PURCHASE AND SALE AGREEMENT

PURCHASE AND SALE AGREEMENT


BETWEEN


PKLB LIMITED PARTNERSHIP, a Maryland partnership having
BASi MARYLAND, INC., a Maryland corporation as its general partner


AS SELLER


AND


THE KEVIN F. DONOHOE COMPANY, INC.


a Pennsylvania corporation


AS PURCHASER


As of November 11, 2004

PURCHASE AND SALE AGREEMENT

        THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of the 11th day of November, 2004 (the “Effective Date”), by and between PKLB LIMITED PARTNERSHIP, a Maryland partnership having BASi MARYLAND, INC., a Maryland corporation as its general partner, having an address at 300 W. Fayette Street, Baltimore, Maryland 21201, and The Kevin F. Donohoe Company, Inc., a Pennsylvania corporation, its successors and assigns (“Purchaser”), having an address at The Curtis Center, Suite 700, Independence Square West, Philadelphia, Pennsylvania 19106.

W I T N E S S E T H:

ARTICLE 1.

PURCHASE AND SALE

        1.         Agreement of Purchase and Sale .    Purchaser and Seller entered into a Purchase and Sale Agreement dated July 26, 2004 (the “Initial Agreement”), a’ copy of which is attached hereto as Exhibit A. The Initial Agreement was terminated by the Purchaser pursuant to Section 3.2 thereof by a letter from Purchaser to Seller dated September 17, 2004. Notwithstanding such termination, the parties hereto wish to proceed with the sale and purchase of the Property in accordance with the terms and conditions of the Initial Agreement, which terms and conditions are hereby incorporated by reference herein, and are modified as set forth below.

ARTICLE 2.

MODIFICATIONS TO INITIAL AGREEMENT

        1.         The Purchase Price is Six Million Five Hundred Thousand Dollars ($6,500,000).

        2.         Paragraph 1.5 shall read as follows:

        “Within ten (10) business days after the Effective Date, Purchaser shall deposit with First American Title Insurance Company (the “Escrow Agent”), having its office at 410 E. Pratt Street, Suite 323, Baltimore, Maryland 21202, Attention: Joseph Reineberg, the sum of One Million Dollars ($1,000,000) (the “Earnest Money”) in good funds, either by certified bank or cashier’s check or by federal wire transfer. The parties agree to use commercially reasonable efforts to reach agreement with respect to all title matters and the final form of the Seller Lease within the ten (10) day period following the Effective Date. The Earnest Money shall be non-refundable except in the case of (i) a default by Seller under Section 6.2, or (ii) any other provision of this Agreement pursuant to which Purchaser shall be entitled to a return of the Earnest Money following a termination hereof. The Escrow Agent shall hold the Earnest Money in an interest-bearing account in accordance with the terms and conditions of an escrow agreement in a form reasonably acceptable to Seller, Purchaser and Escrow Agent entered into among Seller, Purchaser and Escrow Agent simultaneously with the execution of this Agreement. All interest accruing on such sum shall become a part of the Earnest Money and shall be distributed as Earnest Money in accordance with the terms of this Agreement.

