-----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, CD3E60v2GLbAi0qsUz15kJ18JyrxZXDOBuFFOq/ABfLJQxaXrzwEEVJ0vDyJs0wo sek1yFPC76Uex5LbYMMaIg== 0000950116-96-000704.txt : 19960805 0000950116-96-000704.hdr.sgml : 19960805 ACCESSION NUMBER: 0000950116-96-000704 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19960730 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960802 SROS: NONE 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: 1934 Act SEC FILE NUMBER: 001-09106 FILM NUMBER: 96602762 BUSINESS ADDRESS: STREET 1: TWO GREENTREE CENTRE STREET 2: STE 100 CITY: MARLTON STATE: NJ ZIP: 08053 BUSINESS PHONE: 2152519111 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 Filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) July 19, 1996 BRANDYWINE REALTY TRUST - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) MARYLAND 1-9106 23-2413352 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) file number) Identification Number) Two Greentree Centre, Suite 100, Marlton, New Jersey 08053 (Address of principal executive offices) (609) 797-0200 (Registrant's telephone number, including area code) Item 2. Acquisition or Disposition of Assets. On July 19, 1996, the Trust acquired a seven-story, 122,000 square foot office building in Cherry Hill, New Jersey (the "LibertyView Building") from UM Real Estate Investment Company, LLC ("UM") for a cash price of $10.6 million, of which $9.6 million was paid at the closing. The balance is payable to UM, in installments, as outlined below: Due Date Amount -------- ------ July 31, 1997 $100,000 August 31, 1997 $100,000 September 31, 1997 $100,000 October 31, 1997 $100,000 November 31, 1997 $100,000 December 31, 1997 $500,000 The amount of the purchase price was determined through arm's-length negotiation between the Trust and UM. The LibertyView Building was completed in 1990 and, as of May 30, 1996, the occupancy level was approximately 66%. A single tenant, HIP Health Plan of NJ, an HMO provider, occupies 37,515 square feet under a lease expiring January 2007. No other tenant occupies more than 10% of the building. Rentals of another tenant, Shapiro and Kreisman, a law firm, comprise approximately 15.4% of the total current base rents for the property. Other tenants in the LibertyView Building include a regional bank, big six accounting firm and several Philadelphia-based law firms. The Trust financed its acquisition of the LibertyView Building through a combination of term financing ($9,777,140), from a commercial bank (Summit Bank, formerly known as United Jersey Bank), and proceeds from a recent investment in the Trust by an affiliate of Richard M. Osborne, one of the Trustees of the Trust. The acquisition portion of the bank loan ($8,480,000) bears interest at a fixed rate of 8% per annum and matures on January 1, 1999. The bank loan provides for additional funding of an amount not to exceed $1.3 million, which will be advanced for tenant finishing and leasing commissions on currently vacant space. The additional funding will be repayable at prime plus 1% and will mature on January 1, 1999. The bank loan will be secured by a first mortgage on the LibertyView Building, and will generally be non-recourse to the Trust, except that the Trust will be required to guarantee completion of the tenant improvements for any new leases, and up to $3 million of principal of the bank loan plus the amount of principal and interest unpaid as of the date of acceleration of the bank loan in the event of a default thereunder. The bank has reserved the right to approve of any material change in the ownership of -2- the Trust, including a change resulting from the contemplated transaction (the "SSI/TNC Transaction") among the Trust, Safeguard Scientifics, Inc. and The Nichols Company, and in the event the Bank does not approve of any such ownership change, the loan, at the bank's option, will become repayable without penalty upon 120 days notice. If the bank were to withhold approval of the SSI/TNC Transaction and require repayment of its loan, the Trust would be required to seek replacement financing and there can be no assurance that the Trust could obtain such replacement financing or that any such replacement financing would be on terms acceptable to the Trust. If the Trust were unable to refinance the loan, the LibertyView Building could be transferred to the bank with a consequent loss of income and asset value to the Trust. The following table sets forth scheduled lease expirations for leases in place at the LibertyView Building as of June, 1996 for each of the years beginning with January 1, 1996, assuming no tenant exercises renewal options or is terminated due to default:
==================================================================================================================== Rentable Number of Square Annual Leases Footage Percentage of Minimum Rent Average Per Expiring Subject to Occupied Under Square Footage Percentage of Within the Expiring Rentable Expiring Rent Expiring Total Rent Under Year Leases Square Footage Leases Leases Expiring Leases - -------------------------------------------------------------------------------------------------------------------- 1996 1 2,998 3.70% $ 53,964 $ 18.00 4.51% - -------------------------------------------------------------------------------------------------------------------- 1997 1 11,521 14.23% 184,662 16.03 15.42% - -------------------------------------------------------------------------------------------------------------------- 1998 0 0 0.00% -- -- 0.00% - -------------------------------------------------------------------------------------------------------------------- 1999 1 7,233 8.93% 105,840 14.63 8.84% - -------------------------------------------------------------------------------------------------------------------- 2000 2 5,798 7.16% 99,196 17.11 8.28% - -------------------------------------------------------------------------------------------------------------------- 2001 2 6,978 8.62% 126,734 18.16 10.58% - -------------------------------------------------------------------------------------------------------------------- 2002 1 8,912 11.01% 164,872 18.50 13.77% - -------------------------------------------------------------------------------------------------------------------- 2003 0 0 0.00% -- -- 0.00% - -------------------------------------------------------------------------------------------------------------------- 2004 0 0 0.00% -- -- 0.00% - -------------------------------------------------------------------------------------------------------------------- 2005 0 0 0.00% -- -- 0.00% - -------------------------------------------------------------------------------------------------------------------- 2006 and 1 37,515 46.34% 462,185 12.32 38.60% thereafter - -------------------------------------------------------------------------------------------------------------------- TOTAL 9 80,955 100.00% $ 1,197,453 $ 14.79 100.00% ====================================================================================================================
-3- Item 7. Financial Statement, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Businesses Acquired. Index - ----- Brandywine Realty Trust Libertyview Building Report Of Independent Public Accountants Statements Of Revenue and Certain Expenses for the Year Ended December 31, 1995 and the Three Month Period Ended March 31, 1996 Notes to Financial Statements -4- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Brandywine Realty Trust: We have audited the statement of revenue and certain expenses of the LibertyView Building described in Note 1 for the year ended December 31, 1995. This financial statement is the responsibility of the LibertyView Building's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the LibertyView Building's revenue and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain expenses of the LibertyView Building for the year ended December 31, 1995, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Philadelphia, Pa., June 14, 1996 -5- LIBERTYVIEW BUILDING STATEMENTS OF REVENUE AND CERTAIN EXPENSES (Notes 1 and 2) For the For the Three-Month Year Ended Period Ended December 31, March 31, 1995 1996 ------------ ------------ (unaudited) REVENUE: Base rents (Note 2) $1,119,000 $300,000 Tenant reimbursements 535,000 122,000 ---------- -------- Total revenue 1,654,000 422,000 ---------- -------- CERTAIN EXPENSES: Maintenance 277,000 71,000 Utilities 215,000 59,000 Real estate taxes 274,000 74,000 Other operating expenses 32,000 8,000 ---------- -------- Total certain expenses 798,000 212,000 ---------- -------- REVENUE IN EXCESS OF CERTAIN EXPENSES $ 856,000 $210,000 ========== ======== The accompanying notes are an integral part of these statements. -6- LIBERTYVIEW BUILDING NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES DECEMBER 31, 1995 1. BASIS OF PRESENTATION: The statements of revenue and certain expenses reflect the operations of the LibertyView Office Building (the "LibertyView Building") located in New Jersey, which will be acquired by Brandywine Realty Trust (the "Trust") from an unaffiliated party by July 19, 1996. The LibertyView Building has an aggregate net leasable area of approximately 121,700 square feet and is 63% leased as of December 31, 1995. The books of the LibertyView Building are maintained on a modified cash basis. Adjusting entries have been made to present the accompanying financial statements in accordance with generally accepted accounting principles. The accompanying financial statements exclude certain expenses--such as interest, depreciation and amortization, professional fees, and other costs not directly related to the future operations of the LibertyView Building that may not be comparable to the expenses expected to be incurred by the Trust. 2. OPERATING LEASES: Base rents presented for the year ended December 31, 1995 and the three month period ended March 31, 1996, include straight-line adjustments for rental revenue increases in accordance with generally accepted accounting principles. The aggregate rental revenue increase resulting from the straight-line adjustments for the year ended December 31, 1995, and the three month period ended March 31, 1996, was $127,000 and $12,000, respectively. Tenants whose minimum rental payments equaled 10% or more of the total base rents in 1995 were: HIP Health Plan of NJ $462,000 Shapiro and Kreisman $185,000 In September 1995, LibertyView Building entered into a 60-month lease agreement with Sleepcare, a related party to the seller, of which $18,000 and $14,000 of base rents for the -7- year ended December 31, 1995 and the three-month period ended March 31, 1996, respectively, is included in the statements of revenue and certain expenses. The LibertyView Building is leased to tenants under operating leases with expiration dates extending to the year 2007. Future minimum rentals under noncancelable operating leases, excluding tenant reimbursements of operating expenses as of December 31, 1995, are as follows: 1996 $1,205,000 1997 1,177,000 1998 1,118,000 1999 1,118,000 2000 950,000 Thereafter 4,440,000 Certain leases also include provisions requiring tenants to reimburse management costs and other overhead up to stipulated amounts. -8- (b) Pro Forma Financial Information. BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Unaudited) The following sets forth the pro forma condensed consolidating balance sheet of Brandywine Realty Trust as of March 31, 1996 and the pro forma condensed consolidating statements of operations for the year ended December 31, 1995, and the three-month period ended March 31, 1996. The pro forma condensed consolidating financial information is presented as if the consummated transactions of (a) the June 21, 1996 investment by the Turkey Vulture Fund XIII, Ltd. (the "RMO Fund") of $1,330,000 in debt and equity securities of the Trust; and (b) the July 19, 1996 acquisition of the LibertyView Office Building (the "LibertyView Building") by the Trust had been consummated on March 31, 1996, for balance sheet purposes and January 1, 1995 for purposes of the statements of operations. This unaudited pro forma condensed consolidating financial information should be read in conjunction with the historical financial statements of the Trust and LibertyView and the related notes thereto. In management's opinion, all adjustments necessary to reflect the effects of the consummated transactions have been made. The pro forma condensed consolidating financial information is unaudited and is not necessarily indicative of what the actual financial position would have been at March 31, 1996, nor does it purport to represent the future financial position and the results of operations of the Trust. -9- BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET AS OF MARCH 31, 1996 (Notes 1 and 2) (Unaudited) (in thousands)
Brandywine Realty Trust Historical Pro Forma Consolidated Adjustments Pro Forma (A) (B) (C) Consolidated ------------ ----------- ------------- Assets: Real estate investments, net $13,770 $10,600 (B) $24,370 Cash and cash equivalents 701 (90) (B)(C) 611 Escrowed cash 760 -- 760 Deferred costs, net 1,336 -- 1,336 Other assets 390 300 (B) 690 ------- ------- ------- Total assets $16,957 $10,810 $27,767 ======= ======= ======= Liabilities: Mortgages and notes payable $8,905 $10,472 (B)(C) $19,377 Other liabilities 698 -- 698 ------- ------- ------- Total liabilities 9,603 10,472 20,075 ------- ------- ------- Minority Interest -- -- -- Shareholders' Equity: Common shares of beneficial interest 19 1 (C) 20 Additional paid-in capital 16,772 295 (C) 17,067 Stock warrants -- 42 (C) 42 Accumulated equity (deficit) (9,437) -- (9,437) ------- ------- ------- Total shareholders' equity 7,354 338 7,692 ------- ------- ------- Total liabilities and shareholders' equity $16,957 $10,810 $27,767 ======= ======= =======
The accompanying notes and management assumptions are an integral part of these statements. -10- BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 (Notes 1 and 3) (Unaudited) (in thousand, except Share and per Share amounts)
Brandywine Liberty Realty Trust View Historical Building Consolidated Historical Pro Forma Pro Forma (A) (B) Adjustments Consolidated ------------ ---------- --------- ------------ Revenue: Base rents $3,517 $1,119 $ -- $4,636 Tenant reimbursements 66 535 -- 601 Other 83 -- -- 83 ------ ------ ------- ------ Total revenue 3,666 1,654 -- 5,320 ------ ------ ------- ------ Operating expenses: Interest 793 -- 762 (D)(F) 1,555 Depreciation and amortization 1,402 -- 459 (C)(E) 1,861 Other expenses 2,290 798 -- 3,088 ------ ------ ------- ------ Total operating expenses 4,485 798 1,221 6,504 ------ ------ ------- ------ Income (loss) before minority interest (819) 856 (1,221) (1,184) Minority interest in income (loss) 5 -- -- 5 ------ ------ ------- ------ Income (loss) before extraordinary items $ (824) $ 856 $(1,221) $(1,184) ====== ====== ======== ======== Earnings per share of beneficial interest $(0.44) $ (0.61) ======= ======= Weighted average number of shares outstanding including share equivalents 1,874,372 1,934,372 ========= =========
The accompanying notes and management assumptions are an integral part of these statements. -11- BRANDYWINE REALTY TRUST PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 1996 (Notes 1 and 3) (Unaudited) (in thousand, except Share and per Share amounts)
Brandywine Liberty Realty Trust View Historical Building Consolidated Historical Pro Forma Pro Forma (A) (B) Adjustments Consolidated ------------ ---------- ----------- ------------ Revenue: Base rents $ 972 $ 300 $ -- $ 1,272 Tenant reimbursements 35 122 -- 157 Other 38 -- -- 38 ------- ------- ------ ------- Total revenue 1,045 422 -- 1,467 ------- ------- ------ ------- Operating expenses: Interest 207 -- 191 (D)(F) 398 Depreciation and 242 -- 115 (C)(E) 357 amortization Other expenses 584 212 -- 796 ------- ------- ------ ------- Total operating expenses 1,033 212 306 1,551 ------- ------- ------ ------- Income (loss) before 12 210 (306) (84) minority interest Minority interest in income (loss) 2 -- -- 2 ------- ------- ------ ------- Income (loss) before extraordinary items $ 10 $ 210 $ (306) $ (86) ======= ======= ====== ======= Earnings per share of beneficial interest $ 0.01 $ (0.04) ======= ======= Weighted average number of shares outstanding including share equivalents 1,876,944 1,936,944 ========= =========
The accompanying notes and management assumptions are an integral part of these statements. -12- BRANDYWINE REALTY TRUST NOTES AND MANAGEMENT'S ASSUMPTIONS TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION (in thousands, except share and per share amounts) 1. BASIS OF PRESENTATION: Brandywine Realty Trust (the "Trust") is a Maryland real estate investment trust. The Trust owns 4 properties as of March 31, 1996 and on July 19, 1996 acquired the LibertyView Office Building (the "LibertyView Building") from an unrelated party. The LibertyView Building has an aggregate net leasable area of approximately 122,000 square feet and is 63% leased as of December 31, 1995 and 66% leased as of March 31, 1996. These pro forma financial statements should be read in conjunction with the historical financial statements and notes thereto of the Trust, as previously filed, and the LibertyView Building as included elsewhere herein. In management's opinion, all adjustments necessary to reflect the effects of the acquisition of the LibertyView Building by the Trust have been made. 2. ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET: (A) Reflects the historical consolidated balance sheet of the Trust as of March 31, 1996. (B) Reflects the Trust's acquisition of the LibertyView Building as of March 31, 1996, based upon the purchase price of $10,600,000 acquired with cash of $1,420,000, a mortgage note payable of $8,480,000 due in January 1999 with interest payable monthly at 8% and a note payable to the seller of $1,000,000 due in installments through December 1997 with no interest payable. Deferred financing costs of $300,000 related to the mortgage note payable have been capitalized. -13- (C) Reflects the investment in the Trust by the RMO Fund funded by a note bearing interest at prime and 60,000 Common Shares plus one warrant for 60,000 Common Shares at a price of $.70 per share. The warrant is exercisable at $6.50 per share. The loan matures in 1999. Dr. Cash and cash equivalents $1,330,000 Cr. Mortgage and notes payable $992,000 Cr. Common shares of beneficial interest 1,000 Cr. Additional paid-in capital 295,000 Cr. Stock warrants 42,000 3. ADJUSTMENTS TO PRO-FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS: (A) Reflects the historical consolidated operations of the Trust. (B) Reflects the historical operations of the LibertyView Building, excluding certain expenses such as interest, depreciation and amortization, professional costs, and other costs not directly related to the future operations of the LibertyView Building. (C) Reflects depreciation totaling $339,000 and $85,000, respectively, of the LibertyView Building using a 25-year depreciable life for the year ended December 31, 1995, and the three-month period ended March 31, 1996. (D) Reflects the increase in interest expense of $678,000 and $170,000, respectively, related to the mortgage note payable of the LibertyView Building, which has an interest rate of 8% per annum for the year ended December 31, 1995 and for the three-month period ended March 31, 1996. (E) Reflects the amortization of deferred financing costs related to the LibertyView Building of $120,000 and $30,000, respectively, for the year ended December 31, 1995 and the three-month period ended March 31, 1996. (F) Reflects the increase in interest expense of $84,000 related to the note payable to the RMO Fund (which bears interest at prime), assuming a prime rate of 8.25% for the year ended December 31, 1995. For the three-month period ended March 31, 1996, the increase in interest expense was $21,000. -14- (c) Exhibits. Exhibit Index 99.1 Purchase and Sale Agreement between UM Real Estate Investment Company, LLC ("UM") and the Trust. 99.2 First Amendment to Purchase and Sale Agreement between UM and the Trust. 99.3 Second Amendment to Purchase and Sale Agreement between UM and the Trust. 99.4 Third Amendment to Purchase and Sale Agreement between UM and the Trust. 99.5 Promissory Note in the principal amount of $1,000,000 from the Trust to UM. 99.6 Subordinated Mortgage from the Trust to UM. 99.7 Amended and Restated Loan Agreement between the Trust and Summit Bank ("SB"). 99.8 Amended and Restated Promissory Note from the Trust to SB. 99.9 Amended and Restated Mortgage from the Trust to SB. -15- 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 hereunto duly authorized. BRANDYWINE REALTY TRUST Date: August 1, 1996 By: /s/ Gerard H. Sweeney --------------------- Title: President and Chief Executive Officer -16- EX-1 2 EXHIBIT 99.1 Exhibit 99.1 Purchase and Sale Agreement between UM Real Estate Investment Company, LLC ("UM") and the Trust PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made as of the 28th day of March, 1996, by and between UM REAL ESTATE INVESTMENT COMPANY, LLC, a New Jersey limited liability company, with an office at 56 Haddon Avenue, Haddonfield, New Jersey 08033 ("Seller") and BRANDYWINE REALTY TRUST, a Maryland real estate investment trust, with offices at Two Greentree Center, Suite 100, Marlton, New Jersey 08053 ("Buyer"). W I T N E S S E T H: WHEREAS, Seller is the owner of those certain tracts or parcels of ground located at the intersection of Haddonfield Road and Chapel Avenue, Cherry Hill, Camden County, New Jersey, shown on the official tax map of the Township of Cherry Hill as Block 176.01, Lots 1, 2 and 3 (such lots to include the parking lot adjacent to Third Avenue), and which are more particularly described on Exhibit "A" attached hereto (the "Land"), together with the approximately 121,737 square foot office building on Lot 1 commonly known as "LibertyView", as well as all other improvements ("Improvements") and personal property of Seller located thereon and used in connection with the operation of such building, together with those certain other assets, properties, businesses, rights, licenses, privileges, benefits, profits, accounts and claims hereinafter more specifically described, all of which taken together hereinafter sometimes collectively referred to as the "Assets"; and WHEREAS, Seller desires to transfer and convey to Buyer the Assets, and Buyer desires to purchase the Assets from Seller upon the terms and conditions hereinafter provided. NOW, THEREFORE, Buyer and Seller, for and in consideration of the sums hereinafter set forth, receipt of which is hereby acknowledged by Seller, as well as the mutual promises and covenants herein contained, intending to be legally bound, do hereby agree as follows: Article 1 SALE OF PROPERTY 1.1 Subject to all the terms and conditions of this Agreement, Seller agrees to transfer and convey the Assets to Buyer and Buyer agrees to purchase the Assets, free and clear of all liens, encumbrances and liabilities with the exception of the Permitted Exceptions (as hereafter defined), comprised of all of the following: a. The Land and the improvements now or hereafter located or constructed thereon, and all easements, tenements, hereditaments, rights, licenses, privileges and appurtenances, whether or not of record, in any way belonging or relating thereto and all mineral, oil and gas on and under the and all development, air and water rights belonging or relating to the same (collectively the "Property"); b. All fixtures, machinery, vehicles, tools, signs, systems, equipment, furnishings and furniture; tangible and intangible personal property; and replacements, inventories and supplies; all as same now are or hereafter may be located in, on or about the Property, or used in conjunction therewith (collectively the "Personal Property"), including, without limitation, all of the following: all furniture, furnishings and carpeting; all heating, lighting, plumbing, water, sewer, ventilating, exhaust, electrical, gas, refrigeration, air-conditioning, communication, fire protection, security, disability and life/safety fixtures, equipment and systems; all hot water heaters, furnaces, heating controls, motors and boiler pressure systems and equipment; all incinerating, disposal, cleaning, maintenance, janitorial, snow removal and landscaping equipment; all fuels; all appliances; all office equipment, furniture, furnishings and supplies; and all items of specific personal property, if any; excluding from the foregoing only such items of furniture and furnishings as are owned by tenants renting and occupying space in the Property ("Occupancy Tenants") under leases ("Tenant Leases") and pursuant to which -1- the Occupancy Tenants have the right to remove the same from the Property and excluding those items described on Exhibit "B" attached hereto; c. All right, title and interest in and to any streets, roads, alleys or other public ways adjoining the Land, including, without limitation, any land lying in the bed of any street, road, alley or other public way, open or proposed, and any strips and rights-of-way adjoining the Land (including, without limitation, all riparian and other rights in and to submerged lands); d. All certificates, permits, licenses, franchises, authorizations and approvals relating to the Property and/or the Personal Property or the ownership, use, access, occupancy, repair, maintenance or operation thereof or any part thereof, running to or in favor of Seller or the Property and/or the Personal Property, and which Buyer hereafter elects to accept; e. All Operating Agreements (hereinafter defined) running to or in favor of Seller or the Property and/or the Personal Property, and which Buyer hereafter elects to accept; f. All right, title and interest of Seller as landlord or otherwise in and to all Tenant Leases, together with all collateral therefor, all guarantees by third parties of the agreements and obligations thereunder of Occupancy Tenants, and all rentals, security deposits advance rentals, receivables, reimbursements items payable by Occupancy Tenants and all claims against Occupancy Tenants; and g. All right, title and interest of Seller of every kind and description in and to the following: All drawings, plans and specifications covering the Assets or any part thereof; all rights to the name "LibertyView" and all trademarks, trade names, service marks, registrations, logos, applications, good will and other rights (including the right to sue for past and present infringements thereof) associated therewith; the security system; all telephone numbers; all tenant files; all operating and maintenance files; and all maintenance and operating manuals; In no event shall Seller or Buyer be obligated or entitled hereunder to sell and convey, or purchase and acquire, respectively, less than all of the Property. Article 2 PURCHASE PRICE 2.1 Buyer will pay the purchase price (the "Purchase Price") of Ten Million Six Hundred Thousand Dollars ($10,600,000) as follows: (a) Fifty Thousand Dollars ($50,000) good faith deposit to be paid on the date hereof, and, provided Buyer has not terminated this Agreement pursuant to the terms hereof, an additional Fifty Thousand Dollars ($50,000) good faith deposit to be paid on or before the date which is one (1) business day after expiration of the Due Diligence Period (collectively, and together with all interest earned thereon, the "Deposit") to be held by the Title Company (as hereinafter defined) to be invested and held in escrow by the Title Company in an interest bearing account which, if available, shall be a bank money market account insured by F.D.I.C. All interest earned thereon shall be reported as income of Buyer. In the event this Agreement is terminated for any reason (other than due to the default or failure of Buyer to perform hereunder) prior to the expiration of the Due Diligence Period, the Deposit shall be immediately returned to Buyer, the parties acknowledging and agreeing that from and after the expiration of the Due Diligence Period the Deposit is non-refundable. At Closing, if any, the Deposit shall be paid to Seller as a credit towards the Purchase Price. -2- (b) One Million Dollars ($1,000,000) by the execution and delivery to Seller of Buyer's note (the "Note"), which Note shall be secured by a second purchase money mortgage and security agreement (the "Mortgage"), which Mortgage shall be subject and subordinate solely to a first purchase money mortgage recorded at Closing, an assignment of rents and leases (the "Lease Assignment"), UCC-l financing statements (the "Financing Statements"), and such other customary documents required thereunder, in form and containing terms and provisions satisfactory to Seller in its reasonable discretion (collectively, the "Loan Documents"). The term of the Note shall commence at Closing and continue to December 31, 1997. Payments shall be made, without interest, as follows: July 31, 1997 $100,000 August 31, 1997 $100,000 September 30, 1997 $100,000 October 31, 1997 $100,000 November 30, 1997 $100,000 December 31, 1997 $500,000 (c) Nine Million Five Hundred Thousand Dollars ($9,500,000) to be paid at Closing by federal funds wire transfer, cash, certified check or title company check (subject to adjustments at Closing). Article 3 BUYER'S DUE DILIGENCE PERIOD 3.1 Buyer shall have until 5:00 p.m. E.D.S.T. on May 30, 1996 (the "Due Diligence Period") to satisfy itself as to all matters respecting the Property. Buyer may, at any time on or prior to the expiration of the Due Diligence Period, for any reason or no reason, terminate this Agreement by notice to Seller following which (provided Buyer is not then in default hereunder) the Title Company shall return the Deposit to Buyer and thereafter neither party shall have any further rights or obligations hereunder, except for those which by their terms survive termination hereof. 3.2 Seller shall furnish to Buyer within five (5) days after the date hereof, a current rent roll, lease abstracts and copies of the Tenant Leases, pertaining to the Property, a copy of a title report, and copies of all surveys, mechanical, structural and environmental reports pertaining to the Property, which Seller has in its possession and Seller shall cause its representatives to respond truthfully and completely to any inquiries by Buyer regarding the same. 3.3 Seller, and/or its agents, agree to cooperate fully with Buyer and its agents, consultants and employees during the Due Diligence Period and shall, after receiving reasonable notice, and subject to the rights of the tenants under the Tenant Leases, provide Buyer with full access during regular business hours to the Property (including related financial, operational and leasing records, including, as and to the extent the same are in Seller's possession, copies of all plans, specifications, as-built drawings, engineering data, mechanical, structural and environmental investigations (including communications to and from the New Jersey Department of Environmental Protection ("DEP")), consultants' reports, utility agreements, certificates of occupancy, soil reports, zoning compliance reviews, leases, service contracts, maintenance and repair records, tax bills, insurance bills, insurance policies, and books and records relating to the Tenant Leases. If this Agreement terminates without Buyer's acquisition of the Property for any reason, Buyer agrees to (i) repair any damage caused to the Property arising out of Buyer's entry hereunder, and (ii) deliver to Seller all tests, data, reports and other materials relating to the Property obtained by Buyer (including without limitation all items provided to Buyer by Seller). Buyer hereby agrees to indemnify, defend and hold Seller harmless against any loss, damage, liability, or expense, including reasonable attorneys' fees, arising out of Buyer's activities pursuant to this Article 3 and/or Buyer's failure to promptly repair the Property when required hereunder, and/or incurred by Seller in enforcing this Article 3. Buyer's obligations and -3- indemnity under this Article shall survive termination of this Agreement. All of Buyer's activities on the Property pursuant to this Article 3, shall be coordinated verbally, a reasonable time in advance, with Seller's authorized representative, Laurie Korth, at (609) 354-2200. 3.4 If Buyer fails to terminate this Agreement as provided in Section 3.1, Buyer shall be obligated to proceed to Closing (as hereinafter defined), and to increase the Deposit as provided in Section 2.1(a), and the Deposit will be nonrefundable except if, and as, expressly otherwise provided herein. Article 4 CLOSING 4.1 Closing of this transaction shall, subject to the terms of this Agreement, take place at the offices of Archer & Greiner, a Professional Corporation, One Centennial Square, Haddonfield, New Jersey 08033, and shall occur at 10:00 a.m. prevailing time or such other time as may be mutually agreeable to Seller and Buyer on June 14, 1996 (the "Closing Date" or "Closing"); provided, however, Buyer shall use its best efforts to close on or before May 31, 1996. Buyer may at its option close earlier than such date by giving Seller at least ten (10) days advance notice of such early Closing Date, provided that no unrepaired Terminable Loss (as hereinafter defined) shall exist at the date of giving of such notice. Such time for Closing and all dates for performance hereunder are "of the essence" of this Agreement. Formal tender of a deed to the Property by Seller and of the purchase price by Buyer are hereby waived. 4.2 Closing hereunder shall be and hereby is conditioned upon each of the following (the "Closing Conditions"): (a) Title. Title shall be in the state required by the terms and provisions of Article 6. (b) Representations. The representations and warranties contained in Article 8 shall be true and correct in all material respects as of the Closing Date. (c) Obligations. Seller and Buyer shall have performed all of their respective obligations under this Agreement. (d) In addition to any other conditions set forth in this Agreement, Buyer's obligation to close hereunder is subject to each and all of the following conditions precedent: 1. All of Seller's representations and warranties contained in Paragraph 8.1 and elsewhere in this Agreement shall be true and correct when made and also as of the Closing Date. 2. All documents, instruments and assurances required to be delivered on or before Closing to Buyer shall have been duly delivered in form, substance and execution satisfactory to Buyer in its reasonable discretion. 3. All covenants and agreements of Seller herein shall have been duly performed and satisfied. If Seller has not satisfied any one or more of the conditions precedent contained in subparagraphs 1, 2 or 3 immediately above have not been satisfied on or before the Closing Date, Buyer may exercise any one or more of the rights and remedies set forth in Paragraph 12.1 hereof. -4- 4.3 Either party may waive any Closing Condition which has been included for its benefit, and if Closing hereunder occurs, any Closing Condition shall be deemed to have been waived which has not been satisfied. Article 5 CLOSING COSTS AND ADJUSTMENTS 5.1 All real property taxes, and any other charge in lieu of taxes levied or assessed against the Property by any public or quasi-public authority shall be adjusted between the parties hereto at Closing. 5.2 Buyer and Seller shall each bear one-half of the cost of any state, county or other transfer tax and recording fees incurred. Buyer shall be responsible for all title charges incurred (including attendance fees) to include the cost of a lender's policy of title insurance issued to Seller in the amount of the Note. 5.3 If at the time of Closing, the Property or any part thereof shall be or shall have been affected by a confirmed assessment or assessments (that is, any assessment the first installment of which has been paid), then for the purposes of this Agreement all the unpaid installments of any such assessment, including those which are to become due and payable after the Closing, shall be deemed to be due and payable and to be liens upon the Property and shall be paid and discharged by Seller at or prior to the Closing. Unconfirmed improvements or assessments, if any shall be Buyer's responsibility. 5.4 Water and sewer rates and charges shall not be adjusted but shall be paid by Seller based upon a current meter reading to be obtained by Seller; any advance payments relating to a period on and subsequent to the Closing Date shall be credited to Seller and assigned to Buyer. In addition, sewer, gas, electric and other utility charges shall not be adjusted but shall be paid by Seller based upon a current reading by the utilities to be obtained by Seller. 5.5 Rents and all other charges (including cost reimbursement payments) paid under the Tenant Leases shall be adjusted at Closing pursuant to an allocation schedule, such schedule to allocate: (i) security deposits, (ii) 1995 operating expenses, (iii) 1996 estimated operating expenses and other prepaid or accrued items and expenses, including any rents which have accrued but are unpaid at the Closing Date. If any rents under the Tenant Leases (including expense reimbursement payments) are payable or accruable on the basis of estimates or formulae and are subject to adjustment after the Closing Date, and become the subject of disputes with tenants regarding such rents or charges, Buyer shall give Seller written notice thereof within ninety (90) days following Closing and Buyer shall be entitled to offset the amount of the claimed overcharge and shall assign all claims against the applicable tenant with respect to such dispute to Seller. 5.6 All charges, payments and deposits under the Service Contracts shall be adjusted at Closing. 5.7 If any of the foregoing cannot be apportioned at Closing because of the unavailability of the amounts which are to be apportioned, such items shall be apportioned as soon as practicable after the Closing Date. All adjustments and prorations under this Article 5 shall be made as of 11:59 p.m. on the day prior to the Closing Date; that is, all income and expenses for the Closing Date shall be for the account of Buyer. 5.8 Buyer will be responsible for all of its own expenses incurred in its investigation and acquisition of the Property, including without limitation, all charges by its agents, contractors and consultants, and recording fees, all title company charges, title and survey costs, and fees and costs of its counsel. Seller will be responsible for the fees and costs of its counsel. -5- 5.9 The provisions of this Article 5 shall survive Closing. Article 6 TITLE 6.1 Conveyance to Buyer of title to the Property shall be by delivery of Seller's bargain and sale deed with covenants against the grantor's acts ("Seller's Deed"), in recordable form, conveying good, insurable and marketable fee simple title to the Property subject only to the Permitted Exceptions and real estate taxes not due and payable at the date of Closing. 6.2 Conveyance to Buyer of title to (i) the Personal Property shall be by delivery of Seller's bill of sale with covenants and general warranties of good and marketable title (but without warranties of quality, merchantability, or fitness for purpose or use) free and clear of all security interests, liens, charges, claims and encumbrances, and (ii) the remainder of the Assets shall be by delivery of Seller's unconditional deeds, assignments and other conveyance instruments as set forth herein with covenants and general warranties of good and marketable title, free and clear of all security interests, liens, charges, claims and encumbrances. 6.3 This Agreement and the Closing hereunder is conditioned upon Buyer's being entitled to obtain upon payment of the appropriate premium, an ALTA-B Owner's Policy of Title Insurance in the full amount of the Purchase Price by any reputable title insurance company licensed to do business in the State of New Jersey, at regular rates, which policy shall insure that the fee simple title to the Property is vested in Buyer free and clear of all liens and encumbrances other than the exceptions set forth on Exhibit "C" as well as all other matters revealed by the Title Commitment (as hereinafter defined) and not objected to by Buyer during the Due Diligence Period (the "Permitted Exceptions"). During the Due Diligence Period, Buyer shall obtain, and deliver a copy thereof to Seller, a commitment (the "Title Commitment") for the issuance at Closing, upon payment of the premium therefor, of Buyer's Title Policy for the Property. 6.4 As soon as practicable after the date hereof, Buyer, at Buyer's expense, may order a current as-built survey ("Survey") by a licensed surveyor, acceptable to Buyer and Title Company, of the Property which shall describe the Property, be dated after the date hereof, and contain a surveyor's certificate in favor of Buyer, the Title Company and such other parties as Buyer shall designate in form and substance satisfactory for, among other things, deletion of the standard survey exception from the title insurance policy and consistent with and as required by the next succeeding sentences. 6.5 Buyer shall request Title Company and such licensed surveyor to deliver to Seller copies of the Commitment and Survey at such times as same are delivered to Buyer. If the matters revealed by the Commitment and the Survey, other than the following matters: a. real estate taxes not yet due and payable at the date of the Commitment; b. liens, charges, claims and encumbrances of a definite or ascertainable monetary amount, all of which shall be paid off or removed of record by Seller, at Seller's expense, and released at Closing, and Seller agrees so to do and effect same; c. matters which the Commitment states will be removed upon presentation of Seller's ALTA Statement and other documentation, which ALTA Statement and other documentation shall be presented by Seller at Closing, and Seller agrees so to do, and which matters shall be so removed from the title insurance policy at Closing; d. public utility easements which do not underlie the Improvements and do not otherwise interfere with the ownership, use or operation of the Property; and -6- e. Permitted Exceptions are not satisfactory to Buyer, such matters not so satisfactory to Buyer hereinafter called "Unsatisfactory Matters", then, at the election of Buyer, at Buyer's sole discretion, Buyer, unless Seller (with Buyer's approval, which approval may be withheld by Buyer at its sole and unreviewable discretion) causes Title Company to delete such Unsatisfactory Matters from the Commitment or commit to insure over such Unsatisfactory Matters in a manner satisfactory to Buyer, at any time on or prior to the Closing Date (by notice to Seller which may be orally given) may terminate this Agreement, in which event the Deposit and Buyer's reasonable out-of-pocket expenses not to exceed Twenty Thousand Dollars ($20,000), shall be returned to Buyer and neither party shall have any further rights, obligations or liabilities hereunder. If Buyer does not so elect to terminate, Buyer may attempt to cure such Unsatisfactory Matters, such cost to be borne by Seller in an amount not to exceed Twenty Thousand Dollars ($20,000), the remaining Unsatisfactory Matters set forth in the Survey and Commitment shall become part of the Commitment and the state of title shown in the Commitment shall be deemed acceptable to Buyer and Seller shall have no further obligation in respect of such remaining Unsatisfactory Matters. Such Unsatisfactory Matters shall thereupon become so-called "Permitted Exceptions" and may be set forth as permitted encumbrances in Seller's Deed. 6.6 Buyer's obligation to close hereunder shall be conditioned upon Seller's being able, at Closing, to deliver to Buyer title to the Property, fee-simple, free and clear of all liens, claims and encumbrances other than the Permitted Exceptions; and, if Seller is not able to so deliver title or correct or cure the Unsatisfactory Matters, Buyer may either accept such title as Seller can deliver, pursue any remedy or modification of any noted title or survey defect, the cost thereof to be reimbursed by Seller in an amount not to exceed Twenty Thousand Dollars ($20,000) or terminate this Agreement in which event the Deposit and Buyer's out-of-pocket expenses not to exceed Twenty Thousand Dollars ($20,000) and, thereafter, shall be forthwith returned to Buyer and thereafter neither party shall have any further rights or obligations hereunder, except for those which by their terms survive termination hereof. However, if the Property shall be subject to any liens or encumbrances in a fixed or ascertainable amount, Seller shall pay same at or prior to Closing, and may use the proceeds of Closing for such purpose, and if Seller does not satisfy same at or prior to Closing, Buyer shall have the right in addition to all other remedies provided for herein and at law or in equity, to satisfy same at Closing and deduct the cost thereof from the Purchase Price to be paid at Closing. 6.7 In connection with the owner's title insurance policy which Buyer intends to obtain in connection with this transaction, if the Title Commitment is obtained and delivered to Seller prior to the end of the Due Diligence Period, along with specific requests and forms of documents therefor reasonably satisfactory to Seller's counsel, Seller undertakes and agrees to provide such information to, and execute such certificates and affidavits as comport with the actual state of facts in existence as of the Closing Date, for the benefit of and as are reasonably and customarily required by, the issuing title insurance company, in order that Buyer may have any exclusions or exceptions to coverage removed (other than the Permitted Exceptions) including, without limitation, those pertaining to creditors' rights and fraudulent conveyances. 6.8 Seller agrees to execute and deliver and to do or cause to be executed and delivered and to be done any documents and agreements and any things which may be necessary to or desired by Title Company to furnish the required title insurance. Article 7 DELIVERIES AT CLOSING 7.1 At Closing, Seller will deliver or cause to be delivered to Buyer the following: -7- (a) Deed. Seller's Deed, duly executed and acknowledged and in proper form for recording, and an affidavit of title duly executed and acknowledged. (b) Estoppel Letter. A sworn-to, notarized estoppel certificate to Buyer in form reasonably agreed upon by Buyer's lender, from HIP Rutgers, Klehr Harrison, First Union National Bank, as successor to First Fidelity Bank, N.A., and Shapiro and Kreisman (collectively, the "Key Tenants") and Seller shall use its reasonable efforts to obtain such estoppel letters from the other tenants, all dated no earlier than May 1, 1996. (c) Security Deposits. The security deposits (subject to adjustment as provided in Article 5 hereof). (d) Physical Possession. Actual physical possession of the Property (and at the Property all keys and passes thereto), subject only to the rights of the tenants under the Tenant Leases. (e) Intentionally Omitted. (f) Bill of Sale and Assignment. A duly executed Bill of Sale and Assignment and Assumption Agreement in form reasonably acceptable to Buyer and Seller. (g) Letter to Tenants. Executed letters to the tenants under the Tenant Leases advising that Seller has transferred title to the Property to Buyer and that all payments of rent and additional rent are to be remitted directly to Buyer. (h) Leases. At the Property, fully executed counterparts of all Tenant Leases and the files relating thereto. (i) Books and Records. At the Property, copies of all current books and records of Seller reflecting the calculation, payment and receipt of all taxes, operating expenses and other additional rent under the Tenant Leases. (j) Building Plans. At the Property, true and complete set of all as-built building plans, specifications and drawings (and of all documents and other materials related thereto for the Property), if available. (k) Tax Bills. The 1994 and 1995 and the most currently received original tax bills for the Property. (l) Permits. At the Property, and to the extent available, the originals of all certificates of occupancy for individual tenants and all current permits (including all amendments, modifications, supplements and extensions thereof) issued in connection with the operation of the Property except to the extent the same are required to be and are affixed to the Property. (m) Manuals. At the Property, all manuals, diagrams, shop drawings, warranties, and related data in possession of Seller concerning the Property and the use and maintenance of its systems and facilities. (n) Evidence of Authority. Evidence of Seller's existence, good standing and of Seller's authority to execute and deliver this Agreement and all documents required to be delivered by Seller hereunder. (o) ISRA Non-Applicability. A letter from the DEP that indicates that the Property is not subject to the Industrial Site Recovery Act ("ISRA"), the cost of the application fee to be borne by Buyer. -8- (p) Assignment of Guaranties. Seller's duly executed assignment of all guaranties and warranties from all manufacturers of, or other guarantors or warrantors in respect of, all equipment, appliances or other things installed or used in the Property, and from all contractors, suppliers and materialmen with respect to all work and installations done at the Property, to the extent same are in existence. (q) Assignment of Permits. Seller's duly executed assignment of all certificates, permits, licenses, franchises, authorizations and approvals which Buyer desires to have assigned to it, and all of Seller's rights thereunder, together with the originals thereof. (r) Certificate of Seller. Seller's duly executed certificate of reaffirmation and re-making and confirmation dated as of the Closing Date that the warranties and representations of Seller in this Agreement are true and correct as of the Closing Date. (s) Opinion of Counsel. An opinion of Seller's counsel, Archer & Greiner, addressed to Buyer, dated as of the Closing Date to the effect that: 1. Seller is a corporation duly created, existing and in good standing under the laws of the State of New Jersey. Seller has the requisite power and authority to enter into and perform the terms of this Agreement and its closing documents; the exception and delivery of this Agreement and its closing documents have been duly authorized by Seller and no other proceedings on Seller's part are necessary in order to permit Seller to consummate this transaction and its closing documents. 