EXHIBIT 10.QQ


 


EXECUTION VERSION


 


 


MEMBERSHIP
INTERESTS PURCHASE AGREEMENT


 


 


(MBC
Realty, LLC)


 










 


MERCANTILE
BANKSHARES CORPORATION, Seller


 


and


 


HARBOR
GROUP INTERNATIONAL, L.L.C., Buyer


 










 


 


Property:


 


Two
Hopkins Plaza


Baltimore,
Maryland


 





















 


TABLE OF CONTENTS


 


	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Terms Generally

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  membership interests;
  PROPERTY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  PURCHASE PRICE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Purchase
  Price

  	
   

  
	
   

  	
  3.2

  	
  Failure to
  Pay Deposit

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  DUE DILIGENCE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Seller
  Deliverables

  	
   

  
	
   

  	
  4.2

  	
  Independent Investigation

  	
   

  
	
   

  	
  4.3

  	
  Termination
  During Due Diligence Period

  	
   

  
	
   

  	
  4.4

  	
  Buyer’s
  Knowledge

  	
   

  
	
   

  	
  4.5

  	
  AS-IS SALE

  	
   

  
	
   

  	
  4.6

  	
  Service Contracts to be
  Assumed

  	
   

  
	
   

  	
  4.7

  	
  No Obligation to
  Repair or to Comply

  	
   

  
	
   

  	
  4.8

  	
  Buyer’s Entry and
  Indemnity; Limits on Government Contact

  	
   

  
	
   

  	
  4.9

  	
  Release

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  BUYER’S CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Conditions
  to Buyer’s Obligation to Purchase

  	
   

  
	
   

  	
   

  	
  5.1.1

  	
  Seller’s
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
  5.1.2

  	
  Seller’s
  Performance

  	
   

  
	
   

  	
   

  	
  5.1.3

  	
  Condition
  of Title

  	
   

  
	
   

  	
   

  	
  5.1.4

  	
  Estoppel
  Certificates

  	
   

  
	
   

  	
   

  	
  5.1.5

  	
  Income and
  Expenses

  	
   

  
	
   

  	
   

  	
  5.1.6

  	
  Mercantile
  Lease

  	
   

  
	
   

  	
   

  	
  5.1.7

  	
  Disposition
  of Other Properties

  	
   

  
	
   

  	
  5.2

  	
  Failure of Conditions

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  SELLER’S CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Conditions to
  Seller’s Obligations to Sell

  	
   

  
	
   

  	
   

  	
  6.1.1

  	
  Purchase
  Price

  	
   

  
	
   

  	
   

  	
  6.1.2

  	
  Buyer’s Representations and
  Warranties

  	
   

  
	
   

  	
   

  	
  6.1.3

  	
  Buyer’s
  Performance

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Representations
  and Warranties of Seller

  	
   

  
	
   

  	
  7.2

  	
  Representations
  and Warranties of Buyer

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  TITLE and survey

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Title

  	
   

  
	
   

  	
  8.2

  	
  Survey

  	
   

  
						



 


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  9.

  	
  PRE-CLOSING OPERATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Interim Operation of
  the Property

  	
   

  
	
   

  	
  9.2

  	
  Lease Enforcement

  	
   

  
	
   

  	
  9.3

  	
  Lease Termination
  Prior to Closing

  	
   

  
	
   

  	
  9.4

  	
  Risk of Loss and
  Insurance Proceeds

  	
   

  
	
   

  	
  9.5

  	
  Notifications

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Escrow Instructions

  	
   

  
	
   

  	
  10.2

  	
  Closing
  Date

  	
   

  
	
   

  	
  10.3

  	
  Location

  	
   

  
	
   

  	
  10.4

  	
  Closing Documents

  	
   

  
	
   

  	
  10.5

  	
  Additional Seller
  Deliveries

  	
   

  
	
   

  	
  10.6

  	
  Buyer Closing Deliveries

  	
   

  
	
   

  	
  10.7

  	
  Closing Instructions

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  PRORATIONS; EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Rents

  	
   

  
	
   

  	
  11.2

  	
  Receivables and Collections

  	
   

  
	
   

  	
  11.3

  	
  Collection Efforts

  	
   

  
	
   

  	
  11.4

  	
  Security Deposits

  	
   

  
	
   

  	
  11.5

  	
  Adjustments to Prorations

  	
   

  
	
   

  	
  11.6

  	
  INTENTIONALLY OMITTED

  	
   

  
	
   

  	
  11.7

  	
  Post Closing Adjustments

  	
   

  
	
   

  	
  11.8

  	
  Proration Calculations

  	
   

  
	
   

  	
  11.9

  	
  Closing Expenses

  	
   

  
	
   

  	
  11.10

  	
  Survival

  	
   

  
	
   

  	
  11.11

  	
  Payment by Buyer

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Seller’s Default

  	
   

  
	
   

  	
  12.2

  	
  Buyer’s Default

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  BROKERS

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  General Indemnification
  by Seller

  	
   

  
	
   

  	
  14.2

  	
  Indemnification by Buyer

  	
   

  
	
   

  	
  14.3

  	
  Third Person Claims

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  15.1

  	
  Notices

  	
   

  
	
   

  	
  15.2

  	
  Recording

  	
   

  
	
   

  	
  15.3

  	
  Joint Undertaking

  	
   

  
	
   

  	
  15.4

  	
  Whole Agreement; Amendments

  	
   

  
	
   

  	
  15.5

  	
  Attorneys’ Fees

  	
   

  
	
   

  	
  15.6

  	
  Assignment

  	
   

  



 


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  15.7

  	
  Counterparts

  	
   

  
	
   

  	
  15.8

  	
  Holidays

  	
   

  
	
   

  	
  15.9

  	
  Governing Law

  	
   

  
	
   

  	
  15.10

  	
  Waiver of Trial by Jury

  	
   

  
	
   

  	
  15.11

  	
  No Third Party Beneficiary

  	
   

  
	
   

  	
  15.12

  	
  Severability

  	
   

  
	
   

  	
  15.13

  	
  Drafts
  not an Offer to Enter into a Legally Binding Contract

  	
   

  
	
   

  	
  15.14

  	
  Consents

  	
   

  
	
   

  	
  15.15

  	
  Confidential Information

  	
   

  
	
   

  	
  15.16

  	
  Date of this Agreement; Effective
  Date

  	
   

  
	
   

  	
  15.17

  	
  Captions

  	
   

  
	
   

  	
  15.18

  	
  Transaction as
  Sale and Purchase of Assets

  	
   

  
	
   

  	
  15.19

  	
  Venable Lease; Reznick
  Lease

  	
   

  



 


iii





















 


	
  EXHIBITS AND RIDERS

  
	
   

  
	
  A

  	
  LEGAL
  DESCRIPTION OF THE LAND

  
	
  B

  	
  ASSIGNMENT

  
	
  C

  	
  FIRPTA
  AFFIDAVIT

  
	
  D

  	
  INTENTIONALLY
  OMITTED

  
	
  E

  	
  INITIAL
  RENT ROLL AND LIST OF SECURITY DEPOSITS

  
	
  F

  	
  SCHEDULE
  OF LITIGATION

  
	
  G

  	
  CONTRACTS

  
	
  H

  	
  PERSONAL
  PROPERTY

  
	
  J

  	
  TERM
  SHEET FOR MERCANTILE LEASE

  
	
   

  	
   

  
	
  RIDERS

  
	
   

  	
   

  
	
  1

  	
  DEPOSIT ESCROW AGREEMENT

  
			



 


iv





















 


MEMBERSHIP
INTERESTS PURCHASE AGREEMENT


 


This Membership Interests
Purchase Agreement (“Agreement”) is entered into as of October    ,
2004, by and between MERCANTILE BANKSHARES
CORPORATION, a Delaware corporation (“Seller”), and HARBOR GROUP INTERNATIONAL, L.L.C., a Virginia limited
liability company, or its designee (“Buyer”).  In consideration of the mutual agreements
herein set forth, the parties hereto, intending to be legally bound, agree as
follows:


 


DEFINITIONS


 


Definitions. As used in
this Agreement, the following terms shall have the meanings set forth below:


 


“Affiliates”
shall mean with respect to any Person (i) any other Person that directly or
indirectly through one or more intermediaries controls or is controlled by or
is under common control with such Person, (ii) any other Person owning or
controlling 10% or more of the outstanding voting securities of or other
ownership interests in such Person, (iii) any officer, director or partner
of such Person, or (iv) if such Person is an officer, director or partner, any
other company for which such Person acts in any such capacity.


 


“Agreement”
shall mean this Membership Interests Purchase Agreement, as amended or
supplemented from time to time by documents executed by both Seller and Buyer.


 


“ALTA” shall mean
The American Land Title Association.


 


 “Books and Records” is defined in
Section 2(g).


 


“Business
Day” shall mean any day other than a Saturday, a Sunday, or a holiday
recognized by banks in the states of Maryland or New York or by the Federal
government.


 


“Buyer”
shall mean the Person identified as Buyer in the first paragraph of this
Agreement and such Person’s Permitted Assignees.


 


 “Buyer Party” or “Buyer Parties”
shall mean Buyer, any Permitted Assignee of Buyer, and any partner or member
in, or, as applicable, any shareholder or director of Buyer, or any Permitted
Assignee of Buyer, as well as the officers, employees, attorneys, and agents of
Buyer or any Permitted Assignee of Buyer.


 


“Buyer’s
actual knowledge” and similar phrases are defined in Section 4.4.


 


“Buyer’s
Conditions Precedent” is defined in Section 5.1.


 





















 


“Claim”
or “Claims” shall mean any suits, actions, proceedings, investigations,
demands, claims, liabilities, fines, penalties, liens, judgments, losses,
injuries, damages, expenses or costs, including, without limitation, attorneys’
and experts’ fees and costs of investigation.


 


“Closing”
is defined in Section 10.1.


 


“Closing
Date” shall mean the date on which Closing actually occurs.


 


“Closing
Documents” shall mean all the documents, other than this Agreement, to be
executed and delivered by the parties in order to complete Closing, as
specified herein.


 


“Closing Instructions”
is defined in Section 10.4(f).


 


“Closing
Month” shall mean the calendar month in which Closing occurs.


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended, or any corresponding
provision(s) of any succeeding law.


 


“Contracts”
is defined in Section 2(d).


 


“Cross
Keys Lease” is defined in Section 7.1(A)(iv).


 


 “Deposit” is defined in Section 3.1(B).


 


“Deposit
Date” shall mean the two Business Days after the Effective Date.


 


“Deposit
Escrow Agreement” shall mean that certain Deposit Escrow Agreement among
Seller, Buyer and the Title Insurance Company, a counterpart of which is
attached hereto as Rider 1.


 


“Due
Diligence Materials” shall mean, collectively, the Seller Deliverables and
all studies, reports and information obtained by the Buyer from any source
prior to the end of the Due Diligence Period.


 


“Due
Diligence Period” shall mean the period commencing on the Effective Date
and ending at 11:59 P.M. (prevailing Eastern Time) on the date which is 30
days after the Effective Date (such date being herein referred to as the “Due
Diligence Period Expiration Date”), during which period Buyer may, inter
alia, conduct the due diligence activities contemplated by Section 4.


 


“Effective
Date” shall mean the date appearing in the first paragraph of this
Agreement, subject to Section 15.16.


 


“Existing
Leases” shall mean all leases, license agreements and occupancy agreements
pertaining to the Property on the Effective Date, including without limitation
those identified in the Initial Rent Roll, together with all associated
guaranties and 


 


2





















 


sureties, as the same may be amended or modified from
time to time in accordance with the terms of this Agreement.


 


“Federalsburg
Call Center” is defined in Section 7.1(A)(iv).


 


“GAAP”
means United States generally accepted accounting principles, consistently
applied.


 


“Governmental
Authority” shall mean any federal, state, county or municipal government,
or political subdivision thereof, any governmental agency, authority, board,
bureau, commission, department, instrumentality, or public body, or any court
or administrative tribunal.


 


“Hazardous
Materials” shall mean materials, wastes or substances that are (a) included
within the definition of any one or more of the terms “hazardous substances,” “hazardous
materials,” “toxic substances,” “toxic pollutants” and “hazardous waste” in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Sections 9601, et  seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et  seq.),
the Clean Water Act (33 U.S.C. Section 1251, et  seq.), the Safe
Drinking Water Act (14 U.S.C. Section 1401, et  seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et  seq.),
and the Toxic Substance Control Act (15 U.S.C. Section 2601, et  seq.)
and the regulations promulgated pursuant to such laws, (b) regulated, or
classified as hazardous or toxic, under other federal, state or local
environmental laws or regulations, (c) petroleum, (d) asbestos or
asbestos-containing materials, (e) polychlorinated biphenyls, (f) flammable
explosives or (g) radioactive materials.


 


“Improvements”
is defined in Section 2(a).


 


“Land”
is defined in Section 2(a).


 


“Leases”
shall mean all Existing Leases and New Leases, collectively.


 


“Licenses
and Permits” is defined in Section 2(h).


 


“Linthicum
Operations Center” is defined in Section 7.1(A)(iv).


 


“List
of Security Deposits” is defined in Section 4.1(a).


 


“MBCR”
is defined in Section 2.


 


“MBCR
Financial Statements” is defined in Section 7.1(A)(xxvii).


 


“Membership
Interests” is defined in Section 2.


 


“Mercantile
Lease” is defined in Section 5.1.6.


 


3





















 


“New
Leases” is defined in Section 9.1(A).


 


“Non-Permitted
Exceptions” is defined in Section 8.1.


 


“Order”
shall mean an order or decree of any Governmental Authority.


 


“Other
Properties” is defined in Section 7.1(A)(iv).


 


“Parties” shall
mean Seller and Buyer.


 


“Permitted Assignee”
is defined in Section 15.6.


 


“Person”
shall mean any individual, partnership, corporation, limited liability company,
trust or other legal entity.


 


“Personal
Property” is defined in Section 2(b).


 


“Plans”
is defined in Section 2(f).


 


“Prime
Rate” shall mean the prime rate of interest published in the Wall Street
Journal from time to time.


 


“Privileged
Material” shall mean (a) all communications between any Seller Party and
any attorney for such Seller Party or any other Seller Party, (b) evaluations,
analyses and communications among Seller Parties regarding the Property, Buyer,
the transaction evidenced by this Agreement, or Seller’s marketing of the
Property, which evaluations, analyses and communications are intended by any
Seller Party to be confidential.


 


“Property” is
defined in Section 2.


 


“Purchase
Price” is defined in Section 3.1(A).


 


“Real
Estate Taxes” is defined in Section 4.1(c).


 


“Real
Property” is defined in Section 2(a).


 


“Rent
Roll” is defined in Section 4.1(a).


 


“Rents” is
described in Section 11.1.


 


“Reznick” is
defined in Section 9.3.


 


“Reznick Lease” is
defined in Section 9.3.


 


“Scheduled Closing
Date” is defined in Section 10.2.


 


“Seller”
shall mean the Person identified as Seller in the first paragraph of this
Agreement and such Person’s successors and assigns.


 


4





















 


“Seller Caused
Non-Permitted Exceptions” is defined in Section 8.1.


 


“Seller Deliverables”
is described in Section 4.1.


 


“Seller
Parties” shall mean Seller and any partner or member in, or, as applicable,
any shareholder or director of Seller, as well as the officers, employees,
attorneys, and agents of Seller.


 


“Seller’s Broker”
is defined in Section 13.1.


 


“Seller’s
Conditions Precedent” is described in Section 6.1.


 


“Seller
Default” is defined in Section 12.1.


 


“Seller’s
Knowledge”, “MBCR’s Knowledge”, and similar phrases shall mean the actual
knowledge, on any relevant date, of W. Joseph Smith, Edie Councilman or Ronald
D. Mettam (W. Joseph Smith and Edie Councilman having principal operational
authority for MBCR), without investigation or inquiry.


 


“Seller’s
Undertakings” is defined in Section 4.5.


 


“Survey”
is defined in Article 8.


 


“Tenant”
shall mean the tenant, occupier or licensee under any Lease.


 


“Title
Policy” is defined in Article 8.


 


“Title
Insurance Company” shall mean LandAmerica Title Insurance Company


 


“Venable”
is defined in Section 15.19.


 


“Venable
Lease” is defined in Section 15.19.


 


“Warranties”
is defined in Section 2(e).


 


Terms Generally.  For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires, (a) the words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or provision, (b) the words “including” and “include” and
other words of similar import shall be deemed to be followed by the phrase “without
limitation”.  Whenever the context may
require, any defined term or pronoun used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
defined terms, pronouns or nouns shall include the plural and vice versa. The
captions of the Sections of this Agreement are for convenience only and have no
meaning with respect to this Agreement or the rights or obligations of the
parties.  References herein to “Exhibit”,
“Schedule”, “Rider”, “Article”, “Section” or “subsection” shall be deemed
references to an Exhibit, Schedule, Rider, Article, Section or subsection
attached to, or, as applicable, contained in, this Agreement.


