PURCHASE AND SALE AGREEMENT
 
 
(1331 L Street, N.W.
Washington, D.C.)

By and Between

1331 L STREET HOLDINGS, LLC
(as Seller)

And

GLL L-STREET 1331, LLC

(as Purchaser)

 
 
 

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TABLE OF CONTENTS
SectionPage

 
 

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1.
Definitions
1
2.
Sale of The Property
6
2.1
Agreement of Sale and Purchase
6
2.2
As Is, Where Is
6
3.
Matters to Which the Sale is Subject
7
4.
Purchase Price and Payment
7
4.1
Amount
7
4.2
Deposit
7
4.3
Payment
7
4.4
Disposition of Deposit
8
4.5
Interpleader
8
4.6
Escrow Agent as Stakeholder
8
4.7
Escrow Agent to Acknowledge Agreement
8
5.
Closing Adjustments and Prorations
9
5.1
General
9
5.2
Rent
9
5.3
Taxes and Assessments
9
5.4
Operating Expenses and Ground Rent
10
5.5
Security Deposits
11
5.6
Utility Deposits
11
5.7
Leasing Costs
11
5.8
Final Closing Adjustment
13
6.
Closing Date and Costs
14
6.1
Closing Date
14
6.2
Transfer and Recordation Taxes and Closing Costs
14
7.
Closing Documents
14
7.1
Seller’s Deliveries
14
7.2
Purchaser’s Deliveries
16
7.3
Delivery in Escrow
16
8.
Obligations Pending Closing
16
8.1
Continued Care and Maintenance
16
8.2
Leasing of the Property
17
8.3
Service Contracts
17
8.4
Operating Records
17
8.5
Affirmative Covenants
18
8.6
Negative Covenants
18
9
Inspection Period
19
9.1
Due Diligence Materials
19
9.2
Investigation and Inspection
19
9.3
Environmental Studies
20
9.4
Indemnification
20
9.5
Title or Survey Exceptions
20
9.6
Construction Contracts
21

 
 
 

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10.
Conditions of Closing
22
10.1
Estoppel Certificates
22
10.2
Encumbrances Subsequent to Inspection Period
22
10.3
General Conditions of Purchaser
22
10.4
General Conditions of Seller
24
11.
Brokerage
24
12.
Risk of Casualty
25
13.
Notices and Other Communications
25
13.1
Manner of Giving Notice
25
13.2
Addresses for Notices
26
14.
Default and Remedies
27
14.1
Seller’s Default
27
14.2
Purchaser’s Default
27
14.3
Indemnity Provisions
27
14.4
Limitation of Liability
27
15.
Environmental Condition
28
15.1
Existing Reports
28
15.2
Permitted Usage
28
15.3
As Is
28
16.
Seller’s Representations and Warranties
28
16.1
Representations and Warranties Regarding Authority and Status
28
16.2
Representations and Warranties Regarding Property and Legal Matters
29
16.3
Representations and Warranties Regarding Leases, Contracts, and Other Documents
30
17.
Seller’s Disclosures
33
17.1
Soil Disclosures
33
17.2
Underground Storage Tank Disclosure
33
18.
Third Party Beneficiaries
33
19.
Further Assurances
33
20.
No Assignment
33
21.
Purchaser’s Authority
34
23.
Assumption of Service Contracts and Management Agreement
34
24.
Miscellaneous
34
24.1
Captions and Execution
34
24.2
Amendment and Merger
34
24.3
Binding
35
24.4
Governing Law
35
24.5
Entire Agreement
35
24.6
Time of Essence
35
24.7
No Waiver
35
24.8
Partial Invalidity
35
24.9
Exclusive Rights
35
24.10
No Offer or Binding Contract
35
24.11
Counterparts
36
24.12
Joint and Several Liability
36
24.13
Like Kind Exchange
36
24.14
Jury Waiver
36
25.
CoStar Guaranty
36

 
 
 

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TABLE
OF
SCHEDULES AND EXHIBITS

Schedules

A           Legal Description
B           Lease Schedule
C           Operating Statement
D           Service Contracts
E           Pending Litigation
F           Existing Environmental Reports
G           Licenses
H           Specific Permitted Encumbrances
I           Rent Roll
J           Personal Property

Exhibits

A           Form of Assignment and Assumption of Ground Lease
B           Form of Bill of Sale
C           Form of Assignment and Assumption of Leases and Service Contracts
D           Form of Assignment of Intangible Property and Warranties
E           Form of Notice to Tenants
F           Form of FIRPTA Affidavit
G           Form of Title Affidavit
H           Form of Assignment and Assumption of  Construction  Contracts
I           Form of Ground Lease Estoppel Certificate
J           Form of Underground Storage Tank Disclosure
K           Form of Tenant Estoppel
L           Form of CoStar Lease
M           Form of Lease Guaranty
N           Form of Management Termination Agreement
O           First Amendment to Foxhall Lease

 
 

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  PURCHASE AND SALE AGREEMENT
 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered  into as
of the 2nd day of February, 2011 (the “Effective Date”), by and between (i) 1331
L Street Holdings, LLC, a Delaware limited liability company (sometimes referred
to as “Seller” or “Ground Lessee”), and (ii) GLL L-Street 1331, LLC., a Delaware
limited liability company (“Purchaser”), with CoStar Group, Inc. (“Guarantor”)
executing this Agreement solely for the purpose of guaranteeing Seller’s
obligations under this Agreement as provided in Section 25 below.
 
RECITALS:

A.           Seller owns a certain ground leasehold and the improvements
thereon, commonly known as 1331 L Street, N.W., Washington, D.C.
 
B.           Seller has agreed to sell to Purchaser, and Purchaser has agreed to
purchase from Seller, the Property (as hereinafter defined).
 
NOW, THEREFORE, in consideration of the payment of $10 and of the mutual
promises hereinafter set forth and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
 
1. Definitions.  The terms defined in this Section 1 shall have the respective
meanings stated in this Section 1 for all purposes of this Agreement.  For
purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires, (i) the terms defined in this Section 1 include the
plural as well as the singular, and the use of any gender herein shall be deemed
to include the other gender; (ii) accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with United States generally
accepted accounting principles; (iii) references herein to “Sections” and other
subdivisions without reference to a document are to designated Sections and
other subdivisions of this Agreement; (iv) a reference to an Exhibit or a
Schedule without a further reference to the document to which the Exhibit or
Schedule is attached is a reference to an Exhibit or Schedule to this Agreement;
(v) the words “herein”, “hereof”, “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular provision; and (vi)
the word “including” means “including, but not limited to.”
 
Additional Deposit shall mean the sum of Three Million and No/100 Dollars
($3,000,000.00), together with interest thereon as provided in Section in 4.2
 
Additional Rent shall mean all reimbursements of Operating Expenses,
reimbursements of real estate taxes, insurance and other cost reimbursements
payable by Tenants to Seller, as landlord, under their Leases.
 
Affiliate shall mean with respect to any entity, any natural person or firm,
corporation, partnership, limited liability company, association, trust or other
entity which controls, is controlled by, or is under common control with, the
subject entity; a natural person or entity which controls an Affiliate under the
foregoing shall also be deemed to be an Affiliate of such entity.  For purposes
hereof, the term “control” shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of any
such entity, or the power to veto major policy decisions of any such entity,
whether through the ownership of voting securities, by contract or otherwise.
 
Amendment shall have the meaning set forth in Section 8.2.
 
 
 

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Approved Leases shall have the meaning set forth in Section 8.2.
 
Basic Rent shall mean all base rent or basic rent payable in fixed installments
and fixed amounts for stated periods by Tenants under their Leases.
 
Broker shall mean and refer to Cassidy Turley Washington LLC.
 
Building shall mean the building and structures now erected or situated upon the
Land, including all improvements and fixtures, appurtenant to or used in
connection therewith, which are owned by Seller on the Effective Date, all
mechanical systems and equipment comprising part of the building,  and any
interest of Seller in and to alterations and installations in the building and
structures which may now or hereafter, by lease or operation of law, become the
property of Seller. Without limiting the generality of the foregoing, the
following equipment shall be considered included in the Building and conveyed to
Purchaser as part of the Property at no additional cost: (i) the generator
servicing the Building (described as Generac SD275-K361 in the Kelly Generator &
Equipment maintenance contract), (ii) the 300 kw Generac Diesel engine-driven
generator, (iii) all automatic transfer switches, fuel pumps, and fuel oil tanks
associated with said two generators, and (iv) a self contained supplemental
McQuay air conditioning system that provides cooling for the data center in the
Building, including all ducting, sensors, fan, pumps and air handlers.
 
Business Day shall mean those days of the week which are not a Saturday, Sunday
or a federal holiday.
 
Closing shall have the meaning set forth in Section 4.3.
 
Closing Date shall mean February 18, 2011, or such other date as may be mutually
agreed to by the parties.
 
Closing Statement shall have the meaning set forth in Section 5.1.
 
Common Area Construction Contracts shall have the meaning set forth in Section
9.6(a)
 
Common Area Contractors shall have the meaning set forth in Section 9.6(a)
 
Common Area Escrow Account shall have the meaning set forth in Section 5.7(b)
 
Common Area Escrow Amount shall have the meaning set forth in Section 5.7(b)
 
CoStar shall mean CoStar Realty Information, Inc.
 
CoStar Lease shall mean that certain office lease by and between Purchaser and
CoStar Realty Information, Inc., in form attached hereto as Exhibit L, to be
executed on the Closing Date; provided, however, that the Premises Escrow
Agreement attached as Exhibit H to the CoStar Lease and the Common Area Escrow
Agreement attached as Exhibit I to the CoStar Lease are, in both cases, subject
to modification only to address the reasonable comments, if any, of the Escrow
Agent thereto.
 
Cut-Off Date shall have the meaning set forth in Section 5.7(b)
 
Cut-Off Date Balances shall have the meaning set forth in Section 5.7(b)
 
Delinquent Rent shall mean rent which is due and payable by a Tenant on or
before the Closing Date but which has not been paid by the Closing Date.
 
 
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Deposit shall mean the aggregate of the Initial Deposit and the Additional
Deposit, in the amount of Six Million and No/Dollars ($6,000,000.00), together
with interest earned thereon as provided in Section 4.2.
 
Due Diligence Materials shall mean the material supplied by Seller pursuant to
Section 9.1 hereof.
 
Effective Date shall be the date set forth in the preamble to this Agreement.
 
End of the Inspection Period shall mean the earlier of (i) February 2, 2011; or
(ii) the date Purchaser waives its termination rights under Sections 9.2 and 9.5
hereof.
 
Environmental Laws shall refer to all federal, state and local laws, ordinances
or regulations governing Hazardous Materials.
 
Environmental Studies shall have the meaning set forth in Section 9.3.
 
Escrow Agent shall mean Old Republic National Commercial Title Insurance
Company, a Minnesota corporation, 1667 K Street, N.W., Suite 610, Washington,
D.C. 20006-1652, Attention Christopher Naughten, Esq., Tel. (202) 296-3901, Ext.
2; Fax (202) 595-0207.
 
Estoppel shall have the meaning set forth in Section 10.1.
 
Existing Environmental Reports shall have the meaning set forth in Section 9.1.
 
Final Closing Adjustment shall have the meaning set forth in Section 5.8.
 
Ground Lease shall mean that certain Lease dated February 15, 1989 by and
between 1331 L Street Holdings, LLC, a Delaware limited liability company (as
successor-in-interest by multiple assignments, "Ground Lessee") and Manger
8-10-34 Trust Partners LLC, a District of Columbia limited liability company (as
successor-in-interest to Julius Manger, Jr. and William M. Manger, as Successor
Trustees under the several Trusts created by Declaration of Trust dated August
10, 1934, between Julius Manger, Grantor and Julius Manger, Trustee) (the
"Ground Lessor") for the Land located at 1331 L Street, N.W., Washington, D.C.,
as amended and supplemented by (i) Rider to Lease dated February 15, 1989, (ii)
Letter Agreement dated May 8, 1992 from Charles A. Camalier, III, Esquire, on
behalf of Ground Lessee, to Noah P. Rosoff, Esquire, on behalf of Ground Lessor,
as agreed to and accepted by Ground Lessor, (iii) a side letter (regarding
Ground Lessee's indemnity obligations) dated November 9, 2006, (iv) that certain
First Amendment to Lease dated November 27, 2006 by and between Ground Lessee
and Ground Lessor, and (v) that certain Second Amendment to Lease dated July 15,
2009 by and between Ground Lessee and Ground Lessor, as assigned to Seller
pursuant to that certain Assignment and Assumption of Ground Lease, dated
February 5, 2010, and recorded February 9, 2010 as Instrument Number 2010011391
among the Land Records of the District of Columbia.
 
Ground Lessor shall mean Manger 8-10-34 Trust Partners LLC, or its successor in
interest.
 
Hazardous Materials shall have the meaning set forth in Section 15.1.
 
Immaterial Amendment  shall have the meaning set forth in Section 8.2.
 
Initial Deposit shall mean the sum of Three Million and No/100 Dollars
($3,000,000.00), together with interest thereon as provided in Section 4.2.
 
 
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Inspection Period shall have the meaning set forth in Section 9.2.
 
Intangible Property shall mean the contract rights, warranties, licenses,
permits, certificates of occupancy, rights to use trademarks, trade names
(including, but not limited to the name "1331 L Street" and all derivations
thereof), logos, designs, graphics or artwork, architectural drawings and
as-built plans, licenses, approvals, certificates, certificates of occupancy,
governmental approvals, proceeds under insurance policies or condemnation
proceeds, site plans variances, and all similar items owned by Seller and used
in connection with the development of, construction of, or use and operation of
the Property.
 
Knowledge or knowledge of a particular fact or other matter shall be attributed
to Seller only if Andrew Florance, Brian Radecki, and Nadia O’Dea, or any of
them, has actual (and not constructive) knowledge of the fact or other matter,
with no duty of independent investigation or inquiry, except that Seller shall
make inquiry of Property Manager as to the accuracy hereunder of all information
set forth in the Seller’s representations and warranties relating to the
Property.
 
Land shall mean that certain parcel of land described in Schedule A in which
Seller holds a leasehold interest pursuant to the Ground Lease.
 
Lease Guaranty shall mean a Lease Guaranty executed by Guarantor with respect to
the CoStar Lease, the form of which guaranty is attached hereto as Exhibit M.
 
Lease Schedule shall refer to Schedule B.
 
Leases shall mean all leases and subleases of space for portions of the Building
in existence on the Effective Date, and all amendments thereto, a complete list
of which is attached as  Schedule B attached hereto, together with the CoStar
Lease any Approved Leases executed after the Effective Date.
 
Lease Activity Notice shall have the meaning set forth in Section 8.2.
 
Leasing Costs shall mean for a particular Lease (i) all leasing commissions
payable to brokers in connection with a Lease (regardless of when the same shall
be due), and (ii) the cost of any obligation of Landlord under the Lease to
perform or pay for tenant improvements, Tenant improvement allowances, free
rent, rent abatements or offsets, or other landlord concessions.
 
Licenses shall have the meaning set forth in Section 8.5(e).  The Licenses are
identified on Schedule G.
 
Litigation and Litigation Schedule shall have the meaning set forth in Section
16.2(f).
 
Management Agreement shall mean that certain Management Agreement dated February
5, 2010, between Seller and LPC Commercial Services, Inc., as amended.
 
New Lease shall have the meaning set forth in Section 8.2.
 
Non-Disturbance Agreement shall have the meaning set forth in Section 10.3(g).
 
Objections shall have the meaning set forth in Section 9.5.
 
