CONTRIBUTION AGREEMENT

relating to

Hillview Shopping Center, Cherry Hill, New Jersey

Cherry Hill Partner, Inc.

Rubin Oxford Valley Associates, L.P.
Pennsylvania Real Estate Investment Trust
PREIT Associates, L.P.

                               TABLE OF CONTENTS

                                                                           Page

SECTION 1.            DEFINITIONS...........................................  2

SECTION 2.            CONTRIBUTIONS.........................................  2

SECTION 3.            CONSIDERATION.........................................  2

SECTION 4.            REPRESENTATIONS AND WARRANTIES OF THE
                      CONTRIBUTORS..........................................  2
        4.1           As to the Contributors................................  2
        4.2           As to the Project Partnership.........................  7
        4.3           As to the Shopping Center............................. 15

SECTION 5.            REPRESENTATIONS AND WARRANTIES REGARDING PREIT........ 21
        5.1           Organization.......................................... 21
        5.2           Power and Authority................................... 21
        5.3           No Conflicts.......................................... 22
        5.4           Capitalization........................................ 23
        5.5           PREIT Reports......................................... 23
        5.6           Litigation............................................ 24
        5.7           Material Adverse Change............................... 24
        5.8           Brokers............................................... 24

SECTION 6.            CERTAIN COVENANTS AND AGREEMENTS...................... 24
        6.1           Conduct of Business................................... 24
        6.2           Reasonable Efforts.................................... 26
        6.3           Notifications......................................... 26
        6.4           Operation of Shopping Center.......................... 27
        6.5           Preference Amount..................................... 27
        6.6           Interest Rate Swap.................................... 27

SECTION 7.            CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES....... 28
        7.1           Time of Closing....................................... 28
        7.2           Closing Conditions.................................... 28
        7.3           Deliveries at the Closing............................. 33

SECTION 8.            CLOSING ADJUSTMENTS................................... 34
        8.1           Adjustment for Breaches by the Contributors........... 34
        8.2           Casualty or Condemnation.............................. 34

SECTION 9.            INDEMNIFICATION....................................... 35
        9.1           Indemnification by Contributors....................... 35
        9.2           Indemnification by PREIT.............................. 36
        9.3           Limitations on Liability.............................. 36
        9.4           Procedure For Indemnification - Third Party Claims.... 38
        9.5           Procedure for Indemnification - Other Claims.......... 39
        9.6           Distributions of Class A Units by Contributors........ 40
        9.7           Right of Set-Off...................................... 40
        9.8           Indemnification Payments.............................. 40

SECTION 10.           TERMINATION AND ABANDONMENT........................... 40
        10.1          Termination........................................... 40
        10.2          Procedure for Termination; Effect of
                      Termination........................................... 41

SECTION 11.           GENERAL PROVISIONS.................................... 41
        11.1          Survival of Representations and Warranties............ 41
        11.2          Costs and Expenses.................................... 42
        11.3          Notices............................................... 42
        11.4          Access to Information; Confidentiality................ 43
        11.5          Public Announcements.................................. 43
        11.6          No Solicitation....................................... 44
        11.7          Entire Agreement...................................... 44
        11.8          Counterparts.......................................... 44
        11.9          Governing Law......................................... 44
        11.10         Section Headings, Captions and Defined Terms.......... 45
        11.11         Amendments, Modifications and Waiver.................. 45
        11.12         Severability.......................................... 45
        11.13         Liability of Trustees, etc............................ 45

CONTRIBUTION AGREEMENT

relating to

Hillview Shopping Center, Cherry Hill, New Jersey

THIS CONTRIBUTION AGREEMENT (this "Agreement") is made as of the 30th day of July, 1997, by and among CHERRY HILL PARTNER, INC., a New Jersey corporation ("CHP,Inc."), RUBIN OXFORD VALLEY ASSOCIATES, L.P., a Pennsylvania limited partnership ("RO,L.P." and, together with CHP,Inc., the "Contributors," and, each, a "Contributor"), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, an unincorporated association in business trust form created under Pennsylvania law pursuant to a Trust Agreement dated December 27, 1960, as last amended and restated on December 16, 1987 ("PREIT"), and PREIT ASSOCIATES, L.P., a Delaware limited partnership (the "Partnership").

Background

The Contributors are affiliates of The Rubin Organization, Inc., a Pennsylvania corporation ("TRO").

This Contribution Agreement is part of a larger transaction described in the TRO Contribution Agreement of even date herewith (the "TRO Contribution Agreement") among PREIT, TRO, The Rubin Organization-Illinois, Inc. and the shareholders of TRO.

The Partnership has been formed by PREIT and PREIT Property Trust, a Pennsylvania business trust ("PREIT Subsidiary"), pursuant to the terms of the Agreement of Limited Partnership dated as of June 30, 1997 (the "Partnership Agreement") of PREIT Associates, L.P. between PREIT, as general partner, and PREIT Subsidiary, as limited partner.

Subject to the terms and conditions of this Agreement and the TRO Contribution Agreement, the parties intend that the Contributors will contribute their partnership interests (the "Interests") in Cherry Hill Associates, L.P., a New Jersey limited partnership (the "Project Partnership"), which holds title to the shopping center known as the Hillview Shopping Center, Cherry Hill, New Jersey, as more fully described in Schedule B attached hereto and made a part hereof (the "Shopping Center"), in exchange for Class A limited partner interests in the Partnership ("Class A Units").

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

SECTION 1. DEFINITIONS.

Unless otherwise defined herein, capitalized terms used herein shall have the same meanings as ascribed to such terms in the TRO Contribution Agreement.

SECTION 2. CONTRIBUTIONS.

Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 7.1), the Contributors shall contribute to the Partnership, and the Partnership shall acquire from the Contributors, free and clear of all Encumbrances (other than applicable securities law restrictions and subject to the terms and conditions of the limited partnership agreement for the Project Partnership), the Interests and all benefits and advantages to be derived therefrom, including, without limitation, all right, title and interest associated with the Interests in and to the capital accounts of the Contributors, rights of the Contributors to distributions made after the Closing and allocable shares of the Contributors with respect to profits and losses.

SECTION 3. CONSIDERATION.

In consideration for the contributions described in Section 2, subject to the terms and conditions of this Agreement, at the Closing, the Partnership shall issue to the Contributors that number of Class A Units as is set forth in Schedule A hereto (which is incorporated by reference herein) as being issuable at the Closing. Following Closing, the Partnership shall issue to the Contributors at the times specified in Schedule A that number of Class A Units as are issuable, in accordance with Schedule A, following Closing.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS.

The Contributors hereby jointly and severally represent and warrant to PREIT and the Partnership as follows:

4.1 As to the Contributors.

(a) Organization. Each Contributor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all corporate or partnership power to carry on its business as presently conducted, to own and lease the assets and properties which it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound. Each Contributor is duly qualified to do business as a foreign corporation or foreign partnership and is in good standing under the laws of each jurisdiction in which its ownership or leasing of assets or properties or the nature of its

activities requires such qualification except where the failure to be so qualified would not have a material adverse effect on the condition (financial or otherwise), assets, results of operations or business of such Contributor (a "Material Adverse Effect").

(b) Power and Authority. Each Contributor has all requisite corporate or partnership power and authority to execute, deliver and perform its obligations under this Agreement and under the other agreements and documents required to be delivered by it prior to or at the Closing (collectively, the "Contributor Transaction Documents"). The execution, delivery and performance by each Contributor of this Agreement and the other Contributor Transaction Documents to which it is a party have been duly authorized by all necessary corporate or partnership action on the part of such Contributor. This Agreement has been duly and validly executed and delivered by each Contributor and constitutes a legal, valid and binding obligation of each Contributor enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles. When executed and delivered as contemplated herein, each of the other Contributor Transaction Documents to which a Contributor is a party shall, assuming due authorization, execution and delivery thereof by the other parties thereto, constitute a legal, valid and binding obligation of such Contributor enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles.

(c) No Conflicts; etc. Except as described in Section 4.1(c) of the disclosure letter delivered by the Contributors to PREIT on the date hereof (the "Contributor Disclosure Letter"), the execution and delivery by the Contributors of this Agreement do not, and the performance by the Contributors of all of the Contributor Transaction Documents will not (with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with (A) the articles of incorporation, bylaws or partnership agreement (or other organizational documents) of either Contributor or (B) any Law applicable to either Contributor, or by or to which any assets or properties of either Contributor is bound or subject;

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of benefit under, or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to, any Authorization or

Contract to which either Contributor is a party or by which either Contributor or any assets or properties thereof is bound or affected; or

(iii) result in, require or permit the creation or imposition of any Encumbrance upon or with respect to either Contributor, the Interests or any of their other assets or properties.

(d) Except as set forth in Section 4.1(d) of the Contributor Disclosure Letter, the execution and delivery by the Contributors of this Agreement do not, and the execution and delivery by the Contributors of the other Contributor Transaction Documents, and the performance by the Contributors of all of the Contributor Transaction Documents will not, require either Contributor to obtain any authorization of, or to make any filing, registration or declaration with or notification to, any court, government or governmental agency or instrumentality (federal, state, local or foreign) or to obtain the consent, waiver or approval of, or give any notice to, any other Person.

(e) Except as set forth in Section 4.1(e) of the Contributor Disclosure Letter, there are no actions, proceedings or investigations pending or, to the knowledge of the Contributors, threatened, that question any of the transactions contemplated by this Agreement or which, if adversely determined, would have a Material Adverse Effect or could materially and adversely affect either Contributor's ability to enter into or perform its obligations under this Agreement.

(f) Litigation; Orders.

(i) Except as set forth in Section 4.1(f) of the Contributor Disclosure Letter, there are no, and since January 1, 1996 there have not been any, claims, actions, suits, proceedings (arbitration or otherwise) or, to the knowledge of the Contributors, investigations involving or affecting either Contributor or any of their assets or properties or any of their directors, officers, partners or shareholders in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign), or before an arbitrator of any kind. To the knowledge of the Contributors, no such claim, action, suit, proceeding or investigation is presently threatened or contemplated. There are no unsatisfied judgments, penalties or awards against or affecting either Contributor or any of their assets or properties.

(ii) There is no material Order to which either Contributor or any of their assets or properties is subject. No officer, director, partner, shareholder or, to the knowledge of the Contributors, employee of either Contributor is

subject to any Order that prohibits such officer, director, partner, shareholder or employee from engaging in or continuing any conduct, activity or practice relating to its business. The Contributors have each complied in all respects with the terms and conditions of each Order applicable to them.

(g) Undisclosed Liabilities. Except as set forth in Section
4.1 (g) of the Contribution Disclosure Letter, there are no liabilities or obligations of the Contributors of any nature (whether absolute, accrued, contingent, liquidated or unliquidated or otherwise) except the obligations under the limited partnership agreement governing RO,L.P. and under the Agreement of Limited Partnership dated as of November 1, 1996 (the "Project Partnership Agreement") among RO,L.P., Cherry Hill Partner, Inc., and Goldenberg CH Partners, L.P. ("Goldenberg CH"), the partnership agreement governing the Project Partnership, and the obligations of RO,L.P. under the Amended and Restated Limited Partnership Agreement of Oxford Valley Road Associates dated June 27, 1996, among Rubin Oxford, Inc., RO,L.P., OVG General, Inc. ("OVG"), Goldenberg Investors, L.P., Goldenberg Partners, L.P. and Milton S. Schneider, and that certain Contribution Agreement relating to The Court at Oxford Valley of even date herewith among Rubin Oxford, Inc., RO,L.P., PREIT and the Partnership.

(h) The Interests.

(i) Section 4.1(h) of the Contributor Disclosure Letter contains an accurate and complete description of the partnership interests in the Project Partnership that have been issued of record, but the Contributors make no representation or warranty that the partnership interests or equity issued to Persons other than the Contributors have not been later assigned or encumbered. Except as described therein, no Person has any partnership or other interest in the Project Partnership or any right to receive any distributions from the Project Partnership or be allocated any profits or losses of the Project Partnership (provided, however, that with respect to the ownership of the partner interests in the Project Partnership other than the Interests, this representation is limited to the Contributors' knowledge). Each Contributor owns, beneficially and of record, the portion of the Interests described in Schedule A hereto, free and clear of all Encumbrances other than the Project Partnership Agreement. The Persons listed in Section 4.1(h) of the Contributor Disclosure Letter are the sole partners in the Project Partnership (provided, however, that with respect to the ownership of the partner interests in the Project Partnership other than the Interests, this representation is limited to the Contributors' knowledge). The issued and outstanding partnership interests in the Project Partnership have been issued by the Project Partnership in compliance with the Project Partnership Agreement, and such interests were not issued

by the Project Partnership in violation of any federal or state securities laws.

(ii) Except for this Agreement and except as provided in the Project Partnership Agreement or in leases with tenants (any such rights in leases shall be customary in projects comparable to the Shopping Center and shall not prejudice the value of the Shopping Center as calculated in Schedule A hereto), there are no rights, subscriptions, warrants, options, rights of first refusal, conversion rights or agreements of any kind outstanding to purchase or to otherwise acquire any partnership interests or other securities or obligations of any kind convertible into any partnership interest or other securities or any participation interests of any kind in the Shopping Center (or any portion thereof) or the Project Partnership; (provided, however, that with respect to the partner interests in the Project Partnership other than the Interests, this representation is limited to the Contributors' knowledge).

(iii) Upon execution and delivery by the Contributors and the Partnership of the assignment and assumption agreement contemplated by
Section 7.3, the Partnership will acquire good and valid title to the Interests, free and clear of all Encumbrances (except for applicable securities law restrictions and for the Project Partnership Agreement).

(iv) The Contributors have delivered to the Partnership on the date hereof a true and complete copy of the Project Partnership Agreement, as amended to date.

(i) Brokers. No Person acting on behalf of either Contributor or any of their respective affiliates or under the authority of any of the foregoing is or will be entitled to any brokers' or finders' fee or any other commission or similar fee, directly or indirectly, from any of such parties in connection with any of the contribution transactions contemplated by this Agreement.

(j) Accurate Disclosure. All documents and other papers delivered by or on behalf of either Contributor in connection with the transactions contemplated by this Agreement are accurate and complete in all material respects.

(k) Knowledge. For purposes of this Agreement, "to the knowledge of the Contributors" and correlative terms means the actual knowledge of Ronald Rubin, George Rubin, Edward Glickman and the officers and other senior management of each Contributor (or in the case of RO,L.P., its partners), after reasonable inquiry (with respect to Sections 4.1(h)(i) and 4.1(h)(ii), reasonable inquiry shall be construed to mean that inquiry has been made to Goldenberg CH or its affiliates (the "Goldenberg Group") by the Contributors).

(l) Investment Representations.

(i) Each Contributor acknowledges that the Class A Units to be issued pursuant to Section 3 and Schedule A hereto will not be registered under the 1933 Act on the grounds that the issuance of such units is exempt from registration pursuant to Section 4(2) of the 1933 Act and/or Regulation D promulgated under the 1933 Act, and that the reliance of the Partnership on such exemptions is predicated in part on the Contributors' representations, warranties and acknowledgements set forth in this section.

(ii) The Class A Units issued in accordance with this Agreement will be acquired by each Contributor for its own account, not as a nominee or agent, and without a view to resale or other distribution within the meaning of the 1933 Act, and the rules and regulations thereunder, and neither Contributor will distribute any of such units in violation of the 1933 Act.

(iii) Each Contributor (v) acknowledges that the Class A Units, when issued, will not be registered under the 1933 Act and such units will have to be held indefinitely by it unless they are subsequently registered under the 1933 Act or an exemption from registration is available, (w) is aware that any sales of such units made under Rule 144 of the Securities and Exchange Commission under the 1933 Act may be made only in limited amounts and in accordance with the terms and conditions for that Rule and that in such cases where the Rule is not applicable, compliance with some other registration exemption will be required, (x) is aware that Rule 144 may not be available for use by either Contributor for resale of the units, (y) is aware that the Partnership is under no obligation to register, and has no current intention of registering any of such units under the 1933 Act and (z) acknowledges that such Contributor has received and read a private placement memorandum relating to the offer of Class A Units.

(iv) Each Contributor is well versed in financial matters, has had dealings over the years in securities, including "restricted securities," and is fully capable of understanding the type of investment being made in the Class A Units and the risks involved in connection therewith.

4.2 As to the Project Partnership.

(a) Organization. The Project Partnership is a partnership duly organized, validly existing and in good standing under the laws of the State of New Jersey and has all partnership power to carry on its business as presently conducted, to own and lease the assets and properties which it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound. The Project

Partnership is duly qualified to do business as a foreign partnership and is in good standing under the laws of each jurisdiction in which its ownership or leasing of assets or properties or the nature of its activities requires such qualification except where the failure to be so qualified would not have a material adverse effect on the condition (financial or otherwise), assets, results of operations or business of the Project Partnership.

(b) No Conflicts. Except as described in Section 4.2(b) of the Contributor Disclosure Letter, the execution and delivery by the Contributors of this Agreement do not, and the execution and delivery by the Contributors of the other Contributor Transaction Documents and the performance by the Contributors of all of the Contributor Transaction Documents will not (with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with (A) the Project Partnership Agreement, or (B) any Law applicable to the Project Partnership or to the Shopping Center;

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of benefit under, or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to any material Authorization or Contract to which the Project Partnership is a party or by which the Project Partnership or the Shopping Center is bound or affected; or

(iii) result in, require or permit the creation or imposition of any Encumbrance upon or with respect to the Project Partnership, the Shopping Center or any other material assets or properties of the Project Partnership.

(c) Except as set forth in Section 4.2(c) of the Contributor Disclosure Letter, the execution and delivery by the Contributors of this Agreement do not, and the performance by the Contributors of all of the Contributor Transaction Documents will not, require the Project Partnership to obtain any authorization of, or to make any filing, registration or declaration with or notification to, any court, government or governmental agency or instrumentality (federal, state, local or foreign) or to obtain the consent, waiver or approval of, or give any notice to, any other Person.

(d) Compliance with Laws.

(i) Except as disclosed in Section 4.2(d) of the Contributor Disclosure Letter, the Project Partnership is, and, to the knowledge of the Contributors, at all times since its

inception has been, in compliance in all material respects with all Laws that are or were applicable to it or to the conduct or operation of its business or the use of the Shopping Center. The Project Partnership has not received, and there is no basis upon which the Project Partnership may expect to receive, any notice, order or other communication from any government or governmental agency or instrumentality (federal, state, local or foreign) of any alleged, actual or potential material violation of or material failure to comply with any Law applicable to the Project Partnership or the Shopping Center, and no event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a material violation by the Project Partnership, or a material failure by the Project Partnership, to comply with, any Law applicable to the Project Partnership or the Shopping Center.

(ii) The Project Partnership is in possession of all Authorizations required as of the date hereof to own, lease or operate its assets and properties or to carry on its business. The Project Partnership shall obtain as and when required by applicable law, all required Authorizations not presently in its possession, recognizing that the Shopping Center is an ongoing construction project as of the date of this Agreement. The Authorizations currently in effect are in full force and effect without any default or violation thereunder by the Project Partnership or, to the knowledge of the Contributors, by any other party thereto. The Project Partnership is in compliance with all existing Authorizations applicable to it or to the conduct or operation of its business or the use of any of its assets or properties, and no such Authorization shall be affected by the transactions contemplated hereby. Neither the Project Partnership nor, to the best knowledge of the Contributors, any partner therein has received any notice that any such Authorization currently in effect may be revoked or may not in the ordinary course be renewed upon its expiration or that by virtue of the transactions contemplated hereby that any such Authorization may be revoked or may not be granted, renewed or issued to the Project Partnership.

(e) Litigation; Orders.

(i) Except as set forth in Section 4.2(e) of the Contributor Disclosure Letter, there are no, and since inception of the Project Partnership there have not been any, claims, actions, suits, proceedings (arbitration or otherwise) or, to the knowledge of the Contributors, investigations involving or affecting the Project Partnership or any of its assets or properties or, to the knowledge of the Contributors, any of its partners in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign) or before an arbitrator of any kind (each, a "Claim") other than Claims customarily arising in

connection with the ownership and operation of shopping centers similar to the Shopping Center that are covered by insurance or are within the limits of current insurance deductibles. To the knowledge of the Contributors, no such Claim is presently threatened or contemplated. There are no unsatisfied judgments, penalties or awards against or affecting the Project Partnership or any of its assets or properties.

(ii) Except as set forth in Section 4.2(e) of the Contributor Disclosure Letter, there is no Order to which the Project Partnership or any of its assets or properties is subject. No partner or employee of the Project Partnership is subject to any Order that prohibits such partner or employee from engaging in or continuing any conduct, activity or practice relating to its business. The Project Partnership has complied in all respects with the terms and conditions of each Order applicable to it.

(f) Cost Reports. Section 4.2(f) of the Contributor Disclosure Letter includes the cost report reflecting the costs and liabilities of constructing the Shopping Center as of the date of this Agreement (the "Cost Report") incurred by the Project Partnership. As of the date hereof, no financial statements have been prepared for the Project Partnership.

(g) Undisclosed Liabilities.

(i) As of the date hereof, there are no liabilities of the Project Partnership of a nature required to be reflected in a balance sheet prepared in accordance with GAAP except: (x) those described in Section 4.2(g) of the Contributor Disclosure Letter; (y) those reflected or reserved against in the Cost Report; or (z) current liabilities incurred in the ordinary course of business consistent with past practice after the date of the Cost Report and which are neither material in amount nor inconsistent with any of the representations or warranties made herein.

(ii) As of the Closing, there shall be no liabilities of the Project Partnership of any nature (whether absolute, accrued, contingent, liquidated, unliquidated or otherwise) except the liabilities that are taken into account in the calculation of Attributable Debt pursuant to Schedule A hereto.

(h) Title to Property; Encumbrances. The Project Partnership has either good and valid title to, or has a valid, subsisting and unchallenged leasehold interest in or right to use, all personal property owned, used or leased by it. The Project Partnership owns all of the personal property (whether tangible or intangible) that is reflected as owned in its books and records, free and clear of all Encumbrances other than liens

for current taxes not yet due, the Encumbrances set forth in Section 4.2(h) of the Contributor Disclosure Letter and Encumbrances arising after the date hereof in the ordinary course of business or as the result of the Permitted Refinancing.

(i) Taxes.

(i) All Taxes due from or required to be remitted by the Project Partnership with respect to taxable periods ending on or prior to, and the portion of any interim period up to, the Closing Date have been fully and timely paid or, to the extent not yet due or payable, have been adequately provided for on the Cost Report referred to in Section 4.2(f) of the Contributor Disclosure Letter or on the books and records of the Project Partnership. There are no levies, liens or other Encumbrances relating to Taxes existing or pending, or to the best knowledge of the Contributors, threatened with respect to any of the assets of the Project Partnership.

(ii) Except as disclosed in Section 4.2(i) of the Contributor Disclosure Letter, all federal, state, local and foreign returns and reports relating to Taxes, or extensions relating thereto, required to be filed by or with respect to the Project Partnership have been timely and properly filed, and all such returns and reports are correct and complete.

(iii) No issues have been raised with any representative or employee of the Project Partnership (and are currently pending) by the IRS or any other taxing authority in connection with any of the returns and reports referred to in subsection (ii) above and no waivers of statutes of limitations have been given or requested with respect to any such returns and reports or with respect to any Taxes.

(iv) Section 4.2(i) of the Contributor Disclosure Letter identifies all federal, state, local and foreign income, franchise and sales and use tax returns of or with respect to the Project Partnership which have been examined since its date of inception, or which are currently under examination, by the IRS or by other taxing authorities, or with respect to which the applicable statute of limitations (including all extensions and tolling periods) has not yet run. Except as and to the extent shown therein, all deficiencies asserted or assessments made as a result of such examinations have been fully paid, and there are no other unpaid deficiencies asserted or assessments made by any taxing authority against the Project Partnership.

(j) Absence of Certain Changes and Events.

(i) The parties acknowledge that the Shopping Center is not fully developed or constructed and the Shopping Center will not be substantially completed until approximately November 1, 1997. Except as described in Section 4.2(j) of the Contributor Disclosure Letter and except as contemplated or disclosed herein, since its date of inception, the Project Partnership has conducted its business and activities only in the usual and ordinary course consistent with past practice and consistent with the development and construction of a retail shopping center and there has not been any:

(A) declaration or payment of any distribution or payment in respect of any interest in the Project Partnership to the extent that such payment or distribution relates to an obligation or liability of the Project Partnership after Closing or any issuance, repurchase or redemption of any such interest;

(B) amendment to the Project Partnership Agreement;

(C) damage, destruction or loss to any material asset or property of the Project Partnership, whether or not covered by insurance, that has not been fully repaired, restored or replaced;

(D) except for current trade debt incurred in the ordinary course of business consistent with past practice and except for the Permitted Refinancing, borrowing or incurring of any indebtedness, obligation or liability, contingent or otherwise by the Project Partnership;

(E) sale (other than sales of inventory in the ordinary course of business), assignment, conveyance, lease (other than to tenants for occupancy of space in the Shopping Center), or other disposition of any asset or property of the Project Partnership other than in the ordinary course of development and construction of the Shopping Center;

(F) cancellation or waiver of any material claims or rights of the Project Partnership; or

(G) agreement or commitment, whether or not in writing, to do any of the foregoing.

(k) Books and Records. The books and records of the Project Partnership, including financial records and books of

account, are complete and accurate in all material respects and have been maintained in accordance with sound business practices. To the extent such books and records constitute financial records or books of account, they fairly present revenues, expenses, assets and liabilities, all in a manner that will allow the preparation of financial statements that comply with GAAP.

(l) FIRPTA. The Project Partnership is neither a "foreign person" within the meaning of Section 1445(f) of the Code nor a "foreign partner" within the meaning of Section 1446 of the Code.

(m) List of Properties, Contracts, etc. Section 4.2(m) of the Contributor Disclosure Letter contains a complete and accurate list as of the date hereof of each item described below, and the Contributors have delivered to PREIT (or given PREIT access to) true and complete copies of each document (or summaries of oral agreements) described below.

(i) Each of the following types of Contracts, whether oral or written, to which the Project Partnership or, to the Contributors' knowledge, any of its general partners (in their capacities as such) is a party or by which it or any of its assets is bound:

(A) All Contracts that:

(I) involve performance of services or sale or lease of goods, materials or space by the Project Partnership or any of its general partners of an amount or value in excess of $25,000 in any annual period or $100,000 in the aggregate;

(II) involve performance of services or sale or lease of goods, materials or space to the Project Partnership or any of its general partners of an amount or value in excess of $25,000 in any annual period or $100,000 in the aggregate;

(III) are not in the ordinary course of business and involve expenditures or receipts by the Project Partnership or any of its general partners of more than $25,000;

(IV) are not terminable by the Project Partnership or any of its general partners without penalty or premium upon less than 60 days' notice; or

(V) are otherwise material to the business, operations, financial condition or prospects of the Project Partnership or to the ownership, operation or management of the Shopping Center.

(B) All Authorizations held by the Project Partnership that relate to any of the assets or properties owned, used or leased by the Project Partnership;

(C) All outstanding loans and advances by the Project Partnership to any partner, officer or employee of the Project Partnership; and

(D) Other than trade debt incurred in the ordinary course of business, all notes, debt instruments, other evidences of indebtedness, letters of credit and guaranties (whether written or oral) issued by or for the benefit of the Project Partnership and all loan and other agreements relating thereto.

(n) Contracts.

(i) Except as described in Section 4.2(n) of the Contributor Disclosure Letter and subject to the terms and conditions of Section 7.2(a)(ii) below, each Contract of a type required to be identified in Section 4.2(m)(i)(A) of the Contributor Disclosure Letter was made in the ordinary course of business, is in full force and effect and is valid, binding and enforceable against the parties thereto in accordance with its terms. Except as described in Section 4.2(n) of the Contributor Disclosure Letter, the Project Partnership and its general partners have each performed in all material respects all obligations required to be performed by them under each such Contract to which any of them is a party or by which any of them is bound, and, to the knowledge of the Contributors, no condition exists or event has occurred which with notice or lapse of time would constitute a default thereunder or a basis for delay, non-performance, termination, modification or acceleration of maturity or performance by any party thereto.

(ii) There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts paid or payable to the Project Partnership or any of its general partners (in their capacity as such) under any of the Contracts referred to in subparagraph (i) above. All of such Contracts that relate to the provision of services or goods by the Project Partnership or any of its general partners (in their capacity as such) have been entered into in the ordinary course of business and have been entered into without the commission of any act or any consideration having been paid or promised that is or would be in violation of any Law.

(iii) Except as set forth in Section 4.2(n) of the Contributor Disclosure Letter, without limiting the

generality of the foregoing, the Project Partnership Agreement is in full force and effect and each of the parties thereto has performed all obligations required to be performed by it under such agreement.

(o) Preference Amount. As of the date hereof, TRO and an affiliate of Ronald Rubin have the right to receive preferential distributions from the Project Partnership pursuant to Sections 7.2.1.1, 7.2.1.2 and 7.2.1.3 of the Project Partnership Agreement. As of the date hereof, the sum of the Unpaid Preference Amount and the Unpaid Cumulative Special Operating Distributions (each as defined in the Project Partnership Agreement) equals $1,540,000. Prior to the closing date under the TRO Contribution Agreement, TRO and the affiliate of Ronald Rubin will assign all of their rights with respect to such preferential distributions to TRO Liquidating LLC. If TRO Liquidating LLC's rights with respect to such preferential distributions are assigned at Closing as contemplated by Section 4(e) hereof, the assignee of such rights will succeed to all rights to preferential distributions pursuant to Sections 7.2.1.1, 7.2.1.2 and 7.2.1.3 of the Project Partnership Agreement, and such assignee shall be entitled to receive, subject to the terms of the Project Partnership Agreement, preferential distributions from the Project Partnership in an amount equal to the amount the Partnership is required to pay pursuant to
Section 4(e) of Schedule A hereto. Neither the Unpaid Preference Amount nor the Unpaid Cumulative Special Operating Distributions are a part of the Equity Fund (as defined in the TRO Contribution Agreement) and thus the payment of such amounts pursuant to the Project Partnership Agreement will not reduce the balance of the Equity Fund. As of the Closing, assuming a September 30 closing, the sum of the Unpaid Preference Amount and the Unpaid Cumulative Special Operating Distributions shall not exceed $1,600,000.

4.3 As to the Shopping Center.

(a) Title

(i) Based solely on Owner's Policy Nos. 206-103319 and 206-103324 issued by Commonwealth Land Title Insurance Company (the "Title Policy"), as of the date hereof the Project Partnership owns fee simple title to the Shopping Center, free and clear of all Encumbrances except as set forth in the Title Policy and Section 4.3(a) of the Contributor Disclosure Letter (the "Permitted Encumbrances"). To the knowledge of the Contributors, there have been no changes in the state of such title as reflected in the Title Policy other than the Title Policy Encumbrances and those encumbrances required to complete the development and construction of the Shopping Center that are of a nature customary for development projects similar to the Shopping Center.

(ii) The Project Partnership is the owner of, or the lessee under subsisting leases of, or otherwise has the right to use the personal property used by the Project Partnership in the operation of the Shopping Center. All of such property that is reflected on the Project Partnership's records as owned by the Project Partnership is free and clear of all Encumbrances, except for Permitted Encumbrances.

(iii) Except as set forth in Section 4.3(a) of the Contributor Disclosure Letter, the Title Policy and except as provided in tenant leases, there are no rights of first refusal on, or options to purchase, any portion of the Shopping Center or any right to participation interests (whether of profits, sale or refinancing proceeds, or calculated based on fair market value) with respect to any portion of the Shopping Center in favor of any tenant, lender or any other Person other than the Project Partnership. None of the tenant leases provides for any such right or option except that one or more of such leases may provide for a purchase option in favor of the tenant but only in respect of the space leased to such tenant.

(iv) To the knowledge of the Contributors, no eminent domain, condemnation, incorporation, annexation or moratorium or similar proceeding has been commenced or threatened by an authority having the power of eminent domain to condemn any part of the Shopping Center. To the Contributors' knowledge, as of the date hereof, there are no pending or threatened governmental rules, regulations, plans, studies, or court orders or decisions, which do or could materially adversely affect the use or value of the Shopping Center as a retail shopping center.

(b) Mortgage Obligations.

(i) As reflected in the Title Policy, the Shopping Center is subject as of the date hereof to the mortgage(s) securing obligation(s) in the amount(s) set forth in Section 4.3(b) of the Contributor Disclosure Letter (such obligations and any other obligations incurred to refinance such obligations, the "Loan Obligations") and is subject as of the date hereof to no other mortgage. Section 4.3(b) of the Contributor Disclosure Letter sets forth the original principal amount, approximate outstanding principal amount, interest rate, term and other material economic provisions of each of the Loan Obligations.

(ii) The documents identified in Section 4.3(b) of the Contributor Disclosure Letter, true and correct copies of which have been delivered to PREIT (or to which PREIT has been given access), constitute all of the material documents evidencing, defining or securing the Loan Obligations (the "Loan Documents").

(iii) The Project Partnership has complied with the Loan Documents, and there are no events of default thereunder now outstanding. To the Contributors' knowledge, no event has occurred, which with the passage of time or the giving of notice or both, could ripen into an event of default under the terms of the Loan Documents.

(c) Leases.

(i) The Rent Roll attached to Section 4.3(c) of the Contributor Disclosure Letter (the "Rent Roll") lists each of the leases in existence as of the date hereof with respect to any portion of the Shopping Center.

(ii) Except as set forth in Section 4.3(c) of the Contributor Disclosure Letter, as of the date hereof, there are no leases, licenses or other rights of occupancy in force which affect the Shopping Center or any portion thereof other than the leases listed in the Rent Roll. The Contributors have made available to PREIT copies of all of the leases (including all amendments) listed on the Rent Roll. Except as set forth on the Rent Roll, no uncured event of default of the Project Partnership or, to the knowledge of the Contributors, any tenant has occurred and is continuing under any lease of premises within the Shopping Center, no tenant has asserted a defense to or offset or claim against its rent or the performance of its obligations under its lease, and no tenant has asserted a default on the part of the Project Partnership which would give it the right to terminate its lease or a setoff against rent.

(iii) With respect to the leases involving the Shopping Center, except as set forth in Section 4.3(c) of the Contributor Disclosure Letter or in the leases, as of the date hereof:

(A) there are no proposed modifications to any such lease that would reduce:

(I) the space leased to any tenant;

(II) the amount of any tenant's rent; or

(III) the term of any lease;

(B) no free rent or other concession is due any tenant;

(C) the Project Partnership is not required to provide tenant improvements or refurbishments with respect any such lease other than tenant improvements

that the Project Partnership may be required to construct if an expansion option provided in a lease is exercised;

(D) no tenant has an option to terminate its lease prior to its stated expiration date;

(E) except for (x) security deposits or (y) the first full month's rent, whether or not the term of a lease has commenced, no prepayments of rent more than thirty (30) days in advance have been made under any such lease;

(F) no rent or security deposit under any such lease has been assigned or encumbered, except as security for the Loan Documents;

(G) there are no agreements or understandings, written or oral, with any tenant other than as set forth in its lease or on the Rent Roll; and

(H) all brokerage commissions and other compensation or fees payable by reason of the leases have not been paid in full. Attached to Section 4.3(c) of the Contributor Disclosure Letter is a list of brokers commissions due with respect to the Shopping Center and the status of such commissions.

(d) Zoning. The zoning classification for the Shopping Center is I-R/B Shopping Center Overlay Zone, and the contemplated uses of the Shopping Center are in compliance with the applicable zoning ordinances and regulations.

(e) Compliance with Laws and Recorded Declarations. The Project Partnership has complied in all material respects with all Laws (including, without limitation, the Americans with Disabilities Act of 1990) and requirements of insurance bodies applicable to the ownership, leasing, use and operation of the Shopping Center, including, without limitation, parking, dimensional and building setback requirements, and has performed all work and secured all required consents and approvals, or will do so in a timely fashion, and obtained and fully paid, or will do so in a timely fashion, for all Authorizations and any other items and documents required by applicable Law, by contract, or as a condition of any approval granted by or agreement entered into with any applicable municipal authority, required of the Project Partnership for the completion, ownership, leasing, use and occupancy of the Shopping Center, including, but not limited to, final certificates of occupancy for each of the current tenancies in the Shopping Center other than where construction of tenant improvements for new tenancies is not yet completed or timely applications remain pending or where the tenants are required to obtain such consents, approvals or authorizations

under the leases. All such existing Authorizations and other items and documents are in full force and effect. The Project Partnership has not taken any action that would (or failed to take any action, the omission of which might) result in the revocation or suspension of any such Authorization or other item or document, and the Project Partnership has not received any notice of any violation from any federal, state or municipal entity or notice of an intention by any such governmental entity to revoke any certificate of occupancy or other Authorization issued by it in connection with the ownership, use and occupancy of the Shopping Center that in each case has not been cured or otherwise resolved to the satisfaction of such governmental entity. Except as set forth in
Section 4.3(e) of the Contributor Disclosure Letter, to the Contributors' knowledge, (i) any and all charges and other assessments under declarations and like agreements and special assessments to which the Shopping Center or the Project Partnership is subject have been paid to date, and (ii) all consents and approvals required to be obtained under such declarations and like agreements with respect to the Shopping Center have been obtained or are in the process of being obtained. Notwithstanding anything to the contrary contained herein, the Contributors do not represent or warrant compliance by any of the tenants with respect to Laws or that the Contributors are obtaining any Authorizations that are required to be obtained by any tenants, but the Contributors shall enforce the leases and obligations of tenants thereunder.

(f) Environmental Matters.

(i) Except as described in Section 4.3(f) of the Contributor Disclosure Letter, the Contributors have no knowledge of any fact, condition or circumstance that would suggest that the environmental reports listed in Section 4.3(f) of the Contributor Disclosure Letter (which constitute all environmental reports relating to the Shopping Center received by the Contributors) contains any misstatement of material fact or omits to state any material fact. To the knowledge of the Contributors, except for matters set forth in Section 4.3(e) of the Contributor Disclosure Letter, there are no conditions on, beneath or arising from, and there are no Hazardous Substances migrating from, the Shopping Center which might under any Environmental Law (A) give rise to liability or the imposition of a statutory lien upon the Project Partnership or (B) require any Response, Removal or Remedial Action by the Project Partnership.

(ii) To the knowledge of the Contributors, no wastes generated by either Contributor or the Project Partnership have ever been directly or indirectly sent, transferred, transported to, treated, stored or disposed of at any site listed or formally proposed for listing on the National Priority List promulgated pursuant to CERCLA or to any site listed in any state list of sites requiring or recommended for investigation or clean-up.

(g) Reassessments. The Shopping Center has not been fully assessed and the Contributors have been informed that the Shopping Center will be reassessed upon its completion. To the Contributors' knowledge, there are no special assessments or other actions or proceedings that could reasonably be expected to give rise to an increase in real property taxes or assessments against the Shopping Center.

(h) Property Improvements. PREIT acknowledges that the Shopping Center is currently under construction and that the improvements to be built thereon are not complete. Except as disclosed in any engineering studies or reports obtained by or delivered by the Contributors to PREIT as set forth in
Section 4.3(h) of the Contributor Disclosure Letter, the Shopping Center is, to the extent completed, in good condition and repair, ordinary wear and tear excepted, consistent with a Shopping Center project that is still under construction, and has not suffered any casualty or other material damage which has not been repaired in all material respects. To the best of the Contributors' knowledge, there is no material latent or patent structural, mechanical or other significant defect, soil condition or deficiency in the improvements constructed on the Shopping Center, or any other defects, soil conditions or deficiencies which, in the aggregate, would materially adversely affect the value of the Shopping Center as a whole.

(i) Employees and Service Contracts.

(i) Section 4.3(i) of the Contributor Disclosure Letter sets forth a complete and correct list of all existing and proposed union or collective bargaining agreements to which either Contributor or the Project Partnership is a party with respect to or affecting the Shopping Center.

(ii) Section 4.3(i) of the Contributor Disclosure Letter sets forth a complete and correct list of all persons who are employed by the Project Partnership or its partners in connection with the management, operation or maintenance of the Shopping Center, setting forth, with respect to each of them, his or her name, position or duties, regular wages or salary, accrued vacation pay and bonus and other benefits to which he or she is entitled. Each of such persons is an employee-at-will and none of such persons is covered by a written employment agreement.

SECTION 5. REPRESENTATIONS AND WARRANTIES REGARDING PREIT AND THE PARTNERSHIP.

PREIT hereby represents and warrants to the Contributors as follows:

5.1 Organization.

(a) PREIT is an unincorporated association in business trust form duly organized and validly existing under the laws of the Commonwealth of Pennsylvania. PREIT has all necessary trust power to carry on its business as presently conducted, to own and lease the assets and properties that it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound.

(b) The Partnership is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware and has all necessary partnership power to carry on its business as presently conducted, to own and lease the assets and properties that it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound.

5.2 Power and Authority. Each of PREIT and the Partnership has all requisite trust or partnership power to execute, deliver and perform its obligations under this Agreement and under all other agreements and documents required to be delivered by it prior to or at the Closing (collectively, the "Buyer Transaction Documents"). The execution, delivery and performance by PREIT and the Partnership of this Agreement and the other Buyer Transaction Documents have been duly authorized by all necessary corporate or partnership action. This Agreement has been duly and validly executed and delivered by PREIT and the Partnership and constitutes the legal, valid and binding obligation of PREIT and the Partnership enforceable against each of them in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally or by general equitable principles. When executed and delivered as contemplated herein, each of the other Buyer Transaction Documents shall, assuming due authorization, execution and delivery thereof by the other parties thereto, constitute the legal, valid and binding obligation of each of PREIT and the Partnership that is a party thereto enforceable against it in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally or by general equitable principles.

5.3 No Conflicts.

(a) Except as described in Section 5.3 of the disclosure letter delivered by PREIT to the Contributors on the date hereof (the "PREIT Disclosure Letter"), the execution and delivery by PREIT and the Partnership of this Agreement do not, and the execution and delivery by PREIT and the Partnership of the other Buyer Transaction Documents and the performance by PREIT and the Partnership of all of the Buyer Transaction Documents will not (in each case, with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with (A) the trust or partnership agreement (or other organizational documents) of PREIT or the Partnership or (B) any Law applicable to PREIT or the Partnership, or by or to which any assets or properties of PREIT or the Partnership is bound or subject; or

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of benefit or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to any material Authorization or material Contract to which PREIT or the Partnership is a party or by which either PREIT or the Partnership is bound or affected; or

(iii) result in, require or permit the creation or imposition of any material Encumbrance upon or with respect to either PREIT or the Partnership or any of their respective assets or properties.

(b) Except for filings with the Securities and Exchange Commission and except as disclosed in Section 5.3(a) of the PREIT Disclosure Letter, the execution and delivery by PREIT and the Partnership of this Agreement do not, and the execution and delivery by PREIT and the Partnership of the other Buyer Transaction Documents and the performance by PREIT and the Partnership of all of the Buyer Transaction Documents will not, require PREIT or the Partnership to obtain any material Authorization of or make any material filing, registration or declaration with or notification to any court, government or governmental agency or instrumentality (federal, state, local or foreign) or to obtain the material consent, waiver or approval of, or give any material notice to, any Person.

(c) Except as disclosed in filings with the Securities and Exchange Commission made by PREIT, there are no actions, proceedings or investigations against or involving PREIT or the Partnership pending or, to the best knowledge of PREIT, threatened, that question any of the transactions contemplated by this Agreement or the validity of any of the Buyer Transaction Documents or which, if adversely determined, could have a

material adverse effect on the consolidated financial condition, assets, business or results of operations of PREIT or could materially and adversely affect PREIT's or the Partnership's ability to enter into or perform its obligations under the Buyer Transaction Documents.

5.4 Capitalization.

(a) On the date hereof, the outstanding beneficial interests in PREIT consist of 8,679,598 PREIT Shares, and the outstanding partnership interests in the Partnership are as described in Section 5.4(a) of the PREIT Disclosure Letter. Except for 483,875 PREIT Shares reserved for issuance pursuant to outstanding stock options and except as contemplated in the TRO Contribution Agreement, in the Amended Partnership Agreement or in the Employment Agreements referred to in the TRO Contribution Agreement, and except as disclosed in Section 5.4(a) of the PREIT Disclosure Letter, as of the date of this Agreement, there are no options, warrants or other rights, agreements, arrangements or commitments of any character (including, without limitation, voting agreements or arrangements known to PREIT) relating to the issuance of beneficial interests in PREIT or partnership interests in the Partnership. As of the Closing, the outstanding partner interests in the Partnership shall consist of the interests outstanding on the date hereof, the Class A Units to be issued as contemplated in the TRO Contribution Agreement, this Agreement and the EPD Purchase Agreements.

(b) All Class A Units to be issued and delivered pursuant to
Section 3 hereof will be, at the time of issuance and delivery in accordance with the terms of this Agreement, duly authorized and validly issued by the Partnership. Assuming the accuracy of the representations and warranties of the Contributors set forth herein, such issuance will be exempt from registration under the 1933 Act as an offering described in Section 4(2) of such Act and/or pursuant to Regulation D promulgated thereunder.

