Environmental Indemnity Agreement

ENVIRONMENTAL INDEMNITY AGREEMENT


THIS AGREEMENT is made this 22nd day of August, 1996, by and between BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("BOP"), and SAFEGUARD SCIENTIFICS, INC., a Pennsylvania corporation ("SSI") (collectively the "Parties").


WITNESSETH:


A. WHEREAS, this Environmental Indemnity Agreement (the "Agreement") is being executed as part of a larger transaction involving, inter alia, BOP and SSI, the terms and conditions of which are set forth in a Contribution Agreement dated July 31 1996, to which this Agreement is attached as an Exhibit.


B. WHEREAS, as part of that larger transaction, SSI is contributing to BOP certain properties specified in the Contribution Agreement, including certain office and industrial properties owned by SSI which are listed on Exhibit "B" to the Contribution Agreement, and which are referred to therein as the "B Properties."


C. WHEREAS, one of the "B Properties" to be contributed by SSI to BOP is real property known as 110 Summit Drive, which is located in the Whiteland Business Park, West Whiteland Township, Chester County, Pennsylvania, and upon which is constructed a commercial office building of approximately 43,622 sq. ft. (the "Summit Drive Property"). The Summit Drive Property is further described on Exhibit "B" to the Contribution Agreement.


D. WHEREAS, SSI has provided to BOP a Phase I Environmental Site Assessment relating to the Summit Drive Property dated June 10, 1996, which was prepared by Pennoni Associates Inc. in conformance with the ASTM E 1527 Standard Practice for Environmental Site Assessments (the "Phase I Report").


E. WHEREAS, the Parties desire to set forth separately certain agreements with respect to environmental matters relating to the Summit Drive Property.


TERMS AND CONDITIONS


NOW, THEREFORE, in consideration of the promises and the mutual representations, warranties, covenants and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows:


Section I - DEFINITIONS


1.1 For purposes of this Agreement, the following terms shall have the following meanings:


"Known Environmental Conditions" means (1) the waste disposal area identified in the Phase I Report which is present on the Summit Drive Property immediately adjacent to the north side of the office building, together with any soil and groundwater contamination directly related to the waste disposal area (the "Disposal Area Conditions"); and (2) the presence of methane gas in the office building and in the area surrounding the office building on the Summit Drive Property, together with all existing systems, equipment and procedures for monitoring, collecting and venting that gas, including, without limitation, the vapor collection trench, the monitoring well vents and all associated vent pipes and equipment (the "Methane Gas Conditions").


"Unknown Environmental Conditions" means all other environmental conditions related to the Summit Drive Property which are not "Disposal Area Conditions" or "Methane Gas Conditions."


"Environmental Claim" means any written or oral demand, order, claim, suit, lien, action, cost, expense, cause of action, investigation or notice asserted by any person or entity against BOP alleging actual or potential liability under Environmental Laws (including, without limitation, potential or actual liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties).


"Environmental Law" means any common law, or any federal, state, or local statute, regulation, or ordinance relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface, or subsurface strata).


Section 2 - INDEMNIFICATION


2.1 Except as limited in Section 3 below, SSI hereby agrees to defend, indemnify, save, and hold harmless BOP from and against any and all Environmental Claims asserted against BOP arising out of or relating to Disposal Area Conditions.


Section 3 - LIMITATIONS


3.1 Voluntary Acts. Prior to the Termination Date set forth in the following Section 3.2, BOP agrees that it will not voluntarily initiate any removal, remedial or other cleanup actions at the Summit Drive Property relating to Disposal Area Conditions. Should BOP voluntarily initiate any removal, remedial or other cleanup actions at the Summit Drive Property relating to Disposal Area Conditions prior to the Termination Date, SSI shall not be required to defend, indemnify, save, and hold harmless BOP from and against any and all Environmental Claims asserted against BOP arising out of or relating to Disposal Area Conditions.


3.2 Time Period. SSI's indemnification obligation under Section 2.1 of this Agreement shall terminate five (5) years after the "Closing Date" as defined in Section 6.1 of the Contribution Agreement ("Termination Date"). Any Environmental Claim received by BOP prior to the Termination Date, and for which notice is provided in conformance with Section 4.1 of this Agreement, shall remain subject to and covered by this Agreement, and SSI's defense and indemnification obligations to BOP with respect thereto shall continue unimpaired.


3.3 Monetary Cap. The total liability of SSI under Section 2.1 of this Agreement shall be Two Million Eighteen Thousand Dollars ($2,018,000.00).


3.4 Excluded Matters. The indemnity conta ...