 
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Operating Expenses shall mean all costs, expenses, charges and fees relating to
the ownership, management, operation, maintenance and repair of the Property,
including electricity, gas, water, sewer and other utility charges, common area
maintenance charges, vault charges, personal property taxes, periodic charges
payable under Service Contracts, but not including any costs, expenses, charges
or fees which are the direct responsibility of a Tenant under a Lease.
 
Operating Statement shall mean the rent roll, budgets, delinquency reports,
aging analyses and other information attached or listed on Schedule C.
 
Other Seller Interests shall mean all of the right, title and interest of Seller
pertaining to the Land, including all appurtenances thereunto belonging or in
any way appertaining, including the following:
 
(a) all of the right, title and interest of Seller in and to any easements,
grants of right or other agreements affecting the Property or comprising the
Permitted Encumbrances, including any structures or improvements erected
pursuant to such easements, grants of right or other agreements whether or not
situated upon the Land;
 
(b) all of the right, title and interest of Seller in and to any land lying in
the bed of any street, road or avenue, opened or proposed, in front of or
adjoining the Property, to the center line thereof, and to any strips or gores
adjoining the Property or any part thereof, and all right, title and interest of
Seller in and to any award made or to be made in lieu thereof, and in and to any
unpaid award for damages to the Property by reason of change of grade of any
street; and
 
(c) all of the right, title and interest of Seller in and to any mineral and
water rights, if any.
 
Permitted Encumbrances shall mean (a) zoning and building ordinances and land
use regulations, Environmental Laws, and other legal requirements that apply to
the Property; (b) the lien of taxes and assessments not yet due and payable; (c)
any exceptions caused by Purchaser, its agents, representatives, employees or
its contractors; (d) the rights of the Tenants under the Leases as tenants only
and without rights of purchase; (e) matters identified on Schedule H; and (f)
any matters deemed to constitute Permitted Encumbrances under Section 9.5.
 
Personal Property shall mean the tangible personal property located in or on,
and used in the operation of, the Building and/or the Land (including, without
limitation, all maintenance equipment and tools) that is identified in Schedule
J.
 
Premises Construction Contracts shall have the meaning set forth in Section
9.6(b)
 
Premises Escrow Account shall have the meaning set forth in Section 5.7(b)
 
Premises Escrow Amount shall have the meaning set forth in Section 5.7(b)
 
Property shall collectively mean all of Seller’s right, title, and interest in
and to the Land, the Site Improvements, the Building, the Personal Property,
Leases and Licenses, the Intangible Property and the Other Seller Interests.
 
Property Manager shall mean LPC Commercial Services, Inc.
 
Purchase Price shall mean the purchase price for the Property specified in
Section 4.1.
 
Purchaser Response shall have the meaning set forth in Section 9.5.
 
 
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Renewal shall have the meaning set forth in Section 8.2.
 
Security Deposits shall mean all security deposits, access card or key deposits
and other deposits (including any interest accrued thereon in accordance with
the terms of the Tenants' Leases) relating to space within the Building paid by
Tenants under Leases.
 
Seller Response shall have the meaning set forth in Section 9.5.
 
Service Contracts shall mean all of the service, operation, maintenance, labor
and similar agreements entered into by Seller in respect of the Property (but
excluding any construction contracts, such as contracts for the construction of
tenant improvements) which are described in Schedule D.
 
Site Improvements shall mean all of the parking lots, driveway pavings, access
cuts, parking lot striping, lighting, bumpers, drainage systems and landscaping
situated upon the Land and all appurtenances to the Building located outside of
the Land, as shown on the Survey.
 
Survey shall have the meaning set forth in Section 9.5.
 
Tenant shall mean the holder of any right to occupy, possess, or use all or any
part of the Property pursuant to a Lease.
 
Tenant's Fiscal Year shall have the meaning set forth in Section 5.2(b).
 
Title Commitment shall have the meaning set forth in Section 9.5.
 
Title Company shall mean Old Republic National Title Insurance Company, or such
other nationally recognized title insurance company selected by Purchaser.
 
Title Policy shall have the meaning set forth in Section 10.3(c).
 
Underground Storage Tank Disclosure shall have the meaning set forth in Section
17.2.
 
Withheld Amount shall have the meaning set forth in Section 5.7(b)
 
2. Sale of The Property.
 
2.1 Agreement of Sale and Purchase.  Upon and subject to the terms and
conditions contained in this Agreement, Seller agrees to sell the Property to
Purchaser, and Purchaser agrees to purchase the Property from Seller.
 
2.2 "As Is, Where Is".  This Agreement reflects the mutual agreement of Seller
and Purchaser.  Other than the matters specifically set forth in this Agreement,
which by the terms of this Agreement survive Closing, Purchaser will, upon the
Closing, be deemed to have not relied upon and will not rely upon, either
directly or indirectly, any representation or warranty of Seller or any of
Seller's agents or representatives.  Except to the extent set forth in Sections
8, 15 and 16 of this Agreement, Seller specifically disclaims, and neither it
nor any of its Affiliates nor any advisor, consultant or employee of Seller is
making, any representation, warranty or assurance whatsoever to Purchaser, and
no warranties or representations of any kind or character, either express or
implied, are made by Seller or relied upon by Purchaser with respect to the
status of title to or the maintenance, repair, condition, design or
marketability of the Property, or any portion thereof, including, but not
limited to, (a) any implied or express warranty of merchantability, (b) any
implied or express warranty of fitness for a particular purpose, (c) any implied
or express warranty of conformity to models or samples of materials, (d) any
rights of Purchaser under appropriate statutes to claim diminution of
consideration, (e) any claim by Purchaser for damages because of defects,
whether known or
 
 
6

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unknown, with respect to the improvements or the personal property, (f) the
financial condition or prospects of the Property, and (g) the compliance or lack
thereof of the Property with governmental regulations.  Purchaser represents
that it is a knowledgeable, experienced and sophisticated purchaser of real
estate, and that it is relying solely on its own expertise and that of its
advisors in purchasing the Property.  Prior to the Closing, Purchaser will
conduct and may conduct such inspections, investigations and other independent
examinations of the Property and related matters as Purchaser deems necessary,
including, but not limited to, the physical and environmental conditions
thereof, and upon the Closing, will rely upon same and not upon any statements
of Seller (excluding the limited matters represented by Seller in Sections 8, 15
and 16 of this Agreement) or of any Affiliate, officer, director, employee,
agent or attorney of Seller.  Purchaser acknowledges and agrees that upon
Closing, Seller will sell and convey to Purchaser, and Purchaser will accept the
Property, "as is", "where is", and “with all faults” except as may otherwise be
specifically provided in Sections 8, 15 and 16 of this Agreement.  The terms and
conditions of this Section 2.2 will expressly survive the Closing, will not
merge with the provisions of any closing documents, and will survive the
recordation of the Ground Lease Assignment.
 
3. Matters to Which the Sale is Subject. The sale of the Property shall be
subject to each and all of the following:
 
(a) the Permitted Encumbrances;
 
(b) the Ground Lease; and
 
(c) the Service Contracts and any other agreements that affect the Property,
which Purchaser assumes in writing pursuant to the provisions of Section 23.
 
4. Purchase Price and Payment.
 
4.1 Amount.  Subject to the adjustments and prorations contemplated by this
Agreement, the purchase price for the Property shall be the sum of One Hundred
One Million and No/100 Dollars ($101,000,000.00), less the Withheld Amount (the
“Purchase Price”), which shall be payable all in cash at the Closing.
 
4.2 Deposit. Within three (3) Business Days after the Effective Date, Purchaser
shall place the Initial Deposit in escrow with the Escrow Agent.   Within three
(3) Business Days after the End of the Inspection Period (and provided Purchaser
has not elected by written notice to terminate this Agreement as provided in
Sections 9.2 or 9.5 and this Agreement otherwise remains in full force and
effect without default by Seller), Purchaser shall place the Additional Deposit
in escrow with the Escrow Agent.  The Deposit shall be held by the Escrow Agent
pursuant to the express provisions of this Agreement.  Escrow Agent shall
promptly after receipt invest the Initial Deposit and the Additional Deposit in
an interest-bearing account in a federally insured commercial bank acceptable to
both Purchaser and Seller.  The failure of the Purchaser to post the Additional
Deposit as and when required hereunder shall be deemed an election by Purchaser
to terminate this Agreement pursuant to Section 9.2 hereof at the End of the
Inspection Period.
 
 
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4.3 Payment.  On the Closing Date, Purchaser shall pay the Purchase Price to, or
for the account of, Seller in the manner provided for in this Section 4.3,
subject to the adjustments and prorations set forth in this Agreement.  On or
before 1:00  p.m. on the Closing Date, Purchaser shall effect a wire transfer of
federal funds to the Escrow Agent’s designated escrow account in an amount equal
to the result obtained by subtracting (A) the sum of (i) the net amount (if any)
of the costs, expenses, prorations and adjustments payable to Purchaser under
this Agreement, and (ii) the Deposit from (B) the sum of (i) the Purchase Price
and (ii) the net amount (if any) of the costs, expenses, prorations and
adjustments payable by Purchaser under this Agreement.  After the Escrow Agent’s
receipt of the wire transfer of funds and immediately following (i) the
recordation of the Ground Lease Assignment (as hereinafter defined), (ii) the
issuance of the Title Policy to Purchaser and (iii) the disbursement by the
Escrow Agent to Seller of an amount equal to the Purchase Price (including as a
part of the Purchase Price, the Deposit) reduced by the net amount of the costs,
expenses, prorations and adjustments payable by Seller under this Agreement (the
"Closing"), the Escrow Agent shall (1) deliver to Purchaser all documents and
instruments received by Escrow Agent which, in accordance with the terms of this
Agreement, are to be delivered by Seller to Purchaser at the closing of the
purchase; and (2) deliver to Seller all documents and instruments received by
Escrow Agent which, in accordance with the terms of this Agreement, are to be
delivered by Purchaser to Seller at the Closing.  Notwithstanding anything to
the contrary herein, the Escrow Agent shall not record the Ground Lease
Assignment until such time as it is prepared to disburse to Seller on the
Closing Date the amount specified in the immediately preceding sentence, and
issue to Purchaser the Title Policy.
 
4.4 Disposition of Deposit.  If this Agreement is terminated pursuant to Section
14 and thereafter either Seller or Purchaser makes a demand on the Escrow Agent
for the return of the Deposit (if the demand is made by Purchaser) or for the
payment of the Deposit (if the demand is made by Seller), the party making such
demand and the Escrow Agent shall give notice of such demand to the other
party.  If the Escrow Agent does not receive an objection from the other party
to the proposed payment or return of the Deposit within five (5) Business Days
after the giving of such notice, the Escrow Agent shall pay the Deposit to the
party making the demand.  If the Escrow Agent receives an objection from the
other party within the five (5) Business Day period, the Escrow Agent shall
continue to hold the Deposit until otherwise directed by instructions from
Seller and Purchaser or until otherwise directed by a court of competent
jurisdiction.  Until the End of the Inspection Period, the provisions of
Sections 9.2 and 9.5, and not the provisions of this Section 4.4, shall control
the disposition of the Deposit.  The provisions of this Section 4.4 shall also
not apply to other provisions of this Agreement which grant the Purchaser the
right to terminate this Agreement and receive a refund of the Deposit.
 
4.5 Interpleader.  In the event of a dispute concerning the disposition of the
Deposit, the Escrow Agent shall have the right, at any time, to deposit any cash
funds held by it under this Agreement with the clerk of the court having
jurisdiction.  The Escrow Agent shall give notice of such deposit to Seller and
Purchaser.  Upon such deposit, the Escrow Agent shall be relieved and discharged
of all further obligations and responsibilities hereunder.  Until the End of the
Inspection Period, the provisions of Sections 9.2 and 9.5 and not the provisions
of this Section 4.5 shall control the disposition of the Deposit.  The
provisions of this Section 4.5 shall also not apply to other provisions of this
Agreement which grant the Purchaser the right to terminate this Agreement and
receive a refund of the Deposit.
 
4.6 Escrow Agent as Stakeholder.  The parties acknowledge that the Escrow Agent
is acting solely as a stakeholder at their request and for their convenience;
that the Escrow Agent shall not be deemed to be the agent of either of the
parties; and that the Escrow Agent shall not be liable to either of the parties
for any act or omission on its part unless taken or suffered in bad faith, in
willful disregard of this Agreement or involving gross negligence.
 
 
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4.7 Escrow Agent to Acknowledge Agreement.  The Escrow Agent shall acknowledge
its agreement to the provisions of this Agreement by executing this Agreement in
the space provided below.
 
5. Closing Adjustments and Prorations.
 
5.1 General.  All rentals, revenues and other income generated by the Property
and all utilities, real estate taxes, maintenance charges and other Operating
Expenses incurred in connection with the ownership, management and operation of
the Property shall be paid or shall be prorated between Seller and Purchaser in
accordance with the provisions of this Section 5.  For purposes of the
prorations and adjustments to be made pursuant to this Section 5, Purchaser
shall be deemed to own the Property as of the Closing Date and therefore be
entitled to any revenues and be responsible for any expenses for the entire day
upon which the Closing occurs.  Any apportionments and prorations which are not
expressly provided for in this Section 5 shall be made in accordance with the
customary practice in the District of Columbia.  Except as expressly provided
herein, the purpose and intent as to the provisions of prorations and
apportionments set forth in this Section 5 and elsewhere in this Agreement is
that Seller shall bear all expenses of ownership and operation of the Property
and shall receive all income and revenue therefrom accruing through midnight of
the day preceding the Closing and Purchaser shall bear all such expenses and
receive all such income and revenue accruing thereafter. Seller and Purchaser
shall endeavor to cause their respective accountants or other representatives to
prepare a schedule of prorations (the “Closing Statement”) at least three (3)
Business Days before the Closing Date.  Any net adjustment in favor of Purchaser
shall be credited against the Purchase Price at the Closing.  Any net adjustment
in favor of Seller shall be paid in cash at the Closing by Purchaser to Seller.
 
5.2 Rent.  Rent shall be prorated at the Closing in accordance with the
following provisions:
 
(a) Basic Rent and Other Revenues.  Subject to Section 5.2(b), Basic Rent and
other revenues (including, without limitation, Additional Rent) actually
received by Seller shall be prorated between Seller and Purchaser as of the
Closing Date based on the actual number of days in the month during which the
Closing Date occurs.   Seller shall be entitled to all Basic Rent and other
revenues which are due and payable under the Leases before the Closing Date and
Purchaser shall be entitled to all Basic Rent and other revenues which are due
and payable under the Leases on and after the Closing Date.  Accordingly,
Purchaser shall be credited with an amount equal to all prepaid rentals for
periods on and after the Closing Date.
 
(b) Delinquent Rent.  Delinquent Rent shall not be prorated at Closing and shall
be paid by Purchaser to Seller if, as, and when actually collected by Purchaser
after the Closing.  It is understood and agreed that Purchaser shall be
obligated to use its commercially reasonable efforts to collect Delinquent Rent
on behalf of Seller (including, without limitation, sending notices of default
under the applicable lease), but is under no obligation to initiate any legal
proceeding to collect the Delinquent Rent, evict the Tenant who is delinquent,
or terminate the Tenant's lease.  Basic Rent or Additional Rent collected after
the Closing Date (less any collection costs incurred by Purchaser) shall be
applied first to sums for the month in which Closing occurs (and Purchaser shall
promptly pay to Seller its prorated portion of such collections), then  to the
sums then currently due and owing from Tenant under the Lease for all periods
accruing after the Closing Date and then any sums remaining to Delinquent Rent
owed to Seller.
 
