Purchase And Sale Agreement

Contract




                           PURCHASE AND SALE AGREEMENT

          THIS PURCHASE AND SALE AGREEMENT (hereinafter the "Agreement") is 
entered into as of the Effective Date (as set forth below) between 695 Rt. 46 
Realty LLC (hereinafter "695 LLC"), a limited liability company duly 
organized and existing under the laws of the State of New Jersey, maintaining 
offices at 950 Third Avenue, 31st Floor, New York, NY 10022, 710 Rt. 46 
Realty LLC (hereinafter "710 LLC"), a limited liability company duly 
organized and existing under the laws of the State of New Jersey maintaining 
offices at 950 Third Avenue, 31st Floor, New York, NY 10022 (hereinafter 
collectively the "Seller"), and COPT Acquisitions, Inc., a corporation duly 
organized under the laws of the State of Delaware, maintaining offices at One 
Logan Square, Suite 1105, Philadelphia, Pennsylvania 19103 (hereinafter, the 
"Purchaser");

                              W I T N E S S E T H:

          In consideration of the mutual covenants set forth herein and in 
consideration of the earnest money deposit herein called for, the parties 
agree as follows:

          Section 1. Sale and Purchase. Seller shall sell, convey, and assign 
to Purchaser, and Purchaser shall purchase, assume, and accept from Seller, 
for the Purchase Price (hereinafter defined) and on and subject to the terms 
and conditions herein set forth:

          All of that certain land consisting of the tract or parcel (or, if 
more than one, those certain tracts or parcels), of land being described more 
fully on Exhibits "A-1" and "A-2" (hereinafter the "Land"); together with all 
improvements, buildings and structures, which may be located on the Land (the 
"Improvements") (all of which is hereinafter collectively referred to as the 
"Property"), which Property is commonly known by the street addresses 695 
Route 46, Fairfield, New Jersey (hereinafter "695") and 710 Route 46, 
Fairfield, New Jersey (hereinafter "710"). Notwithstanding the foregoing, the 
term Property shall mean "695," where applicable, in connection with the sale 
of 695 Route 46 Fairfield, New Jersey and shall mean 710," where applicable, 
in connection with the sale of 710 Route 46, Fairfield, New Jersey. The 
parties hereto each acknowledge and agree that 695 is owned by 695 LLC and 
710 is owned by 710 LLC and that all agreements and representations herein 
made by 695 LLC pertain only to 695 and that all agreements and 
representations herein made by 710 LLC pertain only to 710. As used herein, 
the term "Seller" shall mean (a) 695 LLC with respect to 695; and (b) 710 LLC 
with respect to 710. An essential term of this contract of sale is that 
Purchaser shall purchase both 695 and 710 for the Purchase Price. In no event 
shall this contract of sale be divisible, it being the agreement of the 
parties that if for any reason whatsoever either 695 or 710 are not 
transferred pursuant to this agreement, neither party 



shall have the right to require the other party to consummate a sale of the 
other parcel.

          This sale includes all of the right, title and interest of the 
Seller in and to

          (a) easements, rights of way, privileges, appurtenances and rights 
to the same belonging to and inuring to the benefit of the Property, if any;

          (b) All of the fixtures and articles of personal property, 
including, but not limited to, machinery and equipment, attached to or 
appurtenant to the Property or used in connection with the operation of the 
Property as set forth on Exhibits M-1 and M-2 (hereinafter, the 
"Personalty"), however, specifically excluding therefrom any such personal 
property which belongs to the tenants;

          (c) all of the right, title and interest of the Seller, if any, in 
and to any land lying in the bed of any street, road or avenue, opened or 
proposed, in front of or adjoining the Property, to the center line thereof, 
and all right, title and interest of Seller in and to any award made or to be 
made in lieu thereof and in and to any unpaid award for damage to the 
Property by reason of change of grade of any street;

          (d) All right, title and interest of Seller in the Leases (as such 
term is hereinafter defined) in effect on the Closing Date in the form 
annexed as Exhibit "H" hereto, excluding however any rights against tenants 
for the collection of rent or other amounts past due pursuant to such Leases; 
together with the Security Deposits held by Seller thereunder and any 
guaranties thereof;

          (e) All right, title and interest of the Seller, if any, (the 
transfer thereof to be without warranty or covenant of any nature) in and to 
the use of the name by which the Property is commonly known, if any, although 
no portion of the Purchase Price will be allocated thereto; and

          (f) all right, title and interest of the Seller, if any, (the 
transfer thereof to be without warranty or covenant of any nature) in and to 
any and all approvals, licenses and permits owned by Seller, if any, to the 
extent that same may be assignable and in any way related to or arising out 
of or used in connection with the Property.

          Section 2. Purchase Price.

          (a) The price for which Seller shall sell and convey the Property 
to Purchaser, and which Purchaser shall pay to Seller, at Closing is 
Twenty-Eight Million Eight Hundred Thousand ($28,800,000) Dollars (the 
"Purchase Price"), payable as follows:

                                       2


               (i) Six Hundred Thousand ($600,000) Dollars (the "Earnest 
Money") payable upon the signing of this agreement pursuant to the provisions 
of Section 3 of this agreement, the receipt of which is hereby acknowledged 
by the escrow agent, Commonwealth Land Title Insurance Company;

               (ii) Intentionally Omitted.

               (iii) Approximately Six Million Five Hundred Thousand Four 
Dollars and Fourteen Cents ($6,500,004.14) by the Purchaser acquiring title 
to "710" subject to and assuming that certain existing mortgage (hereinafter 
the "Existing Mortgage") dated April 29, 1997 made by 710 Rt. 46 Realty LLC 
to Life Investors Insurance Company of America (hereinafter the "Existing 
Mortgagee") in the original principal amount of $6,600,000, a copy of which 
has been delivered to Purchaser;

               (iv) Approximately Twenty-One Million Six Hundred Ninety-Nine 
Thousand Nine Hundred Ninety Five Dollars and Eighty-Six Cents 
($21,699,995.86) at the Closing by wire transfers) of federal funds as 
directed by Seller in writing;

          (b) The parties hereto specifically acknowledge that the transfer 
of 710 subject to the Existing Mortgage will constitute a default pursuant to 
the Existing Mortgage absent the procurement of consent from the Existing 
Mortgagee pursuant to the provisions thereof.

               Accordingly, the parties hereby agree to jointly cooperate for 
the purpose of obtaining the written consent of the Existing Mortgagee to 
this transaction. Without limiting the generality of the foregoing,

               (i) Purchaser agrees to timely complete any application 
materials requested by the Existing Mortgagee and to otherwise comply on a 
timely basis with the requirements of the application process utilized by the 
Existing Mortgagee in making its determination as to whether to consent to 
the instant transaction;

               (ii) Purchaser agrees to make available to the Existing 
Mortgagee financial statements, tax returns, organizational documents and any 
other documents as reasonably required by the Existing Mortgagee;

               (iii) Purchaser shall comply with the provisions of paragraphs 
14A(d) and (e) of the Existing Mortgage;

               (iv) Purchaser shall be responsible for complying with the 
provisions of paragraphs 14A(f) and (g) of the Existing Mortgage. Without 
limiting the generality of the foregoing, Purchaser shall pay the Assumption 
Fee and the existing mortgagee's out-of-pocket expenses, as required to be 
paid pursuant to paragraph 14A(g).

