Exhibit
10.29


EXECUTION COPY


PURCHASE
AGREEMENT AND


AGREEMENT
AND PLAN OF MERGER


DATED AS
OF DECEMBER 21, 2006


BY AND


AMONG


CORPORATE
OFFICE PROPERTIES TRUST,


CORPORATE
OFFICE PROPERTIES, L.P.,


W&M
BUSINESS TRUST,


AND


NOTTINGHAM
VILLAGE, INC.











TABLE OF
CONTENTS


	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. CERTAIN DEFINITIONS

  	
  2

  
	
   

  	
   

  
	
  1.01.

  	
  Certain Definitions

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. PURCHASE AND SALE OF OWNERSHIP INTERESTS
  IN NPI ENTITIES

  	
  14

  
	
   

  	
   

  
	
  2.01.

  	
  Purchase and Sale of the Ownership Interests

  	
  14

  
	
  2.02.

  	
  Purchase Price

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. THE MERGER

  	
  14

  
	
   

  	
   

  
	
  3.01.

  	
  The Merger

  	
  14

  
	
  3.02.

  	
  Effective Date and Effective Time; Closing

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. MERGER CONSIDERATION; EXCHANGE
  PROCEDURES

  	
  16

  
	
   

  	
   

  
	
  4.01.

  	
  Conversion of Shares

  	
  16

  
	
  4.02.

  	
  Exchange Procedures

  	
  17

  
	
  4.03.

  	
  Adjustments

  	
  18

  
	
  4.04.

  	
  Deposit

  	
  19

  
	
  4.05.

  	
  Deposit of Escrow Shares and Additional Escrow
  Shares

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. CONDUCT OF THE PARTIES PENDING CLOSING

  	
  20

  
	
   

  	
   

  
	
  5.01.

  	
  Conduct of Business by Target

  	
  20

  
	
  5.02.

  	
  Conduct of Acquiror

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. REPRESENTATIONS AND WARRANTIES

  	
  22

  
	
   

  	
   

  
	
  6.01.

  	
  Target Disclosure Letter

  	
  22

  
	
  6.02.

  	
  Representations and Warranties of Target

  	
  22

  
	
  6.03.

  	
  Representations and Warranties of Acquiror, Acquiror
  OP and Merger Subsidiary

  	
  38

  
	
  6.04.

  	
  Representations and Warranties of Acquiror and Acquiror
  OP

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. COVENANTS

  	
  45

  
	
   

  	
   

  
	
  7.01.

  	
  Stockholders’ Meeting

  	
  45

  
	
  7.02.

  	
  Registration Statement

  	
  46

  
	
  7.03.

  	
  Access to Information; Confidentiality

  	
  46

  
	
  7.04.

  	
  No-Shop Clause

  	
  47

  
	
  7.05.

  	
  Further Action; Reasonable Efforts

  	
  49

  
	
  7.06.

  	
  Public Announcements

  	
  50

  



 











 


	
  7.07.

  	
  Escrow and Indemnification

  	
  50

  
	
  7.08.

  	
  Intentionally Deleted

  	
  55

  
	
  7.09.

  	
  Transfer Taxes

  	
  55

  
	
  7.10.

  	
  Additional Acknowledgement #2

  	
  55

  
	
  7.11.

  	
  Lender’s Approval

  	
  55

  
	
  7.12.

  	
  Termination of Management Agreements

  	
  56

  
	
  7.13.

  	
  Short Term Loan

  	
  56

  
	
  7.14.

  	
  Tenant Improvements

  	
  56

  
	
  7.15.

  	
  Sewer System Escrow

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. ADDITIONAL AGREEMENTS

  	
  57

  
	
   

  	
   

  
	
  8.01.

  	
  Inspection of the Target Properties

  	
  57

  
	
  8.02.

  	
  Prepayment of Indebtedness

  	
  58

  
	
  8.03.

  	
  Acquisition of Joint Venture Interests; Disposal of
  Properties

  	
  58

  
	
  8.04.

  	
  Prorations and Adjustments

  	
  58

  
	
  8.05.

  	
  Articles Supplementary

  	
  61

  
	
  8.06.

  	
  Intellectual Property

  	
  61

  
	
  8.07.

  	
  COBRA Agreements

  	
  61

  
	
  8.08.

  	
  Certain Agreements

  	
  61

  
	
  8.09.

  	
  Reciprocal Release

  	
  62

  
	
  8.10.

  	
  Lockbox

  	
  62

  
	
  8.11.

  	
  Final Tax Returns

  	
  62

  
	
  8.12.

  	
  Insurance Proceeds

  	
  62

  
	
  8.13.

  	
  Satisfaction of Dollenberg Retirement Obligations

  	
  62

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. CONDITIONS TO CONSUMMATION OF THE
  TRANSACTION AND CLOSING DELIVERIES

  	
  62

  
	
   

  	
   

  
	
  9.01.

  	
  Conditions to the Obligations of Each Party

  	
  62

  
	
  9.02.

  	
  Conditions to the Obligations of Acquiror, Acquiror
  OP and Merger Subsidiary

  	
  63

  
	
  9.03.

  	
  Conditions to the Obligations of Target

  	
  64

  
	
  9.04.

  	
  Deliveries by Target

  	
  65

  
	
  9.05.

  	
  Deliveries by Acquiror

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. TERMINATION

  	
  67

  
	
   

  	
   

  
	
  10.01.

  	
  Termination

  	
  67

  
	
  10.02.

  	
  Effect of Termination

  	
  69

  
	
  10.03.

  	
  Fees and Expenses

  	
  69

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. GENERAL PROVISIONS

  	
  70

  
	
   

  	
   

  
	
  11.01.

  	
  Survival of Representations and Warranties

  	
  70

  
	
  11.02.

  	
  Notices

  	
  70

  
	
  11.03.

  	
  Severability

  	
  71

  
	
  11.04.

  	
  Amendment

  	
  72

  



 











 


	
  11.05.

  	
  Entire Agreement; Assignment

  	
  72

  
	
  11.06.

  	
  Parties in Interest

  	
  72

  
	
  11.07.

  	
  Specific Performance

  	
  72

  
	
  11.08.

  	
  Governing Law

  	
  73

  
	
  11.09.

  	
  Waiver of Jury Trial

  	
  73

  
	
  11.10.

  	
  Headings

  	
  73

  
	
  11.11.

  	
  Counterparts

  	
  73

  
	
  11.12.

  	
  Mutual Drafting

  	
  73

  
	
  11.13.

  	
  Time is of the Essence

  	
  73

  



 











 


SCHEDULES
AND EXHIBITS


	
  Schedule 1.

  	
  Purchase Properties

  	
  S-1-1

  
	
   

  	
   

  	
   

  
	
  Schedule 2.

  	
  Merger Properties

  	
  S-2-1

  
	
   

  	
   

  	
   

  
	
  Schedule 3.

  	
  Retail Properties

  	
  S-3-1

  
	
   

  	
   

  	
   

  
	
  Schedule 4.

  	
  NPI Exchange Properties

  	
  S-4-1

  
	
   

  	
   

  	
   

  
	
  Schedule 5.

  	
  Assumed Loans

  	
  S-5-1

  
	
   

  	
   

  	
   

  
	
  Exhibit A.

  	
  Articles Supplementary

  	
  A-1

  
	
   

  	
   

  	
   

  
	
  Exhibit B.

  	
  Registration Rights Agreement

  	
  B-1

  
	
   

  	
   

  	
   

  
	
  Exhibit C.

  	
  Articles of Merger

  	
  C-1

  
	
   

  	
   

  	
   

  
	
  Exhibit D.

  	
  Wachovia Release

  	
  D-1

  
	
   

  	
   

  	
   

  
	
  Exhibit E.

  	
  License Agreement

  	
  E-1

  
	
   

  	
   

  	
   

  
	
  Exhibit F.

  	
  Notice to Tenants

  	
  F-1

  
	
   

  	
   

  	
   

  
	
  Exhibit G.

  	
  FIRPTA Affidavit

  	
  G-1

  
	
   

  	
   

  	
   

  
	
  Exhibit H.

  	
  Legal Opinions of Gordon Feinblatt

  	
  H-1

  
	
   

  	
   

  	
  H-2

  
	
   

  	
   

  	
   

  
	
  Exhibit I.

  	
  Affidavits for Anchor Title Company

  	
  I-1

  
	
   

  	
   

  	
  I-2

  
	
   

  	
   

  	
  I-3

  
	
   

  	
   

  	
  I-4

  
	
   

  	
   

  	
   

  
	
  Exhibit J.

  	
  Tenant Estoppel Certificate

  	
  J-1

  
	
   

  	
   

  	
   

  
	
  Exhibit K.

  	
  Reciprocal Release

  	
  K-1

  
	
   

  	
   

  	
   

  
	
  Exhibit L.

  	
  First Amendment to Retirement Agreement

  	
  L-1

  
	
   

  	
   

  	
   

  
	
  Exhibit M.

  	
  Legal Opinion of DLA Piper US LLP

  	
  M-1

  
	
   

  	
   

  	
   

  
	
  Exhibit N.

  	
  Acknowledgement of P. Douglas Dollenberg

  	
  N-1

  
	
   

  	
   

  	
   

  
	
  Exhibit O.

  	
  Additional Acknowledgement #1 of P. Douglas
  Dollenberg

  	
  O-1

  
	
   

  	
   

  	
   

  
	
  Exhibit P.

  	
  Additional Acknowledgement #2 of P. Douglas
  Dollenberg

  	
  P-1

  



 











 


TARGET DISCLOSURE LETTER


	
  Section 5.01(b)

  	
  Acquisitions

  
	
  Section 6.02(a)(ii)

  	
  Target Subsidiaries

  
	
  Section 6.02(a)(iv)

  	
  Target Voting Securities

  
	
  Section 6.02(a)(vi)

  	
  Additional Target Subsidiary Information

  
	
  Section 6.02(b)(i)

  	
  Target Stockholders

  
	
  Section 6.02(b)(ii)

  	
  Debt Instruments

  
	
  Section 6.02(b)(iv)

  	
  Voting Agreements

  
	
  Section 6.02(d)(i)

  	
  Conflicts

  
	
  Section 6.02(d)(ii)

  	
  Consents and Filings

  
	
  Section 6.02(e)

  	
  Permits

  
	
  Section 6.02(f)

  	
  Litigation

  
	
  Section 6.02(g)(iii)

  	
  Tenant Improvements and Properties under
  Construction and Acquisition

  
	
  Section 6.02(g)(iv)

  	
  Violations of Law

  
	
  Section 6.02(g)(v)

  	
  Purchase Options

  
	
  Section 6.02(g)(vi)

  	
  Restrictions on Transfer

  
	
  Section 6.02(g)(viii)

  	
  Condemnation Proceedings

  
	
  Section 6.02(g)(x)

  	
  Rent Roll; Delinquency Report; Violations

  
	
  Section 6.02(g)(xii)

  	
  Invalid Leases; Intention to Vacate

  
	
  Section 6.02(g)(xiii)

  	
  Tenant Claims against Rent

  
	
  Section 6.02(g)(xiv)

  	
  Defaults

  
	
  Section 6.02(g)(xv)

  	
  Tenant Insolvency

  
	
  Section 6.02(g)(xvii)

  	
  Commitments; Commissions

  
	
  Section 6.02(g)(xix)

  	
  Letters of Credit

  
	
  Section 6.02(g)(xx)

  	
  Additional Notices

  
	
  Section 6.02(i)(ii)

  	
  Tax Assessments; Audited Tax Returns

  
	
  Section 6.02(i)(iv)

  	
  “S corporation” Election

  
	
  Section 6.02(i)(vi)

  	
  Built-in Gains

  
	
  Section 6.02(i)(viii)

  	
  Excluded Tax Assets

  
	
  Section 6.02(i)(xvi)

  	
  Tax Basis of Acquired Assets

  
	
  Section 6.02(i)(xviii)

  	
  Tax Basis of Certain NPI Properties

  
	
  Section 6.02(j)

  	
  Environmental Matters

  
	
  Section 6.02(k)

  	
  Scheduled Contracts

  
	
  Section 6.02(l)

  	
  Insurance Policies; Cancellation of Policies; Claims

  
	
  Section 6.02(l)(i)

  	
  Insurance Loss Runs

  
	
  Section 6.02(m)

  	
  Related Party Transactions

  
	
  Section 6.02(o)(ii)

  	
  Employee Benefit Plans; Deferred Compensation Plans
  and Obligations

  
	
  Section 6.02(q)

  	
  Personal Property

  
	
  Section 7.09(a)

  	
  Acquiror Transfer Taxes

  
	
  Section 7.09(b)

  	
  Joint Transfer Taxes

  
	
  Section 7.09(c)

  	
  Target Transfer Taxes

  
	
  Section 7.11

  	
  Office Assumed Loan Documents

  



 











 


	
  Section 7.12

  	
  Property Management Agreements

  
	
  Section 8.02

  	
  Existing Indebtedness; Properties Securing Existing
  Indebtedness

  
	
  Section 8.04(iii)

  	
  Letters of Credit Posted as Security Deposits

  
	
  Section 9.02(f)

  	
  Tenant Estoppels

  
	
  Section 9.02(h)

  	
  Corporate Dissolutions

  
	
  Section 9.02(j)

  	
  Officers Life Insurance Loans

  
	
  Section 9.04(n)

  	
  Estoppels from Community Associations

  



 











 


PURCHASE AGREEMENT AND AGREEMENT AND PLAN OF MERGER,
dated as of December 21, 2006 (this “Agreement”), among Corporate Office
Properties Trust, a Maryland real estate investment trust (“Acquiror”), Corporate
Office Properties, L.P., a Delaware limited partnership (“Acquiror OP”),
W&M Business Trust, a Maryland business trust (“Merger Subsidiary”),
and Nottingham Village, Inc. (“Target”), a Maryland corporation.


RECITALS


WHEREAS, Nottingham Properties, Inc., a
Maryland corporation (“NPI”)
owns, through one or more subsidiaries, the commercial office properties and
the appurtenances thereto and the partnership and membership interests listed
on Schedule 1 hereto (the “Purchase Properties”) and Target will own,
immediately prior to the Closing Date, the commercial office properties and
tracts of land listed on Schedule 2 hereto and the appurtenances thereto
through one or more subsidiaries (the “Merger Properties,”);


WHEREAS, Acquiror OP desires to purchase
and NPI desires to sell the percentage of ownership interests in the entities
owning the Purchase Properties as more particularly set forth on Schedule 1
hereto;


WHEREAS, prior to the Merger, Target
intends to dispose of certain residential and other non-office properties,
related entities assets and contracts to the Liquidating Trust or to third
parties;


WHEREAS, one (1) day following the Merger,
the Surviving Entity shall dispose of the ownership interests in the entities
(the “Retail Entities”)
owning the retail properties listed on Schedule 3 hereto (the “Retail Properties”)
by consummating an exchange under Section 1031 of the Code (the “Exchange”) with NPI
whereby the Surviving Entity will exchange the ownership interests in the
Retail Entities for the ownership interests in the entities (the “NPI Exchange Entities”)
owning those properties listed on Schedule 4 hereto (the “NPI Exchange Properties”);


WHEREAS, the Board of Trustees of Acquiror
and the Board of Directors of Target have each adopted a resolution declaring
that the merger of Target with and into Merger Subsidiary (the “Merger”), with Merger
Subsidiary continuing as the surviving entity in the Merger in accordance with
the MGCL, is advisable and have approved this Agreement;


WHEREAS, it is intended that, for U.S.
federal income tax purposes, the Merger shall qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the “Code”),
and that this Agreement shall constitute, and is hereby adopted as, a plan of
reorganization;


WHEREAS,
Acquiror, Acquiror OP, Merger Subsidiary and Target desire to make certain
representations, warranties and agreements in connection with the Merger.
















NOW, THEREFORE, in consideration of the
premises and of the mutual covenants, representations, warranties and
agreements contained herein, and intending to be legally bound hereby, the
parties agree as follows:


ARTICLE I.

CERTAIN DEFINITIONS


1.01.        Certain Definitions.


The
following terms are used in this Agreement with the meanings set forth below:


“Acquiror” has the
meaning set forth in the preamble to this Agreement.


“Acquiror Bylaws”
means the bylaws of Acquiror.


“Acquiror Common Shares”
means common shares of beneficial interest, $.01 par value per share, of
Acquiror.


“Acquiror Convertible Preferred
Shares” means the 5.6% convertible Acquiror Preferred Shares,
$50.00 liquidation preference per share, of Acquiror, with such terms as are
set forth in the Articles Supplementary.


“Acquiror Declaration of Trust”
means the declaration of trust of Acquiror.


“Acquiror Material Adverse Effect”
means any event, circumstance, change or effect that adversely affects the
financial condition or results of operations of Acquiror in an amount in excess
of $100,000,000, that was not reasonably foreseeable at the date of this
Agreement; provided, however, that none of the following shall
be deemed to constitute or shall be taken into account in determining whether
there has been an “Acquiror Material Adverse Effect”:  (i) any event, circumstance, change or
effect arising out of or attributable to (A) any changes in the United
States or global economy or capital, financial or securities markets generally,
including changes in interest or exchange rates, (B) the commencement or
escalation of a war or armed hostilities or the occurrence of acts of terrorism
or sabotage, (C) any changes in general economic, legal, regulatory or
political conditions in the geographic regions in which Acquiror operates, (D)
earthquakes, hurricanes or other natural disasters, and (E) changes in Law or
GAAP or (ii) any existing event, circumstance, change or effect with respect to
which Target has knowledge as of the date hereof.


“Acquiror OP” has the
meaning set forth in the preamble to this Agreement.


“Acquiror Preferred Shares”
means preferred shares of beneficial interest, $.01 par value per share, of
Acquiror.


“Acquiror SEC Documents”
has the meaning set forth in Section 6.04(b).



 2
 









“Acquiror Shares”
means the Acquiror Common Shares and Acquiror Preferred Shares, collectively.


“Acquiror Subsidiary”
or “Acquiror
Subsidiaries” means a Subsidiary or Subsidiaries of Acquiror.


“Acquisition Agreement”
means the Acquisition Agreement dated August 17, 2005 by and between Honeygo
Run Reclamation Center, Inc. and Target.


“Acquisition Proposal”
has the meaning set forth in Section 7.04(a).


“Action” means any
claim, action, suit, proceeding, arbitration, mediation or other investigation
as to which written notice has been provided to the applicable party.


“Additional Escrow Shares”
has the meaning set forth in Section 4.05(b).


“Additional Share Escrow Agreement”
means the escrow agreement among the Share Escrow Agent, Acquiror, Acquiror OP,
Merger Subsidiary and Stockholders’ Agent with respect to the Additional Escrow
Shares.


“Affiliate” means,
with respect to any Person, any other Person which directly or indirectly
controls, is controlled by or is under common control with such Person.  For purposes of the immediately preceding
sentence, the term “control”
(including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”),
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities, by
contract or otherwise.


“Aggregate Closing Adjustments”
has the meaning set forth in Section 4.01(a).


“Agreement” means this
Agreement, as amended or modified from time to time in accordance with Section
11.04.


“Applicable Date” has
the meaning set forth in Section 6.04(b).


“Applicable Permits”
has the meaning set forth in Section 6.02(e).


“Articles of Merger”
has the meaning set forth in Section 3.02(b).


“Articles Supplementary”
means the Articles Supplementary to the Acquiror Declaration of Trust setting
forth the terms of the Acquiror Convertible Preferred Shares, in the form
attached hereto as Exhibit A.


“Assumed Loans” means
the loans listed in Schedule 5 hereto.


“Assumption Fees” has
the meaning set forth in Section 7.11(b).


“Blue Sky Laws” means
the state securities laws of the several States.



 3
 









“Business Day” means
Monday through Friday of each week, except a legal holiday recognized as such
by the U.S. Government or any day on which banking institutions in the State of
Maryland are authorized or obligated to close.


“Calculation Price”
means the average closing price on the NYSE of the Acquiror Common Shares over
a period of twenty (20) trading days, ending on the tenth (10th) trading day prior to the
Closing Date; provided, however,
that such price shall equal a minimum of $43.00 per share and a maximum of
$49.00 per share.


“Cash Escrow Agent”
means Anchor Title Company.


“Cash Escrow Agreement”
means the escrow agreement among the Cash Escrow Agent, Acquiror, Acquiror OP,
Merger Subsidiary and Target with respect to investment and payment of the
Deposit.


“Certificate” or “Certificates” has the
meaning set forth in Section 4.02(a).


“Change in Recommendation”
has the meaning set forth in Section 7.04(f).


“Claims Notice” has
the meaning set forth in Section 7.07(d).


“Closing” and “Closing Date” have
the meanings set forth in Section 3.02(a).


“Closing Adjustments”
has the meaning set forth in Section 8.04.


“Closing Adjustment Amount”
has the meaning set forth in Section 8.04.


“Closing Adjustment Time”
has the meaning set forth in Section 8.04.


“COBRA” means the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.


“Code” means the
Internal Revenue Code of 1986, as amended.


“Common Share Consideration”
means the Common Share Consideration Amount divided by the Calculation Price (i.e.,
the amount of Acquiror Common Shares issued at Closing).


“Common Share Consideration Amount”
means the Merger Consideration Amount minus the Preferred Share Consideration
Amount.


“Confidentiality Agreement”
has the meaning set forth in Section 7.03(b).


“Damages” has the
meaning set forth in Section 7.07(b)(i).


“Debt Balance”  means the balance
due under all indebtedness of Target, Target Subsidiaries and Retail Entities
at the Effective Time, including but not limited to accrued but unpaid
interest, and incurred but unpaid prepayment premiums.  The Debt



 4
 









Balance does not
include the Exchange Properties Indebtedness, as this shall be an obligation of
NPI at the Effective Time.


“Deposit” has the
meaning set forth in Section 4.04.


“Dollenberg Retirement Obligations”
means any outstanding obligations to make payments to P. Douglas Dollenberg
pursuant to Sections 3(iii), 4 and 8(i) of the Retirement Agreement dated
January 1, 2005 by and among P. Douglas Dollenberg, Target and NPI, as
amended.


“Effective Date” means
the day of the Effective Time.


“Effective Time” has
the meaning set forth in Section 3.02(b).


“Environment” has the
meaning set forth in Section 6.04(f).


“Environmental Laws”
means any United Stated federal, state or local Laws in existence on the date
hereof relating to the presence or release of Hazardous Substances or
protection of the environment, including the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”).


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.


“ERISA Affiliate”
means any Person who, together with Target or the Surviving Entity, as
appropriate in the context, is or has been treated as a single employer under
Section 414 of the Code, and the regulations thereunder.


“Escrow Fund” has the
meaning set forth in Section 7.07(a).


“Escrow Period” has
the meaning set forth in Section 7.07(c).


“Escrow Shares” has
the meaning set forth in Section 4.05(a).


“Exchange” has the
meaning set forth in the preamble to this Agreement.


“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.


“Exchange Agreement”
means the exchange agreement to be entered into by and between NPI and
Surviving Entity on the day after the Closing pursuant to which the ownership
interests in the Retail Entities will be exchanged for the ownership interests
in the NPI Exchange Entities.


“Exchange Properties Indebtedness”
has the meaning set forth in the Exchange Agreement.



 5
 









“Existing Indebtedness”
means the Existing Office Indebtedness and the Existing Retail Indebtedness.


“Existing Office Indebtedness”
means the loans incurred by the entities set forth in Section 8.02 of
the Target Disclosure Letter, secured by deeds of trust on the properties owned
by such entities, having an aggregate balance as of December 1, 2006 of
approximately Fifty-Seven Million Five Hundred Sixty-Four Thousand One Hundred
Thirty-One Dollars ($57,564,131).  Target
shall use a portion of the proceeds of the Short Term Loan to prepay the
Existing Office Indebtedness prior to Closing.


“Existing Retail Indebtedness”
means the loans secured by deeds of trust on the properties owned by White
Marsh Plaza Business Trust and The Avenue at White Marsh Business Trust, having
an aggregate balance as of December 1, 2006 of approximately Twenty-Nine
Million One Hundred Forty-Six Thousand Three Hundred Ninety-Eight Dollars
($29,146,398).  Acquiror shall not be
directly or indirectly liable for the Existing Retail Indebtedness upon or
after the closing of the Exchange, except to the extent set forth in Section
6.02(k) of the Target Disclosure Letter.


“Former Superior Proposal”
has the meaning set forth in Section 7.04(e).


“GAAP” means
accounting principles generally accepted in the United States of America.


“Governmental Authority”
means any federal, state or local court, administrative agency or commission or
other governmental authority or instrumentality or agency.


“Gross Value”  means the sum of
$303,422,124 (which is equal to $362,500,000 less the gross purchase price of
$59,077,876 payable for the ownership interests in the NPI Entities).


“Hazardous Materials”
means (i) those substances defined in or regulated under the following
federal statutes and their state counterparts, as each may be amended from time
to time, and all regulations thereunder: 
the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water Act,
the Safe Drinking Water Act, the Atomic Energy Act and the Clean Air Act;
(ii) petroleum and petroleum products, including crude oil and any
fractions thereof; (iii) polychlorinated biphenyls, friable asbestos and
radon; and (iv) any chemicals, materials, substances or wastes which are
defined as or included in the definition of “hazardous substances,” “restricted
hazardous wastes,” “toxic substances,” “toxic pollutants” or words of similar
import, under any applicable Environmental Law; and (v) any substance,
material, or waste regulated by any Governmental Authority pursuant to any
Environmental Law.


“Indemnified Person”
or “Indemnified Persons”
have the meaning set forth in Section 7.07(b)(i).


“Indemnity Threshold”
has the meaning set forth in Section 7.07(b)(iii).



 6
 









“Inspection Period”  has the meaning set forth in Section
8.01(b).


“Intellectual Property”
means all intellectual property owned or used by Target and the Target
Subsidiaries, including patents (including any continuations, divisionals,
continuations-in-part, renewals and reissues), trademarks, trade names, service
marks, logos, domain names and other indicators of source or origin, database
rights, copyrights, mask works, technology, know-how, trade secrets, inventory,
ideas, algorithms, processes, computer software programs or applications (in
both source code and object code form), tangible or intangible proprietary
information or material and all other intellectual property or proprietary
rights, together with all goodwill symbolized by any of the foregoing,
registrations and applications for the foregoing, and rights to sue for past
infringement thereof.


“IRS” means the
Internal Revenue Service.


“knowledge of Acquiror”
or “to Acquiror’s
knowledge” means the actual knowledge of Randall M. Griffin or
Roger A. Waesche, Jr.


