Exhibit 10.6
PURCHASE AND SALE AGREEMENT
     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of August 4,
2005 (the “Effective Date”), is made by and between Patrick Henry Associates,
L.P., a Delaware limited partnership (“Seller”) and Columbia Equity Trust, Inc.,
a Maryland corporation (“Purchaser”).
     In consideration of the mutual covenants and agreements herein contained,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller and Purchaser agree as follows:
SECTION 1.
PURCHASE AND SALE
     1.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell, transfer and convey to Purchaser, and
Purchaser hereby agrees to purchase from Seller, all of the following described
property (collectively, the “Property”):
     1.2 Land. Seller’s fee interest in and to all of that certain tract of land
situated in the City of Newport News, Virginia and described more particularly
in Exhibit A attached hereto and incorporated herein by reference, together with
all of Seller’s right, title and interest appurtenant to such land, including,
without limitation, all of Seller’s right, title and interest, if any, in and to
(i) all minerals, oil, gas, and other hydrocarbon substances thereon, (ii) all
adjacent strips, streets, roads, alleys and rights-of-way, public or private,
open or proposed pertaining thereto, (iii) all easements, privileges, and
hereditaments pertaining thereto, whether or not of record, and (iv) all access,
air, water, riparian, development, and utility, and solar rights pertaining
thereto (collectively, the “Land”).
     1.3 Improvements. The office building and all other improvements and
structures constructed on the Land (collectively, the “Improvements”). The Land
and Improvements are referred to herein as the “Real Property.”
     1.4 Personal Property. All of Seller’s right, title and interest, if any,
in the following additional property (“Personal Property”):
               (a) Tangible Property.
                    (i) mechanical systems, fixtures and equipment comprising a
part of or attached to or located upon the Improvements,
                    (ii) maintenance equipment and tools owned by Seller,
located on the Land and used exclusively in connection with the Improvements,
                    (iii) site plans, plans and specifications and floor plans
in Seller’s possession which relate exclusively to the Real Property,
                    (iv) all signs, supplies, appliances, decorations,
furniture, furnishings, machinery, landscaping and other tangible personal
property owned by Seller, located at and used in connection with the leasing,
management, operation, maintenance and/or repair of the Property,

 

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                    (v) pylons and other signs located on the Land and owned by
Seller, and
                    (vi) other tangible property of every kind and character
owned by Seller and located in or on the Real Property and used in connection
with the leasing, management, operation, maintenance and/or repair of the
Property (collectively, the “Tangible Property”).
               (b) Leases and rental agreements with tenants occupying space in
the Improvements (the “Leases”), and any guaranties or other security applicable
thereto and all security deposits, advance rental, or like payments, if any,
held by Seller in connection with the Leases.
               (c) To the extent assignable or transferable, all contract rights
(collectively, the “Contract Rights”) related to the Real Property, Tangible
Property or Leases (other than insurance policies), including, without
limitation, Seller’s interest in all maintenance, construction, commission,
architectural, parking, telecommunication, supply or service contracts,
warranties, guarantees and bonds and other agreements related to the
Improvements, Tangible Property, or Leases that will remain in existence after
Closing (collectively, the “Operating Contracts”).
               (d) To the extent assignable or transferable, all permits,
licenses, certificates of occupancy, and governmental approvals which relate to
the Real Property, Tangible Property, Leases, the Contract Rights or the
Operating Contracts (collectively, the “Permits”).
               (e) To the extent assignable or transferable, tradenames or
trademarks used exclusively in connection with the Real Property, and any
goodwill related to the Real Property.
SECTION 2.
PURCHASE PRICE
     2.1 The purchase price for the Property shall be Fourteen Million Six
Hundred Thousand Dollars ($14,600,000.00) (the “Purchase Price”), which shall be
paid as follows:
               (a) Within one (1) business day following the execution and
delivery of this Agreement by Seller and Purchaser, Purchaser shall deposit with
Fidelity National Title Insurance Company (the “Escrow Agent” or the “Title
Company”), the amount of Two Hundred Thousand Dollars ($200,000.00), and within
one (1) business day following the expiration of the Inspection Period
(hereinafter defined) Purchaser shall pay to the Escrow Agent an additional
deposit in the amount of Three Hundred Thousand Dollars ($300,000.00), all of
which shall be held by the Escrow Agent in an interest bearing account. Such
amount(s) as shall have been deposited with the Escrow Agent pursuant to this
Section 2.1, and all interest earned thereon are referred to herein collectively
as the “Deposit.” The Deposit will be held pursuant to the provisions of this
Agreement and subject thereto shall be paid to the Seller at Closing. At the
same time as the delivery of the initial Deposit to the Escrow Agent, Purchaser
shall deliver to the Escrow Agent, for immediate release to Seller an additional
sum of $100.00 (the “Independent Consideration Amount”), which amount has been
bargained for and agreed to as independent consideration for granting to
Purchaser, in accordance with this Agreement, the

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right to purchase the Property and the Inspection Period. The Independent
Consideration Amount is in addition to and independent of all other
consideration provided in this Agreement, and is nonrefundable in all events.
               (b) The balance of the Purchase Price (i.e. the Purchase Price
less the Deposit less the unpaid principal balance of the Existing Mortgage (as
hereinafter defined)), plus or minus other adjustments required under this
Agreement, shall be paid at Closing by wire transfer of funds in such amount in
accordance with the written instructions delivered by Seller to Purchaser.
SECTION 3.
DELIVERIES, INSPECTION, LOAN ASSUMPTION AND REPRESENTATIONS
     3.1 Delivery Obligations. Prior to the Effective Date Purchaser has had
access to the information more particularly described on Schedule 1.
     3.2 Inspection Period/Loan Assumption.
               (a) Notwithstanding any provision of this Agreement to the
contrary, this Agreement and the obligations of Purchaser hereunder are
contingent upon Purchaser determining the suitability of the Property in
Purchaser’s sole discretion. Purchaser shall have a period from the date hereof
until 12:00 P.M. New York time on August 11, 2005 (the “Inspection Period”) to
examine the Property. If prior to the expiration of the Inspection Period,
Purchaser determines that the Property is not suitable to Purchaser for any
reason, then Purchaser shall give written notice thereof (the “Termination
Notice”) to Seller and the Escrow Agent prior to the close of business of the
last day of the Inspection Period. If Purchaser timely advises Seller and the
Escrow Agent that it elects not to proceed with this transaction, the Escrow
Agent shall return to Purchaser the Deposit, and thereafter this Agreement shall
be terminated and neither party shall have any further rights or obligations
hereunder except for such obligations which are expressly stated herein to
survive the Closing or the termination of this Agreement (the “Surviving
Obligations”.) TIME SHALL BE OF THE ESSENCE with respect to this Section 3.2(a),
and if the Termination Notice shall not be timely given to the Seller and the
Escrow Agent by the expiration of the Inspection Period, this Agreement shall
remain in full force and effect in accordance with its terms.
     On or before the expiration of the Inspection Period, Purchaser may deliver
written notice to Seller (the “Operating Contracts Notice”) specifying any
Operating Contracts with respect to which Purchaser desires to have the Seller
deliver notices of termination at the Closing (the “Terminated Contracts”);
provided that (i) the effective date of such termination after Closing shall be
subject to the express terms of such Terminated Contracts, (ii) if any such
Service Contract cannot by its terms be terminated, it shall be assumed by
Purchaser and not be a Terminated Contract, and (iii) to the extent that any
such Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall pay any cancellation fees or penalties. If
Purchaser fails to deliver the Operating Contracts Notice on or before the
expiration of the Inspection Period, there shall be no Terminated Contracts and
Purchaser shall assume all Operating Contracts at the Closing.

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               (b) Except as may be specifically provided elsewhere in this
Agreement, Seller makes no representations or warranties as to the truth,
accuracy, completeness, methodology of preparation or otherwise concerning any
engineering or environmental reports or audits or any other materials, data or
other information supplied to Purchaser in connection with Purchaser’s
inspection of the Property (e.g., that such materials are complete, accurate or
the final version thereof, or that such materials are all of such materials as
are in Seller’s Possession (as used in this Agreement, the term “Seller’s
Possession” or “possession of Seller” or words of similar import shall mean and
include documents maintained at Seller’s files located at the Property or with
Seller’s managing agent for the Property)). It is the parties’ express
understanding and agreement that such materials are provided only for
Purchaser’s convenience in making its own examination and determination prior to
the expiration of the Inspection Period as to whether it wishes to purchase the
Property.
               (c) The obligations of Seller and Purchaser under this Agreement
are also conditioned upon Seller obtaining the consent and approval (the “Lender
Approval”) of Deutsche Banc Mortgage Capital, LLC (the “Lender”), the holder of
the existing first mortgage on the Property (the “Existing Mortgage”) in the
original principal amount of $8,650,000 on or before the expiration of the
Lender Approval Period (as hereinafter defined), to the assumption by Purchaser
of the Existing Mortgage encumbering the Property providing for substantially
the following:
               (i) Confirming the unpaid principal balance, accrued interest and
unpaid fees, if any, of the Existing Mortgage; confirming any amounts held as
escrow deposits or reserves and, if required by the mortgage documents,
confirming the absence of any amendments thereto or defaults thereunder;
               (ii) Approving the Seller’s transfer to Purchaser or Purchaser’s
designee of the Property pursuant to this Agreement and subject to the Existing
Mortgage;
               (iii) Releasing Seller and any guarantor from any and all
obligations under the Existing Mortgage arising from and after the date of the
Closing;
               (iv) Confirming the documents evidencing and securing the
Existing Mortgage; and
               (v) Agreeing to the modifications to the transfer provisions of
the Existing Mortgage to allow transfers of interests in Columbia Equity Trust,
Inc. (the “REIT”) or in Columbia Equity, LP (the “OP”) or in any person or
entity owning a direct or indirect interest in the REIT or the OP.
     For purposes of this Agreement, the “Lender Approval Period” shall expire
on the earlier of (x) the date of receipt of Lender Approval and (y) 5:00 p.m.
New York time on September 19, 2005 (the “Outside Date”). Purchaser will
cooperate in all respects with Seller in seeking the Lender Approval, including
but not limited to submission by Purchaser to Lender of all financial and
background information requested by Lender. Purchaser agrees to pay an
assumption fee required by the Lender (up to $86,500.00) and all other
reasonable fees and expenses of Lender and Lender’s counsel in connection with
such assumption, and to reimburse Seller at the Closing for all escrow amounts
deposited in connection with the Existing Mortgage. Purchaser agrees to

