter into this Agreement, Seller hereby represents and warrants to Buyer that the following representations and warranties are true now and will be true at Closing: 5.1 Seller's Authority For Binding Agreement. Seller is a duly authorized and validly existing partnership formed under the laws of the State of Delaware. Seller has full power, right and authority to own its properties, to carry on its business as now conducted, and to enter into and fulfill its obligations under this Agreement. Each of the persons executing this Agreement on behalf of Seller is authorized to do so. This Agreement is the valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms. The execution and delivery of this Agreement and compliance with its terms will not conflict with or result in the breach of any law, judgement, order, writ, injunction, decree, rule or regulation, or conflict with or result in the breach of any other agreement, document or instrument to which Seller is a party or by which it or the Property is bound or affected. 5.2 Employment on "At-Will" Basis. All persons and entities presently employed by Seller in connection with the operation and maintenance of the Premises are employed on an "at will" basis; are dischargeable upon thirty (30) days notice, and, unless otherwise directed by Buyer, shall be terminated by Seller as of Closing. There are no labor disputes pending, nor to the best of Seller's knowledge, contemplated pertaining to the operation or maintenance of the Premises, or any part thereof. Seller is not party to any collective bargaining agreement or labor contract; nor has Seller agreed to recognize any union or collective bargaining unit. Seller has not received any requests from any party for recognition as a representative of employees for collective bargaining purposes; nor has any union or other 5 collective bargaining unit been certified as representing any of Seller's employees. Seller has complied in all respects with all applicable laws relating to the employment of labor, including, without limitation, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), coverage requirements of group health plans, and those relating to wages, hours, collective bargaining, unemployment insurance, workers compensation, equal employment opportunity, age and handicapped discrimination, immigration control and the payment and withholding of taxes. Seller does not have any defined benefit, defined contribution, deferred compensation, profit sharing or retirement or severance arrangements, whether legally binding or not, in which its personnel are eligible to participate; nor is Seller presently paying any pension, deferred compensation or retirement allowance to any person, and Seller has no obligations to continue or to fund such compensation or other arrangements. Seller has no employment agreements, either written or oral, with any person which would require Buyer to employ any such person after the date hereof. Seller acknowledges that it is aware that Buyer may, but shall have no obligation to, offer employment to any of the current employees of Seller. Prior to Closing, Seller shall have paid all of its employees all accrued compensation, including, without limitation, vacation, sick pay or other similar benefits accrued through the date of Closing. 5.3 Service Contracts. Exhibit "E" attached hereto is a complete list of all existing service, equipment, supply and maintenance contracts with respect to or affecting the Property (the "Service Contracts"), and each of such Service Contracts is terminable at will without penalty or cancellation fee upon no more than thirty (30) days notice but, unless otherwise directed by Buyer, shall not be terminated by Seller as of Closing. No written notice of default or breach by Seller in the terms of any of such Service Contracts have been received by Seller. Seller has performed, and at Closing shall have performed, all obligations which it has under said Service Contracts. Anything in this Section 5.3 to the contrary notwithstanding, Seller represents and warrants that any and all existing management agreements and exclusive brokerage or leasing agreements shall, unless otherwise directed by Buyer in writing, or unless otherwise agreed by the parties in writing, be terminated as of Closing, Seller having fully paid and discharged any and all obligations accruing thereunder, and Buyer shall assume no liability under or in respect of any such agreements. 5.4 Condemnation. There is no condemnation or eminent domain proceeding pending with regard to any part of the Property, and to the best of Seller's knowledge, no such proceedings are proposed. 5.5 No Lawsuits. There are no claims, lawsuits or proceedings pending, or to the best of the Seller's knowledge, threatened against or relating to Seller or the Property, or which could affect them, or either of them, in any court or before any governmental agency, except for actions for possession, damages and or rent, if any, against defaulted tenants as disclosed in Exhibit "D". 5.6 No Tax Assessments. There are no public improvements in the nature of off-site improvements, or otherwise, which have been ordered to be made and/or which have not 6 heretofore been assessed, and, to Seller's knowledge, there are no special or general assessments currently affecting or pending against the Property, except as set forth in the Title Binder. 5.7 Leases. There are no oral or written leases or rights of occupancy or grants or claims of right, title or interest in any portion of the Premises other than the leases (the "Leases") listed on the rent roll attached hereto as Exhibit "D". Exhibit "D" identifies (i) each tenant of the Premises, (ii) the date of that tenant's lease, (iii) the expiration date of that tenant's lease, (iv) the annual and monthly minimum rental charge, the tenant's share of building operating costs (including, without limitation, taxes) and any and all costs, expenses and other charges payable by the tenant under the Lease, (v) arrearages, if any, and whether the latest rent due has been paid, (vi) the amount of prepaid rent, if any, (vii) a description of the documents constituting said tenant's Lease, including all amendments, modifications, and letter agreements; (viii) the amount or description of any concessions, allowances, rebates, refunds, escrow or security deposits made by the tenant under said tenant's Lease; (ix) any options to renew, extend, purchase, cancel or terminate; (x) any defaults, outstanding notices of defaults of any kind or nature whatsoever, claims of defaults or similar claim under Leases, and (xi) such other information as Buyer or Buyer's investors or lenders may reasonably request. No tenant has advised Seller that Seller is in default under any of the Leases, or asserted any claim or basis for any claim for free or reduced rent or right of setoff against the landlord or the rent under the Leases, and Seller and its agent have no actual knowledge of any default or any event which has taken place which, with the passage of time, or the delivery of notice, or both, could become an event of default. Seller has the sole right to collect rents under the Leases, and neither such right nor any of the Leases has been assigned, pledged, hypothecated or otherwise encumbered by Seller except as additional collateral for the existing mortgage upon the Premises which shall be satisfied at or before Closing. No holder of any such collateral assignment has asserted or exercised any of its right to collect such rents. Each of the Leases is in the standard form of lease previously delivered to Buyer, is valid and subsisting and in full force and effect, the tenant is in actual possession in the normal course, and the rents set forth in Exhibit "D" are the actual rents, income and charges being collected by Seller under the Leases. Any tenant improvements which Seller is obligated to complete pursuant to any Lease (or any unsigned lease proposal or lease amendment) has been completed as of this date or shall be completed as of Closing, and all costs therefore have been or shall be paid by Seller, and all of Seller's work has or shall have been accepted by the Tenant without exception on or before Closing, other than routine punchlist items, which items shall remain the responsibility of Seller following Closing, and which obligation shall expressly survive Closing. The amount of each security deposit contains, where required by law or otherwise applicable, interest which has accrued in accordance with law. No tenant or other person has any right or option to acquire the Premises, or any part thereof, or to terminate any of the rights currently appurtenant to the Premises, and there are no restrictive covenants in any Leases. No tenant of the Premises under any of the Leases has, and shall not at Closing have, prepaid any rent under any of the Leases for more than one (1) month. Except as otherwise set forth on Exhibit "D", no security deposits by tenants have heretofore been returned or applied to charges against the tenants. 7 5.8 Compliance with Law. (i) The Property and the continued operation and use thereof comply with all applicable requirements of federal, state and local law, and all applicable requirements of governmental bodies or agencies having jurisdiction thereof, and to the best of Seller's knowledge, no portion of the Property lies within a flood hazard area, flood plain or wetland except as may be disclosed on the survey, if any, supplied by Seller or obtained by Buyer, or on the Record Plans for the Property; and there are no outstanding notices of any violations issued by governmental authority having jurisdiction over the Property. The zoning classification of the Property is O-2. Not more than ten (10) days prior to Closing, Seller shall provide Buyer with a certificate from the zoning code enforcement (or other appropriate) officer of the City of New Castle County, dated no earlier than thirty (30) days prior to Closing, confirming that no portion of the Property is in violation of any applicable codes (provided that such confirmation shall be within the province of such officer), and that the Property is in compliance with applicable zoning restrictions. (ii) To the best of Seller's knowledge, (1) no Hazardous Substances (defined below) and no Hazardous Wastes (defined below) are present on the Property including, without limitation, asbestos, flammable substances, explosives, radioactive materials, hazardous wastes, toxic substances, pollutants, pollution, contaminant, polychlorinated byphenyls ("PCBs"), urea formaldehyde foam insulation, radon, corrosive, irritant, biologically infectious materials, petroleum product, garbage, refuse, sludge, hazardous or waste materials, and (2) there has been no use of the Property that may, under any federal, state or local environmental statute, ordinance or regulation, require, at any time, any closure or cessation of the use or occupancy of the Property and/or impose, at any time, upon the owner of the Premises any clean-up or other monetary obligation. Seller has not been identified in any litigation, administrative proceeding or investigation as a responsible party or potentially responsible party for any liability for clean-up costs, natural resource damages or other damages or liability for prior disposal or release of Hazardous Substances, Hazardous Wastes or other environmental pollutants or contaminants, and no lien or superlien has been recorded, filed or otherwise asserted against any real or personal property of Seller for any clean-up costs or other responses costs incurred in connection with any environmental contamination that is attributable, in whole or in part, to Seller. Seller hereby indemnifies and holds Buyer harmless of, from and against any and all liability, loss or damage suffered or incurred as a result of a claim, demand, cost or judgment in favor of a third party, including, without limitation, any governmental authority, arising from the deposit, storage, disposal, burial, dumping, injecting, spilling, leaking, or other placement or release in or on the Premises of Hazardous Substances or Wastes first occurring during Seller's period of ownership. For purposes of this Agreement, "Hazardous Substances" means those elements and compounds which are designated as such in Section 101(14) of the Comprehensive Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601 (14), as amended, all petroleum products and by-products, and any other hazardous substances as that term may be further defined in any and all applicable federal, state and local laws; and "Hazardous Wastes" means any hazardous waste, residential or household waste, solid waste, or other waste as defined in applicable federal, state and local laws. Seller has not received any summons, citation, directive, letter or other communication, written or oral, from any governmental or quasi-governmental authority concerning any intentional or unintentional action or omission on Seller's part which (a) resulted 8 in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous Wastes, or (b) related in any way to the generation, storage, transport, treatment or disposal of Hazardous Substances or Hazardous Wastes. To the best of Seller's knowledge, neither the Premises nor any portion thereof, have been identified on the federal CERLIS, the National Priorities List (40 C.F.R. Part 300, App. B) or any state or local list of potential hazardous waste disposal sites or as an industrial establishment. Seller has conducted a complete and thorough inspection and test of the underground storage tanks located on the Premises, if any, and Seller has confirmed that the results thereof show compliance with all requirements of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Sections 6901 et seq. and all other applicable federal, state and local laws, and Seller has taken all other necessary and appropriate action to comply fully therewith. 5.9 Insurance. Exhibit "F" attached hereto contains a true and correct description of all insurance policies affecting the Property and the operation thereof. All of said insurance policies shall remain in full force and effect until the completion of Closing hereunder. Seller has not received any written notice from any insurance company board of fire underwriters or rating organization (or other body exercising similar functions) (i) claiming any defects or deficiencies which have not been addressed and fully cured or corrected, or (ii) requesting the performance of any repairs, alterations or other work which have not been performed, or (iii) claiming any default which, if not corrected, would result in a cancellation of insurance coverage. 5.10 Current Use Unrestricted. The current use of the Premises as an office building with accessory off-street parking is free from any restrictions which restrict or prevent the continued use of the Premises as such. 5.11 No Brokers. No brokerage or leasing commission or other compensation is now, or will at Closing be, due or payable to any person, firm, corporation, or other entity with respect to or on account of any of the Leases, or any extensions or renewals thereof. 5.12 Utilities. All adequate utilities, useable public sanitary and storm sewers, public water facilities, electric facilities and, if any, gas facilities (collectively, the "Utilities"), are installed in, and are duly connected to, the Premises, and can be used without charge except the normal and usual metered utility charges and water and sewer charges. All Utilities required for the operation of the Property either enter the Property through adjoining public streets or, if they pass through adjoining public land, do so in accordance with valid public easements or private easements which will inure to the benefit of Buyer at no cost to the owner of the Property. All of said Utilities are installed and operating and all installation, connection and "tap-in" charges have been paid for in full. 5.13 Permits, Approvals and Certificates. All required certificates of occupancy for the Property and for separately demised spaces at the Property, and all other licenses, permits, authorizations and approvals necessary for the operation of the Property, have been validly issued and are in good standing and shall remain so upon consummation of Closing. All charges and fees for such have been paid in full. 9 5.14 Good Title to Property. Seller holds good and marketable, indefeasible fee simple title to the Property, free and clear of liens and encumbrances, other than the lien of security interests securing any existing mortgage loans which shall be paid and discharged at or before Closing, and the Permitted Encumbrances. 5.15 All Taxes and Assessments Paid. Seller will have paid prior to Closing, all taxes and assessments, including assessments payable in installments, which are to become due and payable and/or a lien on the Property, except for taxes for the current year which shall be prorated at Closing. 5.16 FIRPTA. Seller is not a "foreign person" as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of 1954, as amended (the "Code"). 5.17 Operating Statement. Exhibit "G" is a correct and complete list of all (a) actual expenses of the Property, including real estate taxes, heat, electric, insurance, water, sewer, gas, fuel oil, trash removal, maintenance and repairs for the three years immediately preceding the date of this Agreement; and (b) actual income collected from rents and other charges paid by tenants (but specifically excluding interest in reserves, tenant security deposits held as such, and interest thereon) for the three (3) years immediately preceding this Agreement. 5.18 Mechanic's Liens. No work has been performed or is in progress at, and no materials have been furnished to the Property which, though not presently the subject of, might give rise to construction, mechanic's, materialmen's, or other liens against the Property or any portion thereof, except that for which full and complete releases have been obtained. If any lien for any such work is filed before or after Closing, Seller shall promptly discharge the same. 5.19 Inventory Schedule. The Schedule of Inventory contains a correct and complete list of personal property owned by Seller and located at or used in connection with the operation of the Property. 5.20 Charges, Fees and Assessments. Any and all applicable charges, fees and assessments (including condominium fees, office building association fees, and the like, to the extent applicable) and any and all other fees, assessments, charges and other sums due under declarations, cross-easements and like agreements to which the Property or any portion thereof may be subject, have been paid, and no special assessments thereunder are pending, and all consents and approvals required to be obtained under any such declarations, cross-easements and like agreements have been obtained pursuant to the requirements of such documentation. 5.21 Rights to Purchase. There are no outstanding agreements, options, rights of first refusal, conditional sales agreements or other agreements or arrangements, whether oral or written, regarding the purchase and sale of the Property, or which otherwise affect any portion of or all the Property. 5.22 No Outstanding Obligations. All debts, liabilities, and obligations of Seller arising out of the construction, ownership, and operation of the Property including, but not limited to, construction costs, salaries, taxes, accounts payable and the like, have been paid as 10 they became due and payable and shall continue to be so paid from the date hereof until the Closing Date. No debts, liabilities, claims, or obligations (whether known or unknown, accrued, absolute, contingent, or otherwise) shall be outstanding as of the Closing Date. 5.23 Access. All curb cut and street opening permits or licenses required for vehicular access to and from the Property to any adjoining public street have been obtained and paid for by Seller and shall be in full force and effect at the Closing. 5.24 Rollback Taxes. The Property is not, and to Seller's knowledge has not been, subject to any roll-back or agricultural taxation or other tax abatement program. 5.25 Development Agreements. Seller is in compliance with and has fully paid and discharged all obligations arising under any and all development, tri-party and like agreements, and any and all other agreements with county, municipal and other governmental and quasi-governmental agencies and authorities respecting the ownership, development and operation of the Property and all portions thereof. 5.26 Correct Copies of Documents. Where copies of any documents have been delivered by Seller to Buyer, whether prior to or pursuant to this Agreement, such copies: (i) are exact copies of the originals of said documents, as executed and delivered by all of the parties thereto; (ii) to the best of Seller's knowledge, constitute, in each case, the entire agreement between the parties thereto with respect to the subject matter thereof, and the original instruments in the form delivered to Buyer, are now in full force and effect, and valid and enforceable in accordance with their respective terms, and no party thereto is in default, and no claim of default by any party has been made or is now pending and there does not now exist any default which, after either the giving of notice or the passing of time, or both, will or may constitute a default, or would excuse performance by any party thereto; and (iii) have not been changed or amended except for amendments, if any, specifically referred to therein. 6. POSSESSION. Possession of the Premises is to be given to Buyer, subject to the right of tenants under the Leases on the Closing Date, by delivery of the Deed, and all keys, combinations and security codes at Closing. 7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY. 7.1 Title Binder. On or before five (5) business days from the execution of this Agreement, Seller shall have delivered to Buyer a copy of its title commitment or policy for the Property (complete with copies of all exceptions to title), and within ten (10) business days after the receipt of same, Buyer shall secure a current title commitment (the "Title Binder") from the Title Company, and shall have until the Inspection Period Expiration Date (as hereinafter defined) to examine the condition of title, including the terms and provisions of all items and documents referred to in the Title Binder, and all information regarding title as disclosed on the Survey (hereinafter defined), and to approve or disapprove the same. If Buyer shall disapprove the condition of title, such disapproval shall be set forth in a notice given to Seller (the "Disapproval Notice") identifying the condition of title to the Property or any of the terms, provisions or contents of said items, documents or Survey which are disapproved by Buyer (the "Title 11 Objections"). Subject to the provisions of the succeeding portion of this Section 7.1, Seller shall have until the date which is ten (10) days after the date of the Disapproval Notice (the "Title Cure Expiration Date") in which to cure or eliminate all items which Buyer disapproves in the Disapproval Notice, and to furnish evidence satisfactory to Buyer and the Title Company that all such items have been cured or eliminated or that arrangements have been made with the Title Company and any parties in interest to cure or eliminate the same at or prior to the Closing. If Seller fails to remove any Title Objection in accordance with the provisions of the immediately preceding sentence, Buyer, nevertheless, may elect (at or prior to the Closing) to consummate the transaction provided for in this Agreement subject to any such Title Objection(s) as may exist as of the Closing with a credit against the Purchase Price equal to the sum necessary to remove any lien of a fixed or ascertainable amount . If Buyer shall not so elect, Buyer may terminate this Agreement by notice in writing to Seller, whereupon the Deposit shall be immediately refunded to Buyer, and this Agreement shall be null and void, and the parties hereto shall be relieved of all further obligations and liability under this Agreement. 7.2 Survey. Within ten (10) days after the date of this Agreement, at Buyer's cost, Seller shall deliver to Buyer a current survey of Property (the "Survey"), prepared by a duly licensed land surveyor acceptable to Buyer. The Survey shall be currently dated, shall show the location on the Property of all buildings and improvements, building and set-back lines, easements, rights-of-way, encroachments, elevations between public roads providing access to the Property, and the boundary of the Property, and other such matters affecting the Property whether physically apparent from the ground, of record in public offices, or otherwise, and shall contain a legal description of the boundaries of the Premises by metes and bounds which shall include a reference to the recorded plat, if any. The surveyor shall certify to Buyer and to the Title Company and to any lender making a loan to Buyer secured by the Property that the Survey is correct and was made on the ground; and that there are no visible discrepancies, conflicts, encroachments, overlapping of improvements, violations of set-back lines, easements, rights-of-way or other such matters affecting the Property except as are shown on the Survey, and that the Survey conforms to all ACTA/ACSM and Pennsylvania Land Title Association standards and requirements for a Class A Survey. Any and all recorded matters shown on said Survey shall be legibly identified by appropriate volume and page recording references with dates of recording noted. Buyer shall have until the Inspection Period Expiration Date to approve or disapprove the material contained thereon. If Buyer shall disapprove such Survey, such disapproval shall be set forth in a Disapproval Notice as hereinabove provided in Section 7.1, and the provisions of Section 7.1 with respect to Disapproval Notices shall apply. 7.3 Physical and Financial Inspection. For a period (the "Inspection Period") commencing on the second (2nd) business day next following the date upon which Buyer shall receive from Seller a fully-executed counterpart of this Agreement, and expiring twenty (20) days thereafter (such date is herein referred to as the "Inspection Period Expiration Date"), Buyer shall have the right to have performed a physical and mechanical inspection, measurement and audit of the Property and an inspection of all books and records and financial information pertaining thereto, and Seller shall cooperate with Buyer and shall furnish to Buyer such information, materials and documents as Buyer may reasonably request and shall have its accountant or internal controller available throughout such period to assist in Buyer's inspection and review. The inspection, audit and measurement of the Property's operation, condition and maintenance 12 shall include, without limitation, such environmental and engineering inspections, reviews and assessments that Buyer deems appropriate. If Buyer fails to close hereunder for any reason other than Seller's breach or default, Buyer shall, to the maximum extent practicable, restore the Property to the condition existing immediately before such tests and assessments. In the event Seller shall fail to deliver or make available any item or information material to Buyer's review of the Property and required to be delivered or made available pursuant to the terms of this Section within five (5) business days next following the date upon which Buyer shall receive from Seller a fully-executed counterpart of this Agreement, then at Buyer's written election, the Inspection Period Expiration Date (and the Closing Date) shall be extended by one day for each day that the delivery or availability of such item is delayed. If Buyer, at Buyer's sole and absolute discretion, shall find such inspection(s) to be unsatisfactory for any reason whatsoever, Buyer shall have the right, at its option, to terminate this Agreement on or before the Inspection Period Expiration Date, and upon such termination, the Deposit shall be immediately refunded to the Buyer, and thereupon the parties hereto shall have no further liabilities one to the other with respect to the subject matter of this Agreement. Buyer agrees that it shall not unreasonably interfere with tenants in performing its inspection. In connection with such inspection, and without limiting the generality of Seller's obligations hereunder, Seller agrees to deliver to Buyer, within five (5) days: 7.3.1 Leases. Copies of all Leases for the Property as of the date hereof, certified by Seller to be true, complete and correct, and lease abstracts respecting each Lease; 7.3.2 Contracts, Licenses, Permits. Copies of the Contract Documents, the Licenses, all building permits, certificates of occupancy, insurance policies applicable to the Property and any other documents evidencing rights described in Section 1.2 hereof; 7.3.3 Utility Costs. A break-down of utility costs for the period the Property has been owned by Seller; 7.3.4 Inventory. Invoices, bills of sale, and other evidence supporting the Schedule of Inventory; 7.3.5 Three Years' Maintenance Expenses. Information concerning maintenance costs of the Property for the past three years, or lesser period, if owned less than three years by the Seller; 7.3.6 Three Years' Tax Bills. A copy of tax bills (i) for the current year, and (ii) if available, for the preceding two years; 7.3.7 Three Years' Operating Statements. Statements of operation of the Property for the past three years, or lesser period, if owned less than three years by Seller, and like statements for the balance of such three year period during which operations were by a prior owner, if available, and if not available, any statements as were received from such prior owner, and such other and further information as Buyer shall reasonably require in order to obtain a certified audit of the operation of the Property prepared in accordance with generally accepted accounting principles consistently applied, by an independent certified public accounting firm selected and paid for by Buyer; 13 7.3.8 Schedule of Violations. A schedule setting forth all violations of any law, ordinance, regulation, rule or requirement of any governmental body having jurisdiction, whether existing or prospective, of which Seller has received written notice, issued or noted by any governmental body during the past three years, and copies of any notices, terminations or correspondence relating thereto; 7.3.9 Schedule of Notices. A schedule of any written demands, requests, requirements or recommendations regarding the operation, maintenance, repair or replacement of the Property or any portion thereof, of which Seller has received notice during the past three years, from the holder of any mortgage or deed of trust or any insurance company or any board of fire underwriters or real estate associations or like body, and copies of all correspondence relating thereto; 7.3.10 Schedule of Replacements and Repairs. All documentation in Seller's possession regarding replacements and repairs to the Property; 7.3.11 Zoning, Site Plan, Subdivision Plan or Plat. All conditional and permanent zoning, site plan, subdivision, building, housing, safety, fire and health approvals, including, without limitation, the local governmental applications, resolutions and approvals supporting the same; 7.3.12 Intentionally Omitted. 7.3.13 Takings or Changes. Copies of all written notices to Seller of proposed or threatened takings or changes with respect to the Property or major access roads within a reasonable radius which would affect the access to the Property, or any portion thereof, by prospective occupants; 7.3.14 Tax Assessments, Appeals and Increases. Copies of all written notices to Seller of all filed, proposed or threatened tax assessment appeals or tax assessment increases related to the Premises; 7.3.15 Litigation. Copies of all pending and written notices to Seller of threatened litigation, including litigation involving tenants, affecting the Property or this transaction; 7.3.16 Insurance Policies. Copies of all insurance policies of Seller related to the Property; 7.3.17 Schedule of Employees. A schedule of all current employees of the Property, setting forth the name, residence, salary, hourly wages, benefit package, bonuses, vacation and sick pay and other prerequisites of their employment; and 7.3.18 Title Information. Seller's most recently dated title report or title commitment respecting the Premises. 14 7.4 Seller's Failure to Deliver. If Seller shall have failed to deliver to Buyer all material documents required to be delivered under Section 7.3 hereof, Buyer may, at its option, at any time on or after such date, but prior to the curing of such failure by Seller, give Seller a five (5) day written notice specifying such default, and if Seller fails to cure such default within such five (5) day period, Buyer may terminate this Agreement, receive the return of the Deposit and pursue any other remedy available to it pursuant to the provisions hereof. 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of Buyer and Seller set forth herein shall survive Closing and delivery of the deed for the applicable period of the statute of limitations pertaining thereto. 9. FIRE OR OTHER CASUALTY. 9.1 Maintain Insurance. Seller shall maintain in effect until the Closing Date the insurance policies (or like policies) now in effect with respect to the Premises and Personal Property as set forth in Exhibit "F". 9.2 Minimal Damage. If prior to the Closing Date any portion of the Property is damaged or destroyed by fire or other casualty, and the cost of repair or restoration thereof shall be $50,000 or less (as established by good faith estimates obtained by Buyer), this Agreement shall remain in force. 9.3 Substantial Damage. If prior to the Closing Date any portion of the Property is damaged or destroyed by fire or other casualty, and the cost of repair or restoration thereof shall be more than $50,000 (as established by good faith estimates obtained by Buyer), Buyer may within ten (10) days after receipt of notice ("Damage Notice") of said damage or destruction, terminate this Agreement by giving written notice thereof to Seller ("Buyer's Notice of Election"), and if this Agreement is so terminated, then the Deposit shall be immediately refunded to Buyer, and thereafter neither party shall have any further liability hereunder thereafter. If Buyer does not so terminate this Agreement, it shall remain in full force and effect, and the provisions of Section 9.4 below shall apply. 9.4 Closing After Substantial Damage. So long as this Agreement shall remain in force under Section 9.2 or 9.3, then either (a) (i) all proceeds of insurance collected prior to Closing, plus the amount of deductible under Seller's insurance policy, shall be adjusted subject to Buyer's approval and participation in any adjustment, and shall be credited to Buyer against the Purchase Price payable by Buyer at Closing, and (ii) all unpaid claims and rights in connection with losses shall be assigned to Buyer at Closing, or, (b) at Buyer's option, Seller shall (i) restore the Property as soon as reasonably practicable to its condition immediately preceding the casualty, (ii) include Buyer, and obtain Buyer's approval to, any adjustments made by Seller. 9.5 Rent Insurance. All rental loss insurance and the proceeds thereof allocable to any period subsequent to Closing shall be paid or assigned to Buyer at Closing. 10. CONDEMNATION. If, prior to the Closing Date, all or any portion of the Premises is taken by eminent domain or a notice of any eminent domain proceedings with respect 15 to the Premises or any part thereof is received by the Seller, then Seller shall within five (5) days thereafter give notice thereof to Buyer and Buyer shall have the option to (a) complete the purchase hereunder or (b) if such taking, in Buyer's sole and absolute discretion, materially affects the Premises or its current economic viability, terminate this Agreement, in which event the Deposit shall be immediately refunded to Buyer, and this Agreement shall be null and void. Buyer shall deliver written notice of its election to the Seller within ten (10) days after the date upon which the Buyer receives written notice of such eminent domain proceedings. If notice of condemnation is received by Buyer and it fails to deliver said written notice of its election within said time period, such failure shall constitute a waiver by Buyer of its right to terminate this Agreement. If this Agreement is not so terminated, Buyer shall be entitled to all awards or damages by reason of any exercise of the power of eminent domain or condemnation with respect to or for the taking of the Premises or any portion thereof, and until such time as closing has occurred, or this Agreement terminates. Any negotiation for, or agreement to, and all contests of any offers and awards relating to eminent domain proceedings shall be conducted with the joint approval and consent of the Seller and the Buyer. 11. Expense Allocations. 11.1 Seller shall pay for one-half of all applicable realty transfer taxes related to the execution, delivery and recording of the Deed, Bill of Sale, and other Closing Documents, and all related recording charges. 11.2 Buyer shall pay for one-half of all applicable realty transfer taxes, for Buyer's title examination, the survey and for Buyer's title examination and premiums. 11.3 Buyer and Seller shall be responsible for paying their own attorney's fees in connection with this transaction. 12. CLOSING. 12.1 Time and Date and Place. The closing ("Closing") on the sale of the Property (herein referred to as the "Closing Date") shall take place at a time specified by Buyer in writing to Seller at least five (5) days prior to the specified Closing Date, but in any event no later than September 19, 1997, at the offices of Pepper, Hamilton & Scheetz, 3000 Two Logan Square, Eighteenth & Arch Streets, Philadelphia, PA, commencing at 10:00 a.m. 12.2 Documents. At Closing, the parties indicated shall simultaneously execute and deliver the following: 12.2.1 Seller's Documents and Other Items. Seller shall execute and deliver or cause to be executed and delivered to Buyer in proper form for recording: 12.2.1.1 Deed. A special warranty deed prepared by Buyer's counsel in form acceptable to Seller (the "Deed"), conveying the Premises to Buyer, duly executed by Seller for recording. The Deed description shall be based upon the metes and bounds description attached as Exhibit "A", unless Buyer requests that Seller convey the Premises by the 16 metes and bounds description shown on the new ALTA/ACSM survey, if any, obtained by Buyer, in which event the Premises shall be so conveyed. 12.2.1.2 Bill of Sale. A warranty bill of sale prepared by Buyer's counsel in form acceptable to Seller, assigning, conveying and transferring to Buyer, all of the Personal Property. 12.2.1.3 Original Leases. All original Leases, tenant files, tenant correspondence and repair records, certified by Seller as being true, correct and complete. 12.2.1.4 Original Licenses, Contract Documents and Other Personal Property. All original Licenses, Contract Documents, and other Personal Property described in Section 1.2 of this Agreement, certified by Seller as being true, correct and complete. 12.2.1.5 Assignment of Leases. An assignment and assumption agreement with reciprocal indemnities, prepared by Buyer's counsel in form acceptable to Seller (the "Assignment"), duly executed by Seller and Buyer, assigning, conveying and transferring to Buyer the Leases. 12.2.1.6 Assignment of Licenses, Contract Documents and Other Personal Property. An assignment agreement prepared by Buyer's counsel, in form acceptable to Seller, assigning, conveying and transferring to Buyer the Licenses, Contracts Documents and Other Personal Property, including, specifically, the Names. 12.2.1.7 FIRPTA Certificates. All certificate(s) required under Section 1445 of the Code. 12.2.1.8 Tenant Letter. Letters to each tenant advising of the change in ownership and directing the payment of rent to such party as the Buyer shall designate, said letter to be in form acceptable to Buyer. 12.2.1.9 Estoppel Certificate from Municipality. All certificate(s) required by Section 5.8 hereof, and any other certificates required by New Castle County, or the State of Delaware as a condition of the conveyance of the Premises or the recording of the Deed. 12.2.1.10 Title Insurance Certificates. Such affidavits of title or other certifications as shall be required by the Title Company to insure Buyer's title to the Premises as set forth in Section 3, and to provide affirmative endorsements (a) against mechanic's liens, (b) insuring against any violation of existing covenants, conditions or restrictions, and insuring that future violation will not result in forfeiture of title, (c) insuring that all foundations in place as of the date of such policy are within the lot lines and applicable set back lines, (d) insuring that the buildings and structures on the Premises do not encroach onto adjoining land, or onto any easements, (e) insuring that confirming that there are no encroachments of improvements from adjoining land onto the Premises (f) removing any exceptions for matters 17 which an accurate survey would disclose, and (g) providing affirmative insurance with respect to such other matters as Buyer shall reasonably specify. 12.2.1.11 Updated Rent Roll. An updated schedule of Tenant Leases, containing all information required to be set forth in Exhibit "D", which schedule is correct and complete as of the date of closing. 12.2.1.12 Seller Certificate. A written certification confirming that as of Closing no representation or warranty of Seller contained in this Agreement, nor any document or certificate delivered to Buyer pursuant to this Agreement or in connection with the transaction contemplated hereby, contains any untrue statement of a material fact or knowingly omits to state a material fact necessary to make any representation or warranty contained herein misleading. 12.2.1.13 Organization Certifications. Confirmation of the good standing and existence of Seller and the due authority of those executing for them, including, without limitation, the following documents issued no earlier than 30 days prior to Closing: (a) good standing certificate in state of organization and in the State in which the Premises are located, (b) articles of incorporation, partnership agreement or other formation instrument certified by the secretary of state of the state of incorporation, (c) a certificate from the secretary of the corporation or managing general partner of the partnership confirming the incumbency of the signatories and the current force and effect of the resolution authorizing their execution of the documents required under this Agreement. 12.2.1.14 Keys. All keys, combinations and security codes for all locks and security devices on the Property; 12.2.1.15 Tax Bills. Current tax bills and, if available, tax bills for each of the years of Seller's ownership of the Property; 12.2.1.16 Tax Reduction Rights. An instrument assigning to Buyer any claims for the reduction of real or personal property taxes assessed against any portion of the Property for the fiscal year in which the Closing takes place; any refund for such year shall be prorated when received; 12.2.1.17 Tenant Estoppels. Seller shall obtain and deliver to Buyer, at least five (5) business days prior to Closing, estoppel certificates in substantially the form attached hereto as Exhibit "H" from The Traveler's Bank, KCI Technologies, Inc. and Blaze Systems Corporation (the "Estoppels"). An estoppel certificate which contains material discrepancies, or any statements inconsistent with representations and warranties of Seller contained in this Agreement and for which Seller does not provide Buyer with an explanation in all respects satisfactory to Buyer, shall not be included when determining the sufficiency of the Estoppels to meet the required percentage set forth above. 12.2.1.18 Leasing and Management Agreement. A leasing and management agreement prepared by Buyer's counsel in form acceptable to Seller (the "Leasing 18 and Management Agreement") duly executed by Buyer and Commonwealth Management Group, Ltd., pursuant to which Commonwealth Management Group, Ltd. shall lease and manage the Property on the terms and conditions more fully set forth therein. 12.2.2 Buyer's Documents. Buyer shall deliver or cause to be delivered to Seller: 12.2.2.1 The amounts required to be paid to Seller pursuant to this Agreement; 12.2.2.2 Confirmation of the existence and subsistence of Buyer, and the authority of those executing for Buyer, including, without limitation, the following documents issued no earlier than thirty (30) days prior to Closing: (a) good standing certificate in State of Maryland, (b) Buyer's Amendment and Restatement of Declaration of Trust filed on August 27, 1996, as amended, (c) a certificate from any officer of Buyer confirming the incumbency of the signatories and the current force and effect of the resolution authorizing their execution of the documents required under this Agreement. 12.2.2.3 Leasing and Management Agreement. Buyer shall execute and deliver the Leasing and Management Agreement, as defined above, pursuant to which Commonwealth Management Group, Ltd. shall lease and manage the Property on the terms and conditions more fully set forth therein. 12.2.3 Title Insurance. As a condition to Buyer's obligations at Closing, Title Company shall furnish Buyer at Closing with the Title Policy, in the form approved by Buyer pursuant to Section 3, in the full amount of the Purchase Price, wherein the Title Company shall insure fee simple title to the Property in Buyer or its designee as of the Closing Date containing no exceptions to title other than those which have been approved by Buyer in writing pursuant to Section 3 hereof and providing the title endorsements specified in Section 12.2.1.10 above. 12.2.4 Necessary Documents. Buyer and Seller shall execute and deliver such other documents and instruments as may be reasonably necessary to complete the transaction contemplated by this Agreement. 13. DEFAULT; REMEDIES 13.1 In the event that any of Seller's representations or warranties contained in this Agreement are materially or prejudicially untrue or if Seller shall have failed to have performed any of the covenants and/or agreements contained in this Agreement which are to be performed by Seller, on or before the date set forth in this Agreement for the performance thereof, or if any of the conditions precedent to Buyer's obligation to consummate the transaction contemplated by this Agreement shall have failed to occur, Buyer may, at its option, rescind this Agreement by giving written notice of such rescission to Seller and Seller shall immediately thereafter return the Deposit, and thereupon, subject to the provisions of Section 13.3 below, the parties shall have no further liability to each other hereunder. In the alternative, but without 19 limitnig Buyer's right upon any default by Seller hereunder to receive the prompt return of the Deposit, Buyer may seek to enforce specific performance of this Agreement. 13.2 Buyer recognizes that the Property will be removed by Seller from the market during the existence of this Agreement and that if this purchase and sale is not consummated because of Buyer's default Seller shall be entitled to compensation for such detriment. Seller and Buyer acknowledge that it is extremely difficult and impracticable ascertain the extent of the detriment, and to avoid this problem, Seller and Buyer agree that if the purchase and sale contemplated in this Agreement is not consummated because of Buyer's default under this Agreement, Seller shall be entitled to retain the Deposit as liquidated damages. The parties agree that the sum stated above as liquidated damages shall be in lieu of any other relief to which Seller might otherwise be entitled, Seller hereby specifically waiving any and all rights which it may have to damages or specific performance as a result of Buyer's default under this Agreement. 13.3 Buyer's Out-of-Pocket Costs. In the event of Seller's breach or default hereunder which results in Buyer's termination of this Agreement, or in the event that Seller shall fail to perform any term, covenant or agreement, or satisfy any condition herein stipulated (including, without limitation, a failure of title), then, in any such event, upon termination by Buyer hereunder, in addition to receiving the immediate return of the Deposit, anything in the Agreement contained to the contrary notwithstanding, Buyer shall also receive from Seller, upon demand, Buyer's actual, documented out-of-pocket costs and expenses associated with this Agreement and Buyer's anticipated acquisition of the Property including, without limitation, Buyer's reasonable counsel fees and costs, title expenses, survey costs, and other costs and expenses associated with Buyer's due diligence, including, without limitation, legal, financial and accounting due diligence, Buyer's structural inspection of the Property and Buyer's environmental assessment of the Property (collectively, "Transaction Costs"). The foregoing list is not intended to be exclusive, but representative of the costs and expenses that the parties anticipate that Buyer will incur in anticipation of this transaction. Seller's maximum reimbursement liability under this Section 13.3 shall not exceed Twenty Five Thousand ($25,000) Dollars. 14. CONDITIONS PRECEDENT TO CLOSING. The obligations of Buyer hereunder are subject to the fulfillment of the following conditions prior to or on the Closing Date (any one of which may be waived in whole or in part by Buyer at or prior to the Closing) and in the event any of the conditions are not complied with, Buyer may terminate this Agreement by notifying the Seller and Escrow Agent and thereupon shall be returned the Deposit and thereafter this Agreement shall be null and void: 14.1 Correctness of Warranties and Representations. The warranties and representations made by Seller in this Agreement shall be true and correct on the Closing Date as though such representations and warranties were made on the Closing Date (except for changes in the Leases permitted under the terms of this Agreement). 14.2 Compliance with Terms and Conditions. Seller shall have performed and complied with all of the terms and conditions required by this Agreement to be performed and complied with by it prior to or on the Closing Date. 20 14.3 Buyer's Satisfaction with Inspection. Buyer shall have notified Seller of Buyer's satisfaction with the review and inspection performed under Section 7 of this Agreement, or shall fail to notify Seller on or before the Inspection Period Expiration Date, of Buyer's dissatisfaction with the results of such review and inspection. 14.4 Trustee Approval. This Agreement and the transactions contemplated hereby shall have received formal approval of Buyer's Board of Trustees at a meeting duly called during the Inspection Period to consider same. 14.5 Estoppels. Seller shall have delivered to Buyer the required Estoppels. 15. PRORATIONS. 15.1 Operating Expenses. The following items shall be prorated at Closing, as of close of business of the day immediately preceding Closing "Adjustment Date": 15.1.1 Rents. All rent, additional rent, percentage rent (if any) and all other charges collected under the Leases shall be apportioned on the Closing Date pro rata on a per diem basis, as if all tenants were current in the payment of rent for the month during which the Closing shall occur. If any tenant is in arrears in the payment of rent or additional rent on the Closing Date, rents received from such within tenant ninety (90) days after the Closing Date shall be applied in the following order of priority: (a) to the Buyer, so long as such tenant is in arrears for current or prior rent arising after Closing, then (b) to Seller for all rent in arrears prior to the Closing Date; and then (c) to Buyer with no further claim by Seller thereto. Buyer shall use good faith efforts to collect any rent owed Seller hereunder, but shall not threaten, and shall be under no obligation to institute, litigation to collect the same. Except as herein provided, Buyer shall have no obligation to collect rents in arrears for the benefit of Seller. Any rents which are delinquent or otherwise not paid at the time of Closing, and collected by Buyer within ninety (90) days after Closing shall be apportioned as aforesaid and the portion to which Seller is entitled shall be promptly remitted by Buyer to Seller. Seller shall have no claim to rents collected ninety (90) days after the Closing Date. 15.1.2 Taxes. Real estate and personal property taxes, if any, on the basis of the fiscal year for which assessed. If the Closing shall occur before the tax rate or assessment is fixed, the apportionment of such real estate and personal property taxes at the Closing shall be upon the basis of the tax rate for the next preceding year applied to the latest assessed valuation. Final adjustment will be made upon the actual tax amount, when determined. 15.1.3 Deposits. Tax and utility company deposits, if any, shall be assigned to Buyer. 15.1.4 Water and Sewer Charges. Water and sewer charges and fire protection and inspection services based upon meter readings to be obtained by Seller effective as of the Adjustment Date, or if not so obtainable, a date not more than ten (10) days prior to the Adjustment Date, and the unfixed meter charges based thereon for the intervening period shall be apportioned on the basis of such last reading. Upon the taking of a subsequent actual reading, 21 such apportionment shall be readjusted and Seller or Buyer, as the case may be, will promptly deliver to the other the amount determined to be so due upon such readjustment. If Seller is unable to furnish such prior reading, any reading subsequent to the Closing will be apportioned on a per diem basis from the date of such reading immediately prior thereto and Seller shall pay the proportionate charges due up to the date of Closing. 15.1.5 Assigned Contracts. Amounts paid or payable in respect of any service and maintenance contracts assigned to Buyer in accordance herewith. 15.1.6 Electricity, gas, steam and fuel. Electricity, gas and steam and fuel oil, if any, based on meter readings or a fuel company letter showing measurement on the day immediately preceding Closing, and valued at current prices. 15.1.7 Security Deposits. Buyer shall receive a check from Seller for the full amount of any security deposits, with accrued interest, or a credit against the Purchase Price in said amount. 15.2 Custom and Practice. Except as set forth in this Agreement, the customs of the State and County in which the Premises are located shall govern prorations. 15.3 Future Installments of Taxes. If at Closing, the Property or any part thereof shall be or shall have been affected by an assessment or assessments which are or may become payable in installments, then for purposes of this Agreement, all unpaid installments of any such assessment, including those which are to become due and payable and to be liens upon the Property shall be paid and discharged by Seller at Closing. 15.4 Application of Prorations. If such prorations result in a payment due Buyer, the cash payable at Closing shall be reduced by such sum. If such prorations result in a payment due Seller, the same shall be paid by uncertified check at Closing. 15.5 Schedule of Prorations. The parties shall endeavor to jointly prepare a schedule of prorations for the Property no less than five (5) days prior to Closing. 15.6 Escalations. At least five (5) days prior to Closing, Seller shall deliver to Buyer a reasonably detailed statement setting forth, as of the date of Closing (a) the sums collected from tenants under Leases on account of or in reimbursement of landlord's operating expenses and/or any other payments made by tenants to landlord on account of sums which are attributable to expenses paid or incurred by the landlord ("escalation payments") for the current fiscal year under each such Lease (whether a lease year or calendar or other year); and (b) the amounts paid or incurred by Seller during the appropriate fiscal year as aforesaid which Seller expects will be paid or reimbursed by escalation payments made by tenants. If Seller shall have collected escalation payments for periods prior to Closing, whether pursuant to estimates which were in excess of the amounts actually required to be paid, or otherwise, there shall be an adjustment and credit to Buyer at Closing for such excess. If the charges were not billed or have not been collected as of the date of Closing, then, when the 22 amount of such escalation payments is determined and collected by Buyer from tenants, Buyer will, upon collection, remit to Seller the portion thereof to which Seller is entitled to the date of Closing. Buyer shall have the right, in good faith, to settle or adjust any amount of such escalation payments due from any tenant without Seller's prior consent, provided that such settlement or adjustment applies ratably to all amounts of escalation payments due from such tenant. 15.7 Readjustments. The parties shall correct any errors in prorations as soon after the Closing as amounts are finally determined. 15.8 Indemnification for Seller's Tax Obligations. Seller shall indemnify, defend and save and hold harmless Buyer from any loss, cost, liability or expense (including, without limitation, reasonable counsel fees and court costs) incurred, paid or suffered by Buyer arising out of or by reason of any claim made by any state taxing or employment authorities asserting or indicating any claims or possible claims for unpaid taxes, penalties, interest or court costs related thereto of Seller or any related party, due the State of Delaware or its political subdivisions. The provisions of this Section 15.8 shall specifically survive Closing hereunder. 15.9 Survival. The provisions of this Section 15 shall expressly survive Closing hereunder. 