“knowledge of Target”
or “to Target’s
knowledge” means the actual knowledge of J. Joseph Credit,
Steven Endres or Peter Teeling.


“Law” has the meaning
set forth in Section 6.02(d)(i).


“Leasing Commissions”
means any commissions due and payable on the Target Properties Leases to third
parties and not to Affiliates of Target.


“Lender’s Approval”
has the meaning set forth in Section 7.11(b).


“License Agreement”
has the meaning set forth in Section 8.06.


“Liens” means any
charge, mortgage, pledge, security interest, restriction, Claim, lien or
encumbrance.


“Liquidating Trust”
means NVI Liquidating Trust, a Maryland business trust.


“Liquidation Preference”
means $50.00 per Acquiror Convertible Preferred Share.


“Loan Escrows” has the
meaning set forth in Section 4.01(a).


“Loan Documents” has
the meaning set forth in Section 7.11(a).


“Loans” means any
loan, loan agreement, note, borrowing arrangement or extension of credit,
including, without limitation, letters of credit, leases, credit enhancements,
guarantees and similar interest-bearing assets, as well as commitments to
extend any of the same.


“Merger” has the
meaning set forth in Section 3.01(a).



 7
 









“Merger Closing Properties”
means the Merger Properties and the Retail Properties.


“Merger Closing Properties Leases”
means the leases applicable to the Merger Closing Properties.


“Merger Consideration”
has the meaning set forth in Section 4.01(a).


“Merger Consideration Amount”
has the meaning set forth in Section 4.01(a).


“Merger Properties”
has the meaning set forth in the preamble to this Agreement.


“Merger Properties Leases”
means the leases in effect as of the date hereof with tenants of the Merger
Properties and all written amendments, modifications and supplements thereto.


“Merger Subsidiary”
has the meaning set forth in the preamble to this Agreement.


“Merger Subsidiary Common Shares”
means the common shares of beneficial interest, $0.01 par value per share, of
Merger Subsidiary.


“MGCL” means the
Maryland General Corporation Law.


“Non-Target Properties Letters of
Credit” has the meaning set forth in Section 6.02(g)(xix).


“NPI” has the meaning
set forth in the preamble to this Agreement.


“NPI Entities” means,
collectively, one hundred percent (100%) of the ownership interests in 37
Allegheny Business Trust, Philadelphia Road Operating Company, LLC, 9020
Mendenhall, LLC, Woods Investors, LLC, Rivers Center III Investors LLC and
White Marsh Hi-Tech 2 Business Trust, fifty percent (50%) of the ownership
interests in Campbell Corporate Center I Limited Partnership, forty-three and
seven-tenths percent (43.7%) in Nottingham Associates Limited Partnership and
sixty percent (60%) in Sandpiper Limited Partnership.


“NPI Exchange Entities”
has the meaning set forth in the preamble to this Agreement.


“NPI Exchange Properties”
has the meaning set forth in the preamble to this Agreement.


“NPI Exchange Properties Leases”
means all leases in effect as of the date hereof with tenants of the NPI
Exchange Properties and all written amendments, modifications and supplements
thereto.


“NYSE” means the New
York Stock Exchange, Inc.



 8
 









“Office Assumed Loan Documents”
means the documents evidencing and relating to the Office Assumed Loans.


“Office Assumed Loans”
means the Assumed Loans, the loans to be assumed by Acquiror OP under the PSA
(Woods and Rivers Center III) and the loan made to Tyler Ridge I.


“Outside Date” has the
meaning set forth in Section 10.01(b)(ii).


“Payment Fund” has the
meaning set forth in Section 4.02(a).


“Permitted Liens”
means (i) Liens for Taxes not yet delinquent and Liens for Taxes being
contested in good faith; (ii) inchoate mechanics’ and materialmen’s Liens
for construction in progress; (iii) inchoate workmen’s, repairmen’s,
warehousemen’s and carriers’ Liens arising in the ordinary course of business
of Target or any of the Target Subsidiaries; (iv) zoning restrictions,
survey exceptions, utility easements, rights of way and similar Liens that are
imposed by any Governmental Authority having jurisdiction thereon; (v) with
respect to real property, any title exception disclosed in title insurance
policy with respect to any Target Property (whether material or immaterial), Liens
and obligations arising under the Material Contracts (including but not limited
to any Lien securing mortgage debt disclosed in the Target Disclosure Letter)
and any other Lien that does not interfere materially with the current use of
such property (assuming its continued use in the manner in which it is
currently used) or materially adversely affect the value or marketability of
such property; (vi) reciprocal easement agreements; (vii) matters that would be
disclosed on current title reports or surveys and/or (viii) Liens or
restrictions arising pursuant to the Target Properties Leases.


“Person” means any
individual, bank, corporation, partnership, association, joint-stock company,
business trust, limited liability company or unincorporated organization.


“Potential Acquiror”
has the meaning set forth in Section 7.04(d).


“Preferred Share Consideration”
means the number of Acquiror Convertible Preferred Shares designated by Target
to Acquiror at least five (5) Business Days prior to the Closing; provided, however, the number of Acquiror
Convertible Preferred Shares shall not exceed the sum of (i) 2,830,000 plus
(ii) seventy percent (70%) of the Aggregate Closing Adjustments divided by the
Liquidation Preference.


“Preferred Share Consideration Amount”
means the Preferred Share Consideration multiplied by the Liquidation
Preference.


“Pre-LOI Leases” the
Target Properties Leases signed on or prior to September 6, 2006.


“Pre-LOI Leasing Commissions”
means any commissions due and payable on Pre-LOI Leases but excluding
commissions due with respect to future renewals or extensions of Pre-LOI
Leases.



 9
 









“Pre-LOI TI Work” has
the meaning set forth in Section 7.14.


“Proxy Statement”
means the proxy statement to be provided to the Target Stockholders in
connection with the Target Stockholders Meeting.


“Purchase and Sale”
has the meaning set forth in Section 2.01.


“Purchase Price” has
the meaning set forth in Section 2.02.


“Purchase Properties”
has the meaning set forth in the preamble to this Agreement.


“Purchase Properties Leases”
means all leases in effect as of the date hereof with tenants of the Purchase
Properties and all written amendments, modifications and supplements thereto.


“Rating Agencies” has
the meaning set forth in Section 7.11(b).


“Reciprocal Release”
has the meaning set forth in Section 9.04(k).


“REIT” means a real
estate investment trust within the meaning of Section 856- 860 of the Code.


“Registration Rights Agreement”
means the registration rights agreement between Acquiror and the Target
Stockholders relating to the filing of the Registration Statement, in
substantially the form attached hereto as Exhibit B.


“Registration Statement”
means the Acquiror Registration Statement on Form S-3 or other available form
registering the resale of the Common Share Consideration and the Acquiror
Common Shares issuable upon conversion of the Acquiror Convertible Preferred
Shares and any amendments or supplements thereto.


“Release” has the
meaning set forth in Section 6.04(f).


“Representative” has
the meaning set forth in Section 7.04(b).


“Retail Entities” has
the meaning set forth in the preamble to this Agreement.


“Retail Loan Guarantees”
has the meaning set forth in Section 7.07(b).


“Retail Properties”
has the meaning set forth in the preamble to this Agreement.


“Retail Transaction”
means the acquisition of NPI by, or the merger of NPI with, an entity that
engages or proposes to engage in retail property acquisitions or ownership.


“Rights” means, with
respect to any Person, warrants, options, rights, convertible securities and
other arrangements or commitments which obligate the Person to issue or dispose
of any of its stock or other ownership interests.



 10
 









“Scheduled Contracts”
means those service and other contracts which have been entered into by Target
or Target Subsidiaries or that will be assigned to Target or Target
Subsidiaries prior to Closing, all as set forth in Section 6.02(k) of
the Target Disclosure Letter.


“SDAT” has the meaning
set forth in Section 3.02(b).


“SEC” means the
Securities and Exchange Commission.


“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
thereunder.


“Share Escrow Agent”
means U.S. Bank National Association.


“Share Escrow Agreement”
means the escrow agreement among the Share Escrow Agent, Acquiror, Acquiror OP,
Merger Subsidiary and Stockholders’ Agent with respect to the Escrow Shares.


“Shares” means shares
of Target Common Stock.


“Short Term Loan”
means the loan to be made to Target by Wachovia Bank, N.A. with an outstanding
balance not to exceed $83,018,978 as of the Closing, which may be fully prepaid
at any time by Acquiror after Closing without any prepayment penalty
thereto.  The documents evidencing or
securing the Short Term Loan are referred to herein as the “Short Term Loan Documents.”  Of the total proceeds of the Short Term Loan,
up to $57,564,131 shall be applied by Target to prepay Existing Office
Indebtedness prior to Closing.


“Stockholder Approval”
has the meaning set forth in Section 6.02(c)(ii).


“Stockholders’ Agent”
shall mean the Liquidating Trust.


“Subsidiary” and “Significant Subsidiary”
have the meanings ascribed to those terms in Rule l-02 of Regulation S-X
promulgated by the SEC.


“Superior Proposal”
means a bona fide written proposal (and its most recently amended or modified
terms, if amended or modified) made by a Person other than Target or its
Affiliates: (A) to consummate an Acquisition Proposal; (B) on terms
which the Target Board in good faith concludes (following advice of its
financial advisors that such proposal is more favorable to the Target
Stockholders, from a financial point of view, and advice of outside counsel),
taking into account, among other things, all legal, financial, regulatory,
timing and other aspects of the proposal and the identity and nature of the
Person making the proposal, would, if consummated, result in a transaction
that is more favorable to Target or to the Target Stockholders (in their
capacities as stockholders), as the case may be, from a financial point of
view, than the transactions contemplated by this Agreement (as the same may be
proposed to be amended by Acquiror pursuant to



 11
 









Section 7.04(e));
and (C) that does not contain any contingency to obtain financing or other
funding.


“Superior Proposal Notice”
has the meaning set forth in Section 7.04(d).


“Surviving Entity” has
the meaning set forth in Section 3.01(a).


“Target” has the
meaning set forth in the preamble to this Agreement.


“Target Board” means
the Board of Directors of Target.


“Target Bylaws” means
the Amended and Restated Bylaws of Target as in effect on the date hereof.


“Target Charter” means
the Articles of Incorporation of Target as in effect on the date hereof.


“Target Class A Common Stock”
means the Class A Common Stock, $10.00 par value per share, of Target.


“Target Class B Common Stock”
means the Class B Common Stock, $1.00 par value per share, of Target.


“Target Common Stock”
means the Target Class A Common Stock together with the Target Class B Common
Stock.


“Target Disclosure Letter”
has the meaning set forth in Section 6.01.


“Target Group” means,
collectively, Target, Target Subsidiaries, NPI and the NPI Entities.


“Target Joint Ventures”
meanings the Target Properties in which Target or a Target Subsidiary owns less
than a 100% equity interest.


“Target Material Adverse Effect”
means any event, circumstance, change or effect that adversely affects the
financial condition or results of operations of Target and the Target
Subsidiaries in an amount in excess of $18,000,000, taken as a whole, that was
not reasonably foreseeable at the date hereof; provided,
however, that none of the
following shall be deemed to constitute or shall be taken into account in
determining whether there has been an “Target Material Adverse Effect”:  (i) any event, circumstance, change or
effect arising out of or attributable to (A) any changes in the United
States or global economy or capital, financial or securities markets generally,
including changes in interest or exchange rates, (B) the commencement or
escalation of a war or armed hostilities or the occurrence of acts of terrorism
or sabotage, (C) any changes in general economic, legal, regulatory or
political conditions in the geographic regions in which Target and the Target
Subsidiaries operate, (D) earthquakes, hurricanes or other natural



 12
 









disasters and (E)
changes in Law or GAAP or (ii) any existing event, circumstance, change or
effect with respect to which Acquiror has knowledge as of the date hereof.


“Target Material Contracts”
means the Target Properties Leases, the Office Assumed Loan Documents, the
Short Term Loan Documents, the Scheduled Contracts and the documents evidencing
or securing the Existing Indebtedness (it being recognized that the documents
evidencing or securing the Existing Office Indebtedness shall be terminated in
conjunction with the repayment thereof with the proceeds of the Short Term
Loan).


“Target Property” or “Target Properties”
means, collectively, the Merger Properties, NPI Exchange Properties and
Purchase Properties.


“Target Properties Escrow LCs”
has the meaning set forth in Section 6.02(g)(xix).


“Target Properties Leases”
means the Purchase Properties Leases collectively with the Merger Properties
Leases and the NPI Exchange Properties Leases.


“Target Properties LCs”
has the meaning set forth in Section 6.02(g)(xix).


“Target Stockholders”
means the holders of the Target Common Stock.


“Target Stockholders Meeting”
means a special meeting of the Target Stockholders to consider and vote upon
the approval of the Merger, this Agreement and any other matter required to be
approved by Target’s stockholders for consummation of the Transaction
(including any adjournment or postponement).


“Target Subsidiary” or
“Target Subsidiaries”
has the meaning set forth in Section 6.02(a)(ii).


“Tax” or “Taxes” shall mean any
federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, stock, franchise, profits, withholding, social
security, unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.


“Tax Returns” means
any return, declaration, report, claim for refund, transfer pricing report or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.


“Termination Date” has
the meaning set forth in Section 10.01.


“Termination Fee” has
the meaning set forth in Section 10.03(b).



 13
 









“Transaction” shall
mean the Merger and the Purchase and Sale, collectively, along with any other
transaction contemplated by this Agreement.


“Transfer Taxes” shall
mean any real property transfer, sales, use, recordation, recording costs,
registration and other fees and any similar Taxes together with any related
interest, penalties or additions to Tax.


ARTICLE II.

PURCHASE AND SALE OF OWNERSHIP INTERESTS IN NPI ENTITIES


2.01.        Purchase and Sale of the Ownership
Interests.


On
the Closing Date, Acquiror OP shall purchase from NPI the percentage of
ownership interests in the NPI Entities as more particularly set forth on Schedule
1 hereto pursuant to the terms and conditions set forth herein (the “Purchase and Sale”)  and pursuant to a purchase and sale
agreement by and between NPI and Acquiror OP (the “PSA”).


2.02.        Purchase Price.


The
purchase price for the ownership interests in the NPI Entities which Acquiror
OP agrees to deliver to NPI, subject to the terms and conditions set forth
herein and in the PSA, shall be cash in an amount equal to (a) $59,077,876
(subject to adjustment) reduced by (b) the reductions and adjustments set forth
in the PSA (the difference between (a) and (b) being herein referred to as the “Purchase Price”).


ARTICLE III.

THE MERGER


3.01.        The Merger.


(a)           The
Merger.  Upon the terms and subject
to the conditions set forth in this Agreement, at the Effective Time, Target
will merge into Merger Subsidiary (the “Merger”), the
separate corporate existence of Target shall cease and Merger Subsidiary shall
survive and continue to exist as a Maryland business trust and as a wholly
owned subsidiary of Acquiror (Merger Subsidiary, as the surviving entity in the
Merger, is sometimes referred to herein as the “Surviving Entity”) with all its rights,
privileges, immunities, powers and franchises continuing unaffected by the
Merger.


(b)           Name.  The name of the Surviving Entity shall be “W&M
Business Trust”.


(c)           Certificate
of Trust and Declaration of Trust. 
The certificate of trust and declaration of trust of the Merger
Subsidiary in effect immediately prior to the Effective Time shall be the
certificate of trust and declaration of trust of the Surviving Entity, unless
and until duly amended in accordance with applicable Law.



 14
 









(d)           Trustees
and Officers of the Surviving Entity. 
The parties hereto shall take all actions necessary so that the trustees
of the Surviving Entity immediately after the Merger shall be the trustees of
the Merger Subsidiary immediately prior to the Merger.  The parties hereto shall take all actions
necessary so that the officers of the Surviving Entity immediately after the
Merger shall be the officers of the Merger Subsidiary immediately prior to the
Merger.


(e)           Effect
of the Merger.  At the Effective
Time, the effect of the Merger shall be as provided in the MGCL.  Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property,
rights, privileges, powers and franchises of Target shall vest in the Surviving
Entity, and the Assumed Loans directly or indirectly shall become the debts of
the Surviving Entity.


(f)            Additional
Actions.  If, at any time after the
Effective Time, the Surviving Entity shall consider that any further
assignments or assurances in law or any other acts are necessary or desirable
to (i) vest, perfect or confirm, of record or otherwise, in the Surviving
Entity its right, title or interest in, to or under any of the rights, properties
or assets of Target acquired or to be acquired by the Surviving Entity as a
result of, or in connection with, the Merger, or (ii) otherwise carry out
the purposes of this Agreement, Target, and its proper officers and directors,
shall be deemed to have granted to the Surviving Entity an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments and
assurances in law and to do all acts necessary or proper to vest, perfect or
confirm title to and possession of such rights, properties or assets in the
Surviving Entity and otherwise to carry out the purposes of this Agreement, and
the proper officers and trustees of the Surviving Entity are fully authorized
in the name of the Surviving Entity or otherwise to take any and all such action.


3.02.        Effective Date and Effective Time;
Closing.


(a)           The closing of the Transaction (the “Closing”) shall take
place immediately prior to the Effective Time at 10:00 a.m., Eastern Time, at
the offices of DLA Piper US LLP at 6225 Smith Avenue, Baltimore, Maryland
21209, or at such other place, at such other time, or on such other date as the
parties may mutually agree upon (such date, the “Closing Date”).  At the Closing, there shall be delivered to
Acquiror and Target the certificates and other documents required to be
delivered under Article IX hereof. 
It is the parties’ goal that the Closing Date shall occur no later than
December 31, 2006.


(b)           As soon as practicable upon
satisfaction or waiver of the conditions set forth in Article IX (other
than those conditions that by their nature are to be satisfied at the
consummation of the Merger, but subject to the fulfillment or waiver of those
conditions), at the closing, the parties shall cause Articles of Merger in the
form of Exhibit C hereto (the “Articles of Merger”) to be filed with the
State Department of Assessments and Taxation of Maryland (the “SDAT”) pursuant to
the MGCL.  The Merger provided for herein
shall become effective at such time as the Articles of Merger have been
accepted for record by the SDAT, or such later time (not to exceed 30 days



 15
 









from the date of filing) designated by the parties in
the Articles of Merger in accordance with the MGCL; provided, however,
that such time shall not be on a date later than the Outside Date (the “Effective Time”).


ARTICLE IV.

MERGER CONSIDERATION; EXCHANGE PROCEDURES


4.01.        Conversion of Shares.


At
the Effective Time, by virtue of the Merger and without any action on the part
of a holder of shares of Target Common Stock:


(a)           The
aggregate merger consideration payable to holders of Target Common Stock issued
and outstanding immediately prior to the Effective Time (expressed as a number
of shares) is referred to as the “Merger Consideration”.  The Merger Consideration shall be comprised
of the Preferred Share Consideration and the Common Share Consideration.  For example, assume that the Debt Balance
were $129,648,266 (comprised of the Existing Retail Indebtedness of
$29,146,398, the Short Term Loan of $83,018,978 and the Assumed Loans of
$17,482,890), the Closing Adjustment Amount due by Target to Acquiror were
$2,000,000 and the Loan Escrows were $1,000,000.  The Merger Consideration Amount would be as
follows:




	
  

  	
  $

  	
  303,422,124

  	
   

  
	
  Debt Balance

  	
   

  	
  $

  	
  –129,648,266

  	
   

  
	
  Closing Adjustment Amount

  	
   

  	
  $

  	
  –2,000,000

  	
   

  
	
  Loan Escrows

  	
   

  	
  $

  	
  +1,000,000

  	
   

  
	
  Merger Consideration Amount

  	
   

  	
  $

  	
  172,773,858

  	
   

  






 


Further, assume
that the Preferred Share Consideration were designated by Target to be
2,830,000 Acquiror Convertible Preferred Shares.  The Preferred Share Consideration Amount
would therefore be 2,830,000 x $50 = $141,500,000.  The Common Share Consideration Amount would
therefore be:




	
  Merger Consideration Amount

  	
   

  	
  $

  	
  172,773,858

  	
   

  
	
  Preferred Share Consideration Amount

  	
   

  	
  $

  	
  –141,500,000

  	
   

  
	
  Common Share Consideration Amount

  	
   

  	
  $

  	
  31,273,858

  	
   

  






 


If the Calculation
Price were $45 per share, the Common Share Consideration would be $31,273,858 ÷
$45 = 694,974.62 Acquiror Common Shares.


“Merger Consideration Amount”
means (i) the excess of the Gross Value over the Debt Balance, (ii) increased
by any Closing Adjustment Amount owed by Acquiror to Target pursuant to Section
8.04, if applicable, or decreased by any Closing Adjustment Amount owed by
Target to Acquiror pursuant to Section 8.04, if applicable, as the case
may be, plus (iii) the amount of any loan escrows held by Target’s lenders in
connection with the Assumed Loans at the Effective Time, to the extent not
taken into account in



 16
 









computing the Debt
Balance (the “Loan
Escrows”).  The sum of
(ii) and (iii) is referred to as the “Aggregate Closing Adjustments”.


(b)           At the Effective Time, except as set
forth in subsections (c) and (d) below, each share of Target
Common Stock issued and outstanding immediately prior to the Effective Time
shall be converted into, and shall be canceled in exchange for, the right to
receive a pro rata share of the Merger Consideration.


(c)           Each share of Merger Subsidiary
Common Shares issued and outstanding immediately prior to the Effective Time
that is owned by Acquiror or by any Subsidiary of Acquiror, shall be converted
into and become one share of common stock of the Surviving Entity.


(d)           Each share of Target Common Stock
that is owned by Target or any of the Target Subsidiaries, or by Acquiror,
Merger Subsidiary or any other direct or indirect Subsidiary of Acquiror or
Merger Subsidiary, shall be cancelled and retired and shall cease to exist and
no cash, stock or any other consideration shall be delivered by Acquiror or
Merger Subsidiary in exchange therefor.


4.02.        Exchange Procedures.


(a)           Custody of Certificates and
Payment Fund.  At or prior to the
Effective Time, (i) Target shall acquire and hold for the Target Stockholders
pursuant to a Power of Attorney between the Liquidating Trust and the Target
Stockholders the certificate or certificates or affidavits of loss in
accordance with Section 4.02(e) hereof (collectively, the “Certificates”), which
immediately prior to the Effective Time represented shares of Target Common
Stock and (ii) Acquiror shall deposit or cause to be deposited with the
Liquidating Trust, for the benefit of the Target Stockholders for exchange in
accordance with this Article IV, full certificates representing Acquiror
Common Shares and Acquiror Convertible Preferred Shares in an amount sufficient
to satisfy the aggregate Merger Consideration (such aggregate certificates
being deposited hereinafter referred to as the “Payment Fund”).  The Liquidating Trust shall, pursuant to
irrevocable instructions, make payments out of the Payment Fund as provided for
in this Article IV, and the Payment Fund shall not be used for any other
purpose.


(b)           Exchange Procedures for Target
Common Stock.  After surrender to the
Liquidating Trust of a Certificate for cancellation, together with such Power
of Attorney duly executed, and such other customary documents as may reasonably
be required by the Liquidating Trust, upon the Effective Time, the holder of
such Certificate shall be entitled to receive the Merger Consideration in
exchange therefor for each share of Target Common Stock formerly represented by
such Certificate.  Such payment of the
Merger Consideration shall be sent to such holder by the Liquidating Trust
promptly after receipt by the Liquidating Trust of the Payment Fund, and the
Power of Attorney duly executed, and such other customary documents as may
reasonably be required by the Liquidating Trust, and the shares of Target
Common Stock formerly represented by such



 17
 









Certificate so
surrendered shall forthwith be canceled. 
No interest will be paid or will accrue on any cash payable upon the
surrender of a Certificate.


(c)           No Further Ownership Rights in
Stock.  Until surrendered as
contemplated by this Article IV, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration in respect of the shares of Target Common
Stock formerly represented by such Certificate as contemplated by this Section
4.02.  All shares paid upon the
surrender for exchange of Certificates in accordance with the terms of this Article
IV shall be deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Target Common Stock represented by such
Certificates.  After the Effective Time,
there shall be no further registration of transfers of shares of Target Common
Stock outstanding immediately prior to the Effective Time on the records of
Target, and if Certificates are presented to the Surviving Entity, they shall
be canceled and exchanged as provided for, and in accordance with the
procedures set forth, in this Article IV.


(d)           Unregistered Transfer of Stock.  If payment of the Merger Consideration is to
be made to a Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition of such payment that the
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the Person requesting such payment shall have
paid any transfer and any other Taxes required by reason of the payment to a
Person other than the registered holder of the Certificate surrendered or shall
have established to the satisfaction of the Surviving Entity that such Tax
either has been paid or is not applicable.


(e)           Lost Certificates.  In the event that any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Entity, an indemnity against any claim that may be made
against it with respect to such Certificate, the Liquidating Trust will issue,
in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration payable pursuant to this Article IV.


(f)            Termination of Payment Fund.  Any portion of the Payment Fund remaining
unclaimed by holders of Shares immediately prior to such time as such amounts
would otherwise escheat to or become property of any Governmental Authority
shall, to the extent permitted by applicable Law, become the property of the Liquidating
Trust free and clear of all claims or interest of any Persons previously
entitled thereto.


(g)           No Liability.  None of Acquiror, Merger Subsidiary, Target
or the Liquidating Trust, or any employee, officer, director, agent or
Affiliate thereof, shall be liable to any Person in respect of any cash from
the Payment Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law.


4.03.        Adjustments.


Notwithstanding
anything in this Agreement to the contrary, if, between the date of this
Agreement and the Effective Time, the outstanding shares of Target Common



 18
 









Stock shall be
changed into a different number, class or series of shares by reason of any
stock dividend, subdivision, reclassification, recapitalization, stock split,
combination or exchange of shares, then the Merger Consideration payable with
respect thereto and any other amounts payable pursuant to this Agreement shall
be appropriately adjusted in order to provide holders of Target Common Stock
the same economic effect as contemplated by this Agreement.


4.04.        Deposit.


Within one (1)
Business Day after the execution of this Agreement, Acquiror shall deposit with
the Cash Escrow Agent in cash Two Million Dollars ($2,000,000) which sum,
together with any interest earned thereon prior to the Closing Date, is
referred to as the “Deposit”,
pursuant to the Cash Escrow Agreement for the benefit of the Target
Stockholders.  The Deposit shall be held
in an interest bearing escrow account, pending disposition of the Deposit in
accordance with Section 8.01(b). 
At Closing of the Merger, the Cash Escrow Agent shall remit the Deposit
to Acquiror.