5.3 Taxes and Assessments.
 
(a) Proration of Taxes at Closing.  All non-delinquent real estate taxes
assessed against the Property shall be prorated between Seller and Purchaser,
based upon the actual current tax bill.  If the most recent tax bill received by
Seller before the Closing Date is not the actual current tax bill, then Seller
and Purchaser shall initially prorate the real estate taxes at the Closing by
applying the most recent tax assessment rate established by the District of
Columbia to the latest assessed valuation established by the District of
Columbia for tax purposes (which may be from a notice of assessment or the most
recent tax bill), and shall reprorate the real estate taxes retroactively
 
 
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at the Final Closing Adjustment.  All real estate taxes accruing before the
Closing Date (no matter when assessed or levied) shall be the obligation of
Seller and all real estate taxes accruing on and after the Closing Date shall be
the obligation of Purchaser.  Any delinquent real estate taxes assessed against
the Property shall be paid (together with any interest and penalties) by Seller
at the Closing.  The parties acknowledge that there is pending a request for a
real estate tax exemption, waiver or abatement on account of CoStar’s occupancy
of the Building that may serve to reduce or eliminate real estate taxes for the
Building, pursuant to the “Technology Act” (as defined in the CoStar
Lease).  Any reduction in real estate taxes pursuant to the immediately
preceding sentence which accrues for any period before the Closing Date shall be
taken into account in making the proration under this Section 5.3(a) (if the
amount of such reduction is ascertained prior to Closing)  or Section 5.8 (if
the amount of such reduction is ascertained after Closing.  The applicable
provisions of the CoStar Lease shall control with respect to CoStar’s
entitlement to the benefit of such reduction in real estate taxes.
 
(b) Post-Closing Supplemental Taxes.  If, after the Closing Date, any additional
or supplemental real estate taxes are assessed against the Property by reason of
back assessments, corrections of previous tax bills or other events occurring
before the Closing Date, Seller and Purchaser shall reprorate the real estate
taxes at the Final Closing Adjustment using the method set forth in Section
5.3(a).
 
(c) Post-Closing Refunds of Taxes.  The parties acknowledge that there is
presently pending a real estate tax appeal for Tax Year 2011 (“2011 Tax
Appeal”), filed on behalf of Seller by Grossberg, Yochelson, Fox & Beyda, LLP
(“GYFB”), pursuant to an engagement letter dated January 5, 2011(the “2011
Engagement Letter”), the terms of which are incorporated herein by
reference.  At Closing, Seller will assign to Purchaser, and Purchaser will
assume from Seller, all rights and responsibilities under the Engagement Letter,
including responsibility for any costs and fees payable thereunder.  Seller
shall be responsible for notifying GYFB of the sale, in accordance with the
terms of the Engagement Letter. Seller shall have the right to withdraw the 2011
Tax Appeal at any time prior to Closing and Purchaser shall have the right to
withdraw the 2011 Tax Appeal at any time after Closing.   Before and after
Closing, Seller will deliver to GYFB any information or documentation requested
by GYFB in connection with the 2011 Tax Appeal which is Seller’s possession or
control.  If the 2011Tax Appeal  is successful, any refunds of real estate taxes
made to Purchaser after the Closing shall first be applied to the unreimbursed
costs of GYFB, and any other costs of Purchaser and Seller incurred in obtaining
the refund, then paid to any Tenants who are entitled to the same, and the
balance, if any,  shall be paid to Seller (for the period prior to the Closing
Date) within ten (10) days of Purchaser’s receipt of such refund and to
Purchaser (for the period commencing on and after the Closing Date).  If the
2011 Tax Appeal is unsuccessful, Purchaser and Seller shall reprorate the
out-of-pocket costs they incurred in the same ratio.  The parties further
acknowledge that there is also presently pending a real estate tax appeal for
Tax Year 2010 (“2010 Tax Appeal”), filed on behalf of Seller by GYFB, pursuant
to engagement letter dated March 30, 2009 (the “2010 Engagement Letter”).  At
Closing, Seller will retain all rights and responsibilities under the 2010
Engagement Letter, including responsibility for any costs and fees payable
thereunder.  If the 2010 Tax Appeal is successful, any refunds of real estate
taxes after the Closing shall first be applied to the unreimbursed costs of
GYFB, and any other costs of Seller incurred in obtaining the refund, then paid
to any Tenants who are entitled to the same, and the balance, if any, shall be
paid to Seller.  If the refund under the 2010 Tax Appeal is paid to Purchaser,
Purchaser shall, within ten (10) days of Purchaser’s receipt of such refund,
promptly remit same to Seller for application in accordance with the terms of
this Section.  If the 2010 Tax Appeal is unsuccessful, Seller shall bear all
cost of said appeal.
 
 
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5.4 Operating Expenses and Ground Rent.  All Operating Expenses shall be
prorated between Seller and Purchaser as of the Closing Date, based on the
actual number of days in the month during which the Closing Date occurs for
monthly expenses, and based on a 365-day year for annual expenses.  For purposes
of this Section, Net Annual Rent under the Ground Lease, which is payable in
advance in equal monthly installments, shall be treated as an Operating Expense.
Seller shall be responsible for all Operating Expenses attributable to the
period before the Closing Date and Purchaser shall be responsible for all
Operating Expenses attributable to the period on and after the Closing Date.  To
the extent commercially reasonable and practicable, Seller and Purchaser shall
obtain billings and meter readings as of the Business Day preceding the Closing
Date to aid in the proration of charges for gas, electricity and other utility
services which are not the direct responsibility of Tenants.  If such billings
or meter readings as of the Business Day preceding the Closing Date are
obtained, adjustments or any costs, expenses, charges or fees shown thereon
shall be made in accordance with such billings or meter readings.  If such
billings or meter readings as of the Business Day preceding the Closing Date are
not available for any utility service, the charges therefor shall be adjusted at
the Closing on the basis of the per diem charges for the most recent prior
period for which bills were issued and shall be further adjusted at the Final
Closing Adjustment on the basis of the actual bills for the current
period.  Estimated payments of percentage rent are payable under the Ground
Lease quarter-annually, in arrears, on or before the 15th day of the first month
following a given calendar quarter, and said payments are subject to audit and
an annual reconciliation, based upon an Annual Reconciliation Statement
delivered to the Ground Lessor when annual reconciliations are delivered to
Tenants of the Building.  Seller’s Annual Reconciliation Statement is based on
an October 1-September 30 fiscal year. Accordingly, at Closing, percentage rent
will have been paid for the 4th calendar quarter of 2010, and will be accruing
for the 1st calendar quarter of 2011.  Accrued percentage rent for the 1st
calendar quarter of 2011 will be prorated between Seller and Purchaser as of the
Closing Date, calculated on the actual number of days in the 1st calendar
quarter of 2011, on the basis of the percentage rent paid to the Ground Lessor
for the 4th calendar quarter of 2010, subject to recalculation when the final
numbers are known.  Seller shall be solely responsible for, and shall indemnify
and hold Purchaser harmless against, all claims, costs and liabilities arising
out of the Ground Lessor’s audit of the fiscal year ending September 30, 2010,
and all earlier fiscal years, including, without limitation, all amounts of
percentage rent determined to be owed for such prior fiscal years.  The
foregoing indemnity shall survive the Closing and shall be enforceable at any
time.
 
5.5 Security Deposits.  Purchaser shall be credited with, and Seller shall be
charged with, an amount equal to all Security Deposits from the Tenants,
together with any statutory or contractual interest owed to Tenants.  Seller
shall be entitled to retain all Security Deposits, interest required to be paid
thereon, or other such credits due Tenants for which Purchaser receives credit
and Seller is charged pursuant to this Section 5.5.
 
5.6 Utility Deposits.  Seller shall be entitled to retain all utility deposits
paid by Seller prior to the Closing.  If any of the utility deposits are not
refundable to Seller without replacement by Purchaser, Purchaser shall either:
(i) deliver the requisite replacement utility deposit to the utility company on
or before the Closing Date, or (ii) pay to Seller at the Closing the amount of
such utility deposit, against a good and sufficient transfer by Seller to
Purchaser of all interest of Seller in the utility deposit.
 
5.7 Leasing Costs.
 
(a) Seller represents and warrants that there are no Leasing Costs in connection
with the Leases that are due and owing or unadvanced as of the Effective Date
(including any leasing/commission agreement relating to the Leases existing as
of the Effective Date), except (i) in connection with the CoStar Lease, as set
forth in Section 5.7(b), (ii) as set forth in Schedule B, (iii) to the extent
set forth in the Foxhall Lease Amendment, and (iv) for such Leasing Costs as may
become due and owing after Closing in connection with the renewal or extension
of any Leases, as provided in the Leases,  All New Leases, Amendments, and
Renewals executed between the Effective Date and the Closing Date shall be
submitted by Seller to Purchaser for review and approval in accordance with the
terms of Section 8.2 hereof (including disclosure of the details of leasing
commissions, tenant improvement
 
 
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obligations, rent abatements and other landlord concessions).  Any Leasing Costs
associated with such New Leases, Renewals and Amendments approved by Purchaser
pursuant to Section 8.2 hereof shall be the obligation of Seller unless
Purchaser specifically agrees otherwise in writing to pay such expenses as part
of its approval of the same.   To the extent that, as of the Closing Date, there
are any written or other agreements pertaining to Leasing Costs which under this
Section are the obligation of the Purchaser to pay after the Closing, the
Purchaser and Seller will, at the Closing, execute a mutually acceptable
agreement whereby the Purchaser assumes the obligation to pay all of such
Leasing Costs for which Purchaser is responsible hereunder and will indemnify
and hold Seller harmless with respect to the same.
 
(b) Notwithstanding anything to the contrary in this Agreement, at Closing, an
amount determined in accordance with this Section 5.7(b) shall be deducted from
$101,000,000 in calculating the Purchase Price (such amount, the “Withheld
Amount”).  The Withheld Amount shall be paid by Purchaser into two escrow
accounts at Closing.  The first escrow account shall be hereinafter referred to
as the “Premises Escrow Account” and it shall be established and held under the
terms of that certain Premises Escrow Agreement, which shall be substantially in
the form of Exhibit H to the CoStar Lease.  Purchaser and CoStar shall, together
with the Escrow Agent, enter into the Premises Escrow Agreement at Closing.  The
amount to be held in the Premises Escrow Account shall be as determined in
accordance with this Section 5.7(b) (such amount, the “Premises Escrow
Amount”).  The Premises Escrow Amount shall be paid by Purchaser into escrow
pursuant to the Premises Escrow Agreement in order to secure the obligation of
Purchaser to fund certain Premises Improvements (as that term is defined in the
CoStar Lease).  The second escrow account shall be referred to hereinafter as
the “Common Area Escrow Account” and it shall be established and held under the
terms of that certain Common Area Escrow Agreement, which shall be substantially
in the form of Exhibit I to the CoStar Lease.  The Purchaser and CoStar shall,
together with the Escrow Agent, enter into the Common Area Escrow Agreement at
Closing.  The amount to be held in the Common Area Escrow Account shall be as
determined in accordance with this Section 5.7(b) (such amount, the “Common Area
Escrow Amount”).  The Common Area Escrow Amount shall be paid by Purchaser into
escrow pursuant to the Common Area Escrow Agreement in order to secure the
obligation of Purchaser to fund certain Common Area Improvements (as that term
is defined in the CoStar Lease), and to fund the estimated Reimbursable Fees
under the Foxhall Amendment (as such terms are hereinafter defined). The
Withheld Amount, the Premises Escrow Amount and the Common Area Escrow Amount
shall be determined in accordance with the following:
 
(i) The parties acknowledge and agree that the Common Area Contractors (as
defined in Section 9.6 hereof) under the Common Area Construction Contracts (as
defined in Section 9.6 hereof) will have agreed by (or in connection with)
Closing to binding and executed Common Area Construction Contracts with an
aggregate contract price to be paid thereunder for full performance of the work
thereunder (such aggregate contract price, plus the estimated Reimbursable Fees
under the Foxhall Amendment) shall be the Common Area Escrow Amount for purposes
hereof);
 
(ii) The Withheld Amount for purposes hereof shall be an amount to be specified
by Seller at Closing, but shall in no event be less than Common Area Escrow
Amount or exceed Fifteen Million and No/100 Dollars ($15,000,000.00); and
 
(iii) The Withheld Amount less the Common Area Escrow Amount shall be the
Premises Escrow Amount for purposes hereof.
 
 
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On the date that is five (5) business days prior to the Closing (the “Cut-Off
Date”), Seller shall cause all Common Area Contractors to prepare invoices for
all work on the Common Area Improvements for which amounts are due and owing
through the Cut-Off Date (such amounts, if any, the “Cut-Off Date
Balances”).  Seller shall, prior to Closing, cause the Cut-Off Date Balances to
be paid to each applicable Common Area Contractor.  As between Seller and
Purchaser, Purchaser shall, upon Closing, be responsible for all payments to be
made to Common Area Contractors for Common Area Improvements completed pursuant
to the Common Area Construction Contracts after the Cut-Off Date, and Seller
will thereafter be absolved of any liability.  In this regard, Seller shall not
be required to, and shall not, pay sums due to any Common Area Contractors for
periods after the Cut-Off Date, and Purchaser assumes liability therefor.
 Seller agrees to secure lien releases from each Common Area Contractor
receiving payments in respect of Cut-Off Date Balances to evidence payment
thereof (which may be conditioned upon receipt of payments in respect of the
Cut-Off Date Balances), bringing such Common Area Contractors current through
the Cut-Off Date.  The parties acknowledge that the CoStar Lease attached hereto
as Exhibit L and the Premises Escrow Agreement and the Common Area Escrow
Agreement do not, as of the Effective Date, contain figures for the “Premises
Improvement Allowance” or the “Common Area Improvement Allowance” (as such terms
are defined in the CoStar Lease).  In connection with the Closing, the parties
shall enter such amounts as determined in accordance with this Section 5.7(b) in
the foregoing documents in order to finalize them for Closing (it being
understood that the Premises Improvement Allowance for purposes of the CoStar
Lease shall be the Premises Escrow Amount determined in accordance herewith, and
that the Common Area Improvement Allowance for purposes of the CoStar Lease
shall be the Common Area Escrow Amount determined in accordance
herewith).  Furthermore, the parties acknowledge that a number needs to be
entered into each of Sections 33.b and 34.b. of the CoStar Lease.  Said number
shall be determined by taking the Premises Escrow Amount determined in
accordance herewith and dividing it by 149,514 and, once determined, said number
shall be inserted into Sections 33.b and 34.b. of the CoStar Lease prior to and
in connection with the Closing.  The parties acknowledge and agree that the
Withheld Amount does not constitute a portion of  the actual consideration
received by Seller for the Property, and that therefore, as set forth in Section
4.1 above, for all purposes (including, without limitation,  Transfer and
Recordation Tax purposes in the District of Columbia, and for federal income tax
purposes), the Purchase Price of the Property does not include the Withheld
Amount (as determined in accordance with this Section 5.7(b)).   
 
5.8 Final Closing Adjustment.  No later than six (6) months following the
Closing Date (or, with respect to a particular proration, such as a proration
requiring calendar or fiscal year-end or similar reconciliation, and only to the
extent necessary to calculate the final amount thereof, by June 30, 2013, Seller
and Purchaser shall make a final adjustment to the prorations made pursuant to
this Section 5 (the “Final Closing Adjustment”).  The Final Closing Adjustment
shall be made in the following manner:
 
(a) General.  All adjustments or prorations which could not be determined at the
Closing because of the lack of actual statements, bills or invoices for the
current period, the year-end adjustment of Additional Rent or any other reason,
shall be made as a part of the Final Closing Adjustment.  Any net adjustment in
favor of Purchaser shall be paid in cash by Seller to Purchaser no later than
thirty (30) days after the Final Closing Adjustment.  Any net adjustment in
favor of Seller shall be paid in cash by Purchaser to Seller no later than
thirty (30) days after the Final Closing Adjustment.  The parties shall correct
any manifest error in the prorations and adjustments made at Closing promptly
after such error is discovered.
 