2. This Agreement and its closing documents have been duly executed and delivered by Seller and constitute legal, valid and binding obligations of Seller, enforceable in accordance with their terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other laws and principles affecting or limiting creditors' rights generally, and subject to all other applicable federal and state laws, statutes, ordinances, rules and regulations, decisions of federal and state courts, and constitutional requirements which may modify, limit, render unenforceable or delay certain of the rights and remedies of Buyer, which other applicable matters will not diminish the practical realization of the benefits intended to be conferred by the Agreement and its closing documents on Buyer (except for the economic consequences of any judicial, administrative or other procedural delay which may be imposed by, relate to or result from such laws, statutes, ordinances, rules, regulations, decisions or constitutional requirements). (t) FIRPTA. A certificate that Seller is not a "foreign person" as defined in the Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act, as amended, in a form complying with federal tax law. (u) Allocation Schedule. A mutually agreed upon schedule as required by Paragraph 5.5 hereof. In addition to the obligations required to be performed hereunder by Seller at Closing, from time to time subsequent to the Closing, Seller shall perform such other acts, and shall execute, acknowledge and deliver such other agreements and documents as Buyer reasonably may request in order to effectuate the consummation of the transaction contemplated herein consistent with the terms hereof, or as may be needed, to vest good, insurable and marketable title to the Assets in Buyer or its assignee or nominee. 7.2 At Closing Buyer will deliver or cause to be delivered to Seller the following: (a) Purchase Price. The unpaid portion (net of the Deposit and the Note) of the Purchase Price. -9- (b) Loan Documents. Duly executed, acknowledged and in form for recording or filing (as applicable) originals of the Loan Documents, as well as the lender's policy of title insurance required under Section 5.2. (c) Counterparts. Duly executed counterparts of the documents provided for in Sections 7.1 (f) and (g). (d) Other Documents. Any other document expressly to be delivered by Buyer pursuant to any other provision of this Agreement. 7.3 At Closing, the Title Company shall deliver the Deposit to Seller. Article 8 WARRANTIES AND REPRESENTATIONS OF SELLER AND BUYER 8.1 As a material inducement to Buyer to enter into this Agreement and to proceed to its consummation on the Closing Date, Seller makes the following representations, warranties, and agreements, to the best of its knowledge, such knowledge being that of Arthur W. Hicks, Jr. and Terry Cassidy, as follows, all upon which Buyer relies: (a) Subject to the Permitted Exceptions and the rights of tenants under Tenant Leases, Seller is the fee simple owner of and is lawfully seized and possessed of the Assets, there are no outstanding agreements of sale or options with respect to the Property, and no party or entity has any rights to possess or occupy the Assets. Seller does not own any property contiguous to the Assets. (b) To the best of Seller's knowledge, neither the execution nor delivery of this Agreement, nor the consummation of the transactions described herein or contemplated hereby nor compliance with the terms hereof by Seller will conflict with or result in the breach of any terms of, or constitute a default under any agreement or instrument of any kind to which Seller is a party or by which Seller is bound. (c) Seller has received no notice of any currently pending Condemnation (as hereinafter defined) affecting the Property, or of any currently pending proceedings to change the zoning, which is Commercial, of the Property. (d) Seller has received no notice of unconfirmed or confirmed assessments against the Assets. (e) Seller has not received service of process or similar formal notice with respect to any actions, litigation, suits, proceedings, appeals (including, without limitation, tax or assessment appeals) or claims affecting the Assets which, if determined adversely to Seller or the Assets, would have a material adverse effect on the operation of the business of the Assets as currently conducted or render title to the Assets unmarketable. (f) Seller has made no application, submission or request for any site plan approval, subdivision approval, variance, waiver, license, sewer permit, building permit or any other approval from any governmental authority, for development and/or use of the Property, which is now pending. (g) Seller is not a "foreign person" as such term is defined pursuant to the Foreign Investment in Real Property Tax Act (FIRPTA) of the Internal Revenue Code. Seller's Federal Employee Identification Number is 22-3304872. (h) The Property is currently subject to the leases described on Exhibit "D" attached hereto (the "Tenant Leases"). Seller has not entered into any other leases, tenancies, licenses or other rights of occupancy or use for any portion of the Property other than the -10- Tenant Leases. Exhibit "D" also sets forth all brokerage commission agreements relating to the Tenant Leases. Seller has not entered into any other agreements for brokerage commissions relating to the property. As a condition precedent to the Closing, Seller shall deliver a duly executed Estoppel Letter from each of the Key Tenants (the "Key Tenant Estoppel Letters"). In the event that Seller is unable to obtain the non-Key Tenant Estoppel Letters, with respect to any of the Tenant Leases, such failure shall not be deemed a default hereunder. Title shall be transferred at Closing subject to and together with the benefit of the Tenant Leases. The copies of the Tenant Leases furnished to Buyer are true, correct and complete copies thereof and such Tenant Leases have not been modified or amended except pursuant to the amendments delivered to Buyer; such Tenant Leases are in full force and effect; no rent or additional rent has been paid thereunder in advance of the due date; to the best knowledge of Seller, there is no default by landlord or tenant in the keeping, observance or performance of any material covenant, agreement, term, provision or condition contained therein; to the best knowledge of Seller, none of the tenants have any rights to offsets, deductions or defenses of the payment of any rent or additional rent except as may be set forth in the Tenant Leases; and there are no option to purchase, right of first offer, right of first refusal or other provision granting to the tenants the right to acquire the Property or any portion thereof or any right to terminate any of the Tenant Leases in the event of a sale of the Property except as may be set forth in the Tenant Leases; Seller has received and holds no security deposit in respect of the Tenant Leases other than as disclosed in Exhibit "D". (i) The Property is currently subject to the management, leasing, service or maintenance contracts and other commitments described on Exhibit "E" attached hereto (the "Service Contracts"); provided however, that Buyer shall only be obligated to assume those Service Contracts which are cancelable on not more than thirty (30) days notice pursuant to their terms. There are no agreements with respect to the operation or maintenance of the Property which would be binding upon Buyer after Closing other than the Service Contracts and certain of the Permitted Exceptions. Title shall be transferred at Closing subject to and together with the benefit of the Service Contracts. (j) Seller is not in the hands of a receiver nor is an application by Seller for the appointment of a receiver pending; Seller has not made an assignment for the benefit of creditors, nor has Seller filed, or to its best knowledge had filed against it, any petition in bankruptcy. (k) Seller shall deliver to Buyer by April 15, 1996 a list of all certificates, permits, licenses, franchises, authorizations and approvals issued respecting the ownership, use, access, occupancy, repair, maintenance or operation of the Property by Seller. To the extent that they are assignable to Buyer, Buyer shall be entitled to the use and benefit of all of same upon consummation of the transaction contemplated hereby without any further action of the parties hereto. Copies of all of same have been delivered to Buyer. (l) Water, sewer, gas, electricity, telephone and cable are currently serving the Property and operating and all installation and connection charges payable as of the date hereof have been paid in full. (m) There has been no damage to any of the Assets by fire or other casualty or any act of God prior to the date hereof. (n) Seller has no actual knowledge (but without any obligation of inquiry) and has received no written notice from tenants or the Township of latent defects in any of the Improvements, and the structural components, exteriors, electrical, gas, plumbing, water, sewer, air conditioning, heating, ventilating, exhaust, mechanical, security, disability, life/safety and other building systems. (o) Seller has not received written notice nor does Seller have actual knowledge of any: -11- 1. pending grievances or arbitration proceedings or unsatisfied arbitration awards, or judicial proceedings or orders respecting awards, relating to the Property or its ownership, operation or occupancy; 2. outstanding unfulfilled requirements or recommendations of any insurance company, any inspection or rating bureau or any board of underwriters concerning the Property or any operation, condition, repair or alteration thereof; 3. pending or actual claims, charges, complaints, petitions or unsatisfied orders or any threat thereof, by or before any administrative agency or court respecting alleged obligations of the owner, operator or any occupant of the Property or any part thereof that might materially and adversely affect the Property, the ownership, operation or occupancy of the Property or any part thereof or any person acquiring ownership, operation or occupancy of the Property through such owner, operator or occupant; or 4. any other action, proceeding or investigation pending or threatened against or involving Seller or the Property that might so affect the Property or such person so acquiring title or occupancy. (p) No equipment or article of personal property owned by Occupancy Tenants and removable by them is material to the operation of the Property. (q) Seller has not received any written notice, nor does Seller have any actual knowledge of any increase in assessed value nor of any other assessments, which would increase such taxes or assessments above such amount for years subsequent to such bill. Seller has not received any assessment notices against the Property with respect to any governmental improvements which have been substantially completed prior to the date hereof and for the cost of which the Property can be assessed. There are no unpaid assessments (including special assessments) levied or assessed against the Property, including unpaid installments for or in respect of any such assessments, and Seller has not received notice of any pending or threatened increase thereof. (r) Seller has caused to be furnished to Buyer copies of unaudited statements of income and expense for each of the months in 1994 and 1995. Each of such monthly financial statements (i) is in accordance with the respective books and records of Seller and (ii) presents fairly and accurately the results of operations for the respective periods covered thereby. All of the books and records relating to the Assets given to Buyer or its representatives accurately and correctly reflect the ownership and operation of the Assets and all income received and expenses incurred by Seller in connection therewith. (s) Seller is not a "foreign person" as defined in the Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act, as amended. (t) Except as set forth in the Phase I Report of TTI Environmental, Inc. and the 1992 Handex Phase I Report prepared for Midlantic National Bank and the Phase I Report prepared by ENSR regarding Lots 2 and 3, copies of which have been delivered to Buyer, Seller has no actual knowledge of, nor has Seller received written notice of, any environmental condition, pollutant, or hazardous or toxic substance, the presence of which would adversely affect the Assets. (u) Seller (i) has paid all commissions and other compensation payable to any broker or other agent or any other party under or in respect of the Pepper, Hamilton & Scheetz Lease and the other Tenant Leases, (ii) has completed any work required to be performed or furnished, as applicable, by lessor under or in respect of the Pepper, Hamilton & Scheetz Lease and the other Tenant Leases and (iii) has paid all tenant allowances and concessions under or in respect to the Tenant Leases. -12- 8.2 All of the covenants, agreements, representations and warranties of Seller contained in this Agreement shall be deemed remade on and as of Closing, shall survive the Closing, and shall not be deemed to merge upon the delivery and acceptance of Seller's Deed or any other conveyance document (except that the representations and warranties contained in Paragraph 8.1 (except for those representations and warranties contained in subparagraph (s) which shall survive indefinitely and except for the representations and warranties contained in subparagraph (t) which shall survive for one year from Closing) which shall survive the Closing for a period of six (6) months only); provided, however, that Buyer shall not be entitled to make any claim against Seller for a breach of a representation or warranty under this Agreement until the aggregate loss incurred by Seller as a result thereof exceeds $5,000, and upon exceeding that amount, Buyer shall be entitled to claim for all losses including the initial $5,000. 8.3 To induce each other to enter into this Agreement, (i) Seller hereby represents and warrants to Buyer that it has been duly authorized and empowered to enter into this Agreement and to perform fully its obligations hereunder, and such obligations constitute the valid and binding obligations of Seller, enforceable in accordance with their terms, and that no further consents of any other person, entity, public body or court is required in connection with this Agreement and the performance of all of its obligations hereunder; and (ii) Buyer hereby represents and warrants to Seller that it has been duly authorized and empowered to enter into this Agreement and to perform fully its obligations hereunder, and such obligations constitute the valid and binding obligations of Buyer, enforceable in accordance with their terms, and that no further consents of any other person, entity, public body or court is required in connection with this Agreement and the performance of all of its obligations hereunder. Article 9 BROKERS 9.1 Each party represents and warrants to the other party that it dealt with no broker or other person (including The Rubin Organization) entitled to claim fees for finders or brokerage services in connection with the negotiation, execution, and delivery of this Agreement, except for CB COMMERCIAL REAL ESTATE GROUP, INC. ("Broker"). Buyer shall pay all commissions or fees due to Broker directly (and not as a credit against the Purchase Price) at Closing. Each party agrees to defend, indemnify, and hold the other party harmless from and against any and all claims for finder's fees or brokerage or other commissions which may at any time be asserted against the indemnified party founded upon a claim that the substance of the aforesaid representations and/or agreements of the indemnifying party is untrue, together with any and all losses, damages, costs and expenses (including reasonable attorneys' fees) relating to such claims or arising therefrom or incurred by the indemnified party in connection with the enforcement of this indemnification provision. The provisions of this Article shall survive the Closing or any termination hereof. Article 10 RISK OF LOSS 10.1 Fire and Casualty. The risk of loss or damage to the Property by fire or other casualty not caused by Buyer or by any of Buyer's agents, employees, contractors and consultants (a "Seller's Cause") until the Closing is assumed by Seller. If the Property is damaged by a Seller's Cause to the extent that the cost to repair the Property will exceed $50,000 (a "Terminable Loss") and the Property is not repaired by Seller prior to the Closing Date, Buyer may at Buyer's sole option, (a) proceed to Closing without an abatement in Purchase Price (except for any deductibles as hereinafter provided) and Seller shall assign all of its insurance claims, including without limitation, casualty and rent interruption insurance (except for Seller's portion of the rent interruption insurance up to the Closing Date) and Seller will give Buyer a credit against the Purchase Price for any deductibles; or (b) terminate this Agreement by notice to Seller, in which event, the Deposit shall be immediately returned to Buyer and thereafter neither party shall have any further rights or -13- obligations hereunder, except for those which by their terms survive termination hereof. If the Property is damaged by a Seller's Cause to the extent that the cost to repair the Property will not exceed $50,000 and the Property is not repaired by Seller prior to the Closing Date, the parties shall proceed to Closing and Seller shall pay Buyer in cash the estimated cost to repair such damage (or Seller shall adjust the Note appropriately). The extent of damage due to a Seller's Cause not to be repaired by Seller prior to the Closing Date, shall be determined as promptly as practicable after occurrence of such damage, by the estimate of an independent, reputable contractor, licensed and operating in the general area in which the Property is located, engaged by Seller but reasonably acceptable to Buyer for the purpose of providing such estimate. 10.2 Condemnation. In the event that at any time prior to the Closing, any proceedings shall be commenced or consummated for the taking of all or any part of the Property, which would materially adversely affect the value of the Property or the continued conduct of business thereon as currently being conducted, for public or quasi-public use pursuant to the power of eminent domain, condemnation or otherwise (a "Condemnation"), Seller shall forthwith give written notice thereof to Buyer. Buyer may, at its option, within seven (7) days of receipt by it of notice of such Condemnation, but in any event not later than one (1) business day prior to the Closing Date (unless such notice of Condemnation is given later than two (2) business days prior to the Closing Date, in which event, Buyer shall make its election prior to Closing) elect by sending notice thereof to Seller either of the following: (a) to terminate this Agreement, in which event the Deposit shall be immediately returned to Buyer and thereafter neither party shall have any further rights or obligations hereunder, except for those which by their terms survive termination hereof; or (b) to proceed with this Agreement without an abatement in the Purchase Price, in which case Seller shall assign any and all awards and other compensation to which Seller is entitled for such Condemnation to Buyer. Article 11 NOTICES Any notices, consents, approvals, submissions or demands (which notices, consents, approvals, submissions or demands shall be hereinafter collectively called "Notices") given under this Agreement or by applicable law, rule or regulation by Seller to Buyer or by Buyer to Seller shall be in writing (except as otherwise expressly provided for in this Agreement). Unless otherwise required in this Agreement, any Notice shall be deemed given: (i) upon refusal, if sent by registered or certified mail, return receipt requested, postage pre-paid or by personal delivery or recognized national overnight courier service delivery, or (ii) on the business day of receipt (or the business day next following a non-business day of receipt), however delivered or transmitted (including by facsimile) with evidence of receipt obtained prior to 5:00 pm. on a business day (or if not received prior to 5:00 p.m. on a business day, then upon the next business day): (a) to Seller, in duplicate, one copy to Seller at the address set forth above, Attn.: Arthur W. Hicks, Jr., Fax No. (609) 354-2216, and the other copy to Archer & Greiner, P.C., One Centennial Square, P.O. Box 3000, Haddonfield, New Jersey 08033, Attn.: Gary L. Green, Esquire, Fax No. (609) 795-0574, or such other address or Fax number as Seller may designate by Notice to Buyer, (b) to Buyer at the address set forth above, Attn.: Gerard H. Sweeney, Fax No. (609) 797-0425 with a copy to Brad Molotsky, Esquire, Pepper, Hamilton & Scheetz, Suite 500, LibertyView, 457 Haddonfield Road, Cherry Hill, New Jersey 08002, Fax No. (215) 981-4930 or such other address or Fax number as Buyer may designate by notice to Seller. -14- Article 12 REMEDIES 12.1 If Seller defaults in the performance of any of its obligations under this Agreement, Buyer may, as Buyer's sole remedy, at Buyer's election either (i) seek to specifically enforce this Agreement against Seller in which event Buyer shall be entitled to collect from Seller reasonable attorney's fees, and the costs, of litigation, or (ii) cure such breach, the cost thereof to be borne by Seller in an amount not to exceed Twenty Thousand Dollars ($20,000), or (iii) terminate this Agreement by notifying Seller thereof, in which event the Deposit and Buyer's reasonably documented out-of-pocket costs not to exceed Twenty Thousand Dollars ($20,000) shall be returned to Buyer and thereafter neither party shall have any further rights or obligations hereunder, except for those which by their terms survive termination hereof. 12.2 If Buyer defaults in the performance of any of its obligations under this Agreement, Seller may, as Seller's sole remedy, terminate this Agreement by notifying Buyer thereof, in which event the Deposit shall be immediately delivered to and retained by Seller as agreed and liquidated damages hereunder, the parties acknowledging that Seller's damages arising in the event of such default are difficult, if not impossible to ascertain, and in such event, thereafter neither party shall have any further rights or obligations hereunder, except for those which by their terms survive termination hereof. Article 13 SELLER COVENANTS 13.1 Seller covenants and agrees during the term of this Agreement as follows: (a) To maintain in full force and effect any and all fire and casualty insurance and public liability insurance in amounts not less than that currently covering the Property. (b) Seller shall not make any new Tenant Leases ("New Tenant Leases") or any amendments (including extensions and renewals) of or cancel any existing Tenant Leases without Buyer's prior written consent; provided, however, Seller shall cooperate with Buyer in presenting new proposals to potential tenants at rates and terms acceptable to Buyer and Seller shall accompany Buyer, after prior written notice, on such proposal meetings. (c) Seller shall promptly deliver to Buyer copies of, and shall comply with all notices of violations of laws, ordinances, orders, regulations or requirements including but not limited to zoning, building, health, safety, disability, pollution control, environmental, fire or similar laws, ordinances, orders and regulations issued by, filed by or served by, any governmental agency having jurisdiction over the Assets, against or affecting the Assets, at Seller's sole cost and expense; the Property shall be conveyed to Buyer free and clear of any and all violations of which Seller has received notice prior to the Closing, any of the foregoing on the Closing Date. (d) From and after the date hereof, Seller shall, in connection with the Assets: 1. carry on its business in, and only in, the usual, regular and ordinary course; 2. perform all of its obligations under agreements and instruments relating to or affecting its properties, assets and business (including, without limitation, all Tenant Leases); -15- 3. maintain its books of account and records in the usual, regular and ordinary manner; 4. comply with all laws, ordinances, orders, regulations and requirements applicable to it, the conduct of its business and the Assets; 5. promptly advise Buyer in writing of (i) any material adverse change (or threat thereof) which shall come to the attention of or become known by Seller in the condition (financial or otherwise), operations or business of Seller or the Assets, and (ii) (without regard to materiality) any notice to Seller of any violation or alleged violation of any obligation or agreement; 6. without Buyer's prior written consent, not sell, encumber or grant any interest in the Assets or any part thereof in any form or manner whatsoever and not perform or permit any act or thing which might diminish or otherwise adversely affect Buyer's interest under this Agreement or in or to the Assets or any part thereof or which might prevent Seller's full performance of its obligations under this Agreement. (e) After the date hereof and until the Closing Date, Seller will use its best and diligent efforts to keep Buyer timely and fully informed of any developments which might cause any of the foregoing representations and warranties to be no longer accurate. (f) Subject to Seller's obligation to keep, repair, replace and maintain the Assets and to the other provisions hereof, Seller shall deliver possession of the Assets to Buyer at Closing in the same condition at the Closing as on the date hereof, excepting therefrom only ordinary interim wear and tear thereto after the date of the last required repair or replacement. (g) Not to encumber or lien or wilfully permit to be encumbered with any encumbrance, lien or other claim of right which may affect title thereto, the Assets, or other rights, appurtenances and herediments to be conveyed pursuant to this Agreement. 13.2 Between the date of the execution of this Agreement and the Closing Date, Seller shall: (a) Maintain the Property in its present condition, reasonable wear and tear, and damage by fire and casualty excepted, including without limitation, periodic and seasonal maintenance (such as maintenance of lawns, shrubbery, walks, parking areas and other common areas in the usual and customary manner). Seller shall deliver the common areas of the Property to Buyer at Closing, in broom clean condition, free and clear of all debris. (b) Operate and manage the Property in substantially the same manner as it has been operated and managed prior to the date of this Agreement, and shall further arrange and pay for the "sealing" of balconies at the Property. (c) Comply with all of the material obligations of Seller under the Tenant Leases, including the obligation to pay leasing commissions due on or before Closing and tenant fit-up costs for the Pepper, Hamilton & Scheetz lease and the Service Contracts. (d) Not enter into any Service Contracts for or on behalf of or affecting the Property unless same may be terminated upon not more than thirty (30) days prior notice or materially modify, cancel, accept surrender of, or accept any advance rental under any of the Tenant Leases, or materially modify any Service Contract, or after the end of the Due Diligence Period, execute any new lease for any portion of the Property, all without the prior written consent of Buyer. -16- Article 14 ACCESS 14.1 Buyer, its agents, employees, contractors and consultants or such person or persons as Buyer may designate, shall have the unrestricted right at all reasonable times upon prior notice to Terry Cassidy in order to enter the Property from time to time together with personnel and materials at any time after the execution of this Agreement for the following purposes: a. To make physical inspections of the subject Assets including subsurface tests, test borings, water survey, drainage tests, percolation tests, topographic surveys, environmental tests, geotechnical tests, drainage calculations and other tests, studies or surveys as Buyer deems necessary in its sole discretion; b. To drive test piles and to make surveys of the Assets showing all information normally and usually required by a surveyor; c. For architectural and engineering purposes; d. The right to show the Assets to prospective lenders or tenants at all reasonable times on reasonable notice to Seller; and e. For any other purpose or purposes in connection with satisfying or furthering any condition or contingency contained in this Agreement or for any other reason as Buyer deems necessary in its reasonable discretion. 14.2. Buyer hereby agrees to indemnify Seller and hold it harmless from and against any and all loss, cost, liability, or expense, including reasonable attorney's fees, arising out of any damage to the Assets as a result of Buyer or Buyer's agents' entry onto the Assets. Article 15 ENVIRONMENTAL MATTERS 15.1 Seller shall obtain and deliver to Buyer (and/or any designees or assignees), Buyer to pay for the sole cost and expense of DEP's Non-Applicability Application, from the DEP within forty-five (45) days from the date hereof, the ISRA approval (the "ISRA Approval") pursuant to ISRA consisting of (i) a non applicability letter, or (ii) non-qualified approval acceptable in Buyer's sole discretion, of Seller's remediation conducted pursuant to ISRA. In the event Seller is unable to deliver the ISRA Approval, Buyer shall have the option of (a) extending from time to time the period of time for Seller to obtain the ISRA Approval (during which period the Closing Date shall be postponed); or (b) terminating this Agreement at the end of such forty-five (45) day period or any extension thereof, in which case the Deposit shall be returned to Buyer and Seller shall reimburse Buyer for all survey, title examination and other costs not to exceed Twenty Thousand Dollars ($20,000). 15.2 Seller shall promptly apply for and use its best efforts to obtain the ISRA Approval as soon as possible. 15.3 Seller shall promptly, from time to time, deliver to Buyer true and complete copies of all documents, reports, affidavits, submissions and correspondence provided by Seller to DEP, if any, and all documents, reports, directives and correspondence provided by the DEP to Seller. Seller shall also promptly deliver to Buyer true and complete copies of all sampling and test results obtained from samples and tests taken at and around the Assets. Seller shall notify Buyer in advance of all meetings scheduled between Seller and DEP, and Buyer, and its designees may attend all such meetings. -17- Article 16 INDEMNIFICATION Each party hereto hereby agrees to indemnify, hold harmless and defend the other party, and such party's agents, employees, successors and assigns, from and against any and all claims, demands, damages, losses, expenses, liabilities and costs whatsoever, known or unknown, past, present or future (including, without limitation, court costs and attorneys' fees), arising out of, or resulting from or attributable to (a) any negligent or wrongful acts or omissions of the indemnifying party or its agents, employees, contractors or suppliers with respect to the Assets and (b) any breach or incorrectness of any representation or warranty made by the indemnifying party in this Agreement, subject to the limitations set forth in Paragraph 8.2 hereof. Additionally, Seller hereby agrees to indemnify, hold harmless and defend Buyer, Buyer's employees, successors and assigns, from and against any and all claims, demands, damages, losses, expenses, liabilities and costs incurred by said indemnified party by reason of said indemnified party's necessity to defend any suit, action or proceeding (administrative, judicial or otherwise) brought by a third-party against Seller or the Assets, wherein Buyer is joined as a party defendant solely by reason of its being the contract purchaser hereunder (e.g. condemnation actions, adjacent land owner actions, etc.). This Article shall survive Closing and any earlier termination of this Agreement. Article 17 AS IS Buyer hereby acknowledges that except with respect to the specific representations made by Seller under this Agreement, Buyer is purchasing the Property in "as is" condition based solely upon the investigations undertaken by Buyer and not upon the representations of any other person. Buyer shall be solely responsible for the physical condition of the Property, including, without limitation, the environmental condition of the Property, and shall not make any claim against Seller related to the physical condition of the Property, including the environmental condition of the Property (including, without limitation, any condition above, on or below the ground), Buyer hereby acknowledging that it has undertaken such investigations as it deems necessary to make its own determination with respect thereto. Article 18 MISCELLANEOUS 18.1 Date of Agreement. The date of this Agreement shall be the date upon which it is executed by the last party to sign same and it shall be the obligation of that party to insert the date and deliver the copies of the Agreement to all parties who are signatories hereto. 18.2 Waiver of Contingencies. Buyer shall have the right to waive any and all contingencies included herein for its benefit and to proceed at its own election to perform the Agreement as if the contingencies had been satisfied. 18.3 Recordation. It is understood and agreed between the parties that neither this Agreement nor any Memorandum of this Agreement shall be recorded provided a Notice of Settlement may be filed by Buyer not more than ten (10) days prior to Closing. 18.4 Applicable Law. This Agreement and the performance of this Agreement shall be governed, interpreted and construed pursuant to the laws of the State of New Jersey. 18.5 Entire Agreement. This writing constitutes the entire agreement of the parties with respect to the subject matter hereof (and, without limitation, supersedes and replaces the letter agreement dated March 21, 1996, which shall be, and is hereby, rendered null and void and of no further -18- force and effect) and may not be modified or amended, except by a written agreement specifically referring to this Agreement signed by Seller and Buyer. 18.6 Intentionally Omitted. 18.7 Assignment. This Agreement may be assigned, transferred, or conveyed (in whole or in part) by Buyer solely to an entity affiliated with and controlled by Buyer, without the prior consent of Seller, provided, however, that the original Buyer shall continue to remain jointly and severally responsible for all obligations of Buyer hereunder. Seller shall have no right to assign this Agreement (including any of Seller's obligations hereunder) without obtaining the prior written consent of Buyer. 18.8 Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors, and assigns. 18.9 Headings and Exhibits. The Article and Section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said Articles and Sections. The Exhibits referred to in this Agreement are deemed to be annexed to this Agreement and made a part hereof as though set forth in the body of this Agreement. 18.10 Counterparts and Facsimile Execution. This Agreement may be executed by facsimile transmissions and in any number of counterparts, each of which shall be deemed to be one and the same instrument. 18.11 Confidentiality. Seller and Buyer shall exercise reasonable best efforts to keep confidential the material business terms of the transaction provided for in this Agreement. Nothing in this section is intended to restrict any party from including such information, if the party reasonably believes such information is necessary, (a) in any materials or discussions prepared or conducted by it in the ordinary course of business, including reports, to its members, shareholders, officers, directors, partners, lenders, and related personnel, or others who have a need to know within the organization, (b) in making of governmental or quasi-governmental filings or returns, (c) in complying or attempting to comply with any of its obligations under this Agreement, and (d) in dealing with its attorneys, accountants, other professionals, and consultants. Further, nothing in this section shall restrict any party from any release, statement or other disclosure of any matter which is of public record, or of any matter which directly contradicts any inaccurate statement made by another party regarding the terms of this Agreement. In no event, however, shall Seller mention Brandywine Realty Trust in any press release or similar disclosure without obtaining the prior written consent of Brandywine Realty Trust. 18.12 Further Assurances. Seller and Buyer each agree to execute and deliver all other instruments and take all other action as the other party may reasonably request from time to time, after Closing, in order to effectuate the transactions provided for herein. The provisions of this Section shall survive Closing. -19- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. SELLER: UM REAL ESTATE INVESTMENT COMPANY, LLC, a New Jersey limited liability company By: /s/ Arthur W. Hicks, Jr. ------------------------------------------ Arthur W. Hicks, Jr., Manager BUYER: BRANDYWINE REALTY TRUST, a Maryland real estate investment trust By: /s/Gerard H. Sweeney ------------------------------------------ Gerard H. Sweeney, President -20- EXHIBIT "A" (Page 1 of 4) ALL THAT CERTAIN tract or parcel of land and premises, situate in the township of Cherry Hill, County of Camden and State of New Jersey, bounded and described as follows: Beginning at a point formed by the intersection of the Northeasterly line of Chapel Avenue (width varies) with the Southeasterly line of Third Avenue (50 ft. wide) and extending; thence (1) North 09 degrees 49 minutes 01 seconds East, along the Southeasterly line of Third Avenue, 142.67 feet to a point in the division line between existing Tax Lots 1 and 2, Block 176.01; thence (2) South 80 degrees 10 minutes 59 seconds East, along said division line, 183.71 feet to a concrete monument in the division line between said Tax Lots; thence (3) South 09 degrees 49 minutes 01 seconds West, along said division line, 52.21 feet to a set iron pin in the division line between said Tax Lots; thence (4) North 80 degrees 10 minutes 59 seconds West, along said division line, 29.43 feet to a found iron pin for a corner in the division line between Tax Lots 1, 2 and 3, Block 176.01; thence (5) South 09 degrees 49 minutes 01 seconds West, along the division line between Tax Lots 1 and 3, Block 176.01, 180.26 feet to a point in the Northeasterly line of Chapel Avenue, thence (6) North 53 degrees 04 minutes 12 seconds West, along said line of Chapel Avenue, 163.20 feet to an angle point in same; thence (7) North 20 degrees 28 minutes 36 seconds West, along same, l7.86 feet to the point and place of beginning BEING shown and designated as Lots 2 and 3, Block 176.01, Plate 18 on the current Tax Map of the Township of Cherry Hill. Based on a Survey of Premises dated June 27, 1994 prepared by Walter H. MacNamara Associates, Inc. EXHIBIT "A" (Page 2 of 4) ALL THAT CERTAIN tract or parcel of land and premises, situate in the Township of Cherry Hill, County of Camden and State of New Jersey, bounded and described as follows: BEGINNING at a point in the Southerly right-of-way line of New Jersey State Highway Route #38, said point being the corner formed by the intersection of the said line of New Jersey State Highway Route #38 with the Easterly right-of-way line of Third Avenue (50 feet wide), and extending; thence along the said right-of-way line of New Jersey State Highway Route #38 (1) South 80 degrees 11 minutes 00 seconds East, 19.53 feet to an angle point common with the Southwesterly right-of-way line of the access road (ramp from New Jersey State Highway Route #38 to Haddonfield Road), and extending; thence along the said right-of-way line to the access road (2) South 45 degrees 29 minutes 39 seconds East, 336.69 feet to an angle point, and extending; thence along the right-of-way line (3) South 21 degrees 17 minutes 18 seconds East, 120.52 feet to a point formed by the intersection of said access road with the Westerly right-of-way line of Haddonfield-Sorrell Horse Road (formerly Stoy Landing Road) a/k/a Camden County Route #E44 (formerly 66 feet wide), and extending; thence along the said right-of-way line of Haddonfield-Sorrell Horse Road (4) South 09 degrees 49 minutes 00 seconds West, 283.83 feet to an angle point, and extending; thence along the said right-of-way line of Haddonfield-Sorrell Horse Road (5) South 24 degrees 17 minutes 14 seconds West, 96.05 feet to an angle point, and extending; thence along the said right-of-way line of Haddonfield-Sorrell Horse Road (6) South 09 degrees 49 minutes 00 seconds West, 257.21 feet to a point of curvature, and extending; thence -continued- EXHIBIT "A" (Page 3 of 4) (7) At the point of curvature in the Westerly right-of-way line of Haddonfield-Sorrell Horse Road, curving to the right having a radius of 30.00 feet, and an arc length of 57.17 feet to a point of tangency connecting the Northeasterly right-of-way line of Chapel Avenue (50 feet wide) a/k/a Camden County #626 with the said right-of-way line of Haddonfield-Sorrell Horse Road, and extending; thence along the said right-of-way line of Chapel Avenue (8) North 61 degrees 00 minutes 11 seconds West, 108.14 feet to an angle point, and extending; thence along the said right-of-way line of Chapel Avenue (9) North 52 degrees 03 minutes 39 seconds West, 43.50 feet to a corner point common with Lot 3, block 176.01, on the Current Tax Map of the Township of Cherry Hill, and extending; thence along a line common with Lot 3, Block 176.01 (10) North 09 degrees 49 minutes 00 seconds East, 178.31 feet to a corner point common with Lots 2 and 3, Block 176.01, said tax map and lands now or formerly of Chapel Printing, and extending; thence along a line common with said Lot 2 (11) South 80 degrees 11 minutes 00 seconds East, 29.43 feet to a corner point, and extending; thence along a line common with said Lot 2 (12) North 09 degrees 49 minutes 00 seconds East, 52.21 feet to a corner point, and extending; thence along a line common with said Lot 2 (13) North 80 degrees 11 minutes 00 seconds West, 183.71 feet to a corner point common with the Easterly right-of-way line of Third Avenue (50 feet wide), and extending; thence (14) North 09 degrees 49 minutes 00 seconds East, 670.63 feet to a corner point common with the Southerly right-of-way line of New Jersey State Highway Route #38, and being the place of beginning EXHIBIT "A" (Page 4 of 4) BEING shown and designated as Lot 1, Block 176.01 Plate 18 on the Current Tax Map of the Township of Cherry Hill. ALSO BEING known as 457 Haddonfield Road. EXHIBIT "B" (Page 1 of 2) LibertyView Building 457 Haddonfield Road Cherry Hill, NJ 08002 Items Not Included in Sale of Property - ------------------------------------------------------------------------------- I - INVENTORY OF MCQUAY HEAT PUMPS - ---------------------------------- 3-TON UNITS - ----------- Model Number Serial Number G.O. Item # Open/Boxed - ------------ ------------- ----------- ---------- CCWO36AMTE 7UK2696304 923585010 Open " 7UK2696204 " Open " 7UK2697004 " Open Total Units: 3 valued at $2,000.00/each = $6,000.00* 2-1/2 TON UNITS - --------------- Model Number Serial Number G.O. Item # Open/Boxed - ------------ ------------- ----------- ---------- CCWO30AMTE 7UJ2836304** 923585040 Open and missing transformer " 7UJ2837104 " Boxed " 7UJ2836504 " Boxed " 7UJ2837204 " Boxed " 7UJ2837504 " Boxed " 7UJ2838204 " Boxed " 7UJ2835204 " Boxed " 7UJ2835504 " Boxed " 7UJ2836204 " Boxed " 7UJ2836404 " Boxed " 7UJ2836304 " Boxed " 7UJ2838804 " Boxed " 7UJ2838304 " Boxed " 7UJ2838904 " Boxed " 7UJ2838104 " Boxed " 7UJ2838704 " Boxed " 7UJ2837904 " Boxed " 7UJ2835604 " Boxed " 7UJ2839104 " Boxed Total Units: 18 boxed value at $2,330.00 = $41,940.00* Note: Defective unit not included EXHIBIT "B" (Page 2 of 2) LibertyView Building 457 Haddonfield Road Cherry Hill, NJ 08002 Items Not Included in Sale of Property - ------------------------------------------------------------------------------- I - MCQUAY HEAT PUMP INVENTORY (Continued) - ---------------------------------- 2-TON UNITS - ----------- Model Number Serial Number G.O. Item # Open/Boxed - ------------ ------------- ----------- ---------- CCWO24AMTE 7UJ2835104 923585030 Boxed " 7UJ2832404 " Boxed " 7UJ2832904 " Boxed " 7UJ2831904 " Boxed " 7UJ2832104 " Boxed " 7UJ2834004 " Boxed " 7UJ2832204 " Boxed Total Units: 7 valued at $2,228.00 = $15,596.00* - ------------------------------------------------------------------------------- GRAND TOTAL VALUE OF ALL UNITS: $63,536.00 NOTES - ----- * Prices quoted by Mr. DiMartino-Fluidics - 7/26/94 (includes valves and thermostats, but not boilerless kits. Unboxed units may need some minor parts) ** HIP has expressed an interest in purchasing some of these units and I have already supplied them with a listing of the inventory. II- JANITORIAL SUPPLIES/EQUIPMENT - ---------------------------------- Paper towels, toilet tissue, Lysol, feminine hygiene products, air freshners, trash bags Vacuum Cleaners Floor Scrubber Floor Buffer III- OFFICE EQUIPMENT - --------------------- Macintosh Powerbook 180 Laptop Computer Texas Instruments T-5032 Calculator AT&T 705 Lobby Desk Phone Xerox Combination FAX Machine/Copier with table One two-drawer wood lateral file cabinet Stapler, 3-hole punch, desk lamp Pens/Pencils EXHIBIT "C" Permitted Exceptions This policy does not insure against loss or damage (and the Company will not play costs, attorneys' fees or expenses) which arise by reason of: 4. Slope, grading and drainage rights affecting that part of premises bounding or abutting Chapel Avenue and as contained in Deed Book 3963, page 158 and Deed Book 4001, page 96. EXHIBIT "C" Permitted Exception This policy does not insure against loss or damage (and the Company will not play costs, attorneys' fees or expenses) which arise by reason of: REMOVED recorded easements, discrepancies or conflicts in boundary lines, shortage in area and encroachments which an accurate and complete survey would disclose. REMOVE filed mechanics' or materialmen's liens. 2. Utility Easement and Right of Way as contained in Deed Book 349, page 292. 3. Slope, drainage and grading rights as contained in Deed Book 2061, page 524 and Deed Book 2171, page 479. 4. Right of Way Grant as contained in Deed Book 4341, page 8. EXHIBIT "D" RENT ROLL-LibertyView of Cherry Hill (as of 3/18/96)
- ----------------------------------------------------------------------------------------------------------------------------------- Rentable Lease Term Suite S.F. Per Annual Free Rent Rent # Tenant Rent Per Sq. Ft. Lease Rent (Months) Start End Start - ----------------------------------------------------------------------------------------------------------------------------------- Existing Tenants 400 Amwest Surety 2/1/94-1/31/98 $15.34 2,294 $ 35,190 5 2/1/92 1/31/00 7/1/92 2/1/98-1/31/00 $16.34 + + 10/20/95-1/31/98 $17.00 549 9,333 10/20/95 1/31/00 ------- ---------- 2/1/98-1/31/00 $18.00 2,843 44,523 Tenant has right of Early Termination after 1/13/98 with 6 mos. prior notice with penalty per formula in lease. 410 Arthur Anderson LLP $18.00 2,457 44,226 3 (incl. last 12/1/95 2/28/01 2/1/96 month of Tenant has right of Early lease) Termination after 11/30/98 with 6 mos. prior notice with penalty per formula in lease. 230 Commonwealth Title $19.05 2,998 57,112 6 2/2/91 8/1/96 8/1/91 Insurance Co. 100 First Fidelity Bank, $14.63 7,233 105,840 0 1/1/90 12/31/99 1/1/90 N.A. 500 Pepper Hamilton $18.25 4,306 78,585 0 3/18/96 3/31/01 3/18/96 & Scheetz Tenant has right of Early Termination after 36, 42, 48 months with 6 mos. prior notice with penalty per formula in lease. 200 HIP Health Plan of NJ 1/1/93-12/31/97 $12.32 31,713 390,704 0 1/1/93 1/1/08 1/1/93 & 300 1/1/98-12/31/02 $14.32 1/1/03-12/31/07 $16.32 or 90% of FMV + + + + HIP Health Plan of NJ Coincide with 5,802 71,481 0 7/15/94 1/1/08 7/15/94 2nd Floor. Expansion original lease ------- ---------- 37,515 462,185 510 Klehr Harrison 12/1/95-5/31/97 $18.50 8,912 164,872 6 5/15/95 5/31/02 12/1/95 6/1/97-5/31/02 $19.00 Tenant has right of Early Termination after 5/31/00 with 9 mos. prior notice with penalty payment of $145,000. N/A Bell Atlantic NYNEX N/A N/A 24,000 0 3/1/96 2/28/01 3/1/96 420 Shapiro & Kreisman $16.03 8,033 128,769 3 6/30/02 9/30/97 9/30/92 + + + + Shapiro & Kreisman $16.03 3,488 55,913 0 9/10/93 9/30/97 9/10/93 ------- ---------- 11,521 184,662 520 SleepCare 9/1/95-8/31/00 $18.50 2,955 54,668 0 9/1/95 8/31/00 9/1/95 ------- ---------- SUBTOTAL-Existing 80,740 1,220,693 ------- ---------- Vacant/Raw Space 40,265 Adjustment Difference 732 ------- ---------- TOTAL 121,737 $1,220,693 ======= ==========