5.5 PREIT Reports. PREIT has delivered to the Contributors copies of PREIT's (a) Proxy Statement dated November 15, 1996, (b) Annual Report on Form 10-K for the fiscal year ending August 31, 1996, as amended by its Report on 10-K/A-1 dated December 2, 1996, and (c) Quarterly Reports on Form 10-Q for the quarters ended November 30, 1996, February 28, 1997 and May 31, 1997, all of which have been filed by PREIT with the Securities and Exchange Commission (the "PREIT Reports"). The audited consolidated financial statements and unaudited interim financial statements of PREIT included in such reports have been prepared in accordance with GAAP consistently applied (except as may be indicated in the notes thereto) and fairly present the consolidated financial condition and results of operations of PREIT as at the dates thereof and for the periods then ended,

subject, in the case of the unaudited interim financial statements, to normal year-end adjustments and any other adjustments described therein. The PREIT Reports do not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

5.6 Litigation. Except as disclosed in filings with the Securities and Exchange Commission, there are no claims, actions, suits, proceedings (arbitration or otherwise) or, to the best knowledge of PREIT, investigations involving or affecting PREIT or any of its subsidiaries or any of their assets or properties or any of their trustees, directors, officers, partners or shareholders in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign) or before any arbitrator of any kind, in each case of a nature that is required to be disclosed in PREIT's 1934 Act reports.

5.7 Material Adverse Change. Except as disclosed in filings with the Securities and Exchange Commission, since May 31, 1997 and through the date hereof, there has not been any material adverse change in the condition (financial or otherwise), assets, results of operations or business of PREIT on a consolidated basis.

5.8 Brokers. Except for Lehman Brothers, Inc., whose fees shall be paid by PREIT, no Person acting on behalf of PREIT or the Partnership or any of their affiliates or under the authority of any of the foregoing is or will be entitled to any brokers' or finders' fee or any other commission or similar fee, directly or indirectly, from any of such parties in connection with any of the transactions contemplated by this Agreement.

SECTION 6. CERTAIN COVENANTS AND AGREEMENTS

6.1 Conduct of Business.

(a) Except as expressly provided herein, between the date hereof and the Closing, except with the prior written consent of PREIT, each Contributor shall, and the Contributors shall cause the Project Partnership to:

(i) carry on its business in, and only in, the usual, regular and ordinary course, consistent with past practice and consistent with the development and construction of a retail shopping center and the provisions hereof and in compliance with all applicable Laws, Authorizations and Contracts;

(ii) pay and discharge all of its debts, liabilities and obligations as they become due and pay all debt service payments, real estate taxes, payables and other liabilities arising from the construction or operation of the Shopping Center that in the ordinary course of business would have been paid prior to the Closing Date (with the exception of those liabilities and obligations which the Contributors are contesting in good faith and for which the Contributors have established adequate reserves on the Project Partnership's books);

(iii) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried by it;

(iv) maintain its facilities and assets in the same state of repair, order and condition as they were on the date hereof, reasonable wear and tear excepted;

(v) maintain its books of account and records in the usual, regular and ordinary manner and use diligent efforts to maintain in full force and effect all of its Authorizations;

(vi) not take any action, fail to take any action or permit to occur any event that would cause or constitute a material breach of or inaccuracy in any representation or warranty set forth herein if made immediately after such event or at the Closing or that would have been required (or result in any situation that would be required) to be disclosed hereunder had such action or inaction been taken or failed to have occurred or had such event occurred prior to the date hereof;

(vii) except as described in Section 6.1(a) of the Contributor Disclosure Letter and the TRO Contribution Agreement, not make any change in its authorized or issued capital stock or partnership interests, grant any stock option or other right to purchase its shares of capital stock, partnership interests or other securities, issue or make any commitment to issue any of its securities, including any securities convertible into capital stock or partnership interests, grant any registration rights or purchase, redeem, retire or make any other acquisition of any shares of its capital stock, partnership interests or other securities;

(viii) not amend or grant any waivers under the Project Partnership Agreement;

(ix) not enter into any agreement or understanding to do or engage in any of the foregoing actions; and

(x) construct and operate the Shopping Center in the ordinary course in a manner consistent with past practice, maintaining the Shopping Center in a reasonable state of repair, order and condition consistent with a development project which is still under construction. Without limiting the foregoing, the Project Partnership shall not defer any required maintenance or repair unless such maintenance or repair would otherwise be deferred in the ordinary course of business.

6.2 Reasonable Efforts. Upon the terms and subject to the condition hereof, between the date hereof and the Closing Date, 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 Law to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, (i) using its or his reasonable efforts to make all required regulatory filings and applications and to obtain all Authorizations and consents, approvals, amendments and waivers from parties to Contracts as are necessary for the consummation of the transactions contemplated by this Agreement and (ii) using its reasonable efforts to cause the conditions to the consummation of the acquisition of the Interests to be satisfied.

6.3 Notifications. Each party hereto shall give prompt notice to the other parties upon becoming aware of: (i) any fact or condition that causes or constitutes (or that reasonably could be expected to cause or constitute) a breach of its representations and warranties set forth herein, or the occurrence, or failure to occur, of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a breach of or any inaccuracy in any of its representations and warranties contained in this Agreement had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition; (ii) any material failure of it or any of its officers, directors, employees or agents, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; (iii) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and (iv) any actions, suits, claims, investigations or proceedings commenced or, to the best of its knowledge, threatened against, relating to or involving or otherwise affecting either Contributor, the Project Partnership or PREIT, as the case may be, or any of the transactions contemplated by this Agreement.

6.4 Operation of Shopping Center.

(a) The Contributors shall take all actions necessary so that as of the Closing Date:

(i) Payments of rent or other monies due from Shopping Center tenants (except reimbursements under leases for site improvements or improvements to tenants' space) that fall due after the Closing Date and are received prior to the Closing Date shall continue to be held in the Project Partnership bank account or by the managing agent through the Closing Date;

(ii) All security deposits under leases and all interest required to be paid thereon pursuant to the terms of such leases shall continue to be held in the Project Partnership bank account, or by the managing agent as the case may be, on the Closing Date; and

(iii) All debt service payments, real estate taxes and payments due under service contracts and service providers in respect of the operation of the Shopping Center that in the ordinary course of business would have been paid prior to the Closing Date shall have been paid prior to the Closing Date by or on behalf of the Project Partnership.

(b) No delinquent rent payments shall be apportioned on the Closing Date. All rent receivables shall remain the property of the Project Partnership.

(c) Notwithstanding anything to the contrary set forth in this Agreement, the Contributors shall be entitled to cause the Project Partnership to refinance its construction loan prior to Closing, provided that the new loan expressly permits the transfer of the Interests contemplated herein and provides that such transfer will not result in any acceleration of indebtedness or other penalties and further provided that the Partnership approves the terms of the refinancing, including, but not limited to, the amount of the refinancing, and the loan documents evidencing and securing the refinancing, which approvals shall not be unreasonably withheld (the "Permitted Refinancing").

6.5 Preference Amount. If rights to preferential distributions from the Project Partnership are to be assigned at Closing as contemplated by Section 4(e) of Schedule A hereto, the Contributors shall deliver to PREIT at least five business days prior to Closing a statement setting forth the sum of the Unpaid Preference Amount and the Unpaid Cumulative Special Operating Distributions as of the Closing.

6.6 Interest Rate Swap. The Contributors shall cause the Project Partnership to liquidate or otherwise terminate prior to

Closing the interest rate swap arrangements that are currently in effect in connection with the Project Partnership's financing.

SECTION 7. CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES.

7.1 Time of Closing. The closing (the "Closing") of the acquisition by the Partnership pursuant to this Agreement of the Interests shall take place at the time and place specified in Schedule A hereto on the Closing Date (as defined in Schedule A hereto).

7.2 Closing Conditions.

(a) Conditions Precedent to PREIT's and the Partnership's Obligations. The obligation of PREIT and the Partnership to consummate the acquisition of the Interests and to take the other actions required to be taken by them at the Closing is subject to the fulfillment by or at the Closing of each of the following conditions, any or all of which may be waived by PREIT in its sole discretion:

(i) Condition of Title. The Project Partnership shall own fee simple title to the Shopping Center and such title shall be good and marketable and insured as such by First American Title Insurance Company, Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation or Chicago Title Insurance Company, as selected by the Partnership (the "Title Insurance Company"), free and clear of all Encumbrances other than Permitted Encumbrances, the existing leases set forth on the Rent Roll or as such leases may have changed in the ordinary course of the operation of the Shopping Center, the mortgage securing the Permitted Refinancing and those encumbrances required to complete the development and construction of the Shopping Center that are of a nature customary for development projects similar to the Shopping Center provided that such encumbrances do not constitute liens in liquidated amounts and do not individually or in the aggregate materially or adversely affect the value or use of the property as a Shopping Center. A vested owners title insurance policy with "non-imputation" and fairways endorsements for the value of the interest in the Project Partnership as determined in accordance with Schedule "A" shall have been issued to the Partnership or a marked-up commitment reflecting the effectiveness of such issuance shall have been delivered (unless such insurance is not issued or effective solely due to the Partnership's failure to pay the premiums therefor).

(ii) Tenant Estoppels. The Contributors shall have used their reasonable efforts to cause the tenants in the Shopping Center to execute and deliver to the Partnership estoppel certificates in form and substance reasonably satisfactory to PREIT. The Contributors shall keep the

Partnership reasonably apprised as to the status of receipt of the estoppel certificates. The failure to obtain and deliver any or all of the estoppel certificates shall not constitute a default by the Contributors hereunder or allow PREIT or the Partnership to terminate this Agreement so long as the Contributors have used reasonable efforts to obtain the estoppel certificates. The Contributors' liability under the representations and warranties under Sections 4.2(m)(i) and 4.3(c) as to a particular tenant shall terminate if the Partnership subsequently receives an estoppel certificate for the applicable tenant which confirms the Contributors' representations under Sections 4.2(l)(i) and 4.3(c) above (provided, if the Partnership receives an estoppel certificate which confirms some but not all of the matters which are the subject of the representations and warranties under Sections 4.2(m)(i) and 4.3(c), then as to such tenant, (x) if the estoppel certificate was received prior to Closing, the representations and warranties set forth in Sections 4.2(m)(i) and 4.3(c) shall be deemed to omit such matters stated on the estoppel certificate as to such matters provided the certifications contained in such estoppel remain true and correct until the Closing Date and (y) if received after Closing, the representations and warranties under Sections 4.2(m)(i) and 4.3(c) shall cease to survive as to such matters but shall continue to survive as to matters not contained in such Estoppel Certificate.)

(iii) Survey, Etc. The Partnership shall have received, at the Partnership's sole cost and expense, updated environmental and engineering reports and surveys for the Shopping Center certified to the Partnership and the Title Insurance Company, in form reasonably satisfactory to PREIT and the Title Insurance Company, and such reports and surveys shall not disclose any material adverse condition not disclosed in the original reports and surveys for the Shopping Center delivered to PREIT or to which PREIT was given access prior to the date of this Agreement.

(iv) No Mortgage Defaults. All payments of principal and interest on all Loan Obligations shall be current and no Loan Obligation shall be in default. The Contributors shall have used their reasonable efforts to cause the holder of each Loan Obligation to issue to the Partnership a letter or certification confirming the principal balance of such Loan Obligation, the date of the last payment and that, to its knowledge, there are no events of default thereunder. The failure to obtain or deliver such letter or certification shall not constitute a default by the Contributors hereunder or allow PREIT or the Partnership to terminate this Agreement provided that the Contributors have used reasonable efforts to obtain such letter or certificate. In the event the letter or certification from the holder of each Loan Obligation contains a certification containing information which confirms the Contributors'

representations under Section 4.3(b) above, the Contributors' liability for such representation shall terminate upon delivery of the letter or certificate to the Partnership provided the certifications contained in such estoppel remain true and correct until the Closing Date.

(v) Representations and Warranties. Except as otherwise expressly provided herein, each of the representations and warranties of the Contributors set forth in this Agreement that is qualified by materiality shall be true and correct, and each of the representations and warranties of the Contributors set forth in this Agreement that is not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date; provided that the failure of one or more representations and warranties to be true and correct as of the Closing Date shall not entitle PREIT to decline to close if the Damages therefrom do not exceed 50% of the value referred to in
Section 7.2(a)(xiv) and if the other conditions in this Section 7.2(a) shall be satisfied.

(vi) Performance of Covenants. All of the agreements, covenants and obligations that either Contributor is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects. The Contributors shall have delivered each of the documents required to be delivered by them pursuant to Section 7.3(a) hereof.

(vii) Legal Matters. The performance of the Buyer and Contributor Transaction Documents and the consummation of the Closing shall not, directly or indirectly (with or without notice or lapse of time), violate, contravene, conflict with or result in a violation of any Law and shall not violate any Order of any court or governmental body of competent jurisdiction, and no suit, action, investigation or legal or administrative proceeding shall have been brought or threatened by any Person (other than by PREIT or the Partnership) that questions the validity or legality of this Agreement or the transactions contemplated hereby.

(viii) Consents and Approvals. Each consent, approval, ratification, waiver or other authorization of any Person necessary, in the reasonable opinion of PREIT, for the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect, and no such consent, approval, ratification, waiver or other authorization: (x) shall have been conditioned upon the modification, cancellation or termination of any Contract, right or Authorization of PREIT, the Partnership or the Project Partnership or (y) shall impose on PREIT, the Project Partnership or the Partnership any condition, provision or requirement not presently imposed upon

the Contributors or the Project Partnership or any condition that would be more restrictive after the Closing on the Project Partnership or the Partnership than the conditions presently imposed on the Contributors or the Project Partnership.

(ix) Opinion of Counsel. PREIT shall have received an opinion of counsel for the Contributors, dated the Closing Date, in form and substance reasonably satisfactory to PREIT and its counsel.

(x) TRO Closing. The TRO Closing shall have occurred.

(xi) Casualty or Condemnation. There shall not have occurred any damage or destruction to, or condemnation of, any portion of the Shopping Center that is reasonably likely to have a material adverse effect on the operations or profitability of the Shopping Center.

(xii) Material Adverse Change. There shall not have been since the date hereof any event, circumstance, condition or contingency that has resulted in a material adverse effect on the business, assets, financial condition or results of operations of the Project Partnership or that is reasonably likely to result in such an change.

(xiii) Compliance Certificate. The Contributors shall have obtained (to the extent such certifications or letters are made available in such jurisdiction prior to substantial completion of the Shopping Center) a certification or letter from the appropriate governmental officer having jurisdiction to the effect that the Shopping Center and its use are in compliance with applicable fire, health, safety and zoning ordinances, rules and regulations.

(xiv) Adjustment for Breaches. The aggregate amount of all Damages arising from breaches entitling PREIT and the Partnership to an adjustment to the aggregate consideration as specified in Section 8.1 shall not exceed 50% of the value of what the Contributors would receive pursuant to
Section 4 of Schedule A absent such adjustment. Neither the Contributors nor the Project Partnership shall have violated any criminal or other material Law and the consummation of the closing shall not violate or conflict with any material Law.

(b) Conditions Precedent to the Contributors' Obligations. The obligation of the Contributors to consummate the contribution of the Interests contemplated by this Agreement and to take the other actions required to be taken by them at the Closing is subject to the fulfillment by or at the Closing of

each of the following conditions, any or all of what may be waived by CHP,Inc. in its sole discretion:

(i) Representations and Warranties. Each of the representations and warranties of PREIT set forth in this Agreement that is qualified by materiality shall be true and correct, and each of the representations and warranties of PREIT set forth in this Agreement that is not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date.

(ii) Performance of Covenants. Each of the agreements, covenants and obligations that PREIT or the Partnership is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects. PREIT shall have delivered each of the documents required to be delivered by it pursuant to
Section 7.3(b) hereof.

(iii) Legal Matters. The performance of the Buyer and Contributor Transaction Documents and the consummation of the Closing shall not, directly or indirectly (with or without notice or lapse of time), violate, contravene, conflict with or result in a violation of any Law and shall not violate any Order of any court or governmental body of competent jurisdiction, and no suit, action, investigation or legal or administrative proceeding shall have been brought or threatened by any Person that questions the validity or legality of this Agreement or the transactions contemplated hereby.

(iv) TRO Closing. The TRO Closing shall have occurred.

(v) Opinion. The Contributors shall have received an opinion of counsel for PREIT, dated the Closing Date, in form and substance reasonably satisfactory to the Contributors and their counsel.

(vi) Adjustment for Breaches. The aggregate amount of all Damages arising from breaches entitling PREIT and the Partnership to an adjustment to the aggregate consideration as specified in Section 8.1 shall not exceed 50% of the value of what the Contributors would receive pursuant to
Section 4 of Schedule A absent such adjustment; provided that if PREIT exercises the PREIT Option (as defined below), this condition shall be deemed to have been satisfied.

7.3 Deliveries at the Closing. At the Closing, in addition to the other actions contemplated elsewhere herein:

(a) The Contributors shall deliver or cause to be delivered to the Partnership:

(i) each of the instruments, agreements or documents listed on Schedule A-1 hereto, in each case in a form reasonably satisfactory to the Contributors and the Partnership, duly executed by each of the signatories thereto other than PREIT or the Partnership;

(ii) certificates, dated the Closing Date and executed by the president of CHP,Inc. to the effect that the conditions set forth in Sections 7.2(a)(v) and (vi) have been satisfied;

(iii) certificates of good standing of a recent date for CHP,Inc. and RO,L.P. certified by the Secretary of State or corresponding certifying authority of the state of incorporation or organization of CHP,Inc. and RO,L.P. and of each state in which CHP,Inc. or RO,L.P. is qualified to do business as a foreign corporation or foreign partnership;

(iv) copies of the resolutions of the board of directors of CHP,Inc. and its shareholders authorizing the transactions contemplated under this Agreement and the Contributor Transaction Documents to which CHP,Inc. or RO,L.P. is a party;

(v) all consents and approvals under the Project Partnership Agreement necessary or appropriate in connection with the transactions contemplated herein; and

(vi) such other documents and instruments as the Partnership or PREIT may reasonably request to effectuate or evidence the transactions contemplated by this Agreement.

(b) The Partnership shall deliver or cause to be delivered to the Contributors the following:

(i) the Class A Units to be delivered at Closing as contemplated by Section 3 and Schedule A hereto;

(ii) copies of resolutions of the board of trustees of PREIT authorizing the transactions contemplated hereunder and under the Buyer Transaction Documents;

(iii) a certificate, dated the Closing Date, executed by the chief executive officer and chief financial

officer of PREIT, to the effect that the conditions set forth in Sections 7.2(b)(i) and (ii) have been satisfied; and

(iv) each of the instruments, agreements and documents listed on Schedule A-1, in a form reasonably satisfactory to the Contributors and the Partnership, duly executed by each of the Partnership or PREIT that is a signatory thereto.

(c) Each party shall deliver or cause to be delivered, as the case may be, to the other parties hereto such other documents, instruments, certificates and opinions as may be required by this Agreement.

SECTION 8. CLOSING ADJUSTMENTS.

8.1 Adjustment for Breaches by the Contributors. It is the intent of the parties that breaches of the representations and warranties of the Contributors set forth in this Agreement (as brought down to the Closing Date in the certificate referred to in Section 7.3(a)(ii), which for this purpose will be deemed to state, inter alia, that the Contributors' representations and warranties in this Agreement were true and correct as of the Closing Date as if made on the Closing Date) that are discovered prior to Closing shall, in addition to giving PREIT and the Partnership the right, under certain circumstances described in Section 7.2, not to close hereunder, cause the consideration otherwise deliverable pursuant to Section 4 of Schedule A to be adjusted downward by the aggregate value of all Damages arising from such breaches; provided, however, that if such downward adjustment would reduce by more than 50% the value of the aggregate consideration the Contributors would receive pursuant to Section 4 of Schedule A absent such adjustment, PREIT shall have the right and option (but not the obligation) to notify the Contributors in writing that the downward adjustment pursuant to this Section 8.1 shall be equal to 50% of the value of such aggregate consideration (the "PREIT Option"). In determining the value of any breaches, there shall be taken into account any insurance recovery that may be available to PREIT or the Partnership, and any insurance proceeds received by the Contributors prior to the Closing that are assigned to the Partnership at Closing.

8.2 Casualty or Condemnation.

(a) If, prior to the Closing Date, there shall be any damage or destruction to all or any portion of the Shopping Center by fire or other casualty, the Contributors shall give prompt notice thereof to PREIT. Unless such damage or destruction is reasonably likely to result in a material adverse effect on the operations or profitability of the Shopping Center, such damage or destruction shall not entitle PREIT or the

Partnership to terminate this Agreement; provided, however, that the number of Class A Units deliverable pursuant to Section 3 and Schedule A shall be reduced by 50% of the value of all material damage or destruction to the extent that such damage or destruction is not fully insured by insurance carried by the Project Partnership or reimbursed by tenants.

(b) If prior to the Closing Date, condemnation or eminent domain proceedings are commenced against the Shopping Center, the Contributors shall give prompt notice thereof to PREIT. Unless the taking contemplated by such condemnation or eminent domain proceeding is reasonably likely to result in a material adverse effect on the operations or profitability of the Shopping Center as a whole, such condemnation or eminent domain proceeding shall not entitle PREIT or the Partnership to terminate this Agreement; provided, however, that the number of Class A Units deliverable pursuant to Section 3 and Schedule A hereto shall be reduced by the excess, if any, of the sum of Deemed Closing Value, Non-Credit Tenant Value and the Post-Adjustment Value (each as defined in Schedule A hereto) over 50% of the aggregate condemnation proceeds received or to be received by the Project Partnership in respect of such condemnation. PREIT shall have the right to participate in the negotiation of the award to be made for such taking, and neither the Contributors nor the Project Partnership shall agree to any proposed award or execute a deed in lieu of condemnation without PREIT's prior written consent. The applicable percentage of any condemnation award payable with respect to the taking of all or any portion the Shopping Center shall be assigned to the Partnership.

SECTION 9. INDEMNIFICATION.

9.1 Indemnification by Contributors. The Contributors shall jointly and severally indemnify, defend and hold harmless PREIT and the Partnership (collectively, "Buyer Indemnified Persons") against and in respect of any and all losses, costs, expenses (including, without limitation, costs of investigation and reasonable defense and attorneys' fees), claims, damages, obligations, liabilities or diminutions in value, whether or not involving a third party claim (collectively, "Damages"), arising out of, based upon or otherwise in respect of: (a) any inaccuracy in or breach of any representation or warranty of either Contributor made in or pursuant to this Agreement (including, without limitation, the certificate referred in Section 7.3(a)(ii), which, for this purpose will be deemed to have stated, inter alia, that the Contributors' representations and warranties in this Agreement were true and correct as of the Closing Date as if made on the Closing Date); (b) any breach or nonfulfillment of any covenant or obligation of either Contributor contained in this Agreement or (c) any of the matters set forth on Schedule 9.1(c) hereto; provided, however, that to

the extent that Damages arising from breaches of representations and warranties were taken into account in reducing the Deemed Closing Value, the Non-Credit Tenant Value or the Post-Adjustment Value (as defined in Schedule A), such Damages shall not be recoverable by Buyer Indemnified Persons pursuant to this Agreement.

9.2 Indemnification by PREIT. PREIT shall indemnify, defend and hold harmless each Contributor against and in respect of any and all Damages arising out of, based upon or otherwise in respect of: (a) any inaccuracy in or breach of any representation or warranty of PREIT made in or pursuant to this Agreement; (b) any breach or nonfulfillment of any covenant or obligation of PREIT or the Partnership contained in this Agreement; or (c) claims relating solely to actions taken by the Partnership ( or its affiliates) as a partner in the Project Partnership after Closing as the result of events and circumstances first occurring after Closing.

9.3 Limitations on Liability.

(a) Neither Contributor shall have any obligation to indemnify any Buyer Indemnified Person against Damages pursuant to Section 9.1(a) of this Agreement arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to this Agreement unless and until the aggregate of all such Damages suffered or incurred by the Buyer Indemnified Persons exceeds $100,000; in which event the Buyer Indemnified Persons shall be entitled to indemnification for the full amount of all Damages suffered or incurred; provided, however, that the above limitation shall not be applicable to any claim for Damages pursuant to Sections 9.1(b) or (c) or based upon a breach of any representation or warranty made in or pursuant to Sections 4.1(a), 4.1(b), 4.1(c), 4.1(g), 4.1(h), 4.2(a), 4.2(b), 4.2(o), or 4.2(g) (in the case of a breach of any of the representations and warranties set forth in
Section 4.2(g), other than due to the existence of liabilities of a nature not required to be reflected in financial statements prepared in accordance with GAAP of which the Contributors had no knowledge prior to Closing).

(b) Following Closing, (i) the Contributors shall not be obligated to indemnify Buyer Indemnified Persons against Damages pursuant to
Section 9.1 to the extent that such indemnification payment (other than indemnification payments in respect of fraud or intentional misrepresentation), when aggregated with all prior indemnification payments (other than indemnification payments in respect of fraud or intentional misrepresentation) by or on behalf of the Contributors to Buyer Indemnified Persons or reasonably paid by or on behalf of the Contributors to third parties for the benefit of Buyer Indemnified Persons pursuant to this Agreement, would exceed the

Aggregate Value (as hereafter defined) and (ii) each partner or shareholder of either Contributor (collectively, "Applicable Beneficial Owners") other than Ronald Rubin and George Rubin (or affiliates controlled by either of them or members of their families) shall not be obligated to indemnify Buyer Indemnified Persons against Damages pursuant to Section 9.1 to the extent that such indemnification payment, when aggregated with all prior indemnification payments by or on behalf of such Applicable Beneficial Owner to Buyer Indemnified Persons or reasonably paid by or on behalf of such Applicable Beneficial Owner to third parties for the benefit of Buyer Indemnified Persons pursuant to this Agreement, would exceed the Proportionate Aggregate Value (as defined below) attributable to such Applicable Beneficial Owner; provided, however, that the limitation of this subclause (ii) shall not apply to the extent an indemnity claim is brought with respect to a matter involving fraud or intentional misrepresentation by such Applicable Beneficial Owner. The "Aggregate Value" means an amount equal to the value of all Class A Units theretofore issued pursuant to Section 3 (it being acknowledged that for this purpose units that would have been issued but for an exercise of the set-off rights specified in Section 9.7 shall be deemed to have been issued), such value to be calculated by multiplying the number of units times the per share Value (as defined in the Amended Partnership Agreement) of a PREIT Share as of the date of issuance of such units.

(c) Following Closing, the liability of each Applicable Beneficial Owner for each indemnity claim pursuant to Section 9.1 shall be limited to that fraction of the aggregate Damages incurred by Buyer Indemnified Persons with respect to such claim that is equal to the quotient whose numerator equals the portion of the Aggregate Value attributable to units (or proceeds of units) theretofore distributed to such Applicable Beneficial Owner by a Contributor (for this purpose units that would have been issued but for an exercise of the set-off rights specified in Section 9.7 shall be deemed to have been issued) (the "Proportionate Aggregate Value") and the denominator of which equals the Aggregate Value; provided, however, that the foregoing shall not limit the liability of Ronald Rubin or George Rubin (or affiliates controlled by either of them or members of their families), each of whom shall be jointly and severally liable for 100% of the aggregate Damages incurred (subject to the cap on aggregate Damages set forth above in subclause (i) of Section 9.3(b)), and provided further that the foregoing limitation shall not apply to the extent an indemnity claim is brought with respect to a matter involving fraud or intentional misrepresentation by such Applicable Beneficial Owner.

(d) No claim arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to this Agreement shall be made unless a claim arises and written notice is delivered to the indemnifying party within

the Basic Claims Period (as defined below); provided that any such claim arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to Sections 4.1(a), 4.1(b) or 4.1(h) may be made at any time. For purposes hereof, "Basic Claims Period" means the period beginning on the date hereof and ending on the date five months after the fiscal year end for the first full fiscal year of PREIT after the Closing under this Agreement.

(e) Disclosures made after the date hereof and any knowledge that is acquired about the accuracy or inaccuracy of or compliance with any representation, warranty, covenant or obligation set forth herein shall not in any manner affect rights to indemnification hereunder based on any such representation, warranty, covenant or obligation or be deemed in any manner to amend the Contributor Disclosure Letter. The waiver by PREIT of any condition based on the accuracy of any representation or warranty, or compliance with any covenant or obligation, will not affect any right to indemnification based on such representations, warranties, covenants and obligations unless otherwise expressly agreed in writing by PREIT. To the extent that any claim for indemnification may be made under Section 9.1(a) and Section 9.1(c), then such claim shall be deemed for all purposes to have arisen only under Section 9.1(c) and not under Section 9.1(a).

(f) Each party's rights under this Section 9 shall be its sole remedy against the other parties in respect of the subject matter hereof, subject to a party's rights, if any, to seek and obtain specific performance.

9.4 Procedure For Indemnification - Third Party Claims.

(a) Within thirty days after receipt by an indemnified party of notice of the commencement of any proceeding against it to which the indemnification in this Section 9 relates, such indemnified party shall, if a claim is to be made against an indemnifying party under Section 9, give notice to the indemnifying party of the commencement of such proceeding, but the failure to so notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such proceeding is materially prejudiced by the indemnified party's failure to give such notice.

(b) If any proceeding referred to in paragraph (a) above is brought against an indemnified party and it gives notice to the indemnifying party of the commencement of such proceeding, the indemnifying party will be entitled to participate in such proceeding and, to the extent that it wishes (unless (i) the indemnifying party is also a party to such proceeding and the

indemnified party determines in good faith that joint representation would be inappropriate, or (ii) the indemnifying party fails to provide reasonable assurance to the indemnified party of its financial capacity to defend such proceeding and provide indemnification with respect to such proceeding), to assume the defense of such proceeding with counsel reasonably satisfactory to the indemnified party and, after notice from the indemnifying party to the indemnified party of its election to assume the defense of such proceeding, the indemnifying party will not, as long as it diligently conducts such defense, be liable to the indemnified party under Section 9 for any fees of other counsel or any other expenses with respect to the defense of such proceeding, in each case subsequently incurred by the indemnified party in connection with the defense of such proceeding, other than reasonable costs of investigation. If the indemnifying party assumes the defense of a proceeding, (A) it will be conclusively established for purposes of this Agreement that the claims made in that proceeding are within the scope of and subject to indemnification; (B) no compromise or settlement of such claims may be effected by the indemnifying party without the indemnified party's consent unless (1) there is no finding or admission of any violation of Law by the indemnified party (or any affiliate thereof) or any violation of the rights of any Person and no effect on any other claims that may be made against the indemnified party, and (2) the sole relief provided is monetary damages that are paid in full by the indemnifying party. The indemnified party will have no liability with respect to any compromise or settlement of the claims underlying such proceeding effected without its consent. If notice is given to an indemnifying party of the commencement of any proceeding and the indemnifying party does not, within ten days after the indemnified party's notice is given, give notice to the indemnified party of its election to assume the defense of such proceeding, the indemnifying party will be bound by any determination made in such proceeding or any compromise or settlement effected by the indemnified party.

(c) Notwithstanding the foregoing, if an indemnified party determines in good faith that there is a reasonable probability that a proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the indemnified party may, with respect to those issues, by notice to the indemnifying party, assume the exclusive right to defend, compromise, or settle such proceeding, but the indemnifying party will not be bound by any determination of a proceeding so defended or any compromise or settlement effected without its consent.

9.5 Procedure for Indemnification - Other Claims. A claim for any matter not involving a third party claim may be asserted by notice to the party from whom indemnification is sought.

9.6 Distributions of Class A Units by Contributors. Neither Contributor shall distribute or otherwise transfer to any of its partners or shareholders or any other Person Class A Units issued pursuant to this Agreement (or proceeds thereof other than distributions on such units) unless such partner, shareholder or other Person first executes and delivers to PREIT an agreement, in form and substance reasonably satisfactory to PREIT, by which such Person would join in and become a party to this Agreement for purposes of the indemnification provisions hereof.

9.7 Right of Set-Off. PREIT and the Partnership shall have the right to set-off, against any Class A Units which may be owed by PREIT or the Partnership to either Contributor, any amount owed by any Applicable Beneficial Owner to any Buyer Indemnified Person pursuant to Section 10 of the TRO Contribution Agreement. To the extent that a Contributor contests an indemnification claim of PREIT or the Partnership that would be the basis for the exercise of a right to set off against any Class A Units owed to such Contributor, the Partnership shall issue such Class A Units and deposit them with an escrow agent reasonably satisfactory to such Contributor until the earlier to occur of (i) resolution of such dispute by a final nonappealable order of a court of competent jurisdiction or (ii) the mutual agreement of such Contributor and PREIT that such units should be released from escrow.

9.8 Indemnification Payments. The Contributors and the Applicable Beneficial Owners shall be entitled to use cash or Class A Units to make indemnification payments hereunder. In the event Class A Units are used, each such unit shall be valued based on the per share Value (as defined in the Amended Partnership Agreement) of a PREIT Share as of the date such unit is tendered to PREIT as an indemnification payment hereunder.

SECTION 10. TERMINATION AND ABANDONMENT.

10.1 Termination. This Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to the Closing:

(i) by PREIT or CHP,Inc., if the Closing has not occurred (other than through the failure of the party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before February 15, 1999, or such later date as the parties may mutually agree upon in writing;

(ii) by mutual consent of PREIT and CHP,Inc.;

(iii) by the Contributors, on the one hand, or PREIT and the Partnership, on the other hand, if a material breach (other than a breach of representations and warranties

that would not constitute a failure of the condition set forth in Section 7.2(a)(xiv)) of any provision of this Agreement has been committed by the other and such breach has not been waived; or

(iv) by PREIT, if any of the conditions in Section 7.2(a) have not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of PREIT or the Partnership to comply with its obligations under this Agreement) and PREIT has not waived all such unsatisfied conditions before termination pursuant to this subparagraph (iv); or

(v) by CHP,Inc. if any of the conditions in Section 7.2(b) have not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of either Contributor to comply with its obligations hereunder) and CHP,Inc. has not waived all such unsatisfied conditions before termination pursuant to this subparagraph (v); or

(vi) by any party hereto if the TRO Contribution Agreement is terminated prior to the consummation of the TRO Closing.

10.2 Procedure for Termination; Effect of Termination. A party terminating this Agreement pursuant to this Section 10 shall give written notice thereof to each other party hereto, whereupon this Agreement shall terminate and the transactions contemplated hereby shall be abandoned without further action by any party and all further obligations of the parties under this Agreement will terminate; provided, however, that if such termination is pursuant to
Section 10.1(iii), the terminating party's right to pursue all legal remedies (including damages and/or specific performance) contemplated by Section 9 will survive such termination unimpaired.

SECTION 11. GENERAL PROVISIONS.

11.1 Survival of Representations and Warranties.

(a) All representations and warranties made by the parties in this Agreement and in the certificates, documents and other agreements delivered pursuant hereto shall survive the Closing, subject to the terms and conditions of Section 9 above. Anything in this Agreement to the contrary notwithstanding:
(i) the representations and warranties of the Contributors and the right of the Buyer Indemnified Persons to indemnification for breach thereof, shall not be affected by any investigation of the Contributors or the Project Partnership made by PREIT or its agents or representatives; and (ii) the representations and warranties of PREIT hereunder, and the right of the Contributors to indemnification for breach thereof, shall not be affected by

any investigation of PREIT or its affiliates made by the Contributors or its agents or representatives.

(b) In the event of any inconsistency between the statements made in the body of this Agreement and those contained in the Contributor Disclosure Letter (other than an express exception to a specifically identified statement), those in this Agreement shall control.

11.2 Costs and Expenses. Except as otherwise expressly provided herein, each party shall bear its own expenses in connection herewith. Any and all transfer taxes, recording and filing fees and all costs associated with obtaining the title insurance or endorsements thereto contemplated herein in connection with the transactions contemplated herein shall be borne by PREIT or the Partnership. The parties contemplate that the transfer of the Interests in accordance with the procedures and the time periods set forth in Schedule A will not be subject to transfer tax. In the event either the Project Partnership or a Contributor makes or causes a transfer of Interests not in accordance with the procedures and time periods set forth herein and in the Partnership Agreement, then the Project Partnership or such Contributor making or causing such transfer shall be responsible for the payment of any transfer tax and all title insurance premiums and title company charges and recording costs due as a result thereof.

11.3 Notices. All notices or other communications permitted or required under this Agreement shall be in writing and shall be sufficiently given if and when hand delivered to the persons set forth below or if sent by documented overnight delivery service or registered or certified mail, postage prepaid, return receipt requested, or by telegram, telex or telecopy, receipt acknowledged, addressed as set forth below or to such other person or persons and/or at such other address or addresses as shall be furnished in writing by any party hereto to the others. Any such notice or communication shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefor in all other cases.

To PREIT or the Partnership:

Pennsylvania Real Estate Investment Trust
455 Pennsylvania Avenue, Suite 135
Fort Washington, PA 19034
Attention: President and Special Committee

With a copy to:

Drinker Biddle & Reath LLP
1100 PNB Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
(215) 988-2700
Telecopy (215) 988-2757

Attention: Howard A. Blum, Esquire

To the Contributors:

c/o The Rubin Organization, Inc.
200 South Broad Street
Philadelphia, PA 19102
Attention: Ronald Rubin

With a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers LLP
1401 Walnut Street
Philadelphia, PA 19102
Attention: Leonard M. Klehr, Esquire

11.4 Access to Information; Confidentiality. Between the date of this Agreement and the Closing Date, PREIT, on the one hand, and the Contributors, on the other hand, will give to the other party and its officers, employees, counsel, accountants and other representatives free and full access to and the right to inspect, during normal business hours, all of the assets, records, facilities, properties and Contracts relating to its business as the other party may reasonably request. Each party shall acquire and hold all confidential information that has been made available by another party hereto subject to the terms and conditions of Section IV of the Letter Agreement dated as of April 16, 1997 (the "Letter Agreement") between TRO and PREIT, the terms of which section are hereby incorporated by reference and which shall remain in force through the Closing.

11.5 Public Announcements. Except as and to the extent required by Law or by the rules of the American Stock Exchange, without the prior written consent of the other party, the

Contributors, on the one hand, and PREIT and the Partnership, on the other hand, will not, and each will direct its representatives not to, directly or indirectly, make any public comment, statement or communication with respect to, or otherwise disclose or permit the disclosure of any of the terms, conditions or other aspects of the transactions contemplated hereby; provided, however, that PREIT may issue a press release, in the form previously circulated by PREIT to TRO, regarding, among other things, the execution of this Agreement; and further provided that PREIT and TRO may each continue such communications with principals, partners, lenders, trustees, attorneys, accountants, investment bankers, consultants engaged by PREIT and TRO, including abstract companies, title companies, engineers and architects, Claude de Botton and his affiliates, Kenneth N. Goldenberg and his affiliates, EPD and its affiliates, and, if agreed in each case by PREIT and TRO, others as may be legally required or necessary in connection with the consummation of the transactions contemplated by this Agreement.

11.6 No Solicitation. Each Contributor shall not, each Contributor shall cause its officers, employees, partners, representatives and agents not to, directly or indirectly, continue, encourage, solicit, initiate or participate in discussions or negotiations with, or provide any nonpublic information to, any Person (other than PREIT and the Partnership and their respective representatives in connection with the transactions contemplated by this Agreement) concerning any sale of assets (other than in the ordinary course of its business consistent with past practice) or shares of capital stock or partnership interests of either Contributor or any merger, consolidation, recapitalization, liquidation or similar transaction involving either Contributor (collectively, an "Acquisition Transaction"). Each Contributor will promptly communicate to PREIT the terms of any inquiry or proposal that it or he may receive in respect of an Acquisition Transaction.

11.7 Entire Agreement. This Agreement, together with the Schedules, Contributor Disclosure Letter, and certificates referred to herein or delivered pursuant hereto, constitute the entire agreement between the parties hereto with respect to its subject matter and supersede all prior and contemporaneous agreements and understandings with respect to the subject matter hereof.

11.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original copy of this Agreement, and all of which, when taken together, shall be deemed to constitute but one and the same Agreement.

11.9 Governing Law. This Agreement is made pursuant to, and shall be construed and enforced in accordance with, the laws of

the Commonwealth of Pennsylvania (and United States federal law, to the extent applicable), irrespective of the principal place of business, residence or domicile of the parties hereto, and without giving effect to otherwise applicable principles of conflicts of laws.

11.10 Section Headings, Captions and Defined Terms. The section headings and captions contained herein are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement. The terms defined herein and in any agreement executed in connection herewith include the plural as well as the singular, and the use of masculine pronouns include the feminine and neuter. Except as otherwise indicated, all agreements defined herein refer to the same as from time to time amended or supplemented or the terms thereof waived or modified in accordance herewith and therewith.

11.11 Amendments, Modifications and Waiver. The parties may amend or modify this Agreement in any respect. Any such amendment or modification shall be in writing. The waiver by any party of any provision of this Agreement shall not constitute or operate as a waiver of any other provision hereof, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision.

11.12 Severability. The invalidity or unenforceability of any particular provision, or part of any provision, of this Agreement shall not affect the other provisions or parts hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions or parts were omitted.

11.13 Liability of Trustees, etc. No recourse shall be had for any obligation of PREIT hereunder, or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of PREIT, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being expressly waived and released by each other party hereto.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, all as of the date first written above.

CHERRY HILL PARTNER, INC.

By: /s/  George Rubin
    -------------------------------------------
    Name:
    Title:

RUBIN OXFORD VALLEY ASSOCIATES, L.P.

By: Rubin Oxford, Inc., its
general partner

By: /s/  Ronald Rubin
    ---------------------------------------
    Name:
    Title

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

By: /s/  Jonathan B. Weller
    ---------------------------------------
    Name:
    Title:


By: /s/  Jeffrey A. Linn
    ---------------------------------------
    Name:
    Title:

PREIT ASSOCIATES, L.P.

By: Pennsylvania Real Estate
Investment Trust, its general partner

By: /s/  Jonathan B. Weller
    -----------------------------------
    Name:
    Title:


By: /s/  Jeffrey A. Linn
    -----------------------------------
    Name:
    Title:

CONTRIBUTION AGREEMENT

relating to

Northeast Tower Center, Philadelphia, Pennsylvania

Roosevelt Blvd. Co., Inc.

Ronald Rubin, George Rubin, Gerald Broker, Leonard B. Shore Joseph Coradino, Lewis M. Stone, Pat Berns, Edward Glickman, Douglas Grayson and Judith Garfinkel Pennsylvania Real Estate Investment Trust PREIT Associates, L.P.

                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----

SECTION 1.            DEFINITIONS.........................................  2

SECTION 2.            CONTRIBUTIONS.......................................  2

SECTION 3.            CONSIDERATION.......................................  4

SECTION 4.            REPRESENTATIONS AND WARRANTIES OF THE
                      CONTRIBUTORS........................................  5
         4.1          As to the Contributors..............................  5
         4.2          As to the Project Partnership....................... 10
         4.3          As to the Shopping Center........................... 18

SECTION 5.            REPRESENTATIONS AND WARRANTIES REGARDING PREIT...... 23
         5.1          Organization........................................ 23
         5.2          Power and Authority................................. 24
         5.3          No Conflicts........................................ 24
         5.4          Capitalization...................................... 25
         5.5          PREIT Reports....................................... 26
         5.6          Litigation.......................................... 26
         5.7          Material Adverse Change............................. 26
         5.8          Brokers............................................. 27

SECTION 6.            CERTAIN COVENANTS AND AGREEMENTS.................... 27
         6.1          Conduct of Business................................. 27
         6.2          Reasonable Efforts.................................. 28
         6.3          Notifications....................................... 29
         6.4          Operation of Shopping Center........................ 29
         6.5          Transfer of Shares or Retained Interests............ 30
         6.6          Bankruptcy Claim.................................... 30

SECTION 7.            CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES..... 31
         7.1          Time of Closing..................................... 31
         7.2          Closing Conditions.................................. 31
         7.3          Deliveries at the Closing........................... 35

SECTION 8.            CLOSING ADJUSTMENTS................................. 37
         8.1          Adjustment for Breaches by the Contributors......... 37
         8.2          Casualty or Condemnation............................ 37

SECTION 9.            INDEMNIFICATION..................................... 38
         9.1          Indemnification by Contributors..................... 38
         9.2          Indemnification by PREIT............................ 39
         9.3          Limitations on Liability............................ 39
         9.4          Procedure For Indemnification - Third Party Claims.. 41
         9.5          Procedure for Indemnification - Other Claims........ 42
         9.6          Distributions of Class A Units by Contributors...... 42
         9.7          Right of Set-Off.................................... 43
         9.8          Indemnification Payments............................ 43

SECTION 10.           TERMINATION AND ABANDONMENT......................... 43
         10.1         Termination......................................... 43
         10.2         Procedure for Termination; Effect of
                      Termination......................................... 44

SECTION 11.           GENERAL PROVISIONS.................................. 45
         11.1         Survival of Representations and Warranties.......... 45
         11.2         Costs and Expenses.................................. 45
         11.3         Notices............................................. 46
         11.4         Access to Information; Confidentiality.............. 47
         11.5         Public Announcements................................ 47
         11.6         No Solicitation..................................... 47
         11.7         Entire Agreement.................................... 48
         11.8         Counterparts........................................ 48
         11.9         Governing Law....................................... 48
         11.10        Section Headings, Captions and Defined Terms........ 48
         11.11        Amendments, Modifications and Waiver................ 48
         11.12        Severability........................................ 48
         11.13        Liability of Trustees, etc.......................... 48
         11.14        Sears Power Plant................................... 49

CONTRIBUTION AGREEMENT

relating to

Northeast Tower Center, Philadelphia, Pennsylvania

THIS CONTRIBUTION AGREEMENT (this "Agreement") is made as of the 30th day of July, 1997, by and among ROOSEVELT BLVD. CO., INC., a Pennsylvania corporation ("RBC, Inc."), RONALD RUBIN, GEORGE RUBIN, GERARD BROKER, LEONARD B. SHORE, JOSEPH CORADINO, LEWIS M. STONE, PAT BERNS, EDWARD GLICKMAN, DOUGLAS GRAYSON and JUDITH GARFINKEL (collectively the "Limited Partners" and together with RBC, Inc. the "Contributors," and, each, a "Contributor"), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, an unincorporated association in business trust form created under Pennsylvania law pursuant to a Trust Agreement dated December 27, 1960, as last amended and restated on December 16, 1987 ("PREIT"), and PREIT ASSOCIATES, L.P., a Delaware limited partnership (the "Partnership").