 


5





















 


membership interests;
PROPERTY


 


Seller owns one
hundred percent (100%) of the membership interests (the “Membership
Interests”) in MBC Realty, LLC, a Maryland limited liability company (“MBCR”),
which owns all of the Property (as hereinafter defined).  Seller hereby agrees to sell and cause to be
conveyed to Buyer, and Buyer hereby agrees to purchase from Seller, all of
Seller’s rights, title and interest in and to the Membership Interests and all
of the benefits accruing to the owner thereof, including, but not limited to,
MBCR’s interest in the following described property (herein collectively called
the “Property”):


 


the parcel or
parcels of land described in Exhibit “A” (“Land”), together with
any and all rights, privileges and easements appurtenant thereto owned by MBCR,
including, without limitation, any and all rights of MBCR in and to all air and
development rights, roads, alleys, easements, streets and ways adjacent to the
Land, all appurtenant rights of ingress and egress thereto or therefrom, any
strips and gores within or bounding the Land and any profits, rights or
appurtenances pertaining to the Land, together with all buildings, improvements
and fixtures (other than fixtures owned or removable by any Tenant or other
Person pursuant to a Lease or Contract) located thereon (collectively, “Improvements”;
the Land, together with the Improvements, the “Real Property”);


 


all equipment,
furnishings, inventory and other tangible personal property owned by MBCR and
not owned or removable by any Tenant or other Person pursuant to a Lease or
Contract, if any, placed or located on the Real Property now or prior to
Closing and used in the operation of the Real Property (the “Personal
Property”);


 


all the
interest of the landlord in all Leases, any and all claims or rights to claim
against a Tenant under any Lease and all security deposits paid or deposited by
Tenants in respect of the Leases;


 


all of MBCR’s
rights in and to all service, maintenance and operating contracts, equipment
leases and similar agreements relating to the operation, maintenance and repair
of the Property, including service and maintenance agreements, utility
agreements and other contractual arrangements, all to the extent assumed by
Buyer in accordance with Section 4.6 of this Agreement (collectively, “Contracts”);


 


all of MBCR’s
rights, title and interest in and to any warranties, guaranties,  entitlements to use, and all other property
rights and interests relating to the Property made by or received from any
Person with respect to any building component, machinery, equipment, furnishings,
fixture or material comprising a part of any Improvement or with respect to any
Personal Property or Contract (collectively, “Warranties”);


 


to the extent
in the possession of MBCR or Seller, and to the extent assignable, all as-built
building plans and specifications relating to the Real Property (collectively, “Plans”);


 


all current
on-site books and records exclusively pertaining to the current operation of
the Property, to the extent in MBCR’s or Seller’s possession, excluding
Privileged Material (collectively, “Books and Records”);


 


6





















 


all licenses,
permits, building inspection approvals, certificates of occupancy, approvals,
subdivision maps and entitlements, if any, issued, approved or granted by
Governmental Authorities in connection with the Real Property (collectively, “Licenses
and Permits”); and


 


all rights to
any award made or to be made or settlement in lieu thereof for damage to the
Land or Improvements by reason of condemnation, eminent domain, exercise of
police power or change of grade of any street.


 


PURCHASE PRICE


 


Purchase Price. 



 


(A)                              The
purchase price for the Membership Interests is Fifty-One Million Two Hundred
Fifty Thousand Dollars ($51,250,000) (“Purchase Price”).


 


(B)                                The
Purchase Price shall be paid by Buyer as follows:


 


On the Deposit Date, Buyer shall deposit by delivery of a
bank draft or wire transfer of immediately available funds pursuant to the wire
transfer instructions set forth in the Deposit Escrow Agreement, in escrow with
the Title Insurance Company, a cash payment of Five Hundred Thousand Dollars
($500,000) (such cash payment, together with all interest earned on such funds,
the “Deposit”).  The Deposit shall be
held in escrow, in an interest-bearing account with a federally insured bank
(which may be an Affiliate of Seller), and disbursed by the Title Insurance
Company pursuant to the provisions of this Agreement and the Deposit Escrow
Agreement.  At Closing, the Deposit (including
all accrued interest) shall be paid to Seller as a credit against the Purchase
Price.


 


The balance of the Purchase Price over and above the
Deposit, plus or minus any apportionments, prorations, credits and costs in
accordance with Section 11 hereof, shall be paid by Buyer at Closing, by wire
transfer of immediately available funds to the Title Insurance Company,
pursuant to the wire transfer instructions set forth in the Deposit Escrow
Agreement, or any replacement instructions, for payment to Seller or on its
behalf at Closing.


 


Failure to Pay Deposit.  In the event that Buyer fails to fund the
Deposit on the Deposit Date (with time being of the essence) for any reason
whatsoever, this Agreement shall immediately and automatically terminate.  Upon any termination of this Agreement pursuant
to this Section 3.2, no party shall have any further rights, duties or
obligations under this Agreement, except as otherwise expressly set forth
herein.


 


DUE DILIGENCE


 


Seller
Deliverables.  Seller
hereby represents and warrants to Buyer that, to Seller’s Knowledge, the copies
previously or hereafter delivered to Buyer (collectively, the “Seller 


 


7





















 


Deliverables”) of the following
items (which, to the extent not previously delivered by Seller, shall be delivered
by Seller to Buyer promptly following the Effective Date or as otherwise
expressly required herein), are or will be true, correct and complete copies of
all such items as maintained or possessed by Seller and/or MBCR at the time of
delivery in all material respects:


 


a rent roll
for the Property for the current year and for past two calendar years, in the
form currently maintained by MBCR (“Rent Roll”) and an accounting of all
refundable security deposits made by Tenants under the Leases (the “List of
Security Deposits”);


 


annual
operating, income and expense statements for the Property for calendar years
2002 and 2003, and for the first nine months of 2004, as well as operating,
income and expense statements on a monthly basis for the trailing 12 month
period ended September 30, 2004, together with such other financial information
as is specified in Section 7.1(A)(xxvii) hereof;


 


the bills
issued for the most recent year and the preceding two (2) years for the
Property for all real estate taxes and assessments (collectively, “Real
Estate Taxes”) relating to the Property;


 


the Leases and
the Contracts;


 


the
Warranties;


 


the Plans;


 


the Books and
Records and expense recovery worksheets and billings for the past two calendar
years and first nine months of 2004;


 


the Licenses
and Permits;


 


all
environmental reports and studies in the possession of MBCR, Seller or its
agents relating to the determination as to whether any Hazardous Materials
exist at the Property and as to any work performed or proposed in connection
with any Hazardous Materials at any time located at the Property, if any, and
any engineering reports with respect to the Property to the extent in the
possession of Seller or MBCR;


 


all
organizational documents related to the formation and operation of MCBR;


 


all
information in the possession of Seller or MBCR related to the transfer of
title of the Property to MBCR;


 


all
information and documentation in the possession of Seller or MBCR related to
MBCR’s tenancy under any lease or agreement, including the Cross Keys Lease;


 


call reports
for each of the years ended December 31, 2001, December 31, 2002 and December
31, 2003 for Mercantile-Safe Deposit and Trust Company as Tenant;


 


8





















 


a complete and
accurate list of all Seller Pension Plans, as such term is defined in Section
7.1(A)(xxx) and including true, correct and complete copies of the most recent
Forms 5500 and any attached financial statements and any related actuarial
report; and


 


all information
related to the sale or assignment of the Other Properties, including copies of
the agreements for the purchase and sale thereof and any environmental reports
to the extent in the possession of Seller or MBCR.


 


Seller shall make the
originals of all Leases available to Buyer at the Property for Buyer’s
inspection at all times from and after the Effective Date through the Closing
Date.


 


Independent Investigation.  Notwithstanding any information which
Seller may have provided to Buyer, Buyer may, during the Due Diligence Period,
inspect and investigate each and every aspect of the Property, either
independently or through agents, representatives or experts of Buyer’s
choosing, as Buyer considers necessary or appropriate.  Without limiting the generality of the
foregoing but subject to the other provisions of this Article 4, Buyer shall
have the right to have performed (i) a physical, mechanical and environmental
inspection of the Property, including but not limited to soil borings,
samplings and other tests and engineering inspections, as Buyer deems necessary
to determine the physical condition of the Property, including but not limited
to whether any Hazardous Materials exist at the Property, and, if so, to
determine the appropriate manner and cost of removal or other corrective
measures with respect to the same, and (ii) an inspection of all books and
records and financial information pertaining thereto.  During the Due Diligence Period, Seller shall
cooperate with Buyer in its inspection of the Property, including but not
limited to, furnishing to Buyer such information, materials and documents as
Buyer may reasonably request and making W. Joseph Smith and other
representatives and agents of Seller and MBCR available to Buyer at reasonable
times and upon reasonable notice; Seller shall not, however, have any
obligation to incur any cost not otherwise contemplated by this Agreement.


 


Termination During Due
Diligence Period.  


 


(A)                              At
any time prior to the Due Diligence Period Expiration Date, Buyer shall have
the right, in its sole and absolute discretion, and for any or no reason
whatsoever, to terminate this Agreement by written notice to Seller given by
Buyer on or prior to the Due Diligence Period Expiration Date, and, upon such
election, the Deposit shall be immediately refunded to Buyer, other than Fifty
Thousand Dollars ($50,000) which shall be paid to Seller as consideration for
the aforementioned Due Diligence Period; provided, however, that the entire
Deposit of Five Hundred Thousand Dollars ($500,000) shall be immediately
refunded to Buyer upon Buyer’s election to terminate this Agreement by written
notice to Seller given by Buyer on or prior to the Due Diligence Period
Expiration Date on the grounds that: (i) the results of the environmental
inspection are unacceptable to Buyer; (ii) the condition of title, including
survey issues, is unacceptable to Buyer; (iii) the liabilities related to the
Other Properties are in any respect unacceptable to Buyer; or (iv) Buyer and
Seller are unable to agree on the terms of the Mercantile Lease.  In addition, the entire Deposit of $500,000
shall be immediately refunded to Buyer, whether before or after the Due
Diligence Period Expiration Date, in the event that Buyer is entitled to
terminate this Agreement following the Due Diligence Period pursuant to the
terms 


 


9





















 


of this Agreement.  Upon Buyer’s
election to terminate this Agreement as set forth in the preceding sentence,
the parties hereto shall have no further liabilities one to the other (other
than those that are expressly stated to survive the termination of this
Agreement).


 


(B)                                Buyer
agrees that it will exercise good faith efforts to advise Seller immediately if
Buyer decides at any time prior to the Due Diligence Period Expiration Date not
to proceed with the purchase contemplated hereunder.


 


Buyer’s Knowledge. 


 


Seller shall have no
liability whatsoever to Buyer with respect to any matter related to the
Property disclosed by Seller in the Due Diligence Materials or of which Buyer
or its agent or counsel obtains actual knowledge, by any means, prior to the
Due Diligence Period Expiration Date. 
For purposes of this Section 4.4, Buyer’s actual knowledge shall mean
the actual, conscious knowledge of T. Richard Litton, Jr., Jordan E. Slone or
Michael H. Heinricher.


 


AS-IS SALE.  


 


BUYER SPECIFICALLY
ACKNOWLEDGES AND AGREES THAT (a) EXCEPT FOR (I) THE REPRESENTATIONS, WARRANTIES
AND COVENANTS MADE BY SELLER IN THIS AGREEMENT, AS QUALIFIED BY SECTION 4.4,
AND SUBJECT TO THE SURVIVAL PROVISIONS OF THIS AGREEMENT, AND (II) THE
REPRESENTATIONS, WARRANTIES AND COVENANTS MADE BY SELLER IN THE CLOSING
DOCUMENTS (ALL THE FOREGOING BEING REFERRED TO, COLLECTIVELY, AS “SELLER’S
UNDERTAKINGS”), SELLER SHALL
SELL AND BUYER SHALL PURCHASE THE MEMBERSHIP INTERESTS AND THEREBY THE PROPERTY
“AS IS, WHERE IS AND WITH ALL FAULTS AND LATENT PATENT DEFECTS” AND WITH ALL
VIOLATIONS OF LAWS AND ORDINANCES, AND (b) EXCEPT FOR SELLER’S UNDERTAKINGS,
BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR
OTHERWISE, FROM SELLER, OR ANY SELLER PARTY AS TO ANY MATTER, CONCERNING THE
PROPERTY, OR (EXCEPT TO THE EXTENT PROVIDED OTHERWISE IN SELLER’S UNDERTAKINGS)
SET FORTH, CONTAINED OR ADDRESSED IN THE DUE DILIGENCE MATERIALS (INCLUDING
WITHOUT LIMITATION, THE COMPLETENESS THEREOF), INCLUDING WITHOUT LIMITATION ANY
WARRANTIES AS TO: (i) THE QUALITY, NATURE, HABITABILITY, MERCHANTABILITY, USE,
OPERATION, VALUE, MARKETABILITY, ADEQUACY OR PHYSICAL CONDITION OF THE PROPERTY
OR ANY ASPECT OR PORTION THEREOF, INCLUDING, WITHOUT LIMITATION, STRUCTURAL
ELEMENTS, FOUNDATION, ROOF, APPURTENANCES, ACCESS, LANDSCAPING, PARKING
FACILITIES, ELECTRICAL, MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY
SYSTEMS, FACILITIES AND APPLIANCES, SOILS, GEOLOGY AND GROUNDWATER, (ii) THE
DIMENSIONS OR LOT SIZE OF THE PROPERTY OR THE SQUARE FOOTAGE OF THE
IMPROVEMENTS THEREON OR OF ANY TENANT SPACE THEREIN, (iii) THE DEVELOPMENT OR
INCOME POTENTIAL, OR RIGHTS OF OR RELATING TO, THE PROPERTY, OR THE PROPERTY’S
USE, HABITABILITY,


 


10





















 


MERCHANTABILITY, OR
FITNESS, OR THE SUITABILITY, VALUE OR ADEQUACY OF THE PROPERTY FOR ANY
PARTICULAR PURPOSE, THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR ANY
OTHER PUBLIC OR PRIVATE RESTRICTIONS ON THE USE OF THE PROPERTY, THE COMPLIANCE
OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS, REGULATIONS,
STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY
GOVERNMENTAL AUTHORITY OR OF ANY OTHER PERSON OR ENTITY (INCLUDING, WITHOUT
LIMITATION, THE AMERICANS WITH DISABILITIES ACT), THE ABILITY OF BUYER TO
OBTAIN ANY NECESSARY GOVERNMENTAL APPROVALS, LICENSES OR PERMITS FOR BUYER’S
INTENDED USE OR DEVELOPMENT OF THE PROPERTY, THE PRESENCE OR ABSENCE OF
HAZARDOUS MATERIALS ON, IN, UNDER, ABOVE OR ABOUT THE PROPERTY OR ANY ADJOINING
OR NEIGHBORING PROPERTY, THE QUALITY OF ANY LABOR AND MATERIALS USED IN THE
CONSTRUCTION OF ANY IMPROVEMENTS, THE CONDITION OF TITLE TO THE PROPERTY, THE
LEASES, CONTRACTS OR ANY OTHER AGREEMENTS AFFECTING THE PROPERTY OR THE
INTENTIONS OF ANY PARTY WITH RESPECT TO THE NEGOTIATION AND/OR EXECUTION OF ANY
LEASE OR CONTRACT WITH RESPECT TO THE PROPERTY, SELLER’S TITLE TO OR OWNERSHIP
OF THE PROPERTY OR ANY PORTION THEREOF OR THE ECONOMICS OF, OR THE INCOME AND
EXPENSES, REVENUE OR EXPENSE PROJECTIONS OR OTHER FINANCIAL MATTERS, RELATING
TO, THE OPERATION OF THE PROPERTY. 
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUT
EXCEPTING SELLER’S UNDERTAKINGS, BUYER EXPRESSLY ACKNOWLEDGES AND AGREES THAT
BUYER IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF ANY SELLER PARTY, NOR
ANY BROKER OR REPRESENTATIVE OF SELLER, WHETHER IMPLIED, PRESUMED OR EXPRESSLY
PROVIDED AT LAW OR OTHERWISE, ARISING BY VIRTUE OF ANY STATUTE, COMMON LAW OR
OTHER LEGALLY BINDING RIGHT OR REMEDY IN FAVOR OF BUYER.  BUYER FURTHER ACKNOWLEDGES AND AGREES, BUT WITHOUT LIMITING SELLER’S UNDERTAKINGS, THAT SELLER IS
UNDER NO DUTY TO MAKE ANY INQUIRY REGARDING ANY MATTER THAT MAY OR MAY NOT BE
KNOWN TO ANY SELLER PARTY OR ANY BROKER OF SELLER.  THIS SECTION SHALL SURVIVE THE CLOSING, OR,
IF THE CLOSING DOES NOT OCCUR, SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT
INDEFINITELY.


 


Service Contracts to be Assumed.  Not later than the Due Diligence Period
Expiration Date, Buyer will notify Seller in writing of those Contracts which
Buyer at its discretion has elected to have terminated.  Seller shall terminate the Contracts which
Buyer has elected to have terminated, and Seller shall be responsible for all
penalties, termination fees and other costs. 
Seller shall indemnify Buyer with respect to all Contracts that Buyer
elects to have terminated and, with respect to those Contracts Buyer elects to
have terminated, for the period before the Closing.  This provision shall survive the Closing.


 


No Obligation to Repair or to Comply.  Except in the ordinary course of
operating the Property in accordance with MBCR’s current practices, and except
for Seller’s Undertakings (to the extent 


 


11





















 


applicable), neither Seller nor MBCR shall be obliged to make any
changes, alterations or repairs to the Property.  Except for Seller’s Undertakings (to the
extent applicable), under no circumstances shall Seller or MBCR be obliged to
cure any violations of law or to comply with the requirements of any insurer
with respect to the Property or to make any capital improvements or repairs.


 


Buyer’s Entry and Indemnity; Limits
on Government Contact.  (A) In
connection with any entry by any Buyer Party or any of their contractors onto
the Property, Buyer shall give to W. Joseph Smith at (410) 237-5451 or Seller’s
Broker advance telephone notice of such entry and shall conduct such entry and
any inspections in connection therewith so as to minimize, to the greatest
extent possible, interference with MBCR’s business and the business and
occupancy of the Tenants and otherwise in a manner reasonably acceptable to
Seller.  Without limiting the foregoing,
prior to any entry to perform any on-site testing or inspection of structural,
subsoil or engineering conditions of the Property, Buyer shall provide W.
Joseph Smith or Seller’s Broker with the identity of the Persons who will
perform such testing or inspections and the proposed scope thereof.  Seller or its representative may, at Seller’s
option, be present to observe any testing or other inspection performed on the
Property.


