Exhibit 10.1
 

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PURCHASE AND SALE AGREEMENT
 

 
 
 
 
(1331 L Street, N.W.
 
Washington, D.C.)
 

 
By and Between
 

 
1331 L Street LLC
 
(as Seller)
 

 
and
 

 
1331 L STREET HOLDINGS, LLC
 
(as Purchaser)
 
 

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TABLE OF CONTENTS

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. 
6

4.
Purchase Price and Payment. 
7

 
4.1
Amount. 
7

 
4.2
Deposit. 
7

 
4.3
Payment. 
7

 
4.4
Disposition of Deposit. 
7

 
4.5
Interpleader. 
8

 
4.6
Escrow Agent as Stakeholder. 
8

 
4.7
Escrow Agent to Acknowledge Agreement. 
8

5.
Closing Adjustments and Prorations. 
8

 
5.1
General. 
8

 
5.2
Rent. 
8

 
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. 
11

6.
Closing Date and Costs. 
12

 
6.1
Closing Date. 
12

 
6.2
Transfer and Recordation Taxes and Closing Costs. 
13

7.
Closing Documents. 
13

 
7.1
Seller’s Deliveries. 
13

 
7.2
Purchaser’s Deliveries. 
14

 
7.3
Delivery in Escrow. 
15

8.
Obligations Pending Closing. 
15

 
8.1
Continued Care and Maintenance. 
15

 
8.2
Leasing of the Property. 
15

 
8.3
Service Contracts. 
16

 
8.4
Operating Records. 
16

 
8.5
Affirmative Covenants. 
16

 
8.6
Negative Covenants. 
17

 
8.7
Recertification of Studies. 
18

9.
Inspection Period. 
18

 
9.1
Due Diligence Materials. 
18

 
9.2
Investigation and Inspection. 
18

 
9.3
Environmental Studies. 
19

 
9.4
Indemnification. 
19

 
9.5
Title or Survey Exceptions. 
19

10.
Conditions of Closing. 
20

 
10.1
Estoppel Certificates. 
20

 
10.2
Encumbrances Subsequent to Inspection Period. 
21

 
10.3
General Conditions of Purchaser. 
21

 
10.4
General Conditions of Seller. 
22

 

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11.
Brokerage. 
22

12.
Risk of Casualty. 
23

13.
Notices and Other Communications. 
23

 
13.1
Manner of Giving Notice. 
23

 
13.2
Addresses for Notices. 
23

 
13.3
E-Mail. 
25

14.
Default and Remedies. 
25

 
14.1
Seller’s Default. 
25

 
14.2
Purchaser’s Default. 
25

 
14.3
Indemnity Provisions. 
26

15.
Environmental Condition. 
26

 
15.1
Existing Reports. 
26

 
15.2
Permitted Usage. 
26

 
15.3
“As Is”. 
26

16.
Seller’s Representations and Warranties. 
27

 
16.1
Representations and Warranties Regarding Authority and Status. 
27

 
16.2
Representations and Warranties Regarding Property and Legal Matters. 
28

 
16.3
Representations and Warranties Regarding Leases, Contracts, and Other
Documents. 
28

17.
Seller’s Disclosures. 
30

 
17.1
Soil Disclosure. 
30

 
17.2
Underground Storage Tank Disclosure. 
31

18.
Third Party Beneficiaries. 
31

19.
Further Assurances. 
31

20.
No Assignment. 
31

21.
Purchaser’s Authority. 
31

22.
Confidentiality. 
32

23.
Assumption or Cancellation of Service Contracts. 
33

24.
Miscellaneous. 
33

 
24.1
Captions and Execution. 
33

 
24.2
Press Release. 
33

 
24.3
Amendment and Merger. 
33

 
24.4
Binding. 
33

 
24.5
Governing Law; Venue and Limitation Date. 
33

 
24.6
Entire Agreement. 
34

 
24.7
Time of Essence. 
34

 
24.8
No Waiver. 
34

 
24.9
Partial Invalidity. 
34

 
24.10
Exclusive Rights. 
34

 
24.11
No Offer or Binding Contract. 
34

 
24.12
Counterparts. 
34

 
24.13
Joint and Several Liability. 
34

 
24.14
Jury Waiver. 
35

 

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TABLE
 
OF
 
SCHEDULES AND EXHIBITS
Schedules
A           Legal Description
B           List of Leases
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 Ground Lease Estoppel Certificate
I           Form of Underground Storage Tank Disclosure
J           Form of Second Amendment
K           Form of Tenant Estoppel

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as
of the 20th day of January, 2010 (the “Effective Date”), by and between (i) 1331
L Street LLC, a Delaware limited liability company (sometimes referred to as
“Seller” or “Ground Lessee”), and (ii) 1331 L Street Holdings, LLC, a Delaware
limited liability company (“Purchaser”).
 
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 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 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.

Approved Leases shall have the meaning set forth in Section 8.2.
 
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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 Holliday, Fenoglio Fowler, LP.

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 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.

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 11, 2010, or such earlier date as may be
mutually agreed to by the parties.

Closing Statement shall have the meaning set forth in Section 5.1.

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.

Deposit shall mean the sum of Four Million Dollars ($4,000,000.00), 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.