(b) Additional Rent Adjustment.  Seller and Purchaser shall prorate the actual
amount of Additional Rent paid by each Tenant for the fiscal year set forth in
such Tenant’s Lease for the determination and payment of Additional Rent (the
“Tenant’s Fiscal Year”).  Such proration shall be made separately for each
Tenant that is obligated to pay Additional Rent,  as follows:
 
 
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(i) Seller shall be entitled to the portion of the actual amount of Additional
Rent paid by the Tenant equal to the product obtained by multiplying such amount
by a fraction, the numerator of which is the number of days in the Tenant’s
Fiscal Year preceding the Closing Date and the denominator of which is the total
number of days in the Tenant’s Fiscal Year; and
 
(ii) Purchaser shall be entitled to the balance of the Additional Rent paid by
the Tenant.
 
In making the foregoing adjustment of Additional Rent, interim payments of
Additional Rent collected and retained by Seller or Purchaser from each Tenant
for the Tenant's Fiscal Year for periods before and after Closing, as the case
may be, shall be taken into account.  The adjustment of interim payments
received and actual Additional Rent paid shall be made separately for each
Tenant and for each type of Additional Rent.
 
(c) No Further Adjustments.  Except for: (i) additional or supplemental real
estate taxes, real estate tax credits or rebates, or other adjustments to real
estate taxes contemplated by Section 5.3, or (ii) manifest errors, the Final
Closing Adjustment shall be conclusive and binding upon Seller and Purchaser,
and Seller and Purchaser hereby waive any right to contest after the Final
Closing Adjustment any prorations, apportionments or adjustments to be made
pursuant to this Section 5.  The provisions of Section 5 shall survive the
Closing.
 
6. Closing Date and Costs.
 
6.1 Closing Date.  The Closing shall take place at the offices of the Title
Company in Washington, D.C. at 1:00 p.m. Eastern Time on the Closing Date, or
such earlier date as may be mutually agreed to by the parties. Notwithstanding
the foregoing, Purchaser and Seller shall endeavor to conduct Closing by
depositing (by overnight or local courier) into escrow with the Title Company,
all closing documents no later than one (1) Business Day prior to the Closing
Date.  In addition, Purchaser and Seller shall endeavor to finalize all
prorations and adjustments to the Purchase Price contemplated by Section 5
hereof, and prepare the Closing Statement detailing all such items and costs of
Closing, no later than three (3) Business Days prior to the Closing Date.
 
6.2 Transfer and Recordation Taxes and Closing Costs.  Seller and Purchaser
shall each pay one-half of (i) all recording costs (including, but not limited
to, all transfer and recordation taxes and recording fees) in connection with
the recording of the Ground Lease Assignment, and (ii) the Closing Escrow and
settlement fee of the Escrow Agent (which shall not exceed $750.00).  Seller
shall pay all costs and expenses necessary to obtain a release of any liens or
encumbrances on the Property.  Purchaser shall pay for all other expenses of
closing, including the costs of examination of title, escrow fees (other than
the Closing Escrow and settlement fee referenced in clause (ii) of this Section
6.2),  the Title Policy, the Survey and all costs associated with any purchase
money financing obtained by Purchaser.  Each party shall pay the fees of its own
legal counsel and other consultants.  The provisions of this Section 6.2 shall
survive the Closing.   
 
7. Closing Documents.
 
7.1 Seller’s Deliveries.  Seller shall execute and/or deliver to Purchaser on
the Closing Date the following:
 
(a) an assignment and assumption of Ground Lease (the “Ground Lease Assignment”)
in the form attached hereto as Exhibit A;
 
(b) a bill of sale in the form attached hereto as Exhibit B;
 
 
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(c) an Assignment and Assumption of Leases and Service Contracts in the form
attached hereto as Exhibit C;
 
(d) an assignment of all Intangible Property and warranties related to the
Property in the form attached hereto as Exhibit D;
 
(e) letters in the form attached hereto as Exhibit E to each Tenant under the
Leases;
 
(f) a Section 1445 Affidavit in the form attached hereto as Exhibit F;
 
(g) an owner’s affidavit addressed to the Title Company in the form attached as
Exhibit G, to eliminate the exceptions in the owner’s title insurance policy for
parties in possession other than the Tenants under the Leases and for mechanic’s
and materialmen’s liens arising in connection with work performed or materials
provided to the Property at Seller’s direction prior to the Closing;
 
(h) the Management Termination Agreement;
 
(i) the Closing Statement referred to in Section 5.1 signed by Seller;
 
(j) the fully executed originals of all Leases, including the CoStar Lease;
 
(k) the Non-Disturbance Agreement executed by Ground Lessor;
 
(l) all keys to the Property, if any, which are in Seller’s possession;
 
(m) originals of the Estoppels from the Ground Lessor and the Tenants and
originals (if in Seller’s possession) of the Ground Lease and all Leases, lease
files and other material required by Section 8.4.
 
(n) all warranties, manufacturer or equipment manuals, service records and
similar information related to the Personal Property which are in Seller's
possession;
 
(o)  a good standing certificate issued by the State of Delaware, dated not more
than thirty (30) days prior to the Closing Date, evidencing that each of the
Seller and Guarantor is in good standing in the state of its organization;
 
(p) Copies of the Construction Contracts relating the Common Area Improvements,
together with an Assignment and Assumption of Construction Contracts, executed
by Seller, in the form attached hereto as Exhibit H;
 
(q)  any transfer and recordation tax declaration;
 
(r) such additional documents as Seller and Purchaser shall mutually agree are
necessary to consummate the sale of the Property to Purchaser or are otherwise
required by the provisions of this Agreement;
 
(s) letters to the other parties under the Service Contracts, advising of the
sale of the Property;
 
(t) the Lease Guaranty executed by Guarantor, and
 
 
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(u) authorizing resolutions for and/or on behalf of Seller, CoStar and Guarantor
evidencing the authority of Seller and Guarantor to enter into and perform this
Agreement, the authority of Guarantor to enter into and perform the Lease
Guaranty, and the authority of CoStar to enter into and perform the Lease; or in
lieu of such resolutions, a secretary’s certificate whereby excerpts of the
applicable resolutions are attached and the secretary certifies that the same
were duly adopted, have not been modified and remain in full force and effect .
 
7.2 Purchaser’s Deliveries.  Purchaser shall execute and/or deliver to Seller on
the Closing Date the following:
 
(a) the Ground Lease Assignment in the form attached hereto as Exhibit A;
 
(b) the Assignment and Assumption of Leases and Service Contracts in the form
attached hereto as Exhibit C;
 
(c) the Assignment and Assumption of Construction Contracts in the form attached
hereto as Exhibit H;
 
(d) subject to the provisions of Section 5.6, letters to the holders of any
utility security deposits authorizing the return of such security deposit to
Seller;
 
(e) the Closing Statement referred to in Section 5.1; and
 
(f) good standing certificate(s) for the Purchaser issued by the State of
Delaware and each state of organization for the Purchaser, dated not more than
thirty (30) days prior to the Closing Date, evidencing that the Purchaser is in
good standing in the state of its organization and, if applicable, the District
of Columbia;
 
(g) a copy of the fully executed New Management Agreement;
 
(h) any transfer and recordation tax declarations; and
 
(i) such additional documents as Seller and Purchaser shall mutually agree are
necessary to consummate the sale of the Property to Purchaser or are otherwise
required by the provisions of this Agreement.
 
7.3 Delivery in Escrow.  The delivery to the Escrow Agent of the Purchase Price,
the executed Ground Lease Assignment and all other documents and instruments
required to be delivered by either party to the other by the terms of this
Agreement shall be deemed to be a good and sufficient tender of performance of
the terms hereof.
 
8. Obligations Pending Closing.
 
8.1 Continued Care and Maintenance.  During the period between the Effective
Date and the Closing Date, Seller agrees: (i) to continue to maintain and
operate the Property in accordance with the provisions of Section 8.5; (ii) not
to make any capital alterations or other substantial alterations or changes to
the Property other than ordinary and necessary maintenance and repairs, without
Purchaser’s prior approval (provided, however, Seller may make any alterations
or changes to the Property that are permitted or required by any Lease
(including the CoStar Lease), or required by Section 8.5(c)(ii) hereof, or are
otherwise disclosed on the Operating Statement, without Purchaser’s prior
approval; and (iii) to maintain in effect all policies of casualty and liability
insurance or similar policies of insurance, with no less than the limits of
coverage now carried with respect to the Property.  Except as set forth in
Section 8.2 hereof, Purchaser agrees not to unreasonably withhold, condition or
delay any such approvals.  Nothing contained herein shall prevent Seller from
acting to prevent loss of life, personal injury or property damage in emergency
situations, or prevent Seller from performing any act with respect to the
Property which may be required by any Lease, applicable law, rule or
governmental regulations.
 
 
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8.2 Leasing of the Property.  If Seller desires to enter into  (i) any new
leases for the Property (a "New Lease"); or (ii) a renewal, extension or
expansion of any existing Leases for the Property (other than renewals,
extensions or expansions of existing Leases evidencing or reflecting the
exercise by Tenants of any rights or options, the terms of which are fixed or
determinable as of the Effective Date, under existing Leases) (a "Renewal") or
(iii) any other amendment or modification to a Lease (the "Amendment"), Seller
shall give Purchaser  prior written notice (the "Lease Activity Notice") of its
desire to do so. The Lease Activity Notice shall include a copy of the proposed
New Lease, Renewal or Amendment, and shall set out the amount of space involved,
the length of the lease term, the proposed financial terms thereof (including
any rent abatement periods), the amount of any leasing commission, tenant
improvement obligations and any “non-standard” provisions of the proposed New
Lease or Renewal or Amendment.  Seller shall not enter into any New Lease,
Renewal or Amendment without Purchaser’s prior written approval. Purchaser’s
approval shall not be unreasonably withheld, delayed or conditioned in
connection with a proposed Amendment which is an “Immaterial Amendment,” as
defined in the next sentence. For purposes hereof, an “Immaterial Amendment” is
an Amendment which will not (i) have any material adverse effect on Purchaser,
legal or financial, (ii) increase the financial or legal obligations of the
landlord under a Lease; or (iii) modify the term of the Lease or the rent
payable thereunder.   The Purchaser will be deemed to have granted its consent
to any New Lease, Renewal or Amendment in the event that it fails to provide
Seller with written objections to the same on or before five (5) Business Days
after its receipt  of the Lease Activity Notice for the particular New Lease,
Renewal or Amendment.  As used in this Agreement, the term "Approved Leases"
refers collectively to any New Lease, Renewal or Amendment, which is approved by
Purchaser pursuant to this Section.
 
8.3 Service Contracts.  Seller shall not enter into any new service contracts in
respect of the Property that cannot be cancelled, without the payment of any
termination related fee or premium, upon thirty (30) days' notice.
 
8.4 Operating Records.  On the Closing Date, Seller will turn over to Purchaser,
or leave at the Property, all books, records, operating records, files and other
materials, in the possession of Seller or its management agent, necessary to a
complete continuity in the operation of the Property, or copies thereof.  For a
period of three (3) years after the Closing Date, Purchaser shall permit Seller
to have access to and, at Seller’s sole cost and expense, make copies of such
records and files during Purchaser’s normal business hours on any Business Day,
provided that (i) Seller has a reasonable business purpose for having access to
such records, and (ii) Seller must provide Purchaser with prior notice of at
least one (1) Business Day  The records that Seller will deliver to Purchaser
shall not include:  (a) any document or correspondence which would be subject to
the attorney-client privilege (“Privileged Materials”) ; (b) any document or
item which Seller is contractually, legally or otherwise bound to keep
confidential (“Confidential Materials”); (c) any document pertaining to the
marketing of the Property for sale to prospective purchasers; (d) any internal
memoranda, reports or assessments of Seller or Seller's affiliates relating to
Seller's valuation of the Property; (e) appraisals of the Property whether
prepared internally by Seller or Seller's affiliates or externally; (f) any
documents relating to Seller's financing or the entity that owns the Property,
but does not directly affect or relate to the Property; and (g) any other
proprietary information or materials relating to Seller's internal
decision-making or investment or financing options.  The foregoing provisions
notwithstanding, (i) the limitations on delivery of records set forth in the
preceding sentence shall in no event be deemed to apply to the Leases,  the
 
 
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Service Contracts and or other documents which Seller is obligated to or has
agreed to deliver to Purchaser by the express terms of this Agreement, and (ii)
if there are any Privileged Materials or Confidential Materials which includes
or relates to information set forth in  Seller’s representations or warranties
hereunder, then (a) in the case of Privileged Materials withheld,  Seller shall
submit a schedule to Purchaser that generally describes the nature of any
privileged information withheld without revealing or being required to reveal
such information (similar to a privilege log that is often required in
connection with requests for production in litigation); (b) in the case of
Confidential Materials, Seller may withhold such materials unless Purchaser
signs a confidentiality agreement reasonably acceptable to Seller in form and
substance agreeing to keep such information confidential and indemnifying Seller
against any damages arising from Purchaser’s breach thereof.
 
8.5 Affirmative Covenants.  Between the Effective Date and the Closing Date,
Seller agrees that it will:
 
(a) at its expense, operate and maintain the Property (including the Personal
Property) in its present order and condition and in accordance with its past
practices to date, make all necessary repairs, and deliver the Property on the
Closing Date in substantially the same condition it is in on the Effective Date,
reasonable wear and tear and damage by fire or other casualty excepted;
 
(b) give prompt written notice to Purchaser of any fire or other casualty
affecting the Property after the Effective Date;
 
(c) deliver to Purchaser, promptly after receipt by Seller after the
Effective  Date, a copy of: (i) all written notices from Tenants; (ii) written
notices from the service providers under any Service Contracts; (iii) written
notices received by Seller of any violations issued by governmental authorities
with respect to the Property (including notices of violations received prior to
the Effective Date and not remedied by the Effective Date), and, at its sole
cost and expense, remedy before the Closing Date all violations of legal
requirements specified in such notice affecting or relating to the Property (to
the extent Purchaser in its investigations uncovers any violations of legal
requirements it will notify the Seller of the same and, except to the extent
required by law, will not contact any legal authority with respect to the same),
and any outstanding work orders and requirements of any company insuring the
Property against casualty;
 
(d) notify Purchaser in writing, promptly after Seller acquires actual knowledge
thereof, of any facts or events which would cause any of Seller's
representations and warranties contained in Sections 15 or 16 of this Agreement
or in the Due Diligence Material supplied by Seller to Purchaser pursuant to
this Agreement, to be untrue or incorrect in any material respect; and
 
(e) maintain in full force and effect all existing licenses and permits relating
to the operation of the Property in its current manner (the "Licenses") and
timely apply for renewals of all such Licenses which will expire before the
Closing Date.
 
8.6 Negative Covenants.  Between the Effective Date and the Closing Date, Seller
agrees that, without Purchaser's written consent in each case, it will not,
directly or indirectly through the Property Manager or any Affiliate:
 
(a) voluntarily grant, create, assume or permit to exist any mortgage, lien,
easement, covenant, condition, right-of-way or restriction upon the Property
other than the Permitted Encumbrances, or voluntarily take or permit any action
adversely affecting the title to the Property as it exists on the Effective
Date, without the prior approval of Purchaser which will not be unreasonably
withheld, conditioned or delayed;
 
 
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(b) alter or amend any of the Service Contracts or become a party to any new
Service Contract unless the new Service Contract is terminable without penalty
to the then owner of the Property upon not more than thirty (30) days' notice or
upon sale of the Property;
 
(c) terminate any Lease, or accept a surrender of the leased premises
thereunder; unless the Seller is legally required to accept the surrender by the
Tenant  pursuant to the express terms of any such Lease;
 
(d) remove from the Property any Personal Property unless such property is
replaced with similar items of at least equal quality prior to the Closing, or
 
(e) agree to any request by a Tenant for permission to assign its Lease or
sublease part or all of its premises, but if such Tenant’s Lease requires that
the landlord’s consent to an assignment or sublease may not unreasonably be
withheld, Purchaser’s consent will not be required with respect thereto although
Seller must nevertheless notify Purchaser in writing of any such request and
must give Purchaser a reasonable opportunity to present its objections (if any)
to such request.
 