16. BROKERS. Each party hereby represents and warrants to the other that it has not employed or retained any broker or finder in connection with the transactions contemplated by this Agreement other than CB Commercial, and that other than CB Commercial, neither has had any dealings with any other person or party which may entitle that person or party to a fee or commission. Each party shall indemnify the other of and from any claims for commissions by any person or party claiming such commission by or through the indemnifying party. 17. ESCROW AGENT. The parties hereto have requested that the Deposit be held in escrow by the Escrow Agent to be applied at the Closing or prior thereto in accordance with this Agreement. The Escrow Agent will deliver the Deposit to Seller or to Buyer, as the case may be under the following conditions: 17.1 Payment to Seller. To Seller on the Closing Date upon the consummation of Closing; 17.2 Notice of Dispute. If either Seller or Buyer believes that it is entitled to the Deposit or any part thereof, it shall make written demand therefor upon the Escrow Agent. The Escrow Agent shall promptly mail a copy thereof to the other party in the manner specified in Section 18.1 below. The other party shall have the right to object to the delivery of the Deposit, by filing written notice of such objections with the Escrow Agent at any time within ten (10) days after the mailing of such copy to it in the manner specified in Section 18.1 below, but not thereafter. Such notice shall set forth the basis for objection to the delivery of the Deposit. Upon receipt of such notice, the Escrow Agent shall promptly deliver a copy thereof to the party who filed the written demand. 23 17.3 Escrow Subject to Dispute. In the event the Escrow Agent shall have received the notice of objection provided for in 17.2 above of this Section, in the manner and within the time therein prescribed, the Escrow Agent shall continue to hold the Deposit until (i) the Escrow Agent receives written notice from both Seller and Buyer directing the disbursement of the Deposit in which case the Escrow Agent shall then disburse said Deposit in accordance with said direction, or (ii) litigation arises between Seller and Buyer, in which event the Escrow Agent shall deposit the Deposit with the Clerk of the Court in which said litigation is pending, or (iii) the Escrow Agent takes such affirmative steps as the Escrow Agent may, at the Escrow Agent's option elect in order to terminate the Escrow Agent's duties including, but not limited to, deposit in Court and an action for interpleader. 17.4 Escrow Agent's Rights and Liabilities. Escrow Agent shall not be required to determine questions of fact or law, and may act upon any instrument or other writing believed by it in good faith to be genuine and to be signed and presented by the proper person, and shall not be liable in connection with the performance of any duties imposed upon Escrow Agent by the provisions of this Agreement, except for Escrow Agent's own willful default or gross negligence. Escrow Agent shall have no duties or responsibilities except those set forth herein. Escrow Agent shall not be bound by any modification of this Agreement, unless the same is in writing and signed by Buyer and Seller, and, if Escrow Agent's duties hereunder are affected, unless Escrow Agent shall have given prior written consent thereto. In the event that Escrow Agent shall be uncertain as to Escrow Agent's duties or rights hereunder, or shall receive instructions from Buyer or Seller which, in Escrow Agent's opinion, are in conflict with any of the provisions hereof, Escrow Agent shall be entitled to hold and apply the Deposit, pursuant to Section 17.3, and may decline to take any other action. 18. GENERAL PROVISIONS. 18.1 Notices. All notices or other communications required or permitted to be given under the terms of this Agreement shall be in writing, and shall be deemed effective when (i) sent by nationally-recognized overnight courier, (ii) facsimile with original following by regular mail, or (iii) deposited in the United States mail and sent by certified mail, postage prepaid, addressed as follows: 18.1.1 If to Buyer, addressed to: BRANDYWINE Realty Trust Newtown Square Corporate Campus 16 Campus Boulevard Suite 150 Newtown Square, PA 19073 Attn.: Gerard H. Sweeney, President and Chief Executive Officer 24 with a copy in each instance to: Eric L. Stern, Esquire Pepper, Hamilton & Scheetz LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 19103 18.1.2 If to Seller, addressed to: Gender Road Joint Venture c/o The Commonwealth Group 62 Read's Way New Castle, Delaware 19720 Attn.: Brock J. Vinton, President with a copy in each instance to: William S. Gee, Esquire Saul, Ewing, Remick & Saul 222 Delaware Avenue Suite 1200 Wilmington, DE 19899 18.1.3 If to Escrow Agent, addressed to: Commonwealth Land Title Insurance Company National Title Service 1700 Market Street Philadelphia, PA 19103 Attn.: M. Gordon Daniels or to such-other address or addresses and to the attention of such other person or persons as any of the parties may notify the other in accordance with the provisions of this Agreement. 18.2 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. 18.3 Entire Agreement. All Exhibits attached to this Agreement are incorporated herein and made a part hereof. [The parties covenant and agree to use their best efforts to develop within five (5) business days of the date hereof, and attach to this Agreement, the exhibits required hereunder. If such exhibits are not agreed upon within ten (10) business days of the date hereof, Buyer may terminate this Agreement and receive back the Deposit.] This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior negotiations, understandings and agreements of any nature whatsoever with respect to the subject 25 matter hereof. This Agreement may not be modified or amended other than by an agreement in writing. The captions included in this Agreement are for convenience only and in no way define, describe or limit the scope or intent of the terms of this Agreement. 18.4 Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania. 18.5 No Recording. This Agreement shall not be recorded in the Office for the Recording of Deeds or in any other office or place of public record. 18.6 Tender. Tender of Deed by Seller and of the Purchase Price by Buyer, are hereby mutually waived. 18.7 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 whose signature appears thereon, and all of which shall together 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. 18.8 Further Instruments. Seller will, whenever and as often as it shall be reasonably requested so to do by Buyer, and Buyer will, whenever and as often as it shall be reasonably requested so to do by Seller, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all conveyances, assignments, correction instruments and all other instruments and documents as may be reasonably necessary in order to complete the transaction provided for in this Agreement and to carry out the intent and purposes of this Agreement. All such instruments and documents shall be satisfactory to the respective attorneys for Buyer and Seller. The provisions of this Article shall survive the Closing. 18.9 Time. Time is of the essence. In the event the last day permitted for the performance of any act required or permitted under this Agreement falls on a Saturday, Sunday, or legal holiday of the United States or the Commonwealth of Pennsylvania, the time for such performance will be extended to the next succeeding business day. Time periods under this Agreement will exclude the first day and include the last day of such time period. 18.10 Designation of Nominee; Assignment of Agreement. Buyer shall have the right to designate one or more of its subsidiaries or affiliate entities to acquire title to the Premises hereunder. Except for the foregoing, Buyer may not assign this Agreement. 18.11 Effective Date. Whenever the term or phrase "effective date hereof" or "date hereof" or other similar phrases describing the date this Agreement becomes binding on Seller and Buyer are used in this Agreement, such terms or phrases shall mean and refer to the date on which a counterpart or counterparts of this Agreement executed by Seller and Buyer are deposited with the Escrow Agent. 26 18.12 Time for Acceptance. This Agreement shall constitute an offer to buy or sell the Property, as case may be, on the terms herein set forth only when executed by the Seller or Buyer. This Agreement may be accepted by the party receiving such executed Agreement only by executing this Agreement and delivering an original signed copy hereof to the Escrow Agent and an originally signed copy hereof to the other party hereto within five (5) business days after such receipt. Failure to accept in the manner and within the time specified shall constitute a rejection and termination of such officer. 18.13 Confidentiality. Each of the parties hereto covenants and agrees to hold the nature and content of this Agreement, including without limitation, the Purchase Price contained herein, in strict confidence prior to Closing, and other than disclosure required by the SEC and except as may be necessary to comply with this Agreement, neither party shall disclose prior to Closing, the nature, content or the Purchase Price of this Agreement without the express written consent of the other party. 18.14 Delivery of Documents. If this Agreement (or any of the Exhibits or Schedules hereto) shall have been prepared by Seller or by its counsel, then promptly upon execution hereof by the parties hereto, Seller shall deliver to Buyer one (1) "clean" copy of this Agreement, complete with all Exhibits and Schedules prepared (or obtained) by Seller or its counsel, and a copy of this Agreement (and said Exhibits and Schedules, if available) on disk, compatible with WordPerfect 5.1. 19. SEC REPORTING (8-K) REQUIREMENTS. For the period of time commencing on the date hereof and continuing through the first anniversary of the Closing Date, and without limitation of other document production otherwise required of Seller hereunder, Seller shall, from time to time, upon reasonable advance written notice from Buyer, provide Buyer and its representatives, with (I) access to all financial and other information pertaining to the period of Seller's ownership and operation of the Property, which information is relevant and reasonably necessary, in the opinion of Buyer's outside, third party accountants (the "Accountants"), to enable Buyer and its Accountants to prepare financial statements in compliance with any or all of (a) Rule 3-05 or 3-14 of Regulation S-X of the Securities and Exchange Commission (the "Commission"), as applicable; (b) any other rule issued by the Commission and applicable to Buyer; and (c) any registration statement, report or disclosure statement filed with the Commission by, or on behalf of Buyer; and (II) a representation letter, signed by the individual(s) responsible for Seller's financial reporting, as prescribed by generally accepted auditing standards promulgated by the Auditing Standards Division of the American Institute of Certified Public Accountants, which representation letter may be required by the Accountants in order to render an opinion concerning Seller's financial statements. 20. INDEMNIFICATION. Without limitation of any other Seller indemnity obligations set forth herein, from and after the Closing Date, Seller shall indemnify, defend and save and hold harmless Buyer, and its respective trustees, directors, officers and employees, of, from and against any and all loss, 27 cost, expense, damage, claim, and liability, including reasonable attorney's fees and court costs, including, without limitation, attorney's fees and costs associated with the enforcement of Seller's indemnification obligations hereunder (hereinafter collectively, "Losses") which Buyer may suffer or incur, resulting from, relating to, or arising in whole or in part, from or out of (i) any misrepresentation or breach of a representation or warranty by Seller contained in this Agreement; (ii) any failure to fulfill any covenant or agreement of Seller contained in this Agreement; (iii) all litigation set forth in this Agreement and on Exhibit "D"; hereto; and (iv) any and all actions, suits, investigations, proceedings, demands, assessments, audits, judgments, and/or claims arising out of or relating to any of the foregoing. Promptly after receipt by Buyer of written notice of the commencement of any suit, audit, demand, judgment, action, investigation or proceeding (a "Third Party Action") or promptly after Buyer incurs a Loss or has knowledge of the existence of a Loss, Buyer will, if a claim with respect thereto is to be made against Seller due to Seller's obligation to provide indemnification hereunder, give Seller written notice of such Loss or the commencement of any Third Party Action; provided, however, that the failure to provide such notice within a reasonable period of time shall not relieve Seller of any of its obligations hereunder, unless Seller is materially prejudiced by such delay. Promptly after receiving such notice, Seller will, upon notice to Buyer, have the right to assume and control the defense and settlement of any such Third Party Action at its own cost and expense; provided, however, that it shall be a condition precedent to the exercise of such right by Seller that Seller shall agree in writing that the Loss, or Third Party Action, as the case may be, is properly within the scope of the indemnification obligation and that as between the parties, Seller shall be responsible to satisfy and discharge such Third Party Action. Seller shall not enter into any resolution or other compromise of a Third Party Action without obtaining the complete release of Buyer for any liability to all claimants under or pursuant to such Third Party Action. Buyer shall have the right to participate in any such defense, contest or other protective action at its own cost and expense. Notwithstanding the foregoing, Buyer shall have the right to assume and control the defense and settlement of a Third Party Action (a) if such action includes claims for equitable relief which, if determined adversely to Buyer, could reasonably be expected to interfere with its intended business operations or damage its business reputation or (b) if Seller fails to do so in a timely manner. In any circumstances in which Buyer undertakes to control the Third Party Action as provided in this paragraph, it shall (i) not enter into any resolution or other compromise involving monetary damages without obtaining the prior written consent of Seller provided that such written consent may not be withheld if it would interfere with Buyer's business operation and (ii) keep Seller informed on an ongoing basis of the status of such Third Party Action and shall deliver to Seller, copies of all documents related to the Third Party Action reasonably requested by Seller. Buyer shall act to assure that all attorneys' fees and expenses incurred in connection therewith are reasonable. 21. EXCULPATION. No recourse shall be had for any obligation of BRANDYWINE Realty Trust under this Agreement or under any document executed in connection herewith or pursuant hereto, or for any claim based thereon or otherwise in respect thereof, against any past, present or future 28 trustee, shareholder, officer or employee of BRANDYWINE Realty Trust, 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 the Seller and all parties claiming by, through or under Seller. 22. AS-IS. Buyer acknowledges and agrees that except as herein elsewhere specifically provided, Seller has not made, does not make and specifically negates and disclaims any representations, warranties (other than the special warranty of title as set out in the deed), promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, statutory, oral or written, past, present or future, of, as to, concerning or with respect to (A) the value, nature, quality or condition of the Property, including, without limitation, the water, soil, and geology, (B) the suitability of the Property for any and all activities and uses which Buyer or any tenant may conduct thereon, (C) the compliance of or by the Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body, (D) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property, (E) the manner or quality of the construction or materials, if any, incorporated into the Property, (F) the manner, quality, state of repair or lack of repair of the Property, (G) compliance with any environmental requirements, including the existence in or on the Property of hazardous materials or (H) any other matter with respect to the Property. Additionally, no person acting on behalf of Seller is authorized to make, and by execution hereof, Buyer acknowledges that, except as herein elsewhere specifically provided, no person has made any representation, agreement, statement, warranty, guaranty or promise regarding the Property or the transaction contemplated herein; and no such representation, warranty, agreement, guaranty, statement or promise, if any, made by any person acting on behalf of Seller shall be valid or binding upon Seller unless expressly set forth herein. Buyer further acknowledges and agrees that, except with respect to information developed by Seller, its principals or affiliates, any information provided or to be provided with respect to the Property was obtained from a variety of sources, that Seller has not made any independent investigation or verification of such information and makes no representations as to the accuracy, truthfulness or completeness of such information, and the Buyer may not be entitled to rely on any such information. The foregoing notwithstanding, Seller has no knowledge that any such information is inaccurate or misleading. Buyer further acknowledges and agrees that to the maximum extent permitted by law, and except as herein elsewhere specifically provided, the sale of the Property as provided for herein is made on an "as is" condition and basis with all faults. It is understood and agreed that the purchase price has been adjusted by prior negotiation to reflect that the Property is sold by Seller and purchased by Buyer subject to the foregoing. 23. Other Transactions. The obligations of the parties to consummate Closing hereunder shall be expressly conditioned upon (i) Seller and Brandywine Operating Partnership, L.P., a Delaware limited partnership ("BOP") executing and delivering a mutually satisfactory operating agreement regarding the governance of Christiana Center Operating Company II LLC, (ii) the execution and delivery by Seller, as seller, and the said Christiana Center Operating Company II LLC, as buyer, of a mutually satisfactory Agreement of Sale regarding the purchase and sale of those certain properties known by the parties as 200 and 300 Commerce Drive, 29 Newark, New Castle County, Delaware, and completion of closing thereunder, (iii) Seller and BOP executing and delivering a mutually satisfactory operating agreement regarding the governance of Christiana Center Operating Company I LLC and (iv) the execution and delivery by Seller, as seller, and the said Christiana Center Operating Company I LLC, as buyer, of a mutually satisfactory Agreement of Sale regarding the purchase and sale of that certain property known as and numbered 400 Commerce Drive, Newark, New Castle County, Delaware, each and all upon terms and conditions acceptable to the parties, failing which neither party hereto shall have any obligation to consummate Closing hereunder. If either party shall elect to terminate this Agreement in such instance, then in that event, the Deposit shall be promptly refunded to the Buyer and thereupon neither party shall have any further obligation to the other hereunder. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed the day and year first above written. GENDER ROAD JOINT VENTURE, BRANDYWINE REALTY TRUST, a Delaware partnership a Maryland Real Estate Investment Trust By: (SEAL) By: /S/ Gerard H. Sweeney, Presient & CEO(SEAL) Brock J. Vinton, Managing Gerard H. Sweeney, Venturer, Hereunto Duly President and Chief Executive Authorized 30 EXHIBIT "H" TENANT ESTOPPEL CERTIFICATE (__________ Portfolio) 100 Commerce Drive Newark, DE __________ __, 1997 Brandywine Realty Trust Newtown Square Corporate Campus 16 Campus Boulevard Newtown Square, PA 19073 Attention: Gerard H. Sweeney, President and Chief Executive Officer NationsBank, N.A., as Agent for the parties listed on Schedule 1 attached hereto Real Estate Banking 8300 Greensboro Drive, Suite 300 McLean, VA 22102 Attention: Cheryl D. Fitzgerald, Vice President Re: Name of Tenant: ___________________ Lease located at Suite _____, ___________ Premises _____________ Municipality, ___ State (the "Property") To Whom it May Concern: The undersigned is the holder of the tenant's interest under the lease described on Exhibit A attached hereto (the "Lease") demising a portion of the Property known as Suite _____ (the "Leased Premises"). We understand that Brandywine Realty Trust, its assignee or nominee ("Brandywine") intends to acquire the Property, and that NationsBank, N.A., as Agent for the parties listed on Schedule 1 attached hereto ("Lender") intends to be the holder of a first mortgage on the Property, and that Brandywine and Lender require this certification from us. Accordingly, we hereby certify to Brandywine and Lender as follows: 1. The Lease is in full force and effect and has not been modified, amended or supplemented in any way, except as follows: None (If appropriate response is other than "None," insert dates of all modifications, amendments or supplements): . 2. There are no other representations, warranties, agreements, concessions, commitments, or other understandings between the undersigned and the Landlord regarding the Property other than as set forth in the Lease or paragraph 1 above. 3. The landlord under the Lease has completed and delivered, and the undersigned has accepted, the Leased Premises in the condition required by the Lease and the term of the Lease commenced on __________. The Leased Premises consists of approximately _________ square feet. The undersigned has taken possession of and is occupying the Leased Premises on a rent-paying basis and the monthly base rent payable thereunder is __________, payable in advance. All improvements and work required under the Lease to be made by the landlord thereunder and all facilities required under the Lease to be furnished to the Leased Premises have been completed to the satisfaction of the undersigned, except as follows: None. (If appropriate response is other than "None," insert description of any improvements and work to be completed by the landlord under the Lease): . 4. The fixed expiration date set forth in the Lease, excluding renewals and extensions, is _________. The undersigned neither has any option or right to purchase the Property or any portion thereof nor does the undersigned have any right or option to terminate the Lease or any of its obligations thereunder in advance of the scheduled termination date of the Lease as noted above, except as follows: None. (If appropriate response is other than "None," insert description of any purchase rights or options, and/or any early termination rights, together with reference to document (and section or paragraph) where found): . 5. All rents, additional rents and other sums due and payable under the Lease have been paid in full and no rents, additional rents or other sums payable under the Lease have been paid for more than one (1) month in advance of the due dates thereof. 6. The landlord under the Lease is not in default under any of the requirements, provisions, terms, conditions or covenants of the Lease to be performed or complied with by the landlord under the Lease, and no event has occurred or situation exists which would, with the passage of time and/or the giving of notice, constitute a default or an event of default by the landlord under the Lease. 7. The undersigned is not in default under any of the requirements, provisions, terms, conditions, or covenants of the Lease to be performed or complied with by the undersigned, and no event has occurred or situation exists which would, with the passage of time and/or the giving of notice, constitute a default or an event of default by the undersigned under the Lease. 8. The undersigned has received no notice from any governmental authority or other person or party claiming a violation of, or requiring compliance with, any Federal, State or local statute, ordinance, rule, regulation or other requirement of law, for environmental contamination at the Leased Premises, to the best knowledge of the undersigned, [NJ only: the undersigned is in compliance with all applicable provisions of the Industrial Site Recovery Act], and no hazardous, toxic or polluting substances or wastes have been generated, treated, manufactured, stored, refined, used, handled, transported, released, spilled, disposed of or deposited by Tenant on, in or under the Leased Premises. 9. Neither the undersigned nor the landlord under the Lease has commenced any action or given or received any notice for the purpose of terminating the Lease. 10. There are no existing defenses, offsets, claims, or credits against the payment of rent or the performance of the undersigned's obligations under the Lease. 11. The undersigned has paid to the landlord under the Lease a security deposit of _________. By: ______________________ Name: Title: Exhibit A (Description of Lease) Lease dated __________ with ________________, Tenant, for Suite _____, _____________ Premises, __________________Municipality, _______State. ______________________________ Exhibit A - (Alternate) - The undersigned hereby certifies to Brandywine Realty Trust, NationsBank, N.A., Administrative Agent, Seller with respect to its tenancy at Suite _____, _______ Premises, ____________ Municipality, ____ State that attached hereto is a true, correct and complete copy of its lease and all amendments thereto ("Lease"). It is intended by the undersigned that this Certificate and the attached documents shall be appended to the within Tenant Estoppel Certificate delivered by the undersigned Tenant to the above-mentioned parties. By: ___________________________ Name: Title: Schedule 1 NationsBank, N.A., Smith Barney Mortgage Capital Group, Inc. and all other parties to whom a direct participation interest in a certain Credit Facility are sold, transferred and assigned pursuant to the provisions of a certain Revolving Credit Agreement and a certain Co-Lender and Servicing Agreement, each dated as of November 25, 1996. EX-10.2 3 EXHIBIT 10.2 AGREEMENT OF SALE for 200 and 300 COMMERCE DRIVE NEWARK, DELAWARE between CHRISTIANA CENTER OPERATING COMPANY II LLC and GENDER ROAD JOINT VENTURE Dated: September 19, 1997 AGREEMENT OF SALE INDEX Section Page 1. PROPERTY BEING SOLD.......................................................5 1.1 Real Property......................................................5 1.2 Personal Property..................................................6 1.3 Leases.............................................................6 1.4 Right to Names.....................................................6 2. PURCHASE PRICE AND MANNER OF PAYMENT......................................6 2.1 Purchase Price.....................................................6 2.2 Manner of Payment..................................................6 2.2.1 Deposit....................................................6 2.2.2 Additional Deposit.........................................7 2.2.3 Cash Balance...............................................7 2.3 Intentionally Omitted..............................................7 3. TITLE.....................................................................7 4. COVENANTS.................................................................7 4.1 Maintenance........................................................7 4.2 Alterations........................................................7 4.3 Lease..............................................................7 4.4 Intentionally Omitted..............................................7 4.5 Intentionally Omitted..............................................7 4.6 Notice to Buyer....................................................8 4.7 Intentionally Omitted..............................................8 4.8 Intentionally Omitted..............................................8 4.9 No New Agreements..................................................8 4.10 Tax Disputes.......................................................8 4.11 Intentionally Omitted..............................................9 5. REPRESENTATIONS AND WARRANTIES............................................9 5.1 Seller's Authority For Binding Agreement...........................9 5.2 Employment.........................................................9 5.3 Service Contracts..................................................9 5.4 Condemnation.......................................................9 5.5 No Tax Assessments.................................................9 5.6 Leases.............................................................9 5.7 Compliance with Law...............................................10 5.8 No Brokers........................................................11 5.9 Utilities.........................................................11 5.10 Permits Approvals and Certificates................................11 5.11 Good Title to Property............................................11 5.12 All Taxes and Assessments Paid....................................11 5.13 FIRPTA............................................................12 5.14 Mechanic's Liens..................................................12 5.15 Rights to Purchase................................................12 5.16 No Outstanding Obligations........................................12 5.17 Rollback Taxes....................................................12 5.18 Development Agreements............................................12 5.19 Correct Copies of Documents.......................................12 5.20 No Lawsuits.......................................................12 6. POSSESSION...............................................................13 7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY..........................13 7.1 Title Binder......................................................13 7.2 Survey............................................................13 7.3 Physical and Financial Inspection.................................14 7.3.1 Intentionally Omitted.....................................14 7.3.2 Contracts, Licenses,Permits...............................14 7.3.3 Intentionally Omitted.....................................14 7.3.4 Intentionally Omitted.....................................14 7.3.5 Intentionally Omitted.....................................15 7.3.6 Three Years' Tax Bills....................................15 7.3.7 Intentionally Omitted.....................................15 7.3.8 Schedule of Violations....................................15 7.3.9 Schedule of Notices.......................................15 7.3.10 Intentionally Omitted.....................................15 7.3.11 Zoning, Site Plan, Subdivision Plan or Plat...............15 7.3.12 Intentionally Omitted.....................................15 7.3.13 Takings or Changes........................................15 7.3.14 Tax Assessments, Appeals and Increases....................15 7.3.15 Litigation................................................15 7.3.16 Insurance Policies........................................15 7.3.17 Intentionally Omitted.....................................15 7.3.18 Title Information.........................................16 7.4 Seller's Failure to Deliver.......................................16 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...............................16 9. INTENTIONALLY OMITTED....................................................16 10. CONDEMNATION.............................................................16 11. Expense Allocations......................................................16 ii 12. CLOSING..................................................................17 12.1 Time and Date and Place...........................................17 12.2 Documents.........................................................17 12.2.1 Seller's Documents and Other Items........................17 12.2.1.1 Deed............................................17 12.2.1.2 Bill of Sale....................................17 12.2.1.3 Intentionally Omitted...........................17 12.2.1.4 Original Licenses, Contract Documents and Other Personal Property...............................17 12.2.1.5 Intentionally Omitted...........................17 12.2.1.6 Assignment of Licenses, Contract Documents and Other Personal Property.........................17 12.2.1.7 FIRPTA Certificates.............................17 12.2.1.8 Intentionally Omitted...........................17 12.2.1.9 Estoppel Certificate from Municipality. ........17 12.2.1.10 Title Insurance Certificates....................18 12.2.1.11 Intentionally Omitted...........................18 12.2.1.12 Seller Certificate..............................18 12.2.1.13 Organization Certifications.....................18 12.2.1.14 Intentionally Omitted...........................18 12.2.1.15 Tax Bills.......................................18 12.2.1.16 Tax Reduction Rights............................18 12.2.1.17 Intentionally Omitted...........................18 12.2.1.18 Leasing Agreement...............................19 12.2.2 Buyer's Documents.........................................19 12.2.2.1..................................................19 12.2.2.2..................................................19 12.2.2.3..................................................19 12.2.2.4..................................................19 12.2.3 Title Insurance...........................................19 12.2.4 Necessary Documents.......................................19 13. DEFAULT; REMEDIES........................................................19 13.1.....................................................................19 13.2.....................................................................20 13.3 Buyer's Out-of-Pocket Costs.........................................20 14. CONDITIONS PRECEDENT TO CLOSING..........................................20 14.1 Correctness of Warranties and Representations.....................21 14.2 Compliance with Terms and Conditions..............................21 14.3 Buyer's Satisfaction with Inspection..............................21 14.4 Trustee Approval..................................................21 15. PRORATIONS...............................................................21 15.1 Operating Expenses..................................................21 15.1.1 Intentionally Omitted.....................................21 iii 15.1.2 Taxes.....................................................21 15.1.3 Deposits..................................................21 15.1.4 Water and Sewer Charges...................................21 15.1.5 Assigned Contracts........................................22 15.1.6 Electricity, gas, steam and fuel..........................22 15.1.7 Intentionally Omitted.....................................22 15.2 Custom and Practice...............................................22 15.3 Future Installments of Taxes......................................22 15.4 Application of Prorations.........................................22 15.5 Schedule of Prorations............................................22 15.6 Intentionally Omitted.............................................22 15.7 Readjustments.....................................................22 15.8 Indemnification for Seller's Tax Obligations......................22 15.9 Survival..........................................................22 16. BROKERS..................................................................22 17. ESCROW AGENT.............................................................23 17.1 Payment to Seller.................................................23 17.2 Notice of Dispute.................................................23 17.3 Escrow Subject to Dispute.........................................23 17.4 Escrow Agent's Rights and Liabilities.............................23 18. GENERAL PROVISIONS.......................................................24 18.1 Notices...........................................................24 18.2 Binding Effect....................................................25 18.3 Entire Agreement..................................................25 18.4 Governing Law.....................................................25 18.5 No Recording......................................................25 18.6 Tender............................................................25 18.7 Execution in Counterparts.........................................25 18.8 Further Instruments...............................................25 18.9 Time..............................................................26 18.10 Designation of Nominee; Assignment of Agreement...................26 18.11 Effective Date....................................................26 18.12 Time for Acceptance...............................................26 18.13 Confidentiality...................................................26 18.14 Delivery of Documents.............................................26 19. SEC REPORTING (8-K) REQUIREMENTS.........................................26 20. INDEMNIFICATION..........................................................27 21. EXCULPATION..............................................................28 22. AS-IS....................................................................28 iv 23. OTHER TRANSACTIONS.......................................................29 v AGREEMENT OF SALE 200, 300 COMMERCE DRIVE AGREEMENT OF SALE made this 19th day of September, 1997, between CHRISTIANA CENTER OPERATING COMPANY II LLC, a Delaware limited liability company, its permitted assignee or nominee, having its principal office at c/o Gender Road Joint Venture, c/oThe Commonwealth Group, 62 Read's Way, New Castle, Delaware 19720 ("Buyer"), and GENDER ROAD JOINT VENTURE, a Delaware partnership, having its principal office at c/o The Commonwealth Group, 62 Read's Way, New Castle, Delaware 19720 ("Seller"). BACKGROUND The Background of this Agreement is as follows: A. Seller is the owner of two certain parcels of land being comprised of 4.82+/- and 6.13+/- acres, respectively, known or to be known as 200 and 300 Commerce Drive, in the City of Newark, New Castle County, Delaware; and B. Seller desires to sell to Buyer and Buyer desires to purchase from Seller the property referred to in this Agreement, upon the terms and conditions set forth herein. TERMS AND CONDITIONS NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and with the preceding Background paragraphs incorporated by reference, the parties hereto, intending to he legally bound hereby, covenant and agrees as follows: 1. PROPERTY BEING SOLD. Seller shall sell, transfer and convey to Buyer on the Closing Date (as hereinafter defined), 1.1 Real Property. Fee simple interest in two (2) certain parcels of land being comprised of 4.82+/- acres and 6.13+/- acres, respectively, all as more fully described on Exhibit "A" hereto, in New Castle County, Delaware, and all of the easements, licenses, rights of way, privileges, hereditaments, appurtenances, and rights to any land lying in the beds of any street, road or avenue, open or proposed, adjoining thereto, and inuring to the benefit of said land (hereinafter collectively referred to as the "Premises"); and 1.2 Personal Property. All equipment, fixtures, machinery and personalty of Seller, of every description attached to or used in connection with the Premises (and not owned by tenants under leases of the Premises), if any, including, without limitation, those listed on the Schedule of Inventory attached hereto as Exhibit "B", and to the extent legally assignable, all intangible personal property owned by the Seller and used in connection with the ownership, operation and maintenance of the land, improvements and other property, excluding cash on hand, but including, without limitation, all contract rights, guaranties and warranties of any nature, all architects', engineers', surveyors' and other real estate professionals' plans, specifications, certifications, contracts, reports, data or other technical descriptions, reports or audits (including, without limitation, all environmental, structural and mechanical inspection reports), and all marketing materials ("Contract Documents"), all governmental permits, licenses, certificates, and approvals in connection with the ownership of the Premises ("Licenses"), all security deposits, utility deposits, escrow accounts, instruments, documents of title, general intangibles, all computers, computer software programs and data and business records pertaining to the Premises, all telephone, communications and security systems and equipment, and all of Seller's rights, claims, and causes of action if any, to the extent they are assignable, under any warranties and/or guarantees of manufacturers, contractors or installers, all rights against tenants and others relating to the Premises or the operation or maintenance thereof, including to the extent applicable, any warranties from any previous owners of the Premises (hereinafter collectively referred to as "Personal Property"); and 1.3 Leases. All leases, licenses and other occupancy agreements for any part of the Premises, if there be any, and all prepaid rent and unapplied security deposits (the "Leases"); and 1.4 Right to Names. Any and all right, title and interest of Seller in and to the name(s) of 200 and 300 Commerce Drive, and the right to all printing styles, trademarks and logos ("Names"). The Premises, Personal Property, Leases and Names are sometimes hereinafter referred to as "Property." 2. PURCHASE PRICE AND MANNER OF PAYMENT. 2.1 Purchase Price. Buyer shall pay the total sum of One Million ($1,000,000) Dollars (hereinafter referred to as the "Purchase Price") subject to adjustment. 2.2 Manner of Payment. The Purchase Price shall be paid in the following manner: 2.2.1 Deposit. By delivery, upon Seller's execution and delivery of this Agreement, of Buyer's good check in the amount of Fifteen Thousand ($15,000) Dollars to the Title Company (hereinafter referred to as "Escrow Agent" or "Escrowee"). This sum, the sum specified in Section 2.2.2 below, and all other sums paid by Buyer to the Escrow Agent under this Agreement (hereinafter referred to as the "Deposit") shall be held by Escrow Agent in a federally-insured, segregated money market account at an institution to be designated by Buyer until 2 termination or consummation of this Agreement. Interest on the Deposit shall be credited to Buyer at Closing, or paid to the party otherwise entitled to the Deposit in the event of the termination of this Agreement prior to Closing. 2.2.2 Additional Deposit. By delivery, within two (2) business days next following the Inspection Period Expiration Date (as hereinafter defined), of Buyer's good check in the amount of Thirty Thousand ($30,000) Dollars. 2.2.3 Cash Balance. The balance by delivery to the Seller on the Closing Date, by wire transfer, the amount of Nine Hundred Fifty Five Thousand ($955,000) Dollars, subject to adjustment as herein provided. 2.3 Intentionally Omitted. 3. TITLE. On the Closing Date, Seller shall convey to Buyer good and marketable fee simple title to the Premises subject only to those rights of way, easements, covenants restrictions, and objections to title (hereinafter "Permitted Exceptions") listed on Exhibit "C" hereto, unless identified by Buyer as "Title Objections" as hereinafter provided, and subject to the rights of tenants listed on the rent roll attached hereto as Exhibit "D", which title shall be insurable at regular rates by a reputable title insurance company ("Title Company") under an ALTA 1970 Form B (Revised 10/17/70 and 3/30/84) title insurance policy ("Title Policy"), with the endorsements and affirmative insurance specified in Section 12.2.1.10 below. Seller and Buyer consent to use, at Buyer's option, Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation or Congress Title Insurance Company as the Title Company. 4. COVENANTS. In addition to the covenants contained in the other Sections of this Agreement, Seller covenants that it shall: 4.1 Maintenance. At all times prior to the Closing Date, maintain the Property in its current condition, reasonable wear and tear and casualty alone excepted, and pay in the normal course of business prior to Closing, all sums due for work, materials or service furnished or otherwise incurred in the ownership and operation prior to Closing. 4.2 Alterations. Not make or permit to be made any alterations, improvements or additions to the Property without the prior written consent of Buyer, not to be unreasonably withheld or delayed, except if required by applicable law or ordinance. 4.3 Lease. Not enter into any Lease, nor amend, modify or terminate any existing Lease, without Buyer's consent. 4.4 Intentionally Omitted. 4.5 Intentionally Omitted. 4.6 Notice to Buyer. Notify Buyer promptly of the occurrence of any of the following: 3 (i) a fire or other casualty causing damage to the Property, or any portion thereof; (ii) receipt of notice of eminent domain proceedings or condemnation of or affecting the Property, or any portion thereof; (iii) receipt of notice from any governmental authority or insurance underwriter relating to the condition, use or occupancy of the Property, or any portion thereof, or any real property adjacent to any of the Property, or setting forth any requirements with respect thereto; (iv) Intentionally Omitted; (v) receipt of any notice of default from the holder of any lien or security interest in or encumbering the Property, or any portion thereof; (vi) Intentionally Omitted; (vii) notice of any actual or threatened litigation against Seller or affecting or relating to the Property, or any portion thereof; or (ix) the commencement of any strike, lock-out, boycott or other labor trouble affecting the Property, or any portion thereof. 4.7 Intentionally Omitted. 4.8 Intentionally Omitted. 4.9 No New Agreements. Except for agreements which can be terminated on not more than thirty (30) days' notice, not enter into any other agreements which affect the Property or the transactions contemplated by this Agreement, without the prior written consent of Buyer, and not permit the creation of any liability which shall bind Buyer or the Premises after Closing. 4.10 Tax Disputes. Notify Buyer of any tax assessment disputes (pending or threatened) prior to Closing, and not agree to any changes in the real estate tax assessment, nor settle, withdraw or otherwise compromise any pending claims with respect to prior tax assessments, without Buyer's prior written consent. If any proceedings shall result in any reduction of assessment and/or tax for the tax year in which the Closing occurs, it is agreed that the amount of tax savings or refund for such tax year, less the reasonable fees and disbursements in connection with such proceedings, shall be apportioned between the parties as of the date real estate taxes are apportioned under this Agreement. The parties agree that from and after the execution and delivery of this Agreement, Buyer, at its sole cost, shall have the right to appeal the current tax assessment of each tax parcel comprising the Premises. Buyer shall consult with Seller prior to filing tax appeal documents, and 4 shall afford Seller reasonable advance notice prior to any public hearings or proceedings at which said appeal will be considered. Seller agrees that Buyer may file such appeals in its name or in Seller's name, as may be required, and Seller shall cooperate with Buyer in the prosecution of such appeal; provided, however, that Buyer agrees to pay the reasonable legal fees incurred by Seller, if any, in connection with furnishing such cooperation. 4.11 Intentionally Omitted. 5. REPRESENTATIONS AND WARRANTIES. In order to induce Buyer to enter into this Agreement, Seller hereby represents and warrants to Buyer that the following representations and warranties are true now and will be true at Closing: 5.1 Seller's Authority For Binding Agreement. Seller is a duly authorized and validly existing partnership formed under the laws of the State of Delaware. Seller has full power, right and authority to own its properties, to carry on its business as now conducted, and to enter into and fulfill its obligations under this Agreement. Each of the persons executing this Agreement on behalf of Seller is authorized to do so. This Agreement is the valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms. The execution and delivery of this Agreement and compliance with its terms will not conflict with or result in the breach of any law, judgement, order, writ, injunction, decree, rule or regulation, or conflict with or result in the breach of any other agreement, document or instrument to which Seller is a party or by which it or the Property is bound or affected. 5.2 Employment. There are no persons or parties employed by Seller in connection with the Property. 5.3 Service Contracts. There are no service, equipment, supply or maintenance contracts with respect to or affecting the Property not terminable on thirty (30) days notice. 5.4 Condemnation. There are no condemnation or eminent domain proceedings pending with regard to any part of the Property, and to the best of the Seller's knowledge, no such proceedings are proposed. 5.5 No Tax Assessments. There are no public improvements in the nature of off-site improvements, or otherwise, which have been ordered to be made and/or which have not heretofore been assessed, and, to the Seller's knowledge, there are no special or general assessments currently affecting or pending against the Property. 5.6 Leases. There are no oral or written leases or rights of occupancy or grants or claims of right, title or interest in any portion of the Property or outstanding letters of intent to lease the Property, or any portion thereof except as set forth in the CSC Lease (as defined in Section 12.2.2.3). 5.7 Compliance with Law. 5 (i) To the best of Seller's knowledge, information and belief, the development of 200 Commerce Drive (Tax Parcel #09 033.00 42) as a three (3)-story, 64,000 +/- sf. office building with accessory on-site parking for a minimum of 217 parking spaces (inclusive of 6 handicapped spaces) and the development of 300 Commerce Drive (Tax Parcel #09.033.00 043) as a three (3) story 43,200]+/- sf. office building with accessory on-site parking for a minimum of 181 spaces (inclusive of 2 handicapped spaces) in accordance with the Record Minor Subdivision Plan recorded in the Office of the Recorder of Deeds in and for New Castle County, Delaware, at Microfilm No. 11239, is permitted by all applicable federal, state and local law, and by the requirements of governmental and quasi-governmental agencies and authorities having jurisdiction thereof, and there are no outstanding notices of any violations issued by any governmental or quasi-governmental agency or authority having jurisdiction over the Property. The zoning classification of the Property is "O-2". Not more than ten (10) days prior to the Closing, the Seller shall provide Buyer with an estoppel certificate from the zoning code enforcement (or other appropriate) officer of New Castle County, confirming that the zoning of the Property and that the proposed development of the site as hereinabove provided is in compliance with such zoning. (ii) To the best of the Seller's knowledge, (1) no Hazardous Substances (defined below) and no Hazardous Wastes (defined below) are present on the Property including, without limitation, asbestos, flammable substances, explosives, radioactive materials, hazardous wastes, toxic substances, pollutants, pollution, contaminant, polychlorinated byphenyls ("PCBs"), urea formaldehyde foam insulation, radon, corrosive, irritant, biologically infectious materials, petroleum product, garbage, refuse, sludge, hazardous or waste materials, and (2) there has been no use of the Property that may, under any federal, state or local environmental statute, ordinance or regulation, require, at any time, any closure or cessation of the use or occupancy of the Property and/or impose, at any time, upon the owner of the Property any clean-up or other monetary obligation. The Seller has not been identified in any litigation, administrative proceeding or investigation as a responsible party or potentially responsible party for any liability for clean-up costs, natural resource damages or other damages or liability for prior disposal or release of Hazardous Substances, Hazardous Wastes or other environmental pollutants or contaminants, and no lien or superlien has been recorded, filed or otherwise asserted against any real or personal property of the Seller for any clean-up costs or other responses costs incurred in connection with any environmental contamination that is attributable, in whole or in part, to the Seller. The Seller hereby indemnifies and holds the Buyer harmless of, from and against any and all liability, loss or damage suffered or incurred as a result of a claim, demand, cost or judgment in favor of a third party, including, without limitation, any governmental authority, arising from the deposit, storage, disposal, burial, dumping, injecting, spilling, leaking, or other placement or release in or on the Property of Hazardous Substances or Wastes first occurring during the Seller's period of ownership. For purposes of this Agreement, "Hazardous Substances" means those elements and compounds which are designated as such in Section 101(14) of the Comprehensive Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601 (14), as amended, all petroleum products and by-products, and any other hazardous substances as that term may be further defined in any and all applicable federal, state and local laws; and "Hazardous Wastes" means any hazardous waste, residential or household waste, solid waste, or other waste as defined in applicable federal, state and local laws. The Seller has not received any summons, citation, directive, letter or other communication, written or oral, from any 6 governmental or quasi-governmental authority concerning any intentional or unintentional action or omission on the Seller's part which (a) resulted in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous Wastes, or (b) related in any way to the generation, storage, transport, treatment or disposal of Hazardous Substances or Hazardous Wastes. To the best of the Seller's knowledge, neither the Property nor any portion thereof, has been identified on the federal CERLIS, the National Priorities List (40 C.F.R. Part 300, App. B) or any state or local list of potential hazardous waste disposal sites or as an industrial establishment. The Seller has conducted a complete and thorough inspection and test of the underground storage tanks located on the Property, if any, and the Seller has confirmed that the results thereof show compliance with all requirements of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Sections 6901 et seq. and all other applicable federal, state and local laws, and the Seller has taken all other necessary and appropriate action to comply fully therewith. 5.8 No Brokers. Except as disclosed on Schedule 5.8 attached hereto, no brokerage or leasing commissions or other compensation is now, or will upon or after the Closing, be due or payable to any person, firm, corporation, or other entity. 5.9 Utilities. Adequate utilities, useable public sanitary and storm sewers, public water facilities, electric facilities and, if any, gas facilities (collectively, the "Utilities"), are available at the lot lines of the Property. All Utilities required for the operation of the Property either enter the Property through adjoining public streets or, if they pass through adjoining public land, do so in accordance with valid public easements or private easements which will inure to the benefit of the Buyer at no cost to the owner of the Property. 5.10 Permits Approvals and Certificates. Seller has obtained record site plan approval from New Castle County, but has not yet obtained the other licenses, permits, approvals and authorizations necessary for the development of the Property as provided in Section 5.7(i) above. Seller has no knowledge, however, of any facts or circumstances, or other reason why all requisite licenses, permits, approvals and authorizations necessary for such development will not be obtained in the ordinary course once applications therefore are made and fees therefore are paid. 5.11 Good Title to Property. The Seller presently holds, and immediately following the Closing, the Buyer shall hold, good and marketable, indefeasible fee simple title to the Property, free and clear of liens and encumbrances, other than the lien of any existing mortgage held by WSFS, which shall be paid and discharged at or before the Closing. 5.12 All Taxes and Assessments Paid. The Seller will have paid prior to the Closing, all taxes and assessments, including assessments payable in installments, which are to become due and payable and/or a lien on the Property, except for taxes for the current year which shall be prorated between the Seller and the Buyer as of the Closing. 5.13 FIRPTA The Seller is not a "foreign person" as such term is defined in Section 1445(f)(3) of the Internal Revenue Code of 1954, as amended (the "Code"). 7 5.14 Mechanic's Liens. No work has been performed or is in progress at, and no materials have been furnished to the Property which, though not presently the subject of, might give rise to construction, mechanic's, materialmen's, or other liens against the Property or any portion thereof, except that for which full and complete releases have been obtained. If any lien for any such work is filed before or after the Closing, the Seller shall promptly discharge the same. 5.15 Rights to Purchase. There are no outstanding agreements, options, rights of first refusal, conditional sales agreements or other agreements or arrangements, whether oral or written, regarding the purchase and sale of the Property. 