Elevator Contract shall mean that certain National Elevator Maintenance
Agreement dated January 10, 2006 by and between Transwestern (on behalf of
Seller) and Otis Elevator Company.

End of the Inspection Period shall mean the earlier of (i) February 1, 2010; 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 Services, 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.

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Ground Lease shall mean that certain Lease dated February 15, 1989 by and
between 1331 L Street 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.

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. Inspection
Period shall have the meaning set forth in Section 9.2.

Intangible Property shall mean the contract rights, 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.

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 Schedule shall refer to Schedule B.

Leases shall mean those leases and subleases of space for portions of the
Building in existence on the Effective Date which are listed on Schedule B
attached hereto, together with any Approved Leases executed after the Effective
Date.

Lease Activity Notice shall have the meaning set forth in Section 8.2.

Leasing Agreement shall refer to that certain Exclusive Leasing Agreement dated
July 1, 2008, as amended, between Seller and Transwestern Carey Winston, LLC
("Transwestern").

Leasing Costs shall mean for a particular Lease (i) all leasing commissions due
to brokers due in connection with a Lease, and (ii) the cost of any obligation
of Landlord under the Lease to perform or pay for tenant improvements,
improvement allowances or other concessions and legal fees.

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). Limitation Date shall have the meaning set forth in Section 24.5
hereof.

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Management Agreement shall mean that certain Management Agreement dated February
22, 2008, between Seller and Transwestern, as amended by that certain First
Amendment to Property Management Agreement dated February 27, 2009.

MBA shall mean the Mortgage Bankers Association, an Illinois not for profit
corporation.

MBA’s NDA shall mean that certain Nondisturbance and Attornment Agreement dated
July 15, 2009 by and between Ground Lessor and MBA.

New Lease shall have the meaning set forth in Section 8.2.

Objections shall have the meaning set forth in Section 9.5.

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; (f) the
Second Amendment; and (g) any matters deemed to constitute Permitted
Encumbrances under Section 9.5.

Personal Property shall mean (i) all tangible personal property located in the
Building and the Land that is owned by Seller and used in the operation of the
Building and the Land, including, without limitation, (a) all maintenance
equipment and tools, and (b) the property identified in Schedule J (which Seller
believes to be a reasonably complete list as of the Effective Date) and (ii) all
mechanical systems and equipment comprising a part of the
 
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Building.  Without limiting the generality of the foregoing, Seller, and MBA (as
evidenced by its execution of this Agreement), agree that the following
equipment shall be considered included in the Personal Property conveyed to
Purchaser as part of the Property at no additional cost, whether same is owned
by Seller or MBA and whether or not same is identified in Schedule J: (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 servicing the MBA leased space, (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 existing MBA data center in the Building,
including all ducting, sensors, fan, pumps and air handlers.

Property shall collectively mean the Land, the Site Improvements, the Building,
the Personal Property, all of Seller’s right, title and interest in and to the
Leases and Licenses, the Intangible Property and the Other Seller Interests.

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.

Renewal shall have the meaning set forth in Section 8.2.

Second Amendment shall mean that certain Second Amendment to Office Lease
Agreement between Purchaser and MBA that will be executed at the Closing.

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 held by
Seller 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 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.

SNDA shall have the meaning set forth in Section 10.1.

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).

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Underground Storage Tank Disclosure shall have the meaning set forth in Section
17.2.

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 8.1, 8.5, 8.6, 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 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 deemed 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 8.1, 8.5, 8.6, 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
8.1, 8.5, 8.6, 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
Deed.

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 may elect, in its sole discretion, to assume in writing.

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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 Forty One
Million Two Hundred Fifty Thousand Dollar($41,250,000) (the “Purchase Price”),
which shall be payable all in cash at the Closing.

4.2 Deposit.    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), Purchaser shall place the
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 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 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.

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 noon 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 from (A) 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, (B) 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.  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.
 
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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.  Seller and Purchaser shall jointly and severally indemnify and hold
the Escrow Agent harmless from and against all costs, claims, and expenses,
including reasonable attorneys’ fees, incurred in connection with the
performance of the Escrow Agent’s duties hereunder, except with respect to
actions or omissions taken or suffered by the Escrow Agent in bad faith, in
willful disregard of this Agreement or involving gross negligence on the part of
the Escrow Agent.

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 cause their respective accountants 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(c), Basic Rent and
other revenues (including, without limitation, percentage rents) 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 after the Closing Date.
 
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(b) Additional Rent.  Subject to Section 5.2(c), monthly or other payments made
by Tenants in advance based upon projected or estimated Additional Rent shall be
prorated between Seller and Purchaser as of the Closing Date based on the actual
number of days in the month or other period for which the advance payment is
made.  Such proration shall be made separately for each Tenant which is
obligated to pay Additional Rent on the basis of the fiscal year set forth in
the Tenant’s Lease for the determination and payment of Additional Rent (the
“Tenant’s Fiscal Year”).  Since all Tenants who are obligated to pay Additional
Rent are on a fiscal year ending September 30 for Additional Rent purposes, such
prorations shall be made separately for each such Tenant on the basis of the
fiscal year ending 9/30/09 (the “Current Fiscal Year”).