- ---------------------------------------------------------------------------------------------------- % Suite Share Renewal Security # Tenant Sq Ft/121,737 Options Reimbursement Deposit - ---------------------------------------------------------------------------------------------------- Existing Tenants 400 Amwest Surety 2.335% None NNN $ 2,834.00 410 Arthur Anderson LLP 2.020% Three months Full Service -- @ same rent then plus Electric One 5 Year Term @ FMV 230 Commonwealth Title 2.463% One 5 Year Term NNN -- Insurance Co. @ FMV 100 First Fidelity Bank, 5.941% One 5 Year Term NNN -- N.A. @ CPI 500 Pepper Hamilton 3.537% Two 5 Year Terms Full Service -- & Scheetz @ FMV plus Electric 200 HIP Health Plan of NJ 26.050% Three 5 Year NNN 32,558.68 & 300 Terms @ 95% of Except Janitorial FMV + HIP Health Plan of NJ -- -- -- -- 2nd Floor. Expansion 510 Klehr Harrison 7.32% One 5 Year Term Full Service 13,739.33 @ $22.00 plus Electric To be ret'd. to Tenant after 11/15/96 N/A Bell Atlantic NYNEX N/A 420 Shapiro & Kreisman 9.464% Two 5 Year Terms NNN -- + @ FMV Shapiro & Kreisman 520 SleepCare 2.427% One 5 Year Term NNN -- ------ @ FMV SUBTOTAL-Existing 66.323% ------ Vacant/Raw Space 33.075% Adjustment Difference 0.601% ------ ---------- TOTAL 100% $49,132.01 ====== ==========
Note: No commission payable except under Apex Agreement relating to Bell Atlantic NYNEX Lease. EXHIBIT "E" Service Contracts
LibertyView Building, 457 Haddonfield Road, Cherry Hill, NJ 08002 Maintenance Contract Listing - ------------------------------------------------------------------------------------------------------------------------------- Termination Contract Period Automatic Renewal Notice Date Company & Service - --------------- ----------------- ----------- ----------------- 04/01/95-03/31/96 1 Year 30 days written Arc Water Treatment Co. (by 2/29/96) HVAC water treatment Notes: Contract not yet renewed, but not cancelled either. Proposed cost for period 4/l/96-3/31/97 would be $2,052.00/year, payable monthly. 04/01/96-11/30/96 None N/A The Brickman Group, Ltd Exterior Landscaping Notes: Annual Cost: $11,800 payable in 10 equal pmts. during period 2/1 - 10/1/96 Contract renewed 1/16/96. No specific language re termination. 02/08/96-02/08/97 1 year 30 day Grinnell Fire Protection at current cost termination Annual inspection of sprinkler notice system and fire pump (by 1/8/97) Notes: Inspection performed June of each year. Annual Cost $1,120.00 Contract renewed 01/10/96 03/01/94-02/28/97 3 Years 90 days written Longview Waste Systems (by 12/1/96) Trash Dumpster 5X Week Service Notes: Annual Cost $11,709.96, payable monthly Contract signed 3/l/94 04/01/96-03/3l/97 No N/A Assn. Retarded Citizens Litter Pickup Notes: 2X month at cost of $150/month No specific provision for contract termination. Contract renewed on 3/12/96. LibertyView Building, 457 Haddonfield Road, Cherry Hill, NJ 08002 Maintenance Contract Listing - ------------------------------------------------------------------------------------------------------------------------------- Termination Contract Period Automatic Renewal Notice Date Company & Service - --------------- ----------------- ----------- ----------------- 04/01/96-03/3l/97 6 Months 30 days written Onan-Cummins Power Systems (by 2/28/97) Maintenance Agt. for Emergency Generator - 2X year Notes: Annual cost - $932.80 Inspections May/November each year 04/01/96-03/31/97 1 Year Renews 1 yr. PM Co., Inc. Automatic unless 30 day Parking Lot Sweeping - 1X/Month termination Notes: Annual Cost $1,208.40, payable notice given monthly. Contract renewed 1/22/96 (by 2/28/97) 04/01/96-03/31/97 1 Year 30 days written Universal Pest Controls, Inc. (by 2/28/97) Exterminator Service 1X/Month Notes: Annual Cost: $540, payable monthly Contract renewed 1/25/96, but can be cancelled on 30 day notice 05/01/96-04/30/97 No 30 days written Thermal Products (by 3/31/97) HVAC/Domestic Water Pump Maintenance Contract. 4X Year Normal Maintenance Annual Cost - $6,412/year, Contract renewed 3/25/96. No specific language re contract termination in event of new owner 06/01/94-05/3l/97 3 Years 90 days written Independence Communication (by 2/28/97) Muzak in Lobby (equipment/tapes) Notes: Annual Cost $1,081.20, payable monthly. Contract signed 5/2/94. Prior consent of Vendor required to transfer contract LibertyView Building, 457 Haddonfield Road, Cherry Hill, NJ 08002 Maintenance Contract Listing - ------------------------------------------------------------------------------------------------------------------------------- Termination Contract Period Automatic Renewal Notice Date Company & Service - --------------- ----------------- ----------- ----------------- 06/16/96-06/16/97 No N/A G.S. Edwards Co. Annual inspection of fire panel/pull stations/smoke detectors. Notes: Landlord reqd. to hire lift chair. (Does not include HIP equipment) Annual Cost - $565.00 Contract renewed 3/14/96. 04/14/96-04/13/98 No 30 days written Amtech (by 3/14/98) Elevator Maintenance 2X/month Notes: Annual Cost - $9.025.00, payable monthly. Contract renewed 3/18/96 07/03/95-07/02/98 1 Year 30 days written Robinson Alarm Company (by 06/01/98) Sprinkler/Fire Panel Monitoring Notes: Annual Cost $360, payable quarterly. Contract signed 4/27/95. Consent of vendor reqd. to transfer contract. 03/08/94-03/01/99 1 Year 30 days written Security Link (formerly Nat'l Guardian) (by 1/29/99) Elevator Phone monitoring Notes: Annual Cost $267.12 payable qtrly. Penalty for contract termination. By: Terry Cassidy - 3/28/96
EX-99.2 3 FIRST AMENDMENT TO PURCHASE Exhibit 99.2 First Amendment to Purchase and Sale Agreement between UM and the Trust FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT This First Amendment made this 30th day of May, 1996, by and between UM REAL ESTATE INVESTMENT COMPANY, LLC ("Seller") and BRANDYWINE REALTY TRUST ("Buyer"). Background Seller and Buyer are parties to that certain Purchase and Sale Agreement made as of the 28th day of March, 1996 (the "Agreement") with respect to the sale of property known as Block 176.01, Lots 1, 2 and 3 on the official tax map of the Township of Cherry Hill together with all improvements thereon (the "Property"). Buyer has requested that Seller extend the Closing Date and, to the extent provided herein, the Due Diligence Period, and Seller has agreed to do so pursuant to the terms and conditions hereafter set forth. NOW, THEREFORE, Buyer and Seller, for and in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, intending to be legally bound, do hereby agree that notwithstanding anything to the contrary contained in the Agreement: 1. Definitions. All defined terms herein shall have the meaning ascribed to them under the Agreement unless specifically provided herein to the contrary. 2. Deposit. (a) Article 2.1(a) is amended by adding thereto the following: In the event Closing does not occur by June 14, 1996, unless due to a default by Seller or due to Buyer's termination of the Agreement as permitted under Article 3 of this First Amendment, the Title Company shall continue to hold the Ninety Thousand Dollars ($90,000) held as Deposit, such sum to become non-refundable on June 14, 1996 and Buyer shall concurrently pay to the Title Company by June 14, 1996 by certified check, bank check or wire transfer, an additional One Hundred Fifty Thousand Dollars ($150,000) which shall become part of the Deposit and thereupon, the Deposit shall be non-refundable. Buyer's failure to pay such additional $150,000 by the above time period to Seller shall constitute a default under the Agreement. Until 5 p.m. on June 14, 1996, only $10,000 of the Deposit pursuant to subparagraph (b) below shall be non-refundable; thereafter, unless Seller defaults hereunder, the remaining Two Hundred Forty Thousand Dollars ($240,000) shall become non-refundable. (b) Ten Thousand Dollars ($10,000) of the Deposit currently held by the Title Company shall be deemed non-refundable as of this date and shall be immediately paid by the Title Company to Seller. Seller shall be entitled to -1- retain such amount in the event Closing does not occur for any reason (including Buyer's termination of the Agreement as permitted under the Agreement or this First Amendment) unless Seller defaults under the Agreement, in which event Seller shall reimburse such $10,000 to Buyer. In the event Buyer terminates the Agreement as permitted under Article 3 of this First Amendment, the remaining Ninety Thousand Dollars ($90,000) of the Deposit shall be returned by the Title Company to Buyer if such date is on or before June 14, 1996; however, if Seller defaults prior to Closing, the entire Deposit, including the additional $150,000 and interest shall be returned to Buyer. 3. Due Diligence. Article 3 of the Agreement is amended by adding thereto the following: Buyer acknowledges that it has completed all of the investigations which it is entitled to undertake pursuant to Article 3 of the Agreement with the exception of those specific items set forth on Schedule 1 attached hereto and made a part hereof (the "Remaining Due Diligence Items"). Buyer shall, from and after the date hereof, no longer have the right to terminate the Agreement for any reason other than (i) Buyer's good faith determination not to proceed based on the results of one or more of the Remaining Due Diligence Items or (ii) Buyer's good faith determination that it is unable to obtain satisfactory financing to acquire the Property. The $50,000 addition to the Deposit required under Article 2.1(a) of the Agreement must be paid by Buyer to the Title Company by 5 p.m. E.D.S.T. on May 30, 1996 notwithstanding the failure of Buyer to have completed the Remaining Due Diligence Items. Such additional $50,000 shall be governed by the terms of amended Article 2.1. Buyer shall have the right to terminate this Agreement solely as a result of Buyer's good faith determination that is not satisfied with the result of one or more of the Remaining Due Diligence Items or Buyer's good faith determination that it is unable to obtain satisfactory financing to acquire the Property, by notice to Seller not later than 5 p.m. on June 14, 1996 following which (provided Buyer is not then in default hereunder), the Title Company shall return the remaining $90,000 of the Deposit to Buyer and thereafter neither party shall have any further rights or obligations under the Agreement, except for those which by their terms survive termination of the Agreement. If Buyer does not terminate the Agreement as permitted under this Article 3 of this First Amendment, the entire Deposit (e.g., $250,000) shall become non-refundable so long as Seller does not default hereunder. 4. Closing. Article 4 of the Agreement shall be amended to provide that Closing shall be held on or before July 19, 1996, at the time and place set forth in the Agreement. -2- 5. Signatures. This First Amendment may be executed in one or more counterparts, each of which shall be deemed an original and part of one and the same document. Telefax signatures shall be deemed the equivalent of original signatures. Except to the extent specifically set forth herein, the terms and conditions of the Agreement are hereby ratified and confirmed. In the event of any conflict between the terms of the Agreement and the terms of this First Amendment, the terms of this First Amendment shall prevail. IN WITNESS WHEREOF, the parties hereto have set forth their hands and seals the day and year first above written. SELLER: UM REAL ESTATE INVESTMENT COMPANY, LLC, a New Jersey limited liability company By: ------------------------------------------ Arthur W. Hicks, Jr., Manager BUYER: BRANDYWINE REALTY TRUST, a Maryland real estate investment trust By: XXXXXXXXXXX ------------------------------------------ 50524-3 May 30, 1996 -3- Schedule 1 Remaining Due Diligence Items 1. Identification of water pressure problem and cause of the sink hole on the Property. Remedy and cost allocation satisfactory to Buyer. 2. Finalization and approval of survey by Buyer. 3. Review and approval of ISRA non-applicability letter (Seller to deliver per Article 15.1 of the Agreement). 4. Review and approval of ISRA No-Further Action Letter regarding the U.S.T. previously located on the Property. -4- EX-99.3 4 EXHIBIT 99.3 Exhibit 99.3 Second Amendment to Purchase and Sale Agreement between UM and the Trust SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT This Second Amendment to Purchase and Sale Agreement is made this 14th day of June, 1996, by and between UM Real Estate Investment Company, LLC ("Seller") and Brandywine Realty Trust ("Buyer"). Background Seller and Buyer are parties to that certain Purchase and Sale Agreement made as of the 28th day of March, 1996 and that certain First Amendment to Purchase and Sale Agreement made as of the 30th day of May, 1996 (collectively, the "Agreement") with respect to the sale of property known as Block 176.01, Lots 1, 2 and 3 on the official tax map of the Township of Cherry Hill together with all improvements thereon (the "Property"). Buyer has requested that Seller modify certain provisions to the Agreement and Seller has agreed to do so pursuant to the terms and conditions hereafter set forth. NOW, THEREFORE, Buyer and Seller, for and in consideration of the mutual covenants herein and other good and valuable consideration, the receipt of which is hereby acknowledged, intending to be legally bound, do hereby agree that notwithstanding anything to the contrary contained in the Agreement: 1. Definitions. All defined terms herein shall have the meaning ascribed to them under the Agreement unless specifically provided herein to the contrary. 2. Deposit. a. Article 2.1(a) is amended and revised as follows: Notwithstanding the terms as stated in the Agreement, Buyer and Seller hereby acknowledge and agree that Buyer has delivered to the Title Company the initial One Hundred Thousand Dollar ($100,000) Deposit and the additional One Hundred Fifty Thousand Dollar ($150,000) Deposit as required by the Agreement. Unless (i) Seller defaults, (ii) Seller fails to address item 1 on Schedule 1 on or before June 28, 1996 in a mutually satisfactory manner or (iii) Bank (as hereinafter defined) fails to fund at Closing a loan in the amount of $8,480,000 in accordance with the letters dated June 5, 1996 and June 14, 1996 attached hereto as Exhibit 2(a) (collectively, the "UJB Letters") through no fault or affirmative action of Buyer, all of the aforesaid Deposit shall be held by the Title Company and is deemed to be non-refundable as of the date hereof. If either of events (i) or (ii) set forth herein occurs hereunder, the entire Deposit shall be refunded to Buyer in accordance with Section 12.1 of the Agreement. In addition to and not by way of limitation of the foregoing, if event (ii) occurs hereunder, Ten Thousand Dollars ($10,000) of the Deposit shall be deemed to be non-refundable, and, thereafter, the remaining Two Hundred Forty Thousand Dollars ($240,000) shall be refunded to Buyer. 3. Due Diligence. Article 3 is amended by adding thereto the following: Notwithstanding the terms as stated in the Agreement, Buyer acknowledges that it has completed all of its investigations which it is entitled to undertake pursuant to Article 3 of the Agreement with the exception of that specific item set forth on Schedule 1 attached hereto and made a part hereof (the "Remaining Due Diligence Item"). Buyer and Seller further acknowledge and agree that (a) Buyer has made a good faith effort to obtain financing to acquire the Property from United Jersey Bank, Seller's current lender (the "Bank"), (b) Bank has advised Buyer orally that such UJB Letters have been approved by its Credit Committee, and (c) Seller will derive a benefit from Buyer's utilization of the Bank. Buyer shall, from and after the date hereof, no longer have the right to terminate the Agreement for any reason other than (i) Buyer's good faith determination not to proceed based on the results of the Remaining Due Diligence Item or (ii) Bank's inability to deliver a formal UJB commitment letter (the "UJB Commitment") to Buyer on or before June 24, 1996 through no fault or affirmative action of Buyer. Buyer shall have the right to terminate the Agreement solely as a result of Buyer's good faith determination that it is not satisfied with the result of the Remaining Due Diligence Item on or before June 28, 1996 or if Bank does not deliver the UJB Commitment on or before June 24, 1996. If Buyer terminates this Agreement for either of events (i) or (ii) herein and Seller is not in default hereunder, the Title Company shall disburse the Deposit as follows: (A) Two Hundred Forty Thousand Dollars ($240,000) to Buyer and (B) Ten Thousand Dollars ($10,000) to Seller; provided, however, if Seller is in default hereunder, the aforesaid Ten Thousand Dollars ($10,000) shall be returned to Buyer; and, provided, further, thereafter, neither party shall have any further rights or -2- obligations under the Agreement, except for those which by their terms survive termination of the Agreement. Subject to the last two sentences of Section 2.1(a) and the condition set forth in Section 4.2(d)(2) regarding the refundability of the Deposit, if Buyer does not terminate this Agreement as permitted under this Article 3 of this Second Amendment, the entire Deposit (e.g., $250,000) shall be non-refundable. 4. Closing. Section 4.2(d)(2) is hereby amended and restated as follows: 2. All documents, instruments and assurances required to be delivered on or before Closing to Buyer shall have been duly delivered in form, substance and execution satisfactory to Buyer in its reasonable discretion, Bank shall fund at Closing the loan in the amount of $8,480,000 in accordance with the UJB Letters attached hereto as Exhibit 2(a), and Seller shall deliver an acceptable ISRA non-applicability letter for the Property and an acceptable ISRA No-Further Action Letter regarding the U.S.T. previously located on the Property. Buyer and Seller acknowledge and agree that if Buyer affirmatively or intentionally causes the Bank to fail to fund the loan at Closing, such funding shall not be a condition to Closing of this transaction. 5. Additional Conditions to Closing. In addition to the conditions set forth in the Agreement, Buyer and Seller acknowledge and agree that as a condition to Closing: (i) the lease by and between Seller and United Medical or a similar subsidiary for space in the Property shall be terminated and (ii) United Jersey Bank shall deliver the Release of the Guaranty of John Aglialoro which Guaranty was executed in connection with the Property. 6. Signatures. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original and part of one and the same document. Telefax signatures shall be deemed the equivalent of original signatures. Except to the extent specifically set forth herein, the terms and conditions of the Agreement are hereby ratified and confirmed. In the event of any conflict between the terms of the Agreement and the terms of this Second Amendment, the terms of this Second Amendment shall prevail. -3- IN WITNESS WHEREOF, the parties hereto have set forth their hand and seals the day and year first above written. SELLER: BUYER: UM REAL ESTATE INVESTMENT BRANDYWINE REALTY TRUST, a COMPANY, LLC, a New Jersey Maryland real estate company investment trust By: Arthur Hicks, Jr. By: Gerard H. Sweeney ------------------------ ------------------------- Arthur Hicks, Jr. Gerard H. Sweeney Manager President -4- Schedule 1 Remaining Due Diligence Item 1. Identification of water pressure problem and cause of the sink hole on the Property. Remedy and cost allocation satisfactory to Buyer. The parties acknowledge and agree that this problem must be remedied to the reasonable satisfaction of the parties on or before June 28, 1996. -5- UNITED United Jersey Bank JERSEY BANK 1800 Chapel Avenue West P.O. Box 5032 Cherry Hill, NJ 08002 609 665-4800 June 14, 1996 Mr. Gerard H. Sweeney President and CEO Brandywine Realty Trust Two Greentree Centre - Suite 200 Marlton, New Jersey 08053 Re: Libertyview Building, Cherry Hill, New Jersey Dear Gerry: This letter is to conform that United Jersey Bank's Real Estate Loan Committee has approved your request for acquisition financing on the Libertyview Building. The general loan terms approved by the Committee are as stated in the executed Letter Of Intent dated June 5, 1996 with the exception of (1) Guarantor Covenants of (a) Stated Net Worth not less than $6.3MM, and (b) FPO pay-out ratio not greater than 110%, and (2) the prohibition against secondary financing has been waived, solely as it relates to the $1MM of deferred purchase price. United Jersey Bank will require review and approval of these subordinate debt documents prior to closing. I look forward to working with you on this transaction and please call me at 609-486-4678 if you have any questions. A commitment letter will be forthcoming shortly. Sincerely, /s/ Amy L. Brown - ----------------------------------- Amy L. Brown Vice President and Regional Manager cc: Michael L. Brown, SVP UNITED United Jersey Bank JERSEY BANK 1800 Chapel Avenue West P.O. Box 5032 Cherry Hill, NJ 08002 609 665-4800 June 5, 1996 Brandywine Realty Trust Mr. Gerard H. Sweeney President and CEO Two Greentree Centre - Suite 100 Marlton, New Jersey 08053 Re: Libertyview Building, Cherry Hill, New Jersey Dear Gerard: This letter will acknowledge that you have submitted a loan request to United Jersey Bank (UJB) for the above referenced project on the following terms and conditions: Borrower: A single asset LLC, to be established. Ownership: 100% by Brandywine Realty Trust. Loan Amount: $9,777,140 as follows: "Permanent Loan" : $8,480,000 - via the Borrower's assumption of UJB's existing first mortgage with UM Real Estate Investment Corporation (UM). Such mortgage to be modified and increased by approximately $1,180,000 (existing mortgage balance of approximately $7.3 million). "Earnout Loan": $1,297,140 - These funds are to be used exclusively for tenant fit-out and leasing commission costs for the 40,782 square feet of currently vacant space. The loan will be funded as follows: (a) maximum of $30 per square foot for tenant fit-out costs on the vacant space located on floors 6 and 7, totaling 35,417 square feet. (b) maximum of $15 per square foot for tenant fit-out costs on the remaining vacant square feet, totaling 5,365 square feet. (c) market leasing commissions for the total 40,782 square feet currently vacant, not to exceed $3.78 per square foot. (d) base rent on these new leases is to be in an amount not less than $18 per square foot, full service, plus electric. (e) all new leases are subject to bank approval and are to be executed on a bank approved standard lease form. Guarantor: Brandywine Realty Trust will guarantee $3 million of the loan. In addition, the Trust will guarantee lien free completion of the improvements. Maturity Date: 1/1/99 (the current maturity date of UJB's existing mortgage with UM) Interest Rate: "Permanent Loan": 8% fixed (current interest rate in UJB's existing mortgage with UM). Principal and Interest payable monthly as billed. "Earnout Loan": Floating at one hundred basis points above UJB's Prime Rate Prepayment Penalty: 1% prepayment penalty on the "Permanent Loan" (the current prepayment penalty in UJB's existing mortgage with UM). There will be no prepayment penalty on the "Earnout Loan". Fees: $100,000; payable at loan closing Amortization: "Permanent Loan": 22.5 years (the approximate remaining amortization in UJB's existing mortgage with UM) "Earnout Loan": None Security: (a) Title insured first mortgage lien on the subject property consisting of the land and improvements built thereon, located at 457 Haddonfield Road, Cherry Hill, Camden County, New Jersey (Block 176.01, Lot l). (b) Title insured first mortgage lien on the approximately 3/4 acre land parcel located at 1700 Chapel Avenue, Cherry Hill, Camden County, New Jersey (BLock 176.01 Lots 2 & 3). (c) Assignment of all leases and rents presently in effect or hereafter executed. Conditions: 1) Subject to Bank review and approval of a Phase I environmental report. 2) Subject to Bank review and approval of a satisfactory appraisal. Value not to exceed 80% on as "As Is" basis and 75% on an "As Stabilized" basis. 3) Subject to Bank review and approval of an engineering report on the subject property. 4) Quarterly audited financial statements of the Guarantor and annual financial statements of the Borrower. Annual tax returns for both the Borrower and the Guarantor. 5) Any monies advanced under the "Earnout Loan" shall be subject to a satisfactory inspection by a bank engineer. Such inspection costs to be borne by the Borrower. 6) All costs of the transaction, e.g. appraisal engineering, environmental, title and legal are to be paid by the Borrower. 7) No secondary financing permitted. 8) The loan is not assumable. If you desire to apply for a loan on substantially the same terms and conditions as set forth above, please indicate so below and return this letter together with a good faith deposit of $20,000 within ten days of the date hereof. Upon receipt of the executed letter and good faith deposit within the time frame specified above, we will undertake formal consideration of the proposed loan and, if otherwise satisfactory, submit same to our loan committee and/or Board of Directors for their consideration. If your loan is approved, we will issue a formal commitment letter which will set forth the terms and conditions under which the Bank will be prepared to make the loan. If the principal business terms and conditions of the commitment are substantially the same as the terms and conditions outlined herein, the good faith deposit will be considered earned and will be credited towards the balance of the commitmemt fee. If the principal business terms and conditions of our commitment letter are not substantially the same, and you do not accept the commitment, or if we choose not to accept the commitment for any reason, we will return the good faith deposit less any expenses incurred by the Bank to third parties. If the Bank declines the loan for any reason whatsoever, it shall have no liability except for the return of the good faith deposit under the circumstances set forth above. If you have any questions regarding the above, please feel free to call me at 609-486-3678. Thank you for this opportunity and we look forward to our growing business relationship. Sincerely, /s/ Amy L. Brown - -------------------------------------- Amy L. Brown Vice President and Regional Manager CC: Michael L. Brown, SVP APPROVED AND ACCEPTED THIS 7TH DAY OF JUNE, 1996 By: Gerard H. Sweeney --------------------------------------- EX-99.4 5 THIRD AMENDMENT TO PURCHASE Exhibit 99.4 Third Amendment to Purchase and Sale Agreement between UM and the Trust. THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT This Third Amendment to Purchase and Sale Agreement is made this 24th day of June, 1996, by and between UM Real Estate Investment Company, LLC ("Seller") and Brandywine Realty Trust ("Buyer"). Background Seller and Buyer are parties to that certain Purchase and Sale Agreement made as of the 28th day of March, 1996, that certain First Amendment to Purchase and Sale Agreement made as of the 30th day of May, 1996 and that certain Second Amendment to Agreement of Sale dated June 14, 1996 (collectively, the "Agreement") with respect to the sale of property known as Block 176.01, Lots 1, 2 and 3 on the official tax map of the Township of Cherry Hill together with all improvements thereon (the "Property"). Buyer has requested that Seller modify certain provisions to the Agreement and Seller has agreed to do so pursuant to the terms and conditions hereafter set forth. NOW, THEREFORE, Buyer and Seller, for and in consideration of the mutual covenants herein and other good and valuable consideration, the receipt of which is hereby acknowledged, intending to be legally bound, do hereby agree that notwithstanding anything to the contrary contained in the Agreement: 1. Definitions. All defined terms herein shall have the meaning ascribed to them under the Agreement unless specifically provided herein to the contrary. 2. Deposit. Article 2 is amended by revising the "June 28, 1996" date set forth therein to "June 25, 1996". 3. Due Diligence. Article 3 is amended by revising the "June 24, 1996" date and the "June 28, 1996" set forth therein to "June 25, 1996." The parties acknowledge and agree that Buyer shall have until 5:00 p.m. on June 25, 1996 to exercise its right to terminate the Agreement for either of (i) its non receipt of the UJB Commitment or (ii) the Remaining Due Diligence Item. 4. Signatures. This Third Amendment may be executed in one or more counterparts, each of which shall be deemed an original and part of one and the same document. Telefax signatures shall be deemed the equivalent of original signatures. Except to the extent specifically set forth herein, the terms and conditions of the Agreement are hereby ratified and confirmed. In the event of any conflict between the terms of the Agreement and the terms of this Third Amendment, the terms of this Third Amendment shall prevail. IN WITNESS WHEREOF, the parties hereto have set forth their hand and seals the day and year first above written. SELLER: BUYER: UM REAL ESTATE INVESTMENT BRANDYWINE REALTY TRUST, a COMPANY, LLC, a New Jersey Maryland real estate company investment trust By: /s/ Arthur Hicks, Jr. By: /s/ Gerard H. Sweeney ------------------------- ---------------------------- Arthur Hicks, Jr. Gerard H. Sweeney Manager President -2- EX-99.5 6 NOTE Exhibit 99.5 Promissory Note in the principal amount of $1,000,000 from the Trust to UM NOTE AMOUNT: $1,000,000 Haddonfield, New Jersey July 19, 1996 FOR VALUE RECEIVED, BRANDYWINE REALTY TRUST, a Maryland real estate investment trust, whose address is Two Greentree Center, Suite 100, Marlton, New Jersey 08053 ("Maker"), hereby promises to pay to the order of UM REAL ESTATE INVESTMENT COMPANY, LLC, a New Jersey limited liability company, with offices at 56 Haddon Avenue, Haddonfield, New Jersey 08033 ("Payee"), the principal sum of ONE MILLION DOLLARS ($1,000,000) (the "Loan"), together with interest on the outstanding balance thereof at the per annum rate hereafter set forth. 1. Principal and interest, if any, shall be payable at the aforesaid office of Payee, or such other place as the holder of this Note may designate, in the following manner: (a) Except as otherwise provided for in the Event of Default, the Note will not bear interest during the term hereof. (b) Maker shall make six (6) payments of principal as follows, unless Payee shall demand immediate payment in accordance with the terms of this Note: July 31, 1997 $100,000 August 31, 1997 $100,000 September 30, 1997 $100,000 October 31, 1997 $100,000 November 30, 1997 $100,000 December 31, 1997 $500,000 (c) The entire unpaid principal together with accrued but unpaid interest thereon and all other sums due under this Note are due on December 31, 1997 (the "Maturity Date") which date is of the essence. THIS NOTE IS PAYABLE IN FULL AT THE MATURITY DATE. PAYEE IS UNDER NO OBLIGATION TO REFINANCE THE LOAN OR EXTEND THE TIME FOR PAYMENT AT THAT TIME. 2. The obligation secured hereby may be prepaid in full or in part, at any time, without penalty. 3. All payments, including any prepayment, shall be in lawful money of the United States of America in immediately available funds and shall be applied first to unpaid, earned fees, then to delinquent escrows, then to accrued interest, and lastly, to principal outstanding. 4. This Note is secured by (1) a subordinated (second) Mortgage and Security Agreement of even date herewith (the "Mortgage"), covering certain land and premises located at the corner of Haddonfield Road and Chapel Avenue, Cherry Hill Township, Camden County, New Jersey, as more particularly described in the Mortgage (together, the "Mortgaged Property"), (2) a second priority security interest in certain personal property located upon the Mortgaged Property and other collateral described in UCC-1 Financing Statements; and (3) a subordinated collateral assignment of rents and leases arising out of the Mortgaged Property. Any failure by Maker to comply with the terms, covenants or conditions of the foregoing documents or any other document executed by Maker in connection with the Loan (collectively, the "Loan Documents") shall, upon the elapsing of any applicable notice and/or grace period, without cure, automatically constitute an Event of Default under this Note, and all of the provisions contained in the Loan Documents by Maker to Payee to secure the indebtedness set forth herein are hereby incorporated by this reference thereto as if the same were set forth herein in detail. 5. The occurrence of one or more of the following, after the expiration of all applicable notice and cure periods, if any, (an "Event of Default"), at the option of Payee, shall constitute a default by Maker under this Note: (a) If Maker shall fail to make any payment when it is due (provided that Payee agrees not more than once during any twelve (12) month period during the term of this Note to give Maker notice of such failure, and allow Maker five (5) days after the giving of such notice to cure such failure, prior to same being an Event of Default); (b) If any certification, warranty, or representation made or hereafter made by Maker to Payee should prove to be false, incorrect, incomplete or misleading; and/or (c) An Event of Default shall occur under the Mortgage and/or any of the other Loan Documents. Upon the occurrence of an Event of Default, subject to a certain Subordination Agreement of even date herewith between Payee and Summit Bank, Payee may, at its option, declare the entire unpaid 1 principal balance of this Note together with interest accrued thereon and all other sums due or owed by Maker hereunder, or under any of the other Loan Documents, to be due and payable immediately, together with reasonable fees for legal counsel and for collection, all of which sums shall bear interest (effective upon such Event of Default) at the rate which is four (4.0%) percent above the domestic "Prime Rate" as published in the Wall Street Journal from time to time under the heading "Money Rates", and payment of the same may be enforced and recovered by the entry of judgment of this Note and the issuance of execution thereon. If any payment due hereunder shall be delinquent for more than ten (10) days after such payment is due and payable, Maker shall pay to Payee a late charge equal to five percent (5%) of such installment. The right to require a late charge is in addition to and not by way of limitation of any other rights and remedies which Payee may have. 6. The remedies of Payee provided herein and in the Mortgage and all of the other Loan Documents shall be cumulative and concurrent, and may be pursued singly, successively and together at the sole discretion of Payee, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release of the same. 7. Maker (and all endorsers, sureties and guarantors) waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Note. Liability hereunder shall be unconditional and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, unless same is in writing and signed by an authorized officer of Payee. 8. It is the intention of the Maker and Payee to conform strictly to the usury laws from time to time in force, and all agreements between Maker and Payee, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or agreed to be paid to Payee or the holder hereof, or collected by Payee or such holder, for the use, forbearance or detention of the money to be loaned hereunder or otherwise, or for the payment or performance of any covenant or obligation contained herein or in the Mortgage and Security Agreement or any of the other Loan Documents, or in any other document evidencing, securing or pertaining to the indebtedness evidenced hereby, exceed the maximum amount permissible under applicable usury laws. If under any circumstances whatsoever fulfillment of any provision hereof or of the Mortgage or any of the other Loan Documents, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity; and if under any circumstances Payee or any other holder hereof shall ever receive an amount deemed interest, by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the principal amount owing hereunder or to other indebtedness secured by the Mortgage and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and other indebtedness, the excess shall be deemed to have been a payment made by mistake and shall be refunded to Maker or to any other person making such payment on Maker's behalf. All sums paid or agreed to be paid to the holder hereof for the use, forbearance or detention of the indebtedness of Maker evidenced hereby, outstanding from time to time shall, to the extent permitted by applicable law, be amortized, pro-rated, allocated and spread from the date of disbursement of the proceeds of this Note until payment in full of such indebtedness so that the actual rate of interest on account of such indebtedness is uniform through the term hereof. The terms and provisions of this paragraph shall control and supersede every other provision of all agreements between Payee and Maker and any endorser or guarantor of this Note. 10. Except as hereinafter set forth, Maker shall not have any personal liability for the payment or performance of any obligations hereunder and in the event of a default hereof, Payee will look solely to the Mortgaged Property and the rents, issues and profits thereof and any other collateral specifically pledged, assigned or granted by Maker as security herefor, and any judgment obtained against Maker shall so note by its terms or as otherwise permissible by law. Notwithstanding the foregoing, in the event of a default under this Note, this obligation shall be recourse to the Maker in an amount which is the difference between $3,000,000 and that portion of the recourse obligation from Maker to Summit Bank (pursuant to a Promissory Note in an amount not to exceed $9,777,240 of even date herewith (the "Summit Note")) which is not credited by Summit Bank under the Summit Note upon an event of default (as defined under the Summit Note) by Maker under the Summit Note (e.g., if Summit Bank utilizes $2,000,000 of the recourse amount as a portion of or as all of its remedy under the Summit Note, as the case may be, after an event of default under the Summit Note, this Note to Payee shall be recourse in the amount of $1,000,000). In no event, however, shall (i) this obligation be recourse to the Maker in an amount greater than the total amount owing by Maker under this Note, nor (ii) the total recourse to Maker pursuant to this Note and the Summit Note exceed $3,000,000. 11. This Note and the performance of Maker's obligations hereunder shall be governed by the laws of the State of New Jersey. 12. The words "Payee" and "Maker" whenever occurring herein shall be deemed and construed to include the respective successors and assigns of Payee and Maker. 13. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ANY SUIT, ACTION OF OTHER LEGAL PROCEEDING ARISING OUT OR IN CONNECTION WITH THIS NOTE SHALL BE BROUGHT IN THE COURTS OF RECORD OF THE STATE OF NEW JERSEY OR THE COURTS OF THE UNITED STATES LOCATED IN THE STATE OF NEW JERSEY. THE PARTIES CONSENT TO JURISDICTION 2 OF EACH SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND WAIVE ANY OBJECTION TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS. 14. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION BETWEEN PAYEE AND MAKER ARISING OUT OF OR IN CONNECTION WITH THE LOAN AND ANY OF THE DOCUMENTS EVIDENCING THE LOAN OR EXECUTED IN CONNECTION THEREWITH BY EITHER PARTY. EACH PARTY ACKNOWLEDGES THE IMPORTANCE OF THIS RIGHT AND MAKES A KNOWING WAIVER THEREOF IN CONSIDERATION OF THE WILLINGNESS OF MAKER TO MAKE THE LOAN TO PAYEE. IN WITNESS WHEREOF, Maker has duly executed this Note the day and year first above mentioned. WITNESS: BRANDYWINE REALTY TRUST, a Maryland real estate investment trust XXXXXXXXXXXXXXXX By: /s/ Gerard H. Sweeney - ----------------- ---------------------------------- Gerard H. Sweeney, President 3 EX-99.6 7 MORTGAGE, SECURITY AGREEMENT Exhibit 99.6 Subordinated Mortgage from the Trust to UM MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING THIS MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING (this "Mortgage") is made the 19th day of July, 1996, between BRANDYWINE REALTY TRUST, a Maryland real estate investment trust, with offices at Two Greentree Center, Suite 100, Marlton, New Jersey 08053 ("Mortgagor"), and UM REAL ESTATE INVESTMENT COMPANY, LLC, a New Jersey limited liability company, with offices at 56 Haddon Avenue, Haddonfield, New Jersey 08033 ("Mortgagee"). W I T N E S S E T H THAT Mortgagor has executed and delivered to Mortgagee its Note bearing even date herewith (the "Note"), wherein Mortgagor promises to pay to Mortgagee the principal sum of One Million and 00/100 ($1,000,000.00) Dollars, lawful money of the United States of America, advanced or to be advanced by Mortgagee to Mortgagor, with interest, if any, thereon, at the rate and times, in the manner and according to the terms and conditions specified in the Note, all of which are incorporated herein by reference, such loan transaction being referred to herein as the "Loan". NOW, THEREFORE, in consideration of the indebtedness, and as security for payment to Mortgagee of the principal with interest, and all other sums provided for in the Note and in this Mortgage, according to their respective terms and conditions and for performance of the agreements, conditions, covenants, provisions and stipulations contained herein, Mortgagor does, subject to the rights of Summit Bank under the Subordination Agreement between Mortgagee and Summit Bank of even date herewith (the "Subordination Agreement"), hereby grant, convey, assign and mortgage unto Mortgagee all of its interest in and agrees that Mortgagee shall have a security interest in, all that, certain parcel of real estate situate in the Township of Cherry Hill, County of Camden and State of New Jersey (the "State"), as more particularly described in Exhibit "A" attached hereto and made a part hereof (the "Land"), TOGETHER WITH: (1) Any and all buildings and improvements erected or hereafter erected thereon; (2) Any and all fixtures, appliances, machinery and equipment of any nature whatsoever, and other articles of personal property at any time now or hereafter installed in, attached to or situated in or upon the Land or the buildings and improvements to be erected thereon, or used or intended to be used in connection with the Land, or in the operation of the buildings and improvements, plant, business or dwelling situate thereon, whether or not the personal property is or shall be affixed thereto or deemed to be a fixture and all renewals or replacements thereof or articles in substitution therefor, including the cash and non-cash proceeds thereof; (3) All building materials, fixtures, building machinery and building equipment delivered on site to the Land during the course of, or in connection with, construction of the buildings and improvements thereon, all of which shall be deemed to be included within the Mortgaged Property (as hereinafter defined) immediately upon the delivery thereof to the Mortgaged Property; (4) Any and all tenements, hereditaments and appurtenances belonging to the Land or any part thereof or intended so to be in any way appertaining thereto, and all streets, alleys, passages, ways, water courses and all easements and covenants now existing or hereafter created for the benefit of Mortgagor or any subsequent owner or tenant of the Land or any part thereof and all rights to enforce the maintenance thereof, and all other rights, liberties and privileges of whatsoever kind or character, and the reversions and remainders, income, rents, issues and profits arising therefrom, and all the estate, right, title, interest, property, possession, claim and demand whatsoever, at law or in equity, of Mortgagor in and to the Land or any part thereof; (5) All leases, contracts of sale and other agreements affecting the use or occupancy of all or any part of the Land, all deposits paid thereunder and all rights of Mortgagor to payment thereunder; (All of the above-mentioned Land, improvements, personal property and other property and interests are sometimes collectively referred to herein as the "Mortgaged Property"); and (6) All of Mortgagor's right, title and interest now or hereafter acquired by Mortgagor in and to all leases, agreements of sale and other agreements in connection with all or any part of the Mortgaged Property (but without any of the obligations thereunder), and the rents, issues and profits payable therefrom. TO HAVE AND TO HOLD on a subordinated (second) basis the Mortgaged Property hereby conveyed or mentioned and intended so to be, unto Mortgagee, to its own use forever. PROVIDED ALWAYS, and this instrument is upon the express condition that, if Mortgagor pays to Mortgagee the principal sum mentioned in the Note, the interest thereon and all other sums payable by Mortgagor to Mortgagee as are secured hereby, in accordance with the provisions of the Note and this 1 Mortgage, at the times and in the manner specified, without deduction, fraud or delay, and Mortgagor performs and complies with all the agreements, conditions, covenants, provisions and stipulations contained herein and in the Note and all of the other documents executed by Mortgagor in connection therewith (together, the "Loan Documents"), then this Mortgage and the estate hereby granted shall cease and become void and Mortgagee shall release the same, at the cost and expense of Mortgagor. THIS MORTGAGE is a second purchase-money mortgage, subject and subordinate solely to that certain first mortgage (the "First Mortgage") dated of even date herewith, in the principal amount of $9,777,140 and given by Mortgagor in favor of Summit Bank. MORTGAGOR COVENANTS, subject to the First Mortgage and that certain Subordination Agreement, among Mortgagor, Mortgagee and Summit Bank dated this date (the "Subordination Agreement") that until the indebtedness secured hereby is fully repaid: 1. Seizin and Warranty: Mortgagor warrants that it is indefeasibly seized of the Mortgaged Property in fee simple, free and clear of all liens and encumbrances other than those appearing on the marked-up Commitment to Insure Title issued by Surety Title Corporation under Application No. ST 20505 at the time of initial closing on the Loan. Mortgagor further warrants that Mortgagor has full power and lawful right to convey the same in fee simple as aforesaid; that it shall be lawful for Mortgagee at all times peaceably and quietly to enter upon, hold, occupy and enjoy the Mortgaged Property and every part thereof; that all property, fixtures and equipment described herein will be fully paid for and free from all liens, encumbrances, title retaining contracts and security interests when delivered and/or installed upon the Mortgaged Property; that such property, fixture and equipment shall, to the extent permitted by law, be deemed to be realty and a part of the freehold. 2. Payment and Performance: Mortgagor shall pay to Mortgagee, in accordance with the terms of the Note and this Mortgage, the principal and interest, and other sums therein set forth; and shall perform and comply with all the agreements, conditions, covenants and stipulations of the Note, this Mortgage and all of the other Loan Documents, the terms of all of which are incorporated herein by reference. 3. Maintenance of Mortgaged Property: Mortgagor shall abstain from and shall not permit the commission of waste in or about the Mortgaged Property; shall not remove or demolish, or alter the structural character of, any building erected at any time on the Mortgaged Property, without the prior written consent of Mortgagee; shall not permit the Mortgaged Property to become vacant, deserted or unguarded; and shall maintain the Mortgaged Property in good condition and repair, reasonable wear and tear excepted and will make or cause to be made, as and when necessary, all repairs, renewals, replacements, structural and non-structural, exterior and interior, ordinary and extraordinary, foreseen and unforseen. 