                                       3


          In the event that the Existing Mortgagee shall fail to either 
consent in writing to the transfer of 710 to Purchaser on or before the date 
thirty (30) days after the Effective Date, or deliver to 710 LLC, Richard 
Wagman and Jean Putzer a release as provided in paragraph 14D of the 
Mortgage, then Seller shall have the option to either (a) terminate this 
agreement by delivering written notice of termination (together with 
reasonable proof of rejection by the Existing Mortgagee, which proof shall be 
deemed to include a copy of the written notice of rejection if such notice 
was issued in writing) to Purchaser within ten (10) business days of receipt 
of the applicable rejection or refusal from the Existing Mortgagee, in which 
event, the Earnest Money shall be returned to the Purchaser and neither party 
shall have any further rights or obligations as against the other; or (b) 
convert this transaction to an "all cash deal" by written notice thereof to 
Purchaser, within the same ten (10) business day period, in which event 
subparagraph 2a(iii) shall be deleted and extinguished from this agreement 
and the sums set forth in subparagraph 2(a)(iv) shall be increased by the 
amount previously set forth in subparagraph 2(a)(iii), so that the balance of 
the Purchase Price due Seller at Closing shall be $28,200,000 (subject to the 
closing adjustments) in the form set forth in subparagraph 2(a)(iv) and in 
such event there shall be no Existing Mortgage and Seller shall satisfy such 
Existing Mortgage at or prior to Closing.

          (c) In the event that 710 shall be sold subject to the Existing 
Mortgage, the following provisions shall be operative:

               (i) In the event that Seller shall make any regularly 
scheduled monthly payments in reduction of the principal amount due and owing 
upon the Existing Mortgage (i.e., principal payments which are not a 
prepayment of principal) between the date hereof and Closing which reduces 
the Existing Mortgage to an amount less than Six Million Five Hundred 
Thousand Four Dollars and Fourteen Cents ($6,500,004.14), Purchaser shall pay 
to Seller at closing a cash payment reflecting the amount of such principal 
payments so that the Purchase Price shall remain unchanged;

               (ii) Seller agrees to deliver to Purchaser at Closing, a 
certificate or letter executed by the Existing Mortgagee or its agent, Aegon 
USA Realty Advisors Inc., certifying the amount of the unpaid principal, the 
date to which interest has been paid and the balance of any escrow accounts 
held by the Existing Mortgagee;

               (iii) The amount of any escrow deposits made by Seller with 
the Existing Mortgagee, including but not limited to those for taxes, water, 
sewer, insurance or any assessments shall be paid by the Purchaser to the 
Seller at the Closing of title hereunder by wire transfer and such deposits 
shall be assigned by the Seller to the Purchaser;

                                       4


               (iv) The existence of a UCC security interest, assignment of 
rents or any other encumbrance to title in favor of the Existing Mortgagee 
shall constitute a Permitted Exception;

          (d) Seller covenants as follows with respect to the Existing 
Mortgage;

               (i) Seller will not modify or amend the Existing Mortgage;

               (ii) Seller will not make any prepayments of principal in 
connection with the Existing Mortgage;

               (iii) Seller will make all payments upon the Existing Mortgage 
which will become due between the date hereof and Closing.

          (e) It shall be a condition precedent to Purchaser's obligation to 
close title that:

               (i) Seller shall not have received a written notice of default 
from the Existing Mortgagee which remains uncured as of the Closing Date; and

               (ii) The following documents (all of which other than the 
Borrower's Certificate, have been previously delivered to the Purchaser) 
constitute all material agreements executed by Seller in connection with the 
closing of the Existing Mortgage; Promissory Note, Mortgage and Security 
Agreement, Assignment of Leases and Rents, Agreement Concerning Leasing, 
Indemnity Agreement, Indemnification Against Environmental Matters, UCC-1 
Financial Statements, Borrower's Certificate, and Post-Closing Agreement.

          Section 3. Earnest Money. Concurrently with the execution hereof, 
Purchaser has delivered to Commonwealth Land Title Insurance Company whose 
address is 1700 Market Street, Philadelphia, Pennsylvania 19103, Attention: 
M. Gordon Daniels, Esq. (hereinafter the "Title Company") the amount of Six 
Hundred Thousand ($600,000) Dollars (the "Earnest Money"). The Title Company 
shall immediately deposit the Earnest Money (which shall include all interest 
earned thereon) in an interest bearing account and the interest earned 
thereon shall be payable to the party to whom the Earnest Money is ultimately 
paid or credited pursuant to this Agreement.

          Section 4. Standard of Title. Seller shall give and Purchaser shall 
accept a marketable title such as either the Title Company or Chicago Title 
Insurance Company will' approve and insure, subject only to the Permitted 
Exceptions and such other matters approved by Purchaser pursuant to the 
further provisions hereof. The Property is being sold and shall be conveyed 
and

                                       5


transferred subject to (1) those title encumbrances and other matters set 
forth in Exhibits "B-1" and "B-2" annexed hereto and made a part hereof and 
(2) those state of facts shown on that survey dated July 11, 1985 revised 
October 23, 1987, prepared by The Calvin Gibson Group L.S., and that survey 
dated November 28, 1995, prepared by Schoor Depalma (hereinafter 
collectively, the "Permitted Exceptions").

          Section 5. Title Objections. Purchaser agrees to forthwith order 
two (2) title reports and surveys for the Property (hereinafter collectively, 
the "Title Commitment"). Purchaser shall have until 5:00 p.m. on the 
twenty-first (21st) day after the Effective Date (defined below), to advise 
Seller in writing as to the existence of any objections to title (other than 
Permitted Exceptions) which are reflected in the Title Commitment and are 
required to be cured in order for Seller to deliver such state of title as 
required pursuant to the provisions of paragraph 4. All matters to which 
Purchaser so objects (other than Permitted Exceptions) are hereinafter 
referred to as the "Non-Permitted Encumbrances"; if no such notice of 
objection is given, then it shall be deemed that all matters reflected by the 
Title Commitment are "Permitted Exceptions" and Purchaser shall accept title 
subject to same. The Non-Permitted Encumbrances, subject to which Purchaser 
elects to purchase the Property, shall thereafter be Permitted Exceptions.

          In the event that Purchaser shall timely advise Seller as to the 
existence of Non-Permitted Encumbrances, and Seller is willing to cure such 
Non-Permitted Encumbrances (or if Seller is otherwise required to cure such 
Non-Permitted Encumbrances pursuant to the further provisions of this 
paragraph), then Seller shall be entitled to reasonable adjournments of the 
Closing Date, but not to exceed thirty (30) days, within which to clear such 
Non-Permitted Encumbrances.

          If for any reason the Seller shall fail to convey at closing a 
title, subject to and in accordance with paragraph 4 of this Agreement, or 
fail to comply with the commitments, representations or conditions on the 
part of the Seller to be performed as set forth herein, the sole obligation 
of the Seller shall be to direct the Title Company to refund the Earnest 
Money to Purchaser, unless Purchaser shall elect to close title pursuant to 
the provisions of the following paragraph, in which event Purchaser shall 
have the remedy of specific performance without abatement in the Purchase 
Price, as provided in paragraph 10(c) of this Agreement.

          Upon the return of the Earnest Money, the Purchaser shall have no 
further claim against the Seller nor any lien against the Property, and the 
Purchaser shall at that time surrender this contract for cancellation. 
Without limiting the generality of the foregoing, it is specifically agreed 
that the Seller shall not be required to bring any action or proceeding or 
otherwise to incur any expenses in excess of Five Hundred Thousand 
($500,000)) Dollars plus the 

                                       6


amount necessary to pay any real estate taxes, water charges and mortgages 
(excluding the Existing Mortgage) encumbering the Property, in order to 
render the title to the Property insurable. Notwithstanding the foregoing, 
Purchaser may nevertheless close title hereunder by accepting such title or 
other state of facts as the Seller may be able to convey, without reduction 
of the purchase price, and without any other liability on the part of the 
Seller. The acceptance of a deed by the Purchaser shall be deemed to be a 
full performance and discharge of every agreement and obligation on the part 
of the Seller to be performed pursuant to the provisions of this agreement 
except those, if any, which are herein specifically stated to survive the 
delivery of the deed.

          Section 6. Right of Inspection: Contingency Period.