Background

The Contributors are affiliates of The Rubin Organization, Inc., a Pennsylvania corporation ("TRO").

This Contribution Agreement is part of a larger transaction described in the TRO Contribution Agreement of even date herewith (the "TRO Contribution Agreement") among PREIT, TRO, The Rubin Organization-Illinois, Inc. and the shareholders of TRO.

The Partnership has been formed by PREIT and PREIT Property Trust, a Pennsylvania business trust ("PREIT Subsidiary"), pursuant to the terms of the Agreement of Limited Partnership dated as of June 30, 1997 (the "Partnership Agreement") of PREIT Associates, L.P. between PREIT, as general partner, and PREIT Subsidiary, as limited partner.

Subject to the terms and conditions of this Agreement and the TRO Contribution Agreement, the parties intend that the Contributors will contribute, in exchange for Class A limited partner interests in the Partnership ("Class A Units"), all of their partner interests (the "Interests") in each of Roosevelt Associates, L.P., a Pennsylvania limited partnership ("RA, L.P."), and Roosevelt II Associates, L.P., a Pennsylvania limited partnership ("RAII, L.P." and together with RA, L.P., the "Project Partnerships") other than an eleven (11%) percent capital interest and profits interest in each of the Project Partnerships (the "Retained Interests") which shall be retained by Ronald Rubin (7.96%) and George Rubin (3.04%) (Ronald Rubin and George Rubin are herein collectively referred to as the

"Rubins"), subject to the terms and conditions set forth herein. RAII, L.P. holds fee title to Parcels 1, 4, 6, and 9 as shown on the plan entitled "Relocation of Lot Lines", Drawing Number 5.01, dated April 20, 1994, last revised December 22, 1994, prepared by Langan Engineering and Environmental Services, Inc. [Parcel 9 was subsequently eliminated and became part of Parcel
1], as modified by "Relocation of Lot Lines Parcels 1 and 2", Drawing Number 5.05, dated January 26, 1995, prepared by Langan Engineering and Environmental Services, Inc., and "Relocation of Lot Lines Parcels 6 and 7", dated November 11, 1994, prepared by Langan Engineering and Environmental Services, Inc. (collectively the foregoing plans are hereinafter referred to as the "Plan"), which comprise, together with Parcel 3 as shown on the Plan, the property of which the shopping center known as the Northeast Tower Center, Philadelphia, Pennsylvania (the "Shopping Center") is a part and RA, L.P. holds a leasehold interest in Parcel 3 as shown on the Plan.

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

SECTION 1. DEFINITIONS.

Unless otherwise defined herein, capitalized terms used herein shall have the same meanings as ascribed to such terms in the TRO Contribution Agreement.

SECTION 2. CONTRIBUTIONS.

(a) Contributions at Closing. Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 7.1), the Contributors shall contribute to the Partnership, and the Partnership shall acquire from the Contributors, free and clear of all Encumbrances (other than applicable securities law restrictions and subject to the terms and conditions of the limited partnership agreements for the Project Partnerships), the Interests (other than the Retained Interests) and all benefits and advantages to be derived therefrom, including, without limitation, all right, title and interest associated with the Interests (other than the Retained Interests) in and to the capital accounts of the Contributors, rights of the Contributors to distributions made after the Closing and allocable shares of the Contributors with respect to profits and losses.

(b) Option to Acquire Retained Interests.

(i) Each of the Rubins hereby grants to the Partnership the irrevocable right and option to acquire all of the Retained Interests owned by him, free and clear of all

Encumbrances (other than applicable securities law restrictions and subject to the terms and conditions of the limited partnership agreements for the Project Partnerships), in exchange for the number of Class A Units specified in Schedule A hereto as being issuable at the Second Closing, upon written notice to such effect being given by the Partnership to either or both Rubins, as the case may be, at least ten days prior to the closing of the exercise of such option. Such option may be exercised by the Partnership at any time prior to the third anniversary of the Closing Date.

(ii) If the option granted pursuant to the preceding paragraph has not been exercised prior to the third anniversary of the Closing Date, then on the first business day following the third anniversary of the Closing Date, the Partnership shall be obligated to acquire from the Rubins, and the Rubins shall be obligated to transfer to the Partnership, all Retained Interests, free and clear of all Encumbrances (other than applicable securities law restrictions and subject to the terms and conditions of the limited partnership agreements for the Project Partnerships), in exchange for the number of Class A Units specified in Schedule A as being issuable at the Second Closing.

(iii) The closing for the transfer of the Retained Interests to the Partnership in accordance with paragraphs (b)(i) or (ii) above is referred to herein as the Second Closing. The date of the Second Closing shall be the date specified in subparagraph (b)(ii) above or the closing date specified in the notice of exercise of the option pursuant to subparagraph (b)(i).

(c) The Bradlees Property. In the event the Contributors (or any of them or any of their affiliates or family members) shall acquire the right to purchase Parcel 2 on the Plan (the "Bradlees Property") and in the further event the Bradlees Property is then subject to a lease or an agreement to lease with Walmart or another tenant acceptable to the Partnership, the Contributors agree to cause the Bradlees Parcel to be offered for sale to a third party and shall grant to the Partnership a right of first refusal exercisable within twenty (20) days after receipt of written notice from the Contributors to purchase the Bradlees Property on the same terms and conditions which are acceptable to the third party purchaser. In the event the Contributors (or any of them or any of their affiliates or family members) shall acquire the right to purchase the Bradlees Property and the Bradlees property is not then subject to a lease as set forth above, the Contributors (or their affiliates or family members) shall grant to the Partnership the irrevocable right and option exercisable within twenty (20) days after receipt of written notice setting forth all material terms to succeed to such Contributor's right to acquire the Bradlees

Property by taking an assignment of the purchase agreement. Upon the closing of the exercise of any such option, the Partnership shall acquire fee title to the Bradlees Property for a purchase price equal to the Appraised Value. In the event the purchase price payable for the Bradlees Property is greater than the Appraised Value, the Contributors shall pay to the seller of the Bradlees Property the difference between the purchase price and the Appraised Value. In the event the purchase price for the Bradlees Parcel is less than the Appraised Value, the Partnership shall pay such difference to the Contributors.

(d) Rubin II, Inc.

(i) At the Closing, Ronald Rubin shall contribute to the Partnership, and the Partnership shall acquire, that number of common shares of Rubin II, Inc., a Pennsylvania corporation ("RII, Inc."), that shall (A) represent eighty-nine (89%) percent of the then-issued and outstanding shares of capital stock in RII, Inc. and (B) possess the power to direct the vote of an amount of voting securities of RII, Inc. sufficient to elect a majority of the board of directors of RII, Inc. (such contributed RII, Inc. common shares, the "Contributed RII Shares"). The parties acknowledge that RII, Inc. is merely a fee title trustee of Parcel 3.

(ii) At the Second Closing, the Partnership shall have the option (but not the obligation) to acquire, and upon written notice of exercise of such option from the Partnership given prior to the Second Closing, Ronald Rubin shall be obligated to contribute to the Partnership, free and clear of all Encumbrances (other than applicable securities law restrictions), all of the common shares of RII, Inc. other than the Contributed RII Shares.

(iii) The contributions referred to in this subparagraph (d) shall be made without the payment by the Partnership of any consideration other than the Class A Units which are otherwise issuable hereunder.

SECTION 3. CONSIDERATION.

(a) In consideration for the contributions described in Section 2, subject to the terms and conditions of this Agreement, at the Closing, the Partnership shall issue to the Contributors that number of Class A Units as is set forth in Schedule A hereto (which is incorporated by reference herein) as being issuable at the Closing and, at the Second Closing, the Partnership shall issue to the Rubins that number of Class A Units as is set forth in Schedule A as being issuable at the Second Closing. Upon the closing of an exercise of any option specific in Section 2(c), the Partnership shall issue to the applicable Contributors the number of Class A Units specified in
Section 2(c).

(b) Notwithstanding anything to the contrary set forth herein, the Partnership shall deliver to the Contributor who is not an "accredited investor," as such term is defined under Regulation D promulgated pursuant to the 1933 Act, in lieu of any Class A Units which would otherwise be issuable to such Contributor pursuant to Section 3(a) of this Agreement (and Schedule A hereto), an amount of cash equal to the product of (i) the number of Class A Units otherwise issuable to such Contributor pursuant to Schedule A of this Agreement and (ii) $23.40.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS.

Each Contributor hereby represents and warrants to PREIT and the Partnership as follows (provided that to the extent a representation or warranty set forth in Section 4 relates solely to the business, affairs or status of a Contributor, such representation and warranty shall be deemed to be made solely by the applicable Contributor to which such representation and warranty relates):

4.1 As to the Contributors.

(a) Organization. RBC, Inc. is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all corporate power to carry on its business as presently conducted, to own and lease the assets and properties which it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound. RBC, Inc. is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction in which its ownership or leasing of assets or properties or the nature of its activities requires such qualification except where the failure to be so qualified would not have a material adverse effect on the condition (financial or otherwise), assets, results of operations or business of RBC, Inc. (a "Material Adverse Effect").

(b) Power and Authority. RBC, Inc. has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and under the other agreements and documents required to be delivered by it prior to or at the Closing (collectively, and together with all documents and agreements required to be delivered by the other Contributors on or prior to the Second Closing, the "Contributor Transaction Documents"). The execution, delivery and performance by RBC, Inc. of this Agreement and the other Contributor Transaction Documents to which it is a party have been duly authorized by all necessary corporate action on the part of RBC, Inc. This Agreement has been duly and validly executed and delivered by each Contributor and constitutes a legal, valid and binding

obligation of each Contributor enforceable against it or him in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles. When executed and delivered as contemplated herein, each of the other Contributor Transaction Documents to which a Contributor is a party shall, assuming due authorization, execution and delivery thereof by the other parties thereto, constitute a legal, valid and binding obligation of such Contributor enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles.

(c) No Conflicts; etc. Except as described in
Section 4.1(c) of the disclosure letter delivered by the Contributors to PREIT on the date hereof (the "Contributor Disclosure Letter"), the execution and delivery by the Contributors of this Agreement do not, and the performance by the Contributors of all of the Contributor Transaction Documents will not (with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with (A) the articles of incorporation, bylaws (or other organizational documents) of RBC, Inc. or (B) any Law applicable to any Contributor, or by or to which any assets or properties of any Contributor is bound or subject;

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of benefit under, or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to, any Authorization or Contract to which any Contributor is a party or by which any Contributor or any assets or properties thereof is bound or affected; or

(iii) result in, require or permit the creation or imposition of any Encumbrance upon or with respect to any Contributor, the Interests, the Contributed RII Shares or any of the Contributors' other assets or properties.

(d) Except as set forth in Section 4.1(d) of the Contributor Disclosure Letter, the execution and delivery by the Contributors of this Agreement does not, and the execution and delivery by the Contributors of the other Contributor Transaction Documents, and the performance by the Contributors of all of the Contributor Transaction Documents will not, require any Contributor to obtain any authorization of, or to make any filing, registration or declaration with or notification to, any court, government or governmental agency or instrumentality

(federal, state, local or foreign) or to obtain the consent, waiver or approval of, or give any notice to, any other Person.

(e) Except as set forth in Section 4.1(e) of the Contributor Disclosure Letter, there are no actions, proceedings or investigations pending or, to the knowledge of the Contributors, threatened, that question any of the transactions contemplated by this Agreement or which, if adversely determined, would have a Material Adverse Effect or could materially and adversely affect any Contributor's ability to enter into or perform its obligations under this Agreement.

(f) Litigation; Orders.

(i) Except as set forth in Section 4.1(f) of the Contributor Disclosure Letter, there are no, and since January 1, 1996, there have not been any, claims, actions, suits, proceedings (arbitration or otherwise) or, to the knowledge of the Contributors, investigations involving or affecting any Contributor or any of their assets or properties or any of their directors, officers, partners or shareholders in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign), or before an arbitrator of any kind. To the knowledge of the Contributors, no such claim, action, suit, proceeding or investigation is presently threatened or contemplated. There are no unsatisfied judgments, penalties or awards against or affecting any Contributor or any of their assets or properties.

(ii) There is no material Order to which any Contributor or any of their assets or properties is subject. No officer, director, partner, shareholder or, to the knowledge of the Contributors, employee of any corporate Contributor is subject to any Order that prohibits such officer, director, partner, shareholder or employee from engaging in or continuing any conduct, activity or practice relating to its business. The Contributors have each complied in all respects with the terms and conditions of each Order applicable to them.

(g) Undisclosed Liabilities. Except as set forth in
Section 4.1(g) of the Contributor Disclosure Letter, there are no liabilities or obligations of the Contributors or RII, Inc. of any nature (whether absolute, accrued, contingent, liquidated or unliquidated or otherwise) except the obligations under the Limited Partnership Agreement dated April 2, 1993, governing RA, L.P. and the Limited Partnership Agreement dated April 13, 1994, governing RAII, L.P (collectively, the "Project Partnership Agreements").

(h) The Interests; The Contributed RII Shares.

(i) Section 4.1(h) of the Contributor Disclosure Letter contains an accurate and complete description of the Interests that have been issued of record. Except as described therein, to the knowledge of the Contributors, no Person has any partnership or other interest in the Project Partnerships or any right to receive any distributions from the Project Partnerships or be allocated any profits or losses of the Project Partnerships. Each Contributor owns, beneficially and of record, the portion of the Interests described in Schedule A hereto, free and clear of all Encumbrances other than the Project Partnership Agreements. The Persons listed in Section 4.1(h) of the Contributor Disclosure Letter are the sole partners in the Project Partnerships. The issued and outstanding partnership interest in the Project Partnerships have been issued by the Project Partnerships in compliance with the Project Partnership Agreements, and such interests were not issued by the Project Partnerships in violation of any federal or state securities laws.

(ii) Except for this Agreement and except as provided in the Project Partnership Agreements or in leases with tenants (any such rights in leases shall be customary in projects comparable to the Shopping Center and shall not prejudice the value of the Shopping Center as calculated in Schedule A hereto), there are no rights, subscriptions, warrants, options, rights of first refusal, conversion rights or agreements of any kind outstanding to purchase or to otherwise acquire any partnership interest or other securities or obligations of any kind convertible into any partnership interest or other securities or any participation interests of any kind in the Shopping Center (or any portion thereof) or the Project Partnerships.

(iii) Upon execution and delivery by the Contributors and the Partnership of the assignment and assumption agreement contemplated by Section 7.3, the Partnership will acquire good and valid title to the Interests, free and clear of all Encumbrances (except for applicable securities law restrictions and for the Project Partnership Agreements).

(iv) The Contributors have delivered to the Partnership on the date hereof true and complete copies of the Project Partnership Agreements, as amended to date.

(v) Ronald Rubin owns, beneficially and of record, all of the outstanding common shares of RII, Inc. There are no shareholder, partnership or other agreements affecting the right of Ronald Rubin to convey the Contributed RII Shares to the Partnership as contemplated herein. Ronald Rubin has the absolute right, power and capacity to sell, assign, transfer, contribute and deliver all of the Contributed RII Shares to the Partnership, free and clear of all Encumbrances (except for restrictions imposed generally by applicable securities laws), as

contemplated herein. Upon delivery to the Partnership of the certificates for the Contributed RII Shares at the Closing as contemplated herein, the Partnership will acquire good and valid title to the Contributed RII Shares, free and clear of all Encumbrances (except for applicable securities law restrictions). No Person has any preemptive or other similar rights with respect to any capital stock or other securities of RII, Inc., and except for this Agreement, there are no offers, options, warrants, rights, agreements or commitments of any kind (contingent or otherwise) relating to the issuance, conversion, registration, voting, sale or transfer of any equity interests or other securities of RII, Inc. or obligating RII, Inc. or any other Person to purchase or redeem any such equity interests or other securities. The outstanding capital stock of RII, Inc. consists of 1,000 common shares. Each such share has been duly authorized, is validly issued and outstanding, fully paid and non-assessable.

(i) Brokers. No Person acting on behalf of any Contributor or any of their respective affiliates or under the authority of any of the foregoing is or will be entitled to any brokers' or finders' fee or any other commission or similar fee, directly or indirectly, from any of such parties in connection with any of the contribution transactions contemplated by this Agreement.

(j) Accurate Disclosure. All documents and other papers delivered by or on behalf of any Contributor in connection with the transactions contemplated by this Agreement are accurate and complete in all material respects.

(k) Knowledge. For purposes of this Agreement, "to the knowledge of the Contributors" and correlative terms means the actual knowledge of Ronald Rubin, Larry Trachtman and Douglas Grayson and the officers and other senior management of RBC,Inc. and Ronald Rubin, George Rubin, Leonard Shore, Joseph Coradino, Lewis Stone, Pat Berns, Edward Glickman and Judith Garfinkel, after reasonable inquiry.

(l) Investment Representations.

(i) Each Contributor acknowledges that the Class A Units to be issued pursuant to Section 3 and Schedule A hereto will not be registered under the 1933 Act on the grounds that the issuance of such units is exempt from registration pursuant to Section 4(2) of the 1933 Act and/or Regulation D promulgated under the 1933 Act, and that the reliance of the Partnership on such exemptions is predicated in part on the Contributors' representations, warranties and acknowledgements set forth in this section.

(ii) Each of the Contributors other than Douglas Grayson is an accredited investor as defined in Regulation D promulgated under the 1933 Act. The Class A Units issued in accordance with this Agreement will be acquired by each Contributor that is acquiring Class A Units hereunder for its or his own account, not as a nominee or agent, and without a view to resale or other distribution within the meaning of the 1933 Act, and the rules and regulations thereunder, and none of the Contributors will distribute any of such units in violation of the 1933 Act.

(iii) Each Contributor (v) acknowledges that the Class A Units, when issued, will not be registered under the 1933 Act and such units will have to be held indefinitely by it or him unless they are subsequently registered under the 1933 Act or an exemption from registration is available, (w) is aware that any sales of such units made under Rule 144 of the Securities and Exchange Commission under the 1933 Act may be made only in limited amounts and in accordance with the terms and conditions for that Rule and that in such cases where the Rule is not applicable, compliance with some other registration exemption will be required, (x) is aware that Rule 144 may not be available for use by any Contributor for resale of the units, (y) is aware that the Partnership is under no obligation to register, and has no current intention of registering any of such units under the 1933 Act and (z) acknowledges that such Contributor has received and read a private placement memorandum relating to the offer of Class A Units.

(iv) Each Contributor is well versed in financial matters, has had dealings over the years in securities, including "restricted securities," and is fully capable of understanding the type of investment being made in the Class A Units and the risks involved in connection therewith.

4.2 As to the Project Partnerships.

(a) Organization. Each Project Partnership is a partnership duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and each Project Partnership has all partnership power to carry on its business as presently conducted, to own and lease the assets and properties which it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound. Each Project Partnership is duly qualified to do business as a foreign partnership and is in good standing under the laws of each jurisdiction in which its ownership or leasing of assets or properties or the nature of their activities requires such qualification except where the failure to be so qualified would not have a material adverse effect on the condition (financial or otherwise), assets, results of operations or business of such Project Partnership.

(b) No Conflicts. Except as described in Section 4.2(b) of the Contributor Disclosure Letter, the execution and delivery by the Contributors of this Agreement do not, and the execution and delivery by the Contributors of the other Contributor Transaction Documents and the performance by the Contributors of all of the Contributor Transaction Documents will not (with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with (A) either Project Partnership Agreement, or (B) any Law applicable to the Project Partnerships or to the Shopping Center;

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of benefit under, or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to any material Authorization or Contract to which either Project Partnership is a party or by which either Project Partnership or the Shopping Center is bound or affected; or

(iii) result in, require or permit the creation or imposition of any Encumbrance upon or with respect to either of the Project Partnerships, the Shopping Center or any other material assets or properties of either of the Project Partnerships.

(c) Except as set forth in Section 4.2(c) of the Contributor Disclosure Letter, the execution and delivery by the Contributors of this Agreement do not, and the performance by the Contributors of all of the Contributor Transaction Documents will not, require the Project Partnerships to obtain any authorization of, or to make any filing, registration or declaration with or notification to, any court, government or governmental agency or instrumentality (federal, state, local or foreign) or to obtain the consent, waiver or approval of, or give any notice to, any other Person.

(d) Compliance with Laws.

(i) Except as disclosed in Section 4.2(d) of the Contributor Disclosure Letter, the Project Partnerships are, and, to the knowledge of the Contributors, at all times since their respective inceptions have been, in compliance in all material respects with all Laws that are or were applicable to either of them or to the conduct or operation of its business or the use of the Shopping Center. The Project Partnerships have not received, and there is no basis upon which the Project Partnerships may expect to receive, any notice, order or other communication from any government or governmental agency or instrumentality (federal, state, local or foreign) of any

alleged, actual or potential material violation of or material failure to comply with any Law applicable to either of the Project Partnerships or the Shopping Center, and no event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a material violation by either of the Project Partnerships, or a material failure by either of the Project Partnerships, to comply with, any Law applicable to either of the Project Partnerships or the Shopping Center.

(ii) Each Project Partnership is in possession of all Authorizations required as of the date hereof to own, lease or operate its assets and properties or to carry on its business. Each Project Partnership shall obtain, as and when required by applicable law, all required Authorizations not presently in its possession, recognizing that the Shopping Center is an ongoing construction project as of the date of this Agreement. The Authorizations currently in effect are in full force and effect without any default or violation thereunder by either of the Project Partnerships or, to the knowledge of the Contributors, by any other party thereto. Each Project Partnership is in compliance with all existing Authorizations applicable to it or to the conduct or operation of its business or the use of any of its assets or properties, and no such Authorization shall be affected by the transactions contemplated hereby. Neither Project Partnership nor, to the knowledge of the Contributors, any partner therein has received any notice that any such Authorization currently in effect may be revoked or may not in the ordinary course be renewed upon its expiration or that by virtue of the transactions contemplated hereby that any such Authorization may be revoked or may not be granted, renewed or issued to either of the Project Partnerships.

(e) Litigation; Orders.

(i) Except as set forth in Section 4.2(e) of the Contributor Disclosure Letter, there are no, and since the respective inceptions of the Project Partnerships there have not been any, claims, actions, suits, proceedings (arbitration or otherwise) or, to the knowledge of the Contributors, investigations involving or affecting either of the Project Partnership or any of their respective assets or properties or, to the knowledge of the Contributors, any of their respective partners in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign) or before an arbitrator of any kind (each, a "Claim") other than Claims customarily arising in connection with the ownership and operation of shopping centers similar to the Shopping Center that are covered by insurance or are within the limits of current insurance deductibles. To the knowledge of the Contributors, no such Claim is presently threatened or contemplated. There are no unsatisfied judgments,

penalties or awards against or affecting either of the Project Partnerships or any of their respective assets or properties.

(ii) Except as set forth in Section 4.2(e) of the Contributor Disclosure Letter, there is no Order to which either of the Project Partnerships or any of their respective assets or properties is subject. No partner or employee of either of the Project Partnerships is subject to any Order that prohibits such partner or employee from engaging in or continuing any conduct, activity or practice relating to its business. Each of the Project Partnerships has complied in all respects with the terms and conditions of each Order applicable to it.

(f) Cost Reports. Section 4.2(f) of the Contributor Disclosure Letter includes the cost report reflecting the costs and liabilities of constructing the Shopping Center as of the date of this Agreement (the "Cost Report") incurred by each of the Project Partnerships. As of the date hereof, no financial statements have been prepared for either of the Project Partnerships.

(g) Undisclosed Liabilities.

(i) As of the date hereof, there are no liabilities of either of the Project Partnerships of a nature required to be reflected in a balance sheet prepared in accordance with GAAP except: (x) those described in Section 4.2(g) of the Contributor Disclosure Letter; (y) those reflected or reserved against in the Cost Report; or (z) current liabilities incurred in the ordinary course of business consistent with past practice after the date of the Cost Report and which are neither material in amount nor inconsistent with any of the representations or warranties made herein.

(ii) As of the Closing, there shall be no liabilities of either of the Project Partnerships of any nature (whether absolute, accrued, contingent, liquidated, unliquidated or otherwise) except the liabilities that are taken into account in the calculation of Attributable Debt pursuant to Schedule A hereto.

(h) Title to Property; Encumbrances. Each of the Project Partnerships has good and valid title to, or has a valid, subsisting and unchallenged leasehold interest in or right to use, all personal property owned, used or leased by them. Each of the Project Partnerships owns all the personal property (whether tangible or intangible) that is reflected as owned in its books and records, free and clear of all Encumbrances other than liens for current taxes not yet due, the Encumbrances set forth in Section 4.2(h) of the Contributor Disclosure Letter and Encumbrances arising after the date hereof in the ordinary course of business.

(i) Taxes.

(i) All Taxes due from or required to be remitted by either of the Project Partnerships with respect to taxable periods ending on or prior to, and the portion of any interim period up to, the Closing Date have been fully and timely paid or, to the extent not yet due or payable, have been adequately provided for on the Cost Report referred to in Section 4.2(f) of the Contributor Disclosure Letter or on the books and records of the applicable Project Partnership. There are no levies, liens or other Encumbrances relating to Taxes existing or pending, or to the best knowledge of the Contributors, threatened with respect to any of the assets of either of the Project Partnerships.

(ii) Except as disclosed in Section 4.2(i) of the Contributor Disclosure Letter, all federal, state, local and foreign returns and reports relating to Taxes, or extensions relating thereto, required to be filed by or with respect to either of the Project Partnerships have been timely and properly filed, and all such returns and reports are correct and complete.

(iii) No issues have been raised with any representative or employee of either of the Project Partnerships (and are currently pending) by the IRS or any other taxing authority in connection with any of the returns and reports referred to in subsection (ii) above and no waivers of statutes of limitations have been given or requested with respect to any such returns and reports or with respect to any Taxes.

(iv) Section 4.2(i) of the Contributor Disclosure Letter identifies all federal, state, local and foreign income, franchise and sales and use tax returns of or with respect to either of the Project Partnerships which have been examined since their respective dates of inception, or which are currently under examination, by the IRS or by other taxing authorities, or with respect to which the applicable statute of limitations (including all extensions and tolling periods) has not yet run. Except as and to the extent shown therein, all deficiencies asserted or assessments made as a result of such examinations have been fully paid, and there are no other unpaid deficiencies asserted or assessments made by any taxing authority against either of the Project Partnerships.

(j) Absence of Certain Changes and Events.

(i) The parties acknowledge that the Shopping Center is not fully developed or constructed and the Shopping Center will not be substantially completed until approximately December 15, 1999. Except as described in Section 4.2(j) of the Contributor Disclosure Letter and except as contemplated or

disclosed herein, since their respective dates of inception, each Project Partnership has conducted its business and activities only in the usual and ordinary course consistent with past practice and consistent with the development and construction of a retail shopping center, and there has not been any:

(A) declaration or payment of any distribution or payment in respect of any interest in either of the Project Partnerships to the extent that such payment or distribution relates to an obligation or liability of such Project Partnership after Closing or any issuance, repurchase or redemption of any such interest;

(B) amendment to either of the Project Partnership Agreements;

(C) damage, destruction or loss to any material asset or property of either of the Project Partnerships, whether or not covered by insurance, that has not been fully repaired, restored or replaced;

(D) except for current trade debt incurred in the ordinary course of business consistent with past practice and except for the Permitted Refinancing (as hereinafter defined), borrowing or incurring of any indebtedness, obligation or liability, contingent or otherwise by either of the Project Partnerships;

(E) sale (other than sales of inventory in the ordinary course of business), assignment, conveyance, lease (other than to tenants for occupancy of space in the Shopping Center), or other disposition of any asset or property of either of the Project Partnerships other than in the ordinary course of development and construction of the Shopping Center;

(F) cancellation or waiver of any material claims or rights of either of the Project Partnerships; or

(G) agreement or commitment, whether or not in writing, to do any of the foregoing.

(k) Books and Records. The books and records of the Project Partnerships, including financial records and books of account, are complete and accurate in all material respects and have been maintained in accordance with sound business practices. To the extent such books and records constitute financial records or books of account, they fairly present revenues, expenses, assets and liabilities, all in a manner that will allow the preparation of financial statements that comply with GAAP.

(l) FIRPTA. Neither Project Partnership is a "foreign person" within the meaning of Section 1445(f) of the Code or a "foreign partner" within the meaning of Section 1446 of the Code.

(m) List of Properties, Contracts, etc. Section 4.2(m) of the Contributor Disclosure Letter contains a complete and accurate list as of the date hereof of each item described below, and the Contributors have delivered to PREIT (or given PREIT access to) true and complete copies of each document (or summaries of oral agreements) described below.

(i) Each of the following types of Contracts, whether oral or written, to which either or both of the Project Partnerships or, to the Contributors' knowledge, any of their respective general partners (in their capacities as such) is a party or by which they or any of their respective assets are bound:

(A) All Contracts that:

(I) involve performance of services or sale or lease of goods, materials or space by either of the Project Partnerships or any of their respective general partners of an amount or value in excess of $25,000 in any annual period or $100,000 in the aggregate;

(II) involve performance of services or sale or lease of goods, materials or space to either of the Project Partnerships or any of their respective general partners of an amount or value in excess of $25,000 in any annual period or $100,000 in the aggregate;

(III) are not in the ordinary course of business and involve expenditures or receipts by either of the Project Partnerships or any of their respective general partners of more than $25,000;

(IV) are not terminable by either of the Project Partnerships or any of their respective general partners without penalty or premium upon less than 60 days' notice; or

(V) are otherwise material to the business, operations, financial condition or prospects of either of the Project Partnerships or to the ownership, operation or management of the Shopping Center.

(B) All Authorizations held by either of the Project Partnerships that relate to any of the assets or properties owned, used or leased by either of the Project Partnerships;

(C) All outstanding loans and advances by either of the Project Partnerships to any partner, officer or employee of either of the Project Partnerships; and

(D) Other than trade debt incurred in the ordinary course of business, all notes, debt instruments, other evidences of indebtedness, letters of credit and guaranties (whether written or oral) issued by or for the benefit of either of the Project Partnerships and all loan and other agreements relating thereto.

(n) Contracts.

(i) Except as described in Section 4.2(n) of the Contributor Disclosure Letter and subject to the terms and conditions of Section 7.2(a)(ii) below, each Contract of a type required to be identified in Section 4.2(m)(i)(A) of the Contributor Disclosure Letter was made in the ordinary course of business, is in full force and effect and is valid, binding and enforceable against the parties thereto in accordance with its terms. Except as described in Section 4.2(n) of the Contributor Disclosure Letter, the Project Partnerships and their respective general partners have each performed in all material respects all obligations required to be performed by them under each such Contract to which any of them is a party or by which any of them is bound, and, to the knowledge of the Contributors, no condition exists or event has occurred which with notice or lapse of time would constitute a default thereunder or a basis for delay, non-performance, termination, modification or acceleration of maturity or performance by any party thereto.

(ii) There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts paid or payable to either of the Project Partnerships or any of their respective general partners (in their capacity as such) under any of the Contracts referred to in subparagraph (i) above. All of such Contracts that relate to the provision of services or goods by either of the Project Partnership or any of their respective general partners (in their capacity as such) have been entered into in the ordinary course of business and have been entered into without the commission of any act or any consideration having been paid or promised that is or would be in violation of any Law.

(iii) Except as set forth in Section 4.2(n) of the Contributor Disclosure Letter, without limiting the generality of the foregoing, the Project Partnership Agreements

are in full force and effect and each of the parties thereto has performed all obligations required to be performed by it under such agreements.

4.3 As to the Shopping Center.

(a) Title

(i) Based solely on Owner's Policy Nos. 485954 and 485957 issued by First American Title Insurance Company (the "Title Policy"), as of the date hereof RAII, L.P. and RII, Inc. own fee simple title to the Shopping Center, free and clear of all Encumbrances except as set forth in
Section 4.3(a) of the Contributor Disclosure Letter (the "Title Policy Encumbrances"). To the knowledge of the Contributors, there have been no changes in the state of such title as reflected in the Title Policy other than Title Policy Encumbrances and those encumbrances required to complete the development and construction of the Shopping Center that are of a nature customary for development projects similar to the Shopping Center (collectively, the "Permitted Encumbrances").

(ii) RA, L.P. is the tenant under a valid and subsisting lease of Parcel 3 dated April 25, 1994 by and between RII, Inc., as Declarant under a Declaration and Agreement of Trust dated April 25, 1994, as landlord, and RA, L.P., as tenant, a Memorandum of which was recorded in the Department of Records of the City of Philadelphia May 20, 1994 in Deed Book VCS 577, Page 387; and RA, L.P. is the sublandlord under a valid and subsisting sublease dated April 25, 1994, by and between RA, L.P., as sublandlord, and Home Depot USA, Inc., as subtenant.

(iii) The Project Partnerships are the owners of, or the lessees under subsisting leases of, or otherwise have the right to use the personal property used by the Project Partnerships in the operation of the Shopping Center. All of such property that is reflected on the records of either of the Project Partnerships as owned by either of the Project Partnerships is free and clear of all Encumbrances, except for Permitted Encumbrances.

(iv) Except as set forth in Section 4.3(a) of the Contributor Disclosure Letter and except as provided in tenant leases, there are no rights of first refusal on, or options to purchase, any portion of the Shopping Center or any right to participation interests (whether of profits, sale or refinancing proceeds, or calculated based on fair market value) with respect to any portion of the Shopping Center in favor of any tenant, lender or any other Person other than either of the Project Partnerships or RII, Inc. None of the tenant leases provides for any such right or option except that one or more of

such leases may provide for a purchase option in favor of the tenant but only in respect of the space leased to such tenant.

(v) To the knowledge of the Contributors, no eminent domain, condemnation, incorporation, annexation or moratorium or similar proceeding has been commenced or threatened by an authority having the power of eminent domain to condemn any part of the Shopping Center. To the Contributors' knowledge, as of the date hereof, there are no pending or threatened governmental rules, regulations, plans, studies, or court orders or decisions, which do or could materially adversely affect the use or value of the Shopping Center as a retail shopping center.

(b) Mortgage Obligations.

(i) The Shopping Center is subject as of the date hereof to the mortgage(s) securing obligation(s) in the amount(s) set forth in Section 4.3(b) of the Contributor Disclosure Letter (such obligations and any other obligations incurred to refinance such obligations, the "Loan Obligations") and is subject as of the date hereof to no other mortgage. Section 4.3(b) of the Contributor Disclosure Letter sets forth the original principal amount, approximate outstanding principal amount, interest rate, term and other material economic provisions of each of the Loan Obligations.

(ii) The documents identified in Section 4.3(b) of the Contributor Disclosure Letter, true and correct copies of which have been delivered to PREIT (or to which PREIT has been given access), constitute all of the material documents evidencing, defining or securing the Loan Obligations (the "Loan Documents").

(iii) The Project Partnerships and RII, Inc. have complied with the Loan Documents, and there are no events of default thereunder now outstanding. To the Contributors' knowledge, no event has occurred, which with the passage of time or the giving of notice or both, could ripen into an event of default under the terms of the Loan Documents.

(c) Leases.

(i) The Rent Roll attached to Section 4.3(c) of the Contributor Disclosure Letter (the "Rent Roll") lists each of the leases in existence as of the date hereof with respect to any portion of the Shopping Center.

(ii) Except as set forth in Section 4.3(c) of the Contributor Disclosure Letter, as of the date hereof, there are no leases, licenses or other rights of occupancy in force which affect the Shopping Center or any portion thereof other than the leases listed in the Rent Roll. The Contributors have

made available to PREIT copies of all of the leases (including all amendments) listed on the Rent Roll. Except as set forth on the Rent Roll, no uncured event of default of either of the Project Partnerships or, to the knowledge of the Contributors, any tenant has occurred and is continuing under any lease of premises within the Shopping Center, no tenant has asserted a defense to or offset or claim against its rent or the performance of its obligations under its lease, and no tenant has asserted a default on the part of either of the Project Partnerships which would give it the right to terminate its lease or a setoff against rent.

(iii) With respect to the leases involving the Shopping Center, except as set forth in Section 4.3(c) of the Contributor Disclosure Letter or in the leases, as of the date hereof:

(A) there are no proposed modifications to any such lease that would reduce:

(I) the space leased to any tenant;

(II) the amount of any tenant's rent; or

(III) the term of any lease;

(B) no free rent or other concession is due any tenant;

(C) Neither Project Partnership is required to provide tenant improvements or refurbishments with respect any such lease other than tenant improvements that either Project Partnership may be required to construct if an expansion option provided in a lease is exercised;

(D) no tenant has an option to terminate its lease prior to its stated expiration date;

(E) except for (x) security deposits or
(y) the first full month's rent, whether or not the term of a lease has commenced, no prepayments of rent more than thirty (30) days in advance have been made under any such lease;

(F) no rent or security deposit under any such lease has been assigned or encumbered, except as security for the Loan Documents;

(G) there are no agreements or understandings, written or oral, with any tenant other than as set forth in its lease or on the Rent Roll; and

(H) all brokerage commissions and other compensation or fees payable by reason of the leases have not been paid in full. Attached to Section 4.3(c) of the Contributor Disclosure Letter is a list of brokers commissions due with respect to the Shopping Center and the status of such commissions.

(d) Zoning. The zoning classification for the Shopping Center is C-3 Commercial, and the contemplated uses of the Shopping Center are in compliance with the applicable zoning ordinances and regulations.

(e) Compliance with Laws and Recorded Declarations. The Project Partnerships have complied in all material respects with all Laws (including, without limitation, the Americans with Disabilities Act of 1990) and requirements of insurance bodies applicable to the ownership, leasing, use and operation of the Shopping Center, including, without limitation, parking, dimensional and building setback requirements, and have performed all work and secured all required consents and approvals, or will do so in a timely fashion, and obtained and fully paid, or will do so in a timely fashion, for all Authorizations and any other items and documents required by applicable Law, by contract, or as a condition of any approval granted by or agreement entered into with any applicable municipal authority, required of either of the Project Partnerships for the completion, ownership, leasing, use and occupancy of the Shopping Center, including, but not limited to, final certificates of occupancy for each of the current tenancies in the Shopping Center other than where construction of tenant improvements for new tenancies is not yet completed or timely applications remain pending or where the tenants are required to obtain such consents, approvals or authorizations under the leases. All such existing Authorizations and other items and documents are in full force and effect. Neither of the Project Partnerships has taken any action that would (or failed to take any action, the omission of which might) result in the revocation or suspension of any such Authorization or other item or document, and neither of the Project Partnerships has received any notice of any violation from any federal, state or municipal entity or notice of an intention by any such governmental entity to revoke any certificate of occupancy or other Authorization issued by it in connection with the ownership, use and occupancy of the Shopping Center that in each case has not been cured or otherwise resolved to the satisfaction of such governmental entity. Except as set forth in
Section 4.3(e) of the Contributor Disclosure Letter, to the Contributors' knowledge, (i) any and all charges and other assessments under declarations and like agreements and special assessments to which the Shopping Center or either of the Project Partnerships is subject have been paid to date, and (ii) all consents and approvals required to be obtained under such declarations and like agreements with respect to the Shopping

Center have been obtained or are in the process of being obtained. Notwithstanding anything to the contrary contained herein, the Contributors do not represent or warrant compliance by any of the tenants with respect to Laws or that the Contributors are obtaining any Authorizations that are required to be obtained by any tenants, but the Contributors shall enforce the leases and obligations of tenants thereunder.

(f) Environmental Matters.

(i) Except as described in Section 4.3(f) of the Contributor Disclosure Letter, the Contributors have no knowledge of any fact, condition or circumstance that would suggest that the environmental reports listed in Section 4.3(f) of the Contributor Disclosure Letter (which constitute all environmental reports relating to the Shopping Center received by the Contributors) contains any misstatement of material fact or omits to state any material fact. To the knowledge of the Contributors, except for matters set forth in Section 4.3(e) of the Contributor Disclosure Letter, there are no conditions on, beneath or arising from, and there are no Hazardous Substances migrating from, the Shopping Center which might under any Environmental Law (A) give rise to liability or the imposition of a statutory lien upon either of the Project Partnerships or RII, Inc. or (B) require any Response, Removal or Remedial Action by either of the Project Partnerships or RII, Inc.

(ii) To the knowledge of the Contributors, no wastes generated by any Contributor or the Project Partnerships have ever been directly or indirectly sent, transferred, transported to, treated, stored or disposed of at any site listed or formally proposed for listing on the National Priority List promulgated pursuant to CERCLA or to any site listed in any state list of sites requiring or recommended for investigation or clean-up.

(g) Reassessments. The Shopping Center has not been fully assessed and the Contributors have been informed that the Shopping Center will be reassessed upon its completion. To the Contributors' knowledge, there are no special assessments or other actions or proceedings that could reasonably be expected to give rise to an increase in real property taxes or assessments against the Shopping Center.

(h) Property Improvements. PREIT acknowledges that the Shopping Center is currently under construction and that the improvements to be built thereon are not complete. Except as disclosed in any engineering studies or reports obtained by or delivered by the Contributors to PREIT as set forth in
Section 4.3(h) of the Contributor Disclosure Letter, the Shopping Center is, to the extent completed, in good condition and repair, ordinary wear and tear excepted, consistent with a shopping

center project that is still under construction, and has not suffered any casualty or other material damage which has not been repaired in all material respects. To the Contributors' knowledge, there is no material latent or patent structural, mechanical or other significant defect, soil condition or deficiency in the improvements constructed on the Shopping Center, or any other defects, soil conditions or deficiencies which, in the aggregate, would materially adversely affect the value of the Shopping Center as a whole.

(i) Employees and Service Contracts.

(i) Section 4.3(i) of the Contributor Disclosure Letter sets forth a complete and correct list of all existing and proposed union or collective bargaining agreements to which any Contributor or either of the Project Partnerships is a party with respect to or affecting the Shopping Center.

(ii) Section 4.3(i) of the Contributor Disclosure Letter sets forth a complete and correct list of all persons who are employed by either of the Project Partnerships or their respective partners in connection with the management, operation or maintenance of the Shopping Center, setting forth, with respect to each of them, his or her name, position or duties, regular wages or salary, accrued vacation pay and bonus and other benefits to which he or she is entitled. Each of such persons is an employee-at-will and none of such persons is covered by a written employment agreement.

SECTION 5. REPRESENTATIONS AND WARRANTIES REGARDING PREIT AND THE PARTNERSHIP.

PREIT hereby represents and warrants to the Contributors as follows:

5.1 Organization.

(a) PREIT is an unincorporated association in business trust form duly organized and validly existing under the laws of the Commonwealth of Pennsylvania. PREIT has all necessary trust power to carry on its business as presently conducted, to own and lease the assets and properties that it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound.

(b) The Partnership is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware and has all necessary partnership power to carry on its business as presently conducted, to own and lease the assets and properties that it owns and leases and to perform

all its obligations under each agreement and instrument to which it is a party or by which it is bound.

5.2 Power and Authority. Each of PREIT and the Partnership has all requisite trust or partnership power to execute, deliver and perform its obligations under this Agreement and under all other agreements and documents required to be delivered by it prior to or at the Closing (collectively, the "Buyer Transaction Documents"). The execution, delivery and performance by PREIT and the Partnership of this Agreement and the other Buyer Transaction Documents have been duly authorized by all necessary corporate or partnership action. This Agreement has been duly and validly executed and delivered by PREIT and the Partnership and constitutes the legal, valid and binding obligation of PREIT and the Partnership enforceable against each of them in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally or by general equitable principles. When executed and delivered as contemplated herein, each of the other Buyer Transaction Documents shall, assuming due authorization, execution and delivery thereof by the other parties thereto, constitute the legal, valid and binding obligation of each of PREIT and the Partnership that is a party thereto enforceable against it in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally or by general equitable principles.