9. Inspection Period.
 
9.1 Due Diligence Materials.  Seller has delivered to Purchaser prior to the
Effective Date the following documents (the "Due Diligence Materials"):
architectural and structural plans relating to the Property in Seller’s
possession; copies of income and expense statements with respect to the Property
for the calendar years ending December 31, 2008 and December 31, 2009, and the
Seller's budget for calendar year 2011 and an income statement for the most
recent calendar quarter ending prior to the Effective Date; copies of real
property tax assessments and tax bills with respect to the  period of Seller’s
ownership of the Property; a copy of the Leases; a rent roll in the form
attached as Schedule I (“Rent Roll”); a list of tenant current delinquencies; a
copy of Seller’s survey; a copy of Seller’s title insurance policy and title
exceptions from Seller’s title insurance policy; a copy of all Service
Contracts; a copy of any environmental reports relating to the Property in
Seller's possession (collectively, the "Existing Environmental Reports"); a copy
of Seller’s existing engineering reports; and a copy of any Licenses in Seller’s
possession.  Seller makes no representations or warranties as to accuracy,
completeness or reliability of the Due Diligence Materials that have been
prepared by third parties, and Seller shall have no liability in connection
therewith, however, to the extent Seller has or obtains actual knowledge of any
information that is required to make such Due Diligence Materials correct,
accurate, complete and not misleading, the Seller will be obligated to promptly
disclose to the Purchaser in writing the information known to Seller.  Purchaser
agrees that all information received from Seller is Seller’s confidential work
product unless otherwise indicated, and Purchaser agrees that it will maintain
the confidentiality of all such information.  In the event of termination of
this Agreement for any reason whatsoever prior to Closing hereunder, Purchaser
shall return to Seller all materials or copies of materials pertaining to the
Property received from Seller or Seller’s agents and all non-confidential,
non-privileged or non-proprietary studies, tests, and materials prepared for
Purchaser’s benefit by third parties that are not related to Purchaser within
five (5) Business Days of such termination.
 
9.2 Investigation and Inspection.  Commencing on the Effective Date and
continuing until the End of the Inspection Period (hereinafter called the
“Inspection Period”), Purchaser shall make, or cause to be made, at Purchaser’s
own risk and expense, such investigation of the Property as is reasonably
necessary, including physical inspections of the Property, review of the Leases,
Service Contracts, laws and ordinances, and approval of survey and condition of
title. Notwithstanding the foregoing sentence, (i) Purchaser shall use
commercially reasonable efforts to ensure that all such tests and inspections
shall be conducted in such a manner so as to not unreasonably disturb or disrupt
the Tenants, occupants and invitees, the normal operations of the Property, or
cause any injury or damage to the Property, and (ii)  Purchaser shall not be
permitted to undertake any soil borings or other drillings or
 
 
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intrusive physical testing  on the Property without prior written notice to, and
written consent of, Seller, which consent  may be withheld or conditioned in
Seller’s sole discretion, and (iii) prior to entering the Property, Seller’s
offices or the offices of the management company for the Property, Purchaser
shall give Seller advance notice at least one (1) Business Day prior to the
inspection (including its intended purpose, scope and location) and shall have
scheduled the inspection with Seller.  During any entry for purposes of
conducting any permitted physical testing, the Purchaser agrees to require its
consultants and agents to observe the Seller's reasonable safety rules for the
Property.  The time and place (if the inspection involves a review of documents)
of each inspection shall occur at times reasonably convenient to Seller.  All of
the Purchaser's entry upon the Property shall be subject to the rights of the
Tenants and may be limited by security regulations of the Tenants and
Seller.  Further, prior to the End of the Inspection Period, the Purchaser
agrees that it will not contact any Tenant (other than CoStar) unless such
contact has received the prior approval of the Seller and a representative of
the Seller accompanies Purchaser to any meeting that the Purchaser may have with
the Tenant.  At any time prior to the End of the Inspection Period, Purchaser
may send Seller and Escrow Agent a notice that Purchaser elects to terminate
this Agreement; however, for such notice to be effective, it must be sent prior
to 5:00 p.m. Eastern Time on the day on which the End of the Inspection Period
occurs.   Effective as of the date Purchaser gives any such notice to Seller,
this Agreement shall be terminated and the parties hereto shall be released of
further liability hereunder except as otherwise provided herein, and the Initial
Deposit immediately returned to the Purchaser.  If, prior to the End of the
Inspection Period, the Purchaser does not so notify Seller that it has elected
to terminate this Agreement, then Purchaser shall be deemed, as of the End of
the Inspection Period, to proceed to purchase the Property on the Closing Date
in accordance with the provisions of this Agreement.  During the period prior to
the Closing Date or earlier termination of this Agreement, the Purchaser will
maintain commercial liability insurance (with contractual coverage comparable to
that provided in standard ISO CGL policies) in an amount not less than
$1,000,000 per occurrence/ $2,000,000 aggregate/$10,000,000 umbrella, and with
carriers licensed to do business in the District of Columbia, selected by
Purchaser in the exercise of its reasonable discretion.  Prior to entering the
Property to perform inspections, the Purchaser will supply Seller with evidence
that the Purchaser is maintaining the insurance required by the foregoing
sentence and has named Seller as an additional insured.
 
9.3 Environmental Studies.  Prior to the Closing Date, Purchaser shall have the
right to conduct studies on the Property to determine the presence of Hazardous
Materials (the "Environmental Studies"); Purchaser agrees to coordinate with
Seller regarding the scope and execution of such Environmental Studies.
 
9.4 Indemnification.  Purchaser hereby indemnifies and holds Seller harmless
from any loss, damage, cost or expense incurred by Seller (including reasonable
attorneys' fees and costs) arising out of damage to the Property or personal
injury to the extent that the same has been caused by Purchaser or its
designated representatives, agents, employees and contractors, during the course
of its activities pursuant to Sections 9.2 and 9.3 hereof.  This indemnity shall
survive the Closing and any termination of this Agreement prior to the Closing,
and shall be enforceable at any time.
 
9.5 Title or Survey Exceptions.     Prior to the Effective Date Purchaser has
ordered, received and reviewed, and delivered to Seller, (a) a title commitment
covering the Property (Old Republic National Title Insurance Company Commitment
No.: DC010000128, Version 3, issued 01/14/2011, with an effective date of
December 3, 2010 hereinafter referred to as the “Title Commitment”); and (b) an
ALTA/ACSM survey of the Property by Bernard F. Locraft, Civil Engineers, dated
April 11, 2008, and last recertified January 7, 2011 as Job No. 8288 (the
"Survey").  Purchaser has notified Seller of its objections (the “Objections”)
that Purchaser has to matters shown on the Survey or in the Title Commitment,
excluding, however, the leases, and matters appearing on Schedule B and on
Schedule H, unless Purchaser’s Objections specifically include any matters
appearing on Schedule H.   Any such item to which
 
 
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Purchaser shall not object shall be deemed to be a “Permitted Encumbrance”. If
there are Objections by Purchaser, including Objections to any matters appearing
on Schedule H,  Seller shall, within five (5) Business Days after the Effective
Date, provide written notice to the Purchaser setting forth, with respect to
each Objection raised by the Purchaser, whether or not the Seller elects, in its
sole discretion, to cure the Objection prior to the Closing and the method of
such cure (the "Seller Response").  It is agreed that the Seller has no
obligation to cure any Objection unless it has expressly agreed to do so in the
Seller Response or such cure is required by Section 10.2 or 10.3 hereof.  The
Purchaser will be provided a period of two (2) Business Days after its receipt
of the Seller Response to provide the Seller and Escrow Agent written notice
(the "Purchaser Response") as to whether (i) with respect to Objections that the
Purchaser has raised and the Seller has notified the Purchaser in the Seller
Response that it will not cure, the Purchaser has elected to waive the
Objection, and (ii) with respect to Objections that the Purchaser has raised and
the Seller has notified the Purchaser in the Seller Response that the Seller
will, prior to the Closing Date, cure the Objection, the cure proposed by the
Seller is unacceptable to the Purchaser in the exercise of its sole and absolute
discretion. In the event that the Purchaser elects to send a Purchaser Response
within the periods permitted by the preceding sentence electing to terminate the
Agreement, then (i) this Agreement shall automatically terminate as of the date
of the Purchaser Response, (ii) the parties shall be relieved from any
continuing liability to the other arising by virtue of this Agreement, exclusive
of the party's indemnity obligation under Section 9.4 hereof, and (iii) the
Deposit shall be returned to the Purchaser. In the event that the Purchaser
fails to deliver a Purchaser Response within the time period permitted hereby,
then (i) the Purchaser shall be deemed to have (1) waived any Objection set
forth in the Objection notice which Seller, in the Seller Response, has notified
the Purchaser that it will not cure the same, and (2) accepted the method of
cure proposed by the Seller in the Seller Response with respect to any Objection
that the Seller has in the Seller Response notified the Purchaser that it will
cure prior to the Closing, and (ii) the Seller will be obligated to effectuate
such cure on or before the Closing Date. Any Objections waived (or deemed
waived) by Purchaser under the foregoing provisions shall also be deemed
Permitted Encumbrances.   Notwithstanding the foregoing, (A) Seller shall pay or
cause to be discharged at or prior to Closing any monetary liens against the
Property to the extent created, assumed or consented to by Seller or by CoStar
(including liens arising out of CoStar’s tenant improvement work), and Purchaser
shall not be required to object to the same, and (B) Seller shall satisfy all
Schedule B-1 requirements related to Seller  (which are those contained in the
following paragraph numbers of the Commitment:  3,4, 7 8, 9, 11,12, and 13).
 
9.6 Construction Contracts.
 
(a) Prior to Closing, Purchaser and Seller agree to cooperate and use
commercially reasonable efforts to negotiate, complete and, as applicable, enter
into certain construction contracts for the Common Area Improvements (as that
term is defined in the CoStar Lease) (the “Common Area Construction Contracts”)
with certain contractors (the “Common Area Contractors”).  The Common Area
Construction Contracts for the general contractor shall require the Contractor
to deliver commercially reasonable payment and performance bonds.  Unless
otherwise consented to by Purchaser, each Common Area Construction Contract
shall provide that the Guaranteed Maximum Price thereunder shall not be
increased due to design defects or unanticipated site conditions.  To the extent
finalized before Closing, each Common Area Construction Contract with a Common
Area Contractor shall be entered into by Seller, and each such Common Area
Construction Contract (i) shall be assigned to Purchaser at Closing pursuant to
that certain Assignment and Assumption of Construction Contracts attached hereto
as Exhibit H; and (ii) shall explicitly permit assignment, without consent of
the applicable Contractor, to Purchaser.  If any particular Common Area
Construction Contract is not completed until Closing, then the Purchaser shall
enter into that Common Area Contract directly with the applicable Common Area
Contractor at Closing and it shall not be assigned.  All Common Area
Construction Contracts covering all work relating to Common Area Improvements
must be entered into at Closing and be in the name of Purchaser (as assignee or
directly) immediately upon Closing.  Prior to execution and delivery of a Common
Area Construction Contract, if any, by Seller prior to Closing, Purchaser shall,
 
 
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upon request of Seller, enter into a short-form letter agreement indicating
Purchaser’s acceptance of such Common Area Construction Contract for purposes of
this Section 9.6 and its agreement to take an assignment of that Common Area
Construction Contract at and upon Closing, in the form negotiated and without a
fee.  Seller shall deliver, as part of its Seller’s Deliveries to be provided
pursuant to Section 7.1 at Closing, copies of all of the Common Area
Construction Contracts.
 
(b) CoStar, an affiliate of Seller, as tenant, may enter into construction
contracts prior to the Closing that extend beyond Closing and relate to the
Premises Improvements (the “Premises Construction Contracts”), and such Premises
Construction Contracts shall (i) cover work relating to Premises Improvements,
and (ii) shall not be assigned to Purchaser at Closing, but shall remain in the
name of CoStar.  Purchaser shall not have the right to consent to such Premises
Construction Contracts.  The parties acknowledge that not all contracts relating
to Premises Improvements will be in place by Closing, and any such contracts
entered into by CoStar after Closing shall be subject to the terms of the CoStar
Lease.  The parties agree that Premises Construction Contracts in place at
Closing will be listed on Schedule E-2 of the CoStar Lease.
 
10. Conditions of Closing.
 
10.1 Estoppel Certificates.  Seller shall obtain for delivery to Purchaser at
least three (3) business days prior to the Closing Date,  estoppel certificates
from (i) each of the Tenants substantially in the form attached as Exhibit K,
and (ii) an estoppel certificate from Ground Lessor (collectively, the
“Estoppels).   The Estoppels must be dated no earlier than sixty (60) days prior
to the Closing Date, and, with respect to the Estoppels from the Tenants, (i)
not disclose a material default by Seller under the Leases, and (ii) disclose no
material and  adverse variance with the information set forth in most current
Due Diligence Materials made available to Purchaser by Seller, Schedule B or
Schedule I or in the Operating Statement.  The Estoppel from the Ground Lessor
will be in the form attached as Exhibit I, and not disclose a default by the
Tenant under the Ground Lease or a material and adverse variation from the
information set forth in Schedule B or Schedule I or from the most current Due
Diligence Materials made available to Purchaser by Seller.  In the event that
any Estoppel contains information at material and adverse variance with the
information set forth in Schedule B and Schedule I, most current Due Diligence
Materials made available to Purchaser by Seller, or in the Operating Statement
or otherwise alleges a monetary or material non-monetary default by Seller under
the Leases or the Ground Lease and, as a result of the same, the condition set
forth in Section 10.3(f) hereof is not satisfied, then Seller shall be obligated
to use commercially reasonable efforts to contest or cure such variance or
default prior to Closing.
 
10.2 Encumbrances Subsequent to Inspection Period.  In the event that Purchaser
does not terminate this Agreement on or before the End of the Inspection Period,
and, prior to the Closing Date, title to the Property should become affected by
any encumbrance, lien, outstanding interest or question or matter affecting
title which is not a Permitted Encumbrance and which is not created or caused to
be created by Purchaser, then Seller shall be obligated to remove such
encumbrance, and Seller shall be entitled, for such purpose, to postpone the
Closing Date for a reasonable period of time, not to exceed thirty (30) days.
 
10.3 General Conditions of Purchaser.  In addition to any other express
conditions set forth in this Agreement, the obligations of Purchaser to purchase
the Property from Seller and to perform the other covenants and obligations to
be performed by Purchaser on the Closing Date is subject to the following
conditions (all or any of which may be waived, in whole or in part, by
Purchaser):
 
 
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(a) Seller Representation and Warranties True.  The representations and
warranties made by Seller in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same force and effect as if such
representations had been made on and as of such date.  Notwithstanding the
foregoing, prior to Closing, the Seller reserves the right to inform Purchaser
of any updates or modifications to the Seller's representations and warranties,
but the Purchaser shall have the right to approve, in the exercise of its good
faith discretion, such update or modification and this condition shall be deemed
unsatisfied if Purchaser in good faith fails to approve such update or
modification.
 
(b) Seller's Performance. On or before the Closing Date, Seller shall have
satisfied its obligations under this Agreement in all material respects.
 