4. Insurance and Condemnation: Mortgagor shall keep the Mortgaged Property continuously insured against loss or damage by fire, and against such other hazards as Summit Bank and Mortgagee may reasonably require under an insurance policy with "broad form" endorsement, issued by Aetna Casualty & Surety Company, on a non-contributing and non-reporting form basis, for the full replacement value thereof and including a business interruption policy for a period of not less than one (1) year. Subject to the First Mortgage, all policies, including policies for any amounts carried in excess of the required minimum and policies not specifically required by Mortgagee, shall be maintained in full force and effect, shall be delivered to Mortgagee, with premiums prepaid, shall be endorsed with a standard mortgagee clause in favor of Mortgagee, with Mortgagee and Summit Bank named as loss payee, shall provide for at least thirty (30) days prior written notice of cancellation, non-renewal or material amendment to Mortgagee, shall be written by insurance companies having an A.M. Best Company, Inc. rating of "A" or higher and a financial size category of not less than XII, or otherwise as approved by Mortgagee. In addition, Mortgagor shall at all times be protected by comprehensive general public liability (in an amount of not less than $1,000,000.00 per occurrence), property damage, and flood (if applicable) insurance policies, and such other insurance as is, from time to time, carried by most owners of properties similar to the Mortgaged Property, including, but not limited to, boiler insurance, business interruption insurance and employer's liability insurance, naming Mortgagee as an additional insured and containing a waiver of subrogation against Mortgagee. Such coverages at all times shall be evidenced by current certificates of insurance issued to Mortgagee providing for thirty (30) days prior written notice of cancellation, non-renewal or material amendment of coverage. If the insurance, or any part thereof, shall expire, be withdrawn, be materially amended or become void or unsafe by reason of the failure or impairment of the capital of any company in which the insurance may then be carried, or if for any reason whatever the insurance shall be unsatisfactory to Mortgagee, Mortgagor shall immediately place new insurance on the Mortgaged Property, satisfactory to Summit Bank. All renewal policies, with premiums paid, shall be delivered to Mortgagee at least thirty (30) days before expiration of the old policies. In the event of loss, Mortgagor will give prompt notice thereof to Mortgagee, and Mortgagee and Summit Bank may make proof of loss if not made promptly by Mortgagor (but shall have no obligation to do so). Except as may be provided in the First Mortgage, each insurance company concerned is hereby authorized and directed to make payment under such insurance, including return of unearned premiums, directly to Mortgagee instead of to Mortgagor and Mortgagee jointly, and Mortgagor appoints 2 Mortgagee, irrevocably, as Mortgagor's attorney-in-fact to endorse any draft therefor. Mortgagee shall apply any casualty insurance proceeds toward the costs of reconstruction or restoration of the Mortgaged Property as long as Mortgagor is not in default, and in such case of a default against the outstanding balance of the Loan, notwithstanding that the amount owing thereon may not then be due and payable. If Mortgagee becomes the owner of the Mortgaged Property or any part thereof by foreclosure or otherwise, such policies, including all right, title and interest of Mortgagor thereunder, shall become the absolute property of Mortgagee. Except as may be provided in the First Mortgage, Mortgagor hereby assigns to Mortgagee any and all awards heretofore and hereafter made to the present and all subsequent owners of the Mortgaged Property by any governmental or other lawful authorities for taking or damaging by eminent domain the whole or any part of the Mortgaged Property or any easement therein, including any awards for any changes of grades of streets, which said awards are hereby assigned to Mortgagee, who is hereby authorized to collect and receive the proceeds of any such awards from such authorities and to give proper receipts and acquittances therefor, and to apply the same (after deduction of attorney's fees and other costs of collecting the funds) toward the payment of the amount owing on account of this Mortgage and the Note, notwithstanding that the amount owing thereon may not then be due and payable. Mortgagor hereby agrees, upon request, to make, execute and deliver any and all assignments and other instruments sufficient for the purpose of evidencing and effecting such assignment of the aforesaid awards to Mortgagee. The aforesaid awards are assigned to Mortgagee free, clear and discharged of any and all encumbrances of any kind or nature whatsoever. Mortgagor further agrees to give Mortgagee prompt notice of the actual or threatened commencement of any proceedings in the nature of eminent domain affecting all or any part of the Mortgaged Property and to deliver to Mortgagee copies of any papers served upon Mortgagor in connection with any such proceedings. No settlement for the damages sustained shall be made by Mortgagor without Mortgagee's prior written approval, which approval shall not be unreasonably withheld. If, prior to the receipt by Mortgagee of either such insurance proceeds or condemnation awards, or both, the Mortgaged Property or any part thereof shall have been sold on foreclosure of this Mortgage, Mortgagee shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive said sums to the extent of the debt remaining unsatisfied after such sale, with interest thereon at the applicable rate set forth in the Note, and to receive the reasonable counsel fees, costs and disbursements incurred by Mortgagee in connection with the collection of said sums. In the event of foreclosure of this Mortgage or other transfer of title to the Mortgaged Property in extinguishment of the Loan, all right, title and interest of Mortgagor in and to any insurance policies then in force shall pass to the purchaser or grantee, and Mortgagor hereby appoints Mortgagee as its attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies and proceeds to such purchaser or grantee. Mortgagor may maintain insurance required by means of one or more blanket insurance policies maintained by Mortgagor; provided, however, that (A) any such policy shall specify, or Mortgagor shall furnish to Mortgagee a written statement from the insurer so specifying, the maximum amount of the total insurance afforded by such blanket policy that is allocated to the Mortgaged Property and any sublimits in such blanket policy applicable to the Mortgaged Property, (B) each such blanket policy shall include an endorsement providing that, in the event of a loss resulting from an insured peril, insurance proceeds shall be allocated to the Mortgaged Property in an amount equal to the coverages required to be maintained by Mortgagor as provided above and (C) the protection afforded under any such blanket policy shall be no less than that which would have been afforded under a separate policy or policies relating only to the Mortgaged Property. 5. Taxes and Other Charges: Mortgagor shall pay when due and payable and before interest or penalties are due thereon, all taxes, assessments, water and sewer rents and all other charges or claims which may be assessed, levied, or filed at any time against Mortgagor, the Mortgaged Property or any part thereof or against the interest of Mortgagee therein, or which by any present or future law may have priority over the indebtedness secured hereby either in lien or in distribution out of the proceeds of any judicial sale; and Mortgagor shall produce to Mortgagee within ten (10) days of Mortgagee's written request the official receipt for the payment thereof; provided that, if Mortgagor in good faith and by appropriate legal action shall contest the validity of any such item, or the amount thereof, and shall have established on its books a reserve for the payment thereof in such amount as Mortgagee may require, then Mortgagor shall not be required to pay the item or to produce the required receipts while the reserve is maintained and so long as the contest operates to prevent collection, is maintained and prosecuted with diligence, and shall not have been terminated or discontinued adversely to Mortgagor. Mortgagor covenants that no owner of the Mortgaged Property shall be entitled to any credit by reason of the payment of any tax thereon. 6. Installments for Insurance, Taxes and Other Charges: Subject to the First Mortgage, without limitation of anything else herein contained, Mortgagor, after an Event of Default, shall pay to Mortgagee monthly at the time when the monthly installment of principal and/or interest is payable, an amount equal to one-twelfth (1/12) of the annual premiums not prepaid for the fire and extended coverage 3 insurance and the annual real estate taxes, water and sewer rents, any special assessments, charges or claims and any other item which at any time may be or become a lien upon the Mortgaged Property prior to the lien of this Mortgage; and on demand from time to time, Mortgagor shall pay to Mortgagee any additional sums necessary to pay such taxes and other items, all as estimated by Mortgagee; the amounts so paid shall be security for payment of taxes and said other items shall be used in payment thereof if Mortgagor is not otherwise in default hereunder. Mortgagor will produce to Mortgagee, not later than ten (10) days before the date on which any installment for insurance, taxes, and other charges shall becomes due and owing, receipts for such installments for insurance, taxes, and other charges. No amount so paid shall be deemed to be trust funds and may be commingled with general funds of Mortgagee, and no interest shall be payable thereon. If, pursuant to any provision of this Mortgage, the whole amount of the unpaid principal debt becomes due and payable, Mortgagee shall have the right, at its election, to apply any amount so held, in such order and in such amounts as Mortgagee may elect, against: (a) any amounts payable by Mortgagor hereunder or under any of the other Loan Documents, and/or (b) accrued and unpaid interest, and/or (c) the outstanding principal balance of the Loan. At Mortgagee's option, Mortgagee from time to time may waive, and after any such waiver may reinstate, the provisions of this Paragraph 6 requiring the monthly payments. Mortgagor will furnish to Mortgagee bills and other requests for payment in sufficient time to enable Mortgagee to pay such taxes, assessments, levies, charges and fees as provided above. 7. Security Agreement: This Mortgage constitutes a security agreement under the Uniform Commercial Code as adopted in the State and creates a second priority security interest in the Mortgaged Property including, without limitation, all furniture, fixtures, equipment and personal property installed in, or to be placed upon, or used in connection with, or necessary for, the operation of the Mortgaged Property, except such personal property owned by tenants in the Mortgaged Property and such personal property owned by the contractor or subcontractors performing work on the Mortgaged Property, whether stored on the Mortgaged Property or elsewhere and used or to be used in connection with the Mortgaged Property; all leases, rents, issues and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents, notes, drafts, letters of credit, insurance policies, insurance and condemnation awards and proceeds, trade names, trademarks and service marks arising from or related to the Mortgaged Property and any business conducted thereon by Mortgagor; and all replacements, additions, accessions and cash and non-cash proceeds and products thereof. Mortgagor shall execute, deliver, file and refile any financing statements or other security agreements Mortgagee may require from time to time to confirm the lien of this Mortgage and the security interest hereby created with respect to such property, and Mortgagor shall pay any reasonable costs or fees incurred in connection therewith. Without limiting the foregoing, Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact for Mortgagor to execute, deliver and file such instruments for and on behalf of Mortgagor after notice and non-delivery for five (5) days. Notwithstanding any release of any or all of the property included in the Mortgaged Property which is deemed "real property", any proceedings to foreclose this Mortgage or its satisfaction of record, the terms hereof shall survive as a security agreement with respect to the security created hereby and referred to herein until the repayment or satisfaction in full of the obligations of Mortgagor as are now or hereafter evidenced by the Note and the other Loan Documents. As to those items of the Mortgaged Property that are, or are to become, fixtures (together with all products and proceeds thereof), it is intended that THIS MORTGAGE SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING from the date of its filing in the real estate records of the County where the Mortgaged Property is located. The name of the record owner of said Mortgaged Property is Mortgagor set forth on page one of this Mortgage. Information concerning the security interest created by this Mortgage may be obtained from Mortgagee, as subordinated secured party, at its address as set forth on page one of this Mortgage. The address of Mortgagor, as debtor, is as set forth on page one of this Mortgage. This Mortgage covers goods which are or are to become fixtures. 8. Existence and Taxes: If Mortgagor or any successor or grantee of Mortgagor is a corporation or partnership, it shall keep in effect its existence and rights as a corporation or partnership under the laws of the state of its incorporation or formation and its right to own property and transact business in the State during the entire time it has any ownership interest in the Mortgaged Property. For all periods during which title to the Mortgaged Property or any part thereof shall be held by a corporation or partnership subject to corporate taxes, partnership taxes or taxes similar to such taxes, Mortgagor shall file returns for such taxes with the proper authorities, bureaus or departments, and it shall pay, when due and payable and before interest or penalties are due thereon, all taxes owing by Mortgagor to the United States, to such state of incorporation or formation and to the State and any political subdivision thereof, and shall produce to Mortgagee, if requested, receipts showing payment of any and all such taxes, charges or assessments, all settlements, notices of deficiency or overassessment and any other notices pertaining to Mortgagor's tax liability, which may be issued by the United States, such state of incorporation or formation, or the State and any political subdivision thereof. 9. Intentionally Deleted. 10. Compliance with Law and Regulations: Mortgagor shall comply with all laws, ordinances, regulations, restrictions, requirements and orders of all federal, state, municipal and other governmental authorities, of courts and of insurance companies relating to Mortgagor or affecting the Mortgaged Property or the use and operation thereof. Mortgagor also shall promptly comply with the provisions of any recorded covenants, conditions or restrictions to which the Mortgaged Property or any part thereof may at any time 4 be subject. Mortgagor shall not cause or allow the construction or erection of any public, municipal or utility improvements upon the Mortgaged Property other than those required by public authorities, without the prior written consent of Mortgagee, which consent shall not be unreasonably withheld. Mortgagor shall not drill or extract or enter into any lease for the drilling for or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character on or from the Mortgaged Property or any part thereof without the prior written consent of Mortgagee. 11. Inspection: Mortgagee and any persons authorized by Mortgagee shall have the right at any time, upon reasonable notice to Mortgagor, to enter the Mortgaged Property at a reasonable hour to inspect and photograph its condition and state of repair in such a manner so as not to unreasonably intefere with Mortgagor's operations. 12. Declaration of No Set-Off: Within fifteen (15) days after requested to do so by Mortgagee, Mortgagor shall certify to Mortgagee or to any proposed assignee of this Mortgage, in a writing duly acknowledged, the amount of principal, interest and other charges then owing on the obligation secured by this Mortgage and whether there are any set-offs or defenses against it, and if such set-offs or defenses are asserted, a detailed explanation thereof. Within fifteen (15) days after requested to do so by Mortgagor, Mortgagee shall certify to Mortgagor, in a writing duly acknowledged, the amount of principal, interest and other charges then owing on the obligation secured by this Mortgage and whether Mortgagor is in default hereunder or under any of the documents securing the indebtedness evidenced hereby or whether, to the best knowledge of Mortgagee, any event has occurred which with the giving of notice or passage of time, or both, would constitute an Event of Default hereunder. 13. Right to Remedy Defaults: In the event that Mortgagor should fail to pay taxes, assessments, water and sewer charges or other lienable claims (except in case of contest as aforesaid) or insurance premiums, or fail to make necessary repairs or permit waste, or otherwise fail to comply with its obligations hereunder or under the Note or any other document executed in connection with this Mortgage, then Mortgagee, at its election and upon ten (10) days prior written notice to Mortgagor, shall have the right to make any payment or expenditure which Mortgagor should have made, or which Mortgagee reasonably deems advisable to protect the security of this Mortgage or the Mortgaged Property, without prejudice to any of Mortgagee's rights or remedies available hereunder or otherwise, at law or in equity. All such sums, as well as costs, advanced by Mortgagee pursuant to this Mortgage shall be due within three (3) days of notice and reasonably detailed explanation thereof from Mortgagor to Mortgagee, shall be secured hereby, and shall bear interest at the default rate, if any, provided in the Note, and if none is so provided, then at the prevailing rate of interest stipulated in the Note, from the date of payment by Mortgagee until date of repayment. 14. Default: A. The occurrence of any one or more of the following after expiration of applicable notice and cure periods, if any, at the option of Mortgagee, shall constitute a default hereunder: (1) Failure of Mortgagor to pay any installment of principal or interest, or any other sum, when it is due under the Note or this Mortgage (provided that Mortgagee agrees, not more than once during any twelve (12) month period during the term of this Mortgage to give Mortgagor notice of such failure and allow five (5) days after the giving of such notice to cure such failure, prior to same being an Event of Default); or (2) If any warranty, representation or other statement made by Mortgagor in this Mortgage or in any other the other Loan Documents is materially false, incorrect, incomplete or misleading; or (3) Mortgagor's non-performance of or noncompliance with any of the other agreements, conditions, covenants, provisions or stipulations contained in the Note or in this Mortgage or any of the other Loan Documents executed in connection with the Loan within thirty (30) days (or such longer period as may be required, provided Mortgagor commences to cure such non-performance or non-compliance within such thirty (30) day period and thereafter proceeds with all due diligence and in good faith to complete such performance or cure such non-compliance) after having received notice thereof from Mortgagee; or (4) If Mortgagor shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts as they become due, or shall file a petition in bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file a petition seeking any relief under any present or future statute, law or regulation, relating to bankruptcy or insolvency or shall file an answer admitting or not contesting the material allegations of a petition filed against it in any such proceeding, or if Mortgagor shall seek or consent to or acquiesce in the appointment of any trustee, receiver, custodian, conservator, sequestrator or similar judicial representative by whatever name of Mortgagor of any material part of its properties not dismissed within sixty (60) days of such appointment; or 5 (5) If within sixty (60) days after the commencement of any proceeding against Mortgagor seeking any relief under any present or future statute, law or regulation relating to bankruptcy or insolvency, such proceeding shall not have been dismissed, or if, within sixty (60) days after the appointment without the consent or acquiescence of Mortgagor, of any trustee, receiver, custodian, conservator, sequestrator or similar judicial representative by whatever name of Mortgagor or of any material part of its properties, such appointment shall not have been vacated; or (6) If a final judgment for the payment of money in excess of $20,000 shall be rendered against Mortgagor and, within thirty (30) days after the entry thereof, such judgment shall not have been discharged, bonded-over or execution thereof stayed pending appeal, or if, within thirty (30) days after the expiration of any such stay, such judgment shall not have been discharged; or (7) If Mortgagor incurs any debt in addition to the debt secured by this Mortgage and the First Mortgage, which additional debt is secured by all or any part of the Mortgaged Property without the prior written consent of Mortgagee; or (8) If any default shall occur under the terms of the First Mortgage. B. Upon the occurrence of any default hereunder, Mortgagee may give written notice thereof to Mortgagor, and upon receipt of such written notice, Mortgagor shall have thirty (30) days within which to cure any such default. The continuance of any default after said notice and the elapsing of thirty (30) days, without cure, shall be deemed an "Event of Default" hereunder; provided, however, that if such default is not susceptible of cure within said thirty (30) day period but is susceptible of cure within a reasonable period of time, then said cure period shall be extended for a reasonable period of time, so long as Mortgagor commences its cure within said thirty (30) day period and diligently prosecutes the same to completion. In the case of the occurrence of a default under either Subparagraph 14A(1) or 14A(2) above, such shall constitute an "Event of Default" hereunder without the need for Mortgagee to provide notice thereof to Mortgagor, anything to the contrary herein notwithstanding. 15. Remedies: A. Subject to the terms of the First Mortgage and the Subordination Agreement, if applicable, upon the happening of any Event of Default, the entire unpaid balance of principal, accrued interest and all other sums secured by this Mortgage shall become immediately due and payable, at the option of Mortgagee, without further notice or demand. B. When the entire indebtedness shall become due and payable, either because of maturity or because of the occurrence of any Event of Default, or otherwise, then forthwith, subject to the First Mortgage and the Subordination Agreement: (1) Foreclosure: Mortgagee may institute an action of mortgage foreclosure, or take such other action at law or in equity for the enforcement of this Mortgage and realization on the mortgage security or any other security herein or elsewhere provided for, as the law may allow, and may proceed therein to final judgment and execution for the entire unpaid balance of the Loan, with interest at the rate stipulated in the Note, together with all other sums due by Mortgagor in accordance with the provisions of the Note and this Mortgage, including all sums which may have been loaned by Mortgagee to Mortgagor after the date of this Mortgage, and all sums which may have been advanced by Mortgagee for taxes, water or sewer rents, other lienable charges or claims, insurance or repairs or maintenance, and all costs of suit. Mortgagor authorizes Mortgagee, at Mortgagee's option, to foreclose this Mortgage subject to the rights of any tenants of the Mortgaged Property; provided, however, that all leases executed subsequent to the recordation of this Mortgage shall at all times be subject and subordinate to this Mortgage and to all the terms and conditions of this Mortgage and to the rights and liens of the holder of this Mortgage and to all renewals, modifications, consolidations, replacements and extensions thereof. The failure to make any such tenants parties defendant to any such foreclosure proceedings and to foreclose their rights will not be, nor be asserted by Mortgagor to be, a defense to any proceedings instituted by Mortgagee to recover the indebtedness secured hereby or any deficiency remaining unpaid after the foreclosure sale of the Mortgaged Property; however, nothing herein contained shall prevent Mortgagor from disputing in any proceedings the amount of the deficiency or the sufficiency of any bid at such foreclosure sale or that the failure to foreclose any such tenants adversely affects the value of the Mortgaged Property. Upon any such foreclosure sale, Mortgagee may bid for and purchase the Mortgaged Property and, upon compliance with the terms of sale, may hold, retain, possess and dispose of the Mortgaged Property in its own absolute right without further accountability. (2) Possession: Mortgagee may enter into possession of the Mortgaged Property, with appropriate legal action, or, in the alternative, Mortgagee shall be entitled as of right to appointment of a receiver without regard to the solvency of Mortgagor or any other person liable for the debt secured hereby, and regardless of whether Mortgagee has an adequate remedy at law; either Mortgagee or said receiver, as the case may be, may (to the extent permitted by law) rent the Mortgaged Property, or any part thereof, for such term or terms and on such other terms and conditions as Mortgagee or such receiver may see fit, collect all rentals (which terms, "rentals", shall also include sums payable for use and occupation) and, after deducting all costs of collection and administration expense, apply the net 6 rentals to the payment of taxes, water, and sewer rents, other lienable charges and claims, insurance premiums and all other carrying charges, and to the maintenance, repair or restoration of the Mortgaged Property, or in reduction of the principal or interest, or both, hereby secured, in such order and amounts as Mortgagee or said receiver may elect. (3) Receiver: Mortgagee, without regard to the value or occupancy of the Mortgaged Property or the solvency of Mortgagor, of all or any part of the Loan, with or without notice to Mortgagor, shall be entitled as a matter of right, if it so elects, to the appointment of a receiver to enter upon and take possession of the Mortgaged Property and to collect all rents, revenues, issues, income, products and profits thereof and apply the same as the court may direct. The receiver shall have all rights and powers permitted under the laws of the state where the Mortgaged Property is located and such other powers as the court making such appointment shall confer. The expenses, including reasonable receiver's fees, attorney's fees, costs and agent's compensation, incurred pursuant to the powers herein contained shall be secured by this Mortgage. The right to enter and take possession of and to manage and operate the Mortgaged Property, and to collect the rents, issues and profits thereof, whether by a receiver or otherwise, shall be cumulative to any other right or remedy hereunder or afforded by law, and may be exercised concurrently therewith or independently thereof. Mortgagee shall be liable to account only for such rents, issues and profits as are actually received by Mortgagee. Notwithstanding the appointment of any receiver or other custodian, Mortgagee shall be entitled as pledgee to the possession and control of any cash, deposits, or instruments at the time held by, or payable or deliverable under the terms of this Mortgage to Mortgagee. C. Subject to the Subordination Agreement, Mortgagee shall have the right, from time to time, to bring an appropriate action to recover any sums required to be paid by Mortgagor under the terms of this Mortgage, as they become due, without regard to whether or not the principal indebtedness or any other sums secured by the Note and this Mortgage shall be due, and without prejudice to the right of Mortgagee thereafter to bring an action to foreclose this Mortgage, or any other action, for any default by Mortgagor existing at the time the earlier action was commenced. D. The Mortgaged Property, if sold pursuant to any writ or order of execution issued on a judgment obtained by virtue of the Note or this Mortgage, or pursuant to any other judicial proceedings under this Mortgage or the Note, may be sold in one parcel, as an entirety, or in such parcels, and in such manner or order as Mortgagee, in its sole discretion, may elect. E. Subject to the Subordination Agreement, Mortgagee shall have the power and authority to institute and maintain at any time and from time to time any suits and proceedings as Mortgagee may deem advisable: (1) to prevent any impairment of the Mortgaged Property by any acts which may be unlawful or any violation of this Mortgage, (2) to preserve or protect its interest in the Mortgaged Property, and (3) to restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order might impair the security hereunder or be prejudicial to Mortgagee's interest. F. Upon request or demand of Mortgagee and following the occurrence of an Event of Default, subject to the First Mortgage and the Subordination Agreement, Mortgagor shall, at its expense, assemble the personal property forming part of the Mortgaged Property and make it available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee, on demand, any and all expenses, including attorneys' fees, incurred or paid by Mortgagee in protecting its interest in such property and in enforcing its rights hereunder with respect to such property. Any notice of sale, disposition or other intended action by Mortgagee with respect to such property sent to Mortgagor in accordance with the provisions hereof at least five (5) days prior to such action, shall constitute reasonable notice to Mortgagor. The proceeds of any disposition of such property, or any part thereof, may be applied by Mortgagee to the payment of the indebtedness secured hereby in such priority and proportions as Mortgagee in its discretion shall deem proper. G. Subject to the First Mortgage and the Subordination Agreement, Mortgagee shall have the right in its sole and absolute discretion to apply any and all amounts received by Mortgagee in the exercise of any of Mortgagee's rights and/or remedies hereunder or under any of the other Loan Documents, in such order and in such amounts as Mortgagee may elect, against: (1) any amounts payable by Mortgagor hereunder or under any of the other Loan Documents, and/or (2) accrued and unpaid interest and/or (3) the outstanding principal balance of the Loan. H. Neither Mortgagor nor any other person now or hereafter obligated for payment of all or any part of the sums now or hereafter secured by this Mortgage shall be relieved of such obligation by reason of the failure of Mortgagee to comply with any request of Mortgagor or of any other person so obligated to take action to foreclose on this Mortgage or otherwise enforce any provisions of this Mortgage or the Note, or by reason of the release, regardless of consideration, of all or any part of the security held for the indebtedness secured by this Mortgage, or by reason of any agreement or stipulation between any subsequent owner of the Mortgaged Property and Mortgagee extending the time of payment or modifying the terms of this Mortgage or the Note without first having obtained the consent of Mortgagor or such other person; and, in the latter event, Mortgagor and all such other persons shall continue to be liable to 7 make payments according to the terms of any such extension or modification agreement, unless expressly released and discharged in writing by Mortgagee. No release of all or any part of the security as aforesaid shall in any way impair or affect the lien of this Mortgage or its priority over any subordinate lien. 16. Counsel Fees: If Mortgagee becomes a party to any suit or proceeding affecting the Mortgaged Property or title thereto, the lien created by this Mortgage or Mortgagee's interest therein (including any proceeding in the nature of eminent domain), or if following the occurrence of an Event of Default, Mortgagee engages counsel to collect any of the indebtedness or to enforce performance of the agreements, conditions, covenants, provisions or stipulations of this Mortgage, the Note or any of the other Loan Documents, Mortgagee's costs, expenses and reasonable fees for legal counsel, whether or not suit is instituted, shall be paid to Mortgagee by Mortgagor, on demand, with interest at the rate provided in the Note, and until paid they shall be deemed to be part of the indebtedness evidenced by the Note and secured by this Mortgage. 17. Notices: All notices permitted or required under this Mortgage or Note shall be in writing, and shall be sent by certified mail, return receipt requested, postage prepaid or prepaid nationally recognized overnight carrier service with receipt required, addressed to the addressee at the address set forth above, or at such other address as the addressee may hereafter designate to the other party in writing. 18. Amendment: This Mortgage cannot be changed or amended except by agreement in writing signed by the party against whom enforcement of the change is sought. 19. Parties Bound: This Mortgage shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. For purposes of this Mortgage, the neuter shall include the masculine and feminine, and the singular shall include the plural and the plural the singular, as the context may require. 20. Interest Rate: Notwithstanding any provision contained in this Mortgage or in the Note secured hereby, Mortgagor's liability for interest shall not exceed the limits now imposed by the applicable usury law. If any clause in the Note, this Mortgage or any of the other Loan Documents requires interest payments in excess of the highest rate permitted by the applicable usury law, the clause in question shall be deemed to require such payment at the highest interest rate allowed by the applicable usury law. 21. Prepayment: The obligation secured hereby may be prepaid in full or in part at any time without penalty. No sums prepaid may be re-borrowed or re-advanced. 22. Financial Statements: Mortgagor covenants to furnish to Mortgagee at any time upon request, Mortgagor's then current Form 1OK/10Q. Mortgagor also agrees to make its books and accounts relating to the Mortgaged Property available for inspection by Mortgagee or its representatives upon request. Following the occurrence of an Event of Default, Mortgagee may, at it option, require (1) within ninety (90) days after the close of each fiscal year of Mortgagor, current, complete, signed, financial statements prepared in accordance with generally accepted accounting principles by, and certified by, an independent certified public accountant (and in form and content satisfactory to Mortgagee) for Mortgagor and each guarantor and/or surety of the Loan; and (2) within forty-five (45) days of each fiscal quarter, interim statements compiled by such independent certified public accountant in accordance with generally accepted accounting principles. 23. No Waiver: Any failure by Mortgagee to insist upon the strict performance by Mortgagor of any of the terms and provisions hereof shall not be deemed to be a waiver of any of the terms and provisions hereof, and Mortgagee, notwithstanding any such failure, shall have the right thereafter to insist upon the strict performance by Mortgagor of any and all of the terms and provisions hereof to be performed by Mortgagor. Acceleration of maturity, once claimed hereunder by Mortgagee, may, at the option of Mortgagee, be rescinded by written acknowledgment to that effect by Mortgagee, but tender and acceptance of partial payments alone shall not in any way affect or rescind such acceleration of maturity. 24. No Obligation to Marshal Assets: Neither Mortgagor nor the holder of any mortgage, lien or other encumbrance affecting all or a part of the Mortgaged Property which is inferior to the lien of this Mortgage shall have any right to require Mortgagee to apply any amounts received by it to the payment of any particular principal indebtedness in preference to any other principal indebtedness secured hereby, and neither Mortgagor nor any such holder shall have any right to require Mortgagee to marshal assets. 25. Mortgagee Appointed Attorney-in-Fact: Mortgagor hereby irrevocably appoints Mortgagee as its attorney-in-fact, in its name and stead, solely to make and execute all conveyances, leases, assignments and transfers of all or any part of the Mortgaged Property sold pursuant to foreclosure or other proceedings, and Mortgagor shall join in the execution of any such instrument of conveyance, assignment or transfer, but such execution by Mortgagor shall not be necessary in order for such conveyance, lease, assignment or transfer to be valid and effective in all respects. 8 26. Compliance with Environmental Requirements: Mortgagor covenants that: A. Mortgagor shall operate the Mortgaged Property or cause it to be operated in compliance with all applicable laws of the state and federal governments and all applicable rules and regulations promulgated by the New Jersey Department of Environmental Protection (the "Department") or any successor agency thereto. Mortgagor shall have the right in good faith to contest or appeal from such laws, ordinances and regulations and any decision adverse to Mortgagor based thereon, but all costs, fees and expenses incurred in connection with such proceedings shall be borne by Mortgagor. B. The term "Hazardous Substances", as used herein shall mean Hazardous Substances or Hazardous Wastes as such terms are defined in N.J.S.A. 58:10-23.11b(k) and N.J.A.C. 7:1E-1.3 and/or those elements or compounds which are contained in the list of hazardous substances covered by the following federal laws: Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.A. 9601 et seq.; the Superfund Amendments and Reauthorization Act of 1987; the Resource Conservation and Recovery Act of 1976, 42 U.S.C.A. 6901 et seq.; the Clean Water Act, 42 U.S.C.A. 7401 et seq.; the Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq., and all other similar existing and future federal, state and municipal statutes, laws and ordinances governing the environment, all as amended from time to time, together with all rules and regulations issued or promulgated pursuant to or in connection with any of the foregoing. C. Mortgagor shall not cause or permit to exist, as a result of an intentional or unintentional action or omission on its part, a Release of Hazardous Substances into any of the Protected Areas, unless said Release of Hazardous Substances is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal or state governmental authorities. D. In the event that there shall be filed a lien against the Mortgaged Property or any part thereof (I) by the U.S. Environmental Protection Agency or (ii) by the Department, pursuant to and in accordance with the provisions of N.J.S.A. 58:10-23.11f(f), as a result of the chief executive of the New Jersey Spill Compensation Fund having expended monies from said fund to pay for Damages and/or Cleanup and Removal Costs arising from an intentional or unintentional action or omission of Mortgagor or any previous owner and/or operator of the Mortgaged Property, and resulting in the Release of Hazardous Substances into any of the Protected Areas, then Mortgagor shall, within thirty (30) days from the date that Mortgagor is given notice that the lien has been placed against any part or all of the Mortgaged Property, or within such shorter period of time in the event that the State of New Jersey has commenced steps to cause the Mortgaged Property to be sold pursuant to such lien, either (I) pay the claim and remove the lien from the Mortgaged Property, or (ii) furnish (a) a bond satisfactory to the title insurance company and Mortgagee in the amount of the claim out of which the lien arises, (b) a cash deposit in the amount of the claim out of which the lien arises, or (c) other security reasonably satisfactory to Mortgagee in an amount sufficient to discharge the claim out of which the lien arises (subject to Mortgagee's agreement, which agreement shall not be unreasonably withheld or delayed, that the commitment of any reputable title insurance company affirmatively to insure over or omit such claim shall constitute such reasonably satisfactory security). E. Should Mortgagor cause or permit any intentional or unintentional action or omission resulting in the Release of Hazardous Substances into any of the Protected Areas, without having obtained a permit issued by the appropriate governmental authorities, Mortgagor shall promptly comply with the provisions of the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq. F. If Mortgagor obtains, gives or receives notice of any Release of Hazardous Substances or threat thereof at the Mortgaged Property, or receives any notice of violation, request for information or notification that it is potentially responsible for investigation or cleanup of environmental conditions at the Mortgaged Property, demand letter or complaint, order, citation, or other notice with regard to any Release of Hazardous Substances or any other environmental matter affecting the Mortgaged Property or Mortgagor's interest therein (an "Environmental Complaint") from any person or entity, including the Department or the U.S. Environmental Protection Agency (either, the "Authority"), then Mortgagor shall, within five (5) business days, give written notice of same to Mortgagee detailing the facts and circumstances giving rise to the Release of Hazardous Substances or Environmental Complaint. Such information is to be provided to allow Mortgagee to protect its security interest in the Mortgaged Property. G. Mortgagor shall promptly forward to Mortgagee copies of any request for information, notification of potential liability, demand letter relating to potential responsibility with respect to the investigation or cleanup of Hazardous Substances at any other site owned, operated or used by Mortgagor to dispose of Hazardous Substances and shall continue to forward copies of communications regarding such claims to Mortgagee until the claim is settled. Mortgagor shall promptly forward to Mortgagee a copy of any filing relating to the Release of Hazardous Substances at any other property owned or leased by Mortgagor that Mortgagor is required to file under any state or local environmental law, regulation or ordinance. Such information is to be provided to allow Mortgagee to protect its security interest in the Mortgaged Property. H. If Mortgagor shall fail to respond promptly to any Release of Hazardous Substances, Environmental Complaint or the presence of any Hazardous Substances affecting the 9 Mortgaged Property, whether or not the same originates or emanates from the Mortgaged Property or any other real estate, and/or if Mortgagor shall fail to comply with any of the requirements of any federal or state environmental law or regulation or local ordinance, Mortgagee may, at its election, but without the obligation to do so after notice and no cure by Mortgagor within five (5) days: (i) give such notices, and/or (ii) enter onto the Mortgaged Property after reasonable notice to Mortgagor and take such actions as Mortgagee deems reasonably necessary or advisable to clean up, remove, mitigate or otherwise deal with any Release of Hazardous Substances, the presence of Hazardous Substances or any Environmental Complaint. All reasonable costs and expenses incurred by Mortgagee in the exercise of any such rights, including any sums paid in connection with any judicial or administrative investigation or proceeding, fines, penalties, fees for legal counsel and other professionals, together with interest thereon at the default rate stipulated in the Note, and if not specified therein, then at the then applicable rate of interest under the Note, from the date of payment by Mortgagee, shall be immediately due and payable by Mortgagor to Mortgagee, and until paid, shall be added to and become a part of the indebtedness under the Note and shall be secured by the lien of this Mortgage. I. Promptly upon the written request of Mortgagee, which written request may be made by Mortgagee from time to time, Mortgagor shall provide Mortgagee, at Mortgagee's initial expense (to be reimbursed by Mortgagor to Mortgagee, immediately upon demand, if such assessment or audit reveals that any Release of Hazardous Substance or other failure or default under this Article, has occurred), an environmental site assessment or environmental audit report issued in favor of Mortgagee and its counsel and prepared by an environmental engineering firm acceptable, in the reasonable opinion of Mortgagee, to assess with a reasonable degree of certainty the existence of a Release of Hazardous Substances and the potential costs in connection with abatement, cleanup or removal of any Hazardous Substances found on, under, at or within the Mortgaged Property; provided that: (1) If such estimates, individually or in the aggregate, exceed $100,000.00, Mortgagee shall have the right to require Mortgagor to post a bond to secure payment of these costs and expenses; and (2) If the Release of Hazardous Substances is the subject of any governmental inquiry, investigation or audit, then the provisions of the preceding subsection shall be suspended during any such governmental action, and Mortgagor shall be subject to any requirement imposed as a result of such governmental action. J. In addition to the Events of Default set forth elsewhere in this Mortgage, the filing by any Authority of an Environmental Complaint or expenditure of money by any Authority to respond to a Release of Hazardous Substances or Environmental Complaint at the Mortgaged Property (an "Action") shall constitute an Event of Default under this Mortgage; provided, however, such Action shall not constitute an Event of Default if, within thirty (30) days of the date of notice to Mortgagor of such Action, Mortgagor demonstrates to the reasonable satisfaction of Mortgagee that it has commenced and is diligently pursuing either: (a) cure or correction of the event which constitutes the basis for the Action, including, as necessary, payment of any claims and removal of any lien imposed and continues diligently to pursue such cure or correction to completion, or (b) institutes proceedings for an injunction, a restraining order or other appeal procedure seeking to prevent such Authority from enforcing such Action or to defend against the enforcement of such Action. Mortgagor shall post a bond, letter of credit or other security, in form, substance, and amount acceptable to Mortgagee and the Authority or entity seeking to enforce the Action, to secure the proper and complete cure or correction of the event which constitutes the basis for the Action. Subject to Mortgagee's agreement, which agreement shall not be unreasonably withheld or delayed, the commitment of any reputable title insurance company to affirmatively insure over or to omit such lien shall constitute such reasonably satisfactory security. K. Except with respect to any occurrence prior to July 19, 1996, and except with respect to any act or omission of Mortgagee after taking possession of the Mortgaged Property, Mortgagor shall defend and indemnify Mortgagee and hold Mortgagee harmless from and against all loss, liability, damages and expenses, claims, costs, fines, penalties, including fees for legal counsel and other professionals, suffered or incurred by Mortgagee, whether as holder of this Mortgage, as a mortgagee in possession, or as successor-in-interest to Mortgagor, by foreclosure deed or deed in lieu of foreclosure, under or on account of any environmental statute, law, ordinance or order including the assertion of any lien thereunder, with respect to any Release of Hazardous Substances, the presence of any Hazardous Substances affecting the Mortgaged Property, whether or not the same originates or emanates from the Mortgaged Property, including any loss of value of the Mortgaged Property as a result of the foregoing so long as no such loss, liability, damage and expense is attributable to any Release of Hazardous Substances resulting from actions on the part of Mortgagee. Mortgagor's obligations under this Article shall arise upon the discovery of the presence of any Hazardous Substances at the Mortgaged Property, whether or not any federal, state, or local environmental agency has taken or threatened any action in connection with the presence of any Hazardous Substances. Mortgagor's obligation hereunder shall survive the termination of this Mortgage. 27. Condominium Regime: Mortgagor covenants and agrees not to submit any part of the Mortgaged Property to a condominium regime without the prior written approval of Mortgagee. If Mortgagee does grant such approval, Mortgagee shall automatically have the right, but not the obligation, 10 to succeed to Mortgagor as developer or grantor under any master deed subjecting the Mortgaged Property to a condominium regime. 28. Intentionally Deleted. 29. Intentionally Deleted. 