(c) 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.  For purposes hereof, Percentage Rent for all periods prior
to the Closing Date but not received by the Closing Date shall be treated in the
same manner as Delinquent Rent under this Section 5.2(c).  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.  In the
event that Seller, prior to the Closing, has initiated an action for Delinquent
Rent, then, at Purchaser’s option, Seller will, at the Closing, assign its
rights in such action to Purchaser who will thereafter prosecute the same on
behalf of Seller, and the legal fees incurred by Purchaser in prosecuting such
action shall be borne by Purchaser and Seller in the same proportion as the
parties share any recovery of Delinquent Rent pursuant to the next sentence of
this Section 5.2(c).  Delinquent Rent collected by Purchaser after the Closing
Date (less any collection costs incurred by Purchaser), for periods prior to the
Closing Date, shall be applied first to any other unpaid Delinquent Rent
accruing after the Closing Date, current rents, and then any sums remaining to
Delinquent Rent owing prior to the Closing Date.  Base Rent or Additional Rent
collected after the Closing Date (less any collection costs incurred by
Purchaser) shall be applied 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.

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 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.

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(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 2010 (“Pending Tax
Appeal”), filed on behalf of Seller by Wilkes Artis, Chartered (“WA”), pursuant
to an engagement letter dated March 30, 2009 (the “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 WA
of the sale, in accordance with the terms of the Engagement Letter.  Before and
after Closing, Seller will deliver to WA any information or documentation
requested by WA in connection with the Pending Tax Appeal which is Seller’s
possession or control.  If the Pending Tax Appeal (or any other prior tax
appeals) is successful, any refunds of real estate taxes made to Purchaser after
the Closing shall first be applied to the unreimbursed costs of WA, 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 Pending Tax Appeal is unsuccessful, Purchaser and Seller shall
reprorate the out-of-pocket costs they incurred in the same ratio.

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
Seller’s fiscal year, which is October 1-September 30.  Accordingly, at Closing,
Percentage Rent will have been paid for the 4th calendar quarter of 2009, and
will be accruing for the 1st calendar quarter of 2010.  Accrued Percentage Rent
for the 1st calendar quarter of 2010 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 2010, on the basis of the Percentage Rent paid to the
Ground Lessor for the 4th calendar quarter of 2009, 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 Seller’s fiscal year
ending September 30, 2009, 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.
 
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5.5 Security Deposits.    Purchaser shall be credited with, and Seller shall be
charged with an amount equal to, all Security Deposits which are set forth in
the Leases and any interest required to be paid thereon regardless of whether or
not such amount is actually being held by Seller, Seller’s managing agent or any
other person under the Leases, unless with respect to a particular Lease, the
Seller can supply reasonable evidence that the sum has been reimbursed to the
Tenant or otherwise been applied by Seller in accordance with the Lease.  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) At the Closing, Seller shall pay for all Leasing Costs in connection with
the Leases that are due and owing as of the Effective Date (including any
leasing/commission agreement relating to the Leases existing as of the Effective
Date).  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
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 Purchaser.  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,
Purchaser shall receive (i) a credit towards the Purchase Price in the amount of
all unadvanced tenant improvement allowances, rent abatements or offsets and
other landlord concessions, and leasing commissions due under the Leases
existing as of the Effective Date.

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, 2011),
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.

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(b) Additional Rent Adjustment.  Seller and Purchaser shall prorate the actual
amount of Additional Rent paid by each Tenant for the Current Fiscal Year as
follows:

(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 Current
Fiscal Year preceding the Closing Date and the denominator of which is the total
number of days in the Current Fiscal Year; and

(ii) Purchaser shall be entitled to the balance of the Additional Rent paid by
the Tenant.

(iii) Accordingly, if the year end statement (“Reconciliation Statement”)
reconciling  the estimated Additional Rent paid by each Tenant for the Current
Fiscal Year with the actual amount of Additional Rent payable by such Tenant for
the Current Fiscal Year shows an underpayment by the Tenant, the payment thereof
by Tenant to Purchaser shall be prorated in the ratio set forth in clauses (i)
and (ii) of this Section 5.8(b); and if the Reconciliation Statement shows an
overpayment by such Tenant, Seller shall reimburse Purchaser for the amount of
said overpayment to be credited to the Tenant in the same ratio.  If it has not
already done so, Seller agrees to prepare and distribute to the Tenants and to
Purchaser prior to the Closing Date all Reconciliation Statements for the
Current Fiscal Year.  Seller shall be solely responsible for, and shall
indemnify and hold Purchaser harmless against, all claims, costs and liabilities
arising out of any claims by Tenants for adjustments with respect to Additional
Rents due for any Fiscal Years ending September 30, 2009 and 2008.

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 Current 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 10:00 a.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.

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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 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 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;

(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) the Second Amendment in the form attached as Exhibit J;

(f) letters in the form attached hereto as Exhibit E to each Tenant under the
Leases;

(g) a Section 1445 Affidavit in the form attached hereto as Exhibit F;

(h) an owner’s affidavit addressed to the Title Company in the form attached as
Exhibit G, and, if required by the Title Company, such other documents
reasonably required by the Title Company to remove any matters which are not
Permitted Encumbrances from Purchaser’s title insurance policy and to eliminate
the exceptions in the owner’s title insurance policy for parties in possession
other than the Tenants under the Leases and mechanic’s liens;

(i) the Closing Statement referred to in Section 5.1 signed by Seller;

(j) all keys to the Property, if any, which are in Seller’s possession;

(k) 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.