          (a) After the Effective Date, Seller shall afford Purchaser and its 
representatives a right to inspect, at reasonable hours, and so long as such 
inspection does not interfere with the rights of Tenants under the Leases; 
the Property, Leases, Property Agreements (as such terms are hereinafter 
defined), Seller's federal income tax returns for the period of its ownership 
of the Property (including all schedules annexed thereto), and such other 
documents or data pertaining to the ownership, or maintenance of the Property 
which are located at the Property or are in Seller's possession and to 
satisfy itself as to the condition the Property. In addition, prior to the 
expiration of the Contingency Period, Seller shall deliver to Purchaser a 
"Certification," with such "Certification" being defined as set forth in 
paragraph 8(b)x hereof, provided, however, that such Certification shall be 
made as of the date thereof rather than as of the Closing Date. Purchaser and 
its representatives shall not damage the Property during the course of its 
inspections and Purchaser shall promptly repair and restore in a workmanlike 
manner satisfactory to Seller any damage to the Property to its prior 
condition. Purchaser shall indemnify and hold Seller harmless from any 
damage, loss, liability or expense (including court costs and attorney fees) 
arising out of the conduct of Purchaser's inspections, which indemnity shall 
survive the expiration, closing or termination of this Agreement. Seller 
represents that all documents or other materials delivered by Seller to 
Purchaser incident to Purchaser's inspection of the Property shall be true 
and correct. Seller further agrees to make available to Purchaser for a 
period of one (1) year subsequent to the closing of title, Seller's federal 
income tax returns, including all schedules thereto and bank statements in 
its possession for the period of its ownership of the Property.

          (b) If for any reasons Purchaser, in its sole and absolute 
discretion, is not satisfied with the Property, then Purchaser shall have the 
right to terminate this Agreement in accordance with Section 10(b) hereof, by 
delivering to Seller a notice of termination at any time during the period 
from the Effective Date until 5:00 p.m. on the twenty-first (21st) day 
following the Effective Date (the "Contingency Period"). In the event 
Purchaser terminates this Agreement during the Contingency Period as herein 
provided, the Title Company shall return the Earnest Money to Purchaser. In 
the event that 

                                       7


Purchaser fails to terminate this Agreement before the expiration of the 
Contingency Period, Purchaser shall have waived its right to terminate this 
Agreement under this Section 6(b), and in such event this Agreement shall 
remain in full force and effect without further right of termination pursuant 
to this paragraph 6(b).

          Section 7. Representations and Warranties.

          (a) Purchaser agrees that, except as expressly provided in this 
Agreement, Seller makes no representations or warranties of any kind or type 
with respect to the Property, including without limitation, the environmental 
condition of the Land and Improvements, the absence of hazardous substances 
or other contaminants, the availability of utilities to the improvements, the 
status of the Leases, the condition of the Improvements, the enforceability 
of the Property Agreements, or the profitability, habitability, 
marketability, or the suitability of the Property for any particular purpose. 
Purchaser assumes full responsibility for inspecting the Property, and for 
ascertaining whether it wishes to proceed with the transaction herein 
contemplated. Seller makes no representations whatsoever except as expressly 
set forth herein. Seller is not liable or bound in any manner by any verbal 
or written statements, representations, or information pertaining to the 
Property furnished by any real estate broker, agent, employee, or other 
person. Purchaser agrees that the Property is to be sold to and accepted by 
Purchaser at closing in its then present condition "as is, with all faults, 
and subject to all notes or notices of violation of law or municipal 
ordinances or requirements issued by any municipal, state or federal 
department, bureau or agency; if any, and without any warranty whatsoever, 
express or implied except to the extent, if at all, expressly provided in 
this Agreement". Notwithstanding anything to the contrary contained herein, 
it is a condition of the Closing that the Property be in materially the same 
physical condition it was at the expiration of the Contingency Period, normal 
wear and tear excepted.

          (b) Notwithstanding the foregoing, Seller represents and warrants 
to Purchaser, as follows:

               (i) Annexed hereto and made a part hereof as Exhibits "C-l" 
and C-2" is a rent roll containing a list of all leases and occupancy 
agreements (individually, a "Lease" and collectively, the "Leases," and the 
tenants thereunder who are herein referred to individually as a "Tenant" and 
collectively as the "Tenants"), true, complete and correct copies of which 
Leases, including all amendments thereof, if any, have been or shall 
simultaneously herewith be delivered to Purchaser. Other than the Leases and 
applicable law, there are no agreements which confer upon a Tenant or upon 
any other person or entity any possessory rights with respect to the Property.

                   Seller does not undertake or guarantee that the Leases 
referred to in this agreement shall be in force or effect at the closing of 
title and 

                                       8


Purchaser agrees that the removal of tenants, whether by summary proceedings 
or otherwise prior to the delivery of the deed shall not give rise to any 
claim on the part of Purchaser, or affect this agreement in any manner 
whatsoever and Seller shall be entitled, but not obligated, to enforce the 
rights of any Lease or any tenancy by summary proceedings. Seller agrees that 
it will not terminate any lease agreement for which the tenant thereunder is 
not in default. No representation has been made as to the responsibilities 
assumed by Seller with respect to the continued occupancy of said premises or 
any part or parts thereof, by any tenant or tenants now in possession except 
as herein otherwise specifically provided. Seller represents that it is not 
in receipt of any written notice from any Tenant (which has not been cured 
and is presently outstanding) alleging a default by Seller in the performance 
of its lease obligations except as follows:

                                     None

          Seller represents that it has not delivered any written notice of 
default to any tenant (which has not been cured and is presently outstanding) 
except as follows:

                                     None

               (ii) No rent under any Lease has been paid more than 
thirty-one (31) days in advance of its due date.

               (iii) Annexed hereto and made a part hereof as Exhibits "D-1" 
and "D-2" is a list of all service and maintenance contracts affecting the 
Property (the "Property Agreements"). Seller has furnished to Purchaser and 
Purchaser's representatives true, accurate and complete copies of the 
Property Agreements, and Purchaser or its representatives have initialed the 
same.

               (iv) Annexed hereto and made a part hereof as Exhibits "E-1" 
and "E-2" is a list of liability and casualty insurance policies of Seller 
covering the Property as of the date hereof. All such insurance policies (or 
replacements or renewals thereof) shall be maintained in full force and 
effect to the date of the Closing;

               (v) Annexed hereto and made a part hereof as Exhibits "F-1" 
and "F-2" is a list of all employees employed by Seller in connection with 
the operation or maintenance of the Property and the wages and salaries paid 
to them. Seller represents that it is not a party to either a union contract 
or any other written contract of employment with any employee of the Property.

               (vi) Seller has not been served with any pleadings involving 
any litigation with respect of the Property except for an action commenced by 
South Pacific Holdings captioned 695 Route 46 Realty LLC vs. S.

                                       9


Pacific Holdings Corp. and S. Pacific Holding Corp. vs. Principal Investment 
Group Inc. and Richard F. Wagman, Docket No. C320-97 in the Superior Court of 
New Jersey, Essex County.

               (vii) The information set forth upon Exhibits K-1 and K-2 
annexed hereto is true and complete.

               (viii) Seller is a duly formed limited liability company 
pursuant to the laws of the State of New Jersey. Seller is duly authorized to 
execute and perform this agreement pursuant to the vote of its members. This 
agreement is a legal and binding obligation of Seller. The execution of this 
agreement (or performance of its terms) will not constitute a violation of 
any agreement to which the Seller is a party other than the Existing Mortgage.

               (ix) Seller has not received any written notice from any 
governmental agency relating to the failure of the Property to comply with 
any applicable law governing the subject premises, except as set forth upon 
Exhibits "N-1" and "N-2".

               (x) None of the representations or warranties contained herein 
shall survive the closing except for a period of sixty (60) days from the 
Closing Date, during which sixty (60) day period, any action thereon must be 
commenced or shall otherwise be deemed waived and extinguished.

          (c) Seller covenants and agrees that between the Effective Date and 
the Closing Date hereunder:

               (i) Seller will not modify, amend or terminate any Lease. 
Notwithstanding the foregoing, Seller shall be permitted to terminate the 
lease of any tenant who is in default pursuant to the terms of its lease 
agreement.