(c) Title to Property.  On the Closing Date, Seller's title to the Property is
free and clear of all mortgages (other than those which will be paid and
released of record on the Closing Date), liens, encumbrances, easements,
conditions and other matters affecting title, recorded or unrecorded, other than
the Permitted Encumbrances.  Subject to the payment by Purchaser of the
applicable premium, Purchaser has received from one or more title insurance
companies reasonably satisfactory to Purchaser, a current ALTA owner's policy of
title insurance, in an amount equal to the Purchase Price, dated, or updated to,
the Closing Date, insuring, or committing to insure, at standard rates,
Purchaser's title to the Property in accordance with the Title Commitment,
subject only to the Permitted Encumbrances (the "Title Policy").  Without
limitation of the foregoing, the standard title exceptions (i.e., items 1, 2 and
3 in Schedule B-Section II of the Title Commitment) shall have been deleted from
the such Title Policy, including any exception for mechanics’, materialsmen’s
and similar liens arising from work performed or materials delivered to the
Property prior to the Closing Date.
 
(d)  No Litigation.  On the Closing Date, there is no Litigation except as set
forth on the Litigation Schedule, and no action or proceeding has been
instituted or threatened before any court to restrain or prohibit or to obtain
damages in respect of, or which is related to or arises out of, this Agreement,
or the consummation of the transactions contemplated herein.
 
(e) Condemnation.   On the Closing Date, no part of the Property or access to
the Property is about to be acquired, or has previously been acquired, by
authority of any governmental authority in the exercise of its power of eminent
domain or by private purchase in lieu thereof, nor on the Closing Date will
there be any threat or imminence of any such acquisition or purchase.
 
(f) Leases.  On the Closing Date, the Leases and the Ground Lease are in full
force and effect, without defaults or delinquencies, other than those set forth
on the Lease Schedule or otherwise approved by Purchaser in
writing.  Notwithstanding the foregoing, the parties acknowledge that given the
nature of the Building, there may be changes in the defaults for Delinquent Rent
under the Leases prior to Closing, and as a result thereof, this condition will
not be deemed to have been unsatisfied due to Delinquent Rents so long as the
total amount of Delinquent Rent for those Leases (determined on an individual
Lease by Lease basis) does not exceed two percent (2%) of the aggregate Base
Rent and Additional Rent due under those same Leases for the 2010 calendar year.
 
(g) Ground Lessor Non-Disturbance. The Ground Lessor shall have executed and
delivered to CoStar a non-disturbance and attornment agreement in the form
required by Section 9.05 of the Ground Lease and as required by the CoStar Lease
(the “Non-Disturbance Agreement”), unless CoStar has waived the receipt of the
Non-Disturbance Agreement as a condition to the effectiveness of the CoStar
Lease.
 
 
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(h) Approval and Assignment of Common Area Construction Contracts.  Except where
such Common Area Construction Contracts are being executed and delivered
directly by Purchaser at Closing, Seller shall have entered into the Common Area
Construction Contracts, the form of which must have been approved by Purchaser
in writing, and Seller shall have assigned such Construction Contracts to
Purchaser as provided in Section 9.6.
 
In the event that on the Closing Date any of the foregoing conditions, or any of
the other express condition set forth in this Agreement, have not been
satisfied, the Purchaser may elect by notice to the Seller and Escrow Agent to
(i) waive the unsatisfied condition, or (ii) terminate this Agreement and
thereupon the Deposit shall be returned to the Purchaser and the parties
relieved of all continuing liability or obligations to the other arising by
virtue of this Agreement except as expressly set forth in this
Agreement.  Notwithstanding anything contained in this Agreement to the
contrary, in the event any of the foregoing conditions have not been satisfied
and such failure is due to a default by Seller hereunder, then in addition to
the rights set forth in the first sentence of this paragraph, Purchaser shall
also have the rights set forth in Section 14.1 of this Agreement.

 
10.4 General Conditions of Seller.  In addition to other express conditions set
forth in this Agreement, the obligations of Seller to sell the Property to
Purchaser and to perform any other covenants or obligations to be performed by
it on the Closing Date is subject to the following conditions (all of which may
be waived in whole or in part by Seller):
 
(a) Purchaser Representation and Warranties True.  The representations and
warranties made by Purchaser in this Agreement are true and correct in all
material respects on the Closing Date with the same force and effect as if such
representations had been made on and as of such date.  Notwithstanding the
foregoing, prior to Closing, the Purchaser reserves the right to inform Seller
of any updates or modifications to the Purchaser 's representations and
warranties, but the Seller shall have the right to approve, in the exercise of
its good faith discretion, such update or modification and this condition shall
be deemed unsatisfied if Seller in good faith fails to approve such update
or  modification.
 
(b) Purchaser Performance. On or before the Closing Date, Purchaser shall have
satisfied its obligations under this Agreement in all material respects.
 
(c) No Litigation.  On the Closing Date, there is no Litigation except as set
forth on the Litigation Schedule, and no action or proceeding has been
instituted or threatened before any court to restrain or prohibit or to obtain
damages in respect of, or which is related to or arises out of, this Agreement,
or the consummation of the transactions contemplated herein.
 
In the event that on the Closing Date any of the foregoing conditions have not
been satisfied, the Seller may elect by notice to the Purchaser and Escrow Agent
to (i) waive the unsatisfied condition, or (ii) terminate this Agreement and
thereupon the Deposit shall be returned to the Purchaser and the parties
relieved of all continuing liability or obligations to the other arising by
virtue of this Agreement, except as expressly set forth in this
Agreement.  Notwithstanding anything contained in this Agreement to the
contrary, in the event any of the foregoing conditions have not been satisfied
and such failure arises out of Purchaser’s default with respect to any of its
obligations under this Agreement, including its failure to close the transaction
when required to do so, then the Deposit shall be received by Seller as
liquidated damages, pursuant to Section 14.2.
 
11. Brokerage. Seller and Purchaser expressly acknowledge that the Broker may be
due a commission for this transaction and, if such commission is due, the same
shall be paid by Seller pursuant to the terms of a separate written agreement,
upon the transfer of the Property to Purchaser and the receipt of the Purchase
Price by Seller.  Each party represents that it has not engaged any other
brokers in this transaction.  As to any broker other than the
 
 
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Broker, Seller and Purchaser agree to hold each other harmless and indemnify
each other from and against any and all claims, demands, loss or damage
(including reasonable attorneys’ fees, court costs and amounts paid in
settlement of any claims) arising out of a claim or demand for any brokerage
commission, fee or other compensation due or alleged to be due as a result of
the indemnifying party’s actions in connection with the transaction contemplated
by this Agreement.  The provisions of this Section 11 shall survive the Closing
or any termination of this Agreement prior to the Closing Date for any reason
whatsoever.
 
12. Risk of Casualty.  If, prior to the Closing Date, all or part of the
Property is damaged by fire or by any other cause whatsoever, Seller shall
promptly give Purchaser written notice of such damage.  If the cost of repairing
such damage is not in excess of Seven Hundred Fifty Thousand Dollars
($750,000.00) (as determined by Seller’s independent insurer), and provided that
the nature of the destruction or damage does not give CoStar or any other Tenant
the right to terminate its Lease or abate rental thereunder (unless such right
has been waived in writing following such damage or destruction), then (i)
Purchaser shall have the right at the Closing to receive, to the extent such
sums have not been expended on repair work, the amount of the deductible plus
all insurance proceeds payable as a result of such casualty loss; (ii) this
Agreement shall continue in full force and effect with no reduction in the
Purchase Price and (iii) Seller shall have no obligation to repair such
damage.  If the cost of repairing damage from such casualty is greater than
Seven Hundred Fifty Thousand Dollars ($750,000.00) (as determined by Seller’s
independent insurer), or if the nature of the damage or destruction shall give
any Tenant the right to abate rent or terminate its Lease and such right shall
not have been waived, then, in either such event, Purchaser shall each have the
right, for a period of ten (10) days from the date of notice of the amount of
damage caused by the casualty, to terminate this Agreement by giving notice of
termination to Seller and the Escrow Agent within such period.  The foregoing
provisions of this Section 12 notwithstanding, Purchaser may not terminate this
Agreement solely by reason of a Tenant’s right to abate rent if Seller makes
provision for Purchaser’s  reimbursement for any abatement of rent from and
after Closing, whether by rent loss insurance of Seller that will inure to
Purchaser’s benefit or other funds provided by Seller. In the event of such
termination hereunder, the Deposit shall be returned to Purchaser and the
parties hereto shall be released of any further liability hereunder except as
otherwise provided herein.  If either party fails to notify the other and Escrow
Agent within such period of its exercise of its right to terminate this
Agreement, then Purchaser shall proceed to Closing and, to the extent such sums
have not been expended on repair work, all insurance proceeds received by Seller
as a result of such casualty loss plus the amount of the deductible not expended
by Seller on repair work shall be paid to Purchaser at the Closing.  If such
proceeds have not yet been received by Seller, then Seller’s rights to such
proceeds shall be assigned to Purchaser at the Closing upon payment by Purchaser
of the full Purchase Price less the amount of Seller’s deductible (subject to
the adjustments and prorations set forth in Section 5), and Seller shall have no
obligation to repair such damage.  Seller shall cooperate with Purchaser in
connection with the recovery of such proceeds from the insurance company.
 
13. Notices and Other Communications.
 
13.1 Manner of Giving Notice.  Each notice, request, demand, consent, approval,
objection or other communication (hereafter in this Section 13 referred to
collectively as “notices” and referred to singly as a “notice”) which Seller,
Purchaser or Escrow Agent is required or permitted to give pursuant to this
Agreement shall be in writing and shall be deemed to have been duly given
if  sent by (i) personal delivery, (ii) Federal Express or other overnight
courier service, (iii) facsimile with confirmation of receipt produced by the
sending machine, or (iv) email with a hard copy to be received within one (1)
Business Day by delivery by method (i) or (ii).  Any such notice shall be deemed
given (i) in the case of notices which are sent by overnight courier service,
when the notice in question is received or when delivery is refused, (ii) when
the notice in question is personally delivered with confirmation of receipt,
(iii) upon facsimile transmission as long as the sender’s facsimile machine
confirms successful transmission, or (iv) in the case of notices which are sent
by email, when the notice in question is received, provided that a copy shall
have been received by a second method as set forth above. With respect to
notices which are sent by overnight courier service, the records of the courier
service shall be conclusive with respect to the date of receipt or refusal of
delivery.
 
 
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13.2 Addresses for Notices.  All notices shall be addressed to the parties at
the following addresses:
 
If to Seller:

1331 L Street Holdings, LLC
c/o CoStar Group, Inc.
1331 L Street N.W.
Washington, D.C. 20005
Attn:  Jon Coleman, General Counsel
Facsimile No: (202) 346-6703
Telephone No: (202) 336-6997
E-Mail: jcoleman@costar.com

-and-

Richard G. David, Esq.
Womble Carlyle Sandridge & Rice, PLLC
1401 Eye Street, NW, Suite 700
Washington, D.C. 20005
Facsimile No.:  (202) 261-0002
Telephone No.: (202) 857-4402
E-mail:  rdavid@wcsr.com

If to Purchaser:

c/o GLL Real Estate Partners
200 South Orange Avenue, Suite 1920
Orlando, FL 32801
Facsimile No.:  (407) 233-1955
Telephone No.:  (407) 233-1900
 
E-mail:  Jochen Schnier

With copies to:
Bradley Arant Boult Cummings LLP
1600 Division Street, Suite 700
Nashville, TN 37203
 
Attention:  J. Greer Cummings, Jr.

Facsimile No.:  (615) 252-6316
Telephone No.:  (615) 252-2316
 
E-mail:  gcummings@babc.com

If to Escrow Agent:

At the address and facsimile number specified in Section 1 hereof

 
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Either party may, by notice given pursuant to this Section 13, change the person
or persons and/or address or addresses, or designate an additional person or
persons or an additional address or addresses, for its notices.

14. Default and Remedies.
 
14.1 Seller’s Default.  Provided all conditions precedent to Seller's
obligations hereunder have been satisfied or waived, and Seller fails to close
the transaction when required to do so under the provisions hereof or Seller
otherwise defaults under this Agreement, then Purchaser may elect one of the
following as Purchaser’s sole and exclusive remedy:  (i) terminate this
Agreement by giving notice of termination and the reasons therefor to Seller, in
which event (a) Seller shall reimburse Purchaser for all reasonable out of
pocket expenses incurred by Purchaser in connection with this Agreement or the
proposed purchase of the Property, not to exceed $150,000.00 and (b) neither
Seller nor Purchaser shall have any further obligations or liabilities one to
the other except as expressly set forth in this Agreement, and the documents and
information provided to Purchaser by Seller and/or Seller’s agents shall be
returned to Seller and the Deposit shall be returned to Purchaser; or (ii)
thereby waiving all other actions, rights or claims for damages, bring an
equitable action for specific performance of the terms of this Agreement. In no
event whatsoever shall Purchaser be entitled to any other damages, rights or
remedies against Seller hereunder.
 
14.2 Purchaser’s Default.  Provided all conditions precedent to Purchaser's
obligations hereunder have been satisfied or waived, and Purchaser fails to
close the transaction when required to do so under the provisions hereof, then
Seller may, as Seller’s sole remedy, terminate this Agreement and receive the
Deposit as liquidated damages, with any documents previously delivered by Seller
to Purchaser to be returned to Seller, and thereafter Seller and Purchaser shall
have no further obligations or liabilities one to the other except as expressly
set forth in this Agreement.  Seller’s right to receive the Deposit as
liquidated damages is agreed to due to the difficulty, inconvenience and
uncertainty of ascertaining actual damages for such breach by Purchaser, and
Purchaser agrees that the same is a reasonable and fair estimate of damages.
 
14.3 Indemnity Provisions.  In the event that this Agreement is terminated
pursuant to this Section, the indemnity obligations of Purchaser contained in
Section 9.4 shall survive such termination.  In addition to the foregoing, the
limitation on liability and remedies contained in this Section shall, in no
event, limit the Purchaser's indemnity obligations under Section 9.4.
 
14.4 Limitation of
Liability                                            .Notwithstanding any
contrary provisions in this Agreement or the documents executed by Seller at
Closing, Seller’s maximum liability as to any obligations which survive Closing
(“Post Closing Claims”)  shall not exceed Five Million  and No/100 Dollars
($5,000,000.00) in the aggregate and shall be limited to Purchaser’s actual
damages (excluding any indirect, punitive, consequential, exemplary or special
damages), and (ii) Purchaser shall not bring any action for a Post Closing Claim
unless the aggregate amount of all such claims exceeds One Hundred Thousand
Dollars ($100,000.00) (the “Floor”), provided that if Purchaser brings an action
for a Post Closing Claim that is in excess of the Floor, then Seller’s liability
therefor shall include the amount up to and including the Floor.  No constituent
partner, member in or manager or agent of Seller or Purchaser, nor any advisor,
director, officer, employee, beneficiary, Shareholder, member, partner,
participant, representative or agent of any limited liability company,
partnership, corporation or other entity that has a direct or indirect interest
in Seller or Purchaser, shall have any personal liability, directly or
indirectly, under or in connection with this Agreement or any agreement made or
entered into under or pursuant to the provisions of this Agreement, or any
amendment or amendments to any of the foregoing.
 
 
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15. Environmental Condition.
 