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use commercially reasonable efforts to deliver to Lender, with a copy to Seller,
no later than five (5) business days after the Effective Date, a fully completed
application seeking Lender Approval together with any required application fees.
     In the event Seller has not obtained the Lender Approval on or before the
end of the Lender Approval Period, this Agreement shall terminate, and provided
Purchaser timely complied with its obligations under the preceding paragraph and
the Lender Approval has not been received on or before the Outside Date through
no fault of Purchaser, the entire Deposit shall be refunded to Purchaser, and
thereafter the parties shall have no obligations or liabilities to each other,
other than the Surviving Obligations.
     3.3 Title and Survey.
               (a) Prior to the Effective Date, Seller delivered to Purchaser a
copy of Seller’s existing title policy (the “Existing Title Policy”), together
with copy of a survey for the Property dated December 12, 2003, prepared by
Hayden Frye and Associates, Inc. (the “Existing Survey”). Seller has ordered an
updated title insurance report from the Title Company (the “Title Commitment”)
and requested that the Title Company provide Purchaser with a copy of the Title
Commitment and legible copies of any covenants, easements and other items listed
as title exceptions therein. Purchaser at Purchaser’s option, cost and expense
may obtain an update of the Existing Survey (the “Survey Update”). In the event
any exceptions, appear in the Existing Title Policy and/or the Existing Survey
that are unacceptable to Purchaser, Purchaser shall, prior to the expiration of
the Inspection Period (time being of the essence) (the “Existing Title Approval
Period”), notify Seller in writing of such facts, the reasons therefor and the
curative steps that would remove the basis for Purchaser’s objections (the
“Purchaser’s Existing Title Objections”). In the event (i) the Survey Update
shows any matter affecting the Property that is unacceptable to Purchaser or
(ii) any exceptions appear in the Title Commitment that are unacceptable to
Purchaser, Purchaser shall, no later than two (2) business days following
receipt of the Title Commitment and the Survey Update (time being of the
essence) but in no event later than August 19, 2005 (the “Title Approval
Period”), notify Seller in writing of such facts, the reasons therefor and the
curative steps that would remove the basis for Purchaser’s objection
(“Purchaser’s Title Objections”). Upon the expiration of the Existing Title
Approval Period and the Title Approval Period, except for Purchaser’s Existing
Title Objections and Purchaser’s Title Objections, Purchaser shall be deemed to
have accepted the form and substance of the Existing Survey and Survey Update,
all matters shown or addressed thereon, and all items shown or addressed in the
Existing Title Policy and the Title Commitment (collectively, the “Approved
Title Matters”).
               (b) Seller shall have no obligation to take any steps or bring
any action or proceeding or otherwise to incur any effort or expense whatsoever
to eliminate or modify any of Purchaser’s Existing Title Objections or
Purchaser’s Title Objections, but the foregoing shall not permit Seller to
refuse to pay off at Closing, to the extent of the monies payable at Closing,
mortgages on the Property of which Seller has actual knowledge, other than the
Existing Mortgage, and pay off or bond mechanic’s liens for work requested by
Seller (as opposed to tenants). Seller, however, at its sole option, may attempt
to eliminate or modify all or a portion of Purchaser’s Existing Title Objections
or Purchaser’s Title Objections to Purchaser’s reasonable satisfaction prior to
the Closing Date or within such additional period of time (up to thirty
(30) days in the aggregate thereafter), for which Seller shall have the right to
adjourn the

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Closing. In the event Seller is unable or unwilling to attempt to eliminate or
modify all of Purchaser’s Existing Title Objections or Purchaser’s Title
Objections to the reasonable satisfaction of Purchaser, Seller shall provide
written notice to Purchaser of those objections Seller will not attempt or be
able to cure (“Seller’s Notice”). Thereafter, Purchaser shall have the option
(as its sole and exclusive remedy) to (x) terminate this Agreement by delivering
written notice thereof to Seller by the earlier to occur of (i) the Closing Date
(as the same may be adjourned as provided in this Agreement), or (ii) five
(5) business days after Seller’s Notice, time being of the essence to the giving
of Purchaser’s notice or (y) proceed to Closing without adjustment to the
Purchase Price. If Purchaser shall duly give such termination notice, then this
Agreement shall thereupon terminate, and upon such termination, Purchaser shall
be entitled to the return of the Deposit, and neither party shall have any
obligation hereunder other than the Surviving Obligations.
               (c) The term “Permitted Encumbrances” as used herein includes:
(i) all of the Approved Title Matters, (ii) any Purchaser’s Existing Title
Objection and/or Purchaser’s Title Objection that Seller states it will not
attempt to cure in Seller’s Notice and that remain uncured at the earlier to
occur of (A) Closing (as the same may be adjourned as provided in this
Agreement) or (B) five (5) business days after Seller’s provision of the
Seller’s Notice, (iii) the rights and interests of parties claiming under the
Leases, (iv) liens for real property taxes, assessments, and water and sewer
meter charges which are not due and payable as of the Closing Date and/or which
are apportioned pursuant to this Agreement, and (v) the Existing Mortgage and
documents of record in connection therewith.
               (d) Purchaser may, at or prior to Closing, notify Seller in
writing of any objection to title (i) raised by the Title Company between the
expiration of the Title Approval Period and the Closing and (ii) not disclosed
by the Title Company or otherwise known to Purchaser prior to the expiration of
the Title Approval Period; provided that Purchaser must notify Seller of such
new objection to title within three (3) business days of being made aware of the
existence of such matter. If Purchaser sends such notice to Seller, Purchaser
and Seller shall have the same rights and obligations with respect to such
notice as apply to Purchaser’s Title Objections under Sections 3.3(b) and
(c) hereof.
     3.4 Purchaser’s Representations and Warranties. Purchaser represents and
warrants to Seller that:
               (a) Purchaser is a corporation, duly organized and in good
standing under the laws of the State of Maryland and has the power to enter into
this Agreement and to execute and deliver this Agreement and to perform all
duties and obligations imposed upon it hereunder, and Purchaser has obtained all
necessary corporate, partnership or other organizational authorizations required
in connection with the execution, delivery and performance of this Agreement and
the transaction contemplated herein and has obtained the consent of all entities
and parties (whether private or governmental) necessary to bind Purchaser to
this Agreement;
               (b) neither the execution nor the delivery of this Agreement, nor
the consummation of the purchase and sale transaction contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions of this Agreement
conflict with or will result in the breach of any of the terms, conditions or
provisions of any agreement or instrument to which Purchaser, or any
shareholder, partner or related entity or affiliate of Purchaser, is a party or
by

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which Purchaser, any shareholder, partner or related entity or affiliate of
Purchaser, or any of Purchaser’s assets is bound;
               (c) with respect to each source of funds to be used by Purchaser
to purchase the Property (respectively, the “Source”), at least one of the
following statements shall be accurate as of the Closing Date: (i) the Source
does not include the assets of (A) an “employee benefit plan” as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), which is subject to Title I of ERISA, or (B) a “plan” as defined in
Section 4975(a) of the Internal Revenue Code of 1986, as amended (“Code”), or
(ii) the Source includes the assets of (A) an “employee benefit plan” as defined
in Section 3(3) of ERISA or (B) a “plan” as defined in Section 4975 of the Code
(each of which has been identified to the Seller in writing pursuant to this
Section 3.4 at least ten (10) business days prior to the Closing Date), but the
use of such Source to purchase the Property will not result in a nonexempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.
The Source is in compliance with the Orders (as hereinafter defined);
               (d) Purchaser has not received written notice that Purchaser:

  (1)   is listed on the Specially Designated Nationals and Blocked Persons List
maintained by the Office of Foreign Asset Control, Department of the Treasury
(“OFAC”) pursuant to any enabling legislation or other Executive Orders in
respect thereof (the Order and such other rules, regulations, legislation, or
orders are collectively called the “Orders”) and/or on any other list of
terrorists or terrorist organizations maintained pursuant to any of the rules
and regulations of OFAC or pursuant to any other applicable Orders (such lists
are collectively referred to as the “Lists”);     (2)   is owned or controlled
by, nor acts for or on behalf of, any Person on the Lists or any other Person
who has been determined by competent authority to be subject to the prohibitions
contained in the Orders;

If Purchaser is notified in writing that it has become listed on the Lists (a
“Triggering Event”), Purchaser shall immediately notify Seller, but in no event
later than five (5) business days after the occurrence of the Triggering Event.
In the event of a Triggering Event, Seller may terminate this Agreement upon
written notice to Purchaser, whereupon the Deposit, subject to compliance with
applicable governmental regulations, shall be retained by Seller, and neither
party shall have any further obligation hereunder except for the Surviving
Obligations. At Seller’s option, Purchaser shall have ten (10) business days
after receipt of Seller’s notice to remove such party from any interest in
Purchaser.
The Purchaser’s representations and warranties set forth in this Section 3.4
shall survive the Closing or termination of this Agreement. As a condition
precedent to Seller’s obligation to close the purchase and sale transaction
contemplated in this Agreement, Purchaser’s representations and warranties
contained herein must remain and be true and correct as of the Closing Date.
Prior to the Closing Date, Purchaser shall notify Seller in writing of any
facts,

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conditions or circumstances which render any of the representations and
warranties set forth in this Section 3.4 in any way inaccurate, incomplete,
incorrect or misleading.
     3.5 Seller’s Representations and Warranties.
     3.5.1 Seller represents and warrants to Purchaser that:
               (a) it has the full right, power, and authority to enter into,
execute and deliver this Agreement, and, subject to Section 3.2(c), to perform
all duties and obligations imposed on it under this Agreement, except to the
limited extent, if any, specifically and expressly set forth in this Agreement
and Seller has obtained all necessary corporate, partnership or other
organizational authorizations required in connection with the execution,
delivery and performance of this Agreement and the transaction contemplated
herein and, subject to Section 3.2(c), has obtained the consent of all entities
and parties (whether private or governmental) necessary to bind Seller to this
Agreement;
               (b) subject to Section 3.2(c), neither the execution nor the
delivery of this Agreement, nor the consummation of the purchase and sale
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement conflict with or will result in the breach of any
of the terms, conditions, or provisions of any agreement or instrument to which
Seller, or any shareholder, partner or related entity or affiliate of Seller, is
a party or by which Seller, any shareholder, partner or related entity or
affiliate of Seller, or any of Seller’s assets is bound;
               (c) the Rent Roll delivered to Purchaser in accordance with
Schedule 1 is accurate in all material respects as of the date thereon, there
are no security deposits other than those set forth on the Rent Roll, and no
tenant has been given free rent, any concession in the payment of rent or any
abatement in the payment of rent, except as set forth in the Rent Roll;
               (d) the list of Operating Contracts to be provided to Purchaser
will be complete and accurate in all material respects as of the date thereon,
and Seller has not received any written notice of Seller’s default under such
Operating Contracts which remains uncured;
               (e) the Leases, or copies thereof, provided or otherwise made
available to Purchaser are true and complete in all material respects;
               (f) except as set forth in Schedule 2, there are no agreements
with tenants or others providing for payment after the Closing by Seller of
tenant improvement or similar allowances;
               (g) to Seller’s knowledge, there is not now pending any action,
suit, or proceeding (including, but not limited to, condemnation or similar
proceedings) before any court or governmental agency that would adversely affect
the Property, or the operation thereof (except those actions or proceedings that
are covered by Seller’s liability insurance coverage and or landlord/tenant
matters is the ordinary course of business);
               (h) to Seller’s knowledge, Seller has not received written notice
that the Property or the use thereof violates any governmental law or regulation
that remains uncured and that would have a materially adverse effect on the use
and operation of the Property;