4.05.        Deposit of Escrow Shares and
Additional Escrow Shares.


(a)           As soon as practicable after the
Effective Time, and subject to, and in accordance with, the provisions of Section
7.07, Acquiror shall cause to be deposited with the Share Escrow Agent a
certificate or certificates representing a number of Acquiror Common Shares
(the “Escrow Shares”)
equal to Three Million Five Hundred Thousand Dollars ($3,500,000) of the Merger
Consideration Amount, which shall be registered in the name of the Share Escrow
Agent as nominee for the holders of Certificates cancelled pursuant to Section
4.02(b).  The Escrow Shares shall be
beneficially owned by such holders so that such holders shall be entitled to
any dividends or distributions (other than securities) and have the right to
vote the shares and shall be available to compensate Acquiror for certain
damages as provided in Section 7.07.  The Escrow Shares shall be released in
accordance with and subject to the provisions of Section 7.07 and the
Share Escrow Agreement.  At the Effective
Time, the Escrow Shares will not have been registered under the Securities
Act.  In accordance with the Registration
Rights Agreement, Acquiror will register the Escrow Shares with the SEC after
Closing pursuant to the Registration Statement.


(b)           As soon as practicable after the
Effective Time, and subject to, and in accordance with, the Additional Share
Escrow Agreement, Acquiror shall cause to be deposited with the Share Escrow
Agent a certificate or certificates representing a number of shares of Acquiror
Common Shares (the “Additional
Escrow Shares”) equal to Four Million Five Hundred Thousand
($4,500,000) of the Merger Consideration Amount, which shall be registered in
the name of the Share Escrow Agent as nominee for the holders of Certificates
cancelled pursuant to Section 4.02(b). 
The Additional Escrow Shares shall be beneficially owned by such holders
so that such holders shall be entitled to any dividends or distributions (other
than securities) and have the right to vote the shares and shall be available
to Acquiror as provided in the Additional Share Escrow Agreement.  The Additional Escrow Shares shall be
released in accordance with and



 19
 









subject to the
provisions of the Additional Share Escrow Agreement.  At the Effective Time, the Additional Escrow
Shares will not have been registered under the Securities Act.  In accordance with the Registration Rights
Agreement, Acquiror will register the Additional Escrow Shares with the SEC
after Closing pursuant to the Registration Statement.


ARTICLE V.

CONDUCT OF THE PARTIES PENDING CLOSING


5.01.        Conduct of Business by Target.


From the date
hereof until the earlier of the Effective Time and the termination of this
Agreement pursuant to and in accordance with Article X, except as
expressly contemplated or permitted by this Agreement or as disclosed in the
Target Disclosure Letter as noted specifically herein, without the prior
written consent of Acquiror, not to be unreasonably withheld, Target will not,
and will cause each of the Target Subsidiaries not to:


(a)           Ordinary
Course.  Conduct its business other
than in the ordinary and usual course consistent with past practice or fail to
use commercially reasonable efforts to preserve its business organization and
in no event enter into any commitment that would impose any obligation on
Acquiror, Target, Target Subsidiaries or the Surviving Entity after the Closing,
other than tenant improvements with respect to Target Properties Leases signed
after September 6, 2006 and other than as set forth in the Target Disclosure
Letter.


(b)           Acquisitions.  Except as set forth in Section 5.01(b)
of the Target Disclosure Letter, acquire all or any portion of the assets,
business or properties of any other entity.


(c)           Governing Documents.  Amend the Target Charter or the Target Bylaws
or the articles of incorporation or bylaws (or equivalent documents) of Target
or any Target Subsidiary.


(d)           Contracts.  Except in the ordinary course of business
consistent with past practice or as otherwise permitted under this Section 5.01
and except as disclosed in the Target Disclosure Letter, enter into or
terminate any Target Material Contract or amend or modify in any material
respect any of its existing Target Material Contracts.


(e)           Insurance.  Allow any insurance policy in effect as of
the date hereof to be modified, lapse or expire prior to Closing or fail to
file any claim, notice or report that Target would normally file in the
ordinary course of business or as reasonably requested by Acquiror.



 20
 









(f)            Future Obligations.  Grant any severance or termination pay to any
director, officer or consultant, pay any special bonus or any remuneration to
any director, officer or consultant, the terms of which would require any
payments to be made post-Closing.


(g)           Employees.  Hire any employees.


(h)           Litigation.  Commence a lawsuit other than for the routine
collection of bills, to protect a material right, or for a breach of this
Agreement.


(i)            Dispositions.  Sell, license or otherwise dispose of any
Target Properties.


(j)            Liens.  Encumber or permit any liens on any Target
Properties.


(k)           Notices.  Deliver a default notice to any tenant
without simultaneously delivering a copy of such notice to Acquiror.


(l)            Indebtedness.  Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, other than draw-downs under credit
arrangements or loan facilities existing on the date of this Agreement, and
other than the Short Term Loans.


(m)          Taxes.  Except as provided in Section 6.02(i)(xix),
make any Tax election, change any Tax election, adopt any Tax accounting
method, change any Tax accounting method, file any Tax return (other than any
estimated Tax returns, payroll Tax returns or sales Tax returns) or any
amendment to a Tax return, enter into any closing agreement, settle any Tax
claim or assessment, or consent to any Tax claim or assessment.


(n)           Target Properties Leases.  (i) Enter into any new leases in excess of
5,000 square feet with respect to a Target Property, (ii) modify or change in
any material respect any existing Target Property Lease in excess of 5,000
square feet or (iii) terminate any Target Property Lease in excess of 5,000
square feet.  For purposes of this Section
5.01(n), consent of Acquiror may be assumed in the event Target has not
received a response from Acquiror within two (2) Business Days of Target’s
request for consent.


(o)           Other Actions.  Authorize or enter into any agreement or
otherwise agree or commit to do any of the foregoing.


5.02.        Conduct of Acquiror.


From
the date hereof until the Effective Time, except as expressly contemplated or
permitted by this Agreement, without the prior written consent of Target, not
to be unreasonably withheld, Acquiror will not, and will cause each of the
Acquiror Subsidiaries not to:



 21
 









(a)           Interference
or Delay.  Take, or cause to be
taken, any action that would interfere with the consummation of the Transaction
and other transactions contemplated by this Agreement, or delay the
consummation of such transactions.


(b)           Adverse Actions.  Take any action that is intended or is
reasonably likely to result in (x) any of its representations and
warranties set forth in this Agreement being or becoming untrue in any material
respect at any time at or prior to the Effective Time or (y) any of the
conditions to the Transaction set forth in Article IX not being
satisfied.


(c)           Other Actions.  Authorize or enter into any agreement or
otherwise agree or commit to do any of the foregoing.


ARTICLE VI.

REPRESENTATIONS AND WARRANTIES


6.01.        Target Disclosure Letter.


Concurrently with
the execution and delivery of this Agreement, Target is delivering to Acquiror
a disclosure letter with numbered sections corresponding to the relevant
sections in this Agreement (the “Target Disclosure Letter”).  Any exception, qualification, limitation,
document or other item described in any provision, subprovision, section or
subsection of any Section of the Target Disclosure Letter with respect to a
particular representation or warranty contained in Section 6.02 herein
shall be deemed to be an exception or qualification with respect to all other
representations or warranties contained in Section 6.02 herein to which
the relevance of such item is reasonably apparent.  Nothing in the Target Disclosure Letter is
intended to broaden the scope of any representation or warranty contained in Section
6.02 herein.


6.02.        Representations and Warranties of
Target.


Subject
to the exceptions and qualifications set forth in the Target Disclosure Letter,
Target hereby represents and warrants to Acquiror, Acquiror OP and Merger
Subsidiary that:


(a)           Existence;
Good Standing; Authority; Compliance with Law.


(i)            Target
is a corporation duly incorporated, validly existing under the laws of the
State of Maryland and in good standing with the SDAT.  Target is duly qualified or licensed to do
business as a foreign entity and is in good standing under the laws of any
other jurisdiction in which the character of the properties owned, leased or
operated by it therein or in which the transaction of its business makes such
qualification or licensing necessary. 
Target has all requisite corporate power and authority to own, operate,
lease and encumber the Target Properties and carry on its business as now
conducted.



 22
 









(ii)           Section 6.02(a)(ii) of the
Target Disclosure Letter sets forth as of the Closing Date: (i) each Subsidiary
of Target (each, a “Target
Subsidiary,” and
collectively, the “Target
Subsidiaries”); (ii) the legal form of each Target Subsidiary,
including the state of formation; and (iii) the identity and ownership interest
of each of the Target Subsidiaries that is held by Target or a Target
Subsidiary.


(iii)          Each of the Target Subsidiaries is
duly organized, validly existing and is in good standing under the laws of the
State of Maryland.  Each of the Target
Subsidiaries is duly qualified or licensed to do business and in good standing
under the laws of each jurisdiction in which the character of the properties
owned, leased or operated by it therein or in which the transaction of its
business makes such qualification or licensing necessary.


(iv)          Except as set forth in Section 6.02(a)(iv)
of the Target Disclosure Letter, as of the Closing Date all of the outstanding
voting securities or other interests of each of the Target Subsidiaries have
been validly issued and are (i) fully paid and nonassessable and (ii) owned,
directly or indirectly, free and clear of any Lien (including any restriction
on the right to vote or sell the same, except as may be provided as a matter of
Law), and all voting interests in each of the Subsidiaries that is a
partnership, joint venture, limited liability company or trust which are owned
by Target, by one of the Target Subsidiaries or by Target and one of the Target
Subsidiaries, are owned free and clear of any Lien (including any restriction
on the right to vote or sell the same, except as may be provided as a matter of
Law).


(v)           Target has previously made available
to Acquiror true and complete copies of the (i) Target Charter and the Target
Bylaws, each as amended through the date hereof, (ii) minute books of meetings
of the Target’s Board and (iii) organizational documents of the Target
Subsidiaries, each as amended through the date hereof.


(vi)          Section 6.02(a)(vi) of the
Target Disclosure Letter sets forth as of the date hereof each Subsidiary of
Target; the legal form of such Subsidiary, including the state of formation,
and the identity and ownership interest of each of the Subsidiaries held
directly or indirectly by Target.


(b)           Capitalization.


(i)            The authorized shares of capital
stock of Target consist of 100,000 shares of Target Class A Common Stock, of
which, as of September 30, 2006, 15,000 were issued and outstanding, 300,000
shares of Target Class B Common Stock, of which, as of September 30, 2006,
75,000 were issued and outstanding and 600 shares of Target Class C Common
Stock, of which, as of September 30, 2006, none are issued and
outstanding.  As of the date of this
Agreement, there were no shares of Target Common Stock reserved for issuance  or required to be reserved for
issuance.  Section 6.02(b)(i) of
the Target Disclosure Letter sets forth a list of the Target Stockholders and
the shares of



 23
 









Target Common Stock owned by each.  There are no other classes of stock of Target
other than Target Common Stock.


(ii)           Section 6.02(b)(ii) of the
Target Disclosure Letter sets forth a list of all secured and unsecured debt
instruments outstanding as of the date hereof of Target and/or relating to the
Target Properties and their outstanding principal amounts as of December 1,
2006.  Target has no outstanding bonds,
debentures, notes or other similar obligations the holders of which have the
right to vote (or which are convertible into or exercisable for securities
having the right to vote) with the Target Stockholders on any matter.


(iii)          As of the Effective Time, there will
not be outstanding any share appreciation rights, dividend equivalent rights,
performance awards, restricted stock unit awards or “phantom” shares applicable
to Target or Target Subsidiaries.


(iv)          Except as set forth in Section
6.02(b)(iv) of the Target Disclosure Letter, there are no agreements or
understandings to which Target is a party with respect to shares of Target
Common Stock, nor does Target have knowledge, as of the date of this Agreement,
of any third party agreements or understandings with respect to the voting of
any such shares.


(v)           Immediately prior to the Closing,
each Target Subsidiary shall be wholly-owned by Target except as otherwise
shown on Schedule 2.  Neither Target nor
any Target Subsidiary has any agreement or commitment to sell or transfer any
of its stock, partnership or ownership interests, as the case may be.


(c)           Authority Relative to this
Agreement.


(i)            Target
has all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the Transaction. 
No other corporate proceedings on the part of Target is necessary to
authorize this Agreement or to consummate the Transaction (other than, with
respect to the Merger and this Agreement, to the extent required by Law, the
Stockholder Approval).  This Agreement
has been duly and validly executed and delivered by Target and, assuming due
authorization, execution and delivery hereof by each of Acquiror, Acquiror OP
and Merger Subsidiary, constitutes a valid, legal and binding agreement of
Target, enforceable against Target in accordance with and subject to its terms
and conditions, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar Laws of general applicability relating to or affecting creditors’ rights
or by general equitable principles.


(ii)           The
Target Board has duly and validly authorized the execution and delivery of this
Agreement, declared the Transaction advisable and approved, subject to the
approval of the Target Stockholders, the Transaction, and no other actions are
required to be taken by the Target Board for the consummation of the
Transaction.  The Target Board has
directed that this Agreement be submitted to the Target Stockholders for their
approval to the extent required by Law and the Target



 24
 









Charter and Target Bylaws.  The
Merger requires the affirmative vote of a two-thirds majority of all votes
entitled to be cast by the holders of all outstanding Target Common Stock as of
the record date for the Target Stockholder Meeting (the “Stockholder Approval”).  The Stockholder Approval is the only vote of
the holders of any class or series of stock of Target necessary to approve the
Transaction.


(d)           No Conflict; Required Filings and
Consents.


(i)            Except as set forth in Section
6.02(d)(i) of the Target Disclosure Letter, the execution and delivery by
Target of this Agreement does not, and the performance of its obligations
hereunder will not, (A) conflict with or violate the organizational
documents of Target or Target Subsidiaries, (B) assuming that all
consents, approvals, authorizations and other actions described in
subsection (ii) have been obtained and all filings and obligations
described in subsection (ii) have been made, conflict with or violate any
domestic statute, law, ordinance, regulation, rule, code, executive order,
injunction, judgment, decree or other order (“Law”) applicable to Target and Target
Subsidiaries or by which any Target Property or other property or asset of
Target or any of the Target Subsidiaries is bound or affected, or
(C) result in any breach of or constitute a default (or an event which,
with notice or lapse of time or both, would become a default) under, or give to
others any right of termination, amendment, acceleration or cancellation of, or
result in the creation of a Lien or other encumbrance on any Target Property or
other property or asset of Target or any of the Target Subsidiaries pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, except, with respect to
clauses (B) and (C), for any such conflicts, violations, breaches, defaults or
other occurrences that would not (x) prevent or delay consummation of the
Transaction or otherwise prevent it from performing its obligations under this
Agreement or (y) have a Target Material Adverse Effect.


(ii)           Except as set forth in Section
6.02(d)(ii) of the Target Disclosure Letter, the execution and delivery by
Target of this Agreement does not, and the performance of its obligations
hereunder will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Authority except
(A) for the filing of the Articles of Merger with, and the acceptance for
record of the Articles of Merger by, the SDAT and (B) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not (x) prevent or delay consummation of the
Transaction or otherwise prevent it from performing its obligations under this
Agreement or (y) have a Target Material Adverse Effect.


(e)           Permits; Compliance.  Except as set forth in Section 6.02(e)
of the Target Disclosure Letter, to the knowledge of Target, each of Target and
the Target Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, consents, certificates, approvals and orders
of any Governmental Authority necessary for each of Target or the Target
Subsidiaries to own, lease and operate the Target Properties or to carry on its
business as it is now being conducted (the “Applicable Permits”),



 25
 









except where the failure to have, or the suspension or
cancellation of, any of the Applicable Permits could not reasonably be expected
to have a Target Material Adverse Effect. 
As of the date hereof, no suspension or cancellation of any of the
Applicable Permits is pending or, to the knowledge of Target, threatened,
except where the failure to have, or the suspension or cancellation of, any of
the Applicable Permits could not reasonably be expected to have a Target
Material Adverse Effect.  Neither Target
nor any of the Target Subsidiaries is in conflict with, or in default, breach
or violation of, (i) any Law applicable to Target or any of the Target
Subsidiaries or by which any of the Target Properties or assets is bound or
affected, or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, Applicable Permit, franchise or other instrument or
obligation to which Target or any of the Target Subsidiaries is a party or by
which Target or any of the Target Subsidiaries or any of their properties or
assets is bound, except for any such conflicts, defaults, breaches or
violations that could not reasonably be expected to have a Target Material
Adverse Effect.


(f)            Litigation.  Except (i) as listed in Section 6.02(f)
of the Target Disclosure Letter, or (ii) for suits, claims, Actions,
proceedings or investigations arising in the ordinary course of business of
Target and the Target Subsidiaries which are adequately covered by insurance
(it being understood that litigation (A) arising from or related in any way to
Hazardous Materials or (B) related to any landlord/tenant rent collection
proceeding or regarding Target Properties Leases in excess of 5,000 square feet
shall not be considered in the ordinary course of business), there is no suit,
Action pending or, to Target’s knowledge, threatened against Target or any of
the Target Subsidiaries or any of the Target Properties that could reasonably
have a Target Material Adverse Effect or that question the validity of this
Agreement or any action to be taken by Target in connection with the
consummation of the Transaction.  None of
Target or the Target Subsidiaries is subject to any order, judgment, writ,
injunction or decree by any Governmental Authority, except as could not
reasonably be expected to have a Target Material Adverse Effect.


(g)           Target
Properties and Target Properties Leases.


(i)            Prior
to the Closing Date, the Target Properties shall be owned by the entities shown
on Schedules 1, 2 and 4 hereof and no other person will have any
ownership interest in or right to share in the profits of any Target Property.


(ii)           Target
has provided Acquiror all policies of title insurance or updates or
endorsements that are in the possession of Target with respect to the Target
Properties, and no claim has been made against any such policy that has not
been resolved and, to Target’s knowledge, there are no facts or circumstances
which would constitute the basis for such a claim.  Except as set forth in Section 6.02(g)(ii)
of the Target Disclosure Letter, to Target’s knowledge and subject to matters
of record, there are no material exceptions not shown on such title insurance
policies.


(iii)          All buildings currently under
construction by the Target Group on the Target Properties, all construction
projects and building maintenance and



 26
 









improvements currently ongoing, all tenant
improvements required to be performed under the Target Properties Leases prior
to the commencement of the initial term of a Target Properties Lease or an
existing expansion or renewal thereof that have not been so completed as of the
date of this Agreement (and have been designated as Pre-LOI TI Work and other
work), and all properties currently under contract for acquisition as of the
date of this Agreement by the Target or Target Subsidiaries are listed as such
in Section 6.02(g)(iii) of the Target Disclosure Letter, other than
routine building maintenance in the ordinary course of business not exceeding
$2,500.


(iv)          Except as provided in Section
6.02(g)(iv) of the Target Disclosure Letter, none of the Target Group (A)
has received written notice of any violation of any Law issued by any
Governmental Authority, (B) has received written notice of any structural defects
relating to any Target Property which would reasonably be expected to have a
Target Material Adverse Effect, or (C) has received written notice of any
physical damage to any Target Property which would, individually or in the
aggregate, reasonably be expected to have a Target Material Adverse Effect for
which there is not insurance in effect covering the cost of the restoration and
the loss of revenue.


(v)           Except as set forth in Section
6.02(g)(v) of the Target Disclosure Letter, no tenant or third party has
any option to purchase any of the Target Properties, rights of first refusal or
other agreements to purchase or sell any Target Properties, other than as set
forth in the Target Properties Leases.


(vi)          Except (A) as set forth in Section
6.02(g)(vi) of the Target Disclosure Letter, (B) for the Target Properties
Leases and (C) for secured loan documents entered into in the ordinary course
of business, there are no written agreements which restrict the Target Group
from transferring any of the Target Properties, and none of the Target
Properties is subject to any restriction on the sale or other disposition
thereof or on the financing or release of financing thereon.


(vii)         To the knowledge of Target, (i) no
certificate, permit or license from any Governmental Authority having
jurisdiction over any of the Target Properties or any agreement, easement or
other right which is necessary to permit the lawful use and operation of the
buildings and improvements on any of the Target Properties or which is necessary
to permit the lawful use and operation of all driveways, roads, parking areas,
out lots, and other means of egress and ingress to and from any of the Target
Properties has not been obtained and is not in full force and effect, and there
is no pending threat of modification or cancellation of any of the same; and
(ii) no written notice of any violation of any federal, state or municipal law,
ordinance, order, regulation or requirement affecting any portion of any of the
Target Properties has been received by any of the Target Group with respect to
the Target Properties from any Governmental Authority and none of the Target
Properties has received notice that any of the Target Properties are in
violation of any such federal, state or municipal law, order, ordinance,
regulation or requirement, including, without limitation, the Americans with
Disabilities Act, except for such violations that would not have a Target
Material Adverse Effect on the value of any of the Target Properties,
individually or in the aggregate.



 27
 









(viii)        Except as set forth in Section
6.02(g)(viii) of the Target Disclosure Letter, there are no condemnation
proceedings pending, or to Target’s Knowledge, threatened, against any of the
Target Properties.


(ix)           None of the Target Group has received
any notice to the effect that (A) any betterment assessments have been levied
against, or rezoning proceedings are pending or threatened with respect to, any
of the Target Properties or (B) any zoning, building or similar law, code,
ordinance, order or regulation is or will be violated by the continued
maintenance, operation or use of any buildings or other improvements on any of
the Target Properties or by the continued maintenance, operation or use of the
parking areas.


(x)            Section 6.02(g)(x) of the Target
Disclosure Letter sets forth a true, accurate and complete rent roll for each
of the Target Properties (the “Rent Roll”) as of the date specified in the Target
Disclosure Letter.  On the Closing Date, Section
6.02(g)(x) of the Target Disclosure Letter will be updated by Target to
reflect the Rent Roll as of two (2) Business Days prior to the Closing
Date.  Section 6.02(g)(x) of the
Target Disclosure Letter sets forth a report listing all tenant delinquencies
(the “Delinquency Report”)
as of the date specified in the Target Disclosure Letter.  On the Closing Date, Section 6.02(g)(x)
of the Target Disclosure Letter will be updated by Target to reflect the
Delinquency Report as of two (2) Business Days prior to the Closing Date.  Except as noted in Section 6.02(g)(x)
of the Target Disclosure Letter, to Target’s knowledge, there is no violation
of any co-tenancy, exclusive or restriction listed in such Section
6.02(g)(x) of the Target Disclosure Letter.


(xi)           Except as set forth in the Target
Disclosure Letter, Target has previously delivered or made available to
Acquiror a true, complete and correct copy of all Target Properties Leases,
tenancies or other agreements for all or any portion of the Target Properties
listed on the Rent Roll, all amendments, modifications, assignments, subleases
to which any member of the Target Group has consented and supplements thereto
and all guarantees with respect thereto.


(xii)          Each of the Target Properties Leases
is valid and subsisting and in full force and effect and has not been amended,
modified or supplemented.  Except as
noted in Section 6.02(g)(xii) of the Target Disclosure Letter, to the
knowledge of Target, other than as set forth in the Target Properties Leases,
no tenant under a Lease has the right to terminate such lease prior to the
scheduled expiration thereof.  Except as
set forth in Section 6.02(g)(xii) of the Target Disclosure Letter, none
of the Target Group has received any written notice from any tenant under a
Target Property Lease of more than 5,000 square feet of any intention to
vacate.


(xiii)         Except as set forth in Section
6.02(g)(xiii) of the Target Disclosure Letter, no member of the Target
Group has received written notice from any tenant under a Lease of any offset,
defense or claim against rent payable by it or other performance of obligations
due from it under its lease.



 28
 









(xiv)        Except as set forth in Section
6.02(g)(xiv) of the Target Disclosure Letter, to Target’s knowledge and
without independent investigation, no tenant under a Lease is currently in
default under any monetary provision of its lease nor is any tenant under a
Lease currently in material default under any non-monetary provision of its
lease, and no such tenant is in arrears in the performance of any monetary
obligation required of it under its lease. 
Except as set forth in Section 6.02(g)(xiv) of the Target
Disclosure Letter, Target, to Target’s knowledge and without independent
investigation, is not aware of any facts or circumstances which with the
passage of time and/or notice would constitute a default by any tenant under a
Lease.


(xv)         Except as set forth in Section
6.02(g)(xv) of the Target Disclosure Letter, Target has received no written
notice stating that any tenant leasing in excess of 5,000 square feet under a
Lease is insolvent or that any such tenant is unable to perform any or all of
its material obligations under its lease.


(xvi)        Except as set forth in Section
6.02(g)(xvi) of the Target Disclosure Letter, no tenant under any of the
Target Properties Leases, or any guarantor, has asserted any claim of which the
Target Group has received written notice which would materially affect the
collection of rent from such tenant and the Target Group has not received
written notice of any material default or breach on the part of the Target
Group under any of the Target Properties Leases which has not been cured within
the applicable cure period.


(xvii)       Section 6.02(g)(xvii) of the
Target Disclosure Letter sets forth a list of all written commitments made by
the Target Group to enter into leases of 5,000 square feet or more of any of
the Target Properties or any portion thereof which has not yet been reduced to
a written lease, including a description of the right of any third party broker
to any outstanding brokerage or other commission incidental thereto and all
other financial terms, all in reasonable detail.  Section 6.02(g)(xvii) of the Target
Disclosure Letter also sets forth a complete list of all brokerage or other
commissions owed in whole or part as of the date hereof by the Target Group
relating to the Target Properties. 
Target has provided true and correct copies of all such written
commitments to Acquiror.


(xviii)      Except as set forth in Section
6.02(g)(xviii) of the Target Disclosure Letter and to the knowledge of
Target, all Target Properties Leases are valid and effective in accordance with
their respective terms, and there is not, under any of such Target Properties
Leases, any material existing default or any event which with notice or lapse
of time or both would constitute such a default, nor do any of such Target
Properties Leases contain any provision which would preclude the Surviving
Entity, a Target Subsidiary or a NPI Entity from occupying and using the leased
premises for the same purposes and upon substantially the same rental and other
terms as are applicable to the occupation and current use by the Target Group.


(xix)         Section 6.02(g)(xix) of the
Target Disclosure Letter sets forth a list of all of the letters of credit with
respect to which Target has any liability,



 29
 









classified as (A) those letters of credit for which
Acquiror will substitute letters of credit and if such letters of credit are
drawn upon, Target shall reimburse Acquiror the amount of such draw (the “Target Properties Escrow LCs”),
(B) those letters of credit for which Acquiror will substitute letters of
credit and assume all obligations thereunder (the “Target Properties LCs”)
and (C) letters of credit relating to properties other than Target Properties
(the “Non-Target
Properties Letters of Credit”).