5.16 No Outstanding Obligations. All debts, liabilities, and obligations of the Seller arising out of the Property including, but not limited to, construction costs, salaries, taxes, accounts payable and the like, have been paid as they became due and payable and shall continue to be so paid from the date hereof until the Closing. No debts, liabilities, claims, or obligations (whether known or unknown, accrued, absolute, contingent, or otherwise) of the Seller arising out of the Property shall be outstanding as of the Closing. 5.17 Rollback Taxes. The Property is not subject to any roll-back or agricultural taxation or other tax abatement program. Any roll-back taxes payable in connection with the Seller's development of the Property have been paid in full. 5.18 Development Agreements. The Property and the Seller are in compliance with and have fully paid and discharged all obligations accrued to date under any and all development, tri-party and like agreements, and any and all other agreements with county, municipal and other governmental and quasi-governmental agencies and authorities respecting the ownership, development and operation of the Property and all portions thereof. 5.19 Correct Copies of Documents. Where copies of any documents have been delivered by the Seller to the Buyer, whether prior to or pursuant to this Agreement, such copies: (i) are exact copies of the originals of said documents, as executed and delivered by all of the parties thereto; (ii) to the best of the Seller's knowledge, constitute, in each case, the entire agreement between the parties thereto with respect to the subject matter thereof, and the original instruments in the form delivered to the Buyer, are now in full force and effect, and valid and enforceable in accordance with their respective terms, and no party thereto is in default, and no claim of default by any party has been made or is now pending and there does not now exist any default which, after either the giving of notice or the passing of time, or both, will or may constitute a default, or would excuse performance by any party thereto; and (iii) have not been changed or amended except for amendments, if any, specifically referred to therein. 5.20 No Lawsuits. There are no claims, lawsuits or proceedings pending, or to the best of the Seller's knowledge, threatened against or relating to Seller or the Property, or which could affect them, or either of them, in any court or before any governmental agency. 6. POSSESSION. Possession of the Premises is to be given to Buyer by delivery of the Deed and possession of the Property. 8 7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY. 7.1 Title Binder. On or before five (5) business days from the execution of this Agreement, Seller shall have delivered to Buyer a copy of its title commitment or policy for the Property (complete with copies of all exceptions to title), and within ten (10) business days after the receipt of same, Buyer shall secure a current title commitment (the "Title Binder") from the Title Company, and shall have until the Inspection Period Expiration Date (as hereinafter defined) to examine the condition of title, including the terms and provisions of all items and documents referred to in the Title Binder, and all information regarding title as disclosed on the Survey (hereinafter defined), and to approve or disapprove the same. If Buyer shall disapprove the condition of title, such disapproval shall be set forth in a notice given to Seller (the "Disapproval Notice") identifying the condition of title to the Property or any of the terms, provisions or contents of said items, documents or Survey which are disapproved by Buyer (the "Title Objections"). Subject to the provisions of the succeeding portion of this Section 7.1, Seller shall have until the date which is ten (10) days after the date of the Disapproval Notice (the "Title Cure Expiration Date") in which to cure or eliminate all items which Buyer disapproves in the Disapproval Notice, and to furnish evidence satisfactory to Buyer and the Title Company that all such items have been cured or eliminated or that arrangements have been made with the Title Company and any parties in interest to cure or eliminate the same at or prior to the Closing. If Seller fails to remove any Title Objection in accordance with the provisions of the immediately preceding sentence, Buyer, nevertheless, may elect (at or prior to the Closing) to consummate the transaction provided for in this Agreement subject to any such Title Objection(s) as may exist as of the Closing with a credit against the Purchase Price equal to the sum necessary to remove any lien of a fixed or ascertainable amount . If Buyer shall not so elect, Buyer may terminate this Agreement by notice in writing to Seller, whereupon the Deposit shall be immediately refunded to Buyer, and this Agreement shall be null and void, and the parties hereto shall be relieved of all further obligations and liability under this Agreement. 7.2 Survey. Within ten (10) days after the date of this Agreement, at Buyer's cost, Seller shall deliver to Buyer a current survey of Property (the "Survey"), prepared by a duly licensed land surveyor acceptable to Buyer. The Survey shall be currently dated, shall show the location on the Property of all buildings and improvements, building and set-back lines, easements, rights-of-way, encroachments, elevations between public roads providing access to the Property, and the boundary of the Property, and other such matters affecting the Property whether physically apparent from the ground, of record in public offices, or otherwise, and shall contain a legal description of the boundaries of the Premises by metes and bounds which shall include a reference to the recorded plat, if any. The surveyor shall certify to Buyer and to the Title Company and to any lender making a loan to Buyer secured by the Property that the Survey is correct and was made on the ground; and that there are no visible discrepancies, conflicts, encroachments, overlapping of improvements, violations of set-back lines, easements, rights-of-way or other such matters affecting the Property except as are shown on the Survey, and that the Survey conforms to all ACTA/ACSM and Pennsylvania Land Title Association standards and requirements for a Class A Survey. Any and all recorded matters shown on said Survey shall be legibly identified by appropriate volume and page recording references with dates of recording noted. Buyer shall have until the Inspection Period Expiration Date to approve or disapprove the 9 material contained thereon. If Buyer shall disapprove such Survey, such disapproval shall be set forth in a Disapproval Notice as hereinabove provided in Section 7.1, and the provisions of Section 7.1 with respect to Disapproval Notices shall apply. 7.3 Physical and Financial Inspection. For a period (the "Inspection Period") commencing on the second (2nd) business day next following the date upon which Buyer shall receive from Seller a fully-executed counterpart of this Agreement, and expiring twenty (20) days thereafter (such date is herein referred to as the "Inspection Period Expiration Date"), Buyer shall have the right to have performed a physical and mechanical inspection, measurement and audit of the Property and an inspection of all books and records and financial information pertaining thereto, and Seller shall cooperate with Buyer and shall furnish to Buyer such information, materials and documents as Buyer may reasonably request and shall have its accountant or internal controller available throughout such period to assist in Buyer's inspection and review. The inspection, audit and measurement of the Property's operation, condition and maintenance shall include, without limitation, such environmental and engineering inspections, reviews and assessments that Buyer deems appropriate. If Buyer fails to close hereunder for any reason other than Seller's breach or default, Buyer shall, to the maximum extent practicable, restore the Property to the condition existing immediately before such tests and assessments. In the event Seller shall fail to deliver or make available any item or information material to Buyer's review of the Property and required to be delivered or made available pursuant to the terms of this Section within five (5) business days next following the date upon which Buyer shall receive from Seller a fully-executed counterpart of this Agreement, then at Buyer's written election, the Inspection Period Expiration Date (and the Closing Date) shall be extended by one day for each day that the delivery or availability of such item is delayed. If Buyer, at Buyer's sole and absolute discretion, shall find such inspection(s) to be unsatisfactory for any reason whatsoever, Buyer shall have the right, at its option, to terminate this Agreement on or before the Inspection Period Expiration Date, and upon such termination, the Deposit shall be immediately refunded to the Buyer, and thereupon the parties hereto shall have no further liabilities one to the other with respect to the subject matter of this Agreement. Buyer agrees that it shall not unreasonably interfere with tenants in performing its inspection. In connection with such inspection, and without limiting the generality of Seller's obligations hereunder, Seller agrees to deliver to Buyer, within five (5) days: 7.3.1 Intentionally Omitted. 7.3.2 Contracts, Licenses, Permits. Copies of the Contract Documents, the Licenses, insurance policies applicable to the Property and any other documents evidencing rights described in Section 1.2 hereof; 7.3.3 Intentionally Omitted. 7.3.4 Intentionally Omitted. 7.3.5 Intentionally Omitted 7.3.6 Three Years' Tax Bills. A copy of tax bills (i) for the current year, and (ii) if available, for the preceding two years; 10 7.3.7 Intentionally Omitted. 7.3.8 Schedule of Violations. A schedule setting forth all violations of any law, ordinance, regulation, rule or requirement of any governmental body having jurisdiction, whether existing or prospective, of which Seller has received written notice, issued or noted by any governmental body during the past three years, and copies of any notices, terminations or correspondence relating thereto; 7.3.9 Schedule of Notices. A schedule of any written demands, requests, requirements or recommendations regarding the operation, maintenance, repair or replacement of the Property or any portion thereof, of which Seller has received notice during the past three years, from the holder of any mortgage or deed of trust or any insurance company or any board of fire underwriters or real estate associations or like body, and copies of all correspondence relating thereto; 7.3.10 Intentionally Omitted. 7.3.11 Zoning, Site Plan, Subdivision Plan or Plat. All conditional and permanent zoning, site plan, subdivision, building, housing, safety, fire and health approvals, including, without limitation, the local governmental applications, resolutions and approvals supporting the same; 7.3.12 Intentionally Omitted. 7.3.13 Takings or Changes. Copies of all written notices to Seller of proposed or threatened takings or changes with respect to the Property or major access roads within a reasonable radius which would affect the access to the Property, or any portion thereof, by prospective occupants; 7.3.14 Tax Assessments, Appeals and Increases. Copies of all written notices to Seller of all filed, proposed or threatened tax assessment appeals or tax assessment increases related to the Premises; 7.3.15 Litigation. Copies of all pending and written notices to Seller of threatened litigation, including litigation affecting the Property or this transaction; 7.3.16 Insurance Policies. Copies of all insurance policies of Seller related to the Property; 7.3.17 Intentionally Omitted. 7.3.18 Title Information. Seller's most recently dated title report or title commitment respecting the Premises. 7.4 Seller's Failure to Deliver. If Seller shall have failed to deliver to Buyer all material documents required to be delivered under Section 7.3 hereof, Buyer may, at its option, at 11 any time on or after such date, but prior to the curing of such failure by Seller, give Seller a five (5) day written notice specifying such default, and if Seller fails to cure such default within such five (5) day period, Buyer may terminate this Agreement, receive the return of the Deposit and pursue any other remedy available to it pursuant to the provisions hereof. 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of Buyer and Seller set forth herein shall survive Closing and delivery of the deed for the applicable period of the statute of limitations pertaining thereto. 9. INTENTIONALLY OMITTED. 10. CONDEMNATION. If, prior to the Closing Date, all or any portion of the Premises is taken by eminent domain or a notice of any eminent domain proceedings with respect to the Premises or any part thereof is received by the Seller, then Seller shall within five (5) days thereafter give notice thereof to Buyer and Buyer shall have the option to (a) complete the purchase hereunder or (b) if such taking, in Buyer's sole and absolute discretion, materially affects the Premises or its current economic viability, terminate this Agreement, in which event the Deposit shall be immediately refunded to Buyer, and this Agreement shall be null and void. Buyer shall deliver written notice of its election to the Seller within ten (10) days after the date upon which the Buyer receives written notice of such eminent domain proceedings. If notice of condemnation is received by Buyer and it fails to deliver said written notice of its election within said time period, such failure shall constitute a waiver by Buyer of its right to terminate this Agreement. If this Agreement is not so terminated, Buyer shall be entitled to all awards or damages by reason of any exercise of the power of eminent domain or condemnation with respect to or for the taking of the Premises or any portion thereof, and until such time as closing has occurred, or this Agreement terminates. Any negotiation for, or agreement to, and all contests of any offers and awards relating to eminent domain proceedings shall be conducted with the joint approval and consent of the Seller and the Buyer. 11. Expense Allocations. 11.1 Seller shall pay for one-half of all applicable realty transfer taxes related to the execution, delivery and recording of the Deed, Bill of Sale, and other Closing Documents, and all related recording charges. 11.2 Buyer shall pay for one-half of all applicable realty transfer taxes, for Buyer's title examination, the survey and for Buyer's title examination and premiums. 11.3 Buyer and Seller shall be responsible for paying their own attorney's fees in connection with this transaction. 12. CLOSING. 12.1 Time and Date and Place. The closing ("Closing") on the sale of the Property (herein referred to as the "Closing Date") shall take place at a time specified by Buyer in writing to Seller at least five (5) days prior to the specified Closing Date, but in any event no later 12 than September 19, 1997, at the offices of Pepper, Hamilton & Scheetz, 3000 Two Logan Square, Eighteenth & Arch Streets, Philadelphia, PA, commencing at 10:00 a.m. 12.2 Documents. At Closing, the parties indicated shall simultaneously execute and deliver the following: 12.2.1 Seller's Documents and Other Items. Seller shall execute and deliver or cause to be executed and delivered to Buyer in proper form for recording: 12.2.1.1 Deed. A special warranty deed prepared by Buyer's counsel in form acceptable to Seller (the "Deed"), conveying the Premises to Buyer, duly executed by Seller for recording. The Deed description shall be based upon the metes and bounds description attached as Exhibit "A", unless Buyer requests that Seller convey the Premises by the metes and bounds description shown on the new ALTA/ACSM survey, if any, obtained by Buyer, in which event the Premises shall be so conveyed. 12.2.1.2 Bill of Sale. A warranty bill of sale prepared by Buyer's counsel in form acceptable to Seller, assigning, conveying and transferring to Buyer, all of the Personal Property, if any. 12.2.1.3 Intentionally Omitted 12.2.1.4 Original Licenses, Contract Documents and Other Personal Property. All original Licenses, Contract Documents, and other Personal Property described in Section 1.2 of this Agreement, certified by Seller as being true, correct and complete. 12.2.1.5 Intentionally Omitted 12.2.1.6 Assignment of Licenses, Contract Documents and Other Personal Property. An assignment agreement prepared by Buyer's counsel, in form acceptable to Seller, assigning, conveying and transferring to Buyer the Licenses, Contracts Documents and Other Personal Property, including, specifically, the Names. 12.2.1.7 FIRPTA Certificates. All certificate(s) required under Section 1445 of the Code. 12.2.1.8 Intentionally Omitted. 12.2.1.9 Estoppel Certificate from Municipality. All certificate(s) required by Section 5.7 hereof, and any other certificates required by New Castle County, or the State of Delaware as a condition of the conveyance of the Premises or the recording of the Deed. 12.2.1.10 Title Insurance Certificates. Such affidavits of title or other certifications as shall be required by the Title Company to insure Buyer's title to the Premises as set forth in Section 3, and to provide affirmative endorsements (a) against mechanic's 13 liens, (b) insuring against any violation of existing covenants, conditions or restrictions, and insuring that future violation will not result in forfeiture of title, (c) insuring that all foundations in place as of the date of such policy are within the lot lines and applicable set back lines, (d) insuring that the buildings and structures on the Premises do not encroach onto adjoining land, or onto any easements, (e) insuring that confirming that there are no encroachments of improvements from adjoining land onto the Premises (f) removing any exceptions for matters which an accurate survey would disclose, and (g) providing affirmative insurance with respect to such other matters as Buyer shall reasonably specify. 12.2.1.11 Intentionally Omitted 12.2.1.12 Seller Certificate. A written certification confirming that as of Closing no representation or warranty of Seller contained in this Agreement, nor any document or certificate delivered to Buyer pursuant to this Agreement or in connection with the transaction contemplated hereby, contains any untrue statement of a material fact or knowingly omits to state a material fact necessary to make any representation or warranty contained herein misleading. 12.2.1.13 Organization Certifications. Confirmation of the good standing and existence of Seller and the due authority of those executing for them, including, without limitation, the following documents issued no earlier than 30 days prior to Closing: (a) good standing certificate in state of organization and in the State in which the Premises are located, (b) articles of incorporation, partnership agreement or other formation instrument certified by the secretary of state of the state of incorporation, (c) a certificate from the secretary of the corporation or managing general partner of the partnership confirming the incumbency of the signatories and the current force and effect of the resolution authorizing their execution of the documents required under this Agreement. 12.2.1.14 Intentionally Omitted 12.2.1.15 Tax Bills. Current tax bills and, if available, tax bills for each of the years of Seller's ownership of the Property; 12.2.1.16 Tax Reduction Rights. An instrument assigning to Buyer any claims for the reduction of real or personal property taxes assessed against any portion of the Property for the fiscal year in which the Closing takes place; any refund for such year shall be prorated when received; 12.2.1.17 Intentionally Omitted 12.2.1.18 Leasing Agreement. A leasing agreement prepared by Buyer's counsel in form acceptable to Seller (the "Leasing Agreement") duly executed by Buyer and Commonwealth Management Group, Ltd., pursuant to which Commonwealth Management Group, Ltd. shall lease the property on terms and conditions more fully set forth therein.. 14 12.2.2 Buyer's Documents. Buyer shall deliver or cause to be delivered to Seller: 12.2.2.1 The amounts required to be paid to Seller pursuant to this Agreement; 12.2.2.2 Confirmation of the existence and subsistence of Buyer, and the authority of those executing for Buyer, including, without limitation, the following documents issued no earlier than thirty (30) days prior to Closing: Operating Agreement and Certificate of Formation. 12.2.2.3 Leasing Agreement. Buyer shall execute and deliver the Leasing Agreement, as defined above, pursuant to which Commonwealth Management Group, Ltd. shall lease the Property on terms and conditions more fully set forth therein. 12.2.2.4 Assignment Agreement Regarding CSC Lease. An agreement prepared by Buyer's counsel, in form acceptable to Seller (the "CSC Expansion Agreement") duly executed by Buyer and Seller, pursuant to which Seller shall assign and Buyer shall assume certain obligations regarding expansion rights of Computer Sciences Corporation under Lease dated July 24, 1997 (the "CSC Lease") with respect to 400 Commerce Drive, all as more fully set forth in the CSC Expansion Agreement. The foregoing notwithstanding, the parties agree that they will execute and deliver the CSC Expansion Agreement on or before closing on Seller's sale of 400 Commerce Drive to Christiana Center Operating Company I LLC. This provision expressly survives Closing hereunder. 12.2.3 Title Insurance. As a condition to Buyer's obligations at Closing, Title Company shall furnish Buyer at Closing with the Title Policy, in the form approved by Buyer pursuant to Section 3, in the full amount of the Purchase Price, wherein the Title Company shall insure fee simple title to the Property in Buyer or its designee as of the Closing Date containing no exceptions to title other than those which have been approved by Buyer in writing pursuant to Section 3 hereof and providing the title endorsements specified in Section 12.2.1.10 above. 12.2.4 Necessary Documents. Buyer and Seller shall execute and deliver such other documents and instruments as may be reasonably necessary to complete the transaction contemplated by this Agreement. 15 13. DEFAULT; REMEDIES 13.1 In the event that any of Seller's representations or warranties contained in this Agreement are materially or prejudicially untrue or if Seller shall have failed to have performed any of the covenants and/or agreements contained in this Agreement which are to be performed by Seller, on or before the date set forth in this Agreement for the performance thereof, or if any of the conditions precedent to Buyer's obligation to consummate the transaction contemplated by this Agreement shall have failed to occur, Buyer may, at its option, rescind this Agreement by giving written notice of such rescission to Seller and Seller shall immediately thereafter return the Deposit, and thereupon, subject to the provisions of Section 13.3 below, the parties shall have no further liability to each other hereunder. In the alternative, but without limiting Buyer's right upon any default by Seller hereunder to receive the prompt return of the Deposit, Buyer may seek to enforce specific performance of this Agreement. 13.2 Buyer recognizes that the Property will be removed by Seller from the market during the existence of this Agreement and that if this purchase and sale is not consummated because of Buyer's default Seller shall be entitled to compensation for such detriment. Seller and Buyer acknowledge that it is extremely difficult and impracticable ascertain the extent of the detriment, and to avoid this problem, Seller and Buyer agree that if the purchase and sale contemplated in this Agreement is not consummated because of Buyer's default under this Agreement, Seller shall be entitled to retain the Deposit as liquidated damages. The parties agree that the sum stated above as liquidated damages shall be in lieu of any other relief to which Seller might otherwise be entitled, Seller hereby specifically waiving any and all rights which it may have to damages or specific performance as a result of Buyer's default under this Agreement. 13.3 Buyer's Out-of-Pocket Costs. In the event of Seller's breach or default hereunder which results in Buyer's termination of this Agreement, or in the event that Seller shall fail to perform any term, covenant or agreement, or satisfy any condition herein stipulated (including, without limitation, a failure of title), then, in any such event, upon termination by Buyer hereunder, in addition to receiving the immediate return of the Deposit, anything in the Agreement contained to the contrary notwithstanding, Buyer shall also receive from Seller, upon demand, Buyer's actual, documented out-of-pocket costs and expenses associated with this Agreement and Buyer's anticipated acquisition of the Property including, without limitation, Buyer's reasonable counsel fees and costs, title expenses, survey costs, and other costs and expenses associated with Buyer's due diligence, including, without limitation, legal, financial and accounting due diligence, Buyer's structural inspection of the Property and Buyer's environmental assessment of the Property (collectively, "Transaction Costs"). The foregoing list is not intended to be exclusive, but representative of the costs and expenses that the parties anticipate that Buyer will incur in anticipation of this transaction. Seller's maximum reimbursement liability under this Section 13.3 shall not exceed Twenty Five Thousand ($25,000) Dollars. 14. CONDITIONS PRECEDENT TO CLOSING. The obligations of Buyer hereunder are subject to the fulfillment of the following conditions prior to or on the Closing Date (any one of which may be waived in whole or in part by Buyer at or prior to the Closing) and in the event any of the conditions are not complied with, 16 Buyer may terminate this Agreement by notifying the Seller and Escrow Agent and thereupon shall be returned the Deposit and thereafter this Agreement shall be null and void: 14.1 Correctness of Warranties and Representations. The warranties and representations made by Seller in this Agreement shall be true and correct on the Closing Date as though such representations and warranties were made on the Closing Date (except for changes in the Leases permitted under the terms of this Agreement). 14.2 Compliance with Terms and Conditions. Seller shall have performed and complied with all of the terms and conditions required by this Agreement to be performed and complied with by it prior to or on the Closing Date. 14.3 Buyer's Satisfaction with Inspection. Buyer shall have notified Seller of Buyer's satisfaction with the review and inspection performed under Section 7 of this Agreement, or shall fail to notify Seller on or before the Inspection Period Expiration Date, of Buyer's dissatisfaction with the results of such review and inspection. 14.4 Trustee Approval. This Agreement and the transactions contemplated hereby shall have received formal approval of Buyer's Board of Trustees at a meeting duly called during the Inspection Period to consider same. 15. PRORATIONS. 15.1 Operating Expenses. The following items shall be prorated at Closing, as of close of business of the day immediately preceding Closing "Adjustment Date": 15.1.1 Intentionally Omitted. 15.1.2 Taxes. Real estate and personal property taxes, if any, on the basis of the fiscal year for which assessed. If the Closing shall occur before the tax rate or assessment is fixed, the apportionment of such real estate and personal property taxes at the Closing shall be upon the basis of the tax rate for the next preceding year applied to the latest assessed valuation. Final adjustment will be made upon the actual tax amount, when determined. 15.1.3 Deposits. Tax and utility company deposits, if any, shall be assigned to Buyer. 15.1.4 Water and Sewer Charges. Water and sewer charges and fire protection and inspection services based upon meter readings to be obtained by Seller effective as of the Adjustment Date, or if not so obtainable, a date not more than ten (10) days prior to the Adjustment Date, and the unfixed meter charges based thereon for the intervening period shall be apportioned on the basis of such last reading. Upon the taking of a subsequent actual reading, such apportionment shall be readjusted and Seller or Buyer, as the case may be, will promptly deliver to the other the amount determined to be so due upon such readjustment. If Seller is unable to furnish such prior reading, any reading subsequent to the Closing will be apportioned on 17 a per diem basis from the date of such reading immediately prior thereto and Seller shall pay the proportionate charges due up to the date of Closing. 15.1.5 Assigned Contracts. Amounts paid or payable in respect of any service and maintenance contracts assigned to Buyer in accordance herewith. 15.1.6 Electricity, gas, steam and fuel. Electricity, gas and steam and fuel oil, if any, based on meter readings or a fuel company letter showing measurement on the day immediately preceding Closing, and valued at current prices. 15.1.7 Intentionally Omitted. 15.2 Custom and Practice. Except as set forth in this Agreement, the customs of the State and County in which the Premises are located shall govern prorations. 15.3 Future Installments of Taxes. If at Closing, the Property or any part thereof shall be or shall have been affected by an assessment or assessments which are or may become payable in installments, then for purposes of this Agreement, all unpaid installments of any such assessment, including those which are to become due and payable and to be liens upon the Property shall be paid and discharged by Seller at Closing. 15.4 Application of Prorations. If such prorations result in a payment due Buyer, the cash payable at Closing shall be reduced by such sum. If such prorations result in a payment due Seller, the same shall be paid by uncertified check at Closing. 15.5 Schedule of Prorations. The parties shall endeavor to jointly prepare a schedule of prorations for the Property no less than five (5) days prior to Closing. 15.6 Intentionally Omitted. 15.7 Readjustments. The parties shall correct any errors in prorations as soon after the Closing as amounts are finally determined. 15.8 Indemnification for Seller's Tax Obligations. Seller shall indemnify, defend and save and hold harmless Buyer from any loss, cost, liability or expense (including, without limitation, reasonable counsel fees and court costs) incurred, paid or suffered by Buyer arising out of or by reason of any claim made by any state taxing or employment authorities asserting or indicating any claims or possible claims for unpaid taxes, penalties, interest or court costs related thereto of Seller or any related party, due the State of Delaware or its political subdivisions. The provisions of this Section 15.8 shall specifically survive Closing hereunder. 15.9 Survival. The provisions of this Section 15 shall expressly survive Closing hereunder. 16. BROKERS. Each party hereby represents and warrants to the other that it has not employed or retained any broker or finder in connection with the transactions contemplated by this Agreement, other than CB Commercial, and that other than CB Commercial, neither party has 18 had any dealings with any other person or party which may entitle that person or party to a fee or commission. Each party shall indemnify the other of and from any claims for commissions by any person or party claiming such commission by or through the indemnifying party. 17. ESCROW AGENT. The parties hereto have requested that the Deposit be held in escrow by the Escrow Agent to be applied at the Closing or prior thereto in accordance with this Agreement. The Escrow Agent will deliver the Deposit to Seller or to Buyer, as the case may be under the following conditions: 17.1 Payment to Seller. To Seller on the Closing Date upon the consummation of Closing; 17.2 Notice of Dispute. If either Seller or Buyer believes that it is entitled to the Deposit or any part thereof, it shall make written demand therefor upon the Escrow Agent. The Escrow Agent shall promptly mail a copy thereof to the other party in the manner specified in Section 18.1 below. The other party shall have the right to object to the delivery of the Deposit, by filing written notice of such objections with the Escrow Agent at any time within ten (10) days after the mailing of such copy to it in the manner specified in Section 18.1 below, but not thereafter. Such notice shall set forth the basis for objection to the delivery of the Deposit. Upon receipt of such notice, the Escrow Agent shall promptly deliver a copy thereof to the party who filed the written demand. 17.3 Escrow Subject to Dispute. In the event the Escrow Agent shall have received the notice of objection provided for in 17.2 above of this Section, in the manner and within the time therein prescribed, the Escrow Agent shall continue to hold the Deposit until (i) the Escrow Agent receives written notice from both Seller and Buyer directing the disbursement of the Deposit in which case the Escrow Agent shall then disburse said Deposit in accordance with said direction, or (ii) litigation arises between Seller and Buyer, in which event the Escrow Agent shall deposit the Deposit with the Clerk of the Court in which said litigation is pending, or (iii) the Escrow Agent takes such affirmative steps as the Escrow Agent may, at the Escrow Agent's option elect in order to terminate the Escrow Agent's duties including, but not limited to, deposit in Court and an action for interpleader. 17.4 Escrow Agent's Rights and Liabilities. Escrow Agent shall not be required to determine questions of fact or law, and may act upon any instrument or other writing believed by it in good faith to be genuine and to be signed and presented by the proper person, and shall not be liable in connection with the performance of any duties imposed upon Escrow Agent by the provisions of this Agreement, except for Escrow Agent's own willful default or gross negligence. Escrow Agent shall have no duties or responsibilities except those set forth herein. Escrow Agent shall not be bound by any modification of this Agreement, unless the same is in writing and signed by Buyer and Seller, and, if Escrow Agent's duties hereunder are affected, unless Escrow Agent shall have given prior written consent thereto. In the event that Escrow Agent shall be uncertain as to Escrow Agent's duties or rights hereunder, or shall receive instructions from Buyer or Seller which, in Escrow Agent's opinion, are in conflict with any of the provisions hereof, Escrow Agent 19 shall be entitled to hold and apply the Deposit, pursuant to Section 17.3, and may decline to take any other action. 18. GENERAL PROVISIONS. 18.1 Notices. All notices or other communications required or permitted to be given under the terms of this Agreement shall be in writing, and shall be deemed effective when (i) sent by nationally-recognized overnight courier, (ii) facsimile with original following by regular mail, or (iii) deposited in the United States mail and sent by certified mail, postage prepaid, addressed as follows: 18.1.1 If to Buyer, addressed to: Brandywine Realty Trust Newtown Square Corporate Campus 16 Campus Boulevard Suite 150 Newtown Square, PA 19073 Attn: Gerard H. Sweeney, President and Chief Executive Officer with a copy in each instance to: Eric L. Stern, Esquire Pepper, Hamilton & Scheetz LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 19103 18.1.2 If to Seller, addressed to: Gender Road Joint Venture c/o The Commonwealth Group 62 Read's Way New Castle, Delaware 19720 Attn.: Brock J. Vinton, President with a copy in each instance to: William S. Gee, Esquire Saul, Ewing, Remick & Saul 222 Delaware Avenue Suite 1200 Wilmington, DE 19899 20 18.1.3 If to Escrow Agent, addressed to: Commonwealth Land Title Insurance Company National Title Service 1700 Market Street Philadelphia, PA 19103 Attn.: M. Gordon Daniels or to such-other address or addresses and to the attention of such other person or persons as any of the parties may notify the other in accordance with the provisions of this Agreement. 18.2 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. 18.3 Entire Agreement. All Exhibits attached to this Agreement are incorporated herein and made a part hereof. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior negotiations, understandings and agreements of any nature whatsoever with respect to the subject matter hereof. This Agreement may not be modified or amended other than by an agreement in writing. The captions included in this Agreement are for convenience only and in no way define, describe or limit the scope or intent of the terms of this Agreement. 18.4 Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania. 18.5 No Recording. This Agreement shall not be recorded in the Office for the Recording of Deeds or in any other office or place of public record. 18.6 Tender. Tender of Deed by Seller and of the Purchase Price by Buyer, are hereby mutually waived. 18.7 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 whose signature appears thereon, and all of which shall together 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. 18.8 Further Instruments. Seller will, whenever and as often as it shall be reasonably request so to do by Buyer, and Buyer will, whenever and as often as it shall be reasonably requested so to do by Seller, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all conveyances, assignments, correction instruments and all other instruments and documents as may be reasonably necessary in order to complete the transaction provided for in this Agreement and to carry out the intent and purposes of this Agreement. All such instruments and documents shall be satisfactory to the respective attorneys for Buyer and Seller. The provisions of this Article shall survive the Closing. 21 18.9 Time. Time is of the essence. In the event the last day permitted for the performance of any act required or permitted under this Agreement falls on a Saturday, Sunday, or legal holiday of the United States or the Commonwealth of Pennsylvania, the time for such performance will be extended to the next succeeding business day. Time periods under this Agreement will exclude the first day and include the last day of such time period. 18.10 Designation of Nominee; Assignment of Agreement. Buyer shall have the right to designate one or more of its subsidiaries or affiliate entities to acquire title to the Premises hereunder. Except for the foregoing, Buyer may not assign this Agreement. 18.11 Effective Date. Whenever the term or phrase "effective date hereof" or "date hereof" or other similar phrases describing the date this Agreement becomes binding on Seller and Buyer are used in this Agreement, such terms or phrases shall mean and refer to the date on which a counterpart or counterparts of this Agreement executed by Seller and Buyer are deposited with the Escrow Agent. 18.12 Time for Acceptance. This Agreement shall constitute an offer to buy or sell the Property, as case may be, on the terms herein set forth only when executed by the Seller or Buyer. This Agreement may be accepted by the party receiving such executed Agreement only by executing this Agreement and delivering an original signed copy hereof to the Escrow Agent and an originally signed copy hereof to the other party hereto within five (5) business days after such receipt. Failure to accept in the manner and within the time specified shall constitute a rejection and termination of such officer. 18.13 Confidentiality. Each of the parties hereto covenants and agrees to hold the nature and content of this Agreement, including without limitation, the Purchase Price contained herein, in strict confidence prior to Closing, and other than disclosure required by the SEC and except as may be necessary to comply with this Agreement, neither party shall disclose prior to Closing, the nature, content or the Purchase Price of this Agreement without the express written consent of the other party. 18.14 Delivery of Documents. If this Agreement (or any of the Exhibits or Schedules hereto) shall have been prepared by Seller or by its counsel, then promptly upon execution hereof by the parties hereto, Seller shall deliver to Buyer one (1) "clean" copy of this Agreement, complete with all Exhibits and Schedules prepared (or obtained) by Seller or its counsel, and a copy of this Agreement (and said Exhibits and Schedules, if available) on disk, compatible with WordPerfect 5.1. 19. SEC REPORTING (8-K) REQUIREMENTS. For the period of time commencing on the date hereof and continuing through the first anniversary of the Closing Date, and without limitation of other document production otherwise required of Seller hereunder, Seller shall, from time to time, upon reasonable advance written notice from Buyer, provide Buyer and its representatives, with (I) access to all financial and other information pertaining to the period of Seller's ownership and operation of the Property, which information is relevant and reasonably necessary, in the opinion of Buyer's outside, third party accountants (the "Accountants"), to enable Buyer and its Accountants to 22 prepare financial statements in compliance with any or all of (a) Rule 3-05 or 3-14 of Regulation S-X of the Securities and Exchange Commission (the "Commission"), as applicable; (b) any other rule issued by the Commission and applicable to Buyer; and (c) any registration statement, report or disclosure statement filed with the Commission by, or on behalf of Buyer; and (II) a representation letter, signed by the individual(s) responsible for Seller's financial reporting, as prescribed by generally accepted auditing standards promulgated by the Auditing Standards Division of the American Institute of Certified Public Accountants, which representation letter may be required by the Accountants in order to render an opinion concerning Seller's financial statements. 20. INDEMNIFICATION. Without limitation of any other Seller indemnity obligations set forth herein, from and after the Closing Date, Seller shall indemnify, defend and save and hold harmless Buyer, and its respective trustees, directors, officers and employees, of, from and against any and all loss, cost, expense, damage, claim, and liability, including reasonable attorney's fees and court costs, including, without limitation, attorney's fees and costs associated with the enforcement of Seller's indemnification obligations hereunder (hereinafter collectively, "Losses") which Buyer may suffer or incur, resulting from, relating to, or arising in whole or in part, from or out of (i) any misrepresentation or breach of a representation or warranty by Seller contained in this Agreement; (ii) any failure to fulfill any covenant or agreement of Seller contained in this Agreement; (iii) all litigation set forth in this Agreement and on Exhibit "D"; hereto; and (iv) any and all actions, suits, investigations, proceedings, demands, assessments, audits, judgments, and/or claims arising out of or relating to any of the foregoing. Promptly after receipt by Buyer of written notice of the commencement of any suit, audit, demand, judgment, action, investigation or proceeding (a "Third Party Action") or promptly after Buyer incurs a Loss or has knowledge of the existence of a Loss, Buyer will, if a claim with respect thereto is to be made against Seller due to Seller's obligation to provide indemnification hereunder, give Seller written notice of such Loss or the commencement of any Third Party Action; provided, however, that the failure to provide such notice within a reasonable period of time shall not relieve Seller of any of its obligations hereunder, unless Seller is materially prejudiced by such delay. Promptly after receiving such notice, Seller will, upon notice to Buyer, have the right to assume and control the defense and settlement of any such Third Party Action at its own cost and expense; provided, however, that it shall be a condition precedent to the exercise of such right by Seller that Seller shall agree in writing that the Loss, or Third Party Action, as the case may be, is properly within the scope of the indemnification obligation and that as between the parties, Seller shall be responsible to satisfy and discharge such Third Party Action. Seller shall not enter into any resolution or other compromise of a Third Party Action without obtaining the complete release of Buyer for any liability to all claimants under or pursuant to such Third Party Action. Buyer shall have the right to participate in any such defense, contest or other protective action at its own cost and expense. Notwithstanding the foregoing, Buyer shall have the right to assume and control the defense and settlement of a Third Party Action (a) if such action includes claims for equitable relief which, if determined adversely to Buyer, could reasonably be expected to interfere with its intended business operations or damage its business reputation or (b) if Seller fails to do so in a 23 timely manner. In any circumstances in which Buyer undertakes to control the Third Party Action as provided in this paragraph, it shall (i) not enter into any resolution or other compromise involving monetary damages without obtaining the prior written consent of Seller provided that such written consent may not be withheld if it would interfere with Buyer's business operation and (ii) keep Seller informed on an ongoing basis of the status of such Third Party Action and shall deliver to Seller, copies of all documents related to the Third Party Action reasonably requested by Seller. Buyer shall act to assure that all attorneys' fees and expenses incurred in connection therewith are reasonable. 21. EXCULPATION. No recourse shall be had for any obligation of Brandywine Realty Trust under this Agreement or under any document executed in connection herewith or pursuant hereto, or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of Brandywine Realty Trust, 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 the Seller and all parties claiming by, through or under Seller. 22. AS-IS. Buyer acknowledges and agrees that except as herein elsewhere specifically provided, Seller has not made, does not make and specifically negates and disclaims any representations, warranties (other than the special warranty of title as set out in the deed), promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, statutory, oral or written, past, present or future, of, as to, concerning or with respect to (A) the value, nature, quality or condition of the Property, including, without limitation, the water, soil, and geology, (B) the suitability of the Property for any and all activities and uses which Buyer or any tenant may conduct thereon, (C) the compliance of or by the Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body, (D) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property, (E) the manner or quality of the construction or materials, if any, incorporated into the Property, (F) the manner, quality, state of repair or lack of repair of the Property, (G) compliance with any environmental requirements, including the existence in or on the Property of hazardous materials or (H) any other matter with respect to the Property. Additionally, no person acting on behalf of Seller is authorized to make, and by execution hereof, Buyer acknowledges that, except as herein elsewhere specifically provided, no person has made any representation, agreement, statement, warranty, guaranty or promise regarding the Property or the transaction contemplated herein; and no such representation, warranty, agreement, guaranty, statement or promise, if any, made by any person acting on behalf of Seller shall be valid or binding upon Seller unless expressly set forth herein. Buyer further acknowledges and agrees that, except with respect to information developed by Seller, its 24 principals or affiliates, any information provided or to be provided with respect to the Property was obtained from a variety of sources, that Seller has not made any independent investigation or verification of such information and makes no representations as to the accuracy, truthfulness or completeness of such information, and the Buyer may not be entitled to rely on any such information. The foregoing notwithstanding, Seller has no knowledge that any such information is inaccurate or misleading. Buyer further acknowledges and agrees that to the maximum extent permitted by law, and except as herein elsewhere specifically provided, the sale of the Property as provided for herein is made on an "as is" condition and basis with all faults. It is understood and agreed that the purchase price has been adjusted by prior negotiation to reflect that the Property is sold by Seller and purchased by Buyer subject to the foregoing. 23. Other Transactions. The obligations of the parties to consummate Closing hereunder shall be expressly conditioned upon (i) Seller and Brandywine Operating Partnership, L.P., a Delaware limited partnership ("BOP") executing and delivering a mutually satisfactory operating agreement regarding the governance of Buyer, (ii) closing by Brandywine Realty Trust, or BOP, as buyer, and Seller, as seller, under that certain Agreement of Sale dated of even date herewith regarding the purchase and sale of 100 Commerce Drive, Newark, New Castle County, Delaware, (iii) Seller and BOP executing and delivering a mutually satisfactory operating agreement regarding the governance of Christiana Center Operating Company I LLC and (iv) the execution and delivery by Seller, as seller, and the said Christiana Center Operating Company I LLC as buyer of a mutually satisfactory Agreement of Sale regarding the purchase and sale of that certain property known as and numbered 400 Commerce Drive, Newark, New Castle County, Delaware, each and all upon terms and conditions acceptable to the parties, failing which neither party hereto shall have any obligation to consummate Closing hereunder. If either party shall elect to terminate this Agreement in such instance, then in that event, the Deposit shall be promptly refunded to the Buyer and thereupon neither party shall have any further obligation to the other hereunder. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed the day and year first above written. GENDER ROAD JOINT VENTURE, CHRISTIANA CENTER OPERATING a Delaware partnership COMPANY II LLC, By Its Members By:_________________(SEAL) BRANDYWINE OPERATING PARTNERSHIP, Brock J. Vinton, Managing Venturer L.P., a Delaware limited partnership, by Hereunto Duly Authorized Brandywine Realty Trust, a Maryland Real Estate Investment Trust, its sole general partner By: /S/ Gerard H. Sweeney, President & CEO ----------------------------------------- Gerard H. Sweeney, President & CEO [SIGNATURES CONTINUED ON THE NEXT PAGE] 25 GENDER ROAD JOINT VENTURE, a Delaware partnership By: ----------------------------------------- Brock J. Vinton, Managing Venturer, Hereunto Duly Authorized 26 Exhibits to Agreement of Sale "A" - Legal Description "B" - Schedule of Inventory "C" - Permitted Encumbrances "D" - Rent Roll Schedules to Agreement of Sale 5.8 - Leasing Commissions ii EXHIBIT "A" Legal Description EXHIBIT "B" Schedule of Inventory None EXHIBIT "C" Permitted Encumbrances EXHIBIT "D" Rent Roll Not Applicable vii EX-10.3 4 EXHIBIT 10.3 AGREEMENT OF SALE for 400 COMMERCE DRIVE NEWARK, DELAWARE between CHRISTIANA CENTER OPERATING COMPANY I LLC and GENDER ROAD JOINT VENTURE Dated: September 19, 1997 AGREEMENT OF SALE INDEX Section Page 1. PROPERTY BEING SOLD........................................................1 1.1 Real Property........................................................1 1.2 Personal Property....................................................1 1.3 Leases...............................................................2 1.4 Right to Names.......................................................2 2. PURCHASE PRICE AND MANNER OF PAYMENT.......................................2 2.1 Purchase Price.......................................................2 2.2 Manner of Payment....................................................2 2.2.1 Deposit.......................................................2 2.2.2 Additiona.l Deposit...........................................3 2.2.3 Cash Balance..................................................3 2.3 Intentionally Omitted................................................3 3. TITLE......................................................................3 4. COVENANTS..................................................................3 4.1 Maintenance..........................................................3 4.2 Alterations..........................................................3 4.3 Lease................................................................3 4.4 Security Deposits....................................................3 4.5 Intentionally Omitted................................................3 4.6 Notice to Buyer......................................................4 4.7 Intentionally Omitted................................................4 4.8 Comply with Leases...................................................4 4.9 No New Agreements....................................................4 4.10 Tax Disputes.........................................................4 4.11 Intentionally Omitted................................................5 5. REPRESENTATIONS AND WARRANTIES............................................5 5.1 Seller's Authority For Binding Agreement.............................5 5.2 Employment...........................................................5 5.3 Service Contracts....................................................5 5.4 Condemnation.........................................................5 5.5 No Tax Assessments...................................................5 5.6 Leases...............................................................6 5.7 Compliance with Law..................................................6 5.8 No Brokers...........................................................7 5.9 Utilities............................................................7 5.10 Permits, Approvals and Certificates..................................7 -i- 5.11 Good Title to Property...............................................8 5.13 FIRPTA...............................................................8 5.14 Mechanic's Liens.....................................................8 5.15 Rights to Purchase...................................................8 5.16 No Outstanding Obligations...........................................8 5.17 Rollback Taxes.......................................................8 5.18 Development Agreements...............................................9 5.19 Charges, Fees and Assessments........................................9 5.20 Correct Copies of Documents..........................................9 6. POSSESSION.................................................................9 7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY............................9 7.1 Title Binder..........................................................9 7.2 Survey...............................................................10 7.3 Physical and Financial Inspection....................................10 7.3.1 Intentionally Omitted.........................................11 7.3.2 Contracts, Licenses, Permits..................................11 7.3.3 Intentionally Omitted.........................................11 7.3.4 Intentionally Omitted.........................................11 7.3.5 Intentionally Omitted.........................................11 7.3.6 Three Years' Tax Bills........................................11 7.3.7 Intentionally Omitted.........................................11 7.3.8 Schedule of Violations........................................11 7.3.9 Schedule of Notices...........................................11 7.3.10 Intentionally Omitted.........................................12 7.3.11 Zoning, Site Plan, Subdivision Plan or Plat...................12 7.3.12 Intentionally Omitted.........................................12 7.3.13 Takings or Changes............................................12 7.3.14 Tax Assessments, Appeals and Increases........................12 7.3.15 Litigation....................................................12 7.3.16 Insurance Policies............................................12 7.3.17 Intentionally Omitted.........................................12 7.3.18 Title Information.............................................12 7.4 Seller's Failure to Deliver..........................................12 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES................................12 9. INTENTIONALLY OMITTED.....................................................12 10. CONDEMNATION..............................................................12 11. EXPENSE ALLOCATIONS.......................................................13 12. CLOSING...................................................................13 12.1 Time and Date and Place..............................................13 -ii- 12.2 Documents.........................................................13 12.2.1 Seller's Documents and Other Items........................13 12.2.1.1 Deed..........................................13 12.2.1.2 Bill of Sale..................................14 12.2.1.3 Original Leases...............................14 12.2.1.4 Original Licenses, Contract Documents and Other Personal Property............................14 12.2.1.5 Assignment of Lease...........................14 12.2.1.6 Assignment of Licenses, Contract Documents and Other Personal Property........................14 12.2.1.7 FIRPTA Certificates...........................14 12.2.1.8 Tenant Letter.................................14 12.2.1.9 Estoppel Certificate from Municipality........14 12.2.1.10 Title Insurance Certificates..................14 12.2.1.11 Updated Rent Roll.............................15 12.2.1.12 Seller Certificate............................15 12.2.1.13 Organization Certifications...................15 12.2.1.14 Keys..........................................15 12.2.1.15 Tax Bills.....................................15 12.2.1.16 Tax Reduction Rights..........................15 12.2.1.17 Tenant Estoppel...............................15 12.2.1.18 Leasing and Management Agreement..............16 12.2.1.19 Engineer's Certificate........................16 12.2.2 Buyer's Documents.........................................16 12.2.3 Title Insurance...........................................16 12.2.4 Necessary Documents.......................................16 13. DEFAULT; REMEDIES.........................................................17 13.1......................................................................17 13.2......................................................................17 13.3 Buyer's Out-of-Pocket Costs.........................................17 14. CONDITIONS PRECEDENT TO CLOSING...........................................17 14.1 Correctness of Warranties and Representations. .....................18 14.2 Compliance with Terms and Conditions.................................18 14.3 Buyer's Satisfaction with Inspection.................................18 14.4 Trustee Approval.....................................................18 14.5 Estoppel.............................................................18 14.6 Financing............................................................18 15. PRORATIONS................................................................18 15.1 Operating Expenses...................................................18 15.1.1 Intentionally Omitted........................................18 15.1.2 Taxes........................................................18 15.1.3 Deposits. ..................................................19 15.1.4 Water and Sewer Charges......................................19 -iii- 15.1.5 Assigned Contracts...........................................19 15.1.6 Electricity, gas, steam and fuel.............................19 15.1.7 Security Deposits............................................19 15.2 Custom and Practice..................................................19 15.3 Future Installments of Taxes.........................................19 15.4 Application of Prorations............................................19 15.5 Schedule of Prorations...............................................19 15.6 Intentionally Omitted................................................19 15.7 Readjustments........................................................19 15.8 Indemnification for Seller's Tax Obligations.........................20 15.9 Survival.............................................................20 16. BROKERS...................................................................20 17. ESCROW AGENT..............................................................20 17.1 Payment to Seller....................................................20 17.2 Notice of Dispute....................................................20 17.3 Escrow Subject to Dispute............................................20 17.4 Escrow Agent's Rights and Liabilities................................21 18. GENERAL PROVISIONS........................................................21 18.1 Notices..............................................................21 18.2 Binding Effect.......................................................22 18.3 Entire Agreement.....................................................22 18.4 Governing Law........................................................22 18.5 No Recording.........................................................22 18.6 Tender..........................................................23 18.7 Execution in Counterparts............................................23 18.8 Further Instruments..................................................23 18.9 Time.................................................................23 18.10 Designation of Nominee; Assignment of Agreement.................23 18.11 Effective Date..................................................23 18.12 Time for Acceptance.............................................23 18.13 Confidentiality.................................................23 18.14 Delivery of Documents...........................................24 19. SEC REPORTING (8-K) REQUIREMENTS..........................................24 20.INDEMNIFICATION............................................................24 21. EXCULPATION...............................................................25 22. AS-IS.....................................................................25 23. INTENTIONALLY OMITTED.....................................................26 -iv- Exhibits to Agreement of Sale "A" - Legal Description "B" - Intentionally Omitted "C" - Permitted Encumbrances "D" - Intentionally Omitted "E" - Intentionally Omitted "F" - Intentionally Omitted "G" - Intentionally Omitted "H" - Form of Tenant Estoppel Certificate Schedules to Agreement of Sale 5.8 - Leasing Commissions 5.16 - Construction Contracts Relating to the Project AGREEMENT OF SALE 400 COMMERCE DRIVE AGREEMENT OF SALE made this 19th day of September, 1997, between CHRISTIANA CENTER OPERATING COMPANY I LLC, a Delaware limited liability company, its permitted assignee or nominee, having its principal office at c/o Gender Road Joint Venture, c/o The Commonwealth Group, 62 Read's Way, New Castle, Delaware 19720 ("Buyer"), and GENDER ROAD JOINT VENTURE, a Delaware partnership, having its principal office at c/o The Commonwealth Group, 62 Read's Way, New Castle, Delaware 19720 ("Seller"). BACKGROUND The Background of this Agreement is as follows: A. Seller is the owner of a certain tract of land being comprised of 13.3 acres, known or to be known as 400 Commerce Drive, in New Castle County, Delaware. B. Seller desires to sell to Buyer and Buyer desires to purchase from Seller the property referred to in this Agreement, upon the terms and conditions set forth herein. TERMS AND CONDITIONS NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and with the preceding Background paragraphs incorporated by reference, the parties hereto, intending to he legally bound hereby, covenant and agrees as follows: 1. PROPERTY BEING SOLD. Seller shall sell, transfer and convey to Buyer on the Closing Date (as hereinafter defined), 1.1 Real Property. Fee simple interest in the parcel of land being comprised of 13.3 acres, all as more fully described on Exhibit "A", New Castle County, Delaware, and all of the easements, licenses, rights of way, privileges, hereditaments, appurtenances, and rights to any land lying in the beds of any street, road or avenue, open or proposed, adjoining thereto, and inuring to the benefit of said land (hereinafter collectively referred to as the "Premises"); and 1.2 Personal Property. All equipment, fixtures, machinery and personalty of Seller, of every description attached to or used in connection with the Premises (and not owned by tenants under leases of the Premises), including, without limitation, those listed on the Schedule of Inventory attached hereto as Exhibit "B", all artwork, renderings, flags, awnings, trade dress, and to the extent legally assignable, all intangible personal property owned by the Seller and used in connection with the ownership, operation and maintenance of the land, improvements and other property, excluding cash on hand but including, without limitation, all contract rights, guaranties and warranties of any nature, all architects', engineers', surveyors' and other real estate professionals' plans, specifications, certifications, contracts, reports, data or other technical descriptions, reports or audits (including, without limitation, all environmental, structural and mechanical inspection reports), and all marketing materials ("Contract Documents"), all governmental permits, licenses, certificates, and approvals in connection with the ownership of the Premises ("Licenses"), all security deposits, utility deposits, escrow accounts, instruments, documents of title, general intangibles, all computers, computer software programs and data and business records pertaining to the Premises, all telephone, communications and security systems and equipment, and all of Seller's rights, claims, and causes of action if any, to the extent they are assignable, under any warranties and/or guarantees of manufacturers, contractors or installers, all rights against tenants and others relating to the Premises or the operation or maintenance thereof, including to the extent applicable, any warranties from any previous owners of the Premises (hereinafter collectively referred to as "Personal Property"); and 1.3 Leases. All leases, licenses and other occupancy agreements for any part of the Premises, and all prepaid rent and unapplied security deposits (the "Leases"); and 1.4 Right to Names. Any and all right, title and interest of Seller in and to the name of 400 Commerce Drive, and the right to all printing styles, trademarks and logos ("Name"). The Premises, Personal Property, Leases and Name are sometimes hereinafter referred to as "Property." 2. PURCHASE PRICE AND MANNER OF PAYMENT. 2.1 Purchase Price. Buyer shall pay the total sum of Nine Hundred Thousand ($900,000) Dollars (hereinafter referred to as the "Purchase Price") subject to adjustment. 2.2 Manner of Payment. The Purchase Price shall be paid in the following manner: 2.2.1 Deposit. By delivery, upon Seller's execution and delivery of this Agreement, of Buyer's good check in the amount of Fifteen Thousand ($15,000) Dollars to the Title Company (hereinafter referred to as "Escrow Agent" or "Escrowee"). This sum, the sum specified in Section 2.2.2 below, and all other sums paid by Buyer to the Escrow Agent under this Agreement (hereinafter referred to as the "Deposit") shall be held by Escrow Agent in a federally-insured, segregated money market account at an institution to be designated by Buyer until termination or consummation of this Agreement. Interest on the Deposit shall be credited to Buyer at Closing, or paid to the party otherwise entitled to the Deposit in the event of the termination of this Agreement prior to Closing. -2- 2.2.2 Additional Deposit. By delivery, within two (2) business days next following the Inspection Period Expiration Date (as hereinafter defined), of Buyer's good check in the amount of Thirty Thousand ($30,000) Dollars. 2.2.3 Cash Balance. The balance by delivery to the Seller on the Closing Date, by wire transfer, the amount of Eight Hundred Fifty-Five Thousand ($855,000) Dollars, subject to adjustment as herein provided. 2.3 Intentionally Omitted. 3. TITLE. On the Closing Date, Seller shall convey to Buyer good and marketable fee simple title to the Premises subject only to those rights of way, easements, covenants restrictions, and objections to title (hereinafter "Permitted Exceptions") listed on Exhibit "C" hereto, unless identified by Buyer as "Title Objections" as hereinafter provided, and subject to the rights of tenants listed on the rent roll attached hereto as Exhibit "D", which title shall be insurable at regular rates by a reputable title insurance company ("Title Company") under an ALTA 1970 Form B (Revised 10/17/70 and 3/30/84) title insurance policy ("Title Policy"), with the endorsements and affirmative insurance specified in Section 12.2.1.10 below. Seller and Buyer consent to use, at Buyer's option, Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation or Congress Title Insurance Company as the Title Company. 4. COVENANTS. In addition to the covenants contained in the other Sections of this Agreement, Seller covenants that it shall: 4.1 Maintenance. At all times prior to the Closing Date, maintain the Property in good condition and repair, reasonable wear and tear and casualty alone excepted, continue to diligently prosecute construction of the Project at the Premises, and pay in the normal course of business prior to Closing, all sums due for work, materials or service furnished or otherwise incurred in the ownership and operation prior to Closing. 4.2 Alterations. Not make or permit to be made any alterations, improvements or additions to the Property other than in accordance with the project budgets, plans and specifications, construction contracts, if any, and the CSC Lease (as hereinafter defined) heretofore delivered to Buyer, without the prior written consent of Buyer, not to be unreasonably withheld or delayed. 4.3 Lease. Not enter into any new Lease, nor amend, modify or terminate any existing Lease without Buyer's consent. 4.4 Security Deposits. Not apply any Tenant's security deposit to the discharge of such Tenant's obligations without Buyer's consent, not to be unreasonably withheld or delayed. 4.5 Intentionally Omitted. -3- 4.6 Notice to Buyer. Notify Buyer promptly of the occurrence of any of the following: (i) a fire or other casualty causing damage to the Property, or any portion thereof; (ii) receipt of notice of eminent domain proceedings or condemnation of or affecting the Property, or any portion thereof; (iii) receipt of notice from any governmental authority or insurance underwriter relating to the condition, use or occupancy of the Property, or any portion thereof, or any real property adjacent to any of the Property, or setting forth any requirements with respect thereto; (iv) receipt or delivery of any default or termination notice or claim of offset or defense to the payment of rent from any tenant; (v) receipt of any notice of default from the holder of any lien or security interest in or encumbering the Property, or any portion thereof; (vi) intentionally omitted; (vii) notice of any actual or threatened litigation against Seller or affecting or relating to the Property, or any portion thereof; or (ix) the commencement of any strike, lock-out, boycott or other labor trouble affecting the Property, or any portion thereof. 4.7 Intentionally Omitted. 4.8 Comply with Leases. Perform all obligations of the landlord as required by the Leases or by any order or direction of any governmental authority having jurisdiction thereof, and to the extent required by law or by any of the Leases, maintain all security deposits held under all Leases in a segregated account, with interest thereon as required. 4.9 No New Agreements. Except for agreements which can be terminated on not more than thirty (30) days' notice, and construction contracts approved in advance by Buyer, not enter into any other agreements which affect the Property or the transactions contemplated by this Agreement, without the prior written consent of Buyer; and not permit the creation of any liability which shall bind Buyer or the Premises after Closing. 4.10 Tax Disputes. Notify Buyer of any tax assessment disputes (pending or threatened) prior to Closing, and not agree to any changes in the real estate tax assessment, nor settle, withdraw or otherwise compromise any pending claims with respect to prior tax assessments, without Buyer's prior written consent. If any proceedings shall result in any reduction of assessment and/or tax for the tax year in which the Closing occurs, it is agreed that -4- the amount of tax savings or refund for such tax year, less the reasonable fees and disbursements in connection with such proceedings, shall be apportioned between the parties as of the date real estate taxes are apportioned under this Agreement. The parties agree that from and after the execution and delivery of this Agreement, Buyer, at its sole cost, shall have the right to appeal the current tax assessment of each tax parcel comprising the Premises. Buyer shall consult with Seller prior to filing tax appeal documents, and shall afford Seller reasonable advance notice prior to any public hearings or proceedings at which said appeal will be considered. Seller agrees that Buyer may file such appeals in its name or in Seller's name, as may be required, and Seller shall cooperate with Buyer in the prosecution of such appeal; provided, however, that Buyer agrees to pay the reasonable legal fees incurred by Seller, if any, in connection with furnishing such cooperation. 4.11 Intentionally Omitted. 5. REPRESENTATIONS AND WARRANTIES. In order to induce Buyer to enter into this Agreement, Seller hereby represents and warrants to Buyer that the following representations and warranties are true now and will be true at Closing: 5.1 Seller's Authority For Binding Agreement. Seller is a duly authorized and validly existing partnership formed under the laws of the State of Delaware. Seller has full power, right and authority to own its properties, to carry on its business as now conducted, and to enter into and fulfill its obligations under this Agreement. Each of the persons executing this Agreement on behalf of Seller is authorized to do so. This Agreement is the valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms. The execution and delivery of this Agreement and compliance with its terms will not conflict with or result in the breach of any law, judgement, order, writ, injunction, decree, rule or regulation, or conflict with or result in the breach of any other agreement, document or instrument to which Seller is a party or by which it or the Property is bound or affected. 5.2 Employment. There are no persons or parties employed by the Seller or any of its affiliates in connection with the Property. Affiliates of Seller are or may hereafter be engaged by Seller or Buyer in connection with construction of improvements contemplated by Buyer and Seller at the Property. 5.3 Service Contracts. There are no service, equipment, supply or maintenance contracts with respect to or affecting the Property not terminable on thirty (30) days notice, other than construction-related contracts, true correct and complete copies of which shall be provided by Seller to Buyer for review and approval prior to execution. 5.4 Condemnation. There are no condemnation or eminent domain proceedings pending with regard to any part of the Property, and to the best of the Seller's knowledge, no such proceedings are proposed. 5.5 No Tax Assessments. There are no public improvements in the nature of off-site improvements, or otherwise, which have been ordered to be made and/or which have not -5- heretofore been assessed, and, to the Seller's knowledge, there are no special or general assessments currently affecting or pending against the Property. 5.6 Leases. There are no oral or written leases or rights of occupancy or grants or claims of right, title or interest in any portion of the Property or outstanding letters of intent to lease the Property, or any portion thereof, other than the lease with Computer Sciences Corporation ("CSC") dated July 28, 1997 (the "CSC Lease"), a true, correct and complete copy of which has been delivered by Seller to Buyer. CSC has not advised the Seller that the Seller is in default under the CSC Lease, and the Seller has no knowledge of any default or of any facts, events or circumstances, which with the passage of time, or the delivery of notice, or both, would constitute an event of default under the CSC Lease. The Seller has the sole right to collect rent under the CSC Lease (once rent becomes due and payable thereunder), and neither such right nor any interest in the CSC Lease has been assigned, pledged, hypothecated or otherwise encumbered by the Seller, except as to certain obligations under the CSC Lease assigned to and assumed by Christiana Center Operating Company II LLC, and the CSC Lease is valid and subsisting and in full force and effect. 5.7 Compliance with Law. (i) The development of the Property as a three (3)-story, 150,000 +/- sf. office building with accessory on-site parking for not fewer than 750 parking spaces is permitted by all applicable federal, state and local law, and by the requirements of governmental and quasi-governmental agencies and authorities having jurisdiction thereof, and there are no outstanding notices of any violations issued by any governmental or quasi-governmental agency or authority having jurisdiction over the Property. The zoning classification of the Property is "M-1". Not more than ten (10) days prior to the Closing, the Seller shall provide the Buyer with an estoppel certificate from the zoning code enforcement (or other appropriate) officer of New Castle County, confirming the zoning of the Property and that the proposed development of the site as hereinabove provided is in compliance with such zoning. (ii) To the best of the Seller's knowledge, (1) no Hazardous Substances (defined below) and no Hazardous Wastes (defined below) are present on the Property including, without limitation, asbestos, flammable substances, explosives, radioactive materials, hazardous wastes, toxic substances, pollutants, pollution, contaminant, polychlorinated byphenyls (PCBs), urea formaldehyde foam insulation, radon, corrosive, irritant, biologically infectious materials, petroleum product, garbage, refuse, sludge, hazardous or waste materials, and (2) there has been no use of the Property that may, under any federal, state or local environmental statute, ordinance or regulation, require, at any time, any closure or cessation of the use or occupancy of the Property and/or impose, at any time, upon the owner of the Property any clean-up or other monetary obligation. The Seller has not been identified in any litigation, administrative proceeding or investigation as a responsible party or potentially responsible party for any liability for clean-up costs, natural resource damages or other damages or liability for prior disposal or release of Hazardous Substances, Hazardous Wastes or other environmental pollutants or contaminants, and no lien or superlien has been recorded, filed or otherwise asserted against any real or personal property of the Seller for any clean-up costs or other responses costs incurred in connection with any environmental contamination that is attributable, in whole or in part, to the -6- Seller. The Seller hereby indemnifies and holds the Buyer harmless of, from and against any and all liability, loss or damage suffered or incurred as a result of a claim, demand, cost or judgment in favor of a third party, including, without limitation, any governmental authority, arising from the deposit, storage, disposal, burial, dumping, injecting, spilling, leaking, or other placement or release in or on the Property of Hazardous Substances or Wastes first occurring during the Seller's period of ownership. For purposes of this Agreement, "Hazardous Substances" means those elements and compounds which are designated as such in Section 101(14) of the Comprehensive Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601 (14), as amended, all petroleum products and by-products, and any other hazardous substances as that term may be further defined in any and all applicable federal, state and local laws; and "Hazardous Wastes" means any hazardous waste, residential or household waste, solid waste, or other waste as defined in applicable federal, state and local laws. The Seller has not received any summons, citation, directive, letter or other communication, written or oral, from any governmental or quasi-governmental authority concerning any intentional or unintentional action or omission on the Seller's part which (a) resulted in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous Wastes, or (b) related in any way to the generation, storage, transport, treatment or disposal of Hazardous Substances or Hazardous Wastes. To the best of the Seller's knowledge, neither the Property nor any portion thereof, has been identified on the federal CERLIS, the National Priorities List (40 C.F.R. Part 300, App. B) or any state or local list of potential hazardous waste disposal sites or as an industrial establishment. The Seller has conducted a complete and thorough inspection and test of the underground storage tanks located on the Property, if any, and the Seller has confirmed that the results thereof show compliance with all requirements of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. Sections 6901 et seq. and all other applicable federal, state and local laws, and the Seller has taken all other necessary and appropriate action to comply fully therewith. 5.8 No Brokers. Except as specifically disclosed in Schedule 5.8 hereto, no brokerage or leasing commissions or other compensation is now, or will upon or after the Closing, be due or payable to any person, firm, corporation, or other entity with respect to or on account of the CSC Lease, or any extensions or renewals thereof. Buyer shall be responsible to pay the leasing commission due CB commercial in connection with the CSC lease. 5.9 Utilities. Adequate utilities, useable public sanitary and storm sewers, public water facilities, electric facilities and, if any, gas facilities (collectively, the "Utilities"), are available at the lot lines of the Property All Utilities required for the operation of the Property either enter the Property through adjoining public streets or, if they pass through adjoining public land, do so in accordance with valid public easements or private easements which will inure to the benefit of Buyer at no cost to the owner of the Property. All permits for the installation, connection and "tap-in" for water and sewer have been obtained and all "tap in" charges have been paid. 5.10 Permits, Approvals and Certificates. All licenses, permits, authorizations and approvals necessary for the development of the Property as a three (3) story, 150,000 +/- sf. office building with accessory on-site parking for not less than 750 parking spaces, including, but not limited to street openings and closing, zoning and use permits, variances and special exceptions, zoning reclassifications, sewer permits, preliminary and final site plan and subdivision -7- approvals, earth moving permits, environmental permits and approvals, and approvals of fire underwriters, have been obtained, are in full force and effect, are final and all appeal periods have run with no appeals having been filed, and that each and all such licenses, permits and approvals are assignable, except for a building permit which have not yet been issued but which may be obtained by the Buyer in the ordinary course without the satisfaction of any further conditions other than payment of the required fee(s) therefor. 5.11 Good Title to Property. The Seller presently holds, and immediately following the Closing the Buyer shall hold, good and marketable, indefeasible fee simple title to the Property, free and clear of liens and encumbrances, other than the lien of any existing mortgage held by PNC Bank, Delaware, which shall be paid and discharged at or before the Closing. 5.12 All Taxes and Assessments Paid. The Seller will have paid prior to the Closing, all taxes and assessments, including assessments payable in installments, which are to become due and payable and/or a lien on the Property, except for taxes for the current year which shall be prorated between the Seller and the Buyer as of the Closing. 5.13 FIRPTA. The Seller is not a "foreign person" as such term is defined in Section 1445(f)(3) of the Code. 5.14 Mechanic's Liens. No work has been performed or is in progress at, and no materials have been furnished to the Property which, though not presently the subject of, might give rise to construction, mechanic's, materialmen's, or other liens against the Property or any portion thereof, except that for which partial releases covering all services performed or materials provided prior to Closing have or shall have been obtained. If any lien for any such work is filed before or after the Closing, the Seller shall promptly discharge the same. Buyer shall assume responsibility to pay for services or materials provided after Closing. 5.15 Rights to Purchase. There are no outstanding agreements, options, rights of first refusal, conditional sales agreements or other agreements or arrangements, whether oral or written, regarding the purchase and sale of the Property. 5.16 No Outstanding Obligations. All debts, liabilities, and obligations of the Seller arising out of the Property including, but not limited to, construction costs, salaries, taxes, accounts payable and the like, have been paid as they became due and payable and shall continue to be so paid from the date hereof until the Closing. No debts, liabilities, claims, or obligations (whether known or unknown, accrued, absolute, contingent, or otherwise) of the Seller arising out of the Property shall be outstanding as of the Closing except for contracts relating to the construction of the Project as set forth on Schedule 5.16 attached hereto, and the CSC Lease, all of which are to be assigned to, and assumed by, the Buyer. 5.17 Rollback Taxes. The Property is not subject to any roll-back or agricultural taxation or other tax abatement program. Any roll-back taxes payable in connection with the Seller's development of the Property have been paid in full. -8- 5.18 Development Agreements. The Property and the Seller are in compliance with and have fully paid and discharged all obligations accrued to date under any and all development, tri-party and like agreements, and any and all other agreements with county, municipal and other governmental and quasi-governmental agencies and authorities respecting the ownership, development and operation of the Property and all portions thereof. 5.19 Charges, Fees and Assessments. Any and all applicable charges, fees and assessments (including condominium fees, office building association fees, and the like, to the extent applicable) and any and all other fees, assessments, charges and other sums due under declarations, cross-easements and like agreements to which the Property or any portion thereof may be subject, have been paid, and no special assessments thereunder are pending, and all consents and approvals required to be obtained under any such declarations, cross-easements and like agreements have been obtained pursuant to the requirements of such documentation. 5.20 Correct Copies of Documents. Where copies of any documents have been delivered by the Seller to the Buyer, whether prior to or pursuant to this Agreement, such copies: (i) are exact copies of the originals of said documents, as executed and delivered by all of the parties thereto; (ii) to the best of the Seller's knowledge, constitute, in each case, the entire agreement between the parties thereto with respect to the subject matter thereof, and the original instruments in the form delivered to the Buyer, are now in full force and effect, and valid and enforceable in accordance with their respective terms, and no party thereto is in default, and no claim of default by any party has been made or is now pending and there does not now exist any default which, after either the giving of notice or the passing of time, or both, will or may constitute a default, or would excuse performance by any party thereto; and (iii) have not been changed or amended except for amendments, if any, specifically referred to therein. 6. POSSESSION. Possession of the Premises is to be given to Buyer, subject to the right of tenants under the Leases on the Closing Date, by delivery of the Deed, and all keys, combinations and security codes at Closing. 7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY. 7.1 Title Binder. On or before five (5) business days from the execution of this Agreement, Seller shall have delivered to Buyer a copy of its title commitment or policy for the Property (complete with copies of all exceptions to title), and within ten (10) business days after the receipt of same, Buyer shall secure a current title commitment (the "Title Binder") from the Title Company, and shall have until the Inspection Period Expiration Date (as hereinafter defined) to examine the condition of title, including the terms and provisions of all items and documents referred to in the Title Binder, and all information regarding title as disclosed on the Survey (hereinafter defined), and to approve or disapprove the same. If Buyer shall disapprove the condition of title, such disapproval shall be set forth in a notice given to Seller (the "Disapproval Notice") identifying the condition of title to the Property or any of the terms, provisions or contents of said items, documents or Survey which are disapproved by Buyer (the "Title Objections"). Subject to the provisions of the succeeding portion of this Section 7.1, Seller shall have until the date which is ten (10) days after the date of the Disapproval Notice (the "Title Cure Expiration Date") in which to cure or eliminate all items which Buyer disapproves in the -9- Disapproval Notice, and to furnish evidence satisfactory to Buyer and the Title Company that all such items have been cured or eliminated or that arrangements have been made with the Title Company and any parties in interest to cure or eliminate the same at or prior to the Closing. If Seller fails to remove any Title Objection in accordance with the provisions of the immediately preceding sentence, Buyer, nevertheless, may elect (at or prior to the Closing) to consummate the transaction provided for in this Agreement subject to any such Title Objection(s) as may exist as of the Closing with a credit against the Purchase Price equal to the sum necessary to remove any lien of a fixed or ascertainable amount . If Buyer shall not so elect, Buyer may terminate this Agreement by notice in writing to Seller, whereupon the Deposit shall be immediately refunded to Buyer, and this Agreement shall be null and void, and the parties hereto shall be relieved of all further obligations and liability under this Agreement. 7.2 Survey. Within ten (10) days after the date of this Agreement, at Buyer's cost, Seller shall deliver to Buyer a current survey of Property (the "Survey"), prepared by a duly licensed land surveyor acceptable to Buyer. The Survey shall be currently dated, shall show the location on the Property of all buildings and improvements, building and set-back lines, easements, rights-of-way, encroachments, elevations between public roads providing access to the Property, and the boundary of the Property, and other such matters affecting the Property whether physically apparent from the ground, of record in public offices, or otherwise, and shall contain a legal description of the boundaries of the Premises by metes and bounds which shall include a reference to the recorded plat, if any. The surveyor shall certify to Buyer and to the Title Company and to any lender making a loan to Buyer secured by the Property that the Survey is correct and was made on the ground; and that there are no visible discrepancies, conflicts, encroachments, overlapping of improvements, violations of set-back lines, easements, rights-of-way or other such matters affecting the Property except as are shown on the Survey, and that the Survey conforms to all ACTA/ACSM and Pennsylvania Land Title Association standards and requirements for a Class A Survey. Any and all recorded matters shown on said Survey shall be legibly identified by appropriate volume and page recording references with dates of recording noted. Buyer shall have until the Inspection Period Expiration Date to approve or disapprove the material contained thereon. If Buyer shall disapprove such Survey, such disapproval shall be set forth in a Disapproval Notice as hereinabove provided in Section 7.1, and the provisions of Section 7.1 with respect to Disapproval Notices shall apply. 7.3 Physical and Financial Inspection. For a period (the "Inspection Period") commencing on the second (2nd) business day next following the date upon which Buyer shall receive from Seller a fully-executed counterpart of this Agreement, and expiring twenty (20) days thereafter (such date is herein referred to as the "Inspection Period Expiration Date"), Buyer shall have the right to have performed a physical and mechanical inspection, measurement and audit of the Property and an inspection of all books and records and financial information pertaining thereto, and Seller shall cooperate with Buyer and shall furnish to Buyer such information, materials and documents as Buyer may reasonably request and shall have its accountant or internal controller available throughout such period to assist in Buyer's inspection and review. The inspection, audit and measurement of the Property's operation, condition and maintenance shall include, without limitation, such environmental and engineering inspections, reviews and assessments that Buyer deems appropriate. If Buyer fails to close hereunder for any reason other than Seller's breach or default, Buyer shall, to the maximum extent practicable, restore the -10- Property to the condition existing immediately before such tests and assessments. In the event Seller shall fail to deliver or make available any item or information material to Buyer's review of the Property and required to be delivered or made available pursuant to the terms of this Section within five (5) business days next following the date upon which Buyer shall receive from Seller a fully-executed counterpart of this Agreement, then at Buyer's written election, the Inspection Period Expiration Date (and the Closing Date) shall be extended by one day for each day that the delivery or availability of such item is delayed. If Buyer, at Buyer's sole and absolute discretion, shall find such inspection(s) to be unsatisfactory for any reason whatsoever, Buyer shall have the right, at its option, to terminate this Agreement on or before the Inspection Period Expiration Date, and upon such termination, the Deposit shall be immediately refunded to the Buyer, and thereupon the parties hereto shall have no further liabilities one to the other with respect to the subject matter of this Agreement. Buyer agrees that it shall not unreasonably interfere with tenants in performing its inspection. In connection with such inspection, and without limiting the generality of Seller's obligations hereunder, Seller agrees to deliver to Buyer, within five (5) days: 7.3.1 Intentionally Omitted. 7.3.2 Contracts, Licenses, Permits. Copies of the Contract Documents, the Licenses, all building permits, certificates of occupancy, insurance policies applicable to the Property and any other documents evidencing rights described in Section 1.2 hereof; 7.3.3 Intentionally Omitted. 7.3.4 Intentionally Omitted. 7.3.5 Intentionally Omitted. 7.3.6 Three Years' Tax Bills. A copy of tax bills (i) for the current year, and (ii) if available, for the preceding two years; 7.3.7 Intentionally Omitted. 7.3.8 Schedule of Violations. A schedule setting forth all violations of any law, ordinance, regulation, rule or requirement of any governmental body having jurisdiction, whether existing or prospective, of which Seller has received written notice, issued or noted by any governmental body during the past three years, and copies of any notices, terminations or correspondence relating thereto; 7.3.9 Schedule of Notices. A schedule of any written demands, requests, requirements or recommendations regarding the operation, maintenance, repair or replacement of the Property or any portion thereof, of which Seller has received notice during the past three years, from the holder of any mortgage or deed of trust or any insurance company or any board of fire underwriters or real estate associations or like body, and copies of all correspondence relating thereto; 7.3.10 Intentionally Omitted. -11- 7.3.11 Zoning, Site Plan, Subdivision Plan or Plat. All conditional and permanent zoning, site plan, subdivision, building, housing, safety, fire and health approvals, including, without limitation, the local governmental applications, resolutions and approvals supporting the same; 7.3.12 Intentionally Omitted. 7.3.13 Takings or Changes. Copies of all written notices to Seller of proposed or threatened takings or changes with respect to the Property or major access roads within a reasonable radius which would affect the access to the Property, or any portion thereof, by prospective occupants; 7.3.14 Tax Assessments, Appeals and Increases. Copies of all written notices to Seller of all filed, proposed or threatened tax assessment appeals or tax assessment increases related to the Premises; 7.3.15 Litigation. Copies of all pending and written notices to Seller of threatened litigation, including litigation involving tenants, affecting the Property or this transaction; 7.3.16 Insurance Policies. Copies of all insurance policies of Seller related to the Property; 7.3.17 Intentionally Omitted. 7.3.18 Title Information. Seller's most recently dated title report or title commitment respecting the Premises. 7.4 Seller's Failure to Deliver. If Seller shall have failed to deliver to Buyer all material documents required to be delivered under Section 7.3 hereof, Buyer may, at its option, at any time on or after such date, but prior to the curing of such failure by Seller, give Seller a five (5) day written notice specifying such default, and if Seller fails to cure such default within such five (5) day period, Buyer may terminate this Agreement, receive the return of the Deposit and pursue any other remedy available to it pursuant to the provisions hereof. 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of Buyer and Seller set forth herein shall survive Closing and delivery of the deed for the applicable period of the statute of limitations pertaining thereto. 9. INTENTIONALLY OMITTED. 10. CONDEMNATION. If, prior to the Closing Date, all or any portion of the Premises is taken by eminent domain or a notice of any eminent domain proceedings with respect to the Premises or any part thereof is received by the Seller, then Seller shall within five (5) days thereafter give notice thereof to Buyer and Buyer shall have the option to (a) complete the purchase hereunder or (b) if such taking, in Buyer's sole and absolute discretion, materially affects -12- the Premises or its current economic viability, terminate this Agreement, in which event the Deposit shall be immediately refunded to Buyer, and this Agreement shall be null and void. Buyer shall deliver written notice of its election to the Seller within ten (10) days after the date upon which the Buyer receives written notice of such eminent domain proceedings. If notice of condemnation is received by Buyer and it fails to deliver said written notice of its election within said time period, such failure shall constitute a waiver by Buyer of its right to terminate this Agreement. If this Agreement is not so terminated, Buyer shall be entitled to all awards or damages by reason of any exercise of the power of eminent domain or condemnation with respect to or for the taking of the Premises or any portion thereof, and until such time as closing has occurred, or this Agreement terminates. Any negotiation for, or agreement to, and all contests of any offers and awards relating to eminent domain proceedings shall be conducted with the joint approval and consent of the Seller and the Buyer. 11. EXPENSE ALLOCATIONS. 11.1 Seller shall pay for one-half of all applicable realty transfer taxes related to the execution, delivery and recording of the Deed, Bill of Sale, and other Closing Documents, and all related recording charges. 11.2 Buyer shall pay for one-half of all applicable realty transfer taxes, for Buyer's title examination, the survey and for Buyer's title examination and premiums. 11.3 Buyer and Seller shall be responsible for paying their own attorney's fees in connection with this transaction. 12. CLOSING. 12.1 Time and Date and Place. The closing ("Closing") on the sale of the Property (herein referred to as the "Closing Date") shall take place at a time specified by Buyer in writing to Seller not later than five (5) days following the Inspection Period Expiration Date, and in any event no later than October 15, 1997, at the offices of Pepper, Hamilton & Scheetz, 3000 Two Logan Square, Eighteenth & Arch Streets, Philadelphia, PA, commencing at 10:00 a.m. 12.2 Documents. At Closing, the parties indicated shall simultaneously execute and deliver the following: 12.2.1 Seller's Documents and Other Items. Seller shall execute and deliver or cause to be executed and delivered to Buyer in proper form for recording: 12.2.1.1 Deed. A special warranty deed prepared by Buyer's counsel in form acceptable to Seller (the "Deed"), conveying the Premises to Buyer, duly executed by Seller for recording. The Deed description shall be based upon the metes and bounds description attached as Exhibit "A", unless Buyer requests that Seller convey the Premises by the metes and bounds description shown on the new ALTA/ACSM survey, if any, obtained by Buyer, in which event the Premises shall be so conveyed. -13- 12.2.1.2 Bill of Sale. A warranty bill of sale prepared by Buyer's counsel in form acceptable to Seller, assigning, conveying and transferring to Buyer, all of the Personal Property. 12.2.1.3 Original Leases. All original Leases, tenant files, tenant correspondence and repair records, certified by Seller as being true, correct and complete. 12.2.1.4 Original Licenses, Contract Documents and Other Personal Property. All original Licenses, Contract Documents, and other Personal Property described in Section 1.2 of this Agreement, certified by Seller as being true, correct and complete. 12.2.1.5 Assignment of Lease. An assignment and assumption agreement with reciprocal indemnities, prepared by Buyer's counsel in form acceptable to Seller (the "Assignment"), duly executed by Seller and Buyer, assigning, conveying and transferring to Buyer the CSC Lease, and acknowledging the interests therein and the obligations thereunder assigned or to be assigned to Christiana Center Operating Company II LLC. 12.2.1.6 Assignment of Licenses, Contract Documents and Other Personal Property. An assignment agreement prepared by Buyer's counsel, in form acceptable to Seller, duly executed by Seller and Buyer assigning, conveying and transferring to Buyer the Licenses, Contract Documents and Other Personal Property, including, specifically, the Names as well as the Construction Management Agreement between Seller and Insite, Inc. (once approved by Buyer) as well as other construction-related agreements once reviewed and approved by Buyer as aforesaid. 12.2.1.7 FIRPTA Certificates. All certificate(s) required under Section 1445 of the Code. 12.2.1.8 Tenant Letter. Letters to each tenant advising of the change in ownership and directing the payment of rent to such party as the Buyer shall designate, said letter to be in form acceptable to Buyer. 12.2.1.9 Estoppel Certificate from Municipality. All certificate(s) required by Section 5.8 hereof, and any other certificates required by New Castle County, or the State of Delaware as a condition of the conveyance of the Premises or the recording of the Deed. 12.2.1.10 Title Insurance Certificates. Such affidavits of title or other certifications as shall be required by the Title Company to insure Buyer's title to the Premises as set forth in Section 3, and to provide affirmative endorsements (a) against mechanic's liens, (b) insuring against any violation of existing covenants, conditions or restrictions, and insuring that future violation will not result in forfeiture of title, (c) insuring that all foundations in place as of the date of such policy are within the lot lines and applicable set back lines, (d) insuring that the buildings and structures on the Premises do not encroach onto adjoining land, or onto any easements, (e) insuring that confirming that there are no encroachments of -14- improvements from adjoining land onto the Premises (f) removing any exceptions for matters which an accurate survey would disclose, and (g) providing affirmative insurance with respect to such other matters as Buyer shall reasonably specify. 12.2.1.11 Updated Rent Roll. An updated schedule of Tenant Leases, containing all information required to be set forth in Exhibit "D", which schedule is correct and complete as of the date of closing. 12.2.1.12 Seller Certificate. A written certification confirming that as of Closing no representation or warranty of Seller contained in this Agreement, nor any document or certificate delivered to Buyer pursuant to this Agreement or in connection with the transaction contemplated hereby, contains any untrue statement of a material fact or knowingly omits to state a material fact necessary to make any representation or warranty contained herein misleading. 12.2.1.13 Organization Certifications. Confirmation of the good standing and existence of Seller and the due authority of those executing for them, including, without limitation, the following documents issued no earlier than 30 days prior to Closing: (a) good standing certificate in state of organization and in the State in which the Premises are located, (b) articles of incorporation, partnership agreement or other formation instrument certified by the secretary of state of the state of incorporation, (c) a certificate from the secretary of the corporation or managing general partner of the partnership confirming the incumbency of the signatories and the current force and effect of the resolution authorizing their execution of the documents required under this Agreement. 12.2.1.14 Keys. All keys, combinations and security codes for all locks and security devices on the Property; 12.2.1.15 Tax Bills. Current tax bills and, if available, tax bills for each of the years of Seller's ownership of the Property; 12.2.1.16 Tax Reduction Rights. An instrument assigning to Buyer any claims for the reduction of real or personal property taxes assessed against any portion of the Property for the fiscal year in which the Closing takes place; any refund for such year shall be prorated when received; 12.2.1.17 Tenant Estoppel. Seller shall obtain and deliver to Buyer, at least five (5) business days prior to Closing, an estoppel certificate in the form prescribed by Buyer or as otherwise appended to this Agreement as Exhibit "H", from Computer Sciences Corporation, regarding the CSC Lease (the "Estoppel"). An estoppel certificate which contains material discrepancies, or any statements inconsistent with representations and warranties of Seller contained in this Agreement and for which Seller does not provide Buyer with an explanation in all respects satisfactory to Buyer, shall not satisfy the requirements of this section. 12.2.1.18 Leasing and Management Agreement. A leasing and management agreement prepared by Buyer's counsel in form acceptable to Seller (the "Leasing -15- and Management Agreement") duly executed by Buyer and Commonwealth Management Group, Ltd., pursuant to which Commonwealth Management Group, Ltd. shall lease and manage the Property on the terms and conditions more fully set forth therein. 12.2.1.19 Engineer's Certificate. An engineer's certificate prepared by Buyer's counsel in form acceptable to Seller's counsel, executed, sealed and delivered by KCI Technologies, Inc., confirming that the Seller has obtained all necessary licenses, permits and approvals required for development of the Property as required by the CSC Lease and as otherwise contemplated by Buyer. 12.2.2 Buyer's Documents. Buyer shall deliver or cause to be delivered to Seller: 12.2.2.1 The amounts required to be paid to Seller pursuant to this Agreement; 12.2.2.2 Confirmation of the existence and subsistence of Buyer, and the authority of those executing for Buyer, including, without limitation, the following documents issued no earlier than thirty (30) days prior to Closing: (a) good standing certificate in State of Maryland, (b) Buyer's Amendment and Restatement of Declaration of Trust filed on August 27, 1996, as amended, (c) a certificate from any officer of Buyer confirming the incumbency of the signatories and the current force and effect of the resolution authorizing their execution of the documents required under this Agreement. 12.2.2.3 Leasing and Management Agreement. Buyer shall execute and deliver the Leasing and Management Agreement, as defined above, pursuant to which Commonwealth Management Group, Ltd. shall lease and manage the Property on the terms and conditions more fully set forth therein. 12.2.3 Title Insurance. As a condition to Buyer's obligations at Closing, Title Company shall furnish Buyer at Closing with the Title Policy, in the form approved by Buyer pursuant to Section 3, in the full amount of the Purchase Price, wherein the Title Company shall insure fee simple title to the Property in Buyer or its designee as of the Closing Date containing no exceptions to title other than those which have been approved by Buyer in writing pursuant to Section 3 hereof and providing the title endorsements specified in Section 12.2.1.10 above. 12.2.4 Necessary Documents. Buyer and Seller shall execute and deliver such other documents and instruments as may be reasonably necessary to complete the transaction contemplated by this Agreement. 13. DEFAULT; REMEDIES 13.1 In the event that any of Seller's representations or warranties contained in this Agreement are materially or prejudicially untrue or if Seller shall have failed to have performed any of the covenants and/or agreements contained in this Agreement which are to be performed by Seller, on or before the date set forth in this Agreement for the performance -16- thereof, or if any of the conditions precedent to Buyer's obligation to consummate the transaction contemplated by this Agreement shall have failed to occur, Buyer may, at its option, rescind this Agreement by giving written notice of such rescission to Seller and Seller shall immediately thereafter return the Deposit, and thereupon, subject to the provisions of Section 13.3 below, the parties shall have no further liability to each other hereunder. In the alternative, but without limiting Buyer's right upon any default by Seller hereunder to receive the prompt return of the Deposit, Buyer may seek to enforce specific performance of this Agreement. 13.2 Buyer recognizes that the Property will be removed by Seller from the market during the existence of this Agreement and that if this purchase and sale is not consummated because of Buyer's default Seller shall be entitled to compensation for such detriment. Seller and Buyer acknowledge that it is extremely difficult and impracticable ascertain the extent of the detriment, and to avoid this problem, Seller and Buyer agree that if the purchase and sale contemplated in this Agreement is not consummated because of Buyer's default under this Agreement, Seller shall be entitled to retain the Deposit as liquidated damages. The parties agree that the sum stated above as liquidated damages shall be in lieu of any other relief to which Seller might otherwise be entitled, Seller hereby specifically waiving any and all rights which it may have to damages or specific performance as a result of Buyer's default under this Agreement. 13.3 Buyer's Out-of-Pocket Costs. In the event of Seller's breach or default hereunder which results in Buyer's termination of this Agreement, or in the event that Seller shall fail to perform any term, covenant or agreement, or satisfy any condition herein stipulated (including, without limitation, a failure of title), then, in any such event, upon termination by Buyer hereunder, in addition to receiving the immediate return of the Deposit, anything in the Agreement contained to the contrary notwithstanding, Buyer shall also receive from Seller, upon demand, Buyer's actual, documented out-of-pocket costs and expenses associated with this Agreement and Buyer's anticipated acquisition of the Property including, without limitation, Buyer's reasonable counsel fees and costs, title expenses, survey costs, and other costs and expenses associated with Buyer's due diligence, including, without limitation, legal, financial and accounting due diligence, Buyer's structural inspection of the Property and Buyer's environmental assessment of the Property (collectively, "Transaction Costs"). The foregoing list is not intended to be exclusive, but representative of the costs and expenses that the parties anticipate that Buyer will incur in anticipation of this transaction. Seller's maximum reimbursement liability under this Section 13.3 shall not exceed Twenty Five Thousand ($25,000) Dollars. -17- 14. CONDITIONS PRECEDENT TO CLOSING. The obligations of Buyer hereunder are subject to the fulfillment of the following conditions prior to or on the Closing Date (any one of which may be waived in whole or in part by Buyer at or prior to the Closing) and in the event any of the conditions are not complied with, Buyer may terminate this Agreement by notifying the Seller and Escrow Agent and thereupon shall be returned the Deposit and thereafter this Agreement shall be null and void: 14.1 Correctness of Warranties and Representations. The warranties and representations made by Seller in this Agreement shall be true and correct on the Closing Date as though such representations and warranties were made on the Closing Date (except for changes in the Leases permitted under the terms of this Agreement). 14.2 Compliance with Terms and Conditions. Seller shall have performed and complied with all of the terms and conditions required by this Agreement to be performed and complied with by it prior to or on the Closing Date. 14.3 Buyer's Satisfaction with Inspection. Buyer shall have notified Seller of Buyer's satisfaction with the review and inspection performed under Section 7 of this Agreement, or shall fail to notify Seller on or before the Inspection Period Expiration Date, of Buyer's dissatisfaction with the results of such review and inspection. 14.4 Trustee Approval. This Agreement and the transactions contemplated hereby shall have received formal approval of Buyer's Board of Trustees at a meeting duly called during the Inspection Period to consider same. 14.5 Estoppel. Seller shall have delivered to Buyer the required Estoppel from Computer Sciences Corporation and the Engineer's Certificate from KCI Technologies, Inc. 14.6 Financing. Buyer shall have obtained a firm, unconditional, written commitment from PNC Bank, N.A., or another lender of its choosing, ("Lender") for financing of the Project as contemplated by the Buyer, and Buyer shall have satisfied all conditions to funding by Lender of the Purchase Price and the initial draw for hard costs for construction. 15. PRORATIONS. 15.1 Operating Expenses. The following items shall be prorated at Closing, as of close of business of the day immediately preceding Closing "Adjustment Date": 15.1.1 Intentionally Omitted. 