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               (i) to Seller’s knowledge, neither Seller nor, to Seller’s
knowledge, any partner of Seller, is the subject of, or has received any written
notice of or threat that the Seller or any such partner has or will become the
subject of, any reorganization, liquidation, dissolution, receivership or other
action or proceeding under the United States Bankruptcy Code, 11 U.S.C. §§ 101,
et seq., or any other federal, state or local laws affecting the rights of
debtors and/or creditors generally, whether voluntary or involuntary and
including, without limitation, proceedings to set aside or avoid any transfer or
any interest in property or obligations, whether denominated as a fraudulent
conveyance, preferential transfer or otherwise, or to recover the value thereof
or to charge, encumber or impose a lien thereon;
               (j) Seller is not a “foreign person” within the meaning of
Section 1445 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder;
               (k) Seller has no employees and no pension plans or employee
benefit plans;
               (l) except as set forth on Schedule 3, there are no agreements
providing for payment after the Closing by Seller of leasing commissions or fees
with respect to procuring tenants for the Property; and
               (m) Robert Lay and Robert Bergman (“Lay” and “Bergman”) are the
two persons within Seller’s asset management organization who have primary
responsibility within such organization for oversight of the operation and
management of the Property.
     3.5.2 The Seller’s representations and warranties set forth in
Section 3.5.1 shall survive the Closing for a period of one hundred eighty
(180) days (the “Survival Period”). If any Leases or Operating Contracts which
have been exhibited to Purchaser or its representatives contain provisions that
are inconsistent with the representations set forth in Section 3.5(c), (d),
(e) and (f) above, such representations and warranties shall be deemed modified
to the extent necessary to eliminate such inconsistency and to conform such
representations and warranties to the provisions of the Leases and Operating
Contracts. As a condition precedent to Purchaser’s obligation to close the
purchase and sale transaction contemplated in this Agreement, Seller’s
representations and warranties contained herein must remain and be true and
correct in all material respects as of the Closing Date, unless such
representations and warranties have changed by reason of facts or circumstances
which pursuant to the terms of this Agreement are permitted to have occurred
(e.g., the Seller entering into a new Operating Contract in accordance with this
Agreement, Seller terminating or entering into a new Lease in accordance with
this Agreement, tenant defaults, vacancies, etc.)
     3.5.3 Prior to the Closing Date, Seller shall notify Purchaser in writing
of any facts, conditions or circumstances which render any of the
representations and warranties set forth in Section 3.5.1 in any way inaccurate,
incomplete, incorrect or misleading. The parties agree that if on or prior to
Closing Purchaser becomes aware (either by way of Seller’s notice or otherwise)
that any representation or warranty of Seller is inaccurate, incomplete,
incorrect or misleading, and whether or not Purchaser elects to close the
transaction (as opposed to terminating this Agreement), Purchaser shall have no
claim against Seller in connection with a breach of such representation or
warranty and shall not look to Seller and/or Seller Related Parties (as
hereinafter defined) for any redress or relief thereof. The Purchaser may not
assert a claim against the Seller and/or Seller Related Parties if at the time
of the Closing the Purchaser had

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knowledge of such breach and nonetheless proceeded with the Closing. Purchaser
and Seller agree that if subsequent to the Closing Purchaser first becomes aware
that any representation or warranty of Seller is inaccurate, incomplete,
incorrect or misleading, Purchaser shall have no claim against Seller and/or
Seller Related Parties in connection with a breach of such representation or
warranty and shall not look to Seller and/or Seller Related Parties for any
redress or relief thereof unless (i) a claim is made by Purchaser against Seller
for breach of such representation or warranty before the expiration of the
Survival Period and (ii) Purchaser’s damages as a result of such breach are
reasonably estimated to aggregate at least $50,000.
     3.5.4 Anything in this Agreement to the contrary notwithstanding, the
maximum aggregate liability of the Seller for breaches of the representations
and warranties herein or the Seller’s Estoppel Certificate(s) (as hereinafter
defined) shall not exceed $350,000 (the “Maximum Amount”). At Closing, at
Seller’s option, Seller will either deliver to Purchaser a separate guaranty of
Seller’s parent, Sterling American Property IV L.P., for the Maximum Amount or
maintain such amount in (cash or letter of credit) a separate escrow with the
Escrow Agent for the duration of the Survival Period (or if longer, until the
resolution of the applicable claim). Purchaser and Seller agree that the words
“Seller’s knowledge” and words of similar import shall mean the current actual
knowledge of Lay and/or Bergman, without any independent investigation on their
part to determine the existence or absence of such facts, and shall not be
construed, by imputation or otherwise, to refer to the knowledge of Seller or
any affiliate of Seller, to any property manager, or to any other officer,
agent, manager, representative or employee of Seller or any affiliate thereof or
to impose upon Lay and Bergman any duty to investigate the matter to which such
actual knowledge, or the absence thereof, pertains.
     3.5.5 Notwithstanding anything in this Agreement to the contrary, any
liability of Seller to Purchaser under or in respect of this Agreement after the
Closing shall not exceed the Maximum Amount.
     3.6 Tenant Estoppel Certificates/ No Bankruptcy of Major Tenants.
               (a) Seller agrees subsequent to the expiration of the Inspection
Period to deliver to all tenants of the Property a request for an estoppel
certificate in the form of Exhibit F attached hereto. The parties agree that,
subject to the provisions of subparagraph (b) below, it shall be a condition to
Purchaser’s obligation to close title under this Agreement that an estoppel
certificate either substantially in the form of Exhibit F or in the form
required by a tenant’s Lease (a “Tenant Estoppel”), dated not earlier than
thirty (30) days prior to the initially scheduled Closing Date be delivered to
Purchaser, from tenants occupying not less than one hundred percent (100%) of
the occupied space in the Property (including Northrop Grumman and Patten Wornom
Hatten (the “Major Tenants”)), no later than five (5) days before Closing.
Seller agrees to use good faith efforts to obtain such Tenant Estoppels,
provided however, Seller shall not be obligated to expend any funds in order to
do so. Notwithstanding the foregoing, if at Closing Seller is unable or fails to
deliver such Tenant Estoppels, Seller may execute and deliver to Purchaser, at
Closing, its own certificate with respect to up to twenty-five (25) percent (but
not for the Major Tenants) of the one hundred percent (100%) of tenants
occupying space, from whom estoppel certificates were not received and whose
Leases are in full force and effect (substantially in the form of Exhibit F or
in the form required by a tenant’s Lease, appropriately modified to reflect that
they are certificates of Seller and made to Seller’s knowledge;

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hereinafter, the “Seller’s Estoppel Certificate”) and the statements of Seller
contained therein shall survive the Closing until the earlier of (a) 180 days
after Closing, and (b) the date Purchaser obtains an estoppel certificate from a
tenant for whom Seller delivered a Seller’s Estoppel Certificate. In the event
that any representation or warranty of Seller was confirmed in a Tenant
Estoppel, notwithstanding anything to the contrary set forth in this Agreement,
such Seller representation or warranty shall not survive Closing.
               (b) The parties agree that each Tenant Estoppel containing
non-material exceptions, qualifications or modifications shall be deemed to be
an acceptable estoppel certificate for purposes of this Section 3.6. In the
event a Tenant Estoppel contains a material exception or qualification or
alleges a material default by Seller (a “Material Default”), Purchaser’s sole
and exclusive remedy shall be to terminate this Agreement by delivering notice
thereof in writing to Seller, on the earlier of two (2) business days after the
date of delivery to Purchaser of a Tenant Estoppel alleging a Material Default
and the Closing Date (the “Estoppel Termination Notice”), time being of the
essence as to the giving of such notice. If Purchaser shall timely give the
Estoppel Termination Notice, then subject to Seller’s option set forth below,
this Agreement shall terminate, and upon such termination, Purchaser shall be
entitled to the return of the Deposit, and neither party shall have any
obligation hereunder other than the Surviving Obligations. If Purchaser shall
have timely delivered the Estoppel Termination Notice to Seller, Seller may, at
its sole option, on or before the Closing Date, but not with respect to the
Major Tenants, either (i) deliver to Purchaser a Seller’s Estoppel Certificate
without the allegations of the Material Default, and the statements of Seller
contained therein shall survive the Closing until the earlier of (x) 180 days
after Closing, and (y) the date Purchaser obtains an estoppel certificate from
such tenant for whom Seller delivered Seller’s Estoppel Certificate, or
(ii) indemnify Purchaser for any alleged Material Default, which indemnity shall
survive Closing for a period of one hundred eighty (180) days unless on
expiration of such one hundred eighty (180) day period there is an action
pending with respect to the subject matter of the Material Default. If Seller
shall duly deliver such Seller Estoppel(s) or indemnity with respect to any
space tenants, Purchaser’s notice of termination shall be void and this
Agreement shall continue in full force and effect and Seller shall be deemed to
have delivered to Purchaser Tenant Estoppels in full compliance with this
Section 3.6. If Purchaser shall not have given timely the Estoppel Termination
Notice, time being of the essence as to the giving of such notice, Purchaser
shall be deemed for all purposes to be satisfied with the form and substance of
each Tenant Estoppel and shall have no further right to object thereto or to
terminate this Agreement based on the response or lack thereof with respect to
the Tenant Estoppels.
               (c) The parties agree that it shall be a condition to Purchaser’s
obligation to close under this Agreement that at Closing the leases of the Major
Tenants shall be in full force and effect and neither Major Tenant shall have
(i) made a general assignment for the benefit of creditors, (ii) filed any
voluntary petition in bankruptcy or suffered the filing of any involuntary
petition by creditors, (iii) suffered the appointment of a receiver to take
possession of all, or substantially all, of its assets, (iv) suffered the
attachment or other judicial seizure of all, or substantially all, of its
assets, (v) admitted in writing its inability to pay its debts as they come due
or (vi) made an offer of settlement, extension or composition to its creditors
generally.