(xx)          Except as set forth in Section
6.02(g)(xx) of the Target Disclosure Letter, Target Group has not received
any notices of threatened claims regarding the Target Properties.


(xxi)         A true and correct copy of the
Acquisition Agreement has been supplied to Target and there have been no
amendments thereof.  Miles &
Stockbridge P.C. is the escrow agent under such Acquisition Agreement and is
holding the $800,000 Sewer System Credit (as such term is defined therein)
pursuant to Section 6.3 of such Acquisition Agreement and none of the Sewer
System Credit has been spent.  Work in
connection with the Sewer System (as such term is defined in the Acquisition
Agreement) has been performed by Target or Target Subsidiaries and the cost of
such work incurred since September 6, 2006 shall be determined prior to
Closing.


(h)           Intellectual
Property.  Except as would not have a
Target Material Adverse Effect, (i) the conduct of business of the Target
Group as currently conducted with respect to the Target Properties does not, to
Target’s knowledge, infringe the Intellectual Property rights of any third
parties and (ii) with respect to Intellectual Property owned by or
licensed to the Target Group and material to the Target Properties, the Target
Group has not received any notice that it does not have the right to use such
Intellectual Property in the continued operation of its business as currently
conducted.


(i)            Taxes.


(i)            There
are no Liens for Taxes upon any assets of the Target Group, except for
Permitted Liens.


(ii)           Each of the Target Group has timely
filed with the appropriate taxing authority all Tax Returns required to be
filed by it prior to the date hereof. 
Each such Tax Return is complete and accurate in all material respects.  All Taxes have been properly reflected in the
statements of operations of the Target Group, and have been paid prior to the
imposition of any penalty.  None of the
Target Group has executed or filed with the IRS or any other taxing authority
any agreement now in effect extending the period for assessment or collection
of any Tax.  Except as set forth in Section
6.02(i)(ii) of the Target Disclosure Letter, none of the Target Group is a
party to any pending action or proceedings by any taxing authority for
assessment or collection of any Tax, and no claim for assessment or collection
of any Tax has been asserted against it. 
Except as set forth in the Target Disclosure Letter, true and complete
copies of all federal, state and local income or franchise Tax Returns filed by
each member of the Target Group with respect to taxable years commencing on or
after January 1, 2003 have



 30
 









been delivered to Acquiror.  No claim has been made in writing by a
Governmental Authority in a jurisdiction where the Target Group does not file
Tax Returns that it is or may be subject to taxation by that jurisdiction.
There is no dispute or claim concerning any Tax liability of the Target Group,
(A) claimed or raised by any taxing authority in writing or (B) as to which the
Target Group has knowledge.  No issues
have been raised in writing in any examination by any taxing authority with
respect to the Target Group which, by application of similar principles,
reasonably could be expected to result in a material deficiency or increase in
Tax for any other period not so examined. Section 6.02(i)(ii) of the
Target Disclosure Letter lists all federal and state income Tax Returns filed
with respect to the Target Group for taxable periods commencing on or after
January 1, 2003 that have been audited, and indicates those Tax Returns, if
any, that currently are the subject of audit.


(iii)          Target and the Stockholders of Target
as of April 1, 1998 made a valid election for Target to be treated as an “S
corporation”, as that term is defined in Section 1361(a) of the Code, and such
election will be in effect at the Closing Date. 
There are no grounds for the revocation of any such election and no such
election will be revoked retroactively or otherwise.  Target has been an S corporation from
April 1, 1998 through the date hereof. 
Neither Target nor any of the stockholders of Target has taken any
action that would cause, or would result in, the termination of the S
corporation status of the Target.


(iv)          Section 6.02(i)(iv) of the
Target Disclosure Letter contains a copy of the Target’s election to be treated
as an S corporation, which was timely filed with the IRS and has not been
superseded by any subsequent filing.  The
IRS has not sent any correspondence to Target questioning the Target’s status
as an S corporation.


(v)           Target (A) shall be taxed as an S
corporation through the Closing Date and has complied (and will comply) with
all applicable provisions of the Code relating to an S corporation through the
Closing Date, (B) has operated, and intends to continue to operate, in such a
manner as to qualify as an S corporation from 1998 and through Closing, and (C)
has not taken or omitted to take any action which would reasonably be expected
to result in a challenge to its status as an S corporation during such time
period, and, to the knowledge of Target, no such challenge is pending or
threatened.


(vi)          Target, for all taxable years
commencing as of April 1, 1998, was eligible to and did validly elect to be
taxed as an S corporation for federal income tax purposes and at all times
thereafter continued such election and continued to be so eligible to be taxed
as an S corporation for federal income tax purposes.  The “built-in gain”, as of December 31, 2005,
of the assets owned indirectly by Target as listed on Section 6.02(i)(vi)
of the Target Disclosure Letter is true, accurate and complete.


(vii)         Target shall not revoke its election to
be taxed as an S corporation within the meaning of Sections 1361 and 1362 of
the Code.  Target shall not



 31
 









take or allow any action that would result in the
termination of its status as a validly electing S corporation within the
meaning of Sections 1361 and 1362 of the Code.


(viii)        Any disposition of the assets of Target
and/or any of the Target Subsidiaries, other than those listed on Section
6.02(i)(viii) of the Target Disclosure Letter, will not be subject to the
rules under Section 1374 of the Code.  As
of Closing, Target shall have no earnings and profits accumulated in any “non-REIT
year” within the meaning of Section 857(a)(2) of the Code.


(ix)           Target and each of the Target
Subsidiaries have withheld and paid all Taxes required to have been withheld
and/or paid in connection with amounts paid or owing to any employee, former
employee, independent contractor, creditor, stockholder, or other third party.


(x)            Target has not owned, directly or
indirectly, an interest in any Subsidiary other than (A) a “qualified
subchapter S subsidiary” within the meaning of Section 1361(b)(3)(B) of the
Code, (B) an entity disregarded for federal income tax purposes or (C) an
entity treated as a partnership for federal income tax purposes.


(xi)           Neither Target nor any of the Target
Subsidiaries has made any election, or is required, to treat any asset of any
Subsidiary as owned by another person for tax purposes (other than by reason of
a Subsidiary being a “qualified S corporation subsidiary” or a “disregarded
entity” for federal income tax purposes and any comparable provision of state,
local or foreign law and except with respect to assets beneficially owned by a
Subsidiary and record title to which is held by another entity).


(xii)          Neither Target nor any of the Target
Subsidiaries has requested, received or is subject to any written ruling of a
taxing authority related to Taxes or has entered into any written and legally
binding agreement with a taxing authority relating to Taxes.


(xiii)         Neither Target nor any of its
Subsidiaries (A) is a party to or is otherwise subject to any Tax allocation or
sharing agreement other than pursuant to the Target Properties Leases or
matters appearing in the land records and (B) has any liability for the Taxes
of another person under law, by contract or otherwise.


(xiv)        Neither Target nor any Target Subsidiary
is a party to any so-called “tax increment financing” or similar agreement and
none of the Target Properties are located within or subject to any tax
increment financing or other special tax district.


(xv)         Target is not and has not been subject
to passive income tax under Section 1375 of the Code.  Target and Target Subsidiaries have not had
gross receipts for any three consecutive fiscal years subsequent to the taxable
year ended December 31, 1998 of which more than twenty-five percent (25%) were “passive
investment income” (as such term is defined in Section 1362(d)(3)(C) of the
Code).



 32
 









(xvi)        Except as set forth in Section
6.02(i)(xvi) of the Target Disclosure Letter, Target has not acquired
assets from another corporation in which the Target’s tax basis for the
acquired assets was determined, in whole or in part, by reference to the tax
basis of the acquired assets (or any other property) in the hands of the
transferor.


(xvii)       As of the Effective Time, Target will
have no earnings and profits for federal income tax purposes that were
accumulated in any taxable year to which the provisions
of Sections 856 through 859 of the Code did not apply with
respect to Target or any Predecessor.  For purposes of this
representation, “Predecessor”
means any corporation the earnings and profits of which Target is required
to take into account under Section 381(c) of the Code, by one or more
successive applications of such Section.


(xviii)      The tax basis as of December 31, 2005 of
the Merger Properties and the Retail Properties is shown in Section
6.02(i)(xviii) of the Target Disclosure Letter and is true, accurate and
complete.


(xix)         Target agrees to timely file the
federal and state income tax returns for Target and Target Subsidiaries for the
final taxable year ending immediately prior to the Effective Time.  Target will timely make an election under Treasury
Regulation Section 1.1368-1(f)(3) to distribute all of its “subchapter C”
earnings and profits through a deemed dividend to the Target Stockholders with
respect to the final taxable year of Target ending immediately prior to the
Effective Time.


(j)           Environmental Matters.  Except as disclosed in Section 6.02(j)
of the Target Disclosure Letter or in the environmental audits/reports listed
thereon (all representations being made only to the knowledge of Target):


(i)            None
of the Target Group has received written notice that any complaint has been
filed that remains unresolved, any penalty has been assessed that has not been
paid and any investigation or review is pending or threatened by any
Governmental Entity with respect to any alleged failure by the Target Group to
have any permit required under any applicable Environmental Law or with respect
to any treatment, storage, recycling, transportation, disposal or “release” (as
defined in 42 U.S.C. § 9601(22) (“Release”)) by the Target Group of any
Hazardous Material in violation of any applicable Environmental Law.


(ii)           Except
in material compliance with applicable Environmental Laws, (A) there are no
asbestos-containing materials present on any Target Property, (B) there are no
regulated levels of PCBs present on any Target Property, and (C) there are no
underground storage tanks, active or abandoned, used for the storage of
Hazardous Materials currently present on any Target Property.


(iii)          None
of Target, NPI or any Target Subsidiary has received written notice of a claim
against any of them, that has not been resolved, to the effect that it is
liable to a third party, including a Governmental Entity, as a result of a
Release of a



 33
 









Hazardous Material into the environment in material violation of any
applicable Environmental Law at any Target Property nor has any reason to
believe such a claim is expected.


(iv)          None
of the Target Group has received written notice of (A) any Liens arising under
or pursuant to any applicable Environmental Law on any Target Property or (B)
any action taken or in process which could subject any Target Property to such
Liens.  The Target Group currently does
not have any duty under any applicable Environmental Law to place any
restriction relating to the presence of Hazardous Material at any Target
Property which have not already been placed.


(v)           None
of the Target Group has transported or arranged for the transportation of any
Hazardous Material to any location which is the subject of any action, suit or
proceeding that could be reasonably expected to result in claims against the
Target Group related to such Hazardous Material for clean-up costs, remedial
work, damages to natural resources or personal injury claims, including claims
under CERCLA and the rules and regulations promulgated thereunder and, to the
knowledge of Target, there is no reasonable basis for such claim.


(vi)          No
Hazardous Materials have been or are threatened to be spilled, released,
discharged or disposed of at any site presently or formerly owned, operated,
leased or used by the Target Group, or, to the knowledge of Target, are present
in the soil, sediment, water or groundwater at any such site.  No Target Property is listed or proposed for
listing on the National Priorities List promulgated pursuant to CERCLA or on
any similar list of sites under any applicable Environmental Law of any other
Governmental Entity where such listing requires active investigation or
clean-up.


(vii)         None
of the Target Group has in its possession or control any environmental
assessment or investigation reports prepared within the last five years that
disclose a material environmental condition with respect to the Target
Properties which has not been addressed or remediated (or is not in the process
of being remediated) or been made the subject of an environmental insurance
policy maintained by the Target Group.


(viii)        Except
as set forth in Section 6.02(j)(viii) of the Target Disclosure Letter,
Target has not entered into any agreements to provide indemnification to any
third party purchaser since January 1, 2003, or to any lender with respect to
existing loans, pursuant to Environmental Laws in relation to any property or
facility previously owned or operated by the Target Group.


(ix)           The
backup generator at 9930 Franklin Square Drive that exhibited oil spill
characteristics was the result of an overfill, not a spill, and there is no
subsurface impact.


(k)           Contracts.  Except for the Target Material Contracts,
neither Target nor any Target Subsidiary is a party to or bound by any contract,
other than (i) those contracts entered into in the ordinary course of business
consistent with past practice that



 34
 









do not extend beyond the Closing Date or are
terminable at the option of Target without penalty and (ii) public works
agreements, utility, grading, storm water management and other development
agreements or permits that are binding on Target or Target Subsidiaries as
of the date hereof but which shall be assigned by Target or Target
Subsidiaries prior to the Effective Time as a result of which neither Target
nor any Target Subsidiary shall have any liability thereunder as of the
Effective Time.  Copies of all of the
Scheduled Contracts have been provided to Acquiror and are true and correct.  None of the Target Group has received any
notice of a default that has not been cured under any of the Scheduled
Contracts or is in default respecting any payment obligations thereunder beyond
any applicable grace periods except where such default has not had or could not
reasonably be expected to have a Target Material Adverse Effect or such default
would not prevent or delay consummation of the Transaction.


(i)            Each
Target Material Contract is valid and binding on each Target Group party
thereto, and none of the Target Group is in default under any Target Material
Contract, except as would not (A) prevent or materially delay consummation of
the Transaction, or (B) result in a Target Material Adverse Effect.


(l)           Insurance.  Section 6.02(l) of the Target
Disclosure Letter sets forth a correct and complete list of the insurance
policies held by, or for the benefit of, the Target Group, including the
underwriter of such policies and the amount of coverage thereunder.  The Target Group has paid, or caused to be
paid, all premiums due under such policies and has not received written notice
that any such member is in default with respect to any obligations under such
policies.  None of the Target Group has
received any written notice of cancellation or termination with respect to any
existing insurance policy set forth in Section 6.02(l) of the Target
Disclosure Letter that is held by, or for the benefit of, any of the Target
Group.  Except as set forth in Section
6.02(l) of the Target Disclosure Letter, in the past three (3) years there
have been no claims made under or against the insurance policies listed
thereon.  Effective upon the date hereof,
Acquiror, Acquiror OP and the Surviving Entity shall be named as additional
insureds, as their interests may appear, with respect to all of the insurance
policies held by or for the benefit of the Target Group as they relate to the
Target Properties.  Target will include
all Target Subsidiaries as additional insureds under such policies.


(m)         Related Party Transactions.  Except as set forth in Section 6.02(m)
of the Target Disclosure Letter and except for ordinary course advances to
employees, set forth in Section 6.02(m) of the Target Disclosure Letter
is a list of all arrangements, agreements and contracts entered into by Target
or any of the Target Subsidiaries under which continuing obligations exist with
any Person who is an officer, director or Affiliate of Target or any of the
Target Subsidiaries, any member of the “immediate family” (as such term is
defined in Item 404 of Regulation S-K promulgated under the Securities Act) of
any of the foregoing or any entity of which any of the foregoing is an
Affiliate.


(n)         Brokers.  No broker, finder or investment banker (other
than Wachovia Capital Markets, LLC) is entitled to any brokerage, finder’s or
other fee or commission in connection with the Transaction based upon
arrangements made by or on



 35
 









behalf of Target, Target
Subsidiaries or NPI.  At Closing, Target
shall have delivered to Acquiror a release by Wachovia Capital Markets, LLC in
the form attached hereto as Exhibit D releasing Acquiror, Acquiror OP
and the Surviving Entity from any liability for any brokerage, finder’s or
other fee or commission due to Wachovia Capital Markets, LLC relating to the
Merger and except as set forth in the documents evidencing the Short Term Loan.


(o)           Labor and ERISA Matters.


(i)            None
of the Target Group is a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor union organization. There is no unfair labor practice or labor
arbitration proceeding pending or, to the knowledge of Target, threatened
against the Target Group, except for any such proceeding which have not had or
could not reasonably be expected to have a Target Material Adverse Effect. To
the knowledge of Target, there are no organizational efforts with respect to
the formation of a collective bargaining unit presently being made or
threatened involving employees of the Target Group.


(ii)           Target
has never had any employees, has never maintained any employee benefit plans
(including, without limitation employee benefit plans within the meaning of
Section 3(3) of ERISA) except as disclosed on Section 6.02(o)(ii) of the
Target Disclosure Letter, and, except as disclosed on Section 6.02(o)(ii)
of the Target Disclosure Letter, as of the Effective Time shall not have any
liabilities or contingent liabilities with respect to employee benefit plans
maintained by any member of the Target Group or any ERISA Affiliate of
Target.  The transactions contemplated by
this Agreement will not result in any liability or obligation, contingent or
otherwise as of the Effective Time, to Target, the Surviving Entity, nor any
ERISA Affiliate of the Surviving Entity, with respect to employees or employee
benefit plans of any member of the Target Group or any ERISA Affiliate of
Target, except for any obligations assumed as set forth in Section 8.07.  Section 6.02(o)(ii) of the Target
Disclosure Letter is a complete and accurate list of all employee benefit plans
and deferred compensation plans (including, without limitation, employee
benefit plans within the meaning of Section 3(3) of ERISA) in which employees
of the Target Group whose employment involves services in connection with the
Target Properties participate.  As of the
date hereof, all persons owed any money under the section “Employee Benefit
Plans of Target” set forth in Section 6.02(o)(ii) of the Target
Disclosure Letter are listed in Section 6.02(o)(ii) of the Target
Disclosure Letter under the section “List of Persons Owed Money Under Target
Employee Benefit Plans.”  All obligations
under the “Employee Benefit Plans of Target” set forth in Section
6.02(o)(ii) of the Target Disclosure Letter shall be fully paid and
satisfied at or prior to Closing, other than the Dollenberg Retirement
Obligations.  Except for any obligations
assumed as set forth in Section 8.07 of this Agreement and except for
the Dollenberg Retirement Obligations, Target shall have no liability under any
of the “Employee Benefit Plans of NPI” set forth in Section 6.02(o)(ii)
of the Target Disclosure Letter.  At the
Effective Time, all employee benefit plans and deferred compensation



 36
 









plans applicable to Target or Target Subsidiaries shall be terminated,
except for the Dollenberg Retirement Obligations.


(p)           Office
Assumed Loans.  Copies of all
documents evidencing and relating to the Office Assumed Loans (the “Office Assumed Loan Documents”)
have been provided to Acquiror and are true and correct.  None of the Target Group has received any
notice of a default that has not been cured under any of the Office Assumed
Loan Documents or is in default respecting any payment obligations thereunder
beyond any applicable grace periods. 
None of the Target Group is aware of any default by Target under the
Office Assumed Loan Documents that has not been previously disclosed to
Acquiror and cured by Target.


(q)           Personal Property.  At Closing, Target shall own all of the
personal property set forth in Section 6.02(q) of the Target Disclosure
Letter free and clear of any liens and encumbrances.


(r)            No Undisclosed Liabilities;
Indebtedness.  As of the Closing
Date, the only liabilities of Target and Target Subsidiaries shall be the
Assumed Loans, the Short Term Loan, and the liability, if any, under those
Scheduled Contracts which have not been terminated or assigned to the
Liquidating Trust or another party prior to the Effective Date.  There have been and are no defaults under the
Office Assumed Loan Documents or the Short Term Loan Documents.  To Target’s knowledge, Columbia Equity
Finance LLC, Rivers Center III Investors LLC and Woods Investors LLC have
complied, since their inception, with all single purpose entity and bankruptcy
remote requirements under the loan documents to which each is a party.  As of the Closing Date, the only liabilities
of the Retail Entities for monies borrowed shall be the Existing Retail
Indebtedness.  As of the Closing Date,
the maximum aggregate amount due under the Existing Retail Indebtedness, the
Short Term Loan and the Assumed Loans shall be $129,648,266 (which has been
computed assuming Existing Retail Indebtedness of $29,146,398, Short Term Loan
of $83,018,978 and Assumed Loans of $17,482,890).


(s)           No Other Representations or
Warranties.


(i)            Except for the representations and
warranties contained in Section 6.02 of this Agreement, Acquiror,
Acquiror OP and Merger Subsidiary acknowledge that none of Target, NPI or nor
any other Person or entity on behalf of Target or NPI has made, and none of
Acquiror, Acquiror OP or Merger Subsidiary has relied upon, any representation
or warranty, whether express or implied, with respect to Target, NPI or any of
the Target Subsidiaries or their respective businesses, affairs, assets,
liabilities, financial condition, results of operations or prospects or with respect
to the accuracy or completeness of any other information provided or made
available to Acquiror and Merger Subsidiary by or on behalf of Target or
NPI.  None of Target, NPI or any other
Person or entity will have, or be subject to, any liability or indemnification
obligation to Acquiror, Acquiror OP, Merger Subsidiary or any other Person or
entity resulting from the distribution in written or verbal communications to
Acquiror or Merger Subsidiary or use by Acquiror, Acquiror OP or Merger
Subsidiary of, any such



 37
 









information, including
any information, documents, projections, forecasts or other material made
available to Acquiror, Acquiror OP or Merger Subsidiary in online “data rooms,”
confidential information memoranda or management interviews and presentations
in expectation of the transactions contemplated by this Agreement.


(ii)           In connection with any investigation
by Acquiror, Acquiror OP and Merger Subsidiary of Target, the Target
Subsidiaries and the Target Properties, Acquiror and Merger Subsidiary have
received or may receive from Target and the Target Subsidiaries and/or other
persons or entities on behalf of Target certain projections, forward-looking
statements and other forecasts and certain business plan information in written
or verbal communications.  Acquiror,
Acquiror OP and Merger Subsidiary acknowledge that there are uncertainties
inherent in attempting to make such estimates, projections and other forecasts
and plans, that Acquiror, Acquiror OP and Merger Subsidiary are familiar with
such uncertainties, that Acquiror, Acquiror OP and Merger Subsidiary are taking
full responsibility for making their own evaluation of the adequacy and
accuracy of all estimates, projections and other forecasts and plans so
furnished to them (including the reasonableness of the assumptions underlying
such estimates, projections, forecasts or plans), and that Acquiror. Acquiror
OP and Merger Subsidiary shall have no claim against any Person or entity with
respect thereto.  Accordingly, Acquiror,
Acquiror OP and Merger Subsidiary acknowledge that none of Target, NPI or any
other Person or entity on behalf of Target or NPI makes any representation or
warranty with respect to such estimates, projections, forecasts or plans
(including the reasonableness of the assumptions underlying such estimates,
projections, forecasts or plans).


6.03.        Representations and Warranties of
Acquiror, Acquiror OP and Merger Subsidiary.


Acquiror,
Acquiror OP and Merger Subsidiary hereby jointly and severally represent and
warrant to Target as follows:


(a)           Organization.


(i)            Acquiror
is a real estate investment trust duly organized, validly existing and in good
standing under the Laws of the State of Maryland.  The Acquiror Declaration of Trust is in
effect and no dissolution, revocation or forfeiture proceedings regarding
Acquiror have been commenced.  Acquiror
is in good standing under the Laws of any other jurisdiction in which the
character of the properties owned, leased or operated by it therein or in which
the transaction of its business makes such qualification or licensing
necessary.  Acquiror has all requisite
power and authority to own, lease and operate its properties and to carry on
its businesses as now conducted and proposed by Acquiror to be conducted.


(ii)           Acquiror
OP is a limited partnership duly formed, validly existing and in good standing
under the laws of Delaware.  The
certificate of formation is in effect and no dissolution, revocation or
forfeiture proceedings regarding Acquiror OP



 38
 









have been commenced.  Acquiror OP
is in good standing under the Laws of any other jurisdiction in which the
character of the properties owned, leased or operated by it therein or in which
the transaction of its business makes such qualification or licensing
necessary.  Acquiror OP has all requisite
power and authority to own, lease and operate its properties and to carry on
its businesses as now conducted and proposed by Acquiror OP to be conducted.


(iii)          Merger
Subsidiary is a business trust duly formed, validly existing and in good standing
under the Laws of the State of Maryland. 
The certificate of trust of Merger Subsidiary is in effect and no
dissolution, revocation or forfeiture proceedings regarding Merger Subsidiary
have been commenced.  Merger Subsidiary
is in good standing under the Laws of any other jurisdiction in which the
character of the properties owned, leased or operated by it therein or in which
the transaction of its business makes such qualification or licensing
necessary.  Merger Subsidiary has all
requisite power and authority to own, lease and operate its properties and to
carry on its businesses as now conducted and proposed by Merger Subsidiary to
be conducted.


(b)           Authority Relative to this
Agreement.


(i)            Each
of Acquiror, Acquiror OP and Merger Subsidiary has all necessary power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.  No
other proceedings on the part of Acquiror, Acquiror OP or Merger Subsidiary, or
any of their respective subsidiaries, are necessary to authorize this Agreement
or to consummate the Transaction.  This
Agreement has been duly and validly executed and delivered by each of Acquiror,
Acquiror OP and Merger Subsidiary and, assuming due authorization, execution
and delivery hereof by Target, constitutes a valid, legal and binding agreement
of each of Acquiror, Acquiror OP and Merger Subsidiary, enforceable against
each of Acquiror, Acquiror OP and Merger Subsidiary in accordance with and
subject to its terms and conditions, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar Laws of general applicability relating to or affecting
creditors’ rights or by general equitable principles.


(ii)           The
board of trustees of Acquiror has duly and validly authorized the execution and
delivery of this Agreement by Acquiror and by Acquiror OP and approved the
consummation of the Transaction, and taken all actions required to be taken by
Acquiror or Acquiror OP for the consummation of the Transaction.


(iii)          The
board of trustees of Merger Subsidiary has duly and validly authorized the
execution and delivery of this Agreement and approved the consummation of the
Transaction, and taken all actions required to be taken by Merger Subsidiary
for the consummation of the Transaction.


(c)           Consents and Approvals; No
Violations.


(i)            The execution and delivery of this
Agreement by Acquiror or Merger Subsidiary does not, and the performance of
Acquiror or Merger Subsidiary’s



 39
 









obligations hereunder
will not, (A) conflict with or violate the Acquiror Declaration of Trust
or Acquiror Bylaws, the certificate of formation or limited partnership
agreement of Acquiror OP or the certificate of trust or declaration of trust of
Merger Subsidiary, (B) assuming that all consents, approvals,
authorizations and other actions described below in subsection (ii) have
been obtained and all filings and obligations described below in
subsection (ii) have been made, conflict with or violate any Law
applicable to Acquiror, Acquiror OP or Merger Subsidiary or by which any of its
properties or assets is bound or affected, or (C) result in any breach of,
or constitute a default (or an event which, with notice or lapse of time or
both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien or other encumbrance on any of its properties or assets
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which it is a
party or by which it or any of its properties or assets is bound or affected,
except, with respect to clauses (B) and (C), for any such conflicts,
violations, breaches, defaults or other occurrences that would not (x) prevent
or delay consummation of the Transaction or otherwise prevent it from
performing its obligations under this Agreement or (y) have an Acquiror
Material Adverse Effect.