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(l) all warranties, manufacturer or equipment manuals, service records and
similar information related to the Personal Property which are in Seller’s
possession;

(m) a good standing certificate issued by the State of Delaware, dated not more
than thirty (30) days prior to the Closing Date, evidencing that the Seller is
in good standing in the state of its organization;

(n) resolutions of the member of the Seller authorizing (1) the Seller to enter
into this transaction and convey the Property to Purchaser; and (2) the person
or entity signing on behalf of the Seller to execute and deliver the documents
required by this Section;

(o) if the documents signed by the Seller have been executed by a legal entity,
a resolution of such entity authorizing it to sign the documents and authorizing
a specific officer to execute the same on behalf of the entity, along with good
standing or other certificates that evidence the entity is in good standing in
the state of its organization;

(p) any transfer and recordation tax declaration;

(q) a certificate signed by Seller that the representations and warranties of
Seller set forth in this Agreement are true and correct on the Closing Date,
subject to the provisions of Section 10.3(a);

(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; and

(s) notice of termination of the Management Agreement;

(t) notice of termination of the Leasing Agreement;

(u) notice of termination of the Elevator Contract and the Pepco Contract;

(v) letters to the other parties under the Service Contracts, advising of the
sale of the Property.

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 in the form attached hereto as Exhibit C;

(c) the Second Amendment in the form attached as Exhibit J;

(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 the District of Columbia;

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(g) resolutions of the Manager of the Purchaser authorizing (1) the Purchaser to
enter into this transaction and purchase the Property from Seller; and (2) the
entity or person signing on behalf of the Purchaser to execute and deliver the
documents required by this Section;
 
(h) if the documents signed by the Purchaser have been executed by a legal
entity, a resolution of such entity authorizing it to sign the documents and
authorizing a specific officer to execute the same on behalf of the entity,
along with good standing or other certificates that evidence the entity is in
good standing in the state of its organization;

(i) any transfer and recordation tax declarations;

(j) a certificate signed by Purchaser that the representations and warranties of
Purchaser set forth in this Agreement are true and correct on the Closing Date,
subject to the provisions of Section 10.4(a); and

(k) 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 Deed 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 its care, maintenance
and operation of the Property on at least the same standards as employed by
Seller to date and use all reasonable efforts to preserve its relations with
Tenants, suppliers and others having business dealings with it; (ii) not to make
any 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
required by any 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.

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
 
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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, which may be
granted or withheld in Purchaser’s sole discretion.  As used in this Agreement,
the term “Approved Leases” refers collectively to (i) any New Lease, Renewal or
Amendment which is approved by Purchaser pursuant to this Section; and (ii) the
Second Amendment.

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  Building operations 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, including, without limitation, all tenant files,
including correspondence with tenants and subtenants, Additional Rent
information and reconciliations, service contract and vendor logs, maintenance
logs, equipment servicing information, and warranty claims. Seller agrees to use
commercially reasonable efforts to take possession of such  books and records
from Transwestern on or before Closing  and deliver same to Purchaser at
Closing, and Seller will also exercise its rights relating to termination and
deliveries by Transwestern as set forth in Section 5.4 of the Management
Agreement, and pay all fees in connection therewith.  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 Seller must provide Purchaser
with prior notice of at least one (1) Business Day.  The records that Seller
will deliver to Purchaser pursuant to this Section shall not include: (a) any
document or correspondence which would be subject to the attorney-client
privilege; (b) any document or item which Seller is contractually or otherwise
bound to keep confidential; (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; (g) any other proprietary information or
materials relating to Seller’s internal decision- making or investment or
financing options; and (h) materials relating to Seller’s financial position,
financings, or borrowings, or internal operations (including, without
limitation, Seller’s general ledger, financial reports, audited and unaudited
financial statements, loan payment records, and payroll records.

8.5 Affirmative Covenants.  Between the Effective Date and the Closing Date,
Seller agrees that it will:

(a) at its expense, maintain the Property in its present order and condition,
make all necessary repairs and replacements 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 date of this Agreement;

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(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 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 (including Environmental Laws) 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;

(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; and

(f) use its commercially reasonable efforts to request and obtain a written (and
if obtained, deliver to Purchaser) acknowledgment from Transwestern that the
Management Agreement and the Leasing Agreement are terminated effective as of
the Closing Date, and that from and after the Closing Date Transwestern shall
not be entitled to any leasing commissions in connection with the
Leases  (including commissions with respect to the current  terms of the Leases,
and commissions due upon any renewals, extensions or expansion of  the Leases),
or in connection with any new leases executed by Purchaser;

8.6 Negative Covenants.  Between the Effective Date of this Agreement and the
Closing Date, Seller agrees that, without Purchaser’s written consent in each
case, it will not, directly or indirectly through any agent or 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 date of this
Agreement, without the prior approval of Purchaser which will not be
unreasonably withheld, conditioned or delayed;

(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, except pursuant to the express terms of the Lease, or, with the
written consent of Purchaser, for non-payment of Rent;

(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
(Seller must maintain the Personal Property substantially in its current
condition, reasonable wear and tear expected);

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(e) except as permitted by the provisions of Section 8.2, permit occupancy of,
or enter into any new Lease for, space in the Property which is presently vacant
or which becomes vacant between the Effective Date and the Closing Date,
including the expansion of a Tenant’s leased premises into such vacant space
(except in a case where an expansion option is contained in a Tenant’s Lease and
the Rent payable in respect of such expansion space is fixed by a formula in
such Tenant’s Lease and is not subject to negotiation between Seller and such
Tenant); or
 
(f) 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.