               (ii) With respect to any portion of the Property which is 
presently vacant, Seller shall not enter any new lease agreements except in 
accordance with the following provisions hereof.

               Prior to the expiration of the Contingency Period, Seller 
shall be authorized and entitled to enter new lease agreements for any vacant 
portion of the Improvements provided that any such lease agreement satisfies 
all of the following criteria:

               1.    base rents of not less than $18.00 per square foot
               2.    electricity charge of $1.25 per square foot
               3.    tenant improvement cost shall not be greater
                     than $20.00 per square foot for a five (5)
                     year lease nor greater than $25.00 per foot
                     for a ten (10) year lease



                                       10


               4.    lease term of not greater than 11 years
                     (excluding options). 
               5.    tenant to pay its proportionate share of real estate 
                     taxes and operating cost escalations over a base year
               6.    rent concession not to exceed one (1) month's rent
               7.    Brokerage commission shall not exceed 7% gross rents 
                     (including overage) 
               8.    The lease form to be utilized shall be the same lease
                     form previously used by Seller in connection 
                     with its prior leasing of the Property, provided however 
                     that the foregoing requirement shall not apply with 
                     respect to a certain lease agreement presently under
                     negotiation with the State of Michigan.

               Subsequent to the expiration of the Contingency Period, and 
provided that Purchaser has not terminated this agreement pursuant to the 
provisions of paragraph 6(b) hereof, Seller shall not enter any new lease 
agreements without the prior written approval of Purchaser.

               In the event that Seller shall enter any new lease agreements 
pursuant to this paragraph (c)(ii), Purchaser shall at Closing assume the 
obligations and performance of the agreements of the Landlord thereunder and 
otherwise agree to be bound by the terms of any such lease agreement, 
including, without limiting the generality of the foregoing, the performance 
of any Tenant improvements required to be made by the Landlord pursuant to 
the terms thereof. In addition, Purchaser shall assume the obligation to pay 
any brokerage commission required to be paid incident to such lease 
agreement. In the event that Seller shall prior to closing be required to pay 
any sums of money on account of either said Tenant improvements or brokerage 
commissions, Purchaser shall at closing credit Seller with a cash payment 
equal to the sums so expended by Seller prior to closing.

               (iii) Seller shall not enter any agreement, the effect of 
which is to encumber the Property with any consensual liens, security 
interests, easements, restrictions or other title objections.

               (iv) Seller will (1) continue to operate the Property in 
accordance with its present operating and leasing policy; (2) keep and 
maintain the Property in at least as good condition and repair as existed on 
the Effective Date, subject to normal wear and tear and to casualty losses; 
and (3) maintain in force and effect property and liability insurance with 
respect to damage or injury to person or property occurring on the Property 
in at least such amounts as are maintained on the Effective Date. It is the 
intention of the parties that the general operation of the Property shall not 
be materially changed between the Effective Date and the Closing Date, except 
as herein provided.

                                       11


               (v) Seller shall not enter into any other agreement relating 
to the ownership or operation of the Property which will be binding upon the 
Purchaser.

               (vi) Seller shall deliver to Purchaser a copy of any written 
notice of violation received by Seller from any applicable municipal 
authority relating to any portion of the Property.

               (vii) Seller shall deliver to Purchaser a copy of any written 
notice of default received by Seller from any Tenant at the Property between 
the date hereof and the Closing Date.

          (d) Purchaser represents and warrants to Seller that Purchaser has 
the full right, power, and authority to execute this Agreement and that this 
Agreement is a legal and binding obligation of Purchaser.

          Section 8. Closing. Closing ("Closing") of the sale of the Property 
Seller to Purchaser shall occur on or before May 1, 1998 (the "Closing 
Date"). If the Closing Date falls on a weekend or holiday, Closing shall 
occur on the immediately following business day. Time is of the essence with 
regard to the Closing Date. Notwithstanding the foregoing, Purchaser shall 
have the right to adjourn the Closing Date for a period of up to thirty (30) 
additional days by delivering to the Title Company (on or before the 
expiration of the Closing Date) an additional deposit on account of the 
Purchase Price in the amount of Six Hundred Thousand ($600,000) Dollars. Any 
such additional deposit made pursuant to the provisions hereof shall be 
deemed Earnest Money for all purposes of this Agreement. Time shall be as of 
the essence with respect to such adjourned closing date. Closing shall occur 
in the offices of Seller's counsel (or at such other place as is mutually 
agreeable to the parties) commencing at 10:00 a.m. on the Closing Date. At 
Closing the following, which are mutually concurrent conditions, shall occur 
(with all legal documents to be in form and content reasonably acceptable to 
the parties and their respective counsel):

          (a) Purchaser, at its sole cost and expense, shall deliver or cause 
to be delivered to Seller the following:

               (i) a wire transfer or transfers in the aggregate amount of 
the balance of the Purchase Price as specified in Section 2 hereof, payable 
as directed in writing by Seller, adjusted in accordance with Sections 8(c) 
hereof and any other sums required to be paid pursuant to the terms of this 
Agreement.

               (ii) the Assignment of Tenant Leases and Assumption Agreement 
described in Section 8(b)(iii) hereof executed by Purchaser;

                                       12


               (iii) a letter to each Tenant of the Property advising such 
Tenant of Purchaser's acquisition of the Property and assumption of Seller's 
liability and obligations under the Leases (which letter shall be 
countersigned by Seller); and

               (iv) evidence satisfactory to the Title Company that the 
person executing the Closing documents has full right, power, and authority 
to do so.

               (v) those assumption and indemnity agreements required to be 
delivered pursuant to this agreement.

               (vi) such other documents and items as may be required by or 
pursuant to this Agreement in order to effect the provisions hereof.

          (b) Seller, at its sole cost and expense, shall deliver or cause to 
be delivered to Purchaser the following:

               (i) Bargain and Sale Deed with Covenants against Grantor's 
Acts duly executed and acknowledged by Seller, conveying the Property to 
Purchaser subject only to the Permitted Exceptions and any other exceptions, 
if any, which Purchaser may approve;

               (ii) a Bill of Sale (herein so called) substantially in the 
form attached hereto as Exhibit "G," duly executed by Seller, transferring, 
assigning and conveying to Purchaser, Seller's interest in and to all 
Personalty without warranty and on an "AS IS", "WHERE IS", "WITH ALL FAULTS" 
basis as set forth in said Exhibit "G";

               (iii) an Assignment of Tenant Leases and Assumption Agreement 
substantially in the form attached hereto as Exhibit "H", duly executed and 
acknowledged by Seller, assigning all of Seller's interest, in, to and under 
all Leases in force on the Closing Date together with all rentals and other 
payments arising therefrom on or after the Closing Date, subject only to the 
Permitted Exceptions and any other exceptions, if any, which Purchaser may 
approve.

               (iv) to the extent that the same are in Seller's possession 
and have not previously been delivered to Purchaser, the originals or copies 
of all Property Agreements, which shall be assigned by Seller and assumed by 
Purchaser substantially in the form of the Assignment of Property Agreements 
attached hereto as Exhibit "I" and made a part hereof for all purposes;

               (v) to the extent the same are in Seller's possession and have 
not previously been delivered to Purchaser, originals or copies of all 
Leases, keys, and other items being transferred by Seller under this Contract;

                                       13


provided, however, Seller may elect to arrange for delivery of all or some of 
such items at the office of the manager of the Property on the Closing Date;

               (vi) an affidavit duly executed by Seller in compliance with 
Section 1445 of the United States Internal Revenue Code, as amended, and 
applicable regulations, stating that Seller is not a "foreign person" as that 
term is defined in said Section 1445;

               (vii) estoppel certificates in the form attached as Exhibit J, 
dated subsequent to the Effective Date, from the following five Tenants:

                      Dean Witter Reynolds Inc.
                      United Health Care Services, Inc.
                      The Museum Company
                      Midsco, Inc.
                      Pearson, Inc.