15.1 Existing Reports. Seller represents and warrants that, except as set forth
in the Existing Environmental Reports (i)  during the period of the Seller's
ownership of the Property no Hazardous Materials have been manufactured, placed,
stored, discharged, or disposed on, in, or under the Property by Seller (except
for diesel fuel stored in aboveground storage tanks to fuel emergency generators
in or on the Building); and (ii) it has not received any notice (nor does Seller
have actual knowledge) of any specific condition that would afford a proper
basis for a governmental notice) that the Property violates any Environmental
Laws. For purposes of this Agreement, the term "Hazardous Materials" shall
include, without limitation,  any substance which is or contains (1) any
“hazardous substance” as now or hereafter defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. §9601 et seq.) (“CERCLA”) or any regulations promulgated under or
pursuant to CERCLA; (2) any “hazardous waste” as now or hereafter defined in the
Resource Conservation and Recovery Act (42 U.S.C. §6901 et. seq.) (“RCRA”) or
regulations promulgated under or pursuant to RCRA; (3) any substance regulated
by the Toxic Substances Control Act (15 U.S.C. §2601 et seq.); (4) gasoline,
diesel fuel, or other petroleum hydrocarbons; (5) asbestos and asbestos
containing materials, in any form, whether friable or non-friable; (6)
polychlorinated biphenyls; (7) radon gas; and (8) any additional substances or
materials which are now or hereafter classified or considered to be hazardous or
toxic under Environmen­tal Requirements (as hereinafter defined) or the common
law, or any other applicable laws relating to the Property.  Hazardous Materials
shall include, without limitation, any substance, the presence of which on the
Property, (A) requires reporting, investigation or remediation under
Environmental Requirements; (B) causes or threatens to cause a nuisance on the
Property or adjacent property or poses or threatens to pose a hazard to the
health or safety of persons on the Property or adjacent property; or (C) which,
if it emanated or migrated from the Property, could constitute a trespass.
 
15.2 Permitted Usage.  The provisions of Section 15.1 are not intended to
prohibit or preclude the use of Hazardous Materials commonly found in office
buildings so long as disposal, use and storage of the same has been conducted in
accordance with applicable laws.  Purchaser acknowledges that prior to the
Closing Date, it will be afforded an opportunity to (i) inspect the Property;
(ii) observe its physical characteristics and existing conditions; and (iii)
conduct such investigation and study on and of the Property and adjacent areas
as Purchaser deemed or deems necessary.
 
15.3 "As Is".  Subject to Seller's responsibility for any breach of the
warranties and representations contained in Sections 8, 15.1 and 16 of this
Agreement, as of the Closing Date, Purchaser agrees not to initiate any claim,
lawsuit or civil proceeding against Seller with respect to the environmental
condition of the Property or the cost of Purchaser's environmental
investigations or any environmental remediation cost first incurred on or after
the Closing (including, but not limited to, those regarding structural and
geologic conditions, subsurface soil and water conditions and solid and
hazardous waste and Hazardous Substances on, under, adjacent to or otherwise
affecting the Property). The foregoing agreements by Purchaser shall survive
either (i) the Closing and the recordation of the  Assignment and Assumption of
the Ground Lease, and shall not be deemed merged therein upon its recordation,
or (ii) any termination of this Agreement.
 
16. Seller’s Representations and Warranties.  Seller makes the following
representations and warranties to Purchaser for the purpose of inducing
Purchaser to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement, each of which representations and
warranties is true and correct in all material respects on the Effective Date:
 
16.1 Representations and Warranties Regarding Authority and Status.
 
 
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(a) Organization. Seller is a limited liability company formed and validly
existing under the laws of the State of Delaware and in good standing in
Delaware and, if applicable, in the District of Columbia.
 
(b) Authorization. The execution and delivery of this Agreement and the
transactions contemplated hereby have been duly authorized by Seller, and by
Guarantor with respect to the Guaranty contained in Section 25 hereof.
 
(c) No Conflicting Agreements.  The execution and delivery by Seller of, and the
performance and compliance by Seller with the terms and provisions of, this
Agreement do not violate any of the terms, conditions or provisions of its
limited liability company operating agreement; any judgment, order, injunction,
decree, regulation or ruling of any court or other governmental authority to
which Seller is subject; or any agreement or contract listed on any Schedule or
Exhibit to this Agreement or, to Seller's knowledge, any other agreement or
contract to which Seller is a party or to which it or the Property is subject
(excluding any mortgage and related loan documents which will be paid and
released of record on the Closing Date).
 
(d) Approvals.  No authorization, consent, order, approval or license from,
filing with, or other act by any Governmental Authority or other Person is or
will be necessary to permit the valid execution and delivery by Seller of this
Agreement or the conveyance by Seller of the Property to Purchaser in accordance
with the terms of this Agreement.
 
(e) Not A Foreign Person. Seller is not a “foreign person,” as defined in the
federal Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax
Reform Act, as amended, and at Closing, Seller shall deliver to Purchaser a
certificate so stating.
 
(f) United States Person.  Seller is a "United States person" within the meaning
of Sections 1445(f)(3) and 7701(a)(30) of the Internal Revenue Code of 1986, as
amended.
 
(g) Absence of Bankruptcy.  Neither Seller nor any member of Seller has
commenced (within the meaning of any bankruptcy law) a voluntary case, consented
to the entry of an order for relief against it in an involuntary case, or
consented to the appointment of a custodian of it or for all or any substantial
part of its property, nor has a court of competent jurisdiction entered an order
or decree under any bankruptcy law that is for relief against Seller or any of
its members in an involuntary case or appoints a custodian of Seller or any of
its members or for all or any substantial part of its or their property.
 
(f)  OFAC. Seller hereby represents and warrants that neither Seller, nor any
persons or entities holding any legal or beneficial interest whatsoever in
Seller, are (i) the target of any sanctions program that is established by
Executive Order of the President or published by the Office of Foreign Assets
Control, U.S. Department of the Treasury (“OFAC”); (ii) designated by the
President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. §
5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the
Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or
any Executive Order of the President issued pursuant to such statutes; or (iii)
named on the following list that is published by OFAC: “List of Specially
Designated Nationals and Blocked Persons.”

16.2 Representations and Warranties Regarding Property and Legal Matters.
 
(a) Operating Statements.  The Operating Statements fairly reflect the income
and expenses of the Property for the respective periods covered thereby.
 
 
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(b) Condemnation.  Seller has not received from a governmental authority notice
of any (and to Seller's actual knowledge there is no, pending or contemplated)
condemnation proceedings affecting the Property, or any part thereof.
 
(c) Zoning.  There are no outstanding zoning proffers or notices of zoning
violations applicable to the Property or any part thereof.
 
(d) Title to Personal Property.  Seller has good and marketable title to, and
owns outright, the Personal Property, free and clear of all liens, encumbrances,
security interests and adverse claims of any kind or character, other than liens
which will be released at the Closing.
 
(e) Mechanics' Liens.  Not as of the Effective Date, but as of the Closing Date
only, all bills and claims due and owing for labor performed and materials
furnished to or for the benefit of the Property for all periods prior to the Cut
Off Date have been (or prior to the Closing Date will be) paid in full, and on
the Closing Date there will be no mechanics' liens or materialmen's liens
(whether or not perfected) on or affecting the Property.
 
(f) Litigation.  The Litigation Schedule set forth on Schedule E contains a
complete and correct list of all investigations, actions, suits, proceedings or
claims pending or, to Seller's actual knowledge, threatened against or affecting
Seller or the Property, at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, board, agency or
instrumentality, domestic or foreign (collectively, the "Litigation"), and sets
forth, with respect to each such Litigation, the parties to such Litigation, the
amount claimed as damages (or other remedies sought) and the status of such
Litigation as of the date hereof.  Except as set forth on the Litigation
Schedule, there is no Litigation.
 
(g) Underground Storage Tanks.  Except as specifically described in the
Underground Storage Tank Disclosure, Seller has no actual knowledge that there
are underground storage tanks located on the Property.  Seller has not removed,
or caused its agents or contractors to remove, any underground storage tanks
from the Property.
 
16.3 Representations and Warranties Regarding Leases, Contracts, and Other
Documents.
 
(a) Leases.
 
(i) Lease Schedule. The Lease Schedule contains a complete list of all Leases in
effect as of the Effective Date.  There are no Leases or other tenancies for any
space in the Property other than those set forth on the Lease Schedule.  Seller
has delivered to Purchaser true and complete copies of each Lease (including all
amendments thereto and all assignments thereof and subleases, if any, and any
other agreements between Seller and a Tenant) described in the Lease Schedule.
 
(ii) Lease Representations.  Except as otherwise disclosed on the Lease Schedule
or elsewhere in this Agreement:
 
(A)           to Seller’s actual knowledge, each Lease is in full force and
effect, constitutes a legal, valid and binding obligation of the Tenant
thereunder, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy and similar laws affecting the
enforcement of creditors' rights generally or equitable considerations which may
affect a court's exercise of its equitable powers, and has not been modified,
amended or extended;
 
(B)           the annual or monthly Rent listed opposite the name of each Tenant
on the Rent Roll is the amount, including Basic Rent and Additional Rent,
actually collected from or billed to such Tenant for the month immediately
preceding the Effective Date and, except as set forth in the Rent Roll, there is
no arrearage in excess of one month;
 
 
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(C)           each Tenant is now in possession of the leased premises under its
Lease, except for CoStar which will take possession of its various unoccupied
offices in accordance with the Lease Schedule;
 
(D)           none of the Tenants owes Seller any amounts due for Rent or other
charges payable under its Lease or other side letter or agreement or, to the
extent any Tenant is delinquent in paying Seller any such amount, the amount of
the delinquency is set forth in Schedule C;
 
(E)           to Seller's actual knowledge, none of the Tenants is in default in
the performance or observance of any of the material non-monetary covenants or
conditions to be kept, observed or performed by it under its Lease and, to the
extent Seller has actual knowledge of any such default, the default is described
in the Rent Roll;
 
(F)           no renewal, extension or expansion options have been granted to
any Tenant except as set forth in such Tenant's Lease;
 
(G)           no Tenant has an option to purchase the Property, or any part
thereof, except as set forth in the CoStar Lease;
 
(H)           no Tenant is entitled to any rebate, rent abatement, concession,
deduction or offset, except as set forth (i) in such Tenant's Lease, and (ii) in
the Lease Schedule if any Tenant is entitled to receive any portion of same from
and after Closing ;
 
(I)           except as disclosed in the Rent Roll, no Tenant has paid any Rent
for a period of more than thirty (30) days in advance;
 
(J)           no Tenant is entitled to receive from Seller, as landlord, any
contribution or allowance, either in money or in kind, on account of the
construction of its improvements, except as set forth (i) in such Tenant's
Lease, and (ii) in  the Lease Schedule if any Tenant is entitled to receive any
portion of same from and after Closing, and the amount of any such contribution
or allowance to be received by any Tenant after Closing shall be deducted from
the Purchase Price;
 
(K)           there are no oral or written representations or agreements between
Seller and any Tenant, except as set forth in the Leases;
 
(L)           Seller has not received from any Tenant under a Lease a written
notice of default by Seller in performing any of its obligations as landlord
under such Lease or a written notice of violation of any legal requirements, and
to Seller’s actual knowledge Seller is not in default in performing any of its
obligations as landlord under any of the Leases or in complying with any legal
requirements;
 
(M)           all alterations, installations, decorations and other work
required to be performed by Seller, as landlord, under the provisions of each
Lease set forth on the Lease Schedule have been completed and fully paid for, or
will be completed and fully paid for on or before the Closing Date, except to
the extent permitted by Section 5.7 hereof; and except as set forth in Section
16.3(a)(ii)(P);
 
 
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(N)           [Intentionally Deleted]
 
(O)           As of the Closing Date, no brokerage commissions, finder’s fee or
similar compensation of any kind shall be due in connection with the Leases,
including both commissions due with respect to current terms and commissions due
upon exercise of options or otherwise, except as set forth on the Lease Schedule
and except for any commissions due under Approved Leases, to the extent
applicable; and
 
(P)           Attached to this Agreement as Exhibit O is a copy of that certain
unsigned First Amendment to Lease (the “Foxhall Lease Amendment”), by and
between Seller and Foxhall Enterprises, Inc.(“Foxhall”), which provides, as set
forth in more detail in the Foxhall Lease Amendment, that the landlord under the
Foxhall Lease (the “Foxhall Landlord”) shall undertake and complete certain
demolition, reconfiguration and construction work described therein (the
“Foxhall Work”) at the Foxhall Landlord’s expense , and (ii) the Foxhall
Landlord shall reimburse Foxhall for all reasonable architectural and legal fees
incurred by Foxhall in connection with the demolition and reconfiguration of the
premises (“Reimbursable Fees”).  The Foxhall Work shall be included in the work
to be completed pursuant to the Common Area Construction
Contracts.  Notwithstanding any other provision of this Agreement to the
Contrary, (i) if the Foxhall Lease Amendment has not been fully executed in the
form attached by the close of business on the Effective Date, Seller shall be
permitted to execute same (or a lease amendment in substantially the same form)
after the Effective Date, but prior to the Closing Date, and same shall be
considered an Approved Lease hereunder; and (ii) the obligation to complete the
Foxhall Work and pay the Reimbursable Fees to Foxhall in accordance with the
Foxhall Amendment shall be assumed by Purchaser, with the entire cost of the
Foxhall Work, and the amount of the Reimbursable Fees, to be paid by Purchaser
out of the Common Area Escrow Amount.
 
Notwithstanding that the CoStar Lease is a Lease hereunder, the parties
acknowledge and agree that none of the representations and warranties made under
this Section 16.3(a) include or cover the CoStar Lease, and Schedules B, C and I
attached to this Agreement have been compiled without regard to the CoStar
Lease, since it is to be executed by Purchaser on the Closing Date.
 
(b) Contracts.  The Service Contract Schedule set forth on Schedule D contains a
complete and accurate list of all Service Contracts. All Service Contracts are
terminable by Seller, its successor or assigns, without cause and without
payment of penalty or premium upon no more than thirty (30) days notice, except
as otherwise noted on Schedule D.  Seller has delivered to Purchaser true and
complete copies of each of the Service Contracts listed on the Service Contract
Schedule.  Each of such Service Contracts is in full force and effect and has
not been modified or amended except as indicated on the Service Contract
Schedule.  Seller has not received any notice of default of Seller under any
Service Contracts that has not been cured and, to its actual knowledge, Seller
is not in default under any of the Service Contracts listed on the Service
Contract Schedule.
 
(c) Ground Lease.  To Seller’s actual knowledge, the Ground Lease is in full
force and effect.  Seller has not received from the Ground Lessor a written
notice of default by Seller in performing any of its obligations as ground
lessee under the Ground Lease, and to Seller’s actual knowledge, Seller is not
in default in performing any of its obligations as ground lessee under the
Ground Lease. The foregoing notwithstanding, Seller acknowledges that it has
been paying ground rent to the Ground Lessor based upon rent payable by Tenant
on the space occupied by Tenant that is less than the rent Tenant will be paying
under the CoStar Lease if it is executed, but Seller agrees (and has discussed
with the Ground Lessor) that it will pay to Ground Lessor at or prior to Closing
any unpaid ground rent that would have been payable on all space occupied by
CoStar had the ground rent been based upon the rent payable by Tenant under the
CoStar Lease (the “Unpaid Accrued Ground Rent”), and Seller shall not be deemed
in default under this Section 17(c) so long as the Ground Lessor has delivered
to the Escrow Agent an Estoppel, in the form attached here as Exhibit I,
confirming among other things that Ground Lessor has received all rents that are
then due under the Ground Lease or will receive the same out of Closing
proceeds; including the Unpaid Accrued Ground Rent.
 
 
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17. Seller’s Disclosures.  .
 