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SECTION 4.
ACCEPTANCE OF PROPERTY
     4.1 “As Is”. Purchaser agrees that, prior to the end of the Inspection
Period, Purchaser or its duly authorized agent will have examined and
investigated to Purchaser’s full satisfaction the physical, economic and legal
condition of the Property, and made all other inquiries Purchaser deemed
necessary in connection with the transaction herein contemplated. Purchaser is
satisfied to purchase the Property in its “as is” condition as of the Effective
Date, reasonable wear and tear from the Effective Date excepted. Any
information, data, schedules, photographs, surveys, set-ups, representations or
other materials furnished to or obtained by Purchaser were for preliminary
purposes only and are superseded by this Agreement. Purchaser has not relied
thereon in executing this Agreement. Except as expressly set forth in this
Agreement, no representations, warranties or agreements of any kind whatsoever
have been made by Seller in regard to the physical or operating condition of the
Property, the condition of Seller’s title thereto, freedom from defects, latent
or patent, the income or profit to be derived from the Property, the expenses of
operation and maintenance thereof, the present or prospective rental income
therefrom, or any other matter or thing affecting or relating to the whole or
any part of the Property, and no representation, covenant or warranty shall
survive the Closing, other than the Surviving Obligations. In arriving at its
decision to purchase the Property, Purchaser did not rely upon any statements by
Seller, Seller’s agents or employees or anyone else acting or purporting to act
on Seller’s behalf, except as expressly set forth in this Agreement. Purchaser
shall rely exclusively on its own independent investigation and evaluation of
every aspect of the Property and not on any materials supplied by Seller, except
for Seller’s representations and warranties contained in this Agreement.
Purchaser expressly disclaims any intent to rely on any such materials provided
to it by Seller in connection with its inspection and agrees that it shall rely
solely on its own independently developed or verified information, except for
Seller’s representations and warranties contained in this Agreement. Purchaser
acknowledges and agrees that the Property is to be acquired subject to all notes
or notices of violations of law or municipal ordinances, orders or requirements
noted in or issued by any governmental authority having jurisdiction thereof
against or affecting the Property.
     4.2 Except as expressly set forth in this Agreement to the contrary,
Purchaser releases Seller, any person, entity or party related to or affiliated
with Seller (the “Seller Related Parties”) and their respective successors and
assigns from and against any and all claims which Purchaser or any person,
entity or any party related to or affiliated with Purchaser (each, a “Purchaser
Related Party”) has or may have arising from or related to any matter or thing
related to or in connection with the Property, including the condition of the
Property at any time, before or after the Closing, including without limitation,
the presence of any hazardous materials, including but not limited to mold, the
documents and information referred to in this Agreement, the leases and the
tenants thereunder, any construction defects, errors or omissions in the design
or construction and any environmental conditions and, except as expressly set
forth in this Agreement to the contrary, neither Purchaser nor any Purchaser
Related Party shall look to Seller, the Seller Related Parties or their
respective successors and assigns in connection with the foregoing for any
redress or relief. This release shall be given full force and effect according
to each of its express terms and provisions, including those relating to unknown
and unsuspected claims, damages and causes of action. The provisions of this
Section 4.2 shall survive the termination of this Agreement or the Closing Date
and shall not be deemed to have merged into any of the documents executed or
delivered at the Closing. To the extent required to be operative, the

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disclaimers and warranties contained herein are “conspicuous” disclaimers for
purposes of any applicable law, rule, regulation or order.
SECTION 5.
CLOSING
     5.1 Closing. The closing of the purchase and sale transaction contemplated
herein (the “Closing) shall take place through an escrow established with the
Title Company at 10:00 a.m. New York time on the date which is five (5) business
days after the receipt of Lender Approval (the “Closing Date”, as the same may
be adjourned as provided in this Agreement), provided however, Purchaser shall
have the right to adjourn the Closing once for a period of up to thirty
(30) days (but not beyond the expiration of Lender Approval) by giving Seller
written notice of its intention to do so no later than three (3) business days
prior to the initial Closing Date (such written notice to set forth as the
adjourned Closing Date), and in order to be effective, such notice must be
accompanied by an additional Deposit of Three Hundred Thousand Dollars
($300,000.00) payable to the order of the Escrow Agent. Except as expressly
provided in this Section 5.1, Purchaser shall have no other right to adjourn the
Closing.
     5.2 Possession. Possession of the Property shall be delivered to Purchaser
at the Closing, subject to the Permitted Encumbrances.
     5.3 Proration. All rents, other amounts payable by the tenants under the
Leases, utilities, water and sewer meter charges and all other operating
expenses with respect to the Property for the month in which the Closing occurs,
and real estate taxes and other assessments with respect to the Property for the
tax year in which the Closing occurs, shall be prorated as of 11:59 p.m. New
York time on the day before the Closing Date with Purchaser receiving the
benefits and burdens of ownership on the Closing Date, provided however, if the
funds representing the balance of the Purchase Price have not been received by
Seller or Seller’s lender by 2:00 p.m. New York time on the Closing Date, all
prorations shall be recalculated as of the next business day.
               (a) If the Closing shall occur before rents and all other amounts
payable by the tenants under the Leases and all other income from the Property
have actually been paid through the month in which the Closing occurs (it being
agreed that Seller is entitled to all arrears in rent), the apportionment of
such rents and other amounts and other income shall be upon the basis of such
rents, other amounts and other income actually received by Seller. Subsequent to
the Closing, if any such rents, other amounts and other income are actually
received by Purchaser from the tenants owing such amounts, all such amounts
shall be applied first to the month in which the Closing occurs, then to rents
due to Purchaser, and the balance shall be immediately paid by Purchaser to
Seller. Purchaser shall make a good faith effort and attempt to collect any such
rents and other amounts and other income not apportioned at the Closing for the
benefit of Seller; however, Purchaser shall not be required to expend any
substantial funds or institute any litigation in its collection efforts. Nothing
in this Agreement shall restrict Seller’s right to collect delinquent rents
directly from a tenant by any legal means, and Seller shall be entitled to keep
any such rents or other damages so collected, provided however, in no event
shall Seller be entitled after the Closing to institute any litigation in its
collection efforts. At Closing, prepaid rents and refundable security deposits
in the possession or control of Seller on Closing (together with any interest
accrued thereon only if interest is specifically required to be paid thereon
under applicable law or under the terms of a specific

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Lease) at Seller’s sole option shall either be (i) transferred to Purchaser at
Closing and not subject to adjustment, or (ii) adjusted by way of a credit in
favor of Purchaser. With respect to any security deposits held by Seller at
Closing in the form of letters of credit that are not transferable by Seller as
landlord, Seller shall request that the applicable Tenants deliver new letters
of credit (“New Letters of Credit”), issued in favor of Purchaser by a date not
later than the Closing, but Seller shall not have any liability for the failure
of such Tenants to so furnish New Letters of Credit and the failure of such
Tenants to furnish New Letters of Credit shall not affect the obligations of
Purchaser to proceed with the Closing. With respect to any letters of credit not
transferable by Seller as landlord and for which New Letters of Credit are not
issued as of Closing, Seller shall, until a New Letter of Credit is issued in
favor of Purchaser, take all reasonable action, as directed by Purchaser and
without obligation to incur any expenses which is not advanced by Purchaser, in
connection with the presentment of such letters of credit for payment as
permitted under the terms of the applicable Lease and in consideration of
Seller’s agreement as aforesaid, Purchaser shall indemnify and hold harmless
Seller for liability arising out of or resulting from Seller’s actions relating
to such letters of credit after the Closing, which obligation shall survive the
Closing.
               (b) (1) If the Closing shall occur before the tax rate or the
assessed valuation of the Property is fixed for the then current year, the
apportionment of taxes and assessments shall be upon the basis of the tax rate
for the preceding year applied to the latest assessed valuation, with a further
reconciliation to be made when the final rate or valuation rate is received.
                    (2) If any certiorari or other proceedings for the reduction
of real estate taxes are pending at the Closing Date with respect to the tax
year in which the Closing occurs or any tax year prior thereto, Seller shall
continue the prosecution of such action. Any tax refund resulting from such
proceeding, net of Seller’s costs of prosecuting the same, and after deducting
any refunds required to be made to tenants pursuant to Leases, shall be
apportioned between Seller and Purchaser in the same proportion that real estate
taxes for such tax year are apportioned.
               (c) If the Closing shall occur before the actual amount of
utilities, water or sewer meter charges or other operating expenses with respect
to the Property for the month in which the Closing occurs are determined, the
apportionment of such utilities, water or sewer meter charges or other operating
expenses shall be upon the basis of an estimate by Seller of such utilities,
water or sewer meter charges or other operating expenses for such month.
Subsequent to the Closing, when the actual amount of such utilities, water or
sewer meter charges or other operating expenses with respect to the Property for
the month in which the Closing occurs are determined, the parties agree to
adjust the proration of such utilities, water or sewer meter charges or other
operating expenses and, if necessary, to refund or repay such sums as shall be
necessary to effect such adjustment.
               (d) If Leases contain obligations (“ Lease Obligations”) on the
part of the tenants for: (i) CPI or similar adjustments, (ii) percentage rents,
(iii) escalation payments for taxes, labor or operations, and/or (iv) other
expenses including, without limitation, common area maintenance or any other
operating cost pass-throughs or retroactive charges payable by tenants which
have accrued as of the Closing Date but are not then due and payable, the amount
of such Lease Obligations shall be prorated as of the Closing Date and paid and
adjusted between Seller and Purchaser when the actual amount of such Lease
Obligations with respect to the Property is

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determined and such Lease Obligations have been received by Purchaser from such
tenant or tenants.
               (e) Reletting Expenses in accordance with Section 8.2 hereof and
Existing Mortgage escrows.
The agreements of Seller and Purchaser set forth in this Section 5.3 shall
survive the Closing. All prorations shall be completed and finalized no later
than March 31, 2006.
     5.4 Closing Costs. Purchaser shall pay, on the Closing Date, the title
insurance premium for the owner’s policy, Lender’s policies, and any
endorsements thereto, all reasonable fees and costs required and incurred by the
Lender in connection with the assumption by Purchaser of the Existing Mortgage,
all survey charges, all recording and filing charges and fees to record the
documents evidencing the conveyance of the Property (other than grantor’s tax),
and all other costs and charges of the closing and consummation of the purchase
and sale transaction contemplated in this Agreement as customarily charged to
and payable by a purchaser in such transactions in the location in which the
Land is situate (including one-half of the escrow charges of the Title Company).
Seller shall pay, on the Closing Date, the cost of the grantor’s tax, costs and
charges of the closing and consummation of the purchase and sale transaction
contemplated in this Agreement as customarily charged to and payable by a seller
in such transactions in the location in which the Land is situate (including
one-half of the escrow charges of the Title Company). Notwithstanding the
foregoing, each party shall pay its own attorneys’ fees and the fees of any
accountants and/or advisors incurred in connection with the transaction
contemplated in this Agreement.
     5.5 Seller’s Obligations at the Closing. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser the following:
               (a) Evidence of Authority. Such organizational and authorizing
documents of Seller as shall be reasonably required by the Title Company to
evidence Seller’s authority to consummate the transactions contemplated by this
Agreement.
               (b) Deed. A duly executed and acknowledged Deed conveying to
Purchaser the Land and Improvements subject only to the Permitted Encumbrances,
in the form of Exhibit B attached hereto, sufficient to enable the Title Company
to issue its standard form owner’s policy to Purchaser, at Purchaser’s expense,
insuring fee simple title to the Land and Improvements, subject only to the
Permitted Encumbrances. Seller agrees to execute and deliver to the Title
Company such customary certifications as are required by the Title Company in
connection with the deletion or insurance over the standard printed exceptions
for mechanic’s liens, broker liens, judgments against similarly named parties,
and rights of tenants as tenants only. Purchaser shall be entitled to request
that the Title Company provide such endorsements (or amendments) to the title
policy as Purchaser may reasonably require, provided that (i) such endorsements
shall be issued at no cost to, and shall not impose any additional liability on,
Seller, (ii) Purchaser’s obligations under this Agreement shall not be
conditioned upon Purchaser’s ability to obtain such endorsements and, if
Purchaser is unable to obtain such endorsements, Purchaser shall nevertheless be
obligated to proceed to close the transaction contemplated by this Agreement
without reduction of or set off against the Purchase Price, and (iii) the
Closing shall not be delayed as a result of Purchaser’s request.