 


(B)                                Buyer
shall maintain or cause to be maintained at all times during the effectiveness
of this Agreement, and for six months thereafter if such policy is a “claims
made” policy, insurance insuring Buyer and Seller for acts or omissions by
Buyer, its employees, agents or contractors occurring by virtue of any entry
onto the Property by any Buyer Party, with limits of not less than
$1,000,000.  If Closing does not occur,
Buyer shall repair any damage to the Property caused by any entry onto the
Property by any Buyer Party  or any of
their contractors and the performance of any tests by any Buyer Party or any of
their contractors.  Buyer shall indemnify
and hold the Seller Parties harmless from and against any Claims arising out of
or relating to any entry on the Property by any Buyer Party or any of their
contractors; provided, however, the indemnity which is the subject of this
sentence shall not cover liability arising from any Hazardous Materials
situated on or about the Property unless such Hazardous Materials are
introduced onto the Property by Buyer, nor shall such indemnification cover any
Claims arising from the negligence of Seller, its agents, employees,
contractors or representatives.  The
foregoing indemnity shall survive the Closing, or, if the Closing does not
occur, survive the termination of this Agreement.


 


(C)                                Notwithstanding
any provision in this Agreement to the contrary, neither Buyer nor any other
Buyer Party nor any of their contractors shall discuss with any Governmental
Authority or any Tenant regarding any Hazardous Materials on or the
environmental condition of the Property, except upon the prior written consent
of Seller or as otherwise required by applicable law; provided, however, that
Buyer or any Buyer Party may make customary and standard inquiry to any
Governmental Authority as to the presence or history of Hazardous Materials or
environmental conditions at the Property. 
Buyer shall give prior written notice to Seller before producing any
records, reports or other data requested by any Governmental Authorities.  Seller shall have the right to have a
representative present when Buyer has, or causes to be had, any such contact
with any Governmental Authority.


 


12





















 


Release.  


 


(A)                              Excepting
Seller’s Undertakings, Buyer, for itself, all Buyer Parties and their
successors and assigns, waives its right to recover from, and forever releases
and discharges, and covenants not to sue, all Seller Parties and all Seller’s
Affiliates with respect to any and all Claims, whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in
any way be connected with the Property, the Membership Interests or this
Agreement, including, without limitation, the physical, environmental and
structural condition of the Property or any law or regulation applicable
thereto, including, without limitation, but excepting Seller’s Undertakings,
any Claim or matter relating to the use, presence, discharge or release of
Hazardous Materials on, under, in, above or about the Property.


 


(B)                                This
Section 4.9 shall survive Closing, and any termination of this Agreement,
indefinitely.


 


BUYER’S CONDITIONS
PRECEDENT


 


Conditions to Buyer’s
Obligation to Purchase.  Buyer’s obligation to complete Closing is
conditioned upon the satisfaction (or Buyer’s written waiver at its sole
discretion) on or prior to the Closing Date of all of the following conditions
(collectively, “Buyer’s Conditions Precedent”):


 


Seller’s Representations and Warranties. 
The representations and warranties of Seller herein contained, with
such updates and changes as are herein expressly permitted, shall be true and
correct in all material respects, except that those representations and
warranties separately qualified by a materiality standard shall be true and
correct in all respects.


 


Seller’s Performance.  Seller shall have
performed in all material respects all of Seller’s covenants, agreements and
obligations required by this Agreement to be performed at or prior to Closing,
except that those covenants, agreements and obligations separately qualified by
a materiality standard shall have been performed by Seller in all respects.


 


Condition of Title.  At Closing, the Real Property shall not be
subject to any Seller Caused Non-Permitted Exceptions.


 


5.1.4                     Estoppel
Certificates.  Seller shall have furnished to Buyer estoppel
certificates in a form to be provided by Buyer, as approved by Buyer’s lender
(without material modifications as to any estoppel certificate), from (i) all
Tenants leasing five thousand (5,000) or more square feet of space in the
Improvements and (ii) Tenants who in the aggregate lease at least eighty-five
percent (85%) of the leased area of the Premises, which certificates shall be
dated not earlier than thirty (30) days prior to the Closing Date, and none of
the Leases shall have been terminated or cancelled and none of the Tenants
shall have ceased operating its business at the Premises, or given Seller any
notice of its intention to terminate its Lease or cease operating its business
at the Premises.  In addition, if required
by Buyer’s lender, Seller shall have furnished to Buyer a subordination,
nondisturbance and attornment agreement (“SNDA”), in a form provided by Buyer,
executed by each of those Tenants under the Leases as required by Buyer’s
lender.  Prior to the Due Diligence
Period Expiration Date, Buyer shall notify Seller in


 


13





















 


writing whether or not Buyer’s lender requires SNDAs, and if it does,
the Tenants from which it is so required. 
If Buyer fails to give such notice to Seller by the Due Diligence Period
Expiration Date, this condition precedent to Buyer’s obligation to close the
transaction contemplated hereunder shall be deemed null and void and of no
further force or effect.  Seller shall
use commercially reasonable efforts to obtain and deliver to Buyer estoppel
certificates from all Tenants and, if required, such SNDAs at least ten (10)
days prior to the Closing.  If, on the
Closing Date, Seller shall not have obtained all required estoppel certificates
and SNDAs and if Buyer does not waive such requirement, then, at Seller’s
option, Seller may adjourn the Closing Date by up to fifteen (15) days (the “Adjourned
Closing Date”) to try to obtain all required estoppel certificates and
SNDAs.  If, by the Adjourned Closing
Date, Seller shall not have obtained and delivered to Buyer all required
estoppel certificates and SNDAs, then Buyer shall have the right, at its
option, to (i) waive such requirement and close without adjustment in the
Purchase Price; or (ii) terminate this Agreement by written notice to Seller
with a copy to the Title Insurance Company, with instructions to the Title
Insurance Company, as escrow agent, to return the Deposit to Buyer (subject to
the provisions of the Escrow Deposit Agreement), and upon return of the Deposit
to Buyer, this Agreement shall terminate and neither party shall have any
further liability or obligation to the other hereunder, except for Buyer’s
obligations to treat Due Diligence Documents as confidential, proprietary information
and return the same to Seller pursuant to Paragraph 15.15 hereof.  Prior to the Adjourned Closing Date Buyer may
at any time waive such requirement and close the transaction without adjustment
or reduction in the Purchase Price.


 


Income and Expenses.  There shall have been no material adverse
change in the income or expenses related to the Premises.


 


Mercantile Lease.  Prior to the Due
Diligence Period Expiration Date, Seller and Buyer shall negotiate in good
faith and agree upon the text of a lease to be entered into by Mercantile
Safe-Deposit and Trust Company, as Tenant, with MBCR (the “Mercantile Lease”)
that shall be substantially in accordance with the terms set forth in the term
sheet attached hereto as Exhibit “J”, and, on or prior to the Due
Diligence Period Expiration Date, Seller shall cause Mercantile-Safe Deposit
and Trust Company and MBCR to execute and deliver to Buyer the Mercantile
Lease, which shall be effective as of the consummation of the Closing.


 


Disposition of Other Properties.  Prior to the Due Diligence Period Expiration
Date, (i) Seller shall convey the Federalsburg Call Center and the Linthicum
Operations Center from MBCR to third parties and shall provide evidence of such
disposition to Buyer and (ii) the Cross Keys Lease shall have been terminated
or assigned by MBCR in accordance with its terms.


 


Failure of Conditions.  If at the time of Closing any Buyer’s
Conditions Precedent shall not have been satisfied in any material respect,
then unless such lack of satisfaction has been caused by a Seller Default (in
which case the provisions of Section 12.1 shall apply), Buyer shall have the
right (as Buyer’s exclusive right and remedy, subject to the Sections 8.1 and
8.2 hereof) either (a) to proceed with Closing without any adjustment in the
Purchase Price, in which case Buyer shall be deemed to have waived all
unsatisfied Buyer’s Conditions Precedent, or (b) to terminate 


 


14





















 


this Agreement by giving Seller notice on or before the Scheduled
Closing Date, in which case the Deposit shall be refunded to Buyer promptly
and, thereupon, neither party shall have any further rights, duties,
liabilities or obligations under this Agreement, except as otherwise expressly
set forth herein.


 


SELLER’S CONDITIONS
PRECEDENT


 


Conditions to Seller’s
Obligations to Sell. 
Seller’s obligation to complete Closing is conditioned upon the
satisfaction (or Seller’s written waiver) on or prior to the Closing Date of
all of the following conditions (collectively, “Seller’s Conditions
Precedent”):


 


Purchase Price.  The
Title Insurance Company shall have received the entire Purchase Price, plus or
minus any prorations, deduction, apportionments or costs in accordance with
Section 11 hereof, and Buyer shall have executed and delivered the Closing
Instructions directing the Title Insurance Company to disburse the same.


 


Buyer’s Representations and Warranties.  The representations and warranties of Buyer
herein contained shall be true and correct in all material respects.


 


Buyer’s Performance.  Buyer shall have
performed, in all material respects, all of Buyer’s covenants, agreements and
obligations required by this Agreement to be performed at or prior to Closing.


 


REPRESENTATIONS AND
WARRANTIES


 


Representations and
Warranties of Seller.


 


(A)                              In
addition to the representations, warranties and covenants contained elsewhere
in this Agreement, Seller hereby represents, warrants, and covenants to Buyer
as follows, which representations and warranties shall survive Closing except
to the extent otherwise set forth herein:


 


(i)                                     Seller
is and will at Closing be duly organized, validly existing and in good standing
under the laws of the state of its formation. 
MBCR is and will at Closing be duly organized, validly existing and in
good standing under the laws of its state of formation.  Seller owns of record and beneficially 100%
of the membership interests in MBCR free and clear of all liens, claims and
encumbrances.  Seller has delivered to
Buyer true, correct and complete copies of the Articles of Organization of
MBCR, the operating agreement of MBCR (the “Operating Agreement”)
and the minute books and records of transfer of membership interests of
MBCR.  MBCR was formed as a Maryland
limited liability company on December 17, 1998 pursuant to the Articles of
Organization and the Operating Agreement described in the preceding
sentence.  The membership interests of
MBCR are not subject to any restriction with 


 


15





















 


respect to their transferability (other than restrictions on transfer
under applicable federal and state securities laws).  No third party has grounds for any claim (i)
against the membership interests, or (ii) that it has any ownership interest in
MBCR .  No person is entitled to any
preemptive rights with respect to the purchase or sale of any membership or
ownership interest in MBCR, and as of the Closing Date there will be no
outstanding options, warrants or other rights, commitments or arrangements,
written or oral to purchase or otherwise acquire any membership or ownership
interest in MBCR or any security directly or indirectly convertible into or
exchangeable or exercisable for any membership or ownership interest in
MBCR.  MBCR does not presently own or
control, directly or indirectly, any interest in any other corporation,
association or other business entity and MBCR does not own or hold any assets
other than the Property.  MBCR is not a
participant in any joint venture, partnership or other similar arrangement.


 


(ii)                                  This
Agreement and all Closing Documents to which Seller is a party (a) are, and at
the time of Closing will be, duly authorized, executed and delivered by Seller,
(b) do not, and at the time of Closing will not, violate any provision of any
agreement to which Seller is a party or to which Seller is subject, (c)
constitute (or in the case of Closing Documents will constitute) a valid and
legally binding obligation of Seller, enforceable in accordance with its terms,
and (d) do not, and at the time of Closing, will not require the consent of any
third parties to be a valid and legally binding obligation of Seller.


 


(iii)                               At
closing, MBCR shall not be obligated under any Contract other than those
Contracts that Buyer elects not to have terminated pursuant to Section 4.6 of
this Agreement.


 


(iv)                              Seller
represents that in addition to the Property, MBCR has owned only two other
properties, one being known as the Linthicum Operations Center and one being
known as the Federalsburg Call Center, and has leased only one property, being
a lease of approximately 839 square feet at the Village at Cross Keys,
Baltimore, Maryland pursuant to a lease, dated March 19, 2004, between MBCR, as
tenant, and VCK Business Trust, as landlord (the “Cross Keys Lease,” and together
with the Linthicum Operations Center and the Federalsburg Call Center, the “Other
Properties”).


 


(v)                                 MBCR
has not at any time had any assets or liabilities, other than assets and
liabilities directly related to the ownership and operation of the Property and
the Other Properties in the ordinary course of business, and liabilities to
employees involved in such business.


 


(vi)


 


(a)
Neither Seller nor MBCR has within the past five years received written notice
of any violation of law with respect to Hazardous Materials at the
Property.  To Seller’s Knowledge and MBCR’s
Knowledge, the Property does not contain any Hazardous Materials which might
subject MBCR to any liability on or after the date hereof.  To Seller’s Knowledge and MBCR’s Knowledge,
the Property does not violate any law with respect 


 


16





















 


to Hazardous Materials in any material respect.  This Section 7.1(A)(vi)(a) shall not
survive the Closing.


 


(b)
Neither Seller nor MBCR has received written notice of any violation of law
with respect to Hazardous Materials at the Other Properties.  The Other Properties do not contain any
Hazardous Materials which might subject MBCR to any liability on or after the
date hereof.  None of the Other
Properties violate any law with respect to Hazardous Materials in any material
respect.


 


(vii)


 


(a)
Neither Seller nor MBCR has received any written notice which remains
outstanding from any governmental body having jurisdiction over the Property as
to any violation of any building, fire, environmental, health or any
governmental law or ordinance affecting the Property which might constitute a
liability of MBCR at or after Closing, nor do Seller or MBCR have knowledge of
any such violations.  This Section
7.1(A)(vii)(a) shall not survive the Closing.


 


(b)
Neither Seller nor MBCR has received any written notice which remains
outstanding from any governmental body having jurisdiction over the Other
Properties as to any violation of any building, fire, environmental, health or
any governmental law or ordinance affecting the Other Properties which might
constitute a liability of MBCR at or after Closing, and no such violations
exist for which Seller or MBCR may become liable.


 


(viii)                        On or
before the Closing Date, all expenses of the Other Properties shall have been
paid current or the liability therefor shall have been assumed by the
transferee owners of each of the Other Properties or the Seller.


 


(ix)                                MBCR
shall have no liabilities as of the Effective Date, whether fixed or contingent,
or arising subsequent to the Closing Date as a result of MBCR’s ownership and
operation of the Other Properties, with the exception of the worker’s
compensation claim described on Exhibit “F” attached hereto, for which
MBCR and Seller are fully insured and for which Seller agrees to be liable in
the event that its insurance fails to cover such claim, and with the exception
of liabilities described in the MBCR Financial Statements, for which Seller
shall be responsible.


 


(x)                                   At
and after Closing MBCR shall not be subject to any liabilities or obligations
pertaining to its prior ownership of the Other Properties, whether known or
unknown, fixed or contingent, liquidated or unliquidated, except such as have
been assumed by and will be paid by the transferees of the Other
Properties.  MBCR has not received
written notice of any litigation that is pending or threatened against MBCR
and, to the knowledge of Seller and MBCR, no such litigation is pending or
threatened.


 


(xi)                                As
of the Effective Date, MBCR shall have no employees and MBCR shall have no
liability to or with respect to any employee, including without limitation no
obligations for salary, wages or benefits for any accrued vacation pay, sick
leave, contributions to pension or profit-sharing plans, cafeteria plans or any
other employee benefit whatsoever.


 


17










 













 


(xii)                             As of
Closing, MBCR shall have filed all tax returns and paid all taxes theretofore
due or payable.  Seller represents and
warrants that for United States federal income tax purposes (and also, to the
extent applicable, for all state and local income tax purposes) MBCR is and
since its formation has been classified and properly characterized as an entity
disregarded as separate from its owner under Treasury Regulation Sections
301.7701-2 and 301.7701-3, and that all tax returns, filings and elections made
by MBCR and Seller to date have been consistent with said classification, and
further (for avoidance of doubt) that MBCR is not and never has been classified
or properly characterized as a corporation, as an association taxable as a
corporation, or as a “publicly traded partnership” treated as a corporation
under Internal Revenue Code Section 7704 or any similar tax law.


 


(xiii)                          MBCR
holds all licenses, franchises, permits and other governmental authorizations
the absence of any of which could have a material adverse effect on MBCR, and
MBCR or Seller has delivered to Buyer an accurate list and description of all
governmental licenses, franchises, permits and other governmental
authorizations, including permits, titles, licenses, franchises and certificates,
which, to Seller’s Knowledge, exist.  All
of those licenses, franchises, permits and other governmental authorizations
are valid, and MBCR has not received any notice that any Governmental Authority
intends to cancel, terminate or not renew any such license, franchise, permit
or other governmental authorization. 
MBCR has conducted and is conducting its business in compliance with the
requirements, standards, criteria and conditions set forth in all licenses, franchises,
permits and other governmental authorizations, and is not in violation of any
of the foregoing except where such non-compliance or violation would not have a
material adverse effect on MBCR.  This
Section 7.1(A)(xiii) shall not survive the Closing.


 


(xiv)                         Except as
otherwise set forth in this Agreement and the Exhibits hereto, (aa) all of the
Leases are in full force and effect, (bb) not more than one (1) month’s rent
under any of the Leases has been collected in advance, (cc) Seller is not in
default under any of the Leases, (dd) Seller has not assigned or pledged the
Leases or the rent due thereunder, and (ee) Seller has no obligation to provide
any Tenant any allowances or credits except as set forth in the Leases.  Other than the Leases, there are no leases or
occupancy agreements in force with respect to the Property.  As of the Effective Date, no Tenant is in
default in any material respect under any Lease.  This Section 7.1(A)(xiv) shall not
survive the Closing.


 


(xv)                            As of
the Effective Date, neither Seller nor MBCR has actual notice, or has received
from any Person any written notice, of any pending or threatened condemnation
or similar proceeding and, to Seller’s knowledge, there is no change or
proposed change in the route, grade, or width of, or otherwise affecting, and
street or road that is contiguous to the Property or any portion of the
Property or of pending public improvements in or adjoining the Property which
will in any manner affect the Property.  This
Section 7.1(A)(xv) shall not survive the Closing.