        3.         Paragraph 2.1, 2.2, 2.3 (including subparagraphs 2.3.2, 2.3.3 and 2.3.4) and 2.5 are deleted.

        4.         Article 3 shall read as follows:

        3.1         Right of Inspection .    During the period beginning upon the Effective Date until Closing, Purchaser shall have the right to make a physical inspection of the Property and to examine during Seller’s normal business hours, at such place or places at the Property, in the offices of the property manager or elsewhere as the same may be located, any operating files maintained by Seller or its property manager in connection with the redevelopment, leasing, maintenance and/or management of the Property, including, without limitation, the Leases, lease files, Operating Agreements, insurance policies, bills, invoices, receipts and other general records relating to the income and expenses of the Property, correspondence, surveys, engineering reports, plans and specifications, warranties for services and materials provided to the Property, and environmental audits and similar materials. Any inspections by Purchaser shall be conducted only during Seller’s normal business hours and upon at least 24 hours prior notice to Seller. Purchaser will use commercially reasonable efforts to perform its inspections in a manner that does not materially interfere with Seller’s business operations being conducted upon the Property. Purchaser shall be entitled to conduct invasive testing on the Property with Seller’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Purchaser agrees to repair any damage to the Property caused by Purchaser and to indemnify against and bold Seller harmless from any claim for liabilities, costs, expenses (including reasonable attorneys’ fees actually incurred) damages or injuries arising out of or resulting from the inspection or testing of the Property by Purchaser or its agents, and notwithstanding anything to the contrary in this Agreement, such obligation to indemnify and hold harmless Seller shall survive Closing or any termination of this Agreement. Purchaser shall maintain public liability and property damage insurance in the amount of $1,000,000, and automobile liability insurance in an amount not less than $1,000,000 which insurance coverage shall name Seller as an additional insured and which insurance coverage shall otherwise be in form and substance satisfactory to Seller and adequate to insure against all liability of Purchaser and its consultants, respectively, and each of its agents, employees or contractors, arising out of the inspections or testing. All inspections and testing shall occur at reasonable times agreed upon by Seller and Purchaser and shall be conducted so as not to interfere unreasonably with use of the Property by Seller or its tenants.

        3.2         Seller Lease .    Seller and Purchaser agree to act in good faith to agree upon the terms and conditions of a triple net lease between Seller, as tenant, and Purchaser, as landlord, for approximately 101,000 square feet of space on the Property (the “Seller Lease”), which terms and conditions will include, but shall not be limited to (i) a lease term of three (3) years beginning with the date of Closing, (ii) base rent equal to $8.00 per leasable square foot of space on a triple net basis, with Seller being responsible for all its proportionate share of operating costs, including, without limitation, utilities, real estate taxes and insurance and all maintenance and repair costs (including elevators) except that Purchaser shall be responsible for roof repair and maintenance and all other capital repairs or replacements (including floors, slabs, foundations and structural elements of the Property), and (iii) an agreement by Purchaser that it will not intentionally take any action that would materially adversely impact Seller’s business during the lease term (with the understanding that Seller, as tenant, is solely responsible for compliance with all laws, rules and regulations applicable to its business). In order to secure Seller’s obligations under the Lease, Seller shall deliver to Purchaser at Closing an irrevocable letter of credit in the face amount of Two Million Eight Hundred Thousand Dollars ($2,800,000) issued by a financial institution and in form and substance acceptable to Purchaser (the “Letter of Credit”). The Letter of Credit shall remain in place for the term of the Seller Lease and may be drawn by Purchaser in the event of Seller’s failure to comply with its obligations under the Seller Lease or in the event that the Letter of Credit is not renewed within thirty (30) days of any expiration thereof. Provided no default has occurred under the Seller Lease, the face amount of the Letter of Credit may be reduced to Two Million Dollars ($2,000.000) on the first anniversary of the date of the Seller Lease and to One Million Dollars ($1,000,000) on the second anniversary of the date of the Seller Lease.

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        5.         Paragraph 4.1. shall read as follows:

        “The Closing shall be held at the offices of Gallagher Evelius & Jones LLP, 216 N. Charles Street, Suite 400, Baltimore, Maryland 21201, on the date selected by the Purchaser with at least five (5) days prior notice to the Seller not later than the thirtieth (30th) day following the Effective Date (the “Outside Date”). Buyer shall have the right to extend the Outside Date by up to ten (10) days by notifying the Seller on or before the thirtieth (30th) day following the Effective Date of its desire to so extend the Outside Date.”