30. Purchase Agreements: Mortgagor hereby represents that there are no purchase agreements or agreements to sell all or any part of the Mortgaged Property now in effect. 31. Intentionally Deleted. 32. Bankruptcy Waiver: Mortgagor agrees that, in consideration of the recitals and mutual covenants contained herein, and for other good and valuable consideration, if Mortgagor or any general partner of Mortgagor shall (I) file with any bankruptcy court of competent jurisdiction or be the subject of any petition under Title 11 of the U.S. Code, as amended, (ii) be the subject of any order for relief issued under such Title 11 of the U.S. Code, as amended, (iii) file or be the subject of any petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal or state act or law relating to bankruptcy, insolvency, or other relief for debtors, (iv) have sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator, or liquidator, (v) be the subject of any order, judgment, or decree entered by any court of competent jurisdiction approving a petition filed against such party for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal or state act or law relating to bankruptcy, insolvency, or relief for mortgagors, Mortgagor shall not assert or request any other party to assert that the automatic stay provided by Section 362 of Title 11 of the U.S. Code (the "Bankruptcy Code") shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of Mortgagee to enforce any rights it has by virtue of this Mortgage and all documents executed by Mortgagor in connection herewith, or at law or in equity, or any other rights Mortgagee has, whether now or hereafter acquired, against Mortgagor or against any collateral for the loans evidenced by the Note, including, but not limited to the Mortgaged Property. Specifically, without limiting the foregoing, in the event of any such voluntary or involuntary bankruptcy filing following the execution and delivery of this Mortgage and all documents executed by Mortgagor in connection herewith, Mortgagee shall be entitled, and Mortgagor irrevocably consents, to an order granting relief from any and all stays, including the automatic stay imposed by Section 362 of the Bankruptcy Code or equitable relief under Section 105 of the Bankruptcy Code, so as to permit Mortgagee to foreclose upon the Collateral and to exercise any and all other rights and remedies of Mortgagee under this Mortgage, any of such documents, or at law or in equity, and Mortgagor hereby irrevocably waives any right to object to such relief. 33. Recourse: Except as hereinafter set forth, Mortgagor shall not have any personal liability for the payment or performance of any obligations under the Note and in the event of a default under the Note, Mortgagee will look solely to the Mortgaged Property and the rents, issues and profits thereof and any other collateral specifically pledged, assigned or granted by Mortgagor as security therefor, and any judgment obtained against Mortgagor shall so note by its terms or as otherwise permissible by law. Notwithstanding the foregoing, in the event of a default hereunder or under the Note, this obligation shall be recourse to Mortgagor in an amount which is the difference between $3,000,000 and that portion of the recourse obligation from Mortgagor to Summit Bank (pursuant to a Promissory Note in an amount not to exceed $9,777,240 of even date herewith (the "Summit Note")) which is not credited by Summit Bank under the Summit Note upon an event of default (as defined under the Summit Note) by Mortgagor under the Summit Note (e.g., if Summit Bank utilizes $2,000,000 of the recourse amount as a portion of or as all of its remedy under the Summit Note, as the case may be, after an event of default under the Summit Note, the Note to Mortgagee shall be recourse in the amount of $1,000,000). In no event, however, shall (i) this obligation be recourse to Mortgagor in an amount greater than the total amount owing by Mortgagor under the Note, nor (ii) the total recourse to Mortgagor pursuant to the Note and the Summit Note exceed $3,000,000. 34. Severability: In the event any clause, provision or term of this Mortgage shall be found by a court of competent jurisdiction to be void or unenforceable, such finding shall not be construed to affect the validity of the remaining terms and conditions hereof and such remaining terms and conditions shall remain in full force and effect. 35. Modification: The parties to this Mortgage may agree to change the interest rate, due date or other term or terms of this Mortgage or the Note. If the parties agree to a change, which change is a "modification" as defined in N.J.S.A. 46:9-8.1 et seq., this Mortgage shall be subject to the priority provisions of that law. 36. Captions: The captions preceding the text of the paragraphs or subparagraphs of this Mortgage are inserted only for convenience or reference and shall not constitute a part of this Mortgage, nor shall they in any way affect its meaning, construction or effect. 37. Governing Law: This Mortgage and the performance of Mortgagor's obligations hereunder shall be governed by the laws of the State of New Jersey. 38. Venue: The parties hereby irrevocably and unconditionally agree that any suit, action or other legal proceeding arising out or in connection with this Mortgage, or the obligations secured hereby, shall be brought in the courts of record of the State of New Jersey or the courts of the United States 11 located in said state, consents to jurisdiction of each such court in any such suit, action or proceeding, and waive any objection to the venue of any such suit, action or proceeding in any of such courts. 39. WAIVER OF JURY TRIAL: TO THE EXTENT PERMITTED BY LAW, THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY LITIGATION BETWEEN MORTGAGOR AND MORTGAGEE ARISING OUT OF OR IN CONNECTION WITH THE LOAN, THIS MORTGAGE AND ANY OF THE OTHER LOAN DOCUMENTS. MORTGAGOR ACKNOWLEDGES THE IMPORTANCE OF THIS RIGHT AND MAKES A KNOWING WAIVER THEREOF IN CONSIDERATION OF THE WILLINGNESS OF MORTGAGEE TO MAKE THE LOAN TO IT. IN WITNESS WHEREOF, this Mortgage has been duly executed as of the day and year first above written. BRANDYWINE REALTY TRUST, a Maryland real estate investment trust By: /s/ Gerard H. Sweeney ----------------------------------- Gerard H. Sweeney, President 12 STATE OF NEW JERSEY : : s.s. COUNTY OF CAMDEN : BE IT REMEMBERED, that on this ___ day of _________________, 1996, before me, the undersigned authority, personally appeared GERARD H. SWEENEY, President of BRANDYWINE REALTY TRUST, Mortgagor mentioned in the within instrument, who I am satisfied is the person who signed the within instrument, and he acknowledged that he signed and delivered the same as such officer aforesaid, and that the within instrument is the voluntary act and deed of such corporation. _________________________________________ Printed Name:____________________________ Title:___________________________________ Commission Expiration:___________________ 66824-3 July 19, 1996 UMR-002-003 13 Schedule C Land Description SURETY File Number TITLE CORPORATION ST 20505 - ------------------------------------------------------------------------------- REVISED LEGAL DESCRIPTION ALL that certain land and premises situate in the Township of Cherry Hill, County of Camden and the State of New Jersey, bounded and described as follows: TRACT #1-BEGINNING at a point in the Southerly right of way line of New Jersey State Highway Route #38, said point being corner formed by the intersection of the said line of New Jersey State Highway Route #38 with the Easterly right of way line of Third Avenue (50 feet wide), and extending; thence along the said right of way line of New Jersey State Highway Route #38; thence (1) South 80 degrees 11 minutes 00 seconds East, 19.53 feet to an angle point common with the Southwesterly right of way line of the access road (ramp from New Jersey State Highway Route #38 to Haddonfield Road), and extending; thence along the said right of way line to the access road; thence (2) South 45 degrees 29 minutes 39 seconds East, 336.69 feet to an angle point, and extending; thence along the right of way line; thence (3) South 21 degrees 17 minutes 18 seconds East, 120.52 feet to a point formed by the intersection of said access road with the Westerly right of way line of Haddonfield-Sorrell Horse Road (formerly Stoy Landing Road) a/k/a Camden County Route #644 (formerly 66 feet wide), and extending; thence along the said right of way line of Haddonfield-Sorrell Horse Road; thence (4) South 09 degrees 49 minutes 00 seconds West, 283.83 feet to an angle point, and extending; thence along the said right of way line of Haddonfield-Sorrell Horse Road; thence (5) South 24 degrees 17 minutes 14 seconds West, 96.03 feet to an angle point, and extending; thence along the said right of way line of Haddonfield-Sorrell Horse Road; thence (6) South 09 degrees 49 minutes 00 seconds West, 257.21 feet to a point of curvature and extending; thence (7) at the point of curvature in the Westerly right of way line of Haddonfield-Sorrell Horse Road, curving to the right having a radius of 30 feet, and an arc length of 57.17 feet to a point of tangency connecting the Northeasterly right of way line of Chapel Avenue (50 feet wide) a/k/a Camden County Route #626 with the said right of way line of Haddonfield-Sorrell Horse Road, and extending; thence along the said right of way line of Chapel Avenue; thence (8) North 61 degrees 00 minutes 11 seconds West, 108.14 feet to an angle point, and extending; thence along the said right of way line of Chapel Avenue; thence PAGE 6 Schedule C Legal SURETY File Number Continued TITLE CORPORATION ST 20505 (9) North 52 degrees 03 minutes 39 seconds West, 43.50 feet to a corner in point common with Lot 3, Block 176.01 on the Current Tax Map of the Township of Cherry Hill, and extending; thence along a line common with Lot 3, Block 176.01; thence (10) North 09 degrees 49 minutes 00 seconds East, 178.31 feet to a corner point common with Lots 2 and 3, Block 176.01, said Tax Map and lands now or formerly of Chapel Printing, and extending; thence along a line common with said Lot 2; thence (11) South 80 degrees 11 minutes 00 seconds East, 29.43 feet to a corner point, and extending; thence along a line common with said Lot 2; thence (12) North 09 degrees 49 minutes 00 seconds East, 52.21 feet to a corner point, and extending; thence along a line common with said Lot 2; thence (13) North 80 degrees 11 minutes 00 seconds West, 183.71 feet to a corner point common with the Easterly right of way line of Third Avenue (50 feet wide), and extending; thence (14) North 09 degrees 49 minutes 00 seconds East, 670.93 feet to a corner point common with the Southerly right of way line of New Jersey State Highway Route #38 and being the place of beginning. BEING shown and designated as Lot 1, Block 176.01, Plate 18 on the Current Tax Map of the Township of Cherry Hill. Being known as 457 Haddonfield Road. TRACT #2-BEGINNING at a point formed by the intersection of the Northeasterly line of Chapel Avenue (width varies) with the Southeasterly line of Third Avenue (50 feet wide) and extending; thence (1) North 09 degrees 49 minutes 01 seconds East, along the Southeasterly line of Third Avenue, 142.67 feet to a point in the division line between existing Tax Lots 1 and 2, Block 176.01; thence (2) South 80 degrees 10 minutes 59 seconds East, along said division line, 183.71 feet to point concrete monument in the division line between said Tax Lots; thence (3) South 09 degrees 49 minutes 01 seconds West, along said division line, 52.21 feet to a set iron pin in the division line between said Tax Lots; thence PAGE 7 Schedule C Legal SURETY File Number Continued TITLE CORPORATION ST 20505 (4) North 80 degrees 10 minutes 59 seconds West, along said division line, 29.43 feet to a found iron pin for a corner in the division line between Tax Lots 1, 2 and 3, Block 176.011 thence (5) South 09 degrees 49 minutes 01 seconds West along the division line between Tax Lots 1 and 3, Block 176.01, 180.26 feet to a point in the Northeasterly line of Chapel Avenue; thence (6) North 53 degrees 04 minutes 12 seconds West, along said line of Chapel Avenue, 163.20 feet to an angle point in same; thence (7) North 20 degrees 28 minutes 36 seconds West, along same, 17.86 feet to the point and place of beginning. BEING shown and designated as Lots 2 and 3, Block 176.01, Plate 18 on the Township of Cherry Hill Tax Map. COMMONLY known as 469 Third Avenue a/k/a 1700 Chapel Avenue. PAGE 8 Said property is also known and described as follows: Description of Property 457 Haddonfield Road Block 176.01, Lots 1,2 & 3 All those certain tract or parcel of land situated in the Township of Cherry Hill, County of Camden and State of New Jersey, being more particularly described as follows BEGINNING at a point in the southerly right-of-way line of New Jersey State Highway Route 38, said point being the corner formed by the intersection of the said line of New Jersey State Highway Route 38 with the northeasterly right-of-way line of Third Avenue (50 feet wide) and extending; thence, along said right-of-way line of New Jersey State Highway Route 38(1) S. 80o 11' 00" E., 19.53 feet to an angle point common with the southwesterly right-of-way of the access road (ramp from New Jersey State Highway Route 38 to Haddonfield Road) and extending; thence, along said right-of-way line to the access road (2) S. 45o 29' 39" E., 336.69 feet to an angle point, and extending; thence, along the right-of-way line (3) S. 21o 17' 18" E., 120.52 feet to a corner point formed by the intersection of said access road with the westerly right-of-way line of Haddonfield-Sorrell Horse Road (formerly Stoy Landing Road), a.k.a. Camden County Route 644 (formerly 66 feet wide), and extending; thence, along the said right-of-way line of Haddonfield-Sorrell Horse Road and lands of Cinelli's Country House, Inc. (4) S. 09o 49' 00" W., 283.83 feet to an angle point, and extending; thence, along said right-of-way line of Haddonfield-Sorrell Horse Road (5) S. 24o 17' 14" W., 96.05 feet to an angle point, and extending; thence, along said right-of-way line of Haddonfield Road (6) S. 09o 49' 00" W., 257.21 feet to a point of curvature, and extending; thence, (7) at the point of curvature in the westerly right-of-way line of Haddonfield-Sorrell Horse Road, curving to the right, having a radius of 30.00 feet and an arc length of 57.17 feet to a point of tangency connecting the northeasterly right-of-way line of Chapel Avenue (variable width), a.k.a. Camden County Route 626, with the said right-of-way line of Haddonfield-Sorrell Horse Road, and extending; thence, along said right-of-way line of Chapel Avenue (8) N. 61o 00' 11" W. , 108.14 feet to an angle point, and extending; thence, along said right-of-way line of Chapel Avenue the following four courses (9) N. 52o 03' 39" W., 43.50 feet to a point; thence, (10) S. 09o 49' 01" W., 1.95 feet to a point; thence, (11) N. 53o 04' 12" W., 163.21 feet to a point; thence, (12) N. 20o 28' 36" W., 17.86 feet to a corner in the aforementioned northeasterly right-of-way line of Third Avenue and extending; thence, along said right-of-way line (13) N. 09o 49' 00" E., 813.30 feet to the point and place of beginning. SAID ABOVE DESCRIBED tract or parcel of land containing within said bounds 6.324 acres more or less. The herein above described is prepared in accordance with an "ALTA/ACSM (1992) Land Title Survey Block 176.01, Lots 1, 2 & 3" prepared by Taylor, Wiseman and Taylor, Mt. Laurel, New Jersey. Scale 1"=30", dated July, 1996 (Dwg. No. 355-17427) EX-99.7 8 EXHIBIT 99.7 Exhibit 99.7 Amended and Restated Loan Agreement between the Trust and Summit Bank ("SB") AMENDED AND RESTATED LOAN AGREEMENT AGREEMENT dated this 19th day of July, 1996, by and between BRANDYWINE REALTY TRUST, a Maryland real estate investment trust with an office at Two Greentree Centre, Suite 100, Marlton, New Jersey 08053 ("Borrower"), and SUMMIT BANK, a New Jersey state bank (formerly known as United Jersey Bank/South, N.A. and United Jersey Bank) with an office at 1800 Chapel Avenue West, Cherry Hill, New Jersey 08002 ("Bank"). Background On December 29, 1993 the Bank and UM Real Estate Investment Corp. ("UM Corp.") entered into a Loan Agreement ("Original Loan Agreement") pursuant to which the Bank agreed to loan to UM Corp. (i) $6,000,000 ("Acquisition Loan") to finance the acquisition of certain real property located at 457 Haddonfield Road and constituting Block 176.01, Lot 1, in Cherry Hill Township, Camden County, New Jersey, as more particularly described on Exhibit A attached hereto ("Primary Property"), and the improvements thereon including a seven (7) story office building containing approximately 121,737 net rentable square feet (collectively, the "Building"), and (ii) up to $1,500,000 ("Construction Loan") to finance the construction of certain tenant improvements to the Building. The Acquisition Loan and Construction Loan are hereinafter referred to collectively as the "Original Loans". The Acquisition Loan was evidenced by a Promissory Note dated December 29, 1993 in the stated principal amount of $6,000,000 executed by UM Corp. and made payable to the order of the Bank ("Acquisition Note"), and the Construction Loan was evidenced by a Promissory Note dated December 29, 1993 in the stated principal amount of $1,500,000 executed by UM Corp. and made payable to the order of the Bank ("Construction Note"). The Acquisition Note and the Construction Note are hereinafter referred to collectively as the "Original Notes". As security for the Original Loans, UM Corp. delivered or caused to be delivered to the Bank, inter alia: (i) a Mortgage and Security Agreement dated December 29, 1993 and recorded in the Office of the Register of Deeds of Camden County, New Jersey, in Mortgage Book 4130, page 558 ("Original Mortgage"), executed by UM Corp. in favor of the Bank and covering the Primary Property and Building; (ii) an Unconditional Assignment of Leases dated December 29, 1993 and recorded in the Office of the Register of Deeds of Camden County, New Jersey, in Mortgage Book 4130, page 603 ("Original Assignment of Leases"), executed by UM Corp. in favor of the Bank and covering all leases with respect to the Primary Property and Building; (iii) UCC Financing 1 Statements dated December 29, 1993 and filed in the New Jersey Secretary of State's Office and Camden County Clerk's Office ("Original Financing Statements"), executed by UM Corp. in favor of the Bank to evidence the grant of security interests in the fixtures and personalty owned by UM Corp. and used in connection with the Primary Property and Building; (iv) an Assignment of Contract Rights and Interests in Licenses, Permits and Agreements dated December 29, 1993 ("Original Assignment of Contract Rights"), executed by UM Corp. in favor of the Bank; (v) a Collateral Assignment of Plans, Specifications, Surveys, Drawings and Reports dated December 29, 1993 ("Original Assignment of Plans"), executed by UM Corp. in favor of the Bank; (vi) an Environmental Agreement dated December 29, 1993 ("Original Environmental Agreement") executed by UM Corp. and the Bank covering the Primary Property and Building; and (vii) an Unconditional Guaranty of Performance dated December 29, 1993 ("Original Performance Guaranty") executed by John Aglialoro ("Original Guarantor") in favor of the Bank. The Original Loan Agreement, the Original Notes, the Original Mortgage, the Original Assignment of Leases, the Original Financing Statements, the Original Assignment of Contract Rights, the Original Assignment of Plans, the Original Environmental Agreement and the Original Performance Guaranty, together with any and all other documents executed and delivered by UM Corp. or the Original Guarantor in connection with the creation of the Loans, are hereinafter referred to collectively as the "Original Loan Documents". On January 31, 1994 UM Corp. was merged into UM Real Estate Investment Company, LLC ("UM Company"). On April 23, 1994, UM Corp., UM Company and the Original Guarantor executed and delivered to the Bank an Instrument of Assumption ("Instrument of Assumption") pursuant to which the Loans were reaffirmed and UM Company expressly assumed and became liable for the Loans. In addition, in connection therewith UM Company delivered to the Bank the following documents: (i) a Notes, Mortgage and Security Agreement Modification Instrument dated March 26, 1994 and recorded in the Office of the Register of Deeds of Camden County, New Jersey, in Mortgage Book 4212, Page 119 ("First Amendment of Mortgage"); (ii) UCC Financing Statements filed in the New Jersey Secretary of State's Office and Camden County Clerk's Office ("New Financing Statements"); (iii) a First Amendment to Promissory Note ("First Amendment of Acquisition Note"), amending the Acquisition Note; and (iv) a First Amendment to Promissory Note ("First Amendment of Construction Note"), amending the Construction Note. The Instrument of Assumption, the First Amendment of Mortgage, the New Financing Statements, the First Amendment of Acquisition Note and the First Amendment of Construction Note, together with any and all other documents executed and delivered 2 by UM Corp., UM Company or the Original Guarantor in connection with the assumption of obligations under the Original Loans, are hereinafter referred to collectively as the "Assumption Documents". On October 14, 1994 UM Company and the Bank executed a First Amendment to Loan Agreement ("First Amendment of Original Loan Agreement") in order to permit the Construction Loan to be used for certain other purposes and to extend the maturity date and certain other time frames relating to the Construction Loan. In connection therewith, (i) a Second Amendment to the Acquisition Note ("Second Amendment of Acquisition Note") was executed by UM Company in favor of the Bank, and (ii) an Amended and Restated Promissory Note dated October 14, 1994 ("Amended and Restated Construction Note") was executed by UM Company in favor of the Bank to replace the Original Construction Note. As additional security for the Original Loans, UM Company delivered or caused to be delivered to the Bank, inter alia: (i) a Second Note, Mortgage and Security Agreement Modification Instrument dated October 14, 1994 and recorded in the Office of the Register of Deeds of Camden County, New Jersey ("Second Amendment of Mortgage") executed by UM Company and the Bank, amending and modifying the Original Mortgage; (ii) a Mortgage and Security Agreement dated October 14, 1994 and recorded in the Office of the Register of Deeds of Camden County, New Jersey, in Mortgage Book 4283, page 445 ("Additional Mortgage") executed by UM Company in favor of the Bank covering certain real property located adjacent to the Primary Property at 1700 Chapel Avenue and constituting Block 176.01, Lots 2 and 3, in Cherry Hill Township, Camden County, New Jersey, as more particularly described on Exhibit B attached hereto ("Additional Property"), and any and all improvements thereon (collectively, the "Additional Property Improvements"); (iii) an Assignment of Contract Rights and Interests in Licenses, Permits and Agreements dated October 14, 1994 ("Additional Assignment of Contract Rights"), executed by UM Company in favor of the Bank; (iv) a Collateral Assignment of Plans, Specifications, Surveys, Drawings and Reports dated October 14, 1994 ("Additional Assignment of Plans"), executed by UM Company in favor of the Bank; (v) an Environmental Agreement dated October 14, 1994 ("Additional Environmental Agreement"), executed by UM Company and the Bank covering the Additional Property and Additional Property Improvements; and (vi) a Confirmation of Unconditional Performance Guaranty dated October 14, 1994 ("Additional Performance Guaranty"), executed by the Original Guarantor in favor of the Bank. The First Amendment of Original Loan Agreement, the Second Amendment of Acquisition Note, the Amended and Restated Construction Note, the Second Amendment of Mortgage, the Additional Mortgage, the Additional Assignment of Contract 3 Rights, the Additional Assignment of Plans, the Additional Environmental Agreement and the Additional Performance Guaranty, together with any and all other documents executed and delivered by UM Company or the Original Guarantor in connection with such amendment of the Original Loans are hereinafter referred to collectively as the "Amendment Documents". The Original Loans, as assumed by UM Company and as amended and modified as set forth hereinabove, are hereinafter referred to collectively as the "Amended Original Loans", and the Original Loan Documents, as assumed by UM Company and as amended and modified by the Assumption Documents and Amendment Documents, are hereinafter referred to as the "Amended Original Loan Documents". The Primary Property and Additional Property are hereinafter referred to collectively as the "Real Property", and the Building and Additional Property Improvements are hereinafter referred to collectively as the "Improvements". As of this date, the aggregate outstanding principal balance of the Amended Original Loans is $7,289,226.41 and, immediately prior to the effectiveness of this Agreement, interest under the Amended Original Loans has been paid through June 30, 1996. Pursuant to a Purchase and Sale Agreement between UM Company and the Borrower dated March 28, 1996, as amended by First Amendment to Purchase and Sale Agreement dated May, 1996, Second Amendment to Purchase and Sale Agreement dated June 14, 1996 and Third Amendment to Purchase and Sale Agreement dated June 24, 1996 (collectively, the "Purchase Agreement"), concurrently herewith, UM Company is transferring and conveying the Real Property and Improvements to the Borrower for the total sum of $10,600,000, of which (i) $2,310,773.59 is being paid in cash or other immediately available funds, (ii) $7,289,226.41 is being paid by the Borrower's assumption of the Amended Original Loans and Amended Original Loan Documents and receipt of the Real Property and Improvements under and subject thereto, and (iii) $1,000,000 is being paid in the form of a loan from UM Company to the Borrower ("Seller Loan") evidenced by a promissory note in the principal amount of $1,000,000 ("Seller Note") and secured by a second mortgage covering the Real Property and Improvements ("Seller Mortgage"). In order to document and evidence the transfer to and assumption by the Borrower of the Amended Original Loans referred to in clause (ii) of the immediately preceding sentence, concurrently herewith UM Companies, the Original Guarantor, the Borrower and the Bank are executing an Assignment, Assumption and Release Agreement dated this date ("Assignment and Assumption"). The Borrower and the Bank desire to amend and restate the Amended Original Loans and Amended Original Loan Documents in their entirety, and in connection therewith the Borrower desires to borrow additional funds from the Bank and the Bank is prepared 4 to lend such additional funds to the Borrower, all subject to the terms and conditions set forth herein. Agreement NOW THEREFORE, in consideration of the premises, and of the mutual promises and undertakings of the parties set forth herein, and with the intention of being legally bound hereby, the parties hereto agree to amend and restate in its entirety the Original Loan Agreement, as it may have been amended by one or more of the Amended Original Loan Documents, as follows: 1. The Loan. (a) Purpose and Amount. The Bank shall lend to the Borrower up to the sum of $9,777,140 (the "Loan"), consisting of (i) $8,480,000 to be used to partially finance the acquisition by the Borrower from UM Company of the Real Property and Improvements ("Acquisition Portion of the Loan"), and (ii) up to $1,297,140 to be used to finance the cost of certain tenant improvements ("Tenant Improvements") and leasing commissions ("Leasing Commissions") in connection with new leases (individually, a "New Lease" and, collectively, the "New Leases") hereinafter entered into between the Borrower and tenants with respect to portions or all of the approximately 40,782 square feet of currently vacant space ("Vacant Space") within the Improvements ("Tenant Improvement Portion of the Loan"), all in accordance with and subject to the terms and conditions set forth herein. (b) Loan Documents. (i) The Borrower's obligation to repay the Loan and any other sums loaned to the Borrower by the Bank is evidenced by the Borrower's amended and restated promissory note dated this date in the principal amount of $9,777,140 ("Note"), providing for the payment of principal, together with interest thereon at the rate set forth therein, in such installments, at such times, and according to such further terms as set forth in the Note. (ii) As security for the Note and all of the Borrower's obligations thereunder and hereunder, the Borrower shall execute and deliver to the Bank or cause to be executed and delivered to the Bank, as the case may be, the following: (A) An amended and restated mortgage and security agreement ("Mortgage") covering the Real Property, the Improvements, and all building materials, fixtures, machinery and equipment necessary or incidental to the construction of the Tenant Improvements or the general operation and maintenance of the Real Property and Improvements, and all renewals and 5 replacements thereof or additions thereto, and such other property as the Bank may reasonably require, all as more specifically described in the Mortgage. (B) An amended and restated assignment of all of the Borrower's right, title and interest in and to any and all present and future leases and agreements of lease affecting the Real Property or Improvements or any part thereof ("Assignment of Leases and Rents"). (C) An amended and restated assignment of all of the Borrower's right, title and interest in and to all construction contracts, architect's agreements, other contracts and agreements, and any and all licenses, permits and approvals relating to the construction of the Tenant Improvements, and all other documents and rights relating to the construction of the Tenant Improvements ("Assignment of Contracts and Permits"). (D) Such security agreements, financing statements, continuation statements and other security instruments as the Bank shall require in order to create a valid and perfected first priority security interest in all personal property now owned or hereafter acquired by the Borrower and located on or used in connection with the Real Property and Improvements. (iii) The Borrower shall execute and deliver such additional documents and instruments as the Bank shall reasonably require in order to perfect the Bank's interest in any of the foregoing property. The Note, Mortgage, Assignment of Leases and Rents, Assignment of Contracts and Permits, financing statements and other documents and instruments referred to above (all of which, together with this Agreement, are hereinafter collectively referred to as the "Loan Documents") shall be in form and substance satisfactory to the Bank, and all necessary filing and recording fees with respect thereto shall be paid by the Borrower. (c) Additional Security. As additional security for the Note and all of the Borrower's obligations thereunder and hereunder, the Borrower hereby irrevocably assigns to the Bank and grants to the Bank a security interest in all of its right, title and interest in and to all Loan funds held by the Bank, whether or not disbursed, all funds in the Borrower's operating account for the Real Property and Improvements, and all reserves, deferred payments, deposits, refunds, cost savings and payments of any kind specifically relating to the Real Property or Improvements or construction of the Tenant Improvements. Upon the occurrence of an event of default under any of the Loan Documents, the Bank may use any of the foregoing for any purpose for which the Borrower could have used them under this Agreement, including without limitation, payments on account of the Loan. 6 In addition, subject to paragraph 9 hereof, the Bank shall have all other rights and remedies with respect to any of the foregoing which are provided under applicable law or at equity. 2. Representations and Warranties. The Borrower hereby represents and warrants to the Bank (which representations and warranties shall survive until the Loan has been paid in full) that: (a) Formation; Existence. The Borrower is a real estate investment trust duly formed, validly existing and in good standing in the Maryland, has the power and authority to carry on its business as now conducted, including the ownership and operation of the Real Property and Improvements. The capital stock of the Borrower, representing the sole form of equity interest in the Borrower, is publicly traded on the American Stock Exchange. Gerard H. Sweeney is the President and Chief Executive Officer of the Borrower. True and correct copies of the Borrower's Trust Agreement, together with any and all amendments thereto, have been furnished to the Bank and the same are in full force and effect as of the date of this Agreement. To the best of the Borrower's knowledge, none of the equity interests of the Borrower has been offered, issued, distributed or sold in violation of any state or federal securities laws. (b) Power and Authority; Authorization; Enforceability. The Borrower has full power, authority and legal right to execute, deliver and comply with each of the Loan Documents and any other document or instrument relating to the Loan to be executed by the Borrower, all actions of the Borrower and other authorizations necessary or appropriate for the execution and delivery of and compliance with the Loan Documents and such other documents and instruments have been taken or obtained and, upon their execution, the Loan Documents and such other documents and instruments shall constitute the valid and legally binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms subject to limitations on enforceability as may be imposed by laws relative to bankruptcy, insolvency or equitable principles generally. (c) Governmental Approval of Loan Documents. No consent, approval or other authorization of or by any court, administrative agency or other governmental authority is required in connection with the Borrower's execution and delivery of or compliance with any of the Loan Documents or any other document or instrument relating to the Loan executed by the Borrower. (d) Conflict; Breach. The Borrower's execution and delivery of and compliance with the Loan Documents and any other documents and instruments relating to the Loan will not conflict with or result in a breach of any applicable law, judgment, order, writ, injunction, decree, rule or regulation of any court, 7 administrative agency or other governmental authority, or of any agreement or other document or instrument to which the Borrower is a party or by which it is bound, and such action by the Borrower will not result in the creation or imposition of any lien, charge or encumbrance upon any property of the Borrower in favor of anyone other than the Bank. (e) Litigation. There is no action, suit or proceeding pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or the Real Property before or by any court, administrative agency or other governmental authority, or which brings into question the validity of the transactions contemplated hereby. (f) Financial Statements. The 10Q of the Borrower as of and for the period ending March 31, 1996 and the 10K of the Borrower as of and for the period ending December 31, 1995, including the financial statements contained therein, fairly and accurately reflect the financial condition of the Borrower as of and for the respective periods shown therein, and there has been no material adverse change in the financial condition or business of the Borrower since the respective dates thereof. (g) Tax Returns. Any and all federal, state and local income tax returns required to have been filed by the Borrower (or extensions thereto) have been filed, and all taxes reflected upon any such tax returns, all past due taxes, interest and penalties and all estimated payments required to be paid have been paid. (h) Bankruptcy; Insolvency. The Borrower has not applied for or consented to the appointment of a receiver, trustee or liquidator of itself or any of its property, admitted in writing its inability to pay its debts as they mature, made a general assignment for the benefit of creditors, been adjudicated a bankrupt or insolvent or filed a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, and no action has been taken by it for the purpose of effecting any of the foregoing. No order, judgment or decree has been entered by any court of competent jurisdiction approving a petition seeking reorganization of the Borrower, or all or a substantial part of the assets of the Borrower, or appointing a receiver, sequestrator, trustee or liquidator of the Borrower or any of its property. (i) Title to Real Property. The Borrower has good and marketable title to an indefeasible fee simple estate in the Real Property, subject to no lien, charge or encumbrance except the 8 Seller Mortgage and such as are listed as exceptions to title or exclusions from coverage in the title insurance policy being issued by Lawyers Title Insurance Corporation ("Title Company") to the Bank concurrently with the recording of the Mortgage. The Primary Property and Additional Property are contiguous to each other without the existence of any gaps or gores. (j) Title to Personal Property. All personal property with respect to which the Borrower has granted to the Bank a security interest pursuant to any of the Loan Documents is otherwise owned by the Borrower free and clear of all liens, encumbrances and security interests. (k) Environmental Matters. (i) To the best of the Borrower's knowledge based upon the Phase I environmental report described in paragraph 4(d)(iii) hereof ("Environmental Report") and the Purchase Agreement, except as may be set forth in the Environmental Report or the Purchase Agreement and except for the use and storage of Hazardous Substances (hereinafter defined) in de minimis amounts which are used in and stored in compliance with all applicable laws and regulations, (A) the Real Property has not been used for the generation, manufacture, storage or disposal of, and there has not been transported to or from the Real Property, any Hazardous Substances or Wastes (as hereinafter defined), (B) there are no Hazardous Substances or Wastes present on the Real Property, (C) the Real Property does not consist in whole or in part of any soils or vegetation that would be considered to be protected wetlands as defined in applicable federal, state and local laws and regulations ("Wetlands"), (D) there has been no use of the Real Property that may, under any federal, state or local law or regulation, require any closure or cessation of the use of the Real Property or impose upon the Borrower or its successors any monetary obligations, (E) no lien or superlien has been recorded, asserted or threatened against the Real Property for any liability in connection with any environmental contamination, and (F) the Real Property is in compliance with all federal, state or local laws and regulations relating to environmental matters. (ii) The Borrower's knowledge with respect to environmental matters affecting the Real Property and Improvements is limited to such matters, if any, which appear in the Environmental Report or Purchase Agreement. (iii) The Borrower has not been identified in any litigation, proceeding or investigation as a responsible party or potentially responsible party for any liability for disposal or release of any Hazardous Substances or Wastes. (iv) For the purposes hereof: (A) "Hazardous 9 Substances" shall mean any flammable explosives, radioactive materials, asbestos, urea-formaldehyde, hazardous wastes, toxic substances or any other elements or compounds designated as a "hazardous substance", "pollutant", "contaminant" or "regulated substance" in the Comprehensive Environmental Response, Compensation and Liability Act or in the Resource Conservation and Recovery Act, both as amended by the Superfund Amendments and Reauthorization Act of 1986, or the Toxic Substance Control Act, the New Jersey Industrial Site Recovery Act, the New Jersey Spill Compensation and Control Act, or any other applicable federal, state or local law or regulation and (B) "Wastes" shall mean any hazardous wastes, biological or medical wastes, residual wastes, solid wastes or other wastes as those terms are defined in the applicable federal, state or local laws or regulations. (l) Compliance with Laws. To the best of the Borrower's knowledge which is based upon UM Company's representations and warranties in the Purchase Agreement and in the letter dated July 2, 1996 from Cherry Hill Township to Brad A. Molotsky, Esq., counsel for the Borrower, the current use of the Real Property and Improvements as an office building complies in all respects with all subdivision, zoning, building and other applicable laws, ordinances, rules and regulations. (m) Leases. The Borrower has delivered to the Bank true, correct and complete copies of all lease agreements affecting any portion of the Real Property and Improvements. To the best of the Borrower's knowledge based upon the estoppel certificates executed by lessees of the Real Property and Improvements and delivered to the Bank on the date hereof, there are no events of default in existence under any such lease agreements or events which, with the passage of time or giving of notice or both, would constitute an event of default under any such lease agreements. (n) Management Agreements. There is no management agreement in effect with respect to the management or operation of the Real Property and Improvements. 3. Covenants. The Borrower covenants and agrees that, until the Loan has been paid in full: (a) Compliance with Laws. The Borrower shall operate and maintain the Real Property and Improvements as an office building in all respects in compliance with all subdivision, zoning, building, and other applicable laws, ordinances, rules and regulations. (b) Leases. The Borrower shall not enter into any New Lease or similar agreement for space comprising any portion or all of the Real Property and Improvements without in each case using the standard form of lease agreement attached hereto as 10 Exhibit C and obtaining the Bank's prior written approval of all of the terms and conditions thereof, which approval shall not be unreasonably withheld or delayed. Once any such lease or similar agreement is approved, the Borrower shall not amend, modify or cancel such lease or agreement without in each case obtaining the Bank's prior written approval. (c) Management Agreements. The Borrower shall not enter into any management agreement with respect to all or any portion of the Real Property and Improvements without in each case obtaining the Bank's prior written approval, which shall not be unreasonably withheld or delayed so long as there is no continuing event of default in existence under any of the Loan Documents. With respect to any such approved management agreement, (i) there shall be no amendment or modification thereof without in each case obtaining the prior written approval of the Bank, and (ii) the lien and priority of payments under such management agreement shall be under and subject and subordinate to payments under the Loan pursuant to a subordination agreement among the Borrower, the manager and the Bank or other documentation satisfactory in form and substance to the Bank. (d) Status of Title to Real Property and Improvements. Except for Permitted Transfers (as hereinafter defined), the Borrower shall not transfer control or ownership of the Real Property and Improvements or any part thereof, directly or indirectly, voluntarily or involuntarily, without the prior written approval of the Bank. Other than the Seller Mortgage, the Borrower shall not create or permit to exist any lien, encumbrance or security interest (whether consensual or otherwise) in favor of any third party with respect to the Real Property and Improvements or any item of property, whether or not a fixture, installed on the Real Property and Improvements or stored thereat and the Borrower shall keep all such property free from any such lien, encumbrance or security interest other than those created in favor of the Bank as contemplated herein and liens for taxes not yet due and payable. In general, the Borrower shall keep the title to the Real Property and the Improvements free of any matter which would, at the time of completion of the Tenant Improvements, prevent any title insurance company from certifying the lien of any mortgage to be executed in favor of a permanent lender or other mortgagee in substitution for or in payment of the Loan, as other than a good and valid first lien upon the Real Property and the Improvements. (e) Mechanic's Liens and Other Encumbrances. The Borrower shall pay, discharge or obtain release bonds from a reputable surety company satisfactory to the Bank for any mechanic's liens or other encumbrances which may be filed or recorded against the Real Property or Improvements within ten (10) days after it receives notice thereof, from the Bank or 11 otherwise. In the event that the Borrower shall fail to pay or discharge any such mechanic's lien or other encumbrance, the Bank, in addition to such other rights as may be available to it, may pay and discharge such mechanic's lien or other encumbrance or deposit in escrow an amount sufficient to do so or cause a mechanic's lien release bond to be issued with respect thereto and pay such amounts as may be necessary in connection therewith, and all amounts so paid or deposited shall be treated as an advance of the Loan from the Bank to the Borrower. (f) Environmental Matters. The Borrower will not, and will use reasonable efforts not to, permit any tenant or other occupant of the Real Property or Improvements to, store, use, generate, treat or dispose of any Hazardous Substances or Wastes on the Real Property or Improvements except in de minimus quantities and in accordance with applicable laws. The Borrower promptly shall advise the Bank in writing of and with respect to any pending or known threatened claim, demand, action or notice by any governmental authority or third party relating to any Hazardous Substances or Wastes affecting the Real Property or Improvements or the discovery or determination of the existence of any Hazardous Substances or Wastes or Wetlands on the Real Property or Improvements. The Bank shall have the right to join in or participate in any legal proceedings or actions initiated in connection with any Hazardous Substances, Wastes or Wetlands affecting the Real Property or Improvements. The Borrower shall reimburse the Bank for reasonable attorneys' fees and costs in connection therewith and the Borrower shall indemnify, defend and hold harmless the Bank from and against any claim, demand, loss or liability, including but not limited to costs of remedial action, response costs, personal injury and property damage, directly or indirectly arising out of or attributable to the use, generation, deposit, storage, release, discharge, disposal, burial, dumping, spilling, leaking or other presence of Hazardous Substances or Wastes on, under or affecting the Real Property or Improvements or arising as the result of the existence of Wetlands on the Real Property or Improvements. The foregoing indemnity shall specifically survive the repayment of the Loan and the satisfaction of the Mortgage. The Borrower shall not, without obtaining the Bank's prior written consent, which consent shall not be unreasonably withheld or delayed so long as there is no continuing event of default then in existence under any of the Loan Documents, enter into any settlement agreement, consent decree or other compromise in respect to any Hazardous Substances, Wastes or Wetlands affecting the Real Property or Improvements. (g) Additional Financing. Except for the Seller Loan, the Borrower shall not incur any additional indebtedness secured by any lien or security interest on the Real Property and Improvements or any other property encumbered in favor of the Bank to secure the Loan. 12 (h) Financial Information. (i) Within one hundred twenty (120) days after the end of each fiscal year of the Borrower, the Borrower shall furnish the Bank with annual financial statements for the Borrower consisting of a balance sheet, a statement of income and expense, cash flow statement and rent roll for the Real Property and Improvements, prepared and audited by Arthur Andersen, L.P., or another independent certified public accounting firm acceptable to the Bank. (ii) Within forty-five (45) days after the end of each fiscal quarter annual period of the Borrower, the Borrower shall furnish the Bank with financial statements for such quarter annual period consisting of a balance sheet, statement of income and expense, cash flow statement and rent roll for the Real Property and Improvements, prepared by management and reviewed by Arthur Andersen, L.P., or another independent certified public accounting firm acceptable to the Bank. (iii) Within thirty (30) days after the respective filings thereof, the Borrower shall furnish the Bank with copies of the Borrower's federal and state income tax returns, certified by the chief financial officer of the Borrower as true and correct copies of such returns as filed. (iv) The Borrower shall furnish to the Bank such other financial information with respect to the Real Property and Improvements as the Bank from time to time reasonably may request. (v) At all times during the term of the Loan, (i) the Borrower's stated net worth shall equal or exceed $6,300,000 and (ii) the Borrower's Funds from Operations Payout Ratio (as defined by the National Association of Real Estate Investment Trusts, Inc.) shall not exceed one hundred ten percent (110%). Compliance with such covenants shall be confirmed in the quarter annual financial statements of the Borrower delivered pursuant to section (ii) hereof and shall be certified to by the chief financial officer of the Borrower. (i) Composition of the Borrower. During the term of the Loan, the Borrower shall maintain its existence as a real estate investment trust under the laws of the State of Maryland. The Borrower's equity securities may be subject to normal trading in the public securities markets and there may be public offerings of the Borrower's equity securities without requirement for the Bank's consent with respect thereto ("Permitted Transfers"). However, the Bank shall have the right to review and approve, within ten (10) days after delivery to the Bank of all information reasonably necessary in order for the Bank to so 13 review and approve, any merger involving the Borrower or any material change in the ownership of the equity securities of the Borrower, and in the event of any disapproval thereof by the Bank, the Loan, at the Bank's option, shall become due and payable within one hundred twenty (120) days after written notice thereof from the Bank to the Borrower. The Borrower shall advise the Bank of the nature of any changes in its Trust Agreement or other organizational documents promptly after any such changes, and the Borrower shall not change any such organizational documents in any manner which would affect its ability to perform any of its obligations under any of the Loan Documents, without in each case obtaining the prior written approval of the Bank. (j) Principal Office. The Borrower shall maintain its principal office and/or the office where it keeps its books and records relating to the Real Property and Improvements at Two Greentree Centre, Suite 100, Marlton, New Jersey 08053, unless it gives the Bank prior written notice of any proposed change in location thereof. (k) Books and Records. The Borrower shall keep complete and accurate books and records with respect to the Real Property and Improvements in accordance with generally accepted accounting principles consistently applied. The Borrower shall furnish to the Bank all such written information relating to its affairs as reasonably may be requested by the Bank from time to time. (l) Operating Account. The Borrower shall maintain with the Bank its primary operating account for the Real Property and Improvements, which account shall be the sole depository for the rental income from the Real Property and Improvements. (m) Audit. The Bank shall have the right at any time and from time to time, subject to two (2) days prior notice and during normal business hours, to audit the books and records of the Borrower relating to the Real Property and Improvements, and the Borrower shall be obligated to make available for any such audit all books, records and other information relating to the Real Property and Improvements that the Bank may reasonably request for such purpose and to cooperate fully with the Bank in connection therewith. The cost of any such audit shall be borne by the Bank if at the time thereof there is no event of default then in existence under any of the Loan Documents, and the cost thereof shall be borne by the Borrower if there is an event of default then in existence under any of the Loan Documents. (n) Use of Proceeds. The Borrower shall use the proceeds of the Loan solely for the purposes and in the amounts set forth in paragraph 1(a) hereof. (o) Changed Circumstances. The Borrower shall promptly notify the Bank in the event any representation or 14 warranty made by the Borrower herein or in any other documents furnished to the Bank in connection with this Agreement becomes false or inaccurate in any material respect. (p) Bank's Costs. The Borrower shall pay or reimburse the Bank for all reasonable costs and expenses (including but not limited to attorneys', surveyors', appraisal, environmental and engineering fees and costs) incurred by the Bank in connection with the preparation, review, modification and enforcement of the Loan Documents and any other document or instrument relating to the Loan and the collection of the Loan. (q) Bank's Fees. As compensation for the expenses of underwriting and evaluating the Loan, the Borrower shall pay to the Bank on the date hereof the sum of $100,000 ("Loan Fee"), less any portion thereof already paid by the Borrower to the Bank. The Loan Fee shall be in addition to the interest and any and all other amounts which the Borrower is required to pay under the Loan Documents. 