In addition to estoppel certificates from the aforenamed five Tenants, Seller 
shall also deliver to Purchaser, estoppel certificates from Tenants occupying 
70% of the remaining rentable square footage (i.e., 70% of the rentable 
square footage of the Property, excluding the rentable square footage 
occupied by the aforenamed five Tenants) in each of the buildings, 695 and 
710.

The aforesaid estoppel certificates required to be delivered by Seller 
hereunder are collectively referred to as the "Required Estoppels"). If 
despite Seller's reasonable efforts to obtain the Required Estoppels, it 
determines that it will not be able to comply with the terms of this 
paragraph, it shall notify Purchaser in writing and specify those tenants 
from whom Seller has been unable to obtain estoppel certificates. In such 
event, Purchaser shall as its sole and exclusive remedy have the right to 
terminate this agreement in accordance with the following provisions. 
Purchaser must notify Seller within ten (10) days of such notice if it elects 
to terminate the contract based on Seller's failure to obtain all of the 
Required Estoppels. In the event that Purchaser elects to terminate this 
agreement as aforesaid, Purchaser shall receive the return of the Earnest 
Money deposited hereunder. If Purchaser does not provide such notice of 
termination within the said ten (10) day period, Purchaser shall be deemed to 
have waived its right to terminate this contract under this Section 8(b)vii, 
and in such event Purchaser shall be required to close title hereunder absent 
the estoppel certificates) of any tenant(s) named in the above notice from 
Seller to Purchaser.

          Notwithstanding the provisions of this subparagraph (vii) relating 
to Seller's delivery obligations at closing, Seller agrees to use reasonable 
efforts to obtain estoppel certificates in the form attached as Exhibit "J" 
from all Tenants of the Property. The provisions of the foregoing sentence 
shall not 

                                       14


expand or otherwise modify Seller's delivery obligations pursuant to this 
subparagraph.

               (viii) Affidavit of Title in Customary Form.

               (ix) Such other documents and items as may be required by or 
pursuant to this Agreement in order to effect the provisions hereof..

               (x) Certification of Seller, certifying that either (a) the 
representations set forth in paragraphs 7b(i)-b(ix) remain true and correct 
as of the date of Closing; or (b) so indicating the change in facts which 
render such representations no longer true as of the date of Closing 
(hereinafter the "Certification"). The failure of said representations to be 
true and correct as of the date of Closing shall not constitute a defense to 
Purchaser to the passages of title and Purchaser shall accept title subject 
to such state of facts without abatement in price and without any claim for 
damages as the result therefrom.

          (c) All normal and customarily proratable items (except to the 
extent paid directly by Tenants to the charging governmental body or other 
applicable entity), including without limitation interest on the Existing 
Mortgage, real estate taxes, water and sewer charges, fuel, service 
contracts, salaries (including benefits) of employees, rents, additional 
rents, escalations, and building utility charges, will be prorated as of the 
Closing Date, Seller being charged and credited for all of same up to the 
Closing Date and Purchaser being charged and credited for all of same on and 
after the Closing Date. In addition the Seller shall receive a credit for any 
sums which may be due Seller pursuant to the provisions of paragraph 13 
hereof. All utility deposits shall be transferred to Purchaser, and Purchaser 
shall reimburse Seller for the amounts thereof. If the actual amounts to be 
prorated are not known as of the Closing Date, the prorations shall be made 
on the basis of the best evidence then available, and thereafter, when actual 
figures are received, a cash settlement will be made between Seller and 
Purchaser. All rentals, if any, actually received by Seller for the month in 
which the Closing occurs shall be prorated as of the Closing Date. To the 
extent actually received by Seller prior to the Closing, Seller shall deliver 
to Purchaser at the Closing all advance payments or rental, other than for 
the month in which the Closing occurs. All Security Deposits held by Seller 
shall be retained by Seller and Purchaser shall receive a credit therefor 
against the Purchase Price (a list of those security deposits held by Seller 
which will be retained by Seller but credited to Purchaser is attached hereto 
as Exhibits "K-1" and "K-2"), less any deposits returned to Tenant in 
accordance with their leases and less any deposits made by a Tenant who has 
vacated the Property. Any rents, additional rents, escalations and other sums 
which are owing to Seller by Tenants of the Property for periods prior to the 
Closing Date ("Delinquent Rents") shall be owned and retained by Seller and 
Seller shall be entitled to collect all of same, (and in connection therewith 
Seller shall have the right to commence legal action for the collection of 
same) but Purchaser agrees to pay 

                                       15


any Delinquent Rents (or Seller's pro rata share thereof to the extent such 
Delinquent Rents are applicable to the month during which the Closing 
occurred) to Seller from the rentals collected by Purchaser from each such 
delinquent Tenant in accordance with the following provisions:

               (i) the first rents collected by Purchaser from a delinquent 
Tenant shall be applied to the month in which the closing occurs (subject to 
apportionment as herein provided);

               (ii) the next rents collected by Purchaser shall be applied to 
current rentals due from such Tenant for the one (1) calendar month after the 
month of Closing;

               (iii) the next rents collected shall be applied on account of 
Delinquent Rents due and owing Seller for the one (1) calendar month 
preceding the month of Closing;

               (iv) the next rents collected shall be applied to the Tenant's 
then outstanding rents due for the period subsequent to the closing of title 
until such Tenant is current in the payment of its rent to Purchaser; and

               (v) the next rentals collected by Purchaser in excess of the 
amounts necessary for the Tenant to be current in its rent obligations to the 
Purchaser, shall be paid to the Seller on account of the Delinquent Rents.

          Purchaser agrees to use reasonable efforts (i.e., bill and demand 
payment) to collect Delinquent Rents from Tenants, but nothing contained 
herein shall operate to require Purchaser to institute a lawsuit to recover 
any such Delinquent Rents. To the extent rentals are collected by Purchaser 
after Closing from Tenants owing Delinquent Rents which are due Seller 
hereunder, Purchaser shall remit such rents collected by Purchaser to Seller 
in payment of the Delinquent Rents due and owing Seller. Any such payment 
shall be made to Seller within ten (10) days of receipt thereof by Purchaser. 
Purchaser agrees to account to Seller on a regular basis subsequent to the 
closing with respect to the collection by Purchaser of Delinquent Rents. In 
the event that after the closing of title, Seller shall receive any rentals 
which correspond to a period subsequent to the closing of title, Seller shall 
pay to Purchaser such portion of any collection. The provisions of this 
paragraph (c) shall survive closing of title.

          (d) The Title Company shall deliver the Earnest Money to Seller.

          (e) Seller shall pay the transfer tax required by law to be paid to 
the State of New Jersey, together with the fee charged by the County Clerk's 
Office for the recording of the deed.

                                       16


          (f) Seller shall deliver to Purchaser a Letter of Non-Applicability 
under the New Jersey Industrial Site Recovery Act with respect to the 
Property. Purchaser agrees to cooperate with Seller by providing any 
information or executing any documents that may be necessary in order to 
procure such letter. If for any reason Seller is unable to provide the Letter 
of Non-Applicability at the time of closing, it shall so notify Purchaser. In 
such event, Purchaser shall as its sole and exclusive remedy have the right 
to either (a) terminate this agreement and receive the return of all Earnest 
Money; or (b) close title hereunder, without any abatement in purchase price 
or claim for damages. Purchaser shall make such election within five (5) days 
of receipt of Seller's notification of its failure to obtain the Letter of 
Non-Applicability. Purchaser's failure to respond in writing within said 
period shall be deemed an election to close title hereunder, absent the 
delivery of the letter, without any abatement in purchase price or claim for 
damages.

          Section 9. Taking Before Closing: Casualty.