15.1.2 Taxes. Real estate and personal property taxes, if any, on the basis of the fiscal year for which assessed. If the Closing shall occur before the tax rate or assessment is fixed, the apportionment of such real estate and personal property taxes at the Closing shall be upon the basis of the tax rate for the next preceding year applied to the latest assessed valuation. Final adjustment will be made upon the actual tax amount, when determined. -18- 15.1.3 Deposits. Tax and utility company deposits, if any, shall be assigned to Buyer. 15.1.4 Water and Sewer Charges. Water and sewer charges and fire protection and inspection services based upon meter readings to be obtained by Seller effective as of the Adjustment Date, or if not so obtainable, a date not more than ten (10) days prior to the Adjustment Date, and the unfixed meter charges based thereon for the intervening period shall be apportioned on the basis of such last reading. Upon the taking of a subsequent actual reading, such apportionment shall be readjusted and Seller or Buyer, as the case may be, will promptly deliver to the other the amount determined to be so due upon such readjustment. If Seller is unable to furnish such prior reading, any reading subsequent to the Closing will be apportioned on a per diem basis from the date of such reading immediately prior thereto and Seller shall pay the proportionate charges due up to the date of Closing. 15.1.5 Assigned Contracts. Amounts paid or payable in respect of any service and maintenance contracts assigned to Buyer in accordance herewith. 15.1.6 Electricity, gas, steam and fuel. Electricity, gas and steam and fuel oil, if any, based on meter readings or a fuel company letter showing measurement on the day immediately preceding Closing, and valued at current prices. 15.1.7 Security Deposits. Buyer shall receive a check from Seller for the full amount of any security deposits, with accrued interest, or a credit against the Purchase Price in said amount. 15.2 Custom and Practice. Except as set forth in this Agreement, the customs of the State and County in which the Premises are located shall govern prorations. 15.3 Future Installments of Taxes. If at Closing, the Property or any part thereof shall be or shall have been affected by an assessment or assessments which are or may become payable in installments, then for purposes of this Agreement, all unpaid installments of any such assessment, including those which are to become due and payable and to be liens upon the Property shall be paid and discharged by Seller at Closing. 15.4 Application of Prorations. If such prorations result in a payment due Buyer, the cash payable at Closing shall be reduced by such sum. If such prorations result in a payment due Seller, the same shall be paid by uncertified check at Closing. 15.5 Schedule of Prorations. The parties shall endeavor to jointly prepare a schedule of prorations for the Property no less than five (5) days prior to Closing. 15.6 Intentionally Omitted. 15.7 Readjustments. The parties shall correct any errors in prorations as soon after the Closing as amounts are finally determined. -19- 15.8 Indemnification for Seller's Tax Obligations. Seller shall indemnify, defend and save and hold harmless Buyer from any loss, cost, liability or expense (including, without limitation, reasonable counsel fees and court costs) incurred, paid or suffered by Buyer arising out of or by reason of any claim made by any state taxing or employment authorities asserting or indicating any claims or possible claims for unpaid taxes, penalties, interest or court costs related thereto of Seller or any related party, due the State of Delaware or its political subdivisions. The provisions of this Section 15.8 shall specifically survive Closing hereunder. 15.9 Survival. The provisions of this Section 15 shall expressly survive Closing hereunder. 16. BROKERS. Each party hereby represents and warrants to the other that it has not employed or retained any broker or finder in connection with the transactions contemplated by this Agreement other than CB Commercial, and that other than CB Commercial, neither has had any dealings with any other person or party which may entitle that person or party to a fee or commission. Each party shall indemnify the other of and from any claims for commissions by any person or party claiming such commission by or through the indemnifying party. 17. ESCROW AGENT. The parties hereto have requested that the Deposit be held in escrow by the Escrow Agent to be applied at the Closing or prior thereto in accordance with this Agreement. The Escrow Agent will deliver the Deposit to Seller or to Buyer, as the case may be under the following conditions: 17.1 Payment to Seller. To Seller on the Closing Date upon the consummation of Closing; 17.2 Notice of Dispute. If either Seller or Buyer believes that it is entitled to the Deposit or any part thereof, it shall make written demand therefor upon the Escrow Agent. The Escrow Agent shall promptly mail a copy thereof to the other party in the manner specified in Section 18.1 below. The other party shall have the right to object to the delivery of the Deposit, by filing written notice of such objections with the Escrow Agent at any time within ten (10) days after the mailing of such copy to it in the manner specified in Section 18.1 below, but not thereafter. Such notice shall set forth the basis for objection to the delivery of the Deposit. Upon receipt of such notice, the Escrow Agent shall promptly deliver a copy thereof to the party who filed the written demand. 17.3 Escrow Subject to Dispute. In the event the Escrow Agent shall have received the notice of objection provided for in 17.2 above of this Section, in the manner and within the time therein prescribed, the Escrow Agent shall continue to hold the Deposit until (i) the Escrow Agent receives written notice from both Seller and Buyer directing the disbursement of the Deposit in which case the Escrow Agent shall then disburse said Deposit in accordance with said direction, or (ii) litigation arises between Seller and Buyer, in which event the Escrow Agent shall deposit the Deposit with the Clerk of the Court in which said litigation is pending, or (iii) the Escrow Agent takes such affirmative steps as the Escrow Agent may, at the Escrow Agent's option elect in order to terminate the Escrow Agent's duties including, but not limited to, deposit in Court and an action for interpleader. -20- 17.4 Escrow Agent's Rights and Liabilities. Escrow Agent shall not be required to determine questions of fact or law, and may act upon any instrument or other writing believed by it in good faith to be genuine and to be signed and presented by the proper person, and shall not be liable in connection with the performance of any duties imposed upon Escrow Agent by the provisions of this Agreement, except for Escrow Agent's own willful default or gross negligence. Escrow Agent shall have no duties or responsibilities except those set forth herein. Escrow Agent shall not be bound by any modification of this Agreement, unless the same is in writing and signed by Buyer and Seller, and, if Escrow Agent's duties hereunder are affected, unless Escrow Agent shall have given prior written consent thereto. In the event that Escrow Agent shall be uncertain as to Escrow Agent's duties or rights hereunder, or shall receive instructions from Buyer or Seller which, in Escrow Agent's opinion, are in conflict with any of the provisions hereof, Escrow Agent shall be entitled to hold and apply the Deposit, pursuant to Section 17.3, and may decline to take any other action. 18. GENERAL PROVISIONS. 18.1 Notices. All notices or other communications required or permitted to be given under the terms of this Agreement shall be in writing, and shall be deemed effective when (i) sent by nationally-recognized overnight courier, (ii) facsimile with original following by regular mail, or (iii) deposited in the United States mail and sent by certified mail, postage prepaid, addressed as follows: 18.1.1 If to Buyer, addressed to: CHRISTIANA CENTER OPERATING COMPANY I LLC c/o The Commonwealth Group 62 Read's Way New Castle, DE 19720 with a copy in each instance to: Eric L. Stern, Esquire Pepper, Hamilton & Scheetz LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 19103 William S. Gee, Esquire Saul, Ewing, Remick & Saul 222 Delaware Avenue Suite 1200 Wilmington, DE 19899 -21- 18.1.2 If to Seller, addressed to: Gender Road Joint Venture c/o The Commonwealth Group 62 Read's Way New Castle, Delaware 19720 Attn.: Brock J. Vinton, President with a copy in each instance to: William S. Gee, Esquire Saul, Ewing, Remick & Saul 222 Delaware Avenue Suite 1200 Wilmington, DE 19899 18.1.3 If to Escrow Agent, addressed to: Commonwealth Land Title Insurance Company National Title Service 1700 Market Street Philadelphia, PA 19103 Attn.: M. Gordon Daniels or to such-other address or addresses and to the attention of such other person or persons as any of the parties may notify the other in accordance with the provisions of this Agreement. 18.2 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. 18.3 Entire Agreement. All Exhibits attached to this Agreement are incorporated herein and made a part hereof. [The parties covenant and agree to use their best efforts to develop within five (5) business days of the date hereof, and attach to this Agreement, the exhibits required hereunder. If such exhibits are not agreed upon within ten (10) business days of the date hereof, Buyer may terminate this Agreement and receive back the Deposit.] This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior negotiations, understandings and agreements of any nature whatsoever with respect to the subject matter hereof. This Agreement may not be modified or amended other than by an agreement in writing. The captions included in this Agreement are for convenience only and in no way define, describe or limit the scope or intent of the terms of this Agreement. 18.4 Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania. -22- 18.5 No Recording. This Agreement shall not be recorded in the Office for the Recording of Deeds or in any other office or place of public record. 18.6 Tender. Tender of Deed by Seller and of the Purchase Price by Buyer, are hereby mutually waived. 18.7 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 whose signature appears thereon, and all of which shall together 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. 18.8 Further Instruments. Seller will, whenever and as often as it shall be reasonably request so to do by Buyer, and Buyer will, whenever and as often as it shall be reasonably requested so to do by Seller, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all conveyances, assignments, correction instruments and all other instruments and documents as may be reasonably necessary in order to complete the transaction provided for in this Agreement and to carry out the intent and purposes of this Agreement. All such instruments and documents shall be satisfactory to the respective attorneys for Buyer and Seller. The provisions of this Article shall survive the Closing. 18.9 Time. Time is of the essence. In the event the last day permitted for the performance of any act required or permitted under this Agreement falls on a Saturday, Sunday, or legal holiday of the United States or the Commonwealth of Pennsylvania, the time for such performance will be extended to the next succeeding business day. Time periods under this Agreement will exclude the first day and include the last day of such time period. 18.10 Designation of Nominee; Assignment of Agreement. Buyer shall have the right to designate one or more of its subsidiaries or affiliate entities to acquire title to the Premises hereunder. Except for the foregoing, Buyer may not assign this Agreement. 18.11 Effective Date. Whenever the term or phrase "effective date hereof" or "date hereof" or other similar phrases describing the date this Agreement becomes binding on Seller and Buyer are used in this Agreement, such terms or phrases shall mean and refer to the date on which a counterpart or counterparts of this Agreement executed by Seller and Buyer are deposited with the Escrow Agent. 18.12 Time for Acceptance. This Agreement shall constitute an offer to buy or sell the Property, as case may be, on the terms herein set forth only when executed by the Seller or Buyer. This Agreement may be accepted by the party receiving such executed Agreement only by executing this Agreement and delivering an original signed copy hereof to the Escrow Agent and an originally signed copy hereof to the other party hereto within five (5) business days after such receipt. Failure to accept in the manner and within the time specified shall constitute a rejection and termination of such officer. -23- 18.13 Confidentiality. Each of the parties hereto covenants and agrees to hold the nature and content of this Agreement, including without limitation, the Purchase Price contained herein, in strict confidence prior to Closing, and other than disclosure required by the SEC and except as may be necessary to comply with this Agreement, neither party shall disclose prior to Closing, the nature, content or the Purchase Price of this Agreement without the express written consent of the other party. 18.14 Delivery of Documents. If this Agreement (or any of the Exhibits or Schedules hereto) shall have been prepared by Seller or by its counsel, then promptly upon execution hereof by the parties hereto, Seller shall deliver to Buyer one (1) "clean" copy of this Agreement, complete with all Exhibits and Schedules prepared (or obtained) by Seller or its counsel, and a copy of this Agreement (and said Exhibits and Schedules, if available) on disk, compatible with WordPerfect 5.1. 19. SEC REPORTING (8-K) REQUIREMENTS. For the period of time commencing on the date hereof and continuing through the first anniversary of the Closing Date, and without limitation of other document production otherwise required of Seller hereunder, Seller shall, from time to time, upon reasonable advance written notice from Buyer, provide Buyer and its representatives, with (I) access to all financial and other information pertaining to the period of Seller's ownership and operation of the Property, which information is relevant and reasonably necessary, in the opinion of Buyer's outside, third party accountants (the "Accountants"), to enable Buyer and its Accountants to prepare financial statements in compliance with any or all of (a) Rule 3-05 or 3-14 of Regulation S-X of the Securities and Exchange Commission (the "Commission"), as applicable; (b) any other rule issued by the Commission and applicable to Buyer; and (c) any registration statement, report or disclosure statement filed with the Commission by, or on behalf of Buyer; and (II) a representation letter, signed by the individual(s) responsible for Seller's financial reporting, as prescribed by generally accepted auditing standards promulgated by the Auditing Standards Division of the American Institute of Certified Public Accountants, which representation letter may be required by the Accountants in order to render an opinion concerning Seller's financial statements. 20. INDEMNIFICATION. Without limitation of any other Seller indemnity obligations set forth herein, from and after the Closing Date, Seller shall indemnify, defend and save and hold harmless Buyer, and its respective trustees, directors, officers and employees, of, from and against any and all loss, cost, expense, damage, claim, and liability, including reasonable attorney's fees and court costs, including, without limitation, attorney's fees and costs associated with the enforcement of Seller's indemnification obligations hereunder (hereinafter collectively, "Losses") which Buyer may suffer or incur, resulting from, relating to, or arising in whole or in part, from or out of (i) any misrepresentation or breach of a representation or warranty by Seller contained in this Agreement; (ii) any failure to fulfill any covenant or agreement of Seller contained in this Agreement; (iii) all litigation set forth in this Agreement and on Exhibit "D"; hereto; and (iv) any and all actions, -24- suits, investigations, proceedings, demands, assessments, audits, judgments, and/or claims arising out of or relating to any of the foregoing. Promptly after receipt by Buyer of written notice of the commencement of any suit, audit, demand, judgment, action, investigation or proceeding (a "Third Party Action") or promptly after Buyer incurs a Loss or has knowledge of the existence of a Loss, Buyer will, if a claim with respect thereto is to be made against Seller due to Seller's obligation to provide indemnification hereunder, give Seller written notice of such Loss or the commencement of any Third Party Action; PROVIDED, HOWEVER, that the failure to provide such notice within a reasonable period of time shall not relieve Seller of any of its obligations hereunder, unless Seller is materially prejudiced by such delay. Promptly after receiving such notice, Seller will, upon notice to Buyer, have the right to assume and control the defense and settlement of any such Third Party Action at its own cost and expense; PROVIDED, HOWEVER, that it shall be a condition precedent to the exercise of such right by Seller that Seller shall agree in writing that the Loss, or Third Party Action, as the case may be, is properly within the scope of the indemnification obligation and that as between the parties, Seller shall be responsible to satisfy and discharge such Third Party Action. Seller shall not enter into any resolution or other compromise of a Third Party Action without obtaining the complete release of Buyer for any liability to all claimants under or pursuant to such Third Party Action. Buyer shall have the right to participate in any such defense, contest or other protective action at its own cost and expense. Notwithstanding the foregoing, Buyer shall have the right to assume and control the defense and settlement of a Third Party Action (a) if such action includes claims for equitable relief which, if determined adversely to Buyer, could reasonably be expected to interfere with its intended business operations or damage its business reputation or (b) if Seller fails to do so in a timely manner. In any circumstances in which Buyer undertakes to control the Third Party Action as provided in this paragraph, it shall (i) not enter into any resolution or other compromise involving monetary damages without obtaining the prior written consent of Seller provided that such written consent may not be withheld if it would interfere with Buyer's business operation and (ii) keep Seller informed on an ongoing basis of the status of such Third Party Action and shall deliver to Seller, copies of all documents related to the Third Party Action reasonably requested by Seller. Buyer shall act to assure that all attorneys' fees and expenses incurred in connection therewith are reasonable. 21. EXCULPATION. No recourse shall be had for any obligation of Brandywine Realty Trust under this Agreement or under any document executed in connection herewith or pursuant hereto, or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of Brandywine Realty Trust, 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 the Seller and all parties claiming by, through or under Seller. -25- 22. AS-IS. Buyer acknowledges and agrees that except as herein elsewhere specifically provided, Seller has not made, does not make and specifically negates and disclaims any representations, warranties (other than the special warranty of title as set out in the deed), promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, statutory, oral or written, past, present or future, of, as to, concerning or with respect to (A) the value, nature, quality or condition of the Property, including, without limitation, the water, soil, and geology, (B) the suitability of the Property for any and all activities and uses which Buyer or any tenant may conduct thereon, (C) the compliance of or by the Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body, (D) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property, (E) the manner or quality of the construction or materials, if any, incorporated into the Property, (F) the manner, quality, state of repair or lack of repair of the Property, (G) compliance with any environmental requirements, including the existence in or on the Property of hazardous materials or (H) any other matter with respect to the Property. Additionally, no person acting on behalf of Seller is authorized to make, and by execution hereof, Buyer acknowledges that, except as herein elsewhere specifically provided, no person has made any representation, agreement, statement, warranty, guaranty or promise regarding the Property or the transaction contemplated herein; and no such representation, warranty, agreement, guaranty, statement or promise, if any, made by any person acting on behalf of Seller shall be valid or binding upon Seller unless expressly set forth herein. Buyer further acknowledges and agrees that, except with respect to information developed by Seller, its principals or affiliates, any information provided or to be provided with respect to the Property was obtained from a variety of sources, that Seller has not made any independent investigation or verification of such information and makes no representations as to the accuracy, truthfulness or completeness of such information, and the Buyer may not be entitled to rely on any such information. The foregoing notwithstanding, Seller has no knowledge that any such information is inaccurate or misleading. Buyer further acknowledges and agrees that to the maximum extent permitted by law, and except as herein elsewhere specifically provided, the sale of the Property as provided for herein is made on an "as is" condition and basis with all faults. It is understood and agreed that the purchase price has been adjusted by prior negotiation to reflect that the Property is sold by Seller and purchased by Buyer subject to the foregoing. 23. INTENTIONALLY OMITTED. -26- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed the day and year first above written. GENDER ROAD JOINT VENTURE, CHRISTIANA CENTER OPERATING a Delaware partnership COMPANY I LLC, By Its Members By:_________________(SEAL) BRANDYWINE OPERATING PARTNERSHIP, Brock J. Vinton, Managing Venturer L.P., a Delaware limited partnership, by Hereunto Duly Authorized Brandywine Realty Trust, a Maryland Real Estate Investment Trust, its sole general partner By: /S/ Gerard H. Sweeney, President & CEO ----------------------------------- Gerard H. Sweeney, President & CEO GENDER ROAD JOINT VENTURE, a Delaware partnership By:________________________________ Brock J. Vinton, Managing Venturer, Hereunto Duly Authorized -27- EXHIBIT "A" LEGAL DESCRIPTION TO BE ATTACHED POST EXECUTION BY THE PARTIES -vi- EXHIBIT "C" PERMITTED ENCUMBRANCES TO BE ATTACHED POST EXECUTION BY THE PARTIES -vii- SCHEDULE 5.15 CONSTRUCTION CONTRACTS RELATING TO THE PROJECT TO BE ATTACHED AFTER THEY ARE DELIVERED TO AND APPROVED BY THE BUYER -viii- EXHIBIT "H" TENANT ESTOPPEL CERTIFICATE (__________ Portfolio) 100 Commerce Drive Newark, DE _____________, 1997 Brandywine Realty Trust Newtown Square Corporate Campus 16 Campus Boulevard Newtown Square, PA 19073 Attention: Gerard H. Sweeney, President and Chief Executive Officer NationsBank, N.A., as Agent for the parties listed on Schedule 1 attached hereto Real Estate Banking 8300 Greensboro Drive, Suite 300 McLean, VA 22102 Attention: Cheryl D. Fitzgerald, Vice President Re: Name of Tenant: (COMPANY CAPS) Lease located at (Suite), (Premises) (Municipality), (State) (the "Property") To Whom it May Concern: The undersigned is the holder of the tenant's interest under the lease described on Exhibit A attached hereto (the "Lease") demising a portion of the Property known as (Suite) (the "Leased Premises"). We understand that Brandywine Realty Trust, its assignee or nominee ("Brandywine") intends to acquire the Property, and that NationsBank, N.A., as Agent for the parties listed on Schedule 1 attached hereto ("Lender") intends to be the holder of a first mortgage on the Property, and that Brandywine and Lender require this certification from us. Accordingly, we hereby certify to Brandywine and Lender as follows: 1. The Lease is in full force and effect and has not been modified, amended or supplemented in any way, except as follows: None (If appropriate response is other than "None," insert dates of all modifications, amendments or supplements): 2. There are no other representations, warranties, agreements, concessions, commitments, or other understandings between the undersigned and the Landlord regarding the Property other than as set forth in the Lease or paragraph 1 above. 3. The landlord under the Lease has completed and delivered, and the undersigned has accepted, the Leased Premises in the condition required by the Lease and the term of the Lease commenced on (Lease start). The Leased Premises consists of approximately (Square feet) square feet. The undersigned has taken possession of and is occupying the Leased Premises on a rent-paying basis and the monthly base rent payable thereunder is (Monthly rent), payable in advance. All improvements and work required under the Lease to be made by the landlord thereunder and all facilities required under the Lease to be furnished to the Leased Premises have been completed to the satisfaction of the undersigned, except as follows: None. (If appropriate response is other than "None," insert description of any improvements and work to be completed by the landlord under the Lease): 4. The fixed expiration date set forth in the Lease, excluding renewals and extensions, is (Lease exp). The undersigned neither has any option or right to purchase the Property or any portion thereof nor does the undersigned have any right or option to terminate the Lease or any of its obligations thereunder in advance of the scheduled termination date of the Lease as noted above, except as follows: None. (If appropriate response is other than "None," insert description of any purchase rights or options, and/or any early termination rights, together with reference to document (and section or paragraph) where found): 5. All rents, additional rents and other sums due and payable under the Lease have been paid in full and no rents, additional rents or other sums payable under the Lease have been paid for more than one (1) month in advance of the due dates thereof. 6. The landlord under the Lease is not in default under any of the requirements, provisions, terms, conditions or covenants of the Lease to be performed or complied with by the landlord under the Lease, and no event has occurred or situation exists which would, with the passage of time and/or the giving of notice, constitute a default or an event of default by the landlord under the Lease. 7. The undersigned is not in default under any of the requirements, provisions, terms, conditions, or covenants of the Lease to be performed or complied with by the undersigned, and no event has occurred or situation exists which would, with the passage of time and/or the giving of notice, constitute a default or an event of default by the undersigned under the Lease. 8. The undersigned has received no notice from any governmental authority or other person or party claiming a violation of, or requiring compliance with, any Federal, State or local statute, ordinance, rule, regulation or other requirement of law, for environmental contamination at the Leased Premises, to the best knowledge of the undersigned, [NJ only: the undersigned is in compliance with all applicable provisions of the Industrial Site Recovery Act], and no hazardous, toxic or polluting substances or wastes have been generated, treated, manufactured, stored, refined, used, handled, transported, released, spilled, disposed of or deposited by Tenant on, in or under the Leased Premises. 9. Neither the undersigned nor the landlord under the Lease has commenced any action or given or received any notice for the purpose of terminating the Lease. 10. There are no existing defenses, offsets, claims, or credits against the payment of rent or the performance of the undersigned's obligations under the Lease. 11. The undersigned has paid to the landlord under the Lease a security deposit of (Security dep). (COMPANY CAPS) By: ------------------------------- Name: Title: Exhibit A (Description of Lease) Lease dated __________ with (Company/Tenant), Tenant, for Suite (Suite), (Premises), (Municipality), (State). ______________________________ Exhibit A - (Alternate) - The undersigned hereby certifies to Brandywine Realty Trust, NationsBank, N.A., Administrative Agent, (Seller) with respect to its tenancy at Suite (Suite), (Premises), (Municipality), (State) that attached hereto is a true, correct and complete copy of its lease and all amendments thereto ("Lease"). It is intended by the undersigned that this Certificate and the attached documents shall be appended to the within Tenant Estoppel Certificate delivered by the undersigned Tenant to the above-mentioned parties. COMPANY CAPS By: ----------------------------- Name: Title: Schedule 1 NationsBank, N.A., Smith Barney Mortgage Capital Group, Inc. and all other parties to whom a direct participation interest in a certain Credit Facility are sold, transferred and assigned pursuant to the provisions of a certain Revolving Credit Agreement and a certain Co-Lender and Servicing Agreement, each dated as of November 25, 1996. EX-10.4 5 EXHIBIT 10.04 EXECUTION OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY I LLC Dated as of September 19, 1997 TABLE OF CONTENTS Page ARTICLE 1 GENERAL PROVISIONS..........................................................2 1.1. Formation.............................................................2 1.2. Name and Principal Place of Business..................................2 1.3. Registered Agent......................................................2 1.4. Purpose...............................................................2 1.5. Limitation on Purposes................................................2 1.6. Title to Property.....................................................3 1.7. Term..................................................................3 1.8. Type of Income........................................................3 ARTICLE 2 CAPITAL CONTRIBUTIONS.......................................................3 2.1. Capital Contributions Generally.......................................3 2.2. Capital Contribution of Class A Member................................3 2.3. Capital Contribution of Class B Member................................4 2.4. Initial Capital and Credit to Capital Account.........................4 2.5. Additional Capital Contributions......................................5 2.6. Maintenance of Capital Accounts.......................................6 2.7. Preferred Capital.....................................................7 2.8. No Interest...........................................................7 2.9. Revaluation of Company Property.......................................7 ARTICLE 3 MANAGEMENT..................................................................7 3.1. Management............................................................7 3.2. Manner of Acting......................................................7 3.3. Contact Representatives...............................................8 3.4. Designated Representatives............................................9 3.5. Fees, Compensation and Reimbursement of Expenses......................9 ARTICLE 4 THE MEMBERS................................................................10 4.1. Meeting of Members...................................................10 4.2. Limitation of Liability..............................................10 4.3. Company Records......................................................10 4.4. Duties of Members....................................................10 i 4.5. Activities of Members................................................10 4.6. Independent Activities of Members....................................10 4.7. Dealings with the Company............................................11 4.8. Covenant not to Withdraw.............................................11 4.9. Additional Members...................................................11 ARTICLE 5 REPRESENTATIONS AND WARRANTIES.............................................12 5.1. Representations and Warranties of Members............................12 ARTICLE 6 INDEMNIFICATION............................................................14 6.1. Liability............................................................14 6.2. Company Indemnification..............................................14 6.3. Member Indemnification...............................................15 6.4. Class B Member Indemnification.......................................15 ARTICLE 7 TRANSFERS..................................................................15 7.1. Transfer Restrictions................................................15 7.2. Permitted Transfers..................................................16 7.3. Conditions of Transfer...............................................16 7.4. Transfers; Recharacterization........................................16 7.5. Conversion of Class B Member.........................................17 ARTICLE 8 BUY-SELL PROVISIONS........................................................17 8.1. Mutual Disagreement..................................................17 8.2. Mandatory Buy-Sell of Interests. ....................................17 8.3. Closing of Purchase or Sale..........................................18 8.4. Definitions..........................................................18 ARTICLE 9 ALLOCATIONS OF PROFITS AND LOSSES..........................................19 9.1. Allocations of Profits...............................................19 9.2. Allocation of Losses.................................................20 9.3. Special Allocations..................................................20 9.4. Curative Allocations.................................................21 9.5. Allocations for Tax Purposes.........................................21 ARTICLE 10 DISTRIBUTIONS..............................................................22 ii 10.1. Net Cash From Operations............................................22 10.2. Net Cash From Sales or Refinancings.................................23 10.3. Authority to Withhold...............................................24 ARTICLE 11 BOOKS, RECORDS, REPORTS AND ACCOUNTING.....................................24 11.1. Books and Records...................................................24 11.2. Company's Accountants...............................................24 11.3. Fiscal Year. .......................................................24 11.4. Accounting Period...................................................25 11.5. Annual Reports......................................................25 11.6. Quarterly Reports...................................................25 11.7. Preparation of Tax Returns..........................................25 11.8. Tax Controversies...................................................25 11.9. Tax Elections.......................................................25 ARTICLE 12 DISSOLUTION AND LIQUIDATION................................................26 12.1. Dissolution.........................................................26 12.2. Bankruptcy of a Member..............................................26 12.3. Liquidation.........................................................26 12.4. No Liquidating Distributions in Kind................................27 12.5. Deficit Capital Account.............................................27 12.6. Certificate of Cancellation.........................................27 12.7. Non-Recourse........................................................27 ARTICLE 13 MISCELLANEOUS..............................................................28 13.1. Amendments..........................................................28 13.2. Notice..............................................................28 13.3. Governing Law.......................................................29 13.4. Severability........................................................29 13.5. Binding Effect......................................................29 13.6. Titles and Captions.................................................30 13.7. No Third Party Rights...............................................30 13.8. Time is of Essence..................................................30 13.9. Further Assurances..................................................30 13.10 Incorporation by Reference..........................................30 13.11. Legal Representation................................................30 13.12. Entire Agreement....................................................30 13.13. Counterparts........................................................30 13.14. Execution of Certificate of Formation...............................30 iii DEFINITIONS OF TERMS......................................................1 iv OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY I LLC THIS OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY I LLC (the "Agreement") is made and entered into as of the 19th day of September, 1997 by and between Brandywine Operating Partnership, L.P., a Delaware limited partnership (the "Class A Member") and Gender Road Joint Venture, a Delaware general partnership (the "Class B Member" and together with the Class A Member, the "Members") as members of CHRISTIANA CENTER OPERATING COMPANY I LLC (the "Company"). Capitalized terms used in this Agreement shall have the meanings set forth on Exhibit A attached hereto unless they are otherwise defined in the preamble, the Background or the particular section in this Agreement in which they are used. BACKGROUND The Class B Member is the owner of the Land. The Members desire to organize and form the Company for the purposes of acquiring the Land from the Class B Member, and developing, constructing and operating the Project, which will be owned, leased and operated by the Company for the production of income. In connection with and as a condition of the consummation of the transactions contemplated by this Agreement, the Company shall enter into (i) the Land Acquisition Agreement with the Class B Member pursuant to which the Class B Member shall sell, and the Company shall purchase, the Land and (ii) the other Collateral Agreements. This Agreement sets forth the understanding between the Members with respect to the terms and conditions of the Land Acquisition (to the extent not inconsistent with the Land Acquisition Agreement), the construction, management and operation of the Project, and the distribution of proceeds received from the ownership and/or disposition of the Property. NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and preceding with the Background paragraphs incorporated by reference, the Members, intending to be legally bound hereby, covenant and agree as follows: ARTICLE 1 GENERAL PROVISIONS 1.1. Formation. The Members desire to form the Company as a limited liability company under the laws of the State of Delaware, and in connection therewith desire to set forth their agreements and understandings as stated in this Agreement. The Members agree that the Company shall be operated pursuant to the terms and conditions set forth in this Agreement, and to the extent not inconsistent therewith, the Act. The Members agree to execute or cause the Company to execute all certificates and documents, including a Certificate of Formation, required by the Act in order that the Company qualify as a limited liability company under the Act. The Members shall do or cause to be done all such other filings, including amendments of the Certificate of Formation, recordings, or other acts as may be necessary or appropriate to comply with the laws of formation and operation of a limited liability company in the State of Delaware and any other jurisdiction in which the Company may conduct business. 1.2. Name and Principal Place of Business. The name of the Company shall be "CHRISTIANA CENTER OPERATING COMPANY I LLC" or such other name as the Members from time to time may select. The principal place of business of the Company shall be Gender Road Joint Venture c/o The Commonwealth Group, 62 Read's Way, New Castle, Delaware 19720, or such other place as the Members from time to time shall determine. 1.3. Registered Agent. The registered agent for the Company shall be The Corporation Trust Company located at Corporation Trust Center, 1209 Orange Street Wilmington, DE 19801. 1.4. Purpose. The sole purpose of the Company shall be to acquire the Land, and to construct, control, own, manage, operate and maintain the Project in accordance with the terms of this Agreement and, to the extent applicable, the Collateral Agreements. In connection therewith, the Company shall have the authority to do all things necessary and appropriate to construct, operate, manage and maintain the Project. 1.5. Limitation on Purposes. The Company shall exist solely for the purposes specified in Section 1.4 hereof and unless the Members agree otherwise, the Company shall not engage in any business other than the Project. The Members do not intend and this Agreement shall not be deemed to create any joint venture, partnership, or other arrangement by and between the Members with respect to any business or activities of any Member other than the business and activities specifically set forth in this Agreement. No Member shall have the power to bind the other Member except with respect to the business of the Company as specifically set forth in this Agreement. 2 1.6. Title to Property. All property owned by the Company, whether real or personal, tangible or intangible, shall be owned by the Company as an entity and in the name of the Company, and no Member shall have any ownership interest in such property. The interest of all Members in the Company are, for all purposes, personal property. 1.7. Term. The term of the Company shall commence upon the filing of the Certificate of Formation in accordance with the Act and shall continue until the Company is terminated in accordance with Article 12 of this Agreement. 1.8. Type of Income. The Class B Member hereby acknowledges and agrees that Brandywine Realty Trust, the general partner of the Class A Member, is a real estate investment trust as defined in Section 856 of the Code, and that as long as the Class A Member is a member of the Company, the Company shall manage its affairs in a manner such that the Company does not intentionally earn any income for tax purposes or acquire any assets which would cause Brandywine Realty Trust to violate any of the provisions of Code Section 856. ARTICLE 2 CAPITAL CONTRIBUTIONS 2.1. Capital Contributions Generally. The Members shall make Capital Contributions to the Company at the Agreed Value set forth in this Section 2.1 at such times and in such manner, and on such terms and conditions as set forth in Section 2.2, in the case of the Class A Member, and as set forth in Section 2.3, in the case of the Class B Member; provided, however, that any such Capital Contributions shall not be treated as Initial Capital or credited to such Member's Capital Account until such time as set forth in Section 2.4 hereof. The Agreed Value of each Member's Capital Contribution is as follows: Member Agreed Value ------ ------------ Class A Member $2,000,000 Class B Member $1,910,000 2.2. Capital Contribution of Class A Member. The Class A Member's Capital Contribution at the Agreed Value set forth in Section 2.1 hereof shall be reflected in the following manner: 2.2.1.In connection with, and upon the closing of, the Acquisition and Construction Loan, the Class A Member shall provide, from a suitably creditworthy financial institution, a letter of credit in an amount up to Two Million Dollars ($2,000,000) to the extent that such letter of credit (i) is necessary to facilitate the Company's procurement of the 3 Acquisition and Construction Loan, or (ii) will result in the Company obtaining more favorable terms and conditions for the Acquisition and Construction Loan. Notwithstanding the Class A Member's agreement hereunder, the parties acknowledge and agree that the Acquisition and Construction Loan is intended to be funded simultaneously with the closing of the Land Acquisition, and that the Class A Member's obligation to provide a letter of credit under this Section 2.2.1 is expressly conditioned upon the closing of the Land Acquisition and the Acquisition and Construction Loan. 2.2.2. In addition to and not in limitation of the Class A Member's obligation under Section 2.2.1 hereof, it is anticipated that prior to or upon completion of the Project, the Acquisition and Construction Loan will be refinanced with the Permanent Loan and a cash contribution by the Class A Member in the amount of Two Million Dollars ($2,000,000) less any amounts advanced under the Letter of Credit plus interest thereon to the extent such amounts have not been paid or reimbursed by the Company. Accordingly, upon the date of the funding of the Permanent Loan, the Class A Member shall contribute to the Company cash in the amount of Two Million Dollars ($2,000,000) less any amounts advanced under the Letter of Credit plus interest thereon to the extent such amounts have not been paid or reimbursed by the Company; provided that upon the contribution of cash by the Class A Member hereunder, the Letter of Credit shall be canceled. The parties hereto intend that the cash contribution by the Class A Member hereunder, together with the proceeds of the Permanent Loan, shall be used to satisfy the Acquisition and Construction Loan. 2.3. Capital Contribution of Class B Member. The Class B Member's Capital Contribution at the Agreed Value set forth in Section 2.1 hereof, shall be made or deemed made as follows: 2.3.1. By executing this Agreement, the Class B Member agrees to provide the Company with the right to purchase the Land and further agrees to contribute to the Company cash in the amount of Two Hundred Sixty Thousand Dollars ($260,000), such cash to be contributed upon the funding of the Permanent Loan. 2.4. Initial Capital and Credit to Capital Account. Upon the funding of the Permanent Loan, each Member's Capital Contribution shall be treated as Initial Capital and shall be credited to such Member's Capital Account; provided, however, that with respect to the Class A Member, to the extent there is an advance or draw under the Letter of Credit delivered by the Class A Member pursuant to Section 2.2.1 hereof, then the amount of such advance or draw plus interest thereon to the extent such amounts have not been paid or reimbursed by the Company shall be treated as part of the Class A Member Initial Capital and shall be included in calculating the Class A Member Preferred Return on Initial Capital to the extent thereof as of the date of such advance or draw. 4 2.5. Additional Capital Contributions. 2.5.1. It is not expected that the Members will be required to contribute any additional capital to the Company other than those Capital Contributions set forth in Sections 2.2 and 2.3 hereof at the times set forth therein and at the Agreed Value. In the event, however, that either the Class A Member or the Class B Member (the "Notifying Member"), in its reasonable business judgment, determines that additional capital is required by the Company, whether for capital expenditures, normal operating expenses, debt service or otherwise in connection with the Project, then the Notifying Member shall give ten (10) days written notice (the "Capital Notice") to the other Member (the "Notified Member") specifying in reasonable detail the amount and purpose of the additional required capital. If the Notified Member agrees within said ten (10) day period that the capital set forth in the Capital Notice is needed by the Company, such additional capital shall be obtained through bank financing or Additional Capital Contributions, as mutually determined by the Notified Member and the Notifying Member. 2.5.2. If the Notified Member and the Notifying Member are unable to agree within said ten (10) day period as to whether additional funds are needed by the Company or are unable to agree as to whether such funds should be obtained through bank financing or Additional Capital Contributions, then the Notifying Member and the Notified Member each shall select a representative who together shall appoint one independent Person, unrelated to either Member or its Affiliates and who is experienced in the real estate development industry and has substantial expertise in the financial marketplace (the "Advisor"), to determine whether and when additional funds are needed and/or the manner in which such funds shall be obtained by the Company; provided that, if the Advisor determines that such additional funds should be obtained from the Members, then both Members shall be required to make an Additional Capital Contribution to the Company as provided in Section 2.5.3 hereof. The Members hereby agree that, in either case, the Advisor's determination shall be final and binding on the Members. 2.5.3. If additional funds are obtained from the Members through Additional Capital Contributions, such contributions shall be made by the Members, in cash on the same terms and in the same amount, within ten (10) business days after receipt of (a) the Capital Notice (in the event that the Members agree to make Additional Capital Contributions pursuant to Section 2.5.1 hereof) or (b) written notice from the Advisor (in the event that the procedure under Section 2.5.2 hereof is utilized). 2.5.4. If additional funds are obtained from the Members through Additional Capital Contributions and both Members make their Additional Capital Contribution hereunder, then, each Member shall be entitled to the Preferred Return on Additional Capital with respect to its Additional Capital Contribution as of the Additional Capital Date. 2.5.5. If Additional Capital Contributions are required to be made by the Members under this Section 2.5 and a Member (the "Defaulting Member") fails to advance its pro rata share of such Additional Capital Contribution, then, any amounts advanced by the other Member (the 5 "Performing Member") shall be treated as a loan by the Performing Member to the Company, and the Performing Member shall have the right, but not the obligation, to make a loan to the Company in the amount of the Additional Capital Contribution due from the Defaulting Member. Any amounts advanced by the Performing Member under this Section 2.5.5, whether on its own behalf or on behalf of the Defaulting Member shall be treated as a loan (a "Capital Loan") notwithstanding that such funds may originally have been advanced by the Performing Member as an Additional Capital Contribution. All Capital Loans shall (i) be for a term of five (5) years, (ii) bear annual interest at a rate of thirteen percent (13%), (iii) be prepayable by the Company in whole or in part without penalty, and (iv) be repaid in full by the Company before any distributions may be made to any Member under Sections 10.1, 10.2 or 12.3 hereof. All payments received with respect to a Capital Loan shall be applied first against accrued and unpaid interest thereunder, and then against the outstanding principal balance thereof. 2.6. Maintenance of Capital Accounts. 2.6.1. The Company shall maintain a separate Capital Account for each Member in accordance with Treasury Regulations promulgated under Section 704(b) of the Code, and each Member's Capital Account shall be as follows: (a) Each Member's Capital Account shall be credited at the Agreed Value at the time set forth in Section 2.4 hereof. (b) Each Member's Capital Account shall be (1) increased by (a) the amount of money contributed by such Member to the capital of the Company, (b) the Gross Asset Value of any property contributed by such Member to the capital of the Company (net of liabilities secured by such contributed property) and (c) the amount of Profits and other items of Company income or gain allocated to such Member under this Agreement, and (2) decreased by (a) the amount of money distributed to such Member by the Company pursuant to this Agreement, (b) the Gross Asset Value of property distributed to such Member by the Company (net of liabilities secured by such distributed property) and (c) the amount of Losses and other items of Company deduction, loss or expense allocated to such Member under this Agreement. 2.6.2. It is intended that the Capital Accounts shall be determined and maintained throughout the full term of the Company in accordance with the capital accounting rules set forth in Treasury Regulation Section 1.704-1(b)(2)(iv), and that all provisions in this Agreement shall be interpreted and applied in a manner consistent therewith. In the event that the Members determine that it is prudent to modify the manner in which the Capital Accounts, or any credits or charges thereto, are computed or maintained in order to comply with such Treasury Regulations, the Members, upon agreement, shall make such modifications to the extent necessary to comply with such Treasury Regulations. 6 2.7. Preferred Capital. It is the intention of the parties hereto that Section 2.6 shall not apply to, or in any way effect, a Member's Initial Capital, Additional Capital, Unreturned Initial Capital or Unreturned Additional Capital, which accounts are maintained for the purpose of distributions pursuant to Article 10 hereof. 2.8. No Interest. No Member shall be entitled to interest on that Member's Capital Contributions or Capital Account except as otherwise provided in this Agreement. 2.9. Revaluation of Company Property. Upon the agreement of the Members, the Capital Accounts of the Members may be adjusted to reflect a revaluation of the property of the Company in accordance with, and at such times as specified in, Treasury Regulation Section 1.704-1(b)(2)(iv)(f); provided that any adjustments hereunder shall be made in accordance with and to the extent provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and (g). ARTICLE 3 MANAGEMENT 3.1. Management. The management of the Company shall be vested in the Members as set forth in this Article 3. Each Member, subject to the terms, conditions, restrictions and limitations contained herein, will possess all of the powers and rights of a member of a limited liability company under the Act; provided, however, no single Member shall be authorized or empowered to undertake any action or make any decision on behalf of the Company or in connection with the Property unless otherwise specifically set forth in this Agreement or in a Collateral Agreement. Each Member acknowledges and agrees that it intends to actively participate in the management of the Company and its operations. 3.2. Manner of Acting. Where this Agreement specifically requires the vote, consent or determination of the Members and/or in order for the Company to undertake any Major Action (as defined in this Section 3.2), the approval at a duly convened meeting or by written consent in lieu of a meeting of each Member shall be required. For purposes of this Agreement, a "Major Action" shall mean and include decisions and undertakings relating to: (a) the acquisition of the Land by the Company pursuant to the Land Acquisition Agreement; (b) the construction and completion of the Project, including construction contracts, schedules and budgets. (c) any loans, borrowings, financing or refinancing in connection with the Project, including without limitation, the Acquisition and Construction Loan and the Permanent Loan; 7 (d) the management of the Project, including the terms and conditions of any management and/or leasing agreements; (e) the annual operating budget and business plan for the Project; (f) the sale, conveyance, transfer, assignment or disposition of the Land and/or the Project; (g) leases for occupancy of space in the Project by tenants, including without limitation rents, escalations, allowances and other business terms; (h) any contract or agreement giving rise to a financial commitment or obligation of the Company; (i) the employment of employees and/or agents in connection with the operation and management of the Project; (j) the admission of any additional Members; (k) the selection of and change of accountants, auditors and/or legal counsel for the Company; and (l) significant tax elections required or permitted pursuant to the Code and/or applicable law of any taxing authority to which the Company is subject. 3.3. Contact Representatives. Each Member shall designate and appoint one or more individuals who shall be the contact person (a "Contact Representative") for such Member and each of whom who shall be authorized by such Member to act on its behalf in the performance of this Agreement and who shall be authorized to make decisions in connection with Major Actions on behalf of such Member. The Class A Member hereby designates and appoints Anthony A. Nichols, Sr. and Gerard H. Sweeney as its initial Contact Representatives, and the Class B Member hereby designates and appoints Brock J. Vinton as its initial Contact Representative. A Member appointing an individual as a Contact Representative may, at any time, appoint and designate a new Contact Representative, provided that such Member shall notify the other Member of such new appointment or designation within a reasonable time after such appointment. 3.4. Designated Representatives. 8 3.4.1. The Members acknowledge and agree that while Company decisions generally shall be made by the Members as set forth in Section 3.2 hereof, the daily operation and management of the Company shall, subject to the limitations set forth in this Section 3.4 or a Collateral Agreement, be delegated to the Administrative Officer, who initially shall be Brock J. Vinton. In addition to the day-to-day management of the Company, the Administrative Officer shall be responsible for the preparation of quarterly and annual financial statements as set forth in Sections 11.5 and 11.6 hereof. 3.4.2. The Members also acknowledge and agree that certain functions of the Company shall, subject to the limitations set forth in this Section 3.4 or a Collateral Agreement, be delegated to the employees or agents of the Class B Member (any such designated employees or agents of the Class B Member being referred to herein as a "Designated Representative"), provided that the Class B Member shall keep the Class A Member apprised of any such employees or agents and their activities. 