 


(xvi)                         As of the
Effective Date, neither Seller nor MBCR has actual notice, or has received
written notice, of any litigation that is pending or threatened with respect to
the Property or MBCR which could affect the Property or MBCR upon or subsequent
to the Closing, except for the worker’s compensation claim described on Exhibit
“F”, which is fully 


 


18





















 


insured and for which Seller agrees to be liable in the event its
insurance fails to cover such claim.  This
Section 7.1(A)(xvi) shall not survive the Closing.


 


(xvii)                      The rent
roll and List of Security Deposits annexed hereto as Exhibit “E” (the “Initial
Rent Roll and List of Security Deposits”) are true and accurate as of their
date, and there are no Tenants at the Property as of the date of such rent roll
except as set forth thereon.  There are
no rent concessions presently in effect other than a rent-free occupancy
agreement for                  
square feet of space for a barbershop for the use and convenience of the Tenants
and a rent-free occupancy agreement for              
square feet of space for a café for the use and convenience of the Tenants..


 


(xviii)                   All payments
due on or before Closing in respect of lease commissions for existing Leases,
including commissions with respect to renewals or extensions thereof which have
heretofore been exercised, are or will be paid current by Seller or MBCR at or
before the Closing.


 


(xix)                           A
correct and complete list of the Contracts which affect the Property is set
forth on Exhibit “G” annexed hereto, and such Contracts have been
delivered to Buyer.  On the Closing Date,
all Contracts, except for those Buyer has elected not to have terminated in
accordance with Section 4.6 hereof, shall be terminated and of no further
force and effect, and any payments due thereunder shall have been paid by
Seller.  Each of the Contracts are valid
and in full force and effect, and, neither MBCR nor, to Seller’s Knowledge, the
other party thereto is in default thereunder.


 


(xx)                              The schedule of
Personal Property annexed hereto as Exhibit “H” contains a correct and
substantially complete list of all Personal Property and fixtures owned by MBCR
and located at or used in connection with the operation of the Property.  All Personal Property is owned by MBCR free
from encumbrances or liens, or is the subject of a Lease.


 


(xxi)                           The
Property is free and clear of all mechanics’ and materialmen’s liens and all
work performed or materials furnished up to Closing which are or might become a
lien against the Property shall be paid for or bonded off at or prior to the
Closing, or an amount sufficient to pay for the same shall be escrowed with the
Title Insurance Company at Closing.


 


(xxii)                        To Seller’s
Knowledge, the Property does not contain any Hazardous Materials other than as
set forth in any reports delivered by Seller to Buyer pursuant to the
provisions of Section 4.1, or such limited quantities of substances used
for cleaning and maintenance as are customarily used in the operation of office
buildings such as the Property.  This Section 7.1(A)(xxii)
shall not survive the Closing.


 


(xxiii)                     Neither
Seller nor MBCR, nor, to Seller’s Knowledge, any Tenant at the Property is the
subject of any existing, pending, threatened or contemplated bankruptcy,
solvency or other debtor’s relief proceeding. 
This Section 7.1(A)(xxiii) shall not survive the Closing.


 


(xxiv)                    Neither Seller
nor MBCR has received any written notice which remains outstanding from any
governmental body having jurisdiction over the Property as to any 


 


19





















 


violation of any building, fire, environmental, health or other
governmental law or ordinance affecting the Property, or any written notice
which remains outstanding from any insurance company or inspection or rating
bureau setting forth any requirements as a condition to the continuation to any
insurance coverage on or with respect to the Property or the continuation
thereof at the existing premium rates.  This
Section 7.1(A)(xxiv) shall not survive the Closing.


 


(xxv)                       Seller is
not a “foreign person” as such term is defined in Section 1445(f)(3) of
the Internal Revenue Code of 1986, as amended (the “Code”).


 


(xxvi)                    To Seller’s
Knowledge, Seller is in compliance with all laws, statutes, rules and regulations
of any federal, state or local governmental authority in the United States of
America applicable to such Persons (as hereinafter defined), including, without
limitation, the requirements of Executive Order No. 13224, 66 Fed. Reg. 49079
(Sept. 25, 2001) (the “Order”) and other similar requirements contained in the
rules and regulations of the Office of Foreign Asset Control, Department of the
Treasury (“OFAC”) and in any enabling legislation or other Executive Orders in
respect thereof (the Order and such other rules, regulations, legislation, or
orders are collectively called the “Orders”), to the extent that noncompliance
would have a material adverse effect on Seller’s ability to convey the
Membership Interests or would cause Buyer to incur a liability.  For purposes of this subsection, “Person”
shall mean any corporation, partnership, limited liability company, joint
venture, individual, trust, real estate investment trust, banking association,
federal or state savings and loan institution and any other legal entity,
whether or not a party hereto; and Seller:


 


(a)                                  is
not listed on the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to the Order and/or on any other list of terrorists
or terrorist organizations maintained pursuant to any of the rules and
regulations of OFAC or pursuant to any other applicable Orders (such lists are
collectively referred to as the “Lists”);


 


(b)                                 has
not been indicted or arrested for money laundering or for predicate crimes to
money laundering, convicted or pled nolo contendere to charges involving money
laundering or predicate crimes to money laundering;


 


(c)                                  has
not been determined by competent authority to be subject to the prohibitions
contained in the Orders;


 


(d)                                 is
not owned or controlled by, nor acts for or on behalf of, any Person on the
Lists or any other Person who has been determined by competent authority to be
subject to the prohibitions contained in the Orders; or


 


(e)                                  shall
not assign this Agreement or any interest herein, to any Person who is listed
on the Lists or who is engaged in illegal activities.


 


If prior to Closing,
Seller becomes listed on the Lists or is indicted, arraigned, or custodially
detained on charges involving money laundering or predicate crimes to money
laundering (each, a “Triggering Event”), Seller shall immediately notify Buyer,
but in no event later than five (5) business days after the occurrence of the
Triggering Event.  In the event of a 


 


20





















 


Triggering Event, Buyer may terminate this Agreement upon written
notice to Seller, whereupon the Deposit, shall be returned to Buyer, and
neither party shall have any further obligation hereunder.  At Seller’s option, Seller shall have ten
(10) business days after receipt of Buyer’s notice to remove such party from
any interest in Seller.


 


(xxvii)                 Seller has
delivered, or shall deliver within two (2) Business Days following the
Effective Date, to Buyer copies of the following financial statements:  balance sheets and income statements, at and
for each of the years ended December 31, 2000, 2001, 2002 and 2003, and
for the nine-month period ended September 30, 2004 prepared by or on
behalf of MBCR and all balance sheets and income and expense statements
prepared in connection with the Property and Other Properties (such income and
expense statements, but not such balance sheets, shall be prepared on a
property by property or stand alone basis) (collectively,
the “MBCR Financial Statements”).  Each
of the MBCR Financial Statements is consistent with the books and records of
MBCR (which, in turn, are accurate and complete in all material respects) and
fairly presents MBCR’s financial condition, assets and liabilities as of their
respective dates and the results of operations and cash flows for the periods
related thereto in compliance with GAAP, consistently applied throughout the
periods which are the subject of MBCR Financial Statements.  All books and records relating to operating
income and expenses of the Property furnished or made available to Buyer by
Seller concerning the operation of the Property shall be those maintained by
Seller in regard to the Property in the normal course of business and  shall be true and correct in all material
respects; all financial and operating statements and information to be
delivered to Buyer shall to be current, correct and complete in all material
respects, fairly present the results of operations for such periods, and have
been prepared on a modified cash basis consistently applied since the beginning
of the periods covered thereby.


 


(xxviii)              Seller has
delivered, or shall deliver within two (2) Business Days following the
Effective Date, to Buyer:


 


(a)                                  true
and complete copies of all policies of insurance to which MBCR is a party or
under which MBCR, is or has been covered at any time within two years preceding
the date of this Agreement;


 


(b)                                 true
and complete copies of all pending applications for policies of insurance;


 


(c)                                  any
statement by the auditor of the MBCR Financial Statements with regard to the
adequacy of such entity’s coverage or of the reserves for claims;


 


(d)                                 a written
description of any self-insurance arrangement by or affecting MBCR, including
any reserves established thereunder; any contract or arrangement, other than a
policy of insurance, for the transfer or sharing of any risk by MBCR;


 


(e)                                  all
policies to which MBCR is a party or that provide coverage to MBCR are valid,
outstanding and enforceable;


 


21





















 


(f)                                    MBCR
has paid (or caused to be paid) all premiums due, and has otherwise performed
all of its obligations, under each policy to which it is a party or that
provides coverage to it or any director thereof; and


 


(g)                                 MBCR
has given notice to the insurer of all claims known by it to be insured
thereby.


 


This Section 7.1(A)(xxviii)
shall not survive the Closing.


 


(xxix)


 


(a) MBCR has complied
with all laws, rules, regulations, writs, injunctions, decrees, and orders
applicable to it or to the ownership, management, maintenance and operation of
the Property (collectively, “Laws”) and has not received any notice of any
alleged claim or threatened claim, violation of, liability or potential
responsibility under, any such Law which has not heretofore been cured and for
which there is no remaining liability. This Section 7.1(A)(xxix)(a)
shall not survive the Closing.


 


(b) MBCR has complied
with all laws, rules, regulations, writs, injunctions, decrees, and orders
applicable to it or to the ownership, management, maintenance and operation of
the Other Properties (collectively, “Laws”) and has not received any notice of
any alleged claim or threatened claim, violation of, liability or potential
responsibility under, any such Law which has not heretofore been cured and for which
there is no remaining liability.


 


(xxx)                         For the
purposes of this representation and warranty, the following terms shall have
the meanings set forth herein:


 


(a) “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and all regulations
and rules issued thereunder, or any successor law;


 


(b) “ERISA Affiliate”
means any person or entity that, together with MBCR, would be, or was at any
time, treated as a single employer under Code Section 414 or ERISA Section 4001;


 


(c) “Multiemployer Plan”
means any employee pension benefit plan described in ERISA Section 3(37);


 


(d) “Pension Plan” means
any employee pension benefit plan subject to Section 412 or ERISA Section 302
or Title IV (including any Multiemployer Plan); and


 


(e) “Seller Pension Plan”
means any Pension Plan that Seller or any ERISA Affiliate has sponsored, or any
Multiemployer Plan to which Seller or any ERISA Affiliate has made
contributions, at any time prior to the date of this Agreement.


 


The Seller Deliverables
include a complete and accurate list of all Seller Pension Plans.  With respect to each Seller Pension Plan, the
Seller Deliverables include true, correct, and complete 


 


22





















 


copies of the most recent
Forms 5500 and any attached financial statements and any related actuarial
report.  Since 1974, neither MBCR, Seller
nor any ERISA Affiliate has sponsored or maintained or had any liability
(whether actual or contingent) with respect to any Pension Plan, other than the
Seller Pension Plans, whether maintained by any of them or by any predecessor
entity.  Seller, MBCR and each other
ERISA Affiliate has no liability (whether actual or contingent) with respect to
any Pension Plan other than the Seller Pension Plans.  With respect to each Seller Pension
Plan:  (i) neither Seller nor any ERISA
Affiliate has terminated or withdrawn or sought a funding waiver, and no facts
exist that could reasonably be expected to cause such actions; (ii) no
accumulated funding deficiency (under Code Section 412 and without regard
to waivers) exists or has existed; (iii) no reportable event (as defined in
ERISA Section 4043) has occurred; (iv) all costs have been provided for on
the basis of consistent methods in accordance with sound actuarial assumptions
and practices; (v) the assets of such Pension Plan, as of its last valuation
date, exceeded its “Benefit Liabilities” (as defined in ERISA Section 4001(a)(16));
and (vi) since the last valuation date, there have been no amendments or
changes to increase the amounts of benefits, except for an increase to certain
retiree pension benefits, and, to the knowledge of Seller, nothing has occurred
that would reduce the excess of assets over benefit liabilities in such plans.  There are no pending claims (other than
routine benefit claims) or lawsuits that have been asserted or instituted by,
against, or relating to, any of the Seller Pension Plans.  Seller, MBCR and each other ERISA Affiliate
has paid all amounts it is required to pay as contributions to the Seller
Pension Plans through and as of the date of this Agreement.


 


(B)                                Each
of the representations and warranties of Seller contained in this Section 7.1
(i) with respect to the Property only, is made subject to and is qualified by
the information disclosed in the Due Diligence Materials; (ii) is made as of
the Effective Date; (iii) to the extent set forth in Section 10.4(i) shall
be deemed remade by Seller at the Closing Date; (iv) shall be true, in all
material respects, as of the Closing Date, except to the extent such
representations and warranties are qualified by any (a) separately stated
material qualifiers, in which event such representations and warranties shall
be true in all respects, or (b) changes permitted in this Agreement or
otherwise approved in writing by Buyer; and (v) except as set forth herein,
shall survive Closing.


 


Representations and
Warranties of Buyer.


 


(A)                              Buyer
hereby represents and warrants to Seller as follows:


 


Buyer is a Virginia limited liability company, duly
organized, validly existing and in good standing under the laws of its
organization.


 


As of the Effective Date, and, provided Buyer has not
terminated this Agreement for any reasons permitted hereunder, at the Closing
Date, this Agreement and all Closing Documents to which Buyer is a party (aa)
are, and will be, duly authorized, executed and delivered by Buyer, (bb) do
not, and will not, violate any provision of any agreement or judicial Order to
which Buyer is a party or to which Buyer or any property owned by Buyer is
subject and (cc) constitute (or in the case of Closing Documents will
constitute) a valid and legally binding obligation of Buyer, enforceable in
accordance with its terms.


 


23





















 


No consents or approvals are required to be obtained from,
and no filings are required to be made with, any Governmental Authority,
lender, equity partner or other Person in connection with the execution and
delivery of this Agreement by Buyer or the consummation by Buyer of the transaction
contemplated hereby (other than any applicable filing requirements under
federal or state securities laws.)


 


Each person executing and delivering this Agreement and all
documents to be executed and delivered by Buyer at Closing has or will have due
and proper authority to execute and deliver the same.


 


Buyer is not the subject of any existing, pending,
threatened or contemplated (A) bankruptcy, solvency or other debtor’s relief
proceeding, or (B) litigation or other judicial or administrative proceeding
which challenges or could adversely affect Buyer’s right or ability to enter
into this Agreement or to consummate the transactions herein contemplated.


 


(B)                                Each
of the representations and warranties of Buyer contained in this Section 7.2
is made as of the Effective Date, and (ii) shall be deemed remade by Buyer, and
shall be true in all material respects, as of the Closing Date.


 


TITLE and survey


 


On the Effective Date, Seller, if it has not
already done so, shall provide to Buyer a copy of the current owner’s policy of
title insurance for the Property (the “Title Policy”), if such Title
Policy is in the possession of Seller or MBCR, and a copy of the most recent
ALTA survey of the Property showing all Improvements thereon (the “Survey”),
if such Survey is in the possession of Seller or MBCR.


 


Title.  At Closing, MBCR shall have good and
marketable fee simple title to the Property, subject only to exceptions to
title specifically permitted pursuant to this Section 8.1.  Buyer shall have until the Due Diligence
Period Expiration Date to examine the condition of title.  If Buyer shall disapprove the condition of
title, such disapproval shall be set forth in a written notice (a “Title
Disapproval Notice”) given to Seller prior to the Due Diligence Period
Expiration Date stating that the condition of title to the Property or any of
the terms, provisions or contents of said items and documents are disapproved
by Buyer.  Seller shall have until the
date which is five (5) Business Days after the date of the applicable Title
Disapproval Notice (the “Title Cure Expiration Date”) in which to cure
or eliminate or agree to cure or eliminate all items which Buyer disapproves in
the applicable Title Disapproval Notice, and to furnish evidence satisfactory
to Buyer in its sole discretion that all such items have been cured or
eliminated or that arrangements acceptable to Buyer in its sole discretion have
been made with the Title Insurance Company and any parties in interest to cure
or eliminate the same at or prior to the Closing.  If such evidence is not received and approved
by Buyer in its sole discretion on or before the Title Cure Expiration Date
(all exceptions to title set forth in any and all Title Disapproval Notices are
herein called “Non-Permitted Exceptions”), then Buyer shall have the
right by written notice delivered to Seller within two (2) Business Days after
the applicable Title Cure Expiration Date (time being of the essence) to elect
to terminate this Agreement and, upon such election, the Deposit shall be
immediately refunded to Buyer and thereupon the Parties hereto shall have no
further obligations one to the other under this Agreement (other than those 


 


24





















 


that are expressly stated to survive the termination of this
Agreement).  Notwithstanding anything
contained herein to the contrary, Seller shall be obligated to cause to be
removed from record at Seller’s sole cost and expense, only the following: (i)
all Non-Permitted Exceptions which are caused by, result from or arise out of
Seller’s failure to pay real estate taxes (or cause MBCR to pay such taxes),
(ii) any lien, charge or encumbrance on the Property which secures a debt
incurred by Seller or MBCR, including, but not limited to a mortgage or other
security interest affecting the Property, (iii) all mechanic’s liens and
materialman’s liens, unless bonded against so as not to be enforceable against
the Property such that a bring-to-date title endorsement for the Property
issued as of the Closing Date would not contain any exceptions for mechanic’s
or materialman’s liens, and (iv) any Non-Permitted Exceptions that Seller shall
have committed to cure in a written notice to Buyer.  (Any Non-Permitted Exception or lien, charge
or encumbrance that Seller is required to remove from record pursuant to the
immediately preceding sentence is herein called a “Seller Caused
Non-Permitted Exception”.)  If Seller
fails to remove any Seller Caused Non-Permitted Exception, Buyer, nevertheless,
may elect (at or prior to the Closing) to consummate the transaction provided
for herein subject to any such Seller Caused Non-Permitted Exception as may
exist as of the Closing with a credit against the balance of the Purchase Price
payable at the Closing equal to (y) the sum necessary to remove any such Seller
Caused Non-Permitted Exception which can be satisfied by a liquidated amount
and (z) the reasonably estimated reduction in the fair market value of the
Property resulting from any Seller Caused Non-Permitted Exception which cannot
be satisfied by the payment of a liquidated amount.  Any title exception other than a Seller
Caused Non-Permitted Exception shall be deemed conclusively approved by Buyer
if it is not set forth in a timely Title Disapproval Notice or if Buyer does
send a timely Title Disapproval Notice but does not elect in writing to
terminate this Agreement within the two (2) Business Day period following the
related Title Cure Expiration Date.