        6.         Paragraph 4.6 is amended by adding the following paragraph;

        “4.6.5     Seller has complied with all of the Schedule B-Section 1 requirements applicable to the Seller as required by the title company in the Title Commitment issued by First American Title Insurance Company, Commitment No. NOS-106989-PHIL, effective April 24, 2004. Notwithstanding the foregoing, nothing shall relieve the Purchaser of any of the obligations Purchaser has assumed under the other terms of the Agreement in order to comply with its Schedule B-1 requirements.”

        All references in the Initial Agreement to the “Effective Date” shall be deemed to mean the Effective Date of this Agreement.

[Signatures follow on next page]

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        IN WITNESS WHEREOF, and intending to be legally bound, the undersigned have duly executed this Agreement.

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EXHIBIT A

AGREEMENT OF PURCHASE AND SALE

BETWEEN PKLB LIMITED PARTNERSHIP

“SELLER”

AND

THE KEVIN F. DONOHOE COMPANY, INC.

“BUYER”

DATED JULY 26, 2004

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PURCHASE AND SALE AGREEMENT


BETWEEN


PKLB LIMITED PARTNERSHIP, a Maryland partnership having
BASi MARYLAND, INC., a Maryland corporation as its general partner


AS SELLER


AND


THE KEVIN F. DONOHOE COMPANY, INC.


a Pennsylvania corporation


AS PURCHASER


As of July 26, 2004

TABLE OF CONTENTS

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PURCHASE AND SALE AGREEMENT

        THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of the 26th day of July, 2004 (the “Effective Date”) by and between PKLB LIMITED PARTNERSHIP, a Maryland partnership having BASi MARYLAND, INC., a Maryland corporation as its general partner, having an address at 300 W. Fayette Street, Baltimore, Maryland 21201, and The Kevin F. Donohoe Company, Inc., a Pennsylvania corporation, its successors and assigns (“Purchaser”), having an address at The Curtis Center, Suite 700, Independence Square West, Philadelphia, Pennsylvania 19106.

W I T N E S S E T H:

ARTICLE 1
PURCHASE AND SALE

        1.1         Agreement of Purchase and Sale. Subject to the terms and conditions hereinafter set forth, Seller agrees to sell and convey and Purchaser agrees to purchase the following:

                        1.1.1         that certain tract or parcel of land situated at 300-306 W. Fayette Street, Baltimore City, Maryland more particularly described on Exhibit A attached hereto and made a part hereof, together with all and singular the rights and appurtenances pertaining to such property, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-of-way (the property described in this Subsection 1.1.1 being herein referred to collectively as the “Land”);

                        1.1.2         all buildings, structures, fixtures and other improvements on the Land (the property described in this Subsection 1.1.2 being herein referred to collectively as the “Improvements”);

                        1.1.3         all of Seller’s right, title and interest in and to all tangible personal property upon the Land or within the Improvements, including, without limitation, appliances, furniture, carpeting, draperies and curtains, tools and supplies, and other items of personal property (excluding cash) used exclusively in connection with the operation of the Land and the Improvements (the property described in this Subsection 1.1.3 being herein referred to collectively as the “Personal Property”); Personal Property does not include furniture, appliances, tools and supplies used in the normal course of Seller’s business.

                        1.1.4         all of Seller’s right, title and interest in and to all agreements listed and described on Exhibit B (the “Rent Roll”) attached hereto and made a part hereof, pursuant to which any portion of the Land or Improvements is used or occupied by anyone other than Seller (the property described in this Subsection 1.1.4 being herein referred to collectively as the “Leases”) which leases shall include the Seller Lease (as hereinafter defined); and

                         1.1.5         all of Seller’s right, title and interest in and to (i) all contracts and agreements (collectively, the “Operating Agreements”) listed and described on Exhibit C (the “Operating Agreements Schedule”) attached hereto and made a part hereof, relating to the upkeep, repair, maintenance or operation of the Land, Improvements or Personal Property which will extend beyond the date of Closing (as such term is defined in Section 4.1 hereof), including specifically, without limitation, all assignable equipment leases, and (ii) all assignable existing warranties and guaranties (expressed or implied) issued to Seller in connection with the Improvements or the Personal Property (the property described in this Subsection 1.1.5 being sometimes herein referred to collectively as the “Intangibles”).