4. Conditions Precedent. The obligation of the Bank to make the Loan to the Borrower is subject to the satisfaction of the following conditions precedent: (a) Representations and Warranties. Each and all of the representations and warranties set forth in paragraph 2 hereof shall be true and correct in all respects. (b) Fees, Charges and Premiums. The Borrower shall have paid for all premiums on insurance policies and bonds, all recording and title company costs and charges assessed against the Borrower, the commitment fee of the Bank, and the legal fees and disbursements of the Bank's counsel in connection with the Loan. (c) Delivery of Loan Documents. The Loan Documents shall have been duly executed and delivered to the Bank and, where applicable, shall have been delivered to the Title Company for recording or filing in the appropriate public office. (d) Delivery of Other Documents. The following documents shall have been delivered by or on behalf of the Borrower to the Bank: (i) Survey of Real Property and Improvements. An as-built survey of the Real Property and Improvements, certified to and acceptable to the Bank and the Title Company and paid for by the Borrower bearing the stamp of a registered surveyor showing the distance to the nearest intersection and the location of all improvements, utility lines, easements, rights-of-way, restrictions, encroachments and building setback lines, together with a metes and bounds description of the Real Property and 15 Improvements corresponding to such survey, sufficient to enable the Title Company to issue title insurance without a survey exception and to issue a contiguity endorsement insuring that the Primary Property and Additional Property are contiguous to each other without the existence of any gaps or gores. (ii) Appraisal. An appraisal of the Real Property and Improvements based upon their current fair market value ("As Is Value") and based upon their fair market value assuming the execution of New Leases covering all of the current Vacant Space within the Improvements and full advance of the Tenant Improvement Portion of the Loan ("Fully Leased Stabilized Value"), which appraisal shall (i) be performed in accordance with the provisions of Title 11 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 by an appraiser selected by or acceptable to the Bank, (ii) indicate that the principal amount of the Acquisition Portion of the Loan is no greater than eighty percent (80%) of the As Is Value and that the principal amount of the sum of (A) the Acquisition Portion and (B) the Tenant Improvement Portion of the Loan, do not exceed seventy-five percent (75%) of the Fully Leased Stabilized Value of the Real Property and Improvements, and (iii) otherwise be satisfactory in form and substance to the Bank. (iii) Environmental Report. A phase I environmental report prepared by an independent environmental engineering firm or firms acceptable to the Bank and paid for by the Borrower indicating that there are no Hazardous Substances, Wastes or Wetlands in, on or around the Real Property and Improvements and otherwise in form and substance satisfactory to the Bank. (iv) Structural and Engineering Report. A report prepared by an independent engineering firm or firms acceptable to the Bank, paid for by the Borrower, and in form and substance satisfactory to the Bank, stating that such firm has inspected the physical condition and structural integrity of the Improvements on the Real Property, including, but not limited to, heating, ventilation and air conditioning units, and electrical, plumbing, roofing and mechanical systems, and has found them to be in good working order and repair. (v) Certificates of Occupancy; Evidence of Compliance. Copies of all applicable certificates of occupancy (or their equivalents) for the Real Property and Improvements, and/or other evidence satisfactory to the Bank that the Real Property and Improvements and the use thereof complies with all applicable governmental requirements, including but not limited to zoning, subdivision, land use and development, building, safety and health laws, ordinances and regulations. (vi) Title Insurance. Marked-up title reports of 16 the Title Company, representing its commitment to issue in favor of the Bank, but at the expense of the Borrower, standard ALTA form mortgagee title insurance policies including endorsements, insuring the lien of the Mortgage as a first lien on the Real Property and Improvements, free and clear of all liens (including possible mechanic's liens, filed or unfiled) and encumbrances and subject only to such objections and exceptions as the Bank may approve. (vii) Property, Liability and Other Insurance. Fully paid fire insurance policy covering risk of loss or damage to the Real Property and Improvements due to fire and such other casualties as the Bank may require with limits equal to one hundred percent (100%) of the full replacement cost with such company or companies reasonably approved by the Bank and containing mortgagee clauses in favor of the Bank in form and content reasonably satisfactory to the Bank; fully paid flood insurance policy, if determined to be necessary by the Bank, applicable to such portion of the Improvements as are in the flood hazard area; rent loss insurance applicable for a period of at least one (1) year following the occurrence of a casualty, which shall be assignable to the Bank; and fully paid liability insurance the Borrower in amounts reasonably acceptable to the Bank and naming the Bank as additional insured thereunder. Receipt of the aforesaid policies or certificates shall not bar the Bank from requiring other or additional insurance which the Bank reasonably requires due to changed circumstances and which insurance is commercially reasonable to obtain for real estate properties similar to the Real Property and Improvements. (viii) Opinion of Counsel. A written opinion of the Borrower's counsel who shall be acceptable to the Bank, which shall be satisfactory in form and substance to the Bank, (A) with respect to the matters set forth in paragraphs 2(a), (b), (c), (d) and (e) of this Agreement, (B) to the effect that the Loan is not usurious, and (C) that such counsel, based upon a factual certificate of the Borrower included with the written opinion, is not aware of any matters contrary to the representations and warranties of the Borrower contained in this Agreement. (ix) Leases. Copies of all lease agreements affecting the Real Property and Improvements, or any part thereof, all of which shall be in form and substance satisfactory to the Bank. In addition, the Borrower shall furnish to the Bank an estoppel certificate and a subordination, non-disturbance and attornment agreement, acceptable to the Bank in form and substance, with respect to such of the existing lease agreements as the Bank may request. (x) Current Rent Roll. A current rent roll for the Real Property and Improvements (including commencement date, termination date and monthly rent for each lease) in form and 17 substance reasonably satisfactory to the Bank and certified as true and correct by the chief financial officer of the Borrower. (xi) Management Agreement. Copies of any management agreement relating to the Real Property and Improvements, which shall be in form and substance reasonably satisfactory to the Bank. (xii) Financial Statements. Current and complete Form 10Q's and Form 10K's, including financial statements, and federal income tax returns for the Borrower, which shall have been reviewed and approved by the Bank. (xiii) Organizational Documents. Certified copies of the Trust Agreement and other organizational documents of the Borrower, together with evidence that said documents have been filed of record as required by applicable law, and certified resolutions or written consents from the appropriate sources authorizing the transactions provided for herein, all in form and substance reasonably satisfactory to the Bank. (xiv) Purchase Agreement. A copy of the Purchase Agreement and all environmental documentation referred to therein, certified as true, correct and complete by the Borrower. (e) Delivery of Subordination Agreement. The Bank and UM Company shall have entered into a Subordination Agreement pursuant to which it is agreed that the Seller Loan shall be under and subject and subordinate in lien and priority to the payment of the Loan, on terms and conditions acceptable to the Bank. 5. Loan Advances. (a) On the date hereof, the Bank shall advance the full amount of the Acquisition Portion of the Loan. A portion thereof in the amount of $7,289,226.41 is represented by the Borrower's assumption of the Amended Original Loans and Amended Original Loan Documents, as amended and restated in their entirety by the Loan Documents. The balance thereof in the amount of $1,190,773.59 is represented by an advance of that amount to or for the account of the Borrower in payment of a portion of the purchase price for the Real Property and Improvements. (b) From time to time after the date hereof, the Bank shall make advances of the Tenant Improvement Portion of the Loan with respect to New Leases, in each case subject to the following conditions: (i)(A) The New Lease must be executed on a standard lease in the form attached hereto as Exhibit C and must 18 provide for a term of not less than five (5) years and a gross rent (subject to payment of electricity by the tenant) thereunder of not less than $18 per square foot of net rentable space; (B) the New Lease must cover a portion or all of the current Vacant Space within the Improvements; (C) advances for Tenant Improvements shall not exceed $30 per square foot with respect to current Vacant Space within the Improvements which constitutes unfinished space and $15 per square foot with respect to current Vacant Space within the Improvements which constitutes partially finished space; and (D) advances for Leasing Commissions shall not exceed $3.78 per square foot of space covered by the New Lease. (ii) Advances of the Tenant Improvement Portion of the Loan shall be made to or for the benefit of the Borrower from time to time as work progresses on the construction of the Tenant Improvements with respect to the New Lease, but such advances shall not be more frequent than monthly and shall be limited to ninety percent (90%) of the cost or value, whichever is less, of the completed work in place for which such advance is made with respect to hard costs but shall be one hundred percent (100%) of the cost or value, whichever is less, with respect to soft costs. Unless otherwise approved by the Bank, the remaining ten percent (10%), including any advances for Leasing Commissions, shall be advanced only upon completion of the construction of the Tenant Improvements with respect to the New Lease and delivery to the Bank of a final release of lien or other proof satisfactory to the Bank that final payment has been made for all material and labor furnished in connection with the Tenant Improvements with respect to the New Lease. (iii) Advances of the Tenant Improvement Portion of the Loan shall be made as construction of the Tenant Improvements with respect to the New Lease progresses upon written applications for payment ("Applications") by the Borrower which Applications shall be accompanied by invoices or paid receipts of the persons or entities for whose labor or materials payment is being sought. Applications shall be submitted only for work completed and materials, free of any lien, encumbrance or security interest, physically incorporated into the construction of the Tenant Improvements. Each Application, as thus submitted, automatically shall constitute a representation and certification by the Borrower that (A) the work done and materials supplied to date are in strict accordance with any applicable plans and specifications, (B) the work and materials for which payment is requested have been physically incorporated into the construction of the Tenant Improvements, (C) the value is as stated, (D) the work and materials conform with all applicable rules and regulations of the governmental authorities having jurisdiction of the Real Property, (E) payment for the work and materials described in such Application has been made or will be made with the proceeds of the advances for which the 19 Application was submitted, (F) no event has occurred which is or with the passage of time or giving of notice or both would become an event of default under any of the Loan Documents, and (G) each and all of the representations and warranties set forth in paragraph 2 hereof continue to be true. The Bank reserves the right to approve the form and content of each Application and to verify the representations therein by an inspection of the Real Property and Improvements. Each Application shall be subject to approval by the Bank Consultant (as hereinafter defined). (iv) The Bank shall have reviewed and approved the identity of the contractor and, if applicable, the architect to be retained by the Borrower, the plans and specifications, and budget, with respect to the Tenant Improvements under the New Lease, each such approval not to be unreasonably withheld or delayed. (v) The Borrower shall have received, and the Bank shall have reviewed and approved, all necessary and appropriate licenses, permits and approvals, including without limitation building permits, for the construction of the Tenant Improvements with respect to the New Lease. (vi) The Bank shall have the right to retain an architect or engineer of its selection to act as the Bank's consultant (the "Bank Consultant") in connection with the construction of the Tenant Improvements, to analyze all pertinent data relating to the construction of the Tenant Improvements and make periodic inspections to verify the progress of construction of the Tenant Improvements. 6. Limitation of the Bank's Liability; Indemnity. (a) Although the Bank and its agents may inspect the course of construction and other matters pertaining to the Tenant Improvements, such inspections are solely for the protection of the Bank as lender, and the Borrower hereby confirms that the Bank is not making and will not be deemed to make any representations or warranties as to any matters pertaining to the Tenant Improvements by reason of such inspections. (b) The rights and benefits of this Agreement shall not inure to the benefit of any third party, except as provided in paragraph 10(e) of this Agreement. Notwithstanding anything to the contrary contained in this Agreement or in any of the other Loan Documents, or any conduct or course of conduct by the Borrower or the Bank or their respective affiliates, agents or employees, neither this Agreement nor any such Loan Documents shall be construed as creating any rights, claims or causes of action against the Bank in favor of any other person or entity other than the Borrower. 20 (c) Subject to the provisions of paragraph 9 hereof and only so long as the Bank has not assumed possession and caused the same, the Borrower, for itself and all those claiming under or through it, agrees to protect, indemnify, defend and hold harmless the Bank, its directors, officers and employees, from and against any and all liability, expense, or damage of any kind or nature and from any suits, claims or demands, including reasonable legal fees and expenses, arising out of this Agreement or in connection herewith unless and except arising solely as a result of the Bank's gross negligence or willful misconduct or actions of the Bank following its assumption of possession of the Real Property and Improvements. This obligation specifically shall survive the repayment of the Loan as to any such liability, expense, damage, suit, claim or demand that arises, or the allegations or rights with respect thereto which arise, prior to the repayment of the Loan. 7. Maximum Rate of Interest on Loan. Notwithstanding anything to the contrary contained herein or in any other document executed in connection with the Loan, the effective rate of interest on the Loan shall not exceed the maximum effective rate of interest permitted by applicable law or regulation. The Borrower hereby agrees to give the Bank written notice in the event that the Borrower has actual knowledge that any interest payment made to the Bank with respect to this Loan will cause the total interest payments collected in any one year to be usurious under applicable law, and the Bank hereby agrees not to collect knowingly any interest from the Borrower in the form of fees or otherwise which will render this Loan usurious. In the event that such interest would be usurious in the Bank's opinion, the Bank reserves the right to reduce the interest payable by the Borrower. This provision shall survive closing hereunder and the repayment of the Loan. 8. Defaults. (a) Events of Default. The occurrence of any one or more of the following events, after the expiration of any applicable notice and/or cure period specifically provided for herein, shall, at the sole option of the Bank, constitute an "event of default" hereunder: (i) The Borrower shall fail to pay any regularly scheduled installment of principal and/or interest due to the Bank under the Note when the same shall become due and payable (including payment of the Loan on the Maturity Date (as defined in the Note)) or the Borrower shall fail to make any other payment due under any of the Loan Documents within fifteen (15) days after notice thereof from the Bank; (ii) Except as otherwise provided for herein, the Borrower shall fail to observe or perform any of the covenants or 21 agreements on its part to be observed or performed under this Agreement or under any of the other Loan Documents within thirty (30) days after written notice from the Bank of such non-compliance, provided that if such non-compliance cannot reasonably be cured within such thirty day period but the Borrower undertakes within such thirty day period and thereafter diligently pursues the curing of such non-compliance, then the period within which the Borrower shall cure such non-compliance shall be extended to sixty (60) days after the original written notice from the Bank of such non-compliance; (iii) Any representation or warranty of the Borrower under the Note or under any of the other Loan Documents shall be untrue in any material respect; (iv) Any event of default, after the expiration of any applicable notice and/or cure period specifically provided for therein, shall occur under any of the other Loan Documents or under any documents evidencing or securing the Seller Loan; (v) The Borrower shall apply for or consent to the appointment of a receiver, trustee or liquidator of itself or any of its property, admit in writing its inability to pay its debts as they mature, make a general assignment for the benefit of creditors, be adjudicated a bankrupt, insolvent or file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or if action shall be taken by the Borrower for the purpose of effecting any of the foregoing; (vi) Any order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition seeking reorganization of the Borrower or all or a substantial part of the assets of the Borrower, or appointing a receiver, sequestrator, trustee or liquidator of the Borrower or any of its property and such order, judgment or decree shall continue unstayed and in effect for a period of thirty (30) days; or (vii) The Improvements shall be materially injured or destroyed by fire or other casualty for which the cost of restoration is not fully insured or, if not fully insured, the Borrower has failed to deposit with the Bank the difference between the insurance proceeds received and the cost of restoration, or in lieu thereof, has failed to agree with the Bank to provide such funds or, in connection with such agreement, has failed to provide the Bank with reasonable assurances that 22 such funds are available, all in accordance with the terms of the Mortgage. (b) Acceleration and Remedies. Upon the occurrence of any event of default hereunder, in addition to any other rights or remedies available to it hereunder or under any other Loan Document or at law or in equity, subject however to the limitations set forth in paragraph 9 hereof, the Bank may exercise any or all of the following rights and remedies in such order and at such time or times as it may deem necessary or appropriate: (i) declare the outstanding principal balance of the Loan, together with all accrued and unpaid interest thereon and all other sums due hereunder or under any of the other Loan Documents, to be immediately due and payable in full; and/or (ii) set off all property of the Borrower now or hereafter at any time in its possession in any capacity whatsoever including, but not limited to, any balance or share of any deposit, trust or agency account, as to all of which property the Borrower hereby grants the Bank a lien and security interest. (c) Remedies Cumulative, etc. (i) No right or remedy conferred upon or reserved to the Bank under any of the Loan Documents, or with respect to any guaranty of payment of the Loan or of performance of any of the Borrower's obligations under any of the Loan Documents or any collateral securing the payment of the Loan under any of the Loan Documents (such guaranty and such other collateral, collectively, the "Collateral"), now or hereafter existing at law or in equity or by statute or other legislative enactment, is intended to be or shall be deemed exclusive of any other such right or remedy, and each and every such right or remedy shall be cumulative and concurrent, and shall be in addition to every other such right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole discretion of the Bank, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefore shall occur. The Bank acknowledges that there is no independent guaranty agreement with respect to the Loan in existence on the date of this Agreement. No act (or failure to act) of the Bank shall be deemed or construed as an election to proceed under any one such right or remedy to the exclusion of any other such right or remedy; furthermore, each such right or remedy of the Bank shall be separate, distinct and cumulative and none shall be given effect to the exclusion of any other. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term of any of the Loan Documents, shall not be construed as a waiver or release of the same, or of any event of default 23 thereunder, or of any obligation or liability of the Borrower thereunder. Nothing herein, however, shall be construed to prevent the Bank from waiving any condition, obligation or default it should so elect. In the event of such election by the Bank, any waiver, in order to be effective, must be in writing and signed by the Bank, and any such waiver shall be strictly limited in its effect to the condition, obligation or default specified therein and shall not extend to any subsequent condition, obligation or default or impair any right of the Bank with respect thereto. (ii) The recovery of any judgment by the Bank and/or the levy of execution under any judgment shall not affect in any manner or to any extent, liens or other security interests in any Collateral, or any rights, remedies or powers of the Bank under any of the Loan Documents or with respect to any Collateral, but such liens and security interests, and such rights, remedies and powers of the Bank shall continue unimpaired as before. Further, the entry of any judgment by the Bank shall not affect in any way the interest rate payable under any of the Loan Documents on any amounts due to the Bank, but interest shall continue to accrue on such amounts at the Default Rate (as hereafter defined). (iii) The Borrower hereby waives presentment, demand, notice of nonpayment, protest, notice of protest, or other notice of dishonor, and any and all other notices in connection with any default in the payment of, or any enforcement of the payment of, the Loan except as may be otherwise specifically set forth herein. To the extent permitted by law, the Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. The Borrower further waives and releases all procedural errors, defects and imperfections in any proceedings instituted by the Bank under the terms of any of the Loan Documents or with respect to any Collateral. (iv) The Borrower agrees that the Bank may release, compromise, forbear with respect to, waive, suspend, extend or renew any of the terms of the Loan Documents (and the Borrower hereby waives any notice of any of the foregoing), and that the Loan Documents may be amended, supplemented or modified by the Bank and the other signatory parties and that the Bank may resort to any Collateral in such order and manner as it may think fit, or accept the assignment, substitution, exchange, pledge, or release of all or any portion of any Collateral, for such consideration, or none, as it may require, without in any way affecting the validity of any liens upon or other security interests in the remainder of any such Collateral (or the priority thereof or the position of any subordinate holder of any lien or other security interest with respect thereto); and any action taken by the Bank pursuant to the foregoing shall in no 24 way be construed as a waiver or release of any right or remedy of the Bank, or of any event of default, or of any liability or obligation of the Borrower, under any of the Loan Documents. (d) Default Rate. Following the occurrence of any event of default and continuing either until such event of default is cured and that fact acknowledged by the Bank or until the principal sum then outstanding under the Note and all other sums payable under the Loan Documents are paid in full, the principal sum outstanding under the Note shall bear interest at rate equal to the annual interest rate then applicable under paragraph 1 of the Note plus four percent (4%) per annum, which rate shall change if, when and as such interest rate changes ("Default Rate"), and shall be secured by the Mortgage and all other Collateral. (e) Cost and Expenses. The Borrower shall pay upon demand all reasonable costs and expenses (including all amounts paid to attorneys, accountants, real estate brokers and other advisors employed by the Bank) incurred by the Bank in the exercise of any of its rights, remedies or powers under any of the Loan Documents, or as a secured or unsecured creditor, as the case may be, of the Borrower in any federal or state bankruptcy proceedings, or with respect to any Collateral with respect to such event of default, and any amount thereof not paid promptly following demand therefor together with interest thereon at the Default Rate from the date of such demand, shall become part of the Loan and shall be secured by the Mortgage and all other Collateral. In connection with and as part of the foregoing, in the event that any of the Loan Documents is placed in the hands of an attorney for the collection of any sum payable thereunder, the Borrower agrees to pay reasonable attorneys' fees for the collection of the amount being claimed under such Loan Document, as well as all costs, disbursements and allowances provided by law, the payment of which sums shall be secured by the Mortgage and all other Collateral. (f) Jurisdiction; Venue. The Borrower agrees that any action or proceeding against it to enforce the Loan may be commenced in state or federal court in Camden County in the State of New Jersey, and the Borrower waives personal service of process and agrees that a summons and complaint commencing an action or proceeding in any such court shall be properly served if served by registered or certified mail in accordance with the notice provisions set forth herein, and the Borrower expressly waives any and all defenses to an exercise of personal jurisdiction by any such court. (g) WAIVER OF TRIAL BY JURY. THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED UPON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN 25 AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE BORROWER OR THE BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK TO MAKE THE LOAN. 9. Limited Liability of the Borrower. Except as hereinafter set forth, the Borrower shall not have any personal liability for the payment of the Loan or for the payment of any sum or performance of any obligation under any of the Loan Documents, and in the event of a default under this Agreement or any of the other Loan Documents the Bank will look solely to the Real Property and Improvements, the rents, issues and profits thereof and any other Collateral specifically pledged, assigned or granted by the Borrower to the Bank as security for the Loan pursuant to this Agreement or any of the other Loan Documents, and any judgment obtained against the Borrower shall so note by its terms or as otherwise permissible by law. Subject to the aforesaid limitation, nothing herein contained shall be construed to prevent the Bank from exercising and enforcing any other remedy against the Borrower or any other person or entity allowed at law or in equity or by any statute or by the terms of this Agreement or any of the other Loan Documents or any other deed of trust, mortgage, security agreement, assignment of leases and rents, guaranty or any other security instrument of any kind now or hereafter securing payment of the Loan. In addition, notwithstanding anything to the contrary contained herein, the Borrower shall indemnify and hold the Bank harmless against, and shall be personally liable and obligated to the Bank for: (a) the completion of construction of the Tenant Improvements in accordance with the respective deadlines therefor in the New Leases free and clear of any and all mechanics liens and any other liens and encumbrances; (b) the payment on a current basis of all monthly installments of principal and interest with respect to the Acquisition Portion of the Loan and interest with respect to the Tenant Improvement Portion of the Loan (but excluding therefrom the entire unpaid principal balance of the Loan becoming due as a result of maturity or acceleration of the Loan to the extent not constituting a regular monthly installment); (c) the principal amount of the Loan to the extent of $3,000,000, which may be allocated between the Acquisition Portion of the Loan and Tenant Improvement Portion of the Loan as the Bank shall determine in its sole discretion, and which shall not be reduced by any payments on account of the Acquisition Portion of the Loan or Tenant Improvement Portion of the Loan by the Borrower or by any other person or entity, whether by payments in the ordinary course or by mortgage foreclosure or otherwise; and 26 (d) an amount equal to all loss, liability, damage, cost and expense suffered or incurred by the Bank in any way arising out of, resulting from or relating to any one or more of the following: (i) any fraud or willful material misrepresentation committed by the Borrower; (ii) any retention by the Borrower of rental income, security deposits, or similar income of the Real Property and Improvements after an event of default has occurred under the Loan Documents to the extent of any such retention; (iii) any real property taxes or assessments accrued prior to the Bank's acquisition of ownership of the Real Property and Improvements following a default by the Borrower under the Loan; (iv) removal or failure to replace any personal property securing the Loan, other than in the ordinary course of the Borrower's business; (v) misapplication of insurance or condemnation proceeds relating to the Real Property and Improvements; (vi) failure to maintain hazard or liability insurance relating to the Real Property and Improvements, in accordance with the Loan Documents; (vii) the presence of any Hazardous Substances or Wastes which may affect the Real Property and Improvements, or any misrepresentation or breach of any covenants or indemnities by the Borrower set forth in the Loan Documents with respect to Hazardous Substances or Wastes; (viii) any transfer of the Real Property and Improvements or any portion thereof other than Permitted Transfers; (ix) any indebtedness secured by a mortgage covering the Real Property and Improvements other than the Seller Loan; (x) any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution, liquidation or receivership proceedings instituted by or against the Borrower, unless and except to the extent that such proceedings are withdrawn, dismissed or discharged within ninety (90) days or unless the Bank obtains title to the Real Property and Improvements within nine (9) months; and (xi) all fees and costs, including reasonable attorney fees, incurred in enforcing and collecting the foregoing. 10. Miscellaneous (a) Time of the Essence. All dates and times for the performance of the Borrower's obligations set forth herein shall be deemed to be of the essence of this Agreement. (b) Broker's and Finder's Fees. The Borrower represents and warrants that it has not dealt with or through any broker or other intermediary in connection with the Loan except for CB Commercial and the Borrower agrees to indemnify, defend and hold the Bank harmless from and against any loss, liability or damage (including attorneys' fees and expenses) arising from any claim for a brokerage fee or finder's fee in connection with the Loan, including any claims by CB Commercial. (c) Publicity. The Bank may, at its option and in such manner as it may determine, announce and publicize the 27 source of the financing for the Real Property and Improvements at any time after the date of this Agreement. (d) Severability. In the event that for any reason one or more of the provisions of this Agreement or their application to any person or circumstance shall be held to be invalid, illegal or unenforceable in any respect or to any extent, such provisions shall nevertheless remain valid, legal and enforceable in all other respects and to such extent as may be permissible. In addition, any such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. (e) Successors and Assigns. This Agreement inures to the benefit of and binds the parties hereto and their respective heirs, personal representatives, successors and assigns, as applicable, and the words "Borrower" and "Bank" whenever occurring herein shall be deemed to include such respective heirs, personal representatives, successors and assigns, as applicable. However, the Borrower shall not voluntarily, or by operation of law, assign or transfer any interest which it may have under this Agreement or convey the Real Property and Improvements, or any part thereof, without the prior written approval of the Bank. The Bank may assign or otherwise transfer the Loan and any or all of the Loan Documents to any other person, and such other person shall thereupon become vested with all of the benefits in respect thereof granted to the Bank herein or otherwise. The Bank shall have the right to sell participations in the Loan to any other persons or entities without the consent of or notice to the Borrower. Without the consent of or notice to the Borrower, the Bank may disclose to any prospective purchaser of any securities issued or to be issued by the Bank, and any prospective or actual purchaser of any participation or other interest in the Loan or any other loans made by the Bank to the Borrower, any financial or other information, data or material in the Bank's possession relating to the Borrower, the Loan or the Real Property and Improvements. (f) Notices. All notices required or desired to be given to either of the parties hereunder shall be in writing and shall be deemed to have been sufficiently given for all purposes when presented personally to such party or sent by a nationally recognized overnight courier or by certified or registered mail, return receipt requested, to such party at its address set forth below: Borrower: Brandywine Realty Trust Two Greentree Centre, Suite 100 Marlton, New Jersey 08053 Attention: Gerard H. Sweeney, President and Chief Executive Officer 28 with a copy to: Pepper, Hamilton & Scheetz 3000 Two Logan Square 18th and Arch Streets Philadelphia, Pennsylvania 19103 Attention: Brad A. Molotsky, Esquire Bank: Summit Bank 1800 Chapel Avenue West Cherry Hill, New Jersey 08002 Attention: Amy Brown Regional Vice President with a copy to: Miller Dunham & Doering l515 Market Street, Suite 1300 Philadelphia, Pennsylvania l9l02 Attention: David H. Huggler, Esquire Such notice shall be deemed to be given when received if delivered personally or three (3) days after the date mailed if sent by a nationally recognized overnight courier or by certified or registered mail, return receipt requested. Any notice of any change in such address shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived in writing by the party entitled to receive such notice. (g) Definitions; Number and Gender. In the event the Borrower consists of more than one person or entity, the obligations and liabilities hereunder of each of such persons and entities shall be joint and several, and the word "Borrower" shall mean all or some or any of them. For purposes of this Agreement, the singular shall be deemed to include the plural and the neuter shall be deemed to include the masculine and feminine, as the context may require. (h) Conflicts Between Instruments. In the event of any conflict between the provisions of this Agreement and the provisions of any of the other Loan Documents, the provisions of this Agreement shall prevail. (i) Captions. The captions or headings of the paragraphs of this Agreement are for convenience only and shall not control or affect the meaning or construction of any of the terms or provisions of this Agreement. (j) Renewal of Obligation. The Loan is a renewal and amendment and restatement in its entirety of the Amended Original Loans, and is not intended as an accord and satisfaction or novation of the Amended Original Loans. (k) Governing Law. This Agreement shall be governed 29 by and construed in accordance with the laws of the State of New Jersey. IN WITNESS WHEREOF, the Borrower and the Bank have executed this Agreement on the date first above set forth. WITNESS/ATTEST: BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust By: /s/ Gerald H. Sweeney - ----------------------------- ------------------------------------- Name: Name: Gerald H. Sweeney Title: Title: President/CEO SUMMIT BANK By: /s/ Amy Brown RVP ------------------------------------- Amy Brown Regional Vice President 30 EXHIBIT A ALL that certain land and premises situate in the Township of Cherry Hill, County of Camden and the State of New Jersey, bounded and described as follows: TRACT #1-BEGINNING at a point in the Southerly right of way line of New Jersey State Highway Route #38, said point being corner formed by the intersection of the said line of New Jersey State Highway Route #38 with the Easterly right of way line of Third Avenue (50 feet wide), and extending; thence along the said right of way line of New Jersey State Highway Route #38; thence (1) South 80 degrees 11 minutes 00 seconds East, 19.53 feet to an angle point common with the Southwesterly right of way line of the access road (ramp from New Jersey State Highway Route #38 to Haddonfield Road), and extending; thence along the said right of way line to the access road; thence (2) South 45 degrees 29 minutes 39 seconds East, 336.69 feet to an angle point, and extending; thence along the right of way line; thence (3) South 21 degrees 17 minutes 18 seconds East, 120.52 feet to a point formed by the intersection of said access road with the Westerly right of way line of Haddonfield-Sorrell Horse Road (formerly Stoy Landing Road) a/k/a Camden County Route #644 (formerly 66 feet wide), and extending; thence along the said right of way line of Haddonfield-Sorrell House Road; thence (4) South 09 degrees 49 minutes 00 seconds West, 283.83 feet to an angle point, and extending; thence along the said right of way line of Haddonfield-Sorrell Horse Road; thence (5) South 24 degrees 17 minutes 14 seconds West, 96.05 feet to an angle point, and extending; thence along the said right of way line of Haddonfield-Sorrell Road; thence (6) South 09 degrees 49 minutes 00 seconds West, 257.21 feet to a point of curvature and extending; thence (7) at the point of curvature in the Westerly right of way line of Haddonfield-Sorrell Horse Road, curving to the right having a radius of 30 feet, and an arc length of 57.17 feet to a point of tangency connecting the Northeasterly right of way line of Chapel Avenue (50 feet wide) a/k/a Camden County Route #626 with the said right of way line of Haddonfield-Sorrell Horse Road, and extending; thence along the said right of way line of Chapel Avenue; thence (8) North 61 degrees 00 minutes 11 seconds West, 108.14 feet to an angle point, and extending; thence along the said right of way line of Chapel Avenue; thence (9) North 52 degrees 03 minutes 39 seconds west, 43.50 feet to a corner in point common with Lot 3, Block 176.01 on the Current Tax Map of the Township of Cherry Hill, and extending; thence along a line common with Lot 3, Block 176.01; thence (10) North 09 degrees 49 minutes 00 seconds East, 178.31 feet to a corner point common with Lots 2 and 3, Block 176.01, said Tax Map and lands now or formerly of Chapel Printing, and extending; thence along a line common with said Lot 2; thence (11) South 80 degrees 11 minutes 00 seconds East, 29.43 feet to a corner point, and extending; thence along a line common with said Lot 2; thence (12) North 09 degrees 49 minutes 00 seconds East, 52.21 feet to a corner point, and extending; thence along a line common with said Lot 2; thence (13) North 80 degrees 11 minutes 00 seconds West, 183.71 feet to a corner point common with the Easterly right of way line of Third Avenue (50 feet wide), and extending; thence (14) North 09 degrees 49 minutes 00 seconds East, 670.93 feet to a corner point common with the Southerly right of way line of New Jersey State Highway Route #38 and being the place of beginning. BEING shown and designated as Lot 1, Block 176.01, Plate 18 on the Current Tax Map of the Township of Cherry Hill. EXHIBIT B ALL that certain land and premises situate in the Township of Cherry Hill, County of Camden and the State of New Jersey, bounded and described as follows: TRACT #2-BEGINNING at a point formed by the intersection of the Northeasterly line of Chapel Avenue (width varies) with the Southeasterly line of Third Avenue (50 feet wide) and extending; thence (1) North 09 degrees 49 minutes 01 seconds East, along the Southeasterly line of Third Avenue, 142.67 feet to a point in the division line between existing Tax Lots 1 and 2, Block 176.01; thence (2) South 80 degrees 10 minutes 59 seconds East, along said division line, 183.71 feet to point concrete monument in the division line between said Tax Lots; thence (3) South 09 degrees 49 minutes 01 seconds West, along said division line, 52.21 feet to a set iron pin in the division line between said Tax Lots; thence (4) North 80 degrees 10 minutes 59 seconds West, along said division line, 29.43 feet to a found iron pin for a corner in the division line between Tax Lots 1, 2 and 3, Block 176.01; thence (5) South 09 degrees 49 minutes 01 seconds West along the division line between Tax Lots 1 and 3, Block 176.01, 180.26 feet to a point in the Northeasterly line of Chapel Avenue; thence (6) North 53 degrees 04 minutes 12 seconds West, along said line of Chapel Avenue, 163.20 feet to an angle point in same; thence (7) North 20 degrees 28 minutes 36 seconds West, along same, 17.86 feet to the point and place of beginning. BEING shown and designated as Lots 2 and 3, Block 176.01, Plate 18 on the Township of Cherry Hill Tax Map. EXHIBIT C Form of Lease Agreement 33 EXHIBIT C The Arthur Anderson Lease shall serve as the agreed upon form lease. EX-99.8 9 EXHIBIT 99.8 Exhibit 99.8 Amended and Restated Promissory Note from the Trust to SB AMENDED AND RESTATED PROMISSORY NOTE $9,777,140 Cherry Hill, New Jersey July 19, 1996 FOR VALUE RECEIVED, BRANDYWINE REALTY TRUST, a Maryland real estate investment trust with an office at Two Greentree Centre, Suite 100, Marlton, New Jersey 08053 ("Maker"), promises to pay to the order of SUMMIT BANK, a New Jersey state bank (formerly known as United Jersey Bank/South, N.A. and United Jersey Bank) with an office at 1800 Chapel Avenue West, Cherry Hill, New Jersey 08002 ("Payee"), at such office of Payee or at such other place as Payee may designate from time to time in writing, the principal sum of Nine Million Seven Hundred Seventy-seven Thousand One Hundred Forty Dollars ($9,777,140) (or so much thereof as has been advanced by Payee to or for the benefit of Maker pursuant to a certain amended and restated loan agreement dated this date by and between Maker and Payee (the "Loan Agreement")) lawful money of the United States of America, together with interest thereon from the date hereof at the rates hereinafter provided, and both payable as hereinafter provided. This Note evidences an amended and restated loan ("Loan") being made by Payee to Maker pursuant to the terms of the Loan Agreement, and reference thereto is made for the background of and basis for the Loan. Capitalized terms not otherwise defined herein shall have the meanings given them in the Loan Agreement. 