 


Survey.  Buyer shall have until the Due Diligence
Period Expiration Date to examine and approve or disapprove the Survey.  If Buyer shall disapprove the Survey, such
disapproval shall be set forth in a written notice (a “Survey Disapproval
Notice”) given to Seller prior to the Due Diligence Period Expiration Date
stating that the Survey or any of the terms, provisions or contents of the
Survey are disapproved by Buyer.  Seller
shall have until the date which is five (5) Business Days after the date of the
Survey Disapproval Notice (the “Survey Cure Expiration Date”) in which
to cure or eliminate or agree to cure or eliminate all items which Buyer
disapproves in the Survey Disapproval Notice, to the satisfaction of Buyer in
its sole discretion, and to furnish evidence to Buyer that all such items have
been eliminated from the Survey or that arrangements have been made with a
surveyor to eliminate the same from the Survey or with the Title Insurance
Company to insure over them at or prior to the Closing in a manner acceptable
to Buyer in its sole discretion.  If such
evidence is not received by Buyer on or before the Survey Cure Expiration Date
(all items on the Survey set forth in the Survey Disapproval Notice being
herein called “Non-Permitted Survey Exceptions”), then Buyer shall have
the right by written notice delivered to Seller within two (2) Business Days
after the applicable Survey Cure Expiration Date (time being of the essence) to
elect to terminate this Agreement and, upon such election, the Deposit shall be
immediately refunded to Buyer and thereupon the parties hereto shall have no
further obligations one to the other under this Agreement (other than those
that are expressly stated to survive the termination of this Agreement).  Notwithstanding anything contained herein to
the contrary, Seller shall be obligated to cause to be removed from the 


 


25





















 


Survey, at Seller’s sole cost and expense, only those Non-Permitted
Survey Exceptions which Seller shall commit to remove in a written notice to
Buyer (each, a “Seller Removal Survey Exception”).  If Seller fails to remove any Seller Removal
Survey Exception, Buyer, nevertheless, may elect (at or prior to the Closing)
to consummate the transaction provided for herein subject to any such Seller
Removal Survey Exception as may exist as of the Closing with a credit against
the balance of the Purchase Price payable at the Closing equal to (y) the sum
necessary to remove such Seller Removal Survey Exception which can be satisfied
by a liquidated amount, or (z) the reasonably estimated reduction in the fair
market value of the Property resulting from any Seller Removal Survey Exception
which cannot be satisfied by the payment of a liquidated amount.  Any survey matter other than a Seller Removal
Survey Exception shall be deemed conclusively approved by Buyer if it is not
set forth in a timely Survey Disapproval Notice or if Buyer does send a timely
Survey Disapproval Notice but does not elect in writing to terminate this
Agreement within the two (2) Business Day period following the Survey Cure
Expiration Date.


 


PRE-CLOSING OPERATIONS


 


Interim Operation of the
Property.


 


(A)                              Seller
hereby covenants that from and after the Effective Date and until the Closing,
Seller shall:


 


(i)                                     Not
permit MBCR to enter into any new Contracts or amend or (unless the contractor
is in default) terminate any existing Contracts without the prior written
consent of Buyer (except that such consent shall not be required with respect
to Contracts to be terminated pursuant to Section 4.6 hereof), which
consent may be withheld or denied in Buyer’s sole discretion.  From time to time prior to Closing, Seller
shall (with reasonable promptness) provide Buyer with copies of all Contracts
entered into by MBCR, with the Buyer’s consent, after the Effective Date
affecting the Property, and all operating statements and other periodic reports
relating to the Property (excluding Privileged Material) prepared by or
delivered to MBCR and/or Seller after the Effective Date.


 


(ii)                                  Except
for trash and consumables, not remove any fixtures, equipment, supplies or
Personal Property owned by MBCR from the Property unless replaced prior to
Closing with items of equal or better quality;


 


(iii)                               Not
withdraw, settle or compromise any protest or reduction proceeding affecting
real estate taxes assessed against the Property for any fiscal period
subsequent to the Closing without the prior written consent of Buyer, which
consent shall not be unreasonably withheld. 
All real estate tax refunds and credits received after the Closing
attributable to the fiscal tax year during which the Closing occurs shall be
apportioned between Seller and Buyer, after deducting and reimbursing Seller
and Buyer for all of their respective expenses of obtaining an assessment
reduction, which obligation shall survive the Closing;


 


(iv)                              Maintain
in full force and effect the current casualty insurance policies covering the
Property or equivalent replacement policies;


 


26





















 


(v)                                 Collect
rents on a current basis in accordance with past practices and not in advance;


 


(vi)                              Give
Buyer notice of any actions commenced against Seller or MBCR which affect the
Property;


 


(vii)                           Except
for tenant improvements and emergency repairs payable at MBCR’s sole cost and
expense, not enter into any commitment or agreement which would obligate Buyer
or MBCR, or which would be cause for a lien on any part of the Property at
Closing, or which would not be completed prior to Closing, for repairs, or
construction of improvements upon or within the Property except those with
respect to which Buyer’s written consent has first been obtained;


 


(viii)                        Perform,
at Seller’s sole cost and expense and in accordance with Seller’s current
practices and industry standard, all normal maintenance and repair in connection
with the Property, including, without limitation, making repairs and
replacements to any broken, defective or malfunctioning portions of the
Property, subject to reasonable wear and tear and further subject to the
occurrence of any damage or destruction to the Property due to fire or other
casualty, and manage and operate the Property in accordance with the terms of
the Leases, all insurance policies and applicable federal, state, and municipal
laws, ordinances and regulations; and


 


(ix)                                Until
Closing, conduct the business of the Property in a normal businesslike and
prudent manner.


 


(B)                                Except
as otherwise provided in this Agreement or approved by Buyer in writing, from
the Effective Date to the Closing Date, Seller shall cause MBCR, in the ordinary
course and consistent with MBCR’s current practices and industry standard, (i)
to negotiate with prospective Tenants and enter into new Leases on terms that
Seller believes, in its good faith business judgment, to be at market rents and
upon commercially reasonable terms (the “New Leases”) provided, however,
that all New Leases, as well as all extensions, modifications or amendments to
Existing Leases, shall be subject to Buyer’s prior written approval, which
approval may be withheld in Buyer’s sole and absolute discretion, (ii) to
enforce Leases and (iii) to perform landlord’s obligations under the Leases
(other than Leases that have been or that are in the process of being
terminated);


 


(C)                                Except
as otherwise provided in this Agreement or approved by Buyer in writing, from
the Effective Date through the Closing Date, Seller shall not permit MBCR to
enter into any New Lease, or any extension, modification or amendment to any
Existing Lease, or any agreement to (nor shall MBCR) create a lien, encumbrance,
covenant or restriction on or affecting the Property without Buyer’s prior
written consent, which consent may be withheld in Buyer’s sole and absolute
discretion with respect to any utility or similar easement necessary for the
operation of the Property, and which shall be deemed granted if Buyer does not
respond in 


 


27





















 


writing to Seller’s request for consent within five (5) Business Days
after Buyer’s receipt of such request.


 


Lease Enforcement.  Subject to the provisions of Section 9.1,
prior to the Closing Date, Seller shall have the right, but not the obligation,
to cause MBCR to enforce the rights and remedies of the landlord under any
Lease, by summary proceedings or otherwise; provided, however, that Seller
shall not cause MBCR to seek to terminate any Lease without the prior written
consent of Buyer, unless the failure to seek such termination would materially
prejudice MBCR’s rights to enforce such Lease.


 


Lease Termination Prior
to Closing.  Except as set forth in Section 5.1.4, the
bankruptcy or default of any Tenant or the termination of any Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease (including
expiration) shall not affect the obligations of Buyer under this Agreement in
any manner or entitle Buyer to a reduction in, or credit or allowance against,
the Purchase Price or give rise to any other Claim on the part of Buyer.  The termination in part of the lease between
Reznick Fedder & Silverman, C.P.A.S., L.L.C. (“Reznick”) and MBCR (the “Reznick
Lease”) shall not affect the obligations of Buyer under this Agreement in any
manner, as Mercantile-Safe Deposit and Trust Company and Venable LLP each have
entered into agreements with Reznick to assume portions of the premises
currently leased under the Reznick Lease (with the exception of the
approximately 10,763 square feet sublet by Reznick to Adelberg, Rudlow, Dorf
& Hendler, LLC, which shall remain subject to the terms and conditions of
the Reznick Lease) as set forth in greater detail in Section 15.19 and
Exhibit J hereof..


 


Risk of Loss and
Insurance Proceeds.


 


(A)                              The
risk of loss or damage to the Property by fire or other casualty shall be borne
by Seller.  However, Buyer shall be bound
to purchase the Membership Interests for the full Purchase Price as required by
the terms hereof, without regard to the occurrence or effect of any damage to
the Property or destruction of any improvements thereon due to fire or other
casualty, if:  i) the repair is completed
prior to Closing or if such damage is not repaired but the cost to repair the
Property is less than or equal to $1,000,000 as determined by the insurance
carrier’s estimate of the cost to repair such loss or damage, and ii) none of
the Tenants shall have terminated their Lease, or be entitled to terminate its
Lease as a result of such loss or damage. 
At Closing the proceeds of the insurance maintained by Seller covering
the casualty (and not theretofore applied to costs of repair or restoration)
shall be paid, credited or assigned to Buyer and Seller shall also pay or
credit Buyer with the amount of any deductible with respect to such policies
and any uninsured loss based solely on the insurance carrier’s estimate
described in clause (i) of the preceding sentence, less any amount paid by
Seller for repair or restoration.


 


(B)                                If
the amount of the damage or destruction as described in this Section 9.5
exceeds $1,000,000 or any of the Tenants shall have terminated their Lease, or
be entitled to terminate its Lease as a result of such loss or damage, then
Buyer may, at its option to be exercised within ten (10) Business Days after
becoming aware of the occurrence of the damage or destruction and receiving the
estimate of the cost to repair the Property and a certified copy of MBCR’s
insurance policies related to the Property, either terminate this Agreement or 


 


28





















 


consummate the purchase.  If
Buyer elects to terminate this Agreement, then the Deposit shall be immediately
returned to Buyer and, thereupon, neither party shall have any further rights
or obligations hereunder except to the extent set forth otherwise in this
Agreement.  If Buyer elects to proceed
with the Closing, then, pending the Closing, Buyer, and not Seller, shall alone
have the right to cause MBCR (i) to adjust, compromise and settle with the
insurance company(s) with respect to the insurance policies, and (ii) to
settle, compromise and contest such award or proposed award relating to the
Property, and Seller agrees to cooperate with Buyer with respect to the
collection of any payments or awards or rights to payments or awards on behalf
of MBCR.  If Buyer proceeds to Closing,
the proceeds of any insurance covering the casualty or loss of future rents
(and not theretofore applied to the costs of repair or restoration) shall be
paid, credited or assigned to Buyer and Seller shall also pay or credit Buyer
with the amount of any deductible with respect to such policies and any
uninsured loss mutually agreed to prior to Closing (if no such mutual agreement
is reached, Seller shall not owe any amount to Buyer for any such uninsured
loss and Buyer can elect to terminate this Agreement or proceed to Closing, as
described in this Section 9.4(B)) less any reasonable amounts paid by
Seller for repair or restoration. The provisions of this Section 9.5(B)
shall survive the Closing.


 


(C)                                If,
prior to Closing, any governmental authority or other entity having
condemnation authority shall institute an eminent domain proceeding or take any
steps preliminary thereto (including the giving of any direct or indirect
notice of intent to institute such proceedings) with regard to the Land or
Improvements, and the same is not dismissed in a final determination for which
all appeal periods have passed on or before ten (10) days prior to the
Scheduled Closing Date, then Seller shall promptly notify Buyer thereof and
Buyer shall be entitled to terminate this Agreement in which event, the Deposit
shall be immediately returned to Buyer and neither party shall have any further
rights or obligations hereunder except to the extent set forth otherwise in
this Agreement.  In the event Buyer does
not exercise its right to terminate this Agreement within said ten (10) day
period, Seller shall assign and transfer to Buyer, at the Closing, all of
Seller’s right, title and interest in and to any awards due Seller from the
condemnation and Buyer shall be given credit against the Purchase Price for all
awards received by Seller on account thereof prior to the Closing.  Seller shall not enter into any settlement of
any condemnation proceedings or eminent domain award without the prior written
consent of Buyer, which consent may be withheld in Buyer’s sole
discretion.  Nothing herein shall
obligate Seller to appeal any condemnation or decision as to compensation
resulting from condemnation; provided, Seller shall, upon request of Buyer,
assign to Buyer all of Seller’s rights to appeal such decision in Seller’s
name, if necessary, and Buyer may proceed with such appeal at Buyer’s sole
cost, expense and risk.


 


(D)                               Notwithstanding
anything in this Section 9.5 to the contrary, if the Property is damaged
by fire or other casualty prior to the Closing and Seller reasonably believes
that Seller can repair (or cause MBCR to repair) such damage prior to the
Closing, then Seller shall have the absolute right to proceed with such
repairs.  If Seller is unable to complete
such repairs by Closing, Section 9.5(A) or 9.5(B), as applicable, shall
apply to the repairs remaining to be completed.


 


29





















 


Notifications.  Between the Effective Date and the Closing,
Seller shall promptly notify Buyer in writing of any condemnation,
environmental, zoning or other land-use regulation proceedings specifically
relating to the Property of which Seller or MBCR receives written notice after
the Effective Date, any written notices of violations of any legal requirements
relating to the Property received by Seller or MBCR after the Effective Date,
and any litigation of which Seller or MBCR receives written notice after the
Effective Date that affects the operation of the Property.  It shall be a condition precedent to Buyer’s
obligation to purchase the Membership Interests, that there shall be no
litigation or proceeding pending at Closing having a potential material adverse
effect upon the Property or Seller’s ability to convey MBCR to Buyer, except
for (a) personal injury cases covered by MBCR’s insurance, subject to
commercially reasonable deductibles, and (b) mechanic’s lien proceedings which
have been bonded off, provided that in all such cases a title bring-to-date
endorsement dated as of the Closing Date would not contain any exception for a
mechanic’s or materialman’s lien. 
Notwithstanding anything herein to the contrary, if Buyer does not
terminate this Agreement on or before the Due Diligence Period Expiration Date,
Buyer shall be deemed to have accepted the Property subject to and without
adjustment for any pending or threatened litigation disclosed by Seller and
MBCR prior to the Due Diligence Period Expiration Date.


 


CLOSING


 


Escrow Instructions.  Upon execution of this Agreement, the parties
hereto shall deposit an executed counterpart of this Agreement with the Title
Insurance Company, and this Agreement, as well as the Deposit Escrow Agreement,
shall serve as the instructions to the Title Insurance Company as escrow agent
for consummation of the purchase and sale contemplated hereby (“Closing”).  Seller and Buyer agree to execute such
reasonable additional escrow instructions as may be appropriate to enable the
Title Insurance Company to conduct Closing in accordance with the terms of this
Agreement, provided, however, that in the event of any conflict between or
among the provisions of this Agreement, the Deposit Escrow Agreement and/or any
supplementary escrow instructions, the terms of this Agreement shall control.


 


Closing Date.  Closing shall be held commencing at 10:00 A.M.
prevailing local time on December 13, 2004 or on any earlier date which is
mutually acceptable to Seller and Buyer (“Scheduled Closing Date”).


 


Location.  The parties shall use their best effort to
conduct Closing through the Title Insurance Company pursuant to the escrow
instructions provided herein.  If Closing
shall require in person attendance by the Parties, then such in person Closing
shall be held on the Scheduled Closing Date at the offices of Buyer’s or Seller’s
counsel, as the parties may decide.


 


Closing Documents.  At least one (1) Business Day prior to the
Scheduled Closing Date, Seller shall execute and deposit into escrow with the
Title Insurance Company fully executed counterparts of each of the following,
in recordable form where applicable, and dated as of the Closing Date:


 


30





















 


an assignment
of membership interests assigning and conveying to Buyer 100% of the Membership
Interests in MBCR, free and clear of all liens, claims and encumbrances (the “Assignment”),
in the form attached hereto as Exhibit “B”.