        1.2         Property Defined .    The Land, the Improvements, the Personal Property, the Leases and the Intangibles are hereinafter sometimes referred to collectively as the "Property."

        1.3         Permitted Exceptions .    The Property shall be conveyed subject to the matters which are, or are deemed to be, Permitted Exceptions pursuant to Article 2 hereof. For purposes hereof, “Permitted Exceptions” are those matters affecting title to the Property which Purchaser has agreed or has deemed to agree pursuant to the terms of Section 2.3 to accept title subject to and in accordance with this Agreement, without any adjustment to the Purchase Price.

        1.4         Purchase Price .    Seller is to sell and Purchaser is to purchase the Property for a total of Seven Million Seven Hundred Fifty Thousand and 00/100 Dollars ($7,750,000) (the “Purchase Price”). The Purchase Price shall be paid to Seller at Closing (hereinafter defined).

        1.5         Earnest Money .    Within three (3) business days after the execution and delivery of this Agreement, Purchaser shall deposit with First American Title Insurance Company (the “Escrow Agent”), having its office at 401 E. Pratt Street, Suite 323, Baltimore, Maryland 21202, Attention: Joseph Reineberg, the sum of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000) (the “Initial Earnest Money”) in good funds, either by certified bank or cashier’s check or by federal wire transfer. On or before the expiration of the Inspection Period (as hereinafter defined) and provided Purchaser has not terminated this Agreement pursuant to Section 3.2 hereof, Purchaser shall make an additional deposit with the Escrow Agent in the amount of Seven Hundred Fifty Thousand Dollars ($750,000) (the “Additional Earnest Money”, the Initial Earnest Money and the Additional Earnest Money are hereinafter collectively referred to as the “Earnest Money”) and upon expiration of the Inspection Period, if Purchaser has not terminated this Agreement, the Earnest Money shall be non-refundable (except in the case of (i) a failure of a condition precedent to Purchaser’s obligation to proceed to Closing set forth in Section 4.6, (ii) a default by Seller under Section 6.2, (iii) a termination of this Agreement by Purchaser pursuant to Section 2.3.3, or (iv) any other provision of this Agreement pursuant to which Purchaser shall be entitled to a return of the Earnest Money following a termination hereof). The Escrow Agent shall hold the Earnest Money in an interest-bearing account in accordance with the terms and conditions of an escrow agreement in a form reasonably acceptable to Seller, Purchaser and Escrow Agent entered into among Seller, Purchaser and Escrow Agent simultaneously with the execution of this Agreement. All interest accruing on such sum shall become a part of the Earnest Money and shall be distributed as Earnest Money in accordance with the terms of this Agreement.

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        1.6         Independent Contract Consideration .    In addition to the Earnest Money, Purchaser shall, concurrently with its execution hereof, deliver to Seller a check in the amount of ONE HUNDRED AND NO/100 DOLLARS ($100.00), which amount Seller and Purchaser agree has been bargained for as consideration for Seller’s execution and delivery of this Agreement and Purchaser’s right to inspect the Property pursuant to Article 3. Such sum is in addition to and independent of any other consideration or payment provided for in this Agreement and is non-refundable in all events.

ARTICLE 2
TITLE, SURVEY AND ENVIRONMENTAL

        2.1          Title Examination; Commitment for Title Insurance .    Purchaser shall have until the expiration of the Inspection Period to examine title to the Property. During the Inspection Period, Purchaser may, at its option, obtain from Escrow Agent sometimes hereinafter referred to as the “Title Company” at Purchaser’s expense, an ALTA title insurance commitment (the “Title Commitment’) covering the Property, showing all matters affecting title to the Property and binding the Title Company to issue at Closing an Owner’s Policy of Title insurance in the full amount of the Purchase Price. If Purchaser desires to obtain a Title Commitment, Purchaser shall cause the Title Commitment to be issued within thirty (30) days after the effective date.