17.1           Soil Disclosure.  . Pursuant to Section 45-608 of the District of
Columbia Code, Seller hereby notifies Purchaser that the soil of the Property as
described by the Soil Conservation Service of the United States Department of
Agriculture in the Soil Survey of the District of Columbia published in 1976, as
the same may be amended from time to time, and as shown on the Soil Maps of the
District of Columbia at the back of that publication, is designated as “urban
land”.  For further information Purchaser can contact a soil testing laboratory,
the District of Columbia Department of Environmental Service or the Soil
Conservation Service of the Department of Agriculture.  The foregoing is given
pursuant to District of Columbia statutory requirements and does not constitute
a limitation on Purchaser's right to inspect and study the soil characteristic
and condition pursuant to Section 9 of this Agreement.
 
17.2           Underground Storage Tank Disclosure.  . Purchaser hereby
acknowledges that, prior to entering into this Agreement, Seller made a
disclosure to Purchaser with respect to any underground storage tanks located on
the Property of which Seller has knowledge.  The form of disclosure is set forth
in Exhibit J (the “Underground Storage Tank Disclosure”).
 
18. Third Party Beneficiaries.  Nothing in this Agreement is intended or shall
be construed to confer upon or to give to any person, firm or corporation other
than the parties hereto any right, remedy, or claim under or by reason of this
Agreement.  All terms and conditions in this Agreement shall be for the sole and
exclusive benefit of the parties hereto.  This Section 18 shall survive the
Closing or termination of this Agreement prior to the Closing Date for any
reason whatsoever.
 
19. Further Assurances.  Purchaser and Seller each agree to execute and deliver
to the other such further documents or instruments, and take such further
actions (at no material unreimbursed expense and with no assumption of
liability) as may be reasonable and necessary in furtherance of the performance
of the terms, covenants and conditions of this Agreement, including, without
limitation, cooperating in the transfer of warranties and Accepted Contracts
that require such further action.  The foregoing provisions notwithstanding,
with respect to the fifteen year roof Warranty #10044 ( the “Roof Warranty”)
issued by Henry Company (“Henry”), Seller will, after Closing, join in any
separate transfer documents required by  Henry to complete the transfer of the
Roof Warranty, comply with the Section thereof entitled “Conditions of
Transfer,” and pay (or reimburse Purchaser for if Purchaser has paid) the
warranty transfer fee to Henry and the cost of any repairs and replacements to
the roof required by Henry under said Section of the Warranty.  This Section 19
shall survive the Closing Date and shall be enforceable at any time.
 
20. No Assignment.  The rights of Purchaser under this Agreement cannot be
assigned in whole or in part without the prior consent of Seller, in Seller’s
sole discretion.  The foregoing shall not however prohibit the Purchaser from
assigning, without the consent of Seller, its rights hereunder to an Affiliate
or to any entity managed or controlled by either GLL Real Estate Partners GmbH
(“GLL”), or an Affiliate of GLL.  Seller shall recognize and be bound to any
assignee permitted in the preceding sentence upon receipt of notice of such
assignment, specifying the name and address of the assignee, and an explanation
of the relationship between Purchaser and the assignee.  Purchaser shall provide
Seller with a complete copy of the fully-executed assignment
documents.  Purchaser’s assignee must assume, in writing, all of the obligations
and duties of the Purchaser contained in this Purchase Agreement; provided,
however, that, in the event of any such assignment, the assignor shall continue
to remain liable for all such obligations and duties of the “Purchaser” under
this Purchase Agreement.
 
 
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21. Purchaser’s Authority.  Purchaser hereby represents and warrants to Seller
that the following statements are true and correct as of the Effective Date and
shall be true and correct as of the Closing Date:
 
(a) The Purchaser is a limited liability company, duly formed and in good
standing under the laws of Delaware.
 
(b) Purchaser has the full right, power and authority and has taken all
requisite limited liability company action to enter into this Agreement, to
purchase the Property and to carry out its obligations as set forth hereunder,
subject to investment committee and investor approval to be obtained prior to
the End of the Inspection Period (the “Purchaser’s Approvals”).  If Purchaser
fails to terminate this Agreement prior to the End of the Inspection Period,
Purchaser shall conclusively be deemed to have obtained Purchaser’s Approvals.
 
(c) Except for the Purchaser’s Approvals, no consent or approval of any person,
entity or governmental agency or authority is required with respect to the
execution and delivery of this Agreement by Purchaser or the consummation by
Purchaser of the transaction contemplated hereby or the performance by Purchaser
of its obligations hereunder.
 
(d) The execution and delivery by Purchaser of, and the performance and
compliance by Purchaser with the terms and provisions of this Agreement, do not
violate any of the terms, conditions or provisions of its partnership agreement;
any judgment, order, injunction, decree, regulation or ruling of any court or
other governmental authority to which Purchaser is subject.
 
(e) There are no attachments, executions, assignments for the benefit of
creditors, receiverships, conservatorship or voluntary or involuntary
proceedings in bankruptcy or pursuant to any debtor relief laws filed by
Purchaser or against Purchaser.
 
22. [INTENTIONALLY DELETED]
 
23. Assumption of Service Contracts; Termination of Management Agreement.  All
Service Contracts are assignable (or Seller shall have obtained any necessary
consents), and shall be included in the assignment and assumption described in
Section 7.1(c).  The Management Agreement shall also be terminated as of the
Closing Date, pursuant to the form of Termination of Management Agreement
(“Management Termination Agreement”) attached hereto as Exhibit N. At Closing,
Purchaser agrees it will enter into a new management agreement with Property
Manager which shall be mutually acceptable to Purchaser and Property Manager.
 
24. Miscellaneous.
 
24.1 Captions and Execution.  The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof.  This Agreement
shall not be binding or effective until properly executed and delivered by
Seller and Purchaser.
 
24.2 Amendment and Merger.  This Agreement may not be changed or terminated
orally.  This Agreement shall not be deemed to have been merged with the
conveyance of title and all covenants, agreements, indemnities, representations
and warranties shall survive the Closing for a period of nine (9) months, except
as may be otherwise specifically provided herein, and any claim or litigation
arising out of this Agreement, or the transaction contemplated hereby, must be
instituted before such date.  This Section shall not limit the survivability of
the Purchaser's indemnity contained in Section 9.4 hereof or of the mutual
indemnities set forth in Section 11 hereof.
 
 
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24.3 Binding.  This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their respective successors, personal
representatives, heirs and permitted assigns.
 
24.4 Governing Law; Venue.  This Agreement shall be governed by and construed in
accordance with the laws of the District of Columbia (without giving any effect
to the principles of conflicts of law).  Should any provision of this Agreement
require judicial interpretation, it is agreed that the court interpreting or
considering same shall not apply the presumption that the terms hereof or
thereof shall be more strictly construed against a party by reason of the rule
or conclusion that a document should be construed more strictly against the
party who itself or through its agent prepared the same, it being agreed that
all parties hereto have participated in the preparation of the instruments and
that each party consulted legal counsel before the execution and delivery
hereof. Any litigation arising out of this Agreement shall be brought in the
Superior Court of the District of Columbia or in the United States District
Court for the District of Columbia, Seller and Purchaser consenting to the venue
of such courts.  In no event shall Seller be liable after the Closing Date for
its breach of any covenant, representation or warranty if (i) such breach was
actually known to Purchaser prior to the Closing Date, and (ii) such breach
entitled Purchaser to terminate this Agreement but Purchaser waived the same by
closing.  Neither party may record this Agreement.
 
24.5 Entire Agreement.  This Agreement, together with the attached Exhibits A
through P and Schedules A through P, contains the entire agreement between the
parties and any and all prior understandings, statements, representations and
agreements are merged herein and any agreement hereafter made shall be
ineffective to change, modify, or discharge this Agreement in whole or in part
unless such agreement hereafter made is in writing and signed by the parties
hereto.
 
24.6 Time of Essence.  Purchaser and Seller each agree that time is of the
essence with respect to each and every provision of this Agreement.
 
24.7 No Waiver.  Except as otherwise provided in this Agreement, failure by
Purchaser or Seller to insist upon or enforce any rights herein shall not
constitute a waiver thereof.
 
24.8 Partial Invalidity.  If any term or provision of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
 
24.9 Exclusive Rights.  After the Effective Date, Seller agrees that it will not
enter into any negotiations or form of letter of intent or other agreement for
the sale of the Property to a third party so long as this Agreement continues in
effect.
 
24.10 No Offer or Binding Contract.  The parties hereto agree that the
submission of an unexecuted copy or counterpart of this Agreement by one party
to another is not intended by either party to be, or be deemed to be a legally
binding contract or an offer to enter into a legally binding contract.  The
parties shall be legally bound pursuant to the terms of this Agreement only if
and when the parties have been able to negotiate all of the terms and provisions
of this Agreement in a manner acceptable to each of the parties in their
respective sole discretion, and both Seller and Purchaser fully executed and
delivered to each other a counterpart of this Agreement.
 
 
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24.11 Counterparts. .  This Agreement may be executed in two (2) or more
counterparts, each counterpart shall be deemed an original and all of which
together shall have the same force and effect as if all parties hereto had
executed a single copy of this Agreement. A signed copy of this Agreement or any
amendment hereto or any other document related hereto transmitted by telecopier,
facsimile machine or email in pdf format shall be deemed an executed original of
such document for all purposes, and the party so providing such signed copy
shall deliver promptly, thereafter, by nationally recognized overnight courier
to all other parties an executed original copy of such signed document.
 
24.12 Joint and Several Liability.   [Intentionally Omitted].
 
24.13 Like Kind Exchange.  Notwithstanding anything contained herein to the
contrary, Purchaser acknowledges that Seller may designate the Property as
relinquished property to consummate a like-kind exchange or reverse like-kind
exchange under Section 1031 of the Internal Revenue Code of 1986, as amended (a
“Seller Exchange”) with respect to property that Seller will acquire either
prior to or within one hundred eighty (180) days after Closing (the “Replacement
Property”).  In the event that Seller designates the Property as relinquished
property to consummate a Seller Exchange with respect to the Replacement
Property through the use of a qualified intermediary (the “Intermediary”) and/or
Exchange Accommodation Titleholder (“EAT”), Purchaser shall cooperate in
structuring the transaction as a Seller Exchange for the benefit of Seller, and
Purchaser agrees to render all required performance under this Agreement to
either the Intermediary or the EAT (either the Intermediary or the EAT referred
to herein, and Purchaser’s Intermediary or EAT, or a single member limited
liability company owned by either such Intermediary or EAT) hereinafter referred
to as the or an “Exchange Assignee”) to the extent reasonably directed by Seller
and to accept performance of all of Seller’s obligations by the Exchange
Assignee, all of the foregoing, however, to be without cost, delay or expense to
Purchaser.  Purchaser agrees that performance by the Exchange Assignee will be
treated as performance by Seller, and Seller agrees that Purchaser’s performance
to the Exchange Assignee will be treated as performance to Seller.  No
assignment of rights under this Agreement to an Exchange Assignee shall effect a
release of Seller from its obligations under this Agreement as primary obligor.
 
24.14 Jury Waiver.  Each party hereto waives the right to a trial by jury in any
action or proceeding based upon, or related to, the subject matter of this
Agreement or any action between any party hereto and any of their successors, or
assigns, under or connected with this Agreement or any of its provisions.  This
waiver is knowingly, intentionally and voluntarily made by each and every party
hereto, ands each of the parties hereto acknowledges that neither such party nor
any person acting on behalf of such party has made any representations of fact
to induce this waiver of trial by jury or in any way to modify or nullify its
effect.
 
25. CoStar Guaranty.  Guarantor joins in this Agreement for the purpose of
guaranteeing and does hereby irrevocably, absolutely and unconditionally
guarantee the timely payment and performance of all of Seller’s liabilities,
obligations and covenants under this Agreement.   In that regard, Guarantor
hereby waives (i) its right to any and all notices, including, but not limited
to, notices of default or dishonor, (ii) any and all other defenses to the
obligations of the Guarantor hereunder, including, but not limited to, defenses
arising from Purchaser’s failure to give timely notice to Guarantor, defenses
arising out of any compromise, release, settlement or discharge of the
guaranteed obligations, the Seller or any other guarantor or surety, and
defenses arising out of the impairment of recourse or collateral.  The Guarantor
understands and agrees that the Purchaser may look first to the Guarantor for
the payment or the performance of the liabilities, obligations and covenants of
Seller under this Agreement, without first looking to and pursuing its remedies
against Seller, this Guaranty being a guaranty of payment and performance and
not merely of collection.  Subrogation rights or any other rights or claims of
any kind the Guarantor has against Seller, if any, shall not become available
until all liabilities, obligations and covenants of Seller under this Agreement
have been fully satisfied.  The validity of this guarantee shall not be impaired
by any event whatsoever, including, but not limited to, (i) the merger,
consolidation, dissolution, cessation of business or liquidation of Seller, (ii)
the
 
 
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financial decline or bankruptcy of Seller, (iii) Purchaser’s compromise or
settlement with or without release of any other party liable for such payment
and performance, (iv)  Purchaser’s failure to file suit against Seller
(regardless of whether Seller is becoming insolvent, is believed to be about to
leave the state or any other circumstance), (v)  Purchaser’s failure to give the
Guarantor notice of default by Seller or notice of dishonor, (vi)  the
unenforceability of the guaranteed obligations against Seller due to bankruptcy
discharge or otherwise, (vii) the extension, modification or amendment of this
Agreement, (viii) Purchaser’s failure to exercise diligence in collection or
enforcement, (ix) the termination of any relationship between the Guarantor and
Seller, or (x) Seller’s change of name or the use of any other name. Purchaser’s
right to enforce the terms of this Guaranty shall not be affected, delayed,
limited, impaired or discharged, in whole or in part, by reason of any stay,
extension or discharge that may be granted to the Seller by any court in
proceedings under the Bankruptcy Code, or any amendments thereof, or under any
other state or other federal statutes, and the Guarantor expressly waives the
benefits of any such stay, extension or discharge. Guarantor agrees to pay all
costs of collection, including, without limitation, court costs and reasonable
attorney’s fees that Purchaser may incur in enforcing the terms of this
guarantee against Guarantor.  The provisions of this section shall be binding
upon the Guarantor and its successors and assigns and inure to the benefit of
Purchaser and its successors and assigns. Failure of Purchaser to insist in any
one or more instances upon strict performance of any one or more of the
provisions hereof or to take advantage of any of its rights hereunder shall not
be construed as a waiver of any such provisions or the relinquishment of any
such rights, but the same shall continue and remain in full force and
effect.  None of the  provisions hereof  shall be deemed waived, unless the
waiver is expressed in writing signed by the party charged therewith.  Guarantor
shall not be entitled to require that Purchaser marshal assets, and the benefit
of any rule of law or equity to the contrary is hereby expressly waived by the
Guarantor.
 
IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale
Agreement as of the date first above written.

 
[Balance of Page Intentionally Blank]

 
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PURCHASER:
 
WITNESS:                                                                            
GLL L-Street 1331, LLC.
 

_____________________________                            
By:                                                      
 Name:                                                      
Title:                                                      

SELLER:

WITNESS:                                                                            1331
L Street Holdings, LLC, a Delaware
                                                                                                
limited liability company

_____________________________                             
By:                                                      
Name:  Andrew Florance
Title:  Manager

 GUARANTOR:

WITNESS:                                                                            
CoStar Group, Inc.

_____________________________                              By:                                                      
Name:                                                      
Title:                                                      

ESCROW AGENT

The undersigned Escrow Agent executes this Agreement solely for the purpose of
evidencing its agreement to perform the obligations of the Escrow Agent as set
forth and contained in the foregoing and annexed Purchase and Sale Agreement, it
being understood and agreed that Escrow Agent shall have absolutely no liability
for the performance by Seller or Purchaser of their obligations under the
Purchase and Sale Agreement.

Old Republic National Title Services Company,
A Minnesota corporation

By:           
Name:
Title:

 
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