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               (c) Assignment. A duly executed and acknowledged counterpart
Assignment and Assumption of Operating Contracts, Warranties and Leases in the
form attached to this Agreement as Exhibit C (the “Assignment”), and a Bill of
Sale in the form attached hereto as Exhibit C-1 (the “Bill of Sale”).
               (d) FIRPTA Affidavit. A duly executed affidavit of Seller in form
attached hereto as Exhibit D certifying that Seller is not a “foreign person,”
as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and
in any applicable state laws for the state in which the Property is located.
               (e) Tenant Notices. Duly executed notice to tenants or lessees
under the Leases in form attached hereto as Exhibit E.
               (f) Original Documents. The originals of all Leases and Operating
Contracts in Seller’s Possession.
               (g) Transfer Tax Forms. All transfer tax and other similar tax
returns which Seller is required by law to execute and acknowledge and to
deliver, either individually or together with Purchaser, to any governmental
authority as a result of the sale, and if Seller is responsible for payment of
such taxes in accordance with this Agreement, checks made payable to the
appropriate governmental authority in the required amounts (unless Seller
authorizes the Title Company to deduct and pay such expenses out of monies
payable to Seller).
               (h) Rent Roll. An updated Rent Roll for the Property.
               (i) Escrow Direction. A confirmation to Escrow Agent confirming
the prorations and the Closing and directing that the Deposit and Purchase Price
is to be delivered to Seller (the “Escrow Direction”).
               (j) Records and Files. Records and files which are in Seller’s
Possession relating to the current operation and maintenance of the Property,
including, without limitation, current tax bills, current water, sewer, utility
and fuel bills, billing records for Tenants, repair and maintenance records and
the like which affect or relate to the Property. The parties agree to cooperate
so that, to the extent practical, deliveries of background records at or prior
to the Closing which Purchaser desires to have delivered to it will be
identified to the satisfaction of the parties at the Closing without actual
delivery at Closing, provided satisfactory arrangements for post-closing
delivery are made.
     5.6 Purchaser’s Obligations at the Closing. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller the following:
               (a) Purchase Price. The balance of the Purchase Price, plus or
minus other adjustments required under this Agreement, by wire transfer of
immediately available funds to Seller.
               (b) Evidence of Authority. Such organizational and authorizing
documents of Purchaser as shall be reasonably required by Seller and/or the
Title Company authorizing Purchaser’s acquisition of the Property pursuant to
this Agreement and the execution of this Agreement and any documents to be
executed by Purchaser at the Closing.

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               (c) Assignment. A duly executed and acknowledged counterpart
Assignment.
               (d) Escrow Direction. A duly executed counterpart of the Escrow
Direction.
               (e) Transfer Tax Forms. Duly executed and acknowledged transfer
tax forms described in Section 5.5(g).
     5.7 Property Management Agreement. At Closing, Seller will terminate its
management agreement for the Property.
SECTION 6.
RISK OF LOSS
     6.1 Condemnation. If, prior to Closing, (i) the whole or any part of the
Property or any interest in the Property is taken by condemnation or right of
eminent domain and (ii) such taking by condemnation or right of eminent domain
results in (A) the taking of all or any part of the Improvements, (B) the loss
of any parking spaces which causes the Property not to comply with applicable
zoning ordinances, (C) a permanent loss of any means of vehicular access to the
Property, or (D) an otherwise adverse and material effect on the value of the
Property, Purchaser may either at or prior to Closing (a) terminate this
Agreement, in which case Purchaser shall be entitled to the return of the
Deposit, and thereafter neither party shall have any rights or obligations under
this Agreement, other than the Surviving Obligations or (b) consummate the
Closing, in which latter event all of Seller’s assignable right, title and
interest in and to the award of the condemning authority shall be assigned to
Purchaser at the Closing and there shall be no reduction in the Purchase Price.
     6.2 Casualty. Except as otherwise provided in this Agreement, Seller
assumes all risks for damage to or injury occurring to the Property by fire,
storm, accident, or any other casualty or cause until the Closing has been
consummated. If before the Closing, the Property, or any part thereof, suffers
any damage from fire or other casualty which in Seller’s reasonable estimate
will require in excess of $750,000 to repair and restore, Seller will notify
Purchaser of such fact (the “Seller’s Casualty Notice”), and Purchaser may
terminate this Agreement by notice to the other party given within ten (10) days
following Seller’s Casualty Notice to Purchaser, in which case Purchaser shall
be entitled to the return of the Deposit, and thereafter neither party shall
have any rights or obligations under this Agreement, other than the Surviving
Obligations . If Purchaser does not terminate this Agreement, it shall remain in
full force and effect, Purchaser agrees that it will consummate the Closing and
accept the assignment of Seller’s right, title and interest in and to the net
proceeds (or rights under the policy) of any insurance covering such damage,
including any rent loss insurance for the period after the Closing (less an
amount equal to any expenses and costs incurred by Seller to collect or adjust
such insurance or to secure the Improvements or initiate repairs or restoration
of the Property, and any portion of such proceeds paid or to be paid on account
of the loss of rents or other income from the Property for the period prior to
and including the Closing Date shall be payable to Seller (collectively, “Seller
Expenses”), to the extent the amount of such net proceeds does not exceed the
Purchase Price, plus an amount equal to Seller’s deductible under its insurance
policy applicable to such casualty, and there shall be no reduction in the
Purchase Price or obligation of Seller to complete restoration. If prior to the
Closing, the Property, or any part thereof, suffers any such damage which will
in Seller’s reasonable estimate require less than $750,000 to repair or restore,

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Purchaser agrees that it will consummate the Closing and accept the assignment
of the net proceeds (or rights under the policy) of any insurance covering such
damage, including any rent loss insurance for the period after the Closing (less
Seller Expenses), to the extent the amount of such net proceeds does not exceed
the Purchase Price, plus an amount equal to Seller’s deductible under its
insurance policy applicable to such casualty, and there shall be no reduction in
the Purchase Price or obligation of Seller to complete restoration. Seller
agrees that from and after the date hereof and until the Closing Seller shall
carry all insurance coverage which it presently carries on the Property.
Seller’s existing liability and property insurance pertaining to the Property
shall be canceled as of the Closing Date, and Seller shall be entitled to
receive any premium refund due thereon.
     6.3 Uniform Vendor and Purchaser Risk Act. Purchaser and Seller each hereby
waives the Uniform Vendor and Purchaser Risk Act and agree that the provisions
of this Section 6 shall govern the respective rights and obligations of
Purchaser and Seller with respect to the subject matter of this Section 6.
SECTION 7.
DEFAULT
     7.1 Breach by Seller. In the event that Seller shall fail to close this
transaction because of Seller’s default in the performance of Seller’s
obligations under this Agreement, Purchaser, as Purchaser’s sole and exclusive
right and remedy, shall either: (1) terminate this Agreement and receive a
refund of the Deposit or (2) pursue the remedy of specific performance of
Seller’s obligations under this Agreement, provided that (i) any such suit for
specific performance must be filed within thirty (30) days after Purchaser first
becomes aware of the breach or default by Seller, (ii) Purchaser is not in
breach or default in the performance of its obligations under this Agreement,
and (iii) Purchaser has tendered the Purchase Price, less Purchaser’s good faith
reasonable estimate of proration credits that would be credited against the
Purchase Price, to the Seller in immediately available funds.
     7.2 Breach by Purchaser. In the event that Purchaser fails to consummate
the transaction contemplated by this Agreement, including delivery of the
additional deposit in accordance with Section 2.1 and Section 5.1, if Purchaser
elects to extend the Closing Date, this Agreement shall terminate and Seller
shall receive and retain the Deposit as liquidated damages (and not as a penalty
or forfeiture) and as Seller’s sole remedy and relief hereunder (except for the
Surviving Obligations). Seller and Purchaser acknowledge that the actual damages
to Seller which would result from such failure would be extremely difficult to
calculate or establish on the date hereof. In addition, Purchaser desires to
have a limitation put upon its potential liability to Seller in the event of
such failure by Purchaser. Seller and Purchaser specifically acknowledge and
agree, after negotiation between Seller and Purchaser, that the amount of the
Deposit constitutes reasonable compensation to Seller for such failure by
Purchaser and shall be disbursed to and retained by Seller as liquidated damages
in the event of such failure by Purchaser. None of the provisions of this
Section 7.2 shall limit, impair or affect any of Purchaser’s indemnities of
Seller or other Surviving Obligations as provided for elsewhere in this
Agreement.