          (a) Seller shall promptly notify Purchaser of any condemnation or 
eminent domain proceeding affecting the Property which is commenced prior to 
Closing. If, before Closing, all or any "substantial portion" (as such term 
is defined in Section 9(c) below) of the Property becomes subject to 
condemnation or eminent domain proceedings. Purchaser shall have the right to 
elect to proceed with Closing (subject to the other provisions of this 
Agreement including, but not limited to the payment of the entire Purchase 
Price required to be paid hereunder) by delivering notice thereof to Seller 
within ten (10) business days of receipt of Seller's notice respecting the 
taking, but Purchaser shall be entitled to all condemnation awards payable as 
a result of such taking, and, Seller shall assign to Purchaser at Closing 
Seller's rights to such awards. If, within ten (10) business days of receipt 
of Seller's notice respecting the taking, Purchaser notifies Seller of its 
intent to terminate this Agreement, the same shall terminate pursuant to 
Section 10(b) hereof; if Purchaser does not timely notify Seller of its 
intent to so terminate this Agreement, it shall remain in full force and 
effect.

          (b) In the event that all or any "substantial portion" of the 
Property shall be damaged or destroyed by fire or other casualty after the 
Effective Date and before the Closing Date, Purchaser may, at its option, 
terminate this Contract by written notice thereof to Seller within ten (10) 
business days after Seller notifies Purchaser of the casualty, in which event 
Purchaser shall receive an immediate refund of the Earnest Money together 
with ail accrued interest thereon and thereafter neither party shall have any 
further rights hereunder. If Purchaser fails to provide such notice to 
Seller, this Agreement shall remain in full force and effect. In the event 
Purchaser does not terminate this Contract as described above, it shall be 
deemed to have elected to proceed to close the transaction contemplated 
herein pursuant to the terms hereof, (including but not limited to the 
payment of the entire Purchase Price required to be paid hereunder) in which 
event Seller shall deliver to Purchaser

                                       17


at the Closing any insurance proceeds actually received by Seller 
attributable to the Property from such casualty, and assign to Purchaser all 
of Seller's right, title and interest in any claim under any applicable 
insurance policies in respect of such casualty, together with an amount equal 
to the deductibles, if any, applicable to such loss under the insurance 
policy(ies), and there shall be no reduction in the Purchase Price. If the 
casualty loss does not involve a "substantial portion" of the Property, as 
defined herein, then Purchaser shall be obligated to close the transaction 
contemplated herein according to the terms hereof, notwithstanding such 
casualty loss, and Seller shall, at Seller's election, either (i) repair the 
damages caused by such casualty loss prior to Closing, at Seller's expense or 
(H) deliver to Purchaser at the Closing any insurance proceeds actually 
received by Seller attributable to the Property from such casualty, and/or 
assign to Purchaser all of Seller's right, title, and interest in any claim 
under any applicable insurance policies in respect of such casualty, together 
with an amount equal to the deductibles, if any, applicable to such loss 
under the insurance policy(ies), and there shall be no reduction in the 
Purchase Price.

          (c) For the purposes of this Section 9, a taking of or casualty 
loss to a "substantial portion" of the Property shall be deemed to include 
any taking or casualty loss which would cost greater than $500,000 to repair 
and restore or, as to a taking, shall involve the taking of a portion of the 
Property valued in excess of $500,000 and shall not include any taking or 
casualty loss of less than such amount. The amount of damage resulting from a 
taking or casualty loss of a portion of the Property shall be determined by a 
contractor mutually agreeable to the Seller and Purchaser.

          (d) Subject to the foregoing provisions of this Section 9, risk of 
loss until Closing shall otherwise be borne by Seller.

          (e) The provisions of this Section 9 shall supersede and prevail in 
the event of any conflict with the provisions of the Uniform Vendor and 
Purchasing Act of New Jersey.

          Section 10. Termination and Remedies.

          (a) If Purchaser defaults in its obligation to purchase the 
Property pursuant to this Agreement, then Seller, as its sole and exclusive 
remedy therefor, shall have the right to terminate this Agreement by 
notifying Purchaser thereof, in which event the Title Company shall deliver 
the Earnest Money to Seller as liquidated damages, whereupon neither 
Purchaser nor Seller shall have any further rights or obligations hereunder. 
This provision shall not limit Purchaser's liability in respect of the 
indemnity contained in Section 6 (a) hereof.

          (b) If Purchaser terminates this Agreement pursuant to Sections 5, 
6 or 9 hereof or pursuant to any other provision hereof expressly permitting 

                                       18


Purchaser to terminate, then the Title Company shall return the Earnest Money 
to Purchaser, whereupon neither party hereto shall have any further rights or 
obligations hereunder.

          (c) If Seller defaults under any provision of this Agreement, then 
Purchaser as its sole and exclusive remedy shall have the right to terminate 
this Agreement by notifying Seller thereof, in which case Title Company shall 
return the Earnest Money to Purchaser and neither party hereto shall have any 
further rights or obligations hereunder. Notwithstanding the foregoing, if 
Seller fails to convey at Closing a title, subject to and in accordance with 
the provisions of paragraph 4 of this Agreement, or if Seller shall fail to 
comply with the commitments, warranties, representations or conditions on the 
part of Seller to be performed as set forth herein, the Purchaser may elect 
to accept title to the Property subject to any such title defect, 
misrepresentation, failure of condition, breach of warranty or other 
deficiency as Seller may be able to convey, without reduction of the Purchase 
Price and without any other liability on the part of the Seller. In the event 
that Purchaser shall elect to close title pursuant to such terms and Seller 
shall fail to deliver title to the Property in accordance with the provisions 
of this paragraph, Purchaser shall be entitled to maintain an action for 
specific performance (without any right to abatement in purchase price or 
damages). In no event shall Seller be liable to Purchaser for damages of any 
kind, whether actual, consequential or punitive.

          (d) Seller and Purchaser hereby acknowledge and agree that they 
have included the provision for payment of liquidated damages in Section 
10(a) because, in the event of a breach by Purchaser, the actual damages to 
be incurred by Seller can reasonably be expected to approximate the amount of 
liquidated damages called for herein and because the actual amount of such 
damages would be difficult if not impossible accurately to measure.

          Section 11. Notices. All notices provided or permitted to be given 
under this Agreement must be in writing and may be served by depositing same 
in the United States mail, addressed to the party to be notified, postage 
prepaid and registered or certified with return receipt requested or by 
nationally recognized overnight courier; by delivering the same in person to 
such party; by prepaid telegram or telex; or, by facsimile copy transmission 
together with registered or certified mail or nationally recognized overnight 
courier. Notice given in accordance herewith shall be effective upon receipt 
at the address of the addressee. The addresses of the parties shall be as 
follows:

If to Seller:              710 Rt. 46 Realty LLC
                           695 Rt. 46 Realty LLC
                           c/o Principal Investment Group Inc.
                           950 Third Avenue-31st Floor
                           New York, NY  10022
                           Fax Number:  (212) 838-8180

                                       19


With a copy to:            Gary A. Barash, Esq.
                           Ellenoff Grossman & Schole
                           200 Madison Avenue-Suite 1900
                           New York, NY  10016
                           Fax Number:  (212) 481-5376

If to Purchaser:           c/o Corporate Office Properties Trust, Inc.
                           One Logan Square, Suite 1105
                           Philadelphia, PA  19103
                           Attention: Mr. Clay W. Hamlin III, President
                           Fax Number:  (215) 567-1907

With a copy to:            F. Michael Wysocki, Esq.
                           Saul Ewing Remick & Saul LLP
                           Centre Square West
                           1500 Market Street, 38th Floor
                           Philadelphia, PA  19102-2186
                           Fax Number:  (215) 972-1932

If to the Title Company/Escrowee:
                           M. Gordon Daniels, Esq.
                           Commonwealth Land Title Insurance Company
                           1700 Market Street
                           Philadelphia, PA  19103-3990
                           Fax Number:  (215) 241-1641

Either party hereto may change its address for notice by giving three (3) 
days prior written notice to the other party.