 


a so-called
non-imputation affidavit addressed to the Title Insurance Company in such form
as the Title Insurance Company shall reasonably require (the “Non-Imputation
Affidavit”),


 


resignation
letters from all the officers and directors of MBCR, to be effective as of the
Closing Date, in form and substance reasonably satisfactory to Buyer,


 


an opinion
from Gallagher Evelius & Jones LLP, counsel to Seller, in form and
substance reasonably satisfactory to Buyer, confirming (a) the due
incorporation of Seller, the corporate power of Seller, the due authorization,
execution and delivery of this Agreement and the Closing Documents to which
Seller is a party by Seller, non-contravention of agreements and law, all
necessary consents being obtained, and the enforceability of this Agreement and
such Closing Documents against Seller, (b) the due organization of MBCR, the
due authorization and valid issuance of its membership interests, the record
ownership of such interests, the absence of options, warrants and rights to
purchase such interests or any preemptive rights in respect thereof, the
noncontravention of agreements and law arising out of the transactions
contemplated by this Agreement and that upon Closing, Buyer will own 100% of
the outstanding membership interests in MBCR, free and clear of any claims of
any third party, and (c) such other matters as Buyer may reasonably request,
subject to usual and customary qualifications and based on counsel’s knowledge
and on Seller’s and MBCR’s certification of facts material to the opinion,


 


a FIRPTA
Affidavit, in the form attached hereto as Exhibit “C”,


 


closing
instructions, with attached settlement statement to be prepared by the Title
Insurance Company, consistent with the terms of this Agreement (“Closing
Instructions”),


 


a rent roll
for the Property, certified by Seller to be true and correct as of a date no
earlier than five (5) Business Days prior to the Closing Date,


 


any usual and
customary affidavits and certificates required by the Title Insurance Company,


 


a certificate
stating that the representations and warranties of Seller contained in this
Agreement are true and correct in all material respects (or, with respect to
representations and warranties separately qualified by materiality standards,
true in all respects) as of the date of Closing (with appropriate modifications
of those representations and warranties made in Section 7.1 to reflect any
changes resulting from actions made in compliance with Section 9.1) or
identifying any representation or warranty which is not, or no longer is, true
and correct in any material respect and explaining the change; provided,
however, that (1) the representations and warranties set forth in clauses
(i)-(v), (vi)(b), (vii)(b), (viii)-(xii), (xvii)-(xxi), (xxv)-(xxvii),
(xxix)(b) and (xxx) of Section 7.1(A) (the “Permanent Representations”)
may not be so identified by Seller as representations or warranties that are no
longer true and correct, Seller hereby agreeing that if any of the Permanent
Representations is not true and correct at the Closing, 


 


31





















 


Seller shall be deemed to be in
breach of this Agreement and Buyer shall have all rights and remedies specified
herein for such breach by Seller, and (2) if any of the other representations
or warranties made by Seller in this Agreement is not true and correct in all
material respects at Closing without change since the date hereof, except
changes occasioned by acts, conduct and occurrences permitted under this
Agreement, and changes which do not have a material adverse effect on the
Property or the operations thereof, then Buyer may, by notice to Seller, elect
to terminate this Agreement, in which event the Deposit shall be promptly
returned to Buyer and, thereafter, this Agreement shall be deemed terminated
and the parties hereto shall have no further liabilities to each other except
to the extent expressly provided otherwise herein.  If, despite changes or other matters
described in such certificate, the Closing occurs, Seller’s representations and
warranties set forth in this Agreement shall be deemed to have been modified by
all statements made in such certificate;


 


the Mercantile
Lease; and


 


any other
instruments required by this Agreement.


 


Additional Seller Deliveries.
 On or prior to the Closing Date,
Seller shall deliver to Buyer at the Property to the extent in Seller’s or MBCR’s
possession, the original counterparts of the Leases, Contracts, Licenses and
Permits (if any), Books and Records and Warranties (if any), all Plans,
operating manuals, brochures, marketing materials, advertisements, Tenant lease
files, and other on-site files and records in the possession of Seller or MBCR
and MBCR’s managing agent and utilized in connection with the operation and
maintenance of the Land and Improvements; and all keys and combinations to all
locks in the Improvements.


 


Buyer Closing Deliveries.  Not later than the Scheduled Closing Date,
Buyer shall have complied with Section 11.11 and shall execute and deposit
into escrow with the Title Insurance Company fully executed counterparts of
each of the following:


 


a duly
executed counterpart of the Assignment,


 


a duly
executed counterpart of the Closing Instructions and settlement statement, and


 


any other
instruments required by this Agreement.


 


Closing Instructions.  At or prior to Closing, Buyer and Seller shall
each execute and deposit in escrow with the Title Insurance Company such other
instructions and documents as are reasonably required by the Title Insurance
Company, on the Closing Date, to: (a) pay Seller the Purchase Price (after any
adjustments or prorations made in accordance with Section 11), (b) record
those Closing Documents (if any) to be recorded, and (c) close the escrow and
consummate Closing in accordance with the terms hereof.


 


32





















 


PRORATIONS; EXPENSES


 


Rents.  Rents, including, without limitation, common
area maintenance charges, taxes, parking charges, operating costs escalations
and all other sums payable by Tenants under the Leases (collectively, “Rents”),
(subject, however, to Section 11.2 as to unpaid Rents); Real Estate Taxes
and personal property taxes, including refunds with respect thereto; the
current installment (only) of any improvement bond, assessment or charge that
is a lien on the Property or that is pending and may become a lien on the
Property; water, sewer and utility charges; amounts paid or payable by MBCR
under any Contract that Buyer has not elected to have terminated pursuant to Section 4.6;
annual permit fees, license fees and/or inspection fees (calculated on the
basis of the period covered); and any other actually received income or prepaid
expense relating to the operation of the Property and covering a time period
which spans the Closing Date shall all be prorated as of 12:01 a.m. prevailing
Eastern Time on the Closing Date, with Buyer deemed the owner of MBCR on the
entire Closing Date.


 


Receivables and Collections.  Any pre-Closing delinquent Rents collected by
Seller or Buyer after the Closing shall be applied as follows:  (i) first, to all months succeeding the
Closing Month until paid up-to-date; (ii) second, to the Closing Month; and
(iii) third, to all months preceding the Closing Month.  If Buyer receives said past due rents, Seller’s
aforesaid share thereof shall be remitted by Buyer to Seller, provided such
Tenant is otherwise current in its rent, and if Seller receives such past due
rents, Buyer’s aforesaid share thereof shall be promptly remitted by Seller to
Buyer.


 


Collection Efforts.  Buyer shall have no obligation after the
Closing Date to collect any delinquent Rents that accrued prior to the Closing
Date and Seller shall have the right to collect such delinquent Rents but under
no circumstance shall Seller have the right to initiate, threaten or pursue
eviction proceedings.


 


Security Deposits. Buyer
(or MBCR) shall be solely obligated to the Tenants for the return of any
security deposits under the Leases.  At
Closing, Buyer shall receive a credit against the Purchase Price in an amount
equal to (i) all security deposits and accrued interest required to be
available for return to the Tenants under the Leases, and (ii) all advance rent
received by Seller from Tenants under the Leases for periods subsequent to the
Closing.


 


Adjustments to Prorations.  In addition to the other provisions of this Article 11,
the following shall apply:


 


Real Estate
Taxes and personal property taxes, if any, shall be pro rated on the basis of
the tax year in which the Closing occurs. 
If the Closing shall occur before the Real Estate Tax rate for the
apportionment period is fixed or known, the apportionment of Real Estate Taxes
shall be on the basis of the real estate tax rate for the next preceding period
applied to the latest assessed valuation and shall be adjusted when the final
tax bill is available.


 


Water and
sewer charges, as well as electricity, gas and steam charges, shall be pro
rated on the basis of the most recent bills available, but if there are water,
electric or gas meters on the Property, Seller, to the extent the same is
obtainable, shall furnish a reading effective as of the date prior to the
Closing Date, or if not so obtainable, to a date not more than thirty (30) days
prior to the date prior to the Closing Date, and the unfixed meter charges
based 


 


33





















 


thereon for the intervening
period shall be apportioned on the basis of such last reading.  Upon the taking of a subsequent actual
reading, such apportionment shall be readjusted and Seller or Buyer, as the
case may be, will promptly deliver to the other the amount determined to be so
due upon such readjustment.  If Seller is
unable to furnish such prior reading, any reading subsequent to the Closing
will be apportioned on a per diem basis from the date of such reading
immediately prior thereto and Seller shall pay the proportionate charges due up
to the date of Closing.  The provisions
and obligations of the parties pursuant to this subparagraph (b) shall survive
the Closing.


 


Any other
funds that will inure to the benefit of or be refunded to MBCR after the
Closing Date (e.g., utility deposits) shall be adjusted or prorated.


 


Any up-front “bonus”
payments made in consideration of entering into any Contract shall be and
remain the property of Seller.


 


Except as set
forth in this Agreement, the customs of the county in which the Property is
located shall govern prorations.


 


If such
prorations result in a payment due Buyer, then the portion of the Purchase
Price payable at Closing shall be reduced by such sum.  If such prorations result in a payment due
Seller, then the same shall be paid to Seller at Closing in addition to the
Purchase Price.  The parties hereto shall
endeavor to prepare a schedule of prorations no less than five (5) days
prior to Closing.


 


INTENTIONALLY OMITTED. 


 


Post Closing Adjustments.  In the event accurate and complete prorations
and adjustments cannot be made as of the Closing Date because current bills or
statements are not available, the parties shall prorate on the basis of the
best available information, and readjust within nine months following the
Closing upon receipt of final bills and statements (including, without
limitation, those related to common area maintenance charges and operating
costs escalations).  In addition, if
after the Closing Date an error or new information is discovered with respect
to the prorations and adjustments made at Closing, the proration or
apportionment shall be adjusted based upon the accurate or new
information.  Also, at the request of
either party made at any time after the Closing Date, there shall be a
post-Closing apportionment with respect to any estimated prorations which were
not reasonably susceptible of final determination at Closing.  Seller and Buyer shall cooperate with each
other with respect to all such adjustments and prorations made after the
Closing Date, and either party owing the other party a sum of money based on
such subsequent prorations or adjustments shall promptly pay said sum to the
other party.  The provisions and
obligations of the parties pursuant to this Section 11.7 shall survive the
Closing.


 


Proration Calculations.  Seller shall initially calculate the
prorations contemplated by this Article 11 and present its calculations to
Buyer, and Buyer shall be afforded the opportunity to review Seller’s
underlying work papers pertaining to the preparation of proration calculations
to determine the correctness of Seller’s calculations.


 


34





















 


Closing Expenses.  Seller shall pay any recording fees for
instruments required to remove Seller-Caused Non-Permitted Exceptions and
Seller Removal Survey Exceptions.  Buyer
shall pay the costs of any title report or search, any updating of the Title
Policy and all endorsements thereto and of updating the Survey, all costs of
any appraisal, engineering and environmental reports ordered by Buyer and any
other filing, administrative or legal expenses payable by a buyer of limited
liability company membership interests in Maryland including, without
limitation, fees and charges of any lender providing purchase money financing
to Buyer.  Seller and Buyer agree that
they shall each be responsible for one-half of any transfer taxes (if any) that
become payable with respect to the Property as a result of Buyer’s acquisition
of the Membership Interests; provided, however, that Seller shall be solely
responsible for any interest payments or penalties (if any) associated with any
failure to pay such transfer taxes in a timely fashion.  Seller and Buyer agree that they shall each
be responsible for one-half of the charges of the Title Insurance Company under
the Deposit Escrow Agreement.  Seller
shall pay the outstanding balances of any and all mortgages and the fees and
charges, if any, of the holder thereof for providing discharges thereof at
Closing.  Seller and Buyer shall each be
responsible for paying their respective attorneys’ and other professional fees
and costs.


 


Survival.  The obligations of Seller and Buyer under
this Article 11 shall survive Closing.


 


Payment by Buyer.  On the Business Day prior to the Closing Date,
Buyer shall wire to the Title Insurance Company, in immediately available
funds, sufficient cash to enable the Title Insurance Company (a) to pay Seller
the entire Purchase Price (as adjusted by the prorations, allocations, costs
and credits set forth in this Agreement) by wire transfer of immediately
available funds, to be received by Seller (at an account or accounts designated
by Seller at least one Business Day prior to Closing) no later than 5:00 p.m.,
prevailing Eastern time, on the Closing Date, and (b) to pay those prorations,
transfer taxes, recording costs, closing costs and similar sums payable by
Buyer hereunder.


 


DEFAULT


 


Seller’s Default.  In the event of Seller’s failure to perform in
any material respect any of its obligations hereunder (or, with respect to
covenants or obligations separately qualified by materiality standards, failure
to perform in any respect) or if any of the representations and warranties made
herein by Seller (after giving effect to such changes and updates as are herein
expressly permitted) are untrue in any material respect (or, with respect to
representations and warranties separately qualified by materiality standards,
untrue in any respect) (each event referred to in the foregoing provisions of
this sentence is herein sometimes called a “Seller Default”), Buyer may
either (i) seek specific performance of this Agreement or (ii) terminate this
Agreement by written notice of termination to Seller and Title Insurance
Company, whereupon the Deposit shall be returned by Title Insurance Company to
Buyer promptly and Seller shall, on Buyer’s demand, tendered in reasonable
detail to Seller within thirty (30) days after written notice of termination,
reimburse Buyer for Buyer’s actual and reasonable out of pocket documented
expenses incurred exclusively with respect to this transaction, and not any
indirect, consequential or punitive damages, no “overhead” or similar charges,
and no damages relating to 


 


35





















 


lost profits or lost opportunity, which reimbursement shall not exceed
$150,000; provided, however, that if Seller, prior to the termination of this
Agreement, enters into an agreement with a third party to sell the Property or
the Membership Interests and fails to close the purchase contemplated under
this Agreement without the occurrence of any default by Buyer, Buyer shall
thereafter be entitled to pursue all rights and remedies available under law or
in equity, including all actual damages Buyer has suffered as a result of such
Seller’s Default, exclusive of indirect, consequential or punitive
damages.  The provisions of this Section 12.1
shall survive the Closing.  Buyer hereby
waives its right to collect damages and all other remedies, except as provided
in this Section, and agrees that the foregoing shall be Buyer’s sole and
exclusive remedies in the event Buyer terminates this Agreement as a result of
Seller’s Default, provided that the foregoing is not intended to limit Seller’s
agreements or obligations under Section 15.5 (Attorneys’ Fees) or Article 11
(Prorations; Expenses) or Article 13 (Brokers), or any right or remedy of
Buyer to recover the sums therein provided for (but no consequential damages)
if Seller breaches any of such Sections.


 


Buyer’s Default.  Buyer recognizes that MBCR and the Property
will be removed by Seller from the market during the existence of this
Agreement and that, if Closing is not consummated because of a default by Buyer
under this Agreement, Seller’s sole remedy shall be to terminate this Agreement
and retain the Deposit (including all accrued interest) as liquidated
damages.  The Parties have agreed that
Seller’s actual damages, in the event of a failure to consummate this sale due
to Buyer’s default, would be extremely difficult or impracticable to
determine.  After negotiation, the
parties have agreed that, considering all the circumstances existing on the
date of this Agreement, the amount of the Deposit is a reasonable estimate of
the damages that Seller would incur in such event. Upon Seller’s receipt of the
Deposit, this Agreement shall be terminated and thereupon the parties shall have
no further obligations one to the other under this Agreement.  The Parties agree that the sum stated above
as liquidated damages shall be the sole and exclusive relief to which Seller
might otherwise be entitled as a result of the Closing not being consummated
because of Buyer’s default under this Agreement, Seller hereby specifically
waiving any and all rights which it may have to damages or specific performance
as a result of Buyer’s default under this Agreement.  The foregoing is not intended to limit Buyer’s
agreements or obligations under Sections 4.8, 15.5 or 15.15 or Articles 11 or
13, or any right or remedy of Seller to recover the sums therein provided for
(but no consequential damages) in the event Buyer breaches any such Sections or
Articles.


 


BROKERS


 


Seller and Buyer
represent and warrant to each other that no broker or finder was instrumental
in arranging or bringing about this transaction and that there are no Claims or
rights for brokerage commissions or finders’ fees in connection with the
transaction contemplated hereby by any Person or entity other than Trammell
Crow Services, Inc. (“Seller’s Broker”), which has been engaged by the
Seller in this transaction and whose fees shall be the responsibility of
Seller.  If any other Person brings a
Claim for a commission or finder’s fee based upon any contact, dealings or
communication with Buyer or Seller, then the party through whom such Person
makes its Claim shall defend the other party from such Claim, and shall
indemnify such other party and hold such other party harmless from any and all
costs, damages, 


 


36





















 


claims, liabilities or expenses (including without limitation,
reasonable attorneys’ fees and disbursements) incurred by it in defending
against the Claim.  The provisions of
this Section shall survive the Closing or, if the Closing does not occur,
any termination of this Agreement.


 


INDEMNIFICATION


 


The Seller and Buyer
agree as follows:


 


General Indemnification
by Seller.  Seller
covenants and agrees that it will indemnify, defend, protect and hold harmless
Buyer at all times, from and after the Effective Date, from and against all
claims, damages, actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without
limitation, reasonable attorneys’ fees and reasonable expenses of
investigation), in excess of $10,000 on an aggregate basis, incurred by Buyer
as a result of or arising from:


 


(A)                              With
respect solely to such representations and warranties that shall survive
Closing as set forth in this Agreement, any breach of the representations and
warranties of the Seller, set forth herein or on the schedules or certificates
delivered in connection herewith;


 


(B)                                With
respect solely to such covenants and agreements that shall survive Closing as
set forth in this Agreement, any breach of any covenants or agreement on the
part of the Seller under this Agreement; and


 


(C)                                Any
liabilities (i) arising from or associated with the ownership, operation, or
management of the Other Properties or (ii) arising out of the business or
operations of MBCR at any time prior to the Closing Date (including, without
limitation, any litigation disclosed on Exhibit F attached hereto).


 


Indemnification by Buyer.  Buyer covenants and agrees that it will
indemnify, defend, protect and hold harmless Seller at all times from and after
the Effective Date, from and against all claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, costs and expenses (including
specifically, but without limitation, reasonable attorneys’ fees and expenses
of investigation) incurred by the Seller as a result of or arising from
(a) any breach by Buyer of its representations and warranties set forth
herein or on the schedules or certificates delivered in connection herewith,
(b) any breach of any agreement on the part of Buyer under this Agreement,
or (c) all Claims arising from the ownership, operation and management of the
Property and MBCR after the Closing Date.


 


Third Person Claims.