8.7 Recertification of Studies.   If requested by Purchaser, Seller will, at no
expense or liability, contact all third party consultants responsible for
producing any study prepared for Seller (or any agent of Seller) in connection
with the development, construction or ownership of the Property (including, but
not limited to, any environmental or engineering study) and authorize and
request such third party consultants, at Purchaser’s expense, to update and
recertify and/or issue reliance letters for the benefit of Purchaser.

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 fiscal years ending September 30, 2008 and September 30, 2009, and the
Seller’s budget for calendar year 2010 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 the information known to Seller, to the Purchaser.  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 information received as set forth in Section 22
hereof.  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 materials
produced by Purchaser or Purchaser’s agents or contractors 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 and which would not cause damage to the Property or disrupt normal
operations of the Property, including physical inspections of the
 
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Property, review of the Leases, Service Contracts, laws and ordinances, and
approval of survey and condition of title.  Notwithstanding the foregoing
sentence, 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 two (2) Business Days’ 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 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.  Further, prior to the End of the Inspection Period,
the Purchaser agrees that it will not contact any Tenant 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 February 1, 2010.  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.  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 or its member,
CoStar Group, Inc.  (“CoStar”) will maintain contractual liability insurance in
an amount not less than $1,000,000 per occurrence/ $2,000,000
aggregate/$25,000,000 umbrella, and with carriers licensed to do business in the
District of Columbia, selected by Purchaser in the exercise of its reasonable
discretion, and reasonably approved by Seller.  Prior to entering the Property
to perform inspections, the Purchaser will supply Seller with evidence that the
Purchaser or CoStar is maintaining the insurance required by the foregoing
sentence.

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 (and by its execution of this Agreement,
CoStar), jointly and severally, hereby indemnify and hold 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, however, this indemnity
will only cover activities that have occurred prior to the Closing.

9.5 Title or Survey Exceptions.  Seller has delivered to Purchaser, and
Purchaser has received, that certain survey prepared by Bernard F. Locroft Civil
Engineers dated April 11, 2008 (the “Existing Survey”).  On or before January
26, 2010, Purchaser, at its own cost and expense, shall have ordered, received
and reviewed, and delivered to Seller, (a) a title commitment covering the
Property (the “Title Commitment”); and (b) if available, an ALTAJACSM survey of
the Property or an update to the Existing Survey (the “Survey”).  Simultaneously
with the delivery of the Title Commitment to Seller, Purchaser shall notify
Seller, in writing, of any objections (the “Objections”) that Purchaser may have
to anything contained on the Survey (or, if Purchaser has not received the
Survey by such date, the Existing Survey) or in the Title Commitment, excluding,
however, the leases and matters
 
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appearing on Schedule B and Schedule H.  Notwithstanding anything to the
contrary in the preceding sentence, if Purchaser has not received the Survey by
the date required by this Section 9.5 and thus bases the Objections (if any) on
the Existing Survey, Purchaser shall have two (2) business days after receipt of
the Survey, but in no event later than January 2010, within which to notify
Seller of any supplemental Objections based solely on any new information
contained in the Survey (i.e. Purchaser shall not have the right to notify
Seller of any supplemental Objections unless the same is based solely on any
information or encumbrance contained in the Survey but not contained in the
Existing Survey).  Any such item to which Purchaser shall not object shall be
deemed to be a “Permitted Encumbrance”.  If there are Objections by Purchaser,
Seller shall, within five (5) Business Days after its receipt of the Purchaser’s
Objection notice, 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 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 proceeding 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.

10. Conditions of Closing.

10.1 Estoppel Certificates.  Seller shall obtain for delivery to Purchaser at
least one (1) business day prior to the Closing Date, Tenant estoppel
certificates (the “Estoppels”) from (i) all of the Tenants in the form attached
as Exhibit K, and (ii) Ground Lessor.  The Estoppels must be dated no earlier
than thirty (30) days prior to the Closing Date.  The Estoppel from the Ground
Lessor will be in the form attached as Exhibit H.  Upon receipt of any Estoppel
from any Tenant, Seller shall deliver the same to Purchaser for Purchaser’s
review.  Purchaser shall notify Seller upon receipt if such Estoppel is not
satisfactory to Purchaser and if Purchaser has not notified Seller of
Purchaser’s disapproval within two (2) Business Days of Purchaser’s receipt of
the Estoppel, then Purchaser shall be deemed to have approved the Estoppel in
question.  In the event that any Estoppel contains information at material
variance with the information set forth in Schedule B and Schedule H or in the
Operating Statement or otherwise alleges a monetary or material non-monetary
default by Seller under the Lease and, as a result of the same, the Seller
violates Section 10.3(f) hereof, then Seller shall be obligated to use
commercially reasonable efforts to contest or cure such variance or default
prior to Closing.

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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 other conditions set forth
in this Agreement, or 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 it 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):

(a) Seller Representation and Warranties True.  The representations and
warranties made by Seller in this Agreement are true and correct on the date of
this Agreement and are true and correct 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 reasonable commercial discretion, such update or
modification.