5.3 No Conflicts.

(a) Except as described in Section 5.3 of the disclosure letter delivered by PREIT to the Contributors on the date hereof (the "PREIT Disclosure Letter"), the execution and delivery by PREIT and the Partnership of this Agreement do not, and the execution and delivery by PREIT and the Partnership of the other Buyer Transaction Documents and the performance by PREIT and the Partnership of all of the Buyer Transaction Documents will not (in each case, with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with (A) the trust or partnership agreement (or other organizational documents) of PREIT or the Partnership or (B) any Law applicable to PREIT or the Partnership, or by or to which any assets or properties of PREIT or the Partnership is bound or subject; or

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of benefit or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to any material Authorization or

material Contract to which PREIT or the Partnership is a party or by which either PREIT or the Partnership is bound or affected; or

(iii) result in, require or permit the creation or imposition of any material Encumbrance upon or with respect to either PREIT or the Partnership or any of their respective assets or properties.

(b) Except for filings with the Securities and Exchange Commission and except as disclosed in Section 5.3(a) of the PREIT Disclosure Letter, the execution and delivery by PREIT and the Partnership of this Agreement do not, and the execution and delivery by PREIT and the Partnership of the other Buyer Transaction Documents and the performance by PREIT and the Partnership of all of the Buyer Transaction Documents will not, require PREIT or the Partnership to obtain any material Authorization of or make any material filing, registration or declaration with or notification to any court, government or governmental agency or instrumentality (federal, state, local or foreign) or to obtain the material consent, waiver or approval of, or give any material notice to, any Person.

(c) Except as disclosed in filings with the Securities and Exchange Commission made by PREIT, there are no actions, proceedings or investigations against or involving PREIT or the Partnership pending or, to the best knowledge of PREIT, threatened, that question any of the transactions contemplated by this Agreement or the validity of any of the Buyer Transaction Documents or which, if adversely determined, could have a material adverse effect on the consolidated financial condition, assets, business or results of operations of PREIT or could materially and adversely affect PREIT's or the Partnership's ability to enter into or perform its obligations under the Buyer Transaction Documents.

5.4 Capitalization.

(a) On the date hereof, the outstanding beneficial interests in PREIT consist of 8,679,598 PREIT Shares, and the outstanding partnership interest in the Partnership are as described in Section 5.4(a) of the PREIT Disclosure Letter. Except for 483,875 PREIT Shares reserved for issuance pursuant to outstanding stock options and except as contemplated in the TRO Contribution Agreement, in the Amended Partnership Agreement or in the Employment Agreements referred to in the TRO Contribution Agreement, and except as disclosed in Section 5.4(a) of the PREIT Disclosure Letter, as of the date of this Agreement, there are no options, warrants or other rights, agreements, arrangements or commitments of any character (including, without limitation, voting agreements or arrangements known to PREIT) relating to the issuance of beneficial interests in PREIT or partnership interest in the Partnership. As of the Closing, the outstanding partner

interests in the Partnership shall consist of the interests outstanding on the date hereof, the Class A Units to be issued as contemplated in the TRO Contribution Agreement, this Agreement and the EPD Purchase Agreements.

(b) All Class A Units to be issued and delivered pursuant to Section 3 hereof will be, at the time of issuance and delivery in accordance with the terms of this Agreement, duly authorized and validly issued by the Partnership. Assuming the accuracy of the representations and warranties of the Contributors set forth herein, such issuance will be exempt from registration under the 1933 Act as an offering described in Section 4(2) of such Act and/or pursuant to Regulation D promulgated thereunder.

5.5 PREIT Reports. PREIT has delivered to the Contributors copies of PREIT's (a) Proxy Statement dated November 15, 1996, (b) Annual Report on Form 10-K for the fiscal year ending August 31, 1996, as amended by its Report on 10-K/A-1 dated December 2, 1996, and (c) Quarterly Reports on Form 10-Q for the quarters ended November 30, 1996, February 28, 1997 and May 31, 1997, all of which have been filed by PREIT with the Securities and Exchange Commission (the "PREIT Reports"). The audited consolidated financial statements and unaudited interim financial statements of PREIT included in such reports have been prepared in accordance with GAAP consistently applied (except as may be indicated in the notes thereto) and fairly present the consolidated financial condition and results of operations of PREIT as at the dates thereof and for the periods then ended, subject, in the case of the unaudited interim financial statements, to normal year-end adjustments and any other adjustments described therein. The PREIT Reports do not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

5.6 Litigation. Except as disclosed in filings with the Securities and Exchange Commission, there are no claims, actions, suits, proceedings (arbitration or otherwise) or, to the best knowledge of PREIT, investigations involving or affecting PREIT or any of its subsidiaries or any of their assets or properties or any of their trustees, directors, officers, partners or shareholders in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign) or before any arbitrator of any kind, in each case of a nature that is required to be disclosed in PREIT's 1934 Act reports.

5.7 Material Adverse Change. Except as disclosed in filings with the Securities and Exchange Commission, since May 31, 1997 and through the date hereof, there has not been any

material adverse change in the condition (financial or otherwise), assets, results of operations or business of PREIT on a consolidated basis.

5.8 Brokers. Except for Lehman Brothers, Inc., whose fees shall be paid by PREIT, no Person acting on behalf of PREIT or the Partnership or any of their affiliates or under the authority of any of the foregoing is or will be entitled to any brokers' or finders' fee or any other commission or similar fee, directly or indirectly, from any of such parties in connection with any of the transactions contemplated by this Agreement.

SECTION 6. CERTAIN COVENANTS AND AGREEMENTS

6.1 Conduct of Business.

(a) Except as expressly provided herein, between the date hereof and the Closing, except with the prior written consent of PREIT, RBC, Inc. shall, and the Contributors shall cause each of the Project Partnerships to:

(i) carry on its business in, and only in, the usual, regular and ordinary course, consistent with past practice and consistent with the development and construction of a retail shopping center and the provisions hereof and in compliance with all applicable Laws, Authorizations and Contracts;

(ii) pay and discharge all of its debts, liabilities and obligations as they become due and pay all debt service payments, real estate taxes, payables and other liabilities arising from the construction or operation of the Shopping Center that in the ordinary course of business would have been paid prior to the Closing Date (with the exception of those liabilities and obligations which the Contributors are contesting in good faith and for which the Contributors have established adequate reserves on the Project Partnerships' books);

(iii) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried by it;

(iv) maintain its facilities and assets in the same state of repair, order and condition as they were on the date hereof, reasonable wear and tear excepted;

(v) maintain its books of account and records in the usual, regular and ordinary manner and use diligent efforts to maintain in full force and effect all of its Authorizations;

(vi) not take any action, fail to take any action or permit to occur any event that would cause or constitute a material breach of or inaccuracy in any representation or warranty set forth herein if made immediately after such event or at the Closing or that would have been required (or result in any situation that would be required) to be disclosed hereunder had such action or inaction been taken or failed to have occurred or had such event occurred prior to the date hereof;

(vii) except as described in Section 6.1(a) of the Contributor Disclosure Letter and the TRO Contribution Agreement, not make any change in its authorized or issued capital stock or partnership interest, grant any stock option or other right to purchase its shares of capital stock, partnership interest or other securities, issue or make any commitment to issue any of its securities, including any securities convertible into capital stock or partnership interest, grant any registration rights or purchase, redeem, retire or make any other acquisition of any shares of its capital stock, partnership interest or other securities;

(viii) not amend or grant any waivers under either of the Project Partnership Agreements;

(ix) not enter into any agreement or understanding to do or engage in any of the foregoing actions; and

(x) construct and operate the Shopping Center in the ordinary course in a manner consistent with past practice, maintaining the Shopping Center in a reasonable state of repair, order and condition consistent with a development project which is still under construction. Without limiting the foregoing, the Project Partnerships shall not defer any required maintenance or repair unless such maintenance or repair would otherwise be deferred in the ordinary course of business.

6.2 Reasonable Efforts. Upon the terms and subject to the condition hereof, between the date hereof and the Closing Date, 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 Law to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, (i) using its or his reasonable efforts to make all required regulatory filings and applications and to obtain all Authorizations and consents, approvals, amendments and waivers from parties to Contracts as are necessary for the consummation of the transactions contemplated by this Agreement and (ii) using its reasonable efforts to cause the conditions to the consummation of the acquisition of the Interests to be satisfied.

6.3 Notifications. Each party hereto shall give prompt notice to the other parties upon becoming aware of: (i) any fact or condition that causes or constitutes (or that reasonably could be expected to cause or constitute) a breach of its representations and warranties set forth herein, or the occurrence, or failure to occur, of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a breach of or any inaccuracy in any of its representations and warranties contained in this Agreement had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition; (ii) any material failure of it or any of its officers, directors, employees or agents, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; (iii) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and (iv) any actions, suits, claims, investigations or proceedings commenced or, to the best of its knowledge, threatened against, relating to or involving or otherwise affecting any Contributor, either of the Project Partnerships or PREIT, as the case may be, or any of the transactions contemplated by this Agreement.

6.4 Operation of Shopping Center.

(a) RBC, Inc. shall take all actions, and the Contributors shall cause the Project Partnerships to take all actions necessary, so that as of the Closing Date:

(i) Payments of rent or other monies due from Shopping Center tenants (except reimbursements under leases for site improvements or improvements to tenants' space) that fall due after the Closing Date and are received prior to the Closing Date shall continue to be held in the applicable Project Partnership bank account, as the case may be, or by the managing agent through the Closing Date;

(ii) All security deposits under leases and all interest required to be paid thereon pursuant to the terms of such leases shall continue to be held in the applicable Project Partnership bank account, as the case may be, or by the managing agent as the case may be, on the Closing Date; and

(iii) All debt service payments, real estate taxes and payments due under service contracts and service providers in respect of the operation of the Shopping Center that in the ordinary course of business would have been paid prior to the Closing Date shall have been paid prior to the Closing Date by or on behalf of either of the Project Partnerships.

(b) No delinquent rent payments shall be apportioned on the Closing Date. All rent receivables shall remain the

property of the appropriate Project Partnership, as the case may be.

(c) Notwithstanding anything to the contrary as set forth in this Agreement, the Contributors shall be entitled to cause the Project Partnerships either to extend the current construction loans (pursuant to extension options currently provided for in the loan agreements) or to refinance their construction loans prior to Closing provided that the new loan(s) expressly permits the transfer of the interests contemplated herein and provided that such transfer will not result in any acceleration of indebtedness or other penalties and further provided that the Partnership approves the terms of the refinancing, including, but not limited to, the amount of the refinancing, and the loan documents evidencing and securing the refinancing, which approval shall not be unreasonably withheld (the "Permitted Refinancing").

6.5 Transfer of Shares or Retained Interests. Between the date hereof and the Second Closing, except as expressly contemplated herein, except with the prior written consent of PREIT: (i) neither of the Rubins shall sell, assign, transfer or otherwise encumber all or any portion of the Retained Interests or any rights of either of them relating to the Retained Interests, and (ii) Ronald Rubin shall not sell, assign, transfer or otherwise encumber any shares of capital stock of RII, Inc. or any rights of Ronald Rubin in such shares. Each of the Rubins shall take all action necessary or appropriate to provide that the Retained Interests and shares of capital stock of RII, Inc. owned by him shall, in the event of his death prior to the date of the Second Closing, pass by the laws of descent and distribution only to a member of his family (as defined under the Philadelphia Code Section 19-1402(8) and in Philadelphia Realty Transfer Tax Regulation Section 503(b)(6)(i)(C)). Any such heir who acquires an interest in any portion of the Retained Interests or capital stock of RII, Inc. shall acquire such interest subject to the terms and conditions of this Agreement.

6.6 Bankruptcy Claim. As of the date hereof, RAII, L.P. has asserted a $2,436,932.63, plus interest, claim against Bradlees Department Store in the bankruptcy proceedings involving Bradlees. If as of the Closing such claim has not been liquidated, the Contributors shall be entitled to cause RAII, L.P. to distribute all rights to such claim to one or more of the Contributors immediately prior to the Closing. If as of Closing either Project Partnership has any potential future liability to Bradlees or to the trustee in the Bradlees bankruptcy proceedings, the Contributors shall execute and deliver a pledge agreement in form and substance reasonably satisfactory to PREIT by which they shall pledge to the Partnership (in order to secure their indemnification undertakings with respect to Section 9.1(c)) such number of Class A Units issued to them hereunder as

shall be equal to 100% of the maximum amount of all such potential liabilities.

SECTION 7. CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES.

7.1 Time of Closing. The closing (the "Closing") of the acquisition by the Partnership pursuant to this Agreement of the Interests (other than the Retained Interests) and the other contributions to the Partnership contemplated herein shall take place at the time and place specified in Schedule A hereto on the Closing Date (as defined in Schedule A hereto).

7.2 Closing Conditions.

(a) Conditions Precedent to PREIT's and the Partnership's Obligations. The obligation of PREIT and the Partnership to consummate the acquisition of the Interests and to take the other actions required to be taken by them at the Closing is subject to the fulfillment by or at the Closing of each of the following conditions, any or all of which may be waived by PREIT in its sole discretion:

(i) Condition of Title. RAII, L.P. and RII, Inc. shall own fee simple title to the Shopping Center and such title shall be good and marketable and insured as such by First American Title Insurance Company, Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation or Chicago Title Insurance Company, as selected by the Partnership (the "Title Insurance Company"), free and clear of all Encumbrances other than Permitted Encumbrances and the existing leases set forth on the Rent Roll or as such leases may have changed in the ordinary course of the operation of the Shopping Center and the mortgage securing the Permitted Refinancing. The following owners title insurance policies (or a marked-up title commitment reflecting the effectiveness of such issuance) shall have been issued and delivered to the Partnership (unless such insurance is not issued or effective solely due to the Partnership's failure to pay the premiums therefor) a vested owners title insurance policy or policies with "non-imputation" and fairways endorsements for the value of the Interests in the Project Partnerships as determined in accordance with Schedule A hereto.

(ii) Tenant Estoppels. The Contributors shall have used their reasonable efforts to cause the tenants in the Shopping Center to execute and deliver to the Partnership estoppel certificates in form and substance reasonably satisfactory to PREIT. The Contributors shall keep the Partnership reasonably apprised as to the status of receipt of the estoppel certificates. The failure to obtain and deliver any or all of the estoppel certificates shall not constitute a default by the Contributors hereunder or allow PREIT or the Partnership to terminate this Agreement provided the Contributors

have used reasonable efforts to obtain the estoppel certificates. The Contributors' liability under the representations and warranties under Sections 4.2(m)(i) and 4.3(c) as to a particular tenant shall terminate if the Partnership subsequently receives an estoppel certificate for the applicable tenant which confirms the Contributor's representations under Sections 4.2
(e)(i) and 4.3 (c) (provided, if the Partnership receives an estoppel certificate which confirms some but not all of the matters which are the subject of the representations and warranties under Sections 4.2(m)(i) and 4.3(c), then as to such tenant, (x) if the estoppel certificate was received prior to Closing, the representations and warranties set forth in Sections 4.2(m)(i) and 4.3(c) shall be deemed to omit such matters stated on the estoppel certificate as to such matters provided the certifications contained in such estoppel remain true and correct until the Closing Date and (y) if received after Closing, the representations and warranties under Sections 4.2(m)(i) and 4.3(c) shall cease to survive as to such matters but shall continue to survive as to matters not contained in such Estoppel Certificate.)

(iii) Survey, Etc. The Partnership shall have received, at the Partnership's sole cost and expense, updated environmental and engineering reports and surveys for the Shopping Center certified to the Partnership and the Title Insurance Company, in form reasonably satisfactory to PREIT and the Title Insurance Company, and such reports and surveys shall not disclose any material adverse condition not disclosed in the original reports and surveys for the Shopping Center delivered to PREIT or to which PREIT was given access prior to the date of this Agreement.

(iv) No Mortgage Defaults. All payments of principal and interest on all Loan Obligations shall be current and no Loan Obligation shall be in default. The Contributors shall have used their reasonable efforts to cause the holder of each Loan Obligation to issue to the Partnership a letter or certification confirming the principal balance of such Loan Obligation, the date of the last payment and that, to its knowledge, there are no events of default thereunder. The failure to obtain or deliver such letter or certification shall not constitute a default by the Contributors hereunder or allow PREIT or the Partnership to terminate this Agreement provided that the Contributors have used reasonable efforts to obtain such letter or certificate. In the event the letter or certification from the holder of each Loan Obligation contains a certification containing information which confirms the Contributors' representations under Section 4.3(b) above, the Contributors' liability for such representation shall terminate upon delivery of the letter or certificate to the Partnership provided the certifications contained in such estoppel remain true and correct until the Closing Date.

(v) Representations and Warranties. Except as otherwise expressly provided herein, each of the representations and warranties of the Contributors set forth in this Agreement that is qualified by materiality shall be true and correct, and each of the representations and warranties of the Contributors set forth in this Agreement that is not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, provided that the failure of one or more representations and warranties to be true and correct as of the Closing Date shall not entitle PREIT to decline to close if the Damages therefrom do not exceed 50% of the value referred to in
Section 7.2(a)(xiv) and if the other conditions of this Section 7.2(a) shall be satisfied.

(vi) Performance of Covenants. All of the agreements, covenants and obligations that any Contributor is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects. The Contributors shall have delivered each of the documents required to be delivered by them pursuant to Section 7.3(a) hereof.

(vii) Legal Matters. The performance of the Buyer and Contributor Transaction Documents and the consummation of the Closing shall not, directly or indirectly (with or without notice or lapse of time), violate, contravene, conflict with or result in a violation of any Law and shall not violate any Order of any court or governmental body of competent jurisdiction, and no suit, action, investigation or legal or administrative proceeding shall have been brought or threatened by any Person (other than by PREIT or the Partnership) that questions the validity or legality of this Agreement or the transactions contemplated hereby.

(viii) Consents and Approvals. Each consent, approval, ratification, waiver or other authorization of any Person necessary, in the reasonable opinion of PREIT, for the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect, and no such consent, approval, ratification, waiver or other authorization: (x) shall have been conditioned upon the modification, cancellation or termination of any Contract, right or Authorization of PREIT, the Partnership or either of the Project Partnerships or (y) shall impose on PREIT, either of the Project Partnerships or the Partnership any condition, provision or requirement not presently imposed upon the Contributors or either of the Project Partnerships or any condition that would be more restrictive after the Closing on either of the Project Partnership or the Partnership than the conditions presently imposed on the Contributors or either of the Project Partnerships.

(ix) Opinion of Counsel. PREIT shall have received an opinion of counsel for the Contributors, dated the Closing Date, in form and substance reasonably satisfactory to PREIT and its counsel.

(x) TRO Closing. The TRO Closing shall have occurred.

(xi) Casualty or Condemnation. There shall not have occurred any damage or destruction to, or condemnation of, any portion of the Shopping Center that is reasonably likely to have a material adverse effect on the operations or profitability of the Shopping Center.

(xii) Material Adverse Change. There shall not have been since the date hereof any event, circumstance, condition or contingency that has resulted in a material adverse effect on the business, assets, financial condition or results of operations of either of the Project Partnerships or that is reasonably likely to result in such an change.

(xiii) Compliance Certificate. The Contributors shall have obtained (to the extent such certifications or letters are made available in such jurisdiction prior to substantial completion of the Shopping Center) a certification or letter from the appropriate governmental officer having jurisdiction to the effect that the Shopping Center and its use are in compliance with applicable fire, health, safety and zoning ordinances, rules and regulations.

(xiv) Adjustment for Breaches. The aggregate amount of all Damages arising from breaches entitling PREIT and the Partnership to an adjustment to the aggregate consideration as specified in Section 8.1 shall not exceed 50% of the value of what the Contributors would receive pursuant to Section 4 of Schedule A absent such adjustment. None of the Contributors and neither of the Project Partnerships shall have violated any criminal or other material Law and the consummation of the Closing shall not violate or conflict with any material Law.

(b) Conditions Precedent to the Contributors' Obligations. The obligation of the Contributors to consummate the contribution of the Interests contemplated by this Agreement and to take the other actions required to be taken by them at the Closing is subject to the fulfillment by or at the Closing of each of the following conditions, any or all of what may be waived by the Contributors in their sole discretion:

(i) Representations and Warranties. Each of the representations and warranties of PREIT set forth in this Agreement that is qualified by materiality shall be true and

correct, and each of the representations and warranties of PREIT set forth in this Agreement that is not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date.

(ii) Performance of Covenants. Each of the agreements, covenants and obligations that PREIT or the Partnership is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects. PREIT shall have delivered each of the documents required to be delivered by it pursuant to Section 7.3(b) hereof.

(iii) Legal Matters. The performance of the Buyer and Contributor Transaction Documents and the consummation of the Closing shall not, directly or indirectly (with or without notice or lapse of time), violate, contravene, conflict with or result in a violation of any Law and shall not violate any Order of any court or governmental body of competent jurisdiction, and no suit, action, investigation or legal or administrative proceeding shall have been brought or threatened by any Person that questions the validity or legality of this Agreement or the transactions contemplated hereby.

(iv) TRO Closing. The TRO Closing shall have occurred.

(v) Opinion. The Contributors shall have received an opinion of counsel for PREIT, dated the Closing Date, in form and substance reasonably satisfactory to the Contributors and their counsel.

(vi) Adjustment for Breaches. The aggregate amount of all Damages arising from breaches entitling PREIT and the Partnership to an adjustment to the aggregate consideration as specified in Section 8.1 shall not exceed 50% of the value of what the Contributors would receive pursuant to Section 4 of Schedule A absent such adjustment; provided that if PREIT exercises the PREIT Option (as defined below), this condition shall be deemed to have been satisfied.

7.3 Deliveries at the Closing. At the Closing, in addition to the other actions contemplated elsewhere herein:

(a) The Contributors shall deliver or cause to be delivered to the Partnership:

(i) each of the instruments, agreements or documents listed on Schedule A-1 hereto, in each case in a form reasonably satisfactory to the Contributors and the Partnership,

duly executed by each of the signatories thereto other than PREIT or the Partnership;

(ii) certificates, dated the Closing Date and executed by the president of RBC, Inc. to the effect that the conditions set forth in Sections 7.2(a)(v) and (vi) have been satisfied;

(iii) certificates of good standing of a recent date for RBC, Inc., RII, Inc., RA, L.P. and RAII, L.P. certified by the Secretary of State or corresponding certifying authority of the state of incorporation or organization of RBC, Inc., RII, Inc., RA, L.P. and RAII, L.P. and of each state in which RBC, Inc., RII, Inc., RA, L.P. and RAII, L.P. are qualified to do business as a foreign corporation or foreign partnership;

(iv) copies of the resolutions of the board of directors of RBC, Inc. and its shareholders authorizing the transactions contemplated under this Agreement and the Contributor Transaction Documents to which RBC, Inc. is a party;

(v) all consents and approvals under the Project Partnership Agreements necessary or appropriate in connection with the transactions contemplated herein;

(vi) stock certificates representing the Contributed RII Shares, duly endorsed for transfer or with stock powers affixed thereto executed in blank in proper form for transfer; and

(vii) such other documents and instruments as the Partnership or PREIT may reasonably request to effectuate or evidence the transactions contemplated by this Agreement.

(b) The Partnership shall deliver or cause to be delivered to the Contributors the following:

(i) the Class A Units to be delivered at Closing as contemplated by Section 3 and Schedule A hereto;

(ii) copies of resolutions of the board of trustees of PREIT authorizing the transactions contemplated hereunder and under the Buyer Transaction Documents;

(iii) a certificate, dated the Closing Date, executed by the chief executive officer and chief financial officer of PREIT, to the effect that the conditions set forth in Sections 7.2(b)(i) and (ii) have been satisfied; and

(iv) each of the instruments, agreements and documents listed on Schedule A-1, in a form reasonably satisfactory to the Contributors and the Partnership, duly

executed by each of the Partnership or PREIT that is a signatory thereto.

(c) Each party shall deliver or cause to be delivered, as the case may be, to the other parties hereto such other documents, instruments, certificates and opinions as may be required by this Agreement.

SECTION 8. CLOSING ADJUSTMENTS.

8.1 Adjustment for Breaches by the Contributors. It is the intent of the parties that breaches of the representations and warranties of the Contributors set forth in this Agreement (as brought down to the Closing Date in the certificate referred to in Section 7.3(a)(ii), which for this purpose will be deemed to state, inter alia, that the Contributors' representations and warranties in this Agreement were true and correct as of the Closing Date as if made on the Closing Date) that are discovered prior to Closing shall, in addition to giving PREIT and the Partnership the right, under certain circumstances described in Section 7.2, not to close hereunder, cause the consideration otherwise deliverable pursuant to Section 4 of Schedule A to be adjusted downward by the aggregate value of all Damages arising from such breaches; provided, however, that if such downward adjustment would reduce by more than 50% the value of the aggregate consideration the Contributors would receive pursuant to Section 4 of Schedule A absent such adjustment, PREIT shall have the right and option (but not the obligation) to notify the Contributors in writing that the downward adjustment pursuant to this Section 8.1 shall be equal to 50% of the value of such aggregate consideration (the "PREIT Option"). In determining the value of any breaches, there shall be taken into account any insurance recovery that may be available to PREIT or the Partnership, and any insurance proceeds received by the Contributors prior to the Closing that are assigned to the Partnership at Closing.

8.2 Casualty or Condemnation.

(a) If, prior to the Closing Date, there shall be any damage or destruction to all or any portion of the Shopping Center by fire or other casualty, the Contributors shall give prompt notice thereof to PREIT. Unless such damage or destruction is reasonably likely to result in a material adverse effect on the operations or profitability of the Shopping Center, such damage or destruction shall not entitle PREIT or the Partnership to terminate this Agreement; provided, however, that the number of Class A Units deliverable pursuant to Section 3 and Schedule A shall be reduced by the value of all material damage or destruction to the extent that such damage or destruction is not fully insured by insurance carried by either of the Project Partnerships or reimbursed by tenants.

(b) If prior to the Closing Date, condemnation or eminent domain proceedings are commenced against the Shopping Center, the Contributors shall give prompt notice thereof to PREIT. Unless the taking contemplated by such condemnation or eminent domain proceeding is reasonably likely to result in a material adverse effect on the operations or profitability of the Shopping Center as a whole, such condemnation or eminent domain proceeding shall not entitle PREIT or the Partnership to terminate this Agreement; provided, however, that the number of Class A Units deliverable pursuant to Section 3 and Schedule A hereto shall be reduced by the excess, if any, of the sum of the Deemed Closing Value, Non-Credit Tenant Value and Post-Adjustment Value (each as defined in Schedule A hereto) over the aggregate condemnation proceeds received or to be received by either of the Project Partnerships in respect of such condemnation. PREIT shall have the right to participate in the negotiation of the award to be made for such taking, and neither the Contributors nor either of the Project Partnerships shall agree to any proposed award or execute a deed in lieu of condemnation without PREIT's prior written consent. The applicable percentage of any condemnation award payable with respect to the taking of all or any portion the Shopping Center shall be assigned to the Partnership.

SECTION 9. INDEMNIFICATION.

9.1 Indemnification by Contributors. Subject to the limitations on liability set forth in Section 9.3, each Contributor shall indemnify, defend and hold harmless PREIT and the Partnership (collectively, "Buyer Indemnified Persons") against and in respect of any and all losses, costs, expenses (including, without limitation, costs of investigation and reasonable defense and attorneys' fees), claims, damages, obligations, liabilities or diminutions in value, whether or not involving a third party claim (collectively, "Damages"), arising out of, based upon or otherwise in respect of: (a) any inaccuracy in or breach of any representation or warranty of such Contributor made in or pursuant to this Agreement (including, without limitation, the certificate referred in Section 7.3(a)(ii), which, for this purpose will be deemed to have stated, inter alia, that the Contributors' representations and warranties in this Agreement were true and correct as of the Closing Date as if made on the Closing Date); (b) any breach or nonfulfillment of any covenant or obligation of any Contributor contained in this Agreement; or (c) any of the matters set forth on Schedule 9.1(c) hereto; provided, however, that to the extent that Damages arising from breaches of representations and warranties were taken into account in reducing the Deemed Closing Value, the Non-Credit Tenant Value or the Post-Adjustment Value (as defined in Schedule A), such Damages shall not be recoverable by Buyer Indemnified Persons pursuant to this Agreement.

9.2 Indemnification by PREIT. PREIT shall indemnify, defend and hold harmless each Contributor against and in respect of any and all Damages arising out of, based upon or otherwise in respect of: (a) any inaccuracy in or breach of any representation or warranty of PREIT made in or pursuant to this Agreement; (b) any breach or nonfulfillment of any covenant or obligation of PREIT or the Partnership contained in this Agreement; or (c) claims relating solely to actions taken by the Partnership (or its affiliates) as a partner in either of the Project Partnerships after Closing as the result of events and circumstances first occurring after Closing.

9.3 Limitations on Liability.

(a) No Contributor shall have any obligation to indemnify any Buyer Indemnified Person against Damages pursuant to Section 9.1(a) of this Agreement arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to this Agreement unless and until the aggregate of all such Damages suffered or incurred by the Buyer Indemnified Persons exceeds $100,000; in which event the Buyer Indemnified Persons shall be entitled to indemnification for the full amount of all Damages suffered or incurred; provided, however, that the above limitation shall not be applicable to any claim for Damages pursuant to Sections 9.1(b) or (c) or based upon a breach of any representation or warranty made in or pursuant to Sections 4.1(a), 4.1(b), 4.1(c), 4.1(g), 4.1(h), 4.2(a), 4.2(b) or 4.2(g) (in the case of a breach of any of the representations and warranties set forth in Section 4.2(g), other than due to the existence of liabilities of a nature not required to be reflected in financial statements prepared in accordance with GAAP of which the Contributors had no knowledge prior to Closing).

(b) Following Closing, (i) the Contributors shall not be obligated to indemnify Buyer Indemnified Persons against Damages pursuant to
Section 9.1 to the extent that such indemnification payment (other than indemnification payments in respect of fraud or intentional misrepresentation), when aggregated with all prior indemnification payments (other than indemnification payments in respect of fraud or intentional misrepresentation) by or on behalf of the Contributors to Buyer Indemnified Persons or reasonably paid by or on behalf of the Contributors to third parties for the benefit of Buyer Indemnified Persons pursuant to this Agreement, would exceed the Aggregate Value (as hereafter defined) and (ii) each Contributor other than Ronald Rubin, George Rubin and RBC, Inc. shall not be obligated to indemnify Buyer Indemnified Persons against Damages pursuant to Section 9.1 to the extent that such indemnification payment, when aggregated with all prior indemnification payments by or on behalf of such Contributor to Buyer Indemnified Persons or reasonably paid by or on behalf of such Contributor to third parties for the benefit of Buyer Indemnified Persons pursuant to

this Agreement, would exceed the Proportionate Aggregate Value (as defined below) attributable to such Contributor; provided, however, that the limitation of this subclause (ii) shall not apply to the extent an indemnity claim is brought with respect to a breach of a representation and warranty made solely by such Contributor and not by such Contributor and other Contributors or with respect to a matter involving fraud or intentional misrepresentation by such Contributor. The "Aggregate Value" means an amount equal to the value of all Class A Units theretofore issued pursuant to Section
3 (it being acknowledged that for this purpose units that would have been issued but for an exercise of the set-off rights specified in Section 9.7 shall be deemed to have been issued), such value to be calculated by multiplying the number of units times the per share Value (as defined in the Amended Partnership Agreement) of a PREIT Share as of the date of issuance of such units.

(c) Following Closing, the liability of each Contributor for each indemnity claim pursuant to Section 9.1 shall be limited to that fraction of the aggregate Damages incurred by Buyer Indemnified Persons with respect to such claim that is equal to the quotient whose numerator equals the portion of the Aggregate Value attributable to units theretofore distributed to such Contributor (for this purpose units that would have been issued but for an exercise of the set-off rights specified in Section 9.7 shall be deemed to have been issued) (the "Proportionate Aggregate Value") and the denominator of which equals the Aggregate Value; provided, however, that the foregoing shall not limit the liability of Ronald Rubin, George Rubin or RBC, Inc., each of whom shall be jointly and severally liable for 100% of the aggregate Damages incurred (subject to the cap on aggregate Damages set forth above in subclause (i) of
Section 9.3(b)) and provided further that the foregoing limitation shall not apply to the extent that an indemnity claim is brought with respect to a breach of a representation and warranty made solely by such Contributor and not by such Contributor and other Contributors or with respect to a matter involving fraud or intentional misrepresentation by such Contributor.

(d) No claim arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to this Agreement shall be made unless a claim arises and written notice is delivered to the indemnifying party within the Basic Claims Period (as defined below); provided that any such claim arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to Sections 4.1(a), 4.1(b) or 4.1(h) may be made at any time. For purposes hereof, "Basic Claims Period" means the period beginning on the date hereof and ending on the date five months after the fiscal year end for the first full fiscal year of PREIT after the Closing under this Agreement.

(e) Disclosures made after the date hereof and any knowledge that is acquired about the accuracy or inaccuracy of or compliance with any representation, warranty, covenant or obligation set forth herein shall not in any manner affect rights to indemnification hereunder based on any such representation, warranty, covenant or obligation or be deemed in any manner to amend the Contributor Disclosure Letter. The waiver by PREIT of any condition based on the accuracy of any representation or warranty, or compliance with any covenant or obligation, will not affect any right to indemnification based on such representations, warranties, covenants and obligations unless otherwise expressly agreed in writing by PREIT. To the extent that any claim for indemnification may be made under Section 9.1(a) and Section 9.1(c), then such claim shall be deemed for all purposes to have arisen only under Section 9.1(c) and not under Section 9.1(a).

(f) Each party's rights under this Section 9 shall be its sole remedy against the other parties in respect of the subject matter hereof, subject to a party's rights, if any, to seek and obtain specific performance.

(g) No party may assert a claim for indemnification pursuant to this Section 9 unless the Closing has occurred or this Agreement has been terminated pursuant to Section 10.

9.4 Procedure For Indemnification - Third Party Claims.

(a) Within thirty days after receipt by an indemnified party of notice of the commencement of any proceeding against it to which the indemnification in this Section 9 relates, such indemnified party shall, if a claim is to be made against an indemnifying party under Section 9, give notice to the indemnifying party of the commencement of such proceeding, but the failure to so notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such proceeding is materially prejudiced by the indemnified party's failure to give such notice.

(b) If any proceeding referred to in paragraph (a) above is brought against an indemnified party and it gives notice to the indemnifying party of the commencement of such proceeding, the indemnifying party will be entitled to participate in such proceeding and, to the extent that it wishes (unless (i) the indemnifying party is also a party to such proceeding and the indemnified party determines in good faith that joint representation would be inappropriate, or (ii) the indemnifying party fails to provide reasonable assurance to the indemnified party of its financial capacity to defend such proceeding and provide indemnification with respect to such proceeding), to

assume the defense of such proceeding with counsel reasonably satisfactory to the indemnified party and, after notice from the indemnifying party to the indemnified party of its election to assume the defense of such proceeding, the indemnifying party will not, as long as it diligently conducts such defense, be liable to the indemnified party under Section 9 for any fees of other counsel or any other expenses with respect to the defense of such proceeding, in each case subsequently incurred by the indemnified party in connection with the defense of such proceeding, other than reasonable costs of investigation. If the indemnifying party assumes the defense of a proceeding, (A) it will be conclusively established for purposes of this Agreement that the claims made in that proceeding are within the scope of and subject to indemnification; (B) no compromise or settlement of such claims may be effected by the indemnifying party without the indemnified party's consent unless (1) there is no finding or admission of any violation of Law by the indemnified party (or any affiliate thereof) or any violation of the rights of any Person and no effect on any other claims that may be made against the indemnified party, and (2) the sole relief provided is monetary damages that are paid in full by the indemnifying party. The indemnified party will have no liability with respect to any compromise or settlement of the claims underlying such proceeding effected without its consent. If notice is given to an indemnifying party of the commencement of any proceeding and the indemnifying party does not, within ten days after the indemnified party's notice is given, give notice to the indemnified party of its election to assume the defense of such proceeding, the indemnifying party will be bound by any determination made in such proceeding or any compromise or settlement effected by the indemnified party.

(c) Notwithstanding the foregoing, if an indemnified party determines in good faith that there is a reasonable probability that a proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the indemnified party may, with respect to those issues, by notice to the indemnifying party, assume the exclusive right to defend, compromise, or settle such proceeding, but the indemnifying party will not be bound by any determination of a proceeding so defended or any compromise or settlement effected without its consent.

9.5 Procedure for Indemnification - Other Claims. A claim for any matter not involving a third party claim may be asserted by notice to the party from whom indemnification is sought.

9.6 Distributions of Class A Units by Contributors. No Contributor shall distribute or otherwise transfer to any other Person Class A Units issued pursuant to this Agreement (or proceeds thereof other than contributions on such units) unless

such Person first executes and delivers to PREIT an agreement, in form and substance reasonably satisfactory to PREIT, by which such Person would join in and become a party to this Agreement for purposes of the indemnification provisions hereof.

9.7 Right of Set-Off. PREIT and the Partnership shall have the right to set-off, against any Class A Units which may be owed by PREIT or the Partnership to any Contributor, any amount owed by any Contributor to any Buyer Indemnified Person pursuant to Section 10 of the TRO Contribution Agreement. To the extent that a Contributor contests an indemnification claim of PREIT or the Partnership that would be the basis for the exercise of a right to set off against any Class A Units owed to such Contributor, the Partnership shall issue such Class A Units and deposit them with an escrow agent reasonably satisfactory to such Contributor until the earlier to occur of (i) resolution of such dispute by a final nonappealable order of a court of competent jurisdiction or (ii) the mutual agreement of such Contributor and PREIT that such units should be released from escrow.

9.8 Indemnification Payments. The Contributors shall be entitled to use cash or Class A Units to make indemnification payments hereunder. In the event Class A Units are used, each such unit shall be valued based on the per share Value (as defined in the Amended Partnership Agreement) of a PREIT Share as of the date such unit is tendered to PREIT as an indemnification payment hereunder.

SECTION 10. TERMINATION AND ABANDONMENT.

10.1 Termination. This Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to the Closing:

(i) by PREIT or the Contributors, if the Closing has not occurred (other than through the failure of the party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before February 15, 2000, or such later date as the parties may mutually agree upon in writing;

(ii) by mutual consent of PREIT and the Contributors;

(iii) by the Contributors, on the one hand, or PREIT and the Partnership, on the other hand, if a material breach (other than a breach of representations and warranties that would not constitute a failure of the condition set forth in Section 7.2(a)(xiv)) of any provision of this Agreement has been committed by the other and such breach has not been waived; or

(iv) by PREIT, if any of the conditions in
Section 7.2(a) have not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of PREIT or the Partnership to comply with its obligations under this Agreement) and PREIT has not waived all such unsatisfied conditions before termination pursuant to this subparagraph (iv); or

(v) by the Contributors if any of the conditions in Section 7.2(b) have not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of any Contributor to comply with its obligations hereunder) and the Contributors have not waived all such unsatisfied conditions before termination pursuant to this subparagraph (v); or

(vi) by any party hereto if the TRO Contribution Agreement is terminated prior to the consummation of the TRO Closing.

10.2 Procedure for Termination; Effect of Termination.

(a) A party terminating this Agreement pursuant to this
Section 10 shall give written notice thereof to each other party hereto, whereupon this Agreement shall terminate and the transactions contemplated hereby shall be abandoned without further action by any party and all further obligations of the parties under this Agreement will terminate; provided, however, that if such termination is pursuant to Section 10.1(iii), the terminating party's right to pursue all legal remedies (including damages and/or specific performance) contemplated by Section 9 will survive such termination unimpaired, except as limited by Section 10.2(b) below.

(b) Following a termination pursuant to Section 10.1(iii), each Contributor other than Ronald Rubin, George Rubin and RBC, Inc. shall have no liability for breaches of covenants, agreements, obligations, representations or warranties set forth herein except to the extent that such Contributor (i) breached a covenant, agreement or obligation set forth herein the performance of which was within his power to control, (ii) made an intentional misrepresentation, or (iii) is the only Contributor that made the representation or warranty that was breached. Following a termination pursuant to Section 10.1(iii), neither Ronald Rubin, George Rubin, RBC, Inc., PREIT nor the Partnership shall have any liability for breaches of covenants, agreements or obligations set forth herein to the extent that such breaches arise from the actions of, or failure to act, by Persons other than the parties hereto and notwithstanding such party's best efforts to cause such Person to act in a manner that would result in the satisfaction of such party's covenants, agreements and obligations hereunder.

SECTION 11. GENERAL PROVISIONS.

11.1 Survival of Representations and Warranties.

(a) All representations and warranties made by the parties in this Agreement and in the certificates, documents and other agreements delivered pursuant hereto shall survive the Closing, subject to the terms and conditions of Section 9 above. Anything in this Agreement to the contrary notwithstanding: (i) the representations and warranties of the Contributors and the right of the Buyer Indemnified Persons to indemnification for breach thereof, shall not be affected by any investigation of the Contributors or the Project Partnerships made by PREIT or its agents or representatives; and (ii) the representations and warranties of PREIT hereunder, and the right of the Contributors to indemnification for breach thereof, shall not be affected by any investigation of PREIT or its affiliates made by the Contributors or its agents or representatives.

(b) In the event of any inconsistency between the statements made in the body of this Agreement and those contained in the Contributor Disclosure Letter (other than an express exception to a specifically identified statement), those in this Agreement shall control.

11.2 Costs and Expenses. Except as otherwise expressly provided herein, each party shall bear its own expenses in connection herewith. Except as otherwise provided herein, any and all recording and filing fees and all costs associated with obtaining the title insurance or endorsements thereto contemplated herein in connection with the transactions contemplated herein shall be borne by PREIT or the Partnership. The parties contemplate that the transfer of the Interests in accordance with the procedures and the time periods set forth in Schedule A will not be subject to transfer tax. In the event that any party hereto makes or causes a transfer of Interests not in accordance with the procedures and time periods set forth herein, then the party making or causing such transfer shall be responsible for the payment of any transfer tax and all title insurance premiums and title company charges and recording costs due as a result thereof; provided, however, that if such transfer tax results from the exercise by the Partnership of its options set forth in Section 2(b)(i) or 2(d)(ii) prior to the third anniversary of the Closing Date, the Partnership shall pay all such tax, premiums, charges and costs arising therefrom. In the event that a determination is made by the applicable taxing authorities that the transactions contemplated by this Agreement are subject to the real estate transfer taxes imposed by either the City of Philadelphia and/or the Commonwealth of Pennsylvania notwithstanding that neither party violated the restrictions set forth in the previous sentence and the Partnership did not exercise its options set forth in Section 2(b)(i) or 2(d)(ii),

the Partnership, on the one hand, and the Contributors, on the other hand, shall each pay one-half of any transfer taxes which are ultimately imposed on such transactions.

11.3 Notices. All notices or other communications permitted or required under this Agreement shall be in writing and shall be sufficiently given if and when hand delivered to the persons set forth below or if sent by documented overnight delivery service or registered or certified mail, postage prepaid, return receipt requested, or by telegram, telex or telecopy, receipt acknowledged, addressed as set forth below or to such other person or persons and/or at such other address or addresses as shall be furnished in writing by any party hereto to the others. Any such notice or communication shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefor in all other cases.

To PREIT or the Partnership:

Pennsylvania Real Estate Investment Trust
455 Pennsylvania Avenue, Suite 135
Fort Washington, PA 19034
Attention: President and Special Committee

With a copy to:

Drinker Biddle & Reath LLP
1100 PNB Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
(215) 988-2700
Telecopy (215) 988-2757

Attention: Howard A. Blum, Esquire

To the Contributors:

c/o The Rubin Organization, Inc.
200 South Broad Street
Philadelphia, PA 19102
Attention: Ronald Rubin

With a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers LLP
1401 Walnut Street
Philadelphia, PA 19102
Attention: Leonard M. Klehr, Esquire

11.4 Access to Information; Confidentiality. Between the date of this Agreement and the Closing Date, PREIT, on the one hand, and the Contributors, on the other hand, will give to the other party and its officers, employees, counsel, accountants and other representatives free and full access to and the right to inspect, during normal business hours, all of the assets, records, facilities, properties and Contracts relating to its business as the other party may reasonably request. Each party shall acquire and hold all confidential information that has been made available by another party hereto subject to the terms and conditions of Section IV of the Letter Agreement dated as of April 16, 1997 (the "Letter Agreement") between TRO and PREIT, the terms of which section are hereby incorporated by reference and which shall remain in force through the Closing.

11.5 Public Announcements. Except as and to the extent required by Law or by the rules of the American Stock Exchange, without the prior written consent of the other party, the Contributors, on the one hand, and PREIT and the Partnership, on the other hand, will not, and each will direct its representatives not to, directly or indirectly, make any public comment, statement or communication with respect to, or otherwise disclose or permit the disclosure of any of the terms, conditions or other aspects of the transactions contemplated hereby; provided, however, that PREIT may issue a press release, in the form previously circulated by PREIT to TRO, regarding, among other things, the execution of this Agreement; and further provided that PREIT and TRO may each continue such communications with principals, partners, lenders, trustees, attorneys, accountants, investment bankers, consultants engaged by PREIT and TRO, including abstract companies, title companies, engineers and architects, Claude de Botton and his affiliates, Kenneth N. Goldenberg and his affiliates, EPD and its affiliates, and, if agreed in each case by PREIT and TRO, others as may be legally required or necessary in connection with the consummation of the transactions contemplated by this Agreement.