(ii)           The execution and delivery of this
Agreement by Acquiror or Merger Subsidiary does not, and the performance of
Acquiror or Merger Subsidiary’s obligations hereunder will not, require any
consent, approval, authorization or permit of, or filing with, or notification
to, any Governmental Authority, except (A) for applicable requirements, if any,
of the Exchange Act, Blue Sky Laws and state takeover Laws, and (B) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not (x) prevent or delay consummation
of the Transaction, or otherwise prevent Acquiror from performing its
obligations under this Agreement or (y) have an Acquiror Material Adverse
Effect.


(d)           Litigation.  There is no Action pending or, to Acquiror’s
knowledge, threatened against Acquiror or any of the Acquiror Subsidiaries or
any of its or their respective properties or assets that questions the validity
of this Agreement or any action to be taken by Acquiror or Merger Subsidiary in
connection with the consummation of the Merger.


(e)           Brokers.  No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or commission payable by
Acquiror in connection with the Merger based upon arrangements made by and on
behalf of Acquiror or Merger Subsidiary or any of their Subsidiaries.


(f)            Ownership
of Merger Subsidiary; No Prior Activities. 
Merger Subsidiary is a direct wholly owned subsidiary of Acquiror.  Merger Subsidiary is a disregarded entity for
federal income tax purposes.  Merger Subsidiary
has not conducted any activities other than in connection with its
organization, the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby.  Merger Subsidiary has no subsidiaries.



 40
 









(g)           No
Ownership of Target Common Stock. 
Neither Acquiror nor any of the Acquiror Subsidiaries, including Merger
Subsidiary, own any Target Common Stock or other securities of Target.


6.04.        Representations and Warranties of
Acquiror and Acquiror OP.


Acquiror and Acquiror
OP represent and warrant to Target as follows:


(a)           Capitalization.


(i)            As
of the date of this Agreement, the authorized capital stock of Acquiror
consists of 75,000,000 Acquiror Common Shares and 15,000,000 Acquiror Preferred
Shares, consisting of (1) 42,375,505 outstanding Acquiror Common Shares, (2)
2,200,000 8.0% Series G Cumulative Redeemable Preferred Shares, all of which
were issued and outstanding, (3) 2,000,000 7.5% Series H Cumulative Redeemable
Preferred Shares, all of which were issued and outstanding and (4) 3,390,000
7.625% Series J Cumulative Redeemable Preferred Shares of which 3,390,000 were
issued and outstanding.


(ii)           All
outstanding Acquiror Common Shares and Acquiror Preferred Shares are, and the
Common Share Consideration and the Preferred Share Consideration to be issued
in connection with the Merger will be, duly authorized, validly issued, fully
paid and nonassessable and not subject to, or issued in violation of, any
preemptive right, purchase option, call option, right of first refusal,
subscription or any other similar right.


(iii)          Acquiror
owns approximately 82.4% of the outstanding common units, 2,200,000 Series G
Preferred Units, 2,000,000 Series H Preferred Units and 3,390,000 Series J
Preferred Units issued by Acquiror OP, and 352,000 Series I Preferred Units
issued by Acquiror OP are owned by a third party and have a liquidation
preference of $25.00.


(iv)          The
authorized capital shares of Merger Subsidiary consists of 1,000 Merger
Subsidiary Common Shares.  All of the
issued and outstanding capital shares of Merger Subsidiary are owned by
Acquiror or Acquiror Subsidiaries. Merger Subsidiary does not have issued or
outstanding any options, warrants, subscriptions, calls, rights, convertible
securities or other agreements or commitments obligating Merger Subsidiary to
issue, transfer or sell any Merger Subsidiary Common Shares to any Person,
other than Acquiror Subsidiaries.


(v)           Except
as provided herein, there are no outstanding restricted Acquiror Common Shares,
performance share awards, stock options, stock appreciation rights or dividend
equivalent rights relating to Acquiror Common Shares.


(vi)          There
is no voting debt of Acquiror or any Acquiror Subsidiary outstanding.



 41















(vii)         All
dividends or distributions on securities of Acquiror that have been declared or
authorized prior to the date of this Agreement have been paid in full.


(b)           SEC
Documents; Financial Statements.


(i)            Acquiror
has filed with or furnished to the SEC, and has heretofore made available to
Target (by public filing with the SEC or otherwise) true and complete copies
of, all reports, schedules, forms, statements and other documents required to
be filed with or furnished to the SEC by Acquiror since January 1, 2006 (the “Applicable Date”)
and prior to the date hereof (collectively, the “Acquiror SEC Documents”).  As of its respective date, each Acquiror SEC
Document complied as to form in all material respects with the requirements of
the Exchange Act or the Securities Act, as the case may be, as and to the
extent applicable thereto, and the rules and regulations of the SEC promulgated
thereunder applicable to such Acquiror SEC Document.  Except to the extent that information
contained in any Acquiror SEC Document filed and publicly available prior to
the date of this Agreement has been revised or superseded by a later Acquiror
SEC Document, none of the Acquiror SEC Documents contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.


(ii)           The
consolidated financial statements of Acquiror included in the Acquiror SEC
Documents complied as of their respective dates in all material respects with
the then applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as may
be indicated therein or in the notes thereto) and fairly presented in all
material respects the consolidated financial position of Acquiror and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and their consolidated cash flows for the periods then
ended, all in accordance with GAAP (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein).


(c)           No
Undisclosed Liabilities.  Subsequent
to the respective dates as of which information is given in Acquiror SEC
Documents, except as described in Acquiror SEC Documents, Acquiror and Acquiror
Subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction, in each case not in the
ordinary course of business, that could result in an Acquiror Material Adverse
Effect.


(d)           Absence
of Certain Changes or Events. 
Subsequent to the respective dates as of which information is given in
Acquiror SEC Documents, (i) neither Acquiror nor any of Acquiror Subsidiaries
has sustained any material casualty loss, condemnations or interference with
their respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from



 42
 









any labor dispute or any legal or governmental proceeding that could
result in an Acquiror Material Adverse Effect and (ii) there has not been any
development or event that could be reasonably likely to result in an Acquiror
Material Adverse Effect, except in each case as described in or contemplated by
Acquiror SEC Documents.


(e)           Compliance
with Laws.  To Acquiror’s knowledge,
Acquiror and Acquiror Subsidiaries possess adequate certificates, authorities,
consents, authorizations or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by them, have
complied, in all material respects, with the laws, regulations and orders known
by them to be applicable to them or their respective businesses and properties,
the absence of which or the failure to comply with could result in an Acquiror
Material Adverse Effect and have not received any notice of proceedings
relating to the revocation or modification of any such certificate, authority,
consents, authorizations or permit that, if determined adversely to Acquiror or
any of Acquiror Subsidiaries, would individually or in the aggregate have an
Acquiror Material Adverse Effect.


(f)            Environmental
Matters.


(i)            Except
for activities, conditions, circumstances or matters that would not have an
Acquiror Material Adverse Effect, (A) to the knowledge of Acquiror, neither
Acquiror nor any of Acquiror Subsidiaries has violated any Environmental Laws
(and Acquiror and Acquiror Subsidiaries are in compliance with all requirements
of applicable permits, licenses, approvals or other authorizations issued
pursuant to Environmental Laws); (B) to the knowledge of Acquiror, none of
Acquiror or Acquiror Subsidiaries has caused or suffered to occur any Release
(as hereinafter defined) of any Hazardous Materials into the Environment (as
hereinafter defined) on, in, under or from any property owned by Acquiror or
Acquiror Subsidiaries that would reasonably be expected to result in the
incurrence of liabilities under, or any violations of, any Environmental Law or
give rise to the imposition of any Lien, under any Environmental Law;


As
used herein, “Environment”
shall mean any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings, structures, and indoor and
outdoor air and “Release”
shall mean any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, emanating or disposing of
any Hazardous Materials into the Environment, including, without limitation,
the abandonment or discard of barrels, containers, tanks (including, without
limitation, underground storage tanks) or other receptacles containing or
previously containing and containing a residue of any Hazardous Materials.


(ii)           To
the knowledge of Acquiror, none of the environmental consultants which prepared
environmental and asbestos inspection reports with respect to any of the
properties was employed for such purpose on a contingent basis or has any
substantial interest in Acquiror or any of Acquiror Subsidiaries, and none of
them nor any



 43
 









of their directors, officers or employees is connected with Acquiror or
any of Acquiror Subsidiaries as a promoter, selling agent, voting trustee,
director, officer or employee.


(g)           Litigation.  Except as disclosed in Acquiror SEC
Documents, there are no pending actions, suits or proceedings against or, to
the knowledge of Acquiror, affecting Acquiror, any of Acquiror Subsidiaries or
any of their respective properties or any of their respective officers or
trustees that, if determined adversely to Acquiror or any of Acquiror
Subsidiaries or any of their respective officers or trustees, would
individually or in the aggregate have an Acquiror Material Adverse Effect; and,
to the knowledge of Acquiror, no such actions, suits or proceedings are
threatened or contemplated, in each case, before or by any federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, having jurisdiction over Acquiror, any of Acquiror
Subsidiaries or assets which would individually or in the aggregate have an
Acquiror Material Adverse Effect.


(h)           Investment
Company Act of 1940.  Acquiror is not
and, after giving effect to the Transaction, will not be an “investment company”
as defined in the Investment Company Act of 1940, as amended.


(i)            Taxes.


(i)            Acquiror
and each of Acquiror Subsidiaries has filed all foreign, federal, state and
local income tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file would
not have an Acquiror Material Adverse Effect) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for any such
tax, assessment, fine or penalty that is currently being contested in good
faith or as described in or contemplated by Acquiror SEC Documents or which
would not result in an Acquiror Material Adverse Effect.


(ii)           Commencing
with Acquiror’s taxable year ended December 31, 1992, Acquiror was organized
and has operated in conformity with the requirements for qualification and
taxation as a REIT.  All statements in
Acquiror SEC Documents regarding Acquiror’s qualification as a REIT are true,
complete and correct in all material respects.


(j)            No
Conflict or Violation.  To the
knowledge of Acquiror, neither Acquiror nor any of Acquiror Subsidiaries is in
breach or violation of its respective declaration of trust, charter, bylaws,
partnership agreement or other organizational document, as the case may be, or
in default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, bond,
debenture, note agreement, joint venture or partnership agreement, lease or
other agreement or instrument that is material to Acquiror and Acquiror
Subsidiaries, taken as a whole, and to which Acquiror or any of Acquiror
Subsidiaries is a party or by which Acquiror or any of Acquiror Subsidiaries or
their respective property is bound (and there is no event which, whether with
or without the giving of notice, or passage of time or



 44
 









both, would constitute a default under any of foregoing), where such
breach, violation or default would have an Acquiror Material Adverse Effect.


(k)           Vote
Required.  No vote of the holders of
any class or series of Acquiror’s capital stock is required to approve this
Agreement, the Merger or any of the transactions contemplated hereby.


(l)            No Other Representations or
Warranties.  Except for the
representations and warranties contained in this Article VI, Target
acknowledges that none of Acquiror, Acquiror OP nor any other Person or entity
on behalf of Acquiror or Acquiror OP has made, nor has Target relied upon, any
representation or warranty, whether express or implied, with respect to
Acquiror or any of the Acquiror Subsidiaries or their respective businesses,
affairs, assets, liabilities, financial condition, results of operations,
future operating or financial results, estimates, projections, forecasts, plans
or prospects (including the reasonableness of the assumptions underlying such
estimates, projections, forecasts, plans or prospects) or with respect to the
accuracy or completeness of any other information provided or made available to
Target by or on behalf of Acquiror or Acquiror OP.  Target acknowledges that there are
uncertainties inherent in attempting to make such estimates, projections and
other forecasts and plans, that Target is taking full responsibility for making
their own evaluation of the adequacy and accuracy of all estimates, projections
and other forecasts and plans so furnished to them (including the reasonableness
of the assumptions underlying such estimates, projections, forecasts or
plans).  None of Acquiror, Acquiror OP
nor any other Person or entity will have, or be subject to, any liability or
indemnification obligation to Target or any other Person or entity resulting
from the distribution in written or verbal communications to Target or use by
Target of, any such information, including any information, documents,
estimates, projections, forecasts, plans, prospects, forward looking statements
or other material made available to Target in online “data rooms,” confidential
information memoranda or management interviews and presentations in expectation
of the transactions contemplated by this Agreement, except to the extent any
such information is deemed to be “made available” to the Company by Acquiror
for purposes of this Article VI.


ARTICLE VII.

COVENANTS


7.01.        Stockholders’ Meeting.


Target
shall, in accordance with applicable Law and Target Charter and Target Bylaws,
(a) duly call, give notice of, convene and hold the Target Stockholders Meeting
as promptly as reasonably practicable after the date of this Agreement, but in
no event later than February 14, 2007, and (b) except as is reasonably likely
to be required by the Target Board’s duties under applicable Law, (i) include
in the Proxy Statement the recommendation of the Target Board that Target’s
Stockholders approve the Merger and (ii) use its reasonable efforts to obtain
Target Stockholder Approval.



 45
 









7.02.        Registration Statement.


Prior
to the Effective Time, Acquiror and the Target Stockholders shall enter into
the Registration Rights Agreement.  The
parties hereto shall cooperate with each other in the preparation of the
Registration Statement, and Acquiror shall notify Target of the receipt of any
comments of the SEC with respect to the Registration Statement and of any
requests by the SEC for any amendment or supplement thereto or for additional
information and shall provide to Target copies of all correspondence between
Acquiror or any representative of Acquiror and the SEC.  Acquiror shall give Target and its counsel
the opportunity to review the Registration Statement prior to its being filed
with the SEC and shall give Target and its counsel the opportunity to review
all amendments and supplements to the Registration Statement and all responses
to requests for additional information and replies to comments prior to their
being filed with, or sent to, the SEC. 
Target shall use its commercially reasonable efforts to obtain the
completed accredited investor questionnaires from the Target Stockholders prior
to the Closing Date.  Target agrees to
furnish a copy of the offering circular or other such offering document
prepared by Acquiror to the Target Stockholders, the distribution of which
shall be at Target’s expense, at the time Target distributes notice of the
Target Stockholders Meeting to the Target Stockholders.


7.03.        Access to Information;
Confidentiality.


(a)           Upon
reasonable notice and subject to applicable Laws relating to the exchange of
information, Target shall, and shall cause each of the Target Subsidiaries to,
afford to the officers, employees, accountants, counsel and other
representatives of Acquiror, reasonable access during normal business hours
during the period prior to the Effective Time, to all its properties, books,
contracts, commitments, records, officers, employees, accountants, counsel and
other representatives and, during such period, Target shall, and shall cause
the Target Subsidiaries to, make available to Acquiror information concerning
the Target Properties and Target personnel as Acquiror may reasonably
request.  Neither Target nor any of the
Target Subsidiaries shall be required to provide access to or disclose
information where such access or disclosure would violate or prejudice the
rights of Target’s customers, jeopardize attorney-client privilege or
contravene any Law, fiduciary duty or binding agreement entered into prior to
the date of this Agreement.  Acquiror
shall, and cause its representatives to, take all reasonable efforts to prevent
such access and inspection from interfering with the business operations of
Target and the Target Subsidiaries.


(b)           All information obtained by Acquiror
pursuant to this Section 7.03 shall be kept confidential in accordance
with the confidentiality agreement, dated June 7, 2006 (the “Confidentiality Agreement”),
between Acquiror and Target.


(c)           After the Effective Time, Acquiror
shall afford to the officers, employees, accountants, counsel and other
representatives of the Liquidating Trust access during normal business hours to
the books and records of the Target Properties as may reasonably be requested.



 46
 









7.04.        No-Shop Clause.


(a)           From
and after the date of the execution and delivery of this Agreement by Target
until the termination of this Agreement or the consummation of the Transaction,
the Target Group will not, without the prior written consent of Acquiror or
except as otherwise permitted by this Agreement directly or indirectly: (i)
sell, assign, lease, pledge or otherwise transfer or dispose of, directly or
indirectly, all or any portion of the Target Properties or Target Properties
Leases, or any material portion or amount of equity securities of Target,
whether through merger, consolidation, business combination, asset sale, share
exchange or otherwise (and including in connection with an offer for all or a
material portion of Target’s stock or assets) (each of such actions being an “Acquisition Proposal”);
(ii) solicit offers for, offer up or seek any Acquisition Proposal; (iii)
initiate, encourage or provide any documents or information to any third party
in connection with, discuss or negotiate with any person regarding any
inquires, proposals or offers relating to any Acquisition Proposal; or
(iv) enter into any agreement or discussions with any party (other than
Acquiror) with respect to any Acquisition Proposal.


(b)           Without limiting the foregoing, it is
agreed that any violation of the restrictions set forth in Section 7.04(a)
by any of the Target Group’s employees, investment bankers, attorneys,
accountants and other advisors or representatives (such employees, investment
bankers, attorneys, accountants and other advisors or representatives,
collectively, “Representatives”),
shall be a breach of Section 7.04(a) by Target.  Upon execution of this Agreement, Target has
caused the Target Group and its Representatives to, cease immediately and
caused to be terminated any and all existing discussions or negotiations with
any Persons conducted heretofore with respect to an Acquisition Proposal.


(c)           Target shall, as promptly as
practicable (and in no event later than 24 hours after receipt thereof), advise
Acquiror of any inquiry received by the Target Group relating to any potential
Acquisition Proposal and of the material terms of any proposal or inquiry,
including the identity of the Person and its Affiliates making the same, that
it may receive in respect of any such potential Acquisition Proposal, or of any
information requested from it or of any negotiations or discussions being
sought to be initiated with it, shall furnish to Acquiror a copy of any such
proposal or inquiry, if it is in writing, or a written summary of any such
proposal or inquiry, if it is not in writing, and shall keep Acquiror fully
informed on a prompt basis with respect to any developments with respect to the
foregoing.


(d)           Notwithstanding the provisions of Section
7.04(a), prior to the receipt of the approval of the transactions
contemplated by this Agreement by Target’s Stockholders, Target may, in response
to an unsolicited, bona fide written Acquisition Proposal from a Person (the “Potential Acquiror”)
which the Target Board determines in good faith, after consultation with a
nationally recognized financial advisor and its outside legal counsel,
constitutes a Superior Proposal (and continues to constitute a Superior
Proposal after taking into account any modifications proposed by Acquiror



 47
 









during any five (5) Business Day period referenced
below), take the following actions (but only if and to the extent that the
Target Board concludes in good faith, following the receipt of advice of its
outside legal counsel, that the failure to do so would constitute a breach of
its fiduciary obligations under applicable Law); provided that, Target has first given Acquiror written
notice that states that Target has received such Superior Proposal and
otherwise includes the information required by Section 7.04(c) (the “Superior Proposal Notice”)
and five (5) Business Days have passed since the receipt of the Superior Proposal
Notice by Acquiror:


(i)            furnish
nonpublic information to the Potential Acquiror, provided that (A) (1) concurrently with furnishing any such
nonpublic information to the Potential Acquiror, Target gives Acquiror written
notice of its intention to furnish nonpublic information and (2) Target
receives from the Potential Acquiror an executed confidentiality agreement
containing customary limitations on the use and disclosure of all nonpublic
written and oral information furnished to the Potential Acquiror on its behalf,
the terms of which are at least as restrictive as to the Potential Acquiror as
the terms contained in the Confidentiality Agreement are as to Acquiror, and
containing customary standstill provisions and (B) contemporaneously with
furnishing any such nonpublic information to the Potential Acquiror, Target
furnishes such nonpublic information to Acquiror; and


(ii)           engage
in negotiations with the Potential Acquiror with respect to the Superior
Proposal, provided that
concurrently with entering into negotiations with the Potential Acquiror, it
gives Acquiror written notice of its intention to enter into negotiations with
the Potential Acquiror.


(e)           For a period of not less than five
(5) Business Days after Acquiror’s receipt of each Superior Proposal Notice,
Target shall, if requested by Acquiror, negotiate in good faith with Acquiror
to revise this Agreement so that the Acquisition Proposal that constituted a
Superior Proposal no longer constitutes a Superior Proposal (a “Former Superior Proposal”).  The terms and conditions of this Section
7.04 shall again apply to any inquiry or proposal made by any Person who
withdraws a Superior Proposal or who made a Former Superior Proposal (after
withdrawal or after such time as their proposal is a Former Superior Proposal).


(f)            In response to the receipt of a
Superior Proposal that has not been withdrawn and continues to constitute a
Superior Proposal after Target’s compliance with Sections 7.04(b)—(e),
the Target Board may withhold or withdraw its recommendation that the Target
Stockholders vote in favor of the approval of the Transaction and, in the case
of a Superior Proposal that is a tender or exchange offer made directly to the
stockholders of Target, may recommend that the Target Stockholders accept the
tender or exchange offer (any of the foregoing actions, whether by the Target
Board or a committee thereof, a “Change in Recommendation”), if both of the
following conditions are met:


(i)            the
Target Stockholder Meeting has not occurred; and



 48
 









(ii)           the
Target Board has concluded in good faith, following the receipt of advice of
its outside legal counsel, that, in light of such Superior Proposal, the
failure of the Target Board to effect a Change in Recommendation would result
in a breach of its fiduciary obligations to the Target Stockholders under
applicable Law.


(g)           Notwithstanding
anything to the contrary contained in this Agreement, the obligation of Target
to call, give notice of, convene and hold the Target Stockholder Meeting and to
hold a vote of the Target Stockholders on this Agreement shall not be limited
or otherwise affected by the commencement, disclosure, announcement or
submission to it of any Acquisition Proposal (whether or not a Superior
Proposal), or by any Change in Recommendation.


7.05.        Further Action; Reasonable Efforts.


(a)           Upon
the terms and subject to the conditions hereof, each of the parties hereto
shall use its reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate and make effective the Merger,
including, without limitation, using its reasonable best efforts to obtain all
Applicable Permits, consents, approvals, authorizations, qualifications and
orders of Governmental Authorities and parties to contracts with Target and the
Target Subsidiaries as are necessary for the consummation of the Merger and to
fulfill the conditions to the Closing. 
In case, at any time after the Closing, any further action is necessary
or desirable to carry out the purposes of this Agreement, each of the parties
hereto shall use all reasonable efforts to cause its respective officers,
employees and agents to take all such action.


(b)           The parties hereto shall cooperate
and assist one another in connection with all actions to be taken pursuant to Section
7.05(a), including the preparation and making of the filings referred to
therein and, if requested, amending or furnishing additional information
thereunder, including, subject to applicable Law and the Confidentiality
Agreement, providing copies of all related documents to the non-filing party
and their advisors prior to filing, and to the extent practicable none of the
parties will file any such document or have any communication with any
Governmental Authority without prior consultation with the other parties; provided, however, Acquiror may make any
Exchange Act filings with the SEC with prior notice to Target to the extent
possible (but without approval rights). 
Each party shall keep the others apprised of the content and status of
any communications with, and communications from, any Governmental Authority
with respect to the Merger.  To the
extent practicable, and as permitted by a Governmental Authority, each party
hereto shall permit representatives of the other party to participate in
meetings (whether by telephone or in Person) with such Governmental Authority.


(c)           Each of the parties hereto agrees to
cooperate and use its reasonable efforts to defend through litigation on the
merits any Action, including administrative or judicial Action, asserted by any
party in order to avoid the entry of, or to have vacated, lifted, reversed,
terminated or overturned any decree, judgment,



 49
 









injunction or other order (whether temporary, preliminary
or permanent) that in whole or in part restricts, delays, prevents or prohibits
consummation of the Merger, including, without limitation, by vigorously
pursuing all available avenues of administrative and judicial appeal.


7.06.        Public Announcements.


Acquiror
and Target agree that no public release or announcement concerning the Merger
shall be issued by either party without the prior consent of the other party,
except as such release or announcement may be required by Law or the rules or
regulations of the NYSE in which case the party required to make the release or
announcement shall use its reasonable best efforts to allow the other party
reasonable time to comment on such release or announcement in advance of such
issuance; provided, however, if such
other party fails to respond or comment on such release or announcement within
two (2) Business Days of receipt of a draft of such release or announcement,
the release or announcement shall be deemed approved.


7.07.        Escrow and Indemnification.


(a)           Escrow Fund.  Within five (5) Business Days after the
Effective Time, the Escrow Shares shall be registered in the name of, and be
deposited with the Share Escrow Agent, such deposit to constitute the escrow
fund (the “Escrow
Fund”) and to be governed by the terms set forth herein
and in the Share Escrow Agreement.  The
Escrow Fund shall consist of the Escrow Shares and shall be available to
compensate Acquiror for Damages pursuant to the indemnification obligations of
Target set forth in Section 7.07(b).


(b)           Indemnification.


(i)            Subject to the limitations set forth
in this Section 7.07, the Target Stockholders will indemnify and hold
harmless Acquiror, Acquiror OP and Merger Subsidiary and their respective
officers, directors, agents and employees, and each Affiliate thereof
(hereinafter referred to individually as an “Indemnified Person” and, collectively,
as “Indemnified Persons”)
from and against any and all losses, costs, damages, liabilities, taxes and
expenses arising from claims, demands, actions, causes of action, including,
without limitation, reasonable legal fees, (collectively, “Damages”) arising out
of (A) any misrepresentation or breach of, or default in connection with, any
of the representations, warranties, covenants and agreements given or made by
the Target Group in this Agreement, the Target Disclosure Letter or any
exhibit, schedule or certificate to, or delivered in connection with, this
Agreement, (B) any of the matters described in Sections 6.02(f) and 6.02(g)(xx)
of the Target



 50
 









Disclosure Letter,
(C) payment obligations under NPI’s or Target’s deferred compensation
plan, pension plan, severance obligations and retirement obligations including,
but not limited to, the Dollenberg Retirement Obligations, (D) any
misrepresentation or breach by NPI under the Exchange Agreement, (E) any
continuing liability in connection with the loans as more particularly
described in Section 6.02(j)(viii) and Section 6.02(k) of the
Target Disclosure Letter but excluding any continuing liability in connection
with the Office Assumed Loans and (F) guarantees signed by Target with respect
to loans relating to the Retail Properties (the “Retail Loan Guarantees”).  The Escrow Fund shall be the security for
this indemnity obligation subject to the limitations in this Agreement.


(ii)           Acquiror and Target each acknowledge
that such Damages, if any, would relate to unresolved contingencies existing at
the Effective Time, which if resolved at the Effective Time would have led to a
reduction in the total number of shares of Merger Consideration that Acquiror
would have agreed to issue in connection with the Merger.  Following the Effective Time, the right to
obtain indemnification from the Escrow Fund, pursuant to the indemnification provisions
of this Section 7.07 and the Share Escrow Agreement shall be Acquiror’s
exclusive remedy for any breach by Target hereof or Damages described in Section
7.07(b)(i); provided, however,
that the foregoing shall not limit liability of any Person or entity in the
case of fraud or any intentional misrepresentation by such Person or entity.