 


(A)                              Promptly
after any party hereto (hereinafter the “Indemnified Party”) has received
notice of or has knowledge of any claim, or of the commencement of any action
or proceeding, by a Person not a party to this Agreement (a “Third Person”)
that could give the Indemnified Party any right to assert a claim for
indemnification hereunder, the Indemnified Party shall, as a condition
precedent to a claim with respect thereto being made against any party 


 


37





















 


obligated to provide indemnification pursuant to Section 14.1 or
14.2 hereof (hereinafter the “Indemnifying Party”), give the Indemnifying Party
written notice of such claim or the commencement of such action or
proceeding.  Such notice shall state the
nature and the basis of such claim and a reasonable estimate of the amount
thereof.


 


(B)                                The
Indemnifying Party shall have the right to defend and settle, at its own
expense and by its own counsel, any such matter so long as the Indemnifying Party
pursues the same in good faith and diligently, provided that the Indemnifying
Party shall not settle any criminal proceeding without the written consent of
the Indemnified Party, such consent not to be unreasonably withheld or delayed,
and further provided that the parties hereto comply with the condition in the
first sentence of paragraph (E) of this Section 14.3. If the Indemnifying
Party undertakes to defend or settle, it shall promptly notify the Indemnified
Party of its intention to do so, and the Indemnified Party shall cooperate, at
the Indemnifying Party’s expense, with the Indemnifying Party and its counsel
in the defense thereof and in any settlement thereof.  Such cooperation shall include, but shall not
be limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party’s possession or control. All Indemnified Parties shall
endeavor to use the same counsel, which shall be the counsel selected by the
Indemnifying Party, provided that if counsel to the Indemnifying Party shall
have a conflict of interest in the opinion of such counsel that prevents
counsel for the Indemnifying Party from representing the Indemnified Party, the
Indemnified Party shall have the right to participate in such matter through
counsel of its own choosing and the Indemnifying Party will reimburse the
Indemnified Party for the reasonable expenses of its counsel and experts.


 


(C)                                After
the Indemnifying Party has notified the Indemnified Party of its intention to
undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability, except (i) as set forth in the last sentence of subparagraph (B), or
(ii) to the extent such participation is requested by the Indemnifying Party,
in which event the Indemnified Party shall be reimbursed by the Indemnifying
Party for reasonable additional legal expenses and out-of-pocket expenses.


 


(D)                               If
the Indemnifying Party does not undertake to defend such matter to which the
Indemnified Party is entitled to indemnification hereunder, or fails diligently
to pursue such defense, the Indemnified Party may undertake such defense
through counsel of its choice, at the cost and expense of the Indemnifying
Party, and the Indemnified Party may settle such matter, and the Indemnifying
Party shall reimburse the Indemnified Party for the amount paid in such
settlement and any other liabilities or expenses incurred by the Indemnified
Party in connection therewith.


 


(E)                                 All
settlements hereunder shall effect a complete release of the Indemnified Party,
unless the Indemnified Party, at its sole discretion, otherwise agrees in
writing. The parties hereto will make appropriate adjustments for any insurance
proceeds in determining the amount of any indemnification obligation under this
Article, provided that no 


 


38





















 


Indemnified Party shall be obligated to seek any payment pursuant to
the terms of any insurance policy.


 


MISCELLANEOUS


 


Notices.  Except as otherwise provided in this
Agreement, any notices required or permitted to be given hereunder shall be
given in writing signed by the party giving the same and shall be deemed to
have been properly given and shall be deemed effective (a) upon delivery, if
delivered in person, (b) three days after deposit, if deposited in the United
States mail, certified mail, postage prepaid, return receipt requested, (c) one
Business Day after delivery to a commercial overnight courier that guarantees
next day delivery and provides a receipt, or (d) on the date of transmission,
if transmitted by electronic mail or by facsimile with machine generated
confirmation of transmission (followed by hard copy delivered in accordance
with preceding subsections (a)-(c)), and such notices shall be addressed as
follows:


 


Seller:                                                                Mercantile
Bankshares Corporation


Two Hopkins Plaza


Baltimore, Maryland 21201


Attention:  Mr. Ronald D. Mettam


Telephone:  (410) 237-5623


Fax: (410)
237-5869


E-mail:
ron.mettam@mercantile.net


 


With a copy to:


 


Gallagher Evelius &
Jones LLP


218 North Charles Street


Suite 400


Baltimore, Maryland 21201


Attention:  Stephen A. Goldberg, Esquire, and Philip F.
Diamond, Esquire


Telephone: (410)
347-1343; (410) 347-1350


Fax: (410) 468-2786


E-mail:
sgoldberg@gejlaw.com and pdiamond@gejlaw.com


 


Buyer:                                                             Harbor
Group International, L.L.C.


555 East Main Street,
Suite 1700


Norfolk, Virginia 23510


Attention:  T. Richard Litton, Jr., Executive Vice
President and General Counsel


Fax:  (757) 640-0817


E-mail:  trlitton@harborg.com


 


39





















 


With a copy to:


 


Whiteford, Taylor &
Preston LLP


Seven Saint Paul Street


14th Floor


Baltimore, Maryland 21202


Attention:  Priscilla K. Carroll, Esquire


Telephone:  (410) 347-8797


Fax:  (410) 347-8731


E-mail:  pcarroll@wtplaw.com


 


Title Insurance Company:


 


LandAmerica Title
Insurance Company


31 Light Street


Suite 500


Baltimore, Maryland  21202-1035


Attention:  Nancy Sacci, Esquire


Telephone:  (410) 752-7070


Fax:  (410) 752-7043


E-mail: nsacci@landam.com


 


or to such other address as
either party may from time to time specify in writing to the other party;
provided, however, that the time period in which a response to any such notice,
election, demand or request must be given shall commence on the date of receipt
thereof.  Personal delivery to a party or
to any officer, partner, member, agent or employee of such party at said
address shall constitute receipt. 
Rejection or other refusal to accept or inability to deliver because of
changed address of which no notice has been received shall also constitute
receipt.  Notices may be given or
received by attorneys for the parties hereunder.


 


Recording.  This Agreement shall not be recorded or
otherwise filed or made a matter of public land or lien records and any attempt
to record or file same by Buyer shall be deemed a default by Buyer hereunder.


 


Joint Undertaking.  In addition to the obligations expressly
required to be performed hereunder by Seller and Buyer, each party agrees to
cooperate with the other and to perform such other acts and to execute,
acknowledge and deliver, prior to and after Closing, such other instruments,
documents and materials as a party may reasonably request and as shall be
necessary in order to effect the consummation of the transaction contemplated
hereby; provided that no such other instrument, document or material shall
either extend or enlarge the obligations of the non-requesting party beyond the
express undertakings of this Agreement or shall require or could require the
non-requesting party to make any payment or expend any funds which are not
expressly provided for herein or which the requesting party shall not
reimburse.  This Section shall
survive Closing.


 


Whole Agreement; Amendments.  This Agreement and the Exhibits and Riders
attached hereto set forth all of the agreements, representations, warranties
and conditions of the Parties hereto with respect to the subject matter hereof,
and supersede all prior or contemporaneous agreements, representations,
warranties and conditions.  The Exhibits
and Riders referred to herein constitute parts of this Agreement.  No alteration, amendment, modification or
waiver of any of the terms or provisions hereof, and no future representation
or warranty by either party 


 


40





















 


with respect to this transaction, shall be valid or enforceable unless
the same be in writing and signed by the party against whom enforcement of same
is sought.


 


Attorneys’ Fees.  If either party hereto defaults in the
performance of any of its obligations under this Agreement or if any dispute
arises between the Parties hereto concerning the meaning, interpretation or
enforcement of any provision of this Agreement, then the defaulting party or
the party not prevailing in such dispute, as the case may be, shall pay the
reasonable costs and expenses incurred by the other party in enforcing or
establishing its rights hereunder, including, without limitation, court costs
(including costs of any trial or appeal therefrom), expert witness fees and
reasonable attorneys’ and paralegals’ fees and disbursements.


 


Assignment.  Buyer’s and Seller’s rights and obligations
hereunder shall not be assignable, directly or indirectly or by operation of
law, without the prior written consent of Seller or Buyer, as applicable;
provided, however, that Buyer may assign its rights under this Agreement,
without Seller’s prior written consent to such assignment, to any Affiliate of
Buyer and, in the event of an assignment by Buyer to an Affiliate, Buyer shall
be released from its obligations hereunder, effective upon completion of
Closing.  Subject to the limitations
described herein, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their permitted successors and assigns (each a “Permitted
Assignee”). The provisions of this Section shall survive the Closing.


 


Counterparts.  This Agreement may be executed by the parties
hereto in any number of separate counterparts, all of which, when delivered,
shall together constitute one and the same Agreement.


 


Holidays.  Wherever this Agreement provides for a date,
day or period of time on or prior to which action or events are to occur or not
occur, and if such date, day or last day of such period of time falls on a day
which is not a Business Day, then same shall be deemed to fall on the
immediately following Business Day.


 


Governing Law.  This Agreement and all issues arising
hereunder shall be governed by the laws of the State of Maryland.


 


Waiver of Trial by Jury.  EACH PARTY HEREBY WAIVES, IRREVOCABLY AND
UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF
OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN
CONNECTION HEREWITH, THE PROPERTY, OR ANY CLAIMS, DEFENSES, RIGHTS OF SET-OFF
OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.  IN THE EVENT OF ANY JUDICIAL PROCEEDING UNDER
THIS AGREEMENT, EACH PARTY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT SITTING IN THE STATE OF MARYLAND AND WAIVES TO THE
MAXIMUM EXTENT PERMITTED BY LAW ANY OBJECTION TO JURISDICTION OR VENUE THEREIN.


 


No Third Party Beneficiary.  Except and to the extent of provisions hereof
that expressly deal with Seller Parties and Buyer Parties and the Affiliates of
such parties, the provisions of this 


 


41





















 


Agreement are not
intended to benefit any Person not a party hereto, and no person not a party
hereto shall have any rights hereunder.


 


Severability.  If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void in any
respect, the remainder of this Agreement and such provisions as applied to
other Persons, places and circumstances shall remain in full force and effect.


 


Drafts not an
Offer to Enter into a Legally Binding Contract.  The submission of a draft, or a marked up
draft, of this Agreement by one party to another is not intended by either
party to be an offer to enter into a legally binding contract with respect to
the purchase and sale of the Property. 
The parties shall be legally bound with respect to the purchase and sale
of the Property pursuant to the terms of this Agreement only if each of Seller
and Buyer have fully executed and delivered to each other a counterpart of this
Agreement, including, without limitation, all Exhibits and Riders hereto, and
the Deposit Escrow Agreement, and the Title Insurance Company has also executed
and delivered the Deposit Escrow Agreement.


 


Consents.  Unless otherwise provided, any consent,
determination, election or approval required to be obtained, or permitted to be
given, by or of any party hereunder, shall be granted, withheld or made (as the
case may be) by such party in the exercise of such party’s sole and absolute
discretion.


 


Confidential Information.  Buyer acknowledges that the transaction
contemplated herein is of a confidential nature and shall not be disclosed
except to Buyer’s consultants, investors, lenders, appraisers, attorneys,
accountants, advisors, and affiliates, or as required by law or court
order.  Except for information lawfully
possessed by Buyer from other sources and information which is publicly
available, Buyer agrees to treat any information provided by Seller, or its
agents, or relating to Seller or the Property as confidential, preserve the
confidentiality thereof, and not disclose, duplicate or use such information,
except to Buyer’s advisors, consultants, investors, lenders, appraisers,
attorneys, accountants and Affiliates in connection with the transaction
contemplated hereby, or as required by law or court order.  In the event of the termination of this
Agreement for any reason whatsoever, Buyer will return to Seller (or, at Buyer’s
option, destroy) all documents, work papers, and other material (including all
copies thereof) obtained from Seller, or its agents, in connection with the
transaction contemplated hereby, and Buyer shall instruct its employees and
others who have had access to such information, to keep such information
confidential.  The provisions of this Section shall
survive any termination of this Agreement but not the Closing.  No party will make any public disclosure of
the specific terms of this Agreement, except as required by law or the order of
a court or an order to complete the Closing Documents.  Without limiting the generality of the
foregoing, any press release or other public disclosure regarding this
Agreement or the transaction contemplated herein, and the wording of same, must
be approved in advance by both parties in writing.


 


Date of this Agreement;
Effective Date.  Seller shall fill in
the date of this Agreement on page 1 hereof as the date which is one
Business Day after Seller delivers two (2) fully executed


 


42





















 


counterparts of this
Agreement to an overnight delivery service for delivery to Buyer or Buyer’s
attorneys.


 


Captions.  The Article and Exhibit headings herein
are for convenience only, and are not to be used in determining the meaning of
this Agreement or any part hereof.


 


Transaction as
Sale and Purchase of Assets.  Seller and Buyer agree that they shall treat
the transaction contemplated under this Agreement as a sale and purchase of
assets for federal income tax purposes (and, to the extent available, for state,
local, and other income tax purposes), as contemplated by Internal Revenue
Service Revenue Ruling 99-5, 1999-1 C.B. 434, Revenue Ruling 99-6, 1999-1 C.B.
432, and, to the extent applicable, Revenue Ruling 2004-85, 2004-33 I.R.B.  Specifically, Buyer shall treat its purchase
of the Membership Interests as Buyer’s purchase of MBCR’s assets from Seller in
accordance with Internal Revenue Code Section 1001, and Seller shall treat
Buyer’s purchase of the Membership Interests from Seller as Seller’s sale to
Buyer of MBCR’s assets in accordance with Internal Revenue Code Section 1001.


 


Venable Lease; Reznick
Lease.  


 


(A)                              Venable
LLP (“Venable”), pursuant to that certain Lease, dated as of May       ,
2001, by and between Venable, as Tenant, and MBCR, as landlord (the “Venable
Lease”), has an option to terminate the Venable Lease upon the satisfaction of
certain conditions.  The current term of
the Venable Lease runs through April 30, 2011.  The Mercantile Lease shall provide that, if
Venable shall exercise the termination option described in this Section 15.19,
Mercantile-Safe Deposit and Trust Company shall assume the Venable Lease
(including without limitation any additional space leased by Venable pursuant
to Section 15.19(B) below) and shall be liable for all of Venable’s
obligations thereunder and entitled to all of Venable’s rights, except for the
termination option.  At Buyer’s option,
Seller shall cause Mercantile-Safe Deposit and Trust Company to execute a new
lease or other instrument evidencing such assumption which shall set forth the
terms of the lease through the balance of the Venable Lease term on the same
terms as that of the Venable Lease. 
Seller shall have the right, subject to Buyer’s approval, which approval
shall not be unreasonably withheld, to cause Mercantile-Safe Deposit and Trust
Company to sublet any or all of the space subject to the Venable Lease to such
Person or Persons as it shall choose in its sole discretion (provided that no
such sublease shall relieve Seller of its obligations under this Section 15.19),
and Seller shall have the exclusive right to receive and retain the proceeds
from any termination payment paid by Venable in connection with the exercise of
the option described herein.


 


(B)                                Buyer
acknowledges that, prior to the Due Diligence Period Expiration Date, Seller
shall have the right, at its sole discretion, to cause MBCR to enter into an
agreement with Reznick whereby MBCR will agree to modify the Reznick Lease so
as to allow Reznick to vacate a portion (consisting of a total of approximately
38,914 square feet) of the premises currently leased under the Reznick Lease no
later than January 15, 2005; provided, however, and as to be set forth in
the Mercantile Lease, that Mercantile-Safe Deposit and Trust Company and/or Venable
shall modify their respective written agreements with MBCR regarding their
assumption of the premises currently leased under the Reznick Lease (excepting
the approximately 10,763 square feet sublet by Reznick.to Adelberg, Rudow, Dorf
& Hendler, LLC) so as to assume such premises (in whole either individually
or collectively) upon Reznick’s


 


43





















 


vacating such premises on
or before January 15, 2005.  Seller
acknowledges that Venable and Mercantile-Safe Deposit and Trust Company shall
assume rights and obligations under the Reznick Lease on the same terms as
their respective Leases and any assumption of the Reznick Lease by Venable
and/or Mercantile-Safe Deposit and Trust Company shall be coterminous with their
respective Leases.


 


44





















 


IN
WITNESS WHEREOF, the parties have executed this Agreement the date and year
first above written.


 


	
  WITNESS:

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
   

  	
  MERCANTILE
  BANKSHARES CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
   

  	
  HARBOR GROUP
  INTERNATIONAL, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  T. Richard
  Litton, Jr.

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice
  President and

  
	
   

  	
   

  	
   

  	
  General Counsel

  
								



 


 


[Signature Page to Membership Interests Purchase Agreement—MBC Realty,
LLC]


 





















 


EXHIBIT A


 


DESCRIPTION OF
LAND


 


ALL THAT PARCEL OF LAND
at the southeast corner of Baltimore Street and Hopkins Place, containing 1.37
acres of land, more or less, known as Development Area No. 12 – Charles Center
Project, together with a perpetual easement for the construction, maintenance,
operation and use of a private vehicular tunnel and ramp within a portion of
the former bed of Hopkins Place (now closed), in Baltimore City, State of
Maryland.


 


A-1





















 


EXHIBIT B


 


FORM OF ASSIGNMENT


AGREEMENT OF ASSIGNMENT AND ASSUMPTION


(Membership Interests in MBC Realty, LLC)


 


This
Agreement of Assignment and Assumption (the “Assignment”)
is made this          day of          ,
2004, by and between MERCANTILE BANKSHARES CORPORATION, a Delaware corporation
(“Assignor”) and                              ,
a                              (“Assignee”).


 


Recital of Facts


 


WHEREAS,
Assignor owns 100% of the outstanding membership interests (the “Membership Interests”) in MBC Realty, LLC, a Maryland
limited liability company (the “Company”),
pursuant to that certain Articles of Organization of the Company, dated as of          ,
2004, and that certain Operating Agreement of the Company, dated as of          ,
2004 (collectively, the “Operating Agreement”);
and


 


WHEREAS,
Assignor desires to convey the Membership Interests to Assignee.