3.4.3. The Administrative Officer and any Designated Representative appointed hereunder shall have the specific power and authority set forth in this Agreement, in an employment agreement, if any, in a Collateral Agreement and as otherwise delegated to such Administrative Officer and/or Designated Representative by the Members; provided that the Administrative Officer and any Designated Representative shall operate the Company subject to (i) basic policy decisions adopted by the Members, (ii) specific limitations and requirements of this Agreement and any other agreement executed by and between the Administrative Officer and the Company and/or a Designated Representative and the Company, as the case may be, and (iii) limitations imposed under the Act. Notwithstanding any provision in this Agreement or any other agreement to the contrary, neither the Administrative Officer nor any Designated Representative shall have the authority, either individually or acting in conjunction with each other or other Designated Representatives, to do any act, make any decision, or engage in any transaction which requires the approval of the Members as set forth in Section 3.2 hereof. 3.5. Fees, Compensation and Reimbursement of Expenses. Upon the funding of the Acquisition and Construction Loan, the Company shall: (a) reimburse the Class B Member for those costs, fees and expenses set forth on Schedule 3.5.1 attached hereto; and (b) reimburse the Class A Member for those costs, fees and expenses set forth on Schedule 3.5.2 attached hereto. 9 ARTICLE 4 THE MEMBERS 4.1. Meeting of Members. The Members shall hold meetings on a quarterly basis or such other periodic basis as the Members may agree at such location as the Members may agree. Any Member may call for a meeting by giving ten (10) days prior written notice to the other Member, which notice shall specify the purpose of the meeting; provided that the ten (10) days notice period may be waived by the other Member. 4.2. Limitation of Liability. Each Member's liability for the debts, obligations and liabilities of the Company shall be limited to the maximum extent permitted by the Act and other applicable law. 4.3. Company Records. Each Member shall have access to all books and records of the Company and to the Company's officers, attorneys and auditors for any reasonable business purpose and shall be entitled to make copies of such books and records at the Company's expense. 4.4. Duties of Members. Each Member shall have a fiduciary duty to the other Member to take into account the best interests of the Company when exercising its rights under this Agreement, provided that it shall not be a breach of any Member's fiduciary duty to exercise any of its rights under this Agreement. Notwithstanding this Section 4.4, the Class B Member acknowledges and agrees that to the extent the Class A Member provides any funds to the Company as lender and not by way of Additional Capital Contribution in connection with the Permanent Loan, the Class A Member, in its capacity as a lender to the Company, shall have no fiduciary duty to the Class B Member hereunder, and all rights, duties and obligations of the Class A Member shall be limited to and as set forth in the loan documents executed in connection with such loan. 4.5. Activities of Members. Except as otherwise expressly provided in this Agreement or in any Collateral Agreement, no Member or Affiliate of any Member shall be obligated to devote its, his or their exclusive time and effort to the business or affairs of the Company, but each Member shall devote sufficient time, effort and resources (including employees or agents of such Member) to the business or affairs of the Company as in its judgment is reasonably required to fulfill its obligations and role in the Company's businesses and to promote the purposes of the Company, provided, however, that the Class B Member shall employ and maintain such employees and agents as shall be necessary to fully perform the duties described in Section 3.4 hereof. 4.6. Independent Activities of Members. Except as otherwise expressly provided in or limited by a Collateral Agreement, each Member (acting on its own behalf) and its Affiliates may, notwithstanding this Agreement, engage in any activities it may choose, whether the same operate 10 the same type of business as the Company or are competitive with the Company and neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Member or its Affiliates from engaging in such activities or require any Member to permit the Company or any other Member to participate in such activity. 4.7. Dealings with the Company. 4.7.1. Except as otherwise expressly provided in or limited by this Agreement or a Collateral Agreement, no Member or Affiliate of any Member shall contract and deal with the Company as an independent contractor, employee or as an agent for others, or receive fees or other compensation from such others or the Company, including without limitation, brokerage fees, commission fees or any other payment on account of the leasing, operations, management, financing or refinancing in connection with the Land or Project, unless and until such Member or the Affiliate of such Member first provides the other Member with the terms of such proposed dealings and obtains the prior written consent to such dealing, contract or undertaking from the other Member. 4.7.2. Notwithstanding Section 4.7.1 hereof, each Member hereby acknowledges and agrees that, in connection with the transactions contemplated by this Agreement, the Company shall execute the Construction Management Agreement, the Developer's Agreement, the Land Acquisition Agreement and the Leasing and Management Agreement pursuant to each of which the Class B Member or its Affiliates shall perform certain functions set forth in each agreement and shall receive the fee for the performance of such functions as set forth therein. 4.8. Covenant not to Withdraw. Notwithstanding any provision in the Act, each Member hereby covenants and agrees that the Member has entered into this Agreement and formed the Company based on its expectation that each Member will continue as a Member of the Company and carry out the duties and obligations undertaken by it in this Agreement and the Collateral Agreements and that, except as otherwise expressly required or permitted hereby, each Member hereby covenants and agrees not to, without the consent of the other Member (a) take any action to file a certificate of dissolution or its equivalent with respect to such Member, (b) take any action that would cause the voluntary Bankruptcy of such Member, (c) withdraw or attempt to withdraw from the Company, unless pursuant to a Permitted Transfer in accordance with Section 7.2 hereof, (d) Transfer all or any portion of its Interest in the Company except as otherwise provided in Article 7 hereof, or (e) demand a return of such Member's Capital Contribution or Capital Account prior to the dissolution and liquidation of the Company pursuant to Section 12.1 hereof. 4.9. Additional Members. Additional Members shall be admitted to the Company upon the unanimous agreement of the Members; provided that such Members also shall unanimously agree on the capital contributions, if any, to be made by such additional Member, the Interests in the Company to which such Member shall be entitled and the expected duties and obligations of such additional Member. Notwithstanding this Section 4.9, no Person shall be admitted to the 11 Company as an additional Member unless such Person executes a counterpart to this Agreement thereby agreeing to be bound by the terms and provisions of this Agreement as if he, she or it were an original Member. ARTICLE 5 REPRESENTATIONS AND WARRANTIES 5.1. Representations and Warranties of Members. By execution and delivery of this Agreement, each Member hereby makes to the other Member the representations and warranties set forth in this Section 5.1 to the extent applicable to such Member. Any and all representations and warranties set forth in this Section 5.1 shall survive the execution of this Agreement. For purposes of this Article 5, the term "Member" shall include such Member's Affiliates that are undertaking or performing any services or activities in connection with the transactions contemplated in this Agreement or any of the Collateral Agreements, and any representations and warranties made by a Member hereunder shall be deemed to include representations and warranties, as appropriate, with respect to such Affiliates. 5.1.1.Organization. Such Member is a limited partnership or general partnership, as applicable, duly organized and formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own, lease and operate its property and to carry on its business as of the date hereof and as contemplated by this Agreement. Each Member is duly qualified to do business and is in good standing as a limited partnership in each jurisdiction in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations under this Agreement or any Collateral Agreement. 5.1.2. Proper Authorization and Power. Each Member has the requisite power and authority to execute and deliver this Agreement and each Collateral Agreement to which it is a party and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and each of the Collateral Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary partnership action, and no other action on the part of the Member or any Person is necessary to authorize the execution, delivery and performance of this Agreement or any Collateral Agreement or the consummation of the transactions contemplated hereby or thereby. This Agreement and each of the Collateral Agreements constitutes a legal, valid and binding obligation of such Member enforceable against it in accordance with their respective terms. No consent, waiver, approval, license or authorization of, or filing, registration or qualification with, or notice to, any governmental unit or any other person is required to be made, obtained or given by the Member or any Person in connection with the execution, delivery and performance of this Agreement or any Collateral Document that has not been heretofore obtained. 12 5.1.3. Validity of Contemplated Transactions. The execution, delivery and performance of this Agreement or any of the Collateral Agreements and the consummation by the Member of the transactions contemplated hereby or thereby does not and will not (i) require any filing or registration with, or consent, authorization, approval or permit of, any governmental or regulatory authority and (ii) violate, conflict with, contravene, result in the breach of, or constitute a default under, accelerate the performance required by, or require the consent, authorization, or approval under (a) any terms, conditions or provisions of the certificate of Limited Partnership of such Member, the partnership agreement of such Member, or any material agreement or instrument to which such Member is a party or by which such Member is made bound or to which any of its properties or assets is subject, (b) any of the terms, conditions or provisions of any law, regulation, order, writ, injunction, decree or determination of any court or governmental or regulatory agency applicable to such Member, or (c) any of the terms, conditions or provisions of any indenture, mortgage, lease agreement or instrument to which such Member is a party or may be bound or to which its properties or assets is subject. 5.1.4. Litigation. There are no actions, suits, proceedings, or investigations pending, or to the knowledge of such Member threatened, against or affecting such Member or any of its businesses, assets or properties, before any court or governmental or regulatory agency which could, if adversely determined, reasonably be expected to impair such Member's ability to perform its obligations under this Agreement or any Collateral Agreement or to have a material adverse effect on the financial condition of such Member. 5.1.5. Investment Representations (a) Such Member's Interest in the Company is intended to be and is being acquired solely for its own account for investment and with no present intention of distributing, reselling, pledging or otherwise disposing of, all or any part thereof; (b) Such Member is aware that Interests in the Company have not been registered under the Securities Act or the applicable state securities laws or the "Blue Sky" laws of any state, that Interests in the Company cannot be distributed, sold, pledged or otherwise disposed of unless they are registered thereunder or unless, in the opinion of counsel satisfactory to the Company, an exemption from such registration is available, and that the Company has no intention of so registering Interests in the Company thereunder and is under no obligation to do so and that accordingly the Member is able and is prepared to bear the economic risk that may be associated with respect to its Interest in the Company; (c) Such Member understands that the Interests are being offered and sold in reliance upon specific exemptions from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations and warranties set forth herein in order to determine the applicability of such exemptions and the suitability of the Members to acquire Interests; and 13 (d) Such Member agrees that in addition to the other restrictions on transfer set forth in this Agreement, it will not sell or otherwise dispose of its Interest unless a registration statement under the Securities Act shall be in effect with respect thereto and such Member shall have complied with all provisions of the Securities Act and all applicable state securities laws or at the Company's request, the Member shall have obtained an opinion of counsel that such proposed sale or disposition will not require registration under the Securities Act or any applicable state securities laws. ARTICLE 6 INDEMNIFICATION 6.1. Liability. No Member or any Affiliate of any Member or any Designated Representative, if appointed pursuant to Section 3.4 hereof, shall be liable, responsible, accountable in damages or otherwise to the Company or any Member for any act or failure to act hereunder in connection with the Company and its business or in the operation and maintenance of the Project unless the act or omission is attributed to gross negligence, willful misconduct or fraud or constitutes a material breach by such person of any term or provision of this Agreement or a Collateral Agreement; provided that nothing in this Section 6.1 is intended to limit, modify or alter any Member's liability or obligations under any Collateral Agreement except to the extent expressly set forth therein. 6.2. Company Indemnification. To the fullest extent permitted by law, each Member and each Affiliate of any Member, as well as each Designated Representative appointed pursuant to Section 3.4 (each of the foregoing being referred to herein as an "Indemnitee", and each Affiliate to which each such Indemnitee is related being referred to herein as such Indemnitee's "Related Person") shall be indemnified, defended and held harmless by the Company to the fullest extent permitted by the Act for, from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorneys' fees and costs), judgments, fines, settlements, demands, actions, or suits relating to or arising out of the business of the Company or the operation and maintenance of the Project, or the exercise by the Indemnitee of any authority conferred on it, him or them hereunder or the performance by the Indemnitee of any of its, his or their duties and obligations under this Agreement. Notwithstanding anything contained in this Agreement to the contrary, no Indemnitee shall be entitled to indemnification hereunder with respect to any claim, issue or matter: (i) in respect of which it, he or its or his Related Person (or the Company as the result of an act or omission of such Related Person) has been adjudged liable for fraud, gross negligence or willful misconduct; (ii) based upon or relating to a material breach by it, him or his or its Related Person of any term or provision of this Agreement or any Collateral Agreement; or (iii) for costs or expenses incurred by the Indemnitee in connection with a claim or action against it, him or his or its Related Person by another Member or such other Member's Related Person that is not related to the Indemnitee's actions under this Agreement. Notwithstanding this Section 6.2, no Member shall be entitled to indemnification by the Company when or if acting in a 14 capacity with the Company as other than a Member, in which case, such right to indemnification shall be governed by an agreement, if any, between the Company and the Member. 6.3. Member Indemnification. Each Member (the "Indemnitor Member") shall indemnify, defend and hold harmless the other Member (the "Indemnitee Member") from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorneys' fees and costs), judgments, fines, settlements, demands, actions, or suits relating to or arising out of any (i) fraud, gross negligence or willful misconduct for which the Indemnitor Member or any of its Affiliates or Related Persons (or the Company as the result of an act or omission of any of the same) has been adjudged liable; (ii) material breach by the Indemnitor Member of any term or provision of this Agreement or any Collateral Agreement, and (iii) material breach or inaccuracy in any representation or warranty made by such Indemnitor Member in this Agreement or any Collateral Agreement. 6.4. Class B Member Indemnification. Notwithstanding any provision in this Agreement to the contrary and in addition to the indemnification set forth in Section 6.3 hereof, the Class B Member shall indemnify, defend and hold wholly harmless the Class A Member, the Company and Brandywine Realty Trust from and against any and all Additional Delaware Realty Transfer Taxes (as defined in this Section 6.4) relating to or arising out of the Company's obligation to pay Delaware realty transfer taxes due in connection with the conveyance of the Land to the Company pursuant to the Land Acquisition Agreement. For purposes of this Section 6.4, "Additional Delaware Realty Transfer Taxes" shall mean any Delaware realty transfer taxes (in excess of the amount of Delaware Realty Transfer Taxes paid by the Company at the closing of the Land Acquisition) that are or become due and payable by the Company as a result of the conveyance of the Land pursuant to the Land Acquisition Agreement, including any and all penalties and interests imposed thereon; provided, however, that Additional Delaware Realty Transfer Taxes shall not include any Delaware Realty Transfer Taxes imposed on the Company as a result of obtaining a building permit or a certificate of occupancy in connection with the Project. Any indemnification hereunder by the Class B Member shall not be deemed to be a capital contribution to the Company by the Class B Member but shall constitute an expense of the Class B Member. ARTICLE 7 TRANSFERS 7.1. Transfer Restrictions. Except as otherwise provided in this Agreement, no Member shall make any Transfer of all or any portion of its Interest, including, without limitation, a Transfer of a right to Profits, Losses or distributions hereunder, unless and until the other Member consents to the Transfer and the transferor Member and the proposed Transferee comply with the provisions of this Article 7. Any Transfer in violation of the requirements of this Agreement shall be null and void ab initio and of no force or effect whatsoever. Each Member hereby acknowledges the reasonableness of the restrictions on Transfer imposed by this Agreement in 15 view of the Company's purpose and the relationship of the Members. Accordingly, the restrictions on Transfer set forth herein shall be specifically enforceable. 7.2. Permitted Transfers. Notwithstanding Section 7.1, a Member may Transfer all or any portion of its Interest in the Company to (i) another Member, and (ii) one of its Affiliates (in each case, a "Permitted Transfer"), provided that a Permitted Transfer to an Affiliate shall comply with the provisions of Section 7.3. 7.3. Conditions of Transfer. Notwithstanding Section 7.2 hereof, a Transfer (including a Permitted Transfer to an Affiliate under Section 7.2) shall not be allowed unless and until the following conditions precedent are satisfied, and once satisfied, the Transferee shall succeed to all rights and be subject to all obligations of the transferring Member with respect to the transferred Interest: 7.3.1. all agreements, articles, minutes, written consents and all other necessary documents and instruments shall have been executed and filed and all other acts shall have been performed which the non-transferring Member deems necessary to make the Transferee a substitute Member of the Company, including, without limitation, the execution by such Transferee of a counterpart signature page to this Agreement pursuant to which the Transferee shall assume any and all obligations and have all rights and interests under this Agreement with respect to the transferred Interest; and 7.3.2. unless otherwise waived by the non-transferring Member, the non-transferring Member shall have received such assurances as may be necessary or appropriate in the opinion of counsel to the Company to confirm that Transfer would not (i) violate the Securities Act or any state securities laws or cause the Company to register thereunder; (ii) require the Company to register as an investment company under the Investment Company Act; (iii) cause the Company to be treated as other than a partnership for federal income tax purposes; and (iv) will not terminate the Company for federal income tax purposes; 7.3.3. unless otherwise waived by the non-transferring Member, the non-transferring Member shall have received such assurances as it deems necessary or appropriate to confirm that such Transferee has the ability to perform all of the Transferor's obligations set forth in this Agreement and the Collateral Agreements, provided that, unless expressly agreed by the non-transferring Member, the Transferor shall not be relieved of any of its liabilities or obligations under this Agreement or any Collateral Agreement; and 7.3.4. all reasonable expenses incurred by the Company and the non-transferring Member in connection with the Transfer shall have been paid by or for the account of the Transferee. 7.4. Transfers; Recharacterization. If any Interest is transferred during any Fiscal Year in compliance with the provisions of this Agreement, Profits, Losses, each item thereof, and all other 16 items attributable to such transferred Interest for such period shall be divided and allocated between the Transferor and the Transferee by taking into account their varying interests during the period in accordance with section 706(d) of the Code, using any conventions permitted by law and reasonably selected by the non-transferring Member. 7.5. Conversion of Class B Member. Notwithstanding the provisions of this Article 7, the Members acknowledge that subsequent to the closing of the Land Acquisition, the Class B Member will convert from a Delaware general partnership to a Delaware limited liability company pursuant to and in accordance with Delaware law; provided that the Class B Member shall obtain the prior written consent of the Class A Member, which consent shall not be unreasonably withheld, as to the conversion, and provided, further, that all of the representations and warranties set forth in Section 5.1 hereof (other than Section 5.1.1) and made by the Class B Member shall remain true and correct with respect to the Class B Member notwithstanding the conversion. ARTICLE 8 BUY-SELL PROVISIONS 8.1. Mutual Disagreement. In the event of a Mutual Disagreement, the Members shall have the rights of mandatory purchase and sale provided in this Article 8. For purposes of this Article 8, "Mutual Disagreement" shall mean the failure the Members to mutually agree upon a Major Action to be undertaken by the Company, which failure remains unresolved for a period ending on the twentieth (20th) day following the submission of a written notice by one Member to the other Member stating that such failure to agree on a Major Action has occurred (the "Election Day"). 8.2. Mandatory Buy-Sell of Interests. 8.2.1. In the event of a Mutual Disagreement, a Member (the "Electing Member") may deliver to the other Member (the "Notice Member") a written notice (the "Election Notice"), which Election Notice shall include an irrevocable offer by the Electing Member either (i) to sell all but not less than all of the Electing Member's Interest in the Company to the Notice Member (the "Offer to Sell"), or (ii) to purchase all, but not less than all, of the Notice Member's Interest in the Company (the "Offer to Purchase" and together with the Offer to Sell, the "Offers"). The Election Notice also shall set forth the Gross Value of the Project to be used in computing the Net Equity Value of a Member's Interests. The price at which a Member's Interest may be purchased or sold under this Section 8.2 (the "Buy-Sell Price") is the Net Equity Value of a Member's Interest, determined as of the Election Day. 8.2.2. For a period ending on the forty-fifth (45th) day following the Election Day (the "Election Period"), the Notice Member shall have the right to accept either the Offer to Sell or the Offer to Purchase. Upon acceptance by the Notice Member of one of the Offers, the 17 Electing Member and the Notice Member shall be required to sell or required to purchase, as the case may be, for the Buy-Sell Price. 8.2.3. If the Notice Member fails to accept either the Offer to Sell or the Offer to Purchase within the Election Period, then, the Offers automatically shall expire and be of no force or effect, and the Notice Member shall be deemed to have made to the Electing Member an offer (the "Counter-Offer") to sell all, but not less than all, of the Notice Member's Interest in the Company for the Buy-Sell Price. Pursuant to the Counter-Offer, the Electing Member shall be obligated to purchase, and the Notice Member shall be required to sell, all but not less than all of the Notice Member's Interest in the Company at the Buy-Sell Price. 8.2.4. The Member purchasing the Interests under this Section 8.2, whether pursuant to one of the Offers or the Counter-Offer, as the case may be, shall be referred to as the "Purchasing Member" and the Member selling such Interests as the "Selling Member." 8.3. Closing of Purchase or Sale. The closing of the purchase or sale under Section 8.2 shall occur on a date and time and at a place mutually agreeable to the Electing Member and the Notice Member, provided that such closing shall not be later than forty-five (45) days after the expiration of the Election Period; and provided, further, that if the Members cannot agree on the place of the closing, the closing shall take place at the law offices of Pepper, Hamilton & Scheetz LLP at the address set forth in Section 13.2.1 hereof. At the closing, the Purchasing Member shall pay to the Selling Member, by cash or other immediately available funds, the Buy-Sell Price, and the Selling Member shall deliver to the Purchasing Member good title, free and clear of any liens, claims, encumbrances, security interests or options of its Interests in the Company, and the Purchasing Member shall agree to indemnify and hold harmless the Selling Member from any and all claims arising in connection with said Interests that accrue after the date of the closing. At the closing, the Purchasing Member and the Selling Member agree to execute such documents and instruments of conveyance as may be necessary or appropriate to confirm the transactions contemplated hereby. 8.4. Definitions. For purposes of this Article 8, the following terms shall have the definitions set forth in this Section 8.4. (a) "Gross Value of the Project" shall be the fair market value of the Project as of the Election Day as determined by the Electing Member and set forth in the Election Notice. (b) "Net Equity Value of a Member's Interest" shall be, as of any day, the amount that would be distributed to such Member in liquidation of the Company pursuant to Section 12.3 hereof if and assuming that the following first occurred: (i) the Project were sold for the Gross Value of the Project, (ii) the Company paid all apportionments and costs customarily made and/or paid in the closing of a real estate transaction in Delaware (iii) the Company paid its accrued, but unpaid liabilities and established reserves for any contingent liabilities pursuant to 18 Section 12.3.3, including without limitation, the Acquisition and Construction Loan or the Permanent Loan (without prepayment premium or penalty), as applicable; provided that the Net Equity Value of a Member's Interest shall be adjusted to reflect (a) the Unreturned Preferred Capital of the Selling Member and Purchasing Member, (b) the accrued and unpaid Preferred Returns of the Selling Member and the Purchasing Member, and (c) any Capital Loans owing to the Selling Member or Purchasing Member. ARTICLE 9 ALLOCATIONS OF PROFITS AND LOSSES 9.1. Allocations of Profits. After giving effect to the special allocations set forth in Section 9.3 hereof, Profits for any Fiscal Year shall be allocated to the Members in the following order and priority: 9.1.1. First, to the Members until the cumulative Profits allocated pursuant to this Section 9.1.1 are equal to the cumulative Losses allocated to the Members pursuant to Section 9.2. hereof for all prior periods (without duplication) in reverse order to which the prior Losses were allocated. 9.1.2. Second, one hundred percent (100%) to the Members, in accordance with their respective Preferred Return Percentage, until: (a) the Class A Member has been allocated an amount equal to the excess, if any, of (1) the sum of the cumulative distributions made to the Class A Member pursuant to Sections 10.1.1(a), 10.2.1(a) and 12.3.4 in respect of (i) the Class A Member Preferred Return on Initial Capital from the Initial Capital Date to the end of the Fiscal Year and (ii) the Class A Member Preferred Return on Additional Capital from the Additional Capital Date to the end of the Fiscal Year, over (2) the cumulative amounts allocated to the Class A Member pursuant to this Section 9.1.2(a) for all prior Fiscal Years; and (b) the Class B Member has been allocated an amount equal to the excess, if any, of (i) the cumulative distributions made to the Class B Member in respect of the Class B Member Preferred Return on Additional Capital pursuant to Sections 10.1.1(b), 10.2.1(b) and 12.3.4 from the Additional Capital Date to the end of the Fiscal Year, over (ii) the cumulative amounts allocated to the Class B Member pursuant to this Section 9.1.2(b) for all prior Fiscal Years. 9.1.3. Third, one hundred percent (100%) to the Class B Member to the extent of the excess, if any, of (i) the cumulative distributions made to the Class B Member in respect of the Class B Member Subordinated Preferred Return on Initial Capital pursuant to Sections 10.1.2, 10.2.2 and 12.3.4 from the Initial Capital Date to the end of the Fiscal Year, over (ii) the 19 cumulative amounts allocated to the Class B Member pursuant to this Section 9.1.3 for all prior Fiscal Years. 9.1.4. Thereafter, to the Members in accordance with their Percentage Interests. 9.2. Allocation of Losses. After giving effect to the special allocations set forth in Section 9.3 hereof, Losses for any Fiscal Year shall be allocated to the Members in the following order and priority: 9.2.1. First, to the extent any Profits have been allocated pursuant to Section 9.1 hereof, Losses shall be allocated first to offset any Profits allocated pursuant to Section 9.1.4, then to offset Profits allocated pursuant to Section 9.1.3, and then to offset Profits allocated pursuant to Section 9.1.2, in each case in an amount up to the amount of any Profits previously allocated under the respective section. To the extent Profits are offset pursuant to this Section 9.2.1, such allocations shall be disregarded for purposes of computing subsequent allocations pursuant to this Section 9.2.1. 9.2.2. Next, to the Members in accordance with their Percentage Interests. 9.2.3. Notwithstanding Section 9.2.1 and 9.2.2, no amount of Loss shall be allocated to a Member to the extent that such allocation would cause or increase a deficit balance in such Member's Capital Account, as adjusted. Rather, such amount of Loss shall be allocated to the Member with positive Capital Account, provided, however, that if no Member has a positive Capital Account at the time of such allocation, Losses shall be allocated to the Members in accordance with Section 9.2.2, provided further, that to the extent that Losses have been allocated to a Member pursuant to this Section 9.2.3, then, notwithstanding Section 9.1 hereof, subsequent Profits shall be allocated to that Member under this Section 9.2.3 until the aggregate Profits allocated to such Member hereunder shall be equal to the aggregate Losses allocated under this Section 9.2.3 for all prior periods. 9.3. Special Allocations. Notwithstanding anything in this Agreement to the contrary, the following special allocations shall be made as follows: 9.3.1. All Nonrecourse Deductions for each Fiscal Year shall be allocated to the Members in proportion to their respective Percentage Interests. For purposes of Treasury Regulation Section 1.752-3, all excess nonrecourse liabilities of the Company will be allocated between the Members in proportion to their respective Percentage Interests. 20 9.3.2.Any items of income, loss, gain or deduction that are attributable to Member Nonrecourse Debt shall be allocated to those Members who bear the economic risk of loss for such debt in accordance with Treasury Regulation Section 1.704-2(i). 9.3.3. If there is a net decrease in Minimum Gain for a taxable year of the Company, then, unless and except to the extent that the exceptions provided in Treasury Regulations Section 1.704-2(f)(2) through (5) are applicable, before any other allocation is made for such taxable year, each Member shall be allocated items of income and gain for such year (and, if necessary, for subsequent years) in an amount equal to the portion of such Member's share of the net decrease in Minimum Gain, as such share is determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section 9.3.2 is intended to qualify as a "minimum gain chargeback" under Treasury Regulation Section 1.704-2(f)(1) and shall be interpreted in a manner consistent therewith. 9.3.4.To the extent that any Member unexpectedly receives any adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of Treasury Regulation Section 1.704-1(b)(2)(ii)(d), which adjustment, allocation or distribution creates or increases a deficit in that Member's Capital Account, then, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the deficit balance in its Capital Account created by such adjustment, allocation, or distribution as quickly as possible. Any special allocations of items of income or gain pursuant to this provision shall be taken into account in computing subsequent allocations of Profits so that the net amount of any items so allocated and the Profits, Losses and all other items allocated to each Member shall, to the extent possible, be equal to the net amount that would have been allocated to each such Member pursuant to the other provisions of this Agreement if such unexpected adjustments, allocations or distributions had not occurred. The foregoing is intended to qualify as a "qualified income offset" within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be applied in a manner consistent with that Treasury Regulation. 9.4. Curative Allocations. The allocations set forth in Sections 9.2.3 and 9.3 (the "Regulatory Allocations") are intended to comply with certain requirements of Treasury Regulation Section 1.704-1(b) and 1.704-2. Notwithstanding any other provision of this Article 9 (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating other items of Company income, gain, loss, deduction or credit among the Members so that, to the extent possible, the net amount of such allocations or other items of income, gain, loss, deduction or credit and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred. 9.5. Allocations for Tax Purposes. In the event the book value of any Company asset differs from its adjusted tax basis (upon contribution, revaluation or otherwise), all income, gain, loss and deduction with respect to such asset shall be allocated to the Members in a manner that takes into account the variation between such book value and adjusted tax basis for such property 21 for federal income tax purposes, pursuant to section 704(c) of the Code or pursuant to the principles thereof using any reasonable allocation method (including curative allocations) as may be determined by the Members or, if the Members so elect, the Company's accountants. Allocations made under this Section 9.5 are made solely for federal, state or local income tax purposes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, or other items or distributions pursuant to any provision of this Agreement. ARTICLE 10 DISTRIBUTIONS 10.1. Net Cash From Operations. Except as otherwise provided in Section 12.3 (relating to liquidating distributions), Net Cash From Operations shall be distributed not later than thirty (30) days after the end of each fiscal quarter of each Fiscal Year in the following order and priority: 10.1.1. First, one hundred percent (100%) to the Members, in accordance with their respective Preferred Return Percentage, until: (a) the Class A Member has been distributed an amount equal to the excess, if any, of (1) the sum of the (i) the Class A Member Preferred Return on Initial Capital from the Initial Capital Date to the end of such fiscal quarter and (ii) the Class A Member Preferred Return on Additional Capital from the Additional Capital Date to the end of such fiscal quarter, over (2) the sum of all prior distributions to the Class A Member in respect of the Class A Member Preferred Return on Initial Capital and the Class A Member Preferred Return on Additional Capital pursuant to this Section 10.1.1(a) and Section 10.2.1 (a); and (b) the Class B Member has been distributed an amount equal to the excess, if any, of (i) the Class B Member Preferred Return on Additional Capital from the Additional Capital Date to the end of such fiscal quarter, over (ii) the sum of all prior distributions to the Class B Member in respect of the Class B Member Preferred Return on Additional Capital pursuant to this Section 10.1.1(b) and Section 10.2.1 (b) 10.1.2. Second, one hundred percent (100%) to the Class B Member to the extent of the excess, if any, of (i) the Class B Member Subordinated Preferred Return on Initial Capital from the Initial Capital Date to the end of such fiscal quarter, over (ii) the sum of all prior distributions to the Class B Member in respect of the Class B Member Subordinated Preferred Return on Initial Capital pursuant to this Section 10.1.2 and Section 10.2.2. 10.1.3. Thereafter, to the Members in accordance with their Percentage Interests. -22- 10.2. Net Cash From Sales or Refinancings. Except as otherwise provided in Section 12.3 (relating to liquidating distributions), Net Cash From Sales or Refinancings, if any, realized or available to the Company shall be distributed as soon as practicable, as determined by the Members, in the following order and priority: 10.2.1. First, one hundred percent (100%) to the Members, in accordance with their respective Preferred Return Percentage, until: (a) the Class A Member has received an amount equal to the excess, if any, of (1) the sum of (i) the Class A Member Preferred Return on Initial Capital from the Initial Capital Date to the date on which the event giving rise to such Net Cash From Sales or Refinancings occurred, and (ii) the Class A Member Preferred Return on Additional Capital from the Additional Capital Date to the date on which the event giving rise to such Net Cash From Sales or Refinancings occurred, over (2) the sum of all prior distributions to the Class A Member in respect of the Class A Member Preferred Return on Initial Capital and the Class A Member Preferred Return on Additional Capital pursuant to this Section 10.2.1(a) and Section 10.1.1(a); and (b) the Class B Member has received an amount equal to the excess, if any, of (i) the Class B Member Preferred Return on Additional Capital from the Additional Capital Date to the date on which the event giving rise to such Net Cash From Sales or Refinancings occurred, over (ii) the sum of all prior distributions to the Class B Member in respect of the Class B Member Preferred Return on Additional Capital pursuant to this Section 10.2.1(b) and Section 10.1.1(b). 10.2.2. Second, one hundred percent (100%) to the Class B Member to the extent of the excess, if any, of (i) the Class B Member Subordinated Preferred Return on Initial Capital from the Initial Capital Date to the date on which the event giving rise to such Net Cash From Sales or Refinancings occurred, over (ii) the sum of all prior distributions to the Class B Member in respect of the Class B Member Subordinated Preferred Return on Initial Capital pursuant to this Section 10.2.2 and Section 10.1.2. 10.2.3. Third, one hundred percent (100%) to the Members, in accordance with their respective Preferred Return Percentage, until (a) the Class A Member has received an amount equal to the sum of the Class A Member Unreturned Additional Capital and the Class A Member Unreturned Initial Capital; and (b) the Class B Member has received an amount equal to the Class B Member Unreturned Additional Capital. -23- 10.2.4. Fourth, one hundred percent (100%) to the Class B Member until the Class B Member Unreturned Initial Capital has been reduced to zero; 10.2.5. Thereafter, to the Members in accordance with their Percentage Interests. 10.3. Authority to Withhold. Upon the written advice of the Company's legal tax counsel, the Company shall be entitled to collect, withhold and make payments on behalf of or with respect to any Member's allocable share of Company income or gain, in amounts required to discharge any obligation of the Company to withhold or make payments to any governmental authority with respect to any federal, state, and local tax liability of such Member arising as a result of such Member's Interest in the Company. Any amount withheld pursuant to the foregoing sentence shall be treated for all purposes of this Agreement as having been paid or distributed to such Member and shall reduce, on a dollar for dollar basis, amounts otherwise payable of distributable to such Member under this Agreement. Each Member hereby agrees to indemnify and hold harmless the Company for, from and against any liability with respect to amounts paid or withheld under this Section 10.3 on behalf of or with respect to such Member. ARTICLE 11 BOOKS, RECORDS, REPORTS AND ACCOUNTING 11.1. Books and Records. The Company shall keep or cause to be kept at its principal place of business appropriate books and records, including without limitation, the following: (a) true and full financial information regarding the status of the Project and financial condition of the Company, including without limitation, records of all costs and expenses incurred, all changes made, all credits made and received, and all income derived in connection with the business of the Company; (b) promptly after becoming available, a copy of the Company's federal, state and local income tax returns for each year; (c) a copy of this Agreement and Certificate of Formation and all amendments thereto, together with executed copies of any written powers of attorney pursuant to which this Agreement and the Certificate of Formation and all amendments thereto have been executed; and (d) other information regarding the affairs of the Company as is just and reasonable. 11.2. Company's Accountants. The Members hereby select and appoint Arthur Andersen LLP to be the Company's independent accountants. 11.3. Fiscal Year. The Fiscal Year of the Company shall be the calendar year or such other accounting period as shall be required under the Code or as may be determined by the Company's independent accountants. 11.4. Accounting Period. Unless otherwise determined by the Company's independent accountants, the Company shall use the accrual method of accounting in maintaining its books and records and in preparation of its financial statements for federal income tax purposes. -24- 11.5. Annual Reports. Within forty-five (45) days after the close of each Fiscal Year, the Administrative Officer shall cause the Company to have prepared, and furnished to each Member, audited financial statements, presented in accordance with generally accepted accounting principles, including without limitation, copies of (i) the balance sheet of the Company, (ii) the Company's income statement, (iii) a statement of the Company's cash flow, (iv) a statement of the Member's Capital Accounts and Preferred Capital and (v) a statement of source and application of funds each as of the last day of the Fiscal Year. 11.6. Quarterly Reports. Within twenty (20) days after the close of each fiscal quarter, the Administrative Officer shall cause the Company to prepare and furnish to each Member quarterly reports of (i) the Company's operations, (ii) quarterly unaudited balance sheets and income statements, and (iii) quarterly statements of cash flow. 11.7. Preparation of Tax Returns. Within ninety (90) days after the end of each Fiscal Year, the Administrative Officer shall cause the Company to arrange for the preparation and timely filing of all tax returns of the Company for federal, state and local income tax purposes and shall cause to be furnished to the Members the tax information reasonably required for federal and state income tax reporting purposes. 11.8. Tax Controversies. The Members hereby appoint and designate the Class A Member as the initial Tax Matters Member, and the Class A Member shall authorize and require one of its officers (the "Tax Matters Representative") to represent the Company (at the Company's expense) in connection with all examinations of the Company's affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services and costs associated therewith. Each Member agrees to cooperate with the Tax Matters Representative and to do or refrain from doing any or all things reasonably required by the Tax Matters Representative in conducting those proceedings. The Tax Matters Representative shall promptly notify the each Member upon the receipt of any correspondence from any federal, state or local tax authorities relating to any examination of the Company's affairs. 11.9. Tax Elections. Any and all elections for federal, state and local tax purposes, including without limitation, any election (i) to adjust the basis of the Company Property pursuant to Code Section 754, 734(b) and 743(b), or comparable state or local law, in connection with Transfers of Interests in the Company; and (ii) to extend the statute of limitations for assessment of tax deficiencies against the Company and the Members with respect to adjustments to the Companies federal, state or local tax returns shall be made by the Members. 25 ARTICLE 12 DISSOLUTION AND LIQUIDATION 12.1. Dissolution. The Company shall dissolve upon the earliest to occur of any of the following: (a) upon the affirmative vote of the Members; (b) upon the sale of the Project and the repayment and satisfaction in full of any financing undertaken by the Company in respect thereof; (c) an entry of a decree of judicial dissolution pursuant to the Act; or (d) December 31, 2050. 12.2. Bankruptcy of a Member. The Bankruptcy of a Member shall not dissolve the Company under the Act. Upon the Bankruptcy of a Member, the non-Bankrupt Member shall have the sole right to manage the Company, and the rights of the Bankrupt Member shall be limited to the right to share in the profits and losses and distributions of the Company to the extent provided in this Agreement and the Bankrupt Member shall not have any right to participate in the management or operation of the Company. 12.3. Liquidation. Upon the dissolution of the Company, the Company shall cease to carry on its business, except insofar as may be necessary for the winding up of its business, but its separate existence shall continue until the Certificate of Cancellation has been filed as required by the Act. Upon dissolution of the Company, the Members shall designate a Person to act as the liquidating trustee (the "Liquidating Trustee") and the business and affairs of the Company shall be wound up and subject to Section 12.3 hereof, the Company liquidated as rapidly as business circumstances permit, and the proceeds thereof shall be distributed (to the extent permitted by applicable law) in the following order and priority: 12.3.1. To the payment of the debts and liabilities of the Company (other than those to Members) in the order of priority provided by law. 12.3.2. To the payment of the expenses of liquidation of the Company in the order of priority provided by law, provided that the Company shall first pay, to the extent permitted by law, liabilities or debts owed to Members. 12.3.3. To the setting up of such reserves as the Liquidating Trustee may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company arising out of or in connection with the Company's business, provided that any such reserve will be held by the Liquidating Trustee for the purposes of disbursing such reserves in payment of any of the -26- aforementioned contingencies and at the expiration of such period as the Liquidating Trustee shall deem advisable (but in no case to exceed eighteen (18) months from the date of liquidation unless an extension of time is consented to by the Members), to distribute the balance thereafter remaining in the manner hereinafter provided. 12.3.4. The balance of the proceeds, if any, to be distributed on or before the later of (i) the end of the taxable year during which such liquidation occurs or (ii) ninety (90) days after the date of such liquidation, in accordance with and in the order set forth in Section 10.2 hereof. 12.4. No Liquidating Distributions in Kind. The Liquidating Trustee shall not distribute, and no Member may demand or receive, property other than cash in return for a Member's contributions, loans or advances, unless the Members unanimously agree to a distribution in kind to any Member; provided, however, that all Members receive, whether in kind or in cash and whether from the Company or the Member receiving an in kind distribution, the amount which such Member is entitled to receive under Section 10.2 hereof. 12.5. Deficit Capital Account. Upon liquidation, each Member shall look solely to the assets of the Company for the return of that Member's Capital Contribution. No Member shall be personally liable for a deficit Capital Account balance of that Member, it being expressly understood that the distribution of liquidation proceeds shall be made solely from existing Company assets in the order and priority set forth in Section 12.3 hereof, and to the extent applicable 12.4. 12.6. Certificate of Cancellation. Following dissolution and liquidation of the Company, when all debts, liabilities and obligations have been paid, satisfied, compromised or otherwise discharged, or adequate provisions have been made therefore, and all of the remaining property and assets have been distributed to Members, the Liquidating Trustee shall file a Certificate of Cancellation as required by the Act. 12.7. Non-Recourse. No recourse shall be had for any of the obligations of the Class A Member hereunder or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of Brandywine Realty Trust, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all of such liability being expressly waived and released by the Class B Member and any such Person who acts through the Class B Member. -27- ARTICLE 13 MISCELLANEOUS 13.1. Amendments. This Agreement may not be amended, modified or revised in any manner without the prior written consent of each of the Members. 13.2. Notice. 13.2.1. All notices, requests and other communications required or permitted to be given under this Agreement shall be in writing and shall be delivered to a Member either personally or by sending a copy thereof by first class or express mail, postage prepaid, or by telex or TWX (with answer back received) or courier services, charges prepaid, or by telecopier, to such Member's address (or to such party's telex, TWX, telecopier, or telephone number) as follows: If to the Class A Member: c/o Brandywine Realty Trust Newtown Corporate Campus 16 Campus Boulevard Suite 150 Newtown Square, PA 19073 Attn: Anthony A. Nichols, Sr., Chairman Gerard H. Sweeney, President and Chief Executive Officer Telephone: (610) 325-5600 Facsimile: (610) 325-5682 with a copy to: Michael H. Friedman, Esquire Pepper, Hamilton & Scheetz LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 19103-2799 Telephone: (215) 981-4563 Facsimile: (215) 981- 4750 -28- If to the Class B Member: Gender Road Joint Venture c/o The Commonwealth Group 62 Read's Way New Castle, Delaware 19720 Attn.: Brock J. Vinton, President Telephone: (302) 323-9700 Facsimile: (302) 323-9703 with a copy to: William S. Gee, Esquire Saul, Ewing, Remick & Saul P.O. Box 1266 Wilmington, DE 19899-1266 Telephone: (302) 421-6823 Facsimile: (302) 421-5874 13.2.2. Any such notice, request or communication shall be deemed to be delivered, given and received for all purposes of this Agreement (i) as of the date so delivered, if delivered personally or by telecopy to the person entitled thereto, (ii) three (3) business days after being deposited in the United States mail, if delivered by first class or express mail, postage prepaid or (iii) one (1) business day after being deposited with a telegraph office or courier service for delivery if notice is sent by telegraph, or courier services. 13.3. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and, to the maximum extent possible, in such manner as to comply with all of the terms and conditions of the Act. 13.4. Severability. If any provision of this Agreement shall be conclusively determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, such provision shall be ineffective only to the extent of such invalidity or unenforceability without invalidating or affecting the remainder of this Agreement thereby. 13.5. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Members and their respective successors and, where permitted, their assigns and Affiliates. -29- 13.6. Titles and Captions. All article, section and paragraph titles and captions contained in this Agreement are for convenience only and are not a part of the context hereof. 13.7. No Third Party Rights. This Agreement is intended to create enforceable rights between the parties hereto only, and creates no rights in, or obligations to, any other Persons whatsoever. 13.8. Time is of Essence. Time is of the essence in the performance of each and every obligation herein imposed. 13.9. Further Assurances. Each Member, upon the request of the other Member, shall execute all further instruments and perform all further acts which are or may become reasonably necessary to effectuate and to carry out the matters contemplated by this Agreement. 13.10. Incorporation by Reference. Any reference to an Exhibit or Schedule or Attachment herein, is hereby incorporated by reference in this Agreement as if such Exhibit, Schedule or Attachment was set out in full in the text of this Agreement. 13.11. Legal Representation. Each party to this Agreement acknowledges that such party is represented by competent legal counsel and that such counsel has fully reviewed this Agreement. This Agreement shall be construed in accordance with its fair meaning without any presumption against the party responsible for drafting this Agreement. 13.12. Entire Agreement. This Agreement contains the entire agreement between the parties hereto and supersedes any and all prior and contemporaneous agreements, arrangements or understandings between the parties relating to the subject matter hereof. No oral understandings, oral statements, oral promises or oral inducements exist. No representations, warranties, covenants or conditions, express or implied, whether by statute or otherwise, other than as set forth herein, have been made by the parties hereto. 13.13. Counterparts. This Agreement may be signed in any number of counterparts. with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute but one and the same agreement. Any and all counterparts may be executed by facsimile. 