(iii)          Acquiror may not receive any Escrow
Shares from the Escrow Fund unless and until the Claims Notice specifying an
aggregate amount of Damages incurred by Acquiror in excess of Five Hundred
Thousand Dollars ($500,000) (the “Indemnity Threshold”) have been delivered to
the Share Escrow Agent as provided in Section 7.07(d) and such amount is
determined pursuant to this Section 7.07 to be payable, after which
Acquiror shall receive Escrow Shares for the amount of any Damages in excess of
the Indemnity Threshold.  In determining
the amount of any Damage attributable to a breach, any materiality standard
contained in a representation, warranty or covenant of Target shall be
disregarded.


(iv)          The Indemnity Threshold shall not
apply to any Claims Notice (A) regarding the payment of any Transfer Taxes, (B)
arising out of matters described in Sections 6.02(f) and 6.02(g)(xx)
of the Target Disclosure Letter whereby Acquiror sustains actual Damages not
reimbursed by insurance, (C) relating to payment obligations under NPI’s or
Target’s deferred compensation plan, pension plan, severance obligations and
retirement obligations including, but not limited to, the Dollenberg Retirement
Obligations, (D) any misrepresentation or breach by NPI under the Exchange
Agreement, (E) arising out of any continuing liability in connection with the
loans as more particularly described in Section 6.02(j)(viii) and Section
6.02(k) of the Target Disclosure Letter but excluding any continuing
liability in connection with the Office Assumed Loans or (F) regarding the
Retail Loan Guarantees.


(c)           Escrow
Period.  The escrow period (the “Escrow Period”)
shall terminate at 11:59 p.m. Eastern Standard Time on the thirty-six (36)
month anniversary of the Closing Date; provided,
however, that a portion of the Escrow Fund, which is necessary to
satisfy any unpaid fees due to the Share Escrow Agent and any unsatisfied
claims specified in any Claims Notice theretofore delivered to the Share Escrow
Agent prior to termination of the Escrow Period with respect to facts and
circumstances existing prior to expiration of the Escrow Period, shall remain
in the Escrow Fund until such claims have been resolved and such fees have been
paid.  Promptly after the Effective



 51
 









Time, Acquiror shall deliver to the Share Escrow Agent a certificate
specifying the Closing Date.


(d)           Claims
Upon Escrow Fund.


(i)            Upon
receipt by the Share Escrow Agent on or before the last day of the Escrow
Period of a certificate signed by any officer of Acquiror (a “Claims Notice”):


(A)          stating that Damages exist in an
aggregate amount greater than the Indemnity Threshold; and


(B)           specifying in reasonable detail the
individual items included in the amount of Damages in such claim, the date each
such item was paid, properly accrued or arose and the nature of the
misrepresentation, breach of warranty or claim to which such item is related,


the Share Escrow
Agent shall set aside Escrow Shares having a value equal to the amount of
Damages in excess of the Indemnity Threshold.


(ii)           Upon the earliest of:  (A) receipt of written authorization from the
Stockholders’ Agent or from the Stockholders’ Agent jointly with Acquiror to
make such delivery, (B) receipt of written notice of a final decision in arbitration
of the claim, or (C) in the event the claim set forth in the Claims Notice is
uncontested by the Stockholders’ Agent as of the close of business on the next
Business Day following the fifteenth (15th) day following receipt by the Share
Escrow Agent of the Claims Notice; on the next Business Day, the Share Escrow
Agent shall deliver the Escrow Shares or the portion of Escrow Shares set aside
pursuant to Section 7.07(d)(i) to Acquiror.


(iii)          For the purpose of compensating
Acquiror for its Damages pursuant to this Agreement, the Escrow Shares in the
Escrow Fund shall be valued at the last reported sale price of an Acquiror
Common Share on the NYSE on the Business Day prior to the date such claim is
paid.


(e)           Objections to Claims.  At the time of delivery of any Claims Notice
to the Share Escrow Agent, a duplicate copy of such Claims Notice shall be
delivered to the Stockholders’ Agent and for a period of fifteen (15) days
after such delivery to the Share Escrow Agent of such Claims Notice, the Share
Escrow Agent shall make no delivery of Escrow Shares pursuant to Section
7.07 unless and until the Share Escrow Agent shall have received written
authorization from the Stockholders’ Agent to make such delivery.  After the expiration of such fifteen (15) day
period, the Share Escrow Agent shall make delivery of the Escrow Shares in
accordance with Section 7.07, provided,
that no such payment or delivery may be made if the Stockholders’ Agent shall
object in a written statement to the claim made in the Claims Notice, and such
statement shall have been delivered to the Share Escrow Agent and to Acquiror
prior to the expiration of such fifteen (15) day period.



 52
 









(f)            Resolution
of Conflicts; Arbitration.


(i)            In
case the Stockholders’ Agent shall so object in writing to any claim or claims
by Acquiror made in any Claims Notice, Acquiror shall have fifteen (15) days
after receipt by the Share Escrow Agent of an objection by the Stockholders’
Agent to respond in a written statement to the objection of the Stockholders’ Agent.  If after such fifteen (15) day period there
remains a dispute as to any claims, the Stockholders’ Agent and Acquiror shall
attempt in good faith for thirty (30) days to agree upon the rights of the
respective parties with respect to each of such claims.  If the Stockholders’ Agent and Acquiror
should so agree, a memorandum setting forth such agreement shall be prepared
and signed by both parties and shall be furnished to the Share Escrow
Agent.  The Share Escrow Agent shall be
entitled to rely on any such memorandum and shall distribute the Escrow Shares
from the Escrow Fund in accordance with the terms thereof.


(ii)           If no such agreement can be reached
after good faith negotiation, either Acquiror or the Stockholders’ Agent may,
by written notice to the other, demand arbitration of the matter unless the
amount of the damage or loss is at issue in pending litigation with a third
party, in which event arbitration shall not be commenced until such amount is
ascertained or both parties agree to arbitration; and in either such event the
matter shall be settled by arbitration conducted by three arbitrators.  Within fifteen (15) days after such written
notice is sent, Acquiror and the Stockholders’ Agent shall each select one
arbitrator, and the two arbitrators so selected shall select a third
arbitrator.  The decision of the
arbitrators as to the validity and amount of any claim in such Claims Notice
shall be binding and conclusive upon the parties to this Agreement, and
notwithstanding anything in this Section 7.07, the Share Escrow Agent
shall be entitled to act in accordance with such decision and make or withhold
payments out of the Escrow Fund in accordance therewith.


(iii)          Judgment upon any award rendered by
the arbitrators may be entered in any court having jurisdiction.  Any such arbitration shall be held in Howard
County, Maryland under the commercial rules then in effect of the American
Arbitration Association and applying the laws of the State of Maryland.  Acquiror, on the one hand, and Target Stockholders,
on the other hand, shall each bear its/their own expenses (including attorneys’
fees and expenses) incurred in connection with any such arbitration.  In the event the arbitrator or arbitrators
find in favor of Acquiror as to the claim in dispute, all fees, costs, and the
reasonable expenses of legal counsel incurred by Acquiror will be charged
against the Escrow Fund in addition to the amount of the disputed claim.  Similarly, in the event the arbitrator or arbitrators
find in favor of Target as to the claim in dispute, all fees, costs, and the
reasonable expenses of legal counsel incurred by Target will be paid by
Acquiror.  The fees and expenses of each
arbitrator and the administrative fee of the American Arbitration Association
shall be allocated by the arbitrator or arbitrators, as the case may be (or, if
not so allocated, shall be borne equally by Acquiror, on the one hand, and
Target Stockholders, out of the Escrow Fund, on the other hand).



 53
 









(g)           Stockholders’ Agent


(i)            The Liquidating Trust shall be
constituted and appointed as the Stockholders’ Agent for and on behalf of the
Target Stockholders to execute and deliver the Share Escrow Agreement and for
all other purposes thereunder, to give and receive notices and communications,
to authorize delivery of Escrow Shares from the Escrow Fund in satisfaction of
claims by Acquiror, to object to such deliveries, to agree to, negotiate, enter
into settlements and compromises of, and demand arbitration and comply with
orders of courts and awards of arbitrators with respect to such claims, and to
take all actions necessary or appropriate in the judgment of the Stockholders’
Agent for the accomplishment of the foregoing. 
Such agency may be changed by the holders of a majority in interest of
the Escrow Fund from time to time upon not less than ten (10) days’ prior
written notice to all of Target Stockholders and to Acquiror.  No bond shall be required of the Stockholders’
Agent, and the Stockholders’ Agent shall receive no compensation for his
services.  Notices or communications to
or from the Stockholders’ Agent shall constitute notice to or from each of
Target Stockholders.


(ii)           The
Stockholders’ Agent shall not be liable for any act done or omitted hereunder
as Stockholders’ Agent while acting in good faith, and any act done or omitted
pursuant to the advice of counsel shall be conclusive evidence of such good
faith.  Target Stockholders shall
severally indemnify the Stockholders’ Agent and hold him harmless against any
loss, liability or expense incurred without bad faith on the part of the
Stockholders’ Agent and arising out of or in connection with the acceptance or
administration of his duties hereunder.


(h)           Actions
of the Stockholders’ Agent.  A
decision, act, consent or instruction of the Stockholders’ Agent shall
constitute a decision of all of Target Stockholders and shall be final, binding
and conclusive upon each and every Target Stockholder, and the Share Escrow
Agent and Acquiror may rely upon any decision, act, consent or instruction of
the Stockholders’ Agent as being the decision, act, consent or instruction of
each and every Target Stockholder.  The
Share Escrow Agent and Acquiror are hereby relieved from any liability to any
person for any acts done by them in accordance with such decision, act, consent
or instruction of the Stockholders’ Agent.


(i)            Third-Party Claims.  In the event that Acquiror becomes aware of a
third-party claim which Acquiror believes may result in a demand against the
Escrow Fund, Acquiror shall promptly notify the Stockholders’ Agent of such
claim, and the Stockholders’ Agent and Target Stockholders shall be entitled,
at their expense, to participate in any defense of such claim.  Acquiror shall have the right in its sole
discretion to settle any such claim; provided,
however, that Acquiror may not effect the settlement of any such
claim without the consent of the Stockholders’ Agent, which consent shall not
be unreasonably withheld.  In the event
that the Stockholders’ Agent has consented to any such settlement, the Stockholders’
Agent shall have no power or authority to object under Section 7.07(e)
or any other provision of this Section 7.07 to any claim by Acquiror
against the Escrow Fund for indemnity in the amount of such settlement.



 54
 









(j)            The provisions of this Section
7.07 shall not be terminated or modified in such a manner as to adversely
affect any indemnitee to whom this Section 7.07 applies without the
consent of such affected indemnitee and are intended to be for the benefit of,
and will be enforceable by, each indemnified party, his or her heirs and his or
her legal representatives.


(k)           Additional Escrow Shares. The Additional Escrow Shares shall be held by
the Share Escrow Agent pursuant to the terms of the Additional Share Escrow
Agreement.


7.08.        Intentionally Deleted.


7.09.        Transfer Taxes.


Acquiror shall be
liable for all Transfer Taxes (including any such taxes imposed
post-Closing) applicable to any transfers relating to the properties set forth
in Section 7.09(a) of the Target Disclosure Letter.  Target and Acquiror shall each be liable for
one-half of all Transfer Taxes (including any such taxes imposed
post-Closing) applicable to any transfers relating to the properties set forth
in Section 7.09(b) of the Target Disclosure Letter.  Target shall be liable for all Transfer
Taxes (including any such taxes imposed post-Closing) applicable to any
transfers relating to the properties set forth in Section 7.09(c) of the
Target Disclosure Letter.  Target and
Acquiror shall each be liable for one-half of all Transfer
Taxes (including any such taxes imposed post-Closing) applicable to any
transfers effectuated pursuant to the transactions contemplated in the
PSA.  Notwithstanding the foregoing, in
no event shall liability under this Section 7.09 extend to any transfers
taking place after the Effective Time.


7.10.        Additional Acknowledgement #2.  Upon the closing of the Retail Transaction,
the Liquidating Trust shall deliver to the Surviving Entity a copy of the
Additional Acknowledgement #2 by P. Douglas Dollenberg in the form attached
hereto as Exhibit P.


7.11.        Lender’s Approval.


(a)           The
current loan documents evidencing the Office Assumed Loans are listed in Section
7.11 of the Target Disclosure Letter (the “Loan Documents”).


(b)           Target
and Acquiror, with due diligence and in good faith, shall cooperate to attempt
to obtain for the benefit of Acquiror, Acquiror OP and Merger Subsidiary
legally binding letters or agreements, effective through the Closing Date, from
the lenders who hold Office Assumed Loans and, if required, any nationally
recognized rating agencies (if any) required by such lenders (the “Rating Agencies”),
approving the transactions contemplated by this Agreement, to the extent
applicable to the Office Assumed Loans, setting forth the amount of principal and
interest outstanding as of the Closing Date, stating that there has not been,
and there does not currently exist, any default under any of the Loan Documents
and thereafter with due diligence and in good faith shall cooperate to
consummate the closing of the Office Assumed Loans (each, a



 55
 









“Lender’s
Approval”).  All
documentation to be signed by Target Group, Acquiror or Acquiror OP in
connection with any Lender’s Approval shall be subject to Acquiror’s prior
written consent, not to be unreasonably withheld.  Target shall pay (i) any assumption fee under
the Loan Documents, (ii) the consent fee charged by the servicer and lenders,
(iii) the legal fees of the servicer and lenders in connection with Lender’s
Approval, (iv) any and all other fees and costs of the servicer, the lenders,
and the Rating Agencies relating to Lender’s Approval including all structural,
environmental, inspection, administrative, flood determination, insurance
review and credit review fees of the servicer, the lenders, and the Rating
Agencies relating to Lender’s Approval or otherwise relating to the Office
Assumed Loans (the “Assumption
Fees”).  On the Closing
Date if the Transaction is consummated, Acquiror shall reimburse Target for the
Assumption Fees.


(c)           Acquiror
shall use its commercially reasonable efforts to obtain a release of NPI and
Nottingham Investment Company from guarantees and/or indemnities for
obligations accruing under the Office Assumed Loans from and after the date of
assumption of the Office Assumed Loans.


7.12.        Termination of Management Agreements.


Prior to the
Effective Time, Target shall terminate those property management agreements
listed in Section 7.12 of the Target Disclosure Letter.


7.13.        Short Term Loan.


No
later than one (1) Business Day prior to the Closing Date, Target shall obtain
the Short Term Loan and will sign the Short Term Loan Documents as may be
reasonably requested by Wachovia Bank, N.A. or Acquiror.  The Short Term Loan Documents shall be
subject to Acquiror’s prior written approval, which may be withheld in its
reasonable discretion.  The proceeds of
the Short Term Loan will be used to repay in full the Existing Office
Indebtedness and certain other obligations of Target.  All liens securing the Existing Office
Indebtedness shall be released at the time of the closing of the Short Term
Loan.  The Short Term Loan may be secured
by a lien on the ownership interests of Target or Target Subsidiaries, provided that such lien is released upon
the guaranty by Acquiror OP of the Short Term Loan.


7.14.        Tenant Improvements.


Target
shall use commercially reasonable efforts to complete all tenant improvement
work with respect to the Pre-LOI Leases required to be performed at the
commencement of the lease term (the “Pre-LOI TI Work”) prior to the Effective
Time.  If such work shall not be
completed prior to the Effective Time, Target will enter into contracts with
third parties, subject to Acquiror’s prior written approval, to complete such
work.  Target will enter into contracts
with third parties, subject to Acquiror’s prior written approval, for all
tenant improvements with respect to Target Properties Leases which are not
Pre-LOI Leases.



 56
 









7.15.        Sewer System Escrow.


Upon
the completion of all work to the Sewer System (as defined in the Acquisition
Agreement), in the event any unspent funds remain in the escrow under such
Acquisition Agreement (which agreement calls for the such remaining funds to be
equally split between Honeygo Run Reclamation Center, Inc. and Target),
Acquiror shall transmit all of the funds it receives from such escrow to the
Liquidating Trust promptly upon receipt of such funds.  Except as set forth in Section 8.04(viii)
hereof, Acquiror shall not be responsible for the reimbursement to Target, any
Target Subsidiary or the Liquidating Trust of any money spent as of the Closing
Date on the Sewer System.


ARTICLE VIII.

ADDITIONAL AGREEMENTS


8.01.        Inspection of the Target Properties.


(a)           Right of Inspection.  Acquiror shall have the right, at its own
risk, cost and expense, at any time prior to Closing during normal business
hours (i.e. Monday through Friday from 9:00 a.m. to 5:00 p.m. - federal
holidays excepted) upon not less than forty-eight (48) hours prior notice to
Target, and subject to the approval of the tenants under the Target Properties
Leases with respect to any entry into the leased premises, to enter, or cause
its agents or representatives to enter, upon any of the Target Properties for
the purpose of making surveys, tests, test borings, inspections, investigations
and architectural, structural, economic, environmental and other studies of any
of the Target Properties as Acquiror may deem desirable.  Target agrees that it shall reasonably
cooperate with Acquiror in connection with any other information regarding the
Target Properties reasonably requested by Acquiror and will provide or make
available such information during the Inspection Period and at all periods
thereafter through the Closing to the extent in Target’s possession.  Acquiror shall, at Acquiror’s sole cost and
expense, promptly and fully restore any damage or destruction to any of the
Target Properties occurring as a result of any act or omission of Acquiror by
reason of such tests, studies or investigations.  Acquiror shall indemnify, defend and hold
Target harmless from and against all loss, cost, damage or claim (including
attorneys’ fees reasonably incurred, court costs and costs of investigation)
arising out of or resulting from Acquiror’s exercise of the right and privilege
granted to Acquiror contained in this Section 8.01, and the undertakings
contained in this Section 8.01 shall survive Closing or prior
termination of this Agreement.


(b)           Inspection Period.  Acquiror shall have the period commencing on
the date hereof and ending at 5:00 p.m. Eastern Time on December 21, 2006 (the “Inspection Period”)
to inspect the Target Properties and to conduct such tests and investigations
as it deems advisable in order to determine that the Target Properties can be
used for Acquiror’s intended use.  If,
during the Inspection Period, Acquiror is not reasonably satisfied with its
findings thereof or for any other reason whatsoever, Acquiror shall notify
Target in writing (prior to the expiration of the Inspection Period) in which
event:



 57
 









(i)            the
Deposit shall be returned to Acquiror; and


(ii)           this Agreement shall be terminated in
accordance with the provisions of Article X hereof.


It is expressly
recognized and agreed by the parties that following expiration of the
Inspection Period, Acquiror shall be deemed to have waived its termination
right under this Section 8.01.  If
this Agreement is terminated by Target pursuant to Section 10.01(d)(i),
the Cash Escrow Agent shall pay the Deposit to Target as Target’s final
liquidated damages (it being understood that Target’s actual damages in the
event of such default are difficult to ascertain and that such proceeds
represent the parties’ best current estimate of such damages).  Conversely, if this Agreement is terminated
for any other reason whatsoever, the Deposit shall be promptly paid by the Cash
Escrow Agent to Acquiror.


8.02.        Prepayment of Indebtedness.


After
obtaining Acquiror’s prior written consent, Target shall prepay the Existing
Office Indebtedness listed in Section 8.02 of the Target Disclosure
Letter prior to Closing, using a portion of the proceeds of the Short Term
Loan, which Existing Office Indebtedness is secured by the properties listed in
Section 8.02 of the Target Disclosure Letter, and in connection
therewith shall pay all accrued interest, prepayment penalties and other
charges related thereto or in connection therewith.


8.03.        Acquisition of Joint Venture
Interests; Disposal of Properties.


Prior
to or concurrently with the Closing, Target shall have taken all actions
necessary to (i) acquire the outstanding equity interests in the Target Joint
Ventures not owned by Target and (ii) dispose of the real estate
properties and related entities owned by Target which hold assets other than
the Target Properties or the Retail Properties.


8.04.        Prorations and Adjustments.


This
Section 8.04 applies to the Merger Closing Properties.  At Closing, accounts payable, rents (to the
extent prepaid), all real and personal property taxes, water rents, sewer
charges, electric and other utility charges, fuel if any, operating expenses, wages,
any special assessments, if any, and other similar charges affecting the Merger
Closing Properties and all utility charges, if any, shall be adjusted and
prorated as of midnight of the day prior to the Closing Date (the “Closing Adjustment Time”).  All other charges or fees customarily
prorated and adjusted in similar transactions shall be adjusted as of the
Closing Adjustment Time.  All rent (other
than prepaid rent) received from the tenants of the Merger Closing Properties
shall be adjusted (prorated) as of the Closing Adjustment Time and paid in
accordance with the following provisions, together with the following
adjustments:


(i)            Following
receipt of the monthly installment of basic rent under any of the Merger
Closing Properties Leases attributable to the month in which the



 58
 









Closing occurs, such installment shall be adjusted as of the Closing
Adjustment Time, with the Target Stockholders being entitled to the portion
thereof attributable to the period of the month immediately preceding the
Closing Date and Acquiror entitled to the balance of such monthly
installment.  Acquiror shall use
commercially reasonable efforts to seek to collect unpaid rents and other
amounts attributable to the period prior to the Closing Adjustment Time.


(ii)           Acquiror
shall be entitled to all basic rent and other sums due under any of the Merger
Closing Properties Leases as of the Closing Adjustment Time with the exception
of (a) common area maintenance (CAM) and real estate tax reimbursements
attributable to periods prior to the Closing Adjustment Time; (b) the basic
rent for the Closing month to which an Acquiror is entitled under (i) above,
and (c) rental arrearages for periods preceding the Closing Adjustment
Time, and (d) rents received from tenants prior to the Closing Adjustment Time
which relate to periods prior to the Closing Adjustment Time.  Annual CAM and tax reimbursements, which are
payable by the tenant on an annual basis after the conclusion of each calendar
year, will be adjusted as of the Closing Adjustment Time, with the Target
Stockholders being entitled to the portion thereof attributable to the period
of the year immediately preceding the Closing Adjustment Time and the Acquiror
being entitled to the balance of such payment. 
Additionally, any tenant payments for special services which were
specifically billed by Target or one of its Affiliates prior to the Closing
Adjustment Time shall be owed to the Target Stockholders.  All CAM payments from tenants received by Target
or Target Subsidiaries which relate to periods after the Closing Adjustment
Time shall be credited to Acquiror at Closing.


(iii)          All security deposits under the Merger
Closing Properties Leases (excluding letters of credit posted as security
deposits as listed in Section 8.04(iii) of the Target Disclosure Letter)
and rents received by Target and Target Subsidiaries which relate to periods
after the Closing Adjustment Time shall be credited to Acquiror at
Closing.  Letters of credit posted as
security deposits as listed in Section 8.04(iii) of the Target
Disclosure Letter shall be assigned to Acquiror at Closing.


(iv)          All Leasing Commissions and tenant
improvements with respect to the Target Properties Leases signed after
September 6, 2006 shall be assumed by Acquiror. 
All Pre-LOI Leasing Commissions and Pre-LOI TI Work shall be the
obligation of the Target.  Any such
unpaid amounts with regard to the Pre-LOI Leases as of the Closing Date,
together with the estimated cost to complete the Pre-LOI TI Work after the
Closing, shall be credited to Acquiror at Closing.  To the extent Target has paid the Leasing
Commissions and tenant improvements for leases signed after September 6, 2006,
Target Stockholders shall receive a credit at Closing.


(v)           Acquiror will be credited at Closing
for an amount equal to any casualty insurance deductibles and uninsured losses
relating to casualties which may have occurred at the Merger Closing Properties
prior to the Closing.



 59
 









(vi)          If Acquiror collects any unpaid or
delinquent rents relating to the Merger Closing Properties after the Closing
Adjustment Time, Acquiror shall deliver to the Liquidating Trust the rent to
which the Liquidating Trust is entitled relating to the period prior to the
Closing Adjustment Time.  All rents
relating to the Merger Closing Properties received by Acquiror after the
Closing Adjustment Time shall be applied first to current and then delinquent
rent in the inverse order of maturity.


(vii)         An amount equal to the Retained LC
Amount shall be credited to Acquiror at Closing pursuant to Section 8.08.


(viii)        Acquiror shall credit to Target
Stockholders at Closing any money spent by Target with respect to the Sewer
System (as such term is defined in the Acquisition Agreement) on or after
September 6, 2006.


(ix)           Intentionally Deleted.


(x)            If there are any liens or
encumbrances applicable to Target Properties other than Permitted Liens, as of
Closing, the amount to discharge such liens and encumbrances shall be credited
to Acquiror at Closing.


(xi)           If there shall be a breach of any of
the representations, warranties, covenants or agreements made by Target herein
and Target fails to cure such breach by the Outside Date, or if there shall be
any outstanding liabilities or obligations of Target, Target Subsidiaries, NPI
Exchange Entities or NPI Entities as of the Effective Time other than the
Office Assumed Loans, the Short Term Loan, the Scheduled Contracts and the
Target Properties Leases, the amount of the aggregate Damages resulting from
such breach or such outstanding liabilities or obligations in excess of Two
Hundred Fifty Thousand Dollars ($250,000) shall be credited to Acquiror at
Closing.


(xii)          The fees payable to the Share Escrow
Agent shall be equally split by Target Stockholders and Acquiror and paid at
Closing.


(xiii)         Any unpaid amounts due by Target as of
the Effective Time as described in Section 6.02(i)(ii) of the Target
Disclosure Letter shall be credited to Acquiror at Closing.  Any refund of prior property taxes owed to
Target as of the Effective Time (net of any attorneys’ fees), pursuant to a
successful appeal, shall be credited to Target Stockholders at Closing.


(xiv)        Any costs to rectify overstressed joints
pursuant to, and in accordance with, paragraph three of Section 6.02(g)(iv)
of the Target Disclosure Letter shall be credited to Acquiror at Closing, to
the extent such costs were not paid by Target prior to Closing.


All adjustment items
(collectively, the “Closing
Adjustments”) shall be resolved by the parties in good faith at
least five (5) Business Days prior to the Closing Date.  To the extent that the Closing Adjustments
result in a net payment due to Target Stockholders, immediately prior to the
Effective Time, the Merger Consideration shall be increased as



 60
 









set forth in Section
4.01.  To the extent that the Closing
Adjustments result in a net payment due by the Target Stockholders, immediately
prior to the Effective Time, the Merger Consideration shall be decreased as set
forth in Section 4.01.  The net
payment either due to or due by the Target Stockholders is referred to as the “Closing Adjustment Amount”.