11.6 No Solicitation. Each Contributor shall not, each Contributor shall cause its officers, employees, partners, representatives and agents not to, directly or indirectly, continue, encourage, solicit, initiate or participate in discussions or negotiations with, or provide any nonpublic information to, any Person (other than PREIT and the Partnership and their respective representatives in connection with the transactions contemplated by this Agreement) concerning any sale of assets (other than in the ordinary course of its business consistent with past practice) or shares of capital stock or partnership interest of any Contributor or any merger, consolidation, recapitalization, liquidation or similar transaction involving any Contributor (collectively, an "Acquisition Transaction"). Each Contributor will promptly

communicate to PREIT the terms of any inquiry or proposal that it or he may receive in respect of an Acquisition Transaction.

11.7 Entire Agreement. This Agreement, together with the Schedules, Contributor Disclosure Letter, and certificates referred to herein or delivered pursuant hereto, constitute the entire agreement between the parties hereto with respect to its subject matter and supersede all prior and contemporaneous agreements and understandings with respect to the subject matter hereof.

11.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original copy of this Agreement, and all of which, when taken together, shall be deemed to constitute but one and the same Agreement.

11.9 Governing Law. This Agreement is made pursuant to, and shall be construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania (and United States federal law, to the extent applicable), irrespective of the principal place of business, residence or domicile of the parties hereto, and without giving effect to otherwise applicable principles of conflicts of laws.

11.10 Section Headings, Captions and Defined Terms. The section headings and captions contained herein are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement. The terms defined herein and in any agreement executed in connection herewith include the plural as well as the singular, and the use of masculine pronouns include the feminine and neuter. Except as otherwise indicated, all agreements defined herein refer to the same as from time to time amended or supplemented or the terms thereof waived or modified in accordance herewith and therewith.

11.11 Amendments, Modifications and Waiver. The parties may amend or modify this Agreement in any respect. Any such amendment or modification shall be in writing. The waiver by any party of any provision of this Agreement shall not constitute or operate as a waiver of any other provision hereof, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision.

11.12 Severability. The invalidity or unenforceability of any particular provision, or part of any provision, of this Agreement shall not affect the other provisions or parts hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions or parts were omitted.

11.13 Liability of Trustees, etc. No recourse shall be had for any obligation of PREIT hereunder, or for any claim based

thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of PREIT, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being expressly waived and released by each other party hereto.

11.14 Sears Power Plant. The former Sears Power Plant, which is located between the Home Depot store and the Bradlees Store site, contains certain Hazardous Substances. The Contributors shall have the right either to cause the removal of the drums and barrels presently located inside the Power Plant and to cause the encapsulation of the building (collectively, the "Remediation") to the reasonable satisfaction of the Partnership or to subdivide the Power Plant from the balance of the Shopping Center and transfer title to the parcel on which the Power Plant is located to a third party or to an entity owned by one or more Contributors. In the event the Contributors elect to retain title to the Power Plant site, the parcel to be subdivided from the balance of the Shopping Center shall be no larger than the footprint of the existing Power Plant building (the Partnership hereby agreeing to consent to appropriate access, parking and other such easements to the subdivided parcel as may be required for the development and use of the Power Plant consistent with current zoning and to such other conditions as shall be a requirement to the grant of subdivision approval so long as such conditions do not require that the sudivided parcel be enlarged beyond the footprint of the building and do not adversely affect the use or value of the Shopping Center) and the subdivision and transfer of title must be completed prior to the Closing Date. In the event the Contributors elect to commence the Remediation and the Remediation is not completed prior to the Closing Date or in the event the Contributors fail to subdivide the Power Plant parcel and transfer title prior to the Closing Date, the terms of Paragraph C of Schedule 9.1(c) shall be applicable.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, all as of the date first written above.

RUBIN BLVD. CO., INC.

By: /s/  Ronald Rubin
-------------------------
Name:
Title:


/s/  Ronald Rubin          (SEAL)                 /s/  Leonard Shore      (SEAL)
-------------------------                         ------------------------
Ronald Rubin                                      Leonard Shore

/s/  George Rubin          (SEAL)            /s/  Joseph Cardino     (SEAL)
-------------------------                         ------------------------
George Rubin                                         Joseph Coradino


/s/  Lewis Stone           (SEAL)            /s/  Pat Berns          (SEAL)
-------------------------                         ------------------------
Lewis Stone                                       Pat Berns


/s/  Edward Glickman       (SEAL)            /s/  Douglas Grayson    (SEAL)
-------------------------                         ------------------------
Edward Glickman                                   Douglas Grayson


/s/  Judith Garfinkel      (SEAL)            /s/  Gerald Broker      (SEAL)
-------------------------                         ------------------------
Judith Garfinkel                                  Gerald Broker

PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST

By: /s/  Jonathan B. Weller
    --------------------------------
   Name:
   Title:


By: /s/  Jeffrey A. Linn
    --------------------------------
   Name:
   Title:

PREIT ASSOCIATES, L.P.

By: Pennsylvania Real Estate
Investment Trust, its general
partner

By: /s/  Jonathan B. Weller
    --------------------------------
   Name:
   Title:


By: /s/  Jeffrey A. Linn
    --------------------------------
   Name:
   Title:

CONTRIBUTION AGREEMENT

relating to

Blue Route Metroplex, Plymouth Meeting, Pennsylvania Red Rose Commons, Lancaster, Pennsylvania Christiana Strip Shopping Center, Christiana, Delaware, and Howell Township, New Jersey

TRO Predevelopment, LLC Pennsylvania Real Estate Investment Trust PREIT Associates, L.P.

                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----


SECTION 1.            DEFINITIONS...........................................  2

SECTION 2.            CONTRIBUTIONS.........................................  3
         2.1          At Closing............................................  3
         2.2          Post-Closing..........................................  3

SECTION 3.            CONSIDERATION.........................................  3
         3.1          At Closing............................................  3
         3.2          Post-Closing..........................................  4

SECTION 4.            REPRESENTATIONS AND WARRANTIES OF THE
                      CONTRIBUTOR...........................................  4
         4.1          Organization..........................................  4
         4.2          Power and Authority...................................  4
         4.3          No Conflicts..........................................  5
         4.4          Litigation; Orders; Development Contingencies.........  6
         4.5          Undisclosed Liabilities...............................  7
         4.6          Assigned Contracts....................................  7
         4.7          Contracts.............................................  9
         4.8          Environmental Matters................................. 10
         4.9          Brokers............................................... 10
         4.10         Accurate Disclosure................................... 10
         4.11         Knowledge............................................. 10
         4.12         FIRPTA................................................ 11
         4.13         Investment Representations............................ 11

SECTION 5.  WARRANTIES AND REPRESENTATIONS AS TO
                        THE PRE-DEVELOPMENT PROPERTIES...................... 12
         5.1          Blue Route Metroplex, Plymouth Meeting,
                      Pennsylvania.......................................... 12
         5.2          Red Rose Commons, Lancaster, Pennsylvania............. 13
         5.3          Christiana Strip Shopping Center, Christiana,
                      Delaware.............................................. 13
         5.4          West Farms Road and Route 9, Howell Township,
                      New Jersey............................................ 14

SECTION 6.  REPRESENTATIONS AND WARRANTIES REGARDING
                        PREIT............................................... 15
         6.1          Organization.......................................... 15
         6.2          Power and Authority................................... 15
         6.3          No Conflicts.......................................... 16
         6.4          Capitalization........................................ 17
         6.5          PREIT Reports......................................... 17
         6.6          Litigation............................................ 18
         6.7          Material Adverse Change............................... 18
         6.8          Brokers............................................... 18


                                      -i-

SECTION 7.            CERTAIN COVENANTS AND AGREEMENTS...................... 18
         7.1          Conduct of Business................................... 18
         7.2          Reasonable Efforts.................................... 20
         7.3          Notifications......................................... 20
         7.4          Rezoning of Christiana Site - Phase II................ 20

SECTION 8.            CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES....... 21
         8.1          Time of Closing....................................... 21
         8.2          Closing Conditions.................................... 21
         8.3          Deliveries at the Closing............................. 23

SECTION 9.            [INTENTIONALLY OMITTED]............................... 24

SECTION 10.           INDEMNIFICATION....................................... 24
         10.1         Indemnification by the Contributor.................... 25
         10.2         Indemnification by PREIT.............................. 25
         10.3         Limitations on Liability.............................. 25
         10.4         Procedure For Indemnification - Third Party
                      Claims................................................ 26
         10.5         Procedure for Indemnification - Other Claims.......... 28
         10.6         Indemnification Payments.............................. 28

SECTION 11.           TERMINATION AND ABANDONMENT........................... 28
         11.1         Termination........................................... 28
         11.2         Procedure for Termination; Effect of
                      Termination........................................... 29

SECTION 12.           GENERAL PROVISIONS.................................... 29
         12.1         Survival of Representations and Warranties............ 29
         12.2         Costs and Expenses.................................... 29
         12.3         Condemnation.......................................... 30
         12.4         Notices............................................... 30
         12.5         Access to Information; Confidentiality................ 31
         12.6         Public Announcements.................................. 31
         12.7         No Solicitation....................................... 31
         12.8         Entire Agreement...................................... 32
         12.9         Counterparts.......................................... 32
         12.10        Governing Law......................................... 32
         12.11        Section Headings, Captions and Defined Terms.......... 32
         12.12        Amendments, Modifications and Waiver.................. 32
         12.13        Severability.......................................... 32
         12.14        Liability of Trustees, etc............................ 33
         12.15        Future Projects....................................... 33
         12.16        Concord Pike.......................................... 34

CONTRIBUTION AGREEMENT

relating to

Blue Route Metroplex, Plymouth Meeting, Pennsylvania Red Rose Commons, Lancaster, Pennsylvania Christiana Strip Shopping Center, Christiana, Delaware and Howell Township, New Jersey

THIS CONTRIBUTION AGREEMENT (this "Agreement") is made as of the 30th day of July, 1997, by and among TRO PREDEVELOPMENT, LLC, a Delaware limited liability company (the "Contributor"), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, an unincorporated association in business trust form created under Pennsylvania law pursuant to a Trust Agreement dated December 27, 1960, as last amended and restated on December 16, 1987 ("PREIT"), and PREIT ASSOCIATES, L.P., a Delaware limited partnership (the "Partnership").

Background

This Contribution Agreement is part of a larger transaction described in the TRO Contribution Agreement of even date herewith (the "TRO Contribution Agreement") among PREIT, The Rubin Organization, Inc. ("TRO"), The Rubin Organization-Illinois, Inc. and the shareholders of TRO. The Contributor is an affiliate of TRO, and its members are shareholders of TRO or affiliates of such shareholders.

The Partnership has been formed by PREIT and PREIT Property Trust, a Pennsylvania business trust ("PREIT Subsidiary"), pursuant to the terms of the Agreement of Limited Partnership dated as of June 30, 1997 (the "Partnership Agreement") of PREIT Associates, L.P. between PREIT, as general partner, and PREIT Subsidiary, as limited partner.

Subject to the terms and conditions of this Agreement and the TRO Contribution Agreement, the parties intend that immediately following the closing under the TRO Contribution Agreement (the "TRO Closing"), the Contributor will assign, transfer and contribute to the Partnership, in exchange for certain reimbursements under the TRO Contribution Agreement and for Class A limited partner interests in the Partnership ("Class A Units"),
(i) all of the Contributor's rights to become an equity owner of one or more partnerships or other entities that own, and otherwise to participate in the development, leasing, management and ownership of, the Metroplex Site and RRC Site (collectively, the "Goldenberg Properties") arising under that certain letter agreement dated March 26, 1996 by and between The Rubin Organization, Inc. and the Goldenberg Group (the

"Goldenberg Agreement"), and (ii) all of the Contributor's right, title and interest in, to and under certain partnership agreements relating to the Christiana Site and, in the event that the Howell Site is a BCRH Property as of the Closing, certain purchase and/or ground lease agreements relating to the Howell Site (each as defined in Schedule B-2 hereto).

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

SECTION 1. DEFINITIONS.

Unless otherwise defined herein, capitalized terms used herein shall have the same meanings as ascribed to such terms in the TRO Contribution Agreement. In addition, the following capitalized terms shall have the following definitions when used herein.

"Assigned Contracts" shall mean the Contracts listed under the heading "Assigned Contracts" in Schedule B-1 hereto; provided, however, that the Assigned Contracts shall not include items II, III, IV, V and VI on such schedule unless and until the Howell Site constitutes a BCRH Property hereunder. If the Howell Site becomes a BCRH Property after the Closing, the Assigned Contracts shall include items II, III, IV, V and VI on such schedule, together with any amendments thereto and supplements thereto and other agreements relating to the Howell Site that have been approved in writing by PREIT prior to the date on which the Howell Site becomes a BCRH Property hereunder.

"BCRH Properties" shall mean the Metroplex Site, the RRC Site and the Christiana Site. The Howell Site shall constitute a BCRH Property as of the Closing hereunder if, in accordance with Section 5.20 of the TRO Contribution Agreement, a contract, in form and substance satisfactory to PREIT, has not been entered into prior to the TRO Closing giving Home Depot the right to acquire the Howell Site. If such a contract is entered into and is in effect as of the TRO Closing, the Howell Site shall not constitute a BCRH Property hereunder unless and until, in accordance with Section 5.20 of the TRO Contribution Agreement, the Partnership exercises its option to treat the site as a BCRH Property hereunder. The BCRH Properties are more specifically described on Schedule B-2 hereto.

"Pre-Development Properties" shall mean those properties set forth in Schedule B-2 hereto and those properties, if any, added thereto with the consent of PREIT given pursuant to Section 12.15 and any property that becomes a Pre-Development Property pursuant to Section 12.16; provided, however, that the Howell Site shall

not constitute a Pre-Development Property unless and until it constitutes a BCRH Property hereunder.

"Third Party Contracts" shall mean those Contracts designated as "Third Party Contracts" on Schedule B-1 hereto.

SECTION 2. CONTRIBUTIONS.

2.1 At Closing. Subject to the terms and conditions of this Agreement, at the Closing (as defined in Schedule A hereto), the Contributor shall sell, transfer, assign and contribute to the Partnership, free and clear of all Encumbrances, all of the Contributor's right, title and interest in, to and under the Assigned Contracts and the Partnership shall assume all obligations of the Contributor arising after Closing under the Assigned Contracts other than liabilities or obligations arising from a breach of or a default under such Assigned Contracts prior to the Closing.

2.2 Post-Closing. If the Howell Site is not a BCRH Property as of the Closing and if the Partnership subsequently elects pursuant to Section 5.20 of the TRO Contribution Agreement to accept the Howell Site as a BCRH Property (the "Post-Closing Election to Acquire") and Howell LLC has become a party hereto, then, on the business day specified by the Partnership in its notice of exercise of the Post-Closing Election to Acquire, Howell LLC shall sell, transfer, assign and contribute to the Partnership, free and clear of all Encumbrances, all right, title and interest of Howell LLC in, to and under the Assigned Contracts specified in items II, III, IV, V and VI of Schedule B- 1 hereto, as theretofore amended and supplemented by Contracts executed after the date hereof that have been approved in writing by the Partnership (as so amended and supplemented, the "Howell Assigned Contracts"), and the Partnership shall assume all obligations of Howell LLC under the Howell Assigned Contracts arising after such contribution to the Partnership other than liabilities or obligations arising from a breach of or a default under such Assigned Contracts prior to Closing. The Contributor's interests in the Assigned Contracts and the Howell Assigned Contracts which are assigned to the Partnership pursuant to the terms and conditions of this Agreement are sometimes hereinafter referred to collectively as the "Contract Interests."

SECTION 3. CONSIDERATION.

3.1 At Closing. In consideration for the contributions described in
Section 2.1, subject to the terms and conditions of this Agreement, the Partnership shall issue to the Contributor, at the time specified in Schedule A-2, that number of Class A Units, if any, specified in Schedule A-2 as being issuable after Closing.

3.2 Post-Closing. In consideration for the contributions specified in
Section 2.2, subject to the terms and conditions of this Agreement, the Partnership shall, at the closing of the contribution of the Howell Assigned Contracts (the "Howell Closing"), (i) transfer and assign to Howell LLC, free and clear of all Encumbrances, all membership interests in Howell LLC issued to the Partnership at the TRO Closing and (ii) pay Howell LLC an amount of cash equal to all reasonable out-of-pocket expenses theretofore paid or incurred but not yet paid by Howell LLC, any TRO Shareholder or any TRO Affiliate to third parties in connection with the acquisition and development of the Howell Site to the extent not theretofore reimbursed out of cash flow from the Howell Site (the amount of such predevelopment costs and expenses being set forth in a statement delivered to the Partnership in response to a request therefor in connection with the Partnership's preparation of the Post-Closing Election to Acquire).

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR.

The Contributor hereby represents and warrants to PREIT and the Partnership as follows (if there is a Howell Closing, the term "Contributor" as used in this Section 4 shall be deemed to mean each of Howell LLC and TRO Predevelopment, LLC and the term "Closing" shall be deemed to mean each of the Closing and the Howell Closing):

4.1 Organization. The Contributor is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has all power to carry on its business as presently conducted, to own and lease the assets and properties which it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound. The Contributor is duly qualified to do business as a foreign limited liability company and is in good standing under the laws of each jurisdiction in which its ownership or leasing of assets or properties or the nature of its activities requires such qualification except where the failure to be so qualified would not have a material adverse effect on the condition (financial or otherwise), assets, results of operations or business of the Contributor (a "Material Adverse Effect").

4.2 Power and Authority. The Contributor has all requisite power, authority and legal right to enter into and perform its obligations under this Agreement and under the other agreements and documents required to be delivered by it prior to or at the Closing (collectively, the "Contributor Transaction Documents"). The execution, delivery and performance by the Contributor of this Agreement and the other Contributor Transaction Documents to which it is a party have been duly authorized by all necessary action on the part of the

Contributor. This Agreement has been duly and validly executed and delivered by the Contributor and constitutes the legal, valid and binding obligation of the Contributor enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles. When executed and delivered as contemplated herein, each of the other Contributor Transaction Documents to which the Contributor is a party shall, assuming due authorization, execution and delivery thereof by the other parties thereto, constitute the legal, valid and binding obligation of the Contributor enforceable against it in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles.

4.3 No Conflicts.

(a) Except as described in Section 4.3(a) of the Contributor Disclosure Letter delivered by the Contributor to PREIT and the Partnership on the date hereof (the "Contributor Disclosure Letter"), the execution and delivery by the Contributor of this Agreement do not, and the execution and delivery by the Contributor of the other Contributor Transaction Documents and the performance by the Contributor of all of the Contributor Transaction Documents will not (in each case, with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with the organizational documents of the Contributor or any Law applicable to the Contributor or by or to which any assets or properties of the Contributor is bound or subject;

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of any benefit under, or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to, any Authorization or any Howell Assigned Contract, any Assigned Contract or any other Contract to which the Contributor is a party or by which the Contributor or any assets or properties thereof is bound or affected; or

(iii) result in, require or permit the creation or imposition of any Encumbrance upon or with respect to the Contributor or any of its assets or properties.

(b) Except as described in Section 4.3(b) of the Contributor Disclosure Letter, the execution and delivery by the Contributor of this Agreement do not, and the execution and

delivery by the Contributor of the other Contributor Transaction Documents and the performance by the Contributor of all of the Contributor Transaction Documents will not, require the Contributor to obtain any authorization of, or to make any filing, registration or declaration with or notification to, any court, government or governmental agency or instrumentality (federal, state, local or foreign) or to obtain the consent, waiver or approval of, or give any notice to any other Person.

(c) Except as described in Section 4.3(c) of the Contributor Disclosure Letter, there are no actions, proceedings or investigations pending or, to the knowledge of the Contributor, threatened, that question any of the transactions contemplated by this Agreement or the validity of any of the Contributor Transaction Documents or which, if adversely determined, could have a Material Adverse Effect or could materially and adversely effect the Contributor's ability to enter into or perform its obligations under any of the Contributor Transaction Documents.

(d) At the Closing and upon execution and delivery by the Contributor and the Partnership (or its affiliates) of an assignment and assumption agreement with respect to the Assigned Contracts, the Partnership will acquire all right, title and interest of the Contributor in, to and under the Assigned Contracts, free and clear of all Encumbrances.

4.4 Litigation; Orders; Development Contingencies.

(a) Except as described in Section 4.4(a) of the Contributor Disclosure Letter, there are no, and since the Contributor's inception there have not been, any, claims, actions, suits, proceedings (arbitration or otherwise) or, to the knowledge of the Contributor, investigations involving or affecting the Contributor or any of its assets or properties or any of its directors, officers, partners or members in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign), or before an arbitrator of any kind that could, if adversely decided, have a Material Adverse Effect. Except as described in
Section 4.4(a) of the Contributor Disclosure Letter, no such pending claim, action, suit, proceeding or investigation, if determined adversely, would either individually or in the aggregate, result in a liability in excess of $5,000 in the case of any single action or $10,000 in the case of all such actions in the aggregate or could result in the loss or diminution of any benefit or privilege presently available to or enjoyed by the Contributor. To the knowledge of the Contributor, except as described in Section 4.4(a) of the Contributor Disclosure Letter, no such claim, action, suit, proceeding or investigation is presently threatened or contemplated. There are no unsatisfied

judgments, penalties or awards against or affecting the Contributor or any of its assets or properties.

(b) Except as described in Section 4.4(b) of the Contributor Disclosure Letter, there is no award, injunction, judgment, order, ruling, subpoena or verdict or other decision entered, issued, made or rendered by any court, arbitrator, government or governmental agency or instrumentality, or agreement with any government or governmental agency or instrumentality (federal, state, local or foreign) (collectively, "Orders") to which the Contributor or any of its assets or properties is subject. To the knowledge of the Contributor, no officer, director, partner, member or employee of the Contributor is subject to any Order that prohibits such officer, director, partner, member or employee from engaging in or continuing any conduct, activity or practice relating to its business. The Contributor has complied in all respects with the terms and conditions of each Order applicable to it.

(c) PREIT and the Partnership recognize that the Howell Assigned Contracts and the Assigned Contracts relate to real estate projects that are not yet fully developed. Accordingly, each project is subject to contingencies such as land use planning, due diligence investigations, and obtaining financing. Notwithstanding anything to the contrary contained herein, the Contributor makes and shall make no representation or warranty that any such project will proceed beyond its present state or that if it does, that it will be developed or completed ("Development Contingencies").

4.5 Undisclosed Liabilities.

(a) There are no liabilities or obligations of the Contributor of any nature (whether absolute, accrued, contingent, liquidated, unliquidated or otherwise) except: (i) those under the Howell Assigned Contracts and the Assigned Contracts; and (ii) those described in Section 4.5 of the Contributor Disclosure Letter.

(b) Except for the Internal Commissions (as hereinafter defined), as of the Closing, there shall be no liabilities or obligations of the Contributor of any nature (whether absolute, accrued, contingent, liquidated, unliquidated or otherwise) except for the Contributor's obligations under the Howell Assigned Contracts (if applicable) and the Assigned Contracts and, in the case of Howell LLC, the predevelopment costs and expenses relating to Howell Site.

4.6 Assigned Contracts

(a) Except for the Goldenberg Agreement and this Agreement, the Contracts listed under the heading "Assigned

Contracts" in Schedule B-1 are the only Contracts that relate, in whole or in part, to any of the properties described on Schedule B-2 to which either Company, any TRO Shareholder or any TRO Affiliate is, as of the date hereof and as of the TRO Closing, or was, at any time prior to the date hereof, a party or is or was otherwise bound or affected.

(b) To the knowledge of the Contributor, except for the Goldenberg Agreement and non-material contracts entered into in the ordinary course of business for the development and construction of retail shopping centers and consistent with industry norms, the Third Party Contracts are the only Contracts that relate, in whole or in part, to any BCRH Property to which the Goldenberg Group (or any affiliate thereof) is, as of the date hereof, a party or is otherwise bound or affected. To the knowledge of the Contributor, the description of the Third Party Contracts set forth in Schedule B-1 is accurate and complete in all material respects.

(c) There has been no amendment or modification of, or waiver by the Contributor, either Company, the TRO Affiliates or the TRO Shareholders of rights under the Goldenberg Agreement.

(d) Prior to the TRO Closing, all of the rights of the Companies, the TRO Shareholders and the TRO Affiliates in, to and under (i) the Assigned Contracts shall be assigned, transferred and conveyed, free and clear of all Encumbrances, to the Contributor and (ii) if the Howell Assigned Contracts are not included in the Assigned Contracts as of the Closing, the Howell Assigned Contracts shall be assigned, free and clear of all Encumbrances, to Howell LLC. No such assignment shall violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of any benefit under, or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to, any of the Howell Assigned Contracts or any of the Assigned Contracts.

(e) Except as described in Schedule B-1 or in the Goldenberg Agreement or as otherwise set forth in Section 4.6(e) of the Contributor Disclosure Letter and except, as of the date hereof (but not as of the Closing), for the interests of TRO, the TRO Shareholders and the TRO Affiliates, no Person has any equity or other interest in the Contributor (other than TRO Shareholders who are the members of the Contributor) or any equity or other interest in, to or under any of the Howell Assigned Contracts or the Assigned Contracts (other than Howell LLC if the Howell Assigned Contracts are not a part of the Assigned Contracts as of the Closing).

(f) Except for this Agreement and as otherwise disclosed or contemplated herein and as contemplated under the

Goldenberg Agreement, there are no rights, subscriptions, warrants, options, rights of first refusal, conversion rights or agreements of any kind outstanding to purchase or to otherwise acquire any interest of the Companies, the TRO Shareholders or the TRO Affiliates in any of the Howell Assigned Contracts or the Assigned Contracts. To the Contributor's knowledge, except for this Agreement and except as described in Schedule B-1 or in Section 4.6 of the Contributor Disclosure Letter and except as described in Section 5.20 of the TRO Contribution Agreement, there are no rights, subscriptions, warrants, options, rights of first refusal, conversion rights or agreements of any kind outstanding to purchase or to otherwise acquire any interest in any of the Pre-Development Properties. None of the Companies, the TRO Shareholders or the TRO Affiliates has any agreement or commitment, whether oral or written, to share any profits or cash flow resulting from the ownership, development, management or leasing of the Howell Site, except that if the Howell Site is sold to Home Depot certain current employees of TRO will be entitled to receive commissions consistent with TRO's past practices (the "Internal Commissions").

4.7 Contracts.

(a) Except as described in Section 4.7 of the Contributor Disclosure Letter, each of the Howell Assigned Contracts, the Assigned Contracts and the Goldenberg Agreement is in full force and effect and is valid, binding and enforceable against the parties thereto in accordance with its terms. Except as described in Section 4.7 of the Contributor Disclosure Letter, the Contributor, the Companies, the TRO Shareholders and the TRO Affiliates have each (i) performed, in all material respects, all obligations required to be performed by it or him under each of the Howell Assigned Contracts, the Assigned Contracts and the Goldenberg Agreement; (ii) not waived the performance of any obligation on the part of any other party under any such Contract. No condition exists or event has occurred which with notice or lapse of time would constitute a default thereunder or a basis for delay, non-performance, termination, modification or acceleration of maturity or performance by any party thereto.

(b) There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts paid or payable to the Contributor or any other material provisions of any of the Howell Assigned Contracts, the Assigned Contracts or the Goldenberg Agreement.

(c) Except as described in Section 4.7 of the Contributor Disclosure Letter, to the Contributor's knowledge, each Third Party Contract (other than those listed in Schedule B-1 as "drafts" or as "possible amendments") is in full force and effect and is valid, binding and enforceable against the parties thereto in accordance with its terms.

4.8 Environmental Matters.

(a) Except as described in Section 4.8 of the Contributor Disclosure Letter:

(i) the Contributor has no knowledge of any fact, condition or circumstance that would suggest that the environmental reports listed in Section 4.8 of the Contributor Disclosure Letter (which constitute all environmental reports relating to the Pre-Development Properties received by the Contributor or its affiliates for which the Contributor can, after exercising reasonable efforts, locate a copy) contains any misstatement of material fact or omits to state any material fact. To the knowledge of the Contributor, except for matters set forth in Section 4.8 of the Contributor Disclosure Letter, there are no conditions on, beneath or arising from, and there are no Hazardous Substances migrating from, any Pre-Development Property which might under any Environmental Law (A) give rise to liability or the imposition of a statutory lien upon the owner of the Pre-Development Property or (B) require any Response, Removal or Remedial Action by the owner of the Pre-Development Property.

(ii) To the knowledge of the Contributor, no wastes generated by any owner of any of the Pre-Development Properties have ever been directly or indirectly sent, transferred, transported to, treated, stored or disposed of at any site listed or formally proposed for listing on the National Priority List promulgated pursuant to CERCLA or to any site listed in any state list of sites requiring or recommended for investigation or clean-up.

4.9 Brokers. No Person acting on behalf of the Contributor or any of its respective affiliates or under the authority of any of the foregoing is or will be entitled to any brokers' or finders' fee or any other commission or similar fee, directly or indirectly, from any of such parties in connection with the transfer of any Contract Interest to the Partnership.

4.10 Accurate Disclosure. All documents and other papers prepared by or on behalf of the Contributor and delivered by or on behalf of the Contributor in connection with the transactions contemplated by this Agreement are accurate and complete in all material respects, and all of such documents and papers prepared or supplied by the Goldenberg Group are, to the knowledge of the Contributor, accurate and complete in all material respects.

4.11 Knowledge. For purposes of this Agreement, "to the knowledge of the Contributor" and correlative terms means the actual knowledge of Ronald Rubin, George Rubin and the other officers and senior management of the Contributor, after reasonable inquiry, except that (i) as to the matters stated in Sections 4.3(c), 4.4(a), 4.4(b), 4.6(f), 4.8(a), 5.1(a), 5.3(a),

and 5.4(a) of this Agreement, such terms mean that Ronald Rubin and George Rubin, together with Richard Brown, Edward Glickman and Douglas Grayson, who are the officers and senior management persons with responsibility for monitoring TRO's (and its affiliates) interest in the Pre-Development Properties, have received no notice and have no actual knowledge to the contrary, but no affirmative inquiry or investigation has been made, and (ii) as to the matters stated in Sections 4.6(b) and 4.10 of this Agreement, the phrase "after reasonable inquiry" means that inquiry has been made of The Goldenberg Group by the Contributor, and the Contributor has received no response to the contrary.

4.12 FIRPTA. The Contributor is neither a "foreign person" within the meaning of Section 1445(f) of the Code nor a "foreign partner" within the meaning of Section 1446 of the Code.

4.13 Investment Representations.

(a) The Contributor acknowledges that the Class A Units to be issued pursuant to Section 3 will not be registered under the 1933 Act on the grounds that the issuance of such units is exempt from registration pursuant to
Section 4(2) of the 1933 Act and/or Regulation D promulgated under the 1933 Act, and that the reliance of the Partnership on such exemptions is predicated in part on the Contributor' representations, warranties and acknowledgements set forth in this section.

(b) The Class A Units issued in accordance with this Agreement will be acquired by the Contributor for its own account, not as a nominee or agent, and without a view to resale or other distribution within the meaning of the 1933 Act, and the rules and regulations thereunder except as contemplated hereunder, and the Contributor will not distribute any of such units in violation of the 1933 Act.

(c) The Contributor (i) acknowledges that the Class A Units, when issued, will not be registered under the 1933 Act and such units will have to be held indefinitely by it unless they are subsequently registered under the 1933 Act or an exemption from registration is available, (ii) is aware that any sales of such units made under Rule 144 of the Securities and Exchange Commission under the 1933 Act may be made only in limited amounts and in accordance with the terms and conditions for that Rule and that in such cases where the Rule is not applicable, compliance with some other registration exemption will be required, (iii) is aware that Rule 144 may not be available for use by the Contributor for resale of the units, (iv) is aware that the Partnership is under no obligation to register, and has no current intention of registering any of such units under the 1933 Act, and (v) acknowledges that he has received and read a private placement memorandum relating to the offer of Class A Units.

(d) The Contributor is well versed in financial matters, has had dealings over the years in securities, including "restricted securities," and is fully capable of understanding the type of investment being made in the Class A Units and the risks involved in connection therewith.

SECTION 5. WARRANTIES AND REPRESENTATIONS AS TO THE PRE-DEVELOPMENT PROPERTIES

The Contributor hereby warrants and represents to PREIT and the Partnership with respect to the Pre-Development Properties as follows:

5.1 Blue Route Metroplex, Plymouth Meeting, Pennsylvania

(a) To the Contributor's knowledge, except for the Agreements of Sale and amendments thereto set forth on Schedule B-1 hereto and the Goldenberg Agreement, and except as set forth in Section 5.1(a) of the Contributor's Disclosure Letter, there are, as of the date hereof, no third party rights of first refusal on, or options or agreements to purchase all or any portion of, the Metroplex Site or any right to participation interests (whether of profits, sale or refinancing proceeds, or calculated based on fair market value) with respect to any portion of the Metroplex Site in favor of any tenant, lender or any other Person.

(b) To the Contributor's knowledge, except as set forth in
Section 5.1(b) of the Contributor's Disclosure Letter, as of the date hereof, no eminent domain, condemnation, incorporation, annexation or moratorium or similar proceeding has been commenced or threatened by an authority having the power of eminent domain to condemn all or any part of the Metroplex Site. To the Contributor's knowledge, as of the date hereof, there are no pending or threatened governmental rules, regulations, plans, studies, or court orders or decisions, which could materially adversely affect the development of the Metroplex Site for its intended use as a retail shopping center.

(c) Attached hereto as Schedule B-3 is a list that was delivered to the Contributor by the Goldenberg Group of all executed leases, executed letters of intent and executed term letters with respect to all proposed tenants for the Metroplex Site as of the date of said list. The Contributor has no reason to believe that the list attached hereto as Schedule B-3 is not accurate as of the date hereof.

(d) The Contributor has no reason to believe that (i) the zoning classifications for parcels comprising the Metroplex Site are other than as set forth in Schedule B-4, or (ii) the proposed/intended use of said Site as a retail shopping center is not permitted under such classifications.

5.2 Red Rose Commons, Lancaster, Pennsylvania

(a) To the Contributor's knowledge, except for the Agreements of Sale and amendments thereto set forth on Schedule B-1 hereto and the Goldenberg Agreement, and except as set forth in Section 5.2(a) of the Contributor's Disclosure Letter, there are, as of the date hereof, no third party rights of first refusal on, or options or agreements to purchase any portion of the property comprising the RRC Site or any right to participation interests (whether of profits, sale or refinancing proceeds, or calculated based on fair market value) with respect to any portion of the RRC Site in favor of any tenant, lender or any other Person.

(b) To the Contributor's knowledge, except as set forth in
Section 5.2(b) of the Contributor's Disclosure Letter, as of the date hereof, no eminent domain, condemnation, incorporation, annexation or moratorium or similar proceeding has been commenced or threatened by an authority having the power of eminent domain to condemn any part of the RRC Site. To the Contributor's knowledge, as of the date hereof, there are no pending or threatened governmental rules, regulations, plans, studies, or court orders or decisions, which could materially adversely affect the development of the RRC Site for its intended use as a retail shopping center.

(c) Attached hereto as Schedule B-3 is a list that was delivered to the Contributor from the Goldenberg Group of all executed leases, executed letters of intent and executed term letters with respect to all proposed tenants for the RRC Site as of the date of said list. The Contributor has no reason to believe that the list attached hereto as Schedule B-3 is not accurate as of the date hereof.

(d) The Contributor has no reason to believe that (i) the zoning classifications for parcels comprising the RRC Site are other than as set forth in Schedule B-4, and (ii) the proposed/intended uses of said Site as a retail shopping center are not permitted under such classifications.

5.3 Christiana Strip Shopping Center, Christiana, Delaware

(a) To the Contributor's knowledge, except for the Agreements of Sale and amendments thereto set forth on Schedule B-1 hereto, and except as set forth in Section 5.3(a) of the Contributor's Disclosure Letter, there are, as of the date hereof, no third party rights of first refusal on, or options or agreements to purchase all or any portion of, the Christiana Site or any right to participation interests (whether of profits, sale or refinancing proceeds, or calculated based on fair market value) with respect to any portion of the Christiana Site in favor of any tenant, lender or any other Person.

(b) To the Contributor's knowledge, except as set forth in
Section 5.3(b) of the Contributor's Disclosure Letter, as of the date hereof, no eminent domain, condemnation, incorporation, annexation or moratorium or similar proceeding has been commenced or threatened by an authority having the power of eminent domain to condemn all or any part of the Christiana Site. To the Contributor's knowledge, as of the date hereof, there are no pending or threatened governmental rules, regulations, plans, studies, or court orders or decisions, which could materially adversely affect the development of the Christiana Site for its intended use as a retail power center.

(c) Attached hereto as Schedule B-3 is a list of all executed leases, executed letters of intent and executed term letters with respect to all proposed tenants for the Christiana Site as of the date of said list.

(d) The Contributor has no reason to believe that (i) the zoning classifications for parcels comprising the Christiana Site are other than as set forth in Schedule B-4, and (ii) the proposed/intended uses of Phase I of said Site as a retail shopping center are not permitted under such classifications.

5.4 West Farms Road and Route 9, Howell Township, New Jersey

(a) To the Contributor's knowledge, except for the Agreements of Sale and amendments thereto set forth on Schedule B-1 hereto and except as otherwise provided herein or in Section 5.20 of the TRO Agreement, and except as set forth in Section 5.4(a) of the Contributor's Disclosure Letter, there are, as of the date hereof, no third party rights of first refusal on, or options or agreements to purchase all or any portion of, the Howell Site or any right to participation interests (whether of profits, sale or refinancing proceeds, or calculated based on fair market value) with respect to any portion of the Howell Site in favor of any tenant, lender or any other Person.

(b) To the Contributor's knowledge, except as set forth in
Section 5.4(b) of the Contributor's Disclosure Letter, as of the date hereof, no eminent domain, condemnation, incorporation, annexation or moratorium or similar proceeding has been commenced or threatened by an authority having the power of eminent domain to condemn all or any part of the Howell Site. To the Contributor's knowledge, as of the date hereof, there are no pending or threatened governmental rules, regulations, plans, studies, or court orders or decisions, which could materially adversely affect the development of the Howell Site for its intended use as a retail shopping center.

(c) Attached hereto as Schedule B-3 is a list of all executed leases, executed letters of intent and executed term letters with respect to all proposed tenants for the Howell Site as of the date of said list.

(d) The Contributor has no reason to believe that (i) the zoning classifications for parcels comprising the Howell Site are other than as set forth in Schedule B-4, and (ii) the proposed/intended uses of the Howell Site as a retail shopping center are not permitted under such classifications.

SECTION 6. REPRESENTATIONS AND WARRANTIES REGARDING PREIT AND THE PARTNERSHIP.

PREIT hereby represents and warrants to the Contributor as follows:

6.1 Organization.

(a) PREIT is an unincorporated association in business trust form duly organized and validly existing under the laws of the Commonwealth of Pennsylvania. PREIT has all necessary trust power to carry on its business as presently conducted, to own and lease the assets and properties that it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound.

(b) The Partnership is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware and has all necessary partnership power to carry on its business as presently conducted, to own and lease the assets and properties that it owns and leases and to perform all its obligations under each agreement and instrument to which it is a party or by which it is bound.

6.2 Power and Authority. Each of PREIT and the Partnership has all requisite trust or partnership power to execute, deliver and perform its obligations under this Agreement and under all other agreements and documents required to be delivered by it prior to or at the Closing (collectively, the "Buyer Transaction Documents"). The execution, delivery and performance by PREIT and the Partnership of this Agreement and the other Buyer Transaction Documents have been duly authorized by all necessary corporate or partnership action. This Agreement has been duly and validly executed and delivered by PREIT and the Partnership and constitutes the legal, valid and binding obligation of PREIT and the Partnership enforceable against each of them in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally or by general equitable principles. When executed and delivered as contemplated herein, each of the other Buyer Transaction Documents shall, assuming due

authorization, execution and delivery thereof by the other parties thereto, constitute the legal, valid and binding obligation of each of PREIT and the Partnership that is a party thereto enforceable against it in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally or by general equitable principles.

6.3 No Conflicts.

(a) Except as described in Section 6.3 of the disclosure letter delivered by PREIT to the Contributors on the date hereof (the "PREIT Disclosure Letter"), the execution and delivery by PREIT and the Partnership of this Agreement do not, and the execution and delivery by PREIT and the Partnership of the other Buyer Transaction Documents and the performance by PREIT and the Partnership of all of the Buyer Transaction Documents will not (in each case, with or without the passage of time or the giving of notice), directly or indirectly:

(i) contravene, violate or conflict with (A) the trust or partnership agreement (or other organizational documents) of PREIT or the Partnership or (B) any Law applicable to PREIT or the Partnership, or by or to which any assets or properties of PREIT or the Partnership is bound or subject; or

(ii) violate or conflict with, result in a breach of, constitute a default or otherwise cause any loss of benefit or give to others any rights (including rights of termination, amendment, foreclosure, cancellation or acceleration) in or with respect to any material Authorization or material Contract to which PREIT or the Partnership is a party or by which either PREIT or the Partnership is bound or affected; or

(iii) result in, require or permit the creation or imposition of any material Encumbrance upon or with respect to either PREIT or the Partnership or any of their respective assets or properties.

(b) Except for filings with the Securities and Exchange Commission and except as disclosed in Section 6.3(a) of the PREIT Disclosure Letter, the execution and delivery by PREIT and the Partnership of this Agreement do not, and the execution and delivery by PREIT and the Partnership of the other Buyer Transaction Documents and the performance by PREIT and the Partnership of all of the Buyer Transaction Documents will not, require PREIT or the Partnership to obtain any material Authorization of or make any material filing, registration or declaration with or notification to any court, government or governmental agency or instrumentality (federal, state, local or foreign) or to obtain the material consent, waiver or approval of, or give any material notice to, any Person.

(c) Except as disclosed in filings with the Securities and Exchange Commission made by PREIT, there are no actions, proceedings or investigations against or involving PREIT or the Partnership pending or, to the best knowledge of PREIT, threatened, that question any of the transactions contemplated by this Agreement or the validity of any of the Buyer Transaction Documents or which, if adversely determined, could have a material adverse effect on the consolidated financial condition, assets, business or results of operations of PREIT or could materially and adversely affect PREIT's or the Partnership's ability to enter into or perform its obligations under the Buyer Transaction Documents.

6.4 Capitalization.

(a) On the date hereof, the outstanding beneficial interests in PREIT consist of 8,679,598 PREIT Shares, and the outstanding partnership interests in the Partnership are as described in Section 6.4(a) of the PREIT Disclosure Letter. Except for 483,875 PREIT Shares reserved for issuance pursuant to outstanding stock options and except as contemplated in the TRO Contribution Agreement, in the Amended Partnership Agreement or in the Employment Agreements referred to in the TRO Contribution Agreement, and except as disclosed in Section 6.4(a) of the PREIT Disclosure Letter, as of the date of this Agreement, there are no options, warrants or other rights, agreements, arrangements or commitments of any character (including, without limitation, voting agreements or arrangements known to PREIT) relating to the issuance of beneficial interests in PREIT or partnership interests in the Partnership. As of the Closing, the outstanding partner interests in the Partnership shall consist of the interests outstanding on the date hereof and the Class A Units to be issued as contemplated in the TRO Contribution Agreement, the Oxford Valley Contribution Agreement and the EPD Purchase Agreements.

(b) All Class A Units to be issued and delivered pursuant to
Section 3 hereof will be, at the time of issuance and delivery in accordance with the terms of this Agreement, duly authorized and validly issued by the Partnership. Assuming the accuracy of the representations and warranties of the Contributor set forth herein, such issuance will be exempt from registration under the 1933 Act as an offering described in Section 4(2) of such Act and/or pursuant to Regulation D promulgated thereunder.

6.5 PREIT Reports. PREIT has delivered to the Contributor copies of PREIT's (a) Proxy Statement dated November 15, 1996, (b) Annual Report on Form 10-K for the fiscal year ending August 31, 1996, as amended by its Report on 10-K/A-1 dated December 2, 1996,and (c) Quarterly Reports on Form 10-Q for the quarters ended November 30, 1996, February 28, 1997 and May 31, 1997, all of which have been filed by PREIT with the Securities and

Exchange Commission (the "PREIT Reports"). The audited consolidated financial statements and unaudited interim financial statements of PREIT included in such reports have been prepared in accordance with GAAP consistently applied (except as may be indicated in the notes thereto) and fairly present the consolidated financial condition and results of operations of PREIT as at the dates thereof and for the periods then ended, subject, in the case of the unaudited interim financial statements, to normal year-end adjustments and any other adjustments described therein. The PREIT Reports do not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

6.6 Litigation. Except as disclosed in filings with the Securities and Exchange Commission, there are no claims, actions, suits, proceedings (arbitration or otherwise) or, to the best knowledge of PREIT, investigations involving or affecting PREIT or any of its subsidiaries or any of their assets or properties or any of their trustees, directors, officers, partners or shareholders in their capacities as such, before or by any court, government or governmental agency or instrumentality (federal, state, local or foreign) or before any arbitrator of any kind, in each case of a nature that is required to be disclosed in PREIT's 1934 Act reports.