(b) Seller’s Performance.  Seller has performed all covenants and obligations
required by this Agreement to be performed by it on or before the Closing Date.

(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 marketable title to the Property, subject only to the Permitted
Encumbrances (the “Title Policy”).

(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
substantial 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 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 are in full force and effect,
without defaults or delinquencies, other than those set forth on the Lease
Schedule or otherwise approved by Purchaser.  Notwithstanding the foregoing, the
parties acknowledge that given the nature of the Building, there may be changes
in the defaults or Delinquent Rent under the Leases prior to Closing, and as a
result thereof, this condition will not be deemed to have been unsatisfied 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 2009
calendar year.

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(g) Second Amendment.  On or before the Effective Date, the Second Amendment
shall have been executed.

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 with respect to the indemnity obligations of
Purchaser under Section 9.4 hereof.  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 on the date
of this Agreement and are true and correct 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 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 reasonable commercial discretion, such update
or modification.

(b) Purchaser Performance.  Purchaser has performed all covenants and
obligations required by this Agreement to be performed by it on or before the
Closing Date.

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 with respect to the indemnity obligations of
Purchaser under Section 9.4 hereof.

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 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.

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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 any Tenant the rights to terminate its Lease (unless such right
has been waived in writing by the Tenant 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 terminate its Lease and the Tenant shall not have waived
it right to terminate, then, in either such event, Seller (with the consent of
its lender) and the 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 the
other and the Escrow Agent within such period.  Upon such termination, 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 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 Federal Express or other overnight courier service, or sent by facsimile
with confirmation of receipt noted by the sending machine.  Any such notice
shall be deemed given when received or when delivery is refused and the time
period to act or respond to such notice shall commence on such date.  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.

13.2  Addresses for Notices.  All notices shall be addressed to the parties at
the following addresses:

If to Purchaser:

1331 L Street Holdings, LLC
c/o Lincoln Property Company
101 Constitution Ave, NW, Suite 600
Washington D.C. 20001
Attn: John Benziger
Facsimile No.:
Telephone No.: (202) 513-6709
E-mail: jbenziger@lpc.com

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With copies to:                     1331 L Street Holdings, LLC
c/o CoStar Group, Inc.
2 Bethesda Metro Center, 10th Floor
Bethesda, MD 20814
Attn: Jon Coleman, General Counsel
Facsimile No: (301-664-9176)
Telephone No: (301) 280-3859
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 Seller:

1331 L Street LLC
c/o Mortgage Bankers Association
1331 L Street, NW.
Washington, D.C. 20005
Attention: Mr. John A. Courson
Facsimile No.:(202) 721-0009
Telephone No.:(202) 557-2702
E-mail:jcourson@mortgagebankers.org
 
 
With copies to:                     1331 L Street LLC
c/o Mortgage Bankers Association
1331 L Street, NW.
Washington, D.C. 20005
Attention: Ms. Phyllis Slesinger, General Counsel
Facsimile No.:(202) 621-1469
Telephone No.:(202) 557-2869
E-mail:pslesinger@mortgagebankers.org

-and-

1331 L Street LLC
c/o Mortgage Bankers Association
1331 L Street, NW.
Washington, D.C. 20005
Attention: Ms. Angela Lazear, CFO
Facsimile No.:(202) 621-1513
Telephone No.:(202) 557-2713
E-mail:alazear@mortgagebankers.com

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-and-

Jerry R. O’Conor, Esq.
O’Conor & Co., LLC
8270 Greensboro Drive-Suite 1050
McLean, VA 22102
Facsimile No.: (703) 448-8889
Telephone No.: (703) 448-9009
E-mail: jroc@oconorlaw.com

-and-

Stephen E. Leach, Esq.
Leach Travell Britt, P.C.
8270 Greensboro Drive-Suite 1050
McLean, VA 22102
Facsimile No.: (703) 584-8901
Telephone No.: (703) 584-8902
E-mail: sleach@ltblaw.com
 
 
If to Escrow Agent:

At the address and facsimile number specified in Section 1 hereof

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.

13.3 E-Mail.  E-mail addresses are provided as a matter of convenience. Notices
may not be sent by e-mail.

14. Default and Remedies.

14.1 Seller’s Default.  If Seller fails to perform any of its obligations or
agreements contained herein, 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 neither
Seller nor Purchaser shall have any further obligations or liabilities one to
the other except with respect to the indemnity obligation of Purchaser under
Section 9.4 herein, 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.

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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 hereunder, 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 with respect to the indemnity obligation of Purchaser under Section 9.4
herein. 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.

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) or, to Seller’s actual knowledge, Tenants and their
respective agents, employees or contractors, 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 include 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 8.1, 8.5, 8.6, 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
 
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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 on the date of this
Agreement:

16.1 Representations and Warranties Regarding Authority and Status.
 
(a) Organization.  Seller is a limited liability company formed and validly
existing under the laws of the State of Delaware.

(b) Authorization.  The execution and delivery of this Agreement and the
transactions contemplated hereby have been duly authorized by Seller.

(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(0(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.

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(h) 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.