        2.2         Survey .     During the Inspection Period, Purchaser may, at its option, employ a surveyor or surveying firm (the “Surveyor”), licensed by the state in which the Property is located, to survey the Property and prepare a survey thereof (the “Survey”). If Purchaser desires to obtain a Survey, Purchaser shall cause the Survey to be prepared within thirty (30) days after the Effective Date.

        2.3          Title/Survey Objections: Cure of Title/Survey Objections .    Purchaser shall have until the earlier of (i) ten (10) days after Purchaser’s receipt of both the Title Commitment and the Survey or (ii) expiration of the Inspection Period to give written notice to Seller of such objections as Purchaser may have to any exceptions to title disclosed in the Title Commitment or the Survey. Any notice of objections sent by Purchaser to Seller shall be accompanied by a copy of the Survey and a copy of the Title Commitment together with any instrument that is the subject of Purchaser’s notice of objections. Any exception to title disclosed in the Title Commitment or the Survey to which Purchaser does not object by timely written notice shall be a Permitted Exception.

                        2.3.2         In the event Purchaser gives timely written notice of objection to any exceptions to title, Seller shall have the right, but not the obligation, to attempt to remove, satisfy or otherwise cure any exceptions to title so objected to. Within ten (10) days after receipt of Purchaser’s notice of objection, (“Seller’s Title Cure Period”) Seller shall give written notice to Purchaser informing Purchaser of Seller’s election with respect to such exceptions. If Seller fails to give written notice of election within such ten (10) day period, Seller shall be deemed to have elected not to attempt to cure the matter objected to. If Seller elects to attempt to cure any exceptions, Seller shall be entitled to one or more reasonable adjournments of the Closing of up to, but not beyond, the sixtieth (60th) day following the date for Closing set forth in Section 4.1 hereof to attempt such cure.

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                        2.3.3         If Seller elects or is deemed to have elected not to cure any exceptions to title objected to by Purchaser or if, after electing to attempt to cure, Seller determines that it is unwilling or unable to remove, satisfy or otherwise cure any such exceptions, Purchaser’s sole remedy hereunder in such event shall be either: (i) to accept title to the Property subject to such exceptions as if Purchaser had not objected thereto and without reduction of the Purchase Price or (ii) to terminate this Agreement, whereupon the Escrow Agent shall return the Earnest Money to Purchaser and the parties hereto shall be relieved of all further liability and/or obligation hereunder. Seller shall be deemed to have cured any such exception if the Title Company agrees to affirmatively insure over such exception.

                        2.3.4         To terminate this Agreement pursuant to this Section 2.3, Purchaser must give written notice to Seller of its election to terminate not later than (i) five (5) business days after receipt of written notice from Seller of Seller’s election not to attempt to cure any exception or of Seller’s determination, having previously elected to attempt to cure, that it is unable or unwilling to do so or (ii) five (5) days after expiration of Seller’s Title Cure Period if Seller is deemed herein to have elected not to attempt to cure such exception. If Purchaser fails to give timely notice of its election to terminate for any reason whatsoever such exception shall be deemed to be a Permitted Exception.

        2.4          Conveyance of Title .    At Closing, Seller shall convey and transfer to Purchaser all of Seller’s right, title and interest in and to the Property. Notwithstanding anything contained herein to the contrary, the Property shall be conveyed subject to the following matters, which shall be deemed to be “Permitted Exceptions” for purposes hereof:

                        2.4.1         the rights of tenants under the Leases;

                        2.4.2         the lien of all ad valorem real estate taxes and assessments not yet due and payable as of the date of Closing, subject to adjustment as herein provided; and

                        2.4.3         items which are or become Permitted Exceptions pursuant to Section 2.3 hereof.