6.7 Material Adverse Change. Except as disclosed in filings with the Securities and Exchange Commission, since May 31, 1997, there has not been any material adverse change in the condition (financial or otherwise), assets, results of operations or business of PREIT on a consolidated basis.

6.8 Brokers. Except for Lehman Brothers, Inc., whose fees shall be paid by PREIT, no Person acting on behalf of PREIT or the Partnership or any of their affiliates or under the authority of any of the foregoing is or will be entitled to any brokers' or finders' fee or any other commission or similar fee, directly or indirectly, from any of such parties in connection with any of the transactions contemplated by this Agreement.

SECTION 7. CERTAIN COVENANTS AND AGREEMENTS

7.1 Conduct of Business.

(a) Except as expressly provided herein, between the date hereof and the Closing, except with the prior written consent of PREIT, the Contributor shall:

(i) carry on its business in the usual, regular and ordinary course, consistent with past practice and the provisions hereof and in compliance with all applicable Laws,

Authorizations and Contracts, preserve intact its present business organization, maintain its existence as a limited liability company, and cause TRO to use reasonable efforts to preserve its relationships with the other parties to the Howell Assigned Contracts and the Assigned Contracts and to monitor and obtain all relevant information relating to the development of the Pre-Development Properties;

(ii) pay and discharge all of its debts, liabilities and obligations as they become due to the extent they are not disputed;

(iii) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried by it;

(iv) maintain its books of account and records in the usual, regular and ordinary manner and use diligent efforts to maintain in full force and effect all of its Authorizations and insurance policies;

(v) not, and shall cause TRO, the TRO Shareholders and the TRO Affiliates not to, amend any of the Howell Assigned Contracts or the Assigned Contracts or the Goldenberg Agreement or consent to an amendment of any Third Party Contract;

(vi) not, and shall cause TRO, the TRO Shareholders and the TRO Affiliates not to, enter into any Contract relating, in whole or in part, to any of the properties listed on Schedule B-2 hereto;

(vii) not take any action, fail to take any action or permit to occur any event that would cause or constitute a breach of or inaccuracy in any representation or warranty set forth herein if made immediately after such event or at the Closing or that would have been required (or result in any situation that would be required) to be disclosed hereunder had such action or inaction been taken or failed to have occurred or had such event occurred prior to the date hereof; provided, however, that this undertaking is subject to the qualification that the Contributor does not currently have a direct involvement in the development of the Goldenberg Properties and that the future development of all Pre-Development Properties is subject to Development Contingencies;

(viii) not make any change in its ownership interests, grant any option or other right to purchase its ownership shares, issue or make any commitment to issue any new ownership shares or purchase, redeem, retire or make any other acquisition of any shares, except that nothing contained in this Section (vii) shall be deemed or construed to limit or preclude

transfers of interests between or among the members of the Contributor, or transfers by members to family members or to trusts for estate planning purposes; and

(ix) not enter into any agreement or understanding to do or engage in any of the foregoing actions.

7.2 Reasonable Efforts. Upon the terms and subject to the condition hereof, between the date hereof and the Closing Date, 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 Law to complete the Closing under this Agreement, including, without limitation, (i) using its reasonable efforts to make all required regulatory filings and applications and to obtain all Authorizations and consents, approvals, amendments and waivers from parties to Contracts as are necessary for the completion of the Closing under this Agreement and (ii) using its reasonable efforts to cause to be satisfied the conditions to the consummation of the contribution of the Contract Interests.

7.3 Notifications. Each party hereto shall give prompt notice to the other parties upon becoming aware of: (i) any fact or condition that causes or constitutes (or that reasonably could be expected to cause or constitute) a breach of its representations and warranties set forth herein, or the occurrence, or failure to occur, of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a breach of or any inaccuracy in any of its representations and warranties contained in this Agreement had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition; (ii) any material failure of it or any of its members, officers, directors, employees or agents, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; (iii) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and (iv) any actions, suits, claims, investigations or proceedings commenced or, to the best of its knowledge, threatened against, relating to or involving or otherwise affecting the Contributor, or PREIT, as the case may be, or any of the transactions contemplated by this Agreement.

7.4 Rezoning of Christiana Site - Phase II. The Christiana Site consists of an unsubdivided parcel. A portion of such parcel ("Phase I") is zoned to permit retail development. The remaining portion ("Phase II") is zoned office and residential. In the event Phase II is rezoned to permit retail development, the entire parcel will remain a Pre-Development Property governed by the terms of this Agreement. Upon the earlier to occur of (i) final rejection (no longer subject to appeal) by the governmental

entity having jurisdiction of an application to rezone Phase II to permit retail development, (ii) a joint decision by the Contributor and the Special Committee to the effect that a rezoning of Phase II to permit retail development is not feasible, or (iii) the fifth (5th) anniversary of the Closing, Phase II will, assuming that it is not then rezoned to permit retail development, no longer be considered a Pre-Development Property, and the Contributor shall be permitted to develop Phase II for its own account so long as Phase II is not developed for retail use and the proposed development of Phase II does not violate the terms and conditions of this Agreement, the TRO Contribution Agreement, or any other agreement executed by PREIT, TRO, any of the TRO Shareholders or any of the TRO Affiliates in conjunction with the transactions contemplated in the TRO Contribution Agreement. If Phase II ceases to constitute a Pre-Development Property as described above, PREIT and the Partnership shall cooperate with the Contributor, at the Contributor's sole cost and expense, in subdividing Phase II from Phase I and in conveying Phase II to the Contributor or its designee.

SECTION 8. CLOSING; CLOSING CONDITIONS; CLOSING DELIVERIES.

8.1 Time of Closing. The closing (the "Closing") of the contributions to the Partnership contemplated by Section 2.1 shall take place immediately following the TRO Closing at the place that the TRO Closing occurs.

8.2 Closing Conditions.

(a) Conditions Precedent to PREIT's and the Partnership's Obligations. The obligation of PREIT and the Partnership to consummate the acquisition of the Assigned Contracts and to take the other actions required to be taken by them at the Closing is subject to the fulfillment by or at the Closing of each of the following conditions, any or all of which may be waived by PREIT in its sole discretion:

(i) Representations and Warranties. Each of the representations and warranties of the Contributor set forth in this Agreement that is qualified by materiality shall be true and correct, and each of the representations and warranties of the Contributor set forth in this Agreement that is not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date.

(ii) Performance of Covenants. All of the agreements, covenants and obligations that the Contributor is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects. The Contributor shall

have delivered each of the documents required to be delivered by it pursuant to Section 8.3 hereof.

(iii) Legal Matters. The performance of the Buyer and Contributor Transaction Documents and the consummation of the Closing shall not, directly or indirectly (with or without notice or lapse of time), violate, contravene, conflict with or result in a violation of any Law and shall not violate any Order of any court or governmental body of competent jurisdiction, and no suit, action, investigation or legal or administrative proceeding shall have been brought or threatened by any Person (other than by PREIT or the Partnership) that questions the validity or legality of this Agreement or the transactions contemplated hereby.

(iv) Consents and Approvals. Each consent, approval, ratification, waiver or other authorization of any Person necessary, in the reasonable opinion of PREIT, for the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect, and no such consent, approval, ratification, waiver or other authorization: (x) shall have been conditioned upon the modification, cancellation or termination of any of the Howell Assigned Contracts or Assigned Contracts, or any other Contract, right or Authorization of PREIT, the Partnership or the Contributor or (y) shall impose on PREIT or the Partnership any condition, provision or requirement not presently imposed upon the Contributor or TRO or any condition that would be more restrictive after the Closing on the Partnership than the conditions presently imposed on the Contributor or TRO.

(v) Opinion of Counsel. PREIT shall have received an opinion of counsel for the Contributor, dated the Closing Date, in form and substance reasonably satisfactory to PREIT and its counsel.

(vi) TRO Closing. The TRO Closing shall have occurred.

(vii) Casualty or Condemnation. There shall not have occurred any damage or destruction to, or condemnation of, any portion of the Pre-Development Properties that has a material adverse effect on the proposed or intended development of all or any of the Pre-Development Properties.

(b) Conditions Precedent to the Contributor's Obligations. The obligation of the Contributor to consummate the contribution of the Assigned Contracts contemplated by this Agreement and to take the other actions required to be taken by it at the Closing is subject to the fulfillment by or at the Closing of each of the following conditions, any or all of which may be waived by the Contributor in its sole discretion:

(i) Representations and Warranties. Each of the representations and warranties of PREIT set forth in this Agreement that is qualified by materiality shall be true and correct, and each of the representations and warranties of PREIT set forth in this Agreement that is not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date.

(ii) Performance of Covenants. Each of the agreements, covenants and obligations that PREIT or the Partnership is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects. PREIT shall have delivered each of the documents required to be delivered by it pursuant to Section 8.3(b) hereof.

(iii) Legal Matters. The performance of the Buyer and Contributor Transaction Documents and the consummation of the Closing shall not, directly or indirectly (with or without notice or lapse of time), violate, contravene, conflict with or result in a violation of any Law and shall not violate any Order of any court or governmental body of competent jurisdiction, and no suit, action, investigation or legal or administrative proceeding shall have been brought or threatened by any Person that questions the validity or legality of this Agreement or the transactions contemplated hereby.

(iv) TRO Closing. The TRO Closing shall have occurred.

(v) Partnership Counsel Opinion. The Contributor shall have received an opinion of counsel for the Partnership, dated the Closing Date, in form and substance reasonably satisfactory to the Contributor and its counsel.

8.3 Deliveries at the Closing. At the Closing, in addition to the other actions contemplated elsewhere herein:

(a) The Contributor shall deliver or cause to be delivered to the Partnership:

(i) each of the instruments, agreements or documents listed on Schedule A-1, in a form reasonably satisfactory to the Contributor and the Partnership, in each case duly executed by each of the signatories thereto other than PREIT or the Partnership;

(ii) certificates, dated the Closing Date and executed by an authorized member of the Contributor to the effect that the conditions set forth in Sections 8.2(a)(i) and (ii) have been satisfied;

(iii) certificates of good standing of a recent date for the Contributor certified by the Secretary of State or corresponding certifying authority of the state of organization of the Contributor and of each state in which the Contributor is qualified to do business as a foreign limited liability company;

(iv) copies of the resolutions of the Contributor and its members authorizing the transactions contemplated under this Agreement and the Contributor Transaction Documents to which the Contributor is a party or confirmation reasonably satisfactory to PREIT and the Partnership that the Contributor's Operating Agreement provides such authorization;

(v) all consents and approvals under the Goldenberg Agreement and the Howell Assigned Contracts and the Assigned Contracts (if and to the extent then in existence) necessary or appropriate in connection with the transactions contemplated herein; and

(vi) such other documents and instruments as the Partnership or PREIT may reasonably request to effectuate or evidence the transactions contemplated by this Agreement.

(b) The Partnership shall deliver or cause to be delivered to the Contributor the following:

(i) copies of resolutions of the board of trustees of PREIT authorizing the transactions contemplated hereunder and under the Buyer Transaction Documents;

(ii) a certificate, dated the Closing Date, executed by the chief executive officer and chief financial officer of PREIT, to the effect that the conditions set forth in Sections 8.2(b)(i) and (ii) have been satisfied; and

(iii) each of the instruments, agreements and documents listed on Schedule A-1, in a form mutually satisfactory to the Contributor and the Partnership, duly executed by each of the Partnership or PREIT that is a signatory thereto.

(c) Each party shall deliver or cause to be delivered, as the case may be, to the other parties hereto such other documents, instruments, certificates and opinions as may be required by this Agreement.

SECTION 9. [INTENTIONALLY OMITTED]

SECTION 10. INDEMNIFICATION.

10.1 Indemnification by the Contributor. The Contributor shall indemnify, defend and hold harmless PREIT and the Partnership (collectively, "Buyer Indemnified Persons") against and in respect of any and all losses, costs, expenses (including, without limitation, costs of investigation and defense and attorneys' fees), claims, damages, obligations, liabilities or diminutions in value, whether or not involving a third party claim (collectively, "Damages"), arising out of, based upon or otherwise in respect of: (a) any inaccuracy in or breach of any representation or warranty of the Contributor made in or pursuant to this Agreement (including, without limitation, the certificate referred in Section 8.3(a)(ii), which, for this purpose will be deemed to have stated, inter alia, that the Contributor's representations and warranties in this Agreement were true and correct as of the Closing Date as if made on the Closing Date); or (b) any breach or nonfulfillment of any covenant or obligation of the Contributor contained in this Agreement.

10.2 Indemnification by PREIT. PREIT shall indemnify, defend and hold harmless the Contributor against and in respect of any and all Damages arising out of, based upon or otherwise in respect of: (a) any inaccuracy in or breach of any representation or warranty of PREIT made in or pursuant to this Agreement; (b) any breach or nonfulfillment of any covenant or obligation of PREIT or the Partnership contained in this Agreement; or (c) claims relating solely to actions taken by the Partnership (or its affiliates) as a party to or in connection with the Assigned Contracts after Closing as the result of events and circumstances first occurring after Closing or, in the case of the Howell Assigned Contracts, after the Howell Closing.

10.3 Limitations on Liability.

(a) The Contributor shall not have any obligation to indemnify any Buyer Indemnified Person against Damages pursuant to Section 10.1 of this Agreement arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to this Agreement unless and until the aggregate of all such Damages suffered or incurred by the Buyer Indemnified Persons exceeds $100,000; in which event the Buyer Indemnified Persons shall be entitled to indemnification for the full amount of all Damages suffered or incurred; provided, however, that the above limitation shall not be applicable to any claim for Damages pursuant to Sections 10.1(b) or based upon a breach of any representation or warranty made in or pursuant to Sections 4.1, 4.2, 4.3, 4.5, 4.6 or 4.7.

(b) No claim arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to this Agreement shall be made unless a claim arises and written notice is delivered to the indemnifying party within the Basic Claims Period (as defined below); provided that any

such claim arising out of or based upon any inaccuracy in or breach of any representation or warranty made in or pursuant to Sections 4.1 or 4.2 may be made at any time. For purposes hereof, "Basic Claims Period" means the period beginning on the date hereof and ending on the date five months after the fiscal year end for the first full fiscal year of PREIT after the TRO Closing.

(c) Disclosures made after the date hereof and any knowledge that is acquired about the accuracy or inaccuracy of or compliance with any representation, warranty, covenant or obligation set forth herein shall not in any manner affect rights to indemnification hereunder based on any such representation, warranty, covenant or obligation or be deemed in any manner to amend the Contributor Disclosure Letter. The waiver by PREIT of any condition based on the accuracy of any representation or warranty, or compliance with any covenant or obligation, will not affect any right to indemnification based on such representations, warranties, covenants and obligations unless otherwise expressly agreed in writing by PREIT.

(d) Each party's rights under this Section 10 shall be its sole remedy against the other parties in respect of the subject matter hereof, subject to a party's rights, if any, to seek and obtain specific performance.

(e) If there is a Howell Closing, the terms set forth in this
Section 10 shall be adjusted as appropriate so that PREIT and the Partnership achieve indemnification protection comparable to that which they would have had in respect of the Howell Site and the Howell Assigned Contracts if the Howell Site had been a Pre-Development Property as of the Closing.

10.4 Procedure For Indemnification - Third Party Claims.

(a) Within thirty days after receipt by an indemnified party of notice of the commencement of any proceeding against it to which the indemnification in this Section 10 relates, such indemnified party shall, if a claim is to be made against an indemnifying party under Section 10, give notice to the indemnifying party of the commencement of such proceeding, but the failure to so notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such proceeding is materially prejudiced by the indemnified party's failure to give such notice.

(b) If any proceeding referred to in paragraph (a) above is brought against an indemnified party and it gives notice to the indemnifying party of the commencement of such proceeding, the indemnifying party will be entitled to participate in such

proceeding and, to the extent that it wishes (unless (i) the indemnifying party is also a party to such proceeding and the indemnified party determines in good faith that joint representation would be inappropriate, or (ii) the indemnifying party fails to provide reasonable assurance to the indemnified party of its financial capacity to defend such proceeding and provide indemnification with respect to such proceeding), to assume the defense of such proceeding with counsel reasonably satisfactory to the indemnified party and, after notice from the indemnifying party to the indemnified party of its election to assume the defense of such proceeding, the indemnifying party will not, as long as it diligently conducts such defense, be liable to the indemnified party under Section 10 for any fees of other counsel or any other expenses with respect to the defense of such proceeding, in each case subsequently incurred by the indemnified party in connection with the defense of such proceeding, other than reasonable costs of investigation. If the indemnifying party assumes the defense of a proceeding, (A) it will be conclusively established for purposes of this Agreement that the claims made in that proceeding are within the scope of and subject to indemnification; (B) no compromise or settlement of such claims may be effected by the indemnifying party without the indemnified party's consent unless (1) there is no finding or admission of any violation of Law by the indemnified party (or any affiliate thereof) or any violation of the rights of any Person and no effect on any other claims that may be made against the indemnified party, and (2) the sole relief provided is monetary damages that are paid in full by the indemnifying party. The indemnified party will have no liability with respect to any compromise or settlement of the claims underlying such proceeding effected without its consent. If notice is given to an indemnifying party of the commencement of any proceeding and the indemnifying party does not, within ten days after the indemnified party's notice is given, give notice to the indemnified party of its election to assume the defense of such proceeding, the indemnifying party will be bound by any determination made in such proceeding or any compromise or settlement effected by the indemnified party.

(c) Notwithstanding the foregoing, if an indemnified party determines in good faith that there is a reasonable probability that a proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the indemnified party may, with respect to those issues, by notice to the indemnifying party, assume the exclusive right to defend, compromise, or settle such proceeding, but the indemnifying party will not be bound by any determination of a proceeding so defended or any compromise or settlement effected without its consent.

10.5 Procedure for Indemnification - Other Claims. A claim for any matter not involving a third party claim may be asserted by notice to the party from whom indemnification is sought.

10.6 Indemnification Payments. The Contributors shall be entitled to use cash or Class A Units to make indemnification payments hereunder. In the event Class A Units are used, each such Unit shall be valued based on the per share value (as defined in the Amended Partnership Agreement) of a PREIT share as of the date such Unit is tendered to PREIT as an indemnification payment hereunder.

SECTION 11. TERMINATION AND ABANDONMENT.

11.1 Termination. This Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to the Closing:

(i) by PREIT or the Contributor, if the Closing has not occurred (other than through the failure of the party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before December 31, 1997, or such later date as the parties may mutually agree upon in writing;

(ii) by mutual consent of PREIT and the Contributor;

(iii) by the Contributor, on the one hand, or PREIT and the Partnership, on the other hand, if a material breach of any provision of this Agreement has been committed by the other and such breach has not been waived; or

(iv) by PREIT, if any of the conditions in Section 8.2(a) have not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of PREIT or the Partnership to comply with its obligations under this Agreement) and PREIT has not waived all such unsatisfied conditions before termination pursuant to this subparagraph (iv); or

(v) by the Contributor if any of the conditions in
Section 8.2(b) have not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of the Contributor to comply with its obligations hereunder) and the Contributor has not waived all such unsatisfied conditions before termination pursuant to this subparagraph (v); or

(vi) by any party hereto if the TRO Contribution Agreement is terminated prior to the consummation of the TRO Closing.

11.2 Procedure for Termination; Effect of Termination. A party terminating this Agreement pursuant to this Section 11 shall give written notice thereof to each other party hereto, whereupon this Agreement shall terminate and the transactions contemplated hereby shall be abandoned without further action by any party and all further obligations of the parties under this Agreement will terminate; provided, however, that if such termination is pursuant to
Section 11.1(iii), the terminating party's right to pursue all legal remedies (including damages and/or specific performance) contemplated by Section 10 will survive such termination unimpaired.

SECTION 12. GENERAL PROVISIONS.

12.1 Survival of Representations and Warranties.

(a) All representations and warranties made by the parties in this Agreement and in the certificates, documents and other agreements delivered pursuant hereto shall survive the Closing, subject to the terms and conditions of Section 10 above. Anything in this Agreement to the contrary notwithstanding:
(i) the representations and warranties of the Contributor and the right of the Buyer Indemnified Persons to indemnification for breach thereof, shall not be affected by any investigation of the Contributor or the Pre-Development Properties made by PREIT or its agents or representatives; and (ii) the representations and warranties of PREIT hereunder, and the right of the Contributor to indemnification for breach thereof, shall not be affected by any investigation of PREIT or its affiliates made by the Contributor or its agents or representatives.

(b) In the event of any inconsistency between the statements made in the body of this Agreement and those contained in the Contributor Disclosure Letter (other than an express exception to a specifically identified statement), those in this Agreement shall control.

12.2 Costs and Expenses. Except as otherwise expressly provided herein, each party shall bear its own expenses in connection herewith. Any and all transfer taxes, recording and filing fees and all costs associated with obtaining the title insurance or endorsements thereto contemplated herein in connection with the transactions contemplated herein shall be borne by PREIT or the Partnership. The parties contemplate that the transfer of the Assigned Contracts in accordance with the procedures and the time periods set forth in Schedule A-2 will not be subject to transfer tax. In the event the Contributor makes or causes a transfer of Assigned Contracts not in accordance with the procedures and time periods set forth herein and in the Partnership Agreement, then the Contributor making or causing such transfer shall be responsible for the payment of any

transfer tax and all title insurance premiums and title company charges and recording costs due as a result thereof.

12.3 Condemnation. If prior to the Closing Date, condemnation or eminent domain proceedings are commenced against all or any portion of any of the Pre-Development Properties, the Contributor shall give notice thereof to PREIT promptly after the Contributor becomes aware of it.

12.4 Notices. All notices or other communications permitted or required under this Agreement shall be in writing and shall be sufficiently given if and when hand delivered to the persons set forth below or if sent by documented overnight delivery service or registered or certified mail, postage prepaid, return receipt requested, or by telegram, telex or telecopy, receipt acknowledged, addressed as set forth below or to such other person or persons and/or at such other address or addresses as shall be furnished in writing by any party hereto to the others. Any such notice or communication shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefor in all other cases.

To PREIT or the Partnership:

Pennsylvania Real Estate Investment Trust
455 Pennsylvania Avenue, Suite 135
Fort Washington, PA 19034
Attention: President and Special Committee

With a copy to:

Drinker Biddle & Reath LLP
1100 PNB Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
(215) 988-2700
Telecopy (215) 988-2757

Attention: Howard A. Blum, Esquire

To the Contributor:

c/o The Rubin Organization, Inc.
200 South Broad Street
Philadelphia, PA 19102
Attention: Ronald Rubin

With a copy to:

Klehr, Harrison, Harvey, Branzberg & Ellers, LLP

1401 Walnut Street Philadelphia, PA 19102 Attention: Leonard M. Klehr, Esq.

12.5 Access to Information; Confidentiality. Between the date of this Agreement and the Closing Date, PREIT, on the one hand, and the Contributor, on the other hand, will give to the other party and its officers, employees, counsel, accountants and other representatives free and full access to and the right to inspect, during normal business hours, all of the assets, records, facilities, properties and contracts relating to its business as the other party may reasonably request. Each party shall acquire and hold all confidential information that has been made available by another party hereto subject to the terms and conditions of Section IV of the Letter Agreement dated as of April 16, 1997 (the "Letter Agreement") between TRO and PREIT, the terms of which section are hereby incorporated by reference and which shall remain in force through the Closing.

12.6 Public Announcements. Except as and to the extent required by Law or by the rules of the American Stock Exchange, without the prior written consent of the other party, the Contributor, on the one hand, and PREIT and the Partnership, on the other hand, will not, and each will direct its representatives not to, directly or indirectly, make any public comment, statement or communication with respect to, or otherwise disclose or permit the disclosure of any of the terms, conditions or other aspects of the transactions contemplated hereby; provided, however, that PREIT may issue a press release, in the form previously circulated by PREIT to TRO, regarding, among other things, the execution of this Agreement; and further provided that PREIT and TRO may each continue such communications with principals, partners, lenders, trustees, attorneys, accountants, investment bankers, consultants engaged by PREIT and TRO, including abstract companies, title companies, engineers and architects, Kenneth N. Goldenberg and his affiliates, EPD and its affiliates, and, if agreed in each case by PREIT and TRO, others as may be legally required or necessary in connection with the consummation of the transactions contemplated by this Agreement.

12.7 No Solicitation. The Contributor shall not and it shall cause its officers, employees, partners, representatives and agents not to, directly or indirectly, continue, encourage, solicit, initiate or participate in discussions or negotiations with, or provide any nonpublic information to, any Person (other than PREIT and the Partnership and their respective representatives in connection with the transactions contemplated by this Agreement) concerning any sale of assets (other than in the ordinary course of its business consistent with past practice) or shares of capital stock or partnership interests of the Contributor or any merger, consolidation, recapitalization, liquidation or similar transaction involving the Contributor

(collectively, an "Acquisition Transaction"). The Contributor will promptly communicate to PREIT the terms of any inquiry or proposal that it may receive in respect of an Acquisition Transaction.

12.8 Entire Agreement. This Agreement, together with the Schedules, Contributor Disclosure Letter, and certificates referred to herein or delivered pursuant hereto, constitute the entire agreement between the parties hereto with respect to its subject matter and supersede all prior and contemporaneous agreements and understandings with respect to the subject matter hereof.

12.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original copy of this Agreement, and all of which, when taken together, shall be deemed to constitute but one and the same Agreement.

12.10 Governing Law. This Agreement is made pursuant to, and shall be construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania (and United States federal law, to the extent applicable), irrespective of the principal place of business, residence or domicile of the parties hereto, and without giving effect to otherwise applicable principles of conflicts of laws.

12.11 Section Headings, Captions and Defined Terms. The section headings and captions contained herein are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement. The terms defined herein and in any agreement executed in connection herewith include the plural as well as the singular, and the use of masculine pronouns include the feminine and neuter. Except as otherwise indicated, all agreements defined herein refer to the same as from time to time amended or supplemented or the terms thereof waived or modified in accordance herewith and therewith.

12.12 Amendments, Modifications and Waiver. The parties may amend or modify this Agreement in any respect. Any such amendment or modification shall be in writing executed by PREIT, the Partnership and the Contributor. Ronald Rubin and/or George Rubin have been granted authority under the operating agreement for the Contributor to execute any and all amendments to this Agreement as Ronald Rubin and George Rubin deem appropriate. The waiver by any party of any provision of this Agreement shall not constitute or operate as a waiver of any other provision hereof, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision.

12.13 Severability. The invalidity or unenforceability of any particular provision, or part of any provision, of this

Agreement shall not affect the other provisions or parts hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions or parts were omitted.

12.14 Liability of Trustees, etc. No recourse shall be had for any obligation of PREIT hereunder, or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of PREIT, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being expressly waived and released by each other party hereto.

12.15 Future Projects.

(a) If prior to the Closing, the Contributor, any of the TRO Shareholders, TRO or any other TRO Affiliate shall enter into discussions to acquire any direct or indirect ownership interests in or rights to acquire additional retail or residential properties not referred to herein, the Contributor shall cause TRO to promptly advise and continue to advise PREIT and the Partnership as to the terms and status of each such proposed project. If TRO or any TRO Affiliate shall desire to enter into any contractual arrangement or agreement with respect to any such proposed project prior to Closing, the Contributor shall cause TRO to present, in writing, the terms and conditions of each such proposed project to PREIT. The Contributor shall cause TRO, the TRO Shareholders and the TRO Affiliates not to enter into any such contractual arrangement or agreement concerning such proposed project prior to Closing unless and until PREIT has given its prior written consent to same. If PREIT has given its consent for TRO or the TRO Affiliates to enter into any such arrangement or agreement, the Contributor shall cause all rights of TRO, the TRO Affiliates and the TRO Shareholders with respect to such project to be assigned at the Closing to the Partnership, and such project shall constitute a Pre-Development Property hereunder and shall therefore be eligible for cost reimbursement as provided in Section 5.17(a) of the TRO Contribution Agreement; provided, however, that no such property shall be deemed to be a BCRH Property.

(b) The Partnership acknowledges receipt of a notice from TRO dated July 2, 1997 regarding the potential development of shopping centers in York, Pennsylvania and Warrington, Pennsylvania. The Partnership hereby elects to include the York and Warrington projects as described in the July 2 letter as Pre-Development Properties hereunder, eligible for cost reimbursement as provided in Section 5.17(a) of the TRO Contribution Agreement (but such properties shall not constitute BCRH Properties). Accordingly, the Contributor shall cause all rights of TRO, the TRO Shareholders and the TRO Shareholders with respect to such project to be assigned at the Closing to the Partnership.

12.16 Concord Pike.

(a) In the event the Contributor demonstrates to PREIT's sole reasonable satisfaction that the Option Agreement dated May 10, 1995, by and between Al-Zar, Ltd. and BMR Associates, L.P. for Concord Pike (the "Option Agreement") is extended for at least one (1) year and the Concord Pike Property is rezoned to permit retail development, the Concord Pike Property shall become a Pre-Development Property, the rights in respect thereof shall be assigned to the Partnership, free and clear of all Encumbrances (except that the Option Agreement will be subject to any Agreement of Sale entered into by the Contributor pursuant to subparagraph (b) below prior to Closing) and the Partnership shall reimburse the Contributor for all reasonable out-of-pocket predevelopment costs and expenses of the Contributor or any TRO Affiliate to the extent not theretofore reimbursed out of the cash flow of Concord Pike. The Partnership shall have the right at any time to waive the requirements as to the extension of the Option Agreement and/or the rezoning and to acquire the Contributor's interest in Concord Pike as a Pre-Development Property. In the event the Concord Pike Property does not become a Pre-Development Property, the Contributor shall be permitted to develop the Concord Pike Property for its own account so long as the Concord Pike Property is not developed for retail or multi-family use and the proposed development of the Concord Pike Property does not violate the terms and conditions of this Agreement, the TRO Contribution Agreement, or any other agreement executed by PREIT, TRO, any of the TRO Shareholders or any of the TRO Affiliates in conjunction with the transactions contemplated in the TRO Contribution Agreement.

(b) Notwithstanding subparagraph (a) above, the Contributor shall have the right between the date hereof and the Closing to enter into an agreement to acquire the Concord Pike Property without a rezoning for a purchase price not to exceed Three Million Dollars ($3,000,000); provided, however, that any such agreement shall provide that the Contributor has the right to assign its rights under such purchase agreement to the Partnership. The Contributor shall provide to the Partnership all materials pertaining to the Concord Pike Property and its right to acquire same and any agreement the Contributor or any TRO Affiliate or TRO Shareholder has with any partner or other co-venturer in respect of such property as the Partnership reasonably requests. The Partnership shall have thirty (30) days after receipt of all such materials to determine whether the Concord Pike Property will become a Pre-Development Property. If the Partnership elects to have the Concord Pike Property become a Pre-Development Property pursuant to this subparagraph (b), the Contributor will assign its rights to acquire the property to the Partnership and the Partnership will acquire the Concord Pike Property from the current owner of the property at the closing provided for under the agreement of sale with such owner (the

Contributor shall ensure that any such agreement shall provide that closing thereunder shall not occur until the later of (x) a date at least 30 days after receipt by the Partnership of materials as aforesaid or (y) the Closing Date). Upon the acquisition by the Partnership of the Concord Pike Property, such property shall thereupon become a Pre-Development Property hereunder.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, all as of the date first written above.

TRO PREDEVELOPMENT, LLC

By: /s/  Ronald Rubin
   --------------------------
   Name:
   Title:

PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST

By: /s/ Jonathan B. Weller
   --------------------------
   Name:
   Title:


By: /s/ Jeffrey A. Linn
   --------------------------
   Name:
   Title:

PREIT ASSOCIATES, L.P.

By: Pennsylvania Real Estate
Investment Trust, its general
partner

By: /s/  Jonathan B. Weller
   --------------------------
   Name:
   Title:


By: /s/  Jeffrey A. Linn
   --------------------------
   Name:
   Title:

FIRST AMENDMENT TO
CONTRIBUTION AGREEMENT

THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT is made as of September 30, 1997 by and among TRO PREDEVELOPMENT, LLC, a Delaware limited liability company (the "Contributors"), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust ("PREIT"), and PREIT ASSOCIATES, L.P., a Delaware limited partnership (the "Partnership").

Background

The parties hereto are parties to a Contribution Agreement dated as of July 30, 1997 (the "Original Agreement").

The parties desire to enter into this Agreement to make certain amendments to the Original Agreement.

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

1. Definitions. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Original Agreement. The term Designee shall mean an entity that is wholly owned directly or in directly by the Partnership and that is designated by the Partnership to the Contributor.

2. Amendment Relating to Contributors.

(a) Section 2.1 of the Original Agreement is hereby amended by the insertion of the words "and/or the Designee" immediately following the word "Partnership" in both places such word appears in Section 2.1.

(b) Section 2.2 of the Original Agreement is hereby amended by the insertion of the words "and/or the Designee" immediately following the word "Partnership" in the ninth, fifteenth, seventeenth and twenty-first lines of Section 2.2.

(c) Section 3.2 of the Original Agreement is hereby amended by the insertion of the words "and/or the Designee" immediately following the word "Partnership" in the seventh line.

(d) Section 12.15(a) of the Original Agreement is hereby amended by the insertion of the words "and/or the Designee" immediately following the word "Partnership" in the fifth line from the bottom of the paragraph.

(e) Section 12.15(b) of the Original Agreement is hereby amended by the insertion of the words "and/or the Designee" immediately following the word "Partnership" in the last line of the paragraph.

(f) Section 12.16(a) of the Original Agreement is hereby amended by the insertion of the words "and/or the Designee" immediately following the word "Partnership" in the eighth line of the paragraph.

(g) Section 12.16(b) of the Original Agreement is hereby amended by the insertion of the words "and/or the Designee" immediately following the word "Partnership" the first time it appears in the eighth and each time it appears in nineteenth and twenty-sixth lines of such paragraph.

3. Amendment Relating to Certain Actions at Closing.

(a) Sections 3(a) and 3(b) of Schedule A to the Original Agreement are hereby amended by inserting the words "and/or the Designee" immediately following the words "Partnership" where it appears in the first line of Sections 3(a) and 3(b).

(b) Section B-1 to the Original Agreement is amended by inserting the following paragraph under the Section entitled "Assigned Contracts":

"VII. Letter Agreement dated March 26, 1996, among The Goldenberg Group, Kenneth B. Goldenberg, Ronald Rubin and The Rubin Organization, Inc. and the Letter Agreement of July 30, 1997, among The Goldenberg Group and Ronald Rubin, with respect to all rights to become an equity owner of one or more partnerships or other entities that own or will own, and to otherwise participate in the development, leasing, management and ownership of the Metroplex Site and RRC Site."

4. Acknowledgement Regarding the Goldenberg Agreement and Equity Fund. The parties hereto acknowledge that all rights under the Goldenberg Agreement relating to the Equity Fund are being conveyed on the date hereof to the Partnership in accordance with the terms of the TRO Contribution Agreement. The Contributors hereby represent and warrant to the Partnership that they have no interest in the Equity Fund or any rights with respect thereto.

5. Confirmation. The Original Agreement, as amended hereby, is ratified and confirmed in all respects.

6. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, and delivered by means of facsimile

transmission or otherwise, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same Amendment. If any party hereto elects to execute and deliver a counterpart signature page by means of facsimile transmission, it shall deliver an original of such counterpart to each of the other parties hereto within ten business days of the date hereof, but in no event will the failure to do so affect in any way the validity of the facsimile signature or its delivery.

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement, all as of the date first above written.

TRO PREDEVELOPMENT, LLC

By: /s/ Ronald Rubin
    --------------------------------
   Name:
   Title:

PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST

By: /s/ Jonathan B. Weller
    --------------------------------
     Name:
     Title:

PREIT ASSOCIATES, L.P.

By: Pennsylvania Real Estate
Investment Trust, its
general partner

By: /s/ Jonathan B. Weller
   ----------------------------
   Name:
   Title:

FIRST REFUSAL RIGHTS AGREEMENT

Pan American Associates, a Pennsylvania
limited partnership, and constituents in
favor of PREIT Associates, L.P.,
a Delaware limited partnership

The parties to this Agreement, effective as of the 30th day of September, 1997, are Pan American Associates, a Pennsylvania limited partnership ("Pan American"), its partners, and all persons having an interest in such partners (Pan American and such partners and persons, sometimes hereinafter collectively referred to as the "Undersigned"), with and for the benefit of PREIT Associates, L.P., a Delaware limited partnership ("PREIT Associates").

Background

The Undersigned are affiliated with PREIT-RUBIN, Inc., a Pennsylvania corporation formerly known as The Rubin Organization, Inc., ("TRO"), or certain of its principals. This Agreement is part of a larger transaction described in the TRO Contribution Agreement dated as of July 30, 1997 (the "TRO Contribution Agreement") among the Pennsylvania Real Estate Investment Trust, PREIT Associates, TRO, The Rubin Organization-Illinois, Inc. and the shareholders of TRO.

Pan American has interests in certain partnerships that own various real estate investments as expressly set forth on Exhibit A hereto attached and made a part hereof (such partnerships, individually, an "Investment Partnership" and, collectively, the "Investment Partnerships"). As part of the larger transaction described above, the Undersigned have agreed to grant to PREIT Associates a first refusal option to acquire their respective interests in the Investment Partnerships as herein provided.

NOW, THEREFORE, in consideration of the execution of the TRO Contribution Agreement and the other documents to be executed in respect of the larger transaction described above, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Warranties. The Undersigned do hereby warrant and represent that,

(a) all of the general and limited partners of Pan American, and all persons having an interest in such partners, are designated as signatories to this Agreement;

(b) the information set forth in Exhibit A is true, correct and complete; and

(c) The copies of the governing documents of each of the Investment Partnerships designated on Exhibit "A", which have been delivered to PREIT Associates, have not been further amended or modified and are true and correct copies of the documents now in force among the partners of the Investment Partnerships constituting the respective partnership agreements of the Investment Partnerships.

2. Definition of Investment Partnership Interest. The term "Investment Partnership Interest" when used herein shall refer to

(a) All or any part of any partnership interest (beneficial or otherwise, direct or indirect) now owned or hereafter acquired by Pan American in any Investment Partnership; and

(b) All or part of any partnership interest hereinafter acquired (beneficial or otherwise, direct or indirect) by any of the Undersigned in any Investment Partnership.

3. Grant of First Refusal Rights. Except for the dispositions referred to in paragraph 6 below, each of the Undersigned hereby grants to PREIT Associates the right of first refusal with respect to the disposition of any Investment Partnership Interest. Each of the Undersigned shall not sell, assign, transfer, convey or otherwise dispose of any Investment Partnership Interest except in compliance with this Agreement.

4. Procedures.

(a) Advance Notice. If any Undersigned shall commence the negotiation for the sale, assignment or transfer of an Investment Partnership Interest to a third party (the "Third Party"), then the applicable Undersigned shall give PREIT Associates as much advance written notification and information as practicable with respect to such negotiations; however, the proposed price so disclosed may not necessarily be the final price.

(b) Offer. Except as provided in paragraph 6 below, none of the Undersigned shall transfer, assign or sell an Investment Partnership Interest to a Third Party without first offering the same to PREIT Associates in accordance with this subparagraph (b). If any of the Undersigned (the "Offering Undersigned") desire to sell, assign or transfer an Investment Partnership Interest to a Third Party who or which have made a bona fide offer in writing for the purchase of such interest (any

such offer, the "Third Party Offer"), the Offering Undersigned shall first identify the Third Party and shall offer in writing to sell, assign or transfer such Investment Partnership Interest to PREIT Associates (the "Offer") at the same price and on the same terms set forth in the Third Party Offer, which Offer shall include a machine reproduction copy of the executed Third Party Offer.

(c) Acceptance. PREIT Associates shall have the right to accept the Offer by giving written notice thereof within fourteen (14) days after receipt of the Offer. If the Offer is not accepted in writing within such fourteen (14) day period, the Offer shall expire and the Offering Undersigned may then proceed with the sale or other transfer to the Third Party, provided, however, that such sale or other transfer is consummated (a) within one hundred twenty (120) days after the expiration of such fourteen
(14) day period, and (b) without any change in the original price or material change in the other terms of the Third Party Offer.

5. Violative Transfers Ineffective. No transfer of any Investment Partnership Interest subject to the First Refusal Rights set forth herein shall be effective if in violation of the rights of PREIT Associates under this Agreement.

6. Exceptions to First Refusal Rights. The First Refusal Rights granted pursuant to Paragraph 3 above shall not apply to the disposition of any Investment Partnership Interest by any of the Undersigned to:

(a) Any of the Undersigned or to any adult member of the immediate family of any of the Undersigned, or in trust for any member of the immediate family of any of the Undersigned. "Member of the immediate family" as used herein shall mean any parent, or any ancestor of a parent, a spouse and any descendants (which shall include adopted children), any spouse of such descendants, any brothers and sisters and any descendants of such brothers or sisters.

(b) Any corporation, business trust, limited liability company, partnership (general or limited) or any other entity in which the Undersigned, or any of them, or any of the persons referred to in subsection (a) above shall hold a 100% interest.

(c) Prior to the transfer of any Investment Partnership Interest to any transferee described in subparagraphs (a) or (b) above (individually, a "Permitted Transferee" and, collectively, "Permitted Transferees"), written notice of such

transfer shall be given to PREIT Associates together with an agreement in form reasonably satisfactory to counsel for PREIT Associates executed by the Permitted Transferee(s) agreeing to be bound by the provisions of this Agreement with like force and effect as if the Permitted Transferee(s) had been an original signatory hereto.

7. Prior First Refusal Rights. The First Refusal Rights granted in this Agreement shall be subject to such first refusal rights in favor of the Investment Partnerships or the other partners therein previously granted by the terms of organizational documents of the Investment Partnerships.

8. Individual Responsibility. Each of the Undersigned shall not be responsible or liable by reason of violation or breach of the terms of this Agreement by any other Undersigned.

9. Term. This Agreement shall remain in full force and effect until the date which is twenty-one (21) years from the date of death of the last survivor of the present Trustees of the Pennsylvania Real Estate Investment Trust, Scott Richard Silberman and Darious James Copeland, upon which this Agreement shall terminate and be at an end, and of no further force and effect, unless sooner terminated by PREIT Associates.

10. Notices. All notices or other communications permitted or required under this Agreement shall be in writing and shall be sufficiently given if and when hand delivered to the persons set forth on Exhibit B, or if sent by documented overnight delivery service or registered or certified mail, postage prepaid, return receipt requested, or by telegram, telex or telecopy, confirmation acknowledged, addressed as set forth on Exhibit B, or to such other person or persons and/or at such other address or addresses as shall be furnished in writing by any party hereof to the others, provided, however, that if such communication is given via telecopier or facsimile transmission, an original counterpart of such communication shall concurrently be sent by first class mail. Any such notice or communication shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefor in all other cases.

11. Future Opportunity. Should any of the Undersigned be offered an Investment Partnership Interest, then written notice thereof shall be given to PREIT Associates, and PREIT Associates shall have the right, by written notice to the applicable Undersigned within fourteen (14) days after receipt of written notice of such offer, to cause the applicable Undersigned to accept said offer on behalf of PREIT Associates at PREIT Associates' sole cost and expense. If PREIT Associates notifies

the applicable Undersigned to accept said offer, said Undersigned shall promptly thereafter execute and deliver an assignment of such Investment Partnership Interest in favor of PREIT Associates or its designee; and PREIT Associates shall assume all of the obligations set forth in the offer and shall indemnify, defend, and hold harmless the applicable Undersigned for any loss, cost, liability or expense paid or incurred by such Undersigned arising out of the failure of PREIT Associates to comply with the terms of the offer.

12. Interference. The Undersigned shall not perform any act or do anything or omit to perform any act with the intent to interfere with or defeat the First Refusal Rights granted pursuant to this agreement.

13. Miscellaneous.

(a) Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed, acknowledged and delivered shall be an original, but all such counterparts together shall constitute but one and the same instrument.

(b) Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction.

(c) Successors and Assigns. All covenants and agreements contained herein shall be binding upon the Undersigned, their respective heirs, successors and assigns, and inure to the benefit of PREIT Associates and its successors and assigns.

(d) Headings. The headings of the various paragraphs and sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

(e) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania without reference to conflict of laws principles.

(f) Gender, etc. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number singular or plural, any other gender, masculine, feminine or neuter, as the context requires.

IN WITNESS WHEREOF, the Undersigned have executed this Agreement as of the date first above written.