8.05.        Articles Supplementary.


Acquiror
shall take all necessary actions to approve and file with the SDAT the Articles
Supplementary prior to the Effective Time.


8.06.        Intellectual Property.


The
parties hereto agree that the Target Stockholders retain the exclusive rights
to use of the word “Nottingham” except that Acquiror will be granted a license
to use the names “Nottingham Ridge,” “Nottingham Centre” and “Nottingham Center”
with respect to those properties, in the form attached hereto as Exhibit E
(the “License Agreement”).


8.07.        COBRA Agreements.


On
and after the Effective Time, Acquiror shall provide applicable notices and
continuing health coverage that satisfies COBRA to Ronald Heagy, Bruce Campbell
III,  John Auer and Deborah Sellmayer (and members of their family), to
individuals who are within their COBRA election period as of the Effective
Time, and to employees of NPI (and members of their family) terminated in
connection with the Retail Transaction but only with respect to the NPI Group
Health Plan and only if such Retail Transaction is consummated within sixty
(60) days of the Closing hereunder. 
Acquiror’s obligation, however, does not include the assumption of any
other liability with respect to NPI’s employee benefit plans and does not
extend to any other obligation or liability under COBRA.  NPI shall indemnify Acquiror, Acquiror OP and
Merger Subsidiary with respect to any such non-assumed obligations and
liabilities, pursuant to the agreement described in Section 9.05(f) of this
Agreement.


8.08.        Certain Agreements.


As
of the Effective Time, Acquiror shall assume the obligations of Target or its
Affiliates under each of the public works agreements, utility
agreements and permits relating to the Target Properties Escrow LCs and
the Target Properties LCs.   At the Closing, Acquiror shall receive a
credit against the Merger Consideration equal to the sum of the amount
outstanding under the Target Properties Escrow LCs as of the Effective Time
(the “Retained LC Amount”).  Acquiror OP shall use its commercially
reasonable efforts to arrange for the Target Properties Escrow LCs to be
released or terminated once the work which is secured by the Target Properties
Escrow LCs shall have been completed (the “Outstanding Work”).  Target will use its commercially reasonable
efforts to complete all Outstanding Work prior to Closing.  To the extent that any such Outstanding Work
is not completed prior to Closing, Acquiror shall use its commercially
reasonable efforts to complete such Outstanding Work.  At any time and



 61
 









from time to time
as a Target Properties Escrow LC is terminated or released, Acquiror will pay
to the Liquidating Trust the amount of the outstanding balance of such Target
Properties Escrow LC less the documented amount paid by Acquiror or Acquiror OP
to complete the Outstanding Work or to correct any defective Outstanding Work
related to such Target Properties Escrow LC.


8.09.        Reciprocal Release.


Prior
to the Closing, Target and NPI will enter into the Reciprocal Release.


8.10.        Lockbox.


Prior
to Closing, Target shall close its lockbox that was previously established for
the receipt of rents attributable to the Target Properties.


8.11.        Final Tax Returns.


Target shall prepare its final income tax return at
its own expense subject to Acquiror’s prior written approval.


8.12.        Insurance Proceeds.


All
insurance proceeds with respect to the Target Properties, regardless of the
amount, shall remain the property of Target and Target Subsidiaries.  Thus, Target Stockholders shall not be
entitled to any such insurance proceeds in the event of a casualty at the
Target Properties or a claim that arose with respect to the Target Properties.


8.13.        Satisfaction of Dollenberg Retirement
Obligations.


Prior
to the Closing, NPI and Target will establish a trust to which they shall pay
the funds due to P. Douglas Dollenberg to satisfy the Dollenberg Retirement
Obligations.


ARTICLE IX.

CONDITIONS TO CONSUMMATION OF THE TRANSACTION AND CLOSING

DELIVERIES


9.01.        Conditions to the Obligations of Each
Party.


The
obligations of each party to effect the Merger shall be subject to the
satisfaction, at or prior to the Closing, of the following conditions:


(a)           Target
Stockholder Approval.  This Agreement
and the Transaction shall have been approved and adopted by the requisite
affirmative vote of the Target Stockholders in accordance with the MGCL and the
Target Charter.



 62
 









(b)           No
Order.  No Governmental Authority in
the United States shall have enacted, issued, promulgated, enforced or entered
any Law (whether temporary, preliminary or permanent) which is then in effect
and has the effect of making the Transaction illegal or otherwise restricting,
preventing or prohibiting consummation of the Transaction.


(c)           Governmental
Approvals.  All required approvals of
Governmental Authorities, if any, shall have been obtained.


(d)           Lender’s
Approval.  All required Lender’s
Approval of the Target Group, if any, shall have been obtained.


9.02.        Conditions to the Obligations of
Acquiror, Acquiror OP and Merger Subsidiary.


The
obligations of Acquiror and Merger Subsidiary to consummate the Transaction are
subject to the satisfaction or waiver (where permissible) of the following
additional conditions:


(a)           Representations and Warranties.  The representations and warranties of Target
in this Agreement that (i) are not made as of a specific date shall be true and
correct as of the date of this Agreement and as of the Closing, as though made
on and as of the Closing, and (ii) are made as of a specific date shall be true
and correct as of such date, in each case, except where the failure of all
representations or warranties to be true and correct in the aggregate is not
reasonably likely to result in a Target Material Adverse Effect.  Notwithstanding the foregoing, in determining
whether a cumulative Target Material Adverse Effect has occurred at Closing for
the purposes of this Section 9.02(a), any limitation as to materiality
or Target Material Adverse Effect in a representation or warranty shall be
disregarded.


(b)           Agreements and Covenants.  Target shall have delivered all of the items
listed in Section 9.04, and otherwise have performed, in all material
respects, all obligations and complied with, in all material respects, all
agreements and covenants to be performed or complied with by it under this
Agreement on or prior to the Closing.


(c)           Material Adverse Effect.  Since the date of this Agreement, there shall
have occurred no change, event or circumstance which, individually, or in the
aggregate, is reasonably likely to result in a Target Material Adverse Effect.


(d)           Existing Indebtedness.  All of the Existing Office Indebtedness shall
have been repaid and the only indebtedness of Target and Target Subsidiaries as
of the Effective Time shall be the Assumed Loans and the Short Term Loan, the
only indebtedness of the Retail Entities as of the Effective Time shall be the
Existing Retail Indebtedness, and the amounts due under the Existing Retail
Indebtedness, Short Term Loan and Assumed Loans shall not exceed $129,648,266.



 63
 









(e)           Officer’s Certificate.  Target shall have delivered to Acquiror a
certificate, dated the date of the Closing, signed by the President or any Vice
President of Target, certifying as to the satisfaction of the conditions
specified in this Section 9.02, and including as an exhibit a Target
Disclosure Letter updated as of the Closing Date.


(f)            Tenant Estoppels.  At least one (1) Business Day prior to the
Closing Date, Target shall have delivered to Acquiror the tenant estoppel
certificates in the form attached hereto as Exhibit J executed by those
tenants listed in Section 9.02(f) of the Target Disclosure Letter, free
from material adverse disclosures not previously disclosed to Acquiror.


(g)           Office Assumed Loan Documents.  The Office Assumed Loan Documents shall have
been fully executed and delivered to Acquiror.


(h)           Corporate Dissolutions.  Prior to the Effective Time, Target shall
have dissolved the corporations listed in Section 9.02(h) of the Target
Disclosure Letter.


(i)              Stock Distribution.  Prior to the Effective Time, Target shall
have caused all of the outstanding stock in each of NVI Communities, Inc. and
Village Ventures, Inc. to be distributed to the Liquidating Trust.


(j)            Assignment of Insurance Loans.  Prior to the Effective Time, Target shall have
transferred all of its rights and obligations relating to the officers life
insurance policies and loans as listed in Section 9.02(j) of the Target
Disclosure Letter to the Liquidating Trust.


9.03.        Conditions to the Obligations of
Target.


The
obligations of Target to consummate the Merger are subject to the satisfaction
or waiver (where permissible) of the following additional conditions:


(a)           Representations
and Warranties.  The representations
and warranties of Acquiror, Acquiror OP and Merger Subsidiary in this Agreement
that (i) are not made as of a specific date shall be true and correct as of the
date of this Agreement and as of the Closing, as though made on and as of the
Closing, and (ii) are made as of a specific date shall be true and correct as
of such date, in each case, except where the failure of such representations or
warranties to be true and correct in the aggregate is not reasonably likely to
result in an Acquiror Material Adverse Effect. 
Notwithstanding the foregoing, in determining whether a cumulative
Acquiror Material Adverse Effect has occurred at Closing for the purposes of
this Section 9.03(a), any limitation as to materiality or Acquiror
Material Adverse Effect in a representation or warranty shall be disregarded.


(b)           Agreements
and Covenants.  Acquiror, Acquiror OP
and Merger Subsidiary shall have performed, in all material respects, all
obligations or complied with, in all material respects, all agreements and
covenants to be performed or complied with by them under this Agreement on or
prior to the Closing.



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(c)           Intentionally
Deleted.


(d)           Articles
Supplementary.  The Articles
Supplementary shall have been approved by the trustees of Acquiror, filed with
and accepted by the SDAT and be in full force and effect.


(e)           Material
Adverse Effect.  Since the date of
this Agreement, there shall have occurred no change, event or circumstance
which, individually, or in the aggregate, is reasonably likely to result in an
Acquiror Material Adverse Effect.


(f)            Officer Certificate.  Acquiror shall have delivered to Target a
certificate, dated the date of the Closing, signed by the President or any Vice
President of Acquiror, certifying as to the satisfaction of the conditions
specified in this Section 9.03.


9.04.        Deliveries by Target.  At Closing, Target shall execute and deliver
or cause to be delivered to Acquiror:


(a)           Notices
to Tenants substantially in the form attached hereto as Exhibit F, dated
as of the Closing Date, executed by Target, and complying with applicable
statutes in order to relieve Target of liability for any security deposits
(provided the security deposits are paid to Acquiror), directing tenants to pay
all rent due and owing under the Target Properties Leases to Acquiror or
Acquiror’s designated agent;


(b)           originals
of the Target Properties Leases and copies of lease files at the Target
Properties, and originals of any maintenance and service contracts that are to
be assumed, to the extent any such documents are in the possession of Target or
any Target Subsidiary;


(c)           an
affidavit that Target is not a “foreign person” in the form attached as Exhibit
G;


(d)           maintenance
records, equipment manuals and plans and specifications for the Target
Properties, to the extent any such documents are in the possession of Target or
any Target Subsidiary;


(e)           keys
or combinations to all locks at the Target Properties, to the extent any such
keys or combinations are in the possession of Target or any Target Subsidiary;


(f)            the
certificate described in Section 9.02(e);


(g)           legal
opinions of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, dated
as of the Closing Date and in the form attached hereto as Exhibit H;



 65
 









(h)           the receipt or release from Wachovia
Capital Markets, LLC as described in Section 6.02(n);


(i)            an executed settlement sheet;


(j)            affidavits required by the Anchor
Title Company in the form attached hereto as Exhibit I;


(k)           cross-release and indemnity between
NPI, Acquiror and Target in the form of Exhibit K attached hereto (the “Reciprocal Release”);


(l)            release of guaranties executed by
Target on properties that are not Target Properties or evidence reasonably
satisfactory to Acquiror that the associated loan has been repaid;


(m)          certificate of good standing of Target
from the State Department of Assessments and Taxation of the State of Maryland;


(n)           estoppels from the community
associations set forth on Section 9.04(n) of the Target Disclsoure
Letter;


(o)           tenant estoppels as more particularly
set forth in Section 9.02(f) hereof;


(p)           the Office Assumed Loan Documents;


(q)           with respect to obligations of Target
to P. Douglas Dollenberg, a receipt evidencing payment of such obligations, a
payoff acknowledgement, a copy of the original promissory note marked cancelled
and paid-in-full and a copy of the returned Target stock certificates;


(r)            the First Amendment to Retirement
Agreement by and between P. Douglas Dollenberg, NPI and Target in substantially
the form of Exhibit L attached hereto;


(s)           releases from the employees listed in
document #1 under the heading “Employee Benefit Plans of Target” in Section
6.02(o)(ii) of the Target Disclosure Letter;


(t)            evidence of payment of all deferred
management fees owed by Target to NPI;


(u)           evidence from Mercantile — Safe
Deposit and Trust Company that there is no balance due under Target’s revolving
line of credit;


(v)           the License Agreement (as executed by
the Liquidating Trust);



 66
 









(w)          the Acknowledgement by P. Douglas
Dollenberg in substantially the form attached hereto as Exhibit N; and


(x)            the Additional Acknowledgement #1 by
P. Douglas Dollenberg in substantially the form attached hereto as Exhibit O.


9.05.        Deliveries by Acquiror.  At Closing, Acquiror shall execute and
deliver or cause to be delivered to Target:


(a)           the Merger Consideration, as more
particularly set forth in Section 4.01;


(b)           certificate of good standing of
Acquiror from the State Department of Assessments and Taxation of the State of
Maryland;


(c)           the Office Assumed Loan Documents;


(d)           legal opinion of DLA Piper US LLP,
dated as of the Closing Date in the form attached hereto 

as Exhibit M;


(e)           the certificate described in Section
9.03(f);


(f)            the Reciprocal Release; and


(g)           the License Agreement (as executed by
the Surviving Entity).


ARTICLE X.

TERMINATION


10.01.      Termination.


This Agreement may
be terminated at any time prior to the Effective Time in writing (the date of
any such termination, the “Termination
Date”):


(a)           by
the mutual written consent of Acquiror and Target;


(b)           by
either Target or the Acquiror upon written notice to the other party, if:


(i)            any Governmental Authority with
jurisdiction over such matters shall have issued a governmental order
permanently restraining, enjoining or otherwise prohibiting the Transaction,
and such governmental order shall have become final and unappealable; provided, however,
that the terms of this Section 10.01(b)(i) shall not be available to any
party (A) unless such party shall have used its reasonable efforts to oppose
any such governmental order or to have such governmental order vacated or made
inapplicable to the Transaction or (B) whose failure to comply with the terms
of this Agreement has been the cause of, or materially contributed to, such
governmental action;



 67
 









(ii)           the Transaction shall not have been
consummated on or before February 28, 2007 (the “Outside Date”), unless the failure to
consummate the Transaction on or prior to the Outside Date is the result of any
action or inaction under this Agreement by the party seeking to terminate the
Agreement pursuant to the terms of this Section 10.01(b)(ii); or


(iii)          upon a vote at a duly held meeting (or
at any adjournment or postponement thereof) to obtain the Stockholder Approval,
the Stockholder Approval is not obtained;


(c)           by
Acquiror, upon written notice to Target:


(i)            if
a Target Material Adverse Effect shall have occured;


(ii)           if
the Target Board makes a Change in Recommendation prior to the Target
Stockholder Meeting; or


(iii)          if
Target shall have breached any of its representations or warranties or failed
to perform any of its covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would give rise to the
failure of a condition set forth in Section 9.02 and (B) is incapable of
being cured by Target by the Outside Date or, if capable of being cured by
Target by the Outside Date, Target does not commence to cure such breach or
failure within ten (10) Business Days after its receipt of written notice
thereof from Acquiror and cure such breach or failure by the Outside Date;


(d)           by
Target, upon written notice to Acquiror, if:


(i)            Acquiror shall have breached any of
its representations or warranties or failed to perform any of its covenants or
other agreements contained in this Agreement, which breach or failure to
perform (A) would give rise to the failure of a condition set forth in Section
9.03(a) or 9.03(b) and (B) is incapable of being cured by Acquiror
by the Outside Date or, if capable of being cured by Acquiror by the Outside
Date, Acquiror does not commence to cure such breach or failure within ten (10)
Business Days after its receipt of written notice thereof from Target and cure
such breach or failure by the Outside Date;


(ii)           prior to receipt of the Stockholder
Approval, Target (i) receives a Superior Proposal, (ii) resolves to accept
such Superior Proposal, (iii) shall have given Acquiror three (3) Business Days’
prior written notice of its intention to terminate pursuant to this provision,
and (iv) such proposal continues to constitute a Superior Proposal taking into
account any revised proposal made by Acquiror during such three (3) Business
Day period; provided, however,
that such termination shall not be effective until such time as payment of the
Termination Fee required by Section 10.03(b) shall have been made by
Target; provided, further, that
Target’s right to terminate this Agreement under this Section 10.01(d)(ii)
shall not be available if Target is then in breach of Section 7.04; or



 68
 









(iii)          the average last reported sale price
on the NYSE of the Acquiror Common Shares over any period of ten (10)
consecutive trading days after the date of this Agreement is less than or equal
to $35.00 per share.


10.02.      Effect of Termination.


In the event of
termination of this Agreement and abandonment of the Merger and the other
transactions contemplated by this Agreement pursuant to and in accordance with Section
10.01, this Agreement shall forthwith become void and of no further force
or effect whatsoever and there shall be no liability on the part of any party,
or their respective officers, directors, subsidiaries or partners, as applicable,
to this Agreement; provided, however, that notwithstanding the
foregoing, the covenants and other obligations under this Agreement shall
terminate upon the termination of this Agreement, except that the agreements
set forth in Section 7.03(b), Section 7.06, Section
8.01, Section 10.03, Section 11.07, Section 11.08 and Section
11.09 shall survive termination indefinitely.  If this Agreement is terminated as provided
herein, all filings, applications and other submissions made pursuant to this
Agreement, to the extent practicable, shall be withdrawn from the agency or
other Person to which they were made.


10.03.      Fees and Expenses.


(a)           Except as otherwise explicitly set
forth in this Section 10.03 or elsewhere in this Agreement, all costs
and expenses incurred in connection with this Agreement or the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the transactions contemplated by this Agreement are consummated.


(b)           Target agrees that if this Agreement
shall be terminated by (i) Acquiror pursuant to Section 10.01(c)(ii), or
(ii) Target pursuant to Section 10.01(d)(ii), Target shall pay to
Acquiror an amount equal to $6,500,000 (the “Termination Fee”) in cash upon such
termination.


(c)           Target agrees that if this Agreement
shall be terminated by Acquiror or Target pursuant to Section 10.01(b)(iii),
and, (i) prior to the Target Stockholder Meeting, an Acquisition Proposal shall
have been publicly announced that is not subsequently withdrawn, and (ii)
concurrently with such termination or within twelve (12) months following the
Termination Date, Target enters into an agreement with respect to such
Acquisition Proposal, or such Acquisition Proposal is consummated, then Target
shall, if and when such Acquisition Proposal is consummated, pay to Acquiror
the Termination Fee within three (3) Business Days following consummation.


(d)           Intentionally Deleted.


(e)           Acquiror agrees that if (i) all
conditions to Closing under Section 9.01 and Section 9.02 have
been satisfied, (ii) Target has tendered all of its deliveries under Section
9.04, (iii) Acquiror fails to deliver the closing deliveries set forth in Section
9.05 and (iv) Target therefore terminates this Agreement in accordance with
Section



 69
 









10.01(b)(ii), then
Acquiror shall reimburse Target for the full amount of prepayment penalties
under the Existing Office Indebtedness previously paid by Target.  Target acknowledges that if it elects
reimbursement of the prepayment penalties under this Section 10.03(e),
such election shall be its sole remedy, together with payment to it of the
Deposit, upon the termination of this Agreement.


(f)            Intentionally Deleted.


(g)           If Stockholder Approval is not
obtained prior to the Outside Date, Target shall reimburse Acquiror for the
reasonable fees and expenses of outside auditors for any audit required by Rule
3-14 of Regulation S-X, as promulgated by the SEC, which filing requirement
results from the filing or contemplated filing of the Registration Statement,
within three (3) Business Days after demand by Acquiror.


(h)           Intentionally Deleted.


(i)            If Acquiror terminates this
Agreement pursuant to Section 10.01(c)(i) or Section 10.01(c)(iii),
Target shall reimburse Acquiror for Acquiror’s reasonable costs and expenses
(including reasonable attorney’s fees) in connection with this Transaction, not
to exceed One Million Dollars ($1,000,000), within three (3) Business Days
after demand by Acquiror.


ARTICLE XI.

GENERAL PROVISIONS


11.01.      Survival of Representations and
Warranties.


The
representations, warranties, covenants and agreements in this Agreement and any
exhibit, schedule or instruments delivered pursuant to this Agreement shall
survive the Closing for a period of thirty-six (36) months from the Closing
Date; provided, that any claims
made under Section 7.07 prior to the end of such thirty-six (36) month
period shall survive until such claim is resolved pursuant to Section 7.07.


11.02.      Notices.


All notices, requests,
claims, demands and other communications hereunder shall be in writing and
shall be given (and shall be deemed to have been duly given upon receipt) by
delivery in Person or by a recognized overnight courier service or sent by
telecopy (providing confirmation of transmission) to the respective parties at
the following addresses or telecopy numbers (or at such other address or
telecopy numbers for a party as shall be specified in a notice given in
accordance with this Section 11.02):



 70
 









if to
Acquiror, Acquiror OP or Merger Subsidiary:


Corporate
Office Properties Trust

6711 Columbia Gateway Drive, Suite 300

Columbia, Maryland  21046

Fax No.: (443) 285-7650

Attn: Roger A. Waesche, Jr., Executive Vice President and Chief Operating
Officer


with copies to:


Corporate
Office Properties Trust

6711 Columbia Gateway Drive, Suite 300

Columbia, Maryland  21046

Fax No.: (443) 285-7652

Attn: Karen M. Singer, Senior Vice President and General Counsel


and


DLA Piper US LLP

6225 Smith Avenue

Baltimore, Maryland  21209

Fax No.: (410) 580-3400

Attn: Richard E. Levine, Esq.


if to Target:


Nottingham
Village, Inc.

100 West Pennsylvania Avenue

Towson, Maryland 21204

Fax No.:  (410) 321-8018

Attention: J. Joseph Credit


with a copy to:


Gordon,
Feinblatt, Rothman, Hoffberger & Hollander, LLC

233 East Redwood Street

Baltimore, Maryland 21202

Fax No.:  (410) 576-4246

Attention:  Abba David Poliakoff, Esq.


11.03.      Severability.


If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law, or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner



 71
 









materially adverse
to any party.  Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.


11.04.      Amendment.


This
Agreement may be amended by the parties hereto by action taken by their
respective board of directors (or similar governing body or entity) at any time
prior to the Effective Time; provided,
however, that, after approval of
the Merger by the Target Stockholders, no amendment may be made that would
reduce the Purchase Price or the Merger Consideration without further
Stockholder Approval.  This Agreement may
not be amended except by an instrument in writing signed by the parties hereto.


11.05.      Entire Agreement; Assignment.


This Agreement, the
exhibits attached hereto, the Target Disclosure Letter and any documents
delivered by the parties in connection herewith constitute the entire agreement
between the parties with respect to the subject matter hereof and supersedes,
except as set forth in Section 7.03(b), all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof and thereof.  This Agreement shall not be assigned by
operation of law or otherwise (except to the Surviving Entity) without the
prior written consent of the other parties.


11.06.      Parties in Interest.


This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, other than Section 7.08, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.


11.07.      Specific Performance.


(a)           The parties hereto agree that
irreparable damage would occur to Acquiror in the event any provision of this
Agreement were not performed by Target or Target Subsidiaries in accordance
with the terms hereof and that Acquiror shall be entitled to seek specific
performance of the terms and conditions of this Agreement, in addition to any
other remedy at law or equity against Target.


(b)           In the event Acquiror fails to perform
its obligations under this Agreement, Target’s exclusive remedy shall be to
terminate this Agreement, in which case the Deposit shall be paid by the Cash
Escrow Agent as provided in Section 8.01 and Section 10.03(e), if
applicable.  Target may not pursue
specific performance against Acquiror, Acquiror OP or Merger Subsidiary.



 72
 









11.08.      Governing Law.


This
Agreement shall be governed by and construed in accordance with, the laws of
the State of Maryland without regard, to the fullest extent permitted by law,
to the conflicts of laws provisions thereof which might result in the
application of the laws of any other jurisdiction.


11.09.      Waiver of Jury Trial.


Each of the
parties hereto hereby waives to the fullest extent permitted by applicable Law
any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in connection with this
Agreement or the transactions contemplated hereby.  Each of the parties hereto (a) certifies that
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement and
the transactions contemplated hereby, as applicable, by, among other things,
the mutual waivers and certifications in this Section 11.09.


11.10.      Headings.


The
descriptive headings contained in this Agreement are included for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.


11.11.      Counterparts.


This
Agreement may be executed and delivered (including by facsimile transmission)
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.


11.12.      Mutual Drafting.


Each
party hereto has participated in the drafting of this Agreement, which each
party acknowledges is the result of extensive negotiations between the parties.


11.13.      Time is of the
Essence.


Time
is of the essence with respect to each provision of this Agreement.


[Signature
page follows]



 73
 









IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in counterparts by their duly authorized officers, all
as of the day and year first above written.




	
  

  	
   

  	
   

  	
  CORPORATE OFFICE PROPERTIES TRUST

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ ROGER A.
  WAESCHE, JR.

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  	
   

  	
   

  	
  Roger A.
  Waesche, Jr.

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Operating
  Officer and

  
	
   

  	
   

  	
   

  	
  CORPORATE OFFICE PROPERTIES,
  L.P.

  
	
   

  	
   

  	
   

  	
  By:

  	
  Corporate Office
  Properties Trust,

  
	
   

  	
   

  	
   

  	
   

  	
  its sole general
  partner

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ ROGER A.
  WAESCHE, JR.

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  	
   

  	
   

  	
  Roger A.
  Waesche, Jr.

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Operating
  Officer and

  
	
   

  	
   

  	
   

  	
  W&M BUSINESS TRUST

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ ROGER A.
  WAESCHE

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  	
   

  	
   

  	
  Roger A.
  Waesche, Jr.

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Operating
  Officer and

  
	
   

  	
   

  	
   

  	
  NOTTINGHAM VILLAGE, INC.

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ J. JOSEPH
  CREDIT

  
	
   

  	
   

  	
   

  	
   

  	
  J. Joseph Credit

  
	
   

  	
   

  	
   

  	
   

  	
  President and
  Chief Executive Officer

  






 


[Signature
page to Merger Agreement]



 74
 









JOINDERS


Nottingham Properties, Inc. joins herein for the sole
purpose of acknowledging its obligations under Sections 8.09 and 8.13 of this
Agreement.




	
  

  	
  NOTTINGHAM PROPERTIES, INC.