          Section 12. Brokerage Commissions. The parties hereto warrant and 
represent that neither party nor their agents or representatives have had any 
dealings with any broker other than Grubb & Ellis (hereinafter the "Broker") 
in connection with the purchase of the Property. Each party does hereby 
indemnify and hold the other harmless from any and all claims of any other 
broker, finder or any other party claiming a fee or commission arising our of 
any act or negotiation on the part of such party or anyone acting on such 
party's behalf. The foregoing indemnity and hold harmless shall cover and 
include any and all liability, loss, cost or expense (including reasonable 
attorneys' fees actually incurred) in connection with any breach of the 
foregoing warranty and representation. Purchaser agrees to be responsible at 
the time of closing for the payment of the entire compensation which is 
required to be paid to the Broker in connection with this transaction.

                                       20


          Purchaser further agrees to cooperate in defense of any brokerage 
lawsuit, to give testimony and to reimburse seller for sellers' reasonable 
attorneys' fees incurred in connection with defending any brokerage claims.

          The provisions of this paragraph shall survive the delivery of the 
deed.

          Section 13. Leasing Brokerage Commissions.

          (a)  Definition.  For purposes of this Section 13:

               (i) The term "Leasing Commissions" shall be defined to mean 
any compensation or other consideration required to be paid pursuant to the 
terms of the brokerage commission agreements which are described on the 
annexed Exhibit "L" hereto (hereinafter collectively the "Brokerage 
Commission Agreements").

          (b) All Leasing Commissions which are due and owing on or prior to 
the time of closing pursuant to Brokerage Commission Agreements shall be paid 
by Seller prior to the closing of title hereunder. Seller shall have no 
obligation to pay any Leasing Commission which is not due and payable at the 
time of closing. Without limiting the generality of the foregoing, it is 
specifically agreed that Seller shall have no obligation or responsibility 
with respect to the payment of any Leasing Commissions which shall become due 
upon the exercise of any option, extension or expansion rights granted 
pursuant to the terms of any lease agreement. Purchaser shall at closing 
assume the obligations to pay all Leasing Commissions which shall become due 
and owing pursuant to the Brokerage Commission Agreements subsequent to the 
closing of title hereunder. Without limiting the generality of the foregoing, 
it is specifically agreed that Purchaser shall assume all obligations and 
responsibilities for payment of any Leasing Commissions which shall become 
due upon the exercise of any option, extension or expansion rights pursuant 
to any Lease. At closing, Purchaser shall execute an indemnification and 
assumption agreement pursuant to which Purchaser shall assume the aforesaid 
obligations and indemnify and hold Seller harmless from any causes of action, 
liabilities or damages arising from such obligations, including court costs 
and reasonable attorneys fees incurred by Seller in enforcing the 
indemnification agreement. At Closing, Seller shall execute an 
indemnification agreement, pursuant to which Seller shall indemnify and hold 
Purchaser harmless from any cause of action, liabilities or damages arising 
from the Seller's failure to pay any Leasing Commission which is due and 
owing at the time of the Closing of this transaction pursuant to the 
Brokerage Commission Agreements, including court costs and reasonable 
attorneys fees incurred by Seller in enforcing the indemnification agreement.

                                       21


          Section 14. Assessments and Certiorari Proceedings.

          (a) If, on the date hereof, the Property or any part thereof are 
affected by an assessment or assessments payable in installments 
(collectively the "Assessments"), Seller shall pay any such installment due 
prior to the Closing and Purchaser shall be responsible for the payment of 
any installments subsequent to the Closing.

          (b) As to any Assessments levied or imposed after the date hereof, 
Seller reserves the right to convert the same into installments payable over 
the maximum allowable period and, in such case, Seller shall be responsible 
for those installments due prior to the Closing of title, Purchaser shall be 
responsible for the payment of all other installments, and adjustments 
thereof shall be effected accordingly at the Closing.

          (c) Seller represents that to the best of its knowledge the 
Property is not presently the subject of any assessment.

          (d) Any lien of any Assessment (or installments thereof) levied or 
due or imposed before or after the date hereof shall not be an objection to 
title.

          (e) With regard to any proceeding with respect to the real estate 
taxes assessed against the Property, if such proceeding shall result in any 
reduction of assessment for the tax year in which the Closing occurs, it is 
agreed that the amount of tax saving refund for such tax year, less the fees 
and disbursements of Seller's attorney and any expert witnesses in connection 
with such proceedings, shall be apportioned between the parties as of the 
date real estate taxes are apportioned under this Agreement.

          Section 15. Payment of Liens from Purchase Price. The existence of 
any lien upon the Property to which the Purchaser is not obliged under the 
terms hereof to take subject, shall not be an objection to the passage of 
title provided that appropriate instruments in recordable form for the 
discharge of the same are delivered at the Closing and either the Title 
Company or Chicago Title Company is willing to omit the exception from 
Purchaser's title report. The Purchaser agrees upon request of Seller to 
issue and deliver upon the Closing separate checks or wire transfers, not in 
excess of the unpaid portion of the cash consideration, in such amounts and 
to such payees as may be directed by the Seller.

          Section 16. Tax Proceedings. If a proceeding is pending to correct 
or reduce the assessed valuation of the Property described in this contract 
for a period extending after the Purchaser's acquisition of title, such 
proceeding shall be continued by the Seller and the Purchaser agrees to pay 
his proportionate -share of the fees and disbursements in the event that such 
a reduction is obtained. Any reduction in taxes actually obtained for the tax 
year during which 

                                       22


this closing shall occur shall be appropriately prorated. This provision 
shall survive the delivery of the deed.

          Section 17. No Recordation of Contract. The Purchaser hereby agrees 
that it shall not record this Contract or any memorandum hereof unless Seller 
is in default. In the event Purchaser shall record this Contract, except as 
provided for herein, it shall be a default under this Contract and Seller may 
terminate this Contract and retain any payment made on account of the price 
as liquidated damages. Nothing herein shall preclude the filing of a notice 
of settlement.

          Section 18. Failure of Contract Deposit. If the payment made on 
account of the purchase price at the time of the execution of this agreement 
is by check, and if said check fails due collection, the Seller at its option 
may declare the contract null, void and of no force and effect, and may 
pursue his remedies against the Purchaser upon the said check or in any 
manner permitted by law, such remedies being cumulative.

          Section 19. Variation in Schedule. In the event that the 
information set forth in any rent schedule hereto annexed should vary by less 
than 2% from the facts as recited in the actual leases which have been 
exhibited to and initiated by the Purchaser, then the information set forth 
on such schedule shall be deemed amended to conform to the facts set forth in 
the leases.

          Section 20. Submission of Contract. Submission of the within 
Contract shall, not be deemed an offer and shall not be binding upon the 
Seller or Purchaser until such time as the Contract has been signed by the 
Purchaser and Seller and the payment of the Initial Earnest Money has been 
made by the Purchaser and received and accepted by the Title Company.

          Section 21. Assigns; Beneficiaries. Purchaser shall not have the 
right to assign this Agreement without the prior written consent of Seller. 
Any assignment by Purchaser without Seller's prior written consent shall 
constitute a material breach of this Agreement, and thereupon Seller shall 
have the right to terminate this Agreement and retain the Earnest Money. 
Subject to the foregoing provisions of this Section, this Agreement shall 
inure to the benefit of and be binding on the parties hereto and their 
respective heirs, legal representatives, successors, and assigns. This 
Agreement is for the sole benefit of Seller and Purchaser, and no third party 
is intended to be a beneficiary of this Agreement. Notwithstanding the 
foregoing, Purchaser shall be permitted to assign this Contract to Corporate 
Office Properties, L.P. provided that such assignment is effected and a copy 
of such assignment is delivered to Seller's counsel prior to the submission 
of any application materials to the Existing Mortgagee in connection with the 
procurement of the Existing Mortgagee's consent to the transfer of the 710 
Property subject to the Existing Mortgage. No assignment of this Contract to 
Corporate Office Properties L.P. shall be valid or 

                                       23


effective unless and until Corporate Office Properties, L.P. shall execute an 
assumption agreement in form reasonably acceptable to Seller's counsel, 
pursuant to which Corporate Office Properties, L.P. assumes all of the 
obligations of Purchaser pursuant to this agreement, specifically including, 
but not limited to the provisions of paragraph 2(b) hereof. In no event shall 
this Contract be assignable or assigned to Corporate Office Properties, L.P. 
or to any other party, after the submission to the Existing Mortgagee of any 
application for said mortgagee's consent to the occurrence of this 
transaction subject to the Existing Mortgage.