Pan American Associates, a PA limited partnership

By: Pan American Office Investments, Inc., a PA corporation, its sole general partner

The following are all of the limited partners of Pan American Associates, and are individually bound by the terms of the within Agreement:

*/s/ Lewis M. Stone                                  */s/ Leonard B. Shore
----------------------------                         ---------------------------
Lewis M. Stone                                       Leonard B. Shore

                                        Richard I Rubin & Co., a PA general
                                                    partnership

/s/ Ronald Rubin                                     */s/ George F. Rubin
----------------------------                         ---------------------------
Ronald Rubin, Partner                                George F. Rubin, Partner

Ronald Rubin, George F. Rubin and the Estate of Richard I. Rubin, deceased are the sole shareholders of Pan American Office Investments, Inc. and together with Judith Garfinkle are the sole partners of Richard I. Rubin & Co. Each of said parties are individually bound by the terms of the within Agreement.

*/s/ Judith Garfinkle                       Estate of Richard I. Rubin,
----------------------------                deceased
Judith Garfinkle

                                            By:/s/ Ronald Rubin
                                              ---------------------------
                                              Ronald Rubin, Executor


* By:/s/ Ronald Rubin
--------------------------
     Attorney-in-Fact

PURCHASE AND SALE AGREEMENT

[Magnolia Mall, Florence, South Carolina]

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the 30th day of June, 1997 by and between MAGNOLIA RETAIL ASSOCIATES, L.L.C., a Delaware limited liability company ("Seller") with an office at c/o Equity Group Investments, Inc., Two North Riverside Plaza, Suite 1000, Chicago, Illinois 60606; and The Rubin Organization, Inc. ("Purchaser"), a Pennsylvania corporation with an office at The Bellevue, 200 South Broad Street, Philadelphia, Pennsylvania 19102.

RECITALS:

A. Seller is the owner of (a) a certain parcel of real estate (the "Tract 10-B Property") in the City of Florence, County of Florence, State of South Carolina, which parcel is more particularly described in Exhibit A attached hereto; (b) the leasehold estate under the ground lease described in Exhibit B attached hereto (the "Ground Lease") which demises, among other things, the real property located in the City of Florence, County of Florence, State of South Carolina, which parcel is more particularly described in Exhibit C attached hereto (the "Shopping Mall Property"), and upon which is located a retail shopping center commonly known as "Magnolia Mall"; (c) rights to purchase all or a portion of the Shopping Mall Property from the Ground Lessor (as such term is defined in Exhibit B) in accordance with the terms and provisions of the Option Agreement and the Anchor Pad Purchase Agreement described in Exhibit B attached hereto. For reference purposes herein, the Tract 10-B Property, the Shopping Mall Property and all of Seller's rights and interests under the Option Agreement and the Anchor Pad Purchase Agreement shall sometimes collectively be referred to as the "Real Property".

B. Purchaser is the manager of the Shopping Mall Property pursuant to a Management and Operating Agreement dated as of January 1, 1995 ("Management Agreement") between Seller and Equity Properties and Development Limited Partnership, an Illinois limited partnership ("EPDLP") as assigned by EPDLP to Purchaser.

C. Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Property (as such term is hereinafter defined), each in accordance with and subject to the terms and conditions set forth in this Agreement.

D. Purchaser and Seller originally intended that the closing would occur no later than June 30, 1997. Accordingly, certain provisions of this Agreement provide that certain attributes and risks of ownership not customarily borne by purchasers until the transfer of title will be borne by Purchaser from and after June 30, 1997.

THEREFORE, in consideration of the above Recitals, the mutual covenants and agreements herein set forth and the benefits to be derived therefrom, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser and Seller agree as follows:

1. PURCHASE AND SALE

Subject to and in accordance with the terms and conditions set forth in this Agreement, Purchaser shall purchase from Seller, and Seller shall sell or cause to be sold to Purchaser, all of Seller's right, title and interest in and to (i) the Real Property, including without limitation Seller's fee interest in the Tract 10-B Property, Seller's leasehold interest in the Shopping Mall Property pursuant to the Ground Lease, and all of Seller's rights and interests under the Option Agreement and Anchor Pad Purchase Agreement; (ii) all buildings and improvements owned by Seller and located on the Real Property as well as any and all of Seller's rights, easements and privileges presently thereon or appertaining thereto; (iii) the leases of the Real Property as of the date hereof and other leases entered into in accordance with this Agreement, and all amendments thereto (the "Leases") affecting the Real Property or any part thereof and all unapplied security or other deposits paid under the Leases; (iv) all tangible personal property owned or leased by Seller and used or useful in the ownership, operation or maintenance of Real Property (or any portion thereof) and located at the Real Property or used solely in connection with the Property, including without limitation the personal property set forth on Exhibit E attached hereto (subject to ordinary depletion) and all additions to or substitutions for the foregoing or any part thereof between the date hereof and the date of Closing (the "Tangible Personal Property"); (v) any and all of the maintenance, service, advertising and other like contracts and agreements and equipment leases (to the extent assignable and to the extent Purchaser is to accept an assignment thereof, as provided below) with respect to the ownership and operation of the Real Property and/or the improvements thereon and other agreements entered into in accordance with this Agreement, and all amendments thereto (the "Service Contracts"); and (vi) all other intangible personal property owned by the Seller and used in the ownership, operation or maintenance of the Property or any portion thereof, including without limitation (A) to the extent assignable, the right to use the trade name "Magnolia Mall" and all other trade names; (B) to the extent assignable and obtained, all certificates of occupancy and other permits, licenses and certificates held by Seller and necessary to occupy, operate and transfer the Real Property (collectively, "Permits and Licenses"); (C) to the extent assignable, all utility, security and other deposits and reserve accounts made (and any refunds thereof) as security for the fulfillment of any obligation of Seller or any person claiming by or through Seller in connection with the Real Property; (D) if and to the extent in Seller's possession or control, all files, budgets, reports, and other business records pertaining to the Real Property including without limitation those relating to any marketing, advertising or similar promotional fund or merchant's association (collectively, "Promotional Organizations") relating to the Property (collectively, "Business Records"); (E) all matured and unmatured claims and causes of action which arise from events occurring from and after Closing; (F) to the extent assignable, all warranties, guaranties and other assurances of performance ("Guaranties and Warranties"); (G) to the extent assignable, all telephone numbers and directory advertising agreements; and (H) to the extent assignable, all surveys, drawings, plans, specifications, diagrams, reports, environmental assessments and other architectural or engineering work product if and to the extent in Seller's possession or control (collectively, the "Plans and Reports"), all to the extent applicable to the period from and after the Closing (as such term is hereinafter defined); (items (i) through
(vi) above are collectively referred to in this Agreement as the "Property"). All of the foregoing expressly excludes all property owned by the Ground Lessor under the Ground Lease or by tenants or other users or occupants of the Property.

Notwithstanding the foregoing, "Business Records" shall exclude (a) internal memoranda, correspondence, analyses, documents or reports prepared by or for Seller in connection with this Agreement or in connection with the transaction contemplated by this Agreement, (b) appraisals, assessments or other valuations of the Real Property in the possession of Seller, and (c) communications between Seller and its attorneys (collectively, the "Excluded Items").

2. PURCHASE PRICE

The purchase price to be paid by Purchaser to Seller for the Property is Forty-Five Million Three Hundred Sixty-Five Thousand and No/100 Dollars ($45,365,000.00) (the "Purchase Price"). The Purchase Price shall be paid as follows:

A. Down Payment. Purchaser shall, within one (1) business day from the date of this Agreement, deliver to Seller the sum of One Hundred Thousand and No/100 Dollars ($100,000.00) (the "Initial Down Payment"). If Purchaser does not terminate this Agreement pursuant to and in accordance with
Section 10 (A) below, then (i) prior to the end of the Review Period (as hereinafter defined), Purchaser shall deliver to Seller the additional sum of Nine Hundred Thousand and No/100 Dollars ($900,000.00) (the "Interim Down Payment"), and (ii) on or before July 9, 1997, Purchaser shall deliver to Seller the additional sum of Four Million Dollars ($4,000,000.00) (the "Final Down Payment"). The Initial Down Payment and the Interim Down Payment and, if delivered to Seller or required to be delivered to Seller, the Final Down Payment, together with interest on such payments at the rate per annum equal to 5.5%, are collectively referred to as the "Down Payment".

If Purchaser fails to timely terminate this Agreement in accordance with Section 10.A. hereof, and fails to timely deposit the Final Down Payment, Purchaser shall be in default, Seller may retain the Initial Down Payment and the Interim Down Payment, as Seller's sole remedy, and this Agreement shall automatically terminate.

B. Cash at Closing. At Closing, Purchaser shall pay to Seller, by wire transferred current federal funds to a bank located in the continental United States, an amount (the "Cash Portion") equal to the Purchase Price minus the sum of (i) the Down Payment, plus (ii) the total dollar amount of the "OP Units" (as defined below), if any, plus (iii) the outstanding principal balance of the Existing Loan (as defined in Section 3.C. hereof), and (iv) plus or minus, as the case may require, the closing prorations and adjustments to be made pursuant to Section 4(C) below. Seller shall give Purchaser its wiring instructions at least three (3) business days before Closing. If the Down Payment exceeds the Cash Portion, Seller shall return the balance to Purchaser at Closing.

C. OP Units. In accordance with the provisions set forth below, if this Agreement is assigned by Purchaser to a TRO Assignee (as defined in the Asset Purchase Agreement) (which hereinafter shall be referred to as a "REIT Assignee"), Seller may elect to receive a portion of the Purchase Price in the form of limited partnership interests ("OP Units") in the REIT Assignee's operating partnership ("Operating Partnership"), which OP Units shall be redeemable

as provided in the partnership agreement of the Operating Partnership into unregistered common shares of beneficial interest ("Shares") in the REIT Assignee (as defined in the Management Agreement) or into cash. In connection with an assignment to a REIT Assignee, the REIT Assignee may designate a controlled (directly or indirectly) affiliate of the REIT Assignee to accept title to the Property ("Titleholder").

(i) As soon as reasonably practicable after the date of this Agreement, but in no event later than July 31, 1997, Purchaser shall (A) notify Seller in writing of the identity of Purchaser's proposed assignee, if any, and (B) provide to Seller, or cause to be provided to Seller, information (the "Information") regarding the ownership structure of the REIT Assignee, the Operating Partnership and the Titleholder as each will be structured as of Closing, including a description of the form of the ownership interests therein, as each will be structured as of Closing, any applicable rights or restrictions regarding the ownership interests, as each will be structured as of Closing, and including all information regarding the REIT Assignee, the Operating Partnership and the Titleholder, and the ownership interests therein as are generally provided by the Operating Partnership to prospective sophisticated and experienced investors including, without limitation, as applicable, partnership agreements, certificates of limited partnership, and the REIT Assignee's existing Trust Agreement and such other items as Seller may reasonably request. Seller's sole remedy in the event of Purchaser's failure to deliver the Information in a timely fashion shall be to have a corresponding extension of time to deliver the Election Notice (defined below).

(ii) Seller shall have twenty-one (21) days from Seller's receipt of such notice and copies of the Operating Partnership's partnership agreement (or the most current draft thereof), the REIT Assignee's existing trust agreement and the proxy statement in substantially the form to be filed by REIT Assignee (and Purchaser will send final documents to Seller as soon as available) to notify Purchaser in writing ("Election Notice") (A) whether it elects to receive a portion of the Purchase Price as OP Units, (B) the total dollar amount of the Purchase Price it would like to receive in OP Units and (C) the identity of the proposed recipients of the OP Units and the dollar amount to be received by each. Failure by Seller to elect to receive a portion of the Purchase Price as OP Units on or prior to said 21st day shall be deemed to be an election to receive the entire Purchase Price in cash.

(iii) If Seller elects to accept any OP Units, then between the receipt of the Election Notice and Closing, (A) Seller shall provide Purchaser with such information as Purchaser may reasonably request to determine whether the issuance of the OP Units would comply with federal and state securities laws and to determine accredited investor status as to each prospective recipient of OP Units and (B) Purchaser shall provide Seller with such additional information regarding the REIT Assignee, the Operating Partnership, the Titleholder, the OP Units and the Shares in Purchaser's possession or control or which is readily available to Purchaser, the REIT Assignee or Titleholder as Seller may reasonably request. A proposed recipient of OP Units which is not an accredited investor shall not be eligible to receive OP Units and shall instead receive its portion of the Purchase Price solely in cash.

(iv) Notwithstanding the foregoing, (a) the maximum number of OP Units which Seller and/or its affiliates may receive at Closing may not, when aggregated with

the number of OP Units received by Diversified Equity Corporation of Illinois, Inc. ("North Dartmouth Seller") and its affiliates in connection with the sale of North Dartmouth Mall to the REIT Assignee (or its nominee), exceed 1,300,000 OP Units; (b) Samuel Zell and affiliates thereof (excluding The Northwestern Mutual Life Insurance Company and affiliates thereof) may not elect to receive directly or indirectly OP Units which, when aggregated with the number of OP Units received by Samuel Zell and affiliates thereof (excluding Arthur Cohen and affiliates thereof) in connection with the sale of North Dartmouth Mall, exceed 650,000 OP Units; and (c) if Seller elects to receive a portion of the Purchase Price as OP Units, the minimum number of OP Units which Seller and/or its affiliates may receive at Closing may not, when aggregated with the number of OP Units received by North Dartmouth Seller and its affiliates in connection with the sale of North Dartmouth Mall to the REIT Assignee (or its nominee), be less than 135,000 OP Units. Upon consummation of the Closing, Seller shall be issued the number of OP Units determined by dividing (i) the total dollar amount of consideration to be paid to Seller as OP Units by (ii) the "Market Price". "Market Price" means the average closing sales price of the Shares on its publicly traded exchange for the 20 business days prior to the earlier of (A) the first public announcement of Purchaser's intended transaction with the REIT Assignee (or any affiliate thereof) or (B) the first public announcement that Samuel Zell or his affiliates may invest in the REIT Assignee (or any affiliate thereof).

(v) Seller's election to accept a portion of the Purchase Price as OP Units shall be conditioned upon (x) Seller's receipt at or prior to Closing, of (1) confirmation that the issuance of the OP Units to Seller has been duly authorized by the Operating Partnership and the REIT Assignee or its general partner(s) and that all necessary consents to such issuance have been obtained; (2) confirmation that the OP Units will be redeemable at any time or times after Closing in accordance with the Operating Partnership's partnership agreement; (3) confirmation that the Shares have been duly authorized and reserved, for issuance upon the election of the holders of OP Units to convert OP Units to Shares; (4) confirmation of such other legal issues as are customarily and reasonably confirmed by sophisticated investors in investments similar to the OP Units (and Purchaser shall use reasonable efforts to cause such items to be delivered to Seller); and (5) evidence of the unconditional obligation of the REIT Assignee and Operating Partnership to provide the holders of the OP Units with the registration rights described on Exhibit F attached hereto; and (Y) there being no material adverse change in the attributes of the Operating Partnership, REIT Assignee, OP Units or Shares from those disclosed to Seller in the Information. If such conditions are not satisfied, then at Seller's election the Purchase Price shall be paid by Purchaser entirely in cash.

(vi) There shall be no restrictions upon the holders of OP Units with respect to (a) the purchase or acquisition by such holders of additional OP Units or Shares or (b) the time period during which OP Units can be redeemed as described above, except that such holders may not take any such action which would cause REIT Assignee to lose its status as a real estate investment trust under any applicable Law.

D. Allocation. Prior to Closing, and if requested by Seller or Purchaser, Purchaser and Seller shall act reasonably in agreeing upon the allocation of the Purchase Price among the land, improvements and personal property.

3. EVIDENCE OF TITLE

A. Title Examination; Commitment for Title Insurance. Except as otherwise provided in this Section 3, Purchaser shall have until the expiration of the Review Period to examine title to the Property. Purchaser shall be responsible for obtaining from Chicago Title Insurance Company (in such capacity, the "Title Insurer"), at Purchaser's expense, a title insurance commitment (the "Title Commitment") covering the Shopping Mall Property and the Tract 10-B Property, under which the Title Insurer agrees to insure title to the Shopping Mall Property and the Tract 10-B Property at customary rates in the full amount of the Purchase Price under an ALTA Leasehold Title Policy (as to the Shopping Mall Property) and an ALTA Form B (1992) owner's policy (as to the Tract 10-B Property), in each case free and clear of all restrictions, encumbrances and title objections, except for the "Permitted Exceptions" (as defined below), and endorsing over the exclusion with respect to rights of creditors (collectively, "Insurable Title"). Purchaser shall instruct the Title Insurer to deliver to Purchaser and Seller copies of the Title Commitment and all instruments referenced in Schedule B thereof.

B. Survey.

(i) During the Review Period, Purchaser shall, at Purchaser's expense, be responsible for employing a surveyor or surveying firm to prepare a survey (the "Survey") of the Property. Purchaser shall instruct said surveyor to deliver a copy of the Survey to Purchaser, Seller and the Title Insurer.

(ii) If Purchaser causes a Survey of the Property to be made, the metes and bounds description in the Deed and Ground Lease Assignment referred to in Section 4(B)(i) below shall, at Purchaser's option, be based on and conform to the Survey provided said description accurately describes the Real Property owned by Seller.

C. Title Objections; Cure of Title Objections.

(i) Seller shall convey and transfer all of Seller's right, title and interest in and to the Real Property at Closing to Purchaser subject only to Permitted Exceptions. The "Permitted Exceptions" shall consist of only (a) the first mortgage (the "Existing Loan Mortgage") encumbering the Property as security for the $25,500,000 loan (the "Existing Loan") heretofore made to Seller by Teachers Insurance and Annuity Association of America ("Existing Lender"), which Existing Loan is evidenced and secured by the documents described on the attached Exhibit G; (b) the Option Agreement and Anchor Pad Purchase Agreement; and (c) those additional title exceptions and survey items which are noted on the attached Exhibit H. If a Title Commitment exception or Survey item arises between the date the Review Period expires and the Closing (a "New Exception"), and such New Exception is not a Permitted Exception, Purchaser shall have five (5) business days after it has been made aware of same within which to notify Seller of any such New Exception (other than a New Exception which is a Permitted

Exception on the attached Exhibit H) to which it objects. Any such New Exception not objected to by Purchaser as aforesaid shall become a Permitted Exception.

(ii) Notwithstanding anything to the contrary contained in the preceding paragraph (i):

(A) With respect to New Exceptions which are not Permitted Exceptions and were caused by an intentional violation by Seller of an obligation of Seller hereunder, Seller shall be obligated to remove or to obtain Title Insurer's waiver of, or endorsement over, such New Exception. Any violation of Section 5.C. shall be deemed "intentional" for purposes of this Section.

(B) With respect to New Exceptions which are not Permitted Exceptions but arose from events occurring prior to June 30, 1997, Seller shall be obligated to remove or to obtain Title Insurer's waiver of, or endorsement over, such New Exceptions but shall not be required to spend, in the aggregate, more than $500,000. If such New Exceptions require the expenditure of amounts in excess of $500,000 to be so cured, and Seller elects not to cure such New Exceptions, Seller shall not be in breach under Section 9.A., but Purchaser may elect either (a) to close subject to such New Exceptions (in which event Seller shall credit Purchaser in the amount of $500,000 at Closing), or (b) to terminate this Agreement in which event the Down Payment will promptly be re-paid to Purchaser and neither party shall have any further obligation hereunder except as expressly survives pursuant to this Agreement.

(C) With respect to New Exceptions which are Permitted Exceptions, Seller shall have no obligation to cure the same. Seller shall, upon receipt of any notice of a claim or lawsuit related to an event occurring after June 30, 1997 which could result in a New Exception, forward a copy of such notice to Purchaser and respond thereto in such manner as Purchaser may reasonably direct, at Purchaser's sole cost and expense.

(D) Seller may delay Closing as necessary for up to thirty (30) days in order to cure any exception which it is required or may elect to cure hereunder.

(iii) If this Agreement is not terminated in accordance with Section 9.A. as a result of a New Exception, Purchaser shall consummate the Closing without any adjustment in the Purchase Price (except as provided in paragraph (ii)B above) and accept title to the property subject to all such exceptions and items (in which event, all such exceptions and items shall be deemed Permitted Exceptions).

4. CLOSING

A. Closing Date. The "Closing" of the transaction contemplated by this Agreement (that is, the payment of the Purchase Price, the transfer of title to the Property and the satisfaction of all other terms and conditions of this Agreement) shall occur at the Philadelphia office of the Title Insurer at 10:00 a.m. on either (i) September 30, 1997, (ii) such earlier date (provided all conditions precedent to Closing required in accordance with Section 10 hereof have

been satisfied) as may be set forth in a written notice from Purchaser to Seller received by Seller at least five (5) business days prior to such designated date, or (iii) at such other time and place as Seller and Purchaser shall agree in writing. The "Closing Date" shall be the date of Closing, provided the Cash Portion (net of Seller's closing costs) has been wired to Seller and the OP Units (if any) have been duly issued by 2:00 p.m. C.S.T. on that day; otherwise the Closing Date shall be deemed to be the next business day. If the date for Closing above provided for falls on a Saturday, Sunday or legal holiday, then the Closing Date shall be the next business day.

B. Closing Documents

(i) Seller. In addition to the other items and documents required elsewhere under this Agreement to be delivered to Purchaser at Closing, Seller shall also execute and/or deliver (or cause to be delivered) to Purchaser the following at Closing:

(a) a special warranty deed (the "Deed") in form attached as Exhibit I duly acknowledged and in proper form for recording;

(b) a bill of sale in form attached as Exhibit J, to which will be attached an updated list of the Tangible Personal Property;

(c) a letter advising tenants under the Leases of the change in ownership of the property in form attached as Exhibit K;

(d) assignments and assumptions of the Leases and the Service Contracts that are to be transferred to Purchaser pursuant to this Agreement, in the form attached as Exhibits L and M;

(e) if and to the extent not previously delivered to Purchaser pursuant to the Management Agreement, (i) the originals (or if not available, copies certified as true to Seller's Knowledge) of the Leases and the Service Contracts, (ii) to the extent in the possession or control of Seller, the originals (or if not available, copies) of the Permits and Licenses, Business Records, Guaranties and Warranties and Plans and Reports, and (iii) the originals (or if not available, copies certified as true) of the Ground Lease, Option Agreement, Anchor Pad Purchase Agreement and the documents (collectively, the "Existing Loan Documents") evidencing, securing, guarantying or otherwise pertaining to the Existing Loan;

(f) a Non-Foreign Certification in form attached as Exhibit N;

(g) a closing statement to be executed by Seller and Purchaser, setting forth the prorations and adjustments to the Purchase Price as required by Section 4(C) below;

(h) the schedule of past-due rents for the Property, if any, as described in Section 4(C)(i)(b) below;

(i) at Purchaser's option, either (A) a termination of the Management Agreement or (B) an assignment and assumption from Seller to Purchaser of Seller's rights and obligations thereunder;

(j) an affidavit of title, in such form and containing such reasonable terms and conditions as may be required by the Title Insurer to enable Title Insurer to insure Purchaser's title to the Property in conformity with Section 3 of this Agreement which Affidavit will not require Seller to make any statements that would expand or increase any of Seller's statements or obligations set forth herein, and specifically, (i) will not require Seller to make any statements regarding the operation of the Property
(a) to the extent relating to the period following the end of the Review Period or (b) which relate to matters which are the responsibility of Purchaser as Manager of the Property and (ii) which will state that the knowledge of Purchaser (as manager) shall not be imputed to Seller;

(k) a written statement of Seller setting forth, to Seller's Knowledge, any changes in Seller's representations and warranties which have occurred since the effective date of such representations and warranties, which statement is to be delivered for informational purposes only and any error therein shall not subject Seller to any liability whatsoever or entitle Purchaser to any remedy whatsoever;

(l) corporate resolutions of Seller's managing member's general partner authorizing this transaction, and an incumbency certificate for the officers signing this Agreement and the other documents to be executed and delivered by Seller pursuant to this Agreement;

(m) a current Certificate of Good Standing for Seller;

(n) Intentionally Omitted;

(o) appropriate documents transferring unencumbered title to any motor vehicles included in this sale for which ownership must be evidenced by a separate title certificate;

(p) if necessary, the withdrawal by Seller of any registration of the trade name "Magnolia Mall";

(q) assignment and assumption of the Ground Lease (the "Ground Lease Assignment") in form attached as Exhibit O-1, assignment of Option Agreement in form attached as Exhibit O-2 ("Option Assignment"), and assignment of Anchor Pad Purchase Agreement in form attached as Exhibit O-3 ("Anchor Pad Assignment"), each duly acknowledged and in proper form for recording;

(r) assignment and assumption of the Existing Loan together with such other documents as may be reasonably required by Seller or Existing Lender (which will not provide that Purchaser shall have any obligations materially in excess of those contemplated

by Exhibit P hereto) to evidence Purchaser's assumption of Seller's obligations under the Existing Loan (including a release of Seller's obligations (unless such release is waived by Seller as provided below) under the Existing Loan documents with respect to events arising after the Closing Date) (collectively, "Loan Assumption Documents") (Purchaser and Seller agree that an assignment and assumption in substantially the form of Exhibit P, although not a required form of assignment and assumption, is an acceptable form of such assignment and assumption); and

(s) such other documents requested by Purchaser, and consistent with the provisions of this Agreement, as may be reasonably required to complete this transaction.

(ii) Purchaser. At Closing, Purchaser shall deliver or cause to be delivered to Seller the following:

(a) the Cash Portion;

(b) such duly executed instruments and verifications as are standard in the securities industry and are necessary to evidence that the OP Units have been legally and irrevocably transferred and which are in form reasonably satisfactory to Purchaser and Seller;

(c) a counterpart of the termination or assignment of the Management Agreement, as the case may be;

(d) assignments and assumptions of the Leases and the Service Contracts that are to be transferred to Purchaser pursuant to this Agreement, in the form attached as Exhibits K and L;

(e) the closing statement referred to in
Section 4(B)(i)(g) above;

(f) a certificate that the representations and warranties of Purchaser contained in this Agreement remain true and correct;

(g) resolutions/consents of Purchaser authorizing this transaction, and an incumbency certificate for the officer(s) signing this Agreement and the other documents to be executed and delivered by Purchaser pursuant to this Agreement;

(h) a then current lease schedule for the Property, containing the same types of information set forth on Exhibit B, and certified by The Rubin Organization, Inc., to be complete and accurate to "Purchaser's Knowledge" (as defined below) and in reliance in part on Seller's representation set forth in 6.A(v)(a)(i);

(i) a written statement of Purchaser setting forth, to Purchaser's Knowledge, any changes in Purchaser's representations and warranties which have

occurred since the effective date of such representations and warranties, which statement is to be delivered for informational purposes only and any error therein shall not subject Purchaser to any liability whatsoever or entitle Seller to any remedy whatsoever;

(j) the Ground Lease Assignment, Option Assignment and Anchor Pad Assignment, each duly acknowledged and in proper form for recording;

(k) the Loan Assumption Documents and such documentation as may be reasonably required in replacement of the Guarantee and Indemnity [as such terms are defined in Exhibit G hereto] required to be released at Closing in accordance with the provisions of Section 10.D. hereof; and

(l) such other documents requested by Seller, and consistent with the provisions of this Agreement, as may be reasonably required to complete this transaction.

(iii) Tenant Estoppels. Seller shall use diligent efforts (which shall be limited to filling out the certificate for each tenant, delivering the certificate to all tenants with a request that it be returned to Seller within 10 days and if a tenant fails to timely return an executed certificate, sending a written request to such tenant that the certificate be promptly executed and returned) to furnish Purchaser with estoppel certificates substantially in the form attached as Exhibit Q ("Estoppel Certificates") from all tenants which are tenants of the Property as of sixty (60) days prior to the Closing Date. Seller shall keep Purchaser reasonably apprised as to the status of receipt of the estoppel certificates. Seller's liability under the representations or warranties under Section 6.A.(v) as to a particular tenant shall terminate upon the sooner of: (i) 270 days from the Closing Date, and (ii) if Purchaser subsequently receives an Estoppel Certificate for the applicable tenant (provided, if Purchaser receives an Estoppel Certificate which confirms some but not all of the matters which are the subject of the representations and warranties under Section 6.A.(v), then as to such Tenant, (x) if the Estoppel Certificate was received prior to Closing, the representations and warranties set forth in Section 6.A.(v) shall be deemed to omit such matters stated on the Estoppel Certificate as to such matters and (y) if received after Closing, the representations and warranties under Section 6.A.(v) shall cease to survive as to such matters but shall continue to survive for the remainder of the survival period described in clause (i) above as to matters not contained in such Estoppel Certificate). Purchaser's failure to receive any Estoppel Certificate shall not entitle Purchaser to terminate this Agreement or to exercise any remedy hereunder except in the event of a breach by Seller (when made) of any representation or warranty set forth in Section 6A(v), until the Representations Expiration Date.

C. Closing Prorations and Adjustments

(i) The following items are to be prorated or adjusted (as appropriate) as of 11:59 p.m. on the day before the Closing Date and reprorated (if necessary) pursuant to Section 4(C)(ii) below, it being understood that for purposes of prorations and adjustments, Seller shall be deemed the owner of the Property on the day before the Closing Date, and Purchaser shall be deemed the owner of the Property on the Closing Date:

(a) real estate and personal property taxes based on the fiscal year used by the taxing authority and assessments for improvements commenced after the date of this Agreement (on the basis of the most recent ascertainable tax or assessment bill if the current bill is not then available), with Seller obligated to pay all assessments relating to improvements in progress or completed as of the date of this Agreement;

(b) the "minimum" or "base" rent payable by tenants under the Leases; provided, however, that rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as and when collected. At Closing, Seller shall deliver to Purchaser a schedule, certified to be complete and accurate by Purchaser and Seller (to their knowledge), of all such past due but uncollected rent and other sums owed by tenants (including without limitation those described in paragraphs (c) and (d) below). Purchaser shall include the amount of such rent and other sums in the first bills thereafter submitted to the tenants in question after the Closing, and shall continue to do so for twelve (12) months thereafter. In connection with the allocation of such uncollected rent and other sums, the parties shall disregard any purported or attempted designation by tenants of the months or periods to which their payments should be applied. Purchaser shall not be obligated to start a law suit to collect any such sums or to evict any tenant for the failure to pay any such sums but Seller shall retain the right to do so after the Closing provided Purchaser may not seek to terminate any Lease or evict any tenant. However, Purchaser shall promptly remit to Seller any such rent or other sums paid by scheduled tenants, but only if there is no deficiency in the then current rent and such other sums;

(c) to the extent not set forth on the schedule of uncollected rent described in Section 4(C)(i)(b) above, "percentage" or "overage" rent that is (1) attributable to any Percentage Rent lease year in which the Closing Date falls and (2) not yet due or payable (not including estimated payments) as of the Closing Date (collectively, "Current Year Percentage Rent"), shall be prorated as follows: promptly upon receipt by Purchaser, Purchaser shall furnish to Seller copies of all sales reports from tenants relative to Current Year Percentage Rent, including, without limitation, all sales reports with respect to any tenants whose Percentage Rent lease years have expired as of the Closing but whose sales reports were not delivered to Seller as of the Closing Date and sales reports of any tenants whose Percentage Rent lease years expire after the Closing, and the amount of any Current Year Percentage Rent shall be payable in accordance with such tenant's Lease as existing as of the Closing Date, and Purchaser shall (to the extent not paid to Seller by way of estimated payments prior to Closing) pay to Seller a pro rata portion of such rent based upon the apportionment being made as of the Closing Date (in

proportion to the relative number of days in the subject year occurring prior and subsequent to the Closing Date), promptly after the date when such rent is received from the tenant. The schedule referred to in Section 4(C)(i)(b) above shall include an itemized breakdown of the total estimated payments made by each tenant as of the Closing Date on account of Current Year Percentage Rent;

(d) to the extent not set forth on the schedule of uncollected rent described in Section 4(C)(i)(b) above, any real estate taxes, common area maintenance, mall maintenance, utility charges, water and sewer charges, contributions to Promotional Organizations and other charges to or contributions by tenants under the Leases that are attributable to the operating year in which the Closing Date falls (collectively, "Current Year Operating Charges") shall be allocated between Seller and Purchaser as follows:
Seller shall be entitled to retain amounts paid by (and shall be responsible for the refunding of excess amounts paid by) tenants for Current Year Operating Charges that are attributable to the period prior to the Closing Date; Purchaser shall be entitled to retain amounts paid by (and shall be responsible for the refunding of excess amounts paid by) tenants for Current Year Operating Charges attributable to the period from and after the Closing Date. Any excess Current Year Operating Charges payable by Seller shall be refunded directly to the appropriate tenants. The schedule referred to in Section 4(C)(i)(b) above shall include an itemized breakdown of the total estimated payments made by each tenant as of the Closing Date on account of Current Year Operating Charges;

(e) Seller and Purchaser shall, as to each of the Leases set forth on Exhibit S and any lease or amendment entered into after the date hereof, allocate the responsibility for all leasing costs (including but not limited to tenant improvement costs, tenant allowances, leasing commissions, and attorneys' fees) as follows: Leasing costs payable pursuant to leases and lease amendments to be assigned to Purchaser are to be prorated between Purchaser and Seller as follows: Purchaser shall pay "Purchaser's Pro Rata Share" and shall credit Seller for any part of "Purchaser's Pro Rata Share" that has already been paid by Seller as of Closing, and Seller shall pay "Seller's Pro Rata Share" and shall credit Purchaser for any portion of "Seller's Pro Rata Share" that has not yet been paid by Seller as of Closing. "Purchaser's Pro Rata Share" shall be a portion of the leasing costs equal to the percentage that the base rent required to be paid under the applicable Lease for the period from and after the Closing Date bears to the total base rent required to be paid under the Lease over the entire term, without regard to extension or cancellation options. "Seller's Pro Rata Share" shall be the portion of leasing costs equal to the percentage that the base rent required to be paid under the applicable Lease prior to Closing bears to the base rent required to be paid under the Lease over the entire term, without regard to extension or cancellation options. Except as aforesaid, Purchaser will be responsible for and pay when due, if Closing occurs, all leasing costs for Leases, to the party entitled to such payment and in accordance with the Management Agreement, as fully as if the Management Agreement had terminated on the Closing Date (whether or not the Management Agreement is in fact terminated as of the Closing Date). Seller and Purchaser agree to pay when due all leasing costs for which each is responsible, and to pay any leasing commissions payable by each under this Agreement in accordance with the Management Agreement;

(f) the amount of unapplied security deposits and other tenant deposits paid under the Leases, and the tenants' portion of any interest required to be paid thereon, if any, which shall be paid or credited to Purchaser at Closing;

(g) to the extent not paid by tenants, gas, water, electric, telephone and all other utility and fuel charges, fuel on hand (at cost plus sales tax), and any deposits with utility companies (to the extent possible, utility prorations will be handled by final meter readings obtained from the utility providers on the day immediately preceding the Closing Date);

(h) amounts due and prepayments under the Service Contracts assigned to Purchaser under this Agreement;

(i) assignable license and permit fees;

(j) contributions of Seller to the Promotional Organizations shall be adjusted and prorated by the parties based upon the period to which such charges relate and any transferable deposits by tenants with respect to such Promotional Organizations, all cash on hand and in bank accounts and all reserves of such Promotional Organizations shall be paid or credited to Purchaser at the Closing;

(k) rent payable under the Ground Lease, together with any deposits with the Ground Lessor thereunder which will be held by the Ground Lessor for the benefit of Purchaser following the Closing, if any;

(l) all interest and other required payments related to the Existing Loan, together with any escrows on deposit with Existing Lender which will be held by Existing Lender for the benefit of Purchaser following the Closing;

(m) all costs and expenses incurred in connection with work at the Property involving the installation of irrigation equipment, including the cost of the equipment itself, shall be paid fifty percent (50%) by Seller and fifty percent (50%) by Purchaser; and

(n) other similar items of income and expenses of operation if and to the extent not paid or reimbursed by Tenants.

(ii) If any item of income or expense set forth in this Section 4(C) is subject to final adjustment after Closing, then Seller and Purchaser shall make, and each shall be entitled to, an appropriate reproration to each such item promptly when accurate information becomes available. Any such reproration shall be paid promptly in cash to the party entitled thereto.

(iii) For purposes of this Section 4(C). the amount of any expense credited by one party to the other shall be deemed an expense paid by that party. The terms of

this Section 4(C), to the extent they call for adjustments, prorations or payments after Closing (collectively, "Post-Closing Adjustments"), shall survive the Closing.

(iv)(a) It is the intention of the parties that except as otherwise specifically provided above, Seller shall be entitled to all income and responsible for all expenses accrued during the period of time up to but not including the Closing Date, and the Purchaser shall be entitled to all income and responsible for all expenses accrued during the period of time from, after and including the Closing Date (as if the Management Agreement terminated at Closing, even if the Management Agreement is instead assigned at Closing)

(b) Except as otherwise provided herein, in the Management Agreement or in any document or instrument to be executed at the Closing, as between Seller and Purchaser, if the closing occurs: (1) Seller shall pay and be responsible for any liabilities resulting from claims for injury to or death of persons which arise prior to June 30, 1997, (and if any such amount is subject to a judgment lien as of Closing, then, subject to
Section 3.C.(ii)(b), Seller shall either credit Purchaser for such amount at Closing or discharge such liability or provide adequate security for the contest of such liability), and (2) Purchaser shall pay and be responsible for any liabilities resulting from claims for injury to or death of persons which arise from and after June 30, 1997. Purchaser and Seller shall cooperate with each other to the extent reasonably necessary in connection with the defense of any such claims. The provisions of this subparagraph (iv) shall survive the Closing, and shall not benefit any third party.

D. Transaction Costs

Purchaser shall pay the cost of the title insurance premium and the survey. Seller shall pay the cost of all transfer taxes or document stamps attributable to the Deed, the Ground Lease Assignment, the Option Assignment and the Anchor Pad Assignment. All other closing and transaction costs (including, without limitation, sales and use taxes, mortgage or intangible taxes and similar taxes or charges and recording charges) shall be paid by Purchaser, except that escrow fees shall be divided equally between Purchaser and Seller. Seller and Purchaser shall, however, be responsible for the fees of their respective attorneys.

E. Possession

Upon Closing, Seller shall deliver to Purchaser possession of the Property.

5. OPERATION OF PROPERTY PRIOR TO CLOSING

A. (i) Notwithstanding anything to the contrary contained in the Management Agreement:

(a) Prior to expiration of the Review Period, and except for the "Consent Transactions" (as defined below), Seller may in the ordinary course of business modify, extend, renew, cancel or permit the expiration of any Lease or Service Contract, or enter into any

proposed Lease or Service Contract which Service Contract is terminable as of Closing or upon 30 days notice without any fee, without Purchaser's consent, except that Seller may not without Purchaser's advice and consent in each instance (which shall not be unreasonably withheld or delayed) modify, extend, renew or cancel, or enter into, any lease for any space now occupied or hereafter vacated by any of the tenants described in Exhibit T attached hereto (each, an "Anchor Tenant"), or enter into a Service Contract which Service Contract is not terminable upon 30 days notice or as of Closing (collectively, "Consent Transactions").

(b) After the expiration of the Review Period, Seller may not, without Purchaser's prior consent, which may not be unreasonably delayed or withheld, (i) modify, extend, renew, cancel or permit the expiration of the any Lease or Service Contract, (ii) enter into any proposed Lease or Service Contract, or (iii) modify, extend, renew, cancel or permit the expiration of the Ground Lease, Option Agreement, Anchor Pad Purchase Agreement or any of the Existing Loan Documents.

(c) Should Seller seek in writing Purchaser's consent for any such action, Purchaser shall respond in writing to Seller (therein giving consent or specifying the precise nature of Purchaser's objection to the action) within five (5) business days of receipt of Seller's request. If Purchaser does not respond within said five (5) business day period, Purchaser shall be deemed conclusively to have consented to the action requested by Seller.

(ii) At least thirty (30) days prior to the Closing, Purchaser will advise Seller as to which Service Contracts, if any, will be assigned to Purchaser at the Closing. As to any of the other Service Contracts, Seller shall upon written request by Purchaser give written notice canceling such Service Contract as of the Closing Date and Purchaser shall pay any cancellation fee in connection therewith.

B. From the date hereof until the Closing or earlier termination of this Agreement, Seller shall not remove (or direct the removal of) any item of Tangible Personal Property except as may be required for repair or replacement or to retire obsolete property; Seller shall cause any property so removed to be promptly replaced by property of equal function and of equal or greater quality.

C. From the date hereof until the Closing or earlier termination, Seller shall keep all existing insurance for the Property (as described in Exhibit U) in full force and effect. Promptly after execution of this Agreement, Seller agrees (a) to purchase such additional insurance as may be necessary to reduce the deductible under Seller's property/business interruption/boiler and machinery insurance coverage to $5,000 and (b) to name Purchaser and Pennsylvania Real Estate Investment Trust (or Titleholder, provided Pennsylvania Real Estate Investment Trust notifies Seller in writing of the identity of Titleholder) as named insureds as their interest may appear, under the Seller's general and umbrella liability (including automobile liability) insurance coverage and as loss payees under the Seller's property/business interruption/boiler and machinery insurance coverage.

D. Seller also covenants that between the date of this Agreement and the Closing Date:

(i) Seller shall not take any action which violates the Management Agreement, or fail to take any action required to be taken under the Management Agreement (including without limitation the failure to spend money in accordance with an approved budget pursuant to the Management Agreement or in order to comply with the Management Agreement), and shall not direct Purchaser as manager under the Management Agreement to take any action which violates the Management Agreement, or to fail to take any action required to be taken under the Management Agreement (including without limitation the failure to spend money in accordance with an approved budget pursuant to the Management Agreement or in order to comply with the Management Agreement), (1) which would cause the Property to be operated, managed and maintained other than in a substantially similar manner as the Property is currently operated, managed and maintained, (2) which would violate or continue the violation of any Law (as defined below), (3) which would violate the provisions of this Agreement, or (4) which would cause any of the representations and warranties of Seller contained in this Agreement to be incorrect, in any material respect as of the Closing, or
(5) which would cause any improvements, painting, repairs, alterations or any other tenant finish work required to be performed by the landlord under the Leases (or any amendments or extensions thereof) by their terms prior to Closing not to be performed on or prior to Closing.

(ii) Without limiting the generality of the preceding paragraph (i):

(a) Seller shall timely comply with its obligations as Owner under the Management Agreement.

(b) Seller shall not cause any "Hazardous Substances" (as defined below) to be placed in, on or under the Property in a manner or in quantities that require remediation under applicable "Environmental Laws" (as defined below).

(c) Seller shall not grant any new liens or encumbrances against the Property, or grant any easements affecting the Property.

(d) Seller shall not release or modify any of the Guaranties and Warranties without the Purchaser's prior consent.

(e) Intentionally Omitted.

(f) Unless a Lease is terminated, Seller may not apply the tenant security or other deposits under that Lease to cure any defaults under that Lease.

E. Seller shall not be deemed to have breached any covenant set forth in this Section 5 if the failure of such covenant to be complied with is the result of an act or omission of Purchaser which is not authorized by, or is in violation of, the Management Agreement.

6. REPRESENTATIONS

A. Seller's Representations and Warranties: Seller represents and warrants to Purchaser that as of the date of this Agreement (unless otherwise stated below):

(i) Seller is a duly formed and validly existing limited liability company organized under the laws of Delaware. Seller is authorized to own and convey title to land in the State of South Carolina.

(ii) Subject to obtaining the consent required in accordance with Section 10.G. hereof, Seller has the full legal right, power and authority to execute and deliver this Agreement and all documents now or hereafter to be executed by it pursuant hereto (collectively, the "Seller's Documents"), to consummate the transaction contemplated in this Agreement, and to perform its obligations under this Agreement and the Seller's Documents. The person signing this Agreement on behalf of Seller is authorized to do so.

(iii) Seller has not been served with any litigation which is still pending with respect to the Property that would adversely affect Seller's ability to perform its obligations under this Agreement, or that would affect title to the Property after Closing or the enforcement of any of the Leases, or that would materially and adversely affect the financial condition or operation of the Property.

(iv) Purchaser has been given access to, or possession of, complete and accurate copies of (a) the Ground Lease, the Option Agreement, the Anchor Pad Purchase Agreement, and the Existing Loan Documents existing as of the date of this Agreement, and (b) to Seller's Knowledge, the Leases, the Permits and Licenses, the Guaranties and Warranties, the Service Contracts and the Plans and Reports (and all amendments thereto) existing of as December 31, 1996.

(v) (a)(1) the information contained in the schedule of leases attached to and made a part of this Agreement as Exhibit D (the "Lease Schedule") is complete and accurate as of December 31, 1996; and (2) there were no leases, or to Seller's Knowledge, tenancies or other rights to occupy the Property as of December 31, 1996 other than those set forth in the Lease Schedule.

(b) Except as set forth in the Lease Schedule or as previously disclosed to or learned by Purchaser as manager under the Management Agreement:

(1) No action or proceeding has been instituted against Seller (in which Seller has received process) by any tenant of the Property which is presently pending in any court, except with respect to claims involving personal injury or property damage, other than those referred to in Exhibit V attached to and made a part of this Agreement and, with the exception of claims or offsets referred to in Exhibit W, there are no outstanding written claims for rent offsets or otherwise by any tenants against Seller.

(2) Seller holds no security or other tenant deposits.

(3) All security and other tenant deposits have been held and, where applicable, returned in compliance with all applicable rules, ordinances and statutes.