13.14. Execution of Certificate of Formation. The Members acknowledge and agree that Kathleen A. Shea, Esquire of Pepper, Hamilton & Scheetz LLP has the power and authority to execute and file the Certificate of Formation with the Secretary of State of the State of Delaware on behalf of the Members in order to form the Company under the Act. [SPACE INTENTIONALLY LEFT BLANK] -30- IN WITNESS WHEREOF, the parties have executed this Operating Agreement of CHRISTIANA CENTER OPERATING COMPANY I LLC effective as of the day and year first above written. MEMBERS: CLASS A MEMBER: BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, by Brandywine Realty Trust, a Maryland Real Estate Investment Trust, its sole general partner By:___________________________________ Gerard H. Sweeney, President and Chief Executive Officer CLASS B MEMBER: GENDER ROAD JOINT VENTURE, a Delaware partnership By:______________________________________ Brock J. Vinton, Managing Venturer, Hereunto Duly Authorized [END OF EXECUTIONS] -31- EXHIBIT A TO OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY I LLC DEFINITIONS OF TERMS The following terms used in this Agreement shall have the meanings described below: "Acquisition and Construction Loan" shall mean the loan made or committed to be made to the Company in respect of the Project at the time of the acquisition of the Land, of which a portion of the proceeds in the amount of $900,000 shall be used to fund the Land Acquisition Price and the remainder of which shall provide financing for the construction of the Project and related costs approved by the Members. "Act" shall mean the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101 et. seq., as amended from time to time. "Additional Capital Contributions" shall mean, with respect to a Member, any additional contributions to the capital of the Company made pursuant to Section 2.5 hereof. "Additional Capital Date" shall mean the date on which the Members make Additional Capital Contributions to the Company pursuant to and in accordance with Section 2.5 hereof; provided that such date shall be the same for both Members. "Administrative Officer" shall be the Person designated as such pursuant to Section 3.4 hereof to undertake the day to day operation of the Company as provided in Section 3.4 hereof. "Advisor" shall have the meaning set forth in Section 2.5.1 hereof. "Affiliate" shall mean a Person who, with respect to any Member (a) directly or indirectly controls, is controlled by or is under common control with such Member; (b) owns or controls 10 percent (10%) or more of the outstanding voting securities of such Member; or (c) is an officer, director, manager, trustee, partner, or member of such Member. "Agreed Value" with respect to a Member shall mean the aggregate value of such Member's Initial Capital contributed to the Company as set forth in Section 2.1 hereof but shall not include Additional Capital Contributions. "Agreement" means this operating agreement, as it may be amended, restated or supplemented from time to time. "Bankruptcy" means, with respect to a Member, the happening of any of the following: (a) the making of a general assignment for the benefit of creditors; (b) the filing of a voluntary petition in bankruptcy or the filing of a pleading in any court of record admitting in writing an inability to pay A-1 debts as they become due; (c) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such Member to be bankrupt or insolvent; (d) the filing of a petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation; (e) the filing of an answer or other pleading admitting the material allegations of, or consenting to, or defaulting in answering, a bankruptcy petition filed against a Member in any bankruptcy proceeding; (f) the filing of an application or other pleading or any action otherwise seeking, consenting to or acquiescing in the appointment of a liquidating trustee, receiver or other liquidator of all or any substantial part of a Member's properties; and (g) the commencement of any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation which has not been quashed or dismissed within 180 days. "Buy-Sell Price" shall have the meaning set forth in Section 8.2.1 hereof. "Capital Account" shall mean the accounting record of each Member's capital interest in the Company maintained pursuant to and in accordance with Section 2.6 hereof. "Capital Contribution" shall mean, with respect to each Member, the Agreed Value set forth in Section 2.1 hereof with respect to such Member which has been credited to such Member's Capital Account pursuant to Section 2.4 hereof. "Capital Notice" shall have the meaning set forth in Section 2.5.1 hereof. "Certificate of Formation" shall mean the certificate of formation of the Company, as amended or restated from time to time, filed in the Office of the Secretary of State of the State of Delaware in accordance with the Act. "Certificate of Cancellation" shall mean the certificate of cancellation filed by the Liquidating Trustee under the Act at such time as set forth in Section 12.6 hereof. "Class A Member" shall have the meaning set forth in the first paragraph of this Agreement. "Class A Member Additional Capital" shall mean the Additional Capital Contributions, if any, made by the Class A Member pursuant to Section 2.5 hereof. The Class A Member Additional Capital shall provide the basis upon which the Class A Member Preferred Return on Additional Capital is calculated. "Class A Member Aggregate Preferred Return" shall mean the sum of the Class A Member Preferred Return on Initial Capital and the Class A Member Preferred Return on Additional Capital. A-2 "Class A Member Initial Capital" shall mean the Capital Contribution made by Class A Member pursuant to Section 2.2.2 and treated as Initial Capital pursuant to Section 2.4 hereof, provided that to the extent there is an advance or draw on the Letter of Credit delivered by the Class A Member pursuant to Section 2.2.1 hereof, any such advance or draw, plus interest thereon not paid or reimbursed by the Company, shall be treated as a Capital Contribution and shall be part of the Class A Member Initial Capital as of the date of such advance or draw. The Class A Member Initial Capital shall provide the basis upon which the Class A Member Preferred Return on Initial Capital shall be calculated. "Class A Member Preferred Return on Additional Capital" shall mean the Preferred Return on Additional Capital to which the Class A Member is entitled under this Agreement. "Class A Member Preferred Return on Initial Capital" shall mean the cumulative right given to the Class A Member to receive in respect of each Fiscal Year a sum equal to ten percent (10%) per annum (determined on the basis of a year of 365 days, for the actual number of days occurring in the period for which the Class A Member Preferred Return on Initial Capital is being determined, cumulative to the extent not distributed in any quarter pursuant to Section 10.1.1(a) or 10.2.1(a) hereof, but not compounded) of the average daily balance of the Class A Member Unreturned Initial Capital from time to time during the period to which the Class A Member Preferred Return on Initial Capital relates. The Class A Member Preferred Return on Initial Capital shall commence on the Initial Capital Date and shall be payable as provided in this Agreement. "Class A Member Unreturned Additional Capital" shall mean the Class A Member Additional Capital reduced by cash distributions in respect of the Class A Member Additional Capital under Section 10.2.3 hereof. "Class A Member Unreturned Initial Capital" shall mean the Class A Member Initial Capital reduced by cash distributions in respect of the Class A Member Initial Capital made pursuant to Section 10.2.3. "Class B Member" shall have the meaning set forth in the first paragraph of this Agreement. "Class B Member Additional Capital" shall mean the Additional Capital Contributions, if any, made by the Class B Member under Section 2.5. The Class B Member Additional Capital shall provide the basis upon which the Class B Member Preferred Return on Additional Capital shall be calculated. "Class B Member Initial Capital" shall mean the Capital Contribution made by Class B Member pursuant to Section 2.3 hereof and treated as Initial Capital pursuant to Section 2.4. The Class B Member Initial Capital shall provide the basis upon which the Class B Member Subordinated Preferred Return on Initial Capital shall be calculated. "Class B Member Preferred Return on Additional Capital" shall mean the Preferred Return on Additional Capital to which the Class B Member is entitled under this Agreement. A-3 "Class B Member Subordinated Preferred Return on Initial Capital" shall mean the cumulative right given to the Class B Member to receive in respect of each Fiscal Year a sum equal to ten percent (10%) per annum (determined on the basis of a year of 365 days, for the actual number of days occurring in the period for which the Class B Member Subordinated Preferred Return on Initial Capital is being determined, cumulative to the extent not distributed in any quarter pursuant to Section 10.1.2 or 10.2.2 hereof, but not compounded) of the average daily balance of the Class B Member Unreturned Initial Capital from time to time during the period to which the Class B Member Subordinated Preferred Return on Initial Capital relates. The Class B Member Subordinated Preferred Return on Initial Capital shall be calculated commencing on the Initial Capital Date and shall be payable as provided in this Agreement; provided that the Class B Member Subordinated Preferred Return on Initial Capital is specifically subordinated to the Class A Member Preferred Return on Initial Capital, the Class A Member Preferred Return on Additional Capital and the Class B Member Preferred Return on Additional Capital. "Class B Member Unreturned Additional Capital" shall mean the Class B Member Additional capital reduced by cash distributions in respect of the Class B Member Additional Capital under Section 10.2.3 hereof. "Class B Member Unreturned Initial Capital" shall mean the Class B Member Initial Capital reduced by cash distributions in respect of the Class B Member Initial Capital made pursuant to Sections 10.2.4 hereof. "Code" shall mean the Internal Revenue Code of 1986 (or successor thereto), as amended from time to time. "Collateral Agreements" shall mean each of the documents, agreements and instruments, including without limitation, the Construction Management Agreement, the Leasing and Management Agreement, the Developer's Agreement and the Land Acquisition Agreement, executed, delivered or performed or to be executed, delivered or performed in connection with, or as a condition of, the consummation of the transactions provided in or contemplated by this Agreement. "Company" means the limited liability company which is the subject of this Agreement, as such limited liability company may from time to time be constituted. "Construction Management Agreement" shall mean that certain agreement by and between the Company and InSite, Inc. for the provisions of construction management services in connection with the Project. "Contact Representative" shall have the meaning set forth in Section 3.3 hereof. "CSC" shall have the meaning set forth in Section 5.2.5 hereof. "CSC Lease" shall have the meaning set forth in Section 5.2.5 hereof. "Defaulting Member" shall have the meaning set forth in Section 2.5.5 hereof. A-4 "Depreciation" shall mean, for each Fiscal Year or other period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Fiscal Year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year or other period bears to such beginning adjusted tax basis. In the event that the federal income tax depreciation, amortization, or other cost recovery deduction is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method. "Designated Representatives" shall have the meaning set forth in Section 3.4 hereof. "Developer's Agreement" shall mean that certain agreement by and between the Company and Commonwealth Group, Ltd. for the provision of development services in connection with the Project. "Electing Member" shall have the meaning set forth in Section 8.2.1 hereof. "Election Notice" shall have the meaning set forth in Section 8.2.1 hereof. "Election Period" shall have the meaning set forth in Section 8.2.1 hereof. "Fiscal Year" means the year on which the accounting and federal income tax records of the Company are kept. "Gross Asset Value" shall mean with respect to any asset of the Company, the asset's adjusted basis for federal income tax purposes, except that (i) where an asset has been revalued on the books of the Company the Gross Asset Value shall be adjusted to reflect such revaluation, (ii) where an asset has been contributed to the Company by a Member, the Gross Asset Value shall be its fair market value as established by the Members and (iii) the Gross Asset Value of Company assets shall be adjusted to reflect Depreciation taken into account with respect to such assets for purposes of determining Profits or Losses. "Gross Value of the Project" shall have the meaning set forth in Section 8.4 hereof. "Indemnitee" shall have the meaning as set forth in Section 6.2 hereof. "Indemnitee Member" shall have the meaning set forth in Section 6.3 hereof. "Indemnitor Member" shall have the meaning as set forth in Section 6.3 hereof. "Initial Capital" shall mean, where no distinction of the Members is required, the initial Capital Contribution of such Member at the Agreed Value upon which a preferred return with respect to such Member is calculated. A-5 "Initial Capital Date" shall mean with respect to the Class A Member for purposes of calculating the Class A Member Preferred Return on Initial Capital and with respect to the Class B Member for purposes of calculating the Class B Member Subordinated Preferred Return on Initial Capital, the date on which the Permanent Loan is funded; provided, however, that with respect to the Class A Member, to the extent there is an advance or draw on the Letter of Credit delivered by the Class A Member pursuant to Section 2.2.1 hereof, then the Initial Capital Date with respect to such advance and draw shall be the date on which such advance or draw is made under the Letter of Credit. "Interest" shall mean with respect to a Member such Member's interest in the rights, powers, privileges, duties and obligations as specified in this Agreement. "Land" shall mean the unimproved real property located in New Castle County, Delaware, as more fully described in the Land Acquisition Agreement. "Land Acquisition" shall mean the acquisition of the Land pursuant to and in accordance with the Land Acquisition Agreement. "Land Acquisition Agreement" shall mean the agreement dated even date herewith executed between the Company, as purchaser, and the Class B Member, as seller, for the acquisition of the Land. "Land Acquisition Price" shall mean Nine Hundred Thousand Dollars ($900,000). "Leasing and Management Agreement" shall mean that certain agreement by and between the Company and Commonwealth Management Group, Ltd. pursuant to which Commonwealth Management Group, Ltd shall provide property management and leasing services in connection with the Project. "Letter of Credit" shall mean the letter of credit provided by the Class A Member pursuant to and in accordance with Section 2.2.1 hereof. "Liquidating Trustee" shall have the meaning set forth in Section 12.3 hereof. "Major Action" shall have the meaning set forth in Section 3.2 hereof. "Members" shall have the meaning set forth in the first paragraph of this Agreement and shall be used where no distinction between the Class A Member and the Class B Member is required. The term "Members" shall include any Person that is admitted to the Company as an additional or substitute member, in accordance with the terms of the Agreement. "Member Minimum Gain" shall mean an amount determined by computing with respect to each Member Nonrecourse Debt, the Minimum Gain that would result if such Member Nonrecourse Debt were treated as a nonrecourse liability, determined in accordance with Treasury Regulation Section 1.704-2(i)(3). A-6 "Member Nonrecourse Debt" shall mean nonrecourse indebtedness of the Company with respect to which any Member has a direct or indirect risk of loss, as more fully defined in Treasury Regulation Section 1.704-2(b)(4). "Member Nonrecourse Deduction" shall mean, for each Fiscal Year, the Company deductions which are attributable to Member Nonrecourse Debt and are characterized as "partner nonrecourse deductions" under Treasury Regulation Section 1.704-2(i)(l). "Minimum Gain" shall mean and refer to, at any time, with respect to all nonrecourse liabilities of the Company (within the meaning of Treasury Regulation Section 1.704-2(b)(3)) the aggregate amount of gain (of whatever character), if any, that would be realized by the Company if it disposed of (in a taxable transaction) all Company Property subject to such liabilities in full satisfaction thereof, and as further defined in Treasury Regulation Section 1.704-2(d). "Mutual Disagreement" shall have the meaning set forth in Section 8.1 hereof. "Net Cash From Operations" shall mean the gross cash proceeds from the ownership or operation of the Property (excluding Capital Contributions, Additional Capital Contributions and proceeds from Capital Loans) less the portion thereof used to pay or establish reserves for all Company expenses, debt payments, capital improvements, replacements and contingencies, all as determined by the Members. Net Cash From Operations shall not be reduced by depreciation, amortization, cost recovery deductions or similar allowances, but shall be increased by any reductions to reserves previously established. "Net Cash from Sales or Refinancings" shall mean the net cash proceeds from all sales or other dispositions of the Property (other than in the ordinary course of business) and all proceeds realized by the Company upon any refinancing of Company indebtedness, less (i) expenses incident to such refinancing and satisfaction of any indebtedness being refinanced, and (ii) any portion thereof used to establish reserves, all as determined by the Members. "Net Cash from Sales or Refinancings" shall include all principal and interest payments with respect to any note or other obligation received by the Company in connection with any sales and other dispositions of the Property. "Net Equity Value of a Member's Interest" shall have the meaning set forth in Section 8.4(b) hereof. "Nonrecourse Deductions" shall have the meaning set forth in Treasury Regulation Section 1.704-2(b)(1). "Notified Member" shall have the meaning set forth in Section 2.5.1 hereof. "Notifying Member" shall have the meaning set forth in Section 2.5.1 hereof. "Percentage Interest" shall mean with respect to a Member, such Member's Interest expressed as a percentage in relation to the Interests held by the other Members, as adjusted from time to time by the admission or withdrawal of Members for any reason as provided in this Agreement or as agreed to by the unanimous consent of the Members and reflected on a schedule A-7 attached hereto as Exhibit B. The initial Percentage Interest of each Member shall be fifty percent (50%) as set forth on Exhibit B attached hereto. "Performing Member" shall have the meaning set forth in Section 2.5.5 hereof. "Permanent Loan" shall mean the loan to be obtained by the Company, the proceeds of which, together with the Class A Member Initial Capital, shall be applied to reduce or repay the Acquisition and Construction Loan. "Permitted Transfer" shall have the meaning set forth in Section 7.2 hereof. "Person" means an individual, firm, corporation, partnership, limited liability company, association, estate, trust, pension or profit-sharing plan, or any other entity. "Preferred Return on Additional Capital" shall mean, with respect to each of the Class A Member and the Class B Member, the cumulative right given to each Member to receive in respect of each Fiscal Year a sum equal to ten percent (10%) per annum (determined on the basis of a year of 365 days, for the actual number of days occurring in the period for which the Preferred Return on Additional Capital is being determined, cumulative to the extent not distributed in any quarter to such Member pursuant to Sections 10.1.1(a) or (b) and/or Sections 10.2.1(a) or (b), as the case may be, but not compounded) of the average daily balance of such Member's Unreturned Additional Capital from time to time during the period to which such Preferred Return on Additional Capital relates. Each Member's Preferred Return on Additional Capital shall commence on the Additional Capital Date and shall be payable as provided in this Agreement. "Preferred Return Percentage" shall mean, with respect to the Class A Member, that percentage, the numerator of which is the Class A Member Aggregate Preferred Return and the denominator of which is the sum of the Class A Member Aggregate Preferred Return and the Class B Member Preferred Return on Additional Capital, and shall mean, with respect to the Class B Member, that percentage, the numerator of which is the Class B Member Preferred Return on Additional Capital, and the denominator of which is the sum of the Class A Member Aggregate Preferred Return and the Class B Member Preferred Return on Additional Capital. "Profits" and "Losses" shall mean, for each Fiscal Year or other period, an amount equal to the Company's taxable income or loss for such year or period, as computed for federal income tax purposes and determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(l) of the Code shall be included in taxable income or loss), with the following adjustments: (a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss; (b) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as such expenditures pursuant to Treasury Regulation Section 1.704-l(b)(2)(iv)(i), and A-8 not otherwise taken into account in computing Profits or Losses shall be subtracted from such taxable income or loss; (c) Gain or loss resulting from any disposition of Company Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value. (d) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing taxable income or loss, Depreciation shall be taken into account for such Fiscal Year or other period in computing taxable income or loss; (e) Notwithstanding any other provision of this definition, Nonrecourse, Deductions, Member Nonrecourse Deductions and any items of income, gain, loss or deduction which are specially allocated pursuant to Section 9.3 of this Agreement, shall not be taken into account in computing taxable income or loss; and (f) In any case where, in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f) Company Property is revalued on the books of the Company to reflect its fair market value, the amount of such revaluation (to the extent not previously taken into account) shall be taken into account as gain or loss from a taxable disposition of such Property for purposes of computing taxable income or loss. "Project" shall mean the three (3) story Class A mid-rise office building containing 150,000 +/- net rentable square feet, and shall include fixtures, machinery, equipment, and all other improvements hereafter constructed on the Land, including site improvements and parking facilities for 750 vehicles, and all equipment, fixtures, furnishings and other personalty used in connection therewith. "Property" shall mean the Land and the Project, collectively. "Regulatory Allocations" shall have the meaning as set forth in Section 9.4 hereof. "Related Person" shall have the meaning set forth in Section 6.2 hereof. "Securities Act" shall mean the Securities Act of 1933, as amended. "Tax Matters Member" means the "tax matters member" as defined in Code section 6231(a)(7). "Tax Matters Representative" shall have the meaning set forth in Section 11.8 hereof. "Transfer" means to sell, assign, transfer, give, donate, pledge, deposit, alienate, bequeath, devise or otherwise dispose of or encumber all or any portion of an Interest to any Person other than the Company. A-9 "Transferee" shall mean a Person to whom a Transfer is made. "Transferor" shall mean a Member making a Transfer under this Agreement. "Treasury Regulations" or "Regulations" shall mean pronouncements, as amended from time to time, or their successor pronouncements, which clarify, interpret and apply the provisions of the Code, and which are designated as "Treasury Regulations" by the United States Department of the Treasury. "Unreturned Additional Capital" shall mean the Class A Member Unreturned Additional Capital and/or the Class B Member Unreturned Additional Capital, as applicable. "Unreturned Initial Capital" shall mean the Class A Member Unreturned Initial Capital and/or the Class B Unreturned Initial Capital, as applicable. END OF EXHIBIT A A-10 EXHIBIT B TO OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY I LLC PERCENTAGE INTERESTS PERCENTAGE MEMBER INTEREST ------ ---------- Class A Member 50% Class B Member 50% A-11 EXHIBIT C TO OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY I LLC COPY OF CSC LEASE A-12 SCHEDULE 3.5.1 Class B Member Reimbursable Fees A-13 SCHEDULE 3.5.2 Class A Member Reimbursable Fees A-14 SCHEDULE 5.2.7 Brokerage or Leasing Fees on CSC Lease A-15 SCHEDULE 5.2.15 Construction Contracts A-16 A-17 EX-10.5 6 EXHIBIT 10.5 EXECUTION OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY II LLC Dated as of September 19, 1997 TABLE OF CONTENTS Page ---- ARTICLE 1 GENERAL PROVISIONS........................................................1 1.1. Formation...........................................................1 1.2. Name and Principal Place of Business................................2 1.3. Registered Agent....................................................2 1.4. Purpose.............................................................2 1.5. Limitation on Purposes..............................................2 1.6. Title to Property...................................................2 1.7. Term................................................................2 1.8. Type of Income......................................................2 ARTICLE 2 CAPITAL CONTRIBUTIONS.....................................................3 2.1. Initial Capital Contribution of BOP.................................3 2.2. Initial Capital Contribution of Gender Road.........................3 2.3. Additional Capital Contributions....................................3 2.4. Maintenance of Capital Accounts.....................................4 2.5. No Interest.........................................................5 2.6. Revaluation of Company Property.....................................5 ARTICLE 3 MANAGEMENT................................................................5 3.1. Management..........................................................5 3.2. Manner of Acting....................................................6 3.3. Contact Representatives.............................................7 3.4. Designated Representatives..........................................7 3.5. Fees, Compensation and Reimbursement of Expenses....................7 ARTICLE 4 THE MEMBERS...............................................................8 4.1. Meeting of Members..................................................8 4.2. Limitation of Liability.............................................8 4.3. Company Records.....................................................8 4.4. Duties of Members...................................................8 4.5. Activities of Members...............................................8 4.6. Independent Activities of Members...................................8 4.7. Dealings with the Company...........................................9 -i- Page ---- 4.8. Covenant not to Withdraw............................................9 4.9. Additional Members..................................................9 ARTICLE 5 REPRESENTATIONS AND WARRANTIES...........................................10 5.1. Representations and Warranties of Members..........................10 ARTICLE 6 INDEMNIFICATION..........................................................12 6.1. Liability..........................................................12 6.2. Company Indemnification............................................12 6.3. Member Indemnification.............................................13 6.4. Gender Road Indemnification........................................13 ARTICLE 7 TRANSFERS................................................................13 7.1. Transfer Restrictions..............................................13 7.2. Permitted Transfers................................................14 7.3. Conditions of Transfer.............................................14 7.4. Transfers; Recharacterization......................................15 7.5. Conversion of Gender Road..........................................15 ARTICLE 8 BUY-SELL PROVISIONS......................................................15 8.1. Mutual Disagreement................................................15 8.2. Mandatory Buy-Sell of Interests....................................15 8.3. Closing of Purchase or Sale........................................16 8.4. Definitions........................................................16 ARTICLE 9 ALLOCATIONS OF PROFITS AND LOSSES........................................17 9.1. Allocations of Profits.............................................17 9.2. Allocation of Losses...............................................17 9.3. Special Allocations................................................18 9.4. Curative Allocations...............................................19 9.5. Allocations for Tax Purposes.......................................19 -ii- Page ---- ARTICLE 10 DISTRIBUTIONS............................................................19 10.1. Distributions Generally...........................................19 10.2. Distributions of Available Cash Flow..............................20 10.3. Authority to Withhold.............................................20 ARTICLE 11 BOOKS, RECORDS, REPORTS AND ACCOUNTING...................................20 11.1. Books and Records.................................................20 11.2. Company's Accountants.............................................21 11.3. Fiscal Year.......................................................21 11.4. Accounting Period.................................................21 11.5. Annual Reports....................................................21 11.6. Quarterly Reports.................................................21 11.7. Preparation of Tax Returns........................................21 11.8. Tax Controversies.................................................21 11.9. Tax Elections.....................................................22 ARTICLE 12 DISSOLUTION AND LIQUIDATION..............................................22 12.1. Dissolution.......................................................22 12.2. Bankruptcy of a Member............................................22 12.3. Liquidation.......................................................22 12.4. No Liquidating Distributions in Kind..............................23 12.5. Deficit Capital Account...........................................23 12.6. Certificate of Cancellation.......................................23 12.7. Non-Recourse......................................................23 ARTICLE 13 MISCELLANEOUS............................................................24 13.1. Amendments........................................................24 13.2. Notice............................................................24 13.3. Governing Law.....................................................25 13.4. Severability......................................................25 13.5. Binding Effect....................................................25 13.6. Titles and Captions...............................................26 13.7. No Third Party Rights.............................................26 13.8. Time is of Essence................................................26 13.9. Further Assurances................................................26 -iii- Page ---- 13.10 Incorporation by Reference.......................................26 13.11. Legal Representation.............................................26 13.12. Entire Agreement.................................................26 13.13. Counterparts.....................................................26 13.14. Execution of Certificate of Formation.............................26 -iv- OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY II LLC THIS OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY II LLC (the "Agreement") is made and entered into as of the 19th day of September, 1997 by and between Brandywine Operating Partnership, L.P., a Delaware limited partnership ("BOP"), and Gender Road Joint Venture, a Delaware general partnership ("Gender Road" and together with BOP, the "Members"), as members of CHRISTIANA CENTER OPERATING COMPANY II LLC (the "Company"). Capitalized terms used in this Agreement shall have the meanings set forth on Exhibit A attached hereto unless they are otherwise defined in the --------- preamble, the Background or the particular section in this Agreement in which they are used. BACKGROUND Gender Road is the owner of the Pad Sites. The Members desire to organize and form the Company for the purpose of acquiring the Pad Sites from Gender Road. This Agreement sets forth the understanding between the Members with respect to the terms and conditions of the acquisition of the Pad Sites, the management and operation of the Company, the future development of the Pad Sites and the distribution of proceeds received from the development, ownership and/or disposition of the Pad Sites. NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and preceding with the Background paragraphs incorporated by reference, the Members, intending to be legally bound hereby, covenant and agree as follows: ARTICLE 1 GENERAL PROVISIONS 1.1. Formation. The Members desire to form the Company as a limited --------- liability company under the laws of the State of Delaware, and in connection therewith desire to set forth their agreements and understandings as stated in this Agreement. The Members agree that the Company shall be operated pursuant to the terms and conditions set forth in this Agreement, and to the extent not inconsistent therewith, the Act. The Members agree to execute or cause the Company to execute all certificates and documents, including a Certificate of Formation, required by the Act in order that the Company qualify as a limited liability company under the Act. The Members shall do or cause to be done all such other filings, including amendments of the Certificate of Formation, recordings, or other acts as may be necessary or appropriate to comply with the laws of formation and operation of a limited liability company in the State of Delaware and any other jurisdiction in which the Company may conduct business. 1.2. Name and Principal Place of Business. The name of the Company shall ------------------------------------ be "CHRISTIANA CENTER OPERATING COMPANY II LLC" or such other name as the Members from time to time may select. The principal place of business of the Company shall be Gender Road Joint Venture c/o The Commonwealth Group, 62 Read's Way, New Castle, Delaware 19720, or such other place as the Members from time to time shall determine. 1.3. Registered Agent. The registered agent for the Company shall be The ---------------- Corporation Trust Company located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. 1.4. Purpose. The sole purpose of the Company shall be to acquire the Pad ------- Sites, with a view toward the future commercial development, management and operation of the Pad Sites. In connection therewith, the Company shall have the authority to do all things necessary and appropriate in connection with the development, construction, operation, management, financing and maintenance of the Pad Sites as provided in and/or limited by this Agreement or a Collateral Agreement. 1.5. Limitation on Purposes. The Company shall exist solely for the ---------------------- purposes specified in Section 1.4 hereof and unless the Members agree otherwise, the Company shall not engage in any business other than the acquisition, development and management of the Pad Sites. The Members do not intend and this Agreement shall not be deemed to create any joint venture, partnership, or other arrangement by and between the Members with respect to any business or activities of any Member other than the business and activities specifically set forth in this Agreement. No Member shall have the power to bind the other Member except with respect to the business of the Company as specifically set forth in this Agreement. 1.6. Title to Property. All property owned by the Company, whether real or ----------------- personal, tangible or intangible, shall be owned by the Company as an entity and in the name of the Company, and no Member shall have any ownership interest in such property. The interest of all Members in the Company are, for all purposes, personal property. 1.7. Term. The term of the Company shall commence upon the filing of the ---- Certificate of Formation in accordance with the Act and shall continue until the Company is terminated in accordance with Article 12 of this Agreement. 1.8. Type of Income. Gender Road hereby acknowledges and agrees that -------------- Brandywine Realty Trust, the general partner of BOP is a real estate investment trust as defined in Section 856 of the Code, and that as long as BOP is a member of the Company, the Company shall manage its affairs in a manner such that the Company does not intentionally earn any income for tax purposes 2 or acquire any assets which would cause Brandywine Realty Trust to violate any of the provisions of Code Section 856. ARTICLE 2 CAPITAL CONTRIBUTIONS 2.1. Initial Capital Contribution of BOP. In connection with, and upon the ----------------------------------- closing of, the Pad Sites Acquisition, BOP shall contribute to the capital of the Company cash in the amount of One Million Dollars ($1,000,000). Notwithstanding BOP's agreement hereunder, the parties acknowledge and agree that BOP's obligation to make the capital contribution hereunder is expressly conditioned upon the closing of the Pad Sites Acquisition. 2.2. Initial Capital Contribution of Gender Road. By executing this ------------------------------------------- Agreement, Gender Road agrees to provide the Company with the right to purchase the Pad Sites and agrees to perform services in connection with the future development of the Pad Sites, such services to be mutually determined by the Members. 2.3. Additional Capital Contributions. -------------------------------- 2.3.1. It is not expected that the Members will be required to contribute any additional capital to the Company other than those Capital Contributions set forth in Sections 2.1. and 2.2 hereof. In the event, however, that either Member (the "Notifying Member"), in its reasonable business judgment, determines that additional capital is required by the Company, whether for capital expenditures, normal operating expenses, debt service or otherwise in connection with the acquisition, development, management or operation of the Pad Sites, then the Notifying Member shall give ten (10) days written notice (the "Capital Notice") to the other Member (the Notified Member") specifying in reasonable detail the amount and purpose of the additional required capital. If the Notified Member agrees within said ten (10) day period that the capital set forth in the Capital Notice is needed by the Company, then, unless the Members mutually agree otherwise, the Company shall obtain such additional capital from BOP as an Additional Capital Contribution in the amount set forth in the Capital Notice. 2.3.2. If the Notified Member disagrees that additional funds are needed by the Company or determines that such additional capital should be obtained in a manner other than additional capital contributions by BOP, then, Section 2.3.1 to the contrary notwithstanding, the Notified Member shall notify the Notifying Member of such decision with said ten (10) day period. In that event, the Notifying Member and the Notified Member each shall select a representative who together shall appoint one independent Person, unrelated to either Member or its Affiliates and who is experienced in the real estate development industry and has substantial expertise in the financial marketplace (the "Advisor"), to determine whether and when additional funds are needed and/or the manner in which such funds shall be obtained by the Company; 3 provided that, if the Advisor determines that such additional funds should be obtained from capital contributions, then the Company shall obtain such additional capital from BOP as an Additional Capital Contribution in the amount determined by the Advisor to be needed by the Company. The Members hereby agree that, in either case, the Advisor's determination shall be final and binding on the Members. 2.3.3. If additional funds are obtained from BOP through Additional Capital Contributions, such contributions shall be made by BOP, in cash within ten (10) business days after receipt of (a) the Capital Notice (in the event that the Notified Member and Notifying Member agree that additional capital is required) or (b) written notice from the Advisor (in the event that the procedure under Section 2.3.2 hereof is utilized). 2.3.4. If an Additional Capital Contribution is made to the Company by BOP hereunder, BOP shall be entitled to the Preferred Return on such Additional Capital Contribution, provided that such Preferred Return shall be calculated as of the date that BOP makes such Additional Capital Contribution to the Company. 2.3.5. If the Advisor determines that Additional Capital Contributions are required to be made under this Section 2.3 and BOP fails to advance such Additional Capital Contribution to the Company, then, Gender Road shall have the right, but not the obligation, to make an Additional Capital Contribution to the Company in the amount of the Additional Capital Contribution originally due from BOP. Any amounts advanced by Gender Road under this Section 2.3.5 as an Additional Capital Contribution shall be entitled to a preferred return thereon equal to, and calculated in the same manner as, the BOP Preferred Return; provided that such preferred return shall be calculated as of the date Gender Road makes such Additional Capital Contribution. Anything to the contrary in Article 10 hereof notwithstanding, to the extent Gender Road is entitled to a preferred return hereunder, such preferred return and the return of Additional Capital Contribution by Gender Road shall be paid by the Company pari passu and pro rata with the payment of the BOP Preferred Return and the return of BOP's Capital Contribution and Additional Capital Contributions. In the event that Gender Road elects not to make an Additional Capital Contribution hereunder, and additional capital required by the Company cannot be obtained through any other means, then, the requirement for additional capital hereunder shall be deemed to be a Mutual Disagreement under Article 8 hereof. 2.4. Maintenance of Capital Accounts. ------------------------------- 2.4.1. The Company shall maintain a separate Capital Account for each Member in accordance with Treasury Regulations promulgated under Section 704(b) of the Code, and each Member's Capital Account shall be as follows: (a) Each Member's Capital Account shall be credited with such Member's Capital Contribution, if any; provided that, Gender Road's initial Capital Account shall be zero. 4 (b) Each Member's Capital Account shall be (1) increased by (a) the amount of money contributed by such Member to the capital of the Company, (b) the Gross Asset Value of any property contributed by such Member to the capital of the Company (net of liabilities secured by such contributed property) and (c) the amount of Profits and other items of Company income or gain allocated to such Member under this Agreement, and (2) decreased by (a) the amount of money distributed to such Member by the Company pursuant to this Agreement, (b) the Gross Asset Value of property distributed to such Member by the Company (net of liabilities secured by such distributed property) and (c) the amount of Losses and other items of Company deduction, loss or expense allocated to such Member under this Agreement. 2.4.2. It is intended that the Capital Accounts shall be determined and maintained throughout the full term of the Company in accordance with the capital accounting rules set forth in Treasury Regulation Section 1.704-1(b)(2)(iv), and that all provisions in this Agreement shall be interpreted and applied in a manner consistent therewith. In the event that the Members determine that it is prudent to modify the manner in which the Capital Accounts, or any credits or charges thereto, are computed or maintained in order to comply with such Treasury Regulations, the Members, upon agreement, shall make such modifications to the extent necessary to comply with such Treasury Regulations, provided that in no event shall such modifications affect (i) BOP's right to, or the amount of, the BOP Preferred Return or a return of the BOP's Capital Contribution and Additional Capital Contributions in the time and manner set forth herein. or (ii) Gender Road's right to, or the amount of, if any, Gender Road's preferred return or a return Gender Road's Additional Capital Contribution as provided in Section 2.3.5 hereof in the time and manner set forth herein. 2.5. No Interest. No Member shall be entitled to interest on that Member's ----------- Capital Contributions or Capital Account except as otherwise provided in this Agreement. 2.6. Revaluation of Company Property. Upon the agreement of the Members, ------------------------------- the Capital Accounts of the Members may be adjusted to reflect a revaluation of the property of the Company in accordance with, and at such times as specified in, Treasury Regulation Section 1.704-1(b)(2)(iv)(f); provided that any adjustments hereunder shall be made in accordance with and to the extent provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and (g). ARTICLE 3 MANAGEMENT 3.1. Management. The management of the Company shall be vested in the ---------- Members as set forth in this Article 3. Each Member, subject to the terms, conditions, restrictions and limitations contained herein, will possess all of the powers and rights of a member of a limited liability company under the Act; provided, however, no single Member shall be authorized or empowered to undertake any action or make any decision on behalf of the Company or in 5 connection with the development of the Pad Sites unless otherwise specifically set forth in this Agreement or a Collateral Agreement. Each Member acknowledges and agrees that it intends to actively participate in the management of the Company and its operations and the development, management and operation of the Pad Sites. 3.2. Manner of Acting. Where this Agreement specifically requires the ---------------- vote, consent or determination of the Members and/or in order for the Company to undertake any Major Action (as defined in this Section 3.2), the approval at a duly convened meeting or by written consent in lieu of a meeting of each Member shall be required. For purposes of this Agreement, a "Major Action" shall mean and include, without limitation, decisions and undertakings relating to: (a) the acquisition of the Pad Sites by the Company; (b) the development or construction of the Pad Sites, (c) operation or management of the Pad Sites; (c) any loans, borrowings, financing or refinancing in connection with the development of the Pad Sites, including without limitation, obtaining construction loans and permanent financing in connection with the development of the Pad Sites; (d) the annual operating budget and business plan for the Company; (e) any contract or agreement giving rise to a financial commitment or obligation of the Company; (f) Subject to Section 3.4 hereof, the employment of employees and/or agents in connection with the Company or the development of the Pad Sites; (g) the admission of any additional Members; (h) the selection of and change of accountants, auditors and/or legal counsel for the Company; and (i) significant tax elections required or permitted pursuant to the Code and/or applicable law of any taxing authority to which the Company is subject. 6 3.3. Contact Representatives. Each Member shall designate and appoint one ----------------------- or more individuals who shall be the contact person (a "Contact Representative") for such Member and each of whom shall be authorized by such Member to act on its behalf in the performance of this Agreement and who shall be authorized to make decisions in connection with Major Actions on behalf of such Member. BOP hereby designates and appoints Anthony A. Nichols, Sr. and Gerard H. Sweeney as its initial Contact Representatives, and Gender Road hereby designates and appoints Brock J. Vinton as its initial Contact Representative. A Member appointing an individual as a Contact Representative may, at any time, appoint and designate a new Contact Representative, provided that such Member shall notify the other Member of such new appointment or designation within a reasonable time after such appointment. 3.4. Designated Representatives. -------------------------- 3.4.1. The Members acknowledge and agree that while Company decisions generally shall be made by the Members, the daily operation and management of the Company shall, subject to the limitations set forth in this Section 3.4 or a Collateral Agreement, be delegated to the Administrative Officer, who initially shall be Brock J. Vinton. In addition to the day-to-day management of the Company, the Administrative Officer shall be responsible for the preparation of quarterly and annual financial statements as set forth in Sections 11.5 and 11.6 hereof. 3.4.2. The Members also acknowledge and agree that certain functions of the Company shall, subject to the limitations set forth in this Section 3.4 or a Collateral Agreement, be delegated to the employees or agents of Gender Road (any such designated employees or agents of Gender Road being referred to herein as a "Designated Representative"), provided that Gender Road shall keep BOP apprised of any such employees or agents and their activities. 3.4.3. The Administrative Officer and any Designated Representative appointed hereunder shall have the specific power and authority set forth in this Agreement, in an employment agreement, if any, in a Collateral Agreement and as otherwise delegated to such Administrative Officer and/or Designated Representative by the Members; provided that the Administrative Officer and any Designated Representative shall operate the Company subject to (i) basic policy decisions adopted by the Members, (ii) specific limitations and requirements of this Agreement and any other agreement executed by and between the Administrative Officer and the Company and/or a Designated Representative and the Company, as the case may be, and (iii) limitations imposed under the Act. Notwithstanding any provision in this Agreement or any other agreement to the contrary, neither the Administrative Officer nor any Designated Representative shall have the authority, either individually or acting in conjunction with each other or other Designated Representatives, to do any act, make any decision, or engage in any transaction which requires the approval of the Members as set forth in Section 3.2 hereof. 3.5. Fees, Compensation and Reimbursement of Expenses. None of the ------------------------------------------------ Administrative Officer or any Designated Representative shall be entitled to fees, compensation or reimbursement 7 of expenses by the Company, except as otherwise specifically set forth in a Collateral Agreement, an employment agreement or other agreement between the Company and such Person. ARTICLE 4 THE MEMBERS 4.1. Meeting of Members. The Members shall hold meetings on a quarterly ------------------ basis or such other periodic basis as the Members may agree at such location as the Members may agree. Any Member may call for a meeting by giving ten (10) days prior written notice to the other Member, which notice shall specify the purpose of the meeting; provided that the ten (10) days notice period may be waived by the other Member. 4.2. Limitation of Liability. Each Member's liability for the debts, ----------------------- obligations and liabilities of the Company shall be limited to the maximum extent permitted by the Act and other applicable law. 4.3. Company Records. Each Member shall have access to all books and --------------- records of the Company and to the Company's officers, attorneys and auditors for any reasonable business purpose and shall be entitled to make copies of such books and records at the Company's expense. 4.4. Duties of Members. Each Member shall have a fiduciary duty to the ----------------- other Member to take into account the best interests of the Company when exercising its rights under this Agreement, provided that it shall not be a breach of any Member's fiduciary duty to exercise any of its rights under this Agreement. 4.5. Activities of Members. Except as otherwise expressly provided in this --------------------- Agreement, no Member or Affiliate of any Member shall be obligated to devote its, his or their exclusive time and effort to the business or affairs of the Company or the development of the Pad Sites, but each Member shall devote sufficient time, effort and resources (including employees or agents of such Member) to the business or affairs of the Company as in its judgment is reasonably required to fulfill its obligations and role in the Company's businesses and to promote the purposes of the Company; provided, however, that Gender Road shall employ and maintain such employees and agents as shall be necessary to fully perform and undertake the daily operation of the Company as set forth in Section 3.4 hereof. 4.6. Independent Activities of Members. Except as otherwise expressly --------------------------------- provided in or limited by this Agreement or a Collateral Agreement, each Member (acting on its own behalf) and its Affiliates may, notwithstanding this Agreement, engage in any activities it may choose, whether the same operate the same type of business as the Company or are competitive with the Company, and neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Member 8 or its Affiliates from engaging in such activities or require any Member to permit the Company or any other Member to participate in such activity. 4.7. Dealings with the Company. ------------------------- 4.7.1. Except as otherwise expressly provided in or limited by this Agreement or a Collateral Agreement, no Member or Affiliate of any Member shall contract and deal with the Company as an independent contractor, employee or as an agent for others, or receive fees or other compensation from such others or the Company, including without limitation, brokerage fees or commission fees, or any other payment on account of the leasing, operations, management, financing or refinancing in connection with the Pad Sites or the development thereof, unless and until such Member or the Affiliate of such Member first provides the other Member with the terms of such proposed dealings and obtains the prior written consent to such dealing, contract or undertaking from the other Member. 4.7.2. Notwithstanding Section 4.7.1 hereof, each Member acknowledges and agrees that, in connection with the transactions contemplated by this Agreement and the future development of the Pad Sites, the Company shall execute a leasing and management agreement pursuant to which Gender Road or its Affiliates shall perform certain functions set forth in such agreement and shall receive a fee for the performance of such functions as set forth therein. 4.8. Covenant not to Withdraw. Notwithstanding any provision in the Act, ------------------------ each Member hereby covenants and agrees that the Member has entered into this Agreement and formed the Company based on its expectation that each Member will continue as a Member of the Company and carry out the duties and obligations undertaken by it in this Agreement and the Collateral Agreements in contemplation of the development of the Pad Sites and that, except as otherwise expressly required or permitted hereby, each Member hereby covenants and agrees not to, without the consent of the other Member (a) take any action to file a certificate of dissolution or its equivalent with respect to such Member, (b) take any action that would cause the voluntary Bankruptcy of such Member, (c) withdraw or attempt to withdraw from the Company, unless pursuant to a Permitted Transfer in accordance with Section 7.2 hereof, (d) Transfer all or any portion of its Interest in the Company except as otherwise provided in Article 7 hereof, or (e) demand a return of such Member's Capital Contribution or Capital Account prior to the dissolution and liquidation of the Company pursuant to Section 12.1 hereof. 4.9. Additional Members. Additional Members shall be admitted to the ------------------ Company upon the unanimous agreement of the Members; provided that such Members also shall unanimously agree on the capital contributions, if any, to be made by such additional Member, the Interests in the Company to which such Member shall be entitled and the expected duties and obligations of such additional Member. Notwithstanding this Section 4.9, no Person shall be admitted to the Company as an additional Member unless such Person executes a counterpart to this Agreement 9 thereby agreeing to be bound by the terms and provisions of this Agreement as if he, she or it were an original Member. ARTICLE 5 REPRESENTATIONS AND WARRANTIES 5.1. Representations and Warranties of Members. By execution and delivery ----------------------------------------- of this Agreement, each Member hereby makes to the other Member the representations and warranties set forth in this Section 5.1 to the extent applicable to such Member. Any and all representations and warranties set forth in this Section 5.1 shall survive the execution of this Agreement. For purposes of this Article 5, the term "Member" shall include such Member's Affiliates that are intended to undertake or perform any services or activities in connection with the Company or the future development of the Pad Sites, as contemplated at this time, and any representations and warranties made by a Member hereunder shall be deemed to include representations and warranties, as appropriate, with respect to such Affiliates. 5.1.1.Organization. Each Member is a limited or general partnership, ------------ as applicable, duly organized and formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own, lease and operate its property and to carry on its business as of the date hereof and as contemplated by this Agreement. Each Member is duly qualified to do business and is in good standing as a limited partnership in each and every jurisdiction in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations under this Agreement and each of the Collateral Agreements. 