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SECTION 8.
FUTURE OPERATIONS
     8.1 Maintenance and Contracts. From the Effective Date of this Agreement
until the Closing or earlier termination of this Agreement:
               (a) Seller will continue to operate the Property in the customary
and ordinary manner consistent with Seller’s current practices in effect as of
the Effective Date, ordinary wear and tear and casualties excepted; and
               (b) Seller will perform all of Seller’s material obligations
under the Contracts. Seller will not, without the prior written consent of
Purchaser (which consent will not be unreasonably withheld or delayed), modify,
enter into, or renew any Contract which cannot be canceled upon thirty (30) days
prior written notice.
     8.2 Leasing.
               (a) Between the Effective Date and the expiration of the
Inspection Period, Seller, in its sole and absolute discretion and without the
consent of Purchaser, shall be permitted to enter into any new Lease for space
in the Property which is presently vacant or which may become vacant prior to
the expiration of the Inspection Period. If Seller enters into such a new Lease,
Seller will provide Purchaser with written notice of such new Lease at least two
(2) business days prior to expiration of the Inspection Period. Between the
expiration of the Inspection Period and Closing, Seller shall not, without
Purchaser’s prior written consent, which consent shall not be unreasonably
withheld or delayed: (a) amend, renew or extend any Lease in any respect, unless
required by law or the terms of the existing lease; (b) grant a written Lease to
any tenant occupying space without a written lease; or (c) terminate any lease
or tenancy except by reason of a default by the tenant thereunder. Between the
expiration of the Inspection Period and Closing, Seller shall not permit
occupancy of, or enter into any new Lease for, space in the Property which is
presently vacant or which may hereafter become vacant without first giving
Purchaser written notice of the identity of the proposed tenant, together with
(a) a copy of the proposed Lease and a summary of the terms thereof in
reasonable detail and (b) a statement of the amount of the brokerage commission,
if any, payable in connection therewith and the terms of payment thereof. If
Purchaser approves such proposed Lease, Purchaser shall so notify Seller within
four (4) business days after receipt of Seller’s notice if such notice was
personally delivered to Purchaser, or within seven (7) business days after the
mailing of such notice by Seller to Purchaser, in which case Seller shall enter
into the proposed Lease, and the Reletting Expenses (as hereinafter defined)
shall be prorated in each case over the term of the lease and apportioned as of
the Closing and credited in favor of Seller at Closing. If Purchaser does not
approve such proposed Lease, provided such Lease was at market rates and
otherwise market terms, Seller shall be credited at Closing the rent and
additional rent that would have been payable under the proposed Lease, from the
date on which the tenant’s obligation to pay rent would have commenced if
Purchaser had not objected until the Closing, less the amount of the brokerage
commission specified in Seller’s notice and the reasonable cost of decoration or
other work required to be performed by the landlord under the terms of the
proposed lease to suit the premises to the tenant’s occupancy (the “Reletting
Expenses”), prorated in each case over the term of the proposed lease and
apportioned as of the Closing. In no event shall the amount so

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credited to Seller for the Reletting Expenses exceed the sums actually paid by
Seller on account thereof.
               (b) If any space is vacant at the time of Closing, Purchaser
shall accept the Property subject to such vacancy. From and after the expiration
of the Inspection Period, Seller shall not grant any concessions or rent
abatements for any period following the Closing without Purchaser’s prior
written consent. Subject to the provisions of Section 3.6(c), Seller does not
warrant that any particular Lease or tenancy will be in force or effect at the
Closing or that the tenants will have performed their obligations thereunder.
The termination of any Lease or tenancy prior to the Closing by reason of the
tenant’s default shall not affect the obligations of Purchaser under this
contract in any manner or entitle Purchaser to an abatement of or credit against
the Purchase Price or give rise to any other claim on the part of Purchaser.
SECTION 9.
MISCELLANEOUS
     9.1 Notices. All notices, demands and requests which may be given or which
are required to be given by either party to the other, and any exercise of a
right of termination provided by this Agreement, shall be in writing and shall
be deemed effective either: (a) on the date personally delivered to the address
below, as evidenced by written receipt therefor, whether or not actually
received by the person to whom addressed; (b) on the third (3rd) business day
after being sent, by certified or registered mail, postage prepaid, return
receipt requested, addressed to the intended recipient at the address specified
below; (c) on the first (1st) business day after being deposited into the
custody of a nationally recognized overnight delivery service such as Federal
Express Corporation, Airborne Express, or United Parcel Service, addressed to
such party at the address specified below; or (d) at the time of electronic
confirmation of receipt after being sent by facsimile to the following numbers.
For purposes of this Section 9.1, the addresses of the parties for all notices
are as follows (unless changed by similar notice in writing given by the
particular person whose address is to be changed):

     
If to Seller:
  c/o Sterling Advisors IV L.L.C.
 
  111 Great Neck Road
 
  Great Neck, NY 11021
 
  Attn: Richard A. Wilpon
 
  Telephone: (516) 504-2100
 
  Facsimile: (516) 504-2111
 
   
with a copy to:
  Schiff Hardin LLP
 
  623 Fifth Avenue
 
  New York, NY 10022
 
  Attn: Marina Rabinovich, Esq.
 
  Telephone: (212) 753-5000
 
  Facsimile: (212) 753-5044
 
   
If to Purchaser:
  Columbia Equity Trust, Inc.
 
  1750 H Street, NW
 
  Suite 500
 
  Washington, DC 20006

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  Attn: Clint Fisch
 
  Telephone: (202) 303-3073
 
  Facsimile: (202) 303-3088
 
   
with a copy to:
  Hunton & Williams LLP
 
  1900 K Street, NW
 
  Suite 1200
 
  Washington, DC 20006
 
  Attn: John M. Ratino
 
  Telephone: (202) 778-2221
 
  Facsimile: (202) 778-2201
 
   
If to Escrow Agent:
  Fidelity National Title Insurance Company
 
  2 Park Avenue
 
  New York, NY 10016
 
  Attn: Kenneth C. Cohen
 
  Telephone: (212) 845-3135
 
  Facsimile: (646) 742-0733

     The attorneys are authorized to give any notice specified in this Agreement
on behalf of their respective clients.
     9.2 Real Estate Commissions. Seller shall pay to CB Richard Ellis, Inc.
(hereinafter called “Agent”) a commission in the amount agreed on, if and when
payable in accordance with the terms of a separate agreement between Seller and
Agent. Except for Agent, neither Seller nor Purchaser has authorized any broker
or finder to act on Purchaser’s or Seller’s behalf in connection with the sale
and purchase hereunder and neither Seller nor Purchaser has dealt with any
broker or finder purporting to act on behalf of any other party. Purchaser
agrees to indemnify, defend, protect and hold harmless Seller from and against
any and all demands, claims, losses, damages, liabilities, costs or expenses of
any kind or character (including reasonable attorneys’ fees and charges) arising
out of or resulting from any agreement, arrangement or understanding alleged to
have been made by Purchaser or on Purchaser’s behalf with any broker or finder
in connection with this Agreement or the transaction contemplated hereby, other
than claims of Agent based on Agent’s agreement with the Seller. Seller agrees
to indemnify, defend, protect and hold harmless Purchaser from and against any
and all claims, losses, damages, liabilities, costs or expenses of any kind or
character, including reasonable attorneys’ fees and expenses, arising out of or
resulting from any agreement, arrangement or understanding alleged to have been
made by Seller or on Seller’s behalf with any broker or finder in connection
with this Agreement or the transaction contemplated hereby. Notwithstanding
anything to the contrary contained herein, this Section 9.2 shall survive the
Closing or any earlier termination of this Agreement.
     9.3 Entire Agreement. This Agreement embodies the entire agreement between
the parties relative to the subject matter hereof, and there are no oral or
written agreements between the parties, nor any representations made by either
party relative to the subject matter hereof, which are not expressly set forth
herein.

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     9.4 Amendment. This Agreement may be amended only by a written instrument
executed by the party or parties to be bound thereby.
     9.5 Headings. The captions and headings used in this Agreement are for
convenience only and do not in any way limit, amplify, or otherwise modify the
provisions of this Agreement.
     9.6 Time of Essence. Time is of the essence of this Agreement (other than
for Seller’s rights to adjourn the Closing as expressly provided in this
Agreement); however, if the final date of any period which is set out in any
provision of this Agreement falls on a Saturday, Sunday or legal holiday under
the laws of the United States, the State of New York, or the State in which the
Property is located, then, in such event, the time of such period shall be
extended to the next day which is not a Saturday, Sunday or legal holiday. As
used in this Agreement, the term “business day” means every day other than
Saturdays, Sundays, or other holidays on which banking institutions in New York
or the State in which the Property is located are closed.
     9.7 Successors and Assigns; Assignment. This Agreement shall bind and inure
to the benefit of Seller and Purchaser and their respective heirs, executors,
administrators, personal and legal representatives, successors and permitted
assigns. Purchaser shall not assign this Agreement or Purchaser’s rights under
this Agreement without the prior written consent of Seller, which consent may be
withheld in its sole and absolute discretion, provided however, subsequent to
the expiration of the Inspection Period, on not less than five (5) business days
prior written notice to Seller, Purchaser shall be entitled to assign this
Agreement to an affiliate (with such affiliate assuming the obligations of
Purchaser under this Agreement). Purchaser shall provide Seller with a true and
complete copy of such assignment and assumption promptly upon execution and
delivery thereof. No assignment of this Agreement or Purchaser’s rights
hereunder shall relieve Purchaser of its liabilities under this Agreement. This
Agreement is solely for the benefit of Seller and Purchaser; there are no third
party beneficiaries hereof. Any assignment of this Agreement in violation of the
foregoing provisions shall at Seller’s option be null and void.
     9.8 Invalid Provision. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable; this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of
this Agreement; and, the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by such illegal, invalid, or
unenforceable provision or by its severance from this Agreement.
     9.9 Attorneys’ Fees. In the event it becomes necessary for either party
hereto to file suit to enforce this Agreement or any provision contained herein,
the party prevailing in such suit shall be entitled to recover, in addition to
all other remedies or damages as provided herein, reasonable attorneys’ fees
incurred in such suit.
     9.10 Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts which, taken together, shall constitute collectively one
(1) agreement; in making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart with each party’s
signature.