(4) There are no leasing commissions outstanding which are payable out of rents.

(5) To Seller's Knowledge, each Lease is in full force and effect.

(6) No default exists on the part of Seller, or to Seller's Knowledge, any tenant under any Lease.

(7) No tenant has any defense, offset or counterclaim against or with respect to rent and other sums payable by it under its Lease except as set forth in its Lease.

(8) There are no concessions, free rent periods, tenant improvement obligations or improvement allowances to any tenant not specified in the applicable Lease.

If any Lease contains provisions which are inconsistent with the foregoing representations and warranties, such representations and warranties shall be deemed modified to the extent necessary to eliminate such inconsistency and to conform such representations and warranties to the provisions of such Lease.

(vi) Intentionally Omitted.

(vii)(a) Except as may have been previously disclosed to or learned by Purchaser as manager under the Management Agreement or as described in the documents set forth on Exhibit X ("Environmental Reports"):

(1) Seller has no Knowledge of any failure to comply with any applicable laws, regulations, ordinances, codes, judgments, or other governmental requirements (collectively, "Laws") with respect to the use, occupancy, construction or condition of the Property (collectively, "Violations"), including without limitation zoning, planning, building, safety, health, electrical, plumbing, or fire Laws and "Environmental Laws" (as defined below) which has not been corrected to the satisfaction of the appropriate governmental authority prior to the date of this Agreement.

(2) No written notice has been received from any insurer of the Property requesting any improvements, alterations, additions, corrections, or other work in, on or about the Property. Purchaser shall be promptly notified if any such notice is received that Seller did not obtain from Purchaser as manager under the Management Agreement.

(b) Without limiting the preceding subparagraph (a), except as may have been previously disclosed to or learned by Purchaser as manager under the Management Agreement or as described in the Environmental Reports, to Seller's Knowledge:

(1) No enforcement action for violation of Environmental Laws has been taken while Seller owned the Property, or is now pending or threatened by any governmental authority with respect to the Property.

(2) No Hazardous Substance is present on the Property that is handled or stored in a manner, or is present in quantities, which require remediation under applicable Environmental Laws.

(3) There are no underground or above ground storage tanks at the Property.

As used in this Agreement, the term "Hazardous Substances" means any hazardous, toxic, corrosive or flammable substance or waste, pollutant or contaminant, including without limitation petroleum, petroleum products, PCBs and asbestos containing materials and including those defined as such under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss.9601, et. seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss.6903(5); the Clean Water Act, 42 U.S.C. ss.7401, et. seq.; the Safe Drinking Water Act, 42 U.S.C. ss.300f, et. seq.; or under other similar applicable federal or state laws and regulations (collectively, "Environmental Laws").

(viii) To Seller's Knowledge, Exhibit E attached to and made a part of this Agreement is a complete and accurate schedule of material items of Tangible Personal Property as of the date of this Agreement.

(ix) To Seller's Knowledge, Exhibit Y attached to and made a part of this Agreement is a complete list of the Service Contracts and Seller is not in default under any of the Service Contracts.

(x) Attached to and made a part of this Agreement as Exhibit Z is a complete and accurate list of all Permits and Licenses affecting the Property. To Seller's Knowledge, none of the Permits and Licenses have been revoked and Seller has received no notice that any Permit or License is subject to revocation.

(xi) Attached to and made a part of this Agreement as Exhibit U is a complete and accurate schedule of all insurance now carried by Seller with respect to the Property.

(xii) Seller is not a party to an unrecorded agreement relating to the installation or use of any water, sanitary sewer or septic system.

(xiii) Except as disclosed on Exhibit AA, there are no existing claims under any of the Guaranties and Warranties.

(xiv) Exhibit G attached to and made a part of this Agreement is a complete and accurate schedule of all material Existing Loan Documents.

B. Purchaser's Representations and Warranties Purchaser represents and warrants to Seller that as of the date of this Agreement:

(i) Purchaser is a duly formed and validly existing corporation organized under the laws of Pennsylvania.

(ii) Purchaser has the full legal right, power and authority to execute and deliver this Agreement and all documents now or hereafter to be executed by Purchaser pursuant to this Agreement (collectively, the "Purchaser's Documents"), to consummate the transaction contemplated hereby, and to perform its obligations hereunder and under Purchaser's Documents.

C. Seller (as of the end of the Review Period) and Purchaser (as of Closing) shall be deemed to remake and restate the representations and warranties set forth in this Section 6 above. Should Seller proceed to Closing with the Knowledge of Purchaser's violation of any representation or warranty contained in this Section 6, Seller will be conclusively deemed to have waived any remedy therefor. Should Purchaser proceed to Closing with Knowledge obtained prior to the end of the Review Period, of Seller's violation of any representation or warranty of Seller contained in this Section 6, Purchaser will be conclusively deemed to have waived any remedy therefor, including any adjustment in Purchase Price.

D. The representations and warranties set forth in Section 6 above, as of the date made (or deemed made) shall survive the Closing, but any "Claims" (as defined below) thereunder must be made in writing within 270 days after Closing (the "Representations Expiration Date") or they shall thereafter be deemed to have lapsed and to be null, void and of no further force or effect.

E. No inspection or examination by Purchaser shall limit Purchaser's right to rely on the representations and warranties of Seller contained herein except as set forth in Section 6.C. Purchaser agrees to promptly notify Seller if Purchaser becomes aware that any representation or warranty is untrue.

7. CASUALTY LOSS AND CONDEMNATION

If, prior to the end of the Review Period, the Property or any material part thereof shall be condemned, or destroyed or damaged by fire or other casualty, Seller shall promptly so notify Purchaser. In the event the effect of such condemnation or casualty occurring prior to the end of the Review Period is material (as hereinafter defined), Purchaser shall have the option either to terminate this Agreement

or to consummate the transaction contemplated by this Agreement notwithstanding such condemnation, destruction or damage. If Purchaser elects to consummate the transaction contemplated by this Agreement or if a casualty or condemnation is immaterial or occurs after the end of the Review Period, Purchaser may not terminate this Agreement but, providing Closing occurs, shall be entitled (a) in the event of a condemnation, to receive the condemnation proceeds, subject to the prior rights thereto of Existing Lender under the Existing Loan Documents and the Ground Lessor under the Ground Lease; provided, however, that in the event any portion of any condemnation award relates solely to Seller's leasehold interest under the Ground Lease and either Ground Lessor retains such portion in accordance with the terms of the Ground Lease or Lender applies such portion in reduction of the principal balance of the Existing Loan in accordance with the provisions of the Existing Loan Documents, then Purchaser shall be entitled at Closing to a credit against the Purchase Price in the amount of such portion; and (b) in the event of a casualty, to settle the loss under all policies of insurance applicable to the destruction or damage and receive the proceeds of insurance applicable thereto, subject to the prior rights thereto of Existing Lender under the Existing Loan Documents, and Seller shall, at Closing, execute and deliver to Purchaser all customary proofs of loss, assignments of claims and other similar items; provided, however, that in the event Existing Lender applies any such insurance proceeds in reduction of the principal balance of the Existing Loan in accordance with the provisions of the Existing Loan Documents, then Purchaser shall be entitled at Closing to a credit against the Purchase Price in the amount of the insurance proceeds so applied. If, upon a material condemnation or casualty prior to the end of the Review Period, Purchaser elects to terminate this Agreement, the Initial Down Payment shall be returned to Purchaser by the Seller, in which event this Agreement shall, without further action of the parties, become null and void and neither party shall have any further rights or obligations under this Agreement. For purposes of this provision, a condemnation or casualty loss shall be deemed to be "material" if
(i) the cost of repairing or restoring the premises in question would be, in the opinion of an independent architect selected by Seller and reasonably approved by Purchaser, equal to or greater than One Million and No/100 Dollars ($1,000,000.00), (ii) such loss would materially and detrimentally impair access to the Property or its improvements or common areas after Closing, or (iii) such loss results in the termination of the Lease of an Anchor Tenant or (iv) such loss results in the termination of Leases for other tenants occupying, in the aggregate, fifteen percent (15%) or more of the gross leasable area of the Property. The provisions of this Section 7 shall supersede the provisions of any Law regarding the allocation of the risk of loss between buyers and sellers.

8. BROKERAGE

Purchaser and Seller each hereby represents and warrants to the other that it has not dealt with any broker, finder or other party in connection with the negotiation of this Agreement or otherwise in connection with the Property. Seller and Purchaser shall each indemnify and hold the other harmless from and against any and all claims of all other brokers and finders claiming by, through or under the indemnifying party and in any way related to the sale and purchase of the Property, this Agreement or otherwise, including, without limitation, attorneys' fees and expenses incurred by the indemnified party in connection with such claim.

9. DEFAULT AND REMEDIES

A. Notwithstanding anything to the contrary contained in this Agreement, if Seller has breached a representation or warranty hereunder (as of the date made or deemed made) or breaches an obligation under this Agreement at any time after the end of the Review Period, then: (1) Purchaser shall be obligated to close in accordance with this Agreement and (2) as Purchaser's sole remedy, Purchaser may make a claim in accordance with Section 12.L hereof if Seller fails to cure such breach after written notice from Purchaser, except that:

(i) if Seller's breach consists of (x) a failure to deliver title to the Property at Closing subject only to Permitted Exceptions, or (y) a failure to deliver the items described in Sections 4.B.(i)(a) through (s) duly executed by Seller as required, or (z) a breach of Section 5.C. hereof which results in an actual loss to Purchaser for which Seller refuses to credit or does not credit Purchaser at Closing (any of the foregoing, a "Major Breach"), and the Major Breach continues for ten (10) days after Purchaser has given Seller notice thereof, then, as Purchaser's sole and exclusive remedy hereunder, Purchaser may terminate this Agreement, in which event the Down Payment theretofore delivered to Seller shall be returned to Purchaser, together with Purchaser's actual out-of-pocket costs incurred in connection with this transaction as of the date of such termination not to exceed $75,000 in the aggregate (and Purchaser shall provide documentation evidencing such costs to Seller) ("Termination Damages"), and this Agreement shall be null and void, and neither party shall have any rights or obligations under this Agreement, and in no event shall Purchaser be entitled to recover additional money damages against Seller or to compel Seller to spend any sums of money in excess of those specifically required under this Agreement;

(ii) if Closing does not occur solely as a result of a failure to deliver either (A) the Ground Lessor Estoppel Certificate (as hereinafter defined), or (B) the Existing Lender Certificate (as hereinafter defined) (each, an "Estoppel Failure"), then (1) Seller may elect to extend the Closing Date for up to sixty
(60) days in order to obtain the applicable certificate, and (2) in the event Seller does not make such election, or upon expiration of such extension period, Purchaser may terminate this Agreement, in which event either (a) the Down Payment theretofore delivered to Seller shall be returned to Purchaser, and this Agreement shall be null and void, and neither party shall have any rights or obligations under this Agreement, and in no event shall Purchaser be entitled to recover any money damages (including without limitation Termination Damages) against Seller or to compel Seller to spend any sums of money in excess of those specifically required under this Agreement, or (b) in the event the Estoppel Failure occurs as a result of a Noncooperation Event (as hereinafter defined), the Down Payment shall be retained by Seller as Seller's sole remedy and as liquidated damages; and

(iii) Purchaser shall retain all rights and remedies available to Purchaser at law, in equity or under this Agreement, and to sue for return of the Down Payment and payment of the Termination Damages, if Seller made any intentional misrepresentation when initially made or commits fraud in connection with this Agreement; provided in no

event shall Purchaser be entitled to seek punitive, exemplary, special or consequential damages, and any action for damages shall be limited to actual damages.

Purchaser and Seller acknowledge and agree that any representation or warranty of Seller which is true as of the end of the Review Period but becomes untrue thereafter, shall not be deemed a default or breach by Seller (unless caused by an intentional breach by Seller of a covenant set forth in this Agreement) in any event and shall not excuse Purchaser from proceeding to Closing.

Purchaser and Seller agree that the remedy of termination of this Agreement shall be available to Purchaser only in the event of a Major Breach or an Estoppel Failure.

B. If Purchaser fails to complete closing in accordance with the terms of this Agreement, then this Agreement shall be terminated and the Down Payment shall be retained by Seller as Seller's sole remedy and as liquidated damages.

C. In the event there is a failure of the condition precedent required in accordance with clause (ii) in Section 10.D. below (a "Release Failure"), then Seller may elect either (i) to terminate this Agreement, in which event the Down Payment shall be returned to Purchaser unless the Release Failure occurs as a result of a Noncooperation Event, (ii) to extend the Closing Date for up to sixty (60) days in order to obtain a satisfactory release from Existing Lender in accordance with Section 10.D., or
(iii) to proceed to Closing notwithstanding the failure of such condition precedent and to rely, in lieu thereof, on the indemnification provisions set forth in Section 12.AA. hereof. Notwithstanding the foregoing, no Noncooperation Event shall be deemed to have occurred if Purchaser (a) prepays the Existing Loan at Closing with Existing Lender's consent, and (b) otherwise satisfies Seller, in Seller's reasonable discretion, that Seller will have no continuing liabilities or obligations under the Existing Loan Documents.

D. As used in this Section 9, the term "Noncooperation Event" shall mean Purchaser's failure to use diligent efforts (i) to deliver to Existing Lender such documentation as Existing Lender reasonably requires or requests, and to otherwise cooperate with Existing Lender, (a) in order to enable Existing Lender to determine the acceptability of Purchaser as the obligor under the Existing Loan Documents, and (b) in connection with the issuance of the Existing Lender Certificate and the release required in
Section 10.D. hereof; and (ii) to cooperate with Seller, including delivery to Ground Lessor of such documentation as Ground Lessor reasonably requests, in connection with Ground Lessor's issuance of the Ground Lessor Estoppel Certificate (unless Purchaser waives the condition precedent that it be obtained). Notwithstanding the foregoing, in no event shall Purchaser be required to deliver or disclose information to Existing Lender or Ground Lessor which violates any Law or any confidentiality agreement to which Purchaser is a party or otherwise exposes Purchaser to liability as a result of such disclosure. Seller and Purchaser acknowledge and agree that: (i) the Down Payment is a reasonable estimate of and bears a reasonable relationship to the damages that would be suffered and costs incurred by Seller as a result of having withdrawn the Property from sale and the failure of Closing to occur due to a default of Purchaser under this Agreement or due to a Noncooperation Event; (ii) the actual damages suffered and costs incurred by Seller as a result of

such withdrawal and failure to close due to a default of Purchaser under this Agreement or Noncooperation Event would be extremely difficult and impractical to determine; (iii) Purchaser seeks to limit its liability under this Agreement to the amount of the Down Payment in the event this Agreement does not close due to a default of Purchaser under this Agreement or a Noncooperation Event; and
(iv) such amount shall constitute valid liquidated damages.

E. After Closing and subject to any limitations set forth in this Agreement, including but not limited to Section 12.L, Seller and Purchaser shall, subject to the terms and conditions of this Agreement, have such rights and remedies as are available at law or in equity, but only for such obligations as expressly survive Closing; except that neither Seller nor Purchaser shall be entitled to recover from the other consequential, exemplary, punitive or special damages.

10. CONDITIONS PRECEDENT

A. (i) Subject to Sections 11, 12(G) and 12(H) below, Purchaser shall have the period of time beginning on the date hereof and ending on June 30, 1997, within which to inspect and investigate the Property and its operations (the "Review Period"). If Purchaser determines that the Property is unsuitable for its purposes and notifies Seller of such decision within the Review Period (or if Purchaser fails to deposit the Interim Down Payment by expiration of the Review Period), the Initial Down Payment shall be returned to Purchaser, at which time this Agreement shall be null and void and neither party shall have any further rights or obligations under this Agreement, except those which by their terms expressly survive such termination. Purchaser need not disclose its reasons for termination. Seller shall cooperate with Purchaser to allow Purchaser and Purchaser's Representatives free access to the Property, to allow Purchaser and Purchaser's Representatives free access to all information and documentation, and otherwise to promptly provide such information and documentation, relating to the Property and its operations as Purchaser may reasonably request (including, without limitation, tenant sales reports and other financial information, income and expense statements for the prior three years and appraisals in Seller's possession (with such material deleted from the appraisals as Seller may, in its reasonable discretion, elect to delete)) but excluding Excluded Items, to the extent such information and documentation has not been previously delivered to or generated by Purchaser pursuant to the Management Agreement and is in Seller's possession or control, and to the extent Seller is not prohibited by written agreement from disclosing such information and documentation. Purchaser's failure to object within the Review Period shall be deemed a waiver by Purchaser of the condition contained in this Section 10.

(ii) Purchaser acknowledges that, notwithstanding any contrary provision contained in the Management Agreement (and all other management agreements between Purchaser and Seller's affiliates), if Purchaser terminates this Agreement in accordance with this paragraph, the Management Agreement (and all other management agreements between Purchaser and Seller's affiliates), may be terminated by an owner due to Purchaser's failure to acquire the Property, unless and only if Purchaser has terminated this Agreement due to a Major Breach which remains uncured during, and as of the end of, the cure period set forth for a Major Breach in Section 9.A. hereof or if Purchaser terminates this Agreement under Section 3.C.(ii) hereof.

B. As a condition of Purchaser's obligation to complete Closing, Seller must not have committed a Major Breach which continues beyond applicable notice and cure periods.

C. As a condition of Seller's obligation to complete Closing, Purchaser must complete Closing in accordance with this Agreement (including, without limitation, satisfaction of the condition precedent set forth in Section 10.D. below).

D. As conditions to Seller's obligation to complete Closing, Purchaser shall be obligated to take such actions and to execute such documentation (i) as are required in accordance with the terms of the Existing Loan Documents so as to cause (a) all indemnitors under the Indemnity described in Exhibit G to be released of all Released Environmental Obligations (as such term is defined in Paragraph 25 of the Existing Loan Mortgage), and (b) all guarantors under the Guarantee described in Exhibit G to be released of all obligations thereunder, and (ii) as may be reasonably required by Seller to cause Seller to be released of all obligations under the other Existing Loan Documents, except those obligations preceding Closing which, in accordance with the terms of the Existing Loan Documents, survive Purchaser's assumption of the Existing Loan.

E. As a condition to Purchaser's obligation to complete Closing, Seller shall furnish Purchaser with an estoppel certificate (the "Ground Lessor Estoppel Certificate") from Ground Lessor in a form consistent with the requirements set forth in the Ground Lease, the Option Agreement and the Anchor Pad Purchase Agreement, collectively. Purchaser hereby acknowledges that a Ground Lessor Estoppel Certificate substantially in the form attached hereto as Exhibit R-1 shall also be acceptable and shall satisfy the requirements of this Section 10.E.

F. As a condition to Purchaser's obligation to complete Closing, Seller shall furnish Purchaser with one or more certificate(s) (collectively, the "Existing Lender's Certificate") from the Existing Lender consenting to the transfer of Seller's interest in the Property to Purchaser and the assumption of all obligations under the Existing Loan Documents by Purchaser, and certifying (i) that to Existing Lender's knowledge, there are no defaults under the Existing Loan Documents, and (ii) as to the outstanding principal balance of the Existing Loan as of the date of the certificate. Purchaser hereby acknowledges that (i) the form of Existing Lender's Certificate attached hereto as Exhibit R-2 contains more information than is required in accordance with this paragraph, and that such form shall also be acceptable and shall satisfy the requirements of this Section 10.F. In the event the Existing Lender's Certificate contains a certification from Existing Lender substantially or substantively identical to Seller's representation under Section 6.A.(xiv) hereof, Seller's liability for such representation shall terminate upon delivery of the Existing Lender's Certificate to Purchaser.

G. As a condition to Seller's and Purchaser's obligations to complete Closing, Seller shall by August 1, 1997 obtain the consent of The Northwestern Mutual Life Insurance Company to the transaction contemplated by this Agreement. Seller shall promptly notify Purchaser if and when Seller receives any response or correspondence with respect to such consent. If Closing does not occur solely as a result of a failure to satisfy this condition

precedent, this Agreement shall be automatically terminated, null and void, the Down Payment shall be returned to Purchaser, and neither party hereto shall have any further obligation to the other under this Agreement.

11. PROPERTY INFORMATION AND CONFIDENTIALITY

A. Purchaser agrees that, prior to the Closing, Purchaser shall use diligent efforts to keep all "Property Information" (as defined below) confidential, and that Property Information shall not, without the prior consent of Seller, be disclosed by Purchaser or Purchaser's Representatives (as hereinafter defined), except to a REIT Assignee and its Purchaser Representatives, and that Property Information will not be used for any purpose other than investigating and evaluating the Property or fulfilling Purchaser's responsibilities as manager under the Management Agreement. Moreover, Purchaser agrees that, prior to the Closing, the Property Information will be transmitted only to a REIT Assignee, and to the Purchaser's, Representatives and such REIT Assignee, who need to know the Property Information for the purpose of investigating and evaluating the Property, and who are informed by Purchaser of the confidential nature of the Property Information and who agree in writing to comply with and be bound by this Section 11 for the benefit of Seller. The provisions of this Section 11(A) shall not apply to Property Information which is disclosed in compliance with the Management Agreement, or which is a matter of public record and shall not be used or construed by Seller to impede Purchaser from complying with its obligations under the Management Agreement or from complying with laws, including, without limitation, governmental regulatory, disclosure, tax and reporting requirements, subpoenas or court orders.

B. Purchaser and Seller, for the benefit of each other, hereby agree that between the date of this Agreement and the Closing Date, they will not release or cause or permit to be released any press notices, publicity (oral or written) or advertising promotion relating to, or otherwise announce or disclose or cause or permit to be announced or disclosed, in any manner whatsoever, the terms, conditions, parties to or substance of this Agreement or the transactions contemplated herein, without first obtaining the written consent of the other party hereto, as to the portion of the disclosure relating to this transaction, the Property or such party and its affiliates, which consent shall not be unreasonably withheld. Seller agrees not to object to any disclosure (including public announcements) required by law to the extent it identifies the parties, property and purchase price (and method of payment thereof) in connection with this transaction. Failure to disapprove any disclosure within two (2) business days of receipt shall be deemed an approval. It is understood that the foregoing shall not preclude either party from discussing the substance or any relevant details of the transactions contemplated in this Agreement, subject to the terms of this Section 11, with a REIT Assignee or any of Purchaser's or such REIT Assignee's attorneys, accountants, professional consultants or potential lenders, as the case may be, or prevent either party hereto from complying with applicable laws, including, without limitation, governmental regulatory, disclosure, tax and reporting requirements, subpoenas or court orders, or prevent Seller from coordinating with tenants to obtain the Estoppel Certificates.

C. Deleted Prior to Execution.

D. In the event this Agreement is terminated, Purchaser and Purchaser's Representatives shall promptly return to Seller all originals and copies of the "New Seller-Supplied Information" (defined below) in the possession of Purchaser and Purchaser's Representatives (or certify to Seller that the same has been destroyed).

E. As used in this Agreement, the term "Property Information" shall mean:

(i) All information and documents relating to the Property, the operation thereof or the sale thereof (including, without limitation, the Ground Lease, Option Agreement, Anchor Pad Purchase Agreement, Existing Loan Documents, Leases, Service Contracts, labor contracts and licenses) generated by Purchaser pursuant to the Management Agreement, or furnished to, or otherwise made available by Seller or any of Seller's Affiliates for review by, Purchaser or a REIT Assignee, or their respective directors, officers, employees, affiliates, partners, brokers, agents, title insurers, surveyors or other representatives, including, without limitation, attorneys, accountants, contractors, consultants, engineers and financial advisors (collectively, "Purchaser's Representatives"), and if and to the extent such information and documents have not been previously furnished to or otherwise made available to Purchaser, or generated by Purchaser, under the Management Agreement such Property Information shall constitute "New Seller-Supplied Information".

(ii) All analyses, compilations, data, studies, reports or other information or documents prepared or obtained by Purchaser or Purchaser's Representatives containing or based in any material part on any information or documents described in the preceding clause (i).

F. In addition to any other remedies available to Seller under this Agreement, Seller shall have the right to seek equitable relief, including, without limitation, injunctive relief or specific performance, against Purchaser or Purchaser's Representatives in order to enforce the provisions of this Section 11.

G. The provisions of this Section 11 shall survive the termination of this Agreement.

H. Notwithstanding anything to the contrary contained in this Section 11 or in the Management Agreement, no failure by Purchaser to comply with this Section 11 shall give Seller the right to terminate the Management Agreement or any other Management Agreement between Seller (or its affiliates) and Purchaser.

12. MISCELLANEOUS

A. All understandings and agreements heretofore had between Seller and Purchaser with respect to the Property are merged in this Agreement, which alone fully and completely expresses the agreement of the parties.

B. Neither this Agreement nor any interest hereunder shall be assigned or transferred by Purchaser or Seller without the prior written consent of the other party, except that Purchaser may assign its rights under this Agreement to a "TRO Assignee", as such term is defined in the Asset Purchase Agreement (defined below) or to Pennsylvania Real Estate Investment Trust or a limited partnership controlled thereby (any of the foregoing, together with any TRO Assignee, shall be referred to as a "Permitted Assignee" and shall be deemed a "REIT Assignee") and the Permitted TRO Assignee may assign such rights back to The Rubin Organization, Inc., in either event without having to first obtain Seller's consent, provided Seller shall receive written notice of the identity of the ultimate assignee at least five (5) business days prior to Closing.

C. This Agreement shall not be modified or amended except in a written document signed by Seller (or its attorneys) and Purchaser (or its attorneys).

D. Time is of the essence of this Agreement.

E. This Agreement shall be governed and interpreted in accordance with the laws of the State of South Carolina.

F. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing and delivered personally, by certified mail, return receipt requested, postage prepaid, by overnight courier (such as Federal express), or by facsimile transmission (with confirmation of transmission), addressed as follows:

If to Seller:        Magnolia Retail Associates, L.L.C.
                     c/o Equity Group Investments, Inc.
                     Two North Riverside Plaza, Suite 1000
                     Chicago, Illinois 60606
                     Attention: George C. Touras
                     Telephone: 312/466-3635
                     Facsimile: 312/454-0826

With copies to:      Richard Schnell
                     The Northwestern Mutual Life Insurance Company
                     720 East Wisconsin Avenue, 16th Floor
                     Milwaukee, Wisconsin 53202
                     Telephone: 414/299-7036
                     Facsimile: 414/299-1557

                     and

                     Rosenberg & Liebentritt, P.C.
                     Two North Riverside Plaza, Suite 1600
                     Chicago, Illinois 60606
                     Attention: Douglas J. Lubelchek, Esquire
                     Telephone: 312/466-3598
                     Facsimile: 312/454-0335

If to Purchaser:     The Rubin Organization, Inc.
                     The Bellevue
                     200 South Broad Street
                     Philadelphia, Pennsylvania 19102
                     Attention: Alan F. Feldman
                                Vice President and Secretary
                     Attention: Gerald Broker, Esquire
                     Telephone: 215/875-0700
                     Facsimile: 215/546-0240

With a copy to:      Gary W. Levi, Esquire
                     Klehr, Harrison, Harvey, Branzburg & Ellers
                     457 Haddonfield Road
                     Suite 510
                     Cherry Hill, New Jersey 08002-2220
                     Telephone: 609/486-7900
                     Facsimile: 609/486-4875

                     John W. Fischer, Esquire
                     Drinker Biddle & Reath
                     Suite 300
                     1000 Westlakes Drive
                     Berwyn, Pennsylvania 19312
                     Telephone: 610/993-2221
                               Facsimile: 610/993-8585

All notices given in accordance with the terms hereof shall be deemed received three (3) business days after posting (in the case of notices sent by certified mail), or when delivered personally or otherwise received or receipt is refused (in the case of all other methods of notice). Either party hereto may change the address for receiving notices, requests, demands or other communication by notice sent in accordance with the terms of this Section 12(F).

G. (i) Purchaser's right of inspection pursuant to Section 10 above shall include the right to enter on the Property, but shall be subject to the rights of Ground Lessor under the Ground Lease and tenants under the Leases and other occupants and users of the Property. No inspection shall be undertaken without reasonable prior notice to Seller. Seller shall have the right to be present at any or all inspections. No inspection shall involve the taking of samples or other physically invasive procedures without the prior consent of Seller, which consent

may be withheld in Seller's sole discretion. Notwithstanding anything to the contrary contained in this Agreement, Purchaser shall restore the Property to its condition existing prior to Purchaser's entry thereon, and indemnify and hold Seller and Seller's Affiliates, and each of them, harmless from and against any and all losses, claims, damages and liabilities (including, without limitation, attorneys' fees incurred in connection therewith) arising out of or resulting from Purchaser's exercise of its rights under this Agreement, including, without limitation, its right of inspection as provided for in
Section 10 above. The terms of this the preceding sentence shall survive the termination of this Agreement.

(ii) Nothing contained in the preceding paragraph (i) shall be deemed to limit Purchaser's rights as Manager under, or limit its ability to comply with its obligations as Manager under, the Management Agreement.

H. Except as provided for in, or as may be done pursuant to, the Management Agreement, Purchaser or Purchaser's Representatives shall not contact Ground Lessor or a tenant or prospective tenant for the Property regarding this transaction unless Purchaser or Purchaser's Representatives first obtains Seller's prior written approval therefor (not to be unreasonably withheld or delayed). Seller shall have the right to be present for all such tenant interviews.

I. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE MANAGEMENT AGREEMENT (TO THE EXTENT SET FORTH THEREIN AND SUBJECT TO THE TERMS THEREOF) OR, AS CONCERNS EQUITY PROPERTIES AND DEVELOPMENT LIMITED PARTNERSHIP ("EPDLP") ONLY, THAT CERTAIN ASSET PURCHASE AGREEMENT DATED DECEMBER 31, 1996 BY AND BETWEEN EPDLP AND THE RUBIN ORGANIZATION, INC. (THE "ASSET PURCHASE AGREEMENT"), IT IS UNDERSTOOD AND AGREED THAT NEITHER SELLER NOR ANY OF SELLER'S AFFILIATES IS MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE PROPERTY INFORMATION OR ANY OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, AT CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS" AS OF THE END OF THE REVIEW PERIOD. EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT, THE ASSET PURCHASE AGREEMENT (AS TO EPDLP ONLY), OR THE MANAGEMENT AGREEMENT (TO THE EXTENT SET FORTH THEREIN AND SUBJECT TO THE TERMS THEREOF), PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND NEITHER

SELLER NOR ANY OF SELLER'S AFFILIATES IS LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, OR ANY THIRD-PARTY, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING. PURCHASER ACKNOWLEDGES THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON EXPIRATION OF THE REVIEW PERIOD, EXCEPT FOR SELLER'S REPRESENTATIONS AND WARRANTIES THAT WILL SURVIVE CLOSING, AND EXCEPT FOR THE SURVIVING REPRESENTATIONS AND WARRANTIES UNDER THE ASSET PURCHASE AGREEMENT (AS TO EPDLP ONLY), OR THE MANAGEMENT AGREEMENT (TO THE EXTENT SET FORTH THEREIN AND SUBJECT TO THE TERMS THEREOF), PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER'S INVESTIGATIONS, AND PURCHASER, UPON EXPIRATION OF THE REVIEW PERIOD, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER AND SELLER'S AFFILIATES FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER EXCEPT FOR CLAIMS BASED ON FRAUD, CRIMINAL CONDUCT OR INTENTIONAL TORTS, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER OR SELLER'S AFFILIATES AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY.

J. In any lawsuit or other proceeding initiated under or with respect to this Agreement, Purchaser and Seller waive any right they may have to trial by jury.

K. If for any reason Purchaser does not consummate the Closing, then Purchaser shall, upon Seller's request, assign and transfer to Seller, without representation, warranty or recourse, all of its right, title and interest in and to any and all studies, reports, surveys and other information, data and/or documents relating to the Property or any part thereof prepared by or at the request of Purchaser, its employees and agents, and shall deliver to Seller copies of all of the foregoing

L. (i) After Closing, Seller shall not be liable to Purchaser in respect of obligations under this Agreement which survive Closing for any amounts in excess of the amount of the "Holdback Funds" (as defined below), or for any amounts less than Fifty Thousand Dollars ($50,000.00) (the "Deductible Amount") in the aggregate, Purchaser hereby waiving any and all claims it may have to such recoveries in excess of, or less than, the foregoing amounts. The foregoing limitations shall apply only to liabilities admitted by Seller to exist or proven by Purchaser to exist through the final adjudication thereof in an appropriate judicial proceeding (a "Final Judgment"), and not to reprorations made pursuant to Section 4(C)(ii) above.

(ii) In order to secure the obligations and liabilities of Seller under this Agreement that survive Closing, including without limitation the obligation to make Post-Closing Adjustments pursuant to
Section 4 above (collectively, "Seller's Surviving Obligations"), and the obligations of Seller under the Management Agreement which survive if the Management Agreement is terminated, Seller covenants not to distribute to its equity owners (except in accordance with clauses (v), (vi) and (vii) below), an amount of consideration (referred to below as the "Holdback Funds") with a value equal to Seven Hundred Fifty Thousand Dollars ($750,000.00) (either in the form of cash or a portion of the OP Units, at Seller's election). The term "Holdback Funds" shall include all interest earned thereon, if any.

(iii) If Purchaser incurs any loss, damage, cost or expense (including attorneys' fees) for any matter Purchaser believes is covered under Seller's Surviving Obligations (a "Claim"), and desires to seek recovery from Seller, Purchaser shall give Seller written notice thereof ("Claim Notice") describing the Claim in reasonable detail. The Claim Notice shall, if applicable, be accompanied by appropriate documentation (including by way of illustration, but not of limitation, receipted bills or canceled checks) and any appropriate calculations which demonstrate that the Deductible Amount has been satisfied. If the Claim Notice states a Claim for a specified amount of money, the Claim Notice shall also be accompanied by appropriate documentation thereof (including by way of illustration, but not of limitation, estimates by independent and reputable vendors, contractors, engineers or architects or other responsible estimators unaffiliated with Purchaser, third party invoices, receipted bills or canceled checks).

(iv) Seller and Purchaser, acting reasonably and in good faith, shall attempt to amicably resolve each Claim within thirty (30) days after its Claim Notice becomes effective. If such amicable resolution results in an agreed amount payable to Purchaser, Seller shall promptly pay the appropriate amount to Purchaser out of the Holdback Funds. If such Claim is not amicably resolved, then Purchaser may proceed to litigate the Claim, and if Purchaser obtains Final Judgment in its favor with respect to the Claim, Seller shall disburse the appropriate amount to Purchaser out of the Holdback Funds. As used herein, "Final Judgment"

means a final judgment or verdict rendered by a court of competent jurisdiction, after all appeals (or expiration of all appeal periods, if no appeal is taken).

(v) If no Claim is made before the Representations Expiration Date, then the Holdback Funds may thereafter be distributed by Seller.

(vi) If any Claim Notice is given before the Representations Expiration Date (collectively, "Eligible Claim[s]") Seller shall not distribute an amount of Holdback Funds in the amount of 150% of such Claims (but in no event more than $750,000 in the aggregate), and retain such amount until such time as (i) Purchaser and Seller jointly agree upon disposition of such funds or (ii) a Final Judgment is entered with respect to such funds. Any balance may be distributed by Seller as of the Representation Expiration Date.

(vii) Promptly after Purchaser and Seller jointly agree upon disposition of such funds or Final Judgment with respect to all Eligible Claims has been entered, Seller shall pay the appropriate amount(s) to Purchaser, and may distribute the balance of the Holdback Funds, if any, and this holdback arrangement shall thereupon terminate. Purchaser may in such event take such legal action to convert any OP Units delivered to Purchaser into cash.

M. Seller and Purchaser hereby designate Title Insurer to act as and perform the duties and obligations of the "reporting person" with respect to the transaction contemplated by this Agreement for purposes of 26 C.F.R. Section 1.6045-4(e)(5) relating to the requirements for information reporting on real estate transaction closed on or after January 1, 1991. In this regard, Seller and Purchaser each agree to execute at Closing, and to cause the Title Insurer to execute at Closing, a Designation Agreement, designating Title Insurer as the reporting person with respect to the transaction contemplated by this Agreement.

N. Purchaser agrees that it does not have and will not have any claims or causes of action against any disclosed or undisclosed trustee, partner, affiliate, beneficiary, principal, member, agent, managing entity, shareholder, director, officer, or employee of Seller (whether direct or indirect), including, without limitation, their attorneys, accountants, consultants, engineers, brokers, and advisors (collectively, "Seller's Affiliates"), arising out of or in connection with this Agreement or the transactions contemplated hereby except in the event of fraud, criminal conduct or intentional tort by such person. Purchaser agrees to look solely to the Holdback Funds for the satisfaction of any liability or obligation arising under this Agreement or the transactions contemplated hereby, or for the performance of any of the covenants, warranties or other agreements contained herein, and further agrees not to sue or otherwise seek to enforce any personal obligation against any of Seller's Affiliates with respect to any matters arising out of or in connection with this Agreement or the transactions contemplated hereby, except in the event of fraud, criminal conduct or intentional tort by such person.

O. Seller shall have the exclusive right to file and control any tax appeal for the real estate taxes attributable to the period prior to and including the calendar year 1996 (the "Pre-1997 Tax Period") but shall keep Purchaser informed of the progress and outcome of any such appeal. To the extent that Seller shall receive a refund therefor, Seller shall disburse to any

tenant not in default under its Lease a portion of such refund as may be due that tenant under its Lease. To the extent that Purchaser's assistance is required in disbursing the refund to the tenants, Purchaser agrees to assist Seller in that regard at Seller's cost. Purchaser shall have the exclusive right to file and control any tax appeal for the real estate taxes attributable to the period after and including the calendar year 1997 (the "1997 Tax Period"), but shall keep Seller informed of the progress and outcome of such appeal and subject to Seller's consent as to calendar year 1997 (which consent shall not be unreasonably withheld or delayed). To the extent that Purchaser shall receive a refund therefor, Purchaser shall disburse to any tenant not in default under its Lease a portion of such refund as may be due that tenant under its Lease. The remainder of the refund, if any, shall be prorated between Purchaser and Seller as of the proration date provided in Section 4(C) after deducting therefrom the cost and expenses reasonably incurred in pursuing the appeal and not charged to tenants. The terms of this Section 12(O) shall survive the Closing.

P. At Seller's request, Purchaser shall furnish to Seller copies of any reports prepared by third parties unaffiliated with Purchaser received by Purchaser relating to any inspections of the Property conducted on Purchaser's behalf, if any (including, specifically, without limitation any reports analyzing compliance of the Property with the provisions of the Americans with Disabilities Act ("ADA"), 42 U.S.C. ss.12101, et. seq., if applicable).

Q. This Agreement may be executed in any number of counterparts, any or all of which may contain the signatures of less than all of the parties, and all of which shall be construed together as a single instrument. For purposes of this Agreement, a telecopy of an executed counterpart shall constitute an original.

R. In the event of litigation between the parties with respect to this Agreement or the transactions contemplated hereby, the prevailing party therein shall be entitled to recover from the losing party therein its attorney's fees and costs of suit.

S. Neither party shall record this Agreement or a memorandum thereof.

T. Seller agrees, at all times prior to and after the Closing, at Purchaser's cost and with no additional liability to Seller, to execute and deliver, or cause to be executed and delivered, and to do, or cause to be done, such other documents and acts as Purchaser may reasonably deem necessary or desirable to assure the effectiveness and benefits of this Agreement and to vest in Purchaser title to and ownership of all of the assets and property being sold to Purchaser under this Agreement.

U. The term "Seller's Knowledge" as used in this Agreement means (i) actual knowledge possessed by, Sharon Polonia, Robert Tanaka, or George Touras or (ii) any written notice respecting any of the matters contained in this Agreement that has been received by any of such persons but shall exclude any actual knowledge of (or notice received by) Purchaser or its agents or employees which may be imputed to such persons as a result of the relationship between Seller and Purchaser created by the Management Agreement. Seller represents to Purchaser that, as of the date of this Agreement, such persons are the persons within Seller's organization who have management or supervisory responsibility in connection with the Property and who

would likely have Knowledge of the matters represented by Seller in this Agreement. The term "Purchaser's Knowledge" as used in this Agreement means (i) actual knowledge possessed by Pat Berns, Gerald Broker, Tim Colby, Betty Hampilos, Alan Feldman, Ed Glickman, George Rubin, Richard Brown or Bob Wahlquist or (ii) any written notice respecting any of the matters contained in this Agreement that has been received by any of such persons. Purchaser represents to Seller that such persons are the persons within Purchaser's organization who would likely have knowledge of the matters represented by Purchaser in this Agreement.

V. For purposes of this Agreement, the masculine shall be deemed to include the feminine and the neuter, and the singular shall be deemed to include the plural, and the plural the singular, as the context may require.

W. The invalidity or unenforceability of any provision of this Agreement shall in no way affect the validity or enforceability of any other provision.

X. The captions contained in this Agreement are not a part of this Agreement. They are only for the convenience of the parties and do not in any way modify, amplify or give full notice of any of the terms, covenants or conditions of this Agreement.

Y. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal or personal representatives, heirs, executors, administrators, successors, and permitted assigns.

Z. Purchaser shall cooperate with Seller and shall execute any and all documents necessary to allow Seller (or its affiliates) to effectuate the conveyance of the Property as an exchange under Section 1031 of the Internal Revenue Code; provided however, that at no time shall Purchaser be required to take title to real estate other than the Property or incur any obligations other than those set forth elsewhere in this Agreement. Seller shall pay all reasonable costs which may be incurred by Purchaser in connection with such tax free exchange and Seller shall indemnify Purchaser and hold it harmless from any loss, cost, damage, expense or liability incurred in connection therewith. Purchaser acknowledges and agrees that Seller may, if necessary, in order for one or more of its affiliates to qualify for an exchange, distribute the Property to its equity owners prior to Closing provided the same shall not relieve Seller of its obligations hereunder and such distributees shall assume the obligations of Seller hereunder (to the extent of such distribution). No such exchange may result in the transfer of OP Units to any party other than a recipient described in
Section 2.C.
hereof.

AA. Purchaser hereby agrees, from and after Closing, to indemnify, defend and hold harmless (i) to the extent the release required in accordance with Section 10.D. hereof has not been obtained and Seller nonetheless elects to proceed to Closing, (a) all guarantors under the Guarantee described in Exhibit G from and against any and all loss, cost, liability or expense that may be incurred by such parties thereunder; (b) all indemnitors under the Indemnity described in Exhibit G from and against any and all loss, cost, liability or expense incurred by such parties thereunder with respect to Released Environmental Obligations (as such term is defined in Paragraph 25 of the Existing Loan Mortgage); and (c) Seller and all of Seller's affiliates from and

against any and all loss, cost, liability or expense arising under any of the other Existing Loan Documents for events occurring after Closing; and (ii) Seller and all of Seller's affiliates from and against any and all loss, cost, liability or expense arising under the Ground Lease, the Option Agreement, and Anchor Pad Purchase Agreement for events occurring after Closing. The provisions of this Section 12.AA. shall survive Closing, and shall not operate in limitation of any other provision set forth in this Agreement.

BB. By signing this Agreement, Samuel Zell, personally and unconditionally, guarantees that to the extent that the Down Payment is required to be re-paid to Purchaser hereunder, such amount shall be re-paid to Purchaser, and guarantees payment of Holdback Funds to Purchaser if, as and when required under Section 12.L. of this Agreement. The provisions of this paragraph shall not be affected by any amendment to this Agreement except as otherwise set forth in such amendment. If and to the extent Samuel Zell makes or is required to make any payment in accordance with the provisions of this paragraph, Samuel Zell shall be subrogated to Purchaser's rights against Seller hereunder.

IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this Agreement as of the date first above written.

SELLER:

MAGNOLIA RETAIL ASSOCIATES, L.L.C., a Delaware limited liability company

By: Florence Mall Partners, an Illinois limited partnership, a member

By: Samuel Zell Robert Lurie General Partners, an Illinois general partnership, its general partner

By: Zell General Partnership, Inc., its general partner

By:/S/ Sheil Z. Rosenberg
   -------------------------
Name:  Sheli Z. Rosenberg
Its: Vice President

PURCHASER:

THE RUBIN ORGANIZATION, INC., a Pennsylvania corporation

By:  /S/ Ronald Rubin
     --------------------------------------------
Its:____________________________________________

JOINDER

The undersigned, Samuel Zell, hereby executes this Agreement for the sole purpose of reflecting his agreement to be bound by the provisions of Section 12.BB. hereof.

/S/ Sheli Z. Rosenberg
----------------------
Sheli Z. Rosenberg as attorney-in-fact for Samuel Zell, pursuant to
Power of Attorney dated May 15, 1997

FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT

THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT is entered into as of the 30th day of September, 1997 between MAGNOLIA RETAIL ASSOCIATES, L.L.C. ("Seller"), a Delaware limited liability company, and PREIT ASSOCIATES, L.P. (the "Operating Partnership"), a Delaware limited partnership.

RECITALS:

A. Seller and The Rubin Organization, Inc. ("TRO") entered into that certain Purchase and Sale Agreement dated as of June 30, 1997 (the "Contract") for the sale of certain property located in Florence, South Carolina (the "Property").