 


NOW,
THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and the
agreements herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:


 


1.                                       Assignor
does hereby assign, transfer and set over to Assignee all of Assignor’s right,
title and interest in and to the Membership Interests, including, without
limitation, (i) all right, title and interest of Assignor from time to time in
and to the Company, (ii) all right, title and interest of Assignor pursuant to
the Operating Agreement from time to time in and to all real and personal
property and every other right, however characterized, now or hereafter held by
the Company, and (iii) all of Assignor’s respective claims, rights, powers,
privileges, security interests, liens and remedies under the Operating
Agreement.  A true and complete copy of
the Operating Agreement and all amendments thereto are attached as Exhibit A.


 


2.                                       Assignee
hereby accepts the assignment and transfer from Assignor of the Membership
Interests in the Company and assumes all liability of Assignor with respect
thereto which pertains to the Membership Interests accruing on or after the
date hereof.


 


3.                                       Assignor
represents that (i) this Assignment has been duly authorized by all necessary
corporate action and that this Assignment constitutes the legal, valid and
binding obligation of Assignor, enforceable in accordance with its terms; (ii)
Assignor is the sole member of the Company; (iii) no other person or party has
any membership interest in the Company; (iv) the Membership Interests are not
evidenced by a certificate of membership interest issued by the Company; (v)
the Membership Interests are not subject to any restriction


 


B-1





















 


with respect
to their transferability (other than restrictions on transfer under applicable
federal and securities laws); (vi) no third party has grounds for any claim (a)
against the Membership Interests or (b) that it has any ownership interest in
the Company; (vii) no person or entity is entitled to any preemptive rights
with respect to the purchase or sale of any membership or ownership interest in
the Company and there are no outstanding options, warrants or other rights,
commitments or arrangements, written or oral, to purchase or otherwise to
acquire any membership or ownership interest in the Company or any security
directly or indirectly convertible into or exchangeable or exercisable for any
membership or ownership interest in the Company; (viii) the Company does not
presently own or control, directly or indirectly, any interest in any other
corporation, association or other business entity; (ix) the Company is not a
participant in any joint venture, partnership or other similar arrangement; (x)
by virtue of this Assignment, Assignee will be admitted as the sole member of the
Company in accordance with the terms and provisions of the Operating Agreement;
(xi) Assignor owns of record and beneficially and hereby transfers the
Membership Interests free and clear of all liens, claims and encumbrances;
(xii) the Assignor has been given no notice of any default by any party in
performing its obligations under the provisions of the Operating Agreement and,
to the best of the Assignor’s knowledge, information, and belief, the Assignor
is not in default in performing those obligations.


 


4.                                       Assignee
hereby represents that this Assignment has been duly authorized by all
necessary                               action
and that this Assignment constitutes the legal, valid and binding obligation of
Assignee, enforceable in accordance with its terms.


 


5.                                       This
Assignment expressly incorporates the terms and conditions of Section 4.5
and Article 7 of that certain Membership Interests Purchase Agreement (the
“Agreement”), dated as of October     ,
2004, between Assignor and Harbor Group International, L.L.C. (of which
Assignee is a permitted assignee pursuant to Section 15.6 of the
Agreement) solely to the extent that such terms and conditions survive Closing
(as such term is defined in the Agreement). 
Assignee acknowledges that Section 4.5 is a material inducement to
Assignor’s entry into the Agreement and this Assignment.  Assignor acknowledges that Article 7 is
a material inducement to Assignee’s entry into the Agreement and this
Assignment.


 


6.                                       The
Assignor shall defend, protect, indemnify, and hold harmless the Assignee, from
and after the Closing Date (as such term is defined in the Agreement), as set
forth specifically in Section 14.1 of the Agreement.


 


7.                                       The
Assignee shall defend, protect, indemnify, and hold harmless the Assignor
against and from any and all liability, claim of liability, or expense arising
out of: (a) any default by the Assignee in performing its obligations under the
provisions of the Operating Agreement occurring after the Closing Date, and (b)
as set forth specifically in Section 14.2 of the Agreement.  The Assignee, on behalf of the Company, also
hereby releases any and all claims the Company has or may have against the
Assignor, except to the extent inconsistent with Paragraph 6 hereof.


 


B-2





















 


8.                                       Assignor
and Assignee agree that this Assignment shall become effective as of the date
hereof and upon its execution and delivery by each party.


 


9.                                       This
Assignment will be construed under and governed by the laws of the State of Maryland,
without giving effect to principles of conflict of laws of that state.


 


10.                                 Assignor
hereby agrees to use commercially reasonable efforts to forward to Assignee any
mail or notices it may receive on behalf of the Company.


 


11.                                 This
Assignment shall be binding upon and inure to the benefit of Assignor and
Assignee and their respective legal representatives, successors and assigns.


 


12.                                 This
Assignment may be executed in counterparts, each of which shall be deemed to be
an original and each of which taken together shall constitute one and the same
instrument.


 


 


[Remainder of Page Left Blank Intentionally]


[Signature Pages Follow]


 


B-3





















 


IN
WITNESS WHEREOF, Assignor and Assignee have executed this instrument as of the
day and year first above written.


 


 


	
  ASSIGNOR:

  	
   

  	
  MERCANTILE
  BANKSHARES

  
	
   

  	
   

  	
  CORPORATION,

  
	
   

  	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							



 


 


[Assignor’s Signature Page to Assignment of Membership
Interests in MBC Realty, LLC]


 


B-4





















 


	
  ASSIGNEE:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										



 


 


[Assignee’s Signature Page to Assignment of Membership
Interests in MBC Realty, LLC)]


 


B-5





















 


EXHIBIT C


 


Internal Revenue Code


Section 1445(b)(2)


Non-foreign Affidavit


(FIRPTA)


 


For purposes of Section 1445(b)(2) of the
Internal Revenue Code, as amended, with respect to MERCANTILE
BANKSHARES CORPORATION, a Delaware corporation (“Transferor”),
the undersigned hereby certifies, under penalty of perjury, to                                         ,
a                                    
that (i) Transferor’s United States taxpayer identification number is                                    ,  (ii) Transferor’s address is Two Hopkins
Plaza, Baltimore, Maryland 21201, and (iii) Transferor is not a “foreign person”,
within the meaning of said Section 1445(b)(2), as amended, and  is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax Regulations). Transferor understands
that this Affidavit may be disclosed to the Internal Revenue Service by the
transferee, and that any false statement made herein could be punished by fine,
imprisonment or both.


 


Under penalties of perjury I declare that I have
examined this certification and to the best of my knowledge and belief it is
true, correct and complete, and I further declare that I have authority to sign
this document on behalf of Mercantile Bankshares Corporation.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sworn to and
  subscribed

  	
   

  	
   

  
	
  before me this         
  day

  	
   

  	
   

  
	
  of                          ,
  2004.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Notary Public

  	
   

  	
   

  
	
  My Commission
  Expires:

  	
   

  	
   

  
						



 


C-1





















 


EXHIBIT D


 


INTENTIONALLY OMITTED


 


D-1





















 


EXHIBIT E


 


RENT ROLL AND LIST OF SECURITY DEPOSITS


 


[To be delivered within 2
Business Days after the Effective Date]


 


E-1





















 


EXHIBIT F


 


SCHEDULE OF LITIGATION


 


MBC Realty, LLC Schedule of
Pending Workers Compensation Claims (Insured under coverage provided by Seller
to its subsidiaries and affiliates)


 


1.               Murry, Charles – Shoulder
sprain.  Occurred while loading data
center paper on lift.  Date of injury: July 8,
2004.  Returned to work July 12,
2004.  Medical expenses and surgery.  Total anticipated payment of $8,000, of which
$350 has been paid as of October 18, 2004.


 


F-1





















 


EXHIBIT G


 


CONTRACTS


 


[To be delivered within 2 Business Days after the Effective Date]


 


G-1





















 


EXHIBIT H


 


PERSONAL PROPERTY


 


[To be delivered within 2
Business Days after the Effective Date]


 


H-1





















 


EXHIBIT J


 


MERCANTILE LEASE TERM SHEET


 


1.               All terms not
defined herein shall have the meanings set forth in the Membership Interests
Purchase Agreement between Mercantile Bankshares Corporation (“Mercantile
Bankshares”) and Harbor Group International, L.L.C. (“Harbor Group”).


 


2.               A lease will be
entered into by Mercantile-Safe Deposit and Trust Company (“Mercantile”) and
MBCR prior to the Due Diligence Period Expiration Date, and shall be effective
as of the date of Closing (the “Mercantile Lease”).  The terms and conditions of the Mercantile
Lease, including rent for the entire Leased Premises (as defined in Section 3
below), shall be substantially the same as the terms and conditions in that
certain lease between MBCR and Mercantile dated August 23, 2004, which
lease was subsequently terminated on October 8, 2004; subject, however, to
any matters to be renegotiated upon written notice from Buyer to Seller within five
(5) Business Days of the Effective Date; provided, however, that (i) the term
of the Mercantile Lease shall commence on the date of Closing and shall run for
a term of ten (10) full calendar years and (ii) the rent for the Venable Space
(as also defined in Section 3 below) shall be as set forth in Section 3.c.
below.


 


3.               The “Leased
Premises” under the lease shall include:


 


a.               All leased space
currently occupied by Mercantile, specifically encompassing 150,651 SF of
office space in the office tower on full or partial floors 1 through 12; 23,746
SF of back office space in the office tower and pavilion; and 3,270 SF of
storage space.  Notwithstanding any
current arrangements between Mercantile and Mercantile Bankshares or MBCR,
Mercantile shall be responsible for expense reimbursements, including parking
expenses, on the 23,746 SF of back office space in the office tower and
pavilion and the 150,651 SF of office space in the office tower.


 


b.              Beginning no later
than January 15, 2005, 28,423 SF of space on the 11th, 20th
and 21st floors currently occupied by Reznick, Fedder &
Silverman, L.L.C. (“Reznick”), which leased space is to be assumed and leased
by Mercantile under the same terms and conditions as the Mercantile Lease
(including without limitation rent).


 


c.               All space under
that certain lease between Venable LLP and MBCR effective May, 2001, as amended
(the “Venable Lease”), specifically encompassing:  121,708 SF of office space on floors 13
through 19; 7,161 SF of lower level space; 6,572 SF of storage space; and all
space which Venable assumes or is obligated to assume from Reznick (approx.
11,780 square feet), under the same terms as the Venable Lease (all of such
space collectively the “Venable Space”);


 


1





















 


provided, however, that Mercantile’s obligations with
respect to leasing the Venable Space shall arise only in the event Venable LLP
exercises its early termination option in the Venable Lease such that the term
expires prior to its April 30, 2011 expiration date.  Mercantile shall have the right, subject to
Harbor Group’s approval, which approval shall not be unreasonably withheld, to
sublet any or all of the Venable Space to such Person or Persons as it shall
choose in its sole discretion, and Mercantile Bankshares shall have the
exclusive right to receive and retain the proceeds from any termination payment
paid by Venable in connection with the exercise of the termination option
described in the preceding sentence.  Any
rent paid by Mercantile for Venable Space shall be paid at the rental rates set
forth in the Venable Lease.


 


4.               All other lease
terms and conditions shall be mutually agreeable to Mercantile Bankshares and
Harbor Group.


 


2





















 


RIDER


 


DEPOSIT ESCROW AGREEMENT


 


LANDAMERICA
TITLE INSURANCE COMPANY (“Escrowee”) agrees to hold in
escrow pursuant to this Agreement, the sum of Five Hundred Thousand Dollars
($500,000) (which sum, together with the interest earned hereon, is herein
referred to as the “Deposit”) to be deposited by HARBOR GROUP
INTERNATIONAL, L.L.C., a Virginia limited liability company (“Buyer”)
pursuant to a certain Membership Interests Purchase Agreement dated October        ,
2004 (“Contract”), between Buyer and MERCANTILE
BANKSHARES CORPORATION, a Delaware corporation (“Seller”),
the provisions of which (including, without limitation, the defined terms) are
hereby incorporated herein by reference.


 


The parties hereto
agree as follows:


 


1.                                       Escrowee
shall, immediately upon receipt of the Deposit, deposit same in an interest
bearing, money market type escrow account with                                        .


 


2.                                       The
Deposit shall be held by Escrowee until the earlier of (y) the Closing, or (z)
such time as Seller or Buyer may be entitled to the Deposit in accordance with
the Contract and this Agreement, at which time Escrowee shall remit the Deposit
to the party entitled thereto in accordance with the Contract and this
Agreement.  The Deposit shall be released
or delivered to the party entitled thereto pursuant to the Contract with
reasonable promptness after Escrowee shall have received notice:


 


(a)                                  from
Seller and Buyer authorizing release of the Deposit, or


 


(b)                                 from
Buyer at any time on or prior to the Due Diligence Period Expiration Date, or


 


(c)                                  from
Seller authorizing the return of the Deposit to Buyer; or


 


(d)                                 of
the occurrence of either of the following events:


 


(i)                                     the
Closing, at which time the Deposit, subject to any prorations or adjustments
made pursuant to Section 11 of the Contract, shall be paid to Seller and
applied to the Purchase Price; or


 


(ii)                                  the
receipt by Escrowee of a written notice from either Seller or Buyer stating
that an event has


 


1





















 


occurred under the Contract entitling the party
delivering such notice to the Deposit, whereupon Escrowee shall deliver written
notice (the “Default Notice”) thereof to the other party and, unless
such other party shall have delivered a written notice of objection to Escrowee
within ten (10) days following receipt by such other party of the Default
Notice, Escrowee shall deliver the Deposit to the party initially requesting
the Deposit.


 


3.        (a)                         Escrowee is to be considered
as a depository only, shall not be deemed to be a party to any document other
than this Agreement, and shall not be responsible or liable in any manner
whatsoever for the sufficiency, manner of execution, or validity of any written
instructions, certificates or any other documents received by it, nor as to the
identity, authority or rights of any persons executing the same.  Escrowee shall be entitled to rely at all
times on instructions given by Seller and/or Buyer, as the case may be and as
required hereunder, without any necessity of verifying the authority
therefor.  Notices given by Joseph N.
Schaller, Esq. or Priscilla K. Carroll, Esq. of Whiteford, Taylor & Preston
L.L.P., as counsel to and on behalf of Buyer, shall be deemed given by Buyer.  Notices given by Stephen A. Goldberg, Esq. or
Philip F. Diamond, Esq. of Gallagher Evelius & Jones LLP, as counsel to and
on behalf of Seller, shall be deemed given by Seller.


 


(b)                                 Escrowee
shall not at any time be held liable for actions taken or omitted to be taken
in good faith and without negligence.  Seller
and Buyer agree to save and hold Escrowee harmless and indemnify Escrowee from
any loss and from any claims or demands arising out of its actions hereunder
other than any claims or demands arising (i) from Escrowee’s negligence or
willful misconduct or (ii) under the Title Policy.


 


(c)                                  It
is further understood by Seller and Buyer that if, as a result of any
disagreement between them or adverse demands and claims being made by any of
them upon Escrowee, or if Escrowee otherwise shall become involved in litigation
with respect to the Contract or this Agreement, or if Escrowee shall determine
in good faith that there may be an issue of fact or law as to the delivery of
the Deposit, Escrowee may deposit the Deposit with a court of competent
jurisdiction and/or in accordance with the order of a court of competent
jurisdiction and in any such event, Seller and Buyer agree that they, jointly
and severally, are and shall be liable to Escrowee and shall reimburse Escrowee
on demand for all costs, expenses and reasonable counsel fees it shall incur or
be compelled to pay by reason of any such 
litigation.  Seller and Buyer
agree between themselves that each shall be responsible to advance one-half of
all amounts due Escrowee pursuant to this Agreement, provided that any such
advance by Seller or Buyer as a result of any dispute or litigation between
them shall be without prejudice to its right to recover such amount as damages
from the breaching party.


 


2





















 


(d)                                 In
taking or omitting to take any action whatsoever hereunder, Escrowee shall be
protected in relying upon any notice, paper, or other document believed by it
to be genuine, or upon evidence deemed by it to be sufficient, and in no event
shall Escrowee be liable hereunder for any act performed or omitted to be
performed by it hereunder in the absence of negligence or bad faith.  Escrowee may consult with counsel in
connection with its duties hereunder and shall be fully protected in any act
taken, suffered or permitted by it in good faith and without negligence in
accordance with the advice of such counsel.


 


4.                                       Upon
the satisfaction of the mutual obligations of the parties hereunder, Escrowee
shall promptly submit for recording or filing, as applicable, all appropriate
instruments delivered to it at the Closing.


 


5.                                       Escrowee
shall have no right or obligation to approve any amendment to the Contract
unless such amendment purports to affect the Escrowee’s rights or obligations
hereunder.


6.                                       Escrowee
shall not charge any title search or examination fees or fees in connection
with its duties as escrow agent in connection with this transaction.


7.                                       This
Agreement shall be governed by the laws of the State of Maryland.


 


Seller represents
that its Federal Tax ID Number is 52-0898572.


 


Buyer represents
that its Federal Tax ID Number is 54-1934716.


 


Escrowee
represents that its wire transfer instructions are as follows:


 


 


 


 


3





















 


IN
WITNESS WHEREOF, Buyer, Seller and Escrowee, for valuable consideration, each
intending to be legally bound and to bind their respective successors and
assigns, have caused this Agreement to be executed and delivered as of October        ,
2004.


 


	
   

  	
   

  	
  MERCANTILE BANKSHARES

  
	
   

  	
   

  	
   

  	
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HARBOR GROUP
  INTERNATIONAL,

  
	
   

  	
   

  	
   

  	
  L.L.C.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LANDAMERICA
  TITLE INSURANCE

  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  
								



 


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