1. Interest Rate. (a) The Acquisition Portion of the Loan shall bear interest on the unpaid principal balance thereof outstanding from time to time at a fixed annual rate of eight percent (8%). The Tenant Improvement Portion of the Loan shall bear interest on the unpaid principal balance thereof outstanding from time to time at an annual rate at all times equal to Payee's prime interest rate, as announced from time to time by Payee ("Prime Rate"), plus one percent (1%), such rate to change when and as the Prime Rate changes. It is understood that the Prime Rate is not necessarily the most favorable interest rate offered by Payee and that Payee prices loans at, above and below the Prime Rate. (b) The annual interest rate shall be calculated on the basis of a 360 day year and the actual number of days elapsed. (c) Notwithstanding anything to the contrary contained herein or in any other document executed in connection with the 1 Loan, the effective rate of interest hereunder shall not exceed the maximum effective rate of interest permitted by applicable law or regulation. Maker hereby agrees to give Payee written notice in the event Maker has actual knowledge that any interest payment made to Payee with respect to this Note will cause the total interest payments collected in any one year to be usurious under applicable law, and Payee hereby agrees not to collect knowingly any interest from Maker in the form of fees or otherwise which will render the Loan usurious. In the event that such interest would be usurious in Payee's opinion, Payee reserves the right to reduce the interest payable by Maker. This provision shall survive the repayment of this Note. 2. Payment Terms. (a) (i) With respect to the Acquisition Portion of the Loan, the unpaid principal balance thereof, together with interest thereon at the rate applicable thereto under paragraph 1(a) hereof, shall be payable in monthly installments beginning on August 19, 1996 and continuing on the same day of each successive calendar month thereafter, each monthly installment to be in the amount of Sixty-seven Thousand Eight Hundred Nine Dollars and Twenty-nine Cents ($67,809.29), which is based upon the stated principal amount of the Acquisition Portion of the Loan, the interest rate applicable thereto pursuant to paragraph 1(a) hereof and a level payment direct reduction amortization schedule with a term of 22 years and 6 months. (ii) With respect to the Tenant Improvement Portion of the Loan, interest only on the unpaid principal balance thereof shall be payable in monthly installments on the nineteenth (19th) day of each month, beginning on the first such date following the first advance of the Tenant Improvement Portion of the Loan and continuing on the same day of each successive calendar month thereafter. (iii) The unpaid principal balance of this Note then outstanding (including the Acquisition Portion of the Loan and the Tenant Improvement Portion of the Loan) together with all accrued and unpaid interest shall become due and payable on January 1, 1999 ("Maturity Date"). (b) Maker shall have the right at any time to prepay all or any portion of the unpaid principal balance of this Note, provided that: (i) There shall be a prepayment penalty or premium with respect to any prepayment of the Acquisition Portion of the Loan in an amount equal to one percent (1%) of the amount being prepaid; provided, however, that there shall be no such 2 prepayment penalty or premium with respect to any prepayment (A) resulting from Payee's disapproval of any merger or material change in the ownership of Maker under paragraph 3(i) of the Loan Agreement, (B) resulting from the application of insurance or condemnation proceeds pursuant to paragraphs 6 and 7, respectively, of the Mortgage or (C) resulting from an acceleration of the indebtedness evidenced by this Note pursuant to paragraph 10 hereof, and there shall be no prepayment penalty or premium with respect to any prepayment of the Tenant Improvement Portion of the Loan. (ii) Any prepayment, whether voluntary or involuntary, shall be applied first to any accrued and unpaid interest under the Acquisition Portion of the Loan or Tenant Improvement Portion of the Loan, whichever is the subject of such prepayment, up to the date of such prepayment and then to any other sums which may be payable to Payee under the Loan Documents up to the date of such prepayment and then to the outstanding principal balance of the Acquisition Portion of the Loan or Tenant Improvement Portion of the Loan, whichever is the subject of such prepayment, any such prepayment applied to principal shall be applied to the principal portions of installments due in the inverse order of their maturity, and the acceptance of any such prepayment when there is an event of default in existence under any of the Loan Documents shall not constitute a waiver, release or accord and satisfaction thereof or of any rights with respect thereto by Payee. 3. Security. This Note, and the due performance by Maker of all of its obligations hereunder, is secured by, inter alia, (a) an amended and restated mortgage and security agreement ("Mortgage") covering certain real property located at 457 Haddonfield Road and 1700 Chapel Avenue, both in Cherry Hill Township, Camden County, New Jersey ("Real Property"), and any and all improvements now existing or hereafter constructed thereon ("Improvements"), which Mortgage is being executed this date and shall be recorded forthwith, (b) an amended and restated assignment of all of Maker's right, title and interest in and to any and all present and future leases affecting the Real Property and Improvements ("Assignment of Leases and Rents"), (c) an amended and restated assignment of all of Maker's right, title and interest in and to all construction contracts, architect's agreements, other contracts and agreements, and any and all licenses, permits and approvals relating to the construction of the Tenant Improvements, and all other documents and rights relating to the construction of the Tenant Improvements ("Assignment of Contracts and Permits"), and (d) security interests in certain personal property of Maker. Reference is hereby made to the Loan Agreement and Mortgage for a full description of the Real Property and Improvements and the 3 collateral pledged pursuant thereto, and the terms upon which this Note is secured. This Note, the Loan Agreement, the Mortgage, the Assignment of Leases and Rents, the Assignment of Contracts and Permits, and any other document executed and delivered in connection with the Loan are hereinafter referred to individually as a "Loan Document" and collectively as the "Loan Documents." Any collateral securing any of Maker's obligations under any of the Loan Documents are hereinafter referred to collectively as the "Collateral." 4. Late Charge. In the event that any payment of principal or interest due to Payee under this Note shall not be paid when due and shall remain unpaid in excess of ten (10) days after the due date, in addition to and not in limitation of any other rights or remedies which Payee may have in respect thereof under any of the Bank Loan Documents or in respect of any Collateral, Maker shall pay Payee on demand a "late charge" computed at the lesser of (a) the rate of five cents ($.05) for each dollar (or part thereof) of any principal or interest amount not paid within ten (10) days after its due date or (b) the maximum amount or rate permitted by law, in order to cover the extra expense and inconvenience to Payee in ensuring payment of such delinquent amount. Maker acknowledges that its failure to pay any amount due under this Note within such ten (10) day period will result in Payee incurring additional expense in servicing the Bank Loan, the loss of the use of the money due and frustration to Payee in meeting its loan commitments, that the damages to Payee in connection with such late payment are extremely difficult and impractical to ascertain, and that a sum equal to five cents ($.05) for each dollar which is not paid within such ten (10) day period, subject to the foregoing limitation, is a reasonable estimate of the damages incurred by Payee in connection with any such late payment. The amount of any such "late charge" not paid promptly following demand therefor shall be deemed outstanding and payable pursuant to this Note and secured by the Mortgage. 5. Events of Default. In addition to any other event referred to herein, the occurrence of which, by the terms hereof, constitutes an event of default hereunder, the occurrence of any one or more of the following events, after the expiration of any applicable notice and/or cure period specifically provided for herein, shall constitute an "event of default" hereunder: (a) Maker shall fail to pay any regularly scheduled installment of principal and/or interest due to Payee under this Note when the same shall become due and payable (including payment of the Loan on the Maturity Date) or Maker shall fail to 4 make any other payment due under any of the Loan Documents within fifteen (15) days after notice thereof from Payee; (b) Except as otherwise provided for in this Note, Maker shall fail to observe or perform any of the covenants or agreements on its part to be observed or performed under this Note or under any of the other Loan Documents within thirty (30) days after written notice from Payee of such non-compliance, provided that if such non-compliance cannot reasonably be cured within such thirty day period but the Maker undertakes within such thirty day period and thereafter diligently pursues the curing of such non-compliance, then the period within which the Maker shall cure such non-compliance shall be extended to sixty (60) days after the original written notice from the Payee of such non-compliance; (c) Any representation or warranty of Maker under this Note or under any of the other Loan Documents shall be untrue in any material respect; (d) Any event of default, after the expiration of any applicable notice and/or cure period specifically provided for therein, shall occur under the terms of any of the other Loan Documents; (e) Maker shall apply for or consent to the appointment of a receiver, trustee or liquidator of itself or any of its property, admit in writing its inability to pay its debts as they mature, make a general assignment for the benefit of creditors, be adjudicated a bankrupt, insolvent or file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or if action shall be taken by Maker for the purpose of effecting any of the foregoing; (f) Any order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition seeking reorganization of Maker or all or a substantial part of the assets of Maker or appointing a receiver, sequestrator, trustee or liquidator of Maker or any of its property, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) days. 6. Remedies. Upon the occurrence of any event of default, then the entire unpaid principal sum hereunder plus all interest 5 accrued thereon plus all other sums due and payable to Payee under the Loan Documents shall, at the option of Payee, become due and payable immediately without presentment, demand, notice of nonpayment, protest, notice of protest or other notice of dishonor, all of which are hereby expressly waived by Maker. In addition to the foregoing, upon the occurrence of any event of default, subject however to the limitations set forth in paragraph 11 hereof, Payee may forthwith exercise singly, concurrently, successively or otherwise any and all rights and remedies available to Payee under any of the Loan Documents or with respect to any Collateral, or available to Payee by law, equity, statute or otherwise. 7. Remedies Cumulative. (a) No right or remedy conferred upon or reserved to Payee under any of the Loan Documents, or with respect to any Collateral, or now or hereafter existing at law or in equity or by statute or other legislative enactment, is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and concurrent, and shall be in addition to every other such right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole discretion of Payee, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefor shall occur. No act of Payee shall be deemed or construed as an election to proceed under any one such right or remedy to the exclusion of any other such right or remedy; furthermore, each such right or remedy of Payee shall be separate, distinct and cumulative and none shall be given effect to the exclusion of any other. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term of any of the Loan Documents, shall not be construed as a waiver or release of the same, or of any event of default thereunder, or of any obligation or liability of Maker thereunder. (b) The recovery of any judgment by Payee and/or the levy of execution under any judgment upon any Collateral shall not affect in any manner or to any extent the lien of the Mortgage upon, or any security interest under the Loan Agreement in such Collateral, or any rights, remedies or powers of Payee under any of the Loan Documents or with respect to any Collateral, but such lien and such security interest, and such rights, remedies and power of Payee shall continue unimpaired as before. Further, the exercise by Payee of its rights and remedies and the entry of any judgment by Payee shall not affect in any way the interest rate payable hereunder or under any of 6 the other Loan Documents on any amounts due to Payee but interest shall continue to accrue on such amounts at the Default Rate (as hereinafter defined). (c) Maker hereby waives presentment, demand, notice of nonpayment, protest, notice of protest or other notice of dishonor, and except as may be stated herein any and all other notices in connection with any default in the payment of, or any enforcement of the payment of, all amounts due under the Loan Documents except as may be specifically set forth herein or therein. To the extent permitted by law, Maker waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. Maker further waives and releases all procedural errors, defects and imperfections in any proceedings instituted by Payee under the terms of any Loan Document or with respect to any Collateral. (d) Maker agrees that Payee may release, compromise, forbear with respect to, waive, suspend, extend or renew any of the terms of the Loan Documents (and Maker hereby waives any notice of any of the foregoing), and that the Loan Documents may be amended, supplemented or modified by Payee and the other signatory parties and that Payee may resort to any Collateral in such order and manner as it may think fit, or accept the assignment, substitution, exchange, pledge, or release of all or any portion of any Collateral, for such consideration, or none, as it may require, without in any way affecting the validity of any liens over or other security interest in the remainder of any such Collateral (or the priority thereof or the position of any subordinate holder of any lien or other security interest with respect thereto); and any action taken by Payee pursuant to the foregoing shall in no way be construed as a waiver or release of any right or remedy of Payee, or of any event of default, or of any liability or obligation of the Maker, under any of the Loan Documents. (e) Maker agrees that any action or proceeding against it to enforce the Note may be commenced in state or federal court in Camden County in the State of New Jersey, and Maker waives personal service of process and agrees that a summons and complaint commencing an action or proceeding in any such court shall be properly served if served by registered or certified mail in accordance with the notice provisions set forth herein and Maker expressly waives any and all defenses to an exercise of personal jurisdiction by any such court. (f) MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED UPON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS 7 OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF MAKER OR PAYEE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE TO MAKE THE LOAN. 8. Default Rate. Following the occurrence of any event of default and continuing either until such event of default is cured and that fact acknowledged by the Payee or until the principal sum then outstanding hereunder and all other sums payable under the Loan Documents are paid in full, the principal sum outstanding hereunder shall bear interest at rate equal to the annual interest rate then applicable under paragraph 1 hereof plus four percent (4%) per annum, which rate shall change if, when and as such interest rate changes ("Default Rate"), and shall be secured by the Mortgage and all other Collateral. 9. Costs and Expenses. Following the occurrence of any event of default, Maker shall pay upon demand all reasonable costs and expenses (including all reasonable amounts paid to attorneys, accountants, real estate brokers and other advisors employed by Payee and/or to any contractors for labor and materials), incurred by Payee in the exercise of any of its rights, remedies or powers under any of the Loan Documents or with respect to any Collateral with respect to such event of default, and any amount thereof not paid promptly following demand therefor shall be added to the principal sum hereunder and shall bear interest at the Default Rate from the date of such demand until paid in full, and shall be secured by the Mortgage and all other Collateral. In connection with and as part of the foregoing, in the event that any of the Loan Documents is placed in the hands of an attorney for the collection of any sum payable thereunder, Maker agrees to pay reasonable attorneys' fees for the collection of the amount being claimed under the Loan Document, as well as all costs, disbursements and allowances provided by law, the payment of which sums shall be secured by the Mortgage and all other Collateral. Nothing in this paragraph 9 shall limit the obligation of Maker to pay any and all costs and expenses for which Maker is otherwise liable under any of the Loan Documents. 10. Mortgage Taxes, etc. Maker shall pay the cost of any revenue, tax or other stamps now or hereafter required by the laws of the State of New Jersey or the United States to be affixed to this Note or the Mortgage and if any taxes are imposed under the laws of the State of New Jersey or the United States with respect to debts secured by a mortgage, or with respect to evidences of indebtedness so secured, Maker shall pay or reimburse Payee upon demand the amount of such taxes without credit against any indebtedness by this Note. If Maker does not 8 or may not do so, Payee may at its option accelerate the indebtedness evidenced by this Note to maturity as in the case of default by Maker. 11. Limited Liability of Maker. Except as hereinafter set forth, Maker shall not have any personal liability for the payment of the Loan or for the payment of any sum or performance of any obligation under any of the Loan Documents, and in the event of a default under this Note or any of the other Loan Documents Payee will look solely to the Real Property and Improvements, the rents, issues and profits thereof and any other Collateral specifically pledged, assigned or granted by Maker to Payee as security for the Loan pursuant to this Note or any of the other Loan Documents, and any judgment obtained against Maker shall so note by its terms or as otherwise permissible by law. Subject to the aforesaid limitation, nothing herein contained shall be construed to prevent Payee from exercising and enforcing any other remedy against Maker or any other person or entity allowed at law or in equity or by any statute or by the terms of this Note or any of the other Loan Documents or any other deed of trust, mortgage, security agreement, assignment of leases and rents, guaranty or any other security instrument of any kind now or hereafter securing payment of the Loan. In addition, notwithstanding anything to the contrary contained herein, Maker shall indemnify and hold Payee harmless against, and shall be personally liable and obligated to Payee for: (a) the completion of construction of the Tenant Improvements in accordance with the respective deadlines therefor in the New Leases free and clear of any and all mechanics liens and any other liens and encumbrances; (b) the payment on a current basis of all monthly installments of principal and interest with respect to the Acquisition Portion of the Loan and interest with respect to the Tenant Improvement Portion of the Loan (but excluding therefrom the entire unpaid principal balance of the Loan becoming due as a result of maturity or acceleration of the Loan to the extent not constituting a regular monthly installment); (c) the principal amount of the Loan to the extent of $3,000,000, which may be allocated between the Acquisition Portion of the Loan and Tenant Improvement Portion of the Loan as Payee shall determine in its sole discretion, and which shall not be reduced by any payments on account of the Acquisition Portion of the Loan or Tenant Improvement Portion of the Loan by Maker or by any other person or entity, whether by payments in the ordinary course or by mortgage foreclosure or otherwise; and 9 (d) an amount equal to all loss, liability, damage, cost and expense suffered or incurred by Payee in any way arising out of, resulting from or relating to any one or more of the following: (i) any fraud or willful material misrepresentation committed by Maker; (ii) any retention by Maker of rental income, security deposits, or similar income of the Real Property and Improvements after an event of default has occurred under the Loan Documents to the extent of any such retention; (iii) any real property taxes or assessments accrued prior to Payee's acquisition of ownership of the Real Property and Improvements following a default by Maker under the Loan; (iv) removal or failure to replace any personal property securing the Loan, other than in the ordinary course of Maker's business; (v) misapplication of insurance or condemnation proceeds relating to the Real Property and Improvements; (vi) failure to maintain hazard or liability insurance relating to the Real Property and Improvements, in accordance with the Loan Documents; (vii) the presence of any Hazardous Substances or Wastes which may affect the Real Property and Improvements, or any misrepresentation or breach of any covenants or indemnities by Maker set forth in the Loan Documents with respect to Hazardous Substances or Wastes; (viii) any transfer of the Real Property and Improvements or any portion thereof other than Permitted Transfers; (ix) any indebtedness secured by a mortgage covering the Real Property and Improvements other than the Seller Loan; (x) any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution, liquidation or receivership proceedings instituted by or against Maker, unless and except to the extent that such proceedings are withdrawn, dismissed or discharged within ninety (90) days or unless Payee obtains title to the Real Property and Improvements within nine (9) months; and (xi) all fees and costs, including reasonable attorney fees, incurred in enforcing and collecting the foregoing. 12. Severability. In the event that for any reason one or more of the provisions of this Note or their application to any person or circumstance shall be held to be invalid, illegal or unenforceable in any respect or to any extent, such provisions shall nevertheless remain valid, legal and enforceable in all such other respects and to such extent as may be permissible. In addition, any such invalidity, illegality or unenforceability shall not affect any other provisions of this Note, but this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 13. Successors and Assigns. This Note inures to the benefit of Payee and binds Maker, and their respective successors and assigns, and the words "Payee" and "Maker" whenever occurring herein shall be deemed and construed to include such respective successors and assigns, as applicable. 10 14. Notices. All notices required to be given to any of the parties hereunder shall be in writing and shall be deemed to have been sufficiently given for all purposes when presented personally to such party or sent by a nationally recognized overnight courier or by certified or registered mail, return receipt requested, to such party at its address set forth below: Maker: Brandywine Realty Trust Two Greentree Centre, Suite 100 Marlton, New Jersey 08053 Attention: Gerard H. Sweeney, President and Chief Executive Officer with a copy to: Pepper, Hamilton & Scheetz 3000 Two Logan Square 18th and Arch Streets Philadelphia, Pennsylvania 19103 Attention: Brad A. Molotsky, Esquire Payee: Summit Bank 1800 Chapel Avenue West Cherry Hill, New Jersey 08002 Attention: Amy Brown Regional Vice President with a copy to: Miller Dunham & Doering 1515 Market Street, 13th Floor Philadelphia, Pennsylvania l9l02 Attention: David H. Huggler, Esquire Such notice shall be deemed to be given when received if delivered personally, or three (3) days after the date mailed if sent by a nationally recognized overnight courier or by certified or registered mail, return receipt requested. Any notice of any change in such address shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived in writing by the party entitled to receive such notice. 15. Definitions; Number and Gender. In the event Maker consists of more than one person or entity, the obligations and liabilities hereunder of each of such persons and entities shall be joint and several and the word "Maker" shall mean all or some or any of them. For purposes of this Note, the singular shall be deemed to include the plural and the neuter shall be deemed to include the masculine and feminine, as the context may require. 11 The references herein to the Loan Documents or any one of them shall include any supplements to or any amendments of or restatements of such Loan Documents or any one of them. 16. Incorporation by Reference. All of the terms and provisions of the Loan Documents, to the extent not inconsistent herewith, are hereby incorporated herein by reference. 17. Captions. The captions or headings of the paragraphs in this Note are for convenience only and shall not control or affect the meaning or construction of any of the terms or provisions of this Note. 18. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New Jersey. IN WITNESS WHEREOF, Maker has executed this Promissory Note in Cherry Hill, New Jersey the day and year first above written. WITNESS/ATTEST: BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust XXXXXX By: /s/ Gerard H. Sweeney - ------------------------------ ------------------------------------- Name: Name: Gerard H. Sweeney Title: Title: 12 EX-99.9 10 MORTGAGE AND SECURITY AGREEMENT Exhibit 99.0 Amended and Restated Mortgage from the Trust to SB AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT THIS AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT ("Mortgage and Security Agreement" or "Mortgage") made this __ day of July, 1996 by BRANDYWINE REALTY TRUST, a Maryland real estate investment trust with an office at Two Greentree Centre, Suite 100, Marlton, New Jersey 08053 ("Mortgagor"), in favor of SUMMIT BANK, a New Jersey state bank (formerly known as United Jersey Bank/South, N.A. and United Jersey Bank) with an office at 1800 Chapel Avenue West, Cherry Hill, New Jersey 08002 ("Mortgagee"). Mortgagor and Mortgagee have entered into an Amended and Restated Loan Agreement dated this date ("Loan Agreement") in order to set forth the terms and conditions of an amended and restated loan from Mortgagee to Mortgagor ("Loan"). The Loan is evidenced by an Amended and Restated Promissory Note dated this date ("Note") in the stated principal amount of Nine Million Seven Hundred Seventy-seven Thousand One Hundred Forty Dollars ($9,777,140) executed by Mortgagor and made payable to the order of Mortgagee. The terms and conditions of the Loan Agreement and Note are incorporated herein by reference, and reference to the Loan Agreement is made for the background of and basis for the Loan. Capitalized terms not otherwise defined herein shall have the meanings given them in the Loan Agreement. The Loan Agreement, the Note, this Mortgage and Security Agreement, and any other document executed and delivered in connection with the Loan are sometimes individually referred to herein as a "Loan Document" and collectively as the "Loan Documents," and any guaranty of, and any other collateral securing any of Mortgagor's obligations under any of the Loan Documents are collectively referred to herein as "Collateral." NOW THIS MORTGAGE AND SECURITY AGREEMENT WITNESSETH, that in consideration of the aforesaid principal sum and as security for the payment thereof with interest as aforesaid, together with all other sums recoverable by Mortgagee under the terms of the Loan Documents, together with all existing and future liabilities of Mortgagor to Mortgagee under the Loan Documents (said indebtedness, interest and all other sums and liabilities are hereinafter collectively referred to as the "Aggregate Debt"), and as security for the due and timely performance by Mortgagor of all of the other provisions of the Loan Documents, and intending to be legally bound hereby, Mortgagor hereby GRANTS, BARGAINS, SELLS, CONVEYS, ASSIGNS, TRANSFERS, RELEASES, PLEDGES and MORTGAGES to Mortgagee all that certain real property located 1 at 457 Haddonfield Road, constituting Block 176.01, Lot 1, and at 1700 Chapel Avenue, constituting Block 176.01, Lots 2 and 3, both in Cherry Hill Township, Camden County, New Jersey, as more fully described in Exhibit A attached hereto and made a part hereof ("Real Property"); TOGETHER WITH all right, title and interest of Mortgagor in and to the following property rights and interests, which Mortgagor hereby assigns to Mortgagee until the Aggregate Debt is paid (the Real Property together with the following property being hereinafter collectively called the "Mortgaged Property"): (a) all buildings and other improvements now or hereafter located on the Real Property including the seven (7) story office building located thereon containing approximately 121,737 net rentable square feet ("Improvements"); (b) all streets, lanes, alleys, passages, ways, water courses, easements, rights, liberties, privileges, air rights, development rights, oil and gas rights, water rights, water stock, tenements, hereditaments and appurtenances whatsoever thereunto belonging to or in any way made appurtenant hereafter, and the reversions and remainder, with respect thereto ("Appurtenances"); (c) all machinery, apparatus, equipment, furniture, furnishings, fixtures, inventory, goods, appliances and other property of every kind and nature whatsoever, together with replacements thereof and accessories, parts or accessions thereto, owned by Mortgagor or in which Mortgagor has or shall have an interest related specifically to the Real Property, and whether or not now or hereafter located on the Real Property, and any and all proceeds of any of the foregoing ("Equipment"); (d) all building materials, building machinery and building equipment delivered on site to the Real Property during the course of, or in connection with, the construction of, or reconstruction of, or remodeling of any building and improvements located on the Real Property from time to time during the term of this Mortgage and Security Agreement ("Building Equipment"); (e) all general intangibles relating to the development or use of the Real Property, including but not limited to all licenses, permits and agreements from or with all boards, agencies, departments, public utilities, governmental or otherwise, all names under which or by which the Real Property or Improvements may at any time be operated or known and all rights to carry on business under any such names or any variations thereof, all trademarks and goodwill in any way relating to the Real Property, and all documents of membership in any owners or 2 members association or similar group having responsibility for managing or operating any portion or all of the Real Property ("Intangibles"); (f) all awards or payments, including interest thereon, which may be made with respect to the Real Property and Improvements, whether from the exercise of the right of eminent domain (including any transfer made in lieu of the exercise of said right), or for any other injury to or decrease in the value of the Real Property or Improvements including, without limitation, all awards or payments of estimated compensation, all damages to the Real Property or Improvements resulting from any taking, all machinery and equipment dislocation expenses, all settlement amounts, and all apportionments of taxes ("Awards"); (g) all insurance policies covering the Real Property or Improvements and all proceeds of any unearned premiums on any such insurance policies including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Real Property or Improvements ("Insurance Policies"); (h) all leases, agreements of sale and other agreements affecting the use or occupancy of any portion or all of the Real Property or Improvements, whether heretofore or hereafter executed and all rights of Mortgagor to payment under any such lease or agreement ("Leases and Agreements"); (i) all rents, receipts, issues, profits and other income of any and all kinds (including deposits) received or receivable and due or to become due from the sale or lease of any property, goods or materials located on the Real Property or from the rendering of services at the Real Property including, but not limited to (i) the lease or sale of all or a portion of the Real Property or Improvements, or (ii) the operation of any income-producing facility on the Real Property or Improvements (all of such proceeds, receipts and income are hereinafter referred to as the "Income and Rents" and all such rights are hereinafter referred to as the "Accounts Receivable"); (j) any securities or guaranties held by Mortgagor with respect to any of the Intangibles, Awards, Leases or Accounts Receivable, and any notes, drafts, acceptances, chattel paper, documents or other instruments evidencing the same ("Securities"); (k) all Loan funds held by Mortgagee, whether or not disbursed, all funds deposited by Mortgagor with Mortgagee pursuant to the Loan Agreement, all reserves, deferred payments, deposits, refunds, cost savings and payments of any kind relating 3 to the Improvements ("Deposits"); (l) all plans and specifications prepared for construction of the Improvements and all studies, data and drawings related thereto; and also all contracts and agreements relating to the aforesaid plans and specifications or to the aforesaid studies, data and drawings, or to the construction of Improvements ("Plans"); and (m) the right, in the name and on behalf of itself or Mortgagor, to appear in or defend any action or proceeding brought with respect to the Real Property or Improvements (including without limitation, any condemnation or arbitration proceedings) and to commence any action or proceedings to protect the interest of Mortgagee in the Real Property and Improvements. TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, its successors and assigns forever. All right, title and interest of Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to the Mortgaged Property hereafter acquired by, or released to, Mortgagor or constructed, assembled or placed by Mortgagor on the Real Property, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, pledge, conveyance, assignment or other act by Mortgagor, shall become subject to the lien of this Mortgage and Security Agreement as fully and completely, and with the same effect, as though now owned by Mortgagor and specifically described herein. Notwithstanding the foregoing, Mortgagor shall, at its own cost, make, execute, acknowledge, deliver and record any and all such further acts, deeds, conveyances, mortgages, notices of assignment, transfers, assurances and other documents as Mortgagee shall from time to time reasonably require for the better assuring, conveying, assigning, transferring and confirming unto Mortgagee of the Mortgaged Property and the other rights hereby conveyed or assigned or intended now or hereafter so to be, or which Mortgagor may be or may hereafter become bound to convey or assign for carrying out the intention of facilitating the performance of the terms of this Mortgage and Security Agreement. In addition, Mortgagor hereby agrees that this Mortgage and Security Agreement is a security agreement under the New Jersey Uniform Commercial Code and creates in Mortgagee a security interest thereunder in, among other things, all Equipment, Building Equipment, Intangibles, Awards, Insurance Policies, Leases and Agreements, Income and Rents, Accounts Receivable, Securities, Deposits and Plans. Mortgagor shall, at its own cost and expense, execute, deliver and file any financing statements, continuation certificates and other documents 4 Mortgagee may reasonably require from time to time to perfect and maintain in favor of Mortgagee a security interest under the Uniform Commercial Code in such Equipment, Building Equipment, Intangibles, Awards, Insurance Policies, Leases and Agreements, Income and Rents, Accounts Receivable, Securities, Deposits and Plans. Without limiting the generality of any of the foregoing, Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact for Mortgagor to execute, deliver and file any of the documents referred to hereinabove for and on behalf of Mortgagor following notice from Mortgagee to Mortgagor to execute such documents and the failure by Mortgagor to do so within five (5) business days. PROVIDED ALWAYS, and these presents are upon this express condition, that if Mortgagor or its successors or assigns shall well and truly pay or cause to be paid unto Mortgagee, its successors or assigns, the Aggregate Debt secured by this Mortgage and Security Agreement, and otherwise perform Mortgagor's obligations under the Loan Documents, then this Mortgage and Security Agreement, and the estate hereby granted, shall cease, determine and be void, and Mortgagee shall furnish to Mortgagor a satisfaction of this Mortgage and Security Agreement in proper form for recording, but Mortgagee shall not be required to bear any expense or cost in connection with such satisfaction or the recording thereof. THIS MORTGAGE AND SECURITY AGREEMENT also secures, inter alia, present and future advances made by Mortgagee pursuant to the Loan Documents, including, without limitation, advances made to enable completion of the Tenant Improvements. The priority of such future advances shall relate back to the date of this Mortgage and Security Agreement, or to such later date as required by applicable law. This Mortgage and Security Agreement also secures advances made by Mortgagee with respect to the Mortgaged Property for the payment of taxes, assessments, maintenance charges, and insurance premiums, costs incurred by Mortgagee for the protection of the Mortgaged Property or the lien of this Mortgage and Security Agreement, and expenses incurred by Mortgagee by reason of the occurrence of an event of default hereunder and the priority of such advances, costs and expenses shall also relate back to the date of this Mortgage and Security Agreement, or to such later date as required by applicable law. MORTGAGOR WARRANTS TO AND COVENANTS WITH Mortgagee as follows: 1. Title. As of the date hereof (a) Mortgagor has good and marketable title to an indefeasible fee simple estate in the Mortgaged Property subject to no lien, charge or encumbrance except such as are listed as exceptions to title or exclusions 5 from coverage in the title insurance policy being issued by Lawyers Title Insurance Corporation to Mortgagee concurrently with the recording of this Mortgage and Security Agreement; (b) this Mortgage and Security Agreement is and shall remain a valid and enforceable first lien on the Mortgaged Property subject only to the matters referred to in subparagraph (a) hereof; (c) Mortgagor shall preserve such title, and all of its rights in and to the Mortgaged Property, and shall forever warrant and defend the validity and priority of the lien hereof against the claims of all persons and entities whomsoever, subject only to the matters referred to in subparagraph (a) hereof; and (d) Mortgagor has full power and lawful authority to mortgage the Mortgaged Property and grant a security interest therein in the manner and form herein done or intended hereafter to be done. 2. Payment and Performance. Mortgagor shall punctually pay or cause to be paid the Aggregate Debt, in the amounts and at the times and places that the same may be due, and perform and comply with all of the terms, covenants, conditions and obligations contained in the Loan Documents. 3. Taxes and Other Charges. Mortgagor shall pay all taxes of every kind and nature (including real and personal property, income, gross receipts, franchise, profits, sales and withholding taxes), all general and special assessments, water and sewer rents and charges, and all levies, permits, inspection and license fees and other public charges now or hereafter levied or assessed against the Mortgaged Property as liens or assessments (hereinafter individually called a "Tax" and collectively the "Taxes") as the same shall become due and payable from time to time and before interest or penalties accrue thereon; provided, however, that Mortgagor shall not be required to pay any Tax to the extent that nonpayment thereof is permitted while the validity thereof is being contested, so long as (a) Mortgagor notifies Mortgagee in writing of its intention to contest the validity thereof, (b) the validity thereof is being contested in good faith by Mortgagor and (c) Mortgagor deposits with Mortgagee if Mortgagee so requests an amount reasonably deemed sufficient to make such payment if the contest is unsuccessful. Notwithstanding the foregoing, Mortgagor shall under no circumstances permit the Mortgaged Property to be sold or advertised for sale for nonpayment of any Tax. Mortgagor shall not apply for or claim any deduction from the taxable value of the Mortgaged Property because of the existence of the Note or this Mortgage and Security Agreement. Subject to Mortgagor's right to contest any Tax as hereinabove provided, Mortgagor shall deliver to Mortgagee receipts evidencing the payment of such Tax on or before the last day on which any Tax may be paid without interest or penalties or as soon thereafter as such receipts are available. 6 4. Insurance. Mortgagor shall keep the Improvements and the Equipment continuously insured against loss or damage by fire (with extended coverage), theft, vandalism, malicious mischief, sprinkler leakage, flood (if the Mortgaged Property is located in a flood plain area) and such other hazards as Mortgagee shall from time to time reasonably require in a total amount equal to the full insurable value, as determined by the insurance company which shall issue such insurance, or in any event not less than that amount below which any co-insurance provisions would apply and not less than the then outstanding amount of the Aggregate Debt. Mortgagor shall also carry appropriate insurance applicable to the Mortgaged Property in connection with the construction work upon the Mortgaged Property (whether or not such work is expensed or capitalized by Mortgagor) as required in the Loan Agreement and in such amounts as may be required by Mortgagee. Mortgagor shall also carry rental loss insurance and comprehensive liability insurance (including bodily injury and property damage) covering all operations of Mortgagor on the Mortgaged Property in such amounts as may be reasonably required by Mortgagee. Any policy or policies with respect to all of the abovementioned insurance (hereinafter called a "Policy") (a) shall be issued by an insurer reasonably acceptable to Mortgagee (for these purposes, Aetna Insurance Company is acceptable to Mortgagee), (b) shall contain, in the case of the hazard insurance and rental loss insurance, a mortgagee clause endorsement naming Mortgagee and its successors and assigns as a co-insured thereunder, as its interests may appear, and, at Mortgagee's option, shall contain a clause naming Mortgagee as an additional insured and/or loss payee, (c) shall contain a provision that Mortgagee shall be given thirty (30) days' prior written notice of material change or cancellation of said Policy and that no such change or cancellation shall be effective as to Mortgagee in the absence of such notice, and (d) shall contain such other provisions as shall from time to time be reasonably required by Mortgagee. Any such Policy may provide for customary "deductibles" provided the limits thereof are reasonably satisfactory to Mortgagee. Not less than fifteen (15) days' prior to any date upon which any premium for such insurance shall be due and payable, Mortgagor shall deliver to Mortgagee satisfactory evidence that such premium has been paid, and further, not less than fifteen (15) days' prior to the expiration date of any Policy, Mortgagor shall deliver to Mortgagee satisfactory evidence of the renewal of such Policy. In the event of the foreclosure of this Mortgage and Security Agreement or other transfer of Mortgagor's interest in the Mortgaged Property in satisfaction of the Aggregate Debt, all right, title and interest of Mortgagor to any Policy then in force covering the Mortgaged Property (including any right to any deferred premiums) shall pass to the transferee of the Mortgaged Property. 7 5. Tax and Insurance Escrow. Upon the written request of Mortgagee at any time following the occurrence of an event of default hereunder, Mortgagor shall pay to Mortgagee on the first day of each month a sum equal to one-twelfth (1/12) of the amount of (a) all real estate taxes, water and sewer charges and assessments, if any, as estimated from time to time by Mortgagee, becoming due with respect to the Mortgaged Property on the next succeeding date upon which the same shall be due and payable and (b) all premiums, computed on an annual basis, for the insurance required to be carried pursuant to paragraph 4 hereof. All such amounts (hereinafter, the "Escrows") shall be held by Mortgagee in such manner as it sees fit without any obligation to invest the same or (if invested) to account for any income or loss resulting therefrom; provided however, that if and to the extent that Mortgagee is required under applicable law to invest the Escrows for the benefit of Mortgagor, Mortgagee shall also have the right to charge a reasonable service fee in connection therewith unless prohibited under such law. The Escrows shall be applied to the payment of the respective items in respect of which the Escrows were deposited, or at Mortgagee's option, to the payment of any such items in such order of priority as Mortgagee shall determine, as the same become due and payable. If, prior to the date upon which any of the aforesaid items shall be due and payable, the amount of Escrows then on deposit therefor shall be insufficient to pay such item, Mortgagor within five (5) days after demand is made therefor shall deposit the amount of such deficiency with Mortgagee. If there is an event of default hereunder, Mortgagee may at its option apply the Escrows or any part thereof in payment of any unpaid portion of the Aggregate Debt. If, when making any assignment of this Mortgage and Security Agreement, the then Mortgagee shall pay over to its assignee the then balance of the Escrows and such assigning Mortgagee shall have no further obligation to Mortgagor with respect to such deposits. 