5.1.2. Proper Authorization and Power. Each Member has the requisite ------------------------------ power and authority to execute and deliver this Agreement and each of the Collateral Agreements and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and each of the Collateral Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary partnership action, and no other action on the part of the Member or any Person is necessary to authorize the execution, delivery and performance of this Agreement or any of the Collateral Agreements, or the consummation of the transactions contemplated hereby or thereby. This Agreement and each of the Collateral Agreements constitutes a legal, valid and binding obligation of such Member enforceable against it in accordance with their respective terms. No consent, waiver, approval, license or authorization of, or filing, registration or qualification with, or notice to, any governmental unit or any other person is required to be made, obtained or given by the Member or any Person in connection with the execution, delivery and performance of this Agreement or any Collateral Document that has not been heretofore obtained. 10 5.1.3. Validity of Contemplated Transactions. The execution, delivery ------------------------------------- and performance of this Agreement or any of the Collateral Agreements and the consummation by the Member of the transactions contemplated hereby or thereby does not and will not (i) require any filing or registration with, or consent, authorization, approval or permit of, any governmental or regulatory authority and (ii) violate, conflict with, contravene, result in the breach of, or constitute a default under, accelerate the performance required by, or require the consent, authorization, or approval under (a) any terms, conditions or provisions of the certificate of Limited Partnership of such Member, the partnership agreement of such Member, or any material agreement or instrument to which such Member is a party or by which such Member is made bound or to which any of its properties or assets is subject, (b) any of the terms, conditions or provisions of any law, regulation, order, writ, injunction, decree or determination of any court or governmental or regulatory agency applicable to such Member, (c) any of the terms, conditions or provisions of any indenture, mortgage, lease agreement or instrument to which such Member is a party or may be bound or to which its properties or assets is subject. 5.1.4. Litigation. There are no actions, suits, proceedings, or ---------- investigations pending, or to the knowledge of such Member threatened against or affecting such Member or any of its businesses, assets or properties, before any court or governmental or regulatory agency which could, if adversely determined, reasonably be expected to impair such Member's ability to perform its obligations under this Agreement or any Collateral Agreement or to have a material adverse effect on the financial condition of such Member. 5.1.5. Investment Representations -------------------------- (a) Such Member's Interest in the Company is intended to be and is being acquired solely for its own account for investment and with no present intention of distributing, reselling, pledging or otherwise disposing of, all or any part thereof; (b) Such Member is aware that Interests in the Company have not been registered under the Securities Act or applicable state securities laws or the "Blue Sky" laws of any state, that Interests in the Company cannot be distributed, sold, pledged or otherwise disposed of unless they are registered thereunder or unless, in the opinion of counsel satisfactory to the Company, an exemption from such registration is available, and that the Company has no intention of so registering Interests in the Company thereunder and is under no obligation to do so and that accordingly the Member is able and is prepared to bear the economic risk that may be associated with respect to its Interest in the Company; (c) Such Member understands that the Interests are being offered and sold in reliance upon specific exemptions from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations and warranties set forth herein in order to determine the applicability of such exemptions and the suitability of the Members to acquire Interests; and 11 (d) Such Member agrees that in addition to the other restrictions on transfer set forth in this Agreement, it will not sell or otherwise dispose of its Interest unless a registration statement under the Securities Act shall be in effect with respect thereto and such Member shall have complied with all provisions of the Securities Act and all applicable state securities laws or at the Company's request, the Member shall have obtained an opinion of counsel that such proposed sale or disposition will not require registration under the Securities Act or any applicable state securities laws. ARTICLE 6 INDEMNIFICATION 6.1. Liability. No Member or any Affiliate of any Member or any Designated --------- Representative, if appointed pursuant to Section 3.4 hereof, shall be liable, responsible, accountable in damages or otherwise to the Company or any Member for any act or failure to act hereunder in connection with the Company and its business, the development of the Pad Sites or in the operation and maintenance of the Pad Sites once developed, unless the act or omission is attributed to gross negligence, willful misconduct or fraud or constitutes a material breach by such person of any term or provision of this Agreement or a Collateral Agreement; provided that nothing in this Section 6.1 is intended to limit, modify or alter any Member's liability or obligations under any Collateral Agreement except to the extent expressly set forth therein. 6.2. Company Indemnification. To the fullest extent permitted by law, each ----------------------- Member and each Affiliate of any Member, as well as each Designated Representative appointed pursuant to Section 3.4 (each of the foregoing being referred to herein as an "Indemnitee", and each Affiliate to which each such Indemnitee is related being referred to herein as such Indemnitee's "Related Person") shall be indemnified, defended and held harmless by the Company to the fullest extent permitted by the Act for, from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorneys' fees and costs), judgments, fines, settlements, demands, actions, or suits relating to or arising out of the business of the Company or the, the development of the Pad Sites or the exercise by the Indemnitee of any authority conferred on it, him or them hereunder or the performance by the Indemnitee of any of its, his or their duties and obligations under this Agreement. Notwithstanding anything contained in this Agreement to the contrary, no Indemnitee shall be entitled to indemnification hereunder with respect to any claim, issue or matter: (i) in respect of which it, he or its or his Related Person (or the Company as the result of an act or omission of such Related Person) has been adjudged liable for fraud, gross negligence or willful misconduct; (ii) based upon or relating to a material breach by it, him or his or its Related Person of any term or provision of this Agreement or any Collateral Agreement; or (iii) for costs or expenses incurred by the Indemnitee in connection with a claim or action against it, him or his or its Related Person by another Member or such other Member's Related Person that is not related to the Indemnitee's actions under this Agreement. Notwithstanding this Section 6.2, no Member shall be entitled to indemnification by the Company when or if acting in a capacity with 12 the Company as other than a Member, in which case, such right to indemnification shall be governed by an agreement, if any, between the Company and the Member. 6.3. Member Indemnification. Each Member (the "Indemnitor Member") shall ---------------------- indemnify, defend and hold harmless the other Member (the "Indemnitee Member") from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorneys' fees and costs), judgments, fines, settlements, demands, actions, or suits relating to or arising out of any (i) fraud, gross negligence or willful misconduct for which the Indemnitor Member or any of its Affiliates or Related Persons (or the Company as the result of an act or omission of any of the same) has been adjudged liable; (ii) material breach by the Indemnitor Member of any term or provision of this Agreement or any Collateral Agreement; and (iii) a material breach or inaccuracy in any representation or warranty made by such Indemnitor Member in this Agreement or any Collateral Agreement. 6.4. Gender Road Indemnification. Notwithstanding any provision in this --------------------------- Agreement to the contrary and in addition to the indemnification set forth in Section 6.3 hereof, Gender Road shall indemnify, defend and hold wholly harmless BOP, the Company and Brandywine Realty Trust from and against any and all Additional Delaware Realty Transfer Taxes (as defined in this Section 6.4) relating to or arising out of the Company's obligation to pay Delaware realty transfer taxes due in connection with the conveyance of the Pad Sites to the Company pursuant to the Pad Sites Acquisition Agreement. For purposes of this Section 6.4, "Additional Delaware Realty Transfer Taxes" shall mean any Delaware realty transfer taxes (in excess of the amount of Delaware Realty Transfer Taxes paid by the Company upon the closing of the Pad Sites Acquisition) that are or become due and payable by the Company as a result of the conveyance of the Pad Sites to the Company pursuant to the Pad Sites Acquisition Agreement, including any and all penalties and interests imposed thereon; provided, however, that Additional Delaware Realty Transfer Taxes shall not include any Delaware Realty Transfer Taxes imposed on the Company in connection with the construction and development of the Pad Sites as a result of obtaining a building permit or a certificate of occupancy in connection with the development of the Pad Sites. ARTICLE 7 TRANSFERS 7.1. Transfer Restrictions. Except as otherwise provided in this --------------------- Agreement, no Member shall make any Transfer of all or any portion of its Interest, including, without limitation, a Transfer of a right to Profits, Losses or distributions hereunder, unless and until the other Member consents to the Transfer and the Transferor and the proposed Transferee comply with the provisions of this Article 7. Any Transfer in violation of the requirements of this Agreement shall be null and void ab initio and of no force or effect whatsoever. Each Member hereby acknowledges the reasonableness of the restrictions on Transfer imposed by this Agreement in 13 view of the Company's purpose and the relationship of the Members. Accordingly, the restrictions on Transfer set forth herein shall be specifically enforceable. 7.2. Permitted Transfers. Notwithstanding Section 7.1, a Member may ------------------- Transfer all or any portion of its Interest in the Company to a (i) another Member, and (ii) to one of its Affiliates (in each case, a "Permitted Transfer"), provided that a Permitted Transfer to an Affiliate shall comply with the provisions of Section 7.3. 7.3. Conditions of Transfer. Notwithstanding Section 7.2 hereof, a ---------------------- Transfer (including a Permitted Transfer to an Affiliate under Section 7.2) shall not be allowed unless and until the following conditions precedent are satisfied, and once satisfied, the Transferee shall succeed to all rights and be subject to all obligations of the Transferor with respect to the transferred Interest: 7.3.1. all agreements, articles, minutes, written consents and all other necessary documents and instruments shall have been executed and filed and all other acts shall have been performed which the non-transferring Member deems necessary to make the Transferee a substitute Member of the Company, including, without limitation, the execution by such Transferee of a counterpart signature page to this Agreement pursuant to which the Transferee shall assume any and all obligations and have all rights and interests under this Agreement with respect to the transferred Interest; and 7.3.2. unless otherwise waived by the non-transferring Member, the non-transferring Member shall have received such assurances as may be necessary or appropriate in the opinion of counsel to the Company to confirm that Transfer would not (i) violate the Securities Act or any state securities laws or cause the Company to register thereunder; (ii) require the Company to register as an investment company under the Investment Company Act; (iii) cause the Company to be treated as other than a partnership for federal income tax purposes; and (iv) cause the termination of the Company for federal income tax purposes; 7.3.3. unless otherwise waived by the non-transferring Member, the non-transferring Member shall have received such assurances as it deems necessary or appropriate to confirm that such Transferee has the ability to perform all of the Transferor's obligations set forth in this Agreement and the Collateral Agreements, provided, however, that, unless expressly agreed by the non-transferring Member, the Transferor shall not be relieved of any of its liabilities or obligations under this Agreement or any Collateral Agreement; and 7.3.4. all reasonable expenses incurred by the Company and the non-transferring Member in connection with the Transfer shall have been paid by or for the account of the Transferee. 7.4. Transfers; Recharacterization. If any Interest is transferred during ----------------------------- any Fiscal Year in compliance with the provisions of this Agreement, Profits, Losses, each item thereof, and all other items attributable to such transferred Interest for such period shall be divided and allocated 14 between the Transferor and the Transferee by taking into account their varying interests during the period in accordance with section 706(d) of the Code, using any conventions permitted by law and reasonably selected by the non-transferring Member. 7.5. Conversion of Gender Road. Notwithstanding the provisions of this ------------------------- Article 7, the Members acknowledge that subsequent to the closing of the Pad Sites Acquisition, Gender Road will convert from a Delaware general partnership to a Delaware limited liability company pursuant to and in accordance with Delaware law; provided that Gender Road shall obtain the prior written consent of BOP, which consent shall not be unreasonably withheld, as to the conversion, and provided, further, that all of the representations and warranties set forth in Section 5.1 hereof (other than Section 5.1.1) and made by Gender Road shall remain true and correct with respect to Gender Road notwithstanding the conversion. ARTICLE 8 BUY-SELL PROVISIONS 8.1. Mutual Disagreement. In the event of a Mutual Disagreement, the ------------------- Members shall have the rights of mandatory purchase and sale provided in this Article 8. For purposes of this Article 8, "Mutual Disagreement" shall mean the failure the Members to mutually agree upon a Major Action to be undertaken by the Company, which failure remains unresolved for a period ending on the twentieth (20th) day following the submission of a written notice by one Member to the other Member stating that such failure to agree on a Major Action has occurred (the "Election Day"). 8.2. Mandatory Buy-Sell of Interests. ------------------------------- 8.2.1. In the event of a Mutual Disagreement, a Member (the "Electing Member") may deliver to the other Member (the "Notice Member") a written notice (the "Election Notice"), which Election Notice shall include an irrevocable offer by the Electing Member either (i) to sell all but not less than all of the Electing Member's Interest in the Company to the Notice Member (the "Offer to Sell"), or (ii) to purchase all, but not less than all, of the Notice Member's Interest in the Company (the "Offer to Purchase" and together with the Offer to Sell, the "Offers"). The Election Notice also shall set forth the Gross Value of the Company to be used in computing the Net Equity Value of a Member's Interests. The price at which a Member's Interest may be purchased or sold under this Section 8.2 (the "Buy-Sell Price") is the Net Equity Value of a Member's Interest, determined as of the Election Day. 8.2.2. For a period ending on the forty-fifth (45th) day following the Election Day (the "Election Period"), the Notice Member shall have the right to accept either the Offer to Sell or the Offer to Purchase. Upon acceptance by the Notice Member of one of the Offers, the 15 Electing Member and the Notice Member shall be required to sell or required to purchase, as the case may be, for the Buy-Sell Price. 8.2.3. If the Notice Member fails to accept either the Offer to Sell or the Offer to Purchase within the Election Period, then, the Offers automatically shall expire and be of no force or effect, and the Notice Member shall be deemed to have made to the Electing Member an offer (the "Counter-Offer") to sell all, but not less than all, of the Notice Member's Interest in the Company for the Buy-Sell Price. Pursuant to the Counter-Offer, the Electing Member shall be obligated to purchase, and the Notice Member shall be required to sell, all but not less than all of the Notice Member's Interest in the Company at the Buy-Sell Price. 8.2.4. The Member purchasing the Interests under this Section 8.2, whether pursuant to one of the Offers or the Counter-Offer, as the case may be, shall be referred to as the "Purchasing Member" and the Member selling such Interests as the "Selling Member." 8.3. Closing of Purchase or Sale. The closing of the purchase or sale under Section 8.2 shall occur on a date and time and at a place mutually agreeable to the Electing Member and the Notice Member, provided that such closing shall not be later than forty-five (45) days after the expiration of the Election Period; and provided, further, that if the Members cannot agree on the place of the closing, the closing shall take place at the law offices of Pepper, Hamilton & Scheetz LLP at the address set forth in Section 13.2.1 hereof. At the closing, the Purchasing Member shall pay to the Selling Member, by cash or other immediately available funds, the Buy-Sell Price, and the Selling Member shall deliver to the Purchasing Member good title, free and clear of any liens, claims, encumbrances, security interests or options of its Interests in the Company, and the Purchasing Member shall agree to indemnify and hold harmless the Selling Member from any and all claims arising in connection with said Interests that accrue after the date of the closing. At the closing, the Purchasing Member and the Selling Member agree to execute such documents and instruments of conveyance as may be necessary or appropriate to confirm the transactions contemplated hereby. 8.4. Definitions. For purposes of this Article 8, the following terms shall have the definitions set forth in this Section 8.4. (a) "Gross Value of the Company" shall be the fair market value of the assets of the Company as of the Election Day as determined by the Electing Member and set forth in the Election Notice. (b) "Net Equity Value of a Member's Interest" shall be, as of any day, the amount that would be distributed to such Member in liquidation of the Company pursuant to Section 12.3 hereof if and assuming that the following first occurred: (i) the assets of the Company were sold for the Gross Value of the Company, and (ii) the Company paid all apportionments and costs customarily made and/or paid in the closing of a real estate transaction in Delaware (iii) the Company paid its accrued, but unpaid liabilities and established reserves for -16- any contingent liabilities pursuant to Section 12.3.3; provided that the Net Equity Value of a Member's Interest shall be adjusted to reflect payment of (a) the BOP Unreturned Preferred Capital, (b) the accrued and unpaid BOP Preferred Return; (c) Gender Road's preferred return on Additional Capital Contributions, if any, as provided in Section 2.3.5 hereof, and (d) the return of Gender Road's Additional Capital Contribution, if any, as provided in Section 2.3.5 hereof. ARTICLE 9 ALLOCATIONS OF PROFITS AND LOSSES 9.1. Allocations of Profits. After giving effect to the special allocations set forth in Section 9.3 hereof, Profits for any Fiscal Year shall be allocated to the Members in the following order and priority: 9.1.1. First, to the Members until the cumulative Profits allocated pursuant to this Section 9.1.1 are equal to the cumulative Losses allocated to the Members pursuant to Section 9.2. hereof for all prior periods (without duplication) in reverse order to which the prior Losses were allocated. 9.1.2. Second, one hundred percent (100%) to BOP in respect of the BOP Preferred Return to the extent of the excess, if any, of (i) the cumulative distributions received by BOP in respect of the BOP Preferred Return pursuant to Sections 10.2.1 and 12.3.4 from the Preferred Capital Date to the end of the Fiscal Year, over (ii) the cumulative amounts allocated to BOP pursuant to this Section 9.1.2 for all prior Fiscal Years. 9.1.3. Thereafter, to the Members in accordance with their Percentage Interests. 9.1.4. The foregoing provisions of Section 9.1 shall be deemed amended as appropriate to take into consideration the situation whereby Gender Road has been paid a preferred return on its Additional Capital Contribution, if any, pursuant to Section 2.3.5 hereof, such that the allocations hereunder reflect the distribution of cash under Section 10.2 hereof. 9.2. Allocation of Losses. After giving effect to the special allocations set forth in Section 9.3 hereof, Losses for any Fiscal Year shall be allocated to the Members in the following order and priority: 9.2.1. First, to the extent any Profits have been allocated pursuant to Section 9.1.3 hereof, Losses shall be allocated to offset any Profits allocated pursuant to Section 9.1.3 in an amount up to the amount of Profits previously allocated under Section 9.1.3. To the extent Profits are offset pursuant to this Section 9.2.1, such allocations shall be disregarded for purposes of computing subsequent allocations pursuant to this Section 9.2.1. -17- 9.2.2. Next, to the Members in accordance with their Percentage Interests. 9.2.3. Notwithstanding Section 9.2.1 and 9.2.2, no amount of Loss shall be allocated to a Member to the extent that such allocation would cause or increase a deficit balance in such Member's Capital Account, as adjusted. Rather, such amount of Loss shall be allocated to the Member with positive Capital Account, provided, however, that if no Member has a positive Capital Account at the time of such allocation, Losses shall be allocated to the Members in accordance with Section 9.2.2, provided further, that to the extent that Losses have been allocated to a Member pursuant to this Section 9.2.3, then, notwithstanding Section 9.1 hereof, subsequent Profits shall be allocated to that Member under this Section 9.2.3 until the aggregate Profits allocated to such Member hereunder shall be equal to the aggregate Losses allocated under this Section 9.2.3 for all prior periods. 9.3. Special Allocations. Notwithstanding anything in this Agreement to the contrary, the following special allocations shall be made as follows: 9.3.1. All Nonrecourse Deductions for each Fiscal year shall be allocated to the Members in proportion to their respective Percentage Interests. For purposes of Treasury Regulation Section 1.752-3, all excess nonrecourse liabilities of the Company will be allocated between the Members in proportion to their respective Percentage Interests. 9.3.2.Any items of income, loss, gain or deduction that are attributable to Member Nonrecourse Debt shall be allocated to those Members who bear the economic risk of loss for such debt in accordance with Treasury Regulation Section 1.704-2(i). 9.3.3. If there is a net decrease in Minimum Gain for a taxable year of the Company, then, unless and except to the extent that the exceptions provided in Treasury Regulations Section 1.704-2(f)(2) through (5) are applicable, before any other allocation is made for such taxable year, each Member shall be allocated items of income and gain for such year (and, if necessary, for subsequent years) in an amount equal to the portion of such Member's share of the net decrease in Minimum Gain, as such share is determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section 9.3.3 is intended to qualify as a "minimum gain chargeback" under Treasury Regulation Section 1.704-2(f)(1) and shall be interpreted in a manner consistent therewith. 9.3.4.To the extent that any Member unexpectedly receives any adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of Treasury Regulation Section 1.704-1(b)(2)(ii)(d), which adjustment, allocation or distribution creates or increases a deficit in that Member's Capital Account, then, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the deficit balance in its Capital Account created by such adjustment, allocation, or distribution as quickly as possible. Any special allocations of items of income or gain pursuant to this provision shall be taken into account in computing subsequent allocations of Profits so that the net amount of any items so -18- allocated and the Profits, Losses and all other items allocated to each Member shall, to the extent possible, be equal to the net amount that would have been allocated to each such Member pursuant to the other provisions of this Agreement if such unexpected adjustments, allocations or distributions had not occurred. The foregoing is intended to qualify as a "qualified income offset" within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be applied in a manner consistent with that Treasury Regulation. 9.4.Curative Allocations. The allocations set forth in Sections 9.2.3 and 9.3 (the "Regulatory Allocations") are intended to comply with certain requirements of Treasury Regulation Section 1.704-1(b) and 1.704-2. Notwithstanding any other provision of this Article 9 (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating other items of Company income, gain, loss, deduction or credit among the Members so that, to the extent possible, the net amount of such allocations or other items of income, gain, loss, deduction or credit and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred. 9.5. Allocations for Tax Purposes. In the event the book value of any Company asset differs from its adjusted tax basis (upon contribution, revaluation or otherwise), all income, gain, loss and deduction with respect to such asset shall be allocated to the Members in a manner that takes into account the variation between such book value and adjusted tax basis for such property for federal income tax purposes, pursuant to section 704(c) of the Code or pursuant to the principles thereof using any reasonable allocation method (including curative allocations) as may be determined by the Members or, if the Members so elect, the Company's accountants. Allocations made under this Section 9.5 are made solely for federal, state or local income tax purposes and shall not affect, or any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, or other items or distributions pursuant to any provision of this Agreement. ARTICLE 10 DISTRIBUTIONS 10.1. Distributions Generally. Except as otherwise provided in Section 12.3 (relating to liquidating distributions), Available Cash Flow, if any, shall be distributed as mutually determined by the Members, except that any distributions to be made under Section 10.2.1 hereof to BOP in respect of the BOP Preferred Return shall be made at the end of the first quarter in which the Company has Available Cash Flow and thereafter shall be payable quarterly to the extent of Available Cash Flow. 10.2. Distributions of Available Cash Flow. Except as otherwise provided in Sections 2.3.5 (in connection with Gender Road's preferred return on Additional Capital Contributions, if -19- any) and 12.3 (relating to liquidating distributions) and subject to Section 10.1 hereof, distributions of Available Cash Flow shall be made in the following order and priority: 10.2.1. First, one hundred percent (100%) to BOP in respect of the BOP Preferred Return until BOP has received an amount equal to the excess, if any, of (i) the BOP Preferred Return from the Preferred Capital Date to the date of such distribution, over (ii) the sum of all prior distributions to BOP in respect of the BOP Preferred Return pursuant to this Section 10.2.1. 10.2.2. Second, one hundred percent (100%) to BOP until the BOP Unreturned Preferred Capital has been reduced to zero; 10.2.3. Thereafter, to the Members in accordance with their Percentage Interests. 10.3. Authority to Withhold. Upon the written advice of the Company's legal tax counsel, the Company shall be entitled to collect, withhold and make payments on behalf of or with respect to any Member's allocable share of Company income or gain, in amounts required to discharge any obligation of the Company to withhold or make payments to any governmental authority with respect to any federal, state, and local tax liability of such Member arising as a result of such Member's Interest in the Company. Any amount withheld pursuant to the foregoing sentence shall be treated for all purposes of this Agreement as having been paid or distributed to such Member and shall reduce, on a dollar for dollar basis, amounts otherwise payable of distributable to such Member under this Agreement. Each Member hereby agrees to indemnify and hold harmless the Company for, from and against any liability with respect to amounts paid or withheld under this Section 10.3 on behalf of or with respect to such Member. ARTICLE 11 BOOKS, RECORDS, REPORTS AND ACCOUNTING 11.1. Books and Records. The Company shall keep or cause to be kept at its principal place of business appropriate books and records, including without limitation, the following: (a) true and full financial information regarding the Company and the status of the development of the Pad Sites and financial condition of the Company, including without limitation, records of all costs and expenses incurred, all changes made, all credits made and received, and all income derived in connection with the business of the Company; (b) promptly after becoming available, a copy of the Company's federal, state and local income tax returns for each year; (c) a copy of this Agreement and Certificate of Formation and all amendments thereto, together with executed copies of any written powers of attorney pursuant to which this Agreement and the Certificate of Formation and all amendments thereto have been executed; and (d) other information regarding the affairs of the Company as is just and reasonable. -20- 11.2. Company's Accountants. The Members hereby select and appoint Arthur Andersen LLP to be the Company's independent accountants. 11.3. Fiscal Year. The Fiscal Year of the Company shall be the calendar year or such other accounting period as shall be required under the Code or as may be determined by the Company's independent accountants. 11.4. Accounting Period. Unless otherwise determined by the Company's independent accountants to be in the best interests of the Company, the Company shall use the accrual method of accounting in maintaining its books and records and in preparation of its financial statements for federal income tax purposes. 11.5. Annual Reports. Within forty-five (45) days after the close of each Fiscal Year, the Administrative Officer shall cause the Company to have prepared and furnished to each Member, audited financial statements, presented in accordance with generally accepted accounting principles, including without limitation, copies of (i) the balance sheet of the Company, (ii) the Company's income statement, (iii) a statement of the Company's cash flow, (iv) a statement of the Member's Capital Accounts and Preferred Capital and (v) a statement of source and application of funds each as of the last day of the Fiscal Year. 11.6. Quarterly Reports. Within twenty (20) days after the close of each fiscal quarter, the Administrative Officer shall cause the Company to prepare and furnish to each Member quarterly reports of (i) the Company's operations, (ii) quarterly unaudited balance sheets and income statements, and (iii) quarterly statements of cash flow. 11.7. Preparation of Tax Returns. Within sixty (60) days after the end of each Fiscal Year, the Administrative Officer shall cause the Company to arrange for the preparation and timely filing of all tax returns of the Company for federal, state and local income tax purposes and shall cause the Company to be furnish to each Member the tax information reasonably required for federal and state income tax reporting purposes. 11.8. Tax Controversies. The Members hereby appoint and designate BOP as the initial Tax Matters Member, and BOP shall authorize and require one of its officers (the "Tax Matters Representative") to represent the Company (at the Company's expense) in connection with all examinations of the Company's affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services and costs associated therewith. Each Member agrees to cooperate with the Tax Matters Representative and to do or refrain from doing any or all things reasonably required by the Tax Matters Representative in conducting those proceedings. The Tax Matters Representative shall promptly notify the each Member upon the receipt of any correspondence from any federal, state or local tax authorities relating to any examination of the Company's affairs. -21- 11.9. Tax Elections. Any and all elections for federal, state and local tax purposes, including without limitation, any election (i) to adjust the basis of the Company Property pursuant to Code Section 754, 734(b) and 743(b), or comparable state or local law, in connection with Transfers of Interests in the Company; and (ii) to extend the statute of limitations fro assessment of tax deficiencies against the Company and the Members with respect to adjustments to the Companies federal, state or local tax returns, shall be made by the Members. ARTICLE 12 DISSOLUTION AND LIQUIDATION 12.1. Dissolution. The Company shall dissolve upon the earliest to occur of any of the following: (a) the affirmative vote of the Members; (b) upon the sale of all of the assets of the Company and the repayment and satisfaction in full of any financing undertaken by the Company in respect thereof; (c) an entry of a decree of judicial dissolution pursuant to the Act; or (d) December 31, 2050. 12.2. Bankruptcy of a Member. The Bankruptcy of a Member shall not cause a dissolution of the Company under the Act. Upon the Bankruptcy of a Member, the non-Bankrupt Member shall have the sole right to manage the Company, and the Bankrupt Member shall not have any right to participate in the management or operation of the Company. Rather, the rights of the Bankrupt Member shall be limited to the right to share in the profits and losses of the Company to the extent provided in this Agreement. 12.3. Liquidation. Upon the dissolution of the Company, the Company shall cease to carry on its business, except insofar as may be necessary for the winding up of its business, but its separate existence shall continue until the Certificate of Cancellation has been filed as required by the Act. Upon dissolution of the Company, the Members shall designate a Person to act as the liquidating trustee (the "Liquidating Trustee") and the business and affairs of the Company shall be wound up and, subject to Section 12.4 hereof, the Company liquidated as rapidly as business circumstances permit, and the proceeds thereof shall be distributed (to the extent permitted by applicable law) in the following order and priority: 12.3.1. To the payment of the debts and liabilities of the Company (other than those to Members) in the order of priority provided by law. -22- 12.3.2. To the payment of the expenses of liquidation of the Company in the order of priority provided by law, provided that the Company shall first pay, to the extent permitted by law, liabilities or debts owed to Members. 12.3.3. To the setting up of such reserves as the Liquidating Trustee may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company arising out of or in connection with the Company's business, provided that any such reserve will be held by the Liquidating Trustee for the purposes of disbursing such reserves in payment of any of the aforementioned contingencies and at the expiration of such period as the Liquidating Trustee shall deem advisable (but in no case to exceed eighteen (18) months from the date of liquidation unless an extension of time is consented to by the Members), to distribute the balance thereafter remaining in the manner hereinafter provided. 12.3.4. The balance of the proceeds, if any, to be distributed on or before the later of (i) the end of the taxable year during which such liquidation occurs or (ii) ninety (90) days after the date of such liquidation, in accordance with and in the order set forth in Section 10.2 and, to the extent applicable, Section 2.3.5. 12.4. No Liquidating Distributions in Kind. The Liquidating Trustee shall not distribute, and no Member may demand or receive, property other than cash in return for a Member's contributions, loans or advances, unless the Members unanimously agree to a distribution in kind to any Member; provided, however, that all Members receive, whether in kind or in cash and whether from the Company or the Member receiving an in kind distribution, the amount which such Member is entitled to receive under Section 10.2 hereof. 12.5. Deficit Capital Account. Upon liquidation, each Member shall look solely to the assets of the Company for the return of that Member's Capital Contribution. No Member shall be personally liable for a deficit Capital Account balance of that Member, it being expressly understood that the distribution of liquidation proceeds shall be made solely from existing Company assets in the order and priority set forth in Section 12.3 hereof, and to the extent applicable 12.4. 12.6. Certificate of Cancellation. Following dissolution and liquidation of the Company, when all debts, liabilities and obligations have been paid, satisfied, compromised or otherwise discharged, or adequate provisions have been made therefore, and all of the remaining property and assets have been distributed to Members, the Liquidating Trustee shall file a Certificate of Cancellation as required by the Act. 12.7. Non-Recourse. No recourse shall be had for any of the obligations of BOP hereunder or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of Brandywine Realty Trust, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all of such liability being expressly waived and released by Gender Road. -23- ARTICLE 13 MISCELLANEOUS 13.1. Amendments. This Agreement may not be amended, modified or revised in any manner without the prior written consent of each of the Members. 13.2. Notice. 13.2.1. All notices, requests and other communications required or permitted to be given under this Agreement shall be in writing and shall be delivered to a Member either personally or by sending a copy thereof by first class or express mail, postage prepaid, or by telex or TWX (with answer back received) or courier services, charges prepaid, or by telecopier, to such Member's address (or to such party's telex, TWX, telecopier, or telephone number) as follows: If to BOP: c/o Brandywine Realty Trust Newtown Corporate Campus 16 Campus Boulevard Suite 150 Newtown Square, PA 19073 Attn: Anthony A. Nichols, Sr., Chairman Gerard H. Sweeney, President and Chief Executive Officer Telephone: (610) 325-5600 Facsimile: (610) 325-5682 or 5622 with a copy to: Michael H. Friedman, Esquire Pepper, Hamilton & Scheetz LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 19103-2799 Telephone: (215) 981-4563 Facsimile: (215) 981- 4750 -24- If to Gender Road: Gender Road Joint Venture c/o The Commonwealth Group 62 Read's Way New Castle, Delaware 19720 Attn.: Brock J. Vinton, President Telephone: (302) 323-9700 Facsimile: (302) 323- 9703 with a copy to: William S. Gee, Esquire Saul, Ewing, Remick & Saul P.O. Box 1266 Wilmington, DE 19899-1266 Telephone: (302) 421-6823 Facsimile: (302) 421-5874 13.2.2. Any such notice, request or communication shall be deemed to be delivered, given and received for all purposes of this Agreement (i) as of the date so delivered, if delivered personally or by telecopy to the person entitled thereto, (ii) three (3) business days after being deposited in the United States mail, or (iii) one (1) business day after being deposited in the United States mail or with a telegraph office or courier service for delivery if notice is sent by telegraph, or courier services. 13.3. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and, to the maximum extent possible, in such manner as to comply with all of the terms and conditions of the Act. 13.4. Severability. If any provision of this Agreement shall be conclusively determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, such provision shall be ineffective only to the extent of such invalidity or unenforceability without invalidating or affecting the remainder of this Agreement thereby. 13.5. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Members and their respective successors and, where permitted, their assigns and Affiliates. -25- 13.6. Titles and Captions. All article, section and paragraph titles and captions contained in this Agreement are for convenience only and are not a part of the context hereof. 13.7. No Third Party Rights. This Agreement is intended to create enforceable rights between the parties hereto only, and creates no rights in, or obligations to, any other Persons whatsoever. 13.8. Time is of Essence. Time is of the essence in the performance of each and every obligation herein imposed. 13.9. Further Assurances. Each Member, upon the request of the other Member, shall execute all further instruments and perform all further acts which are or may become reasonably necessary to effectuate and to carry out the matters contemplated by this Agreement. 13.10. Incorporation by Reference. Any reference to an Exhibit or Schedule or Attachment herein, is hereby incorporated by reference in this Agreement as if such Exhibit, Schedule or Attachment was set out in full in the text of this Agreement. 13.11. Legal Representation. Each party to this Agreement acknowledges that such party is represented by competent legal counsel and that such counsel has fully reviewed this Agreement. This Agreement shall be construed in accordance with its fair meaning without any presumption against the party responsible for drafting this Agreement. 13.12. Entire Agreement. This Agreement contains the entire agreement between the parties hereto and supersedes any and all prior and contemporaneous agreements, arrangements or understandings between the parties relating to the subject matter hereof. No oral understandings, oral statements, oral promises or oral inducements exist. No representations, warranties, covenants or conditions, express or implied, whether by statute or otherwise, other than as set forth herein, have been made by the parties hereto. 13.13. Counterparts. This Agreement may be signed in any number of counterparts. with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute but one and the same agreement. Any and all counterparts may be executed by facsimile. 13.14.Execution of Certificate of Formation. The Members acknowledge and agree that Kathleen A. Shea, Esquire of Pepper, Hamilton & Scheetz LLP has the power and authority to execute and file the Certificate of Formation with the Secretary of State of the State of Delaware on behalf of the Members in order to form the Company under the Act. [SPACE INTENTIONALLY LEFT BLANK] -26- IN WITNESS WHEREOF, the parties have executed this Operating Agreement of CHRISTIANA CENTER OPERATING COMPANY II LLC effective as of the day and year first above written. MEMBERS: BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, by Brandywine Realty Trust, a Maryland Real Estate Investment Trust, its sole general partner By:/S/ Gerard H. Sweeney, President & CEO Gerard H. Sweeney, President and Chief Executive Officer GENDER ROAD JOINT VENTURE, a Delaware partnership By:______________________________ Brock J. Vinton, Managing Venturer, Hereunto Duly Authorized [END OF EXECUTIONS] -27- EXHIBIT A TO OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY II LLC DEFINITIONS OF TERMS The following terms used in this Agreement shall have the meanings described below: "Act" shall mean the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101 et. seq., as amended from time to time. "Additional Capital Contributions" shall mean, with respect to a Member, any additional contributions to the capital of the Company pursuant to Section 2.3 hereof. "Administrative Officer" shall mean the Person designated as such pursuant to Section 3.4 hereof to undertake the day to day operation of the Company as provided in Section 3.4 hereof. "Advisor" shall have the meaning set forth in Section 2.3 hereof. "Affiliate" shall mean a Person who, with respect to any Member: (a) directly or indirectly controls, is controlled by or is under common control with such Member; (b) owns or controls 10 percent (10%) or more of the outstanding voting securities of such Member; or (c) is an officer, director, manager, trustee, partner or member of such Member. "Agreement" means this operating agreement, as it may be amended, restated or supplemented from time to time. "Available Cash Flow" shall mean and consist of all cash proceeds received by the Company (other than Capital Contributions and Additional Capital Contributions), including, but not limited to, proceeds realized by the Company upon any financing or refinancing, proceeds generated by Company operations, and proceeds derived from sales or other dispositions of Company property, less the portion thereof used to pay or establish reserves for the Company's working capital needs, expenses, fees, principal and interest payments on Company debt and contingencies, all as determined by the Members. "Bankruptcy" means, with respect to a Member, the happening of any of the following: (a) the making of a general assignment for the benefit of creditors; (b) the filing of a voluntary petition in bankruptcy or the filing of a pleading in any court of record admitting in writing an inability to pay debts as they become due; (c) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such Member to be bankrupt or insolvent; (d) the filing of a petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation; (e) the filing of an answer or other pleading admitting the material allegations of, or consenting to, or defaulting in answering, a bankruptcy petition filed against a Member in any bankruptcy proceeding; (f) the filing of an A-1 application or other pleading or any action otherwise seeking, consenting to or acquiescing in the appointment of a liquidating trustee, receiver or other liquidator of all or any substantial part of a Member's properties; and (g) the commencement of any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation which has not been quashed or dismissed within 180 days. "Buy-Sell Price" shall have the meaning set forth in Section 8.2.1 hereof. "BOP Preferred Capital" shall mean the Capital Contribution made by BOP pursuant to Section 2.1 and all Additional Capital Contributions made by BOP pursuant to Section 2.3 hereof, which shall provide the basis upon which the BOP Preferred Return shall be calculated. "BOP Preferred Return" shall mean the right given to BOP to receive, in respect of each Fiscal Year, a sum equal to ten percent (10%) per annum (determined on the basis of a year of 365 days, for the actual number of days occurring in the period for which the BOP Preferred Return is being determined, cumulative to the extent not distributed pursuant to Section 10.2.1 hereof, but not compounded), of the average daily balance of the BOP Unreturned Preferred Capital from time to time during the period to which BOP Preferred Return relates. The calculation of the BOP Preferred Return shall commence upon the Preferred Capital Date and shall be payable as provided in this Agreement. "BOP Unreturned Preferred Capital" shall mean the BOP Preferred Capital reduced by cash distributions made pursuant to Sections 10.2.2 and 12.3 hereof. "Capital Account" shall mean the accounting record of each Member's capital interest in the Company maintained pursuant to and in accordance with Section 2.4 hereof. "Capital Contribution" shall mean, with respect to each Member, the amount contributed by such Member to the Capital of the Company, if any, as set forth in Sections 2.1 and 2.2 hereof, as applicable. "Certificate of Formation" shall mean the certificate of formation of the Company, as amended or restated from time to time, filed in the Office of the Secretary of State of the State of Delaware in accordance with the Act. "Certificate of Cancellation" shall mean the certificate of cancellation filed by the Liquidating Trustee under the Act at such time as set forth in Section 12.6 hereof. "Code" shall mean the Internal Revenue Code of 1986 (or successor thereto), as amended from time to time. A-2 "Collateral Agreements" shall mean each of the documents, agreements and instruments, including without limitation, the Pad Sites Agreement of Sale, executed, delivered or performed or to be executed, delivered or performed in connection with, or as a condition of, the consummation of the transactions provided in or contemplated by this Agreement, including without limitation, those documents, agreements and instruments in connection with the development of the Pad Sites to which the Company is a party. "Company" means the limited liability company which is the subject of this Agreement, as such limited liability company may from time to time be constituted. "Contact Representative" shall have the meaning set forth in Section 3.3 hereof. "Defaulting Member" shall have the meaning set forth in Section 2.3 hereof. "Depreciation" shall mean, for each Fiscal Year or other period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Fiscal Year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year or other period bears to such beginning adjusted tax basis. In the event that the federal income tax depreciation, amortization, or other cost recovery deduction is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method. "Designated Representatives" shall have the meaning set forth in Section 3.4 hereof. "Electing Member" shall have the meaning set forth in Section 8.2.1 hereof. "Election Notice" shall have the meaning set forth in Section 8.2.1 hereof. "Election Period" shall have the meaning set forth in Section 8.2.3 hereof. "Fiscal Year" means the year on which the accounting and federal income tax records of the Company are kept. "Gross Asset Value" shall mean with respect to any asset of the Company, the asset's adjusted basis for federal income tax purposes, except that (i) where an asset has been revalued on the books of the Company the Gross Asset Value shall be adjusted to reflect such revaluation, (ii) where an asset has been contributed to the Company by a Member, the Gross Asset Value shall be its fair market value as established by the Members and (iii) the Gross Asset Value of Company assets shall be adjusted to reflect Depreciation taken into account with respect to such assets for purposes of determining Profits or Losses. "Gross Value of the Company" shall have the meaning set forth in Section 8.4 hereof. A-3 "Indemnitee" shall have the meaning as set forth in Section 6.2 hereof. "Indemnitee Member" shall have the meaning as set forth in Section 6.3 hereof. "Indemnitor Member" shall have the meaning as set forth in Section 6.3 hereof. "Interest" shall mean with respect to a Member such Member's interest in the rights, powers, privileges, duties and obligations with respect to the company as specified in this Agreement. "Liquidating Trustee" shall have the meaning set forth in Section 12.3 hereof. "Major Action" shall have the meaning set forth in Section 3.2 hereof. "Members" shall have the meaning set forth in the first paragraph of this Agreement and shall be used where no distinction between BOP and Gender Road is required. To the extent applicable, the term "Members" shall include any Person that is admitted to the Company as an additional or substitute member, in accordance with the terms of this Agreement. "Member Minimum Gain" shall mean an amount determined by computing with respect to each Member Nonrecourse Debt, the Minimum Gain that would result if such Member Nonrecourse Debt were treated as a nonrecourse liability, determined in accordance with Treasury Regulation Section 1.704-2(i)(3). "Member Nonrecourse Debt" shall mean nonrecourse indebtedness of the Company with respect to which any Member has a direct or indirect risk of loss, as more fully defined in Treasury Regulation Section 1.704-2(b)(4). "Member Nonrecourse Deduction" shall mean, for each Fiscal Year, the Company deductions which are attributable to Member Nonrecourse Debt and are characterized as "partner nonrecourse deductions" under Treasury Regulation Section 1.704-2(i)(l). "Minimum Gain" shall mean and refer to, at any time, with respect to all nonrecourse liabilities of the Company (within the meaning of Treasury Regulation Section 1.704-2(b)(3)) the aggregate amount of gain (of whatever character), if any, that would be realized by the Company if it disposed of (in a taxable transaction) all Company Property subject to such liabilities in full satisfaction thereof, and as further defined in Treasury Regulation Section 1.704-2(d). "Mutual Disagreement" shall have the meaning set forth in Section 8.1 hereof. "Net Equity of a Member's Interest" shall have the meaning set forth in Section 8.4 hereof. "Nonrecourse Deductions" shall have the meaning set forth in Treasury Regulation Section 1.704-2(b)(1). A-4 "Notified Member" shall have the meaning set forth in Section 2.3 hereof. "Notifying Member" shall have the meaning set forth in Section 2.3 hereof. "Pad Sites" shall mean the two (2) existing vacant, approved, partially improved parcels of land located in New Castle County, Delaware, as more fully described in the Pad Sites Agreement of Sale. "Pad Sites Acquisition" shall mean the acquisition of the Pad Sites pursuant to and in accordance with the Pad Sites Agreement of Sale. "Pad Sites Agreement of Sale" shall mean that certain agreement executed by and between the Company, as purchaser, and Gender Road, as seller, for the acquisition of the Pad Sites. "Percentage Interest" shall mean with respect to a Member, such Member's Interest expressed as a percentage in relation to the Interests held by the other Members, as adjusted from time to time by the admission or withdrawal of Members for any reason as provided in this Agreement or as agreed to by the unanimous consent of the Members and reflected on Exhibit B attached hereto. The initial Percentage Interest of each Member shall be fifty percent (50%) as set forth on Exhibit B attached hereto. "Performing Member" shall have the meaning set forth in Section 2.3 hereof. "Permitted Transfer" shall have the meaning set forth in Section 7.2 hereof. "Person" means an individual, firm, corporation, partnership, limited liability company, association, estate, trust, pension or profit-sharing plan, or any other entity. "Preferred Capital Date" shall mean, for purposes of calculating the BOP Preferred Return, the date on which BOP makes an initial capital contribution to the Company pursuant to Section 2.1 hereof; provided that with respect to Additional Capital Contributions, the Preferred Capital Date for purposes of calculating the BOP Preferred Return on such Additional Capital Contributions shall be the date on which such Additional Capital Contributions are made by BOP to the Company. "Profits" and "Losses" shall mean, for each Fiscal Year or other period, an amount equal to the Company's taxable income or loss for such year or period, as computed for federal income tax purposes and determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(l) of the Code shall be included in taxable income or loss), with the following adjustments: (a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss; A-5 (b) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as such expenditures pursuant to Treasury Regulation Section 1.704-l(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses shall be subtracted from such taxable income or loss; (c) Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value. (d) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing taxable income or loss, Depreciation shall be taken into account for such Fiscal Year or other period in computing taxable income or loss; (e) Notwithstanding any other provision of this definition, Nonrecourse, Deductions, Member Nonrecourse Deductions and any items of income, gain, loss or deduction which are specially allocated pursuant to Section 9.3 of this Agreement, shall not be taken into account in computing taxable income or loss; and (f) In any case where, in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f) Company property is revalued on the books of the Company to reflect its fair market value, the amount of such revaluation (to the extent not previously taken into account) shall be taken into account as gain or loss from a taxable disposition of such property for purposes of computing taxable income or loss. "Regulatory Allocations" shall have the meaning as set forth in Section 9.4 hereof. "Securities Act" shall mean the Securities Act of 1933, as amended. "Tax Matters Member" means the "tax matters member" as defined in Code section 6231(a)(7) and is selected under Section 11.7 hereof. "Tax Matters Representative" shall have the meaning set forth in Section 11.8 hereof. "Transfer" means to sell, assign, transfer, give, donate, pledge, deposit, alienate, bequeath, devise or otherwise dispose of or encumber all or any portion of an Interest to any Person other than the Company. "Transferee" shall mean a Person to whom a Transfer is made pursuant to Article 7. "Transferor" shall mean a Member making a Transfer under this Agreement pursuant to Article 7. "Treasury Regulations" or "Regulations" shall mean pronouncements, as amended from time to time, or their successor pronouncements, which clarify, interpret and apply the A-6 provisions of the Code, and which are designated as "Treasury Regulations" by the United States Department of the Treasury. [END OF EXHIBIT A] A-7 EXHIBIT B TO OPERATING AGREEMENT OF CHRISTIANA CENTER OPERATING COMPANY II LLC PERCENTAGE INTERESTS PERCENTAGE MEMBER INTEREST ______ _____________ BOP 50% GENDER ROAD 50% A-8 A-9 -----END PRIVACY-ENHANCED MESSAGE-----