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     9.11 Exhibits. The exhibits and schedules attached to this Agreement and
referred to herein are hereby incorporated into this Agreement by this reference
and made a part hereof for all purposes.
     9.12 Construction. Seller and Purchaser acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
     9.13 No Recordation. Seller and Purchaser hereby acknowledge that neither
this Agreement nor any memorandum or affidavit thereof shall be recorded of
public record in the county in which the Property is located or any other
county. Should Purchaser ever record or attempt to record this Agreement, or a
memorandum or affidavit thereof, or any other similar document, then,
notwithstanding anything herein to the contrary, said recordation or attempt at
recordation shall constitute a default by Purchaser hereunder, and, in addition
to the other remedies provided for herein, Seller shall have the express right
to terminate this Agreement by filing a notice of said termination in the county
in which the Land is located.
     9.14 Merger Provision. Except as otherwise expressly provided herein, any
and all rights of action of Purchaser for any breach by Seller of any
representation, warranty or covenant contained in this Agreement shall merge
with the Deed and other instruments executed at Closing, shall terminate at
Closing, and shall not survive Closing.
     9.15 Jury Waiver. PURCHASER AND SELLER DO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, OR UNDER OR IN CONNECTION WITH THIS AGREEMENT,
THE DOCUMENTS DELIVERED BY PURCHASER OR BY SELLER AT CLOSING, OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ANY
ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THIS
AGREEMENT OR THE PROPERTY (INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND
OR CANCEL THIS AGREEMENT AND ANY CLAIMS OR DEFENSES ASSERTING THAT THIS
AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS
WAIVER IS A MATERIAL INDUCEMENT FOR SELLER TO ENTER INTO AND ACCEPT THIS
AGREEMENT AND THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING AND SHALL SURVIVE
THE CLOSING OR TERMINATION OF THIS AGREEMENT.
     9.16 No Personal Liability of Officers, Directors, Etc. of Seller.
Purchaser acknowledges that this Agreement is entered into by a limited
partnership as Seller and Purchaser agrees that no shareholder or individual
officer, partner, director, trustee, asset manager, employee, member, agent or
other representative of Seller shall have any personal liability under this
Agreement or any document executed in connection with the transactions
contemplated by this Agreement.
     9.17 Choice of Law; Submission to Jurisdiction. This Agreement shall be
governed by, and construed and interpreted in accordance with, the law of the
Commonwealth of Virginia. Any legal action, suit or proceeding in connection
with this Agreement or for enforcement of any

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judgment rendered in any such action, suit or proceeding may be brought in the
federal or state courts of the Commonwealth of Virginia, and, Purchaser hereby
irrevocably accepts and submits to the jurisdiction of the aforesaid courts in
personam, generally and unconditionally with respect to any such action, suit,
or proceeding for itself and in respect of its property.
     9.18 Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express prior consent of Seller, neither Purchaser nor any of
Purchaser’s employees, affiliates or agents shall solicit any of Seller’s
employees or any employees located at the Property. This Section 9.18 shall
constitute a Surviving Obligation.
     9.19 Access. Purchaser hereby agrees to retain all leases and lease related
documents (the “Lease Documents”) with respect to the Property and in effect on
or after the Seller’s acquisition of the Property; provided however, Purchaser
shall have no obligation to retain any Lease Documents entered into after
Closing. Purchaser shall cooperate fully, as and to the extent reasonably
requested by Seller and Seller Related Parties, in delivering and/or granting
access to Seller and/or Seller Related Parties of any of the Lease Documents
that Seller and/or Seller Related Parties may require in connection with any
accounting and/or tax audit with respect to Seller’s ownership and management of
the Property. Notwithstanding anything to the contrary herein, Purchaser shall
have no obligation to retain any of the Lease Documents after the date that is
three (3) years from the last day of the fiscal year to which such Lease
Document relates. In addition to the foregoing, after the Closing, Purchaser
agrees to allow Seller and its designated representatives, on prior written
notice and during business hours, reasonable access to the documents,
instruments, books and records for the Property dated prior to the date of
Closing (the “Records”). Seller and its designated representatives shall have
the right to make copies of the Records and the Lease Documents.
SECTION 10.
ESCROW PROVISIONS
     10.1 The Deposit shall be held in escrow by the Escrow Agent until the
earliest of (a) the Closing, on which date the Deposit shall be released to
Seller; (b) ten (10) days after the Escrow Agent shall have delivered to the
non-sending party a copy of the notice sent by Seller or Purchaser stating that
this Agreement has been terminated and that the party so notifying the Escrow
Agent is entitled to the Deposit, following which period the Deposit shall be
(i) delivered to Seller, in the case of a notice from Seller stating that Seller
is entitled to the Deposit, or (ii) delivered to Purchaser, in the case of a
notice from Purchaser stating that Purchaser is entitled to the Deposit;
provided, in each case, however, that within such ten (10) day period the Escrow
Agent does not receive either a notice containing contrary instructions from the
other party hereto or a court order restraining the release of all or any
portion of the Deposit; or (c) a joint notice executed by Seller and Purchaser
is received by the Escrow Agent, in which event the Escrow Agent shall release
the Deposit in accordance with the instructions therein contained. The Escrow
Agent shall reasonably promptly deliver a duplicate copy of any notice received
by it in its capacity as Escrow Agent to Seller and Purchaser. Notwithstanding
anything to the contrary set forth herein, if Purchaser advises Seller and the
Escrow Agent in accordance with Section 3.1 or 3.2 that Purchaser has elected to
terminate this Agreement, then Escrow Agent shall promptly return the Deposit to
Purchaser.

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     10.2 The Deposit shall be held by the Escrow Agent in a separate
interest-bearing money market or bank account. The Deposit may be invested on
behalf of Seller or Purchaser; provided that any direction to the Escrow Agent
for such investment shall be in writing and a completed, signed W-9 Form
accompanies it. The Escrow Agent is not to be held responsible for the loss of
principal or interest on any investment made pursuant to the aforesaid
instruction or in the redemption thereof. If the Closing occurs, the Deposit
shall be paid to Seller and applied to the Purchase Price. In the event that
there is no Closing hereunder and the Deposit is to be paid to Seller pursuant
to the terms of this Agreement, such payment shall be made to Seller, otherwise,
the Deposit shall be paid to Purchaser.
     10.3 In the event that (i) the Escrow Agent shall have received a notice
containing contrary instructions or a court order as provided for in
Section 10.1 hereof and within the time therein prescribed, or (ii) any other
disagreement or dispute shall arise between the parties hereto resulting in
adverse claims or demands being made for the Deposit, whether or not litigation
has been instituted, then and in any such event the Escrow Agent shall refuse to
comply with any claims or demands on it and continue to hold the Deposit until
the Escrow Agent receives either (a) a written notice signed by both Seller and
Purchaser directing the disposition of the Deposit, or (b) a final order of a
court of competent jurisdiction, entered in a proceeding in which Seller,
Purchaser and the Escrow Agent are named as parties, directing the disposition
of the Deposit, in either of which events the Escrow Agent shall then dispose of
the Deposit in accordance with said direction. The Escrow Agent shall not be or
become liable in any way to any person or entity for its refusal to comply with
any such claims or demands until and unless it has received a direction of the
nature described in (a) or (b) above. Upon the taking by the Escrow Agent of any
of the actions described in (a) and (b) above, the Escrow Agent shall be
released of and from all liability hereunder. Notwithstanding the foregoing
provisions of this Section 10.3, the Escrow Agent shall have the following right
in the circumstances described in subdivision (i) or (ii) above: (y) if the
Escrow Agent shall have received a written notice signed by either Seller or
Purchaser advising that litigation between Seller and Purchaser over entitlement
to the Deposit or any portion thereof has been commenced, the Escrow Agent may,
on written notice to Seller and Purchaser, deposit the Deposit with the clerk of
the court in which such litigation is pending, or (z) the Escrow Agent may, on
written notice to Seller and Purchaser, take such affirmative steps as it may,
at its option, elect in order to terminate its duties as escrow agent hereunder,
including, but not limited to, the deposit of the Deposit with a court of
competent jurisdiction and the commencement of an action in interpleader. Upon
the taking by Escrow Agent of either of the actions described in (y) or
(z) above, the Escrow Agent shall be released of and from all liability
hereunder except for any previous willful misconduct or gross negligence.
     10.4 The Escrow Agent shall not be liable for any error in judgment or for
any act done or omitted by it in good faith, or for any mistake of fact or law
and shall not incur any liability in acting upon any signature, notice, request,
waiver, consent, receipt or other paper or document in good faith believed by
the Escrow Agent to be genuine and is released and exculpated from all liability
hereunder except as aforesaid or for willful misconduct or gross negligence. The
sole responsibility of the Escrow Agent hereunder shall be to hold and release
the Deposit in accordance with the provisions of this Agreement. The Escrow
Agent shall be entitled to consult with counsel in connection with its duties
hereunder. The Escrow Agent has executed this Agreement solely to confirm that
it is holding and will hold the Deposit in escrow pursuant to the provisions of
this Section 10 and for no other purpose.

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          SELLER:    
 
        PATRICK HENRY ASSOCIATES L.P.    
 
       
By:
  SAP IV Patrick Henry NF GP L.L.C.,    
 
  its sole general partner    
 
       
 
  By: SAP IV manager, Inc.,    
 
            its manager    
 
       
By:
  /s/ Richard A. Wilpon    
 
       
 
       
Its:
  Senior Executive Vice President    
 
        PURCHASER:    
 
        COLUMBIA EQUITY TRUST, INC.,     a Maryland corporation    
 
       
By:
  /s/ Clinton Fisch    
 
       
 
       
Its:
  Director of Acquisitions    

The undersigned Escrow Agent hereby acknowledges receipt of the Deposit and a
copy of this Agreement, and agrees to hold and dispose of the Deposit in
accordance with the provisions of this Agreement.

          ESCROW AGENT:   Fidelity National Title Insurance Company  
 
  By:    
 
         
 
  Its:    
 
              Date of Execution     by Escrow Agent:
 
  _______, 2005

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SCHEDULE 1
ITEMS TO BE DELIVERED
TO THE EXTENT IN SELLER’S POSSESSION

a)   The last two years’ real estate tax bills;   b)   All utility invoices for
the three (3) most current months (electric, water, sewer and trash removal);  
c)   The last three (3) years operating statements;   d)   Delinquencies Report
(up to 90 days);   e)   Copies of the Leases (if too many, Purchaser may examine
Leases at the offices of the managing agent on prior notice);   f)   Copies of
Operating Contracts;   g)   A rent roll (the “Rent Roll”) identifying all leases
of space within the Property (the “Leases”) current as of a date not earlier
than thirty (30) days prior to the Effective Date;   h)   Existing Mortgage
documents.

 

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SCHEDULE 2
Tenant Improvements Allowances payable after Closing
None

 

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SCHEDULE 3
List of Brokerage Agreements providing for payment of leasing commissions after
Closing.
None

 

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EXHIBIT A
LEGAL DESCRIPTION OF LAND

 

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EXHIBIT B
DEED
SPECIAL WARRANTY DEED SUBJECT TO THE ASSUMPTION OF THE EXISTING DEBT

 

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EXHIBIT C
FORM OF ASSIGNMENT
ASSIGNMENT AND ASSUMPTION OF OPERATING CONTRACTS, WARRANTIES AND LEASES
                                              (“Assignor”), for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, has Granted, Sold, Assigned, Transferred, Conveyed, and Delivered
and by these presents does Grant, Sell, Assign, Transfer, Convey and Deliver
unto                                         , a                                
          (“Assignee”), all of Assignor’s rights, title, and interests in and to
the following items arising or used in connection with the improved property
situated on the land in the                      County, State of
                     more particularly described on Exhibit A attached hereto
and made a part hereof (hereinafter called the “Property”):
     (a) Any leases for space in the Property (the “Leases”), together with
refundable security and other deposits owned or held by Assignor pursuant to the
Leases, and any and all claims against tenants under the Leases for past due
rents or otherwise, which Lease security deposits and claims are described on
Exhibit B attached hereto;
     (b) The assignable service, maintenance, or management Agreements relating
to the ownership and operation of the Property (the “Operating Contracts”)
attached hereto as Exhibit C; and
     (c) Any assignable warranties and guaranties relating to the Property or
any portion thereof (collectively, the “Warranties”).
Assignor and Assignee hereby covenant and agree as follows:
     (i) Assignee accepts the aforesaid assignment and Assignee assumes and
agrees to be bound by and timely perform, observe, discharge, and otherwise
comply with each and every one of the agreements, duties, obligations, covenants
and undertakings upon the lessor’s part to be kept and performed under the
Leases and any obligations of Assignor under the Operating Contracts, from and
after the date hereof.
     (ii) Neither this Assignment nor any term, provision, or condition hereof
may be changed, amended or modified, and no obligation, duty or liability or any
party hereby may be released, discharged or waived, except in a writing signed
by all parties hereto. Except to the extent expressly set forth in this
Assignment, Seller has not made, does not make and specifically negates and
disclaims any representations, warranties, promises, covenants, agreements or
guaranties of any kind or character whatsoever, whether express or implied, oral
or written, past, present or future, of, as to, concerning or with respect to
the Property, Leases, Operating Contracts or Warranties.