6. Casualty Loss. Mortgagor shall notify Mortgagee in writing immediately upon the occurrence of any loss affecting the Mortgaged Property. Mortgagor hereby directs any insurer to pay directly to Mortgagee any moneys payable under any Policy, and Mortgagor hereby appoints Mortgagee as attorney-in-fact to endorse any draft therefor. Sums paid to Mortgagee by any insurer may be retained and applied by Mortgagee toward payment of the Aggregate Debt (whether or not any portion thereof may then be due and payable) in such priority and proportions as Mortgagee in its discretion shall deem proper, and any sums not so applied, at the discretion of Mortgagee, may be paid, either in whole or in part, to Mortgagor for such purposes and upon such conditions as Mortgagee shall designate. Notwithstanding the 8 foregoing, upon the request of Mortgagor, Mortgagee shall make such sums available to Mortgagor for repair and restoration of the damaged property, provided that (a) there is not then in existence any uncured event of default under any of the Loan Documents, (b) Mortgagor shall deposit with Mortgagee prior to the commencement of any such repair or restoration an amount equal to the difference between the estimated cost to repair the damaged property and the sums made available to Mortgagee on account of such insurance, and (c) such repair and restoration can be completed within one (1) year from the date of the loss (but in no event later than the Maturity Date (as defined in the Note)). The determination of the cost to repair the damaged property shall be made by Mortgagee in consultation with an independent third party engineer selected by Mortgagee and paid for by Mortgagor. If Mortgagee retains such insurance money and applies the same toward payment of the Aggregate Debt in accordance with this paragraph 6, the lien of this Mortgage and Security Agreement shall be reduced only by the amount thereof retained by Mortgagee and actually applied by Mortgagee in reduction of the Aggregate Debt. 7. Condemnation. In the event that the whole or any material part of the Mortgaged Property secured by this Mortgage and Security Agreement is condemned or taken for any period of time, or there is any other injury to or material decrease in value of the Mortgaged Property as a result of any public or quasi-public authority or corporation exercising the power of eminent domain or otherwise, all sums awarded as damages for such condemnation or taking to which Mortgagor is entitled shall be paid over immediately to Mortgagee. Upon the receipt thereof, Mortgagee may deduct and withhold from the amount actually received any costs, charges or fees incurred by Mortgagee in connection with the recovery of such award (hereinafter, "Mortgagee's Costs"), and thereafter Mortgagee may apply all or any portion of the balance to the discharge of the Aggregate Debt and, at the option of Mortgagee, may pay over any sums not so applied to Mortgagor for the purpose of restoring or repairing the Mortgaged Property or for any purpose or object satisfactory to Mortgagee, in which event the Aggregate Debt shall not be reduced by that amount. Notwithstanding the foregoing, in the event of a partial rather than complete condemnation of the Mortgaged Property and upon the request of Mortgagor, Mortgagee shall make such sums available to Mortgagor for repair and restoration of the damaged property, provided that (a) there is not then in existence any uncured event of default under any of the Loan Documents, (b) Mortgagor shall deposit with Mortgagee prior to the commencement of any such repair or restoration an amount equal to the difference between the cost to repair the damaged property and the sums made available by Mortgagee on account of such insurance, (c) such repair and restoration can be 9 completed within six (6) months from the date of the loss (but in no event later than the Maturity Date) and (d) Mortgagee has determined that the condemnation of the Mortgaged Property will not materially adversely affect the ownership and operation of the Mortgaged Property for its current purpose as an office building. Mortgagor hereby irrevocably appoints Mortgagee as attorney-in-fact for Mortgagor for the purpose of collection of any or all proceeds available in connection with the condemnation of the Mortgaged Property. If the Mortgaged Property is transferred, through foreclosure or otherwise, prior to the receipt by Mortgagee of such award of payment, Mortgagee shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive such award or payment, or a portion thereof sufficient to pay the Aggregate Debt, whichever is less. 8. Preservation of Lien; No Conveyance of Title. (a) Mortgagor shall pay, from time to time as and when the same shall become due, all claims and demands of any persons or entities which, if unpaid, might result in or permit the creation of a lien on the Mortgaged Property or any part thereof, and in general shall do or cause to be done everything necessary so that the lien hereof shall be fully preserved and so that there shall not be created, permitted or suffered to exist any lien, encumbrance or charge affecting the Mortgaged Property other than those matters referred to in paragraph 1(a) hereof which have been approved in writing by Mortgagee, all at the sole cost of Mortgagor. At Mortgagee's election, and without notice to Mortgagor, Mortgagee may make but is not obligated to make, any payments which Mortgagor has failed to make under any prior lien, but such payment by Mortgagee shall not release Mortgagor from Mortgagor's obligations or constitute a waiver of Mortgagor's default hereunder. Any sum so expended by Mortgagee shall be secured by this Mortgage and Security Agreement, together with interest thereon at the rate stipulated in the Note from the date such payment is made by Mortgagee until the date of repayment by Mortgagor. Notwithstanding the foregoing, Mortgagor shall have the right, at its sole cost and expense, to contest in good faith by any lawful means any such claims and demands, provided that it notifies Mortgagee in writing of its intention to do so and deposits with Mortgagee, if Mortgagee so requests, an amount deemed reasonably sufficient by Mortgagee to satisfy such claims and demands if it is ultimately determined that Mortgagor is responsible therefor. (b) Mortgagor shall not convey or attempt to convey or permit or suffer a conveyance or transfer of legal or equitable title to the Mortgaged Property or any part thereof and whether such conveyance or transfer is voluntary, involuntary, by 10 operation of law or otherwise, so long as any part of the Aggregate Debt remains unpaid without the prior written consent of Mortgagee. 9. Maintenance and Repair; Compliance with Laws and Regulations. Mortgagor shall cause the Mortgaged Property to be maintained in good condition and repair, reasonable wear and tear excepted. None of the Improvements, Equipment or Building Equipment shall be removed, demolished, materially altered or sold (except for normal replacement or upgrade of the Equipment), without the prior written consent of Mortgagee. Subject to the release of the insurance proceeds, Mortgagor shall promptly repair, replace or rebuild any part of the Mortgaged Property which may be damaged or destroyed by any casualty or which may be affected by any condemnation or eminent domain proceeding. Mortgagor shall promptly comply with all laws, orders, ordinances, regulations, restrictions and requirements of governmental authorities, of courts and of insurance companies applicable to Mortgagor or affecting the Mortgaged Property, or the use thereof. Mortgagor also shall promptly comply with the provisions of any recorded covenants, conditions or restrictions to which the Mortgaged Property or any part thereof may at any time be subject. Mortgagor shall not cause or allow the construction or erection of any public, municipal or utility improvements upon the Mortgaged Property other than those required by public authorities, without the prior written consent of Mortgagee. Mortgagor shall not drill or extract or enter into any lease for the drilling for or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character on or from the Mortgaged Property or any part thereof without the prior written consent of Mortgagee. Mortgagor shall not seek, make or consent to any change in zoning or conditions of use of the Mortgaged Property which would impair the ability of Mortgagor to operate the Real Property and Improvements as a first class office building. 10. Environmental Matters. (a) To the best of Mortgagor's knowledge based upon the Environmental Report and the Purchase Agreement, except as may be set forth in the Environmental Report or the Purchase Agreement and except for the use and storage of Hazardous Substances in de minimis amounts which are used in and stored in compliance with all applicable laws and regulations, (i) the Mortgaged Property has not been used for the generation, manufacture, storage or disposal of, and there has not been transported to or from the Mortgaged Property, any Hazardous Substances or Wastes, (ii) there are no Hazardous Substances or Wastes present on the Mortgaged Property, (iii) the Mortgaged Property does not consist in whole or in part of any soils or 11 vegetation that would be considered to be Wetlands, (iv) there has been no use of the Mortgaged Property that may, under any federal, state or local law or regulation, require any closure or cessation of the use of the Mortgaged Property or impose upon Mortgagor or its successors any monetary obligations, (v) no lien or superlien has been recorded, asserted or threatened against the Mortgaged Property for any liability in connection with any environmental contamination, and (vi) the Mortgaged Property is in compliance with all federal, state or local laws and regulations relating to environmental matters. (b) Mortgagor's knowledge with respect to environmental matters affecting the Mortgaged Property is limited to such matters, if any, which appear in the Environmental Report or Purchase Agreement. (c) Mortgagor has not been identified in any litigation, proceeding or investigation as a responsible party or potentially responsible party for any liability for disposal or release of any Hazardous Substances or Wastes. (d) Mortgagor will not, and will use reasonable efforts not to, permit any tenant or other occupant of the Mortgaged Property to, store, use, generate, treat or dispose of any Hazardous Substances or Wastes on the Mortgaged Property except in de minimus quantities and in accordance with all applicable laws. Mortgagor promptly shall advise Mortgagee in writing of and with respect to any pending or known threatened claim, demand, action or notice by any governmental authority or third party relating to any Hazardous Substances or Wastes affecting the Mortgaged Property or the discovery or determination of the existence of any Hazardous Substances or Wastes or Wetlands on the Mortgaged Property. Mortgagee shall have the right to join in or participate in any legal proceedings or actions initiated in connection with any Hazardous Substances, Wastes or Wetlands affecting the Mortgaged Property. Mortgagor shall reimburse Mortgagee for reasonable attorneys' fees and costs in connection therewith and Mortgagor shall indemnify, defend and hold harmless Mortgagee from and against any claim, demand, loss or liability, including but not limited to costs of remedial action, response costs, personal injury and property damage, directly or indirectly arising out of or attributable to the use, generation, deposit, storage, release, discharge, disposal, burial, dumping, spilling, leaking or other presence of Hazardous Substances or Wastes on, under or affecting the Mortgaged Property or arising as the result of the existence of Wetlands on the Mortgaged Property. The foregoing indemnity shall specifically survive the repayment of the Loan and the satisfaction of the Mortgage, but shall not be applicable to any environmental matter first arising subsequent to Mortgagor's 12 ownership of the Mortgaged Property. Mortgagor shall not, without obtaining Mortgagee's prior written consent, enter into any settlement agreement, consent decree or other compromise in respect to any Hazardous Substances, Wastes or Wetlands affecting the Mortgaged Property. 11. Leases. Except as otherwise provided in the Loan Agreement, Mortgagor shall not enter into any lease or similar agreement for space in or on the Mortgaged Property without in each case obtaining Mortgagee's prior written approval of all the terms and conditions thereof and, once approved, Mortgagor shall not amend, modify or cancel any such lease or similar agreement or assign any amounts due thereunder without obtaining Mortgagee's prior written approval. 12. Required Notice. Mortgagor shall give Mortgagee prompt written notice of any action or proceeding purporting to affect the Mortgaged Property of which it has actual knowledge including, without limitation, the following: (a) a fire or other casualty causing damage to the Mortgaged Property; (b) receipt of notice of condemnation of the Mortgaged Property or any part thereof; (c) receipt of notice from any governmental authority relating to the structure, use or occupancy of the Mortgaged Property; (d) receipt of any notice from any tenant of all or any portion of the Mortgaged Property; (e) any change in the occupancy of the Mortgaged Property; (f) receipt of any notice from the holder of any lien or security interest in the Mortgaged Property; or (g) commencement of any litigation affecting the Mortgaged Property. Mortgagee shall have the right to appear in or defend any such action or proceeding to the same extent as Mortgagor after written notice to Mortgagor. Furthermore, Mortgagee shall have the right to bring any action or proceeding, in the name and on behalf of itself or Mortgagor, which Mortgagee, in its discretion, feels should be brought to protect its interest in the Mortgaged Property or any part thereof. 13. Mortgagee's Right to Cure. Mortgagee shall have the right, but not the obligation, at Mortgagee's election and after written notice to Mortgagor, to cure any default by Mortgagor under any of the Loan Documents or under any mortgage or with respect to any security interest, lien or encumbrance which is senior in lien and position to this Mortgage and Security Agreement. Any payments made or expenses incurred by Mortgagee in the exercise of such right shall not release Mortgagor from Mortgagor's obligation or constitute a waiver of Mortgagor's default hereunder. Any such payments made or expenses incurred by Mortgagee shall be repayable within three (3) business days after demand by Mortgagee, together with interest thereon at the rate specified in the Note from the date such payment was made or 13 such expense was incurred, and the aggregate amount thereof, including such interest, shall become part of the Aggregate Debt and shall be secured by the lien of this Mortgage and Security Agreement. l4. Certificate of No Offsets. Within five (5) days after being requested to do so by Mortgagee, Mortgagor shall furnish to Mortgagee or any proposed assignee of this Mortgage and Security Agreement a statement, duly executed, acknowledged and certified by Mortgagor, setting forth the remaining unpaid amount of the Aggregate Debt and whether there exist any uncured defaults, offsets or defenses thereto. l5. Right to Inspect. Mortgagor shall permit Mortgagee and its agents to enter and inspect the Mortgaged Property or any part thereof at all reasonable times during normal business hours and in such a manner so as not to unreasonably interfere with Mortgagor's operations. l6. Revenue, Tax or Other Stamps. Mortgagor shall pay the cost of any revenue, tax or other stamps now or hereafter required by the laws of the State of New Jersey or the United States to be affixed to the Note or this Mortgage and Security Agreement and if any taxes are imposed under the laws of the State of New Jersey or the United States with respect to debts secured by a mortgage, or with respect to evidences of indebtedness so secured, Mortgagor shall pay or reimburse Mortgagee upon demand the amount of such taxes without credit against any indebtedness evidenced by the Note. If Mortgagor does not or may not do so, Mortgagee may at its option accelerate the indebtedness evidenced by the Note to maturity as in the case of default by Mortgagor. 17. Possession. Until an event of default shall have occurred under this Mortgage and Security Agreement, Mortgagor shall be suffered and permitted to retain actual possession of the Mortgaged Property, to manage, operate, use and enjoy the same and all rights appertaining thereto, and to collect, receive, take, use and enjoy the Income and Rents. The right of Mortgagor to collect the Income and Rents may be revoked by Mortgagee at any time and from time to time after an event of default has occurred under this Mortgage and Security Agreement, by giving notice of such revocation to Mortgagor. Following the giving of such notice, Mortgagee may retain and apply the Income and Rents toward payment of the Aggregate Debt in such priority and proportions as Mortgagee, in its discretion, shall determine. 18. Events of Default. The occurrence of any one or more of the following events, after the expiration of any applicable 14 notice and/or cure period specifically provided for herein, shall, at the sole option of the Mortgagee, constitute an "event of default" hereunder: (a) Mortgagor shall fail to pay any regularly scheduled installment of principal and/or interest due to Mortgagee under the Note when the same shall become due and payable (including payment of the Loan on the Maturity Date), or Mortgagor shall fail to make any other payment due under any of the Loan Documents within fifteen (15) days after notice thereof from Mortgagee; (b) Except as otherwise provided for herein, Mortgagor shall fail to observe or perform any of the covenants or agreements on its part to be observed or performed under this Note or under any of the other Loan Documents within thirty (30) days after written notice from Mortgagee of such non-compliance, provided that if such non-compliance cannot reasonably be cured within such thirty day period but Mortgagor undertakes within such thirty day period and thereafter diligently pursues the curing of such non-compliance, then the period within which Mortgagor shall cure such non-compliance shall be extended to sixty (60) days after the original written notice from Mortgagee of such non-compliance; (c) Any representation or warranty of Mortgagor under this Mortgage and Security Agreement or under any of the other Loan Documents shall be untrue in any material respect; (d) Any event of default, after the expiration of any applicable notice and/or cure period specifically provided for therein, shall occur under the terms of any of the other Loan Documents; (e) Mortgagor shall apply for or consent to the appointment of a receiver, trustee or liquidator of itself or any of its, admit in writing its inability to pay its debts as they mature, make a general assignment for the benefit of creditors, be adjudicated a bankrupt, insolvent or file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or if action shall be taken by Mortgagor for the purpose of effecting any of the foregoing; (f) Any order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition seeking reorganization of Mortgagor or all or a substantial part of the 15 assets of Mortgagor or appointing a receiver, sequestrator, trustee or liquidator of Mortgagor or any of its property, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) days. 19. Remedies. Subject to the limitation set forth in paragraph 24 hereof, upon the occurrence of any event of default: (a) The Aggregate Debt shall, at the option of Mortgagee, become due and payable immediately without presentment, demand, notice of nonpayment, protest, notice of protest or other notice of dishonor, all of which are hereby expressly waived by Mortgagor. (b) Mortgagee may institute appropriate proceedings at law or equity to collect the amount of the Aggregate Debt then due (by acceleration or otherwise), or for specific performance of any of the covenants of Mortgagor under any of the Loan Documents (and Mortgagor acknowledges that all such covenants may be specifically enforced by Mortgagee by injunction or other appropriate equitable remedy), or to recover damages for any breach thereof, or to institute an action of mortgage foreclosure against the Mortgaged Property, or take such other action at law or in equity for the enforcement of this Mortgage and Security Agreement and realization on the mortgage security or any other security herein or elsewhere provided for, and proceed therein to final judgment and execution for the Aggregate Debt, with interest as specified in paragraph 21 below, together with costs and expenses as specified in paragraph 22 below. (c) After demand upon Mortgagor for the surrender of possession, Mortgagee may enter upon and take possession of the Mortgaged Property, breaking locks if necessary and without liability for trespass, damages or otherwise and, upon so doing, Mortgagee may, in its discretion and in addition to any of its other rights, as Mortgagee in possession, alter, improve, complete or repair the Mortgaged Property (and in so doing Mortgagee shall have the right to use the Mortgaged Property and to expend such amount for that purpose as Mortgagee shall deem best, all of which, with interest thereon at the rate specified in the Note from date of payment, shall be repayable by Mortgagor on demand and shall be secured hereby), and operate, rent, sell or lease the same in the name of Mortgagor or Mortgagee upon such terms and conditions as Mortgagee shall deem appropriate, and Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact for Mortgagor for all such purposes while there exists any uncured event of default hereunder. (d) Mortgagee may further, by summary proceedings, initiate an action for possession or otherwise, dispossess any 16 tenants, users or occupiers of the Mortgaged Property then or thereafter in default in the payment of any rent or other charge for the use thereof, and any tenants or other users or occupiers whose leasehold estates or rights to use the Mortgaged Property are subordinate to the lien of this Mortgage and Security Agreement, whether or not any such tenant, user or occupier is so in default; and Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact of Mortgagor for all such purposes. If Mortgagor remains in possession after demand by Mortgagee for surrender of possession of the Mortgaged Property, such continued possession by Mortgagor shall be as tenant of Mortgagee, and Mortgagor agrees to pay monthly in advance to Mortgagee such rent for the Mortgaged Property so occupied as Mortgagee may demand, and in default of so doing, Mortgagor may also be dispossessed by summary proceedings or otherwise. In case of the appointment of a receiver of the rents, the foregoing agreement of Mortgagor to pay rent shall inure to the benefit of such receiver. (e) With or without taking possession of the Mortgaged Property, Mortgagee may collect and receive all the Income and Rents and, after deducting the cost of all reasonable alterations, improvements, repairs, completion, partial completion, operation, sale, rental, leasing commissions and charges, including, but not limited to, counsel fees, incurred by Mortgagee, apply the net income to the sums secured hereby in such manner as Mortgagee in its discretion shall determine. Mortgagee shall be liable to account only for the Income and Rents actually received. (f) If Mortgagee shall so elect, Mortgagor shall not resist or contest, but shall join in any petition to any court by Mortgagee for the appointment of a receiver or receivers of the Mortgaged Property or any part thereof, and of all the Income and Rents therefrom, with such powers as the court making such appointment shall confer, and Mortgagor hereby appoints Mortgagee attorney-in-fact of Mortgagor for all such purposes. (g) All deposits held in connection with the rental, lease, license or use of space or other facilities on the Mortgaged Property at the time of the occurrence of such event of default, all interest of Mortgagor in all premiums for, or dividends upon, any insurance for the Mortgaged Property, and all refunds or rebates of taxes and assessments upon the Mortgaged Property, are hereby assigned to Mortgagee as further security for the payment of the Aggregate Debt during the continuance of any such event of default. (h) To the extent now or hereafter permitted by law and subject to such grace periods and notice requirements thereby imposed or imposed by this Mortgage and Security Agreement, 17 Mortgagee may cause a judicial sale of the Mortgaged Property in accordance with this subparagraph (h). Such sale may be made without demand on Mortgagor at the time and place fixed in the notice of such sale, and such sale may be of the Mortgaged Property as a whole or in separate lots, and in such order as Mortgagee may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Such sale of the Mortgaged Property may be postponed by public announcement at the time and place of sale, and may be further postponed from time to time thereafter by public announcement at the time fixed by the preceding postponement. Any person or entity, including Mortgagee, may purchase at such sale. After deducting all costs, fees, and expenses of Mortgagee, including cost of evidence of title in connection with such sale, the proceeds of sale shall be applied to payment of the Aggregate Debt. The Mortgaged Property may be sold as aforesaid either before, after, or during the pendency of any proceedings for the enforcement of the provisions of this Mortgage and Security Agreement, and such power and right of sale shall not be affected by any entry hereunder, or by the exercise of any other right, remedy or power with respect to the enforcement of the provisions of any of the Loan Documents or the collection of the amount of the Aggregate Debt. The provisions of this subparagraph (h) are not intended to and shall not adversely affect Mortgagee's rights to conduct a nonjudicial sale of such portions of the Mortgaged Property as constitute personal property. 20. Remedies Cumulative. (a) No right or remedy conferred upon or reserved to Mortgagee under any of the Loan Documents or with respect to any Collateral, or now or hereafter existing at law or in equity or by statute or other legislative enactment, is intended to be exclusive of any other such right or remedy and each and every such right or remedy shall be cumulative and concurrent, and shall be pursued separately, concurrently, successively or otherwise, at the sole discretion of Mortgagee, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefor shall occur. No act of Mortgagee shall be deemed or construed as an election to proceed under any one such right or remedy to the exclusion of any other such right or remedy; furthermore, each such right or remedy of Mortgagee shall be separate, distinct and cumulative and none shall be given effect to the exclusion of any other. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term of any of the Loan Documents, shall not be construed as a waiver or release 18 of the same, or of any event of default thereunder, or of any obligation or liability of Mortgagor thereunder. (b) The recovery of any judgment by Mortgagee or the levy of execution under any judgment upon the Mortgaged Property shall not affect in any manner, or to any extent, the lien of this Mortgage and Security Agreement upon the Mortgaged Property, or any security interest in any other Collateral, or any rights, remedies or powers of Mortgagee under any of the Loan Documents or with respect to any Collateral, but such lien and such security interest and such rights, remedies and powers of Mortgagee shall continue unimpaired as before. Further, the entry of any judgment by Mortgagee shall not affect in any way the interest payable hereunder or under any of the other Loan Documents on any amounts due to Mortgagee, but interest shall continue to accrue on such amounts at the Default Rate (as hereinafter defined) after the entry of any judgment and continuing until distribution of the proceeds of any Sheriff's sale. (c) Mortgagor hereby waives presentment, demand, notice of nonpayment, protest, notice of protest or other notice of dishonor, and except to the extent specifically provided for herein, any and all other notices in connection with any default in the payment of, or any enforcement of the payment of, the Aggregate Debt except as provided in the Loan Documents. To the extent permitted by law, Mortgagor waives the right to any stay of execution and the benefit of all exemption laws now or hereinafter in effect. (d) Mortgagor agrees that Mortgagee may release, compromise, forbear with respect to, waive, suspend, extend or renew any of the terms of the Loan Documents (and Mortgagor hereby waives any notice of any of the foregoing), and that the Loan Documents may be amended, supplemented or modified by Mortgagee and the other signatory parties and that Mortgagee may resort to any Collateral in such order and manner as it may think fit, or accept the assignment, substitution, exchange, pledge, or release of all or any portion of any Collateral, for such consideration, or none, as it may require, without in any way affecting the validity of any liens over or other security interest in the remainder of any such Collateral (or the priority thereof or the position of any subordinate holder of any lien or other security interest with respect thereto); and any action taken by Mortgagee pursuant to the foregoing shall in no way be construed as a waiver or release of any right or remedy of Mortgagee, or of any event of default, or of any liability or obligation of Mortgagor, under any of the Loan Documents. (e) To the extent permitted by law, Mortgagor shall 19 not at any time insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension or moratorium law, or any exemption from execution or sale of the Mortgaged Property, wherever enacted, now or at any time hereafter in force, which may affect the covenants and terms of performance of this Mortgage and Security Agreement, nor claim, take, or insist upon any benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Mortgaged Property, prior to any sale of any of Mortgagor's interest therein; nor, after any such sale or sales, claim or exercise any right under any statute heretofore or hereafter enacted to redeem the Mortgaged Property so sold or any part thereof, and Mortgagor hereby expressly waives all benefit or advantage of any such law or laws, and covenants not to hinder, delay, or impede the execution of any power herein granted to Mortgagee but to suffer and permit the execution of every power as though no such law or laws had been made or enacted. Mortgagor further waives and releases all procedural errors, defects and imperfections in any proceeding instituted by Mortgagee under any of the Loan Documents. (f) Mortgagor, for itself and for all persons hereafter claiming through or under it or who may at any time hereinafter become holders of liens junior to the lien of this Mortgage and Security Agreement, hereby expressly waives and releases all rights to direct the order in which any of the Mortgaged Property shall be sold in the event of any sale or sales pursuant hereto and to have any of the Mortgaged Property and/or any other property now or hereafter constituting security for the Aggregate Debt marshalled upon any foreclosure of this Mortgage and Security Agreement or of any other security for any of the Aggregate Debt. (g) Mortgagor agrees that any action or proceeding against it to enforce the Mortgage and Security Agreement may be commenced in state or federal court in Camden County in the State of New Jersey and Mortgagor waives personal service of process and agrees that a summons and complaint commencing an action or proceeding in any such court shall be properly served if served by registered or certified mail in accordance with the notice provisions set forth herein and Mortgagor expressly waives any and all defenses to an exercise of personal jurisdiction by any such court. (h) Mortgagor hereby knowingly, voluntarily and intentionally waives any right it may have to a trial by jury in respect of any litigation based upon or arising out of, under or in connection with this Mortgage, any of the other Loan Documents or any course of conduct, course of dealing, statements (whether verbal or written) or actions of Mortgagor or Mortgagee. This 20 provision is a material inducement for Mortgagee to make the Loan. 21. Default Rate. Following the occurrence of any event of default and continuing either until such event of default is cured and that fact acknowledged by Mortgagee or until the principal sum then outstanding under the Note and all other sums payable under the Loan Documents are paid in full, the principal sum outstanding under the Note shall bear interest at rate equal to the annual interest rate then applicable under paragraph 1 of the Note plus four percent (4%) per annum, which rate shall change if, when and as such interest rate changes ("Default Rate"), and shall be secured by the Mortgage and all other Collateral. 22. Costs and Expenses. Following the occurrence of any event of default under any of the Loan Documents, Mortgagor shall pay upon demand all reasonable costs and expenses (including all amounts paid to attorneys, accountants, real estate brokers and other advisors employed by Mortgagee and to any contractors for labor and materials), incurred by Mortgagee in the exercise of any of its rights, remedies or powers under any of the Loan Documents or with respect to any Collateral with respect to such event of default, and any amount thereof not paid promptly following demand therefor, together with interest thereon at the Default Rate from the date of such demand, shall become part of the Aggregate Debt and shall be secured by the lien of this Mortgage and Security Agreement. In connection with and as part of the foregoing, in the event that any of the Loan Documents is placed in the hands of any attorney for the collection of any sum payable thereunder, Mortgagor agrees to pay attorneys' fees for the collection of the amount being claimed under such Loan Documents, as well as all costs, disbursements and allowances provided by law, and the payment of such fees and costs, disbursements and allowances shall also be secured by the lien of this Mortgage and Security Agreement. Nothing in this paragraph 22 shall limit the obligation of Mortgagor to pay costs and expenses of Mortgagee for which Mortgagor is otherwise liable under the Loan Documents. 23. Renewals and Extensions. This Mortgage and Security Agreement shall secure any and all renewals, or extensions of the whole or any part of the indebtedness hereby secured however evidenced, with interest at such lawful rate as may be agreed upon and any such renewals or extensions or any change in the terms or rate of interest shall not impair in any manner the validity of or priority of this Mortgage and Security Agreement, nor release Mortgagor from personal liability for the indebtedness hereby secured. 21 24. Limited Liability of Mortgagor. Except as hereinafter set forth, Mortgagor shall not have any personal liability for the payment of the Loan or for the payment of any sum or performance of any obligation under any of the Loan Documents, and in the event of a default under this Mortgage and Security Agreement or any of the other Loan Documents, Mortgagee will look solely to the Real Property and Improvements, the rents, issues and profits thereof and any other Collateral specifically pledged, assigned or granted by Mortgagor to Mortgagee as security for the Loan pursuant to this Mortgage and Security Agreement or any of the other Loan Documents, and any judgment obtained against Mortgagor shall so note by its terms or as otherwise permissible by law. Subject to the aforesaid limitation, nothing herein contained shall be construed to prevent Mortgagee from exercising and enforcing any other remedy against Mortgagor or any other person or entity allowed at law or in equity or by any statute or by the terms of this Mortgage and Security Agreement or any of the other Loan Documents or any other deed of trust, mortgage, security agreement, assignment of leases and rents, guaranty or any other security instrument of any kind now or hereafter securing payment of the Loan. In addition, notwithstanding anything to the contrary contained herein, Mortgagor shall indemnify and hold Mortgagee harmless against, and shall be personally liable and obligated to Mortgagee for: (a) the completion of construction of the Tenant Improvements in accordance with the respective deadlines therefor in the New Leases free and clear of any and all mechanics liens and any other liens and encumbrances; (b) the payment on a current basis of all monthly installments of principal and interest with respect to the Acquisition Portion of the Loan and interest with respect to the Tenant Improvement Portion of the Loan (but excluding therefrom the entire unpaid principal balance of the Loan becoming due as a result of maturity or acceleration of the Loan to the extent not constituting a regular monthly installment); (c) the principal amount of the Loan to the extent of $3,000,000, which may be allocated between the Acquisition Portion of the Loan and Tenant Improvement Portion of the Loan as Mortgagee shall determine in its sole discretion, and which shall not be reduced by any payments on account of the Acquisition Portion of the Loan or Tenant Improvement Portion of the Loan by Mortgagor or by any other person or entity, whether by payments in the ordinary course or by mortgage foreclosure or otherwise; and (d) an amount equal to all loss, liability, damage, 22 cost and expense suffered or incurred by Mortgagee in any way arising out of, resulting from or relating to any one or more of the following: (i) any fraud or willful material misrepresentation committed by Mortgagor; (ii) any retention by Mortgagor of rental income, security deposits, or similar income of the Real Property and Improvements after an event of default has occurred under the Loan Documents to the extent of any such retention; (iii) any real property taxes or assessments accrued prior to Mortgagee's acquisition of ownership of the Real Property and Improvements following a default by Mortgagor under the Loan; (iv) removal or failure to replace any personal property securing the Loan, other than in the ordinary course of Mortgagor's business; (v) misapplication of insurance or condemnation proceeds relating to the Real Property and Improvements; (vi) failure to maintain hazard or liability insurance relating to the Real Property and Improvements, in accordance with the Loan Documents; (vii) the presence of any Hazardous Substances or Wastes which may affect the Real Property and Improvements, or any misrepresentation or breach of any covenants or indemnities by Mortgagor set forth in the Loan Documents with respect to Hazardous Substances or Wastes; (viii) any transfer of the Real Property and Improvements or any portion thereof other than Permitted Transfers; (ix) any indebtedness secured by a mortgage covering the Real Property and Improvements other than the Seller Loan; (x) any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution, liquidation or receivership proceedings instituted by or against Mortgagor, unless and except to the extent that such proceedings are withdrawn, dismissed or discharged within ninety (90) days or unless Mortgagee obtains title to the Real Property and Improvements within nine (9) months; and (xi) all fees and costs, including reasonable attorney fees, incurred in enforcing and collecting the foregoing. 25. Severability. In the event that for any reason one or more of the provisions of this Mortgage and Security Agreement or their application to any person or circumstance shall be held to be invalid, illegal, or unenforceable in any respect or to any extent, such provisions shall nevertheless remain valid, legal and enforceable in all such other respects and to such extent as may be permissible. In addition, any such invalidity, illegality, or unenforceability shall not affect any other provision of this Mortgage and Security Agreement, but this Mortgage and Security Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 26. Successors and Assigns. This Mortgage and Security Agreement inures to the benefit of Mortgagee and binds Mortgagor, and their respective successors and assigns and the words 23 "Mortgagee" and "Mortgagor" whenever occurring herein shall be deemed to include such respective successors and assigns, as applicable. Mortgagee may assign or otherwise transfer this Mortgage and Security Agreement and any or all of the Loan Documents to any other person, and such other person shall thereupon become vested with all of the benefits in respect thereof granted to Mortgagee herein or otherwise. 27. Notices. All notices required or desired to be given to either of the parties hereunder shall be in writing and shall be deemed to have been sufficiently given for all purposes when presented personally to such party or sent by a nationally recognized overnight courier or by certified or registered mail, return receipt requested, to such party at its address set forth below: Mortgagor: Brandywine Realty Trust Two Greentree Centre, Suite 100 Marlton, New Jersey 08053 Attention: Gerard H. Sweeney, President and Chief Executive Officer with a copy to: Pepper, Hamilton & Scheetz 3000 Two Logan Square 18th and Arch Streets Philadelphia, Pennsylvania 19103 Attention: Brad A. Molotsky, Esquire Mortgagee: Summit Bank 1800 Chapel Avenue West Cherry Hill, New Jersey 08002 Attention: Amy Brown Regional Vice President with a copy to: Miller Dunham & Doering l515 Market Street, Suite 1300 Philadelphia, Pennsylvania l9l02 Attention: David H. Huggler, Esquire Such notice shall be deemed to be given when received if delivered personally or three (3) days after the date mailed if sent by a nationally recognized overnight courier or by certified or registered mail, return receipt requested. Any notice of any change in such address shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived in writing by the party entitled to receive such notice. 28. Definitions; Number and Gender. In the event Mortgagor 24 consists of more than one person or entity, the obligations and liabilities hereunder of each of such persons and entities shall be joint and several and the word "Mortgagor" shall mean all or some or any of them. For purposes of this Mortgage and Security Agreement, the singular shall be deemed to include the plural and the neuter shall be deemed to include the masculine and feminine, as the context may require. The words "Loan Agreement", "Mortgage and Security Agreement", "Note", "Assignment of Leases and Rents" and "Assignment of Contracts and Permits" shall include any supplements to or any amendments of or restatements of the Loan Agreement, this Mortgage and Security Agreement, the Note, the Assignment of Leases and Rents and the Assignment of Contracts and Permits, respectively. The words "Real Property", "Mortgaged Property", "Improvements", "Appurtenances", "Equipment", "Building Equipment", "Intangibles", "Awards", "Insurance Policies", "Leases and Agreements", "Income and Rents", "Accounts Receivable", "Securities", "Deposits" and "Plans" shall include any portion of and additions to the Mortgaged Property, the Mortgaged Property, the Improvements, the Appurtenances, the Equipment, the Building Equipment, the Intangibles, the Awards, the Insurance Policies, the Leases and Agreements, the Income and Rents, the Accounts Receivable, the Securities, the Deposits and the Plans, respectively. 29. Incorporation by Reference. All of the terms and provisions of the Note and the Loan Agreement are hereby incorporated herein by reference. 30. Captions. The captions or headings of the paragraphs of this Mortgage and Security Agreement are for convenience only and shall not control or affect the meaning or construction of any of the terms or provisions of this Mortgage and Security Agreement. 31. Governing Law. This Mortgage and Security Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey. IN WITNESS WHEREOF, Mortgagor has executed this Mortgage and Security Agreement the day and year first above written. WITNESS/ATTEST: BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust By: /s/ Gerard H. Sweeney - ---------------------------------- -------------------------------- Name: Name: Gerard H. Sweeney Title: Title: President/CEO 25 The address of the within named Mortgagee is 1800 Chapel Avenue West, Cherry Hill, New Jersey 08002. SUMMIT BANK By: /s/ Amy Brown RVP ----------------------------- Amy Brown Regional Vice President 26 STATE OF : :ss. COUNTY OF : On this, the ____ day of ________, 1996, before me, a Notary Public in and for the State of ______________________, personally appeared ____________________, who acknowledged himself to be the __________________ of BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust, and that he as such ___________________, executed the foregoing instrument on behalf of such Trust for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. ---------------------------- Notary Public My Commission Expires: 27 EXHIBIT A ALL that certain land and premises situate in the Township of Cherry Hill, County of Camden and the State of New Jersey, bounded and described as follows: TRACT #1-BEGINNING at a point in the Southerly right of way line of New Jersey State Highway Route #38, said point being corner formed by the intersection of the said line of New Jersey State Highway Route #38 with the Easterly right of way line of Third Avenue (50 feet wide), and extending; thence along the said right of way line of New Jersey State Highway Route #38; thence (1) South 80 degrees 11 minutes 00 seconds East, 19.53 feet to an angle point common with the Southwesterly right of way line of the access road (ramp from New Jersey State Highway Route #38 to Haddonfield Road), and extending; thence along the said right of way line to the access road; thence (2) South 45 degrees 29 minutes 39 seconds East, 336.69 feet to an angle point, and extending; thence along the right of way line; thence (3) South 21 degrees 17 minutes 18 seconds East, 120.52 feet to a point formed by the intersection of said access road with the Westerly right of way line of Haddonfield-Sorrell Horse Road (formerly Stoy Landing Road) a/k/a Camden County Route #644 (formerly 66 feet wide), and extending; thence along the said right of way line of Haddonfield-Sorrell Horse Road; thence (4) South 09 degrees 49 minutes 00 seconds West, 283.83 feet to an angle point, and extending; thence along the said right of way line of Haddonfield-Sorrell Horse Road; thence (5) South 24 degrees 17 minutes 14 seconds West, 96.05 feet to an angle point, and extending; thence along the said right of way line of Haddonfield-Sorrell Horse Road; thence (6) South 09 degrees 49 minutes 00 seconds West, 257.21 feet to a point of curvature and extending; thence (7) at the point of curvature in the Westerly right of way line of Haddonfield-Sorrell Horse Road, curving to the right having a radius of 30 feet, and an arc length of 57.17 feet to a point of tangency connecting the Northeasterly right of way line of Chapel Avenue (50 feet wide) a/k/a Camden County Route #626 with the said right of way line of Haddonfield-Sorrell Horse Road, and extending; thence along the said right of way line of Chapel Avenue; thence (8) North 61 degrees 00 minutes 11 seconds West, 108.14 feet to an angle point, and extending; thence along the said right of way line of Chapel Avenue; thence (9) North 52 degrees 03 minutes 39 seconds West, 43.50 feet to a corner in point common with Lot 3, Block 176.01 on the Current Tax Map of the Township of Cherry Hill, and extending; thence along a line common with Lot 3, Block 176.Ol; thence (10) North 09 degrees 49 minutes 00 seconds East, 178.31 feet to a corner point common with Lots 2 and 3, Block 176.01, said Tax Map and lands now or formerly of Chapel Printing, and extending; thence along a line common with said Lot 2; thence (11) South 80 degrees 11 minutes 00 seconds East, 29.43 feet to a corner point, and extending; thence along a line common with said Lot 2; thence (12) North 09 degrees 49 minutes 00 seconds East, 52.21 feet to a corner point, and extending; thence along a line common with said Lot 2; thence (13) North 80 degrees 11 minutes 00 seconds West, 183.71 feet to a corner point common with the Easterly right of way line of Third Avenue (50 feet wide), and extending; thence (14) North 09 degrees 49 minutes 00 seconds East, 670.93 feet to a corner point common with the Southerly right of way line of New Jersey State Highway Route #38 and being the place of beginning. BEING shown and designated as Lot 1, Block 176.01, Plate 18 on the Current Tax Map of the Township of Cherry Hill. TRACT #2-BEGINNING at a point formed by the intersection of the Northeasterly line of Chapel Avenue (width varies) with the Southeasterly line of Third Avenue (50 feet wide) and extending; thence (1) North 09 degrees 49 minutes 01 seconds East, along the Southeasterly line of Third Avenue, 142.67 feet to a point in the division line between existing Tax Lots 1 and 2, Block 176.01; thence (2) South 80 degrees 10 minutes 59 seconds East, along said division line, 183.71 feet to point concrete monument in the division line between said Tax Lots; thence (3) South 09 degrees 49 minutes 01 seconds West, along said division line, 52.21 feet to a set iron pin in the division line between said Tax Lots; thence (4) North 80 degrees 10 minutes 59 seconds West, along said division line, 29.43 feet to a found iron pin for a corner in the division line between Tax Lots 1, 2 and 3, Block 176.01; thence (5) South 09 degrees 49 minutes 01 seconds West along the division line between Tax Lots 1 and 3, Block 176.01, 180.26 feet to a point in the Northeasterly line of Chapel Avenue; thence (6) North 53 degrees 04 minutes 12 seconds West, along said line of Chapel Avenue, 163.20 feet to an angle point in same; thence (7) North 20 degrees 28 minutes 36 seconds West, along same, 17.86 feet to the point and place of beginning. BEING shown and designated as Lots 2 and 3, Block 176.01, Plate 18 on the Township of Cherry Hill Tax Map. -----END PRIVACY-ENHANCED MESSAGE-----