  
	
   

  	
  By:

  	
  /s/ J. JOSEPH
  CREDIT

  
	
   

  	
  J. Joseph Credit

  
	
   

  	
  President and

  
	
   

  	
  Chief Executive
  Officer

  






 


NVI Liquidating Trust joins herein to evidence its
obligations under this Agreement, including its obligations as Stockholders’
Agent under Section 7.07 of this Agreement.




	
  

  	
  NVI LIQUIDATING TRUST

  
	
   

  	
  By:

  	
  /s/ J. JOSEPH
  CREDIT

  
	
   

  	
  J. Joseph
  Credit, Trustee

  






 



 75
 









The
Cash Escrow Agent executes this Purchase Agreement and Agreement and Plan of
Merger of this 21st day of December, 2006 to acknowledge its
receipt of an original copy of this Agreement as executed by Acquiror, Acquiror
OP, Merger Subsidiary and Target, to acknowledge that it is holding the
Deposit, and to acknowledge its agreement to act as Cash Escrow Agent in
accordance with the terms and conditions set forth herein.




	
  WITNESS:

  	
   

  	
  CASH ESCROW AGENT:

  
	
   

  	
   

  	
  ANCHOR TITLE COMPANY

  
	
   

  	
   

  	
  By:

  	
  /s/ M. CHARLOTTE
  POWEL

  
	
   

  	
   

  	
   

  	
  Name: M.
  Charlotte Powel

  
	
   

  	
   

  	
   

  	
  Title: President

  






 



 76
 









The
Share Escrow Agent executes this Purchase Agreement and Agreement and Plan of
Merger of this 21st
day of December, 2006 to acknowledge its receipt of an original
copy of this Agreement as executed by Acquiror, Acquiror OP, Merger Subsidiary
and Target, to acknowledge that it is holding the Escrow Shares, and to
acknowledge its agreement to act as Share Escrow Agent in accordance with the
terms and conditions set forth herein.




	
  WITNESS:

  	
   

  	
  SHARE ESCROW AGENT:

  
	
   

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
  By:

  	
  /s/ CHRIS M.
  FRIESS

  
	
   

  	
   

  	
   

  	
  Name: Chris M.
  Friess

  
	
   

  	
   

  	
   

  	
  Title: Account
  Manager

  






 



 77














SCHEDULE
1


PURCHASE
PROPERTIES


	
  Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Ownership Immediately

  
	
  Class

  	
   

  	
  Property

  	
   

  	
  Address

  	
   

  	
  Prior To Effective Time

  
	
  B.1

  	
   

  	
  37 Allegheny Avenue

  	
   

  	
  37 Allegheny Avenue, Baltimore County, MD

  	
   

  	
  37 Allegheny Business Trust

  
	
  B.2

  	
   

  	
  10552 Philadelphia Road – Leasehold Interest

  	
   

  	
  10552 Philadelphia Road, Baltimore County, MD

  	
   

  	
  Philadelphia Road Operating Company, LLC

  
	
  B.3

  	
   

  	
  Intentionally Deleted

  	
   

  	
   

  	
   

  	
   

  
	
  B.4

  	
   

  	
  9020 Mendenhall

  	
   

  	
  9020 Mendenhall Court, Howard County, MD

  	
   

  	
  9020 Mendenhall, LLC

  
	
  B.5

  	
   

  	
  Woods at Broken Land

  	
   

  	
  9700 Patuxent Woods Drive, Howard County, MD

  	
   

  	
  Woods Investors, LLC

  
	
  B.6

  	
   

  	
  Rivers Center III

  	
   

  	
  10270 N. Old Columbia Road, Howard County, MD

  	
   

  	
  Rivers Center III Investors, LLC

  
	
  G.1

  	
   

  	
  Campbell Corporate Center I

  	
   

  	
  4940 Campbell Boulevard, Baltimore County, MD

  	
   

  	
  Corporate Center I Limited Partnership

  
	
  G.9

  	
   

  	
  Nottingham Centre

  	
   

  	
  502 Washington Avenue, Baltimore County, MD

  	
   

  	
  Nottingham Associates Limited Partnership

  
	
  G.10

  	
   

  	
  White Marsh Health Center

  	
   

  	
  8114 Sandpiper Circle, Baltimore County, MD

  	
   

  	
  White Marsh Health Center Limited Partnership, LLLP

  
	
  G.12

  	
   

  	
  White Marsh Hi-Tech I and II

  	
   

  	
  4969 Mercantile Road (Bldg 1)

  4979 Mercantile Road (Bldg 2)

  4981 Mercantile Road (Parking)

  	
   

  	
  White Marsh Hi-Tech 1 Business Trust (49%) and White
  Marsh Hi-Tech 2 Business Trust (51%)

  



 


Notes


G.1.  Acquiror OP will purchase a 50% limited
partnership interest in Corporate Center I Limited Partnership.


G.9.  Acquiror OP will purchase a 43.7% limited
partnership interest in Nottingham Associates Limited Partnership.


G.10.  Acquiror OP will purchase a 60% limited
partnership interest in Sandpiper Limited Partnership which, in turn, owns a
72.5% general partnership interest in White Marsh Health Center Limited
Partnership, LLLP.


G.12.  Acquiror OP will purchase
100% of beneficial interests in White Marsh Hi-Tech 2 Business Trust (which
shall own a 51% tenancy-in-common interest in White Marsh Hi-Tech property).



 S-1-1














SCHEDULE
2


MERGER PROPERTIES


	
  Property 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Property Owner Immediately

  
	
  Class

  	
   

  	
  Property

  	
   

  	
  Address

  	
   

  	
  Prior To Effective Time

  
	
  A.1

  	
   

  	
  8029 - 8031 Corporate Drive

  	
   

  	
  8029-8031 Corporate Drive, Baltimore County, MD

  	
   

  	
  8029 Corporate Drive Business Trust

  
	
  A.2

  	
   

  	
  Corporate Place I

  	
   

  	
  8140 Corporate Drive, Baltimore County, MD

  	
   

  	
  Corporate Place I Business Trust

  
	
  A.3

  	
   

  	
  Franklin Ridge V

  	
   

  	
  9900 Franklin Square Drive, Baltimore County, MD

  	
   

  	
  Franklin Ridge V Business Trust

  
	
  A.4

  	
   

  	
  Tyler Ridge II – Fee Interest

  	
   

  	
  8007 Corporate Drive, Baltimore County, MD

  	
   

  	
  Tyler Ridge II Business Trust

  
	
  A.5

  	
   

  	
  Tyler Ridge IIA

  	
   

  	
  8003 Corporate Drive, Baltimore County, MD

  	
   

  	
  Tyler Ridge IIA Business Trust

  
	
  A.6

  	
   

  	
  Tyler Ridge III – Fee Interest

  	
   

  	
  7941 Corporate Drive, Baltimore County, MD

  	
   

  	
  Tyler Ridge III Business Trust

  
	
  A.7

  	
   

  	
  McLean Ridge V (L)

  	
   

  	
  8100 Sandpiper Circle, Baltimore County, MD

  	
   

  	
  McLean Ridge V Business Trust

  
	
  A.8

  	
   

  	
  Corporate Place III (L)

  	
   

  	
  8120 Corporate Drive, Baltimore County, MD

  	
   

  	
  Corporate Place III Business Trust

  
	
  A.9

  	
   

  	
  Corporate Place IV (L)

  	
   

  	
  8130 Corporate Drive, Baltimore County, MD

  	
   

  	
  Corporate Place IV Business Trust

  
	
  A.10

  	
   

  	
  Lot 401 – on cul-de-sac (L)

  (Tax Parcel No. 11-2200015748)

  	
   

  	
  4985 Mercantile Road, Baltimore County, MD

  	
   

  	
  Lot 401 Business Trust

  
	
  A.11

  	
   

  	
  Nottingham Ridge (L) and

  (Tax Parcel Nos. 11-2400002078 and 11-2300012935)

  	
   

  	
  5300 Nottingham Drive, Baltimore County, MD SWM Pond
  in Nottingham Ridge

  	
   

  	
  Nottingham Ridge I Business Trust

  
	
  A.12

  	
   

  	
  Nottingham Ridge/Phila. Road (L)

  (Tax Parcel No. 11-2400002075)

  	
   

  	
  5357 Nottingham Drive, Baltimore County, MD

  	
   

  	
  Nottingham Ridge II Business Trust

  
	
  A.13

  	
   

  	
  10521 Red Run Boulevard (L)

  	
   

  	
  10521 Red Run Boulevard, Baltimore County, MD

  	
   

  	
  10521 Red Run Business Trust

  
	
  A.14

  	
   

  	
  Intentionally Deleted

  	
   

  	
   

  	
   

  	
   

  
	
  A.15

  	
   

  	
  Campbell Blvd & Franklin Sq. (18.62 acres and
  1.0052 acres SWM) (L)

  (Tax Parcel No. 14-2200020875) and 

  Tax Parcel No. 14-22000020877)

  	
   

  	
  5251 Campbell Boulevard, Baltimore County, MD

  	
   

  	
  Campbell Boulevard I Business Trust

  



 



 S-2-1
 








 


	
  A.16

  	
   

  	
  Campbell Blvd & Franklin Sq. (5.23 acres) (L)

  (Tax Parcel No. 14-2200020165)

  	
   

  	
  5201 Campbell Boulevard, Baltimore County, MD

  	
   

  	
  Campbell Boulevard II Business Trust

  
	
  A.17

  	
   

  	
  Nottingham Ridge/Phila. Rd. (9.14 acres) (L)

  (Tax Parcel No. 11-2300012656)

  	
   

  	
  5361 Nottingham Drive, Baltimore County, MD

  	
   

  	
  Nottingham Ridge III Business Trust

  
	
  A.18

  	
   

  	
  Intentionally Deleted

  	
   

  	
   

  	
   

  	
   

  
	
  A.19

  	
   

  	
  Franklin Ridge Open Space

  (Tax Parcel No. 14-2300006823) and

  (Tax Parcel No. 14-2300006822)

  	
   

  	
  .174 Ac Pvt Op Sp., NSR Franklin Square Drive and
  .539 Ac Pvt Op Sp., NSR Franklin Square Drive

  	
   

  	
  Franklin Ridge Open Space Business Trust

  
	
  A.20

  	
   

  	
  8027 Corporate Drive

  	
   

  	
  8027 Corporate Drive, Baltimore County, MD Lot 13 –
  Adjacent to Tyler Ridge I

  	
   

  	
  8027 Corporate Drive Business Trust

  
	
  A.21

  	
   

  	
  Tyler Ridge Water Management

  (Tax Parcel No. 14-220001624) and

  (Tax Parcel No. 14-220001623)

  	
   

  	
  Flood Plain and Storm Water Management Area adjacent
  to Tyler Ridge.

  	
   

  	
  Tyler Ridge Water Management Business Trust

  
	
  C.1

  	
   

  	
  10552 Philadelphia Road – Fee Interest

  	
   

  	
  10552 Philadelphia Road, Baltimore County, MD

  	
   

  	
  Honeygo Run Holdings, LLC

  
	
  C.2

  	
   

  	
  Corporate Place II

  	
   

  	
  8110 Corporate Drive, Baltimore County, MD

  	
   

  	
  Corporate Place B Equity Affiliates, LLC

  
	
  C.3

  	
   

  	
  Franklin Ridge I

  	
   

  	
  9940 Franklin Square Drive, Baltimore County, MD

  	
   

  	
  Franklin Ridge No. 1 Business Trust

  
	
  C.4

  	
   

  	
  Franklin Ridge II

  	
   

  	
  9930 Franklin Square Drive, Baltimore County, MD

  	
   

  	
  Franklin Ridge No. 2 Business Trust

  
	
  C.5

  	
   

  	
  Franklin Ridge IV

  	
   

  	
  9910 Franklin Square Drive, Baltimore County, MD

  	
   

  	
  Franklin Ridge No. 4 Business Trust

  
	
  C.6

  	
   

  	
  Nottingham Ridge C

  	
   

  	
  5355 Nottingham Drive, Baltimore County, MD

  	
   

  	
  Nottingham Ridge No. 20 Business Trust

  
	
  C.7

  	
   

  	
  Nottingham Ridge D

  	
   

  	
  5325 Nottingham Drive, Baltimore County, MD

  	
   

  	
  Nottingham Ridge No. 30 Business Trust

  
	
  E.1

  	
   

  	
  Intentionally Deleted

  	
   

  	
   

  	
   

  	
   

  
	
  F.1

  	
   

  	
  White Marsh Commerce Center I

  	
   

  	
  10001 Franklin Square (10001 – 10049), Baltimore
  County, MD

  	
   

  	
  White Marsh Commerce Center I Business Trust

  
	
  F.2

  	
   

  	
  McLean Ridge I

  	
   

  	
  8012 - 8020 Corporate Drive, Baltimore County, MD

  	
   

  	
  McLean Ridge I Business Trust

  
	
  F.3

  	
   

  	
  McLean Ridge II

  	
   

  	
  8002 - 8010 Corporate Drive, Baltimore County, MD

  	
   

  	
  McLean Ridge II Business Trust

  
	
  F.4

  	
   

  	
  McLean Ridge III

  	
   

  	
  7920 Corporate Drive, Baltimore County, MD

  	
   

  	
  McLean Ridge III Business Trust

  
	
  F.5

  	
   

  	
  McLean Ridge IV

  	
   

  	
  8098 Sandpiper Cir., Baltimore County, MD

  	
   

  	
  McLean Ridge IV Business Trust

  



 



 S-2-2
 








 


	
  F.6

  	
   

  	
  White Marsh Commerce Center II (L)

  	
   

  	
  9951 Franklin Square Drive (9951-9999 Franklin Sq.),
  Baltimore County, MD

  	
   

  	
  White Marsh Commerce Center II Business Trust

  
	
  G.1

  	
   

  	
  Campbell Corporate Center I and Parcel A (.630
  acres-Tax Parcel No. 14-2200005926)

  	
   

  	
  4940 Campbell Boulevard, Baltimore County, MD

  	
   

  	
  Corporate Center I Limited Partnership (Campbell
  Corporate Center I) and Campbell Corporate Center I-2 Business Trust (Tax
  Parcel No. 14-2200005926)

  
	
  G.2

  	
   

  	
  Franklin Ridge III

  	
   

  	
  9920 Franklin Square Drive, Baltimore County, MD

  	
   

  	
  Franklin Ridge No. 3 Business Trust

  
	
  G.3

  	
   

  	
  7272 Park Circle Drive

  	
   

  	
  7272 Park Circle Drive, Anne Arundel County, MD

  	
   

  	
  Park Circle Equities, LLC

  
	
  G.8

  	
   

  	
  1.14 acres Tax Parcel No. 14-2000000284

  	
   

  	
  Campbell Boulevard, Baltimore County, MD

  	
   

  	
  White Marsh Business Center 2 Business Trust (Tax
  Parcel No. 14-2000000284)

  
	
  G.9

  	
   

  	
  Nottingham Centre

  	
   

  	
  502 Washington Avenue, Baltimore County, MD

  	
   

  	
  Nottingham Associates Limited Partnership

  
	
  G.10

  	
   

  	
  White Marsh Health Center

  	
   

  	
  8114 Sandpiper Circle, Baltimore County, MD

  	
   

  	
  White Marsh Health Center Limited Partnership, LLLP

  
	
  G.12

  	
   

  	
  White Marsh Hi-Tech I and II

  	
   

  	
  4969 Mercantile Road (Bldg 1) 4979 Mercantile Road
  (Bldg 2) 4981 Mercantile Road (Parking)

  	
   

  	
  White Marsh Hi-Tech 1 Business Trust (49%) and White
  Marsh Hi-Tech 2 Business Trust (51%)

  



 


Notes


1.  All are improved by buildings, except for those marked with an “L”
which are land only.


2.  Target shall own 100% of the ownership interests in each of the
Property Owners in the last column, except as shown below.


G.1.  Corporate Center I Limited Partnership shall
be owned by Corporate Center I, LLC (1% general partner), Acquiror OP (50%
limited partner) and Target (49% limited partner).  Target shall own 100% of Corporate Center I,
LLC.  Target shall also own 100% of
Campbell Corporate Center I-2 Business Trust.


G.9.  Nottingham Associates Limited Partnership shall
be owned by Nottingham Center, LLC (1% general partner) Acquiror OP (43.7%
limited partner) and Target (55.3% limited partner).  Target shall own 100% of Nottingham Center,
LLC.


G.10.  White Marsh Health Center Limited
Partnership, LLLP shall be owned by Sandpiper Limited Partnership (72.5%
general partner) and Target (27.5% limited partner).  Target shall own a 40% general partnership
interest in Sandpiper Limited Partnership and Acquiror OP shall own a 60% limited
partnership interest in Sandpiper Limited Partnership.


G.12.  Target shall own 100% of White Marsh Hi-Tech
I Business Trust (which shall own a 49% tenancy-in-common interest in White
Marsh Hi-Tech property) and Acquiror OP shall own 100% of White Marsh Hi-Tech 2
Business Trust (which shall own a 51% tenancy-in-common interest in White Marsh
Hi-Tech property).



 S-2-3















SCHEDULE
3


RETAIL PROPERTIES


	
  Property

  	
   

  	
  Address

  	
   

  	
  Property Owner Immediately

  Prior To Effective Time

  
	
  Avenue at White Marsh Parking

  	
   

  	
  8207 Town Center Drive, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  8019 Honeygo Blvd – groundlease – Bertucci’s

  	
   

  	
  8019 Honeygo Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  8132 Corporate Drive – groundlease – Red Lobster

  	
   

  	
  8132 Corporate Drive, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  4921 Campbell Blvd – groundlease – TGI Friday’s

  	
   

  	
  4921 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  4924 Campbell Blvd – groundlease – Johns Hopkins

  	
   

  	
  4924 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  4930 Campbell Blvd – groundlease – JHU – Phase 2

  	
   

  	
  4930 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5302 Campbell Blvd – groundlease – McDonald’s II

  	
   

  	
  5302 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  4965-4967 Campbell Blvd – groundlease – Hilton
  Garden Inn

  	
   

  	
  4965-4967 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5100 Campbell Blvd – groundlease – M&T Bank

  	
   

  	
  5100 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5154 Campbell Blvd – groundlease – Chick-fil-A

  	
   

  	
  5154 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5250 Campbell Blvd – groundlease – BP/Subway

  	
   

  	
  5250 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5260 Campbell Blvd – groundlease – SunTrust Bank

  	
   

  	
  5260 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5340 Campbell Blvd – groundlease – BCSB

  	
   

  	
  5340 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5300 Campbell Blvd – groundlease – Lowe’s

  	
   

  	
  5300 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Retail Properties Business Trust

  
	
  5110 Campbell Blvd – groundlease – Panera Bread

  	
   

  	
  5110 Campbell Blvd, Baltimore County, MD

  	
   

  	
  Nottingham Square Business Trust

  



 



 S-3-1
 









 


 


	
  Shoppes at
  Nottingham Square 1

  	
   

  	
  5270 Campbell Boulevard, Baltimore County, MD

  	
   

  	
  Shoppes at Nottingham Square Business Trust

  
	
  Shoppes at
  Nottingham Square 2

  	
   

  	
  5350 Campbell Boulevard, Baltimore County, MD

  	
   

  	
  Campbell-Philadelphia Business Trust

  
	
  White Marsh
  Plaza

  	
   

  	
  District 14, Acct. No. 1900001897, Perry Hall
  Boulevard Baltimore County, MD

  	
   

  	
  White Marsh Plaza Business Trust White Marsh Plaza
  Limited Partnership White Marsh Plaza, LLC

  
	
  The Avenue at
  White Marsh*

  	
   

  	
  8101 Honeygo Boulevard, Baltimore County, MD

  	
   

  	
  The Avenue at White Marsh Business Trust

  



 


Notes


1.  All are improved by buildings.


2.  NVI owns 100% of the ownership interests in each of the Property
Owners in the last column, except as shown below.






*   NVI owns 100% of The Avenue at White Marsh Business Trust.  However, The Avenue at White Marsh Business
Trust owns only a 30% tenancy-in-common interest in The Avenue at White Marsh.



 S-3-2














SCHEDULE
4


NPI EXCHANGE
PROPERTIES


	
  Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Property Owner Immediately

  
	
  Class

  	
   

  	
  Property1

  	
   

  	
  Address

  	
   

  	
  Prior To Effective Time

  
	
  D.1

  	
   

  	
  Tyler Ridge II – Leasehold Interest

  	
   

  	
  8007 Corporate Drive, Baltimore County, MD

  	
   

  	
  Tyler Ridge II Improvements Business Trust

  
	
  D.2

  	
   

  	
  Tyler Ridge III – Leasehold Interest

  	
   

  	
  7941 Corporate Drive, Baltimore County, MD

  	
   

  	
  Tyler Ridge III Improvements Business Trust

  
	
  D.3

  	
   

  	
  Allegheny Parking Facility and

  (Tax Parcel No. 09-0914652094) (L)

  	
   

  	
  111 West Allegheny Avenue, Baltimore County, MD and
  117 West Allegheny Avenue, Baltimore County, MD

  	
   

  	
  Allegheny Parking Business Trust

  
	
  D.4

  	
   

  	
  Campbell Building

  	
   

  	
  100 West Pennsylvania Avenue, Baltimore County, MD

  	
   

  	
  Campbell Building Business Trust

  
	
  D.5

  	
   

  	
  Royston Building

  	
   

  	
  102 West Pennsylvania Avenue, Baltimore County, MD

  	
   

  	
  Royston Building Business Trust

  
	
  D.6

  	
   

  	
  Lot 3A – In front of Residence Inn (L)

  	
   

  	
  4960 Mercantile Road, Baltimore County, MD

  	
   

  	
  Lot 3A Business Trust

  
	
  D.7

  	
   

  	
  Philadelphia Rd./Rt. 43 (28.53 acres) (L)

  (Tax Parcel No. 11-1114066244)

  	
   

  	
  Philadelphia Road, Baltimore County, MD

  	
   

  	
  Philadelphia Road Business Trust

  
	
  E.2

  	
   

  	
  Riverwood Business Center

  	
   

  	
  7150 Riverwood Drive, Howard County, MD

  	
   

  	
  Riverwood Business Center Equity Affiliates, LLC

  
	
  E.3

  	
   

  	
  216 Schilling Center

  	
   

  	
  216 Schilling Circle, Baltimore County, MD

  	
   

  	
  Schilling 216 Investors, LLC

  
	
  E.4

  	
   

  	
  Ridgely’s Choice

  	
   

  	
  8623 Ridgely’s Choice Drive, Baltimore County, MD

  	
   

  	
  Ridgely’s Choice Business Trust

  
	
  G.4

  	
   

  	
  Schilling Center

  	
   

  	
  222 Schilling Circle (222-224 Schilling Cir.),
  Baltimore County, MD

  	
   

  	
  Schilling Center Equities, LLC

  
	
  G.5

  	
   

  	
  Professional Center I

  	
   

  	
  7939 Honeygo Boulevard, Baltimore County, MD

  	
   

  	
  Honeygo Limited Partnership I, LLLP

  
	
  G.6

  	
   

  	
  Professional Center II

  	
   

  	
  7923 Honeygo Boulevard, Baltimore County, MD

  	
   

  	
  Honeygo Limited Partnership II, LLLP

  
	
  G.7

  	
   

  	
  Professional Center III

  	
   

  	
  8133 Perry Hall Boulevard, Baltimore County, MD

  	
   

  	
  Honeygo Limited Partnership III, LLLP

  



 



 S-4-1
 








 


 


	
  G.8

  	
   

  	
  White Marsh Business Center

  	
   

  	
  5020 Campbell Boulevard (WMBC I) 5022 Campbell
  Boulevard (WMBC II) 5026 Campbell Boulevard (WMBC III) 5024 Campbell
  Boulevard (WMBC IV), Baltimore County, MD

  	
   

  	
  White Marsh Business Center Limited Partnership
  (White Marsh Business Center)

  
	
  G.11

  	
   

  	
  Tyler Ridge I

  	
   

  	
  8011 Corporate Drive, Baltimore County, MD

  	
   

  	
  Tyler Ridge I Business Trust

  



 


Notes


1.  All are improved by buildings, except for those marked with an “L”
which are land only.


2.  NPI owns 100% of the ownership interests in each of the Property
Owners in the last column, except as shown below.


G.5.  Honeygo Limited Partnership I, LLLP shall be
owned by Professional Center I, LLC (1% general partner) and NPI (99% limited
partner).  NPI shall own 100% of
Professional Center I, LLC.


G.6.  Honeygo Limited Partnership II, LLLP shall be
owned by White Marsh Professional Center II, LLC (1% general partner) and NPI
(99% limited partner).  NPI shall own
100% of White Marsh Professional Center II, LLC.


G.7.  Honeygo Limited Partnership III, LLLP shall
be owned by Professional Center III, LLC (1% general partner) and NPI (99%
limited partner).  NPI shall own 100% of
Professional Center III, LLC.


G.8.  White Marsh Business Center Limited
Partnership shall be owned by White Marsh Business Center, LLC (1% general
partner) and NPI (99% limited partner). 
NPI shall own 100% of White Marsh Business Center, LLC.  NPI shall also own 100% of White Marsh Business
Center 2 Business Trust.



 S-4-2















SCHEDULE
5


ASSUMED LOANS


	
  Lender/

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Origination
  Date/

  	
   

  	
  Property Securing

  	
   

  	
   

  	
   

  	
  Loan Balance

  	
   

  
	
  Loan Amount

  	
   

  	
  Loan

  	
   

  	
  Property Owner

  	
   

  	
  December 1, 2006

  	
   

  
	
  State Farm Bank 

  6/24/2005

  $6,000,000

  	
   

  	
  Franklin Ridge
  IV

  (Property C.5)

  	
   

  	
  Franklin Ridge No. 4 Business Trust

  	
   

  	
  $

  	
  5,884,138

  	
   

  
	
  State Farm Life Insurance Co.

  7/28/2006

  $6,000,000

  	
   

  	
  7272 Park Circle

  (Property G.3)

  	
   

  	
  Park Circle Equities, LLC

  	
   

  	
  $

  	
  5,966,778

  	
   

  
	
  State Farm Life Insurance Co.

  4/30/2004

  $6,042,655

  	
   

  	
  Nottingham
  Center

  (Property G.9)

  	
   

  	
  Nottingham Associates Limited Partnership

  	
   

  	
  $

  	
  5,631,974

  	
  *

  



 






*
This figure represents 100% of the outstanding loan balance at December 1, 2006
and the entire loan constitutes an Assumed Loan, even though a 43.7% interest
in the partnership will have been purchased pursuant to the PSA.



 S-5-1