          Section 22. Governing Law. This Agreement shall be governed and 
construed in accordance with the substantive federal laws of the United 
States and the laws of the State of New Jersey.

          Section 23. Confidentiality. Seller and Purchaser agree that at all 
times after the Effective Date until the closing of this transaction, no 
press release or any other dissemination of information concerning this 
transaction shall be made unless consented to in writing by both parties, 
except as reasonably necessary to complete this transaction. Without limiting 
the generality of the foregoing, it is hereby specifically agreed that 
neither Purchaser nor its agents or employees shall create any publicity nor 
advise any Tenant or potential tenant of the Property or any member of the 
real estate brokerage community as to the existence of this transaction. 
Failure of Purchaser to comply with the foregoing shall constitute a default 
hereunder entitling Seller to all remedies available pursuant to this 
agreement or at law.

          Section 24. Multiple Counterparts. This Agreement may be executed 
in a number of identical counterparts. If so executed, each of such 
counterparts is to be deemed an original for all purposes, and all such 
counterparts shall, collectively, constitute one agreement, but, in making 
proof of this agreement, it shall not be necessary to produce or account for 
more than one such counterpart.

          Section 25. Severability. Each section of this Agreement 
constitutes a separate agreement between the parties. In the event that any 
provision of this Agreement which would not deprive the parties of the 
benefit of the bargain, is deemed to be invalid or unenforceable on its face 
or as applied, then -such provision shall be deemed severed herefrom to the 
extent invalid and unenforceable. Notwithstanding the foregoing, the parties 
hereby agree that the Property may only be sold in its entirety and that no 
individual parcel of real estate may be sold absent a sale of the entire 
Property upon the terms set forth within this agreement.

          Section 26. Entire Agreement. This Agreement is the entire 
agreement between Seller and Purchaser concerning the sale of the Property, 
all previous agreements (oral or otherwise) are merged herein, and no 

                                       24


modification hereof or subsequent agreement relative to the subject matter 
hereof shall be binding on either party unless reduced to writing and signed 
by the party to be bound. Without limiting the generality of the foregoing, 
the parties hereby agree that the "letter of intent" dated December __, 1997 
is merged herein and no party hereto shall retain any benefits or rights, or 
suffer any obligations or liabilities pursuant to said letter agreement. 
Exhibits A-L, attached hereto, are incorporated herein by this reference for 
all purposes.

          Section 27. Escrow Provisions.

          (a) Commonwealth Land Title Insurance Company (hereinafter the 
"Escrowee") shall hold the Earnest Money in escrow in a special bank account 
(or as otherwise agreed in writing by Seller, Purchaser and Escrowee) until 
the Closing or sooner termination of this contract and shall pay over or 
apply such proceeds in accordance with the terms of this section. Escrowee 
shall hold such Earnest Money in an interest-bearing account, and any 
interest earned thereon, shall be paid to the same party entitled to the 
Earnest Money, and the party receiving such interest shall pay any income 
taxes thereon. The tax identification numbers of the parties shall be 
furnished to Escrowee upon request. If the Purchaser terminates this 
Agreement during the Contingency Period, in accordance with the provisions of 
Section 6(b), and provides the Escrowee with a copy of the termination 
notice, the Escrowee shall, without the necessity of giving notice to the 
Seller, promptly return the Earnest Money to the Purchaser. At the Closing, 
such proceeds and the interest thereon, shall be paid by Escrowee to Seller. 
If for any reason the Closing does not occur and either party makes a written 
demand upon Escrowee after the Expiration of the Contingency Period for 
payment of such amount, Escrowee shall give written notice to the other party 
of such demand. If Escrowee does not receive a written objection from the 
other party to the proposed payment within fifteen (15) days after the giving 
of notice, Escrowee is hereby authorized to make such payment. If Escrowee 
does receive such written objection within such fifteen (15) day period, 
Escrowee shall continue to hold such amount until otherwise directed by 
written instructions from the parties to this contract or a final judgment of 
a court. However, Escrowee shall have the right at any time to deposit the 
escrowed proceeds and interest thereon, if any, with the clerk of the 
appropriate court of the county in which the Land is located. Escrowee shall 
give written notice of such deposit to Seller and Purchaser. Upon such 
deposit Escrowee shall be relieved and discharged of all further obligations 
and further responsibilities hereunder.

          (b) The parties acknowledge that Escrowee is acting solely as a 
stakeholder at their request and for their convenience. Escrowee shall not be 
liable to either of the parties for any act or omission on its part unless 
taken or suffered in bad faith, in willful disregard of this contract or 
involving gross negligence. Seller and Purchaser shall jointly and severally 
indemnify and hold Escrowee harmless from and against all costs, claims and 
expenses, including reasonable attorneys' fees, incurred in connection with 
the performance of 

                                       25


Escrowee's duties hereunder, except with respect to actions or omissions taken
or suffered by Escrowee in bad faith, in willful disregard of this contract or
involving gross negligence on the part of Escrowee.

          (c) Escrowee has acknowledged agreement to these provisions by 
signing in the place indicated on the signature page of this contract.

          IN WITNESS WHEREOF, Purchaser and Seller have executed this 
Agreement as of the dates set forth below their signatures. The "Effective 
Date" of this Agreement is the date a fully executed copy of this Agreement 
is received by each of the parties hereto and the Earnest Money Deposit is 
receipted by the Title Company as set forth below.

710 Rt. 46 Realty LLC, as             695 Rt. 46 Realty LLC, as 
to "710", Seller                      to "695", Seller    

By: /s/ Richard Wagman                      By: /s/ Richard Wagman
- -------------------------                   --------------------------
Name: Richard Wagman                        Name: Richard Wagman
Title: Member                               Title: Member
Date: 3/2/98                                Date: 3/2/98

                                            COPT Acquisitions, Inc., Purchaser


                                            By: /s/ Clay W. Hamlin III
                                            --------------------------
                                            Name: Clay W. Hamlin III
                                            Title: President
                                            Date: 2/26/98


                                       26


The undersigned hereby acknowledges receipt of the Earnest Money and further 
agrees to comply with the provisions hereof relating to the retention and 
disbursement of the Earnest Money and any additional Earnest Money if 
actually deposited hereunder.

Commonwealth Land Title Insurance Company


By: /s/ M. Gordon Daniels
    ---------------------
        M. Gordon Daniels
Date: 3/4/98


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                              SCHEDULE OF EXHIBITS

Exhibit A-1 Legal Description "710" Exhibit A-2 Legal Description "695" Exhibit B-1 Permitted Exceptions "710" Exhibit B-2 Permitted Exceptions "695" Exhibit C-1 Rent Roll "710" Exhibit C-2 Rent Roll "695" Exhibit D-1 Property Agreements "710" Exhibit D-1 Property Agreements "695" Exhibit E-1 Insurance Policies "710" Exhibit E-2 Insurance Policies "695" Exhibit F-1 Employees "710" Exhibit F-2 Employees "695" Exhibit G Bill of Sale Exhibit H Assignment of Tenant Leases and Assumption Agreement Exhibit I Assignment of Property Contracts Exhibit J Form of Estoppel Certificate Exhibit K Schedule of Security Deposits Exhibit L Brokerage Commission Agreements Exhibit M-1 Personalty "710" Exhibit M-2 Personalty "695" Exhibit N-1 Notices of Violation "710" Exhibit N-2 Notices of Violation "695"
28