(b) Condemnation.  Seller has not received from a governmental authority notice
of any (and to Seller’s 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.  All bills and claims for labor performed and materials
furnished to or for the benefit of the Property for all periods prior to the
Closing Date have been (or prior to or contemporaneous with 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 knowledge, threatened in writing 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.

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(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 assignments thereof and subleases, if any, and any other
agreements between Seller, or an Affiliate of Seller, and a Tenant, or an
Affiliate of 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
date of this Agreement and, except as set forth in the Rent Roll, there is no
arrearage in excess of one month;

(C) each Tenant is now in possession of the leased premises under its Lease;

(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 and, to the extent any
Tenant is delinquent in paying Seller any such amount, the amount of the
delinquency is set forth in the Rent Roll;

(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,

(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 ;

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(K) there are no oral or written representations or agreements between Seller,
or an Affiliate of Seller, and any Tenant, or an Affiliate of such 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;

(N) neither Seller nor any Affiliate of Seller has made a loan or other advance
to, or has any ownership interest in, any Tenant or any Affiliate of a Tenant,
except that Seller has disclosed to Purchaser that 100% of the member interest
in Seller is owned by the MBA, a Tenant in the Building pursuant to a Lease; and

(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 for any commissions due under Approved
Leases, to the extent applicable.

(b) Contracts. The Service Contract Schedule set forth on Schedule D contains a
complete and accurate list of all Service Contracts. 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) Management Agreement. The Management Agreement will be terminated on the
Closing Date so that the Property will be conveyed to Purchaser free of the
same.

(d) Leasing Agreement. The Leasing Agreement will be terminated on the Closing
Date so that the Property will be conveyed to Purchaser free of the same.

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.

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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 I (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, and shall be
enforceable at any time up to the Limitation Date. Notwithstanding anything to
the contrary in this Agreement, (i) Purchaser covenants to use its reasonable
commercial efforts to seek and obtain the written consent of the Ground Lessor
to the Second Amendment under Section 5(vi) of the MBA’s NDA for the purpose of
confirming Ground Lessor’s recognition of the Second Amendment as part of MBA’s
Lease for purposes of the MBA’s NDA; (ii) the parties hereto expressly
acknowledge and agree that the MBA is a third party beneficiary for purposes of
this Section 18 and may enforce this obligation against Purchaser.

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 the 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.  he rights of Purchaser under this Agreement cannot be
assigned in whole or in part without the prior consent of Seller, which shall
not be unreasonably withheld, conditioned or delayed. The foregoing shall not
however prohibit the Purchaser from assigning, without the consent of Seller,
its rights hereunder to an Affiliate; however, no such assignment shall relieve
the Purchaser named herein from continuing liability under this Agreement.
Consent by Seller to any assignment of Purchaser’s rights under this Agreement
shall not relieve Purchaser of its obligations under this Agreement, regardless
of whether such assignment includes an assumption of liability by Purchaser’s
assigns.
 
 
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 the State of Delaware, and is qualified to do
business and in good standing in the District of Columbia.
 
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(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.
(c) 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. Confidentiality.  Prior to the Closing and except as may reasonably be
required in connection with the consummation of the transactions contemplated
hereby, each party shall keep confidential the details of the transactions
contemplated hereby and all documents and other information provided the other
party, and will not identify Purchaser or Seller of the Property without the
prior consent of the other. The parties may disclose the details of this
transaction to its employees, officers, affiliates, professionals engaged by it
in connection with the transactions contemplated hereby, but each will require
such parties to abide by the foregoing confidentiality provisions. This Section
22 shall survive the termination of this Agreement prior to the Closing Date for
any reason whatsoever, and shall be enforceable at any time in the event of such
termination. After the Closing Date, each party shall keep confidential all
documents and other confidential information provided by the other party, except
this Section shall not prohibit or restrict any party  from making any
disclosures required by applicable law (including securities laws and the rules
and regulations thereunder) or regulatory requirements of any stock exchange.
Nor will this Section prohibit or restrict any party from making any
disclosures, or require advance notice of any disclosure, of “Non-Confidential
Information” (as defined in the next sentence).  For all purposes of this
Agreement, the term “Non-Confidential Information” shall mean all of the
following  (i) information authorized by the non-disclosing party in writing to
be disclosed, (ii) information that, at the time of disclosure or thereafter is
in the public domain through no fault of the  disclosing party, including,
without limitation, the Offering Memorandum for the sale of the Property
prepared by Holliday Fenoglio Fowler, L.P., and any portion thereof, and all
information about a party disclosed by the party itself; and (iii)  information
and details concerning the economic terms of the purchase of the Building, and
any other information and details about or related to  the Building, including,
without limitation, the Building’s  physical characteristics, and its economic
position and characteristics, such as the lease terms, tenant buildouts, etc.
Notwithstanding anything set forth to the contrary herein, after the Closing
Date, Purchaser may, without any advance notice to Seller, disclose the terms
and conditions of this Agreement and file a copy of this Agreement with the
Securities and Exchange Commission (including without limitation as an exhibit
to any Forms 8-K, 10-K, 10-Q and 10-K). This Section shall not apply to any
press releases, advertisements or other disclosures made in accordance with
Section 24.2 of this Agreement.  All references in this Section 22 to a party,
or to Seller or Purchaser, shall include all Affiliates of such party.

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23. Assumption or Cancellation of Service Contracts.  All Service Contracts
(other than the Elevator Contract and the Master Energy Services Contract for
electric service with Pepco Energy Services, Inc. (the “Pepco Contract”) which
Purchaser elects to have Seller cancel or cause to be cancelled) which are
assignable shall be included in the assignment and assumption described in
Section 7.1(c) and any costs or fees charged by  the service provider in
connection with such assignment shall be prorated at the Closing and thereafter
assumed by Purchaser. Notwithstanding the immediately preceding sentence, any
fee charged by a service provider to transfer a Service Contract shall be borne
by Seller. The Elevator Contract and the Pepco Contract shall be terminated by
Seller on or before the Closing Date and any costs or fees charged by the
service providers in connection with such termination shall be borne by Seller.
Purchaser may also notify Seller in writing on or before the end of the
Inspection Period that it wishes Seller to exercise the termination option under
Section 8.7 of the garage Lease with Marc Parc, Inc., in which event Purchaser
shall assume all obligations in connection with such termination (other than to
provide the notice of termination in accordance with such garage lease, which
shall be Seller’s sole obligation hereunder) and shall indemnify, defend and
hold harmless Seller against all termination fees and liabilities in connection
therewith.

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 Press Release.  Seller and Purchaser each agrees that before the Closing
Date it will not issue any press release, advertisement or other public
communication (“Press Release”)with respect to this Agreement or the
transactions contemplated hereby without the prior consent of the other party
hereto, except to the extent required by law. If Seller or Purchaser is required
by law to issue such a press release or other public communication before the
Closing Date, at least one Business Day before the issuance of the same such
party shall deliver a copy of the proposed press release or other public
communication to the other party hereto for its review and approval, which
approval shall not be unreasonably withheld or delayed. On or after the Closing
Date, each party may, without the prior consent of the other party, issue a
Press Release with respect to this Agreement and the transactions consummated by
this Agreement, provided that, without the prior consent of the other party, no
such Press Release shall contain any information, including information about
and provided by, the other party,  except (i) the terms and conditions of this
Agreement and the transactions consummated by this Agreement, and (ii)
Non-Confidential Information.

24.3 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 six (6) months except
as may be otherwise specifically provided herein. This Section shall not limit
the survivability of the Purchaser’s indemnity contained in Section 9.4 hereof.

24.4 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.

24.5 Governing Law; Venue and Limitation Date.  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
 
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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. Purchaser and Seller agree that any
claim or litigation arising out of this Agreement, or the transaction
contemplated hereby, shall be made or brought no later than two (2) years after
the Closing Date (“Limitation Date”), except that this Limitation Date shall not
apply to any indemnity claim under Section 9.4 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 such breach was known to Purchaser prior to the
Closing Date.
 
24.6 Entire Agreement.  This Agreement, together with the attached Exhibits A
through K and Schedules A through J, 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.

24.7 Time of Essence.  Purchaser and Seller each agree that time is of the
essence with respect to each and every provision of this Agreement.

24.8 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.

24.9 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.

24.10 Exclusive Rights.  After the Effective Date, Seller agrees that it will
not enter into any 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.

24.11 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.

24.12 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.

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24.13 Joint and Several Liability.  If Purchaser consists of more than one
person or entity, their liability under this Agreement shall be (i) joint and
several, and (ii) fixed, absolute and continuing upon execution hereof. Each and
every representation, warranty, covenant (affirmative, negative or otherwise),
agreement, undertaking, obligation, restriction, limitation, waiver and other
provision made or incurred by or imposed on the Purchaser hereunder shall be
deemed to be the joint and several representation, warranty, covenant,
agreement, undertaking, obligation, restriction, limitation or waiver of each
entity comprising Purchaser, and each entity comprising Purchaser hereby waives
any right of subrogation it may have against the other resulting from liability
hereunder until all obligations hereunder have been satisfied. MBA, by its
execution of this Agreement, hereby guarantees all of Seller’s obligations and
liabilities under this Agreement, and Seller and MBA agree that their liability
under this Agreement shall be (i) joint and several, and (ii) fixed, absolute
and continuing upon execution hereof. Each and every representation, warranty,
covenant (affirmative, negative or otherwise), agreement, undertaking,
obligation, restriction, limitation, waiver and other provision made or incurred
by or imposed on the Seller hereunder shall be deemed to be the joint and
several representation, warranty, covenant, agreement, undertaking, obligation,
restriction, limitation or waiver of Seller and MBA.

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.

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IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale
Agreement as of the date first above written.

SELLER:

1331 L Street LLC,
a Delaware limited liability company

By:  Mortgage Bankers Association,
Manager and Sole Member

By: /s/ John
A.Corson                                                                    
Name: John A. Courson
Title: President and Chief Executive Officer

PURCHASER:

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

By: /s/ Andrew
Florance                                                               
Name: Andrew Florance
Title: Manager

ADDITIONAL PARTIES:

MORTGAGE BANKERS ASSOCIATION,
an Illinois not for profit corporation

By: /s/ John A.Corson                   
Name: John A. Courson
Title: President and Chief Executive Officer

COSTAR GROUP, INC.,
a Delaware corporation

By: /s/ Andrew Florance            
Name:  Andrew Florance
Title:  Chief Executive Officer

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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 Insurance Company

By:                                                                           
Name: Christopher Naughten
Title: Vice President
 
 
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