 

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     IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment of
Operating Contracts, Warranties and Leases effective as of the
                     day of                                          ,2005.
Assignor:

         
 
    ,  
 
       
a
       

       
By:
       
Its:
         
Assignee:
     
 
    ,  
 
       
a
       
 
       
By:
       
Its:
       

 

 

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EXHIBIT C-1
BILL OF SALE
     Seller,                                         , a
                                        , in consideration of Ten and No/100
Dollars ($10.00), receipt of which is hereby acknowledged, does hereby sell,
assign, transfer and set over to Purchaser, the following described personal
property, to wit:
All of the furniture, fixtures, equipment, machines, apparatus, supplies and
personal property, of every nature and description, if any, now owned by Seller
and located in or on the real estate commonly known as
“                                        ”,                     County,
                    , which real estate is legally described on Exhibit “A”
attached hereto and made a part hereof, excepting therefrom the following:
(a) any fixtures, furniture, furnishings, equipment or personal property, if
any, of tenants occupying the improvements situated on the real estate; (b) any
fixtures, furniture, furnishings, equipment or personal property, if any, used
by the property manager at the real estate; and (c) fixtures, equipment, and
machines, if any, leased by Seller under any Agreements.
     This transfer is made without representation, warranty or guaranty by, or
recourse against, Seller of any kind whatsoever.
     IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be signed and
sealed in its name by its officers thereunto duly authorized this
                     day of                                        , 2005.
                                        
a                     corporation
By:                                         
Its:                                         
     [EXHIBIT “A” WILL BE LEGAL DESCRIPTION ATTACHED TO AGREEMENT]

 

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EXHIBIT D
FORM OF FIRPTA AFFIDAVIT
TRANSFEROR’S CERTIFICATION OF NON-FOREIGN STATUS
     To inform                                         , a
                                         (“Transferee”), that withholding of tax
under Section 1445 of the Internal Revenue Code of 1986, as amended
(collectively, the “Code”), will not be required for transfer of certain real
property to Transferee by                                         ,
(“Transferor”), the undersigned hereby certifies the following on behalf of
Transferor:
     1. Transferor is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Code and the Income Tax Regulations promulgated thereunder);
     2. Transferor’s U.S. taxpayer identification number is as follows:
                                        . Transferor is not a “disregarded
entity” as defined in 26 CFR Section 1:1445-2(b)(2)(iii).
     3. Transferor’s office address is as follows:
 
 
 
     Transferor understands that this Certification may be disclosed to the
Internal Revenue Service by Transferee and that any false statement contained
herein could be punished by fine, imprisonment, or both.
     Transferor understands that Transferee is relying on this Certification in
determining whether withholding is required upon said transfer.
     Under penalty of perjury I declare that I have examined this Certification
and to the best of my knowledge and belief it is true, correct and complete, and
I further declare that I have authority to sign this document on behalf of
Transferor.
Date:                                         , 2005
TRANSFEROR:

         
 
             
 
             
By:
       
 
       
Its:
       
 
       

 

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EXHIBIT E
FORM OF TENANT NOTICE
                                        , 2005

     
 
         
 
         
 
         

     This is to notify you that                     , a                     
(“Seller”), has sold its interest in the property described above and in
connection therewith has assigned its interest as landlord under your lease to
                                         , a                      (“Buyer”).
     You are further notified that any refundable security deposits or any
prepaid rents under your lease have been transferred to Buyer.
     Commencing as of                                          all rental
payments under your
lease shall be paid to Buyer or as Buyer shall direct. Please make your rent
checks payable to Buyer at the above address.
Any written notices you desire or are required to make to the landlord under
your lease should hereafter be sent to Buyer at the above address.

         
 
  Very truly yours,
 
       
 
  SELLER:
 
       
 
  a    
 
       
 
  By:    
 
       
 
  Its:    
 
       

 

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EXHIBIT F
TENANT’S ESTOPPEL CERTIFICATE
     This TENANT’S ESTOPPEL CERTIFICATE is executed as of this
                     day of                                         , 2005 by
                     which is the Tenant (hereinafter referred to as the
“Tenant”) under that written lease agreement dated as of
                                         by and between
                                        , as Landlord (or “Seller”), and
                                        , as Tenant (hereinafter referred to as
“Lease”) as amended by                                          and relating to
premises known as                                          (the “Leased
Premises”), which are part of the property known as
                                         (the “Premises”).
Tenant represents and warrants to Seller,
                                        , (the “Purchaser”) and Purchaser’s
successors and assigns, and to the Purchaser’s lender, if applicable, each of
the following:
1. The Lease (annexed hereto as Exhibit “A”) is presently in full force and
effect and has not been amended, supplemented, modified or otherwise changed,
except as set forth therein and as noted above. The Lease represents the entire
agreement between the parties as to the leasing of the Leased Premises. All
capitalized terms used herein but not defined shall be given the meaning
assigned to them in the Lease.
2. Neither the Landlord nor the Tenant is in default or breach of the Lease; nor
does a condition exist that with the giving of notice or passage of time would
constitute a default by Landlord; there is no pending litigation between the
Landlord and the Tenant; and Tenant has no claim against Landlord.
3. Tenant is currently obligated to pay the base rental in the amount of
$                                         per month; further, additional rental
pursuant to the Lease is payable as follows: Tenant pays its pro-rata share of
operating expenses in excess of $                                         and
real estate taxes in excess of $                                        ;
4. Tenant has paid the monthly rental required under the Lease through
                                        .
5. The term of the Lease commenced on                                         .
The Rent Commencement Date was                                         . The
Lease will terminate on                                         . The Tenant has
no option to terminate or cancel the Lease. The Lease provides for the following
extension option (if none, please state “none”):
                                        .
6. There are no offsets or credits against any rentals payable under the Lease
and Tenant has made no payment to Landlord as an advance or prepaid rental.
7. Tenant has deposited $                                         as security
deposit under the Lease.
8. Tenant has no option right or right of first refusal to purchase the Leased
Premises or the Premises or any portion thereof.

 

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9. Landlord has performed in all respects all of Landlord’s obligations with
respect to the performance of work or installation of equipment, and Tenant is
not entitled to any tenant improvement allowance after the date hereof.
10. Except as may be otherwise provided in the Lease, the Tenant is not entitled
to any rental concessions or abatements.
11. Tenant has not transferred, assigned, or sublet any portion of the Leased
Premises nor entered into any license or concession agreements with respect
thereto except as follows (if none, please state “none”):
                                        .
Tenant makes this statement for the benefit and protection of the Seller,
Purchaser, its successors and/or assigns, and/or Purchaser’s lender, with the
understanding that such parties intend to rely upon this statement in acquiring
the Premises and/or making a loan to Purchaser.

 

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IN WITNESS WHEREOF, Tenant has executed this Tenant’s Estoppel Certificate as of
the date first above written.

     
 
   
 
  TENANT:
 
   
 
   

 

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TABLE OF CONTENTS

                      Page
SECTION 1.
  PURCHASE AND SALE     1  
1.1
  Purchase and Sale     1  
1.2
  Land     1  
1.3
  Improvements     1  
1.4
  Personal Property     1  
SECTION 2.
  PURCHASE PRICE     2  
2.1
        2  
SECTION 3.
  DELIVERIES, INSPECTION AND REPRESENTATIONS     2  
3.1
  Delivery Obligations     3  
3.2
  Inspection Period     3  
3.3
  Title and Survey     5  
3.4
  Purchaser’s Representations and Warranties     6  
3.5
  Seller’s Representations and Warranties     8  
3.6
  Tenant Estoppel Certificates     10  
SECTION 4.
  ACCEPTANCE OF PROPERTY     11  
4.1
  “As Is”     11  
4.2
        12  
SECTION 5.
  CLOSING     12  
5.1
  Closing     12  
5.2
  Possession     12  
5.3
  Proration     13  
5.4
  Closing Costs     14  
5.5
  Seller’s Obligations at the Closing     15  
5.6
  Purchaser’s Obligations at the Closing     16  
5.7
  Property Management Agreement     16  
SECTION 6.
  RISK OF LOSS     17  
6.1
  Condemnation     17  
6.2
  Casualty     17  
6.3
  Uniform Vendor and Purchaser Risk Act     18  
SECTION 7.
  DEFAULT     18  

 

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                      Page
7.1
  Breach by Seller     18  
7.2
  Breach by Purchaser     18  
SECTION 8.
  FUTURE OPERATIONS     18  
8.1
  Maintenance and Contracts     18  
8.2
  Leasing     19  
SECTION 9.
  MISCELLANEOUS     19  
9.1
  Notices     19  
9.2
  Real Estate Commissions     21  
9.3
  Entire Agreement     21  
9.4
  Amendment     21  
9.5
  Headings     21  
9.6
  Time of Essence     21  
9.7
  Successors and Assigns; Assignment     22  
9.8
  Invalid Provision     22  
9.9
  Attorneys’ Fees     22  
9.10
  Multiple Counterparts     22  
9.11
  Exhibits     22  
9.12
  Construction     22  
9.13
  No Recordation     22  
9.14
  Merger Provision     23  
9.15
  Jury Waiver     23  
9.16
  No Personal Liability of Officers, Directors, Etc. of Seller     23  
9.17
  Choice of Law; Submission to Jurisdiction     23  
9.18
  Non-Solicitation of Employees     23  
9.19
  Access     23  
SECTION 10.
  ESCROW PROVISIONS     24  
10.1
        24  
10.2
        24  
10.3
        24  
10.4
        25  

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PURCHASE AND SALE AGREEMENT
by and between
PATRICK HENRY ASSOCIATES, L.P.
as Seller
and
COLUMBIA EQUITY TRUST, INC.
as Purchaser