        2.5          Environmental Assessment .    Purchaser may, at its option, also obtain, at Purchaser’s expense, an environmental assessment covering the Property (the “Environmental Report”). Purchaser shall, at any time prior to expiration of the Inspection Period, give written notice to Seller of any matter disclosed by such Environmental Report which Purchaser determines to be unacceptable. In the event that Seller fails to cure or correct such unacceptable environmental condition on or before Closing, Purchaser may (i) terminate this Agreement, whereupon the Escrow Agent shall promptly return the Earnest Money to Purchaser, and the parties hereto shall thereafter be relieved of all further liability and/or obligation hereunder or (ii) withdraw its objection and proceed to Closing notwithstanding such unacceptable environmental condition.

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        2.6         No Change in Status. Seller shall not cause or permit the status of title to, or the environmental condition of, the Property to be modified in any way subsequent to the date of this Agreement without the prior written consent of the Purchaser.

ARTICLE 3
INSPECTION PERIOD

        3.1          Right of Inspection .    During the period beginning upon the Effective Date and ending at 5:00 p.m. (local time at the Property) on _______________, 2004 [forty-five (45) days following the date of this Agreement] (hereinafter referred to as the “Inspection Period”), Purchaser shall have the right to make a physical inspection of the Property, including, without limitation, causing the Environmental Report to be issued, and to examine during Seller’s normal business hours, at such place or places at the Property, in the offices of the property manager or elsewhere as the same may be located, any operating files maintained by Seller or its property manager in connection with the redevelopment, leasing, maintenance and/or management of the Property, including, without limitation, the Leases, lease files, Operating Agreements, insurance policies, bills, invoices, receipts and other general records relating to the income and expenses of the Property, correspondence, surveys, engineering reports, plans and specifications, warranties for services and materials provided to the Property, and environmental audits and similar materials. Any inspections by Purchaser shall be conducted only during Seller’s normal business hours and upon at least 24 hours prior notice to Seller. Purchaser will use commercially reasonable efforts to perform its inspections in a manner that does not materially interfere with Seller’s business operations being conducted upon the Property. Purchaser shall be entitled to conduct invasive testing on the Property with Seller’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Purchaser agrees to repair any damage to the Property caused by Purchaser and to indemnify against and hold Seller harmless from any claim for liabilities, costs, expenses (including reasonable attorneys’ fees actually incurred) damages or injuries arising out of or resulting from the inspection or testing of the Property by Purchaser or its agents, and notwithstanding anything to the contrary in this Agreement, such obligation to indemnify and hold harmless Seller shall survive Closing or any termination of this Agreement. Purchaser shall maintain public liability and property damage insurance in the amount of $1,000,000, and automobile liability insurance in an amount not less than $1,000,000 which insurance coverage shall name Seller as an additional insured and which insurance coverage shall otherwise be in form and substance satisfactory to Seller and adequate to insure against all liability of Purchaser and its consultants, respectively, and each of its agents, employees or contractors, arising out of the inspections or testing. All inspections and testing shall occur at reasonable times agreed upon by Seller and Purchaser and shall be conducted so as not to interfere unreasonably with use of the Property by Seller or its tenants.

        3.2          Right of Termination .    Seller agrees that in the event Purchaser determines (such determination to be made in Purchaser’s sole and absolute discretion) that the Property is not suitable for its purposes, Purchaser shall have the right to terminate this Agreement by giving written notice thereof to Seller prior to the expiration of the Inspection Period. If Purchaser gives such notice of termination within the Inspection Period, this Agreement shall terminate and the Earnest Money shall be returned to Purchaser. Time is of the essence with respect to the provisions of this Section 3.2. If Purchaser fails to give Seller